DWS Dreman Small Cap Value Fund

Transcription

1 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES DWS Dreman Small Cap Value Fund Effective January 6, 2009, DWS Dreman Small Cap Value Fund (the Fund") will re-open for investment to new investors. All references in the Fund s current prospectuses disclosing that the Fund is closed to new investors are hereby deleted. Please Retain This Supplement for Future Reference January 5, 2009 DVF1-3602

2 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS: DWS Alternative Asset Allocation Plus Fund DWS Balanced Fund DWS Blue Chip Fund DWS California Tax-Free Income Fund DWS Capital Growth Fund DWS Climate Change Fund DWS Commodity Securities Fund DWS Communications Fund DWS Core Fixed Income Fund DWS Core Plus Allocation Fund DWS Core Plus Income Fund DWS Disciplined Long/Short Growth Fund DWS Disciplined Long/Short Value Fund DWS Disciplined Market Neutral Fund DWS Dreman Concentrated Value Fund DWS Dreman High Return Equity Fund DWS Dreman Mid Cap Value Fund DWS Dreman Small Cap Value Fund DWS EAFE Equity Index Fund DWS Emerging Markets Equity Fund DWS Emerging Markets Fixed Income Fund DWS Enhanced S&P 500 Index Fund DWS Equity 500 Index Fund DWS Equity Income Fund DWS Equity Partners Fund DWS Europe Equity Fund DWS Floating Rate Plus Fund DWS Global Bond Fund DWS Global Opportunities Fund DWS Global Thematic Fund DWS GNMA Fund DWS Gold & Precious Metals Fund DWS Growth & Income Fund DWS Health Care Fund DWS High Income Fund DWS High Income Plus Fund DWS Inflation Protected Plus Fund DWS Intermediate Tax/AMT Free Fund DWS International Fund DWS International Select Equity Fund DWS International Value Opportunities Fund DWS Japan Equity Fund DWS Large Cap Value Fund DWS Large Company Growth Fund DWS Latin America Equity Fund DWS LifeCompass 2015 Fund DWS LifeCompass 2020 Fund DWS LifeCompass 2030 Fund DWS LifeCompass 2040 Fund DWS LifeCompass Income Fund DWS LifeCompass Protect Fund DWS LifeCompass Retirement Fund DWS Lifecycle Long Range Fund DWS Managed Municipal Bond Fund DWS Massachusetts Tax-Free Fund DWS Micro Cap Fund DWS Mid Cap Growth Fund DWS New York Tax-Free Income Fund DWS RREEF Global Infrastructure Fund DWS RREEF Global Real Estate Securities Fund DWS RREEF Real Estate Securities Fund DWS S&P 500 Index Fund DWS Select Alternative Allocation Fund DWS Short Duration Fund DWS Short Duration Plus Fund DWS Short-Term Municipal Bond Fund DWS Small Cap Core Fund DWS Small Cap Growth Fund DWS Strategic Government Securities Fund DWS Strategic High Yield Tax Free Fund DWS Strategic Income Fund DWS Target 2010 Fund DWS Target 2011 Fund DWS Target 2012 Fund DWS Target 2013 Fund DWS Target 2014 Fund DWS Technology Fund DWS U.S. Bond Index Fund DWS Value Builder Fund The following information replaces similar disclosure regarding the schedule for posting portfolio holdings in the Other Policies and Risks For more information" section of each fund s prospectus: A complete list of the fund s portfolio holdings is posted as of the month end on investments.com on or about the 15th day of the following month. More frequent posting of portfolio holdings information may be made from time to time on Please Retain This Supplement for Future Reference October 27, 2008 DMF 3682

3 SUPPLEMENT TO THE CURRENTLY EFFECTIVE PROSPECTUSES OF EACH OF THE LISTED FUNDS/PORTFOLIOS: Cash Account Trust: Government & Agency Securities Portfolio Money Market Portfolio Tax-Exempt Portfolio DWS Alternative Asset Allocation Plus Fund DWS Balanced Fund DWS Blue Chip Fund DWS California Tax-Free Income Fund DWS Capital Growth Fund DWS Climate Change Fund DWS Commodity Securities Fund DWS Communications Fund DWS Core Fixed Income Fund DWS Core Plus Allocation Fund DWS Core Plus Income Fund DWS Disciplined Long/Short Growth Fund DWS Disciplined Long/Short Value Fund DWS Disciplined Market Neutral Fund DWS Dreman Concentrated Value Fund DWS Dreman High Return Equity Fund DWS Dreman Mid Cap Value Fund DWS Dreman Small Cap Value Fund DWS EAFE Equity Index Fund DWS Emerging Markets Equity Fund DWS Emerging Markets Fixed Income Fund DWS Enhanced S&P 500 Index Fund DWS Equity 500 Index Fund DWS Equity Income Fund DWS Equity Partners Fund DWS Europe Equity Fund DWS Floating Rate Plus Fund DWS Global Bond Fund DWS Global Opportunities Fund DWS Global Thematic Fund DWS GNMA Fund DWS Gold & Precious Metals Fund DWS Growth & Income Fund DWS Health Care Fund DWS High Income Fund DWS High Income Plus Fund DWS Inflation Protected Plus Fund DWS Intermediate Tax/AMT Free Fund DWS International Fund DWS International Select Equity Fund DWS International Value Opportunities Fund DWS Japan Equity Fund DWS Large Cap Value Fund DWS Large Company Growth Fund DWS Latin America Equity Fund DWS LifeCompass 2015 Fund DWS LifeCompass 2020 Fund DWS LifeCompass 2030 Fund DWS LifeCompass 2040 Fund DWS LifeCompass Income Fund DWS LifeCompass Protect Fund DWS LifeCompass Retirement Fund DWS Lifecycle Long Range Fund DWS Managed Municipal Bond Fund DWS Massachusetts Tax-Free Fund DWS Micro Cap Fund DWS Mid Cap Growth Fund DWS Money Market Prime Series DWS Money Market Series DWS New York Tax-Free Income Fund DWS RREEF Global Infrastructure Fund DWS RREEF Global Real Estate Securities Fund DWS RREEF Real Estate Securities Fund DWS S&P 500 Index Fund DWS Short Duration Fund DWS Short Duration Plus Fund DWS Short-Term Municipal Bond Fund DWS Small Cap Core Fund DWS Small Cap Growth Fund DWS Strategic Government Securities Fund DWS Strategic High Yield Tax Free Fund DWS Strategic Income Fund DWS Target 2010 Fund DWS Target 2011 Fund DWS Target 2012 Fund DWS Target 2013 Fund DWS Target 2014 Fund DWS Technology Fund DWS U.S. Bond Index Fund DWS Value Builder Fund Investors Cash Trust: Treasury Portfolio Tax-Exempt California Money Market Fund On or about September 25, 2008, the following information replaces similar disclosure under "Policies about transactions" in the "Policies You Should Know About" section of each fund s/portfolio s prospectuses: Each fund/portfolio accepts payment for shares only in US dollars by a check drawn on a US bank, a bank or Federal Funds wire transfer or an electronic bank transfer. A fund/portfolio does not accept third party checks. A third party check is a check made payable to one or more parties and offered as payment to one or more other parties (e.g., a check made payable to you that you offer as payment to someone else). Checks should normally be payable to DWS Investments and drawn by you or a financial institution on your behalf with your name or account number included with the check. Please Retain This Supplement for Future Reference September 25, 2008 DMF 3671R

4 MARCH 1, 2008 PROSPECTUS CLASS S DWS Large Cap Value Fund DWS Dreman High Return Equity Fund DWS Dreman Mid Cap Value Fund DWS Dreman Small Cap Value Fund As with all mutual funds, the Securities and Exchange Commission (SEC) does not approve or disapprove these shares or determine whether the information in this prospectus is truthful or complete. It is a criminal offense for anyone to inform you otherwise.

5 Contents How each Fund Works 4 DWS Large Cap Value Fund 11 DWS Dreman High Return Equity Fund 17 DWS Dreman Mid Cap Value Fund 24 DWS Dreman Small Cap Value Fund 30 Other Policies and Secondary Risks How to Invest in the Funds 42 How to Buy Shares 43 How to Exchange or Sell Shares 46 Policies You Should Know About 59 Understanding Distributions and Taxes 62 Appendix 32 Who Manages and Oversees the Funds 37 Financial Highlights

6 How each Fund Works On the next few pages, you ll find information about each fund s investment objective, the main strategies each uses to pursue that objective and the main risks that could affect performance. Whether you are considering investing in a fund or are already a shareholder, you ll want to look this information over carefully. You may want to keep it on hand for reference as well. Class S shares are generally only available to new investors through feebased programs of investment dealers that have special agreements with each fund s distributor, through certain group retirement plans and through certain registered investment advisors. These dealers and advisors typically charge ongoing fees for services they provide. Remember that mutual funds are investments, not bank deposits. They re not insured or guaranteed by the FDIC or any other government agency. Their share prices will go up and down, and you could lose money by investing in them. DWS Dreman Small Cap Value Fund is closed to new investors (see Policies You Should Know About for additional information). You can find DWS prospectuses on the Internet at (the Web site does not form a part of this prospectus).

7 Class S ticker symbol KDCSX fund number 2312 DWS Large Cap Value Fund The Fund s Main Investment Strategy The fund seeks long-term capital appreciation, with current income as a secondary objective. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in common stocks and other equity securities of large US companies that are similar in size to the companies in the Russell 1000 Value Index (as of January 31, 2008, the Russell 1000 Value Index had a median market capitalization of $4.9 billion) and that the portfolio managers believe are undervalued. These are typically companies that have been sound historically, but are temporarily out of favor. The fund intends to invest primarily in companies whose market capitalizations fall within the normal range of the Index. Although the fund can invest in stocks of any economic sector (which is comprised of two or more industries), at times it may emphasize the financial services sector or other sectors. In fact, it may invest more than 25% of total assets in a single sector. The fund may invest up to 20% of total assets in foreign securities. The fund s equity investments are mainly common stocks, but may also include other types of equities such as preferred or convertible stocks. The portfolio managers begin by screening for stocks whose price-to-earnings ratios are below the average for the S&P 500 Index. The portfolio managers then compare a company s stock price to its book value, cash flow and yield, and analyze individual companies to identify those that are financially sound and appear to have strong potential for long-term growth. 4 DWS Large Cap Value Fund

8 The portfolio managers assemble the fund s portfolio from among the most attractive stocks, drawing on an analysis of economic outlooks for various sectors and industries. The portfolio managers will normally sell a stock when it believes the stock s price is unlikely to go higher, its fundamental factors have changed, other investments offer better opportunities or in the course of adjusting its emphasis on a given industry. Other Investments. The fund is permitted, but not required, to use various types of derivatives (contracts whose value is based on, for example, indices, currencies or securities). Derivatives may be used for hedging and for risk management or for non-hedging purposes to seek to enhance potential gains. The fund may use derivatives in circumstances where portfolio management believes they offer an economical means of gaining exposure to a particular asset class or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, the fund may use futures, currency options and forward currency transactions. Securities Lending. The fund may lend its investment securities in an amount up to % of its total assets to approved institutional borrowers who need to borrow securities in order to complete certain transactions. DWS Large Cap Value Fund 5

9 This fund is designed for investors interested in diversifying a growth-oriented portfolio or adding a core holding to a value-oriented portfolio. The Main Risks of Investing in the Fund There are several risk factors that could hurt the fund s performance, cause you to lose money or cause the fund s performance to trail that of other investments. Stock Market Risk. As with most stock funds, the most important factor affecting this fund is how the stock market performs (to the extent the fund invests in a particular market sector, the fund s performance may be proportionately affected by that segment s general performance). When stock prices fall, you should expect the value of your investment to fall as well. Because a stock represents ownership in its issuer, stock prices can be hurt by poor management, shrinking product demand and other business risks. These may affect single companies as well as groups of companies. In addition, movements in financial markets may adversely affect a stock s price, regardless of how well the company performs. The market as a whole may not favor the types of investments the fund makes and the fund may not be able to get an attractive price for them. Security Selection Risk. A risk that pervades all investing is the risk that the securities in the fund s portfolio may decline in value. Value Investing Risk. At times, value investing may perform better than or worse than other investment styles and the overall market. If the Advisor overestimates the value or return potential of one or more common stocks, the fund may underperform the general equity market. Value stocks may also be out of favor for certain periods in relation to growth stocks. 6 DWS Large Cap Value Fund Industry Risk. While the fund does not concentrate in any industry or sector, to the extent that the fund has exposure to a given industry or sector, any factors affecting that industry or sector could affect the value of portfolio securities. For example, manufacturers of consumer goods could be hurt by a rise in unemployment or technology companies could be hurt by such factors as market saturation, price competition and rapid obsolescence.

10 Securities Lending Risk. Any loss in the market price of securities loaned by the fund that occurs during the term of the loan would be borne by the fund and would adversely affect the fund s performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while the loan is outstanding. However, loans will be made only to borrowers selected by the fund s delegate after a review of relevant facts and circumstances, including the creditworthiness of the borrower. Other factors that could affect performance include: portfolio management could be wrong in the analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters. foreign securities may be more volatile than their US counterparts, for reasons such as currency fluctuations and political and economic uncertainty. derivatives could produce disproportionate losses due to a variety of factors, including the failure of the counterparty to meet its obligations or unexpected price or interest rate movements. (See Secondary Risks for more information.) DWS Large Cap Value Fund 7

11 The Fund s Performance History While a fund s past performance (before and after taxes) isn t necessarily a sign of how it will do in the future, it can be valuable for an investor to know. The bar chart shows how the performance of the fund s Class S shares has varied from year to year, which may give some idea of risk. The table on the following page shows how fund performance compares to relevant index performance (which, unlike fund performance, does not reflect fees or expenses). The performance of both the fund and the index varies over time. All figures assume reinvestment of dividends and distributions (in the case of after-tax returns, reinvested net of assumed tax rates). DWS Large Cap Value Fund The table shows returns for Class S shares on a before-tax and after-tax basis. After-tax returns are estimates calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual aftertax returns depend on an investor s tax situation and may differ from those shown in the table. After-tax returns shown are not relevant for investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts. Annual Total Return (%) as of 12/31 each year Class S For the periods included in the bar chart: Best Quarter: 6.05%, Q Worst Quarter: -1.57%, Q DWS Large Cap Value Fund

12 Average AnnualTotal Returns (%) as of 12/31/ Year Since Inception* Class S Return before Taxes Return after Taxes on Distributions Return after Taxes on Distributions and Sale of Fund Shares 12.23** 8.94** Russell 1000 Value Index (reflects no deductions for fees, expenses or taxes) S&P 500 Index (reflects no deductions for fees, expenses or taxes) * Class S commenced operations on December 20, Index comparisons are as of December 31, ** Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to a capital loss occurring upon redemption resulting in a assumed tax deduction for the shareholder. Total return would have been lower had certain expenses not been reduced. Russell 1000 Value Index is an unmanaged index that consists of those stocks in the Russell 1000 Index with less-than-average growth orientation. Russell 1000 Index is an unmanaged price-only index of the 1,000 largest capitalized companies that are domiciled in the US and whose common stocks are traded. Standard & Poor s 500 Index (S&P 500) is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Current performance may be higher or lower than the performance data quoted above. For more recent performance information, call your financial advisor or (800) or visit our Web site at Return after Taxes on Distributions assumes that an investor holds fund shares at the end of the period. The return reflects taxes only on the fund s distributions and not on a shareholder s gain or loss from selling fund shares. Return after Taxes on Distributions and Sale of Fund Shares assumes that an investor sold his or her fund shares at the end of the period. The return reflects taxes on both the fund s distributions and a shareholder s gain or loss from selling fund shares. DWS Large Cap Value Fund 9

13 How Much Investors Pay The table below describes the fees and expenses that you may pay if you buy and hold fund shares. This information doesn t include any fees that may be charged by your financial advisor. Fee Table Class S Shareholder Fees, paid directly from your investment Redemption/Exchange Fee on shares owned less than 15 days (as % of redemption proceeds) % Annual Operating Expenses, deducted from fund assets Management Fee 0.42% Distribution and/or Service (12b-1) Fee None Other Expenses Total Annual Operating Expenses This fee is charged on applicable redemptions or exchanges. Please see Policies You Should Know About Policies about transactions for further information. 2 Other Expenses also include an administrative services fee paid to the Advisor in the amount of 0.10%. 3 Through March 31, 2008, the Advisor has contractually agreed to waive all or a portion of its management fee or pay certain operating expenses of the fund to the extent necessary to maintain the fund s total operating expenses at 0.80% for Class S shares, excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest. Based on the costs above, this example helps you compare the expenses of the fund to those of other mutual funds. This example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvested all dividends and distributions. This is only an example; actual expenses will be different. Example 1 Year 3 Years 5 Years 10 Years Class S shares $68 $214 $373 $ DWS Large Cap Value Fund

14 Class S ticker symbol KDHSX fund number 2387 DWS Dreman High Return Equity Fund The Fund s Main Investment Strategy The fund seeks to achieve a high rate of total return. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in equity securities (mainly common stocks). The fund focuses on stocks of large US companies that are similar in size to the companies in the S&P 500 Index (as of January 31, 2008, the S&P 500 Index had a median market capitalization of $11.8 billion) and that the portfolio managers believe are undervalued. The fund intends to invest primarily in companies whose market capitalizations fall within the normal range of the Index. Although the fund can invest in stocks of any economic sector, at times it may emphasize the financial services sector or other sectors. In fact, it may invest more than 25% of total assets in a single sector. The fund may invest up to 20% of total assets in foreign securities. The fund s equity investments are mainly common stocks, but may also include other types of equities such as preferred or convertible stocks. The portfolio managers begin by screening for stocks whose price-to-earnings ratios are below the average for the S&P 500 Index. The portfolio managers then compare a company s stock price to its book value, cash flow and yield and analyze individual companies to identify those that are financially sound and appear to have strong potential for long-term growth and income. The portfolio managers assemble the fund s portfolio from among the most attractive stocks, drawing on an analysis of economic outlooks for various sectors and industries. The portfolio managers will normally sell a stock when it reaches a target price, its fundamental factors have changed or when other investments offer better opportunities. DWS Dreman High Return Equity Fund 11

15 This fund is designed for long-term investors who are interested in a large-cap value fund that may focus on certain sectors of the economy. Other Investments. The fund is permitted, but not required, to use various types of derivatives (contracts whose value is based on, for example, indices, currencies or securities). Derivatives may be used for hedging and for risk management or for non-hedging purposes to seek to enhance potential gains. The fund may use derivatives in circumstances where portfolio management believes they offer an economical means of gaining exposure to a particular asset class or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, the fund may use futures, currency options and forward currency transactions. Securities Lending. The fund may lend its investment securities in an amount up to % of its total assets to approved institutional borrowers who need to borrow securities in order to complete certain transactions. The Main Risks of Investing in the Fund There are several risk factors that could hurt the fund s performance, cause you to lose money or cause the fund s performance to trail that of other investments. Stock Market Risk. The fund is affected by how the stock market performs. To the extent the fund invests in a particular capitalization or market sector, the fund s performance may be proportionately affected by that segment s general performance. When stock prices fall, you should expect the value of your investment to fall as well. Because a stock represents ownership in its issuer, stock prices can be hurt by poor management, shrinking product demand and other business risks. These factors may affect single companies as well as groups of companies. In 12 DWS Dreman High Return Equity Fund addition, movements in financial markets may adversely affect a stock s price, regardless of how well the company performs. The market as a whole may not favor the types of investments the fund makes, which could affect the fund s ability to sell them at an attractive price. Security Selection Risk. A risk that pervades all investing is the risk that the securities in the fund s portfolio may decline in value.

16 Value Investing Risk. At times, value investing may perform better than or worse than other investment styles and the overall market. If the Advisor overestimates the value or return potential of one or more common stocks, the fund may underperform the general equity market. Value stocks may also be out of favor for certain periods in relation to growth stocks. Industry Risk. While the fund does not concentrate in any industry or sector, to the extent that the fund has exposure to a given industry or sector, any factors affecting that industry or sector could affect the value of portfolio securities. For example, manufacturers of consumer goods could be hurt by a rise in unemployment or technology companies could be hurt by such factors as market saturation, price competition and rapid obsolescence. Securities Lending Risk. Any loss in the market price of securities loaned by the fund that occurs during the term of the loan would be borne by the fund and would adversely affect the fund s performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while the loan is outstanding. However, loans will be made only to borrowers selected by the fund s delegate after a review of relevant facts and circumstances, including the creditworthiness of the borrower. Other factors that could affect performance include: portfolio management could be wrong in the analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters. foreign securities may be more volatile than their US counterparts, for reasons such as currency fluctuations and political and economic uncertainty. derivatives could produce disproportionate losses due to a variety of factors, including the failure of the counterparty to meet its obligations or unexpected price or interest rate movements. (See Secondary Risks for more information.) DWS Dreman High Return Equity Fund 13

17 The Fund s Performance History While a fund s past performance (before and after taxes) isn t necessarily a sign of how it will do in the future, it can be valuable for an investor to know. The bar chart shows how the performance of the fund s Class S shares has varied from year to year, which may give some idea of risk. The table on the following page shows how fund performance compares to relevant index performance (which, unlike fund performance, does not reflect fees or expenses). The performance of both the fund and the index varies over time. All figures assume reinvestment of dividends and distributions (in the case of after-tax returns, reinvested net of assumed tax rates). DWS Dreman High Return Equity Fund Annual Total Return (%) as of 12/31 each year Class S The table shows returns for Class S shares on a before-tax and after-tax basis. After-tax returns are estimates calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual aftertax returns depend on an investor s tax situation and may differ from those shown in the table. After-tax returns shown are not relevant for investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts For the periods included in the bar chart: Best Quarter: 6.75%, Q Worst Quarter: -5.85%, Q DWS Dreman High Return Equity Fund

18 Average AnnualTotal Returns (%) as of 12/31/ Year Since Inception* Class S Return before Taxes Return after Taxes on Distributions Return after Taxes on Distributions and Sale of Fund Shares 0.57** 6.18 S&P 500 (reflects no deductions for fees, expenses or taxes) * Inception date for Class S was February 28, Index comparison begins on February 28, ** Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to a capital loss occurring upon redemption resulting in an assumed tax deduction for the shareholder. Total returns would have been lower had certain expenses not been reduced. Standard & Poor s 500 Index (S&P 500) is an unmanaged, capitalization-weighted index of 500 stocks. The index is designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. Current performance may be higher or lower than the performance data quoted above. For more recent performance information, call your financial advisor or (800) or visit our Web site at Return after Taxes on Distributions assumes that an investor holds fund shares at the end of the period. The return reflects taxes only on the fund s distributions and not on a shareholder s gain or loss from selling fund shares. Return after Taxes on Distributions and Sale of Fund Shares assumes that an investor sold his or her fund shares at the end of the period. The return reflects taxes on both the fund s distributions and a shareholder s gain or loss from selling fund shares. DWS Dreman High Return Equity Fund 15

19 How Much Investors Pay The table below describes the fees and expenses that you may pay if you buy and hold fund shares. This information doesn t include any fees that may be charged by your financial advisor. Fee Table Class S Shareholder Fees, paid directly from your investment Redemption/Exchange Fee on shares owned less than 15 days (as % of redemption proceeds) % Annual Operating Expenses, deducted from fund assets Management Fee 0.67% Distribution and/or Service (12b-1) Fee None Other Expenses 0.31 Total Annual Operating Expenses This fee is charged on applicable redemptions or exchanges. Please see Policies You Should Know About Policies about transactions for further information. Based on the costs above, this example helps you compare the expenses of the fund to those of other mutual funds. This example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvested all dividends and distributions. This is only an example; actual expenses will be different. Example 1 Year 3 Years 5 Years 10 Years Class S shares $100 $312 $542 $1, DWS Dreman High Return Equity Fund

20 Class S ticker symbol MIDTX fund number 2117 DWS Dreman Mid Cap Value Fund The Fund s Main Investment Strategy The fund seeks long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in common stocks of mid-cap companies that the portfolio managers believe are undervalued, but have favorable prospects for appreciation. The fund defines mid-cap companies as companies that have a market capitalization similar to that of the Russell Midcap Value Index with a market capitalization which usually ranges from $1 billion to $20 billion. The fund may invest up to 20% of total assets in foreign securities. The fund s equity investments are mainly common stocks, but may also include other types of equities such as preferred or convertible stocks. The portfolio managers begin their stock selection process by screening for stocks of mid-cap companies with below market price-to-earnings ratios. The portfolio managers then compare the company s stock price to its book value, cash flow and yield and analyze individual companies to identify those that are financially sound and appear to have strong potential for long-term capital appreciation and dividend growth. The portfolio managers assemble the fund s portfolio from among the most attractive stocks, drawing on an analysis of economic outlooks for various sectors and industries. The portfolio managers will normally sell a stock when it may no longer qualify as a mid-cap company, it reaches a target price, its fundamental factors change or other investments offer better opportunities. DWS Dreman Mid Cap Value Fund 17

21 Other Investments. The fund is permitted, but not required, to use various types of derivatives (contracts whose value is based on, for example, indices, currencies or securities). Derivatives may be used for hedging and for risk management or for non-hedging purposes to seek to enhance potential gains. The fund may use derivatives in circumstances where portfolio management believes they offer an economical means of gaining exposure to a particular asset class or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, the fund may use futures, currency options and forward currency transactions. Securities Lending. The fund may lend its investment securities in an amount up to % of its total assets to approved institutional borrowers who need to borrow securities in order to complete certain transactions. The Main Risks of Investing in the Fund There are several risk factors that could hurt the fund s performance, cause you to lose money or cause the fund s performance to trail that of other investments. Stock Market Risk. As with most stock funds, the most important factor affecting this fund is how the stock market performs (to the extent the fund invests in a particular market sector, the fund s performance may be proportionately affected by that segment s general performance). When stock prices fall, you should expect the value of your investment to fall as well. Because a stock represents ownership in its issuer, stock prices can be hurt by poor management, shrinking product demand and other business risks. These may affect single companies as well as groups of companies. In addition, movements in financial markets may adversely affect a stock s price, regardless of how well the company performs. The market as a whole may not favor the types of investments the fund makes and the fund may not be able to get an attractive price for them. Security Selection Risk. A risk that pervades all investing is the risk that the securities in the fund s portfolio may decline in value. 18 DWS Dreman Mid Cap Value Fund

22 Value Investing Risk. At times, value investing may perform better than or worse than other investment styles and the overall market. If the Advisor overestimates the value or return potential of one or more common stocks, the fund may underperform the general equity market. Value stocks may also be out of favor for certain periods in relation to growth stocks. Medium-Sized Company Risk. Medium-sized company stocks tend to experience steeper price fluctuations down as well as up than stocks of larger companies. A shortage of reliable information the same information gap that creates opportunity can pose added risk. Industry-wide reversals may have a greater impact on medium-sized companies, since they usually lack a large company s financial resources. Medium-sized company stocks are typically less liquid than large company stocks; when things are going poorly, it is harder to find a buyer for a medium-sized company s shares. Industry Risk. While the fund does not concentrate in any industry or sector, to the extent that the fund has exposure to a given industry or sector, any factors affecting that industry or sector could affect the value of portfolio securities. For example, manufacturers of consumer goods could be hurt by a rise in unemployment or technology companies could be hurt by such factors as market saturation, price competition and rapid obsolescence. Securities Lending Risk. Any loss in the market price of securities loaned by the fund that occurs during the term of the loan would be borne by the fund and would adversely affect the fund s performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while the loan is outstanding. However, loans will be made only to borrowers selected by the fund s delegate after a review of relevant facts and circumstances, including the creditworthiness of the borrower. DWS Dreman Mid Cap Value Fund 19

23 Other factors that could affect performance include: portfolio management could be wrong in the analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters. foreign securities may be more volatile than their US counterparts, for reasons such as currency fluctuations and political and economic uncertainty. derivatives could produce disproportionate losses due to a variety of factors, including the failure of the counterparty to meet its obligations or unexpected price or interest rate movements. (See Secondary Risks for more information.) 20 DWS Dreman Mid Cap Value Fund

24 The Fund s Performance History While a fund s past performance (before and after taxes) isn t necessarily a sign of how it will do in the future, it can be valuable for an investor to know. The bar chart shows how the performance of the fund s Class S shares has varied from year to year, which may give some idea of risk. The table on the following page shows how fund performance compares to relevant index performance (which, unlike fund performance, does not reflect fees or expenses). The performance of both the fund and the index varies over time. All figures assume reinvestment of dividends and distributions (in the case of after-tax returns, reinvested net of assumed tax rates). DWS Dreman Mid Cap Value Fund Annual Total Return (%) as of 12/31 each year Class S The table shows returns for Class S shares on a before-tax and after-tax basis. After-tax returns are estimates calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual aftertax returns depend on an investor s tax situation and may differ from those shown in the table. After-tax returns shown are not relevant for investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts For the periods included in the bar chart: Best Quarter: 7.64%, Q Worst Quarter: -3.98%, Q DWS Dreman Mid Cap Value Fund 21

25 Average AnnualTotal Returns (%) as of 12/31/ Year Since Inception* Class S Return before Taxes Return after Taxes on Distributions Return after Taxes on Distributions and Sale of Fund Shares 4.15** 8.65 Russell Midcap Value Index (reflects no deductions for fees, expenses or taxes) * Inception date for the fund was August 2, Index comparison begins on July 31, ** Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to a capital loss occurring upon redemption resulting in an assumed tax deduction for the shareholder. Total return would have been lower had certain expenses not been reduced. The Russell Midcap Value Index is an unmanaged index measuring the performance of those Russell Midcap companies with lower price-to-book ratios and lower forecasted growth values. The stocks are also members of the Russell 1000 Value Index. Current performance may be higher or lower than the performance data quoted above. For more recent performance information, call your financial advisor or (800) or visit our Web site at Return after Taxes on Distributions assumes that an investor holds fund shares at the end of the period. The return reflects taxes only on the fund s distributions and not on a shareholder s gain or loss from selling fund shares. Return after Taxes on Distributions and Sale of Fund Shares assumes that an investor sold his or her fund shares at the end of the period. The return reflects taxes on both the fund s distributions and a shareholder s gain or loss from selling fund shares. 22 DWS Dreman Mid Cap Value Fund

26 How Much Investors Pay The table below describes the fees and expenses that you may pay if you buy and hold fund shares. This information doesn t include any fees that may be charged by your financial advisor. Fee Table Class S Shareholder Fees, paid directly from your investment Redemption/Exchange Fee on shares owned less than 15 days (as % of redemption proceeds) % Annual Operating Expenses, deducted from fund assets Management Fee 0.75% Distribution and/or Service (12b-1) Fee None Other Expenses 0.62 Total Annual Operating Expenses 1.37 Less Expense Waiver/Reimbursement Net Annual Operating Expenses This fee is charged on applicable redemptions or exchanges. Please see Policies You Should Know About Policies about transactions for further information. 2 Through February 28, 2009, the Advisor has contractually agreed to waive all or a portion of its management fee or pay certain operating expenses of the fund to the extent necessary to maintain the fund s total operating expenses at 1.00% for Class S shares, excluding certain expenses such as extraordinary expenses, taxes, brokerage and interest. Based on the costs above (including one year of capped expenses in each period), this example helps you compare the expenses of the fund to those of other mutual funds. This example assumes the expenses above remain the same. It also assumes that you invested $10,000, earned 5% annual returns and reinvested all dividends and distributions. This is only an example; actual expenses will be different. Example 1 Year 3 Years 5 Years 10 Years Class S shares $102 $397 $715 $1,614 DWS Dreman Mid Cap Value Fund 23

27 Class S ticker symbol KDSSX fund number 2389 DWS Dreman Small Cap Value Fund The Fund s Main Investment Strategy The fund seeks long-term capital appreciation. Under normal circumstances, the fund invests at least 80% of net assets, plus the amount of any borrowings for investment purposes, in undervalued common stocks of small US companies, which the fund defines as companies that are similar in market value to those in the Russell 2000 Index (as of January 31, 2008, the Russell 2000 Index had a median market capitalization of $539 million). The fund intends to invest primarily in companies whose market capitalizations fall within the normal range of the Index. While the fund invests mainly in US stocks, it could invest up to 20% of total assets in foreign securities. The fund s equity investments are mainly common stocks, but may also include other types of equities such as preferred or convertible stocks. The portfolio managers begin their stock selection process by screening stocks of small companies with below market priceto-earnings (P/E) ratios. The managers then seek companies with a low price compared to the book value, cash flow and yield and analyze individual companies to identify those that are fundamentally sound and appear to have strong potential for earnings and dividend growth over the Index. From the remaining group, the managers then complete their fundamental analysis and make their buy decisions from a group of the most attractive stocks, drawing on an analysis of economic outlooks for various industries. The managers will normally sell a stock when it no longer qualifies as a small company, when its P/E rises above that of the Index, its fundamentals change or other investments offer better opportunities. 24 DWS Dreman Small Cap Value Fund

28 This fund is designed for value-oriented investors who are interested in small-cap market exposure. Other Investments. The fund is permitted, but not required, to use various types of derivatives (contracts whose value is based on, for example, indices, currencies or securities). Derivatives may be used for hedging and for risk management or for non-hedging purposes to seek to enhance potential gains. The fund may use derivatives in circumstances where portfolio management believes they offer an economical means of gaining exposure to a particular asset class or to keep cash on hand to meet shareholder redemptions or other needs while maintaining exposure to the market. In particular, the fund may use futures, currency options and forward currency transactions. Securities Lending. The fund may lend its investment securities in an amount up to % of its total assets to approved institutional borrowers who need to borrow securities in order to complete certain transactions. The Main Risks of Investing in the Fund There are several risk factors that could hurt the fund s performance, cause you to lose money or cause the fund s performance to trail that of other investments. Stock Market Risk. As with most stock funds, the most important factor affecting this fund is how the stock market performs (to the extent the fund invests in a particular market sector, the fund s performance may be proportionately affected by that segment s general performance). When stock prices fall, you should expect the value of your investment to fall as well. Because a stock represents ownership in its issuer, stock prices can be hurt by poor management, shrinking product demand and other business risks. These may affect single companies as well as groups of companies. In addition, movements in financial markets may adversely affect a stock s price, regardless of how well the company performs. The market as a whole may not favor the types of investments the fund makes and the fund may not be able to get an attractive price for them. Security Selection Risk. A risk that pervades all investing is the risk that the securities in the fund s portfolio may decline in value. DWS Dreman Small Cap Value Fund 25

29 Value Investing Risk. At times, value investing may perform better than or worse than other investment styles and the overall market. If the Advisor overestimates the value or return potential of one or more common stocks, the fund may underperform the general equity market. Value stocks may also be out of favor for certain periods in relation to growth stocks. Industry Risk. While the fund does not concentrate in any industry or sector, to the extent that the fund has exposure to a given industry or sector, any factors affecting that industry or sector could affect the value of portfolio securities. For example, manufacturers of consumer goods could be hurt by a rise in unemployment or technology companies could be hurt by such factors as market saturation, price competition and rapid obsolescence. Securities Lending Risk. Any loss in the market price of securities loaned by the fund that occurs during the term of the loan would be borne by the fund and would adversely affect the fund s performance. Also, there may be delays in recovery of securities loaned or even a loss of rights in the collateral should the borrower of the securities fail financially while the loan is outstanding. However, loans will be made only to borrowers selected by the fund s delegate after a review of relevant facts and circumstances, including the creditworthiness of the borrower. Other factors that could affect performance include: portfolio management could be wrong in the analysis of industries, companies, economic trends, the relative attractiveness of different securities or other matters. foreign securities may be more volatile than their US counterparts, for reasons such as currency fluctuations and political and economic uncertainty. derivatives could produce disproportionate losses due to a variety of factors, including the failure of the counterparty to meet its obligations or unexpected price or interest rate movements. (See Secondary Risks for more information.) 26 DWS Dreman Small Cap Value Fund

30 The Fund s Performance History While a fund s past performance (before and after taxes) isn t necessarily a sign of how it will do in the future, it can be valuable for an investor to know. The bar chart shows how the performance of the fund s Class S shares has varied from year to year, which may give some idea of risk. The table on the following page shows how fund performance compares to relevant index performance (which, unlike fund performance, does not reflect fees or expenses). The performance of both the fund and the index varies over time. All figures assume reinvestment of dividends and distributions (in the case of after-tax returns, reinvested net of assumed tax rates). DWS Dreman Small Cap Value Fund Annual Total Return (%) as of 12/31 each year Class S The table shows returns for Class S shares on a before-tax and after-tax basis. After-tax returns are estimates calculated using the historical highest individual federal marginal income tax rates and do not reflect the impact of state and local taxes. Actual aftertax returns depend on an investor s tax situation and may differ from those shown in the table. After-tax returns shown are not relevant for investors who hold their shares through tax-deferred arrangements, such as 401(k) plans or individual retirement accounts For the periods included in the bar chart: Best Quarter: 14.79%, Q Worst Quarter: -4.19%, Q DWS Dreman Small Cap Value Fund 27

31 Average AnnualTotal Returns (%) as of 12/31/ Year Since Inception* Class S Return before Taxes Return after Taxes on Distributions Return after Taxes on Distributions and Sale of Fund Shares 3.55** Russell 2000 Index (reflects no deductions for fees, expenses or taxes) Russell 2000 Value Index (reflects no deductions for fees, expenses or taxes) * Inception date for Class S was February 28, Index comparisons began on February 28, ** Return after Taxes on Distributions and Sale of Fund Shares is higher than other return figures for the same period due to a capital loss occurring upon redemption resulting in a assumed tax deduction for the shareholder. Russell 2000 Index is an unmanaged capitalization-weighted measure of approximately 2,000 small US stocks. Russell 2000 Value Index is an unmanaged index measuring the performance of those Russell 2000 companies with lower price-to-book ratios and lower forecasted growth values. Current performance may be higher or lower than the performance data quoted above. For more recent performance information, call your financial advisor or (800) or visit our Web site at Return after Taxes on Distributions assumes that an investor holds fund shares at the end of the period. The return reflects taxes only on the fund s distributions and not on a shareholder s gain or loss from selling fund shares. Return after Taxes on Distributions and Sale of Fund Shares assumes that an investor sold his or her fund shares at the end of the period. The return reflects taxes on both the fund s distributions and a shareholder s gain or loss from selling fund shares. 28 DWS Dreman Small Cap Value Fund