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KEMPER-DREMAN FUND, INC.
SUPPLEMENT TO PROSPECTUS
DATED SEPTEMBER 11, 1995
REVISED DECEMBER 15, 1995
CLASS I SHARES
Kemper-Dreman Contrarian Fund (the "Contrarian Fund"), Kemper-Dreman High
Return Fund (the "High Return Fund") and Kemper-Dreman Small Cap Value Fund
(the "Small Cap Value Fund") (collectively, the "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
prospectus, and Class I shares, which are described in the prospectus as
supplemented hereby.
Class I shares are available for purchase exclusively by the following
investors: (a) tax-exempt retirement plans of Kemper Financial Services, Inc.
("KFS"), the parent company of the Funds' investment manager, and its
affiliates; and (b) the following investment advisory clients of KFS and its
investment advisory affiliates (including Kemper Asset Management Company
("KAMCO")) that invest at least $1 million in a Fund: (1) unaffiliated benefit
plans, such as qualified retirement plans (other than individual retirement
accounts and self-directed retirement plans); (2) unaffiliated banks and
insurance companies purchasing for their own accounts; and (3) endowment funds
of unaffiliated non-profit organizations. Class I shares currently are
available for purchase only from Kemper Distributors, Inc., principal
underwriter for the Funds. Share certificates are not available for Class I
shares.
The primary distinctions among the classes of each Fund's shares lie in their
initial and contingent deferred sales charge schedules and in their ongoing
expenses, including asset-based sales charges in the form of Rule 12b-1
distribution fees. Class I shares are offered at net asset value without an
initial sales charge and are not subject to a contingent deferred sales charge
or a Rule 12b-1 distribution fee. Also, there is no administrative services
fee charged to Class I shares. 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, will be higher
for Class I shares than for Class A, Class B and Class C shares.
The following information supplements the indicated sections of the prospectus.
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
SHAREHOLDER TRANSACTION EXPENSES (APPLICABLE TO EACH FUND) CLASS I
-------
<S> <C>
Maximum Sales Charge on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Maximum Sales Charge on Reinvested Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Exchange Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . None
Deferred Sales Charge (as a percentage of redemption proceeds) . . . . . . . . . . . . . . . . . . . . . . . . None
</TABLE>
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<TABLE>
<CAPTION>
SMALL
HIGH CAP
ANNUAL FUND CONTRARIAN RETURN VALUE
OPERATING EXPENSES FUND FUND FUND
(as a percentage of average net assets) ---------- ------ -----
<S> <C> <C> <C>
Management Fees (restated) . . . . . . . . . . .40% .40% .40%
12b-1 Fees . . . . . . . . . . . . . . . . . . None None None
Other Expenses (estimated) . . . . . . . . . . .07% .07% .07%
---- ---- ----
Total Operating Expenses . . . . . . . . . . . .47% .47% .47%
==== ==== ====
</TABLE>
<TABLE>
<CAPTION>
Example Fund 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------- ---- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
You would pay the following Contrarian $5 $15 $26 $59
expenses on a $1,000 investment, High Return $5 $15 $26 $59
assuming (1) 5% annual return and (2) Small Cap Value $5 $15 $26 $59
redemption at the end of each time
period:
</TABLE>
The purpose of the preceding table is to assist investors in understanding the
various costs and expenses that an investor in Class I shares of a Fund will
bear directly or indirectly.
Although it is anticipated that each Fund will bear all its own expenses, the
investment manager has agreed to reduce the management fee of each Fund to the
extent necessary to limit the operating expenses of the Class A, B and C shares
of the Fund as described in the prospectus. The management fee to be paid by
the Class I shares will be at the same level as that paid for the Class A, B
and C shares after the fee reduction for the A, B and C shares. Without the
fee reduction, "Management Fees" for each Fund would be .75% and "Total
Operating Expenses" would be .82%.
"Other Expenses" for Class I shares, which were not available for purchase
prior to September 11, 1995, have been estimated for the current fiscal year.
The Example assumes a 5% annual rate of return pursuant to requirements of the
Securities and Exchange Commission. This hypothetical rate of return is not
intended to be representative of past or future performance of any Fund. The
Example should not be considered to be a representation of past or future
expenses. Actual expenses may be greater or lesser than those shown.
FINANCIAL HIGHLIGHTS
No financial information is presented for Class I shares since no Class I
shares of any Fund had been issued as of the end of the Funds' fiscal year.
SPECIAL FEATURES
Shareholders of Class I shares who have purchased shares because they are
participants in tax-exempt retirement plans of KFS and its affiliates may
exchange their shares for shares of Kemper Money Market Fund or other Class I
shares for direct purchase at their relative asset values.
December 15, 1995
KDF-1I (12/95)
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