<PAGE>
Supplement dated December 20, 2000
to the Prospectus for Class A,
Class B and Class C Shares
dated July 31, 2000 of Flag Investors
Emerging Growth Fund, Inc.
The following "Average Annual Total Return" table and footnotes replace
the table and footnotes on page 2 of the prospectus:
Average Annual Total Return (for periods ended December 31, 1999)
Russell 2000
Class A Shares(1) S&P 500(2) Growth(2)
----------------- ---------- -----------
Past One Year 41.04% 21.04% 43.09%
Past Five Years 24.13% 28.56% 18.99%
Past Ten Years 12.66% 18.21% 13.51%
Russell 2000
Class B Shares(1) S&P 500(2) Growth(2)
----------------- ---------- -----------
Past One Year 40.68% 21.04% 43.09%
Since Inception 18.95% 27.15%(3) 14.91%(3)
(6/20/96)
(1) These figures assume the reinvestment of dividends and capital gain
distributions and include the impact of the current maximum sales charges,
which increased on January 18, 2000.
(2) The Standard & Poor's 500 Composite Index is an unmanaged index that is a
widely recognized benchmark of general market performance. The Russell 2000
Index is an unmanaged index that is a widely recognized benchmark of small
company stock performance. The Russell 2000 Growth Index is an unmanaged
index that measures the performance of those Russell 2000 companies with
higher price-to-book ratios and higher forecasted growth values. Each index
is a passive measure of equity market returns. Neither index factors in the
costs of buying, selling and holding securities - costs which are reflected
in the Fund's results. The Advisors are changing the Fund's primary
benchmark from the S&P 500 to the Russell 2000 Growth Index because they
believe the Russell 2000 Growth Index's performance is a better comparison
for the Fund than the S&P 500 since it tracks those companies which are
more characteristic of the investments made by the Fund.
(3) For the period from 6/30/96 through 12/31/99.
SUPPEG
<PAGE>
Supplement dated December 20, 2000 to the
Prospectus for Institutional Shares
dated July 31, 2000 of Flag Investors
Emerging Growth Fund, Inc.
The following "Average Annual Total Return" table and footnotes replace
the table and footnotes on page 1 of the prospectus:
Average Annual Total Return (for periods ended December 31, 1999)
Russell 2000
Institutional Shares(1) S&P 500(2) Growth(2)
----------------------- ---------- ------------
Past One Year 49.65% 21.04% 43.09%
Since Inception 22.27% 27.07%(3) 17.28%(3)
(11/2/95)
(1) These figures assume the reinvestment of dividends and capital gain
distributions.
(2) The Standard & Poor's 500 Composite Index is an unmanaged index that is a
widely recognized benchmark of general market performance. The Russell 2000
Index is an unmanaged index that is a widely recognized benchmark of small
company stock performance. The Russell 2000 Growth Index is an unmanaged
index that measures the performance of those Russell 2000 companies with
higher price-to-book ratios and higher forecasted growth values. Each index
is a passive measure of equity market returns. Neither index factors in the
costs of buying, selling and holding securities - costs which are reflected
in the Fund's results. The Advisors are changing the Fund's primary
benchmark from the S&P 500 to the Russell 2000 Growth Index because they
believe the Russell 2000 Growth Index's performance is a better comparison
for the Fund than the S&P 500 since it tracks those companies which are
more characteristic of the investments made by the Fund.
(3) For the period from 10/31/95 through 12/31/99.
SUPPINSTEG
