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<C> <C> <C>
KEMPER VALUE FUND, INC. ("KVF") KEMPER EUROPE FUND ("KEUF") KEMPER HORIZON FUND ("KHF")
Kemper Contrarian Fund SUPPLEMENT TO PROSPECTUS Kemper Horizon 20+ Portfolio
Kemper-Dreman High Return DATED APRIL 1, 1997 Kemper Horizon 10+ Portfolio
Equity Fund ------------------------- Kemper Horizon 5 Portfolio
Kemper Small Cap Value Fund SUPPLEMENT TO PROSPECTUS
SUPPLEMENT TO PROSPECTUS DATED NOVEMBER 21, 1997
DATED APRIL 25, 1997 -------------------------
-------------------------
</TABLE>
KEMPER TARGET EQUITY FUND ("KTEF")
Kemper Retirement Fund-Series VII
SUPPLEMENT TO PROSPECTUS
DATED MAY 1, 1997
-------------------------
INVESTMENT MANAGER AND UNDERWRITER
Pursuant to the terms of an agreement, Zurich Insurance Company ("Zurich"), the
parent of the Funds' investment adviser, Zurich Kemper Investments, Inc. ("ZKI")
or, for Kemper Value Fund, Inc., Zurich Kemper Value Advisers, Inc. ("ZKVA"),
and Scudder, Stevens & Clark, Inc. ("Scudder") have formed a new global
investment organization by combining Scudder's business with that of ZKI and
that of ZKVA, and Scudder has changed its name to Scudder Kemper Investments,
Inc. ("Scudder Kemper"). As a result of the transaction, Zurich owns
approximately 70% of Scudder Kemper, with the balance owned by Scudder Kemper's
officers and employees. Scudder Kemper, 280 Park Avenue, 40th floor, New York,
New York 10017, now manages in excess of $200 billion.
Because the transaction between Scudder and Zurich resulted in the assignment of
each Fund's investment management agreement between ZKI or, for Kemper Value
Fund, Inc., ZKVA, and each respective Fund, each of those agreements was deemed
to be automatically terminated upon consummation of the transaction. In
anticipation of the transaction, however, new investment management agreements
between each Fund and Scudder Kemper were approved by each respective Fund's
Board of Directors or Trustees. A special meeting of shareholders (the "Special
Meeting") of each Fund was held in December, 1997, at which time the
shareholders also approved the new investment management agreements. The new
investment management agreements (each an "Investment Management Agreement" and,
collectively, the "Investment Management Agreements") are all effective as of
December 31, 1997 and will be in effect for an initial term ending on the same
date as would the corresponding previous investment management agreement. Dreman
Value Management, L.L.C. continues to provide sub-advisory services to Kemper-
Dreman High Return Equity Fund pursuant to a sub-advisory agreement with Scudder
Kemper.
Each Fund's Investment Management Agreement is substantially similar to the
corresponding investment management agreement terminated by the transaction,
except that Scudder Kemper is the new investment adviser to each Fund, the
management fee is calculated monthly at 1/12 of the applicable annual rate based
upon the average daily net assets for such month, and the expense limitation has
been deleted because there are no longer any state expense limitations in
effect. In addition, for Funds investing in foreign securities, except for KEUF,
each Fund's respective sub-advisory agreement with Zurich Investment Management
Limited ("ZIML") has been terminated and Scudder Kemper has assumed the duties
previously performed by ZIML under each such Fund's respective sub-advisory
agreement. For Kemper Horizon 20+ Portfolio, Kemper Horizon 10+ Portfolio, and
Kemper Horizon 5 Portfolio, each Portfolio's respective sub-advisory agreement
with Zurich Kemper Value Advisors, Inc. ("ZKVA") has been terminated and Scudder
Kemper has assumed the duties previously performed by ZKVA under each
Portfolio's respective sub-advisory agreement.
<PAGE> 2
In addition, under a separate agreement between each Fund and Scudder Fund
Accounting Corporation ("SFAC"), a subsidiary of Scudder Kemper, SFAC, rather
than each Fund's investment manager, will compute the net asset value for each
Fund. SFAC does not charge the Funds for this service; however, subject to Board
approval, at some time in the future, SFAC may seek payment for its services
under this agreement.
CAPITAL STRUCTURE
Pending shareholder approval, rather than invest in securities directly, KVF,
KHF and KEUF may each in the future seek to achieve its investment objective by
pooling its assets with assets of other mutual funds for investment in another
investment company having the same investment objective and substantially the
same investment policies and restrictions as such Fund. The purpose of such an
arrangement is to achieve greater operational efficiencies and to reduce costs.
It is expected that any such investment company will be managed by Scudder
Kemper in substantially the same manner as the corresponding Fund. Shareholders
of each Fund will be given at least 30 days' prior notice of any such
investment, although they will not be entitled to vote on the action. Such
investment would be made only if the Trustees determine it to be in the best
interests of the respective Fund and its shareholders.
SUMMARY OF EXPENSES
The "Example" in the prospectus for Class B Shares and Class C Shares of certain
of the Funds is amended in part as follows:
CLASS B SHARES
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<CAPTION>
EXAMPLE(1) FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
You would pay the following expenses on a Contrarian $64 $103 $145 $215
$1,000 investment, assuming (1) 5% annual Dreman High Return Equity 63 102 144 211
return and (2) redemption at the end of Small Cap Value 65 108 153 234
each
time period: Europe 66 110 157 248
Horizon 20+ 65 107 152 244
Horizon 10+ 64 104 146 229
Horizon 5 62 97 135 217
You would pay the following expenses on Contrarian $24 $ 73 $125 $215
the
same investment, assuming no redemption: High Return Equity 23 72 124 211
Small Cap Value 25 78 133 234
Europe 26 80 137 248
Horizon 20+ 25 77 132 244
Horizon 10+ 24 74 126 229
Horizon 5 22 67 115 217
</TABLE>
(1) Assumes conversion to Class A shares six years after purchase. The
contingent deferred sales charge was applied as follows: 1 year (4%), 3
years (3%), 5 years (2%) and 10 years (0%). See "Redemption or Repurchase of
Shares -- Contingent Deferred Sales Charge -- Class B Shares" in the
prospectus for more information regarding the calculation of the contingent
deferred sales charge.
<PAGE> 3
CLASS C SHARES
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<CAPTION>
EXAMPLE(2) FUND 1 YEAR 3 YEARS 5 YEARS 10 YEARS
---------- ---- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C>
You would pay the following expenses on a
$1,000 investment, assuming (1) 5% annual Contrarian $38 $87 $148 $313
return and (2) redemption at the end of High Return Equity 34 73 125 267
each time period: Small Cap Value 32 69 117 252
Europe 36 79 135 288
Horizon 20+ 35 77 132 282
Horizon 10+ 36 81 139 294
Horizon 5 32 68 116 249
You would pay the following expenses on the
same investment, assuming no redemption: Contrarian $28 $87 $148 $313
High Return Equity 24 73 125 267
Small Cap Value 22 69 117 252
Europe 26 79 135 288
Horizon 20+ 25 77 132 282
Horizon 10+ 26 81 139 294
Horizon 5 22 68 116 249
</TABLE>
(2) The contingent deferred sales charge was applied as follows: 1 year (1%), 3
years (0%), 5 years (0%) and 10 years (0%). See "Redemption or Repurchase of
Shares -- Contingent Deferred Sales Charge -- Class C Shares" in the
prospectus.
December 31, 1997
KMF-1N (LOGO)PRINTED ON RECYCLED PAPER
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KEMPER VALUE FUND, INC. ("KVF") KEMPER EUROPE FUND ("KEUF") KEMPER HORIZON FUND ("KHF")
Kemper Contrarian Fund SUPPLEMENT TO Kemper Horizon 20+ Portfolio
Kemper-Dreman High Return STATEMENT OF Kemper Horizon 10+ Portfolio
Equity Fund ADDITIONAL INFORMATION Kemper Horizon 5 Portfolio
Kemper Small Cap Value Fund DATED APRIL 1, 1997 SUPPLEMENT TO
SUPPLEMENT TO ------------------------- STATEMENT OF
STATEMENT OF ADDITIONAL INFORMATION
ADDITIONAL INFORMATION DATED NOVEMBER 21, 1997
DATED APRIL 25, 1997 -------------------------
-------------------------
</TABLE>
KEMPER TARGET EQUITY FUND ("KTEF")
Kemper Retirement Fund-Series VII ("KRF-VII")
SUPPLEMENT TO STATEMENT OF
ADDITIONAL INFORMATION
DATED NOVEMBER 1, 1997
-------------------------
INVESTMENT RESTRICTIONS -- DELETIONS
With respect to KTEF, the following non-fundamental investment restrictions are
deleted:
(with respect to KRF-VII), the Portfolio may not:
(i) Invest in warrants if more than 5% of the Fund's net assets would be
invested in warrants. Included within that amount, but not to exceed 2% of
the Fund's net assets, may be warrants not listed on the New York or
American Stock Exchanges. Warrants acquired in units or attached to
securities may be deemed to be without value for such purposes.
(iii) Invest in oil, gas and other mineral leases.
(iv) Invest more than 5% of the Fund's total assets in securities of
issuers (other than obligations of, or guaranteed by, the U.S. Government,
its agencies or instrumentalities) which with their predecessors have a
record of less than three years continuous operation and equity securities
of issuers which are not readily marketable.
(v) Invest more than 5% of its total assets in restricted securities,
excluding restricted securities eligible for resale pursuant to Rule 144A
under the Securities Act of 1933 that have been determined to be liquid
pursuant to procedures adopted by the Board of Trustees, provided that the
total amount of Fund assets invested in restricted securities and
securities of issuers which with their predecessors have a record of less
than three years continuous operation will not exceed 10% of total assets.
(vi) Invest more than 10% of its total assets in securities of real estate
investment trusts.
(vii) Purchase or retain the securities of any issuer if any of the
officers, trustees or directors of the Trust or its investment adviser owns
beneficially more than 1/2 of 1% of the securities of such issuer and
together own more than 5% of the securities of such issuer.
(x) Invest in interests in oil or gas exploration or development programs,
although it may invest in the securities of issuers which invest in or
sponsor such programs.
<PAGE> 5
OFFICERS AND TRUSTEES/DIRECTORS
Mr. Timbers is no longer a member of the Board of each of the Funds; Mr. Morax
is no longer a member of the Board of KVF and KEUF. The following are new
members of the Boards of each of the Funds:
DANIEL PIERCE (03/18/34), Trustee*, (63), 345 Park Avenue, New York, New York;
Managing Director, Scudder Kemper; Director, Fiduciary Trust Company; Director,
Fiduciary Company Incorporated.
EDMOND D. VILLANI (03/04/47), Trustee*, (50), 345 Park Avenue, New York, New
York; Chief Executive Officer, Scudder Kemper.
PORTFOLIO TRANSACTIONS
To the maximum extent feasible, it is expected that Scudder Kemper will place
orders for portfolio transactions through Scudder Investor Services, Inc., Two
International Place, Boston, Massachusetts 02110 ("SIS"), a corporation
registered as a broker-dealer and a subsidiary of Scudder. SIS will place orders
on behalf of the Funds with issuers, underwriters or other brokers and dealers.
SIS will not receive any commission, fee or other remuneration from the Funds
for this service.
December 31, 1997 (LOGO)PRINTED ON RECYCLED PAPER
KMF-INN
