<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MARCH 7, 1997
1933 ACT REGISTRATION NO. 33-34819
1940 ACT REGISTRATION NO. 811-6108
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
------------------
FORM N-1A
<TABLE>
<CAPTION>
<S> <C>
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [ ]
Pre-Effective Amendment No. _ [ ]
Post-Effective Amendment No. 7 [X]
and/or
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [ ]
Amendment No. 8 [X]
</TABLE>
(Check appropriate box or boxes)
------------------
TAX-EXEMPT NEW YORK
MONEY MARKET FUND
(Exact name of Registrant as Specified in Charter)
<TABLE>
<S> <C>
222 South Riverside Plaza, Chicago, Illinois 60606
(Address of Principal Executive Office) (Zip Code)
</TABLE>
Registrant's Telephone Number, including Area Code: (312) 537-7000
<TABLE>
<C> <C>
Philip J. Collora, Vice President and Secretary With a copy to:
Tax-Exempt New York Money Market Fund Cathy G. O'Kelly
222 South Riverside Plaza David A. Sturms
Chicago, Illinois 60606 Vedder, Price, Kaufman & Kammholz
(Name and Address of Agent for Service) 222 North LaSalle Street
Chicago, Illinois 60601
</TABLE>
Registrant has registered an indefinite number of its shares under the
Securities Act of 1933 pursuant to Rule 24f-2 under the Investment Company Act
of 1940. The Rule 24f-2 Notice for Registrant's fiscal year ended March 31, 1996
was filed on or about May 29, 1996.
It is proposed that this filing will become effective (check appropriate
box)
[ ] immediately upon filing pursuant to paragraph (b)
on (date) pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[X] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.
================================================================================
<PAGE> 2
TAX-EXEMPT NEW YORK MONEY MARKET FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART A
OF FORM N-1A AND PROSPECTUS
<TABLE>
<CAPTION>
ITEM NUMBER
OF FORM N-1A LOCATION IN PROSPECTUS
------------ ----------------------
<C> <S> <C>
1. Cover Page............................... Cover Page
2. Synopsis................................. Summary; Summary of Expenses
3. Condensed Financial Information.......... Financial Highlights; Performance
4. General Description of Registrant........ Capital Structure; Investment Objectives,
Policies and Risk Factors; Municipal Securities and
Investment Techniques
5. Management of the Fund................... Investment Manager and Shareholder Services
5A. Management's Discussion of
Fund Performance......................... Inapplicable
6. Capital Stock and Other Securities....... Investment Objectives, Policies and Risk Factors;
Dividends and Taxes; Purchase of Shares;
Capital Structure
7. Purchase of Securities Being Offered..... Purchase of Shares; Investment Manager and
Shareholder Services; Net Asset Value; Special
Features
8. Redemption or Repurchase................. Redemption of Shares
9. Pending Legal Proceedings................ Inapplicable
</TABLE>
<PAGE> 3
INVESTORS MUNICIPAL CASH FUND
222 South Riverside Plaza
Chicago, Illinois 60606
TABLE OF CONTENTS
- ---------------------------------------------------------
<TABLE>
<S> <C>
Summary 1
- ------------------------------------------------
Summary of Expenses 2
- ------------------------------------------------
Financial Highlights 3
- ------------------------------------------------
Investment Objectives, Policies and Risk
Factors 4
- ------------------------------------------------
Municipal Securities and Investment
Techniques 8
- ------------------------------------------------
Net Asset Value 10
- ------------------------------------------------
Purchase of Shares 10
- ------------------------------------------------
Redemption of Shares 11
- ------------------------------------------------
Special Features 14
- ------------------------------------------------
Dividends and Taxes 14
- ------------------------------------------------
Investment Manager and Shareholder Services 16
- ------------------------------------------------
Performance 18
- ------------------------------------------------
Capital Structure 18
- ------------------------------------------------
</TABLE>
This Prospectus contains information about each Fund that a prospective investor
should know before investing and should be retained for future reference. A
Statement of Additional Information dated May 31, 1997, has been filed with the
Securities and Exchange Commission and is incorporated herein by reference. It
is available upon request without charge from the Trust at the address or
telephone number on this cover or the firm from which this prospectus was
received.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
INVESTORS
MUNICIPAL
CASH FUND
PROSPECTUS May 31, 1997
INVESTORS MUNICIPAL CASH FUND
222 South Riverside Plaza, Chicago, Illinois 60606 1-800-231-8568.
Investors Municipal Cash Fund is an open-end, non-diversified management
investment company ("Trust") that offers a choice of four investment portfolios
("Funds") to investors seeking, to the extent consistent with stability of
capital, maximum current income that is exempt from federal income taxes and, in
the case of certain Funds, the income taxes of a particular state:
Investors Florida Municipal Cash Fund
Investors New Jersey Municipal Cash Fund
Investors Pennsylvania Municipal Cash Fund
Tax-Exempt New York Money Market Fund
AN INVESTMENT IN A FUND IS NEITHER INSURED NOR GUARANTEED BY THE U.S.
GOVERNMENT, THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE FEDERAL RESERVE BOARD
OR ANY OTHER AGENCY AND IS NOT A DEPOSIT OR OBLIGATION OF, OR GUARANTEED OR
ENDORSED BY, ANY BANK. THERE CAN BE NO ASSURANCE THAT A FUND WILL BE ABLE TO
MAINTAIN A STABLE NET ASSET VALUE OF $1.00 PER SHARE. A FUND MAY INVEST A
SIGNIFICANT PERCENTAGE OF ITS ASSETS IN THE SECURITIES OF A SINGLE ISSUER, AND
THEREFORE, AN INVESTMENT IN A FUND MAY BE SUBJECT TO MORE RISK THAN AN
INVESTMENT IN OTHER TYPES OF MONEY MARKET FUNDS.
<PAGE> 4
INVESTORS MUNICIPAL CASH FUND
222 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606, TELEPHONE 1-800-231-8568
SUMMARY
INVESTMENT OBJECTIVES. Investors Municipal Cash Fund (the "Trust") is
registered as an open-end, non-diversified management investment company that
offers a choice of four investment portfolios ("Funds"). However, each Fund must
meet the diversification requirements of Rule 2a-7 under the Investment Company
Act of 1940.
Each Fund seeks to provide, to the extent consistent with stability of capital,
maximum current income that is exempt from federal income taxes and, in the case
of certain Funds, the income taxes of a particular state.
INVESTORS FLORIDA MUNICIPAL CASH FUND ("Florida Fund") seeks maximum current
income that is exempt from federal income taxes to the extent consistent with
stability of capital.
INVESTORS NEW JERSEY MUNICIPAL CASH FUND ("New Jersey Fund") seeks maximum
current income that is exempt from federal and New Jersey income taxes to the
extent consistent with stability of capital.
INVESTORS PENNSYLVANIA MUNICIPAL CASH FUND ("Pennsylvania Fund") seeks maximum
current income that is exempt from federal and Pennsylvania income taxes to the
extent consistent with stability of capital.
TAX-EXEMPT NEW YORK MONEY MARKET FUND ("New York Fund") seeks maximum current
income that is exempt from federal, New York State and New York City income
taxes to the extent consistent with stability of capital.
Since each Fund is concentrated in securities issued by a state or entities
within a state and may invest a significant percentage of its assets in the
securities of a single issuer, an investment in a Fund may be subject to more
risk than an investment in other types of money market funds. Each Fund seeks to
maintain a net asset value of $1.00 per share. There is no assurance that the
objective of a Fund will be achieved or that a Fund will be able to maintain a
net asset value of $1.00 per share. See "Investment Objectives, Policies and
Risk Factors."
INVESTMENT MANAGER AND SHAREHOLDER SERVICES. Zurich Kemper Investments, Inc.
("ZKI") is the investment manager for each Fund and provides the Funds with
continuous professional investment supervision. ZKI is paid an annual investment
management fee, payable monthly, on a graduated basis of .22% of the first $500
million of combined average daily net assets of all Funds, .20% of the next $500
million, .175% of the next $1 billion, .16% of the next $1 billion and .15% of
combined average daily net assets over $3 billion of all Funds. Zurich Kemper
Distributors, Inc. ("ZKDI"), an affiliate of ZKI, is the primary administrator,
distributor and principal underwriter of the Funds and, as such, provides
information and services for existing and potential shareholders and acts as
agent of each Fund in the sale of its shares. ZKDI receives a distribution
services fee, payable monthly, at an annual rate of .50% of average daily net
assets of each Fund. As distributor, ZKDI normally pays financial services firms
that provide cash management and other services for their customers at a maximum
annual rate of .50% of average daily net assets of those accounts that they
maintain and service. See "Investment Manager and Shareholder Services."
INVESTORS IN A FUND. Each Fund is designed for persons who are seeking, to the
extent consistent with stability of capital, maximum current income exempt from
federal income taxes and, in the case of certain Funds, from income taxes of a
particular state. Through a single investment in shares of a Fund, investors
receive the benefits of professional management and liquidity. Additionally,
each Fund offers the economic advantages of block purchases of securities and
relief from administrative details such as accounting for distributions and the
safekeeping of securities. The tax exemption of Fund dividends for federal
income tax and, if applicable,
1
<PAGE> 5
particular state or local tax purposes does not necessarily result in exemption
under the income or other tax laws of any other state or local taxing authority.
The laws of the several states and local taxing authorities vary with respect to
the taxation of interest income and investments, and shareholders are advised to
consult their own tax advisers as to the status of their accounts under state
and local tax laws. See "Dividends and Taxes."
PURCHASES AND REDEMPTIONS. Shares of a Fund are available at net asset value
through selected financial services firms. The minimum initial investment is
$1,000 and the minimum subsequent investment is $100. See "Purchase of Shares."
Shares may be redeemed at the net asset value next determined after receipt by
the Trust's Shareholder Service Agent of a request to redeem in proper form.
Shares may be redeemed by written request or by using the Trust's expedited
redemption procedures. See "Redemption of Shares."
DIVIDENDS. Dividends are declared daily and paid monthly. Dividends are
automatically reinvested in additional shares, unless the shareholder makes a
different election. See "Dividends and Taxes."
GENERAL INFORMATION AND CAPITAL. The Trust is organized as a business trust
under the laws of Massachusetts and may issue an unlimited number of shares of
beneficial interest in one or more series or funds, all having no par value,
which may be divided by the Board of Trustees into classes of shares. Shares are
fully paid and nonassessable when issued, are transferable without restriction
and have no preemptive or conversion rights. The Trust is not required to hold
annual shareholder meetings; but will hold special meetings as required or
deemed desirable for such purposes as electing trustees, changing fundamental
policies or approving an investment management agreement. See "Capital
Structure."
SUMMARY OF EXPENSES
<TABLE>
<S> <C>
SHAREHOLDER TRANSACTION EXPENSES(1)......................... None
ANNUAL FUND OPERATING EXPENSES
(after fee waiver and expense absorption)
(as a percentage of average net assets)
</TABLE>
<TABLE>
<CAPTION>
FLORIDA NEW JERSEY NEW YORK PENNSYLVANIA
FUND FUND FUND FUND
------- ---------- -------- ------------
<S> <C> <C> <C> <C>
Management Fees............................................. --% --% --% --%
12b-1 Fees(2)............................................... .50% .50% % .50%
Other Expenses(3)........................................... .40% .40% % .40%
--- --- --- ---
Total Operating Expenses.................................... .90% .90% % .90%
=== === === ===
</TABLE>
- ---------------
(1) Investment dealers and other firms may independently charge shareholders
additional fees; please see their materials for details.
(2) As a result of the accrual of 12b-1 fees, long-term shareholders may pay
more than the economic equivalent of the maximum front-end sales charges
permitted by the National Association of Securities Dealers.
(3) "Other Expenses" for the Florida, New Jersey and Pennsylvania Funds have
been estimated for the current fiscal year.
EXAMPLE
<TABLE>
<CAPTION>
FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
You would pay the following expenses Florida $9 $29 -- --
on a $1,000 investment, assuming New Jersey $9 $29 -- --
(1) 5% annual return and New York $ $ $ $
(2) redemption at the end of each time Pennsylvania $9 $29 -- --
period:
</TABLE>
The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in a Fund will bear directly or
indirectly. The Example assumes a 5% annual rate of return pursuant to
requirements of the Securities and Exchange Commission. This hypothetical rate
of return is not intended to be representative of past or future performance of
a Fund.
As discussed more fully under "Investment Manager and Shareholder Services," ZKI
has agreed to temporarily waive its management fee and reimburse or pay
operating expenses to the extent, if any, that "Total Operating Expenses" exceed
.80% of average daily net assets of the New York Fund and .90% of average daily
net assets of each of the
2
<PAGE> 6
Florida, New Jersey and Pennsylvania Funds. Without such waiver and expense
reimbursement, "Management Fees" would have been %, "12b-1 Fees" would have
been %, "Other Expenses" would have been % and "Total Operating Expenses"
would have been % for the New York Fund. Without such waiver and expense
reimbursement, "Management Fees" would be .22%, "12b-1 Fees" would be .50%,
"Other expenses" would be .40%, and "Total Operating Expenses" would be 1.12%,
for each of the Florida, New Jersey and Pennsylvania Funds. The Florida, New
Jersey and Pennsylvania Funds will commence operations on or about May 31, 1997,
thus expenses for those Funds are shown for only the one and three year periods,
and "Other Expenses" are estimated for the current fiscal year.
THE EXAMPLE SHOULD NOT BE CONSIDERED TO BE A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESSER THAN THOSE SHOWN.
FINANCIAL HIGHLIGHTS
The table below shows financial information for the New York Fund expressed in
terms of one share outstanding throughout the period. The information in the
table is covered by the report of the Trust's independent auditors. The report
is contained in the Trust's Registration Statement and is available from the
Trust. The financial statements contained in the Trust's 1997 Annual Report to
Shareholders are incorporated herein by reference and may be obtained by writing
or calling the Trust.
NEW YORK FUND
<TABLE>
<CAPTION>
YEAR ENDED MARCH 31, DECEMBER 13, 1990
-------------------- TO
1997 1996 1995 1994 1993 1992 MARCH 31, 1991
---- ---- ---- ---- ---- ---- -----------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE:
Net asset value, beginning of year $ 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------
Net investment income and dividends
declared .03 .02 .02 .02 .04 .01
- --------------------------------------------------------------------------------------------------------------
Net asset value, end of period $ 1.00 1.00 1.00 1.00 1.00 1.00 1.00
- --------------------------------------------------------------------------------------------------------------
TOTAL RETURN: % 3.03 2.40 1.63 1.90 3.77 .97
- --------------------------------------------------------------------------------------------------------------
RATIOS TO AVERAGE NET ASSETS:
Expenses after expense absorption % .80 .80 .80 .80 .42 .54
- --------------------------------------------------------------------------------------------------------------
Net investment income % 2.95 2.44 1.61 1.88 3.52 3.77
- --------------------------------------------------------------------------------------------------------------
OTHER RATIOS TO AVERAGE NET ASSETS:
Expenses % 1.14 1.15 1.25 1.53 1.45 1.00
- --------------------------------------------------------------------------------------------------------------
Net investment income % 2.61 2.09 1.16 1.15 2.49 3.31
- --------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA:
Net assets at end of period (in thousands) $ 18,527 14,090 10,762 8,424 8,243 2,108
==============================================================================================================
</TABLE>
NOTE: ZKI has agreed to temporarily waive its management fee and reimburse or
pay certain operating expenses to the extent necessary to limit expenses to
specific levels. The Other Ratios to Average Net Assets are computed without
this expense absorption. Ratios have been determined on an annualized basis.
Total return is not annualized.
The Florida, New Jersey and Pennsylvania Funds (not shown above) will commence
operations on or about May 31, 1997.
3
<PAGE> 7
INVESTMENT OBJECTIVES, POLICIES AND RISK FACTORS
Investors Municipal Cash Fund (the "Trust") is a registered open-end,
non-diversified management investment company that offers a choice of four
investment portfolios ("Funds"). Each Fund seeks to provide, to the extent
consistent with stability of capital, maximum current income that is exempt from
federal income taxes and, in the case of certain Funds, the income taxes of a
particular state. The Trust may offer additional Funds in the future.
Each Fund is a money market mutual fund that has been designed to provide
investors with professional management of short-term investment dollars. Each
Fund pools individual and institutional investors' money which it uses to buy
tax-exempt money market instruments. Because the Funds combine their respective
shareholders' money, they can buy and sell large blocks of securities, which
reduces transaction costs and increases yields. The Funds are managed by
investment professionals who analyze market trends to take advantage of changing
conditions. Investments are subject to price fluctuations resulting from rising
or declining interest rates and are subject to the ability of the issuers of
such investments to make payment at maturity. Because of their short maturities,
liquidity and high quality ratings, high quality money market instruments, such
as those in which the Funds invest, are generally considered among the safest
available. There can be no assurance that a Fund will achieve its objective or
that it will maintain a net asset value of $1.00 per share.
As a fundamental investment policy, each Fund will under normal market
conditions maintain at least 80% of its investments in obligations issued by or
on behalf of states, territories and possessions of the United States and the
District of Columbia and their political subdivisions, agencies and
instrumentalities, the income from which is exempt from federal income taxes
("Municipal Securities"). As indicated under "Dividends and Taxes," the Funds
may invest in "private activity bonds." In compliance with the position of the
staff of the Securities and Exchange Commission ("SEC"), the New York Fund does
not consider "private activity" bonds as Municipal Securities for purposes of
the 80% limitation. This is a fundamental policy for the New York Fund so long
as the SEC staff maintains its position, after which it would become
non-fundamental. Each Fund's assets will consist of Municipal Securities and
temporary investments as described below and cash.
The New York Fund will invest only in Municipal Securities that at the time of
purchase: (a) are rated within the two highest ratings of municipal securities
(Aaa or Aa) assigned by Moody's Investors Service, Inc. ("Moody's"), or (AAA or
AA) assigned by Standard & Poor's Corporation ("S&P"); (b) are guaranteed or
insured by the U.S. Government as to the payment of principal and interest; (c)
are fully collateralized by an escrow of U.S. Government securities; (d) have at
the time of purchase a Moody's short-term municipal securities rating of MIG-2
or higher or a municipal commercial paper rating of P-2 or higher, or S&P's
municipal commercial paper rating of A-2 or higher; (e) are unrated, if longer
term municipal securities of that issuer are rated within the two highest rating
categories by Moody's or S&P; or (f) are determined by the Board of Trustees or
its delegate to be at least equal in quality to one or more of the above
categories.
The Florida, New Jersey and Pennsylvania Funds will invest only in Municipal
Securities that at the time of purchase: (a) are rated high quality by Moody's,
S&P, Duff Phelps, Inc., Fitch Investor's Services, Inc. or any other nationally
recognized statistical rating organization ("NRSRO") as determined by the SEC;
(b) are unrated, if in the discretion of the investment manager the Municipal
Securities are determined to be at least equal in quality to one or more of the
ratings in subparagraph (a) immediately above; or (c) are fully collateralized
by an escrow of U.S. Government securities.
Rather than invest in securities directly, each of the Florida, New Jersey and
Pennsylvania Funds may in the future seek to achieve its investment objective by
pooling its assets with assets of other mutual funds managed by ZKI or its
affiliates for investment in another investment company having the same
investment objective and substantially the same investment policies and
restrictions. The purpose of such an arrangement is to achieve greater
operational efficiencies and to reduce costs. It is expected that any such
investment company will be managed by ZKI in substantially the same manner as
the Fund pooling its assets. Shareholders of a Fund will be
4
<PAGE> 8
given at least 30 days prior notice of any such investment, although they will
not be entitled to vote on the action. Such investment would be made only if the
trustees determine it to be in the best interests of a Fund and its
shareholders.
The Funds limit their portfolio investments to securities that meet the
diversification and quality requirements of Rule 2a-7 under the Investment
Company Act of 1940 (the "1940 Act"). See "Net Asset Value." From time to time,
a significant portion of a Fund's securities is supported by credit and
liquidity enhancements from third party banks and other financial institutions,
and as a result, changes in the credit quality of these institutions could cause
losses to a Fund and affect its share price.
From time to time, as a defensive measure, including during periods when
acceptable short-term Municipal Securities are not available, each Fund may
invest in taxable "temporary investments" that include: obligations of the U.S.
Government, its agencies or instrumentalities; debt securities rated within the
two highest grades by Moody's or S&P for the New York Fund; debt securities
rated high quality by any NRSRO for the Florida, New Jersey and Pennsylvania
Funds; commercial paper rated in the two highest grades by either Moody's or S&P
for the New York Fund; commercial paper rated high quality by any NRSRO for the
Florida, New Jersey and Pennsylvania Funds; certificates of deposit of domestic
banks with assets of $1 billion or more; and any of the foregoing temporary
investments subject to repurchase agreements. Under a repurchase agreement a
Fund acquires ownership of a security from a broker-dealer or bank that agrees
to repurchase the security at a mutually agreed upon time and price (which price
is higher than the purchase price), thereby determining the yield during the
Fund's holding period. Repurchase agreements with broker-dealer firms will be
limited to obligations of the U.S. Government, its agencies or
instrumentalities. Maturity of the securities subject to repurchase may exceed
one year. Interest income from temporary investments is taxable to shareholders
as ordinary income. Although a Fund is permitted to invest in taxable securities
(limited under normal market conditions to 20% of a Fund's total assets), it is
each Fund's primary intention to generate income dividends that are not subject
to federal income taxes and, in the case of certain Funds, the income taxes of a
particular state. See "Dividends and Taxes." For a description of the ratings,
see "Appendix--Ratings of Investments" in the Statement of Additional
Information.
The Funds may not borrow money except as a temporary measure for extraordinary
or emergency purposes, and then only in an amount up to one-third of the value
of its total assets, in order to meet redemption requests without immediately
selling any portfolio securities. Any such borrowings under this provision will
not be collateralized. A Fund will not borrow for leverage purposes. A Fund will
not purchase illiquid securities, including repurchase agreements maturing in
more than seven days, if, as a result thereof, more than 10% of a Fund's net
assets valued at the time of the transaction would be invested in such
securities. Up to 25% of the total assets of a Fund may be invested at any time
in debt obligations of a single issuer or of issuers in a single industry, and a
Fund may invest without limitation in Municipal Securities the income on which
may be derived from projects of a single type.
Although the Trust has registered as a "non-diversified" investment company,
each Fund must meet the diversification requirements of Rule 2a-7 under the 1940
Act. Rule 2a-7 provides that a single state money fund shall not, as to 75% of
its assets, invest more than 5% of its assets in the securities of an individual
issuer, provided that the fund may not invest more than 5% of its assets in the
securities of an individual issuer unless the securities are First Tier
Securities (as defined in Rule 2a-7). This allows each Fund, as to 25% of its
assets, to invest more than 5% of its assets in the securities of an individual
issuer. Since each Fund is concentrated in securities issued by a particular
state or entities within that state and may invest a significant percentage of
its assets in the securities of a single issuer, an investment in a Fund may be
subject to more risk than an investment in other types of money market funds.
See "Investment Restrictions" in the Statement of Additional Information.
Each Fund has adopted certain investment restrictions that are presented in the
Statement of Additional Information, and that, together with the investment
objective and fundamental policies of each Fund, cannot be
5
<PAGE> 9
changed without approval by holders of a majority of its outstanding voting
shares. As defined in the 1940 Act, this means the lesser of the vote of (a) 67%
of the shares of a Fund present at a meeting where more than 50% of the
outstanding shares are present in person or by proxy; or (b) more than 50% of
the outstanding shares of a Fund.
FLORIDA FUND. The objective of the Florida Fund is to provide maximum current
income that is exempt from federal income to the extent consistent with
stability of capital. The Florida Fund pursues its objective, primarily through
a professionally managed, non-diversified portfolio of short-term high quality
municipal obligations issued by or on behalf of the State of Florida, its
political subdivisions, authorities and corporations, and territories and
possessions of the United States and their political subdivisions, agencies and
instrumentalities and other securities that are, in the opinion of bond counsel
to the issuer, exempt from the Florida intangibles tax and the interest from
which is exempt from federal income taxes ("Florida Municipal Securities").
Dividends representing interest income received by the Florida Fund on Florida
Municipal Securities will be exempt from federal income taxes. Dividend income
may be subject to state and local taxes. Florida currently has no income tax for
individuals. Since the investment manager believes that exemption from the
Florida intangibles tax is likely to be available, the Florida Fund generally
will seek investments enabling shares of the Florida Fund to be exempt from the
intangibles tax. However, there is no assurance that an exemption from the
Florida intangibles tax will be available. See "Dividends and Taxes." Florida
Municipal Securities may at times have lower yields than other tax-exempt
securities. As a temporary defensive position, to the extent Florida Municipal
Securities are at any time unavailable or unattractive for investment by the
Florida Fund, it will invest in other debt securities the interest from which is
exempt from federal income taxes. Under normal market conditions, as a
non-fundamental policy, the Florida Fund will maintain at least 65% of its total
assets in Florida Municipal Securities. See also "Dividends and Taxes."
Florida is characterized by rapid growth, substantial capital needs, a
manageable debt burden, a diversifying but still somewhat narrow economic base
and good financial operations. The State continues to experience rapid
population growth although not as great as in previous years. The slower
population growth rate should allow the State to catch up on its capital needs.
Technology-based manufacturing, healthcare and financial services have joined
tourism and agriculture as leading elements of Florida's continued economic
growth. Florida's overall financial position remains healthy, despite swings in
financial operations over the past several years. The swings are reflective of
the State's reliance on the sales tax as the major revenue source. Florida has
increased its funding of capital projects through more frequent debt issuance
rather than the historical pay-as-you-go method.
NEW JERSEY FUND. The objective of the New Jersey Fund is to provide maximum
current income that is exempt from federal and New Jersey income taxes to the
extent consistent with stability of capital. The New Jersey Fund pursues its
objective primarily through a professionally managed, non-diversified portfolio
of short-term high quality municipal obligations issued by or on behalf of New
Jersey, its political subdivisions, authorities and corporations, and
territories and possessions of the United States and their political
subdivisions, agencies and instrumentalities the interest from which is, in the
opinion of bond counsel to the issuer, exempt from federal and New Jersey income
taxes ("New Jersey Municipal Securities"). Dividends representing interest
income received by the New Jersey Fund on New Jersey Municipal Securities will
be exempt from federal and New Jersey income taxes. Such dividend income may be
subject to other state and local taxes. To the extent that New Jersey Municipal
Securities are at any time unavailable or unattractive for investment by the New
Jersey Fund, it will invest temporarily in other debt securities the interest
from which is exempt from federal income taxes. Under normal market conditions,
as a non-fundamental policy, the New Jersey Fund will maintain at least 65% of
its total assets in New Jersey Municipal Securities.
New Jersey is the ninth most populous state in the nation. Per capita income in
1993 was the second highest of the states and 129% of the national average. The
distribution of employment in New Jersey mirrors that of the nation. After an
extraordinary boom in the mid-1980's, New Jersey and the rest of the Northeast
fell into a
6
<PAGE> 10
recession a year before the national recession officially began. Along with the
rest of the Northeast, New Jersey climbed out of the recession more slowly than
the rest of the nation. Since 1992, the unemployment rate in New Jersey has
exceeded the national average; the unemployment rates for New Jersey and the
nation during the first quarter of 1995 were 6.9% and 5.9%, respectively.
NEW YORK FUND. The objective of the New York Fund is to provide maximum current
income that is exempt from federal, New York State and New York City income
taxes to the extent consistent with stability of capital. The New York Fund
pursues its objective primarily through a professionally managed,
non-diversified portfolio of short-term high quality municipal obligations
issued by or on behalf of New York State, its political subdivisions,
authorities and corporations, and territories and possessions of the United
States and their political subdivisions, agencies and instrumentalities the
interest from which is, in the opinion of bond counsel to the issuer, exempt
from federal, New York State and New York City income taxes ("New York Municipal
Securities"). Dividends representing net interest income received by the New
York Fund on New York Municipal Securities will be exempt from federal, New York
State and New York City personal income taxes. Such dividend income may be
subject to other state and local taxes. To the extent New York Municipal
Securities are at any time unavailable or unattractive for investment by the New
York Fund, it will invest in other debt securities the interest from which is
exempt from Federal income taxes. Under normal market conditions, as a
non-fundamental policy, the New York Fund will maintain at least 65% of its
total assets in New York Municipal Securities.
New York is the third most populous state in the nation; New York City accounts
for about 40% of the State's population. After a boom in the mid-1980's, New
York and the rest of the Northeast fell into a recession a year before the
national recession officially began. Along with the rest of the Northeast, New
York climbed out of the recession more slowly than the rest of the nation. New
York ranks fourth in the nation in personal income. In 1995, per capita personal
income was 119% of the national average. Employment distribution is similar to
that of the nation except for a higher concentration in the Finance, Insurance
and Real Estate sector and a lower concentration in manufacturing. Historically,
unemployment is more cyclical than for the United States as a whole. Since 1991,
New York unemployment has exceeded the U.S. average.
PENNSYLVANIA FUND. The objective of the Pennsylvania Fund is to provide maximum
current income that is exempt from federal and Pennsylvania income taxes to the
extent consistent with stability of capital. The Pennsylvania Fund pursues its
objective primarily through a professionally managed, non-diversified portfolio
of short-term high quality municipal obligations issued by or on behalf of the
Commonwealth of Pennsylvania, its political subdivisions, authorities and
corporations, and territories and possessions of the United States and their
political subdivisions, agencies and instrumentalities the interest from which
is in the opinion of bond counsel to the issuer, exempt from federal and
Pennsylvania income taxes ("Pennsylvania Municipal Securities"). Dividends
representing interest income received by the Pennsylvania Fund on Pennsylvania
Municipal Securities will be exempt from federal and Pennsylvania income taxes
and (for residents of Philadelphia) from Philadelphia School District Income Tax
and (for residents of Pittsburgh) from the intangibles tax for the City and
School District of Pittsburgh. Such dividend income may be subject to other
state and local taxes. To the extent that Pennsylvania Municipal Securities are
at any time unavailable or unattractive for investment by the Pennsylvania Fund,
it will invest temporarily in other debt securities the interest from which is
exempt from federal income taxes. Under normal market conditions, as a
non-fundamental policy, the Pennsylvania Fund will maintain at least 65% of its
total assets in Pennsylvania Municipal Securities.
While Pennsylvania is among the leading states in manufacturing and mining, it
is transforming into a services and high-tech economy as evidenced by its
growing reputation as a health and education center. The recent recession
adversely affected the Commonwealth starting in 1991, but has been more moderate
than in other Mid-Atlantic and Northeastern states because its economy is less
dependent upon financial services and the defense/aerospace industries.
Competition from foreign markets, particularly in the steel industry,
contributed to the job losses in the Commonwealth's manufacturing sector,
however, the result was a restructuring in the industry which helped the
Commonwealth weather the recent recession much more successfully than in past
recessions. The economy has performed similar to that of the nation and slightly
stronger than its neighboring
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states due to the restructuring and modernization of many of its manufacturing
factories. The growth will still lag that of the South and Midwest. The
replacement of highly paid manufacturing jobs for those in the services and
trade sectors will impede income growth. Relative cost advantages which are
available to businesses in the Commonwealth compared to its neighboring states,
as well as the restructuring and modernization of manufacturing plans, should
aid in boosting the economy.
Additional information concerning the risks associated with the Florida, New
Jersey, New York and Pennsylvania Municipal Securities is set forth in the
Statement of Additional Information under "Municipal Securities".
MUNICIPAL SECURITIES AND INVESTMENT TECHNIQUES
The two principal classifications of Municipal Securities consist of "general
obligation" and "revenue" issues. General obligation bonds are secured by the
issuer's pledge of its full faith, credit and taxing power for the payment of
principal and interest. Revenue bonds are payable only from the revenues derived
from a particular facility or class of facilities or, in some cases, from the
proceeds of a special excise tax or other specific revenue source such as the
user of the facility being financed. Industrial development bonds held by a Fund
are in most cases revenue bonds and are not payable from the unrestricted
revenues of the issuer. Among other types of instruments, a Fund may purchase
tax-exempt commercial paper, warrants and short-term municipal notes such as tax
anticipation notes, bond anticipation notes, revenue anticipation notes,
construction loan notes, warrants and other forms of short-term loans. Such
notes are issued with a short-term maturity in anticipation of the receipt of
tax payments, the proceeds of bond placements or other revenues. A more detailed
discussion of Municipal Securities and NRSRO ratings outlined above under
"Investment Objective and Policies" is contained in the Statement of Additional
Information.
Each Fund may purchase securities which provide for the right to resell them to
an issuer, bank or dealer at an agreed upon price or yield within a specified
period prior to the maturity date of such securities. Such a right to resell is
referred to as a "Standby Commitment." Securities may cost more with Standby
Commitments than without them. Standby Commitments will be entered into solely
to facilitate portfolio liquidity. A Standby Commitment may be exercised before
the maturity date of the related Municipal Security if the Fund's investment
manager revises its evaluation of the creditworthiness of the underlying
security or of the entity issuing the Standby Commitment. Each Fund's policy is
to enter into Standby Commitments only with issuers, banks or dealers which are
determined by the investment manager to present minimal credit risks. If an
issuer, bank or dealer should default on its obligation to repurchase an
underlying security, a Fund might be unable to recover all or a portion of any
loss sustained from having to sell the security elsewhere.
Each Fund may invest in certain Municipal Securities having rates of interest
that are adjusted periodically or that "float" continuously according to
formulae intended to minimize fluctuations in values of the instruments
("Variable Rate Notes"). The interest rate on Variable Rate Notes ordinarily is
determined by reference to or is a percentage of a bank's prime rate, the 90 day
U.S. Treasury bill rate, the rate of return on commercial paper or bank
certificates of deposit, or some similar objective standard. Generally, the
changes in the interest rate on Variable Rate Notes reduce the fluctuation in
the market value of such notes. Accordingly, as interest rates decrease or
increase, the potential for capital appreciation or capital depreciation is less
than for fixed rate obligations. Each Fund currently intends to invest a
substantial portion of its assets in Variable Rate Notes. Variable Rate Demand
Notes have a demand feature which entitles the purchaser to resell the
securities at amortized cost. The rate of return on Variable Rate Demand Notes
also varies according to some objective standard, such as an index of short-term
tax-exempt rates. Variable rate instruments with a demand feature enable a Fund
to purchase instruments with a stated maturity in excess of one year. Each Fund
determines the maturity of variable rate instruments in accordance with Rule
2a-7, which allows a Fund to consider certain of such instruments as having
maturities shorter than the maturity date on the face of the instrument.
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<PAGE> 12
Each Fund may purchase high quality Certificates of Participation in trusts that
hold Municipal Securities. A Certificate of Participation gives a Fund an
undivided interest in the Municipal Security in the proportion that the Fund's
interest bears to the total principal amount of the Municipal Security. These
Certificates of Participation may be variable rate or fixed rate with remaining
maturities of one year or less. A Certificate of Participation may be backed by
an irrevocable letter of credit or guarantee of a financial institution that
satisfies rating agencies as to the credit quality of the Municipal Security
supporting the payment of principal and interest on the Certificate of
Participation. Payments of principal and interest would be dependent upon the
underlying Municipal Security and may be guaranteed under a letter of credit to
the extent of such credit. The quality rating by a rating service of an issue of
Certificates of Participation is based primarily upon the rating of the
Municipal Security held by the trust and the credit rating of the issuer of any
letter of credit and of any other guarantor providing credit support to the
issue. The investment manager considers these factors as well as others, such as
any quality ratings issued by the rating services identified above, in reviewing
the credit risk presented by a Certificate of Participation and in determining
whether the Certificate of Participation is appropriate for investment by a
Fund. It is anticipated by the investment manager that, for most publicly
offered Certificates of Participation, there will be a liquid secondary market
or there may be demand features enabling a Fund to readily sell its Certificates
of Participation prior to maturity to the issuer or a third party. As to those
instruments with demand features, a Fund intends to exercise its right to demand
payment from the issuer of the demand feature only upon a default under the
terms of the Municipal Security, as needed to provide liquidity to meet
redemptions, or to maintain a high quality investment portfolio. While a Fund
may invest without limit in Certificates of Participation, it is currently
anticipated that such investments will not exceed 25% of a Fund's assets.
Each Fund may purchase and sell Municipal Securities on a when-issued or delayed
delivery basis. A when-issued or delayed delivery transaction arises when
securities are bought or sold for future payment and delivery to secure what is
considered to be an advantageous price and yield to a Fund at the time it enters
into the transaction. In determining the maturity of portfolio securities
purchased on a when-issued or delayed delivery basis, a Fund will consider them
purchased on the date when it commits itself to the purchase.
A security purchased on a when-issued basis, like all securities held in a
Fund's portfolio, is subject to changes in market value based upon changes in
the level of interest rates and investors' perceptions of the creditworthiness
of the issuer. Generally such securities will appreciate in value when interest
rates decline and depreciate in value when interest rates rise. Therefore if, in
order to achieve higher interest income, a Fund remains substantially fully
invested at the same time that it has purchased securities on a when-issued
basis, there will be a greater possibility that the net asset value of a Fund's
shares will vary from $1.00 per share, since the value of a when-issued security
is subject to market fluctuation and no interest accrues to the purchaser prior
to settlement of the transaction. See "Net Asset Value."
Each Fund will only make commitments to purchase Municipal Securities on a
when-issued or delayed delivery basis with the intention of actually acquiring
the securities, but each Fund reserves the right to sell these securities before
the settlement date if deemed advisable. The sale of securities may result in
the realization of gains that are not exempt from federal income taxes, and in
the case of certain Funds, income taxes of a state.
Yields on Municipal Securities are dependent on a variety of factors, including
the general conditions of the money market and the municipal bond market, and
the size, maturity and rating of the particular offering. The ratings of NRSROs
represent their opinions as to the quality of the Municipal Securities which
they undertake to rate. It should be emphasized, however, that ratings are
general and are not absolute standards of quality. Consequently, Municipal
Securities with the same maturity, coupon and rating may have different yields.
In seeking to achieve its investment objective, a Fund may invest all or any
part of its assets in Municipal Securities that are industrial development
bonds. Moreover, although a Fund does not currently intend to do so on a regular
basis, it may invest more than 25% of its assets in Municipal Securities which
are repayable out of revenue streams generated from economically related
projects or facilities, if such investment is deemed necessary or appropriate by
the investment manager. To the extent that a Fund's assets are concentrated in
Municipal
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Securities payable from revenues on economically related projects and
facilities, a Fund will be subject to the peculiar risks presented by such
projects to a greater extent than it would be if the Fund's assets were not so
concentrated.
NET ASSET VALUE
Fund shares are sold at their net asset value next determined after an order and
payment are received in the form described under "Purchase of Shares." The net
asset value of a Fund share is calculated by dividing the total assets of the
Fund less its liabilities by the total number of shares outstanding. The net
asset value per share of a Fund is determined on each day the New York Stock
Exchange ("Exchange") is open for trading, at 11:00 a.m. and 3:00 p.m. Chicago
time, and on each other day on which there is a sufficient degree of trading in
a Fund's investments that its net asset value might be affected, except that the
net asset value will not be computed on a day on which no orders to purchase
shares were received and no shares were tendered for redemption. Each Fund seeks
to maintain a net asset value of $1.00 per share.
Each Fund values its portfolio instruments at amortized cost in accordance with
Rule 2a-7 under the 1940 Act, which means that they are valued at their
acquisition cost, as adjusted for amortization of premium or accretion of
discount, rather than at current market value. Calculations are made to compare
the value of a Fund's investments, valued at amortized cost, with market-based
values. Market-based valuations are obtained by using actual quotations provided
by market makers, estimates of market value, or values obtained from yield data
relating to classes of money market instruments published by reputable sources
at the mean between the bid and asked prices for the instruments. If a deviation
of 1/2 of 1% or more were to occur between the net asset value per share
calculated by reference to market-based values and a Fund's $1.00 per share net
asset value, or if there were any other deviation that the Board of Trustees of
the Trust believed would result in a material dilution to shareholders or
purchasers, the Board of Trustees would promptly consider what action, if any,
should be initiated. In order to value its investments at amortized cost, a Fund
purchases only securities with a maturity of 397 days or less and maintains a
dollar-weighted average portfolio maturity of 90 days or less. In addition, each
Fund limits its portfolio investments to securities that meet the
diversification and quality requirements of Rule 2a-7.
PURCHASE OF SHARES
Shares are sold at net asset value with no sales charge through selected
financial services firms, such as broker-dealers and banks ("firms"). The
minimum initial investment is $1,000 and the minimum subsequent investment is
$100 but such minimum amounts may be changed at any time in management's
discretion. Under an automatic investment plan, the minimum initial and
subsequent investment is $50. Firms offering a Fund's shares may set higher
minimums for accounts they service and may change such minimums at their
discretion.
Each Fund seeks to be as fully invested as possible at all times in order to
achieve maximum income. Since the Funds will be investing in instruments that
normally require immediate payment in Federal Funds (monies credited to a bank's
account with its regional Federal Reserve Bank), each Fund has adopted
procedures for the convenience of its shareholders and to ensure that it
receives investable funds. Orders for purchase of shares received by wire
transfer in the form of Federal Funds will be effected at the next determined
net asset value. Shares purchased by wire will receive that day's dividend if
effected at or prior to the 11:00 a.m. Chicago time net asset value
determination, otherwise such shares will receive the dividend for the next
calendar day if effected at 3:00 p.m. Chicago time. Orders for purchase
accompanied by a check or other negotiable bank draft will be accepted and
effected as of 3:00 p.m. Chicago time on the next business day following receipt
and such shares will receive the dividend for the next calendar day following
the day when the purchase is effected. If an order is accompanied by a check
drawn on a foreign bank, funds must normally be collected on such check before
shares will be purchased. See "Purchase and Redemption of Shares" in the
Statement of Additional Information.
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If payment is to be wired, call the firm from which you received this prospectus
for proper instructions.
CLIENTS OF FIRMS. Firms provide varying arrangements for their clients with
respect to the purchase and redemption of Fund shares and the confirmation
thereof. Such firms are responsible for the prompt transmission of purchase and
redemption orders. Some firms may establish higher minimum investment
requirements than set forth above. A firm may arrange with its clients for other
investment or administrative services. Such firms may independently establish
and charge additional amounts to their clients for such services, which charges
would reduce the clients' yield or return. Firms may also hold Fund shares in
nominee or street name as agent for and on behalf of their clients. In such
instances, the Trust's transfer agent will have no information with respect to
or control over the accounts of specific shareholders. Such shareholders may
obtain access to their accounts and information about their accounts only from
their firm. Certain of these firms may receive compensation from the Trust's
Shareholder Service Agent for recordkeeping and other expenses relating to these
nominee accounts. In addition, certain privileges with respect to the purchase
and redemption of shares (such as check writing redemptions) or the reinvestment
of dividends may not be available through such firms or may only be available
subject to conditions and limitations. Some firms may participate in a program
allowing them access to their clients' accounts for servicing including, without
limitation, transfers of registration and dividend payee changes; and may
perform functions such as generation of confirmation statements and disbursement
of cash dividends. The prospectus should be read in connection with such firm's
material regarding its fees and services.
OTHER INFORMATION. The Trust reserves the right to withdraw all or any part of
the offering made by this prospectus or to reject purchase orders without prior
notice. All orders to purchase shares are subject to acceptance by the Trust and
are not binding until confirmed or accepted in writing. Any purchase that would
result in total account balances for a single shareholder in excess of $3
million is subject to prior approval by the Trust. Share certificates are issued
only on request to the Trust and may not be available for certain types of
accounts. A $10 service fee will be charged when a check for purchase of Fund
shares is returned because of insufficient or uncollected funds or a stop
payment order.
Shareholders should direct their inquiries to the firm from which this
prospectus was obtained or to Zurich Kemper Service Company, the Trust's
"Shareholder Service Agent," 811 Main Street, Kansas City, Missouri 64105-2005.
REDEMPTION OF SHARES
GENERAL. Upon receipt by the Shareholder Service Agent of a request in the form
described below, shares will be redeemed by the Trust at the next determined net
asset value. If processed at 3:00 p.m. Chicago time, the shareholder will
receive that day's dividend. A shareholder may use either the regular or
expedited redemption procedures. Shareholders who redeem all their shares of a
Fund will receive the net asset value of such shares and all declared but unpaid
dividends on such shares.
If shares of the Fund to be redeemed were purchased by check or through certain
Automated Clearing House ("ACH") transactions, the Trust may delay transmittal
of redemption proceeds until it has determined that collected funds have been
received for the purchase of such shares, which will be up to 10 days from
receipt by the Trust of the purchase amount. Shareholders may not use expedited
redemption procedures (wire transfer or Redemption Check) until the shares being
redeemed have been owned for at least 10 days and shareholders may not use such
procedures to redeem shares held in certificated form. There is no delay when
shares being redeemed were purchased by wiring Federal Funds.
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<PAGE> 15
If shares being redeemed were acquired from an exchange of shares of a mutual
fund that were offered subject to a contingent deferred sales charge as
described in the prospectus for that other fund, the redemption of such shares
by the Trust may be subject to a contingent deferred sales charge as explained
in such prospectus.
Shareholders can request the following telephone privileges: expedited wire
transfer redemptions, ACH transactions and exchange transactions for individual
and institutional accounts and pre-authorized telephone redemption transactions
for certain institutional accounts. Shareholders may choose these privileges on
the account application or by contacting the Shareholder Service Agent for
appropriate instructions. Please note that the telephone exchange privilege is
automatic unless the shareholder refuses it on the account application. The
Trust or its agents may be liable for any losses, expenses or costs arising out
of fraudulent or unauthorized telephone requests pursuant to these privileges,
unless the Trust or its agents reasonably believe, based upon reasonable
verification procedures, that the telephone instructions are genuine. THE
SHAREHOLDER WILL BEAR THE RISK OF LOSS, including loss resulting from fraudulent
or unauthorized transactions, as long as the reasonable verification procedures
are followed. The verification procedures include recording instructions,
requiring certain identifying information before acting upon instructions and
sending written confirmations.
Because of the high cost of maintaining small accounts, the Trust reserves the
right to redeem an account that falls below the minimum investment level,
currently $1,000. Thus, a shareholder who makes only the minimum initial
investment and then redeems any portion thereof might have the account redeemed.
A shareholder will be notified in writing and will be allowed 60 days to make
additional purchases to bring the account value up to the minimum investment
level before the Trust redeems the shareholder account.
Firms provide varying arrangements for their clients to redeem Fund shares. Such
firms may independently establish and charge amounts to their clients for such
services.
REGULAR REDEMPTIONS. When shares are held for the account of a shareholder by
the Trust's transfer agent, the shareholder may redeem them by sending a written
request with signatures guaranteed to Zurich Kemper Service Company, P.O. Box
419153, Kansas City, Missouri 64141-6153. When certificates for shares have been
issued, they must be mailed to or deposited with the Shareholder Service Agent,
along with a duly endorsed stock power and accompanied by a written request for
redemption. Redemption requests and a stock power must be endorsed by the
account holder with signatures guaranteed by a commercial bank, trust company,
savings and loan association, federal savings bank, member firm of a national
securities exchange or other eligible financial institution. The redemption
request and stock power must be signed exactly as the account is registered
including any special capacity of the registered owner. Additional documentation
may be requested, and a signature guarantee is normally required, from
institutional and fiduciary account holders, such as corporations, custodians
(e.g., under the Uniform Transfers to Minors Act), executors, administrators,
trustees or guardians.
TELEPHONE REDEMPTIONS. If the proceeds of the redemption are $50,000 or less
and the proceeds are payable to the shareholder of record at the address of
record, normally a telephone request or a written request by any one account
holder without a signature guarantee is sufficient for redemptions by individual
or joint account holders, and trust, executor and guardian account holders
(excluding custodial accounts for gifts and transfers to minors) provided the
trustee, executor or guardian is named in the account registration. Other
institutional account holders and guardian account holders of custodial accounts
for gifts and transfers to minors may exercise this special privilege of
redeeming shares by telephone request or written request without signature
guarantee subject to the same conditions as individual account holders and
subject to the limitations on liability described under "General" above,
provided that this privilege has been pre-authorized by the institutional
account holder or guardian account holder by written instruction to the
Shareholder Service Agent with signatures guaranteed. Telephone requests may be
made by calling 1-800-231-8568. Shares purchased by check or through certain ACH
transactions may not be redeemed under this privilege of redeeming shares by
telephone request until such shares have been owned for at least 10 days. This
privilege of redeeming shares by telephone request or by written request without
a signature guarantee may not be used to redeem shares held in
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<PAGE> 16
certificated form and may not be used if the shareholder's account has had an
address change within 30 days of the redemption request. During periods when it
is difficult to contact the Shareholder Service Agent by telephone, it may be
difficult to use the telephone redemption privilege, although investors can
still redeem by mail. The Trust reserves the right to terminate or modify this
privilege at any time.
EXPEDITED WIRE TRANSFER REDEMPTIONS. If the account holder has given
authorization for expedited wire redemption to the account holder's brokerage or
bank account, shares can be redeemed and proceeds sent by a federal wire
transfer to a single previously designated account. Requests received by the
Shareholder Service Agent prior to 11:00 a.m. Chicago time will result in shares
being redeemed that day and normally the proceeds will be sent to the designated
account that day. Once authorization is on file, the Shareholder Service Agent
will honor requests by telephone at 1-800-231-8568 or in writing, subject to the
limitations on liability described under "General" above. The Trust is not
responsible for the efficiency of the federal wire system or the account
holder's financial services firm or bank. The Trust currently does not charge
the account holder for wire transfers. The account holder is responsible for any
charges imposed by the account holder's firm or bank. There is a $1,000 wire
redemption minimum. To change the designated account to receive wire redemption
proceeds, send a written request to the Shareholder Service Agent with
signatures guaranteed as described above, or contact the firm through which
shares of the Fund were purchased. Shares purchased by check or through certain
ACH transactions may not be redeemed by wire transfer until the shares have been
owned for at least 10 days. Account holders may not use this procedure to redeem
shares held in certificated form. During periods when it is difficult to contact
the Shareholder Service Agent by telephone, it may be difficult to use the
expedited wire transfer redemption privilege. The Trust reserves the right to
terminate or modify this privilege at any time.
EXPEDITED REDEMPTIONS BY DRAFT. Upon request, shareholders will be provided
with drafts to be drawn on the Fund ("Redemption Checks"). These Redemption
Checks may be made payable to the order of any person for not more than $5
million. Shareholders should not write Redemption Checks in an amount less than
$100 since a $10 service fee will be charged as described below. When a
Redemption Check is presented for payment, a sufficient number of full and
fractional shares in the shareholder's account will be redeemed as of the next
determined net asset value to cover the amount of the Redemption Check. This
will enable the shareholder to continue earning dividends until the Trust
receives the Redemption Check. A shareholder wishing to use this method of
redemption must complete and file an Account Information Form which is available
from the Trust or firms through which shares were purchased. Redemption Checks
should not be used to close an account since the account normally includes
accrued but unpaid dividends. The Trust reserves the right to terminate or
modify this privilege at any time. This privilege may not be available through
some firms that distribute Fund shares. In addition, firms may impose minimum
balance requirements in order to obtain this feature. Firms may also impose fees
to investors for this privilege or establish variations of minimum check amounts
if approved by the Trust.
Unless one signer is authorized on the Account Information Form, Redemption
Checks must be signed by all account holders. Any change in the signature
authorization must be made by written notice to the Shareholder Service Agent.
Shares purchased by check or through certain ACH transactions may not be
redeemed by Redemption Check until the shares have been on the Trust's books for
at least 10 days. Shareholders may not use this procedure to redeem shares held
in certificated form. The Trust reserves the right to terminate or modify this
privilege at any time.
The Trust may refuse to honor Redemption Checks whenever the right of redemption
has been suspended or postponed, or whenever the account is otherwise impaired.
A $10 service fee will be charged when a Redemption Check is presented to redeem
Trust shares in excess of the value of a Fund account or in an amount less than
$100; when a Redemption Check is presented that would require redemption of
shares that were purchased by check or certain ACH transactions within 10 days;
or when "stop payment" of a Redemption Check is requested.
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<PAGE> 17
SPECIAL FEATURES
Certain firms that offer shares of the Funds also provide special redemption
features through charge or debit cards and checks that redeem Fund shares.
Various firms have different charges for their services. Shareholders should
obtain information from their firm with respect to any special redemption
features, applicable charges, minimum balance requirements and any special rules
of the cash management program being offered.
Information about the following special features is contained in the Statement
of Additional Information; and further information may be obtained without
charge from ZKDI: Exchange Privilege; Systematic Withdrawal Program and
Automated Clearing House Programs.
DIVIDENDS AND TAXES
DIVIDENDS. Dividends are declared daily and paid monthly. Shareholders may
select one of the following ways to receive dividends:
1. REINVEST DIVIDENDS at net asset value into additional shares of a Fund.
Dividends are normally reinvested on the next to last business day of the month.
Dividends will be reinvested unless the shareholder elects to receive them in
cash.
2. RECEIVE DIVIDENDS IN CASH if so requested. Checks will be mailed monthly,
within five business days of the reinvestment date, to the shareholder or any
person designated by the shareholder.
A Fund reinvests dividend checks (and future dividends) in shares of the Fund if
checks are returned as undeliverable. Dividends and other distributions of a
Fund in the aggregate amount of $10 or less are automatically reinvested in
shares of the Fund unless the shareholder requests that such policy not be
applied to the shareholder's account.
TAXES. The Florida, New Jersey and Pennsylvania Funds intend to qualify, and the
New York Fund intends to continue to qualify, as regulated investment companies
under Subchapter M of the Internal Revenue Code (the "Code") and, if so
qualified, will not be subject to federal income taxes to the extent its
earnings are distributed. Each Fund also intends to meet the requirements of the
Code applicable to regulated investment companies distributing tax-exempt
interest dividends and, therefore, dividends representing net interest received
on Municipal Securities will not be includable by shareholders in their gross
income for federal income tax purposes, except to the extent such interest is
subject to the alternative minimum tax as discussed hereinafter. Dividends
representing taxable net investment income (such as net interest income from
temporary investments in obligations of the U.S. Government) and net short-term
capital gains, if any, are taxable to shareholders as ordinary income.
Dividends declared in October, November or December to shareholders of record as
of a date in one of those months and paid during the following January are
treated as paid on December 31 of the calendar year in which declared for
federal income tax purposes. Each Fund may adjust its schedule for dividend
reinvestment for the month of December to assist it in complying with reporting
and minimum distribution requirements contained in the Code.
Net interest on certain "private activity bonds" issued on or after August 8,
1986 is treated as an item of tax preference and may, therefore, be subject to
both the individual and corporate alternative minimum tax. To the extent
provided by regulations to be issued by the Secretary of the Treasury,
exempt-interest dividends from a Fund are to be treated as interest on private
activity bonds in proportion to the interest a Fund receives from private
activity bonds, reduced by allowable deductions. For the 1996 calendar year 18%
of the net interest income for the New York Fund was derived from "private
activity bonds".
Exempt-interest dividends, except to the extent of interest from "private
activity bonds," are not treated as a tax preference item. For a corporate
shareholder, however, such dividends will be included in determining such
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<PAGE> 18
corporate shareholder's "adjusted current earnings." Seventy-five percent of the
excess, if any, of "adjusted current earnings" over the corporate shareholder's
other alternative minimum taxable income with certain adjustments will be a
tax-preference item. Corporate shareholders are advised to consult their tax
advisers with respect to alternative minimum tax consequences.
Shareholders will be required to disclose on their federal income tax returns
the amount of tax-exempt interest earned during the year, including
exempt-interest dividends received from a Fund.
Individuals whose modified income exceeds a base amount will be subject to
federal income tax on up to 85% of their Social Security benefits. Modified
income includes adjusted gross income, tax-exempt interest, including
exempt-interest dividends from a Fund, and 50% of Social Security benefits.
FLORIDA FUND. Dividends paid by the Florida Fund to individual shareholders will
not be subject to the Florida income tax since Florida does not impose a
personal income tax. Dividends paid by the Florida Fund will be taxable to
corporate shareholders that are subject to the Florida corporate income tax.
Additionally, Florida imposes an "intangibles tax" at the rate of $2.00 per
$1,000 of taxable value of certain securities and other intangible assets owned
by Florida residents. U.S. Government securities and Florida Municipal
Securities are exempt from this intangibles tax. If, on December 31 of any year,
the Florida Fund's portfolio consists of both exempt and non-exempt assets, then
only the portion of the value of the Florida Fund's shares attributable to U.S.
Government securities will be exempt from the Florida intangibles tax payable in
the following year. Thus, in order to take full advantage of the exemption from
the intangibles tax in any year, the Florida Fund would be required to sell all
non-exempt assets held in its portfolio and reinvest the proceeds in exempt
assets prior to December 31. Transaction costs involved in restructuring the
portfolio in this fashion would likely reduce the Florida Fund's investment
return and might exceed any increased investment return the Florida Fund
achieved by investing in non-exempt assets during the year.
NEW JERSEY FUND. Dividends paid by the New Jersey Fund will be exempt from New
Jersey Gross Income Tax to the extent that the dividends are derived from
interest on obligations of the state or its political subdivisions or
authorities or on obligations issued by certain other government authorities or
from capital gains from the disposition of such obligations, as long as the New
Jersey Fund meets certain investment and filing requirements necessary to
establish and maintain its status as a "Qualified Investment Fund" in New
Jersey. It is the New Jersey Fund's intention to satisfy these requirements and
maintain Qualified Investment Fund status. Dividends paid by the New Jersey Fund
derived from interest on non-exempt assets will be subject to New Jersey Gross
Income Tax. Dividends paid by the New Jersey Fund will be taxable to corporate
shareholders subject to the New Jersey corporation business (franchise) tax.
NEW YORK FUND. Dividends paid by the New York Fund representing net interest
received on New York Municipal Securities will be exempt from New York State and
New York City income taxes. Dividends paid by the New York Fund will be taxable
to corporate shareholders that are subject to New York State and New York City
corporate franchise tax.
PENNSYLVANIA FUND. Dividends paid by the Pennsylvania Fund will be exempt from
Pennsylvania income tax to the extent that the dividends are derived from
interest on obligations of Pennsylvania, any public authority, commissions,
board or other state agency, any political subdivision of the state or its
public authority, and certain obligations of the U.S. or its territories
(including Puerto Rico, Guam and the Virgin Islands). Dividends paid by the
Pennsylvania Fund representing interest income on Pennsylvania Municipal
Securities are also generally exempt from the Philadelphia School District
Income Tax for residents of Philadelphia and from the intangibles tax for the
City and School District of Pittsburgh for residents of Pittsburgh. Shareholders
of the Pennsylvania Fund who are subject to the Pennsylvania property tax in
their county of residence will be exempt from county personal property tax to
the extent that the portfolio of the Pennsylvania Fund consists of such exempt
obligations on the annual assessment date of January 1.
15
<PAGE> 19
GENERAL. The tax exemption for federal income tax purposes of dividends from a
Fund does not necessarily result in exemption under the income or other tax laws
of any state or local taxing authority. The laws of the several states and local
taxing authorities vary with respect to the taxation of such income, and
shareholders of a Fund are advised to consult their own tax advisers in that
regard and as to the status of their accounts under state and local tax laws.
Each Fund is required by law to withhold 31% of taxable dividends paid to
certain shareholders who do not furnish a correct taxpayer identification number
(in the case of individuals, a social security number) and in certain other
circumstances.
Shareholders normally will receive monthly confirmations of dividends and of
purchase and redemption transactions. Firms may provide varying arrangements
with their clients with respect to confirmations. Tax information will be
provided annually. Shareholders are encouraged to retain copies of their account
confirmation statements or year-end statements for tax reporting purposes.
However, those who have incomplete records may obtain historical account
transaction information at a reasonable fee.
INVESTMENT MANAGER AND SHAREHOLDER SERVICES
INVESTMENT MANAGER. Zurich Kemper Investments, Inc. ("ZKI"), 222 South Riverside
Plaza, Chicago, Illinois 60606, is the investment manager of each Fund and
provides the Funds with continuous professional investment supervision. ZKI is
one of the largest investment managers in the country and has been engaged in
the management of investment funds for more than forty-eight years. ZKI and its
affiliates provide investment advice and manage investment portfolios for the
Kemper Funds, Zurich Money Funds, affiliated insurance companies and other
corporate, pension, profit-sharing and individual accounts representing
approximately $79 billion under management including $9 billion in money market
fund assets and $5 billion in tax-exempt assets. ZKI acts as investment adviser
for 31 open-end and seven closed-end investment companies, with 78 separate
investment portfolios, representing more than 2.5 million shareholder accounts.
ZKI is an indirect subsidiary of Zurich Insurance Company, an internationally
recognized provider of financial services in property/casualty and life
insurance, reinsurance and asset management.
Responsibility for overall management of the Trust rests with its Board of
Trustees and officers. Professional investment supervision is provided by ZKI.
The investment management agreement provides that ZKI shall act as each Fund's
investment adviser, manage its investments and provide it with various services
and facilities. For the services and facilities furnished, the Funds pays an
annual investment management fee, payable monthly, on a graduated basis of .22%
of the first $500 million of combined average daily net assets of all Funds,
.20% of the next $500 million, .175% of the next $1 billion, .16% of the next $1
billion and .15% of combined average daily net assets over $3 billion of all
Funds. ZKI has agreed to temporarily waive its management fee and absorb
operating expenses to the extent, if any, that such expenses, as defined below,
exceed .80% of average daily net assets of the New York Fund and .90% of the
average daily net assets of each of the Florida, New Jersey and Pennsylvania
Funds. For this purpose, "operating expenses" of a Fund does not include taxes,
interest, extraordinary expenses, brokerage commissions or transaction costs.
Upon notice to the Trust, ZKI may at any time terminate any waiver or absorption
of operating expenses. In addition, from time to time, ZKI may voluntarily
absorb certain additional operating expenses of a Fund. The level of this
voluntary expense absorption shall be in ZKI's discretion and is in addition to
ZKI's agreement to absorb certain operating expenses of the Funds described
above.
DISTRIBUTOR AND ADMINISTRATOR. Pursuant to an administration, shareholder
services and distribution agreement ("distribution agreement"), Zurich Kemper
Distributors, Inc. ("ZKDI"), 222 South Riverside Plaza, Chicago, Illinois 60606,
an affiliate of ZKI, serves as distributor, administrator and principal
underwriter of each Fund to provide information and administrative and
distribution services for existing and potential shareholders. The
16
<PAGE> 20
distribution agreement provides that ZKDI shall act as agent for each Fund for
the sale of Fund shares and shall appoint various financial services firms
("firms"), such as broker-dealers and banks, to provide a cash management
service for their customers or clients through a Fund. The firms are to provide
such office space and equipment, telephone facilities, personnel and sales
literature distribution as is necessary or appropriate for providing information
and services to the firms' clients. For its services under the distribution
agreement, the Trust pays ZKDI an annual distribution services fee, payable
monthly, of .50% of average daily net assets of each Fund. The fee is accrued
daily as an expense of each Fund.
ZKDI has related administrative services and selling group agreements with
various broker-dealer firms to provide cash management and other services for
Fund shareholders. ZKDI also has services agreements with banking firms to
provide such services, except for certain underwriting or distribution services
which the banks may be prohibited from providing under the Glass-Steagall Act,
for their clients who wish to invest in a Fund. If the Glass-Steagall Act should
prevent banking firms from acting in any capacity or providing any of the
described services, management will consider what action, if any, is
appropriate. Management does not believe that termination of a relationship with
a bank would result in any material adverse consequences to the Trust. Banks or
other financial services firms may be subject to various state laws regarding
the services described above and may be required to register as dealers pursuant
to state law. ZKDI normally pays the firms at a maximum annual rate of .50% of
average daily net assets of those accounts that they maintain and service. ZKDI
may elect to keep a portion of the total distribution services fee to compensate
itself for functions performed for a Fund or to pay for sales materials or other
promotional activities. Since the distribution agreement provides for fees that
are used by ZKDI to pay for distribution and administration services, the
agreement along with the related administration services and selling group
agreements and the plan contained therein are approved and reviewed in
accordance with Rule 12b-1 under the 1940 Act, which regulates the manner in
which an investment company may, directly or indirectly, bear the expenses of
distributing its shares.
Since the fee payable to ZKDI under the distribution agreement is based upon a
percentage of the average daily net assets of each Fund and not upon the actual
expenditures of ZKDI, the expenses of ZKDI (which may include overhead expense)
may be more or less than the fees received by it under the distribution
agreement. For example, during the fiscal year ended March 31, 1997 for the New
York Fund, ZKDI incurred expenses under the distribution agreement of
approximately $ , while it received an aggregate fee under the
distribution agreement of $ . If the distribution agreement is terminated
in accordance with its terms, the obligation of the Trust to make payments to
ZKDI pursuant to the distribution agreement will cease and the Funds will not be
required to make any payments past the termination date. Thus, there is no legal
obligation for a Fund to pay any excess expenses incurred by ZKDI over its fees
under the distribution agreement if, for any reason, the distribution agreement
is terminated in accordance with its terms. Any cumulative expenses incurred by
ZKDI in excess of fees received may or may not be recovered through future fees
under the distribution agreement.
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary
Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Trust. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Trust. IFTC
also is the Trust's transfer and dividend-paying agent. Pursuant to a services
agreement with IFTC, Zurich Kemper Service Company, 811 Main Street, Kansas
City, Missouri 64105, an affiliate of ZKI, serves as Shareholder Service Agent
of the Trust.
PERFORMANCE
From time to time, a Fund may advertise several types of performance information
including "yield," "effective yield," and "tax equivalent yield." Each of these
figures is based upon historical earnings and is not representative of the
future performance of a Fund. The yield of a Fund refers to the net investment
income generated by a
17
<PAGE> 21
hypothetical investment in the Fund over a specific seven-day period. This net
investment income is then annualized, which means that the net investment income
generated during the seven-day period is assumed to be generated each week over
an annual period and is shown as a percentage of the investment. The effective
yield is calculated similarly, but the net investment income earned by the
investment is assumed to be compounded weekly when annualized. The effective
yield will be slightly higher than the yield due to this compounding effect. Tax
equivalent yield is the yield that a taxable investment must generate in order
to equal the Fund's yield for an investor in a stated federal and, if
applicable, state and local income tax bracket (normally assumed to be the
maximum tax rate). Tax equivalent yield is based upon, and will be higher than,
the portion of a Fund's yield that is tax-exempt.
The performance of a Fund may be compared to that of other money market mutual
funds or mutual fund indexes as reported by independent mutual fund reporting
services such as Lipper Analytical Services, Inc. A Fund's performance and its
relative size may be compared to other money market mutual funds as reported by
IBC/Financial Data, Inc.'s or Money Market Insight(R), reporting services on
money market funds. Investors may want to compare a Fund's performance on an
after-tax basis to that of various bank products as reported by BANK RATE
MONITOR(TM), a financial reporting service that weekly publishes average rates
of bank and thrift institution money market deposit accounts and interest
bearing checking accounts or various certificate of deposit indexes. The
performance of a Fund also may be compared to that of U.S. Treasury bills and
notes. Certain of these alternative investments may offer fixed rates of return
and guaranteed principal and may be insured. In addition, investors may want to
compare a Fund's performance to the Consumer Price Index either directly or by
calculating its "real rate of return," which is adjusted for the effects of
inflation.
Information may be quoted from publications such as MORNINGSTAR, INC., THE WALL
STREET JOURNAL, MONEY MAGAZINE, FORBES, BARRON'S, FORTUNE, THE CHICAGO TRIBUNE,
USA TODAY, INSTITUTIONAL INVESTOR and REGISTERED REPRESENTATIVE. A Fund may
depict the historical performance of the securities in which it may invest over
periods reflecting a variety of market or economic conditions either alone or in
comparison with alternative investments, performance indexes of those
investments or economic indicators. A Fund may also describe its portfolio
holdings and depict its size or relative size compared to other mutual funds,
the number and make-up of its shareholder base and other descriptive factors
concerning the Fund.
A Fund's yield will fluctuate. Shares of a Fund are not insured. Additional
information concerning a Fund's performance appears in the Statement of
Additional Information.
CAPITAL STRUCTURE
The Trust is an open-end, non-diversified management investment company, which
was organized under the name "Tax-Exempt New York Money Market Fund" as a
business trust under the laws of Massachusetts on March 2, 1990 with a single
investment portfolio. On May 31, 1997 the Trust changed its name from "Tax-
Exempt New York Money Market Fund" to "Investors Municipal Cash Fund."
The Trust may issue an unlimited number of shares of beneficial interest in one
or more series or "Funds," all having no par value, which may be divided by the
Board of Trustees into classes of shares, subject to compliance with the
Securities and Exchange Commission regulations permitting the creation of
separate classes of shares. Currently, the Trust has four Funds. None of the
Funds' shares are divided into classes. The Board of Trustees may authorize the
issuance of additional Funds if deemed desirable, each with its own investment
objective, policies and restrictions. Since the Trust offers multiple Funds, it
is known as a "series company." Shares of a Fund have equal noncumulative voting
rights and equal rights with respect to dividends, assets and liquidation of
such Fund subject to any preferences, rights or privileges of any classes of
shares within the Fund. Generally each class of shares issued by a particular
Fund would differ as to the allocation of certain expenses of the Fund such as
distribution and administrative expenses, permitting, among other things,
different levels of services or methods of distribution among various classes.
Shares are fully paid and nonassessable when issued, are
18
<PAGE> 22
transferable without restriction and have no preemptive or conversion rights.
The Trust is not required to hold annual shareholders' meetings, and does not
intend to do so. However, it will hold special meetings as required or deemed
desirable for such purposes as electing trustees, changing fundamental policies
or approving an investment management agreement. Subject to the Agreement and
Declaration of Trust of the Trust, shareholders may remove trustees.
Shareholders will vote by Fund and not in the aggregate or by class except when
voting in the aggregate is required under the 1940 Act, such as for the election
of trustees, or when the Board of Trustees determines that voting by class is
appropriate.
19
<PAGE> 23
<TABLE>
<CAPTION>
<S> <C>
INVESTORS
MUNICIPAL
CASH FUND
PROSPECTUS
MAY 31, 1997
INVESTORS FLORIDA
MUNICIPAL CASH FUND
INVESTORS NEW JERSEY
MUNICIPAL CASH FUND
INVESTORS PENNSYLVANIA
MUNICIPAL CASH FUND
TAX-EXEMPT NEW YORK
MONEY MARKET FUND
TNYMF-1 5/97 (LOGO)printed on recycled paper
</TABLE>
<PAGE> 24
TAX-EXEMPT NEW YORK MONEY MARKET FUND
CROSS-REFERENCE SHEET
BETWEEN ITEMS ENUMERATED IN PART B
OF FORM N-1A AND STATEMENT OF ADDITIONAL INFORMATION
<TABLE>
<CAPTION>
ITEM NUMBER LOCATION IN STATEMENT OF
OF FORM N-1A ADDITIONAL INFORMATION
------------ ------------------------
<S> <C> <C>
10. Cover Page............................... Cover Page
11. Table of Contents........................ Table of Contents
12. General Information and History.......... Inapplicable
13. Investment Objectives and Policies....... Municipal Securities; Investment Restrictions;
Appendix--Ratings of Investments
14. Management of the Fund................... Investment Manager and Shareholder Services;
Officers and Trustees
15. Control Persons and Principal Holders of
Securities............................... Officers and Trustees
16. Investment Advisory and Other Services... Investment Manager and Shareholder Services; Officers
and Trustees
17. Brokerage Allocation and Other
Practices................................ Portfolio Transactions
18. Capital Stock and Other Securities....... Dividends, Net Asset Value and Taxes;
Shareholder Rights
19. Purchase, Redemption and Pricing of
Securities Being Offered................. Purchase and Redemption of Shares
20. Tax Status............................... Dividends, Net Asset Value and Taxes
21. Underwriters............................. Investment Manager and Shareholder Services
22. Calculations of Performance Data......... Performance
23. Financial Statements..................... Financial Statements
</TABLE>
<PAGE> 25
INVESTORS MUNICIPAL CASH FUND
STATEMENT OF ADDITIONAL INFORMATION
MAY 31, 1997
INVESTORS FLORIDA MUNICIPAL CASH FUND ("FLORIDA FUND")
INVESTORS NEW JERSEY MUNICIPAL CASH FUND ("NEW JERSEY FUND")
INVESTORS PENNSYLVANIA MUNICIPAL CASH FUND ("PENNSYLVANIA FUND")
TAX-EXEMPT NEW YORK MONEY MARKET FUND ("NEW YORK FUND")
222 SOUTH RIVERSIDE PLAZA, CHICAGO, ILLINOIS 60606
1-800-231-8568
This Statement of Additional Information is not a prospectus and should be read
in conjunction with the prospectus of Investors Municipal Cash Fund (the
"Trust") dated May 31, 1997. The prospectus may be obtained without charge from
the Trust.
------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Municipal Securities........................................ B-1
Investment Restrictions..................................... B-6
Investment Manager and Shareholder Services................. B-9
Portfolio Transactions...................................... B-11
Purchase and Redemption of Shares........................... B-12
Dividends, Net Asset Value and Taxes........................ B-12
Performance................................................. B-14
Officers and Trustees....................................... B-18
Special Features............................................ B-19
Shareholder Rights.......................................... B-21
Report of Independent Auditors (May , 1997)............... B-22
Statement of Net Assets (May , 1997)...................... B-23
Appendix--Ratings of Investments............................ B-24
</TABLE>
The financial statements appearing in the New York Fund's 1997 Annual Report to
Shareholders are incorporated herein by reference. The New York Fund's Annual
Report accompanies this Statement of Additional Information.
TNYMF 33 5/97 (LOGO)printed on recycled paper
<PAGE> 26
MUNICIPAL SECURITIES
Municipal Securities that a Fund may purchase include, without limitation, debt
obligations issued to obtain funds for various public purposes, including the
construction of a wide range of public facilities such as airports, bridges,
highways, housing, hospitals, mass transportation, public utilities, schools,
streets, and water and sewer works. Other public purposes for which Municipal
Securities may be issued include refunding outstanding obligations, obtaining
funds for general operating expenses and obtaining funds to loan to other public
institutions and facilities.
Municipal Securities, such as industrial development bonds, are issued by or on
behalf of public authorities to obtain funds for purposes including privately
operated airports, housing, conventions, trade shows, ports, sports, parking or
pollution control facilities or for facilities for water, gas, electricity or
sewage and solid waste disposal. Such obligations, which may include lease
arrangements, are included within the term Municipal Securities if the interest
paid thereon qualifies as exempt from federal income taxes. Other types of
industrial development bonds, the proceeds of which are used for the
construction, equipment, repair or improvement of privately operated industrial
or commercial facilities, may constitute Municipal Securities, although the
current federal tax laws place substantial limitations on the size of such
issues.
Municipal Securities generally are classified as "general obligation" or
"revenue." General obligation notes are secured by the issuer's pledge of its
faith, credit and taxing power for the payment of principal and interest.
Revenue notes are payable only from the revenues derived from a particular
facility or class of facilities or, in some cases, from the proceeds of a
special excise or other specific revenue source. Industrial development bonds
which are Municipal Securities are in most cases revenue bonds and generally do
not constitute the pledge of the credit of the issuer of such bonds.
Examples of Municipal Securities which are issued with original maturities of
one year or less are short-term tax anticipation notes, bond anticipation notes,
revenue anticipation notes, construction loan notes, pre-refunded municipal
bonds, warrants and tax-free commercial paper.
Tax anticipation notes typically are sold to finance working capital needs of
municipalities in anticipation of receiving property taxes on a future date.
Bond anticipation notes are sold on an interim basis in anticipation of a
municipality issuing a longer term bond in the future. Revenue anticipation
notes are issued in expectation of receipt of other types of revenue such as
those available under the Federal Revenue Sharing Program. Construction loan
notes are instruments insured by the Federal Housing Administration with
permanent financing by "Fannie Mae" (the Federal National Mortgage Association)
or "Ginnie Mae" (the Government National Mortgage Association) at the end of the
project construction period. Pre-refunded municipal bonds are bonds which are
not yet refundable, but for which securities have been placed in escrow to
refund an original municipal bond issue when it becomes refundable. Tax-free
commercial paper is an unsecured promissory obligation issued or guaranteed by a
municipal issuer. Each Fund may purchase other Municipal Securities similar to
the foregoing that are or may become available, including securities issued to
pre-refund other outstanding obligations of municipal issuers.
The Federal bankruptcy statutes relating to the adjustments of debts of
political subdivisions and authorities of states of the United States provide
that, in certain circumstances, such subdivisions or authorities may be
authorized to initiate bankruptcy proceedings without prior notice to or consent
of creditors, which proceedings could result in material and adverse changes in
the rights of holders of obligations issued by such subdivisions or authorities.
Litigation challenging the validity under state constitutions of present systems
of financing public education has been initiated or adjudicated in a number of
states, and legislation has been introduced to effect changes in public school
finances in some states. In other instances there has been litigation
challenging the issuance of pollution control revenue bonds or the validity of
their issuance under state or Federal law which litigation ultimately could
affect the validity of those Municipal Securities or the tax-free nature of the
interest thereon.
B-1
<PAGE> 27
The following information as to certain risk factors is given to investors
because each Fund concentrates its investments in either Florida, New Jersey,
New York or Pennsylvania Municipal Securities (as defined in the prospectus).
Such information constitutes only a summary, does not purport to be a complete
description and is based upon information from official statements relating to
securities offerings of Florida, New Jersey, New York and Pennsylvania issuers.
FLORIDA FUND. In 1992, Florida voters approved a constitutional amendment
referred to as "Save Our Homes." This amendment limits ad valorem taxes on
homestead properties and restricts the ability of taxing entities to increase
real property taxes. While property taxes levied for payment of debt service are
not restricted by the limitation, the overall creditworthiness of the
governmental entity may be adversely affected. Taxing entities consisting
primarily of residential areas, particularly school districts, and those
entities close to their tax rate limitations are most likely to be adversely
affected.
Under current law, the State of Florida is required to maintain a balanced
budget such that current expenses are met from current revenues. Although
Florida does not currently impose an individual income tax, it does impose a
corporate income tax that is allocable to the State, in addition to an ad
valorem tax on intangible personal property and sales and use taxes. These taxes
are a major source of funds to meet Florida expenses, including repayment of,
and interest on, obligations backed solely by the full faith and credit of the
State, without recourse to any specific project.
Florida has experienced substantial population increases as a result of
migration to Florida from other areas of the United States and from foreign
countries which is expected to continue. Florida's growth was close to three
times the national average during the 1980's. This pace fueled concerns about
the need for resource management and conservation. Although growth has slowed
recently to about twice the national 1% annual rate, it is expected to remain
well above average for the indefinite future. According to the 1990 census
report, Florida's population of 12.7 million was the fourth highest in the
nation and 31% above 1980's 9.7 million, and it is expected to approach 15
million by 2000. It is anticipated that corresponding increases in State
revenues will be necessary during this decade to meet increased burdens on the
various public and social services provided by Florida.
Florida's ability to meet the needs of its population will depend in part upon
its ability to foster business and economic growth. Florida's economy picked up
in 1993, partly due to the rebuilding following Hurricane Andrew (discussed
below) and to some resurgence in the nationwide economy. Real gross state
product grew 4.1% in 1995, down from 4.9% in 1994. Employment numbers reflect
the improved economic picture in the State. The unemployment rate for 1995 was
5.5%, after peaking at 8.2% in 1992. Commercial construction remained weak while
residential construction improved. Construction has shifted to lower-valued
multi-family units rather than the higher priced single-family homes.
International trade continues to grow in southern Florida. Almost 10% of the
state's workforce are directly or indirectly involved in foreign trade. Florida
also continues to experience employment gains in the technology-based industry,
the light manufacturing industry and the service sector. Service industry
payrolls grew by 109,000 jobs in fiscal year 1994-1995. This growth rate is
expected to stabilize over the next several years. Healthcare jobs are
forecasted to be a large contributor to the increase in service industry jobs.
The largest contributor is business services. This growth continues to diversify
and better position Florida's overall economy, which was previously dominated by
agriculture and tourism. Tourism remains a major industry in the state and
accounts for 11% of Florida's economy. The number of visitors to the state had
steadily grown; however, in 1991 the number had dropped for the first time.
Visitors have steadily increased since then and the state is expecting an
increase of 4% for 1997. The number of visitors to the state in 1996 is expected
to exceed 42 million. Latin Americans have become an increasingly larger portion
of the number of visitors to the state. The tourism industry directly employs
about 900,000 people and generates $33 billion in taxable spending. Florida's
future economic and business growth could be restricted by the natural
limitations of available environmental resources and the ability to finance
adequate public facilities such as roads and schools.
B-2
<PAGE> 28
In August 1992, Hurricane Andrew, the costliest natural disaster in Florida's
history, hit Southern Dade County. Hurricane Andrew was very localized and hurt
primarily Southern Dade County including wiping out the City of Homestead. There
have been no adverse credit implications from the Hurricane for local
governmental units or the State. The Hurricane has actually had an economic
stimulating effect on Dade County and some surrounding areas as disaster aid and
insurance refunds are received. Construction of homes and purchases of large
items has boomed. The boom in construction and large ticket purchases has led to
higher employment levels as well as increased sales tax receipts, the largest
revenue source for the State of Florida. In December 1993, the State Legislature
established the Hurricane Andrew Recovery and Rebuilding Trust Fund funded from
transfers from sales tax collections attributed to Hurricane Andrew. These funds
are earmarked for Dade County.
Despite Florida's rapid growth and recent acceleration in debt financing, the
State's debt burden remains lower than that of other large population states.
Net debt payable from state revenues is $613 per capita.
Fiscal year 1995 ended with a General Fund balance of $340.5 million including
$219.9 million in the working capital fund and $120 million in the budget
stabilization fund. Year-to-date fiscal year 1996 is expected to end on target.
Sales tax collection are basically on target with estimates while corporate
income tax collections are well above. Fiscal year 1996 will be the first year
the State must operate under the revenue growth cap established in 1994. Revenue
growth is limited to a five year average growth in personal income. For fiscal
year 1996 this totaled 5.87% or $20.7 billion. The State's continued population
growth, reliance on sales tax receipts for its major revenue source, growing
capital needs and the limitation placed on revenue growth will continue to
challenge the State's ability to maintain a strong financial position.
The State's economy should continue to benefit from good population growth,
economic diversification and an increase in foreign trade. These positive
economic factors combined with the State's moderate debt burden suggest a
certain level of stability in the State's credit outlook.
As of December 12, 1996, the State's general obligation debt was rated Aa by
Moody's Investors Service, Inc. ("Moody's") and AA by Standard & Poor's
Corporation ("S&P").
NEW JERSEY FUND. New Jersey is the ninth most populous state in the nation. Per
capita income in 1993 was the second highest of the states and 129% of the
national average. The distribution of employment in New Jersey mirrors that of
the nation. After an extraordinary boom in the mid-1980's, New Jersey and the
rest of the Northeast fell into a recession a year before the national recession
officially began. Along with the rest of the Northeast, New Jersey climbed out
of the recession more slowly than the rest of the nation. Since 1992, the
unemployment rate in New Jersey has exceeded the national average; the
unemployment rates for New Jersey and the nation during the first quarter of
1995 were 6.9% and 5.9%, respectively.
New Jersey has a complicated debt structure. The State has $3.6 billion in G.O.
debt outstanding, nearly $2.0 billion in appropriation backed debt, and another
$1.2 billion in other tax-supported debt. Net tax-supported debt per capita is
$864, or twice the median and eleventh in the nation. Net tax-supported debt
represents 3.2% of personal income, 50% above the median and fifteenth in the
nation.
On a GAAP ("Generally Accepted Accounting Principles") basis, New Jersey has
achieved a surplus in each of the last three fiscal years, increasing its fund
balance to a large 12% of expenditures. On a budgetary basis, the State has
purposely drawn down the undesignated General Fund fund balance in recent years.
Even so, at the end of fiscal year 1994, the undesignated fund balance was 6% of
expenditures on a GAAP basis. Preliminary numbers for fiscal year 1995 indicate
a modest budgetary deficit, smaller than planned; the GAAP results cannot be
predicted yet. The fiscal year 1996 budget substantially reduces the reliance on
one-shots, and assumes a slower economy than in 1995. The budget has been well
received by the rating agencies.
The New Jersey Constitution provides, in part, that no money shall be drawn from
the State treasury except for appropriations made by law and that no law
appropriating money for any State purpose shall be enacted if the appropriations
contained therein, together with all prior appropriations made for the same
fiscal period, shall
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<PAGE> 29
exceed the total amount of the revenue on hand and anticipated to be available
to meet such appropriations during such fiscal period, as certified by the
Governor.
The Local Government Cap Law (the "Cap Law") generally limits the year-to-year
increase of the total appropriations of any municipality and the tax levy of any
county to either five percent or an index rate determined annually by the
Director, whichever is less. However, where the index percentage rate exceeds
five percent, the Cap Law permits the governing body of any municipality or
county to approve the use of a higher percentage rate up to the index rate.
Further, where the index percentage rate is less than five percent, the Cap Law
also permits the governing body of any municipality or county to approve the use
of a higher percentage rate up to five percent. Regardless of the rate utilized,
certain exceptions exist to the Cap Law's limitation on increases in
appropriations. The principal exceptions to this limitation are municipal and
county appropriations to pay debt service requirements; to comply with certain
other State or federal mandates; amounts approved by referendum; and, in the
case of municipalities only, to fund the preceding year's cash deficit or to
reserve for shortfalls in tax collections.
State law also regulates the issuance of debt by local units. The Local Budget
Law limits the amount of tax anticipation notes that may be issued by local
units and requires the repayment of such notes within 120 days of the end of the
fiscal year (six months in the case of the counties) in which issued. With
certain exceptions, no local unit is permitted to issue bonds for the payment of
current expenses. Local units may not issue bonds to pay outstanding bonds,
except for refunding purposes and then only with the approval of the Local
Finance Board. Local units may issue bond anticipation notes for temporary
periods not exceeding in the aggregate approximately ten years from the date of
first issue. The debt that any local unit may authorize is limited to a
percentage of its equalized valuation basis, which is the average of the
equalized value of all taxable real property and improvements within the
geographic boundaries of the local unit, as annually determined by the Director
of the Division of Taxation, for each of the three most recent years.
As of October, 1996, the State's general obligation ratings were Aa1 by Moody's,
AA+ by S&P and AA+ by Fitch Investors Services, Inc.
NEW YORK FUND. With a population of 18 million, New York ranks third in
population among the fifty states. According to the census, New York gained 2.5%
in population between 1980 and 1990 after a loss of 3.7% in the prior decade.
New York City accounts for about 40% of the State's population. New York ranks
fourth in the nation in personal income; in 1995, per capita personal income was
119% of the national average. Employment peaked in 1989 at 8.2 million, and
declined 425,000 between 1989 and 1992. This was the most severe job loss since
recordkeeping began in 1939. Since then, the State has gained back about 200,000
private sector jobs, while government employment declined by 53,000. Employment
distribution is similar to that of the nation as a whole, except for a higher
concentration in Finance, Insurance and Real Estate (9.0% versus 5.8%
nationally), and a lower concentration in manufacturing (11.8% versus 15.3%
nationally). Unemployment is historically more cyclical than for the United
States as a whole, with lower unemployment in good times and higher unemployment
in bad. Since 1991, New York unemployment has exceeded the U.S. average.
The State's financial performance in fiscal year 1995 was relatively good due to
higher than budgeted growth in personal income taxes. The State still has an
accumulated deficit in its General Fund equal to 5% of expenditures.
Numerous bonds issued by various State agencies and authorities are either
guaranteed by the State or supported by the State through lease-purchase
arrangements, other contractual obligations or moral obligation provisions. As
of December 31, 1995, the principal amount of New York State general obligation
bonds outstanding was $5.2 billion and the principal amount of state-guaranteed
and lease-purchase debt outstanding was $23 billion. In addition, the State has
committed itself on other debt, the outstanding amount of which is $358 million;
much of this debt is self-supporting from outside revenue sources. The State has
had to make large appropriations in recent years to enable State agencies to
meet their financial obligations and, in some
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<PAGE> 30
cases, prevent default. Additional assistance will probably be required in this
and later years since certain localities and authorities, particularly the
Metropolitan Transit Authority, continue to experience financial difficulties.
Between fiscal year 1992 and fiscal year 1994, New York materially improved its
finances. At the end of fiscal year 1991, the accumulated General Fund deficit
exceeded $6 billion on a GAAP basis. By the close of fiscal year 1996 the
deficit had been reduced to less than $3 billion. The State's fiscal year 1997
budget projects an ending cash surplus of $1.3 billion, the result of higher tax
revenues and greater than expected cost containment.
Certain other State agencies, such as the New York State Urban Development
Corporation ("UDC"), the Battery Park City Authority and the Housing Finance
Agency ("HFA") are also dependent upon State legislative appropriations in order
to meet their bond obligations. In February, 1975, UDC defaulted on $1 billion
of its short-term notes and the State appropriated amounts to cure the default.
HFA has a $390 million mortgage on the Co-op City Project located in New York
City. Co-op City has had difficulties in meeting its mortgage payments to HFA
owing to rent strikes by tenants, disputes with the City of New York and other
factors. Yonkers and Buffalo have also experienced financial difficulties, which
have required State appropriations to meet the financial obligations of both
cities. In the case of Yonkers, a State agency that has been monitoring finances
since 1984 took control of all City spending in view of court fines and
financial problems resulting from Yonkers' refusal and delay in implementing a
Court ordered desegregation plan. In addition, counties and other localities on
Long Island have financial problems, including those relating to the Long Island
Lighting Company's construction of its Shoreham nuclear power facility, which
could lead to requests for additional State assistance.
In 1975, New York City (the "City") suffered several financial crises. To help
New York City out of its financial difficulties, the State legislature created
the Municipal Assistance Corporation ("MAC") in 1975. MAC has the authority to
issue bonds and notes and pay or lend the proceeds to the City. MAC also has the
authority to exchange its obligations for City obligations. MAC bonds are
payable out of certain State sales and use taxes imposed within the City, State
stock transfer taxes and per capita State aid to the City. The State is not,
however, obligated to continue these taxes, nor to continue appropriating
revenues from these taxes, nor to continue the appropriation of per capita State
aid to pay MAC obligations. MAC does not have taxing powers, and its bonds are
not obligations enforceable against either the City or the State.
Since 1975, the City's financial condition has been subject to oversight and
review by the New York State Financial Control Board (the "Control Board") and
since 1978 its financial statements have been audited by independent accounting
firms. To be eligible for guarantees and assistance, the City was required to
submit annually to the Control Board a financial plan for the next four fiscal
years covering the City and certain agencies showing balanced budgets determined
in accordance with generally accepted accounting principles. Although the
Control Board's powers of prior approval were suspended effective June 30, 1986
because the City had satisfied certain statutory conditions, the City continues
to submit four year plans to the Control Board for its review. The City
completed fiscal year 1996 with a balanced budget.
In March 1990, "S&P" lowered its rating of New York State's general obligation
debt from AA- to A. In addition, S&P and Moody's lowered their ratings of New
York State's short-term notes from SP-1+ to SP-1 and from MIG-1 to MIG-2,
respectively. In February 1991, Moody's lowered its rating of New York City's
general obligation debt from A to BAA1. In January 1992, Moody's lowered its
rating of New York State legislative appropriations bonds from A to Baa1 and S&P
lowered its rating of New York State legislative appropriations bonds from BBB+
to BBB and of New York State general obligation bonds from A to A-. As of
December, 1996 New York City's general obligation debt are rated Baa1 by Moody's
and BBB+ by S&P. As of December, 1996, general obligation bonds of the State of
New York are rated A and A- by Moody's and S&P, respectively.
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<PAGE> 31
PENNSYLVANIA FUND. Pennsylvania is the fifth largest state in terms of
population. Pennsylvania's resource base has remained stable during the past two
decades. The Census Bureau estimates that the Commonwealth's population
increased 1.6% between 1990 and 1995 to 12.1 million people. This is positive
news after the Commonwealth's population increased a slight .1% during the
1980's to 11,882,000 in 1990 from 11,864,000 in 1980. Pennsylvania is a highly
urbanized state with approximately 85% of its population residing in
metropolitan areas. Similar to national trends, the Commonwealth's central
cities have lost population to the outlying areas. Pittsburgh and Philadelphia
contain approximately 50% of the Commonwealth's population. Pittsburgh and
Philadelphia lost population while their metropolitan areas experienced a total
gain. Philadelphia's population decreased 6% during the 1980's while
Pittsburgh's declined 12.8%.
Pennsylvania's large population base provides the sixth largest workforce in the
U.S. The economic activity in the Commonwealth has traditionally centered around
manufacturing and mining, particularly steel and coal. The 1980's saw
Pennsylvania diversify the economic base away from the traditional manufacturing
and mining industries into the service industry. Manufacturing employment as a
percent of total employment declined from 22% in 1986 to 19% in 1991 and has
fallen slightly further to 18.4% in 1993. Manufacturing employment continues to
experience some decline although the overall percentage has remained stable
during 1994. Employment in the service industries continues to offset any
decline in manufacturing. Service employment increased to 29.9% of total
employment in 1994 compared to 25% in 1986.
The Commonwealth has been able to favorably improve its financial position since
a financial crisis in 1991. The Commonwealth faced a $1.1 billion deficit in
1991 following a severe recession and a corresponding decline in revenues.
Following a major budgetary revision package in 1992 and improved economic
activity the Commonwealth has turned its financial position around and ended
fiscal year 1994 with a General Fund unreserved balance of $329 million.
Operations in 1994-95 concluded with revenues about 3% over estimates. The
general fund closed with a fund balance of $540 million. By law, 10% of the
balance is to be deposited in the tax stabilization fund. The governor has
recommended a further 5% plus $30 million in the reserve for a total of $111
million. The balance would be $177.3 million or 1.1% of revenues. The remaining
$429 million will be used in the fiscal year 1995-96. The General Fund is
budgeted to have a balance of $100 million at year end 1996. The Governor has
put into place several tax reductions which have caused a reduction in base
revenues for the Commonwealth. The corporate income tax rate was reduced from
12.25% to 9.99% over the past three years. The Commonwealth has been able to
maintain growth in expenditures to only 5% since 1993. This reduction has helped
the Commonwealth maintain a satisfactory financial position despite the loss in
revenues.
The proposed 1997 budget totals $31.8 billion and reflects savings of $272
million from tighter Medicaid eligibility requirements and $329 million from
welfare reform. The budget anticipates only $5.1 billion in federal monies while
in 1996 the Commonwealth estimated $5.6 billion. The budget anticipates a
contribution of $17.7 million to the Rainy Day Fund which will total $209.6
million. The budget anticipates only a $5 million surplus.
As of December 12, 1996, all outstanding general obligation bonds of the
Commonwealth of Pennsylvania were rated AA- by S&P and A1 by Moody's. Local
municipalities issuing Pennsylvania municipal securities, although impacted in
general by the economic condition of the Commonwealth, have credit ratings that
are determined with reference to the economic condition of such local
municipalities. For example, as of December 12, 1996, the ratings on the
long-term obligations of the City of Philadelphia (the "City") supported by
payments from the City's General Fund were rated Baa by Moody's and BBB- by S&P.
INVESTMENT RESTRICTIONS
Each Fund has adopted certain investment restrictions which cannot be changed
without approval by holders of a majority of its outstanding voting shares. As
defined in the Investment Company Act of 1940 ("1940 Act"),
B-6
<PAGE> 32
this means the lesser of the vote of (a) 67% of a Fund's shares present at a
meeting where more than 50% of the outstanding shares are present in person or
by proxy; or (b) more than 50% of a Fund's shares.
The New York Fund may not, as a fundamental policy:
(1) Purchase securities (other than securities of the United States Government,
its agencies or instrumentalities or of a state or its political subdivisions)
if as a result of such purchase more than 25% of the Fund's total assets would
be invested in any one industry.
(2) Purchase securities of any issuer (other than obligations of, or guaranteed
by, the United States Government, its agencies or instrumentalities) if, as a
result, more than 5% of the Fund's total assets would be invested in securities
of that issuer; except that, as to 50% of the value of the Fund's total assets,
the Fund may invest up to 25% of its total assets in the securities of any one
issuer. For purposes of this limitation, the Fund will regard as the issuer the
entity that has the primary responsibility for the payment of interest and
principal.
(3) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and policies).
(4) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments. (Any such borrowings under this section will not be
collateralized.) If, for any reason, the current value of the Fund's total
assets falls below an amount equal to three times the amount of its indebtedness
from money borrowed, the Fund will, within three days (not including Sundays and
holidays), reduce its indebtedness to the extent necessary. The Fund will not
borrow for leverage purposes and will not purchase securities or make
investments while borrowings are outstanding.
(5) Make short sales of securities or purchase securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions.
(6) Write, purchase or sell puts, calls or combinations thereof, although the
Fund may purchase Municipal Securities subject to Standby Commitments, Variable
Rate Demand Notes or Repurchase Agreements in accordance with its investment
objective and policies.
(7) Purchase or retain the securities of any issuer if any of the officers,
trustees or directors of the Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer and together own more than
5% of the securities of such issuer.
(8) Invest for the purpose of exercising control or management of another
issuer.
(9) Invest in commodities or commodity futures contracts or in real estate (or
real estate limited partnerships) except that the Fund may invest in Municipal
Securities secured by real estate or interests therein and securities of issuers
that invest or deal in real estate.
(10) Invest in interests in oil, gas or other mineral exploration or development
programs or leases, although it may invest in Municipal Securities of issuers
that invest in or sponsor such programs or leases.
(11) Underwrite securities issued by others except to the extent the Fund may be
deemed to be an underwriter, under the federal securities laws, in connection
with the disposition of portfolio securities.
(12) Issue senior securities as defined in the 1940 Act.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation. The New York
Fund may invest more than 25% of its total assets in industrial development
bonds. The New York Fund did not borrow money as permitted by investment
restriction number 4 in the latest fiscal period, and it has no present
intention of borrowing during the coming year. In addition, the New York Fund
has agreed with
B-7
<PAGE> 33
certain state regulators that, so long as required by any state where the New
York Fund's shares are offered for sale, the New York Fund, as a non-fundamental
policy that may be changed without shareholder vote, may not:
(i) Invest more than 5% of its total assets in industrial development bonds
sponsored by companies that with their predecessors have less than three years'
continuous operation.
(ii) Invest more than 5% of its total assets in securities restricted as to
disposition under the Federal securities laws (except commercial paper issued
under Section 4(2) of the Securities Act of 1933).
The Florida, New Jersey and Pennsylvania Funds each may not, as a fundamental
policy:
(1) Purchase securities (other than securities of the United States Government,
its agencies or instrumentalities or of a state or its political subdivisions)
if as a result of such purchase more than 25% of the Fund's total assets would
be invested in any one industry.
(2) Purchase securities of any issuer (other than obligations of, or guaranteed
by, the United States Government, its agencies or instrumentalities) if, as a
result, more than 5% of the Fund's total assets would be invested in securities
of that issuer; except that, as to 50% of the value of the Fund's total assets,
the Fund may invest up to 25% of its total assets in the securities of any one
issuer. For purposes of this limitation, the Fund will regard as the issuer the
entity that has the primary responsibility for the payment of interest and
principal.
(3) Make loans to others (except through the purchase of debt obligations or
repurchase agreements in accordance with its investment objective and policies).
(4) Borrow money except as a temporary measure for extraordinary or emergency
purposes and then only in an amount up to one-third of the value of its total
assets, in order to meet redemption requests without immediately selling any
money market instruments. (Any such borrowings under this section will not be
collateralized.) If, for any reason, the current value of the Fund's total
assets falls below an amount equal to three times the amount of its indebtedness
from money borrowed, the Fund will, within three days (not including Sundays and
holidays), reduce its indebtedness to the extent necessary. The Fund will not
borrow for leverage purposes and will not purchase securities or make
investments while borrowings are outstanding.
(5) Make short sales of securities or purchase securities on margin, except to
obtain such short-term credits as may be necessary for the clearance of
transactions.
(6) Invest in commodities or commodity futures contracts or in real estate (or
real estate limited partnerships) except that the Fund may invest in Municipal
Securities secured by real estate or interests therein and securities of issuers
that invest or deal in real estate.
(7) Underwrite securities issued by others except to the extent the Fund may be
deemed to be an underwriter, under the federal securities laws, in connection
with the disposition of portfolio securities.
(8) Issue senior securities as defined in the 1940 Act.
If a percentage restriction is adhered to at the time of investment, a later
increase or decrease in percentage beyond the specified limit resulting from a
change in values or net assets will not be considered a violation. A Fund may
invest more than 25% of its total assets in industrial development bonds. The
Florida, New Jersey and Pennsylvania Funds each have adopted the following
non-fundamental restrictions, which may be changed by the Board of Trustees
without shareholder approval.
The Florida, New Jersey and Pennsylvania Funds each may not:
(i) Write, purchase or sell puts, calls or combinations thereof, although the
Fund may purchase Municipal Securities subject to Standby Commitments, Variable
Rate Demand Notes or Repurchase Agreements in accordance with its investment
objective and policies.
(ii) Purchase or retain the securities of any issuer if any of the officers,
trustees or directors of the Fund or its investment adviser owns beneficially
more than 1/2 of 1% of the securities of such issuer and together own more than
5% of the securities of such issuer.
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<PAGE> 34
(iii) Invest for the purpose of exercising control or management of another
issuer.
(iv) Invest in interests in oil, gas or other mineral exploration or development
programs or leases, although it may invest in Municipal Securities of issuers
that invest in or sponsor such programs or leases.
Although the Trust has registered as a "non-diversified" investment company,
each Fund must meet the diversification requirements of Rule 2a-7 under the 1940
Act. Rule 2a-7 provides that a single state money fund shall not, as to 75% of
its assets, invest more than 5% of its assets in the securities of an individual
issuer, provided that the fund may not invest more than 5% of its assets in the
securities of an individual issuer unless the securities are First Tier
Securities (as defined in Rule 2a-7).
INVESTMENT MANAGER AND SHAREHOLDER SERVICES
INVESTMENT MANAGER. Zurich Kemper Investments, Inc. ("ZKI") is the investment
manager for each Fund. ZKI is wholly owned by ZKI Holding Corp. ZKI Holding
Corp. is a more than 90% owned subsidiary of Zurich Holding Company of America,
Inc., which is a wholly owned subsidiary of Zurich Insurance Company, an
internationally recognized company providing financial services in
property/casualty and life insurance, reinsurance and asset management. Pursuant
to an investment management agreement, ZKI acts as each Fund's investment
adviser, manages its investments, administers its business affairs, furnishes
office facilities and equipment, provides clerical, bookkeeping and
administrative services, provides shareholder and information services and
permits any of its officers or employees to serve without compensation as
trustees or officers of the Trust if elected to such positions. The Trust pays
the expenses of its operations, including the fees and expenses of independent
auditors, counsel, custodian and transfer agent and the cost of share
certificates, reports and notices to shareholders, costs of calculating net
asset value, brokerage commissions or transaction costs, taxes, registration
fees, the fees and expenses of qualifying the Trust and its shares for
distribution under federal and state securities laws and membership dues in the
Investment Company Institute or any similar organization.
The agreement provides that ZKI shall not be liable for any error of judgment or
of law, or for any loss suffered by the Trust in connection with the matters to
which the agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of ZKI in the performance of its
obligations and duties, or by reason of its reckless disregard of its
obligations and duties under the agreement.
The investment management agreement continues in effect from year to year so
long as its continuation is approved at least annually by (a) a majority vote of
the trustees who are not parties to such agreement or interested persons of any
such party except in their capacity as trustees of the Trust, cast in person at
a meeting called for such purpose, and (b) by the shareholders of the Fund
subject thereto or the Board of Trustees. It may be terminated at any time upon
60 days' notice by either party, or by a majority vote of the outstanding shares
of the Fund subject thereto, and will terminate automatically upon assignment.
If additional Funds become subject to the investment management agreement, the
provisions concerning continuation, amendment and termination shall be on a Fund
by Fund basis and the management fee and the expense limitation shall be
computed based upon the average daily net assets of all Funds subject to the
agreement and shall be allocated among such Funds based upon the relative net
assets of such Funds. Additional Funds may be subject to a different agreement.
For the services and facilities furnished, the Funds pays an annual investment
management fee, payable monthly, on a graduated basis of .22% of the first $500
million of combined average daily net assets of all Funds, .20% of the next $500
million, .175% of the next $1 billion, .16% of the next $1 billion and .15% of
combined average daily net assets over $3 billion of all Funds. ZKI has agreed
to reimburse the Funds to the extent required by any applicable state expense
limitations should all operating expenses of a Fund, including the investment
management fee of ZKI but excluding taxes, interest, the distribution services
fees of ZKDI (described below), extraordinary expenses and brokerage commissions
or transaction costs, exceed the applicable state expense limitations.
Currently, there are no state expense limitations in effect. For the services
and
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<PAGE> 35
facilities furnished to the Funds pursuant to the investment management
agreement, ZKI received fees for the last three fiscal years as shown in the
table below.
<TABLE>
<CAPTION>
FUND 1997 1996 1995
---- ---- ---- ----
<S> <C> <C> <C>
Florida*................................................ $N.A. N.A. N.A.
New Jersey*............................................. $N.A. N.A. N.A.
New York................................................ $
Pennsylvania*........................................... $N.A. N.A. N.A.
</TABLE>
- ---------------
* Will commence operations on or about May 31, 1997.
ZKI has agreed to temporarily waive its management fee and absorb certain
operating expenses of the Funds to the extent described in the prospectus. See
"Investment Manager and Shareholder Services" in the prospectus. During the
fiscal years ended March 31, 1997, 1996 and 1995, ZKI waived or absorbed
$ , $57,000 and $41,000, respectively, of the New York Fund's operating
expenses.
Certain trustees or officers of the Trust are also directors or officers of ZKI
and ZKDI as indicated under "Officers and Trustees."
DISTRIBUTOR AND ADMINISTRATOR. Pursuant to an administration, shareholder
services and distribution agreement ("distribution agreement"), Zurich Kemper
Distributors, Inc. ("ZKDI") serves as distributor, administrator and principal
underwriter to the Funds to provide information and services for existing and
potential shareholders. The distribution agreement provides that ZKDI shall act
as agent for each Fund in the sale of Fund shares and shall appoint various
firms to provide a cash management service for their customers or clients
through a Fund. The firms are to provide such office space and equipment,
telephone facilities, personnel and sales literature distribution as is
necessary or appropriate for providing information and services to the firms'
clients and prospective clients. The Trust pays for the prospectus and
shareholder reports to be set in type and printed for existing shareholders and
ZKDI pays for the printing and distribution of copies thereof used in connection
with the continuous offering of shares to prospective investors. ZKDI pays for
supplementary sales literature and advertising. For its services as distributor,
the Trust pays ZKDI an annual distribution services fee, payable monthly, of
.50% of average daily net assets of each Fund. The distribution agreement
continues in effect from year to year so long as its continuation is approved at
least annually by a majority of the trustees who are not parties to such
agreement or interested persons of the Trust and who have no direct or indirect
financial interest in the agreement or in any agreement related thereto. The
agreement automatically terminates in the event of its assignment and may be
terminated at any time without penalty by the Trust or by ZKDI upon six months
notice. Termination by the Trust may be by vote of a majority of the Board of
Trustees, or a majority of the Trustees who are not interested persons of the
Trust and who have no direct or indirect financial interest in the agreement, or
a majority vote of the outstanding shares of the Fund subject thereto. The fee
payable pursuant to the distribution agreement for a Fund may not be increased
without approval of the shareholders of that Fund and all material amendments
must in any event be approved by the Board of Trustees in the manner described
above with respect to the continuation of the agreement. The provisions
concerning the continuation, amendment and termination of the distribution
services agreement are on a Fund by Fund basis. The distribution services fee is
charged to the Funds based upon their relative net assets, but the expenditures
by ZKDI under the agreement need not be made on that same basis.
ZKDI has related administration services and selling group agreements with
various broker-dealer firms to provide cash management and other services for
Fund shareholders. Such services and assistance may include, but are not limited
to, establishing and maintaining shareholder accounts and records, processing
purchase and redemption transactions, providing automatic investment in Fund
shares of client account balances, answering routine inquiries regarding a Fund,
assisting clients in changing account options, designations and addresses, and
such other services as may be agreed upon from time to time and as may be
permitted by applicable statute, rule or regulation. ZKDI also has services
agreements with banking firms to provide the above listed services,
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<PAGE> 36
except for certain distribution services that the banks may be prohibited from
providing, for their clients who wish to invest in a Fund. ZKDI also may provide
some of the above services for a Fund. ZKDI normally pays the firms at a maximum
annual rate of .50% of average net assets of those accounts that they maintain
and service. ZKDI may elect to keep a portion of the total administration fee to
compensate itself for functions performed for a Fund or to pay for sales
materials or other promotional activities.
Since the distribution agreement provides for fees which are used by ZKDI to pay
for distribution and administration services, the agreement along with the
related administrative services and selling group agreements are approved and
renewed in accordance with Rule 12b-1 under the 1940 Act which regulates the
manner in which an investment company may, directly or indirectly, bear expenses
of distributing its shares.
During the fiscal year ended March 31, 1997, the New York Fund paid a
distribution services fee of $ . Pursuant to the related services
agreements, ZKDI remitted distribution services fees of $ to various
firms, $ of which was paid to broker-dealer firms then affiliated with
ZKDI. During the fiscal year ended March 31, 1997, ZKDI incurred underwriting,
distribution and administrative expenses in the approximate amounts noted:
service fees to firms $ ; advertising and literature $ ; prospectus
printing $ ; marketing and sales expenses $ , and other expenses
$ , for a total of $ . A portion of the aforesaid marketing, sales and
operating expenses could be considered overhead expense.
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICE AGENT. Investors Fiduciary
Trust Company ("IFTC"), 127 West 10th Street, Kansas City, Missouri 64105, as
custodian, and State Street Bank and Trust Company, 225 Franklin Street, Boston,
Massachusetts 02110, as sub-custodian, have custody of all securities and cash
of the Trust. They attend to the collection of principal and income, and payment
for and collection of proceeds of securities bought and sold by the Trust. IFTC
is also the transfer agent of the Trust (see "Purchase of Shares" in the
prospectus). Pursuant to a services agreement with IFTC, Zurich Kemper Service
Company ("ZKSvC"), an affiliate of ZKI, serves as "Shareholder Service Agent" of
the Trust and, as such, performs all of IFTC's duties as transfer agent and
dividend paying agent. IFTC receives, as transfer agent, and pays to ZKSvC
annual account fees of a maximum of $13 per year per account plus out-of-pocket
expense reimbursement. During the fiscal year ended March 31, 1997, IFTC
remitted shareholder service fees in the amount of $ to ZKSvC as
Shareholder Service Agent.
INDEPENDENT AUDITORS AND REPORTS TO SHAREHOLDERS. The Trust's independent
auditors, Ernst & Young LLP, 233 South Wacker Drive, Chicago, Illinois 60606,
audit and report on the Trust's annual financial statements, review certain
regulatory reports and the Trust's federal income tax return, and perform other
professional accounting, auditing, tax and advisory services when engaged to do
so by the Trust. Shareholders will receive annual audited financial statements
and semi-annual unaudited financial statements.
PORTFOLIO TRANSACTIONS
Portfolio transactions are undertaken principally to pursue each Fund's
investment objective in relation to movements in the general level of interest
rates, to invest money obtained from the sale of Fund shares, to reinvest
proceeds from maturing portfolio securities and to meet redemptions of Fund
shares. These transactions may increase or decrease the yield of a Fund
depending upon management's ability to correctly time and execute such
transactions. Since a Fund's assets will be invested in short-term Municipal
Securities, its portfolio will turn over several times a year. However, since
securities with maturities of less than one year are excluded from required
portfolio turnover rate calculations, a Fund's turnover rate for reporting
purposes will be zero.
ZKI and its affiliates furnish investment management services for the Kemper
Funds, Zurich Money Funds and other clients including affiliated insurance
companies. These entities may share some common research and trading facilities.
At times investment decisions may be made to purchase or sell the same
investment security for a Fund and for one or more of the other clients of ZKI
or its affiliates. When two or more of such clients are
B-11
<PAGE> 37
simultaneously engaged in the purchase or sale of the same security through the
same trading facility, the transactions are allocated as to amount and price in
a manner considered equitable to each.
ZKI, in effecting purchases and sales of portfolio securities for the account of
the Trust, will implement the Trust's policy of seeking the best execution of
orders. Consistent with this policy, orders for portfolio transactions are
placed with broker-dealer firms giving consideration to the quality, quantity
and nature of the firm's professional services, which include execution,
financial responsibility, responsiveness, clearance procedures, wire service
quotations and statistical and other research information provided to the Trust
and ZKI and its affiliates. Subject to seeking best execution of an order,
brokerage is allocated on the basis of all service provided. Any research
benefits derived are available for all clients including clients of ZKI and its
affiliates. The Trust expects that purchases and sales of portfolio securities
usually will be principal transactions. Portfolio securities will normally be
purchased directly from the issuer or from an underwriter or market maker for
the securities. There usually are no brokerage commissions paid by the Trust for
such purchases. During the last three fiscal years the Trust paid no portfolio
brokerage commissions. Purchases from underwriters will include a commission or
concession paid by the issuer to the underwriter, and purchases from dealers
serving as market makers will include the spread between the bid and asked
prices.
PURCHASE AND REDEMPTION OF SHARES
Fund shares are sold at their net asset value next determined after an order and
payment are received in the form described in the prospectus. The minimum
initial investment is $1,000 and the minimum subsequent investment is $100 but
such minimum amounts may be changed at any time. The Trust may waive the minimum
for purchases by trustees, directors, officers or employees of a Fund or ZKI and
its affiliates. An investor wishing to open an account should use the Account
Information Form available from the Trust or financial services firms. Orders
for the purchase of shares that are accompanied by a check drawn on a foreign
bank (other than a check drawn on a Canadian bank in U.S. Dollars) will not be
considered in proper form and will not be processed unless and until the Trust
determines that it has received payment of the proceeds of the check. The time
required for such a determination will vary and cannot be determined in advance.
The Trust may suspend the right of redemption or delay payment more than seven
days (a) during any period when the New York Stock Exchange ("Exchange") is
closed other than customary weekend and holiday closings or during any period in
which trading on the Exchange is restricted, (b) during any period when an
emergency exists as a result of which (i) disposal of a Fund's investments is
not reasonably practicable, or (ii) it is not reasonably practicable for a Fund
to determine the value of its net assets, or (c) for such other periods as the
Securities and Exchange Commission may by order permit for the protection of
each Fund's shareholders.
Although it is the Trust's present policy to redeem in cash, if the Board of
Trustees determines that a material adverse effect would be experienced by the
remaining shareholders if payment were made wholly in cash, the Trust will pay
the redemption price in whole or in part by a distribution of portfolio
securities in lieu of cash, in conformity with the applicable rules of the
Securities and Exchange Commission, taking such securities at the same value
used to determine net asset value, and selecting the securities in such manner
as the Board of Trustees may deem fair and equitable. If such a distribution
occurs, shareholders receiving securities and selling them could receive less
than the redemption value of such securities and in addition would incur certain
transaction costs. Such a redemption would not be as liquid as a redemption
entirely in cash. The Trust has elected to be governed by Rule 18f-1 under the
1940 Act pursuant to which each Fund is obligated to redeem shares solely in
cash up to the lesser of $250,000 or 1% of the net assets of a Fund during any
90-day period for any one shareholder of record.
DIVIDENDS, NET ASSET VALUE AND TAXES
DIVIDENDS. Dividends are declared daily and paid monthly. Shareholders will
receive dividends in additional shares unless they elect to receive cash.
Dividends will be reinvested monthly in additional shares of a Fund
B-12
<PAGE> 38
normally on the next to last business day of the month. The Trust will pay
shareholders who redeem their entire accounts all unpaid dividends at the time
of redemption not later than the next dividend payment date. Upon written
request to the Shareholder Service Agent, a shareholder may elect to have Fund
dividends invested without sales charge in shares of another Kemper Fund
offering this privilege at the net asset value of such other fund on the
reinvestment date. See "Special Features--Exchange Privilege" for a list of such
other Kemper Funds. To use this privilege of investing Fund dividends in shares
of another Kemper Fund, shareholders must maintain a minimum account value of
$1,000 in this Fund.
Each Fund calculates its dividends based on its daily net investment income. For
this purpose, net investment income consists of (a) accrued interest income plus
or minus amortized original issue discount or premium, (b) plus or minus all
short-term realized gains and losses on investments and (c) minus accrued
expenses. Expenses of a Fund are accrued each day. Since a Fund's investments
are valued at amortized cost, there will be no unrealized gains or losses on
such investments. However, should the net asset value so computed deviate
significantly from market value, the Board of Trustees could decide to value the
investments at market value and then unrealized gains and losses would be
included in net investment income above.
Dividends are reinvested monthly and shareholders will receive monthly
confirmation of dividends and of purchase and redemption transactions.
NET ASSET VALUE. As described in the prospectus, each Fund values its portfolio
instruments at amortized cost, which does not take into account unrealized
capital gains or losses. This involves initially valuing an instrument at its
cost and thereafter assuming a constant amortization to maturity of any discount
or premium, regardless of the effect of fluctuating interest rates on the market
value of the instrument. While this method provides certainty in valuation, it
may result in periods during which value, as determined by amortized cost, is
higher or lower than the price a Fund would receive if it sold the instrument.
Calculations are made to compare the value of a Fund's investments valued at
amortized cost with market values. Market valuations are obtained by using
actual quotations provided by market makers, estimates of market value, or
values obtained from yield data relating to classes of money market instruments
published by reputable sources at the mean between the bid and asked prices for
the instruments. If a deviation of 1/2 of 1% or more were to occur between the
net asset value per share calculated by reference to market values and a Fund's
$1.00 per share net asset value, or if there were any other deviation that the
Board of Trustees of the Trust believed would result in a material dilution to
shareholders or purchasers, the Board of Trustees would promptly consider what
action, if any, should be initiated. If a Fund's net asset value per share
(computed using market values) declined, or were expected to decline, below
$1.00 (computed using amortized cost), the Board of Trustees of the Trust might
temporarily reduce or suspend dividend payments in an effort to maintain the net
asset value at $1.00 per share. As a result of such reduction or suspension of
dividends or other action by the Board of Trustees, an investor would receive
less income during a given period than if such a reduction or suspension had not
taken place. Such action could result in investors receiving no dividend for the
period during which they hold their shares and receiving, upon redemption, a
price per share lower than that which they paid. On the other hand, if a Fund's
net asset value per share (computed using market values) were to increase, or
were anticipated to increase above $1.00 (computed using amortized cost), the
Board of Trustees of the Trust might supplement dividends in an effort to
maintain the net asset value at $1.00 per share.
TAXES. Interest on indebtedness which is incurred to purchase or carry shares of
a mutual fund which distributes exempt-interest dividends during the year is not
deductible for Federal income tax purposes. Further, a Fund may not be an
appropriate investment for persons who are "substantial users" of facilities
financed by industrial development bonds held by a Fund or are "related persons"
to such users; such persons should consult their tax advisers before investing
in a Fund.
The "Superfund Act of 1986" (the "Superfund Act") imposes a separate tax on
corporations at a rate of 0.12 percent of the excess of such corporation's
"modified alternative minimum taxable income" over $2 million. A portion of
tax-exempt interest, including exempt-interest dividends from a Fund, may be
includible in modified
B-13
<PAGE> 39
alternative minimum taxable income. Corporate shareholders are advised to
consult their tax advisers with respect to the consequences of the Superfund
Act.
PERFORMANCE
As reflected in the prospectus, historical performance calculations for the
Funds may be shown in the form of "yield," "effective yield," and "tax
equivalent yield." These various measures of performance are described below.
ZKI has agreed to absorb certain operating expenses of each Fund to the extent
described in the prospectus. Without this expense absorption, the performance
results noted herein would have been lower.
Each Fund's yield is computed in accordance with a standardized method
prescribed by rules of the Securities and Exchange Commission. Under that
method, the yield quotation is based on a seven-day period and is computed as
follows. The first calculation is net investment income per share, which is
accrued interest on portfolio securities, plus or minus amortized original issue
discount or premium, less accrued expenses. This number is then divided by the
price per share (expected to remain constant at $1.00) at the beginning of the
period ("base period return"). The result is then divided by 7 and multiplied by
365 and the resulting yield figure is carried to the nearest one-hundredth of
one percent. Realized capital gains or losses and unrealized appreciation or
depreciation of investments are not included in the calculation. For the seven
day period ended March 31, 1997, the New York Fund's yield was %.
Each Fund's effective yield is determined by taking the base period return
(computed as described above) and calculating the effect of assumed compounding.
The formula for the effective yield is: (base period return +1)365/7- 1. For the
seven day period ended March 31, 1997, the New York Fund's effective yield was
%.
The tax equivalent yield of a Fund is computed by dividing that portion of a
Fund's yield (computed as described above) which is tax-exempt by (one minus the
stated federal and, if applicable, state and local income tax rate) and adding
the result to that portion, if any, of the yield of a Fund that is not
tax-exempt. Based upon a marginal federal income tax rate of 37.1% and a
combined Federal, New York State and New York City income tax rate of 43.5% and
the Fund's yield computed as described above for the seven day period ended
March 31, 1997, the New York Fund's tax equivalent yield for that period was
%. Based upon a marginal federal income tax rate of 37.1%, the New York
Fund's tax equivalent yield for the seven day period ended March 31, 1997 was
%. For additional information concerning tax-exempt yields, see "Tax-Exempt
versus Taxable Yield" below.
Each Fund's yield fluctuates, and the publication of an annualized yield
quotation is not a representation as to what an investment in a Fund will
actually yield for any given future period. Actual yields will depend not only
on changes in interest rates on money market instruments during the period in
which the investment in a Fund is held, but also on such matters as Fund
expenses.
Investors have an extensive choice of money market funds and money market
deposit accounts and the information below may be useful to investors who wish
to compare the past performance of a Fund with that of its competitors. Past
performance cannot be a guarantee of future results.
As indicated in the prospectus (see "Performance"), a Fund's performance may be
compared to that of other mutual funds tracked by Lipper Analytical Services,
Inc. ("Lipper"). Lipper performance calculations include the reinvestment of all
capital gain and income dividends for the periods covered by the calculations. A
Fund's performance also may be compared to other money market funds as reported
by IBC/Financial Data, Inc.'s ("IBC") or Money Market Insight(R), reporting
services on money market funds. As reported by IBC, all investment results
represent total return (annualized results for the period net of management fees
and expenses) and one-year investment results would be effective annual yields
assuming reinvestment of dividends.
The following investment comparisons are based upon information reported by
Lipper and IBC. In the comparison of performance to IBC Money Fund Averages(TM)
All Taxable and to Lipper Money Market Instrument Funds Average, the performance
of the New York Fund has been adjusted on a taxable equivalent basis assuming a
marginal federal income tax rate of 37.1% and a combined Federal, New York State
and New York
B-14
<PAGE> 40
City income tax rate of 43.5% (see "Tax-Exempt versus Taxable Yield" below for
more information concerning taxable equivalent performance).
IBC FINANCIAL DATA, INC. LIPPER ANALYTICAL SERVICES, INC.
THESE RESULTS ARE NOT ANNUALIZED.
<TABLE>
<CAPTION>
IBC FINANCIAL
DATA, INC. LIPPER
TAX-EXEMPT MONEY FUND TAX-EXEMPT NEW YORK
NEW YORK AVERAGESTM ALL NEW YORK TAX-EXEMPT
MONEY TAX-FREE MONEY MONEY MONEY MARKET
PERIOD MARKET FUND MARKET FUNDS PERIOD MARKET FUND FUNDS AVERAGE
- -------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7 Days Ended 3/25/97..... % % 1 Month Ended 3/31/97.... % %
1 Month Ended 3/31/97.... 3 Months Ended 3/31/97...
</TABLE>
<TABLE>
<CAPTION>
TAX-EXEMPT TAX-EXEMPT
NEW YORK NEW YORK LIPPER
MONEY IBC FINANCIAL MONEY MONEY
MARKET FUND DATA, INC. MARKET FUND MARKET
TAXABLE MONEY FUND TAXABLE INSTRUMENT
EQUIVALENT AVERAGESTM ALL EQUIVALENT FUNDS
PERIOD BASIS* TAXABLE PERIOD BASIS* AVERAGE
- -------------------------------------------------------- ------------------------------------------------------
<S> <C> <C> <C> <C> <C>
7 Days Ended 3/25/97..... % % 1 Month Ended 3/31/97.... % %
1 Month Ended 3/31/97.... 3 Months Ended 3/31/97...
</TABLE>
- -----------------------------------------------
* Source: ZKI (not reported in IBC or Lipper).
A Fund's performance also may be compared on an after-tax basis to various bank
products, including the average rate of bank and thrift institution money market
deposit accounts or interest bearing checking accounts as reported in the BANK
RATE MONITOR National Index(TM) of 100 leading bank and thrift institutions as
published by BANK RATE MONITOR(TM), N. Palm Beach, Florida 33408. The rates
published by the BANK RATE MONITOR National Index(TM) are averages of the
personal account rates offered on the Wednesday prior to the date of publication
by 100 of the leading bank and thrift institutions in the ten largest
Consolidated Standard Metropolitan Statistical Areas. Account minimums range
upward from $2,000 in each institution and compounding methods vary. Interest
bearing checking accounts generally offer unlimited check writing while money
market deposit accounts generally restrict the number of checks that may be
written. If more than one rate is offered, the lowest rate is used. Rates are
determined by the financial institution and are subject to change at any time.
Bank products represent a taxable alternative income producing product. Bank and
thrift institution deposit accounts may be insured. Shareholder accounts in a
Fund are not insured. Bank passbook savings accounts share some liquidity
features with money market mutual fund accounts but they may not offer all the
features available from a money market mutual fund, such as check writing. Bank
passbook savings accounts normally offer a fixed rate of interest while the
yield of a Fund fluctuates. Bank checking accounts normally do not pay interest
but share some liquidity features with money market mutual fund accounts (e.g.,
the ability to write checks against the account). Bank certificates of deposit
may offer fixed or variable rates for a set term. (Normally, a variety of terms
are available.) Withdrawal of these deposits prior to maturity normally will be
subject to a penalty. In contrast, shares of a Fund are redeemable at the net
asset value (normally $1.00 per share) next determined after a request is
received, without charge.
Investors also may want to compare a Fund's performance on an after-tax basis to
that of U.S. Treasury bills or notes because such instruments represent
alternative income producing products. Treasury obligations are issued in
selected denominations. Rates of U.S. Treasury obligations are fixed at the time
of issuance and payment of principal and interest is backed by the full faith
and credit of the U.S. Treasury. The market value of such instruments generally
will fluctuate inversely with interest rates prior to maturity and will equal
par value at maturity. Generally, the value of obligations with shorter
maturities will fluctuate less than those with longer maturities. A Fund's yield
will fluctuate. Also, while each Fund seeks to maintain a net asset value per
share of $1.00, there is no assurance that it will be able to do so. Any such
comparisons may be useful to investors who
B-15
<PAGE> 41
wish to compare a Fund's past performance with that of its competitors. Of
course, past performance cannot be a guarantee of future results.
A Fund's performance also may be compared to the Consumer Price Index, as
published by the U.S. Bureau of Labor Statistics, which is an established
measure of change over time in the prices of goods and services in major
expenditure groups.
TAX-EXEMPT VERSUS TAXABLE YIELD. You may want to determine which
investment--tax-exempt or taxable--will provide you with a higher after-tax
return. To determine the taxable equivalent yield, simply divide the yield from
the tax-exempt investment by the sum of [1 minus your marginal tax rate]. The
tables below are provided for your convenience in making this calculation for
selected tax-exempt yields and taxable income levels. These yields are presented
for purposes of illustration only and are not representative of any yield that a
Fund may generate. Both tables are based upon current law as to the 1997
federal, New York State and City, and 1996 Pennsylvania and New Jersey tax rate
schedules.
TAXABLE EQUIVALENT YIELD TABLE FOR PERSONS WHOSE ADJUSTED GROSS INCOME IS UNDER
$121,200
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SINGLE JOINT YOUR A TAX-EXEMPT YIELD OF:
MARGINAL
FEDERAL TAX 2% 3% 4% 5% 6% 7%
TAXABLE INCOME RATE IS EQUIVALENT TO A TAXABLE YIELD OF:
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$24,650 - $59,750 $41,200 - $99,600 28.0% 2.78 4.17 5.56 6.94 8.33 9.72
- ---------------------------------------------------------------------------------------------------------------------------------
Over $59,750 Over $99,600 31.0 2.90 4.35 5.80 7.25 8.70 10.14
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SINGLE JOINT COMBINED A TAX-EXEMPT YIELD OF:
NEW JERSEY
AND FEDERAL 2% 3% 4% 5% 6% 7%
TAXABLE INCOME TAX RATE IS EQUIVALENT TO A TAXABLE YIELD OF:
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$24,650 - $35,000 $41,200 - $50,000 29.3% 2.83 4.24 5.66 7.07 8.49 9.90
- ---------------------------------------------------------------------------------------------------------------------------------
$50,000 - $70,000 29.8 2.85 4.27 5.70 7.12 8.55 9.97
- ---------------------------------------------------------------------------------------------------------------------------------
$35,000 - $40,000 $70,000 - $80,000 30.5 2.88 4.32 5.76 7.19 8.63 10.07
- ---------------------------------------------------------------------------------------------------------------------------------
$40,000 - $59,750 $80,000 - $99,600 32.0 2.94 4.41 5.88 7.35 8.82 10.29
- ---------------------------------------------------------------------------------------------------------------------------------
$59,750 - $75,000 $99,600 - $150,000 34.8 3.07 4.60 6.13 7.67 9.20 10.74
- ---------------------------------------------------------------------------------------------------------------------------------
Over $75,000 Over $150,000 35.4 3.10 4.64 6.19 7.74 9.29 10.84
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
SINGLE JOINT COMBINED
N.Y. CITY, A TAX-EXEMPT YIELD OF:
N.Y. STATE
AND FEDERAL 2% 3% 4% 5% 6% 7%
TAXABLE INCOME TAX RATE** IS EQUIVALENT TO A TAXABLE YIELD OF:
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$24,650 - $59,750 $41,200 - $99,600 35.4% 3.10 4.64 6.19 7.74 9.29 10.84
- ---------------------------------------------------------------------------------------------------------------------------------
Over $59,750 Over $99,600 38.1 3.23 4.85 6.46 8.08 9.69 11.31
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
SINGLE JOINT COMBINED A TAX-EXEMPT YIELD OF:
PENNSYLVANIA
AND FEDERAL 2% 3% 4% 5% 6% 7%
TAXABLE INCOME TAX RATE IS EQUIVALENT TO A TAXABLE YIELD OF:
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$24,650 - $59,750 $41,200 - $99,600 30.0% 2.86 4.29 5.71 7.14 8.57 10.00
- ----------------------------------------------------------------------------------------------------------------------------------
Over $59,750 Over $99,600 32.9 2.98 4.47 5.96 7.45 8.94 10.43
==================================================================================================================================
</TABLE>
B-16
<PAGE> 42
TAXABLE EQUIVALENT YIELD TABLE FOR PERSONS WHOSE ADJUSTED GROSS INCOME IS OVER
$121,200
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
A TAX-EXEMPT YIELD OF:
SINGLE JOINT YOUR
MARGINAL 2% 3% 4%
FEDERAL TAX IS EQUIVALENT TO A TAXABLE
TAXABLE INCOME RATE YIELD OF:
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$59,750 - $124,650 $99,600 - $151,750 31.9% 2.94 4.41 5.87
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 $151,750 - $271,050 37.1 3.18 4.77 6.36
- ---------------------------------------------------------------------------------------------------
Over $271,050 Over $271,050 40.8 3.38 5.07 6.76
===================================================================================================
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SINGLE
A TAX-EXEMPT YIELD OF:
TAXABLE INCOME 5% 6% 7%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$59,750 - $124,650 7.34 8.81 10.28
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 7.95 9.54 11.13
- ---------------------------------------------------------------------------------------------------
Over $271,050 8.45 10.14 11.82
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
A TAX-EXEMPT YIELD OF:
SINGLE JOINT COMBINED
NEW JERSEY 2% 3% 4%
AND FEDERAL IS EQUIVALENT TO A TAXABLE
TAXABLE INCOME TAX RATE YIELD OF:
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$59,750 - $75,000 $99,600 - $150,000 35.7% 3.11 4.67 6.22
- ---------------------------------------------------------------------------------------------------
$75,000 - $124,650 $150,000 - $151,750 36.2 3.13 4.70 6.27
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 $151,750 - $271,050 41.1 3.40 5.09 6.79
- ---------------------------------------------------------------------------------------------------
Over $271,050 Over $271,050 44.6 3.61 5.42 7.22
===================================================================================================
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SINGLE
A TAX-EXEMPT YIELD OF:
TAXABLE INCOME 5% 6% 7%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$59,750 - $75,000 7.78 9.33 10.89
- ---------------------------------------------------------------------------------------------------
$75,000 - $124,650 7.84 9.40 10.97
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 8.49 10.19 11.88
- ---------------------------------------------------------------------------------------------------
Over $271,050 9.03 10.83 12.64
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SINGLE JOINT COMBINED A TAX-EXEMPT YIELD OF:
N.Y. CITY,
N.Y. STATE 2% 3% 4%
AND FEDERAL IS EQUIVALENT TO A TAXABLE
TAXABLE INCOME TAX RATE** YIELD OF:
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$59,750 - $124,650 $99,600 - $151,750 38.9% 3.27 4.91 6.55
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 $151,750 - $271,050 43.5% 3.54 5.31 7.08
- ---------------------------------------------------------------------------------------------------
Over $271,050 Over $271,050 46.9 3.77 5.65 7.53
===================================================================================================
<CAPTION>
- ---------------------------------------------------------------------------------------------------
SINGLE
A TAX-EXEMPT YIELD OF:
TAXABLE INCOME 5% 6% 7%
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$59,750 - $124,650 8.18 9.82 11.46
- ---------------------------------------------------------------------------------------------------
$124,650 - $271,050 8.85 10.62 12.39
- ---------------------------------------------------------------------------------------------------
Over $271,050 9.42 11.30 13.18
===================================================================================================
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------
A TAX-EXEMPT YIELD OF:
SINGLE JOINT COMBINED
PENNSYLVANIA 2% 3% 4%
AND FEDERAL IS EQUIVALENT TO A TAXABLE
TAXABLE INCOME TAX RATE YIELD OF:
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$59,750 - 124,650 $99,600 - $151,750 33.8% 3.02 4.53 6.04
- ----------------------------------------------------------------------------------------------------
$124,650 - $271,050 $151,750 - $271,050 38.9 3.27 4.91 6.55
- ----------------------------------------------------------------------------------------------------
Over $271,050 Over $271,050 42.5 3.48 5.22 6.96
====================================================================================================
<CAPTION>
- ----------------------------------------------------------------------------------------------------
SINGLE
A TAX-EXEMPT YIELD OF:
TAXABLE INCOME 5% 6% 7%
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$59,750 - 124,650 7.55 9.06 10.57
- ----------------------------------------------------------------------------------------------------
$124,650 - $271,050 8.18 9,82 11.46
- ----------------------------------------------------------------------------------------------------
Over $271,050 8.70 10.43 12.17
====================================================================================================
</TABLE>
* This table assumes a decrease of $3.00 of itemized deductions for each $100
of adjusted gross income over $121,200. For a married couple with adjusted
gross income between $181,800 and $304,300 (single between $121,200 and
$243,700), add 0.7% to the above Marginal Federal Tax Rate for each personal
and dependency exemption. The taxable equivalent yield is the tax-exempt
yield divided by: 100% minus the adjusted tax rate. For example, if the table
tax rate is 37.1% and you are married with no dependents, the adjusted tax
rate is 38.5% (37.1% + 0.7% + 0.7%). For a tax-exempt yield of 6%, the
taxable equivalent yield is about 9.8% (6% / (100% - 38.5%)).
** The tables do not reflect the impact of the New York State Tax Table Benefit
Recapture that is intended to eliminate the benefit of the graduated rate
structure and applies to taxable income between $100,000 and $150,000.
B-17
<PAGE> 43
OFFICERS AND TRUSTEES
The officers and trustees of the Funds, their birthdates, their principal
occupations and their affiliations, if any, with ZKI and ZKDI, are as follows
(The number following each person's title is the number of investment companies
managed by ZKI and its affiliates, for which he or she holds similar positions):
DAVID W. BELIN (6/20/28), Trustee (25), 2000 Financial Center, 7th and Walnut,
Des Moines, Iowa; Member, Belin Harris Lamson McCormick Zumbach Flynn, P.C.
(attorneys).
LEWIS A. BURNHAM (1/8/33), Trustee (25), 16410 Avila Boulevard, Tampa, Florida;
Partner, Business Resources Group; formerly, Executive Vice President, Anchor
Glass Container Corporation.
DONALD L. DUNAWAY (3/8/37), Trustee (25), 7515 Pelican Bay Blvd., Naples,
Florida; Retired; formerly, Executive Vice President, A. O. Smith Corporation
(diversified manufacturer).
ROBERT B. HOFFMAN (12/11/36), Trustee (25), 800 North Lindbergh Boulevard, St.
Louis, Missouri; Senior Vice President and Chief Financial Officer, Monsanto
Company (chemical products); formerly, Vice President, FMC Corporation
(manufacturer of machinery and chemicals); prior thereto, Director, Executive
Vice President and Chief Financial Officer, Staley Continental, Inc. (food
products).
DONALD R. JONES (1/17/30), Trustee (25), 1776 Beaver Pond Road, Inverness,
Illinois; Retired; Director, Motorola, Inc. (manufacturer of electronic
equipment and components); formerly, Executive Vice President and Chief
Financial Officer, Motorola, Inc.
DOMINIQUE P. MORAX (10/2/48), Trustee* (38), 222 South Riverside Plaza, Chicago,
Illinois; Member, Extended Corporate Executive Board, Zurich Insurance Company;
Director, ZKI.
SHIRLEY D. PETERSON (7/3/41), Trustee (25), 401 Rosemont Avenue, Frederick,
Maryland; President, Hood College; formerly, partner, Steptoe & Johnson
(attorneys); prior thereto, Commissioner, Internal Revenue Service; prior
thereto, Assistant Attorney General, U.S. Department of Justice.
WILLIAM P. SOMMERS (7/22/33), Trustee (25), 333 Ravenswood Avenue, Menlo Park,
California; President and Chief Executive Officer, SRI International (research
and development); prior thereto, Executive Vice President, Iameter (medical
information and educational service provider); prior thereto, Senior Vice
President and Director, Booz, Allen & Hamilton Inc. (management consulting
firm) (retired); Director, Rohr, Inc., Therapeutic Discovery Corp. and Litton
Industries.
STEPHEN B. TIMBERS (8/8/44), President and Trustee*(38), 222 South Riverside
Plaza, Chicago, Illinois; President, Chief Executive Officer, Chief Investment
Officer and Director, ZKI; Director, ZKDI and LTV Corporation.
J. PATRICK BEIMFORD, JR. (5/25/50), Vice President*(23), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President and Chief Investment Officer
of Fixed Income Investments, ZKI.
PHILIP J. COLLORA (11/15/45), Vice President and Secretary*(38), 222 South
Riverside Plaza, Chicago, Illinois; Attorney, Senior Vice President and
Assistant Secretary, ZKI.
JEROME L. DUFFY (6/29/36), Treasurer*(38), 222 South Riverside Plaza, Chicago,
Illinois; Senior Vice President, ZKI.
CHARLES R. MANZONI, JR. (1/23/47), Vice President*, (38), 222 South Riverside
Plaza, Chicago, Illinois; Executive Vice President, Secretary and General
Counsel of ZKI; Secretary, ZKI Holding Corp.; Secretary, ZKI Agency, Inc.;
formerly, Partner, Gardner, Carton & Douglas (attorneys).
JOHN E. NEAL (3/9/50), Vice President* (38), 222 South Riverside Plaza, Chicago,
Illinois; President, Kemper Funds Group, a unit of ZKI; Director, ZKI and ZKDI.
FRANK J. RACHWALSKI, JR. (3/26/45), Vice President*(9), 222 South Riverside
Plaza, Chicago, Illinois; Senior Vice President, ZKI.
ELIZABETH C. WERTH (10/1/47), Assistant Secretary*(30), 222 South Riverside
Plaza, Chicago, Illinois; Vice President, ZKI; and Vice President and Director
of State Registrations, ZKDI.
*Interested persons as defined in the Investment Company Act of 1940.
B-18
<PAGE> 44
The trustees and officers who are "interested persons" as designated above
receive no compensation from the Funds. The table below shows amounts paid or
accrued to those trustees who are not designated "interested persons" during the
New York Fund's fiscal year ended March 31, 1997 except that the information in
the last column is for the calendar year 1996.
<TABLE>
<CAPTION>
TOTAL
AGGREGATE COMPENSATION
COMPENSATION KEMPER FUNDS
NAME OF TRUSTEE FROM NEW YORK FUND PAID TO TRUSTEES(2)
--------------- ------------------ -------------------
<S> <C> <C>
David W. Belin(1)........................................... $ $143,400
Lewis A. Burnham............................................ 88,800
Donald L. Dunaway(1)........................................ 141,200
Robert B. Hoffman........................................... 92,100
Donald R. Jones............................................. 92,100
Shirley D. Peterson......................................... 89,800
William P. Sommers.......................................... 87,500
</TABLE>
- ---------------
(1) Includes deferred fees and interest thereon pursuant to deferred
compensation agreements with the Kemper Funds. Deferred amounts accrue
interest monthly at a rate approximate to the yield of Zurich Money
Funds-Zurich Money Market Fund. Total deferred fees and interest accrued for
the latest and all prior fiscal years for the New York Fund are $ for
Mr. Belin and $ for Mr. Dunaway.
(2) Includes compensation for service on the Boards of 24 Kemper funds with 41
fund portfolios. Each trustee currently serves as a trustee of 25 Kemper
Funds and 42 fund portfolios.
On May 10, 1997, the trustees and officers as a group owned less than 1% of the
then outstanding shares of each Fund. As of May 10, 1997, no shareholder owned
of record more than 5% of the outstanding shares of the Funds except that ZKI
owned all the outstanding shares of the Florida, New Jersey and Pennsylvania
Funds.
SPECIAL FEATURES
EXCHANGE PRIVILEGE. Subject to the limitations described below, Class A Shares
(or the equivalent) of the following Kemper Mutual Funds may be exchanged for
each other at their relative net asset values: Kemper Technology Fund, Kemper
Total Return Fund, Kemper Growth Fund, Kemper Small Capitalization Equity Fund,
Kemper Income and Capital Preservation Fund, Kemper Municipal Bond Fund, Kemper
Diversified Income Fund, Kemper High Yield Fund, Kemper U.S. Government
Securities Fund, Kemper International Fund, Kemper State Tax-Free Income Series,
Kemper Adjustable Rate U.S. Government Fund, Kemper Blue Chip Fund, Kemper
Global Income Fund, Kemper Target Equity Fund (series are subject to a limited
offering period), Kemper Intermediate Municipal Bond Fund, Kemper Cash Reserves
Fund, Kemper U.S. Mortgage Fund, Kemper Short-Intermediate Government Fund,
Kemper Dreman Fund, Inc., Kemper Value+Growth Fund, Kemper Quantitative Equity
Fund, Kemper Horizon Fund, Kemper Europe Fund, Kemper Asian Growth Fund and
Kemper Aggressive Growth Fund ("Kemper Mutual Funds") and certain "Money Market
Funds" (Zurich Money Funds, Cash Equivalent Fund, Tax-Exempt California Money
Market Fund, Cash Account Trust, Investors Municipal Cash Fund and Investors
Cash Trust). Shares of Money Market Funds and Kemper Cash Reserves Fund that
were acquired by purchase (not including shares acquired by dividend
reinvestment) are subject to the applicable sales charge on exchange. In
addition, shares of a Kemper Mutual Fund with a value in excess of $1,000,000,
other than Kemper Cash Reserves Fund, acquired by exchange from another Fund may
not be exchanged thereafter until they have been owned for 15 days (the "15 Day
Hold Policy"). For purposes of determining whether the 15 Day Hold Policy
applies to a particular exchange, the value of the shares to be exchanged shall
be computed by aggregating the value of shares being exchanged for all accounts
under common control, direction or advice, including without limitation accounts
administered by a financial services firm offering market timing, asset
allocation or similar services. Series of Kemper Target Equity Fund will be
B-19
<PAGE> 45
available on exchange only during the Offering Period for such series as
described in the prospectus for such series. Cash Equivalent Fund, Tax-Exempt
California Money Market Fund, Cash Account Trust, Investors Municipal Cash Fund
and Investors Cash Trust are available on exchange but only through a financial
services firm having a services agreement with ZKDI with respect to such funds.
Exchanges may only be made for funds that are available for sale in the
shareholder's state of residence. Currently, Tax-Exempt California Money Market
Fund is available for sale only in California and the Funds of Investors
Municipal Cash Fund are available for sale only in the following states and
federal district:
<TABLE>
<CAPTION>
FLORIDA FUND NEW JERSEY FUND NEW YORK FUND PENNSYLVANIA FUND
------------ --------------- ------------- -----------------
<S> <C> <C> <C>
Alabama Connecticut Connecticut Connecticut
Florida Delaware New Jersey Delaware
Georgia District of Columbia New York District of Columbia
Maryland Pennsylvania Maryland
Massachusetts Michigan
New Jersey Ohio
Virginia Pennsylvania
West Virginia Vermont
Virginia
West Virginia
</TABLE>
The total value of shares being exchanged must at least equal the minimum
investment requirement of the Kemper Fund into which they are being exchanged.
Exchanges are made based on relative dollar values of the shares involved in the
exchange. There is no service fee for an exchange; however, financial services
firms may charge for their services in expediting exchange transactions.
Exchanges will be effected by redemption of shares of the fund held and purchase
of shares of the other fund. For federal income tax purposes, any such exchange
constitutes a sale upon which a gain or loss may be realized, depending upon
whether the value of the shares being exchanged is more or less than the
shareholder's adjusted cost basis. Shareholders interested in exercising the
exchange privilege may obtain an exchange form and prospectuses of the other
funds from firms or ZKDI. Exchanges also may be authorized by telephone if the
shareholder has given authorization. Once the authorization is on file, the
Shareholder Service Agent will honor requests by telephone at 1-800-231-8568 or
in writing subject to the limitations on liability described in the prospectus.
Any share certificates must be deposited prior to any exchange of such shares.
During periods when it is difficult to contact the Shareholder Service Agent by
telephone, it may be difficult to use the telephone exchange privilege. The
exchange privilege is not a right and may be suspended, terminated or modified
at any time. Except as otherwise permitted by applicable regulation, 60 days'
prior written notice of any termination or material change will be provided.
SYSTEMATIC WITHDRAWAL PROGRAM. The owner of $5,000 or more of a Fund's shares
may provide for the payment from the owner's account of any requested dollar
amount up to $50,000 to be paid to the owner or the owner's designated payee
monthly, quarterly, semi-annually or annually. The minimum periodic payment is
$100. Shares are redeemed so that the payee will receive payment approximately
the first of the month. Dividend distributions will be automatically reinvested
at net asset value. A sufficient number of full and fractional shares will be
redeemed to make the designated payment. Depending upon the size of the payments
requested, redemptions for the purpose of making such payments may reduce or
even exhaust the account. The right is reserved to amend the systematic
withdrawal program on 30 days' notice. The program may be terminated at any time
by the shareholder or the Trust. Firms provide varying arrangements for their
clients to redeem Fund shares on a periodic basis. Such firms may independently
establish minimums for such services.
ELECTRONIC FUNDS TRANSFER PROGRAMS. For your convenience, the Trust has
established several investment and redemption programs using electronic funds
transfer via the Automated Clearing House (ACH). There is currently no charge by
the Trust for these programs. To use these features, your financial institution
(your
B-20
<PAGE> 46
employer's financial institution in the case of payroll deposit) must be
affiliated with an Automated Clearing House (ACH). This ACH affiliation permits
the Shareholder Service Agent to electronically transfer money between your bank
account, or employer's payroll bank in the case of Direct Deposit, and your Fund
account. Your bank's crediting policies of these transferred funds may vary.
These features may be amended or terminated at any time by the Trust.
Shareholders should contact ZKSvC at 1-800-621-1048 or the firm through which
their account was established for more information. These programs may not be
available through some firms that distribute Fund shares.
SHAREHOLDER RIGHTS
The Trust generally is not required to hold meetings of its shareholders. Under
the Agreement and Declaration of Trust of the Funds ("Declaration of Trust"),
however, shareholder meetings will be held in connection with the following
matters: (a) the election or removal of trustees if a meeting is called for such
purpose; (b) the adoption of any contract for which shareholder approval is
required by the 1940 Act; (c) any termination of a Fund to the extent and as
provided in the Declaration of Trust; (d) any amendment of the Declaration of
Trust (other than amendments changing the name of the Trust, establishing a
fund, supplying any omission, curing any ambiguity or curing, correcting or
supplementing any defective or inconsistent provision thereof); and (e) such
additional matters as may be required by law, the Declaration of Trust, the
By-laws of the Trust, or any registration of the Trust with the Securities and
Exchange Commission or any state, or as the trustees may consider necessary or
desirable. The shareholders also would vote upon changes in fundamental
investment objectives, policies or restrictions.
Each trustee serves until the next meeting of shareholders, if any, called for
the purpose of electing trustees and until the election and qualification of a
successor or until such trustee sooner dies, resigns, retires or is removed by a
majority vote of the shares entitled to vote (as described below) or a majority
of the trustees. In accordance with the 1940 Act (a) the Trust will hold a
shareholder meeting for the election of trustees at such time as less than a
majority of the trustees have been elected by shareholders, and (b) if, as a
result of a vacancy on the Board of Trustees, less than two-thirds of the
trustees have been elected by the shareholders, that vacancy will be filled only
by a vote of the shareholders.
Trustees may be removed from office by a vote of the holders of a majority of
the outstanding shares at a meeting called for that purpose, which meeting shall
be held upon the written request of the holders of not less than 10% of the
outstanding shares. Upon the written request of ten or more shareholders who
have been such for at least six months and who hold shares constituting at least
1% of the outstanding shares of the Trust stating that such shareholders wish to
communicate with the other shareholders for the purpose of obtaining the
signatures necessary to demand a meeting to consider removal of a trustee, the
Trust has undertaken to disseminate appropriate materials at the expense of the
requesting shareholders.
The Declaration of Trust provides that the presence at a shareholder meeting in
person or by proxy of at least 30% of the shares entitled to vote on a matter
shall constitute a quorum. Thus, a meeting of shareholders of the Trust could
take place even if less than a majority of the shareholders were represented on
its scheduled date. Shareholders would in such a case be permitted to take
action which does not require a larger vote than a majority of a quorum, such as
the election of trustees and ratification of the selection of auditors. Some
matters requiring a larger vote under the Declaration of Trust, such as
termination or reorganization of the Trust and certain amendments of the
Declaration of Trust, would not be affected by this provision; nor would matters
which under the 1940 Act require the vote of a "majority of the outstanding
voting securities" as defined in the 1940 Act.
The Declaration of Trust specifically authorizes the Board of Trustees to
terminate the Trust (or any Fund or class) by notice to the shareholders without
shareholder approval.
B-21
<PAGE> 47
Under Massachusetts law, shareholders of a Massachusetts business trust could,
under certain circumstances, be held personally liable for obligations of the
Trust. The Declaration of Trust, however, disclaims shareholder liability for
acts or obligations of the Trust and requires that notice of such disclaimer be
given in each agreement, obligation, or instrument entered into or executed by
the Trust or the trustees. Moreover, the Declaration of Trust provides for
indemnification out of Trust property for all losses and expenses of any
shareholder held personally liable for the obligations of the Trust and the
Trust will be covered by insurance which the trustees consider adequate to cover
foreseeable tort claims. Thus, the risk of a shareholder incurring financial
loss on account of shareholder liability is considered by ZKI remote and not
material, since it is limited to circumstances in which a disclaimer is
inoperative and the Trust itself is unable to meet its obligations.
B-22
<PAGE> 48
REPORT OF INDEPENDENT AUDITORS
The Board of Trustees and Shareholder
Investors Municipal Cash Fund--
Investors Florida Municipal Cash Fund
Investors New Jersey Municipal Cash Fund
Investors Pennsylvania Municipal Cash Fund
We have audited the accompanying statement of net assets of Investors Municipal
Cash Fund--Investors Florida Municipal Cash Fund; Investors New Jersey Municipal
Cash Fund; and Investors Pennsylvania Municipal Cash Fund as of May , 1997.
This statement of net assets is the responsibility of the Trust's management.
Our responsibility is to express an opinion on this statement of net assets
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the statement of net assets is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the statement of net assets. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall statement of net assets
presentation. We believe that our audit of the statement of net assets provides
a reasonable basis for our opinion.
In our opinion, the statement of net assets referred to above presents fairly,
in all material respects, the financial position of Investors Municipal Cash
Fund--Investors Florida Municipal Cash Fund; Investors New Jersey Municipal Cash
Fund; and Investors Pennsylvania Municipal Cash Fund at May , 1997 in
conformity with generally accepted accounting principles.
Chicago, Illinois
May , 1997
B-23
<PAGE> 49
INVESTORS MUNICIPAL CASH FUND--
INVESTORS FLORIDA MUNICIPAL CASH FUND
INVESTORS NEW JERSEY MUNICIPAL CASH FUND
INVESTORS PENNSYLVANIA MUNICIPAL CASH FUND
STATEMENT OF NET ASSETS--MAY , 1997
<TABLE>
<CAPTION>
FLORIDA NEW JERSEY PENNSYLVANIA
FUND FUND FUND
------- ---------- ------------
<S> <C> <C> <C>
ASSETS
Cash........................................................ $100,000 $100,000 $100,000
======== ======== ========
NET ASSETS
Net assets, applicable to shares of beneficial interest
(unlimited number of shares authorized, no par value)
outstanding for each Fund as follows:
100,000................................................... $100,000 $100,000 $100,000
======== ======== ========
THE PRICING OF SHARES
Net asset value and redemption price per share ($100,000.00
/ 100,000 shares outstanding)............................. $ 1.00 $ 1.00 $ 1.00
</TABLE>
- ---------------
NOTES:
Investors Municipal Cash Fund (the "Trust") was organized as a business trust
under the laws of The Commonwealth of Massachusetts on March 2, 1990. All shares
of beneficial interest of Investors Florida Municipal Cash Fund, Investors New
Jersey Municipal Cash Fund and Investors Pennsylvania Municipal Cash Fund of the
Trust were issued to Zurich Kemper Investments, Inc. ("ZKI"), the investment
manager for each series, on May , 1997 for $100,000 cash for a total of
$300,000. The Trust may establish multiple series; currently four series have
been established.
The costs of organization of the Funds will be paid by ZKI.
B-24
<PAGE> 50
INVESTORS MUNICIPAL CASH FUND
PART C.
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements
(i) Financial statements included in Part A of the Registration
Statement:
Tax-Exempt New York Money Market Fund--Financial Highlights.
Investors Florida Municipal Cash Fund, Investors New Jersey
Municipal Cash Fund and Investors Pennsylvania Municipal Cash
Fund--None.
(ii) Financial statements included in Part B of the Registration
Statement:
Tax-Exempt New York Money Market Fund.
Statement of assets and liabilities--March 31, 1997.
Statement of operations for the year ended March 31, 1997.
Statement of changes in net assets for each of the two years in
the period ended March 31, 1997.
Portfolio of investments--March 31, 1997.
Notes to financial statements.
Schedules II, III, IV and V have been omitted as the required
information is not present.
Schedule I has been omitted as the required information is presented in
the portfolio of investments at March 31, 1997.
Investors Florida Municipal Cash Fund, Investors New Jersey
Municipal Cash Fund and Investors Pennsylvania Municipal Cash Fund.
Statement of Net Assets--May , 1997.
Schedules I, II, III, IV and V have been omitted as the required
information is not present.
(b) Exhibits
<TABLE>
<S> <C>
99.b1. Amended and Restated Agreement and Declaration of Trust.*
99.b2. By-Laws.*
99.b3. Inapplicable.
99.b4.(a) Text of Share Certificate.*
99.b4.(b) Written Instrument Establishing and Designating New
Series.**
99.b4.(c) Written Instrument Establishing and Designating New Trust
Name.**
99.b5.(a) Investment Management Agreement.*
99.b5.(b) Notification of Additional Portfolios.**
99.b6.(a) Administration, Shareholder Services and Distribution
Agreement.*
99.b6.(b) Form of Selling Group Agreement.*
99.b7. Inapplicable.
99.b8. Custody Agreement.*
99.b9.(a) Agency Agreement.*
99.b9.(b) Supplement to Agency Agreement.*
99.b10.(a) Opinion and Consent of Vedder, Price, Kaufman & Kammholz.**.
99.b10.(b) Opinion and Consent of Ropes & Gray.**
</TABLE>
C-1
<PAGE> 51
<TABLE>
<S> <C>
99.b11. Report and Consent of Independent Auditors.**
99.b12. Inapplicable.
99.b13. Subscription Agreement.**
99.b14. Inapplicable.
99.b15. See 99.b6.(a) above.
99.b16. Performance Calculations.*
99.b24. Power of Attorney.
99.b485(b) Inapplicable.
27. Inapplicable.
</TABLE>
- ---------------
* Incorporated herein by reference to the Amendment to Registrant's
Registration Statement on Form N-1A identified below:
<TABLE>
<CAPTION>
EXHIBIT NO. POST-EFFECTIVE AMENDMENT NO. DATE OF FILING
----------- ---------------------------- --------------
<S> <C> <C>
1a, 2, 4, 5(a), 6(b), 8, 9(a) and 16 5 7/28/95
6(a) and 9(b) 6 7/26/96
</TABLE>
** To be filed by Post-Effective Amendment prior to the effective date.
ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Not Applicable.
ITEM 26. NUMBER OF HOLDERS OF SECURITIES
The number of record holders of each series of Registrant as of February
18, 1997 is as follows:
<TABLE>
<CAPTION>
NUMBER OF
RECORD
FUND HOLDERS
---- ---------
<S> <C>
Investors Florida Municipal Cash Fund....................... 0
Investors New Jersey Municipal Cash Fund.................... 0
Investors Pennsylvania Municipal Cash Fund.................. 0
Tax-Exempt New York Money Market Fund....................... 85
</TABLE>
ITEM 27. INDEMNIFICATION
Article VIII of the Registrant's Agreement and Declaration of Trust
(Exhibit 1 hereto, which is incorporated herein by reference) provides in effect
that the Registrant will indemnify its officers and trustees under certain
circumstances. However, in accordance with Section 17(h) and 17(i) of the
Investment Company Act of 1940 and its own terms, said Article of the Agreement
and Declaration of Trust does not protect any person against any liability to
the Registrant or its shareholders to which he would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence, or reckless
disregard of the duties involved in the conduct of his office.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to trustees, officers, and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that, in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a trustee, officer, or controlling person of the Registrant in the
successful defense of any action, suit, or proceeding) is asserted by such
trustee, officer, or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question as to whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
C-2
<PAGE> 52
ITEM 28(a) BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Information pertaining to business and other connections of the
Registrant's investment advisers is hereby incorporated by reference to the
section of the Prospectus captioned "Investment Manager and Shareholder
Services" and to the section of the Statement of Additional Information
captioned "Investment Manager and Shareholder Services".
Zurich Kemper Investments, Inc., investment adviser of the Registrant, is
investment adviser of:
Kemper Mutual Funds:
Kemper Technology Fund
Kemper Total Return Fund
Kemper Growth Fund
Kemper Small Capitalization Equity Fund
Kemper Income and Capital Preservation Fund
Kemper Money Funds
Kemper National Tax-Free Income Series
Kemper Diversified Income Fund
Kemper High Yield Fund
Cash Equivalent Fund
Kemper U.S. Government Securities Fund
Kemper International Fund
Kemper Portfolios
Kemper State Tax-Free Income Series
Tax-Exempt California Money Market Fund
Kemper Adjustable Rate U.S. Government Fund
Kemper Blue Chip Fund
Kemper Global Income Fund
Kemper Target Equity Fund
Cash Account Trust
Investors Cash Trust
Tax-Exempt New York Money Market Fund
Kemper Value Plus Growth Fund
Kemper Quantitative Equity Fund
Kemper Horizon Fund
Kemper Europe Fund
Kemper Asian Growth Fund
Kemper Aggressive Growth Fund
Kemper Closed-End Funds:
Kemper High Income Trust
Kemper Intermediate Government Trust
Kemper Municipal Income Trust
Kemper Multi-Market Income Trust
Kemper Strategic Municipal Income Trust
The Growth Fund of Spain, Inc.
Kemper Strategic Income Fund
Zurich Kemper Investments, Inc. also furnishes investment advice to and
manages investment portfolios for other clients including Kemper Investors Fund
and Kemper International Bond Fund.
C-3
<PAGE> 53
Item 28(b)(i) Business and Other Connections of Officers
and Directors of Zurich Kemper Investments, Inc.,
the Investment Adviser
TIMBERS, STEPHEN B.
Director, President, Chief Executive Officer and Chief Investment
Officer, Zurich Kemper Investments, Inc.
Director, Kemper Distributors, Inc.
Director, Zurich Investment Management, Inc.
Director, Chairman, Kemper Service Company
Director, Dreman Value Advisors, Inc.
Director, ZKI Agency, Inc.
Director, President, Kemper International Management, Inc.
Trustee and President, Kemper Funds
Director, The LTV Corporation
Governor, Investment Company Institute
NEAL, JOHN E.
Director, Zurich Kemper Investments, Inc.
President, Kemper Funds Group, a unit of Zurich Kemper
Investments, Inc.
Director, President, Kemper Service Company
Director, Kemper Distributors, Inc.
Director, Zurich Investment Management, Inc.
Director, Dreman Value Advisors, Inc.
Director, ZKI Agency, Inc.
Director, Community Investment Corporation
Director, Continental Community Development Corporation
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
Director, RespiteCare
Director, Urban Shopping Centers, Inc.
Vice President, Kemper Funds
C-4
<PAGE> 54
MORAX, DOMINQUE P.
Director, Zurich Kemper Investments, Inc.
Senior Vice President, Member Extended Corporate Executive Board,
Zurich Insurance Company
Trustee, Kemper Funds
CHAPMAN, II, WILLIAM E.
President, Kemper Retirement Plans Group, a unit of Zurich Kemper
Investments, Inc.
Director, Executive Vice President, Kemper Distributors, Inc.
Executive Vice President, Kemper Service Company
VOGEL, VICTOR E.
Senior Executive Vice President, Zurich Kemper Investments, Inc.
Trustee, Zurich Kemper Investments, Inc. Profit Sharing Plan & Money
Purchase Pension Plan
Executive Vice President, Kemper Service Company
BEIMFORD, JR., JOSEPH P.
Executive Vice President, Chief Investment Officer - Fixed
Income, Zurich Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Galaxy Offshore, Inc.
Vice President, Investors Cash Trust
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Global Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Intermediate Government Trust
Vice President, Kemper International Bond Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Money Funds
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Municipal Income Trust
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Portfolios
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Income Fund
Vice President, Kemper Strategic Municipal Income Trust
Vice President, Kemper U.S. Government Securities Fund
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
COXON, JAMES H.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Vice President, Galaxy Offshore, Inc.
C-5
<PAGE> 55
Managing Director, Zurich Investment Management, Inc.
DUDASIK, PATRICK H.
Executive Vice President and Chief Financial Officer, Zurich Kemper
Investments, Inc.
Executive Vice President, Chief Financial Officer and Treasurer,
Dreman Value Advisors, Inc.
Chief Financial Officer and Treasurer, Zurich Investment Management, Inc.
Treasurer and Chief Financial Officer, Kemper Distributors, Inc.
Treasurer and Chief Financial Officer, Kemper Service Company
Director and Treasurer, Zurich Investment Management Limited
Treasurer, ZKI Agency, Inc.
GREENAWALT, JAMES L.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, President, Kemper Distributors, Inc.
Director, President, ZKI Agency, Inc.
LANGBAUM, GARY A.
Executive Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Total Return Fund
Vice President, Kemper Investors Fund
MANZONI, JR., CHARLES R.
Executive Vice President, Secretary & General Counsel, Zurich Kemper
Investments, Inc.
Vice President, Kemper Funds
Secretary, ZKI Agency, Inc.
Secretary, Kemper Service Company
Secretary, Kemper Distributors, Inc.
Secretary, ZKI Holding Corporation
Secretary, Zurich Investment Management, Inc.
MURRIHY, MAURA J.
Executive Vice President, Zurich Kemper Investments, Inc.
REYNOLDS, STEVEN H.
Executive Vice President, Chief Investment Officer - Equities, Zurich
Kemper Investments, Inc.
Vice President, Kemper Technology Fund
Vice President, Kemper Total Return Fund
Vice President, Kemper Growth Fund
Vice President, Kemper Small Capitalization Equity Fund
Vice President, Kemper International Fund
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Target Equity Fund
Vice President, Kemper Horizon Fund
Vice President, Kemper Investors Fund
Vice President, The Growth Fund of Spain, Inc.
Vice President, Kemper Europe Fund
C-6
<PAGE> 56
ROBERTS, SCOTT A.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Senior Managing Director, Zurich Investment Management, Inc.
SILIGMUELLER, DALE S.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Executive Vice President, Kemper Service Company
WEISS, ROBERT D.
Executive Vice President, Zurich Kemper Investments, Inc.
Director, Senior Managing Director, Zurich Investment Management, Inc.
BUKOWSKI, DANIEL J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Quantitative Equity Fund
Vice President, Kemper Value Plus Growth Fund
Vice President, Kemper Investors Fund
BUTLER, DAVID H.
Senior Vice President, Zurich Kemper Investments, Inc.
CERVONE, DAVID M.
Senior Vice President, Zurich Kemper Investments, Inc.
CESSINE, ROBERT S.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Income and Capital Preservation Fund
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Investors Fund
CHESTER, TRACY McCORMICK
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Blue Chip Fund
Vice President, Kemper Target Equity Fund
CHIEN, CHRISTINE
Senior Vice President, Zurich Kemper Investments, Inc.
CIARLELLI, ROBERT W.
Senior Vice President, Zurich Kemper Investments, Inc.
Executive Vice President, Kemper Service Company
COLLORA, PHILIP J.
Senior Vice President and Assistant Secretary, Zurich Kemper
Investments, Inc.
Vice President and Secretary, Kemper Funds
C-7
<PAGE> 57
Assistant Secretary, Kemper International Management, Inc.
Assistant Secretary, Zurich Investment Management, Inc.
Assistant Secretary, Dreman Value Advisors, Inc.
Assistant Secretary, ZKI Agency, Inc.
DUFFY, JEROME L.
Senior Vice President, Zurich Kemper Investments, Inc.
Treasurer, Kemper Funds
FENGER, JAMES E.
Senior Vice President, Zurich Kemper Investments, Inc.
FINK, THOMAS M.
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
GALLAGHER, MICHAEL L.
Senior Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Kemper Service Company
GOERS, RICHARD A.
Senior Vice President, Zurich Kemper Investments, Inc.
GREENWALD, MARSHALL L.
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
HARRINGTON, MICHAEL E.
Senior Vice President, Zurich Kemper Investments, Inc.
KLEIN, GEORGE
Senior Vice President, Zurich Kemper Investments, Inc.
Director, Managing Director, Zurich Investment Management, Inc.
KLEIN, MARTIN
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
KORTH, FRANK D.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Technology Fund
McNAMARA, MICHAEL A.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
C-8
<PAGE> 58
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
MOELLER, JAMES V.
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
MOORE, C. PERRY
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, ZKI Agency, Inc.
MIER, CHRISTOPHER J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper National Tax-Free Income Series
Vice President, Kemper Municipal Income Trust
Vice President, Kemper State Tax-Free Income Series
Vice President, Kemper Strategic Municipal Income Trust
RABIEGA, CRAIG F.
Senior Vice President, Zurich Kemper Investments, Inc.
First Vice President, Kemper Service Company
RACHWALSKI, JR. FRANK J.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
Vice President, Investors Cash Trust
Vice President, Kemper Investors Fund
Vice President, Kemper Money Funds
Vice President, Kemper Portfolios
Vice President, Tax-Exempt California Money Market Fund
Vice President, Tax-Exempt New York Money Market Fund
REGNER, THOMAS M.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Horizon Fund
Vice President, Kemper Investors Fund
RESIS, JR., HARRY E.
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper High Income Trust
Vice President, Kemper High Yield Fund
Vice President, Kemper Investors Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
SILVIA, JOHN E.
Senior Vice President, Zurich Kemper Investments, Inc.
SMITH, JR., EDWARD BYRON
Senior Vice President, Zurich Kemper Investments, Inc.
SWANSON, DAVID
Senior Vice President, Zurich Kemper Investments, Inc.
C-9
<PAGE> 59
VANDENBERG, RICHARD
Senior Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper U.S. Government Securities Fund
Vice President, Kemper Portfolios
Vice President, Kemper Adjustable Rate U.S. Government Fund
VINCENT, CHRISTOPHER T.
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
WONNACOTT, LARRY R.
Senior Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
BAZAN, KENNETH M.
First Vice President, Zurich Kemper Investments, Inc.
Director, K-P Greenway, Inc.
Director, K-P Plaza Dallas, Inc.
Director, Kemper/Prime Acquisition Fund, Inc.
BOEHM, JONATHAN J.
First Vice President, Zurich Kemper Investments, Inc.
Senior Vice President, Kemper Service Company
BURROW, DALE R.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Strategic Municipal Income Trust
BYRNES, ELIZABETH A.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Adjustable Rate U.S. Government Fund
Vice President, Kemper Intermediate Government Trust
CHIEN, CHRISTINE
First Vice President, Zurich Kemper Investments, Inc.
CHRISTIANSEN, HERBERT A.
First Vice President, Zurich Kemper Investments, Inc.
First Vice President, Kemper Service Company
COHEN, JERRI I.
First Vice President, Zurich Kemper Investments, Inc.
DeMAIO, CHRIS C.
First Vice President, Zurich Kemper Investments, Inc.
Vice President and Chief Accounting Officer, Kemper Service
Company
C-10
<PAGE> 60
DEXTER, STEPHEN P.
First Vice President, Zurich Kemper Investments, Inc.
DOYLE, DANIEL J.
First Vice President, Zurich Kemper Investments, Inc.
HALE, DAVID D.
First Vice President, Zurich Kemper Investments, Inc.
HAUSKEN, PHILIP D.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Distributors, Inc.
Assistant Secretary, Zurich Investment Management, Inc.
HORTON, ROBERT J.
First Vice President, Zurich Kemper Investments, Inc.
INNES, BRUCE D.
First Vice President, Zurich Kemper Investments, Inc.
Co-President, International Association of Corporate and
Professional Recruiters
JACOBS, PETER M.
First Vice President, Zurich Kemper Investments, Inc.
KEELEY, MICHELLE M.
First Vice President, Zurich Kemper Investments, Inc.
KIEL, CAROL L.
First Vice President, Zurich Kemper Investments, Inc.
KNAPP, WILLIAM M.
First Vice President, Zurich Kemper Investments, Inc.
LAUGHLIN, ANN M.
First Vice President, Zurich Kemper Investments, Inc.
LENTZ, MAUREEN P.
First Vice President, Zurich Kemper Investments, Inc.
McCRINDLE-PETRARCA, SUSAN
First Vice President, Zurich Kemper Investments, Inc.
MINER, EDWARD
First Vice President, Zurich Kemper Investments, Inc.
MURRAY, SCOTT S.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
NORRIS, JOHNSTON A.
First Vice President, Zurich Kemper Investments, Inc.
C-11
<PAGE> 61
PANOZZO, ROBERTA L.
First Vice President, Zurich Kemper Investments, Inc.
PONTECORE, SUSAN E.
First Vice President, Zurich Kemper Investments, Inc.
RADIS, STEVE A.
First Vice President, Zurich Kemper Investments, Inc.
RATEKIN, DIANE E.
First Vice President, Assistant General Counsel and Assistant
Secretary, Zurich Kemper Investments, Inc.
Assistant Secretary, Kemper Distributors, Inc.
SMITH, ROBERT G.
First Vice President, Zurich Kemper Investments, Inc.
STUEBE, JOHN W.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Cash Account Trust
Vice President, Cash Equivalent Fund
TEPPER, SHARYN A.
First Vice President, Zurich Kemper Investments, Inc.
Assistant Secretary, Zurich Investment Management, Inc.
TRUTTER, JONATHAN W.
First Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
Vice President, Kemper Diversified Income Fund
Vice President, Kemper Multi-Market Income Trust
Vice President, Kemper Strategic Income Fund
WETHERALD, ROBERT F.
First Vice President, Zurich Kemper Investments, Inc.
WILLSON, STEPHEN R.
First Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Strategic Municipal Income Trust
WITTNEBEL, MARK E.
First Vice President, Zurich Kemper Investments, Inc.
ADAMS, DONALD
Vice President, Zurich Kemper Investments, Inc.
ALLEN, PATRICIA L.
Vice President, Zurich Kemper Investments, Inc.
ANDREASEN, AMY
Vice President, Zurich Kemper Investments, Inc.
ANTONAK, GEORGE A.
Vice President, Zurich Kemper Investments, Inc.
BALASUBRAMANIAM, KALAMADI
Vice President, Zurich Kemper Investments, Inc.
BARRY, JOANN M.
Vice President, Zurich Kemper Investments, Inc.
C-12
<PAGE> 62
BIEBERLY, CHRISTINE A.
Vice President, Zurich Kemper Investments, Inc.
BODEM, RICHARD A.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
BRENNAN, ELEANOR R.
Vice President, Zurich Kemper Investments, Inc.
BUCHANAN, PAMELA S.
Vice President, Zurich Kemper Investments, Inc.
BURKE, MARY PAT
Vice President, Zurich Kemper Investments, Inc.
BURSHTAN, DAVID H.
Vice President, Zurich Kemper Investments, Inc.
CARNEY, ANNE T.
Vice President, Zurich Kemper Investments, Inc.
CACCIOLA, RONALD
Vice President, Zurich Kemper Investments, Inc.
Managing Director, Zurich Investment Management, Inc.
CARTER, PAUL J.
Vice President and Compliance Manager, Zurich Kemper Investments, Inc.
COHEN, JERRI I.
Vice President, Zurich Kemper Investments, Inc.
COULTER, STEVAN F.
Vice President, Zurich Kemper Investments, Inc.
ESOLA, CHARLES J.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
FRIHART, THORA A.
Vice President, Zurich Kemper Investments, Inc.
GERACI, AUGUST L.
Vice President, Zurich Kemper Investments, Inc.
GOLAN, JAMES S.
Vice President, Zurich Kemper Investments, Inc.
GOODWIN, JUDITH C.
Vice President, Zurich Kemper Investments, Inc.
GRAY, PATRICK
Vice President, Zurich Kemper Investments, Inc.
GROOTENDORST, TONYA
Vice President, Zurich Kemper Investments, Inc.
HECHT, MARC L.
Vice President, Zurich Kemper Investments, Inc.
Assistant Secretary, Kemper Distributors, Inc.
Assistant Secretary, ZKI Holding Corporation
Assistant Secretary, ZKI Agency, Inc.
C-13
<PAGE> 63
HUOT, LISA L.
Vice President, Zurich Kemper Investments, Inc.
JASINSKI, R. ANTHONY
Vice President, Zurich Kemper Investments, Inc.
KARWOWSKI, KENNETH F.
Vice President, Zurich Kemper Investments, Inc.
KENNEDY, PATRICK J.
Vice President, Zurich Kemper Investments, Inc.
KOBS, MICHAEL G.
Vice President, Zurich Kemper Investments, Inc.
KOCH, DEBORAH L.
Vice President, Zurich Kemper Investments, Inc.
KOURY, KATHRYN E.
Vice President, Zurich Kemper Investments, Inc.
KOWALCZYK, MARK A.
Vice President, Zurich Kemper Investments, Inc.
Vice President, ZKI Agency, Inc.
KRANZ, KATHY J.
Vice President, Zurich Kemper Investments, Inc.
KRUEGER, PAMELA D.
Vice President, Zurich Kemper Investments, Inc.
KYCE, JOYCE
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
LASKA, ROBERTA E.
Vice President, Zurich Kemper Investments, Inc.
LAUTZ, STEPHEN
Vice President, Zurich Kemper Investments, Inc.
LeFEBVRE, THOMAS J.
Vice President, Zurich Kemper Investments, Inc.
McGINN, MARTHA R.
Vice President, Zurich Kemper Investments, Inc.
McGOVERN, KAREN B.
Vice President, Zurich Kemper Investments, Inc.
MILLER, GARY L.
Vice President, Zurich Kemper Investments, Inc.
MILLIGAN, BRIAN J.
Vice President, Zurich Kemper Investments, Inc.
C-14
<PAGE> 64
MULLEN, TERRENCE
Vice President, Zurich Kemper Investments, Inc.
MURPHY, THOMAS M.
Vice President, Zurich Kemper Investments, Inc.
NEVILLE, BRIAN P.
Vice President, Zurich Kemper Investments, Inc.
NORMAN, JR., DONALD L.
Vice President, Zurich Kemper Investments, Inc.
NOWAK, GREGORY J.
Vice President, Zurich Kemper Investments, Inc.
PANOZZO, ALBERT R.
Vice President, Zurich Kemper Investments, Inc.
PAXTON, THOMAS
Vice President, Zurich Kemper Investments, Inc.
QUADRINI, LISA L.
Vice President, Zurich Kemper Investments, Inc.
RANDALL, JR., WALTER R.
Vice President, Zurich Kemper Investments, Inc.
ROBINSON, DEBRA A.
Vice President, Zurich Kemper Investments, Inc.
RODGERS, JOHN B.
Vice President, Zurich Kemper Investments, Inc.
ROKOSZ, PAUL A.
Vice President, Zurich Kemper Investments, Inc.
ROSE, KATIE M.
Vice President, Zurich Kemper Investments, Inc.
RUDIN, MICHELLE I.
Vice President, Zurich Kemper Investments, Inc.
SAENGER, MARYELLEN
Vice President, Zurich Kemper Investments, Inc.
SHULTZ, KAREN D.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
SOPHER, EDWARD O.
Vice President, Zurich Kemper Investments, Inc.
C-15
<PAGE> 65
SPILLER, KATHLEEN A.
Vice President, Zurich Kemper Investments, Inc.
SPURLING, CHRIS
Vice President, Zurich Kemper Investments, Inc.
STROMM, LAWRENCE D.
Vice President, Zurich Kemper Investments, Inc.
THOMAS, JILL
Vice President, Zurich Kemper Investments, Inc.
VANDEMERKT, RICHARD J.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
WALKER, ANGELA
Vice President, Zurich Kemper Investments, Inc.
WATKINS, JAMES K.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Service Company
WERTH, ELIZABETH C.
Vice President, Zurich Kemper Investments, Inc.
Vice President, Kemper Distributors, Inc.
Assistant Secretary, Kemper Open-End Mutual Funds
WILNER, MITCHELL
Vice President, Zurich Kemper Investments, Inc.
WIZER, BARBARA K.
Vice President, Zurich Kemper Investments, Inc.
ZURAWSKI, CATHERINE N.
Vice President, Zurich Kemper Investments, Inc.
C-16
<PAGE> 66
ITEM 29. PRINCIPAL UNDERWRITERS
(a) Kemper Distributors, Inc. acts as principal underwriter of
the Registrant's shares and acts as principal underwriter of the Kemper Funds,
Kemper Investors Fund, Kemper International Bond Fund and Kemper-Dreman Fund,
Inc.
(b) Information on the officers and directors of Kemper
Distributors, Inc., principal underwriter for the Registrant is set forth
below. The principal business address is 222 South Riverside Plaza, Chicago,
Illinois 60606.
<TABLE>
<CAPTION>
POSITIONS AND
POSITIONS AND OFFICES OFFICES WITH
NAME WITH UNDERWRITER REGISTRANT
---- ---------------- ----------
<S> <C> <C>
James L. Greenawalt Director, President None
William E. Chapman, II Director, Executive Vice President None
John E. Neal Director Vice President
Stephen B. Timbers Director President/Trustee
Patrick H. Dudasik Financial Principal, Treasurer
and Chief Financial Officer None
Linda A. Bercher Senior Vice President None
Thomas V. Bruns Senior Vice President None
Terry Cunningham Senior Vice President None
John H. Robison, Jr. Senior Vice President None
Henry J. Schulthesz Senior Vice President None
Philip D. Hausken Vice President None
Carlene D. Merold Vice President None
Elizabeth C. Werth Vice President Assistant Secretary
Charles R. Manzoni, Jr. Secretary Vice President
Marc L. Hecht Assistant Secretary None
Diane E. Ratekin Assistant Secretary None
</TABLE>
(c) Not applicable.
C-17
<PAGE> 67
ITEM 30. LOCATION OF ACCOUNTS AND RECORDS
Accounts, books and other documents are maintained at the offices of the
Registrant, the offices of Registrant's investment adviser, Zurich Kemper
Investments, Inc., 222 South Riverside Plaza, Chicago, Illinois 60606, at the
offices of the Registrant's principal underwriter, Zurich Kemper Distributors,
Inc., 222 Riverside Plaza Street, Chicago, Illinois 60606 or, in the case of
records concerning custodial functions, at the offices of the custodian,
Investors Fiduciary Trust Company ("IFTC"), 127 West 10th Street, Kansas City,
Missouri 64105 or, in the case of records concerning transfer agency functions,
at the offices of IFTC and of the shareholder service agent, Zurich Kemper
Service Company, 811 Main Street, Kansas City, Missouri 64105.
ITEM 31. MANAGEMENT SERVICES
Not applicable.
ITEM 32. UNDERTAKINGS
(a) Not applicable.
(b) The Registrant undertakes to file a Post-Effective Amendment using
financial statements of Investors Florida Municipal Cash Fund, Investors New
Jersey Municipal Cash Fund and Investors Pennsylvania Municipal Cash Fund, which
need not be certified, within four to six months from the effective date of the
Registration Statement.
(c) The Registrant undertakes to furnish to each person to whom a
prospectus is delivered a copy of the Registrant's latest annual report to
shareholders, upon request and without charge.
C-18
<PAGE> 68
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant certifies and has duly caused
this Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Chicago and State of Illinois, on the
7th day of March, 1997.
TAX-EXEMPT NEW YORK MONEY MARKET FUND
by /s/ STEPHEN B. TIMBERS
------------------------------------
Stephen B. Timbers, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on March 7, 1997 on behalf of the
following persons in the capacities indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ STEPHEN B. TIMBERS President
- --------------------------------------------------- (Principal Executive Officer) and Trustee
Stephen B. Timbers
/s/ DAVID W. BELIN* Trustee
- ---------------------------------------------------
David W. Belin
/s/ LEWIS A. BURNHAM* Trustee
- ---------------------------------------------------
Lewis A. Burnham
/s/ DONALD L. DUNAWAY* Trustee
- ---------------------------------------------------
Donald L. Dunaway
/s/ ROBERT B. HOFFMAN* Trustee
- ---------------------------------------------------
Robert B. Hoffman
/s/ DONALD R. JONES* Trustee
- ---------------------------------------------------
Donald R. Jones
/s/ DOMINIQUE P. MORAX* Trustee
- ---------------------------------------------------
Dominique P. Morax
/s/ SHIRLEY D. PETERSON* Trustee
- ---------------------------------------------------
Shirley D. Peterson
/s/ WILLIAM P. SOMMERS* Trustee
- ---------------------------------------------------
William P. Sommers
/s/ JEROME L. DUFFY* Trustee
- --------------------------------------------------- (Principal Financial and Accounting Officer)
Jerome L. Duffy
* Philip J. Collora signs this document pursuant to
powers of attorney filed herein.
/s/ PHILIP J. COLLORA
- ---------------------------------------------------
Philip J. Collora
</TABLE>
C-19
<PAGE> 69
INDEX TO EXHIBITS
Exhibits
<TABLE>
<S> <C>
99.b1. Amended and Restated Agreement and Declaration of Trust.*
99.b2. By-Laws.*
99.b3. Inapplicable.
99.b4.(a) Text of Share Certificate.*
99.b4.(b) Written Instrument Establishing and Designating New
Series.**
99.b4.(c) Written Instrument Establishing and Designating New Trust
Name.**
99.b5.(a) Investment Management Agreement.*
99.b5.(b) Notification of Additional Portfolios.**
99.b6.(a) Administration, Shareholder Services and Distribution
Agreement.*
99.b6.(b) Form of Selling Group Agreement.*
99.b7. Inapplicable.
99.b8. Custody Agreement.*
99.b9.(a) Agency Agreement.*
99.b9.(b) Supplement to Agency Agreement.*
99.b10.(a) Opinion and Consent of Vedder, Price, Kaufman & Kammholz.**.
99.b10.(b) Opinion and Consent of Ropes & Gray.**
99.b11. Report and Consent of Independent Auditors.**
99.b12. Inapplicable.
99.b13. Subscription Agreement.**
99.b14. Inapplicable.
99.b15. See 99.b6.(a) above.
99.b16. Performance Calculations.*
99.b24. Power of Attorney.
99.b485(b) Inapplicable.
27. Inapplicable.
</TABLE>
- ---------------
* Incorporated herein by reference to the Amendment to Registrant's
Registration Statement on Form N-1A identified below:
<TABLE>
<CAPTION>
EXHIBIT NO. POST-EFFECTIVE AMENDMENT NO. DATE OF FILING
----------- ---------------------------- --------------
<S> <C> <C>
1a, 2, 4, 5(a), 6(b), 8, 9(a) and 16 5 7/28/95
6(a) and 9(b) 6 7/26/96
</TABLE>
** To be filed by Post-Effective Amendment prior to the effective date.
<PAGE> 1
EX-99.B24
POWER OF ATTORNEY
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Stephen B. Timbers Trustee January 21, 1997
---------------------------
<PAGE> 2
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ David W. Belin Trustee January 21, 1997
---------------------------
<PAGE> 3
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Lewis A. Burnham Trustee January 21, 1997
---------------------------
<PAGE> 4
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Donald L. Dunaway Trustee January 21, 1997
---------------------------
<PAGE> 5
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Robert B. Hoffman Trustee January 21, 1997
---------------------------
<PAGE> 6
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Donald R. Jones Trustee January 21, 1997
---------------------------
<PAGE> 7
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Dominique P. Morax Trustee January 21, 1997
---------------------------
<PAGE> 8
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ Shirley D. Peterson Trustee January 21, 1997
---------------------------
<PAGE> 9
POWER OF ATTORNEY
-----------------
The person whose signature appears below hereby appoints
Stephen B. Timbers, Charles R. Manzoni, Jr. and Philip J.
Collora and each of them, any of whom may act without the
joinder of the others, as such person's attorney-in-fact to
sign and file on such person's behalf individually and in the
capacity stated below such registration statements,
amendments, post-effective amendments, exhibits, applications
and other documents with the Securities and Exchange
Commission or any other regulatory authority as may be
desirable or necessary in connection with the public offering
of shares of Tax-Exempt New York Money Market Fund.
Signature Title Date
/s/ William P. Sommers Trustee January 21, 1997
---------------------------
