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KEMPER EQUITY FUNDS/GROWTH STYLE KEMPER VALUE SERIES, INC.
Kemper Aggressive Growth Fund Kemper Contrarian Fund
Kemper Blue Chip Fund Kemper-Dreman High Return Equity Fund
Kemper Growth Fund Kemper Small Cap Value Fund
Kemper Quantitative Equity Fund SUPPLEMENT TO PROSPECTUS
Kemper Small Capitalization Equity Fund DATED APRIL 1, 1998
Kemper Technology Fund _________________
Kemper Total Return Fund
Kemper Value+Growth Fund KEMPER ASSET ALLOCATION FUNDS
SUPPLEMENT TO PROSPECTUS Kemper Horizon 20+ Portfolio
DATED FEBRUARY 1, 1998 Kemper Horizon 10+ Portfolio
_________________ Kemper Horizon 5 Portfolio
SUPPLEMENT TO PROSPECTUS
KEMPER INCOME FUNDS DATED NOVEMBER 21, 1997
Kemper Adjustable Rate U.S. Government Fund _________________
Kemper Diversified Income Fund
Kemper U.S. Government Securities Fund KEMPER TARGET EQUITY FUNDS
Kemper High Yield Fund Kemper Retirement Fund Series VII
Kemper High Yield Opportunity Fund SUPPLEMENT TO PROSPECTUS
Kemper Income and Capital Preservation Fund DATED NOVEMBER 1, 1997
Kemper U.S. Mortgage Fund _________________
Kemper Short-Intermediate Government Fund
SUPPLEMENT TO PROSPECTUS KEMPER TAX-FREE INCOME FUNDS
DATED DECEMBER 30, 1997 Kemper Municipal Bond Fund
_________________ Kemper Intermediate Municipal Bond Fund
Kemper California Tax-Free Income Fund
KEMPER GLOBAL AND INTERNATIONAL FUNDS Kemper Florida Tax-Free Income Fund
Kemper Asian Growth Fund Kemper Michigan Tax-Free Income Fund
Kemper Europe Fund Kemper New Jersey Tax-Free Income Fund
Kemper Global Income Fund Kemper New York Tax-Free Income Fund
Kemper International Fund Kemper Ohio Tax-Free Income Fund
SUPPLEMENT TO PROSPECTUS Kemper Pennsylvania Tax-Free Income Fund
DATED MARCH 1, 1998 Kemper Texas Tax-Free Income Fund
_________________ SUPPLEMENT TO PROSPECTUS
DATED NOVEMBER 26, 1997
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KEMPER EQUITY FUNDS/VALUE STYLE
Kemper Contrarian Fund
Kemper-Dreman High Return Equity Fund
Kemper Small Cap Value Fund
Kemper Small Cap Relative Value Fund
SUPPLEMENT TO PROSPECTUS
DATED MAY 6, 1998
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The following disclosure replaces the "Net Asset Value" section of each
Prospectus except the Kemper Equity Funds/Value Style Prospectus. The following
effective dates apply: June 1998 for Kemper Aggressive Growth Fund, Kemper Blue
Chip Fund, Kemper Target Equity Fund - Kemper Retirement Fund Series VII and
Kemper Total Return Fund; and July 1998 for Kemper Asian Growth Fund. The
following disclosure will be effective prior to the close of the third calendar
quarter of 1998 for the remainder of the Funds.
<PAGE>
Net Asset Value
The net asset value per share of a 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 the class by the number of shares of
that class outstanding. The per share net asset value of each of Class
B and Class C shares of the Fund will generally be lower than that of
the Class A shares of a Fund because of the higher expenses borne by
the Class B and Class C shares. The net asset value of shares of a Fund
is computed as of the close of regular trading (the "value time") on
the New York Stock Exchange (the "Exchange") on each day the Exchange
is open for trading. The Exchange is scheduled to be closed on the
following holidays: New Year's Day, Martin Luther King, Jr. Day,
Presidents' Day, Good Friday, Memorial Day, Independence Day, Labor
Day, Thanksgiving and Christmas.
Portfolio securities for which market quotations are readily available
are generally valued at market value as of the value time in the manner
described below. All other securities may be valued at fair value as
determined in good faith by or under the direction of the Board.
With respect to the Funds with securities listed primarily on foreign
exchanges, such securities may trade on days when the Fund's net asset
value is not computed; and therefore, the net asset value of a Fund may
be significantly affected on days when the investor has no access to
the Fund.
An exchange-traded equity security is valued at its most recent sale
price. Lacking any sales, the security is valued at the calculated mean
between the most recent bid quotation and the most recent asked
quotation (the "Calculated Mean"). Lacking a Calculated Mean, the
security is valued at the most recent bid quotation. An equity security
which is traded on The Nasdaq Stock Market Inc. ("Nasdaq") is valued at
its most recent sale price. Lacking any sales, the security is valued
at the most recent bid quotation. The value of an equity security not
quoted on Nasdaq, but traded in another over-the-counter market, is its
most recent sale price. Lacking any sales, the security is valued at
the Calculated Mean. Lacking a Calculated Mean, the security is valued
at the most recent bid quotation.
Debt securities are valued at prices supplied by a pricing agent(s)
which reflect broker/dealer supplied valuations and electronic data
processing techniques. Money market instruments purchased with an
original maturity of sixty days or less, maturing at par, shall be
valued at amortized cost, which the Board believes approximates market
value. If it is not possible to value a particular debt security
pursuant to these valuation methods, the value of such security is the
most recent bid quotation supplied by a bona fide marketmaker. If it is
not possible to value a particular debt security pursuant to the above
methods, the investment manager of the particular fund may calculate
the price of that debt security, subject to limitations established by
the Board.
An exchange-traded options contract on securities, currencies, futures
and other financial instruments is valued at its most recent sale price
on such exchange. Lacking any sales, the options contract is valued at
the Calculated Mean. Lacking any Calculated Mean, the options contract
is valued at the most recent bid quotation in the case of a purchased
options contract, or the most recent asked quotation in the case of a
written options contract. An options contract on securities, currencies
and other financial instruments traded over-the-counter is valued at
the most recent bid quotation in the case of a purchased options
contract and at the most recent asked quotation in the case of a
written options contract. Futures contracts are valued at the most
recent settlement price. Foreign currency exchange forward contracts
are valued at the value of the underlying currency at the prevailing
exchange rate on the valuation date.
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If a security is traded on more than one exchange, or upon one or more
exchanges and in the over-the-counter market, quotations are taken from
the market in which the security is traded most extensively.
If, in the opinion of the Valuation Committee of the Board of Trustees,
the value of a portfolio asset as determined in accordance with these
procedures does not represent the fair market value of the portfolio
asset, the value of the portfolio asset is taken to be an amount which,
in the opinion of the Valuation Committee, represents fair market value
on the basis of all available information. The value of other portfolio
holdings owned by a Fund is determined in a manner which, in the
discretion of the Valuation Committee, most fairly reflects market
value of the property on the valuation date.
Following the valuations of securities or other portfolios assets in
terms of the currency in which the market quotation used is expressed
("Local Currency"), the value of these portfolio assets in terms of
U.S. dollars is calculated by converting the Local Currency into U.S.
dollars at the prevailing currency exchange rate on the valuation date.
The following text supplements information in the section entitled "Investment
Manager and Underwriter" on page 23 in the Prospectus dated March 1, 1998 for
Kemper Asian Growth Fund, Kemper Europe Fund, Kemper Global Income Fund and
Kemper International Fund.
Investment Manager and Underwriter
Zurich Investment Management Limited ("ZIML") has been serving as
sub-adviser for the Kemper Asian Growth Fund, Kemper Europe Fund,
Kemper Global Income Fund and Kemper International Fund pursuant to
sub-advisory agreements with Scudder Kemper Investments, Inc. ("Scudder
Kemper"), the Funds' investment manager. ZIML, which was previously a
wholly owned subsidiary of Zurich Insurance Company, is now a wholly
owned subsidiary of Scudder Kemper and is now known as Scudder
Investments (U.K.) Limited (the "Sub-Adviser"). As a result of this
ownership change, for Kemper Europe Fund, Kemper Global Income Fund and
Kemper International Fund, new sub-advisory agreements, which were
previously approved by shareholders, have been entered into between
Scudder Kemper and the Sub-Adviser on the same terms as the previous
agreements, which terminated automatically. The sub-advisory agreement
for Kemper Asian Growth Fund also terminated automatically upon this
ownership change but a new agreement has not been implemented for that
Fund, which will be managed solely by Scudder Kemper.
The following text replaces information in the section entitled "Investment
Manager and Underwriter" on page 23 in the Prospectus dated March 1, 1998 for
Kemper Asian Growth Fund, Kemper Europe Fund, Kemper Global Income Fund and
Kemper International Fund.
Stephen P. Dexter and Marc. J. Slendebroek have been the co-lead
portfolio managers for the Kemper International Fund since June 1998.
Mr. Dexter joined Scudder Kemper in 1986 and is a Senior Vice
President. He received a B.A. in Economics and an M.B.A. in Finance
from the University of Wisconsin. Mr. Slendebroek joined the
Sub-Adviser in September 1994 and is an Associate Director. Prior to
joining the Sub-Adviser, Mr. Slendebroek was a Manager of Dutch
research at Kleinwort Benson Securities from 1992 to 1994. He received
a Masters Degree in Civil Law from the University of Leiden, in the
Netherlands.
Elizabeth J. Allan and Theresa Gusman have been the co-lead portfolio
managers for the Kemper Asian Growth Fund since June 1998. Ms. Allan
joined Scudder Kemper in 1987 and is a Senior Vice President. She
received a B.A. in East Asian Studies from Colby College, two M.A.s
(the first from Indiana University in East Asian Studies and the
second from Princeton University in Sociology) and an M.B.A. in
Finance and International Business from New York University. Ms.
Gusman joined Scudder Kemper in 1995 and is a Vice President. Prior to
joining Scudder Kemper, she was an equity research analyst since 1983.
Ms. Gusman received a B.A. in Economics from the State University of
New York.
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The following text replaces the section and heading entitled "Investment
Objectives, Policies and Risk Factors -- Depository Receipts" on page 20 in the
Prospectus dated May 6, 1998 for Kemper Contrarian Fund, Kemper-Dreman High
Return Equity Fund, Kemper Small Cap Value Fund, and Kemper Small Cap Relative
Value Fund:
Foreign Companies
Each Fund may invest up to 20% of its assets in securities of foreign
companies through the acquisition of American Depository Receipts
("ADRs"), as well as through the purchase of securities of foreign
companies that are publicly traded in the United States. ADRs are
bought and sold in the United States and are issued by domestic banks.
ADRs represent the right to receive securities of foreign issuers
deposited in the domestic bank or a correspondent bank. ADRs do not
eliminate all of the risk inherent in investing in the securities of
foreign issuers, such as changes in foreign currency exchange rates.
However, by investing in ADRs rather than directly in foreign issuers'
stock, the Fund avoids currency risks during the settlement period. In
general, there is a large, liquid market in the United States for most
ADRs.
The following text replaces the third paragraph in the section entitled
"Investment Objectives, Policies and Risk Factors - Selection of Investments" on
page 11 in the Prospectus dated April 1, 1998 for Kemper Contrarian Fund,
Kemper-Dreman High Return Equity Fund, and Kemper Small Cap Value Fund:
Selection of Investments
Fundamental analysis is used on companies that initially look
promising. Earnings and cash flow analysis as well as a company's
conventional dividend payout ratio are important to this process.
Typically, the Funds will consist of approximately 25 to 50 stocks,
diversified by both sector and industry, although, as noted above, the
High Return Equity Fund may, from time to time, concentrate its assets
in one or more market sectors. Most investments will be in securities
of domestic companies, but, the Funds may also invest up to 20% of
their assets in securities of foreign companies through the acquisition
of American Depository Receipts ("ADRs") as well as through the
purchase of securities of foreign companies that are publicly traded in
the United States. ADRs are receipts issued by a U.S. bank or trust
company evidencing ownership of underlying securities issued by a
foreign issuer. ADRs may be listed on a national securities exchange or
may be traded in the over-the-counter market. While it is anticipated
that under normal circumstances all Funds will be fully invested, in
order to conserve assets during temporary defensive periods when the
investment manager deems it appropriate, each Fund may invest up to 50%
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.
Investments in such interest bearing securities will be for temporary
defensive purposes only.
The following text replaces the third and fourth paragraphs in the section
entitled "Investment Objectives, Policies and Risk Factors - Kemper Value+Growth
Fund" on page 21 in the Prospectus dated February 1, 1998 for Kemper
Value+Growth Fund:
Value+Growth Fund
The allocation between growth and value stocks in the Fund's portfolio
will be made by the investment manager's Quantitative Research
Department with the help of a proprietary model that evaluates
macro-economic factors such as the strength of the economy, interest
<PAGE>
rates and special factors concerning growth and value stocks.
Historically, the performance of growth and value stocks has tended to
be counter-cyclical, i.e., 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 are believed to present greater
return opportunities at the time. 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 and changes would normally be
expected to be gradual. There is no assurance that the allocation
process will improve investment results.
In managing both the growth and value portions of the portfolio, the
investment manager emphasizes stock selection and fundamental research
in seeking to enhance long-term performance potential. The investment
manager considers a number of qualitative and quantitative factors in
considering whether to invest in a growth or value stock including
return on equity, earnings growth, price to earnings, price to book
value and price to cash flow ratios, dividend yield, level of debt,
good management and industry leadership. Typically stocks of both
types will have a market capitalization in excess of $1 billion.
The following text replaces information in the section entitled "Investment
Manager and Underwriter" on page 30 in the Prospectus dated February 1, 1998 for
Kemper Value+Growth Fund and Kemper Quantitative Equity Fund; and on page 20 in
the Prospectus dated November 21, 1997 for Kemper Horizon 20+ Portfolio, Kemper
10+ Portfolio and Kemper Horizon 5 Portfolio.
INVESTMENT MANAGER AND UNDERWRITER
Philip S. Fortuna is the lead portfolio manager for the Kemper Horizon
Fund, Kemper Value+Growth Fund, and Kemper Quantitative Equity Fund.
Mr. Fortuna joined Scudder Kemper in 1986 and is a Managing Director.
He served as Director of Quantitative Services from 1987 to 1993 and
Director of Investment Operations from 1993 to 1995. From 1995 to
1997, he was involved in global planning and new product development
in addition to his portfolio management responsibilities. Mr. Fortuna
currently oversees all of Scudder Kemper's quantitative activities.
August 17, 1998
[Inventory Code]
