-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, kJLa1Q9Bl2tTEpGiMaoMLtno2tUxnQ3tU+AORtuJ3+PIpi+mLlMDY68ufQ9jor08 RIWSKzKPkxY7EBF4nUcFUg== 0000950124-95-002792.txt : 19950905 0000950124-95-002792.hdr.sgml : 19950905 ACCESSION NUMBER: 0000950124-95-002792 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950630 FILED AS OF DATE: 19950831 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: KILICO VARIABLE SEPARATE ACCOUNT/IL CENTRAL INDEX KEY: 0000810369 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 36305975 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-05025 FILM NUMBER: 95569392 BUSINESS ADDRESS: STREET 1: 1 KEMPER DRIVE CITY: LONG GROVE STATE: IL ZIP: 60049-0001 BUSINESS PHONE: 7083204982 MAIL ADDRESS: STREET 1: C/O KEMPER LIFE INSURANCE COMPANIES STREET 2: 1 KEMPER DRIVE CITY: LONG GROVE STATE: IL ZIP: 60049-0001 N-30D 1 SEMI ANNUAL REPORTS 1 DEAR KILICO POLICY OWNER: - --------------------------------------- GENERAL ECONOMIC OVERVIEW Investors enjoyed generally positive performance in both the fixed-income and stock markets in the first six months of 1995. At this midpoint in the year, the returns of most leading securities markets are significantly higher than they were at the same time in 1994. But recently, several events occurred to challenge the markets: - - Early in July, the Federal Reserve Board acknowledged that economic growth had slowed so much that a recession might now be possible. In response, the Federal Reserve eased short-term interest rates by a small but symbolic 25 basis points. This action was significant because, since February 1994, the Fed had been raising interest rates to slow down what was considered high enough growth to rekindle troublesome inflation. - - Then, midway into July, the stock market took a brief tumble. After a two-day period of anxiety, the market recovered and finished the month well ahead. But such a sudden, severe mini-correction served to remind investors that the current bull market will probably come to an end someday and that some sectors may be overextended today. - - Finally, the late July release of the gross domestic product (GDP) revealed that growth in the economy in the second quarter was almost nonexistent. The economy has not experienced such a low real GDP change (0.5%) in four years. Proof of the economic slowdown was good news for investors who worry about runaway growth and its inevitable result, inflation. At the same time, we were pleased to see economic data that suggest that certain sectors of the economy, such as housing and foreign trade, are poised for growth in the third and fourth quarters. These should help provide momentum and keep us clear of a recession. In fact, we anticipate 2% to 3% real GDP growth for the next few quarters. Nevertheless, additional action by the Federal Reserve to lower interest rates would not surprise us. OUR ECONOMIC OUTLOOK As we view the remainder of 1995, we believe that the opportunities for common stock investors will be increasingly concentrated in higher quality investments. Companies cannot necessarily count on the economy to provide above average earnings support. Rather, stocks that have proven themselves with a pattern of consistent earnings are likely to attract investor support. Specifically, sectors that produce more consistent earnings, such as health care, consumer nondurables, selected technology and selected capital goods can be expected to do well. Picking the right sectors to invest in will be the key challenge for equity investors during the next few quarters. In addition, we look for the fixed-income markets to continue their positive performance, as they tend to do well during periods of slow growth and low inflation. Leading international economies are lagging the U.S. economy. Japan and Germany, whose economies typically follow U.S. growth, are not as robust as in past cycles. This phenomenon makes international investing very complex currently. Moreover, conditions in emerging market countries underline the importance of careful research and experience in understanding how these markets work. Nevertheless, the same fundamentals that have driven markets higher in the U.S. are to be found in many foreign countries currently. Political leadership also has some bearing on the progress of the economy and the state of the financial markets. In the months preceding a presidential election year, it has been common for incumbents to attempt to stimulate growth. Given our Republican Congress and Democratic President, however, we do not consider this a foregone conclusion as we move closer to 1996. We would like to direct your attention to the performance of the subaccounts, which are investment options available through your policy. Please take a 1 2 moment to review the market and performance summaries prepared by the portfolio managers.
MONEY MARKET PERCENT CHANGE IN SUBACCOUNT ACCUMULATION UNIT VALUE+ - ----------------------------------------------------------------- Six Months Ended 6/30/95 2.39% - ----------------------------------------------------------------- - -----------------------------------------------------------------
CURRENT NET YIELDS++ For Week Ended 6/30/95 Current Annualized Yield 4.68% Compounded Effective Yield 4.79%
- ----------------------------------------------------------------- The current annualized yield was 4.62% for the week ended July 31, 1995; the compounded effective yield was 4.73%. The KINF Money Market Portfolio benefited from the last Federal rate increase in February in terms of higher yields. However, by the end of June, it seemed likely that the economic slowdown would soon cause a halt in the trend to higher rates. In fact the Federal Reserve eased monetary conditions in the beginning of July. However, we do not anticipate an extended trend of lower rates. We believe that the current economic slowdown will cease and some rebounding will occur during the fourth quarter. However, to respond to the Fed's expected action, we are slightly extending the average life of the Portfolio, which invests in high quality short-term investments that can provide both stability of principal and the opportunity for competitive money market yields. Frank Rachwalski Portfolio Manager August 2, 1995
TOTAL RETURN PERCENT CHANGE IN SUBACCOUNT ACCUMULATION UNIT VALUE+ - ----------------------------------------------------------------- Six Months Ended 6/30/95 14.59% - ------------------------------------------------------------------ - ------------------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN PERFORMANCE++ For Period Ended 6/30/95
1 YEAR 5 YEAR INCEPTION TO DATE ---------------- ---------------- ------------------ 6.42% 8.05% 6.37%
- --------------------------------------------------------- Average annual total return performance reflects surrender charges as follows: one-year (9%) and five year (5%). The returns represent past performance only; the investment return and principal value will fluctuate so that unit values, when redeemed, may be worth more or less than their original cost. The first six months of 1995 saw significant changes for the KINF Total Return Portfolio, including revisions to the Portfolio's investment strategy that enabled the Portfolio to take advantage of stock and bond market rallies. Commensurate with a change announced early in the year, we said that we normally expect to invest approximately 60% of the Portfolio in stocks (which provide the potential for long-term growth of capital) and 40% of the Portfolio in bonds (which provide most of the Portfolio's yield, enabling the Portfolio to generate current income). The Portfolio has a broad ability to invest in six basic asset classes (domestic and international growth stocks and four types of bonds). Throughout the six-month period, the Portfolio's domestic stock holdings led its performance, helped alternately by global bonds and U.S. Treasuries. Halfway into the year, the decision was made to shift funds from international equities to take greater advantage of the domestic stock market. The current environment of "reasonably good" corporate earnings and slow economic growth is the "best of both worlds." Notwithstanding the stock market's strength to date, we continue to be bullish about the opportunities of U.S. stock market. Technology and financial stocks, in particular, remain an emphasis. Gary A. Langbaum, Portfolio Manager August 1, 1995
HIGH YIELD PERCENT CHANGE IN SUBACCOUNT ACCUMULATION UNIT VALUE+ - --------------------------------------------------------- Six Months Ended 6/30/95 9.53% - --------------------------------------------------------- - ---------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN PERFORMANCE++ For Period Ended 6/30/95
1 YEAR 5 YEAR INCEPTION TO DATE ---------------- ---------------- ------------------ .74% 12.40% 7.81%
- --------------------------------------------------------- Average annual total return performance reflects surrender charges as follows: one-year (9%) and five year (5%). The returns represent past performance only; the investment return and principal value will fluctuate so that unit values, when redeemed, may be worth more or less than their original cost. The domestic bond market rebounded strongly in the first six months of 1995 as investors were pleased to see that higher interest rates had the effect of slowing down economic growth. It was an environment that 2 3 presented many opportunities for the KINF High Yield Portfolio. Below investment-grade bonds, the Portfolio's primary investment, continued to out perform U.S. Treasuries. Demand for the higher income offered by these bonds has been stimulated by the recent decline in yields. At the same time, there has been a decline in new issues, which also helps bond prices. This sector has benefitted from favorable levels of supply and demand. The Portfolio's exposure to BB-rated bonds, in particular, has also contributed to performance. BB-rated bonds are the highest quality tier of high yield paper, which means that their price movement tends to be more closely correlated to Treasuries than lower quality bonds. The favorable supply conditions and the economic slowdown that is apparently underway combine to make us optimistic about the Portfolio's potential going forward. Fixed-income investments perform best during times of slow growth and moderate inflation expectations. Michael A. McNamara Harry E. Resis, Jr. Co-Portfolio Managers August 1, 1995
EQUITY PERCENT CHANGE IN SUBACCOUNT ACCUMULATION UNIT VALUE+ - --------------------------------------------------------- Six Months Ended 6/30/95 16.51% - --------------------------------------------------------- - ---------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN PERFORMANCE++ For Period Ended 6/30/95
1 YEAR 5 YEAR INCEPTION TO DATE ---------------- ---------------- ------------------ 14.09% 12.64% 9.28%
- --------------------------------------------------------- Average annual total return performance reflects surrender charges as follows: one-year (9%) and five year (5%). The returns represent past performance only; the investment return and principal value will fluctuate so that unit values, when redeemed, may be worth more or less than their original cost. The stock market rose to a series of record highs during the first half of 1995, spurred by declining interest rates, favorable earnings reports and an extended rally for technology stocks. The KINF Equity Portfolio benefitted from positions in technology (Intel, Microsoft) and interest rate-sensitive stocks (MBNA, NationsBank), as well as blue chip companies with international exposure (Coca Cola, Proctor & Gamble) which gained from strong sales and a weak dollar. Positions in retail (Home Depot, Ann Taylor) were generally weak, reflecting a slowdown in consumer spending. These holdings, as well as defensive positions such as foods and household products, limited the Portfolio's gains relative to some of its peers. Trading during the 2nd quarter included additional purchases in the technology sector and selected stocks in the financial and consumer product sectors. New holdings include Amgen, a leader in biotechnology, Boston Scientific, a producer of medical devices, and more familiar names including DuPont, Goodrich, Boeing, Scott Paper and Xerox. Selected technology stocks including Motorola and Compuware were sold due to concerns about valuations and earnings momentum. Several retail positions including May Dept. Stores and Ann Taylor were eliminated in response to weak sales and earnings projections. Positions in Nucor, Warner Lambert, W.W. Grainger, Corning Glass and Morton International were also eliminated. A number of positions were trimmed as the Portfolio took profits on stocks that had posted substantial gains. Looking ahead, a slower economy and low inflation should continue to favor growth stocks through the next several months. We expect to maintain a defensive position in larger companies that can sustain earnings growth in this environment. C. Beth Cotner Portfolio Manager August 1, 1995
GOVERNMENT SECURITIES PERCENT CHANGE IN SUBACCOUNT ACCUMULATION UNIT VALUE+ - --------------------------------------------------------- Six Months Ended 6/30/95 11.21% - --------------------------------------------------------- - ---------------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN PERFORMANCE++ For Period Ended 6/30/95
1 YEAR 5 YEAR INCEPTION TO DATE ---------------- ---------------- ------------------ 2.18% 6.83% 6.94%
- --------------------------------------------------------- Average annual total return performance reflects surrender charges as follows: one-year (9%) and five year (5%). The returns represent past performance only; the investment return and principal value will fluctuate so that unit values, when redeemed, may be worth more or less than their original cost. The fixed-income market rebounded strongly in the first six months of 1995 as slower economic growth 3 4 quelled investors' concerns about inflation. Despite considerable market volatility during the second quarter, the market posted impressive gains. Early in the second quarter, the Portfolio's Treasury holdings were increased. Treasuries outperformed mortgages in April and May as volatility and the prospect of prepayment alarmed mortgage investors. In June, we reduced the allocation of Treasuries in favor of mortgages. We expect mortgages to outperform as volatility declines in the second half of the year. Looking ahead, we remain optimistic about the investment climate. A slower pace of economic growth is expected to keep inflationary pressures subdued. A low inflation environment is optimal for fixed income investments. Paul F. Sloan Portfolio Manager July 27, 1995 We appreciate your support as a Kemper policy owner and look forward to continuing to serve your insurance needs. Sincerely, [SIG] [SIG] John B. Scott Stephen B. Timbers Chairman Chief Executive Officer President Chief Investment Officer Chief Executive Officer Kemper Financial Services, Inc. Kemper Investors Life Insurance Company [PHOTO] [PHOTO] + The percent change in accumulation unit value is net of mortality and expense risk charges. No adjustment has been made for the cost of insurance charge or surrender charges. No withdrawals are assumed. ++ In determining performance for Kemper SELECT, the Fund expenses include the deduction of management fees of .50% for the Money Market Portfolio, .55% for the Government Securities and Total Return Portfolios and .60% for the Equity and High Yield Portfolios. Kemper SELECT assesses a daily asset charge that amounts to .90% per annum for mortality and expense risk. The monthly cost of insurance for Kemper SELECT which varies by age, gender and classification, however, is not deducted and thus is not reflected in total return and average annual total return performance figures. A $1,000 payment is used to calculate average annual total return. Performance figures for Kemper SELECT assume no policy loans and no additional payments (100% guideline premium plan). Average annual total return measures the change in the value of an investment in the Subaccount. Average annual total return figures reflect all fees and charges, including early withdrawal and surrender charges as follows: one year (9%) and five year (5%). The Money Market Subaccount's current annualized yield is the seven-day annualized net investment income per share as of date specified. Gains or losses are not included. The effective yield reflects compounding of income. There can be no assurance that the Money Market Portfolio will be able to maintain a stable net asset value of $1.00 per share. The Subaccount is not insured or guaranteed by the U.S. Government. The returns are based upon historical results and are not representative of future results. Factors affecting performance include portfolio management; general market, economic and fiscal conditions; and operating expenses. Investment return and principal value will fluctuate so that unit values, when redeemed, may be worth more or less than their original cost. With respect to the High Yield Subaccount investment in lower-rated and non-rated securities present greater risk of loss to principal and interest than higher-rated securities. 4 5 KILICO VARIABLE SEPARATE ACCOUNT FINANCIAL STATEMENTS 5 6 KILICO VARIABLE SEPARATE ACCOUNT COMBINED STATEMENT OF ASSETS AND LIABILITIES AND POLICY OWNERS' EQUITY JUNE 30, 1995 (UNAUDITED) (IN THOUSANDS)
Money Government Market Total Return High Yield Equity Securities Combined Subaccount Subaccount Subaccount Subaccount Subaccount -------- ---------- ------------ ---------- ---------- ---------- ASSETS Investments, at current value................ $11,291 1,742 2,343 1,633 1,582 3,991 Dividends and other receivables.............. 3 3 -- -- -- -- ------- ----- ----- ----- ----- ----- Total assets........................... 11,294 1,745 2,343 1,633 1,582 3,991 LIABILITIES AND POLICY OWNERS' EQUITY Liabilities: Mortality and expense risk................. 9 1 2 2 1 3 ------- ----- ----- ----- ----- ----- Policy owners' equity........................ $11,285 1,744 2,341 1,631 1,581 3,988 ======= ===== ===== ===== ===== ===== ANALYSIS OF POLICY OWNERS' EQUITY Excess of proceeds from units sold over payments for units redeemed................ $ 6,852 1,303 1,157 1,097 941 2,354 Accumulated net investment income............ 3,075 441 688 598 227 1,121 Accumulated net realized gain (loss) on sales of investments............................. 732 -- 317 (31) 201 245 Unrealized appreciation (depreciation) of investments................................ 626 -- 179 (33) 212 268 ------- ----- ----- ----- ----- ----- Policy owners' equity........................ $11,285 1,744 2,341 1,631 1,581 3,988 ======= ===== ===== ===== ===== =====
See accompanying notes to combined financial statements. 6 7 KILICO VARIABLE SEPARATE ACCOUNT COMBINED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) (IN THOUSANDS)
Money Government Market Total Return High Yield Equity Securities Combined Subaccount Subaccount Subaccount Subaccount Subaccount -------- ---------- ------------ ---------- ---------- ---------- Dividends and capital gains distributions........................ $ 570 45 67 90 116 252 Mortality and expense risk charges..... 48 8 9 8 5 18 ------ -- --- --- --- --- Net investment income.................. 522 37 58 82 111 234 ------ -- --- --- --- --- Net realized and unrealized gain on investments: Net realized gain on sales of investments........................ 66 -- 2 20 12 32 Change in unrealized appreciation of investments........................ 525 -- 239 25 98 163 ------ -- --- --- --- --- Net realized and unrealized gain on investments.......................... 591 -- 241 45 110 195 ------ -- --- --- --- --- Net increase in policy owners' equity resulting from operations............ $1,113 37 299 127 221 429 ====== == === === ==== ===
See accompanying notes to combined financial statements. 7 8 KILICO VARIABLE SEPARATE ACCOUNT COMBINED STATEMENTS OF CHANGES IN POLICY OWNERS' EQUITY FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) AND THE YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS)
Money Market Combined Subaccount ------------------------- ------------------------- Six months Six months ended June Year ended ended June Year ended 30, December 31, 30, December 31, 1995 1994 1995 1994 ---------- ------------ ---------- ------------ Operations: Net investment income................................................ $ 522 615 37 43 Net realized gain (loss) on sales of investments..................... 66 55 -- -- Change in unrealized appreciation (depreciation) of investments..................................................... 525 (1,154) -- -- -------- ------ ----- ----- Net increase (decrease) in policy owners' equity resulting from operations........................................ 1,113 (484) 37 43 -------- ------ ----- ----- Account unit transactions: Proceeds from units sold............................................. 17 514 15 507 Net transfers (to) from subaccounts.................................. -- -- 396 14 Payments for units redeemed.......................................... (289) (563) (14) (96) -------- ------ ----- ----- Net increase (decrease) in policy owners' equity from account unit transactions................................... (272) (49) 397 425 -------- ------ ----- ----- Total increase (decrease) in policy owners' equity..................... 841 (533) 434 468 Policy owners' equity: Beginning of year.................................................... 10,444 10,977 1,310 842 -------- ------ ----- ----- End of year.......................................................... $ 11,285 10,444 1,744 1,310 ======== ====== ===== =====
See accompanying notes to combined financial statements. 8 9
Government Total Return High Yield Equity Securities Subaccount Subaccount Subaccount Subaccount - --------------------------- --------------------------- --------------------------- --------------------------- Six months Year Six months Year Six months Year Six months Year ended ended ended ended ended ended ended ended June 30, December 31, June 30, December 31, June 30, December 31, June 30, December 31, 1995 1994 1995 1994 1995 1994 1995 1994 - ---------- ------------ ---------- ------------ ---------- ------------ ---------- ------------ 58 188 82 88 111 57 234 239 2 20 20 28 12 (1) 32 8 239 (458) 25 (171) 98 (143) 163 (382) ----- ----- ----- ----- ----- ----- ----- ----- 299 (250) 127 (55) 221 (87) 429 (135) ----- ----- ----- ----- ----- ----- ----- ----- -- -- -- 6 2 1 -- -- (36) (455) (150) 13 329 (71) (539) 499 (46) (133) (60) (177) (92) (75) (77) (82) ----- ----- ----- ----- ----- ----- ----- ----- (82) (588) (210) (158) 239 (145) (616) 417 ----- ----- ----- ----- ----- ----- ----- ----- 217 (838) (83) (213) 460 (232) (187) 282 2,124 2,962 1,714 1,927 1,121 1,353 4,175 3,893 ----- ----- ----- ----- ----- ----- ----- ----- 2,341 2,124 1,631 1,714 1,581 1,121 3,988 4,175 ===== ===== ===== ===== ===== ===== ===== =====
9 10 KILICO VARIABLE SEPARATE ACCOUNT NOTES TO COMBINED FINANCIAL STATEMENTS (UNAUDITED) (1) GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES ORGANIZATION. KILICO Variable Separate Account (the "Separate Account") is a unit investment trust registered under the Investment Company Act of 1940, as amended, established by Kemper Investors Life Insurance Company ("KILICO"). The Separate Account receives and invests premiums under a variable life insurance policy ("Policy"). The Separate Account is divided into five Subaccounts and each Subaccount invests exclusively in a corresponding Portfolio of the Kemper Investors Fund (The "Fund"), an open-end diversified management investment company. The Fund has added two additional Subaccounts, the International Portfolio and the Small Capitalization Equity Portfolio, which are not available investment vehicles to policy owners of the Separate Account. SECURITY VALUATION. The investments are stated at current value which is based on the closing bid price, net asset value, at June 30, 1995. SECURITY TRANSACTIONS AND INVESTMENT INCOME. Security transactions are accounted for on the trade date (date when KILICO accepts risks of providing insurance coverage to the insured). Dividends and capital gains distributions are recorded as income on the ex-dividend date. Realized gains and losses from security transactions are reported on an identified cost basis. ACCOUNT UNIT TRANSACTIONS. Proceeds from a Policy are automatically allocated to the Money Market Subaccount on the trade date for a 15 day period. At the end of this period, the Separate Account value (cash value) may be allocated to other Subaccounts as designated by the owner of the Policy. ACCUMULATION UNIT VALUATION. On each day the New York Stock Exchange (the "Exchange") is open for trading, the accumulation unit value is determined as of the earlier of 3:00 p.m. (Chicago time) or the close of the Exchange by dividing the total value of each Subaccount's investments and other assets, less liabilities, by the number of accumulation units outstanding in the respective Subaccount. FEDERAL INCOME TAXES. The operations of the Separate Account are included in the Federal income tax return of KILICO. Under existing Federal income tax law, investment income and realized capital gains and losses of the Separate Account increase liabilities under the contract and are, therefore, not taxed. Thus the Separate Account may realize net investment income and capital gains and losses without Federal income tax consequences. 10 11 NOTES TO COMBINED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) (2) SUMMARY OF INVESTMENTS Investments, at cost, at June 30, 1995, are as follows (in thousands):
Shares Owned Cost ----- -------- INVESTMENT PORTFOLIO Kemper Investors Fund Money Market Portfolio....................................................... 1,742 $ 1,742 Kemper Investors Fund Total Return Portfolio....................................................... 993 2,164 Kemper Investors Fund High Yield Portfolio......................................................... 1,387 1,666 Kemper Investors Fund Equity Portfolio............................................................. 551 1,370 Kemper Investors Fund Government Securities Portfolio.............................................. 3,349 3,723 -------- TOTAL INVESTMENTS.............................................................................. $ 10,665 =======
The underlying investments and significant industry concentrations are summarized below. MONEY MARKET PORTFOLIO: This Portfolio invests primarily in short-term obligations of major banks and corporations. At June 30, 1995, no industry exceeded 20% of the Portfolio's assets. TOTAL RETURN PORTFOLIO: This Portfolio's investments will normally consist of fixed-income and equity securities. Fixed-income securities will include bonds and other debt securities and preferred stocks. Equity investments normally will consist of common stocks and securities convertible into or exchangeable for common stocks, however, the Portfolio may also make private placement investments (which are normally restricted securities). At June 30, 1995, the Portfolio had 21.4% of its assets invested in U.S. Government obligations. No other industry exceeded 20% of the Portfolio's assets. HIGH YIELD PORTFOLIO: This Portfolio invests in fixed-income securities, a substantial portion of which are high yielding fixed-income securities. These securities ordinarily will be in the lower rating categories of recognized rating agencies or will be non-rated, and generally will involve more risk than securities in the higher rating categories. At June 30, 1995, no industry exceeded 20% of the Portfolio's assets. EQUITY PORTFOLIO: This Portfolio's investments normally will consist of common stocks and securities convertible into or exchangeable for common stocks, however, it may also make private placement investments (which are normally restricted securities). At June 30, 1995, no industry exceeded 20% of the Portfolio's assets. GOVERNMENT SECURITIES PORTFOLIO: This Portfolio invests primarily in U.S. Government Securities. The Portfolio will also invest in fixed-income securities other than U.S. Government securities and will engage in options and financial futures transactions. At June 30, 1995, the Portfolio had 95.8% of its assets invested in U.S. Government obligations. No other industry exceeded 20% of the Portfolio's assets. (3) TRANSACTIONS WITH AFFILIATES KILICO assesses a monthly charge to the Subaccounts for the cost of insurance. The cost of insurance charge is allocated among the Subaccounts in the proportion of each Subaccount to the Separate Account value. Cost of insurance charges totaled approximately $76,700 for the six months ended June 30, 1995. Additionally, KILICO 11 12 NOTES TO COMBINED FINANCIAL STATEMENTS (UNAUDITED)--(CONTINUED) assesses a daily charge to the Subaccounts for mortality and expense risk assumed by KILICO at an annual rate of .90% of assets. Proceeds payable on the surrender of a Policy are reduced by the amount of any applicable contingent deferred sales charge. During the six months ended June 30, 1995, KILICO received contingent deferred sales charges of approximately $2,900. Kemper Financial Services, Inc., an affiliated company, is the investment manager of the Portfolios of the Fund which serve as the underlying investments of the Separate Account. (4) POLICY OWNERS' EQUITY Policy owners' equity at June 30, 1995 is as follows (in thousands, except unit value; differences are due to rounding):
Number Policy of Unit Owners' Units Value Equity ----- ----- -------- Money Market Subaccount................................................................... 1,186 1.472 $ 1,744 Total Return Subaccount................................................................... 1,409 1.660 2,341 High Yield Subaccount..................................................................... 887 1.842 1,631 Equity Subaccount......................................................................... 773 2.045 1,581 Government Securities Subaccount.......................................................... 2,305 1.730 3,988 -------- TOTAL POLICY OWNERS' EQUITY....................................................... $ 11,285 ========
12 13 KEMPER INVESTORS FUND FINANCIAL STATEMENTS 13 14 KEMPER INVESTORS FUND STATEMENT OF ASSETS AND LIABILITIES JUNE 30, 1995 (UNAUDITED) (IN THOUSANDS)
Small Money Total High Government Capitalization Market Return Yield Equity Securities International Equity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- --------- --------- --------- ---------- ------------- -------------- ASSETS Investments, at value (Cost: $64,246, $521,105, $252,733, $281,233, $103,642, $112,281 and $17,939, respectively):......... $64,246 587,681 249,486 351,676 106,168 124,731 20,481 Cash.............................. 535 1,332 728 148 367 4,473 220 Receivable for: Investments sold................ -- 49,660 1,020 10,075 79 2,263 353 Interest and dividends.......... 130 5,483 5,694 530 817 399 3 ------- ------- ------- ------- ------ ------- ------ Total assets................ 64,911 644,156 256,928 362,429 107,431 131,866 21,057 LIABILITIES AND NET ASSETS Payable for: Investments purchased........... -- 8,794 4,031 3,739 12,176 4,808 336 Dividends....................... 148 -- -- -- -- -- -- Management fee.................. 27 291 130 175 44 79 11 Custodian and transfer agent fees and related expenses..... 3 72 13 21 5 75 5 Other........................... 20 13 17 16 11 17 5 ------- ------- ------- ------- ------ ------- ------ Total liabilities........... 198 9,170 4,191 3,951 12,236 4,979 357 ------- ------- ------- ------- ------ ------- ------ Net assets........................ $64,713 634,986 252,737 358,478 95,195 126,887 20,700 ======= ======= ======= ======= ====== ======= ====== ANALYSIS OF NET ASSETS Excess of amounts received from issuance of shares over amounts paid on redemptions of shares on account of capital.............. $64,713 562,647 269,868 280,409 83,602 118,276 17,987 Undistributed net realized gain (loss) on sales of investments and foreign currency transactions.................... -- (7,669) (23,410) 3,818 (5,235) (5,081) 65 Net unrealized appreciation (depreciation) on investments and assets and liabilities in foreign currencies.............. -- 66,576 (3,247) 70,443 2,526 12,056 2,542 Undistributed net investment income.......................... -- 13,432 9,526 3,808 14,302 1,636 106 ------- ------- ------- ------- ------ ------- ------ Net assets applicable to shares outstanding..................... $64,713 634,986 252,737 358,478 95,195 126,887 20,700 ======= ======= ======= ======= ====== ======= ====== THE PRICING OF SHARES Shares outstanding, no par value........................... 64,713 269,455 214,228 124,869 79,883 100,465 17,337 ======= ======= ======= ======= ====== ======= ====== Net asset value and redemption price per share (Net assets / shares outstanding).... $ 1.00 2.357 1.180 2.871 1.192 1.263 1.194 ======= ======= ======= ======= ====== ======= ======
See accompanying notes to financial statements. 14 15 KEMPER INVESTORS FUND STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) (IN THOUSANDS)
Small Money Total High Government Capitalization Market Return Yield Equity Securities International Equity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio ------ ------ ------ ------ ------ ------ ----- Investment income: Interest.......................... $2,384 10,361 13,790 613 3,996 327 93 Dividends......................... -- 3,254 11 2,233 -- 1,521 23 ------ ------ ------ ------ ------ ------ ----- 2,384 13,615 13,801 2,846 3,996 1,848 116 Less foreign taxes withheld....... -- -- -- -- -- 153 -- ------ ------ ------ ------ ------ ------ ----- Total investment income......... 2,384 13,615 13,801 2,846 3,996 1,695 116 Expenses: Management fee.................... 195 1,675 720 979 272 451 54 Custodian and transfer agent fees and related expenses............ 6 69 21 14 14 47 9 Professional fees................. 5 23 8 11 3 4 -- Trustees' fees and other.......... 1 49 22 26 13 17 4 ------ ------ ------ ------ ------ ------ ----- Total expenses.................. 207 1,816 771 1,030 302 519 67 ------ ------ ------ ------ ------ ------ ----- Net investment income............... 2,177 11,799 13,030 1,816 3,694 1,176 49 Net realized and unrealized gain (loss) on investments: Net realized gain (loss) on sales of investments and foreign currency transactions........... -- 19,310 (3,281) 4,670 1,901 (5,056) 193 Net realized gain from futures transactions.................... -- -- -- -- 243 -- -- ------ ------ ------ ------ ------ ------ ----- Net realized gain (loss)........ 2,177 19,310 (3,281) 4,670 2,144 (5,056) 193 Change in net unrealized appreciation on investments and assets and liabilities in foreign currencies.............. -- 54,417 12,891 44,459 5,178 8,616 2,240 ------ ------ ------ ------ ------ ------ ----- Net gain on investments............. -- 73,727 9,610 49,129 7,322 3,560 2,433 ------ ------ ------ ------ ------ ------ ----- Net increase in net assets resulting from operations................... $2,177 85,526 22,640 50,945 11,016 4,736 2,482 ====== ====== ====== ====== ====== ====== =====
15 16 KEMPER INVESTORS FUND STATEMENT OF CHANGES IN NET ASSETS FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED) AND FOR THE YEAR ENDED DECEMBER 31, 1994 (IN THOUSANDS)
Money Market Total Return Portfolio Portfolio --------------------- --------------------- 1995 1994 1995 1994 -------- ------ ------- ------- Operations: Net investment income...................................................... $ 2,177 4,049 11,799 19,352 Net realized gain (loss)................................................... -- -- 19,310 (26,384) Change in net unrealized appreciation (depreciation)....................... -- (495) 54,417 (55,621) -------- ------ ------- ------- Net increase (decrease) in net assets resulting from operations.......... 2,177 3,554 85,526 (62,653) Equalization credits (charges)............................................... -- -- (892) 721 Dividends to shareholders: Distribution from net investment income.................................... (2,177) (4,049) (18,740) (15,302) Distribution from net realized gain on investments......................... -- -- -- (42,771) Distribution in excess of net realized gain on investments................. -- -- -- (586) -------- ------ ------- ------- Total dividends to shareholders.............................................. (2,177) (4,049) (18,740) (58,659) Net (decrease) increase from capital share transactions...................... (19,108) 15,644 (17,502) 63,355 Capital contribution from investment manager................................. -- 495 -- -- -------- ------ ------- ------- Total (decrease) increase in net assets...................................... (19,108) 15,644 48,392 (57,236) Net assets: Beginning of period........................................................ 83,821 68,177 586,594 643,830 -------- ------ ------- ------- End of period.............................................................. $ 64,713 83,821 634,986 586,594 ======== ====== ======= ======= Undistributed net investment income at end of period......................... $ -- -- 13,432 21,265 ======== ====== ======= =======
(a) For the period from May 2, 1994 (commencement of operations) to December 31, 1994. See accompanying notes to financial statements. 16 17
Government Small High Yield Equity Securities International Capitalization Portfolio Portfolio Portfolio Portfolio Equity Portfolio - ------------------- ------------------- ------------------ ------------------- ----------------- 1995 1994 1995 1994 1995 1994 1995 1994 1995 1994(a) - ------- ------- ------- ------- ------ ------- ------- ------- ------ ------ 13,030 21,022 1,816 2,041 3,694 6,026 1,176 828 49 37 (3,281) (6,998) 4,670 23,805 2,144 (6,812) (5,056) 1,853 193 (128) 12,891 (19,015) 44,459 (37,642) 5,178 (2,415) 8,616 (7,631) 2,240 302 - ------- ------- ------- ------- ------ ------- ------- ------- ------ ------ 22,640 (4,991) 50,945 (11,796) 11,016 (3,201) 4,736 (4,950) 2,482 211 381 (1,390) 111 432 (1,259) (2,672) 21 422 36 60 (22,165) (19,251) (1,120) -- (6,202) (5,312) (970) -- (76) -- -- -- (24,649) (14,929) -- (2,095) (1,941) (1,170) -- -- -- -- -- -- -- (561) -- -- -- -- - ------- ------- ------- ------- ------ ------- ------- ------- ------ ------ (22,165) (19,251) (25,769) (14,929) (6,202) (7,968) (2,911) (1,170) (76) -- 32,466 11,083 11,483 63,540 (4,142) (12,289) 2,331 39,528 5,349 12,538 -- -- -- -- -- -- -- -- -- -- - ------- ------- ------- ------- ------ ------- ------- ------- ------ ------ 33,322 (14,549) 36,770 37,247 (587) (26,130) 4,177 33,830 7,791 12,809 219,415 233,964 321,708 284,461 95,782 121,912 122,710 88,880 12,909 100 - ------- ------- ------- ------- ------ ------- ------- ------- ------ ------ 252,737 219,415 358,478 321,708 95,195 95,782 126,887 122,710 20,700 12,909 ======= ======= ======= ======= ====== ======= ======= ======= ====== ====== 9,526 18,280 3,808 3,001 14,302 18,069 1,636 1,716 106 97 ======= ======= ======= ======= ====== ======= ======= ======= ====== ======
17 18 KEMPER INVESTORS FUND NOTES TO FINANCIAL STATEMENTS (1) DESCRIPTION OF THE FUND Kemper Investors Fund (the "Fund") is an open-end, diversified management investment company organized as a business trust under the laws of Massachusetts. The Fund offers multiple Portfolios, currently consisting of the Money Market, Total Return, High Yield, Equity, Government Securities, International and Small Capitalization Equity Portfolios. The Fund has an unlimited number of authorized shares. (2) SIGNIFICANT ACCOUNTING POLICIES INVESTMENT VALUATION. Investments are stated at value. The securities of the Total Return, High Yield, Equity, Government Securities, International and Small Capitalization Equity Portfolios that are traded on a domestic securities exchange or securities listed on the NASDAQ National Market are valued at the last sale price on the exchange or market where primarily traded or listed 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. A security that is listed or traded on more than one exchange is valued at the quotation on the exchange determined to be the primary market for that security by the Board of Trustees or its delegates. Securities not so traded or listed are valued at the last current bid quotation if market quotations are available. 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. Equity options are valued at the last sale price unless the bid price is higher or the asked price is lower, in which event such bid or asked price is used. Exchange traded fixed income 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 fixed income 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. The securities of the Money Market Portfolio are stated at amortized cost, which approximates market value. In the event that a deviation of 1/2 of 1% or more exists between the Portfolio's $1.00 per share net asset value, calculated at amortized cost, and the net asset value calculated by reference to market quotations, or if there is any other deviation that the Board of Trustees believes would result in a material dilution to shareholders or purchasers, the Board of Trustees will promptly consider what action, if any, should be initiated. 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. Dollars at the mean between the bid and offered quotations of such currencies against the U.S. Dollar 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 Portfolios include that portion of the results of operations resulting from changes in foreign exchange rates with the net realized and unrealized gain (loss) from investments, as appropriate. 18 19 NOTES TO FINANCIAL STATEMENTS--(CONTINUED) INVESTMENT TRANSACTIONS AND INVESTMENT INCOME. Investment transactions are accounted for on the trade date (date the order to buy or sell is executed). Dividend income is recorded on the ex-dividend date, except that certain dividends from foreign securities are recorded as soon as the information is available to the Fund. Interest income is recorded on the accrual basis and includes premium and discount amortization on money market instruments and mortgage-backed securities; it also includes original issue and market discount amortization on long-term fixed income securities. Realized gains and losses from investment transactions are reported on an identified cost basis. Gains and losses on premiums from expired options are recognized on date of expiration. Realized and unrealized gains or losses on financial futures, options and forward foreign currency contracts are included in net realized and unrealized gain (loss) on investments, as appropriate. Several of the Portfolios may purchase securities with delivery or payment to occur at a later date. At the time a Portfolio enters into a commitment to purchase a security, the transaction is recorded and the value of the security is reflected in the net asset value. The value of the security may vary with market fluctuations. No interest accrues to the Portfolio until payment takes place. At the time the Portfolio enters into this type of transaction it is required to designate cash or other liquid assets equal to the value of the securities purchased. At June 30, 1995, the Government Securities Portfolio had $11,951,000 of purchase commitments outstanding (13% of net assets) with a corresponding amount of assets designated. EXPENSES. Expenses arising in connection with a Portfolio are allocated to that Portfolio. Other Fund expenses are allocated among the Portfolios in proportion to their relative net assets. FUND SHARE VALUATION. Shares of each Portfolio of the Fund are offered on a continuous basis to the separate accounts of participating insurance companies where permitted by law. On each day the New York Stock Exchange is open for trading, each Portfolio determines its net asset value per share (NAV) by dividing the total value of the Portfolio's investments and other assets, less liabilities, by the number of Portfolio shares outstanding. The NAV is determined as of the earlier of 3:00 p.m. Chicago time or the close of the Exchange for the Total Return, High Yield, Equity, Government Securities, International and Small Capitalization Equity Portfolios and at 11:00 a.m. and as of the earlier of 3:00 p.m. Chicago time or the close of the Exchange for the Money Market Portfolio. 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 for the International Portfolio does not take place contemporaneously with the determination of prices of the Fund's foreign securities. FEDERAL INCOME TAXES AND DIVIDENDS TO SHAREHOLDERS. Each Portfolio has complied with the special provisions of the Internal Revenue Code available to investment companies for the six months ended June 30, 1995. The accumulated net realized loss on sales of investments for federal income tax purposes at June 30, 1995 amounted to approximately $7,879,000 in the Total Return Portfolio, $23,396,000 in the High Yield Portfolio, $4,668,000 in the Government Securities Portfolio and $4,925,000 in the International Portfolio. These losses are available to offset future taxable gains in their respective Portfolios and, if not applied, expire during the period 1998 through 2003. Distributions to shareholders are determined in accordance with income tax principles which may treat certain transactions differently from generally accepted accounting principles. 19 20 NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Dividends payable to shareholders are recorded by the Total Return, High Yield, Equity, Government Securities, International and Small Capitalization Equity Portfolios on the ex-dividend date. Net realized capital gains, if any, reduced by capital loss carryovers, will be distributed at least annually. The Money Market Portfolio declares a daily dividend equal to its net investment income for that day, payable monthly. Shareholders will receive dividends in additional shares. EQUALIZATION ACCOUNTING. A portion of proceeds from sales and cost of redemptions of Fund shares in the Total Return, High Yield, Equity, Government Securities, International and Small Capitalization Equity Portfolios 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. OTHER CONSIDERATIONS. The High Yield Portfolio invests a substantial portion of its assets in high yield bonds. These bonds ordinarily are in the lower rating categories of recognized rating agencies or are non-rated, and thus involve more risk than higher rated bonds. Kemper Financial Services, Inc. (KFS), the Fund's investment manager, may serve as a member of various bondholders' committees. These committees represent the interests of bondholders in restructuring negotiations and court proceedings. As a result of participation on such committees, KFS may receive material, non-public information with respect to bonds the Fund owns. Accordingly, the Fund may be temporarily precluded from effecting transactions in such bonds due to various restraints imposed by federal and state securities laws involving the possession of material, non-public information. (3) TRANSACTIONS WITH AFFILIATES The Fund has a management agreement with KFS. For management services and facilities furnished, the Fund pays a fee, based on average daily net assets, at an annual rate of .50% for the Money Market Portfolio, .55% for the Total Return and Government Securities Portfolios, .60% for the High Yield and Equity Portfolios, .65% for the Small Capitalization Equity Portfolio and .75% for the International Portfolio. For the six months ended June 30, 1995, the Fund incurred management fees of $4,346,000. Kemper Distributors, Inc., an affiliate of KFS, is the distributor and principal underwriter for shares of the Fund. Kemper Asset Holdings, Inc. (KAHI), a subsidiary of Kemper Corporation, the parent company of Kemper Financial Services, Inc., arranged for the issuance of an irrevocable letter of credit from the Bank of New York for the benefit of the Fund. The letter of credit supports the payment of $3,000,000 of principal plus interest on the Orange County, California obligation held in the Money Market Portfolio. In early July, the letter of credit was increased to $3,201,000, the maturity of the obligation was extended to June 30, 1996 and the interest rate was increased by .95%. The Fund and KAHI are parties to an agreement related to the letter of credit which provides, among other things, that, in connection with a payment of principal or interest under the letter of credit, the Fund will transfer to KAHI any proceeds received under the Orange County obligation. The Fund has a custodian and a transfer agent agreement with Investors Fiduciary Trust Company, which was 50% owned by KFS until January 31, 1995 when KFS completed the sale of IFTC to a third party. For the six months ended June 30, 1995, the Fund incurred custodian and transfer agent fees and related expenses of $180,000. 20 21 NOTES TO FINANCIAL STATEMENTS--(CONTINUED) Certain officers or trustees of the Fund are also officers or directors of KFS. During the six months ended June 30, 1995, the Fund made no direct payments to its officers and incurred trustees' fees of $47,000 to independent trustees. (4) INVESTMENT TRANSACTIONS For the six months ended June 30, 1995 investment transactions (excluding temporary short-term investments) are as follows (in thousands):
Small Total High Government Capitalization Return Yield Equity Securities International Equity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio --------- --------- --------- ---------- ------------- -------------- Purchases............................. $ 481,973 153,929 110,869 208,006 64,669 11,000 --------- --------- --------- ---------- ------ ------ Proceeds from sales................... $ 493,079 117,897 123,471 207,949 61,346 5,297 --------- --------- --------- ---------- ------ ------
(5) CAPITAL SHARE TRANSACTIONS The following table summarizes the activity in capital shares of the Fund (in thousands):
Six months ended June 30, 1995 -------------------------------------------------------------------------------------------------------------------- Money Government Small Market Total Return High Yield Equity Securities International Capitalization Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Equity Portfolio --------- ---------------- -------------- -------------- -------------- --------------- ---------------- (a) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount --------- ------ ------ ------ ------ ------ ------- ------ ------- ------ ------- ------ ------ Shares sold... $ 52,643 22,021 $ 48,283 48,951 $54,432 19,110 $52,474 24,100 $21,955 16,475 $21,455 9,229 $ 9,965 Shares issued in reinvestment of dividends... 2,256 8,512 18,740 19,366 22,165 9,679 25,769 5,447 6,202 3,339 2,911 70 76 --------- ------ -------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- 54,899 30,533 67,023 68,317 76,597 28,789 78,243 29,547 28,157 19,814 24,366 9,299 10,041 Less shares redeemed... 74,007 38,768 84,525 39,294 44,131 24,641 66,760 33,556 32,299 17,969 22,035 4,381 4,692 --------- ------ -------- ------ ------- ------ ------- ------ ------- ------ ------- ------ ------- Net (decrease) increase from capital share transactions.. $(19,108) (8,235) $(17,502) 29,023 $32,466 4,148 $11,483 (4,009) $(4,142) 1,845 $ 2,331 4,918 $ 5,349 ======== ====== ======== ====== ======= ===== ======= ====== ======= ===== ======= ===== =======
Year ended December 31, 1994 --------------------------------------------------------------------------------------------------------------------------- Small Money Government Capitalization Market Total Return High Yield Equity Securities International Equity Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio Portfolio(b) --------- ----------------- ------------------- ----------------- ----------------- ----------------- --------------- (a) Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount Shares Amount --------- ------ --------- -------- --------- ------ --------- ------- -------- ------ --------- ------ ------- Shares sold... $218,865 55,759 $127,333 105,586 $122,106 63,325 $173,691 18,859 $ 17,396 78,847 $ 99,933 16,090 $16,218 Shares issued in reinvestment of dividends... 3,923 27,538 58,659 16,697 19,251 5,689 14,929 7,004 7,968 952 1,170 -- -- -------- ------ -------- ------- -------- ------ -------- ------ -------- ------ -------- ------ ------- 222,788 83,297 185,992 122,283 141,357 69,014 188,620 25,863 25,364 79,799 101,103 16,090 16,218 Less shares redeemed... 207,144 54,564 122,637 111,925 130,274 45,216 125,080 38,208 37,653 49,218 61,575 3,671 3,680 -------- ------ -------- ------- -------- ------ -------- ------ -------- ------ -------- ------ ------- Net increase (decrease) from capital share transactions.. $ 15,644 28,733 $ 63,355 10,358 $ 11,083 23,798 $ 63,540 (12,345) $(12,289) 30,581 $ 39,528 12,419 $12,538 ======== ====== ======== ====== ======== ====== ======== ======= ======== ====== ======== ====== =======
(a) For the Money Market Portfolio, dollar amounts and number of shares are the same. (b) For the period from May 2, 1994 (commencement of operations) to December 31, 1994. 21 22 NOTES TO FINANCIAL STATEMENTS--(CONTINUED) (6) FINANCIAL FUTURES CONTRACTS In order to protect itself against future changes in market conditions which otherwise might affect adversely the value of securities the Government Securities Portfolio holds, the Portfolio has entered into exchange traded financial futures contracts as described below. The Portfolio bears the market risk that arises from changes in the value of these financial instruments. At the time the Portfolio enters into a futures contract, it is required to make a margin deposit with its custodian of a specified amount of cash or eligible securities. Subsequently, gain or loss is recognized and payments are made on a daily basis between the Portfolio and the broker as the market price of the futures contract fluctuates. At June 30, 1995, the market value of investments pledged by the Portfolio to cover margin requirements for open futures positions was $354,000. At June 30, 1995, the Portfolio had outstanding financial futures contracts as follows:
Face Expiration Loss at Type Amount Position Month 6/30/95 - ------------------------------------------------------------------------------- U.S. Treasury Bonds $14,700,000 Long September 1995 $58,000 - -------------------------------------------------------------------------------
(7) FORWARD FOREIGN CURRENCY CONTRACTS In order to protect itself against a decline in the value of particular foreign currencies against the U.S. Dollar, the International Portfolio has entered into forward contracts to deliver foreign currency in exchange for U.S. Dollars as described below. The Portfolio bears the market risk that arises from changes in foreign exchange rates, and accordingly, the unrealized loss on these contracts is reflected in the accompanying financial statements. The Portfolio also bears the credit risk if the counterparty fails to perform under the contract. At June 30, 1995, the Portfolio had outstanding forward foreign currency contracts as follows:
Contract Unrealized Foreign Currency amount in Loss to be delivered U.S. Dollars Settlement at 6/30/95 (in thousands) (in thousands) Date (in thousands) - ---------------------------------------------------------------------------------------- 7,367 French Francs $ 1,455 July 1995 $ 64 - ---------------------------------------------------------------------------------------- 1,026,000 Japanese Yen 12,000 July 1995 85 - ---------------------------------------------------------------------------------------- 6,752 Netherland Guilders 4,200 July 1995 158 - ---------------------------------------------------------------------------------------- 2,472 Swiss Francs 2,070 July 1995 78 - ---------------------------------------------------------------------------------------- Net unrealized loss $385 - ----------------------------------------------------------------------------------------
22 23 FINANCIAL HIGHLIGHTS MONEY MARKET PORTFOLIO
Six months ended Year ended December 31, June 30, 1995 1994 1993 1992 1991 ------------- ------ ------ ------ ------ PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period............................... $1.00 1.00 1.00 1.00 1.00 Net investment income and dividends declared....................... .03 .04 .03 .03 .06 ------------- ------ ------ ------ ------ Net asset value, end of period..................................... $1.00 1.00 1.00 1.00 1.00 ============ ====== ====== ====== ====== TOTAL RETURN (%)................................................... 2.82 3.96 2.83 3.43 5.89 RATIOS TO AVERAGE NET ASSETS (%): Expenses........................................................... .53 .53 .56 .57 .56 Net investment income.............................................. 5.63 3.95 2.79 3.38 5.80 SUPPLEMENTAL DATA: Net assets at end of period (in thousands)......................... $64,713 83,821 68,177 75,270 76,479
NOTE TO MONEY MARKET PORTFOLIO: The total return for 1994 includes the effect of a capital contribution from the investment manager. Without the capital contribution, the total return would have been 3.47%. TOTAL RETURN PORTFOLIO
Six months ended Year ended December 31, June 30, 1995 1994 1993 1992 1991 ------------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period.......................... $2.112 2.586 2.473 2.658 2.071 Income from investment operations: Net investment income....................................... .044 .069 .069 .061 .080 Net realized and unrealized gain (loss) on investments...... .271 (.313) .214 (.026) .677 ------------- ------- ------- ------- ------- Total from investment operations.............................. .315 (.244) .283 .035 .757 Less dividends: Distribution from net investment income..................... .070 .060 .050 .080 .110 Distribution from net realized gain on investments.......... -- .168 .120 .140 .060 Distribution in excess of net realized gain on investments............................................... -- .002 -- -- -- ------------- ------- ------- ------- ------- Total dividends............................................... .070 .230 .170 .220 .170 ------------- ------- ------- ------- ------- Net asset value, end of period................................ $2.357 2.112 2.586 2.473 2.658 ============ ======= ======= ======= ======= TOTAL RETURN (%).............................................. 15.11 (9.50) 12.13 1.69 37.90 RATIOS TO AVERAGE NET ASSETS (%): Expenses...................................................... .60 .61 .59 .60 .61 Net investment income......................................... 3.87 3.13 3.19 3.41 3.46 SUPPLEMENTAL DATA: Net assets at end of period (in thousands).................... $ 634,986 586,594 643,830 528,007 412,772 Portfolio turnover rate (%)................................... 164 128 191 160 187
23 24 FINANCIAL HIGHLIGHTS--(CONTINUED) HIGH YIELD PORTFOLIO
Six months ended Year ended December 31, June 30, 1995 1994 1993 1992 1991 ------------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period............................. $1.185 1.338 1.209 1.144 .914 Income from investment operations: Net investment income.......................................... .066 .116 .120 .125 .140 Net realized and unrealized gain (loss) on investments......... .049 (.149) .109 .070 .300 ------------- ------- ------- ------- ------- Total from investment operations................................. .115 (.033) .229 .195 .440 Less distributions from net investment income.................... .120 .120 .100 .130 .210 ------------- ------- ------- ------- ------- Net asset value, end of period................................... $1.180 1.185 1.338 1.209 1.144 ============ ======= ======= ======= ======= TOTAL RETURN (%)................................................. 10.02 (2.25) 20.00 17.76 51.83 RATIOS TO AVERAGE NET ASSETS (%): Expenses......................................................... .64 .65 .63 .64 .67 Net investment income............................................ 10.86 9.49 9.54 10.44 12.95 SUPPLEMENTAL DATA: Net assets at end of period (in thousands)....................... $ 252,737 219,415 233,964 162,158 121,608 Portfolio turnover rate (%)...................................... 90 98 84 57 31
EQUITY PORTFOLIO
Six months ended Year ended December 31, June 30, 1995 1994 1993 1992 1991 ------------- ------- ------- ------- ------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period............................. $2.665 2.935 2.631 2.642 1.681 Income from investment operations: Net investment income.......................................... .015 .018 .004 .007 .017 Net realized and unrealized gain (loss) on investments......... .421 (.138) .370 .082 .974 ------------- ------- ------- ------- ------- Total from investment operations................................. .436 (.120) .374 .089 .991 Less dividends: Distribution from net investment income........................ .010 -- .010 .005 .030 Distribution from net realized gain on investments............. .220 .150 .060 .095 -- ------------- ------- ------- ------- ------- Total dividends.................................................. .230 .150 .070 .100 .030 ------------- ------- ------- ------- ------- Net asset value, end of period................................... $2.871 2.665 2.935 2.631 2.642 ============ ======= ======= ======= ======= TOTAL RETURN (%)................................................. 17.03 (4.02) 14.63 3.57 59.47 RATIOS TO AVERAGE NET ASSETS (%): Expenses......................................................... .63 .66 .64 .64 .67 Net investment income............................................ 1.11 .69 .30 .65 .83 SUPPLEMENTAL DATA: Net assets at end of period (in thousands)....................... $ 358,478 321,708 284,461 203,624 118,983 Portfolio turnover rate (%)...................................... 72 106 78 78 106
24 25 FINANCIAL HIGHLIGHTS--(CONTINUED) GOVERNMENT SECURITIES PORTFOLIO
Six months ended Year ended December 31, June 30, 1995 1994 1993 1992 1991 ------------- ------------- ------------- ------ ------ PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period.... $1.142 1.267 1.277 1.287 1.175 Income from investment operations: Net investment income................. .044 .067 .060 .064 .090 Net realized and unrealized gain (loss) on investments............... .086 (.102) .020 .006 .082 ------ ----- ----- ----- ----- Total from investment operations........ .130 (.035) .080 .070 .172 Less dividends: Distribution from net investment income.............................. .080 .060 .060 .050 .060 Distribution from net realized gain on investments......................... -- .024 .030 .030 -- Distribution in excess of net realized gain on investments................. -- .006 -- -- -- ------ ----- ----- ----- ----- Total dividends......................... .080 .090 .090 .080 .060 ------ ----- ----- ----- ----- Net asset value, end of period.......... $1.192 1.142 1.267 1.277 1.287 ====== ===== ===== ===== ===== TOTAL RETURN (%)........................ 11.71 (2.74) 6.48 5.90 15.22 RATIOS TO AVERAGE NET ASSETS (%): Expenses................................ .61 .63 .60 .61 .63 Net investment income................... 7.47 5.69 5.05 6.08 7.42 SUPPLEMENTAL DATA: Net assets at end of period (in thousands)............................ $95,195 95,782 121,912 98,814 59,064 Portfolio turnover rate (%)............. 404 606 534 492 141
INTERNATIONAL PORTFOLIO
January 6, Six months Year ended 1992 to ended December 31, December 31, June 30, 1995 1994 1993 1992 ------------- -------- ------ ------------ PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period........................... $1.244 1.306 .993 1.000 Income from investment operations: Net investment income........................................ .012 .009 .010 .010 Net realized and unrealized gain (loss) on investments............................................. .037 (.056) .313 (.017) --------- ------- ------ ------ Total from investment operations............................... .049 (.047) .323 (.007) Less dividends: Distribution from net investment income...................... .010 -- .009 -- Distribution from net realized gain on investments........... .020 .015 .001 -- --------- ------- ------ ------ Total dividends................................................ .030 .015 .010 -- --------- ------- ------ ------ Net asset value, end of period................................. $1.263 1.244 1.306 .993 ========= ======= ====== ====== TOTAL RETURN (%)............................................... 3.98 (3.59) 32.83 (.72) RATIOS TO AVERAGE NET ASSETS (%): Expenses....................................................... .86 .93 .92 1.11 Net investment income.......................................... 1.96 .74 .86 1.01 SUPPLEMENTAL DATA: Net assets at end of period (in thousands)..................... $ 126,887 122,710 88,880 19,447 Portfolio turnover rate (%).................................... 115 107 116 129
25 26 FINANCIAL HIGHLIGHTS--(CONTINUED) SMALL CAPITALIZATION EQUITY PORTFOLIO
Six months May 2, 1994 ended to June 30, 1995 December 31, 1994 ------------- ----------------- PER SHARE OPERATING PERFORMANCE: Net asset value, beginning of period.......................... $1.039 1.000 Income from investment operations: Net investment income....................................... .003 .008 Net realized and unrealized gain on investments............. .157 .031 ------ ----- Total from investment operations.............................. .160 .039 Less distributions from net investment income................. .005 -- ------ ----- Net asset value, end of period................................ $1.194 1.039 ====== ===== TOTAL RETURN (%).............................................. 15.39 3.95 RATIOS TO AVERAGE NET ASSETS (%): Expenses...................................................... .81 1.25 Net investment income......................................... .59 .91 SUPPLEMENTAL DATA: Net assets at end of period (in thousands).................... $20,700 12,909 Portfolio turnover rate (%)................................... 76 58
- --------------- NOTE: Ratios for all Portfolios have been determined on an annualized basis. Total return is not annualized. 26 27 KEMPER INVESTORS FUND MONEY MARKET PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Value ------- CORPORATE OBLIGATIONS CAPTIVE BUSINESS FINANCE--18.5% (a)American Honda Finance Corporation 6.19%, 8/9/95...................................... $ 1,999 Caterpillar Financial Services Corporation 6.06%, 8/11/95.............................. 1,986 CSW Credit, Inc. 6.01%, 8/3/95............................... 1,989 (a)Finova Capital Corporation 6.16%, 9/15/95.............................. 2,000 Freedom Asset Funding Corporation 5.96%, 7/14/95.............................. 1,996 Phillip Morris Capital Corporation 5.99%, 7/31/95.............................. 1,990 ------- 11,960 CONSUMER FINANCE AND BANKING--6.2% (a)Beneficial Corporation 6.04%, 7/12/95.............................. 2,000 Chrysler Financial Corporation 6.04%, 8/30/95.............................. 1,980 ------- 3,980 CONSUMER PRODUCTS AND SERVICES--12.3% American Home Products Corporation 6.03%, 8/10/95.............................. 1,987 Coca-Cola Enterprises Inc. 5.99%, 7/10/95.............................. 1,997 Dayton Hudson Corporation 6.03%, 7/21/95.............................. 1,993 Whirlpool Corporation 6.14%, 7/19/95.............................. 1,994 ------- 7,971 CORPORATE FINANCING--9.2% (a)Beta Finance Corporation 5.57%, 7/5/95............................... 2,000 GTE Finance Corporation 6.05%, 8/14/95.............................. 1,985 Windmill Funding Corporation 6.01%, 8/1/95............................... 1,990 ------- 5,975 ENERGY--3.1% AES Shady Point, Inc. 5.97%, 7/21/95.............................. 1,993 FINANCIAL SERVICES--12.4% (a)Bear Stearns Companies Inc. 6.13%, 7/21/95.............................. 2,000 (a)CS First Boston, Inc. 6.16%, 7/12/95.............................. 2,000 Value ------- Dean Witter, Discover & Company 6.01%, 8/11/95.............................. $ 1,987 (a)Salomon Inc. 6.41%, 7/3/95............................... 2,000 ------- 7,987 MANUFACTURING AND INDUSTRIAL PRODUCTS--10.0% Bridgestone/Firestone, Inc. 5.99%, 7/21/95.............................. 1,993 Cooper Industries, Inc. 5.96%, 7/7/95............................... 2,498 DIC Americas, Inc. 6.01%, 7/12/95.............................. 1,996 ------- 6,487 (b)MUNICIPAL OBLIGATION--4.6% (a)Orange County, California 6.06%, 7/10/95 (maturity), $3,000,000 (par)....................................... 2,190 Letter of credit from The Bank of New York.... 810 ------- 3,000 RECEIVABLES FINANCING--19.9% First Brands Commercial, Inc. 6.00%, 9/25/95.............................. 1,972 Heller Financial, Inc. 6.04%, 9/27/95.............................. 1,971 (a)Sanwa Business Credit Corporation 6.03%, 7/6/95............................... 3,000 SFC (USA) Inc. 6.04%, 8/31/95.............................. 1,980 Strait Capital Corporation 6.05%, 8/31/95.............................. 1,980 Working Capital Management Co. L.P. 6.01%, 7/28/95.............................. 1,991 ------- 12,894 ------- TOTAL CORPORATE OBLIGATIONS--96.2% (average maturity: 30 days)..................... 62,247 FOREIGN GOVERNMENT OBLIGATION--3.1% (a)Kingdom of Sweden 6.06%, 7/11/95.............................. 1,999 (maturity: 10 days) TOTAL INVESTMENTS--99.3% (average maturity: 30 days)..................... 64,246 CASH AND OTHER ASSETS, LESS LIABILITIES--.7%........................... 467 ------- NET ASSETS--100%................................ $64,713 =======
See accompanying notes to portfolio of investments. 27 28 NOTES TO MONEY MARKET PORTFOLIO OF INVESTMENTS Interest rates represent annualized yield to date of maturity, except for variable rate securities described in Note (a). For each security, cost (for financial reporting and federal income tax purposes) and carrying value are the same. Likewise, carrying value approximates principal amount. (a) Variable rate securities. The rates shown are the current rates at June 30, 1995. The dates shown represent the demand date or next interest rate change date. (b) Illiquid security. See Note (3) of the Notes to Financial Statements. See accompanying notes to financial statements. 28 29 KEMPER INVESTORS FUND TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Principal Amount Value ---------- -------- U.S. GOVERNMENT OBLIGATIONS U.S. Treasury Notes 7.875%, 1998.................... $ 4,000 $ 4,188 7.75%, 2000..................... 10,000 10,689 7.875%, 2001.................... 7,000 7,642 7.75%, 2001..................... 9,000 9,734 6.25%, 2003..................... 8,500 8,529 7.25%, 2004..................... 33,000 35,270 U.S. Treasury Bonds 7.25%, 2016..................... 19,000 20,178 8.75%, 2017..................... 32,000 39,400 -------- TOTAL U.S. GOVERNMENT OBLIGATIONS--21.4% (Cost: $131,126).................. 135,630 (B)FOREIGN GOVERNMENT OBLIGATIONS Government of Canada 8.00%, 1998..................... 800 596 6.50%, 2004..................... 1,150 761 Kingdom of Denmark 6.00%, 1999..................... 6,000 1,038 9.00%, 2000..................... 7,000 1,345 8.00%, 2003..................... 2,000 360 Dutch State Loan 7.75%, 2000..................... 1,000 684 6.50%, 2003..................... 2,000 1,262 Republic of Finland, 11.00%, 1999.................... 12,000 3,063 French Treasury 8.50%, 2000..................... 5,250 1,138 9.50%, 2001..................... 5,500 1,249 6.75%, 2003..................... 7,000 1,376 Government of Ireland 6.25%, 1999..................... 540 818 6.25%, 2004..................... 600 824 New Zealand Government 8.00%, 1998..................... 500 334 6.50%, 2000..................... 2,900 1,841 8.00%, 2004..................... 1,000 685 Republic of Portugal, 11.875%, 2000................... 220,000 1,519 -------- TOTAL FOREIGN GOVERNMENT OBLIGATIONS--3.0% (Cost: $17,667)................... 18,893 Number of Shares Value ---------- -------- COMMON STOCKS CHEMICALS--1.1% Air Products & Chemicals.......... 60,000 $ 3,345 Monsanto Co. ..................... 37,000 3,335 -------- 6,680 COMMUNICATIONS AND MEDIA--3.4% (b)AirTouch Communications........ 60,000 1,710 AT&T........................... 130,500 6,933 (a)DSC Communications Corp. ...... 83,300 3,873 (a)Gillett Holdings, Inc. ........ 33,652 698 Singapore Press Holdings, Ltd.. 10,400 156 (a)Tele-Communications, Inc. ..... 140,000 3,281 (a)Tellabs Operations............. 48,000 2,310 (a)Viacom International "A" Shares................... 12,456 579 "B" Shares................... 50,377 2,336 -------- 21,876 COMPUTER SOFTWARE AND ELECTRONICS--11.3% AMP, Inc. ........................ 50,000 2,113 (a)Applied Materials, Inc. ....... 30,300 2,625 (a)Atmel Corporation.............. 41,400 2,293 (a)Cisco Systems.................. 105,000 5,309 (a)Compaq Computer Corp. ......... 40,000 1,815 Computer Associates International.................. 100,000 6,775 First Data Corporation......... 70,800 4,027 First Financial Management Corporation.................. 31,000 2,651 General Motors Corp., "E"...... 100,100 4,354 Hewlett-Packard, Co. .......... 100,000 7,450 Intel Corp. ................... 150,600 9,535 (a)Microsoft Corp. ............... 100,000 9,037 (a)Oracle Systems Corp. .......... 155,000 5,987 (a)Silicon Graphics Inc. ......... 117,300 4,677 (a)Sun Microsystems............... 65,000 3,152 -------- 71,800 CONSUMER PRODUCTS AND SERVICES--10.7% Aalberts Industries, N.V. ........ 8,559 482 Coca-Cola Co. .................... 180,000 11,475 ConAgra Inc. ..................... 50,000 1,744 CPC International................. 60,000 3,705 Duracell International Inc. ...... 40,000 1,730
29 30 KEMPER INVESTORS FUND TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares Value ---------- -------- Gillette Co. ..................... 120,000 $ 5,355 Greencore Group PLC............... 55,000 414 Manpower Inc. .................... 25,200 643 Newell Co. ....................... 95,200 2,332 PepsiCo........................... 195,000 8,897 Philip Morris Companies........... 172,800 12,852 Procter & Gamble Co. ............. 134,200 9,646 Rubbermaid........................ 70,000 1,942 Sara Lee Corp. ................... 150,000 4,275 Shaw Industries................... 148,200 2,519 -------- 68,011 DRUGS AND HEALTH CARE--8.4% Abbott Laboratories............... 116,600 4,722 Columbia/HCA Healthcare Corp...... 100,400 4,342 (b)Forest Laboratories.............. 96,000 4,260 Johnson & Johnson................. 100,000 6,762 Eli Lilly & Co.................... 80,000 6,280 Merck & Co., Inc.................. 165,200 8,095 Pfizer............................ 90,000 8,314 SmithKline Beecham, PLC........... 140,000 6,335 United Healthcare Corp............ 65,000 2,689 (b)U.S. Bioscience with warrants expiring 1998................... 4,703 37 U.S. Healthcare................... 51,300 1,571 -------- 53,407 ELECTRICAL EQUIPMENT--2.2% Emerson Electric Co............... 58,900 4,211 General Electric Co............... 138,600 7,814 York International Corp........... 54,200 2,439 -------- 14,464 ENERGY AND RELATED SERVICES--2.4% Enron Corp........................ 152,200 5,346 Mobil Corp........................ 65,000 6,240 Noble Affiliates.................. 100,000 2,550 Union Texas Petroleum Holdings.... 60,000 1,267 -------- 15,403 ENTERTAINMENT AND RESTAURANTS--2.9% Harrah's Entertainment............ 135,000 3,797 La Quinta Motor Inns.............. 55,000 1,485 McDonald's Corp................... 150,000 5,869 (b)Promus Companies................. 67,500 1,485 Tabcorp Holdings Ltd.............. 100,360 208 Number of Shares Value ---------- -------- Walt Disney Company............... 100,000 $ 5,563 -------- 18,407 FINANCIAL SERVICES AND REAL ESTATE--6.3% (a)Allied Irish Banks PLC........... 24,400 115 American General Corp............. 50,000 1,688 American International Group, Inc............................. 60,000 6,840 Banc One Corporation.............. 120,000 3,870 Boatmen's Bancshares.............. 120,100 4,234 CITIC Pacific Ltd................. 98,000 246 Federal National Mortgage Association..................... 40,000 3,775 First USA......................... 45,100 2,001 General Re Corp................... 25,000 3,347 (b)Goldlion Holdings Ltd., warrants expiring 1995 and 1996............................ 325,000 1 MBNA Corporation.................. 111,500 3,763 MGIC Investment Corp.............. 68,600 3,216 NationsBank....................... 50,000 2,681 Providian Corp.................... 75,000 2,719 Road Builder...................... 27,000 90 Sanyo Shinpan Finance Co., Ltd.... 4,100 299 Sumitomo Corp..................... 32,000 291 (b)Wai Kee Holdings Ltd., warrants expiring 1996................... 192,000 3 -------- 39,179 MANUFACTURING--2.2% Alco Standard Corporation......... 35,000 2,796 Allied-Signal..................... 29,000 1,291 Boeing Co......................... 60,000 3,757 Georgia-Pacific Corp.............. 40,000 3,470 Xerox Corporation................. 22,500 2,638 -------- 13,952 RETAILING AND DISTRIBUTION--3.2% (b)CUC International................ 60,300 2,533 Federated Department Stores....... 75,000 1,931 Hagemeyer N.V..................... 4,391 196 Home Depot........................ 163,703 6,650 May Department Stores Co.......... 75,000 3,122 (b)Thrifty Payless Holdings......... 47,500 154 Wal-Mart Stores................... 211,600 5,660 -------- 20,246
30 31 KEMPER INVESTORS FUND TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares or Principal Amount Value ---------- -------- TRANSPORTATION--.5% Koninklijke Van Ommeren........... 20 $ 1 Union Pacific Corp................ 40,000 2,215 (b)Wisconsin Central Transportation Corp........................... 19,700 965 -------- 3,181 -------- TOTAL COMMON STOCKS--54.6% (Cost: $288,745).................. 346,606 CORPORATE OBLIGATIONS BROADCASTING, CABLESYSTEMS AND PUBLISHING--1.9% CF Cable TV Inc., 11.625%, 2005... $ 510 541 Century Communications Corp., 9.50%, 2005..................... 1,500 1,489 Comcast Corporation, 10.625%, 2012................... 1,500 1,605 Continental Cablevision, Inc., 9.50%, 2013..................... 2,000 2,060 Rogers Cablesystems Limited, 10.00%, 2005.................... 1,050 1,079 Time Warner Entertainment Company, L.P., 8.375%, 2033..... 1,000 979 Time Warner, Inc. 9.15%, 2023..... 1,000 1,036 Univision TV, 11.75%, 2001........ 1,500 1,613 Viacom International Inc., 8.00%, 2006............................ 1,500 1,455 -------- 11,857 COMMUNICATIONS AND MEDIA--1.7% Cinemark USA Inc., 12.00%, 2002... 570 613 Cox Communications, 6.875%, 2005.................... 2,000 1,972 MCI Communications, 7.50%, 2004... 2,000 2,078 News American Holdings, 9.25%, 2013............................ 2,000 2,239 Rogers Cantel 11.125%, 2002....... 1,790 1,857 TCI Communications, 8.65%, 2004... 2,000 2,104 -------- 10,863 CONSUMER PRODUCTS AND SERVICES--.8% Nabisco, 6.70%, 2002.............. 1,000 988 Philip Morris Companies, Inc., 7.25%, 2003..................... 1,000 1,016 Principal Amount Value ---------- -------- RJR Nabisco 8.00%, 2000..................... $ 1,000 $ 1,048 8.75%, 2005..................... 2,000 2,055 -------- 5,107 DRUGS AND HEALTH CARE--.9% American Home Products, 7.90%, 2005............................ 2,000 2,140 Columbia/HCA Healthcare Corp., 6.91%, 2005..................... 2,000 1,976 National Medical Enterprises 9.625%, 2002.................... 130 137 10.125%, 2005................... 1,370 1,449 -------- 5,702 ENERGY AND RELATED SERVICES--2.0% Cincinnati Gas and Electric Company, 7.20%, 2023............ 2,000 1,901 Commonwealth Edison Co., 8.125%, 2007............................ 2,000 2,031 Gulf Canada Resources, Ltd., 9.25%, 2004..................... 1,500 1,464 Philips Electronics N.V., 8.375%, 2006............................ 2,000 2,204 Texas Utilities Company, 6.75%, 2003..................... 2,000 1,984 TransTexas Gas Corporation, 11.50%, 2002.................... 1,500 1,539 WRT Energy Corp. 13.875%, 2002................... 130 129 Westinghouse Electric Corp., 8.875%, 2001.................... 750 799 8.625%, 2012.................... 500 517 -------- 12,568 ENVIRONMENTAL SERVICES--.2% Browning-Ferris Industries, 7.875%, 2005.................... 1,000 1,076 FINANCIAL SERVICES AND REAL ESTATE--3.0% ABN AMRO Bank, 8.25%, 2009........ 2,000 2,134 Abbey National First Capital, 8.20%, 2004..................... 2,000 2,170 Associates Corp., N.A., 8.25%, 1999............................ 2,000 2,130 Capital One Bank 8.125%, 1998.................... 1,000 1,035 8.125%, 2000.................... 1,000 1,048
31 32 KEMPER INVESTORS FUND TOTAL RETURN PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Principal Amount Value ---------- -------- Comdata Network, Inc. 12.50%, 1999.................... $ 1,480 $ 1,613 13.25%, 2002.................... 20 22 Commercial Credit, 7.375%, 2005... 2,000 2,063 (b)Export-Import Bank Japan, 4.375%, 2003.................... 38,000 498 First USA Bank, Medium Term Note, 8.10%, 1997..................... 2,000 2,050 GMAC, Medium Term Note, 8.50%, 2000............................ 2,000 2,154 (b)IBRD Japan, 4.75%, 2004..................... 20,000 272 (b)Japan Development Bank, 6.50%, 2001..................... 55,000 794 Lehman Brothers Holdings, 8.375%, 1999............................ 1,000 1,042 -------- 19,025 MANUFACTURING--1.0% Great Dane Holding, 12.75%, 2001............................ 300 296 Lockheed Corp., 6.75%, 2003....... 2,000 1,996 Nortek Inc., 9.875%, 2004......... 90 81 Owens-Illinois, Inc., 11.00%, 2003............................ 3,990 4,379 -------- 6,752 RETAILING AND DISTRIBUTION--1.0% Federated Department Stores, Inc., convertible, 9.72%, 2004........ 100 101 Grand Union Company, 12.00%, 2004.................... 1,000 968 Principal Amount Value ---------- -------- May Department Stores Co., 7.50%, 2015............................ $ 1,000 $ 1,007 Pathmark Stores, Inc., 11.625%, 2002................... 1,500 1,571 Penn Traffic Company 8.625%, 2003.................... 1,000 940 10.65%, 2004.................... 400 417 9.625%, 2005.................... 100 94 Sears Roebuck & Co., 6.25%, 2004............................ 1,500 1,436 -------- 6,534 TRANSPORTATION--1.1% Burlington Motor Holdings Inc., 11.50%, 2003.................... 3,200 2,560 Delta Airlines, 9.75%, 2021....... 2,000 2,234 United Airlines 11.21%, 2004.................... 1,000 1,213 3.907%, 2018.................... 1,000 1,061 -------- 7,068 -------- TOTAL CORPORATE OBLIGATIONS--13.6% (Cost: $83,567)................... 86,552 -------- TOTAL INVESTMENTS--92.6% (Cost: $521,105).................. 587,681 CASH AND OTHER ASSETS, LESS LIABILITIES--7.4%................... 47,305 -------- NET ASSETS--100%.................... $634,986 ========
32 33 NOTES TO TOTAL RETURN PORTFOLIO OF INVESTMENTS (a) Non-income producing security. (b) Principal amount shown is in local currency. Based on the cost of investments of $521,105,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $72,807,000, the aggregate gross unrealized depreciation was $6,231,000 and the net unrealized appreciation on investments was $66,576,000. See accompanying notes to financial statements. 33 34 KEMPER INVESTORS FUND HIGH YIELD PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Principal Amount Value --------- -------- GOVERNMENT OBLIGATIONS--4.1% (Cost: $10,359) U.S. Treasury Notes 8.875%, 1996..................... $ 8,500 $ 8,659 7.375%, 1997..................... 1,700 1,756 -------- 10,415 CORPORATE OBLIGATIONS BROADCASTING, CABLESYSTEMS AND PUBLISHING--17.4% Act III Broadcasting, Inc., 9.625%, 2003..................... 330 332 Adelphia Communications Corporation, 12.50%, 2002........ 1,730 1,721 Affinity Group, Inc., 11.50%, 2003............................. 1,460 1,455 (b)Australis Media Ltd., convertible, 14.00%, 2003........ 2,220 1,160 (b)Bell Cablemedia PLC, 11.95%, 2004............................. 2,860 1,902 Big Flower Press, Inc., 10.75%, 2003............................. 1,900 1,905 CF Cable TV Inc., 11.625%, 2005.... 740 784 Cablevision Industries Corporation, 10.75%, 2002..................... 2,015 2,201 Cablevision Systems Company 9.875%, 2013..................... 1,345 1,419 9.875%, 2023..................... 280 293 Century Communications Corporation 9.50%, 2000...................... 300 302 11.875%, 2003.................... 1,360 1,442 9.50%, 2005...................... 2,690 2,670 Comcast Corporation 9.375%, 2005..................... 1,120 1,126 9.50%, 2008...................... 1,330 1,327 10.625%, 2012.................... 1,850 1,980 Continental Cablevision, Inc., 9.50%, 2013...................... 4,270 4,398 Granite Broadcasting Corp., 10.375%, 2005.................... 1,420 1,425 (b)International CableTel Incorporated, 12.75%, 2005....... 3,670 2,165 Katz Corporation, 12.75%, 2002..... 960 1,037 (b)Neodata Services, 12.00%, 2003............................. 1,210 1,010 Rogers Cablesystems Limited 9.625%, 2002..................... 780 786 10.00%, 2005..................... 800 822 Sinclair Broadcasting Group, Inc., 10.00%, 2003..................... 1,620 1,616 Principal Amount Value --------- -------- Summit Communications Group, Inc., 10.50%, 2005..................... $ 1,200 $ 1,302 Univision TV, 11.75%, 2001......... 370 398 Viacom International Inc., 8.00%, 2006............................. 4,880 4,734 Videotron Groupe, 10.625%, 2005.... 500 526 (b)Videotron Holdings PLC, 11.12%, 2004............................. 1,250 819 Webcraft Technologies, Inc., 9.375%, 2002..................... 640 560 Young Broadcasting Corporation, 11.75%, 2004..................... 260 286 -------- 43,903 BUSINESS SERVICES--4.0% Comdata Network, Inc. 12.50%, 1999..................... 1,250 1,362 13.25%, 2002..................... 1,000 1,125 Computervision Corporation 10.875%, 1997.................... 2,100 2,082 11.375%, 1999.................... 720 665 Corporate Express Inc., 9.125%, 2004............................. 1,300 1,264 Merisal, Inc., 12.50%, 2004........ 1,370 1,206 Monarch Marking Systems, 12.50%, 2003............................. 1,160 1,172 Outdoor Systems, 10.75%, 2003...... 1,250 1,194 -------- 10,070 CHEMICALS--5.2% Agriculture, Mining and Chemicals, Inc., 10.75%, 2003..................... 640 659 Arcadian Partners, L.P., 10.75%, 2005............................. 1,420 1,434 Atlantis Group, Inc., 11.00%, 2003............................. 1,135 1,121 G-I Holdings Inc., zero coupon, 1998............................. 2,080 1,404 Huntsman Corporation, 10.625%, 2001............................. 400 423 Pioneer Americas Acquisition Corp., 13.375%, 2005.................... 1,500 1,538 Polymer Group Inc., 12.75%, 2002... 1,240 1,249 Rexene Corporation, 11.75%, 2004... 1,650 1,766 Terra Industry, 10.50%, 2005....... 790 806 UCC Investors Holdings, Inc. 10.50%, 2002..................... 2,280 2,314 11.00%, 2003..................... 300 305 -------- 13,019 COMMUNICATIONS--6.3% (b)Call-Net Enterprises Inc., 13.25%, 2004..................... 1,000 600 (b)Celcaribe S.A., 13.50%, 2004...... 1,000 840 (b)Cellular, Inc., 11.75%, 2003...... 625 463 Commnet Cellular, 11.25%, 2005..... 500 503
34 35 KEMPER INVESTORS FUND HIGH YIELD PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Principal Amount Value --------- -------- (b)Echostar Communication, 12.875%, 2004, with warrants expiring 2004........... $ 4,575 $ 2,511 Intermedia Communications, convertible, 13.50%, 2005........ 1,140 1,143 Paging Network, Inc. 11.75%, 2002..................... 2,010 2,163 (a) 9.445%, 2002.................... 1,000 1,000 (b)PanAmSat, L.P., 11.375%, 2003..... 2,275 1,627 Rogers Cantel, 11.125%, 2002....... 3,570 3,703 USA Mobile Communications, Inc. II, 14.00%, 2004..................... 1,190 1,306 -------- 15,859 CONSTRUCTION MATERIALS--5.4% American Standard Inc. 10.875%, 1999.................... 2,315 2,506 11.375%, 2004.................... 1,090 1,188 (b) 10.50%, 2005.................. 1,110 844 9.25%, 2016...................... 840 840 (b)Building Materials Corporation of America, 11.75%, 2004............ 3,495 2,071 Nortek, Inc., 9.875%, 2004......... 1,700 1,522 Triangle Pacific Corp., 10.50%, 2003............................. 2,185 2,218 Waxman Industries, Inc. 12.25%, 1998..................... 850 816 13.75%, 1999..................... 884 747 (a)(b) 12.75%, 2004, with warrants expiring 2004.................... 1,749 777 -------- 13,529 CONSUMER PRODUCTS AND SERVICES--7.3% Allied Waste Industry, 12.00%, 2004............................. 550 575 Bally's Park Place Funding, Inc., 9.25%, 2004...................... 2,690 2,528 Beatrice Foods, Inc., 12.00%, 2001............................. 2,000 1,820 Cinemark USA, Inc., 12.00%, 2002... 940 1,011 (b)Dr. Pepper Bottling Holdings, Inc., 11.625%, 2003.............. 1,120 846 Empress River Casino, 10.75%, 2002............................. 1,090 1,090 Host Marriott Travel Plaza, 9.50%, 2005............................. 1,500 1,440 Mid-American Waste Systems Inc., 12.25%, 2003..................... 1,100 1,122 Players International, 10.875%, 2005............................. 370 364 Santa Fe Hotel, Inc., 11.00%, 2000, with warrants expiring 1996...... 850 783 Principal Amount Value --------- -------- (b)Six Flags Theme Park, 12.25%, 2005............................. $ 1,750 $ 1,260 Trump Taj Mahal, PIK, 11.35%, 1999............................. 5,553 4,442 Westpoint Stevens, 9.375%, 2005.... 1,200 1,158 -------- 18,439 DRUGS AND HEALTH CARE--4.7% Abbey Healthcare Group Incorporated, 9.50%, 2002........ 1,035 1,066 Amerisource Distribution Corp., PIK, 11.25%, 2005................ 753 847 Charter Medical Corporation, 11.25%, 2004..................... 2,570 2,737 Dade International Inc., 13.00%, 2005............................. 840 886 National Medical Enterprises 9.625%, 2002..................... 500 529 10.125%, 2005.................... 2,350 2,485 Ornda Healthcorporation 12.25%, 2002..................... 1,505 1,667 11.375%, 2004.................... 1,560 1,704 -------- 11,921 ENERGY AND RELATED SERVICES--3.4% Chesapeake Energy Corp., 10.50%, 2002............................. 675 665 Dual Drilling Company, 9.875%, 2004..................... 400 375 Empire Gas Corporation, 7.00%, 2004, with warrants expiring 2004...... 900 717 Gerrity Oil & Gas, 11.75%, 2004.... 1,010 934 Global Marine Inc., 12.75%, 1999... 280 310 Gulf Canada Resources, Ltd., 9.25%, 2004............................. 1,800 1,757 HS Resources, 9.875%, 2003......... 230 223 TransTexas Gas Corporation, 11.50%, 2002............................. 2,900 2,976 WRT Energy Corp. 13.875%, 2002.................... 600 594 -------- 8,551 FINANCIAL SERVICES, HOME BUILDING AND REAL ESTATE--2.3% Continental Homes Holding, 12.00%, 1999............................. 970 980 Forecast Group L.P., 11.375%, 2000............................. 250 145
35 36 KEMPER INVESTORS FUND HIGH YIELD PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Principal Amount Value --------- -------- (a)Great American Holdings, 11.00%, 1998............................. $ 675 $ 678 Hovnanian Kent 11.25%, 2002..................... 1,318 1,153 9.75%, 2005...................... 600 465 J.M. Peters, 12.75%, 2002, with warrants expiring 2004...... 460 395 NVR Inc., 11.00%, 2003............. 970 883 Oriole Homes Corp., 12.50%, 2003... 140 122 Presley Companies, 12.50%, 2001.... 1,400 1,148 -------- 5,969 MANUFACTURING, METALS AND MINING--16.4% Aftermarket Technology, 12.00%, 2004............................. 1,080 1,145 Algoma Steel, 12.375%, 2005........ 630 568 Amstar Corporation, 11.375%, 1997............................. 2,744 2,799 BE Aerospace, 9.75%, 2003.......... 880 880 Bluebird Body Company, 11.75%, 2002..................... 1,430 1,466 Day International Group, 11.25%, 2005..................... 430 432 Essex Group Incorporated, 10.00%, 2003............................. 900 864 Exide Corporation 10.75%, 2002..................... 580 612 12.25%, 2005..................... 410 418 Fairchild Corporation 12.00%, 2001..................... 2,390 2,043 13.00%, 2007..................... 339 278 Fairchild Industries, 12.25%, 1999............................. 1,490 1,516 Fairfield Manufacturing Company, 11.375%, 2001.................... 830 784 Foamex L.P. 11.25%, 2002..................... 930 921 11.875%, 2004.................... 1,370 1,295 (b)Foamex-JPS Automotive L.P., 14.00%, 2004, with warrants expiring 1999.................... 940 517 Great Dane Holding, 12.75%, 2001... 2,355 2,320 GS Technologies, 12.00%, 2004...... 1,420 1,392 Gulf States Steel, convertible, 13.50%, 2003..................... 1,000 973 Jordan Industries, 10.375%, 2003... 1,560 1,435 JPS Automotive Products Corporation, 11.125%, 2001....... 1,110 1,088 Principal Amount Value --------- -------- K & F Industries, Inc. 13.75%, 2001..................... $ 4,930 $ 5,078 11.875%, 2003.................... 420 428 (a)Lehman (K&F) Promissory Note, 6.125%, 1997..................... 350 326 Lear Seating Corporation 8.25%, 2002............................. 250 237 Newflo Corporation, 13.25%, 2002... 1,050 1,047 Pace Industries, Inc., 10.625%, 2002............................. 1,020 966 Penda Industries Inc., 10.75%, 2004............................. 650 579 RHI Holdings, 11.875%, 1999........ 790 760 SPX Corporation, 11.75%, 2002...... 380 395 Sequa Corporation 9.625%, 1999..................... 250 247 8.75%, 2001...................... 730 681 9.375%, 2003..................... 270 248 Thermadyne Industries, Inc., PIK 10.25%, 2002..................... 1,290 1,277 10.75%, 2003..................... 1,476 1,446 Unisys Corporation 13.50%, 1997..................... 1,160 1,282 8.875%, 1997..................... 315 315 10.625%, 1999.................... 2,290 2,462 -------- 41,520 PAPER AND FOREST PRODUCTS--6.3% Berry Plastics Corporation, 12.25%, 2004, with warrants expiring 2004............................. 480 493 Container Corporation of America, 11.25%, 2004..................... 1,545 1,622 Gaylord Container Corporation 11.50%, 2001..................... 695 737 (b) 12.75%, 2005.................... 2,380 2,332 Maxxam Group, Inc. (b) 12.25%, 2003.................... 585 348 11.25%, 2003..................... 1,030 963 Owens-Illinois, Inc. 11.00%, 2003..................... 970 1,065 9.95%, 2004...................... 2,540 2,591 9.75%, 2004...................... 2,720 2,761 Repap New Brunswick Inc., 10.625%, 2005.................... 1,250 1,258 Sweetheart Cup Company Inc., 10.50%, 2003..................... 900 869 S. D. Warren Company, 12.00%, 2004............................. 850 918 -------- 15,957
36 37 KEMPER INVESTORS FUND HIGH YIELD PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Principal Amount Value --------- -------- RETAILING--11.2% Color Tile, Inc., 10.75%, 2001..... $ 2,470 $ 1,210 Dominick's Bank Loan, 10.875%, 2005............................. 1,760 1,784 Federated Department Stores, Inc., convertible, 9.72%, 2004......... 420 424 Finlay Fine Jewelry Corporation, 10.625%, 2003.................... 580 560 Grand Union Company (c) 12.25%, 2002.................... 3,990 1,022 (a) 12.00%, 2004.................... 1,100 1,064 (b)International Semi-Tech Microelectronics Inc., 11.50%, 2003............................. 1,650 825 P & C Food Markets, 11.50%, 2001... 910 961 Pamida Holdings, 11.75%, 2003...... 1,950 1,755 Pathmark Stores, Inc. 12.625%, 2002.................... 1,000 1,065 11.625%, 2002.................... 1,655 1,734 9.625%, 2003..................... 720 702 Penn Traffic Company 8.625%, 2003..................... 1,620 1,523 9.625%, 2005..................... 1,640 1,542 Ralphs Grocery Company (a) 9.312%, 2002.................... 335 336 (a) 9.812%, 2003.................... 335 336 10.45%, 2004..................... 1,880 1,871 (a) 10.062%, 2004................... 335 336 13.75%, 2005..................... 1,130 1,215 Southland Corporation, 5.00%, 2003............................. 5,709 4,366 Specialty Retailers, Inc., 11.00%, 2003............................. 610 567 Thrifty Payless Inc. 11.75%, 2003..................... 2,390 2,521 12.25%, 2004..................... 600 618 -------- 28,337 TRANSPORTATION--1.1% Burlington Motor Holdings Inc., 11.50%, 2003..................... 1,350 1,080 Principal Amount or Number of Shares Value --------- -------- OMI Corp., 10.25%, 2003............ $ 1,625 $ 1,357 (b)Transtar Holdings, L.P., 13.375%, 2003.................... 631 372 -------- 2,809 -------- TOTAL CORPORATE OBLIGATIONS--91.0% (Cost: $234,274)................... 229,883 PREFERRED AND COMMON STOCKS BCP/Essex Holdings................. 23,000 shs. 598 (c)Computervision Corporation........ 162,160 1,074 (c)Gaylord Container Corporation, warrants expiring 1996........... 218,579 2,268 (c)Gillett Holdings, Inc............. 42,066 873 (c)Specialty Equipment Companies, Inc.............................. 13,000 167 (c)Thrifty Payless Inc............... 31,540 103 (c)UGI Inc........................... 4,249 5 Walter Industries, Inc............. 7,469 103 -------- TOTAL PREFERRED AND COMMON STOCKS--2.0% (Cost: $4,103)..................... 5,191 MONEY MARKET INSTRUMENTS--1.6% Yield--6.21% Due--July, 1995 (Cost: $3,997) Cooperative Receivables Corporation........................ $ 4,000 3,997 -------- TOTAL INVESTMENTS--98.7% (Cost: $252,733)................... 249,486 CASH AND OTHER ASSETS, LESS LIABILITIES--1.3%............... 3,251 -------- NET ASSETS--100%..................... $252,737 ========
See accompanying notes to portfolio of investments. 37 38 NOTES TO HIGH YIELD PORTFOLIO OF INVESTMENTS (a) The following securities may require registration under the Securities Act of 1933 or an exemption therefrom in order to effect sale in the ordinary course of business; they were valued at cost on the dates of acquisition. These securities were valued at fair value as determined in good faith by the Board of Trustees of the Fund. There were no market quotations available for unrestricted securities of the same class on the dates of acquisition or on June 30, 1995. At June 30, 1995, the value of the Portfolio's restricted securities was $4,083,000, which represented 1.60% of net assets.
Principal Amount Dates of or Number Unit Security Description Acquisition of Shares Cost ------------------------------------------------------------------------------------------------------------------- Grand Union Company, 12.00%, 2004 July 1992-January 1995 $1,100,000 $ 81.33 ------------------------------------------------------------------------------------------------------------------- Great American Holdings, 11.00%, 1998 July 1990-March 1992 675,000 84.15 ------------------------------------------------------------------------------------------------------------------- Lehman (K&F) Promissory Note, 6.125%, 1997 July 1994 350,000 90.75 ------------------------------------------------------------------------------------------------------------------- Paging Network, 9.445%, 2002 March 1995 1,000,000 99.75 ------------------------------------------------------------------------------------------------------------------- Ralphs Grocery Company, 9.312%-10.062%, 2002-2004 June 1995 1,005,000 100.00 ------------------------------------------------------------------------------------------------------------------- Waxman Industries, Inc., warrants expiring 2004 June 1994 52,274shs. 2.00 -------------------------------------------------------------------------------------------------------------------
(b) Deferred interest obligation; currently zero coupon under terms of the initial offering. (c) Non-income producing security. In the case of a bond, generally denotes that issuer has defaulted on the payment of interest or has filed for bankruptcy. "PIK" denotes that interest or dividends are paid in kind. Based on the cost of investments of $252,733,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $7,396,000, the aggregate gross unrealized depreciation was $10,643,000 and the net unrealized depreciation on investments was $3,247,000. See accompanying notes to financial statements. 38 39 KEMPER INVESTORS FUND EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Number of Shares Value ---------- -------- COMMON STOCKS CHEMICALS--4.4% Air Products & Chemicals........... 65,000 $ 3,624 B.F. Goodrich Co. ................. 29,300 1,571 E.I. DuPont de Nemours & Co. ...... 75,000 5,156 Monsanto Co. ...................... 61,000 5,498 -------- 15,849 COMMUNICATIONS AND MEDIA--5.5% A T & T............................ 73,400 3,899 Cox Communications Inc. ........... 155,000 3,003 Singapore Press Holdings, Ltd...... 4,000 60 (a)Tellabs, Inc. .................... 150,400 7,238 (a)3Com Corporation.................. 40,000 2,680 (a)Viacom International "B".......... 60,093 2,787 -------- 19,667 COMPUTER SOFTWARE, ELECTRONIC DATA PROCESSING AND SEMI-CONDUCTORS--15.2% Adobe Systems...................... 30,000 1,740 (a)Atmel Corporation................. 30,300 1,678 (a)Cisco Systems..................... 92,800 4,692 First Data Corporation............. 48,700 2,770 First Financial Management Corporation...................... 80,000 6,840 General Motors Corp., "E".......... 63,000 2,741 Hewlett-Packard, Co. .............. 70,000 5,215 Informix Corp. .................... 150,000 3,806 Intel Corp. ....................... 100,000 6,331 Linear Technology Corp. ........... 50,000 3,300 Loral Corp. ....................... 38,200 1,977 (a)Microsoft Corp.................... 65,000 5,874 Reynolds & Reynolds Co. ........... 50,000 1,475 (a)Silicon Graphics Inc.............. 119,000 4,745 (a)Solectron Corp.................... 43,100 1,471 -------- 54,655 CONSUMER PRODUCTS AND SERVICES--16.9% Alco Standard Corporation.......... 53,000 4,233 Campbell Soup Co. ................. 55,000 2,695 Coca-Cola Co. ..................... 160,000 10,200 Colgate-Palmolive Co. ............. 50,000 3,656 ConAgra Inc. ...................... 69,000 2,406 CPC International.................. 42,000 2,594 (a)CUC International................. 65,800 2,764 (a)Franklin Quest Inc. .............. 63,100 1,514 Number of Shares Value ---------- -------- Gillette Co. ...................... 90,000 $ 4,016 Greencore Group PLC................ 15,000 113 Manpower Inc. ..................... 120,000 3,060 PepsiCo............................ 40,000 1,825 Philip Morris Companies............ 93,900 6,984 Procter & Gamble Co. .............. 103,000 7,403 Sara Lee Corp. .................... 120,000 3,420 Service Corp. International........ 118,000 3,732 -------- 60,615 CONSTRUCTION--.6% Fluor Corp. ....................... 43,000 2,236 Road Builder....................... 7,000 23 -------- 2,259 ENERGY AND RELATED SERVICES--1.8% Enron Corp. ....................... 134,100 4,710 Mobil Corp. ....................... 18,000 1,728 -------- 6,438 ENTERTAINMENT AND RESTAURANTS--3.1% Harrah's Entertainment............. 55,550 1,562 McDonald's Corp. .................. 75,000 2,934 (a)Promus Companies.................. 27,775 611 Tabcorp Holdings Ltd. ............. 25,850 54 Walt Disney Company................ 105,000 5,841 -------- 11,002 FINANCIAL SERVICES AND REAL ESTATE--9.3% Aalberts Industries N.V............ 2,300 130 (a)Allied Irish Banks PLC............ 7,200 34 American International Group, Inc.............................. 30,000 3,420 Boatmen's Bancshares............... 113,000 3,983 CITIC Pacific Ltd.................. 26,000 65 First USA.......................... 71,400 3,168 General Re Corp.................... 30,200 4,043 Hagemeyer N.V...................... 1,144 51 Healthcare COMPARE Corp............ 55,000 1,650 MBNA Corporation................... 180,900 6,105 Mercantile Bancorp................. 40,000 1,795 MGIC Investment Corp............... 113,000 5,297 NationsBank........................ 63,000 3,378 Sanyo Shinpan Finance Co., Ltd..... 800 58 Sumitomo Corp...................... 8,000 73 -------- 33,250
39 40 KEMPER INVESTORS FUND EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares Value ---------- -------- MANUFACTURING--11.2% AMP, Inc........................... 20,000 $ 845 (a)Applied Materials, Inc............ 23,000 1,992 Boeing Co.......................... 86,000 5,386 (a)Crown Cork & Seal Co.............. 70,000 3,509 Emerson Electric Co................ 69,000 4,934 General Electric Co................ 85,400 4,814 Newell Co.......................... 135,000 3,308 Scott Paper Co..................... 168,000 8,316 TriMas Corp........................ 125,600 2,889 Xerox Corporation.................. 27,000 3,166 York International Corp............ 23,400 1,053 -------- 40,212 MEDICAL PRODUCTS AND SERVICES--17.2% Abbott Laboratories................ 178,400 7,225 Amgen Inc.......................... 22,000 1,770 Boston Scientific Corp............. 50,000 1,594 Columbia/HCA Healthcare Corp....... 82,000 3,547 Eli Lilly & Co..................... 50,000 3,925 Healthsource, Inc.................. 50,000 1,750 (a)IDEXX Laboratories................ 67,200 1,747 (a)Integrated Health Services........ 100,000 3,000 Johnson & Johnson.................. 113,900 7,702 Medtronic, Inc..................... 82,000 6,324 Merck & Co., Inc................... 140,000 6,860 (a)Mid Atlantic Medical Services, Inc.............................. 61,600 1,140 Pfizer............................. 21,800 2,014 (a)R. P. Scherer Corp................ 34,000 1,437 SmithKline Beecham PLC............. 45,000 2,036 United Healthcare Corp............. 180,000 7,448 (a)U.S. Bioscience, with warrants expiring 1998.................... 735 2 (a)Value Health...................... 66,350 2,140 -------- 61,661 RETAILING AND DISTRIBUTION--5.9% Federated Department Stores........ 140,000 3,605 Number of Shares or Principal Amount Value ---------- -------- Home Depot......................... 115,200 $ 4,680 Nabisco Holdings................... 17,500 473 (a)Office Depot...................... 74,350 2,091 (a)Starbucks Corporation............. 51,800 1,845 (a)Viking Office Products............ 54,400 1,992 Wal-Mart Stores.................... 241,700 6,465 -------- 21,151 TRANSPORTATION--.8% (a)Wisconsin Central Transportation Corp............................. 58,200 2,852 -------- TOTAL COMMON STOCKS--91.9% (Cost: $259,915)..................... 329,611 CONVERTIBLE CORPORATE OBLIGATIONS--.6% (Cost: $1,333) Medaphis Corp., 6.50%, 2000........ $ 1,333 2,079 MONEY MARKET INSTRUMENTS Yield--6.05% to 6.30% Due--July 1995 Cooperative Receivables Corporation...................... 5,000 4,997 Cox Enterprises.................... 10,000 9,993 Working Capital Management Company.......................... 5,000 4,996 -------- TOTAL MONEY MARKET INSTRUMENTS--5.6% (Cost: $19,985).................... 19,986 -------- TOTAL INVESTMENTS--98.1% (Cost: $281,233)................... 351,676 CASH AND OTHER ASSETS, LESS LIABILITIES--1.9%............... 6,802 -------- NET ASSETS--100%..................... $358,478 ========
40 41 NOTES TO EQUITY PORTFOLIO OF INVESTMENTS (a) Non-income producing security. Based on the cost of investments of $281,233,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $72,005,000, the aggregate gross unrealized depreciation was $1,562,000 and the net unrealized appreciation on investments was $70,443,000. See accompanying notes to financial statements. 41 42 KEMPER INVESTORS FUND GOVERNMENT SECURITIES PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Coupon Principal Rate Maturity Amount Value ------ --------- --------- -------- U.S. GOVERNMENT OBLIGATIONS FEDERAL HOME LOAN MORTGAGE CORPORATION--11.1% (Cost: $10,012) Pass-through Certificates................................................. 7.00 % 2023-2024 $10,711 $ 10,530 FEDERAL NATIONAL MORTGAGE ASSOCIATION--10.4% (Cost: $9,678) Pass-through Certificates................................................. 7.50 2025 1,956 1,962 8.00 2024-2025 7,825 7,972 -------- 9,934 GOVERNMENT NATIONAL MORTGAGE ASSOCIATION--60.8% (Cost: $56,488) Pass-through Certificates................................................. 6.50 2023-2025 3,947 3,792 7.00 2022-2025 18,217 17,917 7.50 2022-2025 15,851 15,926 8.00 2016-2025 11,364 11,623 8.50 2016-2024 1,745 1,813 9.00 2016-2020 2,087 2,192 9.50 2013-2024 3,115 3,300 10.00 2016 1,184 1,286 -------- 57,849 U.S. TREASURY SECURITIES--13.5% (Cost: $12,569) Notes..................................................................... 7.50 1997 1,000 1,025 6.87 5 2000 2,000 2,071 7.25 2004 3,000 3,205 Bonds..................................................................... 8.75 2020 1,000 1,242 7.25 2022 5,000 5,335 -------- 12,878 -------- TOTAL U.S. GOVERNMENT OBLIGATIONS--95.8% (Cost: $88,747)........................................................... 91,191 CORPORATE OBLIGATIONS American Home Products.................................................... 7.90 2005 500 535 Commonwealth Edison Company............................................... 8.37 5 2006 500 547 Hydro-Quebec.............................................................. 7.37 5 2003 500 512 Philip Morris Companies................................................... 7.25 2003 500 508 Philips Electric N.V. .................................................... 8.37 5 2006 500 551 Sears Roebuck & Co. ...................................................... 6.25 2004 500 479 -------- TOTAL CORPORATE OBLIGATIONS--3.3% (Cost: $3,049)............................................................ 3,132 MONEY MARKET INSTRUMENTS--12.4% (Cost: $11,846) Yield--5.70% Due--September 1995 Student Loan Marketing Association........................................ 12,000 11,845 -------- TOTAL INVESTMENTS--111.5% (Cost: $103,642).................................... 106,168 LIABILITIES, LESS CASH AND OTHER ASSETS--(11.5)%.............................. (10,973) -------- NET ASSETS--100%.............................................................. $ 95,195 ========
NOTE TO GOVERNMENT SECURITIES PORTFOLIO OF INVESTMENTS Based on the cost of investments of $103,642,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $2,972,000, the aggregate gross unrealized depreciation was $446,000 and the net unrealized appreciation on investments was $2,526,000. See accompanying notes to financial statements. 42 43 KEMPER INVESTORS FUND INTERNATIONAL PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Number of Shares Value --------- -------- COMMON STOCKS CONTINENTAL EUROPE FINLAND--4.7% Oy Nokia AB......................... 103,008 $ 6,020 Telecommunications company FRANCE--4.5% Carrefour S.A. ..................... 6,000 3,076 Food retailer L'Oreal S.A......................... 6,400 1,607 Consumer products and services Technip S.A......................... 16,400 1,022 Oil company -------- 5,705 GERMANY--4.3% Mannesmann A.G...................... 7,600 2,320 Construction and engineering company Veba, A.G........................... 8,000 3,141 Electric utility -------- 5,461 IRELAND--3.5% (a)Allied Irish Banks PLC............. 235,000 1,108 Banking Greencore Group PLC................. 225,302 1,697 Food producer Independent Newspapers Ltd.......... 90,000 494 Publisher Irish Life Assurance PLC............ 300,000 997 Life assurance and pension policies Kerry Group PLC..................... 25,280 166 Food processing -------- 4,462 ITALY--.9% Sirti SpA........................... 152,915 1,134 Telecommunications company NETHERLANDS--11.0% Aalberts Industries N.V............. 23,158 1,304 Hardware company ABN Amro Bank....................... 25,092 968 Banking Getronics NV........................ 19,500 955 Information systems Hagemeyer N.V....................... 42,710 1,903 Trading company Koninklijke Ahold NV................ 75,000 2,685 Food retailer and distributor Koninklijke PTT Netherlands NV...... 25,787 926 Commercial services Number of Shares Value --------- -------- PolyGram NV......................... 49,500 $ 2,921 Music recording company Wolters Kluwer...................... 26,382 2,326 Multinational publishing organization -------- 13,988 SPAIN--1.9% Banco Bilbao Vizcaya................ 34,600 999 Banking Repsol S.A.......................... 45,000 1,416 Oil and gas producer -------- 2,415 SWEDEN--9.4% Astra AB............................ 90,000 2,775 Pharmaceutical company Atlas Copco AB...................... 100,000 1,387 Industrial machinery manufacturer LM Ericsson "B"..................... 257,740 5,132 Telecommunications equipment manufacturer Gambro AB........................... 92,000 1,327 Pharmaceutical company H & M Hennes & Mauritz AB........... 21,560 1,261 Retailing -------- 11,882 SWITZERLAND--5.2% Rhone-Poulenc....................... 200 8 Chemical and pharmaceutical company Roche Holdings AG................... 680 4,379 Pharmaceutical company Union Bank of Switzerland........... 1,200 1,243 Banking Zehnder Holdings AG................. 1,350 984 Climate control equipment manufacturer -------- 6,614 -------- TOTAL CONTINENTAL EUROPE--45.4% 57,681 PACIFIC REGION HONG KONG--5.1% Cheung Kong Holding Ltd............. 188,000 931 Financial services CITIC Pacific Ltd................... 455,000 1,144 Financial services Hong Kong Telecommunications Ltd.... 526,000 1,040 Telecommunication services HSBC Holdings PLC................... 87,068 1,117 Banking Hutchison Whampoa Ltd............... 227,000 1,097 Diversified holding company
43 44 KEMPER INVESTORS FUND INTERNATIONAL PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares Value --------- -------- New World Development Co., Ltd...... 161,889 $ 539 Investment holding and property investment company Peregrine Investment Holdings....... 415,000 590 Investment banking Wai Kee Holdings Ltd., warrants expiring 1996.............. 204,000 3 Construction company -------- 6,461 JAPAN--14.8% Amada Co., Ltd...................... 25,000 213 Equipment manufacturer Bridgestone Corp.................... 39,000 574 Manufacturer of rubber related products Daiichi Kangyo Bank................. 65,000 1,171 Banking Daifuku Co., Ltd.................... 45,000 503 Manufacturer of diversified machinery Fuji Bank Ltd....................... 62,000 1,249 Banking Fujisawa Pharmaceutical............. 130,000 1,360 Pharmaceutical company JMS Co. Ltd......................... 43,000 261 Medical equipment supplier Kurita Water Industries Ltd......... 30,000 770 Water treatment equipment and chemical manufacturer Kyocera Corp........................ 13,000 1,069 Electronics manufacturer Marui Co., Ltd...................... 68,000 1,081 Retailer Mitsubishi Heavy Industries......... 165,000 1,119 Industrial machinery manufacturer Nippondenso Co., Ltd................ 33,000 599 Automotive components manufacturer and supplier NKK Corp............................ 446,000 1,045 Steel manufacturer Omron Corp.......................... 50,000 954 Electronics manufacturer Sanyo Shinpan Finance Co., Ltd...... 3,800 278 Consumer finance company Seven Eleven Japan Co., Ltd......... 16,000 1,144 Convenience retailer Sharp Corp.......................... 30,000 396 Electronics manufacturer Sumitomo Bank Ltd................... 75,000 1,299 Banking Number of Shares Value --------- -------- Sumitomo Corp....................... 105,000 $ 955 Holding company Sumitomo Trust & Banking............ 120,000 1,456 Banking Tokyo Electron Ltd.................. 12,000 410 Electronics manufacturer (a)Ube Industries, Ltd................ 250,000 872 Diversified company -------- 18,778 MALAYSIA--1.9% Resorts World Bhd................... 138,000 809 Operator of tourist resorts Road Builder........................ 63,000 209 Construction company TA Enterprise Bhd................... 125,000 431 Financial services Telekom Malaysia.................... 135,000 1,024 Telecommunications company -------- 2,473 SINGAPORE--3.5% Development Bank.................... 51,000 580 Banking Fraser & Neave Ltd. ................ 108,000 1,244 Beer and soft drink manufacturer Keppel Corp. Ltd. .................. 127,000 1,036 Conglomerate holding company Singapore Press Holdings............ 102,000 1,525 Publisher -------- 4,385 -------- TOTAL PACIFIC REGION--25.3% 32,097 COMMONWEALTH COUNTRIES AUSTRALIA--4.5% Australian and New Zealand Banking Group Ltd. ......................... 508,700 1,803 Financial services CSL Limited......................... 269,000 563 Plasma producer Tabcorp Holdings Ltd. .............. 1,165,300 2,412 Entertainment and gaming TNT Ltd. ........................... 666,000 873 Transportation and logistics -------- 5,651 NEW ZEALAND--.9% Lion Nathan Ltd..................... 591,700 1,170 Beer and soft drink manufacturer
44 45 KEMPER INVESTORS FUND INTERNATIONAL PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares Value --------- -------- UNITED KINGDOM--11.9% British Petroleum................... 314,106 $ 2,251 Petroleum mining and production company Commercial Union PLC................ 90,000 838 Holding company Dixons Group PLC.................... 430,000 1,755 Electronics retailer Glaxo Wellcome PLC.................. 260,000 3,191 Pharmaceutical company Lloyds Bank PLC..................... 95,000 942 Banking Reed International PLC.............. 136,000 1,910 Publisher (a)Telewest Communications............ 346,000 897 Communications utility Tesco PLC........................... 377,970 1,744 Food retailer Tomkins PLC......................... 430,000 1,536 Industrial manufacturer -------- 15,064 -------- TOTAL COMMONWEALTH COUNTRIES--17.3%...................... 21,885 LATIN AMERICA AND EMERGING MARKETS BRAZIL--.5% Makro Atacadista.................... 41,800 606 Food retailer Number of Shares or Principal Amount Value --------- -------- CHILE--.9% (a)Provida Corporation, ADR......... 43,700 $ 1,174 Financial services -------- TOTAL LATIN AMERICA AND EMERGING MARKETS--1.4%................ 1,780 -------- TOTAL COMMON STOCKS--89.4% (Cost: $100,993).................... 113,443 MONEY MARKET INSTRUMENTS Yield--6.10% to 6.25% Due--July 1995 Barton Capital Corporation........ $ 3,100 3,098 Houston Industries................ 5,800 5,795 Unocal Corporation................ 2,400 2,395 TOTAL MONEY MARKET INSTRUMENTS--8.9% (Cost: $11,288)..................... 11,288 -------- TOTAL INVESTMENTS--98.3% (Cost: $112,281).................... 124,731 CASH AND OTHER ASSETS, LESS LIABILITIES--1.7%.............. 2,156 -------- NET ASSETS--100%...................... $126,887 ========
See accompanying notes to portfolio of investments. 45 46 NOTES TO INTERNATIONAL PORTFOLIO OF INVESTMENTS (a) Non-income producing security. (b) Based on the cost of investments of $112,281,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $15,868,000, the aggregate gross unrealized depreciation was $3,418,000 and the net unrealized appreciation on investments was $12,450,000. (c) At June 30, 1995, the International Portfolio's investments had the following industry diversification (dollars in thousands):
Value % --------- ----- Financial Services............................................................................ $ 20,019 15.8 Communications................................................................................ 15,247 12.0 Chemicals, Medical Equipment and Pharmaceuticals.............................................. 14,634 11.5 Retailing..................................................................................... 13,352 10.5 Consumer Products and Services................................................................ 12,485 9.8 Industrial Products and Services.............................................................. 7,713 6.1 Publishing.................................................................................... 6,255 4.9 Diversified................................................................................... 4,798 3.8 Energy Sources................................................................................ 4,689 3.7 Utilities..................................................................................... 3,141 2.5 Food and Beverages............................................................................ 4,277 3.4 Electrical and Electronics.................................................................... 2,829 2.2 Construction and Building Materials........................................................... 2,532 2.0 Transportation................................................................................ 873 .7 Automobiles, Parts and Service................................................................ 599 .5 --------- ----- Total Common Stocks........................................................................... 113,443 89.4 Money Market Instruments...................................................................... 11,288 8.9 --------- ----- Total Investments............................................................................. 124,731 98.3 Cash and Other Assets, Less Liabilities....................................................... 2,156 1.7 --------- ----- Net Assets.................................................................................... $ 126,887 100.0 ========= =====
See accompanying notes to financial statements. 46 47 KEMPER INVESTORS FUND SMALL CAPITALIZATION EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995 (DOLLARS IN THOUSANDS)
Number of Shares Value --------- ------- COMMON STOCKS BUILDING MATERIALS AND HOUSING--.4% (a)Schuler Homes...................... 6,400 $ 78 CABLE TELEVISION, BROADCASTING AND WIRELESS COMMUNICATIONS--3.8% American Radio...................... 1,400 32 (a)EZ Communications.................. 2,000 37 Gaylord Entertainment Co. .......... 14,700 371 Highwaymaster....................... 1,200 18 (a)Infinity Broadcasting.............. 3,000 100 (a)Jones Intercable "A"............... 9,200 138 Sinclair Broadcasting Group......... 3,400 95 ------- 791 CHEMICALS--4.7% Ferro Corp. ........................ 6,000 159 (a)FMC Corp. ......................... 6,000 403 Lawter International................ 8,000 96 Minerals Technologies............... 5,200 187 OM Group............................ 4,800 137 ------- 982 COMPUTER SOFTWARE AND TECHNOLOGY--12.4% (a)Alternative Resources Corporation......................... 14,900 395 Anadigics Inc. ..................... 1,200 23 (a)Atmel Corporation.................. 3,000 166 (a)Baan Co. N.V. ..................... 500 15 (a)Broderbund Software, Inc. ......... 1,800 115 (a)CATS Software...................... 1,600 18 (a)C P Clare.......................... 5,000 100 Dendrite............................ 4,400 71 Discreet Logic...................... 300 10 (a)Gartner Group...................... 2,000 58 HNC Software........................ 100 2 (a)Integraph Corp. ................... 1,400 16 Integrated Silicon Systems.......... 1,200 63 (a)Keane, Inc. ....................... 8,000 199 (a)Lam Research Corp. ................ 1,200 77 (a)Marshall Industries................ 1,000 34 (a)Medaphis Corp. .................... 3,000 65 (a)Microchip Technology............... 6,000 218 (a)Novellus Systems................... 1,000 68 (a)Paradigm Technology................ 300 7 (a)Parametric Technology Corp. ....... 2,000 99 Pioneer-Standard Electronics........ 2,000 49 (a)7th Level, Inc. ................... 9,900 141 (a)Silicon Valley Group............... 1,300 47 Number of Shares Value --------- ------- (a)Solectron Corp. ................... 6,000 $ 205 SpyGlass Corp. ..................... 1,000 29 (a)StrataCom.......................... 700 34 (a)Ultratech Stepper, Inc. ........... 6,000 211 (a)Uunet Technology, Inc. ............ 900 25 Videoserver......................... 300 12 ------- 2,572 CONSUMER PRODUCTS AND SERVICES--7.4% Barefoot, Inc. ..................... 10,000 139 (a)Franklin Quest Co. ................ 7,900 190 Global Direct Mail.................. 1,000 20 Hudson Foods........................ 19,500 271 (a)Kenneth Cole Productions........... 5,000 167 (a)Safety 1st......................... 9,100 179 Stewart Enterprises, Inc. .......... 7,500 251 UNIFI, Inc. ........................ 5,400 130 (a)Whole Foods Market................. 5,000 76 (a)Williams-Sonoma.................... 4,500 99 ------- 1,522 ENGINEERING--1.2% Jacobs Engineering Group............ 11,000 242 FINANCIAL SERVICES--4.4% Aames Financial Corp. .............. 10,600 192 ADVANTA Corp. ...................... 7,200 272 (a)SPS Transaction Services........... 7,500 260 Western National Corporation........ 14,300 177 ------- 901 GAMING AND LODGING--2.5% (a)Felcor Suite Hotels................ 4,300 110 (a)Hammons John Q Hotels, Inc. ....... 10,000 140 (a)MGM Grand.......................... 3,000 82 (a)Players International.............. 1,650 33 (a)Prime Hospitality Corp. ........... 14,000 138 (a)Station Casinos Inc. .............. 800 14 ------- 517 MANUFACTURING AND DISTRIBUTION--6.4% Elsag Bailey........................ 3,000 83 Federal Signal Corp. ............... 12,000 260 Greenfield Industries............... 9,000 261 IMCO Recycling...................... 5,300 99 (a)Input/Output, Inc. ................ 2,300 83 Nordson Corp. ...................... 400 22 TriMas Corp. ....................... 20,000 460 Wabash National Corp. .............. 2,100 65 ------- 1,333
47 48 KEMPER INVESTORS FUND SMALL CAPITALIZATION EQUITY PORTFOLIO PORTFOLIO OF INVESTMENTS JUNE 30, 1995--(CONTINUED) (DOLLARS IN THOUSANDS)
Number of Shares Value --------- ------- MEDICAL PRODUCTS AND EQUIPMENT--9.5% Arrow International................. 6,100 $ 258 (a)Centocor Inc. ..................... 7,000 100 DENTSPLY International.............. 7,000 252 Healthdyne Technologies............. 9,000 92 (a)Heart Technology................... 7,800 151 ICU Medical......................... 5,200 73 (a)IDEXX Laboratories................. 15,000 390 (a)Isolyser........................... 1,500 54 i-STAT Corp. ....................... 1,200 44 (a)MediSense.......................... 2,400 46 (a)Research Industries................ 15,000 345 (a)Respironics........................ 5,600 80 (a)TECNOL Medical Products, Inc. ..... 3,700 81 ------- 1,966 MEDICAL SERVICES--7.6% (a)ABR Information Services........... 4,000 118 American Oncology................... 1,300 36 (a)Caremark International, Inc. ...... 15,000 300 (a)Coastal Physician Group............ 12,000 154 (a)CRA Managed Care................... 5,800 131 (a)Occusystems........................ 4,400 75 Omnicare, Inc. ..................... 12,000 325 (a)Orthodontic Centers of America..... 5,000 121 (a)Renal Treatment Centers............ 6,600 163 (a)RTW Inc............................ 8,500 155 ------- 1,578 OFFICE EQUIPMENT AND SUPPLIES--3.3% Danka Business Systems PLC.......... 11,000 266 (a)OfficeMax.......................... 7,500 209 (a)Viking Office Products............. 5,500 201 ------- 676 RETAILING AND RESTAURANTS--7.7% (a)Department 56, Inc. ............... 7,000 268 (a)General Nutrition.................. 6,600 232 (a)Gymboree........................... 5,900 172 (a)Movie Gallery...................... 4,600 161 (a)PETsMART........................... 6,000 172 Number of Shares or Principal Amount Value --------- ------- (a)Proffitt's, Inc. .................. 6,000 $ 178 (a)Starbucks Corp. ................... 6,000 214 Tandy Corp.......................... 4,000 207 ------- 1,604 TELECOMMUNICATIONS AND EQUIPMENT--7.2% Allen Group......................... 11,000 326 (a)International CableTel............. 7,500 244 (a)LCI International, Inc. ........... 11,600 355 (a)Tellabs Operations................. 8,000 385 Teltrend Inc. ...................... 1,900 38 U.S. Robotics....................... 1,300 142 ------- 1,490 TRANSPORTATION--3.6% (a)ABC Rail Products.................. 8,000 184 (a)Copart, Inc. ...................... 5,400 123 (a)Wisconsin Central Transportation Corp.............................. 8,800 431 ------- 738 ------- TOTAL COMMON STOCKS--82.1% (Cost: $14,448)....................... 16,990 MONEY MARKET INSTRUMENTS Yield--5.88% to 6.02% Due--July and September 1995 Federal Home Loan Bank............ $ 1,000 998 Federal Home Loan Mortgage Corporation..................... 1,500 1,494 Federal National Mortgage Association..................... 1,010 999 ------- TOTAL MONEY MARKET INSTRUMENTS--16.8% (Cost: $3,491)...................... 3,491 ------- TOTAL INVESTMENTS--98.9% (Cost: $17,939)..................... 20,481 CASH AND OTHER ASSETS, LESS LIABILITIES--1.1%................ 219 ------- NET ASSETS--100%...................... $20,700 =======
NOTES TO SMALL CAPITALIZATION EQUITY PORTFOLIO OF INVESTMENTS (a) Non-income producing security. Based on the cost of investments of $17,939,000 for federal income tax purposes at June 30, 1995, the aggregate gross unrealized appreciation was $2,920,000, the aggregate gross unrealized depreciation was $378,000 and the net unrealized appreciation on investments was $2,542,000. 48 49 This publication may be distributed to the public only if preceded or accompanied by a prospectus. Distributed by Investors Brokerage Services, Inc. [KEMPER LOGO] Kemper Investors Life Insurance Company 1 Kemper Drive Long Grove, IL 60049 [RECYCLED LOGO] PRINTED ON RECYCLED PAPER L-8071S(8/95) Individual Policy form series L-8001 1031 [KEMPER LOGO] KEMPER SELECT SEMI-ANNUAL REPORT - - A Variable Life Insurance Policy - - KILICO Variable Separate Account - - Kemper Investors Fund Period Ended June 30, 1995 -----END PRIVACY-ENHANCED MESSAGE-----