<PAGE> 1
Kemper International Bond Fund
SEMIANNUAL REPORT TO SHAREHOLDERS FOR
THE PERIOD ENDED JUNE 30, 1996
SEEKING TOTAL RETURN, A COMBINATION OF INCOME AND CAPITAL APPRECIATION,
PRINCIPALLY THROUGH A PORTFOLIO OF INVESTMENT GRADE FOREIGN DEBT
SECURITIES
" ... With a reduced position in Japan, we looked for and found significant
pockets of value elsewhere."
[KEMPER LOGO]
<PAGE> 2
3
Performance Update
5
Portfolio of
Investments
6
Financial Statements
8
Notes to
Financial Statements
11
Financial Highlights
AT A GLANCE
- -------------------------------------------------------------------------------
KEMPER INTERNATIONAL BOND FUND
TOTAL RETURN*
- -------------------------------------------------------------------------------
FOR THE SIX-MONTH PERIOD ENDED JUNE 30, 1996
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
<S> <C>
KEMPER INTERNATIONAL
BOND FUND -1.11%
- -------------------------------------------------------------------------------
</TABLE>
Return is historical and does not represent future performance. Returns and net
asset value fluctuate. Shares are redeemable at current net asset value, which
may be more or less than original cost.
*Total return measures net investment income and capital gain or loss from
portfolio investments, assuming reinvestment of all dividends. During the
periods noted, securities prices fluctuated. For additional information, see the
Prospectus and Statement of Additional Information and the Financial Highlights
at the end of this report.
- -------------------------------------------------------------------------------
NET ASSET VALUE
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AS OF AS OF
6/30/96 12/31/95
- -------------------------------------------------------------------------------
<S> <C> <C>
KEMPER INTERNATIONAL BOND FUND $8.93 $9.03
- -------------------------------------------------------------------------------
</TABLE>
TERMS TO KNOW
COUPON RATE Interest rate on a debt security the issuer promises to pay to the
holder until maturity, expressed as an annual percentage of par value.
CURRENCY RISK The U.S. dollar value of a foreign security tends to decrease when
the value of the U.S. dollar rises against the foreign currency in which the
security is denominated. Conversely, the U.S. dollar value of a foreign security
tends to increase when the value of the U.S. dollar falls against the currency.
INDEX An unmanaged group of securities that is considered representative of the
stock or bond markets. An index does not take into account any fees or expenses
related to the individual securities that it tracks. However, for performance
comparisons, the index is adjusted to reflect reinvestment of dividends of the
securities in the index.
TOTAL RETURN A fund's total return measures both the net investment income and
any realized and unrealized appreciation or depreciation of the underlying
investments in its portfolio for the period, assuming that dividends are
reinvested. It represents the aggregate percentage or dollar value change over
the period.
<PAGE> 3
PERFORMANCE UPDATE
[JOHNS PHOTO]
GORDON JOHNS JOINED ZURICH KEMPER INVESTMENTS, INC. IN 1988 AND IS THE MANAGING
DIRECTOR OF ZURICH INVESTMENT MANAGEMENT LIMITED, LONDON, AND IS A VICE
PRESIDENT AND PORTFOLIO MANAGER OF KEMPER INTERNATIONAL BOND FUND. JOHNS
GRADUATED WITH A B.A. IN LAW FROM BALLIOL COLLEGE, OXFORD.
THE VIEWS EXPRESSED IN THIS REPORT REFLECT THOSE OF THE PORTFOLIO MANAGER ONLY
THROUGH THE END OF THE PERIOD OF THE REPORT, AS STATED ON THE COVER. THE
MANAGER'S VIEWS ARE SUBJECT TO CHANGE AT ANY TIME, BASED
ON MARKET AND OTHER CONDITIONS.
DURING THE LAST SIX MONTHS, THE COMPARATIVELY STRONGER PERFORMANCE OF
INTERNATIONAL BOND MARKETS HELPED TO OFFSET THE LOW RETURNS SEEN IN THE U.S.
BELOW, PORTFOLIO MANAGER GORDON JOHNS DISCUSSES THE MARKET ACTIVITY AND KEMPER
INTERNATIONAL BOND FUND'S PERFORMANCE.
Q GORDON, HOW WOULD YOU CHARACTERIZE KEMPER INTERNATIONAL BOND FUND'S
PERFORMANCE DURING THE LAST SIX MONTHS AND THE GLOBAL BOND MARKETS' PERFORMANCE
IN GENERAL?
A Kemper International Bond Fund ended this six-month period at -1.11
percent, slightly behind the J.P. Morgan Global Government Bond Index ex-U.S.*
which slipped to -1.00 percent, in U.S. dollar terms, for the period. It was a
market in which bonds earned their coupon rates but there was very little
capital appreciation.
* THE J.P. MORGAN GLOBAL GOVERNMENT BOND INDEX EX-U.S. IS AN UNMANAGED INDEX
THAT IS GENERALLY CONSIDERED REPRESENTATIVE OF THE INTERNATIONAL OR GOVERNMENT
BOND MARKETS EXCLUDING THE U.S. THIS INDEX SERVES AS A BENCHMARK TO WHICH WORLD
INCOME BOND FUNDS COMPARE THEIR PERFORMANCE.
Q WHICH MARKETS DID THE FUND FAVOR?
A In general, we found New Zealand and Australia, members of the
dollar-bloc countries, the most attractive in this period because the
dollar-bloc tended to improve against the other currencies, especially the yen.
Compared to the J.P. Morgan Global Government Bond Index ex-U.S., the fund is
overweighted in Europe, Australia and New Zealand. We are underweighted in
Japan due to currency uncertainties.
In the last six months, we have eliminated our exposure to smaller
markets such as Portugal and Finland because the core European markets were
more attractive from a valuation standpoint than these peripheral markets. Also
on a risk basis, core markets including France, Germany and the Netherlands
were offering higher forecasted returns. The United Kingdom is an example of a
core market where we also found value. In addition, we increased our Australian
exposure during this period because of low valuations in the markets there. The
Australian bond market provided a good alternative to other weak government
bond markets.
Q WHAT STRATEGIES PROVED MOST BENEFICIAL DURING THE PERIOD?
A We maintained a minimal exposure in Japan. By keeping our exposure in
this market low, we were able to reduce the effect of the weak Japanese
currency and the weak bond market for the six-month period. This lesser
weighting, compared to the J.P. Morgan Global Government Bond Index ex-U.S.,
helped our performance for the period. With a reduced position in Japan, we
looked for and found significant pockets of value elsewhere. The fund was
overweighted in France, for example, and returns in local
3
<PAGE> 4
PERFORMANCE UPDATE
currency terms there were 4.42 percent. We also had greater exposure to the
United Kingdom than the index and that market returned 1.25 percent.
Q WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
A We don't anticipate a great deal of change. We are not seeing the sort
of attractive valuations that inspire significant moves in the bond market. The
positioning of the portfolio assumes some appreciation of the dollar bloc, and
we will continue to favor Australia and New Zealand. We are looking for stable
interest rates worldwide, yet growth should continue at a reasonable pace.
Q WHAT ARE THE RISKS TO THIS OUTLOOK?
A When comparing the inflation levels in the major economies of the
world, they have increased only slightly over the previous year. Growth has
turned around in Europe, the business cycle in North America is maturing and
the output in the U.S. is reaching its potential. Obviously, the major risk
brought on by these conditions is that the current growth will produce
inflationary pressure. If this happens, governments may tighten monetary
policies and raise interest rates. Should that happen, bond values will suffer.
4
<PAGE> 5
PORTFOLIO OF INVESTMENTS
KEMPER INTERNATIONAL BOND FUND
Portfolio of Investments at June 30, 1996
(in thousands)
<TABLE>
<CAPTION>
GOVERNMENT OBLIGATIONS (85.0%) LOCAL CURRENCY U.S. DOLLAR
CURRENCY AND CORPORATE OBLIGATIONS (10.2%) PRINCIPAL VALUE
<S> <C> <C> <C>
FRENCH FRANC--23.6% Kingdom of Denmark, 5.50%, 1999 2,000 $ 393
French Treasury, 8.50%, 2002 1,800 396
Republic of Portugal, 7.70%, 2005 1,850 386
Kingdom of Spain, 6.50%, 2001 1,900 381
-----------------------------------------------------------------------------
European Investment Bank, 8.75%, 2002 1,750 387
-----------------------------------------------------------------------------
1,943
- --------------------------------------------------------------------------------------------------------------------
GERMAN Republic of Austria, 6.875%, 2000 580 401
DEUTSCHEMARK--22.8%
Kingdom of Belgium, 7.00%, 2002 500 343
Republic of Finland, 8.25%, 2002 500 363
Federal Republic of Germany, 8.375%, 2001 545 401
Kingdom of Sweden, 6.00%, 2000 550 369
-----------------------------------------------------------------------------
1,877
- --------------------------------------------------------------------------------------------------------------------
BRITISH POUND--20.5% United Kingdom
10.00%, 2003 185 324
9.50%, 2005 800 1,371
-----------------------------------------------------------------------------
1,695
- --------------------------------------------------------------------------------------------------------------------
AUSTRALIAN DOLLAR--13.6% Commonwealth of Australia
7.00%, 2000 500 376
12.00%, 2001 410 369
Treasury Corporation of Victoria, 8.25%,
2003 500 379
-----------------------------------------------------------------------------
1,124
- --------------------------------------------------------------------------------------------------------------------
JAPANESE YEN--9.9% Italian Treasury, 5.125%, 2003 35,000 360
-----------------------------------------------------------------------------
EBRD, 4.50%, 1997 10,000 95
IBRD, 4.75%, 2004 35,000 360
-----------------------------------------------------------------------------
815
- --------------------------------------------------------------------------------------------------------------------
NEW ZEALAND DOLLAR--4.8% New Zealand Government, 10.00%, 2002 550 394
-----------------------------------------------------------------------------
TOTAL GOVERNMENT AND CORPORATE OBLIGATIONS--95.2%
(Cost: $8,013) 7,848
----------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
MONEY MARKET Yield-5.25% to 5.27%
INSTRUMENTS--3.0%
Due-July and August 1996
(Cost: $249) $ 250 249
----------------------------------------------------------------------------
TOTAL INVESTMENTS--98.2%
(Cost: $8,262) 8,097
----------------------------------------------------------------------------
CASH AND OTHER ASSETS,
LESS LIABILITIES--1.8% 149
----------------------------------------------------------------------------
NET ASSETS--100% $ 8,246
----------------------------------------------------------------------------
</TABLE>
NOTES TO PORTFOLIO OF INVESTMENTS
The Fund is a non-diversified investment company and may invest a relatively
high percentage of its assets in the obligations of a limited number of issuers.
Based on the cost of investments of $8,262,000 for federal income tax purposes
at June 30, 1996, the gross unrealized appreciation was $53,000, the gross
unrealized depreciation was $218,000 and the net unrealized depreciation was
$165,000.
See accompanying Notes to Financial Statements.
5
<PAGE> 6
FINANCIAL STATEMENTS
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996
(in thousands)
ASSETS
<TABLE>
<S> <C>
Investments, at value
(Cost: $8,262) $8,097
- -------------------------------------------------------------------------------------------------------
Cash 14
- -------------------------------------------------------------------------------------------------------
Receivable for:
Investments sold 465
- -------------------------------------------------------------------------------------------------------
Interest 164
- -------------------------------------------------------------------------------------------------------
TOTAL ASSETS 8,740
- -------------------------------------------------------------------------------------------------------
</TABLE>
LIABILITIES AND NET ASSETS
<TABLE>
<S> <C>
Payable for:
Investments purchased 481
- -------------------------------------------------------------------------------------------------------
Management fee 5
- -------------------------------------------------------------------------------------------------------
Trustees' fees and other 8
- -------------------------------------------------------------------------------------------------------
Total liabilities 494
- -------------------------------------------------------------------------------------------------------
NET ASSETS $8,246
- -------------------------------------------------------------------------------------------------------
</TABLE>
ANALYSIS OF NET ASSETS
<TABLE>
<S> <C>
Paid-in capital $8,017
- -------------------------------------------------------------------------------------------------------
Accumulated net realized loss on investments and foreign currency transactions (165)
- -------------------------------------------------------------------------------------------------------
Net unrealized depreciation on investments and assets and liabilities in foreign currencies (154)
- -------------------------------------------------------------------------------------------------------
Undistributed net investment income 548
- -------------------------------------------------------------------------------------------------------
NET ASSETS APPLICABLE TO SHARES OUTSTANDING $8,246
- -------------------------------------------------------------------------------------------------------
</TABLE>
THE PRICING OF SHARES
<TABLE>
<S> <C>
NET ASSET VALUE, OFFERING AND REDEMPTION PRICE PER SHARE
($8,246 / 924 shares outstanding) $8.93
- -------------------------------------------------------------------------------------------------------
</TABLE>
See accompanying Notes to Financial Statements.
6
<PAGE> 7
FINANCIAL STATEMENTS
STATEMENT OF OPERATIONS
Six months ended June 30, 1996
(in thousands)
NET INVESTMENT INCOME
<TABLE>
<S> <C>
Interest income $ 301
- -------------------------------------------------------------------------------------------------------
Expenses:
Management fee 33
- -------------------------------------------------------------------------------------------------------
Professional fees 22
- -------------------------------------------------------------------------------------------------------
Custodian and transfer agent fees and related expenses 6
- -------------------------------------------------------------------------------------------------------
Registration fees and expenses 4
- -------------------------------------------------------------------------------------------------------
Trustees' fees and other 12
- -------------------------------------------------------------------------------------------------------
Total expenses 77
- -------------------------------------------------------------------------------------------------------
NET INVESTMENT INCOME 224
- -------------------------------------------------------------------------------------------------------
</TABLE>
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS
<TABLE>
<S> <C>
Net realized loss on sales of investments and foreign currency transactions (145)
- -------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation on investments and
assets and liabilities in foreign currencies (193)
- -------------------------------------------------------------------------------------------------------
Net loss on investments (338)
- -------------------------------------------------------------------------------------------------------
NET DECREASE IN NET ASSETS RESULTING FROM OPERATIONS $(114)
- -------------------------------------------------------------------------------------------------------
</TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(in thousands)
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 1, 1995
ENDED JUNE 30, TO
1996 DECEMBER 31, 1995
<S> <C> <C>
OPERATIONS, DIVIDENDS AND CAPITAL SHARE ACTIVITY
Net investment income $ 224 346
- -------------------------------------------------------------------------------------------------------
Net realized gain (loss) (145) 54
- -------------------------------------------------------------------------------------------------------
Change in net unrealized appreciation/depreciation (193) 39
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets resulting from
operations (114) 439
- -------------------------------------------------------------------------------------------------------
Net equalization credits (charges) (38) 525
- -------------------------------------------------------------------------------------------------------
Distribution from net investment income -- (427)
- -------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- (156)
- -------------------------------------------------------------------------------------------------------
Total dividends to shareholders -- (583)
- -------------------------------------------------------------------------------------------------------
Net increase (decrease) from capital share transactions (1,566) 9,483
- -------------------------------------------------------------------------------------------------------
TOTAL INCREASE (DECREASE) IN NET ASSETS (1,718) 9,864
- -------------------------------------------------------------------------------------------------------
</TABLE>
NET ASSETS
<TABLE>
<S> <C> <C>
Beginning of period 9,964 100
- -------------------------------------------------------------------------------------------------------
END OF PERIOD (including undistributed net investment
income of $548 and $362, respectively) $ 8,246 9,964
- -------------------------------------------------------------------------------------------------------
</TABLE>
7
<PAGE> 8
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
1 DESCRIPTION OF THE FUND Kemper International Bond Fund is an open-end
management investment company organized as a
business trust under the laws of Massachusetts.
Shares of the Fund are offered primarily for
investment by institutions and high net worth
individuals. Shares are offered at net asset value
and the minimum initial investment is $1 million.
- --------------------------------------------------------------------------------
2 SIGNIFICANT ACCOUNTING INVESTMENT VALUATION. Investments are stated at
POLICIES value. Fixed income securities are valued by using
market quotations, or independent pricing services
that use prices provided by market makers or
estimates of market values obtained from yield data
relating to instruments or securities with similar
characteristics. Portfolio securities that are
traded on a domestic securities exchange are valued
at the last sale price on the exchange where
primarily traded or, if there is no recent sale, at
the last current bid quotation. Portfolio
securities that are primarily traded on foreign
securities exchanges are generally valued at the
preceding closing values of such securities on
their respective exchanges where primarily traded.
Securities not so traded are valued at the last
current bid quotation if market quotations are
available. Exchange traded options are valued at
the last sale price unless there is no sale price,
in which event prices provided by market makers are
used. Over-the-counter traded options are valued
based upon prices provided by market makers.
Financial futures and options thereon are valued at
the settlement price established each day by the
board of trade or exchange on which they are
traded. Forward foreign currency contracts and
foreign currencies are valued at the forward and
current exchange rates, respectively, prevailing on
the day of valuation. Other securities and assets
are valued at fair value as determined in good
faith by the Board of Trustees.
CURRENCY TRANSLATION. The books and records of the
Fund are maintained in U.S. dollars. All assets and
liabilities initially expressed in foreign currency
values are converted into U.S. dollar values at the
mean between the bid and offered quotations of such
currencies against U.S. dollars as last quoted by a
recognized dealer. If such quotations are not
readily available, the rate of exchange is
determined in good faith by the Board of Trustees.
Income and expenses and purchases and sales of
investments are translated into U.S. dollars at the
rate of exchange prevailing on the respective dates
of such transactions. The Fund includes that
portion of the results of operations resulting from
changes in foreign exchange rates with net realized
and unrealized gain or loss from investments and
foreign currency transactions, as appropriate.
INVESTMENT TRANSACTIONS AND INVESTMENT INCOME.
Investment transactions are accounted for on the
trade date (date the order to buy or sell is
executed). Interest income is recorded on the
accrual basis and includes discount amortization on
fixed income securities. Realized gains and losses
from investment transactions are reported on an
identified cost basis.
FUND SHARE VALUATION. Fund shares are sold and
redeemed on a continuous basis at net asset value.
On each day the New York Stock Exchange is
8
<PAGE> 9
NOTES TO FINANCIAL STATEMENTS
open for trading, the net asset value per share is
determined as of the earlier of 3:00 p.m. Chicago
time or the close of the Exchange by dividing the
net assets by the number of outstanding shares.
Because of the need to obtain prices as of the
close of trading on various exchanges throughout
the world, the calculation of net asset value does
not take place contemporaneously with the
determination of the prices of the Fund's foreign
securities.
FEDERAL INCOME TAXES. The Fund has complied with
the special provisions of the Internal Revenue Code
available to investment companies for the six
months ended June 30, 1996.
DIVIDENDS TO SHAREHOLDERS. The Fund declares and
pays dividends of net investment income and any net
realized capital gains annually, which are recorded
on the ex-dividend date. Dividends are determined
in accordance with income tax principles which may
treat certain transactions differently from
generally accepted accounting principles. These
differences are primarily due to differing
treatments for certain transactions such as foreign
currency transactions.
EQUALIZATION ACCOUNTING. A portion of proceeds from
sales and cost of redemptions of Fund shares is
credited or charged to undistributed net investment
income so that income per share available for
distribution is not affected by sales or
redemptions of shares.
- --------------------------------------------------------------------------------
3 TRANSACTIONS WITH
AFFILIATES MANAGEMENT AGREEMENT. The Fund has a management
agreement with Zurich Kemper Investments, Inc.
(ZKI), and pays a management fee at an annual rate
of .75% of the first $250 million of average daily
net assets declining to .62% of average daily net
assets in excess of $12.5 billion. The Fund
incurred a management fee of $33,000 for the six
months ended June 30, 1996.
OFFICERS AND TRUSTEES. Certain officers or trustees
of the Fund are also officers or directors of ZKI.
During the six months ended June 30, 1996, the Fund
made no direct payments to its officers and
incurred trustees' fees of $10,000 to independent
trustees.
- --------------------------------------------------------------------------------
4 INVESTMENT
TRANSACTIONS For the six months ended June 30, 1996, investment
transactions (excluding short-term instruments) are
as follows (in thousands):
Purchases $13,650
Proceeds from sales 14,837
9
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5 CAPITAL SHARE
TRANSACTIONS The following table summarizes the activity in
capital shares of the Fund (in thousands):
<TABLE>
<CAPTION>
FEBRUARY 1, 1995
SIX MONTHS ENDED TO
JUNE 30, 1996 DECEMBER 31, 1995
------------------- ---------------------
SHARES AMOUNT SHARES AMOUNT
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares sold 112 $ 999 2,314 $ 20,425
-------------------------------------------------------------------------------
Shares issued in reinvestment
of dividends -- -- 64 582
-------------------------------------------------------------------------------
Shares redeemed (292) (2,565) (1,285) (11,524)
-------------------------------------------------------------------------------
NET INCREASE (DECREASE) FROM
CAPITAL SHARE TRANSACTIONS (180) $(1,566) 1,093 $ 9,483
-------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
6 FORWARD FOREIGN
CURRENCY TRANSACTIONS In order to help protect itself against a decline
in the value of particular foreign currencies
against the U.S. dollar, the Fund has entered into
forward contracts to deliver or receive foreign
currency in exchange for U.S. dollars as described
below. The Fund bears the market risk that arises
from changes in foreign exchange rates, and
accordingly, the net unrealized gain (loss) on
these contracts is reflected in the accompanying
financial statements. The Fund also bears the
credit risk if the counterparty fails to perform
under the contract. At June 30, 1996, the Fund had
outstanding forward foreign currency contracts as
follows (in thousands):
<TABLE>
<CAPTION>
IN
FOREIGN CURRENCY EXCHANGE SETTLEMENT UNREALIZED
TO DELIVER/RECEIVE FOR DATE GAIN (LOSS)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales contracts 1,476 Australian dollars $ 1,159 September '96 $ 3
- -----------------------------------------------------------------------------------------------------
377 British pounds 569 July '96 5
----------------------------------------------------------------------------------
2,900 German marks 1,912 July '96 (17)
- -----------------------------------------------------------------------------------------------------
Purchase contracts 3,850 Finnish markka 815 August '96 16
- -----------------------------------------------------------------------------------------------------
529 Irish punts 841 September '96 5
----------------------------------------------------------------------------------
1,000,000 Italian lire 647 September '96 --
----------------------------------------------------------------------------------
17,000 Japanese yen 160 July '96 (5)
----------------------------------------------------------------------------------
600 New Zealand dollars 403 September '96 4
----------------------------------------------------------------------------------
5,240 Norwegian krones 808 September '96 --
----------------------------------------------------------------------------------
21,000 Spanish pesetas 163 August '96 --
----------------------------------------------------------------------------------
TOTAL $ 11
----------------------------------------------------------------------------------
</TABLE>
10
<PAGE> 11
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
SIX MONTHS FEBRUARY 1, 1995
ENDED TO
JUNE 30, 1996 DECEMBER 31, 1995
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of period $9.03 9.00
- ------------------------------------------------------------------------------------------------------------
Net investment income .28 .47
- ------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (.38) .12
- ------------------------------------------------------------------------------------------------------------
Total from investment operations (.10) .59
- ------------------------------------------------------------------------------------------------------------
Less dividends:
Distribution from net investment income -- .41
- ------------------------------------------------------------------------------------------------------------
Distribution from net realized gain -- .15
- ------------------------------------------------------------------------------------------------------------
Total dividends -- .56
- ------------------------------------------------------------------------------------------------------------
Net asset value, end of period $8.93 9.03
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN (NOT ANNUALIZED) (1.11)% 6.56
RATIOS TO AVERAGE NET ASSETS (ANNUALIZED)
Expenses 1.62 % 1.34
- ------------------------------------------------------------------------------------------------------------
Net investment income 5.00 5.66
- ------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DATA
Net assets at end of period (in thousands) $8,246 9,964
- ------------------------------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 324% 332
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTE: Net investment income per share for the period ended December 31, 1995,
was determined based on average shares outstanding.
11
<PAGE> 12
TRUSTEES & OFFICERS
TRUSTEES
STEPHEN B. TIMBERS
President and Trustee
JAMES E. AKINS
Trustee
ARTHUR R. GOTTSCHALK
Trustee
FREDERICK T. KELSEY
Trustee
DOMINIQUE P. MORAX
Trustee
FRED B. RENWICK
Trustee
JOHN B. TINGLEFF
Trustee
JOHN G. WEITHERS
Trustee
OFFICERS
J. PATRICK BEIMFORD, JR.
Vice President
GORDON K. JOHNS
Vice President
PHILIP J. COLLORA
Vice President and
Secretary
CHARLES F. CUSTER
Vice President and
Assistant Secretary
JEROME L. DUFFY
Treasurer
ELIZABETH C. WERTH
Assistant Secretary
- --------------------------------------------------------------------------------
LEGAL COUNSEL VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, IL 60601
- --------------------------------------------------------------------------------
SHAREHOLDER SERVICE AGENT KEMPER SERVICE COMPANY
P.O. Box 419557
Kansas City, MO 64141
- --------------------------------------------------------------------------------
CUSTODIAN AND TRANSFER AGENT INVESTORS FIDUCIARY TRUST COMPANY
27 West 10th Street
Kansas City, MO 64105
- --------------------------------------------------------------------------------
FOREIGN CUSTODIAN THE CHASE MANHATTAN BANK, N.A.
Chase Metro Tech Center
Brooklyn, NY 11245
- --------------------------------------------------------------------------------
INVESTMENT MANAGER ZURICH KEMPER INVESTMENTS, INC.
PRINCIPAL UNDERWRITER KEMPER DISTRIBUTORS, INC.
120 S. LaSalle Street Chicago, IL 60603
[RECYCLE LOGO]
Printed on recycled paper.
KIBF - 3 (8/96) [KEMPER LOGO]
1019600
Printed in the U.S.A.
