<PAGE> PAGE 1
000 B000000 09/30/97
000 C000000 0000095605
000 D000000 N
000 E000000 NF
000 F000000 Y
000 G000000 Y
000 H000000 N
000 I000000 3.0
000 J000000 A
001 A000000 KEMPER SMALL CAPITALIZATION EQUITY FUND
001 B000000 811-1702
001 C000000 3125377000
002 A000000 222 SOUTH RIVERSIDE PLAZA
002 B000000 CHICAGO
002 C000000 IL
002 D010000 60606
002 D020000 5808
003 000000 N
004 000000 N
005 000000 N
006 000000 N
007 A000000 N
007 B000000 0
007 C010100 1
007 C010200 2
007 C010300 3
007 C010400 4
007 C010500 5
007 C010600 6
007 C010700 7
007 C010800 8
007 C010900 9
007 C011000 10
008 A000001 ZURICH KEMPER INVESTMENTS, INC.
008 B000001 A
008 C000001 801-6634
008 D010001 CHICAGO
008 D020001 IL
008 D030001 60606
008 D040001 5808
008 A000002 ZURICH INVESTMENT MANAGEMENT LIMITED
008 B000002 S
008 C000002 801-45306
008 D010002 LONDON
008 D050002 UK
008 D060002 EC4M 7RQ
010 A000001 ZURICH KEMPER DISTRIBUTORS, INC.
010 B000001 8-47765
010 C010001 CHICAGO
010 C020001 IL
010 C030001 60606
<PAGE> PAGE 2
010 C040001 5808
011 A000001 ZURICH KEMPER DISTRIBUTORS, INC.
011 B000001 8-47765
011 C010001 CHICAGO
011 C020001 IL
011 C030001 60606
011 C040001 5808
012 A000001 ZURICH KEMPER SERVICE COMPANY
012 B000001 84-1713
012 C010001 KANSAS CITY
012 C020001 MO
012 C030001 64105
013 A000001 ERNST & YOUNG LLP
013 B010001 CHICAGO
013 B020001 IL
013 B030001 60606
014 A000001 ZURICH KEMPER DISTRIBUTORS, INC.
014 B000001 8-47765
014 A000002 GRUNTAL SECURITIES, INC.
014 B000002 8-31022
014 A000003 THE GMS GROUP, INC.
014 B000003 8-23936
015 A000001 INVESTORS FIDUCIARY TRUST COMPANY
015 B000001 C
015 C010001 KANSAS CITY
015 C020001 MO
015 C030001 64105
015 E010001 X
015 A000002 THE CHASE MANHATTAN BANK
015 B000002 C
015 C010002 BROOKLYN
015 C020002 NY
015 C030002 11245
015 E040002 X
015 A000003 STATE STREET BANK AND TRUST COMPANY
015 B000003 S
015 C010003 BOSTON
015 C020003 MA
015 C030003 02110
015 E010003 X
018 000000 Y
019 A000000 Y
019 B000000 62
019 C000000 KEMPERFNDS
020 A000001 SMITH BARNEY INC.
020 B000001 13-1912900
020 C000001 175
020 A000002 ALEX. BROWN & SONS INCORPORATED
020 B000002 52-0256630
020 C000002 136
020 A000003 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
<PAGE> PAGE 3
020 B000003 13-5674085
020 C000003 105
020 A000004 LEHMAN BROTHERS INC.
020 B000004 UNKNOWN
020 C000004 77
020 A000005 MONTGOMERY SECURITIES
020 B000005 94-1701676
020 C000005 75
020 A000006 INSTINET CORPORATION
020 B000006 13-3443395
020 C000006 72
020 A000007 PIPER JAFFRY
020 B000007 UNKNOWN
020 C000007 69
020 A000008 GOLDMAN, SACHS & CO.
020 B000008 13-5108880
020 C000008 65
020 A000009 SALOMON BROTHERS INC.
020 B000009 13-3082694
020 C000009 63
020 A000010 DONALDSON, LUFKIN & JENRETTE SECURITIES CORP.
020 B000010 13-2741729
020 C000010 53
021 000000 1651
022 A000001 GOLDMAN, SACHS & CO.
022 B000001 13-5108880
022 C000001 731148
022 D000001 89375
022 A000002 LEHMAN BROTHERS INC.
022 B000002 13-2518466
022 C000002 504644
022 D000002 105598
022 A000003 MERRILL LYNCH, PIERCE, FENNER & SMITH INC.
022 B000003 13-5674085
022 C000003 343083
022 D000003 44555
022 A000004 CS FIRST BOSTON CORP.
022 B000004 13-5659485
022 C000004 205969
022 D000004 57641
022 A000005 SALOMON BROTHERS INC.
022 B000005 13-3082694
022 C000005 108122
022 D000005 19761
022 A000006 SMITH BARNEY INC.
022 B000006 13-1912900
022 C000006 48357
022 D000006 58832
022 A000007 MORGAN STANLEY & CO. INCORPORATED
022 B000007 13-2655998
022 C000007 70467
<PAGE> PAGE 4
022 D000007 25267
022 A000008 BANK OF AMERICA
022 B000008 UNKNOWN
022 C000008 72202
022 D000008 9097
022 A000009 ALEX BROWN & SONS INCORPORATED
022 B000009 52-0256630
022 C000009 51130
022 D000009 26355
022 A000010 FIRST NATIONAL BANK OF CHICAGO
022 B000010 UNKNOWN
022 C000010 66542
022 D000010 0
023 C000000 3237193
023 D000000 2308879
024 000000 Y
025 A000001 LEHMAN BROTHERS
025 B000001 13-2518466
025 C000001 D
025 D000001 6095
025 D000002 0
025 D000003 0
025 D000004 0
025 D000005 0
025 D000006 0
025 D000007 0
025 D000008 0
026 A000000 Y
026 B000000 Y
026 C000000 Y
026 D000000 Y
026 E000000 N
026 F000000 N
026 G010000 N
026 G020000 N
026 H000000 N
027 000000 Y
028 A010000 14474
028 A020000 2
028 A030000 0
028 A040000 40145
028 B010000 25247
028 B020000 8
028 B030000 0
028 B040000 23460
028 C010000 22036
028 C020000 17
028 C030000 0
028 C040000 25561
028 D010000 36075
028 D020000 2
<PAGE> PAGE 5
028 D030000 0
028 D040000 25526
028 E010000 45564
028 E020000 0
028 E030000 0
028 E040000 62026
028 F010000 79149
028 F020000 0
028 F030000 0
028 F040000 51934
028 G010000 222545
028 G020000 29
028 G030000 0
028 G040000 228652
028 H000000 43677
029 000000 Y
030 A000000 809
030 B000000 5.75
030 C000000 0.00
031 A000000 104
031 B000000 0
032 000000 705
033 000000 0
034 000000 Y
035 000000 419
036 A000000 N
036 B000000 0
037 000000 N
038 000000 0
039 000000 N
040 000000 Y
041 000000 Y
042 A000000 0
042 B000000 0
042 C000000 0
042 D000000 0
042 E000000 0
042 F000000 0
042 G000000 0
042 H000000 100
043 000000 1992
044 000000 2800
045 000000 Y
046 000000 N
047 000000 N
048 000000 0.000
048 A010000 0
048 A020000 0.000
048 B010000 0
048 B020000 0.000
048 C010000 0
<PAGE> PAGE 6
048 C020000 0.000
048 D010000 0
048 D020000 0.000
048 E010000 0
048 E020000 0.000
048 F010000 0
048 F020000 0.000
048 G010000 0
048 G020000 0.000
048 H010000 0
048 H020000 0.000
048 I010000 0
048 I020000 0.000
048 J010000 0
048 J020000 0.000
048 K010000 0
048 K020000 0.000
049 000000 N
050 000000 N
051 000000 Y
052 000000 N
053 A000000 N
054 A000000 Y
054 B000000 Y
054 C000000 N
054 D000000 N
054 E000000 N
054 F000000 N
054 G000000 N
054 H000000 Y
054 I000000 N
054 J000000 Y
054 K000000 N
054 L000000 N
054 M000000 Y
054 N000000 N
054 O000000 N
055 A000000 N
055 B000000 N
056 000000 Y
057 000000 N
058 A000000 N
059 000000 Y
060 A000000 Y
060 B000000 Y
061 000000 1000
062 A000000 N
062 B000000 0.0
062 C000000 0.0
062 D000000 0.0
062 E000000 0.0
<PAGE> PAGE 7
062 F000000 0.0
062 G000000 0.0
062 H000000 0.0
062 I000000 0.0
062 J000000 0.0
062 K000000 0.0
062 L000000 0.0
062 M000000 0.0
062 N000000 0.0
062 O000000 0.0
062 P000000 0.0
062 Q000000 0.0
062 R000000 0.0
063 A000000 0
063 B000000 0.0
066 A000000 Y
066 B000000 N
066 C000000 Y
066 D000000 N
066 E000000 N
066 F000000 N
066 G000000 N
067 000000 N
068 A000000 N
068 B000000 N
069 000000 N
070 A010000 Y
070 A020000 Y
070 B010000 Y
070 B020000 N
070 C010000 Y
070 C020000 N
070 D010000 Y
070 D020000 N
070 E010000 Y
070 E020000 N
070 F010000 Y
070 F020000 N
070 G010000 Y
070 G020000 N
070 H010000 Y
070 H020000 N
070 I010000 N
070 I020000 N
070 J010000 Y
070 J020000 Y
070 K010000 N
070 K020000 N
070 L010000 Y
070 L020000 Y
070 M010000 Y
<PAGE> PAGE 8
070 M020000 N
070 N010000 Y
070 N020000 N
070 O010000 N
070 O020000 N
070 P010000 N
070 P020000 N
070 Q010000 Y
070 Q020000 N
070 R010000 Y
070 R020000 N
071 A000000 902294
071 B000000 879204
071 C000000 859541
071 D000000 102
072 A000000 12
072 B000000 3633
072 C000000 2748
072 D000000 0
072 E000000 0
072 F000000 3193
072 G000000 2029
072 H000000 0
072 I000000 0
072 J000000 3860
072 K000000 0
072 L000000 259
072 M000000 31
072 N000000 28
072 O000000 0
072 P000000 0
072 Q000000 0
072 R000000 51
072 S000000 9
072 T000000 1992
072 U000000 0
072 V000000 0
072 W000000 28
072 X000000 11480
072 Y000000 0
072 Z000000 -5099
072AA000000 210971
072BB000000 102109
072CC010000 0
072CC020000 101461
072DD010000 0
072DD020000 0
072EE000000 76845
073 A010000 0.0000
073 A020000 0.0000
073 B000000 0.5700
<PAGE> PAGE 9
073 C000000 0.0000
074 A000000 21
074 B000000 0
074 C000000 62105
074 D000000 0
074 E000000 283
074 F000000 1032428
074 G000000 0
074 H000000 0
074 I000000 0
074 J000000 11478
074 K000000 0
074 L000000 1653
074 M000000 0
074 N000000 1107968
074 O000000 3436
074 P000000 659
074 Q000000 0
074 R010000 0
074 R020000 0
074 R030000 0
074 R040000 8395
074 S000000 0
074 T000000 1095478
074 U010000 95260
074 U020000 43677
074 V010000 0.00
074 V020000 0.00
074 W000000 0.0000
074 X000000 101486
074 Y000000 0
075 A000000 0
075 B000000 925420
076 000000 0.00
077 A000000 Y
077 B000000 Y
077 C000000 N
077 D000000 N
077 E000000 N
077 F000000 N
077 G000000 N
077 H000000 N
077 I000000 N
077 J000000 N
077 K000000 N
077 L000000 N
077 M000000 N
077 N000000 N
077 O000000 Y
077 P000000 N
077 Q010000 N
<PAGE> PAGE 10
077 Q020000 N
077 Q030000 N
080 A000000 ICI MUTUAL INSURANCE COMPANY
080 C000000 60000
081 A000000 Y
081 B000000 97
082 A000000 Y
082 B000000 50
083 A000000 N
083 B000000 0
084 A000000 N
084 B000000 0
085 A000000 Y
085 B000000 N
086 A010000 0
086 A020000 0
086 B010000 0
086 B020000 0
086 C010000 0
086 C020000 0
086 D010000 0
086 D020000 0
086 E010000 0
086 E020000 0
086 F010000 0
086 F020000 0
SIGNATURE JEROME L. DUFFY
TITLE TREASURER
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1997 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITIALIZATION EQUITY FUND
<SERIES>
<NUMBER> 001
<NAME> CLASS A
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 754,975
<INVESTMENTS-AT-VALUE> 1,094,816
<RECEIVABLES> 13,131
<ASSETS-OTHER> 21
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,107,968
<PAYABLE-FOR-SECURITIES> 3,436
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,054
<TOTAL-LIABILITIES> 12,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 635,871
<SHARES-COMMON-STOCK> 95,260
<SHARES-COMMON-PRIOR> 92,752
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 119,766
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 339,841
<NET-ASSETS> 1,095,478
<DIVIDEND-INCOME> 2,748
<INTEREST-INCOME> 3,633
<OTHER-INCOME> 0
<EXPENSES-NET> (11,480)
<NET-INVESTMENT-INCOME> (5,099)
<REALIZED-GAINS-CURRENT> 108,862
<APPREC-INCREASE-CURRENT> 101,461
<NET-CHANGE-FROM-OPS> 205,224
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (52,851)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 28,403
<NUMBER-OF-SHARES-REDEEMED> (33,969)
<SHARES-REINVESTED> 8,074
<NET-CHANGE-IN-ASSETS> 161,403
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 87,752
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,193
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,480
<AVERAGE-NET-ASSETS> 925,420
<PER-SHARE-NAV-BEGIN> 7.01
<PER-SHARE-NII> (.01)
<PER-SHARE-GAIN-APPREC> 1.55
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.57)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.98
<EXPENSE-RATIO> .90
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1997 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 002
<NAME> CLASS B
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 754,975
<INVESTMENTS-AT-VALUE> 1,094,816
<RECEIVABLES> 13,131
<ASSETS-OTHER> 21
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,107,968
<PAYABLE-FOR-SECURITIES> 3,436
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,054
<TOTAL-LIABILITIES> 12,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 635,871
<SHARES-COMMON-STOCK> 39,598
<SHARES-COMMON-PRIOR> 37,882
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 119,766
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 339,841
<NET-ASSETS> 1,095,478
<DIVIDEND-INCOME> 2,748
<INTEREST-INCOME> 3,633
<OTHER-INCOME> 0
<EXPENSES-NET> (11,480)
<NET-INVESTMENT-INCOME> (5,099)
<REALIZED-GAINS-CURRENT> 108,862
<APPREC-INCREASE-CURRENT> 101,461
<NET-CHANGE-FROM-OPS> 205,224
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (21,904)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 14,228
<NUMBER-OF-SHARES-REDEEMED> (16,096)
<SHARES-REINVESTED> 3,584
<NET-CHANGE-IN-ASSETS> 161,403
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 87,752
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,193
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,480
<AVERAGE-NET-ASSETS> 925,420
<PER-SHARE-NAV-BEGIN> 6.81
<PER-SHARE-NII> (.10)
<PER-SHARE-GAIN-APPREC> 1.50
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.57)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.64
<EXPENSE-RATIO> 2.14
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1997 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITIALIZATION EQUITY FUND
<SERIES>
<NUMBER> 003
<NAME> CLASS C
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 754,975
<INVESTMENTS-AT-VALUE> 1,094,816
<RECEIVABLES> 13,131
<ASSETS-OTHER> 21
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,107,968
<PAYABLE-FOR-SECURITIES> 3,436
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,054
<TOTAL-LIABILITIES> 12,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 635,871
<SHARES-COMMON-STOCK> 1,487
<SHARES-COMMON-PRIOR> 952
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 119,766
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 339,841
<NET-ASSETS> 1,095,478
<DIVIDEND-INCOME> 2,748
<INTEREST-INCOME> 3,633
<OTHER-INCOME> 0
<EXPENSES-NET> (11,480)
<NET-INVESTMENT-INCOME> (5,099)
<REALIZED-GAINS-CURRENT> 108,862
<APPREC-INCREASE-CURRENT> 101,461
<NET-CHANGE-FROM-OPS> 205,224
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (850)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,306
<NUMBER-OF-SHARES-REDEEMED> (7,876)
<SHARES-REINVESTED> 105
<NET-CHANGE-IN-ASSETS> 161,403
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 87,752
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,193
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,480
<AVERAGE-NET-ASSETS> 925,420
<PER-SHARE-NAV-BEGIN> 6.80
<PER-SHARE-NII> (.09)
<PER-SHARE-GAIN-APPREC> 1.49
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.57)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 7.63
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<LEGEND>
PER SHARE AND RATIO INFORMATION IS SHOWN AT THE CLASS LEVEL. ALL OTHER
INFORMATION IS COMBINED FOR ALL CLASSES. THIS SCHEDULE CONTAINS SUMMARY
FINANCIAL INFORMATION EXTRACTED FROM THE 1997 ANNUAL REPORT TO SHAREHOLDERS AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000095605
<NAME> KEMPER SMALL CAPITALIZATION EQUITY FUND
<SERIES>
<NUMBER> 004
<NAME> CLASS I
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 754,975
<INVESTMENTS-AT-VALUE> 1,094,816
<RECEIVABLES> 13,131
<ASSETS-OTHER> 21
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 1,107,968
<PAYABLE-FOR-SECURITIES> 3,436
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 9,054
<TOTAL-LIABILITIES> 12,490
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 635,871
<SHARES-COMMON-STOCK> 2,592
<SHARES-COMMON-PRIOR> 2,818
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 119,766
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 339,841
<NET-ASSETS> 1,095,478
<DIVIDEND-INCOME> 2,748
<INTEREST-INCOME> 3,633
<OTHER-INCOME> 0
<EXPENSES-NET> (11,480)
<NET-INVESTMENT-INCOME> (5,099)
<REALIZED-GAINS-CURRENT> 108,862
<APPREC-INCREASE-CURRENT> 101,461
<NET-CHANGE-FROM-OPS> 205,224
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (1,450)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,369
<NUMBER-OF-SHARES-REDEEMED> (1,827)
<SHARES-REINVESTED> 232
<NET-CHANGE-IN-ASSETS> 161,403
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 87,752
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,193
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 11,480
<AVERAGE-NET-ASSETS> 925,420
<PER-SHARE-NAV-BEGIN> 7.05
<PER-SHARE-NII> .01
<PER-SHARE-GAIN-APPREC> 1.58
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> (.57)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 8.07
<EXPENSE-RATIO> .53
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
Exhibit 770
Kemper Small Capitalization Equity Fund
Form N-SAR for the period ended 9/30/97
File No. 811-1702
Offering Date: 10/2/96
Description of Security: Advanced Health Corporation
Total Amount of Underwriting: 2,300,000 Shares
Name of Fund: Kemper Small Capitalization Equity Fund
Amount Purchased: 32,800 Shares
Affiliate That Participated in Underwriting: Gruntal and Co.
Amount Purchased 4% Limit (1): 1.5%
Amount Purchased 3% Limit (2): Less than 0.1%
Purchased From: Cowen & Co.
Underwriting syndicates members: Cowen & Co., Volpe, Welty &
Co., Bear, Stearns & Co. Inc., Deutsche Morgan Grenfell
Inc., Donaldson, Lufkin & Jenrette Securities Corp.,
Hambrecht & Quist LLC, Montgomery Securities, Morgan Stanley
& Co. Inc., Oppenheimer & Co., Inc., Prudential Securities
Inc., UBS Securities LLC, Wasserstein Perella Securities,
Inc., Advest, Inc., The Chicago Corporation, Dominick &
Dominick, Inc., Gerard Klauer Mattison & Co., LLC, McDonald
& Company Securities, Inc., Pennsylvania Merchant Group
Ltd., Piper Jaffray Inc., Punk, Ziegel & Knoell, Raymond
James & Associates, Inc., Roney & Co., Scott & Stringfellow,
Inc., Southcoast Capital Corp., Unterberg Harris, Wheat
First Butcher Singer.
Offering Date: 10/29/96
Description of Security: Aurum Software, Inc.
Total Amount of Underwriting: 2,650,000 Shares
Name of Fund: Kemper Small Capitalization Equity Fund
Amount Purchased: 11,100 Shares
Affiliate That Participated in Underwriting: Gruntal and Co.
Amount Purchased 4% Limit (1): 0.9%
Amount Purchased 3% Limit (2): Less than 0.1%
Purchased from: Alex. Brown & Sons Inc.
Underwriting syndicates members: Alex. Brown & Sons Inc.,
Cowen & Co., Wessels, Arnold & Henderson, L.L.C., Deutsche
Morgan Grenfell Inc., Hambrecht & Quist LLC, Lehman Brothers
Inc., Merrill Lynch, Pierce, Fenner & Smith Inc., Montgomery
Securities, Oppenheimer & Co., Inc., PaineWebber Inc.,
Robertson, Stephens & Co., LLC, Smith Barney Inc., UBS
Securities LLC, Dakin Securities Corp., Punk, Ziegel &
Knoell, The Robinson-Humphrey Co., Inc., Soundview Financial
Group, Inc., Sterne, Agee & Leach, Inc., Sutro & Co., Inc.
Offering Date: 8/6/97
Description of Security: OCWEN Financial Corp.
Total Amount of Underwriting: 3,000,000 Shares
Name of Fund: Kemper Small Capitalization Equity Fund
Amount Purchased: 84,300 Shares
Affiliate That Participated in Underwriting: Gruntal and Co.
Amount Purchased 4% Limit (1): 2.8%
Amount Purchased 3% Limit (2): 0.4%
Purchased From: Lehman Brothers Inc.
Underwriting syndicates members: Lehman Brothers Inc.,
Friedman, Billings, Ramsey & Co., Inc., Morgan Stanley &
Co., Inc., Bear Stearns & Co., Inc., Credit Suisse First
Boston Corp., Dillon Read & Co., Inc., Donaldson, Lufkin &
Jenrette Securities Corp., A.G. Edwards & Sons, Inc., EVEREN
Securities Inc., Merrill Lynch & Co., Montgomery Securities,
Oppenheimer & Co., Inc., Prudential Securities, Inc.,
Salomon Brothers, Inc., J.C. Bradford & Co., Allen C. Ewing
& Co., Piper Jaffray Inc., Raymond James & Associates Inc.,
Robinson-Humphrey Co., Inc., Sandler, O'Neill & Partners,
L.P., Southeast Research Partners, Inc.
Offering Date: 10/25/96
Description of Security: Triumph Group, Inc.
Total Amount of Underwriting: 2,500,000 Shares
Name of Fund: Kemper Small Capitalization Equity Fund
Amount Purchased: 46,800 Shares
Affiliate That Participated in Underwriting: Gruntal and Co.
Amount Purchased 4% Limit (1): 2.0%
Amount Purchased 3% Limit (2): 0.1%
Purchased From: Alex. Brown & Sons Inc.
Underwriting syndicates members: Alex. Brown & Sons Inc.,
Dillon, Read & Co. Inc., Goldman, Sachs & Co., Lazard Freres
& Co. LLC, Morgan Stanley & Co., Inc., Oppenheimer & Co.,
Inc., Smith Barney Inc., Dominick & Dominick, Inc.,
Fahnestock & Co., Inc., Freimark Blair & Co., Inc., Janney
Montgomery Scott Inc., C.L. King & Associates, Inc.,
Pennsylvania Merchant Group Ltd., The Robinson-Humphrey Co.,
Inc., Stephans Inc., Sterne, Agee & Leach, Inc.
(1) The amount purchased may not be greater than 4% of the
total principal amount of an issue. Percentage applies
to all Funds purchasing shares.
(2) The amount purchased may not be greater than 3% of the
Funds total assets.
REPORT OF INDEPENDENT AUDITORS
Board of Trustees
Kemper Funds
In planning and performing our audit of the financial statements of
each of the Kemper Funds listed in Exhibit A attached hereto (the
"Funds") for the period ended as of the date listed in Exhibit A
attached hereto ("Report Date"), we considered their internal
control, including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of
expressing our opinion on the financial statements and to comply with
the requirements of Form N-SAR, not to provide assurance on the
internal control.
The management of the Funds is responsible for establishing and
maintaining internal control. In fulfilling this responsibility,
estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls
that are relevant to an audit pertain to the entity's objective of
preparing financial statements for external purposes that are fairly
presented in conformity with generally accepted accounting
principles. Those controls include the safeguarding of assets
against unauthorized acquisition, use or disposition.
Because of inherent limitations in internal control, errors or
irregularities may occur and not be detected. Also, projection of
any evaluation of internal control to future periods is subject to
the risk that it may become inadequate because of changes in
conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control would not necessarily
disclose all matters in the internal control that might be material
weaknesses under standards established by the American Institute of
Certified Public Accountants. A material weakness is a condition in
which the design or operation of one or more of the internal control
components does not reduce to a relatively low level the risk that
errors or irregularities in amounts that would be material in
relation to the financial statements being audited may occur and not
be detected within a timely period by employees in the normal course
of performing their assigned functions. However, we noted no matters
involving the internal control and its operation, including controls
for safeguarding securities, that we consider to be material
weaknesses as defined above as of Report Date.
This report is intended solely for the information and use of
management and the Securities and Exchange Commission.
ERNST & YOUNG LLP
Chicago, Illinois
November 18, 1997
Kemper Funds Exhibit A
September 30, 1997
Kemper Portfolios:
Kemper Cash Reserves Fund
Kemper U.S. Mortgage Fund
Kemper Short-Intermediate Government Fund
Kemper Growth Fund
Kemper Small Capitalization Equity Fund
Kemper Aggressive Growth Fund
Kemper High Yield Fund
Kemper National Tax-Free Income Series
Kemper Municipal Bond Fund
Kemper Intermediate Municipal Bond Fund
Tax-Exempt California Money Market Fund
