KEMPER INCOME FUNDS         KEMPER INCOME FUNDS

   Kemper High Yield Fund      Kemper Adjustable Rate
     Kemper High Yield         U.S. Government Fund*
      Opportunity Fund       Kemper Short-Intermediate
 Kemper Income And Capital        Government Fund
     Preservation Fund       Kemper Diversified Income
   Kemper Short-Term U.S.              Fund**
      Government Fund          Kemper U.S. Government
Kemper Strategic Income Fund      Securities Fund
   Kemper U.S. Government      Kemper High Yield Fund
      Securities Fund            Kemper High Yield
 Kemper U.S. Mortgage Fund        Opportunity Fund
  SUPPLEMENT TO PROSPECTUS   Kemper Income And Capital
   DATED JANUARY 1, 1999,        Preservation Fund
AS REVISED FEBRUARY 8, 1999  Kemper U.S. Mortgage Fund
     ------------------       SUPPLEMENT TO PROSPECTUS
                                DATED JANUARY 1, 1999  
KEMPER TAX-FREE INCOME FUNDS      ------------------   
   
 Kemper Municipal Bond Fund      KEMPER INCOME FUNDS   
    Kemper Intermediate       
    Municipal Bond Fund       Kemper High Yield Fund II
 Kemper California Tax-Free    SUPPLEMENT TO PROSPECTUS
        Income Fund            DATED NOVEMBER 30, 1998 
  Kemper Florida Tax-Free         ------------------   
        Income Fund           
  Kemper New York Tax-Free 
        Income Fund        
Kemper Ohio Tax-Free Income
            Fund           
  SUPPLEMENT TO PROSPECTUS 
   DATED JANUARY 1, 1999   
     ------------------    

*        On  February 5, 1999,  Kemper  Short-Intermediate  Government  Fund was
         reorganized into Kemper  Adjustable Rate U.S.  Government Fund.  Kemper
         Adjustable Rate U.S. Government Fund was then renamed Kemper Short-Term
         U.S.  Government  Fund,  and its  objective  and policies  were changed
         accordingly.

**       Currently known as Kemper Strategic Income Fund

The following disclosure  supplements the disclosure in the "Special Features --
Exchange Privilege -- General" section of the prospectus for all funds:

Effective June 1, 1999, in addition to the current limits on exchanges of shares
with a value over $1,000,000, shares of a Kemper Fund with a value of $1,000,000
or less (except  Kemper Cash  Reserves  Fund)  acquired by exchange from another
Kemper Fund, or from a Money Market Fund, may

March 29, 1999



not be  exchanged  thereafter  until they have been owned for 15 days if, in the
investment manager's judgement, the exchange activity may have an adverse effect
on the fund. In particular, a pattern of exchanges that coincides with a "market
timing"  strategy may be  disruptive to the Fund and therefore may be subject to
the 15-Day Hold Policy.

For Kemper  Income And  Capital  Preservation  Fund,  the  following  disclosure
replaces the relevant  paragraph in the "Principal  strategies and  investments"
section on page 36 of the prospectus dated January 1, 1999:

While the fund has the  ability  to invest up to 20% of its assets in high yield
securities, the fund normally invests predominantly in corporate debt securities
which  are  rated  in  the  four  highest  grades  by  a  nationally  recognized
statistical  rating  service such as Standard and Poor's  Corporation or Moody's
Investors Service, Inc. and Mortgage Backed Securities.

For Kemper  Income And  Capital  Preservation  Fund,  the  following  disclosure
supplements the "Additional  information  about principal risks" section on page
36 of the prospectus dated January 1, 1999:

High Yield  Fixed  Income  Securities.  Investments  in high yield  fixed-income
securities (often referred to as "junk bonds") are more likely to be affected by
negative  developments  relating  to  their  issuer  or  industry,   and  entail
relatively  greater risk of loss of income and  principal  than  investments  in
higher rated  securities.  Market prices of high yield  securities may fluctuate
more than market prices of higher rated securities.