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SMALL CAP STOCKS STILL HOLD LONG-TERM POTENTIAL, SAYS KEMPER PORTFOLIO MANAGER

 SMALL CAP STOCKS STILL HOLD LONG-TERM POTENTIAL,
 SAYS KEMPER PORTFOLIO MANAGER
 CHICAGO, Nov. 27 /PRNewswire/ -- Despite whispers predicting the end of the recent small market capitalization (small cap) stock cycle, the current climate favoring small cap stocks will prevail for some time to come, according to Kemper Summit Fund Portfolio Manager C. Beth Cotner.
 "For the past several months, small caps have outperformed both the market and larger capitalization stocks," said Cotner, who asserts that the trend will continue. "I believe the U.S. markets are now entering what could be an extended cycle favoring small cap growth, similar to the cycle we had between 1974-1983. With small cap investing, periods of over- or under-performance tend to run for years. In fact, there are seven distinct cycles (see accompanying graphic) of small-cap performance since 1926."
 Cotner predicts that several major factors, including the possibility of further easing by the Federal Reserve and a slower-than- expected economic recovery, will help small cap stocks provide investors with continued strong returns in 1992.
 "The environment in the mid- and late-1990s was ideal for large-cap stocks," said Cotner. "Investors focused on poorly run companies which were asset-rich and likely takeover targets. The 1990s are emerging as an era where strong companies with unleveraged balance sheets are likely to prosper. During periods of slow growth, such as we are experiencing now, smaller companies have historically outperformed the market and larger-cap companies."
 "Small growth companies continued to look inexpensive," says Cotner, "not only from a relative performance viewpoint, but also on a fundamental research basis."
 Cotner defines "small cap" stocks as companies with less than $1 billion in capitalization. Within the small cap market, Cotner looks for companies with a high annual growth rate -- at least 15 percent, a market leadership position or special niche in its industry, and strong management. Cotner's hands-on portfolio management style led her to meet with over 70 top management teams last year alone. She evaluates each company partly based on the CEO's leadership, vision and focus. She now believes the short-term outlook for the retail, technology and healthcare sectors is very positive.
 Some of her fund's current holdings include Duty Free International, Biomet and Symantec. Looking ahead, Cotner says she will continue to purchase small-cap companies with above-average earnings growth, being watchful to monitor companies that may be vulnerable to disappointing earnings.
 Cotner's Kemper Summit Fund is up 43.98 percent year-to-date as of Oct. 31, two-and-a-half percentage points above the small-cap fund average of 41.48 percent and well above the S&P total return of 22.05 percent for the same period.
 KFS is one of three financial services units of Kemper Corp. The other two financial servicers units are Kemper Securities Group, Inc. (KSG), and Kemper Investors Life insurance Co. (KILICO). KFS currently has over $62 billion in assets under management. Kemper Corp. is a non-operating holding company with major subsidiaries in property casualty insurance, life insurance, risk management, reinsurance and investment services.
 YEAR SMALL-CAP VS. LARGE-CAP PERFORMANCE (A):
 1926-31 Small-caps underperform 6 of 6 years
 1932-45 Small-caps outperform 12 of 14 years
 1946-57 Small-caps underperform 9 of 12 years
 1958-68 Small-caps outperform 9 of 11 years
 1959-73 Small-caps underperform 4 of 5 years
 1974-83 Small-caps outperform 10 of 10 years
 1984-90 Small-caps underperform 6 of 7 years
 (A) Source: Ibbotson -- "Stocks, Bonds, Bills and Inflation: Historical Returns."
 -0- 11/27/91
 /CONTACT: Martin Gawne, 312-845-1905, or Steve Radis, 312-917-8393, both of Kemper Financial Services/
 (KEM) CO: Kemper Financial Services ST: Illinois IN: FIN SU: ECO


JT -- NY049 -- 7854 11/27/91 15:59 EST
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Date:Nov 27, 1991
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