DEUTSCHE MULTI-MARKET INCOME TRUST (“KMM”)

DEUTSCHE STRATEGIC INCOME TRUST (“KST”)

A MESSAGE FROM EACH FUND’S BOARD OF TRUSTEES

August 18, 2016

Dear Shareholders:

The Joint Annual Meeting of Shareholders (the “Meeting”) of KMM and KST (individually, a “Fund” and collectively, the “Funds”) is to be held at 9:30 a.m. Eastern time, on September 30, 2016 at the offices of Deutsche Investment Management Americas Inc., 345 Park Avenue, New York, New York 10154. Shareholders who are unable to attend the Meeting are strongly encouraged to submit a proxy, which is customary in meetings of this kind. A Notice of Joint Annual Meeting of Shareholders, a Joint Proxy Statement regarding the Meeting, a WHITE proxy card for your vote at the Meeting and a postage prepaid envelope in which to return your proxy are enclosed. You may instead authorize a proxy by touch-tone telephone or through the Internet, as explained on your proxy card.

At the Meeting, the shareholders of each Fund are being asked to consider and act upon two proposals described further below. There will also be an opportunity to discuss matters of interest to you as a shareholder. As previously announced and as discussed further in the Joint Proxy Statement, on July 13, 2016, the Board of each Fund approved the termination of each Fund, pursuant to which each Fund will make a liquidating distribution to shareholders no later than December 31, 2018.

At the meeting, shareholders are being asked to elect four (4) Board Members as set forth in the Notice of Joint Annual Meeting of Shareholders and as explained in the Joint Proxy Statement. Each Board unanimously recommends shareholders vote FOR the election of each of the Board’s nominees.

In addition, shareholders of each Fund are being asked to consider a shareholder proposal for their Fund requesting that the Board of the Fund take the necessary steps to declassify the Fund’s Board of Trustees. Western Investment, LLC has notified each Fund’s Board that it intends to present this proposal regarding board declassification with respect to each Fund at the Meeting. If Western Investment, LLC does not properly present its shareholder proposal as required by Rule 14a-8 under the Securities Exchange Act of 1934 and the applicable provisions of the Fund’s Amended and Restated By-laws (see Exhibit D) for either or both Funds at the Meeting, the proposal will not be submitted to a vote of shareholders of the applicable Fund(s). The Board believes for each Fund that the shareholder proposal would not be in the best interests of the Fund. After thorough consideration, each Board is recommending shareholders vote AGAINST the shareholder proposal for their Fund regarding Board declassification.

Western Investment, LLC has also notified each Fund of its intention to run an opposing slate of candidates against the Board’s nominees for Board Members and otherwise solicit support for its proposal regarding board declassification. Western Investment, LLC might send you materials in an effort to solicit your vote for its Board nominees and its shareholder proposal. Each Board unanimously believes that Western Investment, LLC’s actions are not in your Fund’s best interests and urges you to NOT RETURN any proxy card sent to you by Western Investment, LLC.

Your vote at the Meeting is particularly important because of the possible nomination by a dissident shareholder of a separate slate of nominees. Each Fund’s Board of Trustees unanimously recommends that you vote for the election of the Board’s four nominees listed on the enclosed WHITE proxy card. Each Board believes that the Board’s nominees will best serve the best interests of your Fund.

Thank you for your response and for your continued investment.

Respectfully,

John W. Ballantine

Henry P. Becton, Jr.

Dawn-Marie Driscoll

Keith R. Fox

Paul K. Freeman

Kenneth C. Froewiss

Richard J. Herring

William McClayton

Rebecca W. Rimel

William N. Searcy, Jr.

Jean Gleason Stromberg

A WHITE PROXY CARD IS ENCLOSED. SHAREHOLDERS WHO DO NOT EXPECT TO ATTEND THE JOINT ANNUAL MEETING FOR THE FUNDS ARE URGED TO SIGN THE WHITE PROXY CARD (UNLESS AUTHORIZING THEIR PROXIES BY TOUCH-TONE TELEPHONE OR THROUGH THE INTERNET) AND MAIL IT IN THE ENCLOSED POSTAGE PREPAID ENVELOPE SO AS TO ENSURE A QUORUM AT THE ANNUAL MEETING. THIS IS IMPORTANT WHETHER YOU OWN FEW OR MANY SHARES. IF YOU HAVE ANY QUESTIONS, PLEASE CONTACT GEORGESON, INC., YOUR FUND’S PROXY SOLICITOR, AT 866-695-6075.

DEUTSCHE MULTI-MARKET INCOME TRUST (“KMM”)

DEUTSCHE STRATEGIC INCOME TRUST (“KST”)

345 PARK AVENUE

NEW YORK, NEW YORK 10154

NOTICE OF JOINT ANNUAL MEETING OF SHAREHOLDERS

TO BE HELD SEPTEMBER 30, 2016

This is the formal notice for the joint annual meeting of shareholders of KMM and KST (individually, a “Fund” and collectively, the “Funds”). It tells you the proposals that you will be asked to vote on and the time and place of the joint annual meeting, in the event you choose to attend in person.

To the shareholders of the Funds:

A joint annual meeting of shareholders of each Fund will be held September 30, 2016 at 9:30 a.m. (Eastern time), at the offices of Deutsche Investment Management Americas Inc., 345 Park Avenue, New York, New York 10154 (the “Meeting”), to consider the following proposals (each a “Proposal” and, collectively, the “Proposals”):

PROPOSALS:

The persons named as proxies will vote in their discretion on any other business that properly may come before the Meeting and at any adjournment(s) or postponement(s) thereof.

Holders of record of shares of each Fund at the close of business on July 20, 2016 are entitled to vote at the Meeting and at any adjournment(s) or postponement(s) thereof.

THE BOARD OF YOUR FUND RECOMMENDS THAT YOU VOTE FOR PROPOSAL I — THE ELECTION OF EACH CLASS II BOARD MEMBER NOMINEE.

THE BOARD OF YOUR FUND RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL II AND PROPOSAL III, AS APPLICABLE — THE SHAREHOLDER PROPOSAL REGARDING BOARD DECLASSIFICATION.

Your vote at the Meeting is particularly important to all shareholders of each Fund because of the possible nomination by a dissident shareholder of a separate slate of nominees. Each Fund’s Board of Trustees unanimously recommends that you vote for the election of the Board’s four nominees listed on the enclosed WHITE proxy card. Each Board believes that its nominees will best serve the interests of the Fund.

To the extent permitted by each Fund’s Amended and Restated Agreement and Declaration of Trust, any meeting of shareholders may, by action of the chairman of the meeting, be adjourned without further notice with respect to one or more matters to be considered at such meeting to a designated time and place, whether or not a quorum is present with respect to such matter; upon motion of the chairman of the meeting, the question of adjournment may be submitted to a vote of the shareholders, and in that case, any adjournment with respect to one or more matters must be approved by the vote of holders of a majority of the shares present and entitled to vote with respect to the matter or matters adjourned, and without further notice to the extent permitted by each Fund’s Amended and Restated Agreement and Declaration of Trust.

This notice and the related proxy materials are being mailed to shareholders of each Fund on or about August 22, 2016. This proxy is being solicited on behalf of your Fund’s Board.

By Order of the Board

John Millette

Secretary

August 18, 2016

We urge you to mark, sign, date and mail the enclosed WHITE proxy card in the postage-paid envelope provided or to record your voting instructions by telephone or via the Internet so that you will be represented at the Meeting. If you complete and sign the WHITE proxy card (or tell us how you want to vote by voting by telephone or via the

Internet), we will vote it exactly as you tell us. If you simply sign the WHITE proxy card, we will vote it in accordance with your Board’s recommendations on the Proposals. Your prompt return of the enclosed WHITE proxy card (or your voting by telephone or via the Internet) may prevent the necessity and expense of further solicitations. Please do not sign any gold or other color proxy card that may be provided by the dissident shareholder. If you have any questions, please call Georgeson Inc., your Fund’s proxy solicitor, at the special toll-free number we have set up for you (866-695-6075), or contact your financial advisor.

INSTRUCTIONS FOR SIGNING PROXY CARDS

The following general rules for signing proxy cards may be of assistance to you and avoid the time and expense involved in validating your vote if you fail to sign your proxy card properly.

DEUTSCHE MULTI-MARKET INCOME TRUST (“KMM”)

DEUTSCHE STRATEGIC INCOME TRUST (“KST”)

JOINT PROXY STATEMENT

FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS

August 18, 2016

GENERAL

This joint proxy statement (the “Proxy Statement”) is being furnished in connection with the solicitation of proxies by the Board of each of KMM and KST (each a “Fund” and collectively, the “Funds”), for use at the annual meeting of shareholders of each Fund to be held jointly at the offices of Deutsche Investment Management Americas Inc. (“DIMA” or the “Advisor”), 345 Park Avenue, New York, New York 10154 on September 30, 2016 at 9:30 a.m. (Eastern time), and at any adjournment(s) or postponement(s) thereof (the “Meeting”). The principal executive address of the Funds is 345 Park Avenue, New York, New York 10154.

This Proxy Statement, along with the enclosed Notice of Joint Annual Meeting of Shareholders and the accompanying WHITE proxy card (the “Proxy Card”), are first being mailed to shareholders on or about August 22, 2016. The Proxy Statement explains what you should know before voting on the proposals described herein. Please read it carefully and keep it for future reference.

The term “Board,” as used herein, refers to the board of trustees of each Fund. The term “Board Member,” as used herein, refers to a person who serves as a trustee of a Fund (each a “Trustee”).

The Meeting is being held to consider and to vote on the following proposals (each a “Proposal” and, collectively, the “Proposals”) for each Fund, as indicated below and as described more fully herein, and such other matters as properly may come before the Meeting:

PROPOSALS:

THE BOARD OF YOUR FUND RECOMMENDS THAT YOU VOTE FOR PROPOSAL I — THE ELECTION OF EACH

CLASS II BOARD MEMBER NOMINEE.

THE BOARD OF YOUR FUND RECOMMENDS THAT YOU VOTE AGAINST PROPOSAL II AND PROPOSAL III, AS APPLICABLE  — THE SHAREHOLDER PROPOSAL REGARDING BOARD DECLASSIFICATION.

The vote required to approve each Proposal is described under each Proposal and under “Additional Information — Quorum and Required Vote.”

The persons named as proxies will vote in their discretion on any other business that properly may come before the Meeting and at any adjournment(s) or postponement(s) thereof.

The most recent Annual Report of each Fund, containing audited financial statements (each, an “Annual Report”), previously has been furnished to each Fund’s shareholders. An additional copy of an Annual Report and the most recent Semi-Annual Report (each a “Semi-Annual Report”) succeeding an Annual Report, if any, will be furnished without charge upon request by writing to your Fund at 345 Park Avenue, New York, New York 10154, or by calling 800-349-4281. Annual Reports and Semi-Annual Reports also are available on the Deutsche Asset Management website at www.deutschefunds.com and on the website of the Securities and Exchange Commission (the “SEC”) at www.sec.gov.

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PROPOSAL I

ELECTION OF BOARD MEMBERS

Shareholders of each Fund are being asked to elect Board Members to the Board of their Fund as described below.

Pursuant to each Fund’s Amended and Restated Agreement and Declaration of Trust and Amended and Restated By-Laws, the Board of each Fund has been divided into three (3) classes with Board Members of each class being elected to serve until the third annual meeting following their election. At the Meeting, four (4) Class II Board Members are to be elected by shareholders of each Fund, each to hold office until the annual meeting of shareholders in 2019, or until the termination of the Fund as described below has been completed, and until such Board Member’s successor is duly elected and qualifies or until such Board Member sooner dies, resigns, retires or is removed. As previously announced, the Board has approved the termination of KMM and KST, pursuant to which each Fund will make a liquidating distribution to shareholders no later than December 31, 2018. Board Members elected to the Boards of KMM and KST at the Meeting will serve until the termination of the Fund. In the event the termination of KMM and/or KST does not occur, Board Members elected to the Boards of KMM and/or KST would serve until the annual meeting of shareholders in 2019. The Class II Board Member nominees standing for election at the Meeting are: Mr. Henry P. Becton, Jr., Dr. Paul K. Freeman, Mr. William McClayton and Ms. Jean Gleason Stromberg (collectively, the “Board Member Nominees”). Under each Fund’s current retirement policy, Mr. Becton, Jr. and Ms. Stromberg are scheduled to retire from the Board on December 31, 2018.

The Board Member Nominees were nominated by each Fund’s Board upon the recommendation of the Board’s Nominating and Governance Committee. The Board Member Nominees currently serve as Board Members of each Fund, and currently serve as Board Members of other Deutsche funds advised by DIMA.

Each Fund has received notice from Western Investment, LLC, a dissident shareholder, of Western Investment, LLC’s intent to nominate a separate slate of individuals for election to the Board at the Meeting. As of the date of this Proxy Statement, Western Investment, LLC has completed preliminary filings of proxy statements for each of the Funds with the SEC with respect to the Meeting, and it is possible that Western Investment, LLC will prepare and mail proxy materials to solicit your vote in favor of the alternate nominees. As discussed more fully below, the Nominating and Governance Committee of the Board decided to recommend to the Board the nomination of the Board Member Nominees, not the individuals named in Western Investment, LLC’s notice.

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Each Board’s Nominating and Governance Committee is responsible for evaluating candidates for membership on the Board and recommending a proposed slate of nominees for consideration by the full Board. In determining to recommend the nomination of current Board Members of each Fund, the Nominating and Governance Committee considered the cost and operational efficiencies realized by having a single consolidated board oversee substantially all Deutsche funds. The Nominating and Governance Committee also considered the qualifications of the candidates proposed to be nominated by Western Investment, LLC. Each Fund’s Board concluded that the nomination of the current Board Members whose terms expire at the Meeting is in the best interests of the Fund because they will fairly and objectively consider the interests of the Fund. Each Board unanimously recommends that shareholders vote for the election of the Board’s nominees.

It is the intention of the persons named in the enclosed Proxy Card to vote the shares represented thereby for the election of the Board Member Nominees unless the Proxy Card is marked otherwise. Each of the Board Member Nominees has consented to being named in the Proxy Statement and has agreed to serve as a Board Member of a Fund if elected. However, should any Board Member Nominee become unable or unwilling to serve prior to the Meeting, the persons named as proxies may vote your shares for substitute nominees, if any, recommended by the Board of your Fund.

Information Concerning the Board Member Nominees and Board Members

Information is provided below as of July 1, 2016 for the Board Member Nominees and the continuing Board Members for each Fund’s Board. All of the Board Member Nominees and continuing Board Members are “non-interested” Board Members, as that term is used in the Investment Company Act of 1940, as amended (the “1940 Act”) (“Independent Board Members”). See pages 9-10 for further discussion of the qualifications of the Board Member Nominees and the continuing Board Members.

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Board Member Nominees/Board Members:

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6

7

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Unless otherwise noted, each Board Member and Board Member Nominee has engaged in the principal occupation(s) noted in the table above for at least the most recent five years, although not necessarily in the same capacity. The mailing address of each Independent Board Member is c/o Kenneth C. Froewiss, Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139.

As reported to the Funds, Exhibit A to this Proxy Statement sets forth the dollar range of equity securities and number of shares beneficially owned by each Board Member in each Fund as of July 1, 2016. Exhibit A also sets forth the aggregate dollar range of equity securities beneficially owned by each Board Member in all Deutsche funds overseen by the Board Member as of July 1, 2016.

The Nominating and Governance Committee of the Board of each Fund is responsible for recommending proposed nominees for election to the full Board for its approval. In recommending the election of the current Board Members, the Committee generally considered the educational, business and professional experience of each Board Member in determining his or her qualifications to serve as a Board Member, including the Board Member’s record of service as a director or trustee of public and private organizations. In the case of each Board Member, this included his or her many years of previous service as a director or trustee of certain of the Deutsche funds. This previous service has provided these Board Members with a valuable understanding of the history of the Deutsche funds and the DIMA organization and has also served to demonstrate his or her high level of diligence and commitment to the interests of fund shareholders and his or her ability to work effectively and collegially with other members of the Board. The Committee also considered, among other factors, the particular attributes described below with respect to the various individual Board Members:

John W. Ballantine — Mr. Ballantine’s experience in banking, financial risk management and investments acquired in the course of his service as a senior executive of a major U.S. bank.

Henry P. Becton, Jr. — Mr. Becton’s professional training and experience as an attorney, his experience as the chief executive officer of a major public media company and his experience as lead director of two NYSE companies, including his service at various times as the chair of the audit, compensation and nominating committees of one or both of such boards.

Dawn-Marie Driscoll — Ms. Driscoll’s professional training and experience as an attorney, her expertise as a consultant, professor and author on the subject of business ethics, her service as a member of the executive committee of the Independent Directors Council of the

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Investment Company Institute and her experience as a director of an insurance company serving the mutual fund industry.

Keith R. Fox — Mr. Fox’s experience as the chairman and a director of various private operating companies and investment partnerships and his experience as a director and audit committee member of several public companies. In addition, he holds the Chartered Financial Analyst designation.

Paul K. Freeman — Dr. Freeman’s professional training and experience as an attorney and an economist, his experience as the founder and chief executive officer of an insurance company, his experience as a senior executive and consultant for various companies focusing on matters relating to risk management and his service on the Independent Directors Council of the Investment Company Institute.

Kenneth C. Froewiss — Dr. Froewiss’ professional training and experience as an economist, his experience in finance acquired in various professional positions with governmental and private banking organizations and his experience as a professor of finance at a leading business school.

Richard J. Herring — Mr. Herring’s experience as a professor of finance at a leading business school and his service as an advisor to various professional and governmental organizations.

William McClayton — Mr. McClayton’s professional training and experience in public accounting, including his service as a senior partner of a major public accounting firm focusing on financial markets companies and his service as a senior executive of a public management consulting firm.

Rebecca W. Rimel — Ms. Rimel’s experience on a broad range of public policy issues acquired during her service as the executive director of a major foundation and her experience as a director of several public companies.

William N. Searcy, Jr. — Mr. Searcy’s experience as an investment officer for various major public company retirement plans, which included evaluation of unaffiliated investment advisers and supervision of various administrative and accounting functions.

Jean Gleason Stromberg — Ms. Stromberg’s professional training and experience as an attorney specializing in federal securities law, her service in a senior position with the Securities and Exchange Commission and the U.S. Government Accountability Office and her experience as a director and audit committee member of several major non-profit organizations.

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Officers

The officers of each Fund are set forth in Exhibit B hereto.

Compensation of Board Members and Officers

Each Independent Board Member receives compensation from each Fund for his or her services, which includes retainer fees and specified amounts for various committee services and for the Board Chairperson and Vice Chairperson, as applicable. No additional compensation is paid to any Independent Board Member for travel time to meetings, attendance at directors’ educational seminars or conferences, service on industry or association committees, participation as speakers at directors’ conferences or service on special fund industry director task forces or subcommittees. Independent Board Members do not receive any employee benefits such as pension or retirement benefits or health insurance from the Funds or any fund in the Deutsche fund complex.

Fund officers who are officers, directors, employees or stockholders of Deutsche Asset Management (“Deutsche AM”) or its affiliates receive no direct compensation from the Funds, although they are compensated as employees of the Deutsche AM division of Deutsche Bank AG, or its affiliates, and as a result may be deemed to indirectly receive a portion of their compensation from revenues generated by the Funds.

Exhibit C to this Proxy Statement sets forth compensation paid to each Independent Board Member by each Fund for its most recently completed fiscal year and to each Independent Board Member by the Deutsche fund complex for the calendar year ended December 31, 2015.

Board Structure

The primary responsibility of each Fund’s Board is to represent the interests of the Fund and to provide oversight of the management of the Fund. SEC rules currently require a majority of the board members of a fund to be “independent” if the fund takes advantage of certain exemptive rules under the 1940 Act. If the Board Member Nominees are elected by shareholders, each Board will be comprised of eleven individuals, all of whom are Independent Board Members. Each of the Board Member Nominees that will be considered an Independent Board Member, if elected, has been selected and nominated solely by the current Independent Board Members of each Fund.

Each Fund’s Board meets multiple times during the year to review investment performance and other operational matters, including regulatory and compliance related policies and procedures. Furthermore, the Independent Board Members review the fees paid to

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the Advisor and its affiliates for investment advisory services and other services. Each Board has adopted specific policies and guidelines that, among other things, seek to further enhance the effectiveness of the Independent Board Members in performing their duties. For example, the Independent Board Members select independent legal counsel to work with them in reviewing fees, advisory and other contracts and overseeing fund matters, and regularly meet privately with their counsel. An Independent Board Member, Dr. Froewiss, currently serves as Chairperson of the Board of each Fund.

During calendar year 2015, the Board of each Fund met nine (9) times. Each Board Member attended at least 75% of the respective meetings of each Board and the committees (if a member thereof) held during calendar year 2015. The Chairman of the Board attended the 2015 annual shareholder meeting of each Fund.

The Board of each Fund provides a process for shareholders to send communications to the Board. Correspondence should be sent by U.S. mail or courier service to Kenneth C. Froewiss, Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139, who will forward it to a specific Board Member if addressed to that Board Member.

Taking into account the number, the diversity and the complexity of the funds overseen by the Board Members and the aggregate amount of assets under management in the Deutsche funds, each Board has determined that the efficient conduct of its affairs makes it desirable to delegate responsibility for certain specific matters to committees of the Board. These committees, which are described in more detail below, review and evaluate matters specified in their charters and make recommendations to the Board as they deem appropriate. Each committee may utilize the resources of the Fund’s counsel and auditors as well as other experts. The committees meet as often as necessary, either in conjunction with regular meetings of the Board or otherwise. The membership and chair of each committee are appointed by the Board upon recommendations of the Nominating and Governance Committee. The membership and chair of each committee consists solely of Independent Board Members.

Each Board has determined that this committee structure also allows the Board to focus more effectively on the oversight of risk as part of its broader oversight of the Fund’s affairs. While risk management is the primary responsibility of each Fund’s investment advisor, the Board regularly receives reports regarding investment risks and compliance risks. The Board’s committee structure allows separate committees to focus on different aspects of these risks and their potential impact on some or all of the Deutsche funds and to discuss with the Fund’s investment advisor and administrator how it monitors and controls such risks.

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The Board of each Fund has established the following standing committees: Audit Committee and Valuation Sub-Committee, Nominating and Governance Committee, Contract Committee, Investment Oversight Committee and Operations Committee (each a “Committee”). The Board of each Fund also has a Dividend Committee which has no responsibility with respect to the Funds. For each Committee, except the Dividend Committee, a written charter setting forth the Committee’s responsibilities was adopted by each Board. The function, membership and number of meetings held in calendar year 2015 for each Committee is discussed below.

Audit Committee.  The Audit Committee, which consists entirely of Independent Board Members, assists the Board in fulfilling its responsibility for oversight of (1) the integrity of the financial statements, (2) a Fund’s accounting and financial reporting policies and procedures, (3) a Fund’s compliance with legal and regulatory requirements related to accounting and financial reporting, (4) valuation of Fund assets and securities and (5) the qualifications, independence and performance of the independent registered public accounting firm for a Fund. The Audit Committee oversees the valuation of Fund securities and other assets and determines, as needed, the fair value of Fund securities or other assets under certain circumstances as described in a Fund’s Valuation Procedures. The Audit Committee has appointed a Valuation Sub-Committee, which may make determinations of fair value required when the Audit Committee is not in session. The current members of each Fund’s Valuation Sub-Committee are John W. Ballantine, Richard J. Herring, Henry P. Becton, Jr. (Alternate), Paul K. Freeman (Alternate) and William McClayton (Alternate). The Audit Committee also approves and recommends to the Board the appointment, retention or termination of the independent registered public accounting firm for a Fund, reviews the scope of audit and internal controls, considers and reports to the Board on matters relating to a Fund’s accounting and financial reporting practices, and performs such other tasks as the full Board deems necessary or appropriate. The Audit Committee receives annual representations from the independent registered public accounting firm as to its independence. Each Fund’s Audit Committee is governed by the Audit Committee Charter, which is available on each Fund’s information page at https://www.deutschefunds.com/EN/products/closed-end-prices-performance.jsp (click on the relevant Fund). Each Fund’s Audit Committee is comprised of only Independent Board Members who are “independent” as defined in the New York Stock Exchange (“NYSE”) listing standards applicable to closed-end funds. Pursuant to the charter of each Fund’s Audit Committee, no member of the Audit Committee shall serve on the audit committee of more than three public companies unless the Board determines that such

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simultaneous service would not impair the ability of the Audit Committee member to serve effectively on the committee. At its January 2012 meeting, the Board of each Fund considered the fact that Mr. Richard Herring had begun simultaneous service on more than three public company audit committees and determined that such service would not impair his ability to effectively serve on the Audit Committee. During the calendar year 2015, the Audit Committee of each Fund’s Board held seven (7) meetings.

In January 2016, each Fund’s Audit Committee reviewed and discussed the audited financial statements with management for the Fund’s fiscal year ended 2015. Each Fund’s Audit Committee also discussed with the independent registered public accounting firm the matters required to be discussed by Auditing Standard No. 16 (Communications With Audit Committees). Each Fund’s independent registered public accounting firm provided the Fund’s Audit Committee the written disclosure required by Public Company Accounting Oversight Board Rule 3526 (Communications with Audit Committees Concerning Independence), and each Fund’s Audit Committee discussed with representatives of the independent registered public accounting firm their firm’s independence. Based on its review of each Fund’s financial statements and discussions with management and the independent registered public accounting firm and other written disclosure provided by the independent registered public accounting firm, each Fund’s Audit Committee recommended to its Fund’s Board that the audited financial statements be included in the annual report provided to shareholders for each Fund’s fiscal year ended 2015. The current members of each Fund’s Audit Committee are:

Paul K. Freeman (Chair)

William McClayton (Vice Chair)

John W. Ballantine

Henry P. Becton, Jr.

Richard J. Herring

Nominating and Governance Committee.  The Nominating and Governance Committee, which consists entirely of Independent Board Members, recommends individuals for membership on the Board, nominates officers, Board and committee chairs, vice chairs and committee members, and oversees the operations of the Board. The Nominating and Governance Committee has not established specific, minimum qualifications that must be met by an individual to be considered by the Nominating and Governance Committee for nomination as a Board Member. The Nominating and Governance Committee may take into account a wide variety of factors in considering Board Member candidates, including, but not limited to:

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(i) availability and commitment of a candidate to attend meetings and perform his or her responsibilities to the Board, (ii) relevant industry and related experience, (iii) educational background, (iv) financial expertise, (v) an assessment of the candidate’s ability, judgment and expertise, and (vi) the current composition of the Board. Each Fund’s Nominating and Governance Committee generally believes that the Board benefits from diversity of background, experience and views among its members, and considers this as a factor in evaluating the composition of the Board, but has not adopted any specific policy in this regard. The Nominating and Governance Committee reviews recommendations by shareholders for candidates for Board positions on the same basis as candidates recommended by other sources. Shareholders may recommend candidates for Board positions by forwarding their correspondence by U.S. mail or courier service to Kenneth C. Froewiss, Chairman, Deutsche Mutual Funds, P.O. Box 390601, Cambridge, MA 02139. Each Fund’s Nominating and Governance Committee is governed by a Nominating and Governance Committee Charter, which is available on each Fund’s information page at https://www.deutschefunds.com/EN/products/closed-end-prices-performance.jsp (click on the relevant Fund). Each Fund’s Nominating and Governance Committee is comprised of only Independent Board Members who are “independent” as defined in the NYSE listing standards applicable to closed-end funds. The current members of each Fund’s Nominating and Governance Committee are Rebecca W. Rimel (Chair), Henry P. Becton, Jr. (Vice Chair), John W. Ballantine and William McClayton. During the calendar year 2015, the Nominating and Governance Committee of each Fund’s Board held five (5) meetings.

Contract Committee.  The Contract Committee, which consists entirely of Independent Board Members, reviews at least annually (a) a Fund’s financial arrangements with DIMA and its affiliates, and (b) a Fund’s expense ratios. The current members of each Fund’s Contract Committee are Keith R. Fox (Chair), William N. Searcy, Jr. (Vice Chair), Dawn-Marie Driscoll, Paul K. Freeman, Richard J. Herring and Jean Gleason Stromberg. During the calendar year 2015, the Contract Committee of each Fund’s Board held six (6) meetings.

Investment Oversight Committee.  The Investment Oversight Committee, which consists entirely of Independent Board Members, reviews the investment operations of the Funds. The Investment Oversight Committee was constituted on November 11, 2015. Prior thereto, each Board had a Fixed Income and Asset Allocation Oversight Committee performing similar functions as the Investment Oversight Committee. The current members of each Fund’s Investment Oversight Committee are John W. Ballantine (Chair), William McClayton (Vice Chair), Henry

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P. Becton, Jr., Dawn-Marie Driscoll, Paul K. Freeman, Richard J. Herring, Rebecca W. Rimel, William N. Searcy, Jr. and Jean Gleason Stromberg. During the calendar year 2015, while the Investment Oversight Committee did not meet, the Fixed-Income and Asset Allocation Oversight Committee of each Fund’s Board held five (5) meetings.

Operations Committee.  The Operations Committee, which consists entirely of Independent Board Members, reviews the administrative operations and general compliance matters of a Fund. The Operations Committee reviews administrative matters related to the operations of a Fund, policies and procedures relating to portfolio transactions, custody arrangements, fidelity bond and insurance arrangements and such other tasks as the full Board deems necessary or appropriate. The current members of each Fund’s Operations Committee are Dawn-Marie Driscoll (Chair), William N. Searcy, Jr. (Vice Chair), Keith R. Fox, Rebecca W. Rimel and Jean Gleason Stromberg. During the calendar year 2015, the Operations Committee of each Fund’s Board held six (6) meetings.

Ad Hoc Committees.  In addition to the standing committees described above, from time to time the Board of each Fund may also form ad hoc committees to consider specific issues.

Required Vote

Each Fund will vote separately on the election of Board Member Nominees. A majority of the shares outstanding and entitled to vote on the matter shall elect a Board Member Nominee.

Recommendation of the Board

The Board of your Fund believes that the election of each Board Member Nominee is in the best interests of your Fund. Accordingly, the Board unanimously recommends that shareholders of each Fund vote FOR the election of each Board Member Nominee as set forth in Proposal I above.

As noted above, Western Investment, LLC, a dissident shareholder, has notified each Fund of its intention to run an opposing slate of candidates against the Board Member Nominees. Western Investment, LLC might send you soliciting materials in an effort to solicit your vote for its nominees to each Fund’s Board. Your Fund’s Board urges you to NOT RETURN any proxy card sent to you by Western Investment, LLC.

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PROPOSAL II — KMM ONLY

SHAREHOLDER PROPOSAL REGARDING BOARD DECLASSIFICATION

Shareholder Proposal

Arthur D. Lipson, Managing Member of Western Investment, LLC, on behalf of Western Investment, LLC (“Western”), P.O. Box 71279, Salt Lake City, Utah 84171, has advised the Fund that Western plans to introduce the resolution presented below at the Meeting. Pursuant to the statement on Schedule 13D/A filed by Western with the SEC on July 20, 2016, Western owned 1,025,693 shares of the Fund’s units of beneficial interest as of July 19, 2016. If Western does not properly present this proposal at the Meeting, the proposal will not be submitted to a vote. The Board believes that this shareholder proposal would not be in the best interests of the Fund and asks shareholders to consider the Board’s response which follows the shareholder proposal and supporting statement. The Board unanimously recommends that you vote AGAINST the shareholder proposal regarding Board declassification set forth below.

Shareholders should be aware that the shareholder proposal, if properly presented for shareholder action at the Meeting, is simply a recommendation that the Board consider Board declassification. Approval of the shareholder proposal would not automatically result in the elimination of the Fund’s classified board structure. In order to eliminate the Fund’s classified board structure, the Board would need to approve a formal amendment repealing the classified board provisions of the Fund’s Amended and Restated By-Laws.

In accordance with the rules of the Securities and Exchange Commission (“SEC”), the text of Western’s resolution and supporting statement is printed verbatim from their submission. Neither the Fund, the Board, nor DIMA is responsible for the contents of Western’s proposal or supporting statement.

BEGINNING OF WESTERN’S PROPOSAL AND SUPPORTING STATEMENT

Proposal

RESOLVED, that the shareholders of Deutsche Multi-Market Income Trust (“KMM”) hereby request that the Board of Directors of KMM (the “Board”) take the necessary steps to declassify the Board so that all directors are elected on an annual basis. Such declassification shall be completed in a manner that does not affect the unexpired terms of the previously elected directors.

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Supporting Statement:

We believe the annual election of all directors encourages board accountability to its shareholders and when directors are held accountable for their actions, they perform better. This view is shared by most, who believe it to be the standard for corporate governance best practices. According to FactSet Research Systems, the vast majority of companies in the S&P 500 and Russell 1000 indexes elect all directors annually, with only approximately 10.5% and 25%, respectively, of companies retaining classified boards.

Currently, the KMM Board is divided into three classes serving staggered three-year terms. It is our belief that the classification of the Board is strong proof that the Board is not acting in the best interests of shareholders. A classified board protects the incumbents, which in turn limits accountability to shareholders.

KMM’s investment manager, Deutsche Investment Management Americas Inc. (“DIM”), has further blocked shareholder rights by requiring that directors be elected by a near-impossible absolute majority of shares outstanding, rather than a majority of shares voting, thereby enabling losing incumbents to remain in office following a contested election.

Further, KMM’s Board has a long history of acting in an undemocratic manner by failing to recognize all votes cast, failing to seat dissident directors who won the overwhelming majority of votes cast at annual meetings and failing to hold timely annual meetings.

Subsequently, the director of the SEC’s Division of Investment Management has publicly criticized all of these shareholder-unfriendly behaviors.

We remain committed to improving corporate governance at KMM for the benefit of all shareholders. Declassification of the Board is a positive step which will allow more productive shareholder engagement and will help KMM achieve its optimal valuation.

In this challenging economic environment, accountability for performance must be given to the shareholders whose capital has been entrusted in the form of share investments in KMM. Sadly, KMM’s shares have consistently traded at a persistent discount to its per share net asset value. For example, on September 29, 2015, the discount was an abysmal 17.76%.

DIM has overseen significant losses in KMM and its seven taxable sister funds. Due to shareholder pressures (including overwhelming losses in proxy contests), six of the seven funds have, or are scheduled to be, liquidated or converted into open-end funds.

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KMM’s classified board and majority voting requirements also violate DIM’s own corporate governance voting standards, an embarrassing contradiction.

If this proposal is approved and adopted by the Board, all directors would be subject to annual election after the phase-in period.

For a greater voice in KMM’s corporate governance and to increase the accountability of the Board to shareholders, we urge you to vote FOR this proposal.

END OF WESTERN’S PROPOSAL AND SUPPORTING STATEMENT

Recommendation of the Board of Trustees

After carefully considering Western’s proposal, the Board unanimously recommends that you vote AGAINST the shareholder proposal. The Board believes that the classified Board structure continues to be in the best interests of the Fund, and that Western appears to be using the proposal to unfairly attack the performance of the Board and further its own short-term interests, which may not be in the best interests of long-term shareholders. The Board remains committed to balancing such potentially opposing interests so as to act in the best interests of all shareholders, as evidenced by its recent decision to approve the termination of the Fund, pursuant to which the Fund will make a liquidating distribution to shareholders no later than December 31, 2018 (the “Liquidation”). The Board believes that the Liquidation preserves the benefits of the closed-end structure for a reasonable period of time for shareholders while providing a date certain by which shareholders will receive net asset value for their shares.

Background on Classified Board Structure

The Fund’s Amended and Restated By-Laws provide for the Board Members to be classified into three classes of approximately equal size, and the Board Members of each class are elected to hold office for a term expiring at the annual meeting of shareholders held in the third year following their election and until their successors are duly elected and qualified. The Fund’s classified board structure is intended to promote stability and continuity in the management of the Fund by ensuring that a majority of the Fund’s Board Members at any given time have prior experience as Board Members of the Fund and knowledge about the Fund’s operations. In addition, the classified board structure is designed to reduce the Fund’s vulnerability to hostile takeover attempts or the threats of proxy fights by activist shareholders who may have short-term interests that are not aligned with the best interests of the Fund. Because only approximately one-third of the

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Fund’s Board Members are elected at any annual meeting of shareholders, at least two annual meetings would be required to effect a change in control of the Fund’s Board, giving the Board the time and leverage necessary to engage activist shareholders in good-faith, arm’s length discussions and to negotiate the best result for the Fund. Absent the classified board structure, an activist shareholder could unilaterally gain control of the Fund by acquiring or obtaining voting control over a sufficient number of the Fund’s shares to replace the entire Board with its own nominees at a single annual meeting. The classified board structure does not prevent hostile takeover attempts, but it provides the Fund with some protection against abusive tactics and artificial pressures and provides the Board the time and opportunity to negotiate with activist shareholders and to make decisions that seek to balance the interests of all shareholders of the Fund, not just short-term activist shareholders.

The Board’s Statement in Opposition

In its supporting statement, Western argues against the classified board structure by stating: “It is our belief that the classification of the Board is strong proof that the Board is not acting in the best interests of shareholders. A classified board protects the incumbents, which in turn limits accountability to shareholders.” The Board believes that these statements are inaccurate and unfounded. A Board Member elected to a classified board is no less accountable or responsive to shareholders than he or she would be if elected annually. A Board Member on a classified board has the same ongoing duties to the Fund, regardless of how often he or she stands for election. The Board reviews matters relating to the Fund, including performance matters and trading discounts, on an ongoing basis and seeks to balance the interests of all shareholders of the Fund.

As noted above, the Board believes that Western is using the proposal to unfairly attack the performance of the Board and further its own short-term interests. The Board believes that this is evident in Western’s false and misleading statements about the Fund’s performance and trading discount. Western attacks the Fund’s performance by stating that “[DIMA] has overseen significant losses in KMM,” but this statement is simply not true. In fact, while the performance of the Fund has fluctuated over different measurement periods, the Fund’s average annual total returns since inception on January 23, 1989 through June 30, 2016 are 9.40% and 8.72% based on net asset value and market price, respectively. Similarly, Western’s statements about the Fund’s trading discount are misleading. Western states: “Sadly, KMM’s shares have consistently traded at a persistent discount to its per share net asset value. For example, on September 29, 2015, the discount was

20

an abysmal 17.76%.” In considering Western’s statement, shareholders should know that Western selected the day on which the Fund traded at its largest discount over the past five years. The complete facts are that, like all closed-end funds, the Fund typically trades at either a discount or premium to its per share net asset value and while the Fund has traded at an average discount of 3.11% over the five-year period ended June 30, 2016, it has also experienced periods where it has traded at a premium.

The Board believes that long-term shareholders of the Fund have benefited from good total return performance and a steady stream of income. In overseeing the Fund, the Board regularly reviews the trading price of the Fund. While, at times, the Fund has traded at a premium, for the majority of its history it has traded at a relatively small discount. When the discount has widened, the Board has taken steps to seek to address it. In 2009, for example, the Board adopted a share repurchase program. In 2015 and early 2016, when the Fund’s discount widened, the Board, at a meeting in February 2016, increased the number of shares subject to repurchase under the program from 5% to 10% of the Fund’s outstanding shares. While the Fund’s discount narrowed from 11.31% (as of February 26, 2016, the date the increase in the shares subject to repurchase was announced) to 8.95% (as of June 28, 2016), the Board reviewed additional options for the Fund at its May and July 2016 meetings. Based on this review, at its July 2016 meeting, the Board approved the Liquidation of the Fund. The Board believes that this action balances the interests of both short-term and long-term shareholders by establishing a date certain by which all shareholders will receive net asset value for their shares on the liquidation date, while preserving the benefits of the closed-end structure, including the potential to enhance investment returns through the use of leverage and the ability to fully invest the Fund’s portfolio without having to manage daily cash inflows and/or redemptions, for shareholders for a specified period of time.

For the reasons discussed above, the Board believes that the classified board structure continues to be in the best interests of the Fund and that Western appears to be using the proposal to unfairly attack the performance of the Board and further its own short-term interests, which may not be in the best interests of long-term shareholders. The Board has always sought to act for the benefit of all shareholders in the Fund and believes that the Liquidation of the Fund no later than December 31, 2018 fairly balances the interests of all shareholders. The Board unanimously recommends that you vote AGAINST the shareholder proposal.

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Required Vote

Pursuant to the Fund’s Declaration of Trust, the vote of a majority of the shares entitled to vote on a matter decides such matter. As such, approval of Proposal II shall require the affirmative vote of a majority of the shares of KMM outstanding and entitled to vote on Proposal II.

Because Western owns a substantial number of shares of the Fund, its votes for Proposal II may have a considerable impact on the outcome of the vote. Abstentions and broker non-votes will have the effect of a vote against Proposal II.

PROPOSAL III — KST ONLY

SHAREHOLDER PROPOSAL REGARDING BOARD DECLASSIFICATION

Shareholder Proposal

Arthur D. Lipson, Managing Member of Western Investment, LLC, on behalf of Western Investment, LLC (“Western”), P.O. Box 71279, Salt Lake City, Utah 84171, has advised the Fund that Western plans to introduce the resolution presented below at the Meeting. Pursuant to the statement on Schedule 13D/A filed by Western with the SEC on July 20, 2016, Western owned 196,890 shares of the Fund’s units of beneficial interest as of July 18, 2016. If Western does not properly present this proposal at the Meeting, the proposal will not be submitted to a vote. The Board believes that this shareholder proposal would not be in the best interests of the Fund and asks shareholders to consider the Board’s response which follows the shareholder proposal and supporting statement. The Board unanimously recommends that you vote AGAINST the shareholder proposal regarding Board declassification set forth below.

Shareholders should be aware that the shareholder proposal, if properly presented for shareholder action at the Meeting, is simply a recommendation that the Board consider Board declassification. Approval of the shareholder proposal would not automatically result in the elimination of the Fund’s classified board structure. In order to eliminate the Fund’s classified board structure, the Board would need to approve a formal amendment repealing the classified board provisions of the Fund’s Amended and Restated By-Laws.

In accordance with the rules of the Securities and Exchange Commission (“SEC”), the text of Western’s resolution and supporting statement is printed verbatim from their submission. Neither the Fund, the Board, nor DIMA is responsible for the contents of Western’s proposal or supporting statement.

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BEGINNING OF WESTERN’S PROPOSAL AND SUPPORTING STATEMENT

Proposal

RESOLVED, that the shareholders of Deutsche Strategic Income Trust (“KST”) hereby request that the Board of Directors of KST (the “Board”) take the necessary steps to declassify the Board so that all directors are elected on an annual basis. Such declassification shall be completed in a manner that does not affect the unexpired terms of the previously elected directors.

Supporting Statement:

We believe the annual election of all directors encourages board accountability to its shareholders and when directors are held accountable for their actions, they perform better. This view is shared by most, who believe it to be the standard for corporate governance best practices. According to FactSet Research Systems, the vast majority of companies in the S&P 500 and Russell 1000 indexes elect all directors annually, with only approximately 10.5% and 25%, respectively, of companies retaining classified boards.

Currently, the KST Board is divided into three classes serving staggered three-year terms. It is our belief that the classification of the Board is strong proof that the Board is not acting in the best interests of shareholders. A classified board protects the incumbents, which in turn limits accountability to shareholders.

KST’s investment manager, Deutsche Investment Management Americas Inc. (“DIM”), has further blocked shareholder rights by requiring that directors be elected by a near-impossible absolute majority of shares outstanding, rather than a majority of shares voting, thereby enabling losing incumbents to remain in office following a contested election.

Further, KST’s Board has a long history of acting in an undemocratic manner by failing to recognize all votes cast, failing to seat dissident directors who won the overwhelming majority of votes cast at annual meetings and failing to hold timely annual meetings.

Subsequently, the director of the SEC’s Division of Investment Management has publicly criticized all of these shareholder-unfriendly behaviors.

We remain committed to improving corporate governance at KST for the benefit of all shareholders. Declassification of the Board is a positive step which will allow more productive shareholder engagement and will help KST achieve its optimal valuation.

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In this challenging economic environment, accountability for performance must be given to the shareholders whose capital has been entrusted in the form of share investments in KST. Sadly, KST’s shares have consistently traded at a persistent discount to its per share net asset value. For example, on August 25, 2015, the discount was an abysmal 18.56%.

DIM has overseen significant losses in KST and its seven taxable sister funds. Due to shareholder pressures (including overwhelming losses in proxy contests), six of the seven funds have, or are scheduled to be, liquidated or converted into open-end funds.

KMM’s [sic] classified board and majority voting requirements also violate DIM’s own corporate governance voting standards, an embarrassing contradiction.

If this proposal is approved and adopted by the Board, all directors would be subject to annual election after the phase-in period.

For a greater voice in KST’s corporate governance and to increase the accountability of the Board to shareholders, we urge you to vote FOR this proposal.

END OF WESTERN’S PROPOSAL AND SUPPORTING STATEMENT

Recommendation of the Board of Trustees

After carefully considering Western’s proposal, the Board unanimously recommends that you vote AGAINST the shareholder proposal. The Board believes that the classified Board structure continues to be in the best interests of the Fund, and that Western appears to be using the proposal to unfairly attack the performance of the Board and further its own short-term interests, which may not be in the best interests of long-term shareholders. The Board remains committed to balancing such potentially opposing interests so as to act in the best interests of all shareholders, as evidenced by its recent decision to approve the termination of the Fund, pursuant to which the Fund will make a liquidating distribution to shareholders no later than December 31, 2018 (the “Liquidation”). The Board believes that the Liquidation preserves the benefits of the closed-end structure for a reasonable period of time for shareholders while providing a date certain by which shareholders will receive net asset value for their shares.

Background on Classified Board Structure

The Fund’s Amended and Restated By-Laws provide for the Board Members to be classified into three classes of approximately equal size,

24

and the Board Members of each class are elected to hold office for a term expiring at the annual meeting of shareholders held in the third year following their election and until their successors are duly elected and qualified. The Fund’s classified board structure is intended to promote stability and continuity in the management of the Fund by ensuring that a majority of the Fund’s Board Members at any given time have prior experience as Board Members of the Fund and knowledge about the Fund’s operations. In addition, the classified board structure is designed to reduce the Fund’s vulnerability to hostile takeover attempts or the threats of proxy fights by activist shareholders who may have short-term interests that are not aligned with the best interests of the Fund. Because only approximately one-third of the Fund’s Board Members are elected at any annual meeting of shareholders, at least two annual meetings would be required to effect a change in control of the Fund’s Board, giving the Board the time and leverage necessary to engage activist shareholders in good-faith, arm’s length discussions and to negotiate the best result for the Fund. Absent the classified board structure, an activist shareholder could unilaterally gain control of the Fund by acquiring or obtaining voting control over a sufficient number of the Fund’s shares to replace the entire Board with its own nominees at a single annual meeting. The classified board structure does not prevent hostile takeover attempts, but it provides the Fund with some protection against abusive tactics and artificial pressures and provides the Board the time and opportunity to negotiate with activist shareholders and to make decisions that seek to balance the interests of all shareholders of the Fund, not just short-term activist shareholders.

The Board’s Statement in Opposition

In its supporting statement, Western argues against the classified board structure by stating: “It is our belief that the classification of the Board is strong proof that the Board is not acting in the best interests of shareholders. A classified board protects the incumbents, which in turn limits accountability to shareholders.” The Board believes that these statements are inaccurate and unfounded. A Board Member elected to a classified board is no less accountable or responsive to shareholders than he or she would be if elected annually. A Board Member on a classified board has the same ongoing duties to the Fund, regardless of how often he or she stands for election. The Board reviews matters relating to the Fund, including performance matters and trading discounts, on an ongoing basis and seeks to balance the interests of all shareholders of the Fund.

As noted above, the Board believes that Western is using the proposal to unfairly attack the performance of the Board and further its own

25

short-term interests. The Board believes that this is evident in Western’s false and misleading statements about the Fund’s performance and trading discount. Western attacks the Fund’s performance by stating that “[DIMA] has overseen significant losses in KST,” but this statement is simply not true. In fact, while the performance of the Fund has fluctuated over different measurement periods, the Fund’s average annual total returns since inception on April 29, 1994 through June 30, 2016 are 9.60% and 8.86% based on net asset value and market price, respectively. Similarly, Western’s statements about the Fund’s trading discount are misleading. Western states: “Sadly, KST’s shares have consistently traded at a persistent discount to its per share net asset value. For example, on August 25, 2015, the discount was an abysmal 18.56%.” In considering Western’s statement, shareholders should know that Western selected the day on which the Fund traded at its largest discount over the past five years. The complete facts are that, like all closed-end funds, the Fund typically trades at either a discount or premium to its per share net asset value and while the Fund has traded at an average discount of 5.89% over the five-year period ended June 30, 2016, it has also experienced periods where it has traded at a premium.

The Board believes that long-term shareholders of the Fund have benefited from good total return performance and a steady stream of income. In overseeing the Fund, the Board regularly reviews the trading price of the Fund. While, at times, the Fund has traded at a premium, for the majority of its history it has traded at a relatively small discount. When the discount has widened, the Board has taken steps to seek to address it. In 2009, for example, the Board adopted a share repurchase program. In 2015 and early 2016, when the Fund’s discount widened, the Board, at a meeting in February 2016, increased the number of shares subject to repurchase under the program from 5% to 10% of the Fund’s outstanding shares. While the Fund’s discount narrowed from 11.10% (as of February 26, 2016, the date the increase in the shares subject to repurchase was announced) to 6.51% (as of June 28, 2016), the Board reviewed additional options for the Fund at its May and July 2016 meetings. Based on this review, at its July 2016 meeting, the Board approved the Liquidation of the Fund. The Board believes that this action balances the interests of both short-term and long-term shareholders by establishing a date certain by which all shareholders will receive net asset value for their shares on the liquidation date, while preserving the benefits of the closed-end structure, including the potential to enhance investment returns through the use of leverage and the ability to fully invest the Fund’s portfolio without having to manage daily cash inflows and/or redemptions, for shareholders for a specified period of time.

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For the reasons discussed above, the Board believes that the classified board structure continues to be in the best interests of the Fund and that Western appears to be using the proposal to unfairly attack the performance of the Board and further its own short-term interests, which may not be in the best interests of long-term shareholders. The Board has always sought to act for the benefit of all shareholders in the Fund and believes that the Liquidation of the Fund no later than December 31, 2018 fairly balances the interests of all shareholders. The Board unanimously recommends that you vote AGAINST the shareholder proposal.

Required Vote

Pursuant to the Fund’s Declaration of Trust, the vote of a majority of the shares entitled to vote on a matter decides such matter. As such, approval of Proposal III shall require the affirmative vote of a majority of the shares of KST outstanding and entitled to vote on Proposal III.

Because Western owns a substantial number of shares of the Fund, its votes for Proposal III may have a considerable impact on the outcome of the vote. Abstentions and broker non-votes will have the effect of a vote against Proposal III.

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INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Each Fund’s Board, including the Independent Board Members, has selected Ernst & Young LLP (“E&Y”) to act as independent registered public accounting firm to audit the books and records of its Fund for the current fiscal year. E&Y has served each Fund in this capacity since each Fund was organized and has no direct or indirect financial interest in any Fund except as the independent registered public accounting firm. Representatives of E&Y will not be present at the Meeting.

The following table shows the amount of fees that E&Y billed to (i) each Fund during the Fund’s last two fiscal years; and (ii) DIMA and any entity controlling, controlled by, or under common control with DIMA (collectively, the “DIMA Entities”) that provides ongoing services to each Fund, for engagements directly related to the Fund’s operations and financial reporting, during the Fund’s last two fiscal years. Each Fund’s Audit Committee approved in advance all audit services and non-audit services that E&Y provided to the Fund.

Services that each Fund’s Independent Registered Public Accountant Billed to the Fund and DIMA Entities

Non-Audit Services.  The following table shows the amount of fees that E&Y billed during each Fund’s last two fiscal years for non-audit services. Each Fund’s Audit Committee pre-approved all non-audit services that E&Y provided to the DIMA Entities that related directly

28

to the Fund’s operations and financial reporting. Each Fund’s Audit Committee requested and received information from E&Y about any non-audit services that E&Y rendered during the Fund’s last fiscal year to the DIMA Entities. Each Fund’s Audit Committee considered this information in evaluating E&Y’s independence.

All other engagement fees were billed for services in connection with agreed upon procedures and tax compliance for DIMA and other related entities.

Audit Committee Pre-Approval Policies and Procedures.  Generally, each Fund’s Audit Committee must pre-approve (i) all services to be performed for the Fund by the Fund’s independent registered public accounting firm and (ii) all non-audit services to be performed by the Fund’s independent registered public accounting firm for the DIMA Entities with respect to operations and financial reporting of the Fund, except that the Chairperson or Vice Chairperson of the Fund’s Audit Committee may grant the pre-approval for non-audit services described in items (i) and (ii) above for non-prohibited services for engagements of less than $100,000. All such delegated pre-approvals shall be presented to each Fund’s Audit Committee no later than the next Audit Committee meeting.

There were no amounts that were approved by the Audit Committee pursuant to the de minimis exception under Rule 2-01(c)(7)(i)(C) or Rule 2-01(c)(7)(ii) of Regulation S-X.

According to each Fund’s principal independent registered public accounting firm, substantially all of the principal independent registered public accounting firm’s hours spent on auditing the Fund’s financial statements were attributed to work performed by full-time permanent employees of the principal independent registered public accounting firm.

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In connection with the audit of the 2014 and 2015 financial statements, each Fund entered into an engagement letter with E&Y. The terms of the engagement letter required by E&Y, and agreed to by each Fund’s Audit Committee, included provisions in which the parties consented to the sole jurisdiction of federal courts in New York, Boston or the Northern District of Illinois, as well as a waiver of right to a trial by jury and, in 2014, an exclusion of punitive damages.

In connection with the audit of the 2016 financial statements, each Fund entered into an engagement letter with E&Y. The terms of the engagement letter required by E&Y, and agreed to by each Fund’s Audit Committee, include a provision mandating the use of mediation and arbitration to resolve any controversy or claim between the parties arising out of or relating to the engagement letter or the services provided thereunder.

1.) For each Fund, in various communications beginning on April 20, 2016, E&Y advised the Fund’s Audit Committee that E&Y had identified the following matters that it determined to be inconsistent with the SEC’s auditor independence rules.

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E&Y advised the Audit Committee that the above described matters, individually and in the aggregate, do not and will not impair E&Y’s ability to exercise objective and impartial judgment in connection with the audits of the financial statements for the Fund and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that E&Y has been and is capable of objective and impartial judgment on all issues encompassed within E&Y’s audit engagements, and that E&Y can continue to act as the Independent Registered Public Accounting Firm.

Management and the Audit Committee considered these matters and, based solely upon E&Y’s description of the facts and the representations made by E&Y, believe that (1) these matters did not impact E&Y’s application of objective and impartial judgment with respect to all issues encompassed within E&Y’s audit engagements; and (2) a reasonable investor with knowledge of all relevant facts and circumstances would reach the same conclusion.

2.) For each Fund, in various communications beginning on June 27, 2016, E&Y also informed the Audit Committee that E&Y had identified independence breaches where E&Y and covered persons maintain lending relationships with owners of greater than 10% of the shares of certain investment companies within the “investment company complex” as defined under Rule 2-01(f)(14) of Regulation S-X. E&Y informed the Audit Committee that these lending relationships are inconsistent with Rule 2-01(c)(l)(ii)(A) of Regulation S-X (referred to as the “Loan Rule”).

The Loan Rule specifically provides that an accounting firm would not be independent if it receives a loan from a lender that is a record or beneficial owner of more than ten percent of an audit client’s equity securities. For purposes of the Loan Rule, audit clients include the Fund as well as all registered investment companies advised by DIMA and its

32

affiliates, including other subsidiaries of the Adviser’s parent company, Deutsche Bank AG (collectively, the “Deutsche Funds Complex”). E&Y’s lending relationships affect E&Y’s independence under the Loan Rule with respect to all investment companies in the Deutsche Funds Complex.

E&Y informed the Audit Committee that, after evaluating the facts and circumstances and the applicable independence rules, E&Y has concluded that the lending relationships described above do not and will not impair E&Y’s ability to exercise objective and impartial judgment in connection with the audits of the financial statements for each Fund and a reasonable investor with knowledge of all relevant facts and circumstances would conclude that E&Y has been and is capable of objective and impartial judgment on all issues encompassed within E&Y’s audit engagements. E&Y informed the Audit Committee that its conclusion was based on a number of factors, including, among others, E&Y’s belief that the lenders are not able to impact the impartiality of E&Y or assert any influence over the investment companies in the Deutsche Funds Complex whose shares the lenders own or the applicable investment company’s investment adviser. In addition, the individuals at E&Y who arranged E&Y’s lending relationships have no oversight of, or ability to influence, the individuals at E&Y who conducted the audits of the Fund’s financial statements.

On June 20, 2016, the SEC Staff issued a “no-action” letter to another mutual fund complex (see Fidelity Management & Research Company et al., No-Action Letter) related to similar Loan Rule issues as those described above. In that letter, the SEC Staff confirmed that it would not recommend enforcement action against an investment company that relied on the audit services performed by an audit firm that was not in compliance with the Loan Rule in certain specified circumstances. The circumstances described in the no-action letter appear to be substantially similar to the circumstances that effected E&Y’s independence under the Loan Rule with respect to the Fund. E&Y confirmed to the Audit Committee that it meets the conditions of the no-action letter. In the no-action letter, the SEC Staff stated that the relief under the letter is temporary and will expire 18 months after the issuance of the letter.

ADDITIONAL INFORMATION

Quorum and Required Vote.  Proxies are being solicited from each Fund’s shareholders by the respective Fund’s Board for the Meeting. Unless revoked, all valid proxies will be voted in accordance with the specification thereon or, in the absence of specification, FOR the election of all Board Member Nominees and AGAINST the shareholder

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proposal regarding Board declassification, and as the persons named in the proxy determine on such other business as may come before the Meeting. However, should any Board Member Nominee become unable or unwilling to serve prior to the Meeting, the persons named as proxies may vote your shares for substitute nominees, if any recommended by the Board.

If an annual meeting is called for the purpose of considering the election of Board Members, and a then current Board Member up for election is not elected and such Board Member’s successor is not elected and qualified, then the current Board Member shall remain a member of the relevant class, holding office until the annual meeting held in the third succeeding year after such annual meeting is initially called and until the election and qualification of such Board Member’s successor, if any, or until such current Board Member sooner dies, resigns, retires or is removed.

For each Fund, the presence at the Meeting of 30% of the shares of such Fund outstanding and entitled to vote at the Meeting constitutes a quorum for the Meeting. Thus, the meeting for a particular Fund could not take place on its scheduled date if less than 30% of the shares of that Fund were represented. The tellers will count shares represented by proxies that reflect abstentions and “broker non-votes” (i.e., shares held by brokers or nominees as to which (i) instructions have not been received from the beneficial owners or the persons entitled to vote, and (ii) the broker or nominee does not have the discretionary voting power on a particular matter) as shares that are present and entitled to vote on the matter for purposes of determining the presence of a quorum.

To the extent permitted by the Amended and Restated Agreement and Declaration of Trust, any meeting of shareholders may, by action of the chairman of the meeting, be adjourned without further notice with respect to one or more matters to be considered at such meeting to a designated time and place, whether or not a quorum is present with respect to such matter; upon motion of the chairman of the meeting, the question of adjournment may be submitted to a vote of the shareholders, and in that case, any adjournment with respect to one or more matters must be approved by the vote of holders of a majority of the shares present and entitled to vote with respect to the matter or matters adjourned, and without further notice to the extent permitted by the Amended and Restated Agreement and Declaration of Trust. Adjournment will subject a Fund to additional expenses. Unless a proxy is otherwise limited in this regard, any shares present and entitled to vote at the Meeting that are represented by broker non-votes may, at the discretion of the proxies named therein, be voted in favor of such an adjournment.

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For each Fund, each whole share is entitled to one vote and each fractional share is entitled to a proportionate fractional vote. For Proposal I for each Fund, a majority of the Fund’s shares outstanding and entitled to vote shall elect a Board Member Nominee. For Proposal II and Proposal III, pursuant to each Fund’s Declaration of Trust, the vote of a majority of the Fund’s shares entitled to vote on the matter shall decide the matter. As such, approval of Proposal II shall require the affirmative vote of a majority of the shares of KMM outstanding and entitled to vote on Proposal II and approval of Proposal III shall require the affirmative vote of a majority of the shares of KST outstanding and entitled to vote on Proposal III. Abstentions and broker non-votes will have the effect of a vote against each of Proposal I, Proposal II and Proposal III.

Record Date and Method of Tabulation.  Shareholders of record of each Fund at the close of business on July 20, 2016 (the “Record Date”) are entitled to notice of, and to vote at, the Meeting. As of the Record Date, shares of each Fund were issued and outstanding as follows:

Votes cast by proxy or in person at the Meeting will be counted by persons appointed by the Funds as tellers for the Meeting. Shareholders will vote by individual Fund on the Proposals.

Deutsche Bank Voting. Deutsche Bank Trust  Company Americas (“Deutsche Bank Trust”) will vote any shares in accounts as to which Deutsche Bank Trust has voting authority, and shares in any other accounts as to which Deutsche Bank Trust is the agent of record, which are not otherwise represented in person or by proxy at the Meeting. Deutsche Bank Trust will vote shares of the Funds over which it has investment discretion in accordance with its fiduciary and other legal obligations, and in its discretion may consult with the beneficial owners or other fiduciaries. Deutsche Bank Trust will vote shares of the Funds for which it is the owner of record but does not have investment discretion, which are not otherwise represented in person or by proxy at the Meeting, in the same proportion as the votes cast by holders of all shares in the Funds otherwise represented at the Meeting. This practice is commonly referred to as “mirror” or “echo” voting. Deutsche Bank Trust and its affiliates will vote any shares held in proprietary accounts in accordance with their voting procedures.

35

Share Ownership.  As of the Record Date, each Fund knows of no person who beneficially owns more than 5% of any of the outstanding shares of the Fund, except as follows:

36

Collectively, for each Fund, the Board Members and executive officers of the Fund own less than 1% of such Fund’s outstanding shares. The number of shares beneficially owned is determined under rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose.

Proxy Costs and Solicitation of Proxies.  Each Fund will pay its costs of preparing, printing and mailing the enclosed Proxy Card and Proxy Statement and all other costs incurred in connection with the solicitation of proxies, including any additional solicitation made by letter or telephone. In addition to solicitations by mail, solicitations also may be made by telephone, through the Internet or in person by officers and representatives of each Fund, by officers and employees of DIMA, and by certain financial services firms and their representatives, who will receive no extra compensation for their services. Georgeson Inc. has been engaged to assist in the solicitation of proxies for each Fund at an estimated cost of $48,500 for KMM and $32,000 for KST, plus reimbursement for out-of-pocket expenses. However, the exact cost will depend on the amount and types of services rendered. If the shareholders record votes by telephone or through the Internet, the proxy solicitor will use procedures designed to authenticate shareholders’ identities, to allow shareholders to authorize the voting of their shares in accordance with their instructions and to allow shareholders to confirm that their instructions have been recorded properly.

If a shareholder wishes to participate in the Meeting, but does not wish to give a proxy by telephone or via the Internet, the shareholder may still submit the Proxy Card(s) originally sent with this Proxy Statement or attend the Meeting in person. Should shareholders require additional information regarding the proxy or replacement Proxy Card(s) or for directions on how to attend the Meeting in person, they may call Georgeson Inc. toll-free at 866-695-6075. Any proxy given by a shareholder is revocable until voted at the Meeting.

As the Meeting date approaches, certain shareholders of the Funds may receive a telephone call from a representative of Georgeson Inc. if their votes have not yet been received.

Persons holding shares as nominees will, upon request, be reimbursed for their reasonable expenses in soliciting instructions from their principals. The Funds will pay the costs of solicitation, including (a) the printing and mailing of this Proxy Statement and the accompanying materials, (b) the reimbursement of brokerage firms and others for their expenses in forwarding solicitation materials to the beneficial owners of each Fund’s shares, (c) payment to Georgeson Inc. for its services in soliciting proxies and (d) supplementary solicitations to submit proxies.

37

One Proxy Statement may be delivered to two or more shareholders of a Fund who share an address, unless a Fund has received instructions to the contrary. To request a separate copy of the Proxy Statement, which will be delivered upon written or oral request, or for instructions as to how to request a single copy if multiple copies are received, shareholders should call 800-349-4281 or write to your Fund at 345 Park Avenue, New York, New York 10154.

Revocation of Proxies.  Proxies, including proxies given by telephone or via the Internet, may be revoked at any time before they are voted either (i) by a written revocation received by the Secretary of your Fund at One Beacon Street, Boston, MA 02108, (ii) by properly submitting a later-dated Proxy Card that is received by the Fund at or prior to the Meeting or (iii) by attending the Meeting and voting in person. Merely attending the Meeting without voting, however, will not revoke a proxy previously given.

Section 16(a) Beneficial Ownership Reporting Compliance.   Section 30(h) of the 1940 Act and Section 16(a) of the Securities Exchange Act of 1934 require each Fund’s officers and Board Members, DIMA, affiliated persons of DIMA and persons who own more than ten percent of a registered class of the Fund’s equity securities to file forms reporting their affiliation with that Fund and reports of ownership and changes in ownership of that Fund’s shares with the SEC. These persons and entities are required by SEC regulation to furnish the Funds with copies of all Section 16(a) forms they file. Based solely upon its review of the copies of such forms received by it, and written representations from certain reporting persons that no year-end reports were required for those persons, each Fund believes that during the fiscal year ended November 30, 2015, all filings required by Section 16(a) were timely. 

Investment Advisor and Administrator.  DIMA, 345 Park Avenue, New York, New York 10154, serves as each Fund’s investment advisor and administrator. DIMA is an indirect, wholly-owned subsidiary of Deutsche Bank AG.

Deutsche AM represents the asset management activities conducted by Deutsche Bank AG or any of its subsidiaries. Deutsche AM is a global asset management organization that offers a wide range of investing expertise and resources, including hundreds of portfolio managers and analysts and an office network that reaches the world’s major investment centers. This well-resourced global investment platform brings together a wide variety of experience and investment insight, across industries, regions, asset classes and investing styles.

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SUBMISSION OF SHAREHOLDER PROPOSALS

Shareholders wishing to submit proposals for inclusion in a proxy statement for a shareholders’ meeting to be held in 2017 should send their written proposals to the Secretary of the applicable Fund at the following address: Deutsche Investment Management Americas Inc., One Beacon Street, Boston, MA 02108.

It is currently anticipated that the next annual meeting of shareholders will be held in September 2017. A shareholder wishing to submit a proposal for inclusion in a Fund’s proxy statement for the 2017 annual meeting of shareholders pursuant to Rule 14a-8 under the Securities Exchange Act of 1934 should send such written proposal along with all information required by the advanced notice provisions of the Amended and Restated By-Laws as described in the next paragraph to the Secretary of the Fund within a reasonable time before the solicitation of proxies for such meeting. A Fund will treat any such proposal received no later than April 24, 2017 as timely. The timely submission of a proposal, however, does not guarantee its inclusion.

Each Fund has established advance notice requirements pursuant to its Amended and Restated By-Laws for the submission of shareholder proposals, including proposals pursuant to Rule 14a-8 under the Securities Exchange Act of 1934, to be considered by shareholders at an annual meeting. Pursuant to the advance notice provisions of each Fund’s Amended and Restated By-Laws for nominations of individuals for election to the Board or other business to be properly brought before an annual meeting by a shareholder pursuant to the advance notice provisions, the shareholder must have given timely notice thereof in writing to the Secretary of the Fund and such other business must otherwise be a proper matter for action by the shareholders. To be timely, a shareholder’s notice shall set forth all information required pursuant to the advance notice requirements and shall be delivered to the Secretary at the principal executive office of the Fund not earlier than March 25, 2017 nor later than 5:00 p.m., Eastern Time, on April 24, 2017. However, in the event that the date of the annual meeting is advanced or delayed by more than 30 days from the first anniversary of the date of the preceding year’s annual meeting, notice by the shareholder to be timely must be so delivered not earlier than the 120th day prior to the date of such annual meeting and not later than 5:00 p.m., Eastern time, on the 90th day prior to the date of such annual meeting or, if the first public announcement of the date of such annual meeting is less than 100 days prior to the date of such annual meeting, the tenth day following the day on which public announcement of the date of such meeting is first made. Each Fund’s advance notice requirements are set forth in Exhibit D. The timely submission of a proposal, however, does not guarantee that it will be considered at the applicable annual meeting.

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OTHER MATTERS TO COME BEFORE THE MEETING

No Board Member is aware of any matters that will be presented for action at the Meeting other than the matters set forth herein. Should any other matters requiring a vote of shareholders arise, the proxy in the accompanying form will confer upon the person or persons entitled to vote the shares represented by such proxy the discretionary authority to vote the shares as to any such other matters in accordance with their best judgment in the interest of each Fund.

IF YOU HAVE ANY QUESTIONS CONCERNING THIS PROXY STATEMENT OR THE PROCEDURES TO BE FOLLOWED TO EXECUTE AND TO DELIVER A WHITE PROXY CARD, PLEASE CONTACT GEORGESON INC. AT 866-695-6075.

SHAREHOLDERS WHO DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WHO WISH TO HAVE THEIR SHARES VOTED ARE REQUESTED TO DATE AND TO SIGN THE ENCLOSED WHITE PROXY CARD AND TO RETURN IT IN THE ENCLOSED ENVELOPE, OR TO FOLLOW THE INSTRUCTIONS ON THE ENCLOSED WHITE PROXY CARD FOR VOTING BY TELEPHONE OR THROUGH THE INTERNET.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE JOINT ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON SEPTEMBER 30, 2016:

The Notice of Meeting, Proxy Statement and Proxy Card(s) are available at www.proxy-direct.com/deu-28064.

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EXHIBIT A

BOARD MEMBER SHARE OWNERSHIP

As of July 1, 2016, the Board Members and the officers of each Fund as a whole owned less than 1% of the outstanding shares of the Funds.

The following tables show the dollar range of equity securities beneficially owned and the number of shares beneficially owned by each Board Member in each Fund as of July 1, 2016.

Under its Board Governance Policies, each Fund’s Board has established the expectation that within three years of becoming a Board Member, a Board Member will have invested in the aggregate at least $275,000 in the Deutsche Funds. Each Board Member owns over $275,000 of shares on an aggregate basis in all Deutsche funds overseen by the Board Member as of July 1, 2016.

Dollar Range of Equity Securities Beneficially Owned

Number of Shares Beneficially Owned

A-1

EXHIBIT B

OFFICERS⁽¹⁾

Unless otherwise indicated, the address of each officer below is One Beacon Street, Boston, Massachusetts 02108.

B-1

B-2

EXHIBIT C

BOARD MEMBER COMPENSATION

The table below shows (i) the compensation paid to each Independent Board Member by each Fund for its most recently completed fiscal year and (ii) the total compensation received by each Independent Board Member from the Deutsche fund complex for the calendar year ended December 31, 2015. No Independent Board Member of the Funds receives pension or retirement benefits from the Funds.

C-1

EXHIBIT D

ADVANCE NOTICE REQUIREMENTS FOR

DEUTSCHE MULTI-MARKET INCOME TRUST (“KMM”)

DEUTSCHE STRATEGIC INCOME TRUST (“KST”)

The following is an excerpt from the Amended and Restated By-Laws for KMM and KST. The excerpt is qualified in its entirety by the complete Amended and Restated By-Laws for KMM and KST. Any terms not defined herein have the meaning set forth in the Amended and Restated By-Laws.

D-1

D-2

D-3

D-4

D-5

D-6

D-7

D-8

D-9

CE.PROXY-072016.KMM.KST