-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, E91XNoLiMKZeQfzxwVIEAR86hUNZb4s1/LFvDEbaDRv/2eD4oBV98udZk9MVYco7 02u4Zs0rOkxigbBs4A0c4g== 0000088053-99-001266.txt : 19991230 0000088053-99-001266.hdr.sgml : 19991230 ACCESSION NUMBER: 0000088053-99-001266 CONFORMED SUBMISSION TYPE: 497 PUBLIC DOCUMENT COUNT: 1 FILED AS OF DATE: 19991229 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KEMPER ADJUSTABLE RATE U S GOVERNMENT FUND CENTRAL INDEX KEY: 0000814955 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 363528556 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 497 SEC ACT: SEC FILE NUMBER: 033-14832 FILM NUMBER: 99782097 BUSINESS ADDRESS: STREET 1: 222 S RIVERSIDE PLAZA CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3125371569 MAIL ADDRESS: STREET 1: 222 SOUTH RIVERSIDE PLAZA CITY: CHICAGO STATE: IL ZIP: 60606 FORMER COMPANY: FORMER CONFORMED NAME: KEMPER GOVERNMENT INCOME TRUST DATE OF NAME CHANGE: 19870811 497 1 SUPPLEMENT TO PROSPECTUS DATED 01/01/00 KEMPER INCOME FUNDS Kemper High Yield Fund Kemper High Yield Fund II Kemper High Yield Opportunity Fund Kemper Income and Capital Preservation Fund Kemper Short-Term U.S. Government Fund* Kemper Strategic Income Fund** Kemper U.S. Government Securities Fund Kemper U.S. Mortgage Fund SUPPLEMENT TO PROSPECTUS DATED JANUARY 1, 2000 ------------------------ CLASS I SHARES ------------------------ * 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. ** Formerly Kemper Diversified Income Fund The above funds currently offer four classes of shares to provide investors with different purchasing options. These are Class A, Class B and Class C shares, which are described in the funds' prospectus, and Class I shares, which are described in the prospectus as supplemented hereby. When placing purchase orders, investors must specify whether the order is for Class A, Class B, Class C or Class I shares. Class I shares are available for purchase exclusively by the following categories of institutional investors: (1) tax-exempt retirement plans (Profit Sharing, 401(k), Money Purchase Pension and Defined Benefit Plans) of Scudder Kemper Investments, Inc. ("Scudder Kemper") and its affiliates and rollover accounts from those plans; (2) the following investment advisory clients of Scudder Kemper and its investment advisory affiliates that invest at least $1 million in a Fund: unaffiliated benefit plans, such as qualified retirement plans (other than individual retirement accounts and self-directed retirement plans); unaffiliated banks and insurance companies purchasing for their own accounts; and endowment funds of unaffiliated non-profit organizations; (3) investment-only accounts for large qualified plans, with at least $50 million in total plan assets or at least 1000 participants; (4) trust and fiduciary accounts of trust companies and bank trust departments providing fee-based advisory services that invest at least $1 million in a Fund on behalf of each trust; (5) policy holders under Zurich-American Insurance Group's collateral investment program investing at least $200,000 in a Fund; and (6) investment companies managed by Scudder Kemper that invest primarily in other investment companies. Class I shares currently are available for purchase only from Kemper Distributors, Inc. ("KDI"), principal underwriter for the Funds, and, in the case of category 4 above, selected dealers authorized by KDI. Share certificates are not available for Class I shares. The following information supplements the indicated sections of the prospectus. PERFORMANCE The following table shows how the funds Class I Shares' returns over different periods average out. For context, the table has a broad-based market index (which, unlike the fund, have no fees or expenses). All figures in this section assume reinvestment of dividends and distributions. As always, past performance is no guarantee of future results. Average Annual Total Returns -- Class I shares For periods ended Inception of December 31, 1998 One Year Life of Class Class - ----------------- -------- ------------- ----- Kemper High Yield Fund 1.59% 11.10% 12/29/94 Salomon Brothers Long-Term High Yield Bond Index* 9.23% 15.74%** -- - -------------- * The Salomon Brothers Long-Term High Yield Bond Index is on a total return basis and is comprised of high yield bonds with a par value of $50 million or higher and a remaining maturity of ten years or longer rated BB+ or lower by Standard & Poor's Corporation or Ba1 or lower by Moody's Investors Service, Inc. ** For the period of 12/31/94 through 12/31/98. For periods ended Inception of December 31, 1998 One Year Life of Class Class - ----------------- -------- ------------- ----- Kemper Income And Capital Preservation Fund 8.16% 7.80% 7/3/95 Lehman Brothers Aggregate Bond Index* 8.69% 8.09%** -- - -------------- * The Lehman Brothers Aggregate Bond Index is an unmanaged index generally representative of intermediate-term government bonds, investment grade corporate debt securities, and mortgage backed securities. ** For the period of 6/30/95 through 12/31/98. 2 For periods ended Inception of December 31, 1998 One Year Life of Class Class - ----------------- -------- ------------- ----- Kemper U.S. Government 7.26% 7.39% 7/3/95 Securities Fund Salomon Brothers 6.82% 7.85%** -- 30-Year GNMA Index* - -------------- * The Salomon Brothers 30-Year GNMA Index is unmanaged, is on a total-return basis with all dividends reinvested and is comprised of GNMA 30-year pass throughs of single family and graduated payment mortgages. In order for a GNMA coupon to be included in the index, it must have at least $200 million of outstanding coupon product. ** For the period of 6/30/95 through 12/31/98. 3 HOW MUCH INVESTORS PAY This table describes the fees and expenses that you may pay if you buy and hold shares of the fund. Shareholder fees: Fees paid directly from your investment. Maximum Sales Maximum Maximum Charge Deferred Sales (Load) Sales Charge Imposed on Charge (Load) Purchases (Load) Imposed on (as a % of (as a % of Reinvested offering redemption Dividends/ Redemption Exchange price) proceeds) Distributions Fee Fee ------ --------- ------------- --- --- Kemper High Yield Fund None None None None None Kemper High Yield Fund II None None None None None Kemper High Yield Opportunity Fund None None None None None Kemper Income And Capital Preservation Fund None None None None None Kemper Short-Term U.S. Government Fund None None None None None Kemper Strategic Income Fund None None None None None Kemper U.S. Government Securities Fund None None None None None Kemper U.S. Mortgage Fund None None None None None 4 Annual fund operating expenses: Expenses that are deducted from fund assets. Total Annual Fund Management Distribution Other Operating Fee (12b-1) Fees Expenses* Expenses* --- ------------ --------- --------- Kemper High Yield Fund 0.52% None 0.10% 0.62% Kemper High Yield Fund II 0.65% None 0.40% 1.05% Kemper High Yield Opportunity Fund 0.65% None 0.61% 1.26% Kemper Income And Capital Preservation Fund 0.54% None 0.17% 0.71% Kemper Short-Term U.S. Government Fund 0.54% None 0.26% 0.80% Kemper Strategic Income Fund 0.56% None 0.19% 0.75% Kemper U.S. Government Securities Fund 0.42% None 0.17% 0.59% Kemper U.S. Mortgage Fund 0.51% None 0.18% 0.69% - -------------- * Estimated for Kemper Short-Term U.S. Government Fund, Kemper Strategic Income Fund, Kemper High Yield Opportunity Fund, Kemper High Yield Fund II and Kemper U.S. Mortgage Fund since no Class I shares were issued as of the respective fiscal year ends. 5 Example This example is to help you compare the cost of investing in a fund with the cost of investing in other mutual funds. This example illustrates the impact of the above fees and expenses on an account with an initial investment of $10,000, based on the expenses shown above. It assumes a 5% annual return, the reinvestment of all dividends and distributions and "annual fund operating expenses" remaining the same each year. The example is hypothetical: actual fund expenses and return vary from year to year, and may be higher or lower than those shown. Fees and expenses if you sold shares after: 1 Year 3 Years 5 Years 10 Years ------ ------- ------- -------- Kemper High Yield Fund $64 $199 $346 $774 Kemper High Yield Fund II $107 $334 $579 $1,283 Kemper High Yield Opportunity Fund $128 $400 $692 $1,523 Kemper Income And Capital Preservation Fund $73 $227 $395 $883 Kemper Short-Term U.S. Government Fund $82 $255 $444 $990 Kemper Strategic Income Fund $77 $240 $417 $930 Kemper U.S. Government Securities Fund $60 $189 $329 $738 Kemper U.S. Mortgage Fund $70 $221 $384 $859 6 FINANCIAL HIGHLIGHTS No financial information is presented for Class I shares of Kemper Short-Term U.S. Government Fund, Kemper Strategic Income Fund, Kemper High Yield Opportunity Fund, Kemper High Yield Fund II and Kemper U.S. Mortgage Fund, since no Class I shares were issued as of the respective fiscal year ends of the funds. Kemper High Yield Fund December 29, 1994 to September Year ended September 30, 30, CLASS I 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Per share operating performance Net asset value, beginning of period $7.68 8.50 8.23 8.01 7.55 - ---------------------------------------------------------------------------- Income from investment operations: Net investment income .82 .76 .78 .78 .66 - ---------------------------------------------------------------------------- Net realized and unrealized gain (loss) (.48) (.78) .31 .23 .39 - ---------------------------------------------------------------------------- Total from investment operations .34 (.02) 1.09 1.01 1.05 - ---------------------------------------------------------------------------- Less distribution from net investment income .80 .80 .82 .79 .59 - ---------------------------------------------------------------------------- Net asset value, end of period $7.22 7.68 8.50 8.23 8.01 - ---------------------------------------------------------------------------- Total return (not annualized) 4.36% (.66) 13.96 13.32 14.37 - ---------------------------------------------------------------------------- Ratios to average net assets (annualized) Expenses .62% .60 .62 .61 .61 - ---------------------------------------------------------------------------- Net investment income 10.49% 9.38 9.44 9.72 10.70 - ---------------------------------------------------------------------------- Year ended September 30, 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Supplemental data for all classes Net assets at end of year (in thousands) $4,281,395 4,784,262 4,939,302 4,096,939 3,527,954 - ---------------------------------------------------------------------------- Portfolio turnover rate 67% 92 91 102 99 - ---------------------------------------------------------------------------- Note: Total return does not reflect the effect of any sales charges. Per share data was determined based on average shares outstanding during the year ended September 30, 1999 and September 30, 1998. 7 Kemper Income And Capital Preservation Fund July 3 to October Year ended October 31, 31, CLASS I 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Per share operating performance Net asset value, beginning of period $8.67 8.53 8.45 8.61 8.52 - ---------------------------------------------------------------------------- Income from investment operations: Net investment income .53 .56 .59 .60 .19 - ---------------------------------------------------------------------------- Net realized and unrealized gain (loss) (.63) .15 .08 (.15) .12 - ---------------------------------------------------------------------------- Total from investment operations (.10) .71 .67 .45 .31 - ---------------------------------------------------------------------------- Less distribution from net investment income .52 .57 .59 .61 .22 - ---------------------------------------------------------------------------- Net asset value, end of period $8.05 8.67 8.53 8.45 8.61 - ---------------------------------------------------------------------------- Total return (not annualized) (1.23)% 8.62 8.26 5.45 3.65 - ---------------------------------------------------------------------------- Ratios to average net assets (annualized) Expenses, before expense reductions .71% .66 .70 .72 .62 - ---------------------------------------------------------------------------- Expenses, after expense reductions .71% .66 .70 .72 .62 - ---------------------------------------------------------------------------- Net investment income 6.41% 6.52 7.02 7.14 6.87 - ---------------------------------------------------------------------------- Year ended October 31, 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Supplemental data for all classes Net assets at end of year (in thousands) $496,191 694,057 613,470 572,998 649,427 - ---------------------------------------------------------------------------- Portfolio turnover rate 108% 121 164 74 182 - ---------------------------------------------------------------------------- Note: Total return does not reflect the effect of any sales charges. 8 Kemper U.S. Government Securities Fund July 3 to October Year ended October 31, 31, CLASS I 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Per share operating performance Net asset value, beginning of period $8.85 8.81 8.74 8.92 8.88 - ---------------------------------------------------------------------------- Income from investment operations: Net investment income .55 .59 .66 .64 .22 - ---------------------------------------------------------------------------- Net realized and unrealized gain (loss) (.40) .07 .06 (.17) .04 - ---------------------------------------------------------------------------- Total from investment operations .15 .66 .72 .47 .26 - ---------------------------------------------------------------------------- Less distribution from net investment income .62 .62 .65 .65 .22 - ---------------------------------------------------------------------------- Net asset value, end of period $8.38 8.85 8.81 8.74 8.92 - ---------------------------------------------------------------------------- Total return (not annualized) 1.81% 7.75 8.60 5.56 3.02 - ---------------------------------------------------------------------------- Ratios to average net assets (annualized) Expenses, before expense reductions .60% .57 .60 .59 .53 - ---------------------------------------------------------------------------- Expenses, after expense reductions .59% .57 .60 .59 .53 - ---------------------------------------------------------------------------- Net investment income 6.47% 6.73 7.52 7.35 7.07 - ---------------------------------------------------------------------------- Year ended October 31, 1999 1998 1997 1996 1995 - ---------------------------------------------------------------------------- Supplemental data for all classes Net assets at end of year (in thousands) $2,982,945 3,442,212 3,642,027 4,163,157 4,738,415 - ---------------------------------------------------------------------------- Portfolio turnover rate 177% 150 261 391 362 - ---------------------------------------------------------------------------- Note: Total return does not reflect the effect of any sales charges. Per share data were determined based on average shares outstanding during the year ended October 31, 1998. 9 SPECIAL FEATURES Shareholders of a Fund's Class I shares may exchange their shares for (i) shares of Zurich Money Funds -- Zurich Money Market Fund if the shareholders of Class I shares have purchased shares because they are participants in tax-exempt retirement plans of Scudder Kemper and its affiliates and (ii) Class I shares of any other "Kemper Mutual Fund" listed in the prospectus. Conversely, shareholders of Zurich Money Funds -- Zurich Money Market Fund who have purchased shares because they are participants in tax-exempt retirement plans of Scudder Kemper and its affiliates may exchange their shares for Class I shares of "Kemper Mutual Funds" to the extent that they are available through their plan. Exchanges will be made at the relative net asset values of the shares. Exchanges are subject to the limitations set forth in the prospectus. As a result of the relatively lower expenses for Class I Shares, the level of income dividends per share (as a percentage of net asset value) and, therefore, the overall investment return, typically will be higher for Class I shares than for Class A, Class B and Class C shares. 10 January 1, 2000 -----END PRIVACY-ENHANCED MESSAGE-----