[LOGO] KEMPER FUNDS
Kemper Equity Funds
Growth Style
PROSPECTUS February 1, 1999
KEMPER EQUITY FUNDS GROWTH STYLE
222 South Riverside Plaza, Chicago, Illinois 60606 (800) 621-1048
This prospectus describes a choice of funds managed by Scudder Kemper
Investments, Inc.
Kemper Aggressive Growth Fund
Kemper Blue Chip Fund
Kemper Classic Growth Fund*
Kemper Growth Fund
Kemper Small Capitalization Equity Fund
Kemper Technology Fund
Kemper Total Return Fund
Kemper Value+Growth Fund
* Effective January 1, 1999. Kemper Classic Growth Fund refers to the Kemper
shares of Classic Growth Fund.
Mutual funds:
o are not FDIC-insured
o have no bank guarantees
o may lose value
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the adequacy of this prospectus. Any representation to
the contrary is a criminal offense.
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Contents
2 Growth Stock Investing
- --------------------------------------------------------------------------------
2 Investment approach
2 Principal risk factors
3 About The Funds
- --------------------------------------------------------------------------------
3 Kemper Aggressive Growth Fund
8 Kemper Blue Chip fund
13 Kemper Classic Growth Fund
18 Kemper Growth Fund
23 Kemper Small Capitalization Equity Fund
28 Kemper Technology Fund
33 Kemper Total Return Fund
39 Kemper Value+Growth Fund
44 Investment Manager
50 About Your Investment
- --------------------------------------------------------------------------------
50 Choosing a share class
52 Buying shares
57 Selling and exchanging shares
58 Distributions and taxes
59 Transaction information
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GROWTH STOCK INVESTING
INVESTMENT APPROACH
The funds, except Kemper Value+Growth Fund, described in this prospectus invest
primarily in "growth stocks" -- shares of companies that are expected to
experience rapid growth resulting from strong sales, talented management and
dominant market positions. Kemper Value+Growth Fund invests in both growth and
value stocks. Because of their anticipated return potential, growth stocks are
generally in strong demand and tend to carry relatively high price-to-earnings
ratios (P/E) relative to the overall stock market. The investment manager
invests for the funds using a "growth at a reasonable price" strategy that
involves analysis of the companies' fundamental strengths and assessing overall
economic conditions to uncover companies that the investment manager believes
are trading at reasonable prices but that still have the potential for strong
growth.
Each fund approaches stock investing with a different style and risk profile.
PRINCIPAL RISK FACTORS
There are market and investment risks with any security. The value of an
investment in the funds will fluctuate over time and it is possible to lose
money invested in the funds.
Stock Market. Each fund's returns and net asset value will go up and down, and
it is possible to lose money invested in a fund. Stock market movements will
affect the funds' share prices on a daily basis. Declines are possible both in
the overall stock market or in the types of securities held by the funds.
Equity Investing. An investment in the common stock of a company represents a
proportionate ownership interest in that company. Therefore, the fund
participates in the success or failure of any company in which it holds stock.
Compared to other classes of financial assets, such as bonds or cash
equivalents, common stocks have historically offered a greater potential for
gain on investment. However, the market value of common stocks can fluctuate
significantly, reflecting such things as the business performance of the issuing
company, investors' perceptions of the company or the overall stock market and
general economic or financial market movements. Smaller companies are especially
sensitive to these factors and may even become valueless.
Growth Investing. Because of their perceived return potential, growth stocks are
typically in demand and tend to carry relatively high prices. Growth stocks
generally experience greater share price fluctuations as the market reacts to
changing perceptions of the underlying companies' growth potential and broader
economic activity.
Portfolio Strategy. The portfolio management team's skill in choosing
appropriate investments for the funds will determine in large part the funds'
ability to achieve their respective investment objectives.
Inflation. There is a possibility that the rising prices of goods and services
may have the effect of offsetting a fund's real return.
2 Growth Stock Investing
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ABOUT THE FUNDS
KEMPER AGGRESSIVE GROWTH FUND
Investment objective and principal strategies
Kemper Aggressive Growth Fund seeks capital appreciation through the use of
aggressive investment techniques. Except as otherwise indicated, the fund's
investment objective and policies may be changed without a vote of shareholders.
In seeking to achieve its objective, the fund invests primarily in equity
securities of U.S. companies that the investment manager believes offer the best
opportunities for capital appreciation at any given time. The investment manager
pursues a flexible investment strategy in the selection of securities, not
limited to any particular investment sector, industry or company size. The
investment manager may, depending upon market circumstances, emphasize the
securities of small, medium or large-sized companies from time to time. The fund
may invest a significant portion of its assets in initial public offerings
("IPOs"), which are typically securities of small, unseasoned issuers.
The fund may invest 25% or more of its total assets in one or more market
sectors, such as the technology sector.
The investment manager considers a variety of factors to select stocks,
including sustainable, above average earnings growth relative to the overall
stock market, historic earnings, earnings estimates and company fundamentals.
The fund is intended for more aggressive investors who wish to address long-term
capital appreciation goals.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. To the extent that the fund takes aggressive investment
positions, the fund may underperform in markets that favor more conservative
growth stock funds.
Sector Investing. To the extent that the fund focuses its investments in a
market sector, financial, economic, business and other developments affecting
issuers in that sector may have a greater effect on the fund than if it had not
focused its assets in that sector.
Non-diversified. Because the fund is "non-diversified", the fund may invest a
relatively high percentage of its assets in a limited number of issuers.
Accordingly, the fund's investment returns are more likely to be impacted by
changes in the market value and returns of any one portfolio holding.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
Kemper Aggressive Growth Fund 3
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comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1997 1998
---- ----
33.38% 13.98%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 25.50% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was ?18.97% (the third quarter of 1998).
Average Annual Total Returns
For periods ended
Russell
December 31, 1998 Class A Class B Class C 3000 Index
----------------- ------- ------- ------- ----------
One Year 7.40% 10.11% 13.18% 24.14%
Five Years -- -- -- --
Ten Years -- -- -- --
Since Class Inception** 19.68% 21.04% 22.36% *
- -----------
* Index returns for the life of each class: 27.91% (12/31/96) for Class A, B
and C shares.
** Inception date for Class A, B and C shares is 12/31/96.
The Russell 3000 Index is an unmanaged index comprised of the largest
capitalized U.S. domiciled companies whose common stocks trade in the U.S. Index
returns assume reinvestment of dividends and, unlike the fund's returns, do not
reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
4 Kemper Aggressive Growth Fund
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You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.38% 0.38% 0.38%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 1.08% 1.68% 1.63%
----- ----- -----
Total Annual Fund Operating Expenses 1.46% 2.81% 2.76%
Subject to the qualification described below, Scudder Kemper Investments, Inc.
has agreed to temporarily reimburse certain operating expenses to the extent
necessary to limit the fund's "Other Expenses" of Class A shares to 0.87%, Class
B to 0.99% and Class C to 0.97%; provided, however, transfer agency fees and
related out-of-pocket expenses will not be subject to this reimbursement.
Therefore, if transfer agency fees and related out-of-pocket expenses were to
exceed the limits upon Other Expenses for a particular class during the period
of the reimbursement (contrary to current estimates), such expenses would be
charged to the class in the actual amount incurred and Other Expenses for the
class would exceed the limits described above during the period. This
arrangement may be discontinued at any time. As a result, for the fiscal year
ended September 30, 1998, "Other Expenses" were reduced by 0.21%, 0.69% and
0.66% for Class A, Class B and Class C and actual total annual fund operating
expenses were 1.25% for Class A, 2.12% for Class B and 2.10% for Class C. The
information contained in the above table and the example below reflects the
expenses of the fund without taking into account any applicable fee waivers
and/or reimbursements.
Kemper Aggressive Growth Fund 5
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Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds. This example illustrates the impact of
the above fees and expenses on an account with an initial investment of $10,000,
based on the expenses shown above. It assumes a 5% annual return, the
reinvestment of all dividends and distributions and "annual fund operating
expenses" remaining the same each year. The example is hypothetical: actual fund
expenses and returns vary from year to year, and may be higher or lower than
those shown. The example does not reflect sales charges (loads) on reinvested
dividends and other distributions. If these sales charges were included, your
costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $715 $684 $379
3 Years $1,010 $1,171 $856
5 Years $1,327 $1,684 $1,459
10 Years $2,221 $2,514 $3,090
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $715 $284 $279
3 Years $1,010 $871 $856
5 Years $1,327 $1,484 $1,459
10 Years $2,221 $2,514 $3,090
Principal strategies and investments
Under normal conditions, the fund will invest at least 65%, and may invest up to
100%, of its total assets in equity securities. The investment manager uses a
disciplined approach to stock selection and fundamental research to help it
identify quality growth companies whose stocks are selling at reasonable prices.
The investment manager relies heavily upon the fundamental analysis and research
of its large research staff, and will generally seek to invest in growth
companies whose value may not be fully recognized by the market at large.
Such companies may be:
o expected to achieve accelerating earnings growth, perhaps due to strong
demand for their products or services;
o undervalued, based upon price/earnings ratios, price/book value ratios and
other measures;
o undergoing financial restructuring;
o involved in takeover or arbitrage situations;
o expected to benefit from evolving market cycles or changing economic
conditions; or
6 Kemper Aggressive Growth Fund
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o representing special situations, such as changes in management or favorable
regulatory developments.
Because of the flexible nature of the fund's investment policies, the fund may
have a higher portfolio turnover than a typical equity mutual fund. To some
extent, the fund may trade in securities for the short term. In addition, the
investment manager may use market volatility in an attempt to capitalize on
apparently unwarranted price fluctuations, both to purchase or increase
undervalued positions and to sell or reduce overvalued holdings. For example,
during market declines, the fund may add to positions in favored securities,
while becoming more aggressive as it gradually reduces the number of companies
represented in its portfolio. Conversely, in rising markets, the fund may reduce
or eliminate fully valued positions, while becoming more conservative as it
gradually increases the number of companies in its portfolio.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would affect the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in cash or defensive type securities, such as high-grade debt securities,
securities of the U.S. Government or its agencies and high quality money market
instruments, including repurchase agreements. Because this defensive policy
differs from the fund's investment objective, the fund may not achieve its goals
during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risk
If the aggressive growth types of stocks the fund invests in do not produce
expected earnings results, they may lose significant share value.
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
Kemper Aggressive Growth Fund 7
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KEMPER BLUE CHIP FUND
Investment objective and principal strategies
Kemper Blue Chip Fund seeks growth of capital and of income. Except as otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
The fund invests in a diversified portfolio, emphasizing investments primarily
in U.S. common stocks of large, well known, high quality companies. Companies of
this general type are often referred to as "Blue Chip" companies and are similar
in size to those included in the Russell 1000 Index -- a widely used benchmark
of large stock performance. Such companies generally have an established history
of earnings and dividends. "Blue Chip" companies are generally identified by
their substantial capitalization, easy access to credit, good industry position
and superior management structure.
The fund may be appropriate for investors who wish to establish the foundation
of a growth-oriented portfolio, or for investors who wish to diversify an
investment portfolio into large-cap equity stocks.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. To the extent that the fund invests in larger, more
established companies, the fund may underperform in markets that do not favor
growth stock funds.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
8 Kemper Blue Chip Fund
<PAGE>
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
27.26% 2.41% 44.43% -1.20% 3.82% -5.16% 31.72% 27.70% 26.21% 14.40%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 19.21% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was ?13.81% (the third quarter of 1990).
Average Annual Total Returns
For periods ended Russell
December 31, 1998 Class A Class B Class C 1000 Index
----------------- ------- ------- ------- ----------
One Year 7.84% 10.66% 13.58% 27.02%
Five Years 16.77% -- -- 23.37%
Ten Years 15.41% -- -- 19.03%
Since Class Inception** 13.17% 19.78% 20.14% *
- -----------
* Index returns for the life of each class: 19.47% (11/30/87) for Class A and
26.16% (5/31/94) for Class B and C shares.
** Inception dates for Class A, B and C shares are 11/23/87, 5/31/94 and
5/31/94, respectively.
The Russell 1000 Index is an unmanaged capitalization weighted price only index
comprised of the largest capitalized U.S. companies whose common stocks are
traded in the United States. Index returns assume reinvestment of dividends and,
unlike the fund's returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Kemper Blue Chip Fund 9
<PAGE>
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load) Imposed
on Purchases (as % of offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.56% 0.56% 0.56%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.73% 0.79% 0.72%
----- ----- -----
Total Annual Fund Operating Expenses 1.29% 2.10% 2.03%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $699 $613 $306
3 Years $960 $958 $637
5 Years $1,242 $1,329 $1,093
10 Years $2,042 $2,034 $2,358
10 Kemper Blue Chip Fund
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Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $699 $213 $206
3 Years $960 $658 $637
5 Years $1,242 $1,129 $1,093
10 Years $2,042 $2,034 $2,358
Principal strategies and investments
Under normal market conditions, the fund will invest at least 65%, and may
invest up to 100%, of its total assets in the common stocks of companies with a
market capitalization of at least $1 billion at the time of investment.
"Blue Chip" companies are believed to generally exhibit less investment risk and
less price volatility than companies lacking these high quality characteristics,
such as smaller, less seasoned companies. In addition, the large market of
publicly held shares for such companies and the generally high trading volume in
those shares results in a relatively high degree of liquidity for such
investments. The characteristics of high quality and high liquidity of "Blue
Chip" investments should make the market for such stocks attractive to investors
both within and outside the United States. The fund will generally attempt to
avoid speculative securities or those with significant speculative
characteristics.
In general, the fund will seek to invest in those established, high quality
companies whose industries are experiencing favorable secular or cyclical
change. Thus, in seeking its objective the fund will endeavor to select its
investments from high quality companies operating in the more attractive
industries. To select stocks, the investment manager researches a variety of
factors, including historic and projected earnings growth rates, company
fundamentals and balance sheet data.
A stock is typically sold when, in the opinion of the investment manager, (i)
the stock has reached its fair market value and its appreciation potential is
limited, (ii) a company's fundamentals have deteriorated or (iii) the fund's
portfolio is too heavily weighted in a particular stock or industry sector.
There are risks inherent in the investment in any security, including shares of
the fund. The investment manager attempts to reduce risk through diversification
of the fund's portfolio and fundamental research; however, there is no guarantee
that such efforts will be successful. The investment manager believes that there
are opportunities for growth of capital and growth of dividends from investments
in "Blue Chip" companies over time. The fund's shares are intended for long-term
investment.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would affect the
Kemper Blue Chip Fund 11
<PAGE>
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risk
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
12 Kemper Blue Chip Fund
<PAGE>
KEMPER CLASSIC GROWTH FUND
Investment objectives and principal strategies
Classic Growth Fund seeks to provide long-term growth of capital with reduced
share price volatility compared to other growth mutual funds. Except as
otherwise indicated, the fund's investment objective and policies may be changed
without a vote of shareholders.
The fund invests in common stocks to achieve its objective. The fund is broadly
diversified and managed, with attention paid to stock valuation and risk, in
order to attempt to moderate share price volatility. The fund focuses on firms
with a record of strong and sustainable earnings growth, solid management with a
proven ability to add value over time and reasonable stock market valuations --
in short, firms with solid growth potential. While current income is not a
stated objective of the fund, many of the fund's securities may provide regular
dividends, which are also expected to grow over time.
The fund is intended to be a major component of the equity portion of a
long-term portfolio and, as such, can be an excellent retirement investment
vehicle. As part of an investment plan geared towards retirement or long-term
investment, the fund can complement an individual portfolio consisting of more
or less aggressive funds, considering individual timeframes and tolerance for
risk. As an investment for those already in their retirement years, this fund
seeks long-term growth, but with less share price volatility than other growth
funds.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. To the extent that the fund seeks to moderate share price
volatility compared with other growth stock mutual funds, the fund may
underperform in markets that favor more aggressive growth stock funds.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed, and comparing this
information to a broad measure of market performance. Of course, past
performance is not necessarily an indication of future performance. The fund
currently offers four classes of shares. The original class of shares is
designated Class S. This prospectus sets forth information about Classes A, B
and C. Because Classes A, B and C had not commenced operations as of 12/31/97,
the performance information set forth below is for Class S shares, and does not
reflect sales charges, which reduce return. All share classes invest in the same
underlying portfolio of securities and have the same management team. Because of
different fees and expenses, performance of share classes will differ.
Kemper Classic Growth Fund 13
<PAGE>
Total return for year ended December 31
[The information below was represented by a bar graph in the printed materials.]
1997
----
34.38%
For the period included in the bar chart, the Class S shares' highest return for
a calendar quarter was 20.73% (the second quarter of 1997), and the Class S
shares' lowest return for a calendar quarter was ?1.7% (the fourth quarter of
1997).
The Class A shares' year-to-date total return as of September 30, 1998 was
- -2.09%.
Average Annual Total Returns
For periods ended
December 31, 1997 Class S S&P 500 Index+
----------------- ------- --------------
One Year 34.86% 33.38%
Since Inception (9/9/96) 36.89% 34.18% (9/30/96)
- -----------
+ The Standard & Poor's (S&P) 500 Index is an unmanaged
capitalization-weighted measure of 500 widely held common stocks listed on
the New York Stock Exchange and American Stock Exchange and traded on the
Nasdaq Stock Market, Inc. Index returns assume reinvestment of dividends
and, unlike fund returns, do not reflect any fees, expenses or sales
charges.
Fee and expense information
This information is designed to help you understand the fees and expenses that
you may pay if you buy and hold shares of the fund. Each class of shares has a
different set of transaction fees, which will vary based on the length of time
you hold shares in the fund and the amount of your investment. You will find
details about fee discounts and waivers in the Buying shares and Choosing a
share class -- Special features sections of this prospectus.
14 Kemper Classic Growth Fund
<PAGE>
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge Imposed on
Reinvested Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.70% 0.70% 0.70%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 1.04% 1.07% 1.55%
----- ----- -----
Total Annual Fund Operating Expenses 1.74% 2.52% 3.00%
For the fiscal year ended August 31, 1998, the fund received reimbursement in
the amount of 0.50%, 0.40% and 0.91% for Class A, B and C shares, respectively.
As a result, actual total fund operating expenses were 1.24%, 2.12% and 2.09%
for Class A, B and C shares, respectively. The investment manager has agreed to
continue to waive 0.25% of its management fee until December 31, 1999. The
information contained in the above table and the example below reflects the
expenses of the fund without taking into account any applicable fee waivers
and/or reimbursements.
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown.
Kemper Classic Growth Fund 15
<PAGE>
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $742 $665 $405
3 Years $1,091 $1,107 $927
5 Years $1,464 $1,567 $1,577
10 Years $2,509 N/A $3,318
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $742 $255 $303
3 Years $1,091 $785 $927
5 Years $1,464 $1,340 $1,577
10 Years $2,509 N/A $3,318
Principal strategies and investments
Under normal market conditions, the fund invests primarily in a diversified
portfolio of common stocks which the investment manager believes offer
above-average appreciation potential, while offering the potential for less
share price volatility than other growth mutual funds.
In seeking such investments, the investment manager focuses its investments in
high quality, medium- to large-sized U.S. companies with leading competitive
positions. Using in-depth fundamental company research, along with proprietary
financial quality, stock rating and risk measures, the investment manager looks
for companies with:
o strong and sustainable earnings growth
o solid management with a proven ability to add value over time
o reasonable stock market valuations.
These companies often have important business franchises, leading products,
services or technologies, or dominant marketing and distribution systems.
The fund employs a three-step process designed to help identify attractive
growth stocks. The fund's management team begins with a universe of quality
companies with market capitalizations greater than $2 billion. Then they narrow
the universe using fundamental and quantitative analysis to rank stocks based on
several factors including:
o strong fundamentals -- include stocks of companies that they believe have
the ability to deliver consistent earnings growth
o attractive valuations -- identify stocks that they believe are priced
attractively based on expectations for the company's growth prospects
o attractive share price performance -- a proven ability to create value for
shareholders over time.
16 Kemper Classic Growth Fund
<PAGE>
The fund allocates its investments among different industries and companies, and
adjusts its portfolio securities based on long-term investment considerations as
opposed to short-term trading. The fund emphasizes U.S. investments, although it
can commit a portion of its assets to the equity securities of foreign growth
companies that meet the criteria applicable to domestic investments.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goal during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques which may impact fund performance,
including options, futures and other strategic transactions. The fund is limited
to 5% of net assets for initial margin and premium amounts on futures positions
considered speculative by the Commodities Futures Trading Commission.
More information about these and other investments and strategies is provided in
the Statement of Additional Information. Of course, there can be no guarantee
that by following these investment strategies, the fund will achieve its
objective.
Additional principal risks
Foreign investing risk. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
Kemper Classic Growth Fund 17
<PAGE>
KEMPER GROWTH FUND
Investment objective and principal strategies
Kemper Growth Fund seeks growth of capital through professional management and
diversification of investments in securities that the investment manager
believes have the potential for capital appreciation. Except as otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders. The fund invests primarily in a diversified portfolio of
large-capitalization U.S. common stocks of companies that the investment manager
believes have above-average growth prospects. Companies in which the fund
invests generally are similar in size to those included in the Russell 1000
Growth Index -- a widely used benchmark of larger stock performance. To select
securities with the potential for high growth, the investment manager evaluates
a variety of factors, historic and projected earnings rates, stock prices,
company balance sheets and fundamentals. The investment manager seeks stocks
that are reasonably priced relative to its analysis for their growth potential.
The fund may be appropriate for investors who are seeking to add a more
aggressive core equity holding.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. If the growth stocks the fund invests in do not produce the
expected earnings growth, their share price may drop and the fund's net asset
value would decline.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
18 Kemper Growth Fund
<PAGE>
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
30.75% 3.86% 66.85% -1.56% 1.63% -5.91% 31.87% 16.34% 16.80% 14.22%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 27.57% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was -22.18% (the third quarter of 1998).
Average Annual Total Returns
For periods ended Russell 1000
December 31, 1998 Class A Class B Class C Growth Index
----------------- ------- ------- ------- ------------
One Year 7.64% 9.98% 13.37% 38.71%
Five Years 12.67% -- -- 25.70%
Ten Years 15.19% -- -- 20.57%
Since Class Inception** 12.78% 14.96% 15.44% *
- -----------
* Index returns for the life of each class: 29.05% (5/31/94) for Class B and
Class C shares. The index was not in existence on the A shares' inception
date.
** Inception dates for Class A, B and C shares are 4/4/66, 5/31/94 and
5/31/94, respectively.
The Russell 1000 Growth Index is an unmanaged index comprised of common stocks
of larger U.S. companies with greater than average growth orientation and
represents the universe of stocks from which "earnings/growth" money managers
typically select. Index returns assume reinvestment of dividends and, unlike the
fund's returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Kemper Growth Fund 19
<PAGE>
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load) Imposed
on Purchases (as % of offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load) Imposed
on Reinvested Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.54% 0.54% 0.54%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.50% 0.85% 0.69%
----- ----- -----
Total Annual Fund Operating Expenses 1.04% 2.14% 1.98%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $675 $617 $301
3 Years $887 $970 $621
5 Years $1,116 $1,349 $1,068
10 Years $1,773 $1,932 $2,306
20 Kemper Growth Fund
<PAGE>
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $675 $217 $201
3 Years $887 $670 $621
5 Years $1,116 $1,149 $1,068
10 Years $1,773 $1,932 $2,306
Principal strategies and investments
In seeking to achieve its objective, the fund will invest primarily in equity
securities that the fund's investment manager believes offer the potential for
increasing the fund's total asset value.
Some of the factors the fund's portfolio management team will consider in making
its investments are:
o patterns of increasing growth in sales and earnings;
o the development of new or improved products or services;
o favorable outlooks for growth in the industry;
o the probability of increased operating efficiencies;
o emphasis on research and development;
o cyclical conditions; and
o other signs that a company is expected to show greater than average capital
appreciation and earnings growth.
In seeking to obtain capital appreciation, the investment manager seeks
reasonably priced securities that it believes have the potential to appreciate
at an above-average rate, relative to the stock market as a whole. The
investment manager anticipates making purchases and sales on the basis of
valuations and fundamentals. The fund attempts to identify under-valued
situations that it anticipates will appreciate over a longer time period.
However, because the valuations of growth-style securities may change more
rapidly than the valuations of other types of investments, the investment
manager expects to hold certain securities for a shorter period of time (that
is, under a year). The fund will emphasize fundamental research to select
securities.
The fund's investment policy may involve a higher level of risk than is inherent
in other types of investments. Since any income received from such securities
will be entirely incidental, an investor should not consider a purchase of fund
shares to be a complete investment program.
A stock is typically sold when, in the opinion of the portfolio manager, (i) the
stock has reached its fair market value, or (ii) the company's fundamentals have
deteriorated.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
Kemper Growth Fund 21
<PAGE>
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs that would affect the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risk
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
22 Kemper Growth Fund
<PAGE>
KEMPER SMALL CAPITALIZATION EQUITY FUND
Investment objective and principal strategies
Kemper Small Capitalization Equity Fund seeks maximum appreciation of investors'
capital. Current income will not be a significant factor. Except as otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
The fund invests primarily in a diversified portfolio of domestic small company
stocks that the investment manager believes have the potential for long-term
capital growth. Companies in which the fund invests generally are similar in
size to those included in the Russell 2000 Index -- a widely used benchmark of
small stock performance. To select securities, the investment manager evaluates
a variety of factors, including historic earnings growth, projected earnings
growth, return on equity, debt to capital ratios, and company fundamentals. The
investment manager seeks attractive areas for investment opportunity arising
from such factors as technological advances, new marketing methods, and changes
in the economy and population.
The fund may be a good choice for investors seeking to add the growth potential
of small company stocks to a diversified portfolio and for investors who wish to
balance existing large capitalization holdings.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio, and inflation risk. You will find a discussion of these under
"Growth Stock Investing" at the front of this prospectus.
Management Style. The fund's investment focus on smaller companies involves
greater risk than a fund that invests primarily in larger, more established
companies.
Small Company Risk. While small company stocks have historically outperformed
large company stocks, they also have been subject to greater investment risk.
The risks generally associated with small companies include more limited product
lines, markets and financial resources, lack of management depth or experience,
dependency on key personnel and vulnerability to adverse market and economic
developments. Accordingly, the prices of small company stocks tend to be more
volatile than prices of large company stocks. Further, the prices of small
company stocks are often adversely affected by limited trading volumes and the
lack of publicly available information.
Also, because small companies normally have fewer shares outstanding and these
shares generally trade less frequently than large companies, it may be more
difficult for the fund to buy and sell significant amounts of small company
shares without having an unfavorable impact on the shares' stock market price.
Kemper Small Capitalization Equity Fund 23
<PAGE>
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
26.13% -5.22% 69.01% -0.12% 16.79% -3.31% 31.17% 14.09% 20.47% -3.10%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 24.87% (the first quarter of 1991), and the fund's lowest
return for a calendar quarter was ?27.85% (the fourth quarter of 1998).
Average Annual Total Returns
For periods ended Russell
December 31, 1998 Class A Class B Class C 2000 Index
----------------- ------- ------- ------- ----------
One Year -8.69% -6.88% -3.60% -2.55%
Five Years 9.76% -- -- 16.40%
Ten Years 14.17% -- -- 15.77%
Since Class Inception** 12.18% 11.87% 12.30% *
- -----------
* Index returns for the life of each class: 13.81% (5/31/94) for Class B and
Class C shares. The Index was not in existence on the A shares' inception
date.
** Inception dates for Class A, B and C shares are 2/20/69, 5/31/94 and
5/31/94, respectively.
The Russell 2000 Index is an unmanaged capitalization-weighted measure of
approximately 2000 small U.S. stocks. Index returns assume reinvestment of
dividends and, unlike the fund's returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class
24 Kemper Small Capitalization Equity Fund
<PAGE>
of shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.36% 0.36% 0.36%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.54% 1.03% 0.95%
----- ----- -----
Total Annual Fund Operating Expenses 0.90% 2.14% 2.06%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Kemper Small Capitalization Equity Fund 25
<PAGE>
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $662 $617 $309
3 Years $845 $970 $646
5 Years $1,045 $1,349 $1,108
10 Years $1,619 $1,862 $2,390
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $662 $217 $209
3 Years $845 $670 $646
5 Years $1,045 $1,149 $1,108
10 Years $1,619 $1,862 $2,390
Principal strategies and investments
Under normal circumstances, the fund will invest at least 65% of its total
assets in the equity securities of smaller companies, i.e., those having a
market capitalization of $1 billion or less at the time of investment.
Many of these companies would be in the early stages of their life cycle.
Currently, the investment manager believes that investment opportunities may be
found among the following types of companies:
o companies engaged in high growth fields such as electronics, medical
technology, computer software and specialty retailing;
o companies having a significantly improved earnings outlook as the result of
a changed economic environment, acquisitions, mergers, new management,
changed corporate strategy or product innovation;
o companies supplying new or rapidly growing services to consumers and
businesses in such fields as automation, data processing, communications,
marketing and finance; and
o companies with innovative concepts or ideas.
In the selection of investments, long-term capital appreciation will take
precedence over short range market fluctuations. The fund does not intend to
engage actively in trading for short-term profits, although it may occasionally
make investments for short-term capital appreciation when such action is
believed to be desirable and consistent with sound investment procedure.
A stock is typically sold when, in the opinion of the portfolio manager, (i) the
stock has reached its fair market value and its appreciation potential is
limited, or (ii) a company's fundamentals have deteriorated.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would affect the
fund's performance over time. In addition, shareholders may incur taxes on any
realized capital gains.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
26 Kemper Small Capitalization Equity Fund
<PAGE>
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risk
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
Kemper Small Capitalization Equity Fund 27
<PAGE>
KEMPER TECHNOLOGY FUND
Investment objective and principal strategies
Kemper Technology Fund seeks growth of capital. Except as otherwise indicated,
the fund's investment objective and policies may be changed without a vote of
shareholders.
The fund invests primarily in domestic common stocks of companies in the
technology sector which the investment manager expects to benefit from
technological advances and improvements, with an emphasis on the securities of
companies that the investment manager believes have potential for long-term
capital growth. The investment manager considers a variety of factors in
selecting securities, including historic earnings growth, earnings growth
estimates, stock price, balance sheets, and company fundamentals.
Receipt of income from such securities will be entirely incidental.
The fund may be a good choice for more aggressive investors seeking to pursue
maximum capital appreciation.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. Because many of the companies benefiting from technological
advances are smaller in size, the fund involves greater risk than a fund that
invests primarily in larger, more established companies. Also, emphasis by the
fund on technology companies involves greater risk than investment in a broader
range of sectors and securities.
Sector Investing. The fund emphasizes technology companies, therefore to the
extent that the fund focuses its investments in a market sector, financial,
business and other developments affecting issuers in that sector may have a
greater effect on the fund than if it had not focused its assets in that sector.
In addition, an investment in the fund may involve significantly greater risks
and greater volatility than a diversified equity mutual fund that is invested in
issuers in various sectors or industries. The fund is subject to the risk that a
particular group of related stocks will decline in price due to sector-specific
developments.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
28 Kemper Technology Fund
<PAGE>
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
24.81% 0.44% 44.35% -1.19% 11.69% 11.35% 42.77% 20.60% 7.11% 43.59%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 37.51% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was ?16.80% (the third quarter of 1990).
Average Annual Total Returns
For periods ended Russell 1000
December 31, 1998 Class A Class B Class C Growth Index
----------------- ------- ------- ------- -------------
One Year 35.31% 39.17% 42.78% 38.71%
Five Years 22.69% -- -- 25.70%
Ten Years 18.69% -- -- 20.57%
Since Class Inception** 13.60% 25.61% 26.06% *
- -----------
* Index returns for the life of each class: 29.05% (5/31/94) for Class B and
Class C shares. The Index was not in existence on the A shares' inception
date.
** Inception dates for Class A, B and C shares are 9/7/48, 5/31/94 and
5/31/94, respectively.
The Russell 1000 Growth Index is an unmanaged index comprised of common stocks
of larger U.S. companies with greater than average growth orientation and
represents the universe of stocks from which "earnings/growth" money managers
typically select. Index returns assume reinvestment of dividends and, unlike the
fund's returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Kemper Technology Fund 29
<PAGE>
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
1 The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.55% 0.55% 0.55%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.37% 0.55% 0.51%
----- ----- -----
Total Annual Fund Operating Expenses 0.92% 1.85% 1.81%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $663 $588 $284
3 Years $851 $882 $569
5 Years $1,055 $1,201 $980
10 Years $1,641 $1,701 $2,127
30 Kemper Technology Fund
<PAGE>
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $663 $188 $184
3 Years $851 $582 $569
5 Years $1,055 $1,001 $980
10 Years $1,641 $1,701 $2,127
Principal strategies and investments
The fund invests principally in the common stock of companies in the technology
sector. Technology companies include those whose processes, products or
services, in the judgment of the investment manager, are or may be expected to
significantly benefit from scientific developments and the application of
technical advances in industry, manufacturing and commerce. This investment
policy permits the investment manager to seek stocks having superior growth
potential in virtually any industry in which they may be found. Examples of the
types of industries the fund may invest in are:
o aerospace;
o electronics;
o genetic engineering;
o geology;
o information sciences (including computers and computer software);
o medicine (including pharmacology, biotechnology and biophysics); and
o oceanography.
A stock is typically sold when, in the opinion of the portfolio manager, (i) the
stock has reached its fair market value and its appreciation potential is
limited, or (ii) a company's fundamentals have deteriorated.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
Because the fund may engage in active and frequent trading of portfolio
securities, the fund may have higher transaction costs which would affect the
the fund's performance over time. In addition, shareholders may incur taxes on
any realized capital gains.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Kemper Technology Fund 31
<PAGE>
Additional risks
Small company risk. While small company stocks have historically outperformed
large company stocks, they also have been subject to greater investment risk.
The risks generally associated with small companies include more limited product
lines, markets and financial resources, lack of management depth or experience,
dependency on key personnel and vulnerability to adverse market and economic
developments. Accordingly, the prices of small company stocks tend to be more
volatile than prices of large company stocks. Further, the prices of small
company stocks are often adversely affected by limited trading volumes and the
lack of publicly available information.
Also, because small companies normally have fewer shares outstanding and these
shares generally trade less frequently than large companies, it may be more
difficult for the fund to buy and sell significant amounts of small company
shares without having an unfavorable impact on the shares' stock market price.
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
32 Kemper Technology Fund
<PAGE>
KEMPER TOTAL RETURN FUND
Investment objective and principal strategies
Kemper Total Return Fund seeks the highest total return, a combination of income
and capital appreciation, consistent with reasonable risk. Except as otherwise
indicated, the fund's investment objective and policies may be changed without a
vote of shareholders.
The fund's investments will normally consist of domestic equity and fixed income
securities. The percentage of assets invested in specific categories of fixed
income and equity securities will vary from time to time depending upon the
judgment of the fund's portfolio management team as to general market and
economic conditions, trends in yields and interest rates and changes in fiscal
or monetary policies. In pursuit of capital appreciation, the investment manager
seeks growth-oriented, quality stocks of companies of any size that it believes
are attractively priced and have strong fundamentals. The fund also emphasizes
current income in seeking its objective. Fixed income investments may be of any
rating, and may include lower-rated high yield/high risk securities.
Because the fund invests in both stocks and bonds, it may be a good choice for
investors seeking diversification in a single fund. The fund may be an
appropriate choice for more conservative equity investors. The balanced approach
of the fund may also appeal to investors who are interested in pursuing income
and capital appreciation.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. To the extent that the fund invests in both stocks and bonds
to seek to moderate share price volatility compared with other growth stock
mutual funds, the fund may underperform in markets that favor more aggressive
growth stock funds.
Interest Rates. Interest rate risk is the risk that the value of a fund's
investments will go down when interest rates rise. Normally the value of a
fund's investments varies inversely with changes in interest rates so that in
periods of rising interest rates, the value of a fund's portfolio declines.
Maturity. Generally, longer-term securities are more susceptible to changes in
value as a result of interest-rate changes than are shorter-term securities.
Credit Risk. Credit risk refers to the risk that an issuer of a bond may default
with respect to the payment of principal and interest. The lower a bond is
rated, the more it is considered to be a speculative or risky investment.
Prepayment Risk. Prepayment risk is commonly associated with pooled debt
securities, such as mortgage-backed securities and asset-backed securities, but
may affect other debt securities as well. When the underlying debt obligations
Kemper Total Return Fund 33
<PAGE>
are prepaid ahead of schedule, the return on the security will be lower than
expected. Prepayment rates usually increase when interest rates are falling.
High Yield, Fixed Income Securities. Investments in high yield securities (often
referred to as "junk bonds") are more likely to be affected by negative
developments relating to their issuer or industry, and entail relatively greater
risk of loss of income and principal than investments in higher rated
securities. Market prices of high yield securities may fluctuate more than
market prices of higher rated securities.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998
---- ---- ---- ---- ---- ---- ---- ---- ---- ----
19.83% 4.11% 40.16% 2.49% 11.59% -9.18% 25.80% 16.25% 19.14% 15.91%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 17.08% (the first quarter of 1991), and the fund's lowest
return for a calendar quarter was ?9.82% (the third quarter of 1990).
34 Kemper Total Return Fund
<PAGE>
Average Annual Total Returns
For periods ended Russell 1000
December 31, 1998 Class A Class B Class C Growth Index
----------------- ------- ------- ------- ------------
One Year 9.21% 11.68% 14.79% 38.71%
Five Years 11.57% -- -- 25.70%
Ten Years 13.20% -- -- 20.57%
Since Class Inception** 12.00% 14.39% 14.77% *
- -----------
* Index returns for the life of each class: 29.05% (5/31/94) for Class B and
C shares. The Index was not in existence on the Class A shares' inception
date.
** Inception dates for Class A, B and C shares are 3/2/64, 5/31/94 and
5/31/94, respectively.
The Russell 1000 Growth Index is an unmanaged index comprised of common stocks
of larger U.S. companies with greater than average growth orientation and
represents the universe of stocks from which "earnings/growth" money managers
typically select. Index returns assume reinvestment of dividends and, unlike the
fund's returns, do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Kemper Total Return Fund 35
<PAGE>
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.53% 0.53% 0.53%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.48% 0.73% 0.62%
----- ----- -----
Total Annual Fund Operating Expenses 1.01% 2.01% 1.90%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $672 $604 $293
3 Years $878 $931 $597
5 Years $1,101 $1,283 $1,026
10 Years $1,740 $1,841 $2,222
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $672 $204 $193
3 Years $878 $631 $597
5 Years $1,101 $1,083 $1,026
10 Years $1,740 $1,841 $2,222
Principal strategies and investments
The fund follows a highly flexible program of investing in common stocks and
bonds in pursuit of its goal for total return.
The equity securities that the fund invests in are those that the investment
manager believes are reasonably priced relative their earnings growth potential.
To select stocks, the investment manager evaluates a variety of factors
including historic and projected earnings growth, balance sheets and stock
prices. The investment manager expects to follow a disciplined buy and sell
strategy, in which proprietary research gathered from meetings with, among
others, senior management of companies in which the fund invests, government
experts and industry leaders plays an important role.
36 Kemper Total Return Fund
<PAGE>
The fixed income securities the fund invests in include bonds and other debt
securities (such as U.S. and foreign government securities and investment grade
and high yield corporate obligations) and preferred stocks, some of which may
have a call on common stocks through attached warrants or a conversion
privilege. The fund may invest in high yield fixed income securities which are
in the lower rating categories and those which are unrated. Thus, the fund could
invest in some instruments considered by the rating services to have
predominantly speculative characteristics. Investments in lower rated or
non-rated securities, while generally providing greater income and opportunity
for gain than investments in higher rated securities, entail greater risk of
loss of income and principal. Currently, it is anticipated that the fund would
invest less than 35% of its total assets in high yield fixed income securities.
The fund may invest up to 25% of its total assets in foreign securities.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risks
High Yield Securities. High yield, fixed income securities (commonly referred to
as "junk bonds") have widely varying characteristics and quality. These lower
rated and non-rated fixed income securities are considered, on balance, to be
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation and generally will
involve more credit risk than securities in the higher rating categories. The
market values of these securities tend to reflect individual corporate
developments to a greater extent than do those of higher rated securities, which
react primarily to fluctuations in the general level of interest rates. Such
lower rated securities also are more sensitive to economic conditions than are
higher rated securities. Adverse publicity and investor perceptions regarding
lower rated bonds, whether or not based on fundamental analysis, may depress the
prices for such securities. These and other factors adversely affecting the
market value of high yield securities will adversely affect the fund's net asset
value. In addition, the fund may have difficulty disposing of certain junk bonds
because they may have a thin trading market. Because not all dealers maintain
markets in all high yield securities, the fund anticipates that such securities
could be sold only to a limited number of dealers or institutional investors.
The lack of a liquid secondary market may have an adverse effect on the market
price and the fund's ability to dispose of particular issues and may also make
it more difficult
Kemper Total Return Fund 37
<PAGE>
for the fund to obtain accurate market quotations for purposes of valuing the
fund's assets. Market quotations generally are available on many high yield
issues only from a limited number of dealers and may not necessarily represent
firm bids of such dealers or prices for actual sales.
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
38 Kemper Total Return Fund
<PAGE>
KEMPER VALUE+GROWTH FUND
Investment objective and principal strategies
Kemper Value+Growth Fund seeks growth of capital through a portfolio of growth
and value stocks. A secondary objective of the fund is the reduction of risk
over a full market cycle compared to a portfolio of only growth stocks or only
value stocks. Except as otherwise indicated, the fund's investment objective and
policies may be changed without a vote of shareholders.
The fund invests primarily in a diversified portfolio of U.S. common stocks. The
investment manager combines value and growth stocks using sophisticated
quantitative modeling. The fund may invest in the stocks of companies of any
size, but focuses on the 1500 U.S. companies with the largest market
capitalization. Typically companies in which the fund invests will have a market
capitalization in excess of $1 billion.
Growth stocks are stocks of companies whose earnings per share are expected by
the investment manager to grow faster than the market average. Growth stocks
tend to trade at higher price-to-earnings (P/E) ratios than the general market,
but the investment manager believes that the potential of such stocks for above
average earnings more than justifies their price.
Value stocks are considered "bargain stocks" because they are perceived as
undervalued, i.e., attractively priced in relation to their earnings potential
(low P/E ratios). Value stocks typically have low P/E ratios and dividend yields
higher than the average of the companies represented in the Standard & Poor's
500 Stock Index.
The fund may be appropriate for investors seeking to conveniently combine value
stocks and growth stocks in a single fund.
Principal risks
The fund's principal risks are associated with investing in the stock market,
equity and growth investing, the investment manager's skill in managing the
fund's portfolio and inflation risk. You will find a discussion of these risks
under "Growth Stock Investing" at the front of this prospectus.
Management Style. To the extent that the fund seeks to moderate share price
volatility by investing in both value and growth stocks, the fund may
underperform in markets that strongly favor pure growth or value funds.
Past performance
The chart and table below provide some indication of the risks of investing in
the fund by illustrating how the fund has performed from year to year, and
comparing this information to a broad measure of market performance. Of course,
past performance is not necessarily an indication of future performance.
The information provided in the chart is for Class A shares, and does not
reflect sales charges, which reduce return.
Kemper Value+Growth Fund 39
<PAGE>
Total returns for years ended December 31
[The information below was represented by a bar graph in the printed materials.]
1996 1997 1998
---- ---- ----
25.56% 24.52% 18.88%
For the period included in the bar chart, the fund's highest return for a
calendar quarter was 20.66% (the fourth quarter of 1998), and the fund's lowest
return for a calendar quarter was ?12.62% (the third quarter of 1998).
Average Annual Total Returns
For periods ended Russell 1000
December 31, 1998 Class A Class B Class C Index
----------------- ------- ------- ------- -----
One Year 12.04% 14.88% 17.80% 27.02%
Five Years -- -- -- --
Ten Years -- -- -- --
Since Class Inception** 21.40% 22.26% 22.66% *
- -----------
* Index returns for the life of each class: 28.11% (10/31/95) for Class A, B
and C shares.
** Inception date for Class A, B and C shares is 10/16/95.
The Russell 1000 Index is an unmanaged capitalization-weighted price only index
comprised of the largest capitalized U.S. companies whose common stocks are
traded in the United States.
Index returns assume reinvestment of dividends and, unlike the fund's returns,
do not reflect any fees or expenses.
Fee and expense information
The following information is designed to help you understand the fees and
expenses that you may pay if you buy and hold shares of the fund. Each class of
shares has a different set of transaction fees, which will vary based on the
length of time you hold shares in the fund and the amount of your investment.
You will find details about fee discounts and waivers in the Buying shares and
Choosing a share class -- Special features sections of this prospectus.
40 Kemper Value+Growth Fund
<PAGE>
Shareholder fees: Fees paid directly from your investment.
Class A Class B Class C
------- ------- -------
Maximum Sales Charge (Load)
Imposed on Purchases (as % of
offering price) 5.75% None None
Maximum Deferred Sales Charge
(Load) (as % of redemption proceeds) None(1) 4% 1%
Maximum Sales Charge (Load)
Imposed on Reinvested
Dividends/Distributions None None None
Redemption Fee (as % of amount
redeemed, if applicable) None None None
Exchange Fee None None None
- -----------
(1) The redemption of Class A shares purchased at net asset value under the
Large Order NAV Purchase Privilege may be subject to a contingent deferred
sales charge of 1% during the first year and 0.50% during the second year.
Annual fund operating expenses: Expenses that are deducted from fund assets.
Class A Class B Class C
------- ------- -------
Management Fee 0.72% 0.72% 0.72%
Distribution (12b-1) Fees None 0.75% 0.75%
Other Expenses 0.70% 0.80% 0.69%
----- ----- -----
Total Annual Fund Operating Expenses 1.42% 2.27% 2.16%
Example
This example is to help you compare the cost of investing in the fund with the
cost of investing in other mutual funds.
This example illustrates the impact of the above fees and expenses on an account
with an initial investment of $10,000, based on the expenses shown above. It
assumes a 5% annual return, the reinvestment of all dividends and distributions
and "annual fund operating expenses" remaining the same each year. The example
is hypothetical: actual fund expenses and returns vary from year to year, and
may be higher or lower than those shown. The example does not reflect sales
charges (loads) on reinvested dividends and other distributions. If these sales
charges were included, your costs would be higher.
Fees and expenses if you sold shares after:
Class A Class B Class C
------- ------- -------
1 Year $711 $630 $319
3 Years $999 $1,009 $676
5 Years $1,307 $1,415 $1,159
10 Years $2,179 $2,195 $2,493
Kemper Value+Growth Fund 41
<PAGE>
Fees and expenses if you did not sell your shares:
Class A Class B Class C
------- ------- -------
1 Year $711 $230 $219
3 Years $999 $709 $676
5 Years $1,307 $1,215 $1,159
10 Years $2,179 $2,195 $2,493
Principal strategies and investments
Historically, the performance of growth and value stocks has tended to be
counter-cyclical, that is, when one was in favor, the other was out of favor
relative to the equity market in general. Through the allocation process, the
investment manager will seek to weight the portfolio more heavily in the type of
stocks that the fund's portfolio management team believes present greater return
opportunities at the time.
The investment manager's Quantitative Research Department will use proprietary
modeling techniques to determine the allocation between growth and value stocks
in the fund's portfolio.
The neutral allocation between growth and value stocks would be 50%/50%. The
allocation to growth or value may be up to 75% at any time. Allocation decisions
are normally based upon long-term considerations. The investment manager expects
that changes in the allocation would be gradual. There is no assurance that the
allocation process will improve investment results.
To select individual securities, the investment manager uses additional
quantitative models. Growth stocks and value stocks are evaluated according to
style-specific models. By using multiple models, the investment manager seeks to
create a portfolio where value and growth stocks are clearly delineated.
In managing the growth portion of the portfolio, the investment manager's
proprietary quantitative models evaluate a variety of momentum factors. These
include historical earnings growth, projected earnings growth, return on equity,
debt to capital and other balance sheet data.
In managing the value portion of the portfolio, the investment manager's
proprietary quantitative models evaluate a variety of valuation factors. These
include price-to-earnings ratios, price-to-book ratios, price-to-cash flow,
dividend growth rates, earnings estimates and growth rates, return on equity and
other balance sheet data.
Although the fund does not presently intend to do so, it may invest up to 25% of
its total assets in foreign securities.
For temporary defensive purposes, the fund may invest up to 100% of its assets
in short-term high-grade debt securities, cash and cash equivalents. Because
this defensive policy differs from the fund's investment objective, the fund may
not achieve its goals during a defensive period.
While not principal investments or strategies of the fund, the fund may utilize
other investments and investment techniques that may impact fund performance,
including options, futures and other strategic transactions.
42 Kemper Value+Growth Fund
<PAGE>
More information about investments and strategies is provided in the Statement
of Additional Information. Of course, there can be no guarantee that by
following these strategies, the fund will achieve its objective.
Additional risk
Foreign Investing. Investing in foreign securities, and to a greater extent
emerging markets, involves risks in addition to those associated with investing
in securities in the U.S. To the extent that investments are denominated in
foreign currencies, adverse changes in the values of foreign currencies may have
a significant negative effect on any returns from these investments. Investing
in foreign securities exposes the fund to an increased risk of political and
economic instability.
Other risks of investing in foreign securities include: limited information,
higher brokerage costs, different accounting standards and thinner trading
markets as compared to U.S. markets.
Kemper Value+Growth Fund 43
<PAGE>
INVESTMENT MANAGER
The fund retains the investment management firm of Scudder Kemper Investments,
Inc., Two International Place, Boston, MA, to manage their daily investment and
business affairs subject to the policies established by the funds' Boards.
Scudder Kemper Investments, Inc. actively manages the fund's investments.
Professional management can be an important advantage for investors who do not
have the time or expertise to invest directly in individual securities. Scudder
Kemper Investments, Inc. is one of the largest and most experienced investment
management organizations worldwide, managing more than $230 billion in assets
globally for mutual fund investors, retirement and pension plans, institutional
and corporate clients, and private family and individual accounts.
Each of the funds below pays Scudder Kemper Investments, Inc. a graduated
monthly investment management fee. Fees paid for each fund's most recently
completed fiscal year are shown below:
As a % of average
daily net assets
----------------
Kemper Blue Chip Fund 0.56%
Kemper Classic Growth Fund* 0.70%
Kemper Growth Fund 0.54%
Kemper Technology Fund 0.55%
Kemper Total Return Fund 0.53%
Kemper Value+Growth Fund 0.72%
- -----------
* For Kemper Classic Growth Fund, the investment manager has agreed to waive
0.25% of its management fee until December 31, 1999.
The Kemper Aggressive Growth Fund and Kemper Small Capitalization Equity Fund
pay Scudder Kemper Investments, Inc. an annual investment management fee
(payable monthly) at the annual rate of 0.65% of the average daily net assets of
each Fund. This Base Fee may be adjusted upward or downward on the basis of the
investment performance of the Class A shares of each Fund relative to the
performance of the Standard & Poor's 500 Composite Stock Price Index over a
twelve-month period
The investment management fee for the Kemper Aggressive Growth Fund may range
from 0.45% to 0.85% of the average daily net assets of the fund. The investment
management fee for the Kemper Small Capitalization Equity Fund may range from
0.35% to 0.95% of the average daily net asset of the fund.
Investment management fees paid by Kemper Aggressive Growth Fund and Kemper
Small Capitalization Equity Fund to Scudder Kemper Investments, Inc. for the
most recently completed fiscal year are shown below:
As a % of average daily net assets
----------------------------------
Kemper Aggressive Growth Fund 0.38%
Kemper Small Capitalization Equity Fund 0.36%
44 Investment Manager
<PAGE>
PORTFOLIO MANAGEMENT
The following investment professionals are associated with the funds as
indicated:
Kemper Aggressive Growth Fund
PORTFOLIO MANAGEMENT
The following investment professionals are associated with the funds as
indicated:
Kemper Aggressive Growth Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Kurt R. Stalzer 1997 Joined Scudder Kemper in 1997. He
Lead Portfolio Manager began his investment career in
1982. Prior to joining Scudder
Kemper he was a Senior Portfolio
Manager for an unaffiliated
investment company.
David H. Burshtan 1998 Joined Scudder Kemper in 1995. He
Portfolio Manager began his investment career in
1988. Prior to joining Scudder
Kemper he was a Senior
International Securities Analyst
responsible for emerging markets
at a trust company.
- --------------------------------------------------------------------------------
Kemper Blue Chip Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Tracy McCormick 1994 Joined Scudder Kemper in 1994.
Lead Portfolio Manager She began her investment career
in 1980. Prior to joining Scudder
Kemper she was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
Steven H. Reynolds 1998 Joined Scudder Kemper in 1995. He
Portfolio Manager began his investment career in
1968. Prior to joining Scudder
Kemper he was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
Gary A. Langbaum 1998 Joined Scudder Kemper in 1988. He
Portfolio Manager began his investment career in
1970. Prior to joining Scudder
Kemper he was a Senior Research
Analyst and Associate Director of
Research at a banking trust
company.
Maureen P. Lentz 1998 Joined Scudder Kemper in 1994.
Portfolio Manager She began her investment career
in 1988. Prior to joining Scudder
Kemper she worked as a systems
and operations analyst for an
unaffiliated insurance company.
- --------------------------------------------------------------------------------
Investment Manager 45
<PAGE>
Kemper Classic Growth Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
William F. Gadsden 1996 Joined Scudder Kemper in 1983. He
Co-Lead Portfolio began his investment career in
Manager 1983. Prior to joining Scudder
Kemper he worked for an
international custodian bank.
Bruce F. Beaty 1996 Joined Scudder Kemper in 1991. He
Co-Lead Portfolio began his investment career in
Manager 1982. Prior to joining Scudder
Kemper he worked for an
unaffiliated insurance company.
- --------------------------------------------------------------------------------
Kemper Growth Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Steven H. Reynolds 1998 Joined Scudder Kemper in 1995. He
Lead Portfolio Manager began his investment career in
1968. Prior to joining Scudder
Kemper he was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
Tracy McCormick 1994 Joined Scudder Kemper in 1994.
Portfolio Manager She began her investment career
in 1980. Prior to joining Scudder
Kemper she was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
Gary A. Langbaum 1998 Joined Scudder Kemper in 1988. He
Portfolio Manager began his investment career in
1970. Prior to joining Scudder
Kemper he was a Senior Research
Analyst and Associate Director of
Reserach at a banking trust
company.
Maureen P. Lentz 1998 Joined Scudder Kemper in 1994.
Portfolio Manager She began her investment career
in 1988. Prior to joining Scudder
Kemper she worked as a systems
and operations analyst for an
unaffiliated insurance company.
- --------------------------------------------------------------------------------
46 Investment Manager
<PAGE>
Kemper Small Capitalization Equity Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Kurt R. Stalzer 1997 Joined Scudder Kemper in 1997. He
Lead Portfolio Manager began his investment career in
1982. Prior to joining Scudder
Kemper he was a Senior Portfolio
Manager for an unaffiliated
investment company.
David H. Burshtan 1998 Joined Scudder Kemper in 1995. He
Portfolio Manager began his investment career in
1988. Prior to joining Scudder
Kemper he was a Senior
International Securities Analyst
responsible for emerging markets
at a trust company.
- --------------------------------------------------------------------------------
Kemper Technology Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
James B. Burkhart 1998 Joined Scudder Kemper in 1998. He
Lead Portfolio Manager began his investment career in
1970. Prior to joining Scudder
Kemper he was an analyst and
Portfolio Manager for a trust
company.
Tracy McCormick 1998 Joined Scudder Kemper in 1994.
Portfolio Manager She began her investment career
in 1980. Prior to joining Scudder
Kemper she was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
- --------------------------------------------------------------------------------
Kemper Total Return Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Gary A. Langbaum 1995 Joined Scudder Kemper in 1988. He
Lead Portfolio Manager began his investment career in
1970. Prior to joining Scudder
Kemper he was a Senior Research
Analyst and Associate Director of
Reserach at a banking trust
company.
Tracy McCormick 1998 Joined Scudder Kemper in 1994.
Portfolio Manager She began her investment career
in 1980. Prior to joining Scudder
Kemper she was Senior Vice
President and a Portfolio Manager
at an unaffiliated investment
management company.
Stephen A. Wohler 1998 Joined Scudder Kemper in 1979.
Portfolio Manager Since then he has served as
portfolio manager for other
affiliated mutual funds and has
over 20 years of investment
experience.
- --------------------------------------------------------------------------------
Investment Manager 47
<PAGE>
Kemper Value+Growth Fund
Name & Title Joined the Fund Background
- --------------------------------------------------------------------------------
Philip S. Fortuna 1998 Joined Scudder Kemper in 1986.
Lead Portfolio Manager Since then he has served as
portfolio manager for other
affiliated mutual funds and has
over 15 years of investment
experience.
Karla D. Grant 1998 Joined Scudder Kemper in 1997.
Portfolio Manager She began her investment career
in 1990. Prior to joining Scudder
Kemper she served as Vice
President for several independent
asset management firms.
Shahram Tajbakhsh 1998 Joined Scudder Kemper in 1996. He
Portfolio Manager began his investment career in
1984. Prior to joining Scudder
Kemper he was a Lead Project
Manager at an international
financial news provider.
Robert D. Tymoczko 1998 Joined Scudder Kemper in 1997. He
Portfolio Manager began his investment career in
1996. Prior to joining Scudder
Kemper he worked as an economic
consultant specializing in
quantitative research and
econometric consulting.
- --------------------------------------------------------------------------------
Year 2000 readiness
Like other mutual funds and financial and business organizations worldwide, the
funds could be adversely affected if computer systems on which a fund relies,
which primarily include those used by the investment manager, its affiliates or
other service providers, are unable to correctly process date-related
information on and after January 1, 2000. This risk is commonly called the Year
2000 Issue. Failure to successfully address the Year 2000 Issue could result in
interruptions to and other material adverse effects on the funds' business and
operations, such as problems with calculating net asset value and difficulties
in implementing a fund's purchase and redemption procedures. The investment
manager has commenced a review of the Year 2000 Issue as it may affect the funds
and is taking steps it believes are reasonably designed to address the Year 2000
Issue, although there can be no assurances that these steps will be sufficient.
In addition, there can be no assurances that the Year 2000 Issue will not have
an adverse effect on the issuers whose securities are held by a fund or on
global markets or economies generally.
Euro conversion
The introduction of a new European currency, the Euro, may result in
uncertainties for European securities and the operation of each fund. The Euro
was introduced on January 1, 1999, by eleven European countries that are members
of the European Economic and Monetary Union (EMU). The introduction of the Euro
will require the redenomination of European debt and
48 Investment Manager
<PAGE>
equity securities over a period of time, which may result in various accounting
differences and/or tax treatments. Additional questions are raised by the fact
that certain other European community members, including the United Kingdom, did
not officially implement the Euro on January 1, 1999.
The investment manager is actively working to address Euro-related issues and
understands that other key service providers are taking similar steps. At this
time, however, no one knows precisely what the degree of impact will be. To the
extent that the market impact or effect on a fund's holdings is negative, it
could hurt the fund's performance.
Investment Manager 49
<PAGE>
ABOUT YOUR INVESTMENT
CHOOSING A SHARE CLASS
Each fund provides investors with the option of purchasing shares in the
following ways:
- --------------------------------------------------------------------------------
Class A Shares Offered at net asset value plus a maximum sales charge of
5.75% of the offering price. Reduced sales charges apply
to purchases of $50,000 or more. Class A shares purchased
at net asset value under the Large Order NAV Purchase
Privilege may be subject to a 1% contingent deferred
sales charge if redeemed within one year of purchase and
a .50% contingent deferred sales change if redeemed
during the second year of purchase.
Class B Shares Offered at net asset value without an initial sales
charge, but subject to a 0.75% Rule 12b-1 distribution
fee and a contingent deferred sales charge that declines
from 4% to zero on certain redemptions made within six
years of purchase. Class B shares automatically convert
into Class A shares (which have lower ongoing expenses)
six years after purchase.
Class C Shares Offered at net asset value without an initial sales
charge, but subject to a 0.75% Rule 12b-1 distribution
fee and a 1% contingent deferred sales charge on
redemptions made within one year of purchase. Class C
shares do not convert into another class.
- --------------------------------------------------------------------------------
When placing purchase orders, investors must specify whether the order is for
Class A, Class B or Class C shares. Each class of shares represents interests in
the same portfolio of investments of a fund.
The decision as to which class to choose depends on a number of factors,
including the amount and intended length of the investment. Investors that
qualify for reduced sales charges might consider Class A shares. Investors who
prefer not to pay an initial sales charge and who plan to hold their investment
for more than six years might consider Class B shares. Investors who prefer not
to pay an initial sales charge but who plan to redeem their shares within six
years might consider Class C shares. For more information about the three sales
arrangements, consult your financial representative or Kemper Service Company,
the Shareholder Service Agent. Be aware that financial services firms may
receive different compensation depending upon which class of shares they sell.
Rule 12b-1 plan
Each fund has adopted plans under Rule 12b-1 that provides for fees payable as
an expense of the Class B shares and the Class C shares that are used by the
transfer agent to pay for distribution and other services provided to
shareholders of those classes. Because 12b-1 fees are paid out of fund assets on
an ongoing basis, they will, over time, increase the cost of investment and may
50 About Your Investment
<PAGE>
cost more than other types of sales charges. Long-term shareholders may pay more
than the economic equivalent of the maximum initial sales charges permitted by
the National Association of Securities Dealers, although Kemper Distributors,
Inc. believes that it is unlikely, in the case of Class B Shares, because of the
automatic conversion feature of those Shares.
Special features
Class A Shares -- Combined Purchases. Each fund's Class A shares (or the
equivalent) may be purchased at the rate applicable to the discount bracket
attained by combining concurrent investments in Class A shares of most Kemper
Funds.
Class A Shares -- Letter of Intent. The same reduced sales charges for Class A
shares also apply to the aggregate amount of purchases made by any purchaser
within a 24-month period under a written Letter of Intent ("Letter") provided by
Kemper Distributors. The Letter, which imposes no obligation to purchase or sell
additional Class A shares, provides for a price adjustment depending upon the
actual amount purchased within such period.
Class A Shares -- Cumulative Discount. Class A shares of a fund may also be
purchased at the rate applicable to the discount bracket attained by adding to
the cost of shares of a fund being purchased, the value of all Class A shares of
the above mentioned Kemper Funds (computed at the maximum offering price at the
time of the purchase for which the discount is applicable) already owned by the
investor.
Class A Shares -- Large Order NAV Purchase Privilege. Class A shares of a fund
may be purchased at net asset value by any purchaser provided that the amount
invested in such fund or other Kemper Funds totals at least $1,000,000 including
purchases of Class A shares pursuant to the "Combined Purchases," "Letter of
Intent" and "Cumulative Discount" features described above (the "Large Order NAV
Purchase Privilege").
Exchange Privilege -- General. Shareholders of Class A, Class B and Class C
shares may exchange their shares for shares of the corresponding class of Kemper
Funds. Shares of a Kemper Fund with a value in excess of $1,000,000 (except
Kemper Cash Reserves Fund) acquired by exchange from another Kemper Fund, or
from a Money Market Fund, may not be exchanged thereafter until they have been
owned for 15 days (the "15 Day Hold Policy"). For purposes of determining
whether the 15-Day Hold Policy applies to a particular exchange, the value of
the shares to be exchanged shall be computed by aggregating the value of shares
being exchanged for all accounts under common control, direction or advice,
including without limitation accounts administered by a financial services firm
offering market timing, asset allocation or similar services.
For purposes of determining any contingent deferred sales charge that may be
imposed upon the redemption of the shares received on exchange, amounts
exchanged retain their original cost and purchase date.
About Your Investment 51
<PAGE>
BUYING SHARES
You may purchase shares of a fund by contacting the securities dealer or other
financial services firm from whom you received this prospectus.
CLASS A SHARES
Public Offering Price. Including Sales Charge
Sales Charge
------------
As a % of As a % of Net
Amount of Purchase Offering Price Amount Invested*
------------------ -------------- ----------------
Less than $50,000 5.75% 6.10%
$50,000 but less than $100,000 4.50 4.71%
$100,000 but less than $250,000 3.50 3.63%
$250,000 but less than $500,000 2.60 2.67%
$500,000 but less than $1 million 2.00 2.04%
$1 million and over 0.00** 0.00**
- -----------
* Rounded to the nearest one hundredth percent
** Redemption of shares may be subject to a contingent deferred sales charge
as discussed below.
NAV Purchases
Class A shares of a fund may be purchased at net asset value by:
o shareholders in connection with the investment or reinvestment of income
and capital gain dividends
o a participant-directed qualified retirement plan or a participant-directed
non-qualified deferred compensation plan or a participant-directed
qualified retirement plan which is not sponsored by a K-12 school district,
provided in each case that such plan has not less than 200 eligible
employees
o any purchaser with Kemper Funds investment totals of at least $1,000,000
o unitholders of unit investment trusts sponsored by Ranson & Associates,
Inc. or its predecessors through reinvestment programs described in the
prospectuses of such trusts that have such programs
o officers, trustees, directors, employees (including retirees) and sales
representatives of a fund, its investment manager, its principal
underwriter or certain affiliated companies, for themselves or members of
their families, any trust, pension, profit-sharing or other benefit plan
for only such persons
o persons who purchase shares through bank trust departments that process
such trades through an automated, integrated mutual fund clearing program
provided by a third party clearing firm
o registered representatives and employees of broker-dealers having selling
group agreements with Kemper Distributors any trust, pension,
profit-sharing or other benefit plan for only such persons
o officers, directors, and employees of service agents of the funds
52 About Your Investment
<PAGE>
o members of the plaintiff class in the proceeding known as Howard and Audrey
Tabankin, et al. v. Kemper Short-Term Global Income Fund, et. al., Case No.
93 C 5231 (N.D.IL)
o selected employees (including their spouses and dependent children) of
banks and other financial services firms that provide administrative
services related to the funds pursuant to an agreement with Kemper
Distributors or one of its affiliates
o certain professionals who assist in the promotion of Kemper Funds pursuant
to personal services contracts with Kemper Distributors, for themselves or
members of their families
o in connection with the acquisition of the assets of or merger or
consolidation with another investment company
o shareholders who owned shares of Kemper Value Series, Inc. ("KVS") on
September 8, 1995, and have continuously owned shares of KVS (or a Kemper
Fund acquired by exchange of KVS shares) since that date, for themselves or
members of their families, any trust, pension, profit-sharing or other
benefit plan for only such persons
o persons who purchase shares of the fund through Kemper Distributors as part
of an automated billing and wage deduction program administered by
RewardsPlus of America
o through certain investment advisers registered under the Investment
Advisers Act of 1940 and other financial services firms, acting solely as
agent for their clients, that adhere to certain standards established by
Kemper Distributors, including a requirement that such shares be purchased
for the benefit of their clients participating in an investment advisory
program or agency commission program under which such clients pay a fee to
the investment advisor or other firm for portfolio management or agency
brokerage services.
Contingent Deferred Sales Charge
A contingent deferred sales charge may be imposed upon redemption of Class A
shares purchased under the Large Order NAV Purchase Privilege as follows: 1% if
they are redeemed within one year of purchase and 0.50% if redeemed during the
second year following purchase. The charge will not be imposed upon redemption
of reinvested dividends or share appreciation. The charge is applied to the
value of the shares redeemed, excluding amounts not subject to the charge. The
contingent deferred sales charge will be waived in the event of:
o redemptions under a fund's Systematic Withdrawal Plan at a maximum of 10%
per year of the net asset value of the account
o redemption of shares of a shareholder (including a registered joint owner)
who has died
About Your Investment 53
<PAGE>
o redemption of shares of a shareholder (including a registered joint owner)
who after purchase of the shares being redeemed becomes totally disabled
(as evidenced by a determination by the federal Social Security
Administration)
o redemptions by a participant-directed qualified retirement plan or a
participant-directed non-qualified deferred compensation plan or a
participant-directed qualified retirement plan which is not sponsored by a
K-12 school district
o redemptions by employer sponsored employee benefit plans using the
subaccount record keeping system made available through the Shareholder
Service Agent or its affiliates
o redemptions of shares whose dealer of record at the time of the investment
notifies Kemper Distributors that the dealer waives the commission
applicable to such Large Order NAV Purchase.
Rule 12b-1 Fee
None
Exchange Privilege
Class A shares may be exchanged for each other at their relative net asset
values. Shares of Money Market Funds and Kemper Cash Reserves Fund acquired by
purchase (not including shares acquired by dividend reinvestment) are subject to
the applicable sales charge on exchange.
Class A shares purchased under the Large Order NAV Purchase Privilege may be
exchanged for Class A shares of any Kemper Fund or a Money Market Fund without
paying any contingent deferred sales charge. If the Class A shares received on
exchange are redeemed thereafter, a contingent deferred sales charge may be
imposed.
CLASS B SHARES
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
Contingent Deferred Sales Charge
A contingent deferred sales charge may be imposed upon redemption of Class B
shares. There is no such charge upon redemption of any share appreciation or
reinvested dividends. The charge is computed at the following rates applied to
the value of the shares redeemed excluding amounts not subject to the charge.
Year of Redemption
After Purchase: First Second Third Fourth Fifth Sixth
-------------------------------------------------------------------------------
Contingent Deferred
Sales Charge: 4% 3% 3% 2% 2% 1%
54 About Your Investment
<PAGE>
The contingent deferred sales charge will be waived:
o for redemptions to satisfy required minimum distributions after age 70 1/2
from an IRA account (with the maximum amount subject to this waiver being
based only upon the shareholder's Kemper IRA accounts)
o for redemptions made pursuant to any IRA systematic withdrawal based on the
shareholder's life expectancy including, but not limited to, substantially
equal periodic payments described in Code Section 72(t)(2)(A)(iv) prior to
age 59 1/2
o for redemptions made pursuant to a systematic withdrawal plan
o in the event of the total disability (as evidenced by a determination by
the federal Social Security Administration) of the shareholder (including a
registered joint owner) occurring after the purchase of the shares being
redeemed
o in the event of the death of the shareholder (including a registered joint
owner).
The contingent deferred sales charge will also be waived in connection with the
following redemptions of shares held by employer sponsored employee benefit
plans maintained on the subaccount record keeping system made available by
Kemper Service Company, the Shareholder Service Agent:
o redemptions to satisfy participant loan advances (note that loan repayments
constitute new purchases for purposes of the contingent deferred sales
charge and the conversion privilege)
o redemptions in connection with retirement distributions (limited at any one
time to 10% of the total value of plan assets invested in a fund
o redemptions in connection with distributions qualifying under the hardship
provisions of the Code
o redemptions representing returns of excess contributions to such plans.
Rule 12b-1 Fee
0.75%
Conversion Feature
Class B shares of a fund will automatically convert to Class A shares of the
same fund six years after issuance on the basis of the relative net asset value
per share. Shares purchased through the reinvestment of dividends and other
distributions paid with respect to Class B shares in a shareholder's fund
account will be converted to Class A shares on a pro rata basis.
Exchange Privilege
Class B shares of a fund and Class B shares of most Kemper Funds may be
exchanged for each other at their relative net asset values without a contingent
deferred sales charge.
About Your Investment 55
<PAGE>
CLASS C SHARES
Public Offering Price
Net asset value per share without any sales charge at the time of purchase.
Contingent Deferred Sales Charge
A contingent deferred sales charge of 1% may be imposed upon redemption of Class
C shares redeemed within one year of purchase. The charge will not be imposed
upon redemption of reinvested dividends or share appreciation.
The contingent deferred sales charge will be waived in the event of:
o redemptions by a participant-directed qualified retirement plan described
in Code Section 401(a) or a participant-directed non-qualified deferred
compensation plan described in Code Section 457
o redemptions by employer sponsored employee benefit plans (or their
participants) using the subaccount record keeping system made available
through the Shareholder Service Agent
o redemption of shares of a shareholder (including a registered joint owner)
who has died
o redemption of shares of a shareholder (including a registered joint owner)
who after purchase of the shares being redeemed becomes totally disabled
(as evidenced by a determination by the federal Social Security
Administration)
o redemptions under a fund's systematic withdrawal plan at a maximum of 10%
per year of the net asset value of the account
o redemption of shares by an employer sponsored employee benefit plan that
offers funds in addition to Kemper Funds and whose dealer of record has
waived the advance of the first year administrative service and
distribution fees applicable to such shares and agrees to receive such fees
quarterly
o redemption of shares purchased through a dealer-sponsored asset allocation
program maintained on an omnibus record-keeping system provided the dealer
of record has waived the advance of the first year administrative services
and distribution fees applicable to such shares and has agreed to receive
such fees quarterly.
Rule 12b-1 Fee
0.75%
Conversion Feature
None
Exchange Privilege
Class C shares of a fund and Class C shares of most Kemper Funds may be
exchanged for each other at their relative net asset values. Class C shares may
be exchanged without a contingent deferred sales charge.
56 About Your Investment
<PAGE>
SELLING AND EXCHANGING SHARES
General
Contact your securities dealer or other financial services firm to arrange for
share redemptions or exchanges.
Any shareholder may require a fund to redeem his or her shares. When shares are
held for the account of a shareholder by the funds' transfer agent, the
shareholder may redeem them by sending a written request with signatures
guaranteed to Kemper Mutual Funds, Attention: Redemption Department, P.O. Box
419557, Kansas City, Missouri 64141-6557.
An exchange of shares entails the sale of fund shares and subsequent purchase of
shares of another Kemper Fund.
The rate of the contingent deferred sales charge is determined by the length of
the period of ownership. Investments are tracked on a monthly basis. The period
of ownership for this purpose begins the first day of the month in which the
order for the investment is received. For example, an investment made in
December, 1996 will be eligible for the second year's charge if redeemed on or
after December 1, 1997. In the event no specific order is requested when
redeeming shares subject to a contingent deferred sales charge, the redemption
will be made first from shares representing reinvested dividends and then from
the earliest purchase of shares. KDI receives any contingent deferred sales
charge directly.
Share certificates
When certificates for shares have been issued, they must be mailed to or
deposited with Kemper Service Company, the Shareholder Service Agent, along with
a duly endorsed stock power and accompanied by a written request for redemption.
Redemption requests and a stock power must be endorsed by the account holder
with signatures guaranteed. The redemption request and stock power must be
signed exactly as the account is registered, including any special capacity of
the registered owner. Additional documentation may be requested, and a signature
guarantee is normally required, from institutional and fiduciary account
holders, such as corporations, custodians (e.g., under the Uniform Transfers to
Minors Act), executors, administrators, trustees or guardians.
Reinvestment privilege
Under certain circumstances, a shareholder who has redeemed Class A shares may
reinvest up to the full amount redeemed at net asset value at the time of the
reinvestment. These reinvested shares will retain their original cost and
purchase date for purposes of the contingent deferred sales charge. Also, a
holder of Class B shares who has redeemed shares may reinvest up to the full
amount redeemed, less any applicable contingent deferred sales charge that may
have been imposed upon the redemption of such shares, at net asset value in
Class A shares. The reinvestment privilege may be terminated or modified at any
time. The reinvestment privilege can be used only once as to any specific shares
and reinvestment must be effected within six months of the redemption.
About Your Investment 57
<PAGE>
DISTRIBUTIONS AND TAXES
Dividends and capital gains distributions
Each fund normally distributes dividends of net investment income as follows:
annually for Kemper Aggressive Growth, Classic Growth, Growth, Small Cap,
Technology and Value+Growth Funds; semi-annually for Kemper Blue Chip Fund; and
quarterly for Kemper Total Return Fund. Each fund distributes any net realized
short-term and long-term capital gains at least annually. The quarterly
distribution to shareholders of Kemper Total Return Fund may include short-term
capital gains.
Income and capital gain dividends, if any, of a fund will be credited to
shareholder accounts in full and fractional shares of the same class of that
fund at net asset value on the reinvestment date, except that, upon written
request to Kemper Service Company, the Shareholder Service Agent, a shareholder
may select one of the following options:
1. To receive income and short-term capital gain dividends in cash and
long-term capital gain dividends in shares of the same class at net asset
value; or
2. To receive income and capital gain dividends in cash.
Any dividends of a fund that are reinvested will normally be reinvested in
shares of the same class of that same fund. However, upon written request to
Kemper Service Company, the Shareholder Service Agent, you may choose to have
dividends of a fund invested in shares of the same class of another Kemper Fund
at the net asset value of that class and fund. To use this privilege, you must
maintain a minimum account value of $1,000 in the fund distributing the
dividends. The funds will reinvest dividend checks (and future dividends) in
shares of that same fund and class if checks are returned as undeliverable.
Dividends and other distributions in the aggregate amount of $10 or less are
automatically reinvested in shares of the same fund unless you request that such
policy not be applied to your account.
Distributions are generally taxable, whether received in cash or reinvested.
Taxes
Dividends representing net investment income and net short-term capital gains,
if any, are taxable to you as ordinary income. Long-term capital gains
distributions, if any, are taxable to you as long-term capital gains, regardless
of how long you have owned your shares. Short-term capital gains and any other
taxable income distributions are taxable to you as ordinary income. A portion of
dividends from ordinary income may qualify for the dividends-received deduction
for corporations.
A dividend received shortly after the purchase of shares reduces the net asset
value of the shares by the amount of the dividend and, although in effect a
return of capital, is taxable to you.
A sale or exchange of shares is a taxable event and may result in a capital gain
or loss which may be long-term or short-term, generally depending on how long
you owned the shares.
58 About Your Investment
<PAGE>
Any dividends or capital gains distributions declared in October, November or
December with a record date in such month and paid during the following January
are taxable to you as if paid on December 31 of the calendar year in which they
were declared.
Each fund sends you detailed tax information about the amount and type of its
distributions by January 31 of the following year.
Each fund may be required to withhold U.S. federal income tax at the rate of 31%
of all taxable distributions payable to you if you fail to provide the fund with
your current taxpayer identification number or to make required certifications,
or if you have been notified by the IRS that you are subject to backup
withholding. Any such withheld amounts may be credited against your U.S. federal
income tax liability.
You may be subject to state, local and foreign taxes on fund distributions and
dispositions of fund shares. You should consult your tax advisor regarding the
particular tax consequences of an investment in a fund.
TRANSACTION INFORMATION
Share price
Scudder Fund Accounting Corporation determines the net asset value per share of
the funds as of the close of regular trading on the New York Stock Exchange,
normally 4:00 p.m. eastern time, on each day the New York Stock Exchange is open
for trading. Market prices are used to determine the value of the funds' assets.
If market prices are not readily available for a security or if a security's
price is not considered to be market indicative, that security may be valued by
another method that the Board or its delegate believes accurately reflects fair
value. In those circumstances where a security's price is not considered to be
market indicative, the security's valuation may differ from an available market
quotation.
The net asset value per share of each fund is the value of one share and is
determined separately for each class by dividing the value of a fund's net
assets attributable to that class, less all liabilities, by the number of shares
of that class outstanding. The per share net asset value of the Class B and
Class C shares of a fund will generally be lower than that of the Class A shares
of a fund because of the higher annual expenses borne by the Class B and Class C
shares.
To the extent that a fund invests in foreign securities, these securities may be
listed on foreign exchanges that trade on days when the fund does not price its
shares. As a result, the net asset value per share of a fund may change at a
time when shareholders are not able to purchase or redeem their shares.
Processing time
All requests to buy and sell shares that are received in good order by the
funds' transfer agent by the close of regular trading on the New York Stock
Exchange are executed at the net asset value per share calculated at the close
of trading that day (subject to any applicable sales load or contingent deferred
sales
About Your Investment 59
<PAGE>
charge). Orders received by dealers or other financial services firms prior to
the determination of net asset value and received by the funds' transfer agent
prior to the close of its business day will be confirmed at a price based on the
net asset value effective on that day. If an order is accompanied by a check
drawn on a foreign bank, funds must normally be collected before shares will be
purchased.
Payment for shares you sell will be made in cash as promptly as practicable but
in no event later than seven days after receipt of a properly executed request.
If you have share certificates, these must accompany your order in proper form
for transfer. When you place an order to sell shares for which the fund may not
yet have received good payment (i.e., purchases by check, EXPRESS-Transfer or
Bank Direct Deposit), the fund may delay transmittal of the proceeds until it
has determined that collected funds have been received for the purchase of such
shares. This may be up to 10 days from receipt by a fund of the purchase amount.
The redemption of shares within certain time periods may be subject to
contingent deferred sales charges, as noted above.
Signature guarantees
A signature guarantee is required unless you sell $50,000 or less worth of
shares (prior to the imposition of any contingent deferred sales charge) and the
proceeds are payable to the shareholder of record at the address of record. You
can obtain a guarantee from most brokerage houses and financial institutions,
although not from a notary public. The funds will normally send you the proceeds
within one business day following your request, but may take up to seven
business days (or longer in the case of shares recently purchased by check).
Purchase restrictions
Purchases and sales should be made for long-term investment purposes only. The
funds and their transfer agent each reserves the right to reject purchases of
fund shares (including exchanges) for any reason, including when there is
evidence of a pattern of frequent purchases and sales made in response to
short-term fluctuations in a fund's share price. The funds reserve the right to
withdraw all or any part of the offering made by this prospectus and to reject
purchase orders. Also, from time to time, each fund may temporarily suspend the
offering of its shares or a class of its shares to new investors. During the
period of such suspension, persons who are already shareholders normally are
permitted to continue to purchase additional shares and to have dividends
reinvested.
Minimum balances
The minimum initial investment for each fund is $1,000 and the minimum
subsequent investment is $100. The minimum initial investment for an Individual
Retirement Account is $250 and the minimum subsequent investment is $50. Under
an automatic investment plan, such as Bank Direct Deposit, Payroll Direct
Deposit or Government Direct Deposit, the minimum initial and subsequent
investment is $50. These minimum amounts may be changed at any time in
management's discretion.
60 About Your Investment
<PAGE>
Because of the high cost of maintaining small accounts, the funds may assess a
quarterly fee of $9 on an account with a balance below $1,000 for the quarter.
The fee will not apply to accounts enrolled in an automatic investment program,
Individual Retirement Accounts or employer sponsored employee benefit plans
using the subaccount record keeping system made available through Kemper Service
Company, the Shareholder Service Agent.
Third party transactions
If you buy and sell shares of a fund through a member of the National
Association of Securities Dealers, Inc. (other than the funds' distributor,
Kemper Distributors), that member may charge a fee for that service. This
prospectus should be read in connection with such firms' material regarding
their fees and services.
Redemption-in-kind
The funds reserve the right to honor any request for redemption or repurchase by
making payment in whole or in part in readily marketable securities ("redemption
in kind"). These securities will be chosen by the fund and valued as they are
for purposes of computing the fund's net asset value. A shareholder may incur
transaction expenses in converting these securities to cash.
About Your Investment 61
<PAGE>
FINANCIAL HIGHLIGHTS
The tables below are intended to help you understand the funds' or certain
classes of a fund's financial performance for the periods reflected below.
Certain information reflects financial results for a single fund share. The
total return figures show what an investor in a fund (or certain classes of a
fund) would have earned (or lost) assuming reinvestment of all dividends and
distributions. This information, for all funds except Classic Growth Fund, has
been audited by Ernst & Young LLP. With respect to Classic Growth Fund, this
information has been audited by PricewaterhouseCoopers LLP. The reports of each
of the auditors, along with the funds' financial statements, are included in the
funds' annual report, which are available upon request by calling the Kemper
Funds at 1-800-621-1048.
Kemper Aggressive Growth Fund
December
Year ended 31, 1996 to
September September
30, 30,
CLASS A 1998 1997
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $12.60 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.02) (.02)
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.05) 3.12
- --------------------------------------------------------------------------------
Total from investment operations (1.07) 3.10
- --------------------------------------------------------------------------------
Less distribution from net realized gain .55 --
- --------------------------------------------------------------------------------
Net asset value, end of period $10.98 12.60
- --------------------------------------------------------------------------------
Total return (not annualized) (8.67)% 32.63
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the Fund 1.25% 1.49
- --------------------------------------------------------------------------------
Net investment loss (.42)% (.35)
- --------------------------------------------------------------------------------
Other ratios to average net assets (annualized)
Expenses 1.46% --
- --------------------------------------------------------------------------------
Net investment loss (.63)% --
- --------------------------------------------------------------------------------
62 Financial Highlights
<PAGE>
December
Year ended 31, 1996 to
September September
30, 30,
CLASS B 1998 1997
- -------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $12.52 9.50
- -------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.04) (.08)
- -------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.10) 3.10
- -------------------------------------------------------------------------------
Total from investment operations (1.14) 3.02
- -------------------------------------------------------------------------------
Less distribution from net realized gain .55 --
- -------------------------------------------------------------------------------
Net asset value, end of period $10.83 12.52
- -------------------------------------------------------------------------------
Total return (not annualized) (9.30)% 31.79
- -------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the Fund 2.12% 2.41
- -------------------------------------------------------------------------------
Net investment loss (1.29)% (1.27)
- -------------------------------------------------------------------------------
Other ratios to average net assets (annualized)
Expenses 2.81% --
- -------------------------------------------------------------------------------
Net investment loss (1.98)% --
- -------------------------------------------------------------------------------
December
Year ended 31, 1996 to
September September
30, 30,
CLASS C 1998 1997
- --------------------------------------------------------------------------------
Per share operating performance
Net asset value, beginning of period $12.53 9.50
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment loss (.04) (.07)
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (1.10) 3.10
- --------------------------------------------------------------------------------
Total from investment operations (1.14) 3.03
- --------------------------------------------------------------------------------
Less distribution from net realized gain .55 --
- --------------------------------------------------------------------------------
Net asset value, end of period $10.84 12.53
- --------------------------------------------------------------------------------
Total return (not annualized) (9.29)% 31.89
- --------------------------------------------------------------------------------
Ratios to average net assets (annualized)
Expenses absorbed by the Fund 2.10% 2.19
- --------------------------------------------------------------------------------
Net investment loss (1.27)% (1.05)
- --------------------------------------------------------------------------------
Other ratios to average net assets (annualized)
Expenses 2.76% --
- --------------------------------------------------------------------------------
Net investment loss (1.93)% --
- --------------------------------------------------------------------------------
December
Year ended 31, 1996 to
September September
30, 30,
1998 1997
- -------------------------------------------------------------------------------
Supplemental data for all classes
Net assets at end of period (in thousands) $37,332 11,609
- -------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 190% 364
- -------------------------------------------------------------------------------
Notes: Total return does not reflect the effect of any sales charges. Scudder
Kemper agreed to temporarily waive certain operating expenses of the Fund during
the year ended September 30, 1998. The Other Ratios to Average Net Assets are
computed without this waiver.
Financial Highlights 63
<PAGE>
Kemper Blue Chip Fund
<TABLE>
<CAPTION>
Year ended October 31,
CLASS A 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of year $17.68 17.14 14.87 12.33 13.88
- -----------------------------------------------------------------------------------
Income from investment operations:
Net investment income .11 .18 .22 .19 .19
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) 1.17 3.70 3.45 2.57 (.71)
- -----------------------------------------------------------------------------------
Total from investment
operations 1.28 3.88 3.67 2.76 (.52)
- -----------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .16 .21 .20 .20 .19
- -----------------------------------------------------------------------------------
Distribution from net
realized gain 2.19 3.13 1.20 .02 .84
- -----------------------------------------------------------------------------------
Total dividends 2.35 3.34 1.40 .22 1.03
- -----------------------------------------------------------------------------------
Net asset value, end of year $16.61 17.68 17.14 14.87 12.33
- -----------------------------------------------------------------------------------
Total return 7.80% 26.78 26.72 22.74 (3.82)
- -----------------------------------------------------------------------------------
Ratios to average net assets
Expenses 1.29% 1.19 1.26 1.30 1.48
- -----------------------------------------------------------------------------------
Net investment income .62% 1.07 1.40 1.47 1.50
</TABLE>
<TABLE>
<CAPTION>
May 31
to
October
Year ended October 31, 31,
CLASS B 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $17.61 17.09 14.82 12.29 12.30
- ----------------------------------------------------------------------------------
Income from investment
operations:
Net investment income (.03) .04 .10 .09 .06
- ----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) 1.17 3.67 3.45 2.56 (.01)
- ----------------------------------------------------------------------------------
Total from investment
operations 1.14 3.71 3.55 2.65 .05
- ----------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .01 .06 .08 .10 .06
- ----------------------------------------------------------------------------------
Distribution from net
realized gain 2.19 3.13 1.20 .02 --
- ----------------------------------------------------------------------------------
Total dividends 2.20 3.19 1.28 .12 .06
- ----------------------------------------------------------------------------------
Net asset value, end of
period $16.55 17.61 17.09 14.82 12.29
- ----------------------------------------------------------------------------------
Total return (not
annualized) 6.96% 25.62 25.82 21.76 .42
- ----------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.10% 2.06 2.08 2.06 2.43
- ----------------------------------------------------------------------------------
Net investment income (.19)% .20 .58 .71 .33
- ----------------------------------------------------------------------------------
</TABLE>
64 Financial Highlights
<PAGE>
<TABLE>
<CAPTION>
May 31 to
Year ended October 31, October 31,
CLASS C 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $17.69 17.15 14.88 12.32 12.30
- ---------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income
(loss) (.01) .03 .10 .07 .09
- ---------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) 1.18 3.71 3.45 2.62 (.01)
- ---------------------------------------------------------------------------------------
Total from investment
operations 1.17 3.74 3.55 2.69 .08
- ---------------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .02 .07 .08 .11 .06
- ---------------------------------------------------------------------------------------
Distribution from net
realized gain 2.19 3.13 1.20 .02 --
- ---------------------------------------------------------------------------------------
Total dividends 2.21 3.20 1.28 .13 .06
- ---------------------------------------------------------------------------------------
Net asset value, end of period $16.65 17.69 17.15 14.88 12.32
- ---------------------------------------------------------------------------------------
Total return (not
annualized) 7.08% 25.71 25.75 22.04 .67
- ---------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.03% 2.00 2.05 2.01 2.33
- ---------------------------------------------------------------------------------------
Net investment income
(loss) (.12)% .26 .61 .76 .43
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended October 31,
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of year
(in thousands) $581,770 446,891 256,172 168,266 153,172
- ----------------------------------------------------------------------------------------
Portfolio turnover rate 157% 183 166 117 131
- ----------------------------------------------------------------------------------------
</TABLE>
Note: Total return does not reflect the effect of any sales charges.
Financial Highlights 65
<PAGE>
Kemper Classic Growth Fund
For the period April 16, 1998
(commencement of sale of
Class A, B and C shares)
to August 31, 1998
CLASS A CLASS B CLASS C
- --------------------------------------------------------------------------------
Net asset value, beginning of period $20.30 $20.30 $20.30
- --------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) .01 (.05) (.05)
- --------------------------------------------------------------------------------
Net realized and unrealized gain (loss)
on investment transactions (3.69) (3.68) (3.68)
- --------------------------------------------------------------------------------
Total from investment operations (3.68) (3.73) (3.73)
- --------------------------------------------------------------------------------
Net asset value, end of period $16.62 $16.57 $16.57
- --------------------------------------------------------------------------------
Total return (%) (b) (c) (18.13)** (18.37)** (18.37)**
- --------------------------------------------------------------------------------
Ratios and supplemental data
Net assets, end of period ($ millions) 7.2 5.9 .9
- --------------------------------------------------------------------------------
Ratio of operating expenses, net, to
average daily net assets (%) 1.24* 2.12* 2.09*
- --------------------------------------------------------------------------------
Ratio of operating expenses before
expense reductions, to average
daily net assets (%) 1.74* 2.52* 3.00*
- --------------------------------------------------------------------------------
Ratio of net investment income (loss) to
average daily net assets (%) .10* (.79)* (.73)*
- --------------------------------------------------------------------------------
Portfolio turnover rate (%) 48.5 48.5 48.5
- --------------------------------------------------------------------------------
(a) Based on monthly average shares outstanding during the period.
(b) Total return would have been lower had certain expenses not been reduced.
(c) Total return does not reflect the effect of any sales charges.
* Annualized
** Not annualized
66 Financial Highlights
<PAGE>
Kemper Growth Fund
<TABLE>
<CAPTION>
Year ended September 30,
CLASS A 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of year $15.47 17.21 16.07 12.93 15.33
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment income (loss) (.01) -- .12 .05 .01
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.65) 2.61 2.74 3.27 (1.41)
- -----------------------------------------------------------------------------------
Total from investment
operations (1.66) 2.61 2.86 3.32 (1.40)
- -----------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income -- -- .04 -- --
- -----------------------------------------------------------------------------------
Distribution from net
realized gain 2.09 4.35 1.68 .18 1.00
- -----------------------------------------------------------------------------------
Total dividends 2.09 4.35 1.72 .18 1.00
- -----------------------------------------------------------------------------------
Net asset value, end of year $11.72 15.47 17.21 16.07 12.93
- -----------------------------------------------------------------------------------
Total return (11.78)% 19.97 19.62 26.07 (9.39)
- -----------------------------------------------------------------------------------
Ratios to average net assets
Expenses 1.04% 1.06 1.07 1.17 1.09
- -----------------------------------------------------------------------------------
Net investment income (loss) (.09)% .07 .65 .43 .24
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
May 31
to
Sept.
Year ended September 30, 30,
CLASS B 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $14.83 16.82 15.85 12.88 13.10
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.16) (.16) (.09) (.08) (.03)
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.55) 2.52 2.74 3.23 (.19)
- -----------------------------------------------------------------------------------
Total from investment
operations (1.71) 2.36 2.65 3.15 (.22)
- -----------------------------------------------------------------------------------
Less distribution from net
realized gain 2.09 4.35 1.68 .18 --
- -----------------------------------------------------------------------------------
Net asset value, end of
period $11.03 14.83 16.82 15.85 12.88
- -----------------------------------------------------------------------------------
Total return (not
annualized) (12.73)% 18.68 18.47 24.83 (1.68)
- -----------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.14% 2.13 2.05 2.17 2.11
- -----------------------------------------------------------------------------------
Net investment loss (1.19)% (1.00) (.33) (.57) (.76)
- -----------------------------------------------------------------------------------
</TABLE>
Financial Highlights 67
<PAGE>
<TABLE>
<CAPTION>
May 31
to
Sept.
Year ended September 30, 30,
CLASS C 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $14.91 16.87 15.87 12.88 13.09
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.14) (.13) (.06) (.07) (.02)
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.55) 2.52 2.74 3.24 (.19)
- -----------------------------------------------------------------------------------
Total from investment
operations (1.69) 2.39 2.68 3.17 (.21)
- -----------------------------------------------------------------------------------
Less distribution from net
realized gain 2.09 4.35 1.68 .18 --
- -----------------------------------------------------------------------------------
Net asset value, end of
period $11.13 14.91 16.87 15.87 12.88
- -----------------------------------------------------------------------------------
Total return (not
annualized) (12.50)% 18.87 18.65 24.99 (1.60)
- -----------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.98% 1.99 1.95 2.03 2.09
- -----------------------------------------------------------------------------------
Net investment loss (1.03)% (.86) (.23) (.43) (.67)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended September 30,
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of year (in
thousands) $2,209,521 2,827,565 2,738,303 2,503,301 2,255,977
- ----------------------------------------------------------------------------------------------
Portfolio turnover rate 122% 201 150 67 115
</TABLE>
Notes: Total return does not reflect the effect of any sales charges. Per share
data for year ended September 30, 1998 were determined based on average shares
outstanding.
68 Financial Highlights
<PAGE>
Kemper Small Capitalization Equity Fund
<TABLE>
<CAPTION>
Year ended September 30,
CLASS A 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of year $7.98 7.01 7.14 5.81 6.45
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.03) (.01) (.02) (.01) (.01)
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.84) 1.55 .94 1.68 (.27)
- -----------------------------------------------------------------------------------
Total from investment
operations (1.87) 1.54 .92 1.67 (.28)
- -----------------------------------------------------------------------------------
Less distribution from net
realized gain .81 .57 1.05 .34 .36
- -----------------------------------------------------------------------------------
Net asset value, end of
year $5.30 7.98 7.01 7.14 5.81
- -----------------------------------------------------------------------------------
Total return (25.13)% 24.29 16.33 30.88 (4.31)
- -----------------------------------------------------------------------------------
Ratios to average net assets
Expenses .90% .90 1.08 1.14 1.34
- -----------------------------------------------------------------------------------
Net investment loss (.38)% (.20) (.26) (.18) (.76)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
May 31,
to Sept.
Year ended September 30, 30,
CLASS B 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $7.64 6.81 7.03 5.78 5.65
- -------------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.11) (.10) (.09) (.07) (.02)
- -------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.74) 1.50 .92 1.66 .15
- -------------------------------------------------------------------------------------
Total from investment
operations (1.85) 1.40 .83 1.59 .13
- -------------------------------------------------------------------------------------
Less distribution from net
realized gain .81 .57 1.05 .34 --
- -------------------------------------------------------------------------------------
Net asset value, end of
period $4.98 7.64 6.81 7.03 5.78
- -------------------------------------------------------------------------------------
Total return (not
annualized) (26.06)% 22.83 15.13 29.59 2.30
- -------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.14% 2.14 2.15 2.17 2.29
- -------------------------------------------------------------------------------------
Net investment loss (1.62)% (1.44) (1.33) (1.21) (1.38)
- -------------------------------------------------------------------------------------
</TABLE>
Financial Highlights 69
<PAGE>
<TABLE>
<CAPTION>
May 31,
to Sept.
Year ended September 30, 30,
CLASS C 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $7.63 6.80 7.02 5.77 5.65
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.14) (.09) (.09) (.07) (.03)
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) (1.68) 1.49 .92 1.66 .15
- -----------------------------------------------------------------------------------
Total from investment
operations (1.82) 1.40 .83 1.59 .12
- -----------------------------------------------------------------------------------
Less distribution from net
realized gain .81 .57 1.05 .34 --
- -----------------------------------------------------------------------------------
Net asset value, end of
period $5.00 7.63 6.80 7.02 5.77
- -----------------------------------------------------------------------------------
Total return (not
annualized) (25.65)% 22.87 15.16 29.65 2.12
- -----------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.06% 1.95 2.15 2.10 2.10
- -----------------------------------------------------------------------------------
Net investment loss (1.54)% (1.25) (1.33) (1.14) (1.21)
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended September 30,
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of year (in
thousands) $718,349 1,095,478 934,075 839,905 631,607
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 86% 102 85 102 58
- ------------------------------------------------------------------------------------------------
</TABLE>
Notes: Total return does not reflect the effect of any sales charges. Per share
data for the year ended September 30, 1996 were determined based on average
shares outstanding.
70 Financial Highlights
<PAGE>
Kemper Technology Fund
<TABLE>
<CAPTION>
Year ended October 31,
CLASS A 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of year $13.13 13.16 14.63 11.50 10.68
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.04) (.06) (.08) (.03) --
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain .82 2.14 .74 4.66 1.49
- -----------------------------------------------------------------------------------
Total from investment
operations .78 2.08 .66 4.63 1.49
- -----------------------------------------------------------------------------------
Less distribution from net
realized gain 2.14 2.11 2.13 1.50 .67
- -----------------------------------------------------------------------------------
Net asset value, end of
year $11.77 13.13 13.16 14.63 11.50
- -----------------------------------------------------------------------------------
Total return 8.21% 17.11 7.83 47.30 14.95
- -----------------------------------------------------------------------------------
Ratios to average net assets
Expenses .92% .89 .89 .88 .89
- -----------------------------------------------------------------------------------
Net investment income (loss) .37% (.42) (.62) (.23) .05
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
May 31
to
October
Year ended October 31, 31,
CLASS B 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $12.54 12.77 14.39 11.45 9.99
- -------------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.14) (.18) (.19) (.15) (.05)
- -------------------------------------------------------------------------------------
Net realized and unrealized
gain .77 2.06 .70 4.59 1.51
- -------------------------------------------------------------------------------------
Total from investment
operations .63 1.88 .51 4.44 1.46
- -------------------------------------------------------------------------------------
Less distribution from net
realized gain 2.14 2.11 2.13 1.50 --
- -------------------------------------------------------------------------------------
Net asset value, end of
period $11.03 12.54 12.77 14.39 11.45
- -------------------------------------------------------------------------------------
Total return (not annualized) 7.24% 15.91 6.76 45.65 14.61
- -------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.85% 1.85 1.87 1.82 1.99
- -------------------------------------------------------------------------------------
Net investment loss (1.30)% (1.38) (1.60) (1.17) (1.08)
- -------------------------------------------------------------------------------------
</TABLE>
Financial Highlights 71
<PAGE>
<TABLE>
<CAPTION>
May 31
to
October
Year ended October 31, 31,
CLASS C 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $12.64 12.85 14.45 11.45 9.99
- -------------------------------------------------------------------------------------
Income from investment
operations:
Net investment loss (.14) (.17) (.18) (.15) (.05)
- -------------------------------------------------------------------------------------
Net realized and unrealized
gain .81 2.07 .71 4.65 1.51
- -------------------------------------------------------------------------------------
Total from investment
operations .67 1.90 .53 4.50 1.46
- -------------------------------------------------------------------------------------
Less distribution from net
realized gain 2.14 2.11 2.13 1.50 --
- -------------------------------------------------------------------------------------
Net asset value, end of
period $11.17 12.64 12.85 14.45 11.45
- -------------------------------------------------------------------------------------
Total return (not annualized) 7.57% 15.98 6.88 46.23 14.61
- -------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.81% 1.82 1.82 1.76 1.83
- -------------------------------------------------------------------------------------
Net investment loss (1.26)% (1.35) (1.55) (1.11) (.92)
- -------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended October 31,
1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of year
(in thousands) $1,247,991 1,209,723 1,062,813 1,017,955 713,654
- ----------------------------------------------------------------------------------------------------
Portfolio turnover rate 146% 192 121 105 81
- ----------------------------------------------------------------------------------------------------
</TABLE>
Note: Total return does not reflect the effect of any sales charges. Per share
data for 1995 through 1998 were determined based on average shares outstanding.
72 Financial Highlights
<PAGE>
Kemper Total Return Fund
<TABLE>
<CAPTION>
Year ended October 31,
CLASS A 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of year $11.34 11.28 10.60 9.10 11.23
- -----------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .29 .31 .28 .29 .19
- -----------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .77 1.57 1.24 1.46 (1.01)
- -----------------------------------------------------------------------------------
Total from investment
operations 1.06 1.88 1.52 1.75 (.82)
- -----------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .31 .33 .34 .25 .23
- -----------------------------------------------------------------------------------
Distribution from net
realized gain 1.55 1.49 .50 -- 1.08
- -----------------------------------------------------------------------------------
Total dividends 1.86 1.82 .84 .25 1.31
- -----------------------------------------------------------------------------------
Net asset value, end of
year $10.54 11.34 11.28 10.60 9.10
- -----------------------------------------------------------------------------------
Total return 10.47% 18.95 15.34 19.46 (7.92)
- -----------------------------------------------------------------------------------
Ratios to average net assets
Expenses 1.01% 1.01 1.05 1.12 1.13
- -----------------------------------------------------------------------------------
Net investment income 2.75% 2.92 2.76 3.00 2.34
- -----------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
May 31
to
October
Year ended October 31, 31,
CLASS B 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $11.33 11.27 10.59 9.09 9.24
- -------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .19 .22 .19 .20 .06
- -------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .75 1.55 1.23 1.46 (.16)
- -------------------------------------------------------------------------------------
Total from investment
operations .94 1.77 1.42 1.66 (.10)
- -------------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .20 .22 .24 .16 .05
- -------------------------------------------------------------------------------------
Distribution from net
realized gain 1.55 1.49 .50 -- --
- -------------------------------------------------------------------------------------
Total dividends 1.75 1.71 .74 .16 .05
- -------------------------------------------------------------------------------------
Net asset value, end of
period $10.52 11.33 11.27 10.59 9.09
- -------------------------------------------------------------------------------------
Total return (not
annualized) 9.30% 17.86 14.28 18.42 (1.06)
- -------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 2.01% 1.95 1.99 2.05 2.03
- -------------------------------------------------------------------------------------
Net investment income 1.75% 1.98 1.82 2.07 1.57
- -------------------------------------------------------------------------------------
</TABLE>
Financial Highlights 73
<PAGE>
<TABLE>
<CAPTION>
May 31 to
Year ended October 31, October 31,
CLASS C 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning
of period $11.34 11.28 10.61 9.09 9.24
- ---------------------------------------------------------------------------------------
Income from investment
operations:
Net investment income .20 .22 .20 .21 .06
- ---------------------------------------------------------------------------------------
Net realized and unrealized
gain (loss) .77 1.56 1.22 1.48 (.16)
- ---------------------------------------------------------------------------------------
Total from investment
operations .97 1.78 1.42 1.69 (.10)
- ---------------------------------------------------------------------------------------
Less dividends:
Distribution from net
investment income .22 .23 .25 .17 .05
- ---------------------------------------------------------------------------------------
Distribution from net
realized gain 1.55 1.49 .50 -- --
- ---------------------------------------------------------------------------------------
Total dividends 1.77 1.72 .75 .17 .05
- ---------------------------------------------------------------------------------------
Net asset value, end of
period $10.54 11.34 11.28 10.61 9.09
- ---------------------------------------------------------------------------------------
Total return (not annualized) 9.50% 17.92 14.31 18.76 (1.05)
- ---------------------------------------------------------------------------------------
Ratios to average net assets
(annualized)
Expenses 1.90% 1.90 1.89 1.86 2.00
- ---------------------------------------------------------------------------------------
Net investment income 1.86% 2.03 1.92 2.26 1.60
- ---------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Year ended October 31,
1998 1997 1996 1995 1994
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of year
(in thousands) $3,321,254 3,241,383 3,020,798 2,926,542 2,864,322
- ------------------------------------------------------------------------------------------------
Portfolio turnover rate 80% 122 85 142 121
- ------------------------------------------------------------------------------------------------
</TABLE>
Note: Total return does not reflect the effect of any sales charges.
74 Financial Highlights
<PAGE>
Kemper Value+Growth Fund
<TABLE>
<CAPTION>
October
16 to
November
Year ended November 30, 30,
CLASS A 1998 1997 1996 1995
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $14.62 12.95 10.02 9.50
- --------------------------------------------------------------------------------------
Income from investment operations:
Net investment income .01 .02 .05 .02
- --------------------------------------------------------------------------------------
Net realized and unrealized gain 1.69 2.48 2.88 .50
- --------------------------------------------------------------------------------------
Total from investment operations 1.70 2.50 2.93 .52
- --------------------------------------------------------------------------------------
Less distribution from net realized
gain .50 .83 -- --
- --------------------------------------------------------------------------------------
Net asset value, end of period $15.82 14.62 12.95 10.02
- --------------------------------------------------------------------------------------
Total return (not annualized) 12.06% 20.83 29.24 5.47
- --------------------------------------------------------------------------------------
Ratios to average net assets
(annualized) (a)
Expenses 1.42% 1.41 1.47 1.35
- --------------------------------------------------------------------------------------
Net investment income .22% .35 .43 2.25
- --------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
October
16 to
November
Year ended November 30, 30,
CLASS B 1998 1997 1996 1995
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $14.37 12.83 10.02 9.50
- -------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.07) (.07) (.04) .02
- -------------------------------------------------------------------------------------------
Net realized and unrealized gain 1.60 2.44 2.85 .50
- -------------------------------------------------------------------------------------------
Total from investment operations 1.53 2.37 2.81 .52
- -------------------------------------------------------------------------------------------
Less distribution from net realized
gain .50 .83 -- --
- -------------------------------------------------------------------------------------------
Net asset value, end of period $15.40 14.37 12.83 10.02
- -------------------------------------------------------------------------------------------
Total return (not annualized) 11.06% 19.96 28.04 5.47
- -------------------------------------------------------------------------------------------
Ratios to average net assets (annualized) (a)
Expenses 2.27% 2.27 2.27 2.10
- -------------------------------------------------------------------------------------------
Net investment income (loss) (.63)% (.51) (.37) 1.50
- -------------------------------------------------------------------------------------------
</TABLE>
Financial Highlights 75
<PAGE>
<TABLE>
<CAPTION>
October
16 to
November
Year ended November 30, 30,
CLASS C 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per share operating performance
Net asset value, beginning of period $14.37 12.84 10.01 9.50
- ------------------------------------------------------------------------------------------
Income from investment operations:
Net investment income (loss) (.04) (.05) (.04) .01
- ------------------------------------------------------------------------------------------
Net realized and unrealized gain 1.57 2.41 2.87 .50
- ------------------------------------------------------------------------------------------
Total from investment operations 1.53 2.36 2.83 .51
- ------------------------------------------------------------------------------------------
Less distribution from net realized gain .50 .83 -- --
- ------------------------------------------------------------------------------------------
Net asset value, end of period $15.40 14.37 12.84 10.01
- ------------------------------------------------------------------------------------------
Total return (not annualized) 11.06% 19.86 28.27 5.37
- ------------------------------------------------------------------------------------------
Ratios to average net assets (annualized)(a)
Expenses 2.16% 2.15 2.22 2.07
- ------------------------------------------------------------------------------------------
Net investment income (loss) (.52)% (.39) (.32) 1.53
- ------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
October
16 to
November
Year ended November 30, 30,
1998 1997 1996 1995
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Supplemental data for all classes
Net assets at end of period
(in thousands) $144,791 97,741 39,092 5,851
- ----------------------------------------------------------------------------------------
Portfolio turnover rate (annualized) 92% 56 82 --
</TABLE>
Note: Total return does not reflect the effect of any sales charges.
(a) Scudder Kemper Investments, Inc. agreed to temporarily waive certain
operating expenses of the fund during the fiscal years ended November 30,
1997 and 1996. Absent this waiver, the ratios of expenses to average net
assets would have increased and the ratios of net investment income to
average net assets would have decreased by the following amounts: for the
year ended November 30, 1997, 0.05% for Class B and 0.01% for Class C; for
the year ended November 30, 1996, 0.12% for Class A, 0.17% for Class B and
0.13% for Class C.
76 Financial Highlights
<PAGE>
Additional information about the funds may be found in the Statement of
Additional Information, the Shareholder Services Guide and in shareholder
reports. Shareholder inquiries may be made by calling Kemper at the toll-free
telephone number listed below. The Statement of Additional Information contains
more information on fund investments and operations. The Shareholder Services
Guide contains more information about purchases and sales of fund shares. The
semiannual and annual shareholder reports contain a discussion of the market
conditions and the investment strategies that significantly affected the funds'
performance during the last fiscal year, as well as a listing of portfolio
holdings and financial statements. These and other fund documents may be
obtained without charge from the following sources:
- --------------------------------------------------------------------------------
By Phone Call Kemper at: 1-800-621-1048
- --------------------------------------------------------------------------------
By Mail Kemper Distributors, Inc.
222 South Riverside Plaza
Chicago, IL 60606-5808
or
Public Reference Section
Securities and Exchange Commission
Washington, D.C. 20549-6009
(a duplication fee is charged)
- --------------------------------------------------------------------------------
In Person Public Reference Room
Securities and Exchange Commission
Washington, D.C.
(Call 1-800-SEC-0330
for more information.)
- --------------------------------------------------------------------------------
By Internet http://www.sec.gov
http://www.kemper.com
- --------------------------------------------------------------------------------
The Statement of Additional Information is incorporated by reference into this
prospectus (is legally a part of this prospectus).
Investment Company Act file numbers:
Kemper Aggressive Growth Fund 811-07855
Kemper Blue Chip Fund 811-5357
Kemper Classic Growth Fund 811-43
Kemper Growth Fund 811-1365
Kemper Small Capitalization Equity Fund 811-1702
Kemper Technology Fund 811-0547
Kemper Total Return Fund 811-1236
Kemper Value+Growth Fund 811-7331
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