Edgar Filing: VAN KAMPEN HIGH YIELD FUND

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 2005

REGISTRATION NOS. 2-62115

811-2851
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933 [X]
POST-EFFECTIVE AMENDMENT NO. 52 [X]

REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 [X]
AMENDMENT NO. 47 [X]

VAN KAMPEN
HIGH YIELD FUND

(FORMERLY KNOWN AS VAN KAMPEN HIGH INCOME CORPORATE BOND FUND)

(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)
1221 AVENUE OF THE AMERICAS, NEW YORK, NY 10020
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(212) 762-5260
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE

AMY R. DOBERMAN, ESQ.
MANAGING DIRECTOR
VAN KAMPEN INVESTMENTS INC.
1221 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10020
(NAME AND ADDRESS OF AGENT FOR SERVICE)
---------------------
COPIES TO:

CHARLES B. TAYLOR, ESQ.

SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
333 WEST WACKER DRIVE
CHICAGO, ILLINOIS 60606
(312) 407-0700

Approximate Date of Proposed Public Offering: As soon as practicable
following effectiveness of this Registration Statement.

It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)

[X] on December 30, 2005 pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485.

If appropriate, check the following box:
[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Beneficial Interest, par
value $0.01 per share
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MUTUAL FUNDS

Van Kampen
High Yield Fund

---------------------------------------
This Prospectus is dated

December 30, 2005

CLASS A SHARES
CLASS B SHARES
CLASS C SHARES

(VAN KAMPEN INVESTMENTS SHINE LOGO)

Van Kampen High Yield Fund's primary
investment objective is to seek to
maximize current income. Capital
appreciation is a secondary objective
which is sought only when consistent
with the Fund's primary investment
objective. The Fund's investment
adviser seeks to achieve the Fund's
investment objectives by investing
primarily in a portfolio of
high-yielding, high-risk bonds and
other income securities, such as
convertible securities and preferred
stock.

Shares of the Fund have not been
approved or disapproved by the
Securities and Exchange Commission
(SEC) or any state regulator, and
neither the SEC nor any state
regulator has passed upon the accuracy
or adequacy of this Prospectus. Any
representation to the contrary is a
criminal offense.

Table of Contents

Risk/Return Summary......................................... 3
Fees and Expenses of the Fund............................... 6
Investment Objectives, Principal Investment Strategies and
Risks....................................................... 7
Investment Advisory Services................................ 15
Purchase of Shares.......................................... 16
Redemption of Shares........................................ 25
Distributions from the Fund................................. 27
Shareholder Services........................................ 27
Frequent Purchases and Redemptions of Fund Shares........... 29
Federal Income Taxation..................................... 30
Disclosure of Portfolio Holdings............................ 32
Financial Highlights........................................ 33
Appendix--Description of Securities Ratings................. A-1

No dealer, salesperson or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, in connection with the offer contained in this Prospectus and, if
given or made, such other information or representations must not be relied upon
as having been authorized by the Fund, the Fund's investment adviser or the
Fund's distributor. This Prospectus does not constitute an offer by the Fund or
by the Fund's distributor to sell or a solicitation of an offer to buy any of
the securities offered hereby in any jurisdiction to any person to whom it is
unlawful for the Fund to make such an offer in such jurisdiction.

Risk/Return Summary

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INVESTMENT OBJECTIVES

The Fund's primary investment objective is to seek to maximize current income.
Capital appreciation is a secondary objective which is sought only when
consistent with the Fund's primary investment objective.

PRINCIPAL INVESTMENT STRATEGIES

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objectives by investing primarily in a portfolio of
high-yielding, high-risk bonds and other income securities, such as convertible
securities and preferred stock. The Fund buys and sells medium- and lower-grade
securities with a view towards seeking a high level of current income and
capital appreciation over the long-term. Lower-grade securities are commonly
referred to as junk bonds. The Fund invests in a broad range of income
securities represented by various companies and industries and traded on various
markets. In selecting securities for investment, the Fund's investment adviser
seeks to identify securities which entail reasonable credit risk considered in
relation to the Fund's investment policies. The Fund's investment adviser uses
an investment strategy of fundamental credit analysis and emphasizes issuers
that it believes will remain financially sound and perform well in a range of
market conditions. Portfolio securities are typically sold when the fundamental
assessment of an issuer by the Fund's investment adviser materially changes.

Under normal market conditions, the Fund invests at least 65% of its total
assets in corporate bonds and other income securities with maturities greater
than one year. The Fund may invest up to 35% of its total assets in securities
issued by foreign governments or foreign corporations. The Fund may purchase and
sell certain derivative instruments, such as options, futures contracts and
options on futures contracts (collectively, also referred to in this Prospectus
as strategic transactions), for various portfolio management purposes, including
to earn income, to facilitate portfolio management and to mitigate risks.

PRINCIPAL INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objectives.

CREDIT RISK. Credit risk refers to an issuer's ability to make timely payments
of interest and principal. Because the Fund invests primarily in medium- and
lower-grade securities, the Fund is subject to a higher level of credit risk
than a fund that invests only in investment grade securities. The credit quality
of noninvestment-grade securities is considered speculative by recognized rating
agencies with respect to the issuer's continuing ability to pay interest and
principal. Lower-grade securities may have less liquidity and a higher incidence
of default than higher-grade securities. The Fund may incur higher expenses to
protect the Fund's interests in such securities. The credit risks and market
prices of lower-grade securities generally are more sensitive to negative issuer
developments, such as reduced revenues or increased expenditures, or adverse
economic conditions, such as a recession, than are higher-grade securities.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Fund will decline. The prices of income securities tend to fall as
interest rates rise, and such declines tend to be greater among income
securities with longer maturities. Although the Fund has no policy limiting the
maturities of its investments, the Fund's investment adviser seeks to maintain a
portfolio duration of two to six years. This means that the Fund is subject to
greater market risk than a fund investing solely in shorter-term securities (see
"Investment Objectives, Principal Investment Strategies and Risks" for an
explanation of maturities and durations). Medium- and lower-grade securities,
especially those with longer maturities or those that do not make regular
interest payments, may be more volatile and may decline more in price in
response to negative issuer developments or general economic news than
higher-grade securities.

Market risk is often greater among certain types of income securities, such as
zero coupon bonds or pay-in-kind securities. As interest rates change, these
securities often fluctuate more in price than traditional income securities and
may subject the Fund to greater

market risk than a fund that does not own these types of securities.

INCOME RISK. The income you receive from the Fund is based primarily on interest
rates and credit risk, which can vary widely over the short- and long-term. If
interest rates drop, your income from the Fund may drop as well.

CALL RISK. If interest rates fall, it is possible that issuers of income
securities with high interest rates will prepay or "call" their securities
before their maturity dates. In this event, the proceeds from the called
securities would likely be reinvested by the Fund in securities bearing the new,
lower interest rates, resulting in a possible decline in the Fund's income and
distributions to shareholders.

FOREIGN RISKS. Because the Fund may own securities of foreign issuers, it may be
subject to risks not usually associated with owning securities of U.S. issuers.
These risks can include fluctuations in foreign currencies, foreign currency
exchange controls, political and economic instability, differences in financial
reporting, differences in securities regulation, and trading and foreign
taxation issues. The Fund may also invest in issuers in developing or emerging
market countries, which are subject to greater risks than investments in
securities of issuers in developed countries.

RISKS OF USING DERIVATIVE INSTRUMENTS. In general terms, a derivative instrument
is one whose value depends on (or is derived from) the value of an underlying
asset, interest rate or index. Options, futures contracts and options on futures
contracts are examples of derivative instruments. Derivative instruments involve
risks different from direct investments in underlying securities. These risks
include imperfect correlation between the value of the instruments and the
underlying assets; risks of default by the other party to certain transactions;
risks that the transactions may result in losses that partially or completely
offset gains in portfolio positions; and risks that the transactions may not be
liquid.

MANAGER RISK. As with any managed fund, the Fund's investment adviser may not be
successful in selecting the best-performing securities or investment techniques,
and the Fund's performance may lag behind that of similar funds.

INVESTOR PROFILE

In light of the Fund's investment objectives and principal investment
strategies, the Fund may be appropriate for investors who:

- Seek a high level of current income

- Are willing to take on the substantially increased risks of medium- and
lower-grade securities in exchange for potentially higher income

- Wish to add to their investment portfolio a fund that invests primarily in
medium- and lower-grade income securities

An investment in the Fund is not a deposit of any bank or other insured
depository institution. An investment in the Fund is not insured or guaranteed
by the Federal Deposit Insurance Corporation or any other government agency.

An investment in the Fund may not be appropriate for all investors. The Fund is
not intended to be a complete investment program, and investors should consider
their long-term investment goals and financial needs when making an investment
decision about the Fund. An investment in the Fund is intended to be a long-
term investment, and the Fund should not be used as a trading vehicle.

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Fund is to look at how its
performance has varied from year to year. The following chart shows the annual
returns of the Fund's Class A Shares over the ten calendar years prior to the
date of this Prospectus. Sales loads are not reflected in this chart. If these
sales loads had been included, the returns shown below would have been

lower. Remember that past performance of the Fund is not indicative of its
future performance.

[BAR GRAPH]

ANNUAL RETURN
-------------

1995 17.43
1996 13.65
1997 12.24
1998 0.46
1999 3.90
2000 -8.22
2001 -2.65
2002 -9.42
2003 24.17
2004 10.47

The Fund's return for the nine-month period ended September 30, 2005 for Class A
Shares was 0.60%. As a result of market activity, current performance may vary
from the figures shown.

The annual returns of the Fund's Class B Shares and Class C Shares would have
similar variability from year to year as shown in the preceding chart for Class
A Shares because all of the Fund's shares are invested in the same portfolio of
securities; however, the actual annual returns of Class B Shares and Class C
Shares would be lower than the annual returns shown for the Fund's Class A
Shares because of differences in the expenses borne by each class of shares.

During the ten-year period shown in the bar chart, the highest quarterly return
for Class A Shares was 8.27% (for the quarter ended June 30, 2003) and the
lowest quarterly return for Class A Shares was -8.20% (for the quarter ended
September 30, 1998).

COMPARATIVE PERFORMANCE

As a basis for evaluating the Fund's performance and risks, the table below
shows how the Fund's performance compares with the JP Morgan Global High Yield
Index*, a broad-based market index that the Fund's investment adviser believes
is an appropriate benchmark for the Fund, and the Lipper High Yield Bond Fund
Index, an index of funds with similar investment objectives. The Fund's
performance figures include the maximum sales charges paid by investors. The
indices' performance figures do not include any commissions, sales charges or
taxes that would be paid by investors purchasing the securities represented by
the indices. An investment cannot be made directly in the indices.

In addition to before tax returns for each class of shares, the table shows
after tax returns for the Fund's Class A Shares in two ways: (i) after taxes on
distributions and (ii) after taxes on distributions and sale of Fund shares. The
after tax returns for the Fund's Class B Shares and Class C Shares will vary
from the Class A Shares' returns. After tax returns are calculated using the
historical highest individual federal marginal income tax rates during the
periods shown and do not reflect the impact of state and local taxes. Actual
after tax returns depend on an investor's tax situation and may differ from
those shown. After tax returns are not relevant to investors who hold their Fund
shares through tax-deferred arrangements, such as 401(k) plans or individual
retirement accounts. An after tax return may be higher than the before tax
return due to an assumed benefit from any capital loss that would have been
realized had Fund shares been sold at the end of the relevant period.

Average annual total returns (before and after taxes) are shown for the periods
ended December 31, 2004 (the most recently completed calendar year prior to the
date of this Prospectus). Remember that past performance

(before and after taxes) of the Fund is not indicative of its future
performance.

AVERAGE ANNUAL
TOTAL RETURNS
FOR THE
PERIODS ENDED PAST PAST PAST
DECEMBER 31, 2004 1 YEAR 5 YEARS 10 YEARS
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Van Kampen High Yield
Fund -- Class A Shares
Return Before Taxes 5.25% 1.12% 5.16%
Return After Taxes on
Distributions 2.81% -2.42% 1.31%
Return After Taxes on
Distributions and Sale
of Fund Shares 3.32% -1.29% 1.98%
JP Morgan Global High
Yield Index* 11.55% 7.60% 8.61%
Lipper High Yield Bond
Fund Index 10.34% 3.99% 6.69%
................................................................
Van Kampen High Yield
Fund -- Class B Shares
Return Before Taxes 5.61% 1.11% 5.18%**
JP Morgan Global High
Yield Index* 11.55% 7.60% 8.61%
Lipper High Yield Bond
Fund Index 10.34% 3.99% 6.69%
................................................................
Van Kampen High Yield
Fund -- Class C Shares
Return Before Taxes 8.75% 1.29% 4.84%
JP Morgan Global High
Yield Index* 11.55% 7.60% 8.61%
Lipper High Yield Bond
Fund Index 10.34% 3.99% 6.69%
................................................................

* JP Morgan Global High Yield Index is an unmanaged, broad-based index that
reflects the general performance of the global high yield corporate debt
market, including domestic and international issues.

** The "Past 10 Years" performance for Class B Shares reflects the conversion of
such shares into Class A Shares six years after the end of the calendar month
in which the shares were purchased. Class B Shares purchased on or after June
1, 1996 will convert to Class A Shares eight years after the end of the
calendar month in which the shares were purchased. See "Purchase of Shares."

The current yield for the thirty-day period ended August 31, 2005 is 6.10% for
Class A Shares, 5.60% for Class B Shares and 5.69% for Class C Shares. Investors
can obtain the current yield of the Fund for each class of shares by calling
(800) 847-2424 or by visiting our web site at www.vankampen.com.

Fees and Expenses
of the Fund

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This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

CLASS A CLASS B CLASS C
SHARES SHARES SHARES
----------------------------------------------------------------

SHAREHOLDER FEES
(fees paid directly from your investment)
----------------------------------------------------------------
Maximum sales charge
(load) imposed on
purchases (as a
percentage of offering
price) 4.75%(1) None None
................................................................
Maximum deferred sales
charge (load)(as a
percentage of the lesser
of original purchase
price or redemption
proceeds) None(2) 4.00%(3) 1.00%(4)
................................................................
Maximum sales charge
(load) imposed on
reinvested dividends None None None
................................................................
Redemption fee(5) 2.00% 2.00% 2.00%
................................................................
Exchange fee(5) 2.00% 2.00% 2.00%
................................................................

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets and are based on
expenses incurred during the Fund's fiscal year ended August 31,
2005, except as noted below)
----------------------------------------------------------------
Management fees(6) 0.39% 0.39% 0.39%
................................................................
Distribution and/or
service (12b-1) fees(7) 0.24% 1.00%(8) 1.00%(8)
................................................................
Other expenses 0.32% 0.33% 0.32%
................................................................
Total annual fund
operating expenses(6) 0.95% 1.72% 1.71%
................................................................

(1) Reduced for purchases of $100,000 and over. See "Purchase of Shares -- Class
A Shares."

(2) Investments of $1 million or more are not subject to any sales charge at the
time of purchase, but a deferred sales charge of 1.00% may be imposed on
certain redemptions made within eighteen months of purchase. With respect to
shares purchased prior to December 1, 2004, a deferred sales charge of 1.00%
may be imposed on certain redemptions made within one year of purchase. See
"Purchase of Shares -- Class A Shares."

(3) The maximum deferred sales charge is 4.00% in the first and second year
after purchase and declines thereafter as follows:

Year 1-4.00%
Year 2-4.00%
Year 3-3.00%
Year 4-2.50%
Year 5-1.50%
After-None

See "Purchase of Shares -- Class B Shares."
(4) The maximum deferred sales charge is 1.00% in the first year after purchase
and 0.00% thereafter. See "Purchase of Shares -- Class C Shares."

(5) The redemption fee and the exchange fee apply to the proceeds of Fund shares
that are redeemed or exchanged within 30 days of purchase. See "Redemption
of Shares" for more information on when the fees apply.

(6) Expense information has been restated to reflect management fees in effect
as of June 1, 2005. See "Investment Advisory Services."

(7) Class A Shares are subject to a combined annual distribution and service fee
of up to 0.25% of the average daily net assets attributable to such class of
shares. Class B Shares and Class C Shares are each subject to a combined
annual distribution and service fee of up to 1.00% of the average daily net
assets attributable to such class of shares. See "Purchase of Shares."

(8) While Class B Shares and Class C Shares do not have any front-end sales
charges, their higher ongoing annual expenses (due to higher 12b-1 and
service fees) mean that over time you could end up paying more for these
shares than if you were to pay front-end sales charges for Class A Shares.

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same each year (except for the ten-year
amounts for Class B Shares which reflect the conversion of Class B Shares to
Class A Shares eight years after the end of the calendar month in which the
shares were purchased). Although your actual costs may be higher or lower, based
on these assumptions your costs would be:

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
--------------------------------------------------------------------

Class A Shares $567 $763 $ 976 $1,586
....................................................................
Class B Shares $575 $842 $1,083 $1,826*
....................................................................
Class C Shares $274 $539 $ 928 $2,019
....................................................................

You would pay the following expenses if you did not redeem your shares:

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
-------------------------------------------------------------------

Class A Shares $567 $763 $976 $1,586
...................................................................
Class B Shares $175 $542 $933 $1,826*
...................................................................
Class C Shares $174 $539 $928 $2,019
...................................................................

* Based on conversion to Class A Shares eight years after the end of the
calendar month in which the shares were purchased.

Investment Objectives,
Principal Investment Strategies and Risks

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INVESTMENT OBJECTIVES

The Fund's primary investment objective is to seek to maximize current income.
Capital appreciation is a secondary objective that the Fund will seek only when
consistent with the Fund's primary investment objective. The Fund's investment
objectives may be changed by the Fund's Board of Trustees without shareholder
approval, but no change is anticipated. If the Fund's investment objectives
change, the Fund will notify shareholders and shareholders should consider
whether the Fund remains an appropriate investment in light of their then
current financial position and needs. There are risks inherent in all
investments in securities; accordingly, there can be no assurance that the Fund
will achieve its investment objectives.

PRINCIPAL INVESTMENT
STRATEGIES AND RISKS

("Moody's") and unrated securities determined by the Fund's investment adviser
to be of comparable quality at the time of purchase. With respect to such
investments, the Fund has not established any limit on the percentage of its
portfolio which may be invested in securities in any one rating category.
Securities rated BB or lower by S&P or rated Ba or lower by Moody's and unrated
securities of comparable quality are regarded as below investment grade and are
commonly referred to as junk bonds, and involve greater risks than investments
in higher-grade securities. Investors should carefully consider the section
below entitled "Risks of Investing in Medium- and Lower-Grade Securities."
Certain types of income securities are subject to additional risks, see
"Additional Information Regarding Certain Income Securities" below.

Under normal market conditions, the Fund invests at least 80% of its net assets
(plus any borrowings for investment purposes) in high yield, high risk corporate
bonds at the time of investment. The Fund's policy in the foregoing sentence may
be changed by the Fund's Board of Trustees, but no change is anticipated; if the
Fund's policy in the foregoing sentence changes, the Fund will notify
shareholders in writing at least 60 days prior to implementation of the change
and shareholders should consider whether the Fund remains an appropriate
investment in light of the changes.

The Fund buys and sells securities with a view towards seeking a high level of
current income and capital appreciation over the long-term. The Fund invests in
a broad range of income securities represented by various companies and
industries and traded on various markets. The Fund's investment adviser uses an
investment strategy of in-depth, fundamental credit analysis and emphasizes
issuers that it believes will remain financially sound and perform well in a
range of market conditions. In its effort to enhance value and diversify the
Fund's portfolio, the Fund's investment adviser may seek investments in cyclical
issues or out-of-favor areas of the market to contribute to the Fund's
performance.

The higher income and potential for capital appreciation sought by the Fund are
generally obtainable from securities in the medium- and lower-credit quality
range. Such securities tend to offer higher yields than higher-grade securities
with the same maturities because the historical conditions of the issuers of
such securities may not have been as strong as those of other issuers. These
securities may be issued in connection with corporate restructurings such as
leveraged buyouts, mergers, acquisitions, debt recapitalization or similar
events. These securities are often issued by smaller, less creditworthy
companies or companies with substantial debt and may include financially
troubled companies or companies in default or in restructuring.

UNDERSTANDING
QUALITY RATINGS

Income securities ratings are based on the issuer's ability to pay
interest and repay the principal. Income securities with ratings above the
bold line in the table are considered "investment grade," while those with
ratings below the bold line are regarded as "noninvestment grade." A
detailed explanation of these and other ratings can be found in the
appendix to this Prospectus.

S&P MOODY'S MEANING
------------------------------------------------------

AAA Aaa Highest quality
......................................................
AA Aa High quality
......................................................
A A Above-average quality
......................................................
BBB Baa Average quality
------------------------------------------------------
BB Ba Below-average quality
......................................................
B B Marginal quality
......................................................
CCC Caa Poor quality
......................................................
CC Ca Highly speculative
......................................................
C C Lowest quality
......................................................
D -- In default
......................................................

Such securities often are subordinated to the prior claims of banks and other
senior lenders. Lower-grade securities are regarded by the rating agencies as
predominantly speculative with respect to the issuer's continuing ability to
meet principal and interest payments. The ratings of S&P and Moody's represent
their opinions of the quality of the income securities they undertake to rate,
but not the market risk of such securities. It should be emphasized however,
that ratings are general and are not absolute standards of quality.

The Fund's investment adviser seeks to minimize the risks involved in investing
in medium- and lower-grade

securities through diversification and a focus on in-depth research and
fundamental credit analysis. In selecting securities for investment, the Fund's
investment adviser considers, among other things, the security's current income
potential, the rating assigned to the security, the issuer's experience and
managerial strength, the financial soundness of the issuer and the outlook of
its industry, changing financial condition, borrowing requirements or debt
maturity schedules, regulatory concerns, and responsiveness to changes in
business conditions and interest rates. The Fund's investment adviser also may
consider relative values based on anticipated cash flow, interest or dividend
coverage, balance sheet analysis and earnings prospects. The investment adviser
evaluates each individual income security for credit quality and value and
attempts to identify higher-yielding securities of companies whose financial
condition has improved since the issuance of such securities or is anticipated
to improve in the future. Because of the number of investment considerations
involved in investing in medium- and lower-grade securities, achievement of the
Fund's investment objectives may be more dependent upon the investment adviser's
credit analysis than is the case with investing in higher-grade securities.

The value of income securities generally varies inversely with changes in
prevailing interest rates. If interest rates rise, income security prices
generally fall; if interest rates fall, income security prices generally rise.
Shorter-term securities are generally less sensitive to interest rate changes
than longer-term securities; thus, for a given change in interest rates, the
market prices of shorter-maturity securities generally fluctuate less than the
market prices of longer-maturity securities. Income securities with shorter
maturities generally offer lower yields than income securities with longer
maturities assuming all other factors, including credit quality, are equal.
Under normal market conditions, the Fund invests at least 65% of its total
assets in corporate bonds and other income securities with maturities greater
than one year and, while the Fund has no policy limiting the maturities of the
debt securities in which it may invest, the Fund's investment adviser seeks to
moderate risk by normally maintaining a portfolio duration of two to six years.
Duration is a measure of the expected life of a debt security that was developed
as a more precise alternative to the concept of "term to maturity." Duration
incorporates a debt security's yield, coupon interest payments, final maturity
and call features into one measurement. A duration calculation looks at the
present value of a security's entire payment stream, whereas term to maturity is
based solely on the date of a security's final principal repayment.

UNDERSTANDING
MATURITIES

An income security can be categorized according to its maturity, which is
the length of time before the issuer must repay the principal.

Term Maturity Level
---------------------------------------------------

1-3 years Short
...................................................
4-10 years Intermediate
...................................................
More than 10 years Long
...................................................

UNDERSTANDING
DURATION

Duration provides an alternative approach to assessing a security's market
risk. Duration measures the expected life of a security by incorporating
the security's yield, coupon interest payments, final maturity and call
features into one measure. Whereas maturity focuses only on the final
principal repayment date of a security, duration looks at the timing and
present value of all of a security's principal, interest or other
payments. Typically, a bond with interest payments due prior to maturity
has a duration less than maturity. A zero coupon bond, which does not make
interest payments prior to maturity, would have the same duration and
maturity.

RISK OF INVESTING IN
MEDIUM- AND LOWER-GRADE SECURITIES

Securities that are in the medium- or lower-grade categories generally offer
higher yields than are offered by higher-grade securities of similar maturities,
but they also generally involve greater risks, such as greater credit risk,
greater market risk and volatility, greater liquidity concerns and potentially
greater manager risk. Investors should carefully consider the risks of owning

shares of a fund which invests in medium- or lower-grade securities before
investing in the Fund.

Credit risk relates to the issuer's ability to make timely payment of interest
and principal when due. Medium-and lower-grade securities are considered more
susceptible to nonpayment of interest and principal or default than higher-grade
securities. Increases in interest rates or changes in the economy may
significantly affect the ability of issuers of medium- or lower-grade income
securities to pay interest and to repay principal, to meet projected financial
goals or to obtain additional financing. In the event that an issuer of
securities held by the Fund experiences difficulties in the timely payment of
principal and interest and such issuer seeks to restructure the terms of its
borrowings, the Fund may incur additional expenses and may determine to invest
additional assets with respect to such issuer or the project or projects to
which the Fund's securities relate. Further, the Fund may incur additional
expenses to the extent that it is required to seek recovery upon a default in
the payment of interest or the repayment of principal on its portfolio holdings,
and the Fund may be unable to obtain full recovery on such amounts.

Market risk relates to changes in market value of a security that occur as a
result of variation in the level of prevailing interest rates and yield
relationships in the income securities market and as a result of real or
perceived changes in credit risk. The value of the Fund's investments can be
expected to fluctuate over time. When interest rates decline, the value of a
portfolio invested in fixed income securities generally can be expected to rise.
Conversely, when interest rates rise, the value of a portfolio invested in fixed
income securities generally can be expected to decline. Income securities with
longer maturities, which may have higher yields, may increase or decrease in
value more than income securities with shorter maturities. However, the
secondary market prices of medium- or lower-grade securities generally are less
sensitive to changes in interest rates and are more sensitive to general adverse
economic changes or specific developments with respect to the particular issuers
than are the secondary market prices of higher-grade securities. A significant
increase in interest rates or a general economic downturn could severely disrupt
the market for medium- or lower-grade securities and adversely affect the market
value of such securities. Such events also could lead to a higher incidence of
default by issuers of medium- or lower-grade securities as compared with
higher-grade securities. In addition, changes in credit risks, interest rates,
the credit markets or periods of general economic uncertainty can be expected to
result in increased volatility in the market price of the medium- or lower-grade
securities in the Fund and thus in the net asset value of the Fund. Adverse
publicity and investor perceptions, whether or not based on rational analysis,
may affect the value, volatility and liquidity of medium- or lower-grade
securities.

The markets for medium- or lower-grade securities may be less liquid than the
markets for higher-grade securities. Liquidity relates to the ability of a fund
to sell a security in a timely manner at a price which reflects the value of
that security. To the extent that there is no established retail market for some
of the medium- or lower-grade securities in which the Fund may invest, trading
in such securities may be relatively inactive. Prices of medium- or lower-grade
securities may decline rapidly in the event a significant number of holders
decide to sell. Changes in expectations regarding an individual issuer of
medium- or lower-grade securities generally could reduce market liquidity for
such securities and make their sale by the Fund more difficult, at least in the
absence of price concessions. The effects of adverse publicity and investor
perceptions may be more pronounced for securities for which no established
retail market exists as compared with the effects on securities for which such a
market does exist. An economic downturn or an increase in interest rates could
severely disrupt the market for such securities and adversely affect the value
of outstanding securities or the ability of the issuers to repay principal and
interest. Further, the Fund may have more difficulty selling such securities in
a timely manner and at their stated value than would be the case for securities
for which an established retail market does exist.

During periods of reduced market liquidity or in the absence of readily
available market quotations for medium- or lower-grade securities held in the
Fund's portfolio, the ability of the Fund to value the Fund's securities becomes
more difficult and the judgment of the Fund may play a greater role in the
valuation of the Fund's securities due to the reduced availability of reliable
objective data.

The Fund may invest in securities not producing immediate cash income, including
securities in default, zero coupon securities or pay-in-kind securities. Prices
on non-cash-paying instruments may be more sensitive to changes in the issuer's
financial condition, fluctuation in interest rates and market demand/supply
imbalances than cash-paying securities with similar credit ratings, and thus may
be more speculative. Special tax considerations are associated with investing in
certain lower-grade securities, such as zero coupon or pay-in-kind securities.
See "Federal Income Taxation" below. The Fund's investment adviser will weigh
these concerns against the expected total returns from such instruments. See
"Additional Information Regarding Certain Income Securities" below.

The Fund may invest in securities rated below B by both Moody's and S&P, common
stocks or other equity securities and income securities on which interest or
dividends are not being paid when such investments are consistent with the
Fund's investment objectives or are acquired as part of a unit consisting of a
combination of income or equity securities. Equity securities as referred to
herein do not include preferred stocks (which the Fund considers income
securities). The Fund will not purchase any such securities which will cause
more than 20% of its total assets to be so invested or which would cause more
than 10% of its total assets to be invested in common stocks, warrants and
options on equity securities at the time of investment.

The Fund's investments may include securities with the lowest grade assigned by
recognized rating organizations and unrated securities of comparable quality.
Securities assigned the lowest grade ratings include those of companies that are
in default or are in bankruptcy or reorganization. Securities of such companies
are regarded by the rating agencies as having extremely poor prospects of ever
attaining any real investment standing and are usually available at deep
discounts from the face values of the instruments. A security purchased at a
deep discount may currently pay a very high effective yield. In addition, if the
financial condition of the issuer improves, the underlying value of the security
may increase, resulting in capital appreciation. If the company defaults on its
obligations or remains in default, or if the plan of reorganization does not
provide sufficient payments for debtholders, the deep discount securities may
stop generating income and lose value or become worthless. The Fund's investment
adviser will balance the benefits of deep discount securities with their risks.
While a diversified portfolio may reduce the overall impact of a deep discount
security that is in default or loses its value, the risk cannot be eliminated.

Few medium- and lower-grade income securities are listed for trading on any
national securities exchange, and issuers of medium- and lower-grade income
securities may choose not to have a rating assigned to their obligations by any
nationally recognized statistical rating organization. As a result, the Fund's
portfolio may consist of a higher portion of unlisted or unrated securities as
compared with an investment company that invests primarily in higher-grade
securities. Unrated securities are usually not as attractive to as many buyers
as are rated securities, a factor which may make unrated securities less
marketable. These factors may have the effect of limiting the availability of
the securities for purchase by the Fund and may also limit the ability of the
Fund to sell such securities at their fair value either to meet redemption
requests or in response to changes in the economy or the financial markets.
Further, to the extent the Fund owns or may acquire illiquid or restricted
medium- or lower-grade securities, these securities may involve special
registration responsibilities, liabilities and costs, and liquidity and
valuation difficulties.

The Fund will rely on its investment adviser's judgment, analysis and experience
in evaluating the creditworthiness of an issuer. The amount of available
information about the financial condition of certain medium- or lower-grade
issuers may be less extensive than other issuers. In its analysis, the Fund's
investment adviser may consider the credit ratings of recognized rating
organizations in evaluating securities although the investment adviser does not
rely primarily on these ratings. Credit ratings of securities rating
organizations evaluate only the safety of principal and interest payments, not
the market risk. In addition, ratings are general and not absolute standards of
quality, and credit ratings are subject to the risk that the creditworthiness of
an issuer may change and the rating agencies may fail to change such ratings in
a timely fashion. A rating downgrade does not require the Fund to dispose of a
security. The Fund's investment adviser continuously monitors the issuers of
securities held in the Fund. Additionally, since most foreign income securities
are not rated, the Fund will invest in such

securities based on the analysis of the Fund's investment adviser without any
guidance from published ratings. Because of the number of investment
considerations involved in investing in medium- or lower-grade securities and
foreign income securities, achievement of the Fund's investment objectives may
be more dependent upon the credit analysis of the Fund's investment adviser than
is the case with investing in higher-grade securities.

New or proposed laws may have an impact on the market for medium- or lower-grade
securities. The Fund's investment adviser is unable at this time to predict what
effect, if any, legislation may have on the market for medium- or lower-grade
securities.

Special tax considerations are associated with investing in certain medium- or
lower-grade securities, such as zero coupon or pay-in-kind securities. See
"Federal Income Taxation" below.

The table below sets forth the percentages of the Fund's assets during the
fiscal year ended August 31, 2005 invested in the various rating categories
(based on the higher of the S&P or Moody's ratings) and in unrated debt
securities. The percentages are based on the dollar-weighted average of credit
ratings of all securities held by the Fund during the 2005 fiscal year computed
on a monthly basis.

FISCAL YEAR ENDED AUGUST 31, 2005
UNRATED SECURITIES OF
RATED SECURITIES COMPARABLE QUALITY
RATING (AS A PERCENTAGE OF (AS A PERCENTAGE OF
CATEGORY PORTFOLIO VALUE) PORTFOLIO VALUE)
-----------------------------------------------------------------------

AAA/Aaa 0.00% 0.41%
.......................................................................
AA/Aa 0.00% 0.00%
.......................................................................
A/A 0.00% 0.00%
.......................................................................
BBB/Baa 1.61% 0.20%
.......................................................................
BB/Ba 24.72% 0.05%
.......................................................................
B/B 57.56% 0.89%
.......................................................................
CCC/Caa 11.90% 0.85%
.......................................................................
CC/Ca 0.05% 0.00%
.......................................................................
C/C 0.06% 0.00%
.......................................................................
D 0.00% 0.41%
.......................................................................
Equities 1.29% 0.00%
.......................................................................
Percentage of
Rated and Unrated
Debt Securities 97.19% 2.81%
.......................................................................

The percentage of the Fund's assets invested in securities of various grades may
vary from time to time from those listed above.

ADDITIONAL INFORMATION REGARDING

CERTAIN INCOME SECURITIES

Zero coupon securities are income securities that do not entitle the holder to
any periodic payment of interest prior to maturity or a specified date when the
securities begin paying current interest. They are issued and traded at a
discount from their face amounts or par value, which discount varies depending
on the time remaining until cash payments begin, prevailing interest rates,
liquidity of the security and the perceived credit quality of the issuer.
Because such securities do not entitle the holder to any periodic payments of
interest prior to maturity, this prevents any reinvestment of interest payments
at prevailing interest rates if prevailing interest rates rise. On the other
hand, because there are no periodic interest payments to be reinvested prior to
maturity, zero coupon securities eliminate the reinvestment risk and may lock in
a favorable rate of return to maturity if interest rates drop.

Payment-in-kind securities are income securities that pay interest through the
issuance of additional securities. Prices on such non-cash-paying instruments
may be more sensitive to changes in the issuer's financial condition,
fluctuations in interest rates and market demand/supply imbalances than
cash-paying securities with similar credit ratings, and thus may be more
speculative than are securities that pay interest periodically in cash.

Special tax considerations are associated with investing in zero coupon and
pay-in-kind securities. See "Federal Income Taxation" below. The Fund's
investment adviser will weigh these concerns against the expected total returns
from such instruments.

RISKS OF INVESTING IN
SECURITIES OF FOREIGN ISSUERS

believes that in certain instances such securities of foreign issuers may
provide higher yields than securities of domestic issuers which have similar
maturities.

Investments in securities of foreign issuers present certain risks not
ordinarily associated with investments in securities of U.S. issuers. These
risks include fluctuations in foreign currency exchange rates, political,
economic or legal developments (including war or other instability,
expropriation of assets, nationalization and confiscatory taxation), the
imposition of foreign exchange limitations (including currency blockage),
withholding taxes on income or capital transactions or other restrictions,
higher transaction costs (including higher brokerage, custodial and settlement
costs and currency conversion costs) and possible difficulty in enforcing
contractual obligations or taking judicial action. Securities of foreign issuers
may not be as liquid and may be more volatile than comparable securities of
domestic issuers.

In addition, there often is less publicly available information about many
foreign issuers, and issuers of foreign securities are subject to different,
often less comprehensive, auditing, accounting and financial reporting
disclosure requirements than domestic issuers. There is generally less
government regulation of exchanges, brokers and listed companies abroad than in
the United States and, with respect to certain foreign countries, there is a
possibility of expropriation or confiscatory taxation, or diplomatic
developments which could affect investment in those countries. Because there is
usually less supervision and governmental regulation of foreign exchanges,
brokers and dealers than there is in the United States, the Fund may experience
settlement difficulties or delays not usually encountered in the United States.

Delays in making trades in securities of foreign issuers relating to volume
constraints, limitations or restrictions, clearance or settlement procedures, or
otherwise could impact yields and result in temporary periods when assets of the
Fund are not fully invested or attractive investment opportunities are foregone.

The Fund may invest in securities of issuers determined by the investment
adviser to be in developing or emerging market countries. Investments in
securities of issuers in developing or emerging market countries are subject to
greater risks than investments in securities of developed countries since
emerging market countries tend to have economic structures that are less diverse
and mature and political systems that are less stable than developed countries.

In addition to the increased risks of investing in securities of foreign
issuers, there are often increased transaction costs associated with investing
in securities of foreign issuers, including the costs incurred in connection
with converting currencies, higher foreign brokerage or dealer costs and higher
settlement costs or custodial costs.

Since the Fund may invest in securities denominated or quoted in currencies
other than the U.S. dollar, the Fund may be affected by changes in foreign
currency exchange rates (and exchange control regulations) which affect the
value of investments in the Fund and the accrued income and appreciation or
depreciation of the investments. Changes in foreign currency exchange rates
relative to the U.S. dollar will affect the U.S. dollar value of the Fund's
assets denominated in that currency and the Fund's return on such assets as well
as any temporary uninvested reserves in bank deposits in foreign currencies. In
addition, the Fund will incur costs in connection with conversions between
various currencies.

The Fund may invest in securities of foreign issuers in the form of depositary
receipts. Depositary receipts involve substantially identical risks to those
associated with direct investment in securities of foreign issuers. In addition,
the underlying issuers of certain depositary receipts, particularly unsponsored
or unregistered depositary receipts, are under no obligation to distribute
shareholder communications to the holders of such receipts, or to pass through
to them any voting rights with respect to the deposited securities.

STRATEGIC TRANSACTIONS

The Fund may, but is not required to, use various investment strategic
transactions, including options, futures contracts and options on futures
contracts, in several different ways depending upon the status of the Fund's
investments and the expectations of the Fund's investment adviser concerning the
securities markets. Although the Fund's investment adviser seeks to use these
transactions to achieve the Fund's investment objectives, no assurance can be
given that the use of these transactions will achieve this result.

The Fund can engage in options transactions on securities, indices or on futures
contracts to attempt to manage the Fund's risk in advancing or declining
markets. For example, the value of a put option generally increases as the value
of the underlying security declines. Value is protected against a market decline
to the degree the performance of the put correlates with the performance of the
Fund's investment portfolio. If the market remains stable or advances, the Fund
can refrain from exercising the put and its portfolio will participate in the
advance, having incurred only the premium cost for the put.

The Fund may purchase and sell listed and over-the-counter options ("OTC
Options"). OTC Options are subject to certain additional risks including default
by the other party to the transaction and the liquidity of the transactions.

The Fund may enter into contracts for the purchase or sale for future delivery
of fixed-income securities or contracts based on financial indices including any
index of U.S. government securities or foreign government securities (futures
contracts) and may purchase and write put and call options to buy or sell
futures contracts (options on futures contracts). A sale of a futures contract
means the acquisition of a contractual obligation to deliver the securities
called for by the contract at a specified price on a specified date. A purchase
of a futures contract means the incurring of a contractual obligation to acquire
the securities called for by the contract at a specified price on a specified
date. The purchaser of a futures contract on an index agrees to take delivery of
an amount of cash equal to the difference between a specified multiple of the
value of the index on the expiration date of the contract and the price at which
the contract was originally struck. No physical delivery of the fixed-income
securities underlying the index is made. These investment techniques generally
are used to protect against anticipated future changes in interest or exchange
rates which otherwise might either adversely affect the value of the Fund's
portfolio securities or adversely affect the price of securities which the Fund
intends to purchase at a later date.

In certain cases, the options and futures contracts markets provide investment
or risk management opportunities that are not available from direct investments
in underlying securities. In addition, some strategies can be performed with
greater ease and at lower cost by utilizing the options and futures contracts
markets rather than purchasing or selling portfolio securities. However, such
transactions involve risks different from those involved with direct investments
in underlying securities. For example, there may be an imperfect correlation
between the value of the instruments and the underlying assets. In addition, the
use of these transactions includes the risks of default by the other party to
certain transactions. The Fund may incur losses in using these transactions that
partially or completely offset gains in portfolio positions. These transactions
may not be liquid and involve manager risk. In addition, such transactions may
involve commissions and other costs, which may increase the Fund's expenses and
reduce its return.

The Fund complies with applicable regulatory requirements when implementing
strategic transactions, including the maintenance of cash and/or liquid
securities in segregated accounts when mandated by SEC rules. A more complete
discussion of options, futures contracts and options on futures contracts and
their risks is contained in the Fund's Statement of Additional Information. The
Statement of Additional Information can be obtained by investors free of charge
as described on the back cover of this Prospectus.

OTHER INVESTMENTS AND RISK FACTORS

For cash management purposes, the Fund may engage in repurchase agreements with
broker-dealers, banks and other financial institutions to earn a return on
temporarily available cash. Such transactions are subject to the risk of default
by the other party.

The Fund may invest up to 15% of its net assets in illiquid securities and
certain restricted securities. Such securities may be difficult or impossible to
sell at the time and the price that the Fund would like. Thus, the Fund may have
to sell such securities at a lower price, sell other securities instead to
obtain cash or forego other investment opportunities.

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund may sell securities without regard to the length of time they have been
held to take advantage of

new investment opportunities, yield differentials, or for other reasons. The
Fund's portfolio turnover rate may vary from year to year. A high portfolio
turnover rate (100% or more) increases a fund's transaction costs (including
brokerage commissions and dealer costs), which would adversely impact a fund's
performance. Higher portfolio turnover may result in the realization of more
short-term capital gains than if a fund had lower portfolio turnover. The
turnover rate will not be a limiting factor, however, if the Fund's investment
adviser considers portfolio changes appropriate. The Fund's portfolio turnover
rate is reported in the section entitled "Financial Highlights."

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more defensive
investment strategy, the Fund may, on a temporary basis, hold cash or invest a
portion or all of its assets in securities issued or guaranteed by the U.S.
government, its agencies or instrumentalities, prime commercial paper,
certificates of deposit, bankers' acceptances and other obligations of domestic
banks having total assets of at least $500 million, repurchase agreements and
short-term money market instruments. Under normal market conditions, the yield
on these securities will tend to be lower than the yield on other securities
that may be owned by the Fund. In taking such a defensive position, the Fund
would temporarily not be pursuing and may not achieve its investment objectives.

Investment
Advisory Services
-------------------------------------------------------------------------------

THE ADVISER. Van Kampen Asset Management is the Fund's investment adviser (the
"Adviser"). The Adviser is a wholly owned subsidiary of Van Kampen Investments
Inc. ("Van Kampen Investments"). Van Kampen Investments is a diversified asset
management company that administers more than three million retail investor
accounts, has extensive capabilities for managing institutional portfolios and
has more than $104 billion under management or supervision as of September 30,
2005. Van Kampen Funds Inc., the distributor of the Fund (the "Distributor"), is
also a wholly owned subsidiary of Van Kampen Investments. Van Kampen Investments
is an indirect wholly owned subsidiary of Morgan Stanley, a preeminent global
financial services firm that maintains leading market positions in each of its
three primary businesses: securities, asset management and credit services.
Morgan Stanley is a full service securities firm engaged in securities trading
and brokerage activities, investment banking, research and analysis, financing
and financial advisory services. The Adviser's principal office is located at
1221 Avenue of the Americas, New York, New York 10020.

ADVISORY AGREEMENT. The Fund retains the Adviser to manage the investment of its
assets and to place orders for the purchase and sale of its portfolio
securities. Effective June 1, 2005, under an investment advisory agreement
between the Adviser and the Fund (the "Advisory Agreement"), the Fund pays the
Adviser a monthly fee computed based upon an annual rate applied to the average
daily net assets of the Fund as follows:

AVERAGE DAILY NET ASSETS % PER ANNUM
--------------------------------------------------

First $500 million 0.420%
..................................................
Next $250 million 0.345%
..................................................
Next $250 million 0.295%
..................................................
Next $1 billion 0.270%
..................................................
Next $1 billion 0.245%
..................................................
Over $3 billion 0.220%
..................................................

Prior to June 1, 2005, the Fund paid the Adviser a monthly fee computed based
upon the annual rate applied to the average daily net assets of the Fund as
follows:

AVERAGE DAILY NET ASSETS % PER ANNUM
--------------------------------------------------

First $150 million 0.625%
..................................................
Next $150 million 0.550%
..................................................
Over $300 million 0.500%
..................................................

Applying these fee schedules, the Fund's effective advisory fee rate was 0.50%
of the Fund's average daily net assets for the Fund's fiscal year ended August
31, 2005. The Fund's average daily net assets are determined by taking the
average of all of the determinations of the net assets during a given calendar
month. Such fee is payable for each calendar month as soon as practicable after
the end of that month.

The Adviser furnishes offices, necessary facilities and equipment and provides
administrative services to the Fund. The Fund pays all charges and expenses of
its day-to-day operations, including service fees, distribution fees, custodian
fees, legal and independent registered public accounting firm fees, the costs of
reports and proxies to shareholders, compensation of trustees of the Fund (other
than those who are affiliated persons of the Adviser, Distributor or Van Kampen
Investments) and all other ordinary business expenses not specifically assumed
by the Adviser.

A discussion regarding the basis for the Board of Trustees' approval of the
Advisory Agreement is available in the Fund's Annual Report for the fiscal year
ended August 31, 2005.

PORTFOLIO MANAGEMENT. The Fund is managed within the Adviser's Taxable Fixed
Income team. The team consists of portfolio managers and analysts. Current
members of the team jointly and primarily responsible for the day-to-day
management of the Fund's portfolio are Gordon W. Loery, an Executive Director of
the Adviser, and Joshua Givelber, a Vice President of the Adviser.

Mr. Loery has been associated with the Adviser in an investment management
capacity since 1990 and joined the team managing the Fund in July 2001. Mr.
Givelber has been associated with the Adviser in an investment management
capacity since 1999 and joined the team managing the Fund in April 2003.

Mr. Loery is the lead manager of the Fund. Each team member is responsible for
specific sectors. All team members are responsible for the execution of the
overall strategy of the Fund.

The Fund's Statement of Additional Information provides additional information
about the portfolio managers' compensation structure, other accounts managed by
the portfolio managers and the portfolio managers' ownership of securities in
the Fund.

The composition of the team may change without notice from time to time.

Purchase of Shares

-------------------------------------------------------------------------------

GENERAL

This Prospectus offers three classes of shares of the Fund, designated as Class
A Shares, Class B Shares and Class C Shares. Other classes of shares of the Fund
may be offered through one or more separate prospectuses of the Fund. By
offering multiple classes of shares, the Fund permits each investor to choose
the class of shares that is most beneficial given the type of investor, the
amount to be invested and the length of time the investor expects to hold the
shares. As described more fully below, each class of shares offers a distinct
structure of sales charges, distribution and service fees and other features
that are designed to address a variety of needs.

Each class of shares of the Fund represents an interest in the same portfolio of
investments of the Fund and has the same rights except that (i) Class A Shares
generally bear the sales charge expenses at the time of purchase while Class B
Shares and Class C Shares generally bear the sales charge expenses at the time
of redemption and any expenses (including higher distribution fees and transfer
agency costs) resulting from such deferred sales charge arrangement, (ii) each
class of shares has exclusive voting rights with respect to approvals of the
Rule 12b-1 distribution plan and service plan (each as described below) under
which the class's distribution fee and/or service fee is paid, (iii) each class
of shares has different exchange privileges, (iv) certain classes of shares are
subject to a conversion feature, and (v) certain classes of shares have
different shareholder service options available.

PRICING FUND SHARES

The offering price of the Fund's shares is based upon the Fund's net asset value
per share (plus sales charges, where applicable). Differences in net asset
values per share of the Class A Shares, Class B Shares and Class C Shares are
generally expected to be due to the daily expense accruals of the higher
distribution fees and transfer agency costs applicable to the Class B Shares and
Class C Shares and the differential in the dividends that may be paid on each
class of shares.

The net asset value per share for each class of shares of the Fund is determined
once daily as of the close of

trading on the New York Stock Exchange (the "Exchange") (currently 4:00 p.m.,
Eastern time) each day the Exchange is open for trading except on any day on
which no purchase or redemption orders are received or there is not a sufficient
degree of trading in the Fund's portfolio securities such that the Fund's net
asset value per share might be materially affected. The Fund's Board of Trustees
reserves the right to calculate the net asset value per share and adjust the
offering price more frequently than once daily if deemed desirable. Net asset
value per share for each class is determined by dividing the value of the Fund's
portfolio securities, cash and other assets (including accrued interest)
attributable to such class, less all liabilities (including accrued expenses)
attributable to such class, by the total number of shares of the class
outstanding.

Such computation is made by using prices as of the close of trading on the
Exchange and (i) valuing securities listed or traded on a domestic securities
exchange at the last reported sale price or, if there has been no sale that day,
at the mean between the last reported bid and asked prices and valuing
securities listed or traded on a foreign securities exchange at the last
reported sale price or the latest bid price, (ii) valuing over-the-counter
securities at the NASDAQ Official Closing Price or, if there has been no sale
that day, at the mean between the last reported bid and asked prices, (iii)
valuing unlisted securities at the mean between the last reported bid and asked
prices obtained from reputable brokers, and (iv) valuing any securities for
which market quotations are not readily available and any other assets at their
fair value as determined in good faith by the Adviser in accordance with
procedures established by the Fund's Board of Trustees. In cases where a
security is traded on more than one exchange, the security is valued on the
exchange designated as the primary market. Securities with remaining maturities
of 60 days or less are valued at amortized cost, which approximates market
value. See the financial statements and notes thereto in the Fund's Annual
Report.

Trading in securities on many foreign securities exchanges and over-the-counter
markets is normally completed before the close of business on each U.S. business
day. In addition, securities trading in a particular country or countries may
not take place on all U.S. business days or may take place on days which are not
U.S. business days. Changes in valuations on certain securities may occur at
times or on days on which the Fund's net asset value is not calculated and on
which the Fund does not effect sales, redemptions and exchanges of its shares.
The Fund calculates net asset value per share, and therefore effects sales,
redemptions and exchanges of its shares, as of the close of trading on the
Exchange each day the Exchange is open for trading.

If events materially affecting the price of foreign portfolio securities occur
between the time when their price was last determined on such foreign securities
exchange or market and the time when the Fund's net asset value was last
calculated, such securities may be valued at their fair value as determined in
good faith by the Adviser in accordance with procedures established by the
Fund's Board of Trustees, an effect of which may be to foreclose opportunities
available to market timers or short-term traders. For purposes of calculating
net asset value per share, all assets and liabilities initially expressed in
foreign currencies will be converted into U.S. dollars at the mean of the bid
price and asked price of such currencies against the U.S. dollar as quoted by a
major bank.

DISTRIBUTION PLAN AND SERVICE PLAN

The Fund has adopted a distribution plan (the "Distribution Plan") with respect
to each of its Class A Shares, Class B Shares and Class C Shares pursuant to
Rule 12b-1 under the Investment Company Act of 1940, as amended (the "1940
Act"). The Fund also has adopted a service plan (the "Service Plan") with
respect to each such class of its shares. Under the Distribution Plan and the
Service Plan, the Fund pays distribution fees in connection with the sale and
distribution of its shares and service fees in connection with the provision of
ongoing services to shareholders of each such class and the maintenance of
shareholder accounts.

The amount of distribution fees and service fees varies among the classes
offered by the Fund. Because these fees are paid out of the Fund's assets on an
ongoing basis, these fees will increase the cost of your investment in the Fund.
By purchasing a class of shares subject to higher distribution fees and service
fees, you may pay more over time than on a class of shares with other types of
sales charge arrangements. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges

permitted by the rules of the NASD. The net income attributable to a class of
shares will be reduced by the amount of the distribution fees and service fees
and other expenses of the Fund associated with that class of shares.

To assist investors in comparing classes of shares, the tables under the
Prospectus heading "Fees and Expenses of the Fund" provide a summary of sales
charges and expenses and an example of the sales charges and expenses of the
Fund applicable to each class of shares offered herein.

HOW TO BUY SHARES

The shares are offered on a continuous basis through the Distributor as
principal underwriter, which is located at 1221 Avenue of the Americas, New
York, New York 10020. Shares may be purchased through members of the NASD who
are acting as securities dealers ("dealers") and NASD members or eligible
non-NASD members who are acting as brokers or agents for investors ("brokers").
Dealers and brokers are sometimes referred to herein as authorized dealers.

Shares may be purchased on any business day by completing the account
application form and forwarding it, directly or through an authorized dealer,
administrator, custodian, trustee, record keeper or financial adviser, to the
Fund's shareholder service agent, Van Kampen Investor Services Inc. ("Investor
Services"), a wholly owned subsidiary of Van Kampen Investments. When purchasing
shares of the Fund, investors must specify whether the purchase is for Class A
Shares, Class B Shares or Class C Shares by selecting the correct Fund number on
the account application form. Sales personnel of authorized dealers distributing
the Fund's shares are entitled to receive compensation for selling such shares
and may receive differing compensation for selling Class A Shares, Class B
Shares or Class C Shares.

The Adviser and/or the Distributor may pay compensation (out of their own funds
and not as an expense of the Fund) to certain affiliated or unaffiliated
authorized dealers in connection with the sale or retention of Fund shares
and/or shareholder servicing. Such compensation may be significant in amount and
the prospect of receiving, or the receipt of, such compensation may provide both
affiliated and unaffiliated entities, and their representatives or employees,
with an incentive to favor sales of shares of the Fund over other investment
options. Any such payments will not change the net asset value or the price of
the Fund's shares. For more information, please see the Fund's Statement of
Additional Information and/or contact your authorized dealer.

The offering price for shares is based upon the next determined net asset value
per share (plus sales charges, where applicable) after an order is received
timely by Investor Services. Purchases completed through an authorized dealer,
administrator, custodian, trustee, record keeper or financial adviser may
involve additional fees charged by such person. Orders received by Investor
Services prior to the close of the Exchange, and orders received by authorized
dealers, administrators, custodians, trustees, record keepers or financial
advisers prior to the close of the Exchange that are properly transmitted to
Investor Services by the time designated by Investor Services, are priced based
on the date of receipt. Orders received by Investor Services after the close of
the Exchange, and orders received by authorized dealers, administrators,
custodians, trustees, record keepers or financial advisers after the close of
the Exchange or orders received by such persons that are not transmitted to
Investor Services until after the time designated by Investor Services, are
priced based on the date of the next determined net asset value per share
provided they are received timely by Investor Services on such date. It is the
responsibility of authorized dealers, administrators, custodians, trustees,
record keepers or financial advisers to transmit orders received by them to
Investor Services so they will be received in a timely manner.

The Fund and the Distributor reserve the right to reject or limit any order to
purchase Fund shares through exchange or otherwise and to close any shareholder
account. Certain patterns of past exchanges and/or purchase or sale transactions
involving the Fund or other Participating Funds (as defined below) may result in
the Fund rejecting or limiting, in the Fund's or the Distributor's discretion,
additional purchases and/or exchanges or in an account being closed.
Determinations in this regard may be made based on the frequency or dollar
amount of the previous exchanges or purchase or sale transactions. The Fund also
reserves the right to suspend the sale of the Fund's shares in response to
conditions in the securities markets or for other reasons. As used herein,
"Participating Funds" refers to

Van Kampen investment companies advised by the Adviser and distributed by the
Distributor as determined from time to time by the Fund's Board of Trustees.

Investor accounts will automatically be credited with additional shares of the
Fund after any Fund distributions, such as dividends and capital gain dividends,
unless the investor instructs the Fund otherwise. Investors wishing to receive
cash instead of additional shares should contact the Fund by visiting our web
site at www.vankampen.com, by writing to the Fund, c/o Van Kampen Investor
Services Inc., PO Box 947, Jersey City, New Jersey 07303-0947, or by telephone
at (800) 847-2424.

There is no minimum investment amount when establishing an account with the
Fund. However, the Fund may redeem any shareholder account (other than
retirement accounts and accounts established through a broker for which the
transfer agent does not have discretion to initiate transactions) that has been
open for one year or more and has a balance of less than $1,000. Shareholders
will receive written notice at least 60 days in advance of any involuntary
redemption and will be given the opportunity to purchase at net asset value
without a sales charge the number of additional shares needed to bring the
account value to $1,000. There will be no involuntary redemption if the value of
the account is less than $1,000 due to market depreciation.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. What
this means to you: when you open an account, you will be asked to provide your
name, address, date of birth, and other information that will allow us to
identify you. The Fund and the Distributor reserve the right to not open your
account if this information is not provided. If the Fund or the Distributor is
unable to verify your identity, the Fund and the Distributor reserve the right
to restrict additional transactions and/or liquidate your account at the next
calculated net asset value after the account is closed (minus any applicable
sales or other charges) or take any other action required by law.

CLASS A SHARES

Class A Shares of the Fund are sold at the offering price, which is net asset
value plus an initial maximum sales charge of up to 4.75% (or 4.99% of the net
amount invested), reduced on investments of $100,000 or more as follows:

CLASS A SHARES
SALES CHARGE SCHEDULE*

AS % OF AS % OF
SIZE OF OFFERING NET AMOUNT
INVESTMENT PRICE INVESTED
----------------------------------------------------------------

Less than $100,000 4.75% 4.99%
................................................................
$100,000 but less than
$250,000 3.75% 3.90%
................................................................
$250,000 but less than
$500,000 2.75% 2.83%
................................................................
$500,000 but less than
$1,000,000 2.00% 2.04%
................................................................
$1,000,000 or more ** **
................................................................

* The actual sales charge that may be paid by an investor may differ slightly
from the sales charge shown above due to rounding that occurs in the
calculation of the offering price and in the number of shares purchased.

** No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
eighteen months of purchase. With respect to shares purchased prior to
December 1, 2004, a contingent deferred sales charge of 1.00% may be imposed
on certain redemptions made within one year of purchase. The contingent
deferred sales charge is assessed on an amount equal to the lesser of the
then current market value of the shares or the historical cost of the shares
(which is the amount actually paid for the shares at the time of original
purchase) being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price. Shareholders
should retain any records necessary to substantiate the historical cost of
their shares, as the Fund and authorized dealers may not retain this
information.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

Under the Distribution Plan and the Service Plan, the Fund may spend up to a
total of 0.25% per year of the Fund's average daily net assets with respect to
Class A Shares of the Fund.

CLASS A SHARES QUANTITY DISCOUNTS

Investors purchasing Class A Shares may, under certain circumstances described
below, be entitled to pay reduced or no sales charges. A person eligible for a
reduced sales charge includes an individual, his or her spouse and children
under 21 years of age and any corporation, partnership or sole proprietorship
which is 100% owned, either alone or in combination, by any of the foregoing; a
trustee or other fiduciary purchasing for a single trust or for a single
fiduciary account, or a "company" as defined in Section 2(a)(8) of the 1940 Act.

Investors must notify the Fund or their authorized dealer at the time of the
purchase order whenever a quantity discount is applicable to purchases and may
be required to provide the Fund, or their authorized dealer, with certain
information or records to verify eligibility for a quantity discount. Such
information or records may include account statements or other records for
shares of the Fund or other Participating Funds in all accounts (e.g.,
retirement accounts) of the investor and other eligible persons, as described
above, which may include accounts held at the Fund or at other authorized
dealers. Upon such notification, an investor will pay the lowest applicable
sales charge. Shareholders should retain any records necessary to substantiate
the purchase price of the shares, as the Fund and authorized dealers may not
retain this information.

Quantity discounts may be modified or terminated at any time. For more
information about quantity discounts, investors should contact the Fund, their
authorized dealer or the Distributor.

VOLUME DISCOUNTS. The size of investment shown in the Class A Shares sales
charge table applies to the total dollar amount being invested by any person in
shares of the Fund, or in any combination of shares of the Fund and shares of
other Participating Funds, although other Participating Funds may have different
sales charges.

CUMULATIVE PURCHASE DISCOUNT. The size of investment shown in the Class A Shares
sales charge table may also be determined by combining the amount being invested
in shares of the Participating Funds plus the current offering price of all
shares of the Participating Funds currently owned.

LETTER OF INTENT. A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating investments over a 13-month period
to determine the sales charge as outlined in the Class A Shares sales charge
table. The size of investment shown in the Class A Shares sales charge table
includes purchases of shares of the Participating Funds in Class A Shares over a
13-month period based on the total amount of intended purchases plus the current
offering price of all shares of the Participating Funds previously purchased and
still owned. An investor may elect to compute the 13-month period starting up to
90 days before the date of execution of a Letter of Intent. Each investment made
during the period receives the reduced sales charge applicable to the total
amount of the investment goal. The Letter of Intent does not preclude the Fund
(or any other Participating Fund) from discontinuing the sale of its shares. The
initial purchase must be for an amount equal to at least 5% of the minimum total
purchase amount of the level selected. If trades not initially made under a
Letter of Intent subsequently qualify for a lower sales charge through the
90-day backdating provisions, an adjustment will be made at the expiration of
the Letter of Intent to give effect to the lower sales charge. Such adjustment
in sales charge will be used to purchase additional shares. The Fund initially
will escrow shares totaling 5% of the dollar amount of the Letter of Intent to
be held by Investor Services in the name of the shareholder. In the event the
Letter of Intent goal is not achieved within the specified period, the investor
must pay the difference between the sales charge applicable to the purchases
made and the reduced sales charge previously paid. Such payments may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain the difference.

CLASS A SHARES
PURCHASE PROGRAMS

Purchasers of Class A Shares may be entitled to reduced or no initial sales
charges in connection with the unit investment trust reinvestment program and
purchases by registered representatives of selling firms or purchases by persons
affiliated with the Fund or the Distributor. The Fund reserves the right to
modify or terminate these arrangements at any time.

UNIT INVESTMENT TRUST REINVESTMENT PROGRAM. The Fund permits unitholders of unit
investment trusts to reinvest distributions from such trusts in Class A Shares
of the Fund at net asset value without a sales charge if the administrator of an
investor's unit investment trust program meets certain uniform criteria relating
to cost savings by the Fund and the Distributor. The offering price for all
other investments made from unit investment trust distributions will be net
asset value plus an initial maximum sales charge of up to 1.00% (1.01% of the
net amount invested). Of this amount, the Distributor will pay to the authorized
dealer, if any, through which such participation in the qualifying program was
initiated 0.50% of the offering price as a dealer concession or agency
commission. Persons desiring more information with respect to this program,
including the terms and conditions that apply to the program, should contact
their authorized dealer or the Distributor.

The administrator of such a unit investment trust must have an agreement with
the Distributor pursuant to which the administrator will (1) submit a single
bulk order and make payment with a single remittance for all investments in the
Fund during each distribution period by all investors who choose to invest in
the Fund through the program and (2) provide Investor Services with appropriate
backup data for each investor participating in the program in a computerized
format fully compatible with Investor Services' processing system.

To obtain these special benefits, all dividends and other distributions from the
Fund must be reinvested in additional shares and there cannot be any systematic
withdrawal program. The Fund will send account activity statements to such
participants on a quarterly basis only, even if their investments are made more
frequently. The Fund reserves the right to modify or terminate this program at
any time.

NET ASSET VALUE PURCHASE OPTIONS. Class A Shares of the Fund may be purchased at
net asset value without a sales charge, generally upon written assurance that
the purchase is made for investment purposes and that the shares will not be
resold except through redemption by the Fund, by:

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
and any of its subsidiaries and such persons' families and their beneficial
accounts.

(2) Current or retired directors, officers and employees of Morgan Stanley and
any of its subsidiaries; employees of an investment subadviser to any fund
described in (1) above or an affiliate of such subadviser; and such
persons' families and their beneficial accounts.

(3) Directors, officers, employees and, when permitted, registered
representatives, of financial institutions that have a selling group
agreement with the Distributor and their spouses and children under 21
years of age when purchasing for any accounts they beneficially own, or, in
the case of any such financial institution, when purchasing for retirement
plans for such institution's employees; provided that such purchases are
otherwise permitted by such institutions.

(4) Banks, broker-dealers and other financial institutions (including
registered investment advisers and financial planners) that have entered
into an agreement with the Distributor or one of its affiliates, purchasing
shares on behalf of clients participating in a fund supermarket, wrap
program, asset allocation program, or other program in which the clients
pay an asset-based fee (which may be subject to a minimum flat fee) for:
advisory or financial planning services, executing transactions in
Participating Fund shares, or for otherwise participating in the program.

(5) Trustees and other fiduciaries purchasing shares for retirement plans which
invest in multiple fund families through broker-dealer retirement plan
alliance programs that have entered into agreements with the Distributor
and which are subject to certain minimum size and operational requirements.
Trustees and other fiduciaries should refer to the Statement of Additional
Information for further details with respect to such alliance programs.

(6) Retirement plans funded by the rollovers of assets of Participating Funds
from an employer-sponsored retirement plan and established exclusively for
the benefit of an individual (specifically

including, but not limited to, a Traditional IRA, Roth IRA, SIMPLE IRA,
Solo 401(k), Money Purchase or Profit Sharing plan) if:

(i) the account being funded by such rollover is to be maintained by the
same trustee, custodian or administrator that maintained the plan from
which the rollover funding such rollover originated, or an affiliate
thereof; and

(ii) the dealer of record with respect to the account being funded by such
rollover is the same as the dealer of record with respect to the plan
from which the rollover funding such rollover originated, or an
affiliate thereof.

(7) Trusts created under pension, profit sharing or other employee benefit
plans (including qualified and non-qualified deferred compensation plans),
provided that (a) the total plan assets are at least $1 million or (b) the
plan has more than 100 eligible employees. A commission will be paid to
authorized dealers who initiate and are responsible for such purchases
within a rolling twelve-month period as follows: 1.00% on sales of $1
million to $2 million, plus 0.75% on the next $1 million, plus 0.50% on the
next $2 million, plus 0.25% on the excess over $5 million.

(8) Clients of authorized dealers purchasing shares in fixed or flat fee
(rather than transaction based fees) brokerage accounts.

(9) Certain qualified state tuition plans qualifying pursuant to Section 529 of
the Code that are approved by the Fund's Distributor. There is no minimum
investment amount for purchases made under this option (9).

(10) Unit investment trusts sponsored by the Distributor or its affiliates.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents and the parents of the person's spouse.

Purchase orders made pursuant to clause (4) may be placed either through
authorized dealers as described above or directly with Investor Services by the
investment adviser, financial planner, trust company or bank trust department,
provided that Investor Services receives federal funds for the purchase by the
close of business on the next business day following acceptance of the order. An
authorized dealer may charge a transaction fee for placing an order to purchase
shares pursuant to this provision or for placing a redemption order with respect
to such shares. Authorized dealers will be paid a service fee as described above
on purchases made under options (3) through (9) above. The Fund may terminate,
or amend the terms of, offering shares of the Fund at net asset value to such
groups at any time.

Eligible purchasers of Class A Shares may also be entitled to reduced or no
initial sales charges through certain purchase programs offered by the Fund. For
more information, see "Other Purchase Programs" herein.

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within five years of purchase as
shown in the following table:

CLASS B SHARES
SALES CHARGE SCHEDULE

CONTINGENT DEFERRED
SALES CHARGE
AS A PERCENTAGE OF
DOLLAR AMOUNT
YEAR SINCE PURCHASE SUBJECT TO CHARGE
-----------------------------------------------------

First 4.00%
.....................................................
Second 4.00%
.....................................................
Third 3.00%
.....................................................
Fourth 2.50%
.....................................................
Fifth 1.50%
.....................................................
Sixth and After None
.....................................................

information. In addition, no sales charge is assessed on shares derived from
reinvestment of dividends or capital gain dividends. The Fund generally will not
accept a purchase order for Class B Shares in the amount of $100,000 or more.

The amount of the contingent deferred sales charge, if any, varies depending on
the number of years from the time of each purchase of Class B Shares until the
time of redemption of such shares.

In determining whether a contingent deferred sales charge applies to a
redemption, it is assumed that the shares being redeemed first are any shares in
the shareholder's Fund account that are not subject to a contingent deferred
sales charge, followed by shares held the longest in the shareholder's account.

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to Class B Shares of the Fund. In
addition, under the Service Plan, the Fund may spend up to 0.25% per year of the
Fund's average daily net assets with respect to Class B Shares of the Fund.

Eligible purchasers of Class B Shares may also be entitled to reduced or no
contingent deferred sales charges through certain purchase programs offered by
the Fund. For more information, see "Other Purchase Programs" herein.

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value of the shares or the historical cost of
the shares (which is the amount actually paid for the shares at the time of
original purchase) being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price. Shareholders
should retain any records necessary to substantiate the historical cost of their
shares as the Fund and authorized dealers may not retain this information. In
addition, no sales charge is assessed on shares derived from reinvestment of
dividends or capital gain dividends. The Fund will not accept a purchase order
for Class C Shares in the amount of $1 million or more.

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to Class C Shares of the Fund. In
addition, under the Service Plan, the Fund may spend up to 0.25% per year of the
Fund's average daily net assets with respect to Class C Shares of the Fund.

Eligible purchasers of Class C Shares may also be entitled to reduced or no
contingent deferred sales charges through certain purchase programs offered by
the Fund. For more information, see "Other Purchase Programs" herein.

CONVERSION FEATURE

Class B Shares purchased on or after June 1, 1996, including Class B Shares
received from reinvestment of distributions through the dividend reinvestment
plan on such shares, automatically convert to Class A Shares eight years after
the end of the calendar month in which the shares were purchased. Class C Shares
purchased before January 1, 1997, including Class C Shares received from
reinvestment of distributions through the dividend reinvestment plan on such
shares, automatically convert to Class A Shares ten years after the end of the
calendar month in which the shares were purchased. Such conversions will be on
the basis of the relative net asset values per share, without the imposition of
any sales load, fee or other charge. The conversion schedule applicable to a
share of the Fund acquired through the exchange privilege from a Participating
Fund is determined by reference to the Participating Fund from which such share
was originally purchased.

The conversion of such shares to Class A Shares is subject to the continuing
availability of an opinion of counsel to the effect that (i) the assessment of
the higher distribution fee and transfer agency costs with respect to such
shares does not result in the Fund's dividends or capital gain dividends
constituting

"preferential dividends" under the federal income tax law and (ii) the
conversion of shares does not constitute a taxable event under federal income
tax law. The conversion may be suspended if such an opinion is no longer
available and such shares might continue to be subject to the higher aggregate
fees applicable to such shares for an indefinite period.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

The contingent deferred sales charge is waived on redemptions of Class A Shares
purchased subject to a contingent deferred sales charge (i) for required minimum
distributions from an individual retirement account ("IRA") or certain other
retirement plan distributions, (ii) for withdrawals under the Fund's systematic
withdrawal plan but limited to 12% annually of the initial value of the account,
(iii) if no commission or transaction fee is paid by the Distributor to
authorized dealers at the time of purchase of such shares or (iv) if made by the
Fund's involuntary liquidation of a shareholder's account as described herein.
The contingent deferred sales charge is waived on Class B Shares and Class C
Shares in the circumstances listed above with respect to Class A Shares as well
as within one year following the death or disability (as disability is defined
by federal income tax law) of a shareholder. However, waiver category (iii)
above is only applicable with respect to Class B Shares and Class C Shares sold
through certain 401(k) plans. Subject to certain limitations, a shareholder who
has redeemed Class C Shares of the Fund may reinvest in Class C Shares at net
asset value with credit for any contingent deferred sales charge if the
reinvestment is made within 180 days after the redemption, provided that shares
of the Fund are available for sale at the time of reinvestment. For a more
complete description of contingent deferred sales charge waivers, please refer
to the Statement of Additional Information or contact your authorized dealer.

OTHER PURCHASE PROGRAMS

EXCHANGE PRIVILEGE. Exchanges of shares are sales of shares of one Participating
Fund and purchases of shares of another Participating Fund. Shares of the Fund
may be exchanged for shares of the same class of any Participating Fund based on
the next determined net asset value per share of each fund after requesting the
exchange without any sales charge, subject to certain limitations. For more
information regarding the exchange privilege, see the section of this Prospectus
entitled "Shareholder Services -- Exchange privilege."

REINSTATEMENT PRIVILEGE. A Class A Shareholder or Class B Shareholder who has
redeemed shares of the Fund may reinstate any portion or all of the net proceeds
of such redemption (and may include that amount necessary to acquire a
fractional share to round off his or her purchase to the next full share) in
Class A Shares of the Fund. A Class C Shareholder who has redeemed shares of the
Fund may reinstate any portion or all of the net proceeds of such redemption
(and may include that amount necessary to acquire a fractional share to round
off his or her purchase to the next full share) in Class C Shares of the Fund
with credit given for any contingent deferred sales charge paid upon such
redemption, provided that such shareholder has not previously exercised this
reinstatement privilege with respect to Class C Shares of the Fund. Shares will
be reinstated to the same fund account from which such shares were redeemed.
Shares acquired in this manner will be deemed to have the original cost and
purchase date of the redeemed shares for purposes of applying the contingent
deferred sales charge applicable to Class C Shares to subsequent redemptions.
Reinstatements are made at the net asset value per share (without a sales
charge) next determined after the order is received, which must be made within
180 days after the date of the redemption, provided that shares of the Fund are
available for sale. Reinstatement at net asset value per share is also offered
to participants in eligible retirement plans for repayment of principal (and
interest) on their borrowings on such plans, provided that shares of the Fund
are available for sale. Shareholders must notify the Distributor or their
authorized dealer of their eligibility to participate in the reinstatement
privilege and may be required to provide documentation to the Fund.

DIVIDEND DIVERSIFICATION. A shareholder may elect, by completing the appropriate
section of the account application form or by calling (800) 847-2424 ((800)
421-2833 for the hearing impaired), to have all dividends and capital gain
dividends paid on a class of shares of the Fund invested into shares of the same
class of any of the Participating Funds so long as the investor has a
pre-existing account for such class of shares of the other fund. Both accounts
must be of the same type, either non-retirement or retirement. If the accounts
are

retirement accounts, they must both be for the same class and of the same type
of retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit
Sharing plans) and for the benefit of the same individual. If a qualified,
pre-existing account does not exist, the shareholder must establish a new
account subject to any requirements of the Participating Fund into which
distributions will be invested. Distributions are invested into the selected
Participating Fund, provided that shares of such Participating Fund are
available for sale, at its net asset value per share as of the payable date of
the distribution from the Fund.

AVAILABILITY OF INFORMATION. Clear and prominent information regarding sales
charges of the Fund and the applicability and availability of discounts from
sales charges is available free of charge through our web site at
www.vankampen.com, which provides links to the Prospectus and Statement of
Additional Information containing the relevant information.

Redemption of Shares

-------------------------------------------------------------------------------

Generally, shareholders may redeem for cash some or all of their shares without
charge by the Fund (other than any applicable sales charge, redemption fee or
exchange fee) at any time.

As described under the Prospectus heading "Purchase of Shares," redemptions of
Class B Shares and Class C Shares may be subject to a contingent deferred sales
charge. In addition, certain redemptions of Class A Shares for shareholder
accounts of $1 million or more may be subject to a contingent deferred sales
charge. Redemptions completed through an authorized dealer, custodian, trustee
or record keeper of a retirement plan account may involve additional fees
charged by such person.

The Fund will assess a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within 30 days of purchase. The redemption
fee is paid directly to the Fund and is intended to defray the costs associated
with the sale of portfolio securities to satisfy redemption and exchange
requests made by such shareholders, thereby reducing the impact on longer-term
shareholders of such costs. For purposes of determining whether the redemption
fee applies, shares that were held the longest will be redeemed first. For Fund
shares acquired by exchange, the holding period prior to the exchange is not
considered in determining whether the redemption fee is applied. The redemption
fee and exchange fee are not imposed on redemptions and/or exchanges made (i)
through systematic withdrawal or exchange plans, (ii) through pre-approved asset
allocation programs, (iii) on shares received by reinvesting income dividends or
capital gain distributions and (iv) through check writing (with respect to
certain fixed-income funds).

The redemption fee and exchange fee may not be imposed on transactions that
occur through certain omnibus accounts at financial intermediaries. Certain
financial intermediaries may apply different methodologies than those described
above in assessing redemption fees, may impose their own redemption fee that may
differ from the Fund's redemption fee or may impose certain trading restrictions
to deter market timing and frequent trading. If you invest in the Fund through a
financial intermediary, please read that firm's materials carefully to learn
about any other restrictions or fees that may apply.

Except as specified below under "Telephone Redemption Requests," payment for
shares redeemed generally will be made by check mailed within seven days after
receipt by Investor Services of the redemption request and any other necessary
documents in proper form as described below. Such payment may be postponed or
the right of redemption suspended as provided by the rules of the SEC. Such
payment may, under certain circumstances, be paid wholly or in part by a
distribution-in-kind of portfolio securities. A distribution-in-kind may result
in recognition by the shareholder of a gain or loss for federal income tax
purposes when such securities are distributed, and the shareholder may have
brokerage costs and a gain or loss for federal income tax purposes upon the
shareholder's disposition of such securities. If the shares to be redeemed have
been recently purchased by check, Investor Services may delay the payment of
redemption proceeds until it confirms that the purchase check has cleared, which
may take up to 15 calendar days from the date of purchase. A taxable gain or
loss may be recognized by the shareholder upon redemption of shares.

WRITTEN REDEMPTION REQUESTS. Shareholders may request a redemption of shares by
written request in proper form sent directly to Van Kampen Investor Services
Inc., PO Box 947, Jersey City, New Jersey 07303-0947. The request for redemption
should indicate the number of shares or dollar amount to be redeemed, the Fund
name, the class designation of such shares and the shareholder's account number.
The redemption request must be signed by all persons in whose names the shares
are registered. Signatures must conform exactly to the account registration. If
the proceeds of the redemption exceed $100,000, or if the proceeds are not to be
paid to the record owner at the record address, or if the record address has
changed within the previous 15 calendar days, signature(s) must be guaranteed by
one of the following: a bank or trust company; a broker-dealer; a credit union;
a national securities exchange, a registered securities association or a
clearing agency; a savings and loan association; or a federal savings bank.

Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption request to be in proper form.
In some cases, however, additional documents may be necessary. Certificated
shares may be redeemed only by written request. The certificates for the shares
being redeemed must be properly endorsed for transfer and must accompany a
written redemption request. Generally, in the event a redemption is requested by
and registered to a corporation, partnership, trust, fiduciary, estate or other
legal entity owning shares of the Fund, a copy of the corporate resolution or
other legal documentation appointing the authorized signer and certified within
the prior 120 calendar days must accompany the redemption request. Retirement
plan distribution requests should be sent to the plan custodian/trustee to be
forwarded to Investor Services. Contact the plan custodian/trustee for further
information.

In the case of written redemption requests sent directly to Investor Services,
the redemption price is the net asset value per share next determined after the
request in proper form is received by Investor Services.

AUTHORIZED DEALER REDEMPTION REQUESTS. Shareholders may place redemption
requests through an authorized dealer following procedures specified by such
authorized dealer. The redemption price for such shares is the net asset value
per share next calculated after an order in proper form is received by an
authorized dealer provided such order is transmitted to the Distributor by the
time designated by the Distributor. It is the responsibility of authorized
dealers to transmit redemption requests received by them to the Distributor so
they will be received prior to such time. Redemptions completed through an
authorized dealer may involve additional fees charged by the dealer.

TELEPHONE REDEMPTION REQUESTS. The Fund permits redemption of shares by
telephone and for redemption proceeds to be sent to the address of record for
the account or to the bank account of record as described below. A shareholder
automatically has telephone redemption privileges unless the shareholder
indicates otherwise by checking the applicable box on the account application
form. For accounts that are not established with telephone redemption
privileges, a shareholder may call the Fund at (800) 847-2424 to request that a
copy of the Account Services form be sent to the shareholder for completion or
visit our web site at www.vankampen.com to download this form. Shares may be
redeemed by calling (800) 847-2424, our automated telephone system, which is
generally accessible 24 hours a day, seven days a week. Van Kampen Investments
and its subsidiaries, including Investor Services, and the Fund employ
procedures considered by them to be reasonable to confirm that instructions
communicated by telephone are genuine. Such procedures include requiring certain
personal identification information prior to acting upon telephone instructions,
tape-recording telephone communications and providing written confirmation of
instructions communicated by telephone. If reasonable procedures are employed,
none of Van Kampen Investments, Investor Services or the Fund will be liable for
following telephone instructions which it reasonably believes to be genuine.
Telephone redemptions may not be available if the shareholder cannot reach
Investor Services by telephone, whether because all telephone lines are busy or
for any other reason; in such case, a shareholder would have to use the Fund's
other redemption procedures previously described. Requests received by Investor
Services prior to 4:00 p.m., Eastern time, will be processed at the next
determined net asset value per share. These privileges are available for most
accounts other than retirement accounts or accounts with shares represented by
certificates. If an account has

multiple owners, Investor Services may rely on the instructions of any one
owner.

For redemptions authorized by telephone, amounts of $50,000 or less may be
redeemed daily if the proceeds are to be paid by check or by Automated Clearing
House and amounts of at least $1,000 up to $1 million may be redeemed daily if
the proceeds are to be paid by wire. The proceeds must be payable to the
shareholder(s) of record and sent to the address of record for the account or
wired directly to their predesignated bank account for this account. This
privilege is not available if the address of record has been changed within 15
calendar days prior to a telephone redemption request. Proceeds from redemptions
payable by wire transfer are expected to be wired on the next business day
following the date of redemption. The Fund reserves the right at any time to
terminate, limit or otherwise modify this redemption privilege.

Distributions from the Fund

-------------------------------------------------------------------------------

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

DIVIDENDS. Interest from investments is the Fund's main source of net investment
income. The Fund's present policy, which may be changed at any time by the
Fund's Board of Trustees, is to declare daily and distribute monthly all, or
substantially all, of its net investment income as dividends to shareholders.
Dividends are automatically applied to purchase additional shares of the Fund at
the next determined net asset value unless the shareholder instructs otherwise.

The per share dividends on Class B Shares and Class C Shares may be lower than
the per share dividends on Class A Shares as a result of the higher distribution
fees and transfer agency costs applicable to such classes of shares.

CAPITAL GAIN DIVIDENDS. The Fund may realize capital gains or losses when it
sells securities, depending on whether the sales prices for the securities are
higher or lower than purchase prices. The Fund distributes any net capital gains
to shareholders as capital gain dividends at least annually. As in the case of
dividends, capital gain dividends are automatically reinvested in additional
shares of the Fund at the next determined net asset value unless the shareholder
instructs otherwise.

Shareholder Services

-------------------------------------------------------------------------------

Listed below are some of the shareholder services the Fund offers to investors.
For a more complete description of the Fund's shareholder services, such as
investment accounts, share certificates, retirement plans, automated clearing
house deposits, dividend diversification and the systematic withdrawal plan,
please refer to the Statement of Additional Information or contact your
authorized dealer.

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written instruction or by telephone, you may also perform certain
transactions through the internet (restrictions apply to certain account and
transaction types). Please refer to our web site at www.vankampen.com for
further instructions regarding internet transactions. Van Kampen Investments and
its subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated
through the internet are genuine. Such procedures include requiring use of a
personal identification number prior to acting upon internet instructions and
providing written confirmation of instructions communicated through the
internet. If reasonable procedures are employed, none of Van Kampen Investments,
Investor Services or the Fund will be liable for following instructions received
through the internet which it reasonably believes to be genuine. If an account
has multiple owners, Investor Services may rely on the instructions of any one
owner.

REINVESTMENT PLAN. A convenient way for investors to accumulate additional
shares is by accepting dividends and capital gain dividends in shares of the

Fund. Such shares are acquired at net asset value per share (without a sales
charge) on the applicable payable date of the dividend or capital gain dividend.
Unless the shareholder instructs otherwise, the reinvestment plan is automatic.
This instruction may be made by visiting our web site at www.vankampen.com, by
writing to Investor Services or by telephone by calling (800) 847-2424 ((800)
421-2833 for the hearing impaired). The investor may, on the account application
form or prior to any declaration, instruct that dividends and/or capital gain
dividends be paid in cash, be reinvested in the Fund at the next determined net
asset value or be reinvested in another Participating Fund at the next
determined net asset value.

AUTOMATIC INVESTMENT PLAN. An automatic investment plan is available under which
a shareholder can authorize Investor Services to debit the shareholder's bank
account on a regular basis to invest predetermined amounts in the Fund.
Additional information is available from the Distributor or your authorized
dealer.

CHECK WRITING PRIVILEGE. A Class A Shareholder holding shares of the Fund for
which certificates have not been issued and which are not in escrow may write
checks against such shareholder's account by completing the Checkwriting Form
and the appropriate section of the account application form and returning the
forms to Investor Services. Once the forms are properly completed, signed and
returned, a supply of checks (redemption drafts) will be sent to the Class A
Shareholder. Checks can be written to the order of any person in any amount of
$100 or more.

When a check is presented to the custodian bank, State Street Bank and Trust
Company (the "Bank"), for payment, full and fractional Class A Shares required
to cover the amount of the check are redeemed from the shareholder's Class A
Shares account by Investor Services at the next determined net asset value per
share. Check writing redemptions represent the sale of Class A Shares. Any gain
or loss realized on the redemption of shares is a taxable event.

Checks will not be honored for redemption of Class A Shares held less than 15
calendar days, unless such Class A Shares have been paid for by bank wire. Any
Class A Shares for which there are outstanding certificates may not be redeemed
by check. If the amount of the check is greater than the proceeds of all
uncertificated shares held in the shareholder's Class A Shares account, the
check will be returned and the shareholder may be subject to additional charges.
A shareholder may not liquidate the entire account by means of a check. The
check writing privilege may be terminated or suspended at any time by the Fund
or by the Bank and neither shall incur any liability for such amendment or
termination or for effecting redemptions to pay checks reasonably believed to be
genuine or for returning or not paying on checks which have not been accepted
for any reason. Retirement plans and accounts that are subject to backup
withholding are not eligible for the check writing privilege.

EXCHANGE PRIVILEGE. Shares of the Fund may be exchanged for shares of the same
class of any Participating Fund based on the next determined net asset value per
share of each fund after requesting the exchange without any sales charge,
subject to certain limitations. Shares of the Fund may be exchanged for shares
of any Participating Fund only if shares of that Participating Fund are
available for sale. Shareholders seeking an exchange into a Participating Fund
should obtain and read the current prospectus for such fund prior to
implementing an exchange. A prospectus of any of the Participating Funds may be
obtained from an authorized dealer or the Distributor or by visiting our web
site at www.vankampen.com.

Shares of the Fund will be assessed an exchange fee of 2% on the proceeds of the
exchanged shares held for less than 30 days. See "Redemption of Shares" above
for more information about when the exchange fee will apply.

When shares that are subject to a contingent deferred sales charge are exchanged
among Participating Funds, the holding period for purposes of computing the
contingent deferred sales charge is based upon the date of the initial purchase
of such shares from a Participating Fund. When such shares are redeemed and not
exchanged for shares of another Participating Fund, the shares are subject to
the contingent deferred sales charge schedule imposed by the Participating Fund
from which such shares were originally purchased.

Exchanges of shares are sales of shares of one Participating Fund and purchases
of shares of another

Participating Fund. The sale may result in a gain or loss for federal income tax
purposes. If the shares sold have been held for less than 91 days, the sales
charge paid on such shares is carried over and included in the tax basis of the
shares acquired.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services, by calling (800) 847-2424, our automated telephone system
(which is generally accessible 24 hours a day, seven days a week), or by
visiting our web site at www.vankampen.com. A shareholder automatically has
these exchange privileges unless the shareholder indicates otherwise by checking
the applicable box on the account application form. Van Kampen Investments and
its subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated by
telephone are genuine. Such procedures include requiring certain personal
identification information prior to acting upon telephone instructions,
tape-recording telephone communications, and providing written confirmation of
instructions communicated by telephone. If reasonable procedures are employed,
none of Van Kampen Investments, Investor Services or the Fund will be liable for
following telephone instructions which it reasonably believes to be genuine. If
the exchanging shareholder does not have an account in the fund whose shares are
being acquired, a new account will be established with the same registration,
dividend and capital gain dividend options (except dividend diversification) and
authorized dealer of record as the account from which shares are exchanged,
unless otherwise specified by the shareholder. In order to establish a
systematic withdrawal plan for the new account or reinvest dividends from the
new account into another fund, however, an exchanging shareholder must submit a
specific request.

The Fund and the Distributor reserve the right to reject or limit any order to
purchase Fund shares through exchange or otherwise and to close any shareholder
account. Certain patterns of past exchanges and/or purchase or sale transactions
involving the Fund or other Participating Funds may result in the Fund rejecting
or limiting, in the Fund's or the Distributor's discretion, additional purchases
and/or exchanges or in an account being closed. Determinations in this regard
may be made based on the frequency or dollar amount of the previous exchanges or
purchase or sale transactions. The Fund may modify, restrict or terminate the
exchange privilege at any time. Shareholders will receive 60 days' notice of any
termination or material amendment to this exchange privilege.

For purposes of determining the sales charge rate previously paid on Class A
Shares, all sales charges paid on the exchanged shares and on any shares
previously exchanged for such shares or for any of their predecessors shall be
included. If the exchanged shares were acquired through reinvestment, those
shares are deemed to have been sold with a sales charge rate equal to the rate
previously paid on the shares on which the dividend or distribution was paid. If
a shareholder exchanges less than all of such shareholder's shares, the shares
upon which the highest sales charge rate was previously paid are deemed
exchanged first.

Exchange requests received on a business day prior to the time shares of the
funds involved in the request are priced will be processed on the date of
receipt. "Processing" a request means that shares of the fund which the
shareholder is redeeming will be redeemed at the net asset value per share next
determined on the date of receipt. Shares of the fund that the shareholder is
purchasing will also normally be purchased at the net asset value per share,
plus any applicable sales charge, next determined on the date of receipt.
Exchange requests received on a business day after the time that shares of the
funds involved in the request are priced will be processed on the next business
day in the manner described herein.

Frequent Purchases
and Redemptions of Fund Shares

-------------------------------------------------------------------------------

Frequent purchases and redemptions of Fund shares by Fund shareholders
("market-timing" or "short-term trading") may present risks for long-term
shareholders of the Fund, which may include, among other things, diluting the
value of Fund shares held by long-term shareholders, interfering with the
efficient management of the Fund's portfolio, increasing trading and

administrative costs, incurring unwanted taxable gains, and forcing the Fund to
hold excess levels of cash.

Certain types of mutual funds may be more susceptible to investors seeking to
market time or short-term trade. Mutual funds that invest in securities that
are, among other things, thinly traded, traded infrequently or less liquid are
subject to risk that market timers and/or short-term traders may seek to take
advantage of situations where the current market price may not accurately
reflect the current market value.

The Fund discourages and does not accommodate frequent purchases and redemptions
of Fund shares by Fund shareholders, and the Fund's Board of Trustees has
adopted policies and procedures to deter such frequent purchases and
redemptions. The Fund's policies with respect to purchases, redemptions and
exchanges of Fund shares are described in the "Fees and Expenses of the Fund,"
"Purchase of Shares," "Redemption of Shares" and "Shareholder Services --
Exchange privilege" sections of this Prospectus. The Fund's policies with
respect to valuing portfolio securities are described in the "Purchase of
Shares" section of this Prospectus. Except as described in each of these
sections and with respect to omnibus accounts, the Fund's policies regarding
frequent trading of Fund shares are applied uniformly to all shareholders. With
respect to trades that occur through omnibus accounts at intermediaries, such as
investment advisers, broker dealers, transfer agents, third party administrators
and insurance companies, the Fund (i) has requested assurance that such
intermediaries currently selling Fund shares have in place internal policies and
procedures reasonably designed to address market timing concerns and has
instructed such intermediaries to notify the Fund immediately if they are unable
to comply with such policies and procedures and (ii) requires all prospective
intermediaries to agree to cooperate in enforcing the Fund's policies with
respect to frequent purchases, exchanges and redemptions of Fund shares.

Federal Income Taxation

-------------------------------------------------------------------------------

Distributions of the Fund's investment company taxable income (generally
ordinary income and net short-term capital gain) are taxable to shareholders as
ordinary income to the extent of the Fund's earnings and profits, whether paid
in cash or reinvested in additional shares. Distributions of the Fund's net
capital gain (which is the excess of net long-term capital gain over net
short-term capital loss) designated as capital gain dividends, if any, are
taxable to shareholders as long-term capital gain, whether paid in cash or
reinvested in additional shares, and regardless of how long the shares of the
Fund have been held by such shareholders. The Fund expects that its
distributions will consist primarily of ordinary income and capital gain
dividends. Distributions in excess of the Fund's earnings and profits will first
reduce the adjusted tax basis of a shareholder's shares and, after such adjusted
tax basis is reduced to zero, will constitute capital gain to such shareholder
(assuming such shares are held as a capital asset).

Although distributions generally are treated as taxable in the year they are
paid, distributions declared in October, November or December, payable to
shareholders of record on a specified date in such month and paid during January
of the following year will be treated as having been distributed by the Fund and
received by the shareholders on the December 31st prior to the date of payment.
The Fund will inform shareholders of the source and tax status of all
distributions promptly after the close of each calendar year.

The Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "2003 Tax Act")
contains provisions that reduce the U.S. federal income tax rates on (1) long-
term capital gains received by individuals and (2) "qualified dividend income"
received by individuals from certain domestic and foreign corporations. The
reduced rates for capital gains generally apply to long-term capital gains from
sales or exchanges recognized on or after May 6, 2003, and cease to apply for
taxable years beginning after December 31, 2008. The reduced rate for dividends
generally applies to "qualified dividend income" received in taxable years
beginning after December 31, 2002, and ceases to apply for taxable years
beginning after December 31, 2008. Fund shareholders, as well as the Fund
itself, must also satisfy certain holding period and other requirements in order
for the reduced rate for dividends to apply. Because the Fund may invest a
portion of its assets in preferred stocks and securities convertible into common
stock, ordinary income dividends paid by the Fund may be

eligible for the reduced rate applicable to "qualified dividend income." No
assurance can be given as to what percentage of the ordinary income dividends
paid by the Fund will consist of "qualified dividend income." To the extent that
distributions from the Fund are designated as capital gain dividends, such
distributions will be eligible for the reduced rates applicable to long-term
capital gains.

The sale or exchange of shares may be a taxable transaction for federal income
tax purposes. Shareholders who sell their shares will generally recognize a gain
or loss in an amount equal to the difference between their adjusted tax basis in
the shares sold and the amount received. If the shares are held by the
shareholder as a capital asset, the gain or loss will be a capital gain or loss.
As a consequence of the 2003 Tax Act, the maximum tax rate applicable to net
capital gains recognized by individuals and other non-corporate taxpayers on the
sale or exchange of shares is (i) the same as the maximum ordinary income tax
rate for capital assets held for one year or less or (ii) for net capital gains
recognized on or after May 6, 2003, 15% for capital assets held for more than
one year (20% for net capital gains recognized in taxable years beginning after
December 31, 2008).

Backup withholding rules require the Fund, in certain circumstances, to withhold
28% (through 2010) of dividends and certain other payments, including redemption
proceeds, paid to shareholders who do not furnish to the Fund their correct
taxpayer identification number (in the case of individuals, their social
security number) and make certain required certifications (including
certifications as to foreign status, if applicable), or who are otherwise
subject to backup withholding.

Foreign shareholders, including shareholders who are non-resident aliens, may be
subject to U.S. withholding tax on certain distributions (whether received in
cash or in shares) at a rate of 30% or such lower rate as prescribed by an
applicable treaty. The American Jobs Creation Act of 2004 (the "2004 Tax Act")
permits the Fund to pay "interest-related dividends" and "short-term capital
gain dividends" to its foreign shareholders without having to withhold on such
dividends at the 30% rate. Under the 2004 Tax Act, the amount of
"interest-related dividends" that the Fund may pay each year is limited to the
amount of qualified interest income received by the Fund during that year, less
the amount of the Fund's expenses properly allocable to such interest income.
Under the 2004 Tax Act, the amount of "short-term capital gain dividends" that
the Fund may pay each year generally is limited to the excess of the Fund's net
short-term capital gains over its net long-term capital losses, without any
reduction for the Fund's expenses allocable to such gains (with exceptions for
certain gains). The exemption from 30% withholding tax for "short-term capital
gain dividends" does not apply with respect to foreign shareholders that are
present in the United States for more than 182 days during the taxable year. If
the Fund's income for a taxable year includes "qualified interest income" or net
short-term capital gains, the Fund may designate dividends as "interest-related
dividends" or "short-term capital gain dividends" by written notice mailed to
its foreign shareholders not later than 60 days after the close of the Fund's
taxable year. Foreign shareholders must provide documentation to the Fund
certifying their non-United States status. These provisions apply to dividends
paid by the Fund with respect to the Fund's taxable years beginning on or after
January 1, 2005 and will cease to apply to dividends paid by the Fund with
respect to the Fund's taxable years beginning after December 31, 2007. No
assurance can be given that Congress will not repeal these provisions prior to
their scheduled expiration under the 2004 Tax Act. Prospective foreign investors
should consult their advisers concerning the tax consequences to them of an
investment in shares of the Fund.

The Fund intends to qualify as a regulated investment company under federal
income tax law. If the Fund so qualifies and distributes each year to its
shareholders at least 90% of its investment company taxable income, the Fund
will not be required to pay federal income taxes on any income it distributes to
shareholders. If the Fund distributes less than an amount equal to the sum of
98% of its ordinary income and 98% of its capital gain net income, plus any
amounts that were not distributed in previous taxable years, then the Fund will
be subject to a nondeductible 4% excise tax on the undistributed amounts.

to securities issued at a discount, the Fund will be required to accrue as
income each year a portion of the discount and to distribute such income each
year to maintain its qualification as a regulated investment company and to
avoid income and excise taxes. To generate sufficient cash to make distributions
necessary to satisfy the 90% distribution requirement and to avoid income and
excise taxes, the Fund may have to dispose of securities that it would otherwise
have continued to hold.

The federal income tax discussion set forth above is for general information
only. Shareholders and prospective investors should consult their own advisers
regarding the specific federal tax consequences of purchasing, holding and
disposing of shares of the Fund, as well as the effects of state, local and
foreign tax laws and any proposed tax law changes.

Disclosure of Portfolio Holdings

-------------------------------------------------------------------------------

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

Financial Highlights

---------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information
reflects financial results for a single Fund share. The total returns in the
table represent the rate that an investor would have earned (or lost) on an
investment in the Fund (assuming reinvestment of all distributions and not
including payment of the maximum sales charge or taxes on Fund distributions
or redemptions). The information has been audited by Ernst & Young LLP, the
Fund's independent registered public accounting firm, whose report, along
with the Fund's most recent financial statements, may be obtained without
charge from our web site at www.vankampen.com or by calling the telephone
number on the back cover of this Prospectus. This information should be read
in conjunction with the financial statements and notes thereto included in
the Fund's Annual Report.

CLASS A SHARES
YEAR ENDED AUGUST 31,
2005 2004 2003 2002(A) 2001
----------------------------------------------------------------------------------------------------------

Net Asset Value, Beginning of the Period..... $3.64 $3.43 $3.15 $4.23 $5.24
------ ------ ------ ------- ------
Net Investment Income....................... .26 .26 .29 .39 .51
Net Realized and Unrealized Gain/Loss....... (.02) .21 .29 (1.01) (.96)
------ ------ ------ ------- ------
Total from Investment Operations............. .24 .47 .58 (.62) (.45)
------ ------ ------ ------- ------
Less:
Distributions from Net Investment Income.... .25 .25 .24 .43 .55
Return of Capital Distributions............. -0- .01 .06 .03 .01
------ ------ ------ ------- ------
Total Distributions.......................... .25 .26 .30 .46 .56
------ ------ ------ ------- ------
Net Asset Value, End of the Period........... $3.63 $3.64 $3.43 $3.15 $4.23
------ ------ ------ ------- ------
Total Return................................. 6.89%(b) 14.02%(b) 19.26%(b) -15.75%(b) -9.04%(b)
Net Assets at End of the Period (In
millions)................................... $532.0 $379.5 $408.7 $308.5 $394.4
Ratio of Expenses to Average Net Assets...... 1.06% 1.06% 1.12% 1.08% 1.05%
Ratio of Net Investment Income to Average Net
Assets...................................... 7.11% 7.45% 8.36% 10.39% 10.93%
Portfolio Turnover........................... 84% 88% 95% 83% 80%

CLASS B SHARES
YEAR ENDED AUGUST 31,
2005 2004 2003 2002(A) 2001
--------------------------------------------- -------------------------------------------------------

Net Asset Value, Beginning of the Period..... $3.65 $3.44 $3.16 $4.24 $5.25
------ ------ ------ ------- ------
Net Investment Income....................... .25 .23 .25 .35 .48
Net Realized and Unrealized Gain/Loss....... (.02) .21 .30 (1.01) (.97)
------ ------ ------ ------- ------
Total from Investment Operations............. .23 .44 .55 (.66) (.49)
------ ------ ------ ------- ------
Less:
Distributions from Net Investment Income.... .23 .22 .21 .39 .51
Return of Capital Distributions............. -0- .01 .06 .03 .01
------ ------ ------ ------- ------
Total Distributions.......................... .23 .23 .27 .42 .52
------ ------ ------ ------- ------
Net Asset Value, End of the Period........... $3.65 $3.65 $3.44 $3.16 $4.24
------ ------ ------ ------- ------
Total Return................................. 6.36%(c) 12.79%(c) 18.27%(c) -16.12%(c) -9.80%(c)
Net Assets at End of the Period (In
millions)................................... $191.0 $160.7 $175.6 $168.8 $249.6
Ratio of Expenses to Average Net Assets...... 1.83% 1.82% 1.89% 1.84% 1.83%
Ratio of Net Investment Income to Average Net
Assets...................................... 6.33% 6.70% 7.68% 9.67% 10.13%
Portfolio Turnover........................... 84% 88% 95% 83% 80%

CLASS C SHARES
YEAR ENDED AUGUST 31,
2005 2004 2003 2002(A) 2001
--------------------------------------------- -----------------------------------------------------------

Net Asset Value, Beginning of the Period..... $3.61 $3.41 $3.13 $4.20 $5.22
----- ------ ------ ------- -------
Net Investment Income....................... .25 .23 .25 .35 .48
Net Realized and Unrealized Gain/Loss....... (.03) .20 .30 (1.00) (.98)
----- ------ ------ ------- -------
Total from Investment Operations............. .22 .43 .55 (.65) (.50)
----- ------ ------ ------- -------
Less:
Distributions from Net Investment Income.... .23 .22 .21 .39 .51
Return of Capital Distributions............. -0- .01 .06 .03 .01
----- ------ ------ ------- -------
Total Distributions.......................... .23 .23 .27 .42 .52
----- ------ ------ ------- -------
Net Asset Value, End of the Period........... $3.60 $3.61 $3.41 $3.13 $4.20
----- ------ ------ ------- -------
Total Return................................. 6.17%(d)(e) 12.98%(d)(e) 18.14%(d)(f) -16.04%(d) -10.06%(d)
Net Assets at End of the Period (In
millions)................................... $54.5 $41.4 $41.5 $36.7 $58.7
Ratio of Expenses to Average Net Assets...... 1.82%(e) 1.81%(e) 1.86% 1.84% 1.82%
Ratio of Net Investment Income to Average Net
Assets...................................... 6.34%(e) 6.71%(e) 7.68%(f) 9.68% 10.12%
Portfolio Turnover........................... 84% 88% 95% 83% 80%

(a) As required, effective September 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment
Companies and began amortizing premium on fixed income securities and
presenting paydown gains and losses on mortgage- and asset-backed
securities as interest income. The effect of these changes for the
period ended August 31, 2002 was to decrease the ratio of net investment
income to average net assets from 10.49% to 10.39% for Class A Shares,
from 9.77% to 9.67% for Class B Shares and from 9.78% to 9.68% for Class
C Shares . Net investment income per share and net realized gains and
losses per share were unaffected by the adjustments. Per share, ratios
and supplemental data for periods prior to August 31, 2002 have not been
restated to reflect this change in presentation.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent
deferred sales charge ("CDSC"). On purchases of $1 million or more, a
CDSC of 1% may be imposed on certain redemptions made within eighteen
months of purchase. With respect to shares purchased prior to December
1, 2004, a CDSC of 1% may be imposed on certain redemptions made within
one year of purchase. If the sales charges were included, total returns
would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to .25% and do not reflect the deduction of taxes
that a shareholder would pay on Fund distributions or the redemption of
Fund shares.

(c) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4% imposed on certain redemptions
made within the first and second year of purchase and declining to 0%
after the fifth year. If the sales charge were included, total returns
would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that
a shareholder would pay on Fund distributions or the redemption of Fund
shares.

(d) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1% imposed on certain redemptions
made within one year of purchase. If the sales charge were included,
total returns would be lower. These returns include combined Rule 12b-1
fees and service fees of up to 1% and do not reflect the deduction of
taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares.

(e) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of
Net Investment Income to Average Net Assets reflect actual 12b-1 fees of
less than 1%.

(f) Certain non-recurring payments were made to Class C Shares, resulting in
an increase to the Total Return and Ratio of Net Investment Income to
Average Net Assets of .01%.

Appendix -- Description of Securities Ratings

-------------------------------------------------------------------------------

STANDARD & POOR'S -- A brief description of the applicable Standard & Poor's
(S&P) rating symbols and their meanings (as published by S&P) follows:

A S&P issue credit rating is a current opinion of the creditworthiness of an
obligor with respect to a specific financial obligation, a specific class of
financial obligations, or a specific financial program (including ratings on
medium-term note programs and commercial paper programs). It takes into
consideration the creditworthiness of guarantors, insurers, or other forms of
credit enhancement on the obligation and takes into account the currency in
which the obligation is denominated. The issue credit rating is not a
recommendation to purchase, sell, or hold a financial obligation, inasmuch as it
does not comment as to market price or suitability for a particular investor.

Issue credit ratings are based on current information furnished by the obligors
or obtained by S&P from other sources it considers reliable. S&P does not
perform an audit in connection with any credit rating and may, on occasion, rely
on unaudited financial information. Credit ratings may be changed, suspended, or
withdrawn as a result of changes in, or unavailability of, such information, or
based on other circumstances.

Issue credit ratings can be either long-term or short-term. Short-term ratings
are generally assigned to those obligations considered short term in the
relevant market. In the U.S., for example, that means obligations with an
original maturity of no more than 365 days -- including commercial paper.
Short-term ratings are also used to indicate the creditworthiness of an obligor
with respect to put features on long-term obligations. The result is a dual
rating, in which the short-term ratings address the put feature, in addition to
the usual long-term rating. Medium-term notes are assigned long-term ratings.

LONG-TERM ISSUE CREDIT RATINGS

Issue credit ratings are based, in varying degrees, on the following
considerations:

- Likelihood of payment -- capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;

- Nature of and provisions of the obligation;

- Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditors' rights.

The issue rating definitions are expressed in terms of default risk. As such,
they pertain to senior obligations of an entity. Junior obligations are
typically rated lower than senior obligations, to reflect the lower priority in
bankruptcy, as noted above. (Such differention applies when an entity has both
senior and subordinated obligations, secured and unsecured obligations, or
operating company and holding company obligations.) Accordingly, in the case of
junior debt, the rating may not conform exactly with the category definition.

AAA: An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA: An obligation rated "AA" differs from the highest-rated obligations only to
a small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A: An obligation rated "A" is somewhat more susceptible to the adverse effects
of changes in circumstances and economic conditions than obligations in
higher-rated categories. However, the obligor's capacity to meet its financial
commitment on the obligation is still strong.

BBB: An obligation rated "BBB" exhibits adequate protection parameters. However,
adverse economic conditions or changing circumstances are more likely to lead to
a weakened capacity of the obligor to meet its financial commitment on the
obligation.

A-1

SPECULATIVE GRADE

BB, B, CCC, CC, C: Obligations rated "BB", "B", "CCC", "CC" and "C" are regarded
as having significant speculative characteristics. "BB" indicates the least
degree of speculation and "C" the highest. While such obligations will likely
have some quality and protective characteristics, these may be outweighed by
large uncertainties or major exposures to adverse conditions.

BB: An obligation rated "BB" is less vulnerable to nonpayment than other
speculative issues. However, it faces major ongoing uncertainties or exposure to
adverse business, financial, or economic conditions which could lead to the
obligor's inadequate capacity to meet its financial commitment on the
obligation.

B: An obligation rated "B" is more vulnerable to nonpayment than obligations
rated "BB", but the obligor currently has the capacity to meet its financial
commitment on the obligation. Adverse business, financial, or economic
conditions will likely impair the obligor's capacity or willingness to meet its
financial commitment on the obligation.

CCC: An obligation rated "CCC" is currently vulnerable to nonpayment, and is
dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation. In the event of
adverse business, financial, or economic conditions, the obligor is not likely
to have the capacity to meet its financial commitment on the obligation.

CC: An obligation rated "CC" is currently highly vulnerable to nonpayment.

C: A subordinated debt or preferred stock obligation rated 'C' is currently
highly vulnerable to nonpayment. The 'C' rating may be used to cover a situation
where a bankruptcy petition has been filed or similar action taken, but payments
on this obligation are being continued. A 'C' also will be assigned to a
preferred stock issue in arrears on dividends or sinking fund payments, but that
is currently paying.

D: An obligation rated "D" is in payment default. The "D" rating category is
used when payments on an obligation are not made on the date due even if the
applicable grace period has not expired, unless S&P believes that such payments
will be made during such grace period. The "D" rating also will be used upon the
filing of a bankruptcy petition or the taking of a similar action if payments on
an obligation are jeopardized.

Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
major rating categories.

N.R.: This indicates that no rating has been requested, that there is
insufficient information on which to base a rating, or that Standard & Poor's
does not rate a particular obligation as a matter of policy.

SHORT-TERM ISSUE CREDIT RATINGS

A S&P short-term rating is a current assessment of the likelihood of timely
payment of debt considered short-term in the relevant market

Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. These categories are as follows:

A-1: A short-term obligation rated 'A-1' is rated in the highest category by
S&P. The obligor's capacity to meet its financial commitment on the obligation
is strong. Within this category, certain obligations are designated with a plus
sign (+). This indicates that the obligor's capacity to meet its financial
commitment on these obligations is extremely strong.

A-2: A short-term obligation rated 'A-2' is somewhat more susceptible to the
adverse effects of changes in circumstances and economic conditions than
obligations in higher rating categories. However, the obligor's capacity to meet
its financial commitment on the obligation is satisfactory.

A-3: A short-term obligation rated 'A-3' exhibits adequate protection
parameters. However, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity of the obligor to meet its financial
commitment on the obligation.

B: A short-term obligation rated 'B' is regarded as having significant
speculative characteristics. Ratings of 'B-1', 'B-2' and 'B-3' may be assigned
to indicate finer distinctions within the 'B' category. The obligor

A-2

currently has the capacity to meet its financial commitment on the obligation;
however, it faces major ongoing uncertainties which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B-1: A short-term obligation rated 'B-1' is regarded as having significant
speculative characteristics, but the obligor has a relatively stronger capacity
to meet its financial commitments over the short-term compared to other
speculative-grade obligors.

B-2: A short-term obligation rated 'B-2' is regarded as having significant
speculative characteristics, and the obligor has an average speculative-grade
capacity to meet its financial commitments over the short-term compared to other
speculative-grade obligors.

B-3: A short-term obligation rated 'B-3' is regarded as having significant
speculative characteristics, and the obligor has a relatively weaker capacity to
meet its financial commitments over the short-term compared to other
speculative-grade obligors.

C: A short-term obligation rated 'C' is currently vulnerable to nonpayment and
is dependent upon favorable business, financial, and economic conditions for the
obligor to meet its financial commitment on the obligation.

D: A short-term obligation rated 'D' is in payment default. The 'D' rating
category is used when payments on an obligation are not made on the date due
even if the applicable grace period has not expired, unless S&P believes that
such payments will be made during such grace period. The 'D' rating also will be
used upon the filing of a bankruptcy petition or the taking of a similar action
if payments on an obligation are jeopardized.

A short-term rating is not a recommendation to purchase, sell, or hold a
financial obligation, inasmuch as it does not comment as to market price or
suitability for a particular investor. Issue credit ratings are based on current
information furnished by the obligors or obtained by S&P from other sources it
considers reliable. S&P does not perform an audit in connection with any credit
rating and may, on occasion, rely on unaudited financial information. Credit
ratings may be changed, suspended, or withdrawn as a result of changes in, or
unavailability of, such information, or based on other circumstances.

DUAL RATINGS

S&P assigns "dual" ratings to all debt issues that have a put option or demand
feature as part of their structure. The first rating addresses the likelihood of
repayment of principal and interest as due, and the second rating addresses only
the demand feature. The long-term debt rating symbols are used for bonds to
denote the long-term maturity and the commercial paper rating symbols for the
put option (for example, 'AAA/A-1+'). With short-term demand debt, S&P note
rating symbols are used with the commercial paper rating symbols (for example,
'SP-1+/A-1+').

MOODY'S INVESTORS SERVICE INC. -- A brief description of the applicable Moody's
Investors Service, Inc. (Moody's) rating symbols and their meanings (as
published by Moody's) follows:

LONG-TERM OBLIGATION RATINGS

Moody's long-term obligation ratings are opinions of the relative credit risk of
fixed-income obligations with an original maturity of one year or more. They
address the possibility that a financial obligation will not be honored as
promised. Such ratings reflect both the likelihood of default and any financial
loss suffered in the event of default.

MOODY'S LONG-TERM RATING DEFINITIONS:

Aaa: Obligations rated Aaa are judged to be of the highest quality, with minimal
credit risk.

Aa: Obligations rated Aa are judged to be of high quality and are subject to
very low credit risk.

A: Obligations rated A are considered upper-medium grade and are subject to low
credit risk.

Baa: Obligations rated Baa are subject to moderate credit risk. They are
considered medium-grade and as such may possess certain speculative
characteristics.

Ba: Obligations rated Ba are judged to have speculative elements and are subject
to substantial credit risk.

B: Obligations rated B are considered speculative and are subject to high credit
risk.

A-3

Caa: Obligations rated Caa are judged to be of poor standing and are subject to
very high credit risk.

Ca: Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.

C: Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.

Note: Moody's appends numerical modifiers 1, 2, and 3 to each generic rating
classification from Aa through Caa. The modifier 1 indicates that the obligation
ranks in the higher end of its generic rating category; the modifier 2 indicates
a mid-range ranking; and the modifier 3 indicates a ranking in the lower end of
that generic rating category.

MEDIUM-TERM NOTE RATINGS

Moody's assigns long-term ratings to individual debt securities issued from
medium-term note (MTN) programs, in addition to indicating ratings to MTN
programs themselves. Notes issued under MTN programs with such indicated ratings
are rated at issuance at the rating applicable to all pari passu notes issued
under the same program, at the program's relevant indicated rating, provided
such notes do not exhibit any of the characteristics listed below:

- Notes containing features that link interest or principal to the credit
performance of any third party or parties (i.e., credit-linked notes);

- Notes allowing for negative coupons, or negative principal;

- Notes containing any provision that could obligate the investor to make any
additional payments;

- Notes containing provisions that subordinate the claim.

For notes with any of these characteristics, the rating of the individual note
may differ from the indicated rating of the program.

For credit-linked securities, Moody's policy is to "look through" to the credit
risk of the underlying obligor. Moody's policy with respect to non-credit linked
obligations is to rate the issuer's ability to meet the contract as stated,
regardless of potential losses to investors as a result of non-credit
developments. In other words, as long as the obligation has debt standing in the
event of bankruptcy, we will assign the appropriate debt class level rating to
the instrument.

Market participants must determine whether any particular note is rated, and if
so, at what rating level. Moody's encourages market participants to contact
Moody's Ratings Desks or visit www.moodys.com directly if they have questions
regarding ratings for specific notes issued under a medium-term note program.
Unrated notes issued under an MTN program may be assigned an NR (not rated)
symbol.

SHORT-TERM RATINGS

Moody's short-term ratings are opinions of the ability of issuers to honor
short-term financial obligations. Ratings may be assigned to issuers, short-term
programs or to individual short-term debt instruments. Such obligations
generally have an original maturity not exceeding thirteen months, unless
explicitly noted.

Moody's employs the following designations to indicate the relative repayment
ability of rated issuers:

P-1

Issuers (or supporting institutions) rated Prime-1 have a superior ability to
repay short-term debt obligations.

P-2

Issuers (or supporting institutions) rated Prime-2 have a strong ability to
repay short-term debt obligations.

P-3

Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to
repay short-term obligations.

Issuers (or supporting institutions) rated Not Prime do not fall within any of
the Prime rating categories.

NOTE: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced
by the senior-most long-term rating of the issuer, its guarantor or
support-provider.

A-4

For More Information

-------------------------------------------------------------------------------

EXISTING SHAREHOLDERS OR PROSPECTIVE INVESTORS
- Call your broker
- WEB SITE
www.vankampen.com
- FUNDINFO(R)
Automated Telephone System 800-847-2424

DEALERS
- WEB SITE
www.vankampen.com
- FUNDINFO(R)
Automated Telephone System 800-847-2424
- VAN KAMPEN INVESTMENTS 800-421-5666

TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
- For shareholder and dealer inquiries through TDD, call 800-421-2833

VAN KAMPEN HIGH YIELD FUND
1221 Avenue of the Americas
New York, New York 10020

Investment Adviser
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020

Distributor
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020

Transfer Agent
VAN KAMPEN INVESTOR SERVICES INC.
PO Box 947
Jersey City, New Jersey 07303-0947
Attn: Van Kampen High Yield Fund

Custodian
STATE STREET BANK AND TRUST COMPANY

One Lincoln Street

Boston, Massachusetts 02111

Attn: Van Kampen High Yield Fund

Legal Counsel
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606

Independent Registered Public Accounting Firm
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

--------------------------------------------------------------------------------
Van Kampen High Yield Fund
A Statement of Additional Information, which contains more details about the
Fund, is incorporated by reference in its entirety into this Prospectus.

You will find additional information about the Fund in its annual and
semiannual reports to shareholders. The annual report explains the market
conditions and investment strategies affecting the Fund's performance during
its last fiscal year.

You can ask questions or obtain a free copy of the Fund's reports or its
Statement of Additional Information by calling 800.847.2424.
Telecommunications Device for the Deaf users may call 800.421.2833. Free
copies of the Fund's reports and its Statement of Additional Information are
available from our web site at www.vankampen.com.

Information about the Fund, including its reports and Statement of
Additional Information, has been filed with the Securities and Exchange
Commission (SEC). It can be reviewed and copied at the SEC's Public
Reference Room in Washington, DC or on the EDGAR database on the SEC's
internet site (http://www.sec.gov). Information on the operation of the
SEC's Public Reference Room may be obtained by calling the SEC at
202.551.8090. You can also request copies of these materials, upon payment
of a duplicating fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference Section of the SEC,
Washington, DC 20549-0102.

This Prospectus is dated

December 30, 2005

CLASS A SHARES
CLASS B SHARES
CLASS C SHARES

The Fund's Investment Company Act File No. is 811-2851.
--------------------------------------------------------------------------------

Van Kampen Funds Inc.

1 Parkview Plaza

P.O. Box 5555

Oakbrook Terrace, IL 60181-5555

www.vankampen.com

Member NASD/SIPC

HYI PRO 12/05

65044PRO-00
(VAN KAMPEN INVESTMENTS SHINE LOGO)

MUTUAL FUNDS

Van Kampen
High Yield Fund

---------------------------------------
This Prospectus is dated

December 30, 2005

CLASS I SHARES

(VAN KAMPEN INVESTMENTS SHINE LOGO)

Table of Contents

Risk/Return Summary......................................... 3
Fees and Expenses of the Fund............................... 6
Investment Objectives, Principal Investment Strategies and
Risks....................................................... 7
Investment Advisory Services................................ 14
Purchase of Shares.......................................... 15
Redemption of Shares........................................ 18
Distributions from the Fund................................. 19
Shareholder Services........................................ 19
Frequent Purchases and Redemptions of Fund Shares........... 19
Federal Income Taxation..................................... 20
Disclosure of Portfolio Holdings............................ 22
Financial Highlights........................................ 23
Appendix--Description of Securities Ratings................. A-1

Risk/Return Summary

-------------------------------------------------------------------------------

INVESTMENT OBJECTIVES

PRINCIPAL INVESTMENT STRATEGIES

PRINCIPAL INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objectives.

market risk than a fund that does not own these types of securities.

INVESTOR PROFILE

In light of the Fund's investment objectives and principal investment
strategies, the Fund may be appropriate for investors who:

- Seek a high level of current income

- Are willing to take on the substantially increased risks of medium- and
lower-grade securities in exchange for potentially higher income

- Wish to add to their investment portfolio a fund that invests primarily in
medium- and lower-grade income securities

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Fund is to look at how its
performance has varied from year to year. The following chart shows the annual
returns of the Fund's Class A Shares* over the ten calendar years prior to the
date of this Prospectus. Remember that

past performance of the Fund is not indicative of its future performance.

[BAR GRAPH]

CLASS A SHARES'* ANNUAL RETURN
------------------------------

1995 17.43
1996 13.65
1997 12.24
1998 0.46
1999 3.90
2000 -8.22
2001 -2.65
2002 -9.42
2003 24.17
2004 10.47

* Class I Shares commenced operations on March 23, 2005 and therefore do not
have a full calendar year of return information to report. The returns shown
in the Annual Performance chart above (and in the Comparative Performance
chart below) are for the Class A Shares of the Fund (which are offered in a
separate prospectus). The Class A Shares' sales loads are not reflected in
this chart. If these sales loads had been included, the returns shown above
would have been lower. The annual returns of the Fund's Class I Shares would
have similar variability from year to year as shown in the preceding chart for
Class A Shares because all of the Fund's shares are invested in the same
portfolio of securities; however, the actual annual returns of Class I Shares
will differ from the annual returns shown for the Fund's Class A Shares
because of differences in the expenses borne by each class of shares. Return
information for the Fund's Class I Shares will be shown in future prospectuses
offering the Fund's Class I Shares after the Fund's Class I Shares have a full
calendar year of return information to report.

The Fund's return for the nine-month period ended September 30, 2005 for Class A
Shares was 0.60%. As a result of market activity, current performance may vary
from the figures shown.

COMPARATIVE PERFORMANCE

As a basis for evaluating the Fund's performance and risks, the table below
shows how the Fund's performance compares with the JP Morgan Global High Yield
Index*, a broad-based market index that the Fund's investment adviser believes
is an appropriate benchmark for the Fund, and the Lipper High Yield Bond Fund
Index, an index of funds with similar investment objectives. The Fund's
performance figures are for the Fund's Class A Shares** and include the maximum
sales charges paid by investors on such Class A Shares. The indices' performance
figures do not include any commissions, sales charges or taxes that would be
paid by investors purchasing the securities represented by the indices. An
investment cannot be made directly in the indices.

In addition to before tax returns, the table shows after tax returns for the
Fund's Class A Shares in two ways: (i) after taxes on distributions and (ii)
after taxes on distributions and sale of Fund shares. The after tax returns for
the Fund's Class I Shares will vary from the Class A Shares' returns. After tax
returns are calculated using the historical highest individual federal marginal
income tax rates during the periods shown and do not reflect the impact of state
and local taxes. Actual after tax returns depend on an investor's tax situation
and may differ from those shown. After tax returns are not relevant to investors
who hold their Fund shares through tax-deferred arrangements, such as 401(k)
plans or individual retirement accounts. An after tax return may be higher than
the before tax return due to an assumed benefit from any capital loss that would
have been realized had Fund shares been sold at the end of the relevant period.

(before and after taxes) of the Fund is not indicative of its future
performance.

AVERAGE ANNUAL
TOTAL RETURNS
FOR THE
PERIODS ENDED PAST PAST PAST
DECEMBER 31, 2004 1 YEAR 5 YEARS 10 YEARS
------------------------------------------------------------------

Van Kampen High Yield Fund --
Class A Shares**
Return Before Taxes 5.25% 1.12% 5.16%
Return After Taxes on
Distributions 2.81% -2.42% 1.31%
Return After Taxes on
Distributions and Sale of
Fund Shares 3.32% -1.29% 1.98%
JP Morgan Global High Yield
Index* 11.55% 7.60% 8.61%
Lipper High Yield Bond Fund
Index 10.34% 3.99% 6.69%
..................................................................

** Class I Shares commenced operations on March 23, 2005 and therefore do not
have a full calendar year of return information to report. The returns shown
in the Comparative Performance chart are for the Class A Shares of the Fund
(which are offered in a separate prospectus). Although all of the Fund's
shares are invested in the same portfolio of securities, the actual annual
returns of the Class I Shares will differ from the annual returns shown for
the Fund's Class A Shares because of differences in the sales charges and
expenses borne by each class of shares. Return information for the Fund's
Class I Shares will be shown in future prospectuses offering the Fund's Class
I Shares after the Fund's Class I Shares have a full calendar year of return
information to report.

The current yield for the thirty-day period ended August 31, 2005 is 6.10% for
Class A Shares. Investors can obtain the current yield of the Fund for each
class of shares by calling (800) 847-2424 or by visiting our web site at
www.vankampen.com.

Fees and Expenses
of the Fund

-------------------------------------------------------------------------------

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

CLASS I
SHARES
-----------------------------------------------------------

SHAREHOLDER FEES
(fees paid directly from your investment)
-----------------------------------------------------------
Maximum sales charge (load) imposed on
purchases None
...........................................................
Maximum deferred sales charge (load) None
...........................................................
Maximum sales charge (load) imposed on
reinvested dividends None
...........................................................
Redemption fee(1) 2.00%
...........................................................
Exchange fee(1) 2.00%
...........................................................

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
-----------------------------------------------------------
Management fees(2) 0.39%
...........................................................
Other expenses(3) 0.35%
...........................................................
Total annual fund operating expenses(2) 0.74%
...........................................................

(1) The redemption fee and the exchange fee apply to the proceeds of Fund shares
that are redeemed or exchanged within 30 days of purchase. See "Redemption
of Shares" for more information on when the fees apply.

(2) Expense information has been restated to reflect management fees in effect
as of June 1, 2005. See "Investment Advisory Services."

(3) Other expenses are based on estimated expenses for the current fiscal year.

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

may be higher or lower, based on these assumptions your costs would be:

ONE THREE FIVE TEN
YEAR YEARS YEARS YEARS
------------------------------------------------------------------

Class I Shares $76 $237 $411 $918
..................................................................

Investment Objectives,
Principal Investment
Strategies and Risks

-------------------------------------------------------------------------------

INVESTMENT OBJECTIVES

PRINCIPAL INVESTMENT
STRATEGIES AND RISKS

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objectives by investing primarily in a portfolio of high-
yielding, high-risk bonds and other income securities, including convertible
securities and preferred stock. Under normal market conditions, the Fund invests
primarily in medium- and lower-grade income securities, which includes
securities rated at the time of purchase BBB or lower by Standard & Poor's
("S&P") or rated Baa or lower by Moody's Investors Service, Inc. ("Moody's") and
unrated securities determined by the Fund's investment adviser to be of
comparable quality at the time of purchase. With respect to such investments,
the Fund has not established any limit on the percentage of its portfolio which
may be invested in securities in any one rating category. Securities rated BB or
lower by S&P or rated Ba or lower by Moody's and unrated securities of
comparable quality are regarded as below investment grade and are commonly
referred to as junk bonds, and involve greater risks than investments in
higher-grade securities. Investors should carefully consider the section below
entitled "Risks of Investing in Medium- and Lower-Grade Securities." Certain
types of income securities are subject to additional risks, see "Additional
Information Regarding Certain Income Securities" below.

smaller, less creditworthy companies or companies with substantial debt and may
include financially troubled companies or companies in default or in
restructuring.

UNDERSTANDING
QUALITY RATINGS

S&P MOODY'S MEANING
------------------------------------------------------

AAA Aaa Highest quality
......................................................
AA Aa High quality
......................................................
A A Above-average grade
......................................................
BBB Baa Average grade
------------------------------------------------------
BB Ba Below-average grade
......................................................
B B Marginal grade
......................................................
CCC Caa Poor grade
......................................................
CC Ca Highly speculative
......................................................
C C Lowest grade
......................................................
D -- In default
......................................................

The Fund's investment adviser seeks to minimize the risks involved in investing
in medium- and lower-grade securities through diversification and a focus on
in-depth research and fundamental credit analysis. In selecting securities for
investment, the Fund's investment adviser considers, among other things, the
security's current income potential, the rating assigned to the security, the
issuer's experience and managerial strength, the financial soundness of the
issuer and the outlook of its industry, changing financial condition, borrowing
requirements or debt maturity schedules, regulatory concerns, and responsiveness
to changes in business conditions and interest rates. The Fund's investment
adviser also may consider relative values based on anticipated cash flow,
interest or dividend coverage, balance sheet analysis and earnings prospects.
The investment adviser evaluates each individual income security for credit
quality and value and attempts to identify higher-yielding securities of
companies whose financial condition has improved since the issuance of such
securities or is anticipated to improve in the future. Because of the number of
investment considerations involved in investing in medium- and lower-grade
securities, achievement of the Fund's investment objectives may be more
dependent upon the investment adviser's credit analysis than is the case with
investing in higher-grade securities.

UNDERSTANDING
MATURITIES

An income security can be categorized according to its maturity, which is
the length of time before the issuer must repay the principal.

Term Maturity Level
---------------------------------------------------

UNDERSTANDING
DURATION

RISK OF INVESTING IN
MEDIUM- AND LOWER-GRADE SECURITIES

price of the medium- or lower-grade securities in the Fund and thus in the net
asset value of the Fund. Adverse publicity and investor perceptions, whether or
not based on rational analysis, may affect the value, volatility and liquidity
of medium- or lower-grade securities.

Special tax considerations are associated with investing in certain medium- or
lower-grade securities, such as zero coupon or pay-in-kind securities. See
"Federal Income Taxation" below.

The percentage of the Fund's assets invested in securities of various grades may
vary from time to time from those listed above.

ADDITIONAL INFORMATION REGARDING
CERTAIN INCOME SECURITIES

RISKS OF INVESTING IN
SECURITIES OF FOREIGN ISSUERS

The Fund may invest up to 35% of its total assets in securities issued by
foreign governments and other foreign issuers which are similar in quality to
the securities described above. Securities of foreign issuers may be denominated
in U.S. dollars or in currencies other than U.S. dollars. The Fund's investment
adviser believes that in certain instances such securities of foreign issuers
may provide higher yields than securities of domestic issuers which have similar
maturities.

STRATEGIC TRANSACTIONS

different from those involved with direct investments in underlying securities.
For example, there may be an imperfect correlation between the value of the
instruments and the underlying assets. In addition, the use of these
transactions includes the risks of default by the other party to certain
transactions. The Fund may incur losses in using these transactions that
partially or completely offset gains in portfolio positions. These transactions
may not be liquid and involve manager risk. In addition, such transactions may
involve commissions and other costs, which may increase the Fund's expenses and
reduce its return.

OTHER INVESTMENTS AND RISK FACTORS

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund may sell securities without regard to the length of time they have been
held to take advantage of new investment opportunities, yield differentials, or
for other reasons. The Fund's portfolio turnover rate may vary from year to
year. A high portfolio turnover rate (100% or more) increases a fund's
transaction costs (including brokerage commissions and dealer costs), which
would adversely impact a fund's performance. Higher portfolio turnover may
result in the realization of more short-term capital gains than if a fund had
lower portfolio turnover. The turnover rate will not be a limiting factor,
however, if the Fund's investment adviser considers portfolio changes
appropriate. The Fund's portfolio turnover rate is reported in the section
entitled "Financial Highlights."

Investment
Advisory Services

-------------------------------------------------------------------------------

Stanley is a full service securities firm engaged in securities trading and
brokerage activities, investment banking, research and analysis, financing and
financial advisory services. The Adviser's principal office is located at 1221
Avenue of the Americas, New York, New York 10020.

AVERAGE DAILY NET ASSETS % PER ANNUM
--------------------------------------------------

Prior to June 1, 2005, the Fund paid the Adviser a monthly fee computed based
upon an annual rate applied to the average daily net assets of the Fund as
follows:

AVERAGE DAILY NET ASSETS % PER ANNUM
--------------------------------------------------

A discussion regarding the basis for the Board of Trustees' approval of the
Advisory Agreement is available in the Fund's Annual Report for the fiscal year
ended August 31, 2005.

Mr. Loery is the lead manager of the Fund. Each team member is responsible for
specific sectors. All team members are responsible for the execution of the
overall strategy of the Fund.

The composition of the team may change without notice from time to time.

Purchase of Shares

-------------------------------------------------------------------------------

GENERAL

This Prospectus offers Class I Shares of the Fund. Class I Shares are offered
without any sales charges on

purchases or sales and without any distribution (12b-1) fee and service fee.
Class I Shares are available for purchase exclusively by investors through (i)
tax-exempt retirement plans with assets of at least one million dollars
(including 401(k) plans, 457 plans, employer-sponsored 403(b) plans, profit
sharing and money purchase plans, defined benefit plans and non-qualified
deferred compensation plans), (ii) fee-based investment programs with assets of
at least one million dollars and (iii) institutional clients with assets of at
least one million dollars.

Participants in tax-exempt retirement plans must contact the plan's
administrator to purchase shares. For plan administrator contact information,
participants should contact their respective employer's human resources
department. Participants in fee-based investment programs should contact the
program's administrator or their financial adviser to purchase shares.
Transactions generally are effected on behalf of a tax-exempt retirement plan
participant by the administrator or a custodian, trustee or record keeper for
the plan and on behalf of a fee-based investment program participant by their
administrator or financial adviser. Institutional clients may purchase shares
either directly or through an authorized dealer.

Other classes of shares of the Fund may be offered through one or more separate
prospectuses of the Fund. Each class of shares of the Fund represents an
interest in the same portfolio of investments of the Fund and generally has the
same rights, except for the differing sales loads, distribution fees, service
fees and any related expenses associated with each class of shares, the
exclusive voting rights by each class with respect to any distribution plan or
service plan for such class of shares, and some classes may have different
conversion rights or shareholder servicing options.

PRICING FUND SHARES

The offering price of the Fund's Class I Shares is based upon the Fund's next
determined net asset value per share after an order is received timely by the
Fund's shareholder service agent, Van Kampen Investor Services Inc. ("Investor
Services"), a wholly-owned subsidiary of Van Kampen Investments, either directly
or from authorized dealers, administrators, financial advisers, custodians,
trustees or record keepers. The net asset value per share is determined once
daily as of the close of trading on the New York Stock Exchange (the "Exchange")
(currently 4:00 p.m., Eastern time) each day the Exchange is open for trading
except on any day on which no purchase or redemption orders are received or
there is not a sufficient degree of trading in the Fund's portfolio securities
such that the Fund's net asset value per share might be materially affected. The
Fund's Board of Trustees reserves the right to calculate the net asset value per
share and adjust the offering price more frequently than once daily if deemed
desirable. Net asset value per share for Class I Shares is determined by
dividing the value of the Fund's portfolio securities, cash and other assets
(including accrued interest) attributable to Class I Shares, less all
liabilities (including accrued expenses) attributable to Class I Shares, by the
total number of Class I Shares outstanding.

certain securities may occur at times or on days on which the Fund's net asset
value is not calculated and on which the Fund does not effect sales, redemptions
and exchanges of its shares. The Fund calculates net asset value per share, and
therefore effects sales, redemptions and exchanges of its shares, as of the
close of trading on the Exchange each day the Exchange is open for trading.

HOW TO BUY SHARES

Shares may be purchased on any business day through an authorized dealer,
administrator, custodian, trustee, record keeper or financial adviser, who will
submit orders to Investor Services.

The offering price for shares is based upon the next determined net asset value
per share after an order is received timely by Investor Services. Purchases
completed through an authorized dealer, administrator, custodian, trustee,
record keeper or financial adviser may involve additional fees charged by such
person. Orders received by Investor Services prior to the close of the Exchange,
and orders received by authorized dealers, administrators, custodians, trustees,
record keepers or financial advisers prior to the close of the Exchange that are
properly transmitted to Investor Services by the time designated by Investor
Services, are priced based on the date of receipt. Orders received by Investor
Services after the close of the Exchange, and orders received by authorized
dealers, administrators, custodians, trustees, record keepers or financial
advisers after the close of the Exchange or orders received by such persons that
are not transmitted to Investor Services until after the time designated by
Investor Services, are priced based on the date of the next determined net asset
value per share provided they are received timely by Investor Services on such
date. It is the responsibility of authorized dealers, administrators,
custodians, trustees, record keepers or financial advisers to transmit orders
received by them to Investor Services so they will be received in a timely
manner.

the Adviser and distributed by the Distributor as determined from time to time
by the Fund's Board of Trustees.

Investor accounts will automatically be credited with additional shares of the
Fund after any Fund distributions, such as dividends and capital gain dividends,
unless the investor instructs the Fund otherwise. Investors wishing to receive
cash instead of additional shares should contact their authorized dealer,
administrator or financial adviser.

To help the government fight the funding of terrorism and money laundering
activities, federal law requires all financial institutions to obtain, verify,
and record information that identifies each person who opens an account. What
this means to you: when you open an account, you will be asked to provide your
name, address, date of birth, and other information that will allow us to
identify you. The Fund and the Distributor reserve the right to not open your
account if this information is not provided. If the Fund or the Distributor is
unable to verify your identity, the Fund and the Distributor reserve the right
to restrict additional transactions and/or liquidate your account at the next
calculated net asset value after the account is closed (less any applicable
redemption fee or exchange fee) or take any other action required by law.

Redemption of Shares

-------------------------------------------------------------------------------

Generally, shareholders of Class I Shares of the Fund may redeem for cash some
or all of their shares without charge by the Fund (other than any applicable
redemption fee or exchange fee) at any time. Participants in tax-exempt
retirement plans must contact the plan's administrator to redeem shares. For
plan administrator contact information, participants should contact their
respective employer's human resources department. Participants in fee-based
investment programs must contact the program's administrator or their financial
adviser to redeem shares. Institutional clients may redeem shares either
directly or through an authorized dealer. Plan administrators, custodians,
trustees, record keepers or financial advisers may place redemption requests
directly with Investor Services or through an authorized dealer following
procedures specified by such authorized dealer.

The Fund will assess a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within 30 days of purchase. The redemption
fee is paid directly to the Fund and is intended to defray the costs associated
with the sale of portfolio securities to satisfy redemption and exchange
requests made by such shareholders, thereby reducing the impact on longer-term
shareholders of such costs. For purposes of determining whether the redemption
fee applies, shares that were held the longest will be redeemed first. For Fund
shares acquired by exchange, the holding period prior to the exchange is not
considered in determining whether the redemption fee is applied. The redemption
fee and exchange fee are not imposed on redemptions and/or exchanges made (i)
through pre-approved asset allocation programs and (ii) on shares received by
reinvesting income dividends or capital gain distributions.

The redemption price will be the net asset value per share (less any applicable
redemption fee or exchange fee) next determined after the receipt by Investor
Services of a request in proper form from an administrator, custodian, trustee,
record keeper or financial adviser or by the Distributor from an authorized
dealer provided such order is transmitted to Investor Services or the
Distributor by the time designated by Investor Services or the Distributor. It
is the responsibility of administrators, financial advisers, custodians,
trustees, record keepers and authorized dealers to transmit redemption requests
received by them to Investor Services or the Distributor so they will be
received prior to such time. Redemptions completed through an administrator,
custodian, trustee, record

keeper, financial adviser or authorized dealer may involve additional fees
charged by such person.

Payment for shares redeemed generally will be mailed within seven days after
receipt by Investor Services of the redemption request in proper form. Such
payment may be postponed or the right of redemption suspended as provided by the
rules of the SEC. Such payment may, under certain circumstances, be paid wholly
or in part by a distribution-in-kind of portfolio securities. A
distribution-in-kind may result in recognition by the shareholder of a gain or
loss for federal income tax purposes when such securities are distributed, and
the shareholder may have brokerage costs and a gain or loss for federal income
tax purposes upon the shareholder's disposition of such securities. If the
shares to be redeemed have been recently purchased by check, Investor Services
may delay the payment of redemption proceeds until it confirms that the purchase
check has cleared, which may take up to 15 calendar days from the date of
purchase.

Upon learning that a shareholder of Class I Shares has ceased his or her
participation in the plan or program, then the Fund shall convert all Class I
Shares held by the shareholder to Class A Shares of the Fund (which are
described and offered in a separate prospectus). The failure of a shareholder of
a fee-based investment program to satisfy any minimum investment requirement
will not constitute a conversion event. Such conversion will be on the basis of
the relative net asset values of the shares, without imposition of any sales
load, fee or other charge.

Distributions from
the Fund

-------------------------------------------------------------------------------

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

Shareholder Services

-------------------------------------------------------------------------------

Participants in tax-exempt retirement plans and fee-based investment programs
eligible to purchase the shares of the Fund must contact the administrator or
their financial adviser to purchase, redeem or exchange shares. Certain
shareholder services may only be available to tax-exempt retirement plan
participants through a plan administrator. Participants should contact the
appropriate tax-exempt retirement plan administrator for information regarding
the administration of participants' investments in the shares.

Frequent Purchases
and Redemptions of
Fund Shares

-------------------------------------------------------------------------------

The Fund discourages and does not accommodate frequent purchases and redemptions
of Fund shares by Fund shareholders, and the Fund's Board of Trustees has
adopted policies and procedures to deter such frequent purchases and
redemptions. The Fund's policies with respect to purchases, redemptions and
exchanges of Fund shares are described in the "Fees and Expenses of the Fund,"
"Purchase of Shares," "Redemption of Shares" and "Shareholder Services" sections
of this Prospectus. The Fund's policies with respect to valuing portfolio
securities are described in the "Purchase of Shares" section of this Prospectus.
Except as described in each of these sections and with respect to omnibus
accounts, the Fund's policies regarding frequent trading of Fund shares are
applied uniformly to all shareholders. With respect to trades that occur through
omnibus accounts at intermediaries, such as investment advisers, broker dealers,
transfer agents, third party administrators and insurance companies, the Fund
(i) has requested assurance that such intermediaries currently selling Fund
shares have in place internal policies and procedures reasonably designed to
address market timing concerns and has instructed such intermediaries to notify
the Fund immediately if they are unable to comply with such policies and
procedures and (ii) requires all prospective intermediaries to agree to
cooperate in enforcing the Fund's policies with respect to frequent purchases,
exchanges and redemptions of Fund shares.

Federal Income Taxation

-------------------------------------------------------------------------------

the Fund will consist of "qualified dividend income." To the extent that
distributions from the Fund are designated as capital gain dividends, such
distributions will be eligible for the reduced rates applicable to long-term
capital gains.

Backup withholding rules require the Fund, in certain circumstances, to withhold
28% (through 2010) of dividends and certain other payments, including redemption
proceeds, paid to shareholders who do not furnish to the Fund their correct
taxpayer identification number (in the case of individuals, their social
security number) and make certain required certifications (including
certifications as to foreign status, if applicable) or who are otherwise subject
to backup withholding.

discount and to distribute such income each year to maintain its qualification
as a regulated investment company and to avoid income and excise taxes. To
generate sufficient cash to make distributions necessary to satisfy the 90%
distribution requirement and to avoid income and excise taxes, the Fund may have
to dispose of securities that it would otherwise have continued to hold.

Disclosure of
Portfolio Holdings

-------------------------------------------------------------------------------

A description of the Fund's policies and procedures with respect to the
disclosure of the Fund's portfolio securities is available in the Fund's
Statement of Additional Information.

Financial Highlights

-------------------------------------------------------------------------------

The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all distributions and not including taxes
on Fund distributions or redemptions). The information has been audited by Ernst
& Young LLP, the Fund's independent registered public accounting firm, whose
report, along with the Fund's most recent financial statements, may be obtained
without charge from our web site at www.vankampen.com or by calling the
telephone number on the back cover of this Prospectus. This information should
be read in conjunction with the financial statements and notes thereto included
in the Fund's Annual Report.

CLASS I SHARES
MARCH 23, 2005
(COMMENCEMENT
OF OPERATIONS) TO
AUGUST 31, 2005
----------------------------------------------------------------------------------------------

Net Asset Value, Beginning of the Period.................... $3.65
-----
Net Investment Income..................................... .12
Net Realized and Unrealized Loss.......................... (.02)
-----
Total from Investment Operations............................ .10
Less Distributions from Net Investment Income............... .12
-----
Net Asset Value, End of the Period.......................... $3.63
=====

Total Return(a)............................................. 2.69%*
Net Assets at End of the Period (In millions)............... $23.3
Ratio of Expenses to Average Net Assets..................... .85%
Ratio of Net Investment Income to Average Net Assets........ 6.97%
Portfolio Turnover.......................................... 84%

* Non-Annualized

(a) Assumes reinvestment of all distributions for the period. Return does not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.

Appendix -- Description of Securities Ratings

-------------------------------------------------------------------------------

STANDARD & POOR'S -- A brief description of the applicable Standard & Poor's
(S&P) rating symbols and their meanings (as published by S&P) follows:

LONG-TERM ISSUE CREDIT RATINGS

Issue credit ratings are based, in varying degrees, on the following
considerations:

- Likelihood of payment -- capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation;

- Nature of and provisions of the obligation;

AAA: An obligation rated "AAA" has the highest rating assigned by S&P. The
obligor's capacity to meet its financial commitment on the obligation is
extremely strong.

AA: An obligation rated "AA" differs from the highest-rated obligations only to
a small degree. The obligor's capacity to meet its financial commitment on the
obligation is very strong.

A-1

SPECULATIVE GRADE

CC: An obligation rated "CC" is currently highly vulnerable to nonpayment.

Plus (+) or minus (-): The ratings from 'AA' to 'CCC' may be modified by the
addition of a plus (+) or minus (-) sign to show relative standing within the
major rating categories.

SHORT-TERM ISSUE CREDIT RATINGS

A S&P short-term rating is a current assessment of the likelihood of timely
payment of debt considered short-term in the relevant market

Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. These categories are as follows:

A-2

DUAL RATINGS

MOODY'S INVESTORS SERVICE INC. -- A brief description of the applicable Moody's
Investors Service, Inc. (Moody's) rating symbols and their meanings (as
published by Moody's) follows:

LONG-TERM OBLIGATION RATINGS

MOODY'S LONG-TERM RATING DEFINITIONS:

Aaa: Obligations rated Aaa are judged to be of the highest quality, with minimal
credit risk.

Aa: Obligations rated Aa are judged to be of high quality and are subject to
very low credit risk.

A: Obligations rated A are considered upper-medium grade and are subject to low
credit risk.

Baa: Obligations rated Baa are subject to moderate credit risk. They are
considered medium-grade and as such may possess certain speculative
characteristics.

Ba: Obligations rated Ba are judged to have speculative elements and are subject
to substantial credit risk.

B: Obligations rated B are considered speculative and are subject to high credit
risk.

A-3

Caa: Obligations rated Caa are judged to be of poor standing and are subject to
very high credit risk.

Ca: Obligations rated Ca are highly speculative and are likely in, or very near,
default, with some prospect of recovery of principal and interest.

C: Obligations rated C are the lowest rated class of bonds and are typically in
default, with little prospect for recovery of principal or interest.

MEDIUM-TERM NOTE RATINGS

- Notes containing features that link interest or principal to the credit
performance of any third party or parties (i.e., credit-linked notes);

- Notes allowing for negative coupons, or negative principal;

- Notes containing any provision that could obligate the investor to make any
additional payments;

- Notes containing provisions that subordinate the claim.

For notes with any of these characteristics, the rating of the individual note
may differ from the indicated rating of the program.

SHORT-TERM RATINGS

Moody's employs the following designations to indicate the relative repayment
ability of rated issuers:

P-1

Issuers (or supporting institutions) rated Prime-1 have a superior ability to
repay short-term debt obligations.

P-2

Issuers (or supporting institutions) rated Prime-2 have a strong ability to
repay short-term debt obligations.

P-3

Issuers (or supporting institutions) rated Prime-3 have an acceptable ability to
repay short-term obligations.

Issuers (or supporting institutions) rated Not Prime do not fall within any of
the Prime rating categories.

NOTE: Canadian issuers rated P-1 or P-2 have their short-term ratings enhanced
by the senior-most long-term rating of the issuer, its guarantor or
support-provider.

A-4

For More Information

-------------------------------------------------------------------------------

EXISTING SHAREHOLDERS OR PROSPECTIVE INVESTORS
- Call your broker
- WEB SITE
www.vankampen.com

DEALERS
- WEB SITE
www.vankampen.com

- VAN KAMPEN INVESTMENTS 800-421-5666

TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD)
- For shareholder and dealer inquiries through TDD, call 800-421-2833

VAN KAMPEN HIGH YIELD FUND
1221 Avenue of the Americas
New York, New York 10020

Investment Adviser
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020

Distributor
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020

Transfer Agent
VAN KAMPEN INVESTOR SERVICES INC.
PO Box 947
Jersey City, New Jersey 07303-0947
Attn: Van Kampen High Yield Fund

Custodian
STATE STREET BANK AND TRUST COMPANY

One Lincoln Street

Boston, Massachusetts 02111

Attn: Van Kampen High Yield Fund

Legal Counsel
SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606

Independent Registered Public Accounting Firm
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

This Prospectus is dated

December 30, 2005

CLASS I SHARES

The Fund's Investment Company Act File No. is 811-2851.
--------------------------------------------------------------------------------

Van Kampen Funds Inc.

1 Parkview Plaza

P.O. Box 5555

Oakbrook Terrace, IL 60181-5555

www.vankampen.com

Member NASD/SIPC

HYI PRO I 12/05

(VAN KAMPEN INVESTMENTS SHINE LOGO)

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN

HIGH YIELD FUND

Van Kampen High Yield Fund's (the "Fund") investment objective is to seek
to maximize current income. Capital appreciation is a secondary objective which
is sought only when consistent with the Fund's primary investment objective. The
Fund's investment adviser seeks to achieve the Fund's investment objectives by
investing primarily in a portfolio of high-yielding, high-risk bonds and other
income securities, such as convertible securities and preferred stock.

The Fund is organized as the sole diversified series of the Van Kampen High
Income Corporate Bond Fund (formerly known as Van Kampen High Income Corporate
Bond Fund), an open-end management investment company (the "Trust").

This Statement of Additional Information is not a prospectus. Shares of the
Fund are subject to two different prospectuses. Class A Shares, Class B Shares
and Class C Shares are subject to one prospectus dated December 30, 2005 and
Class I Shares are subject to a separate prospectus dated December 30, 2005
(collectively referred to herein as the "Prospectuses" or individually as a
"Prospectus"). This Statement of Additional Information should be read in
conjunction with a Prospectus of the Fund. This Statement of Additional
Information does not include all the information that a prospective investor
should consider before purchasing shares of the Fund. Investors should obtain
and read a Prospectus prior to purchasing shares of the Fund. A Class A Shares,
Class B Shares and Class C Shares Prospectus, a Class I Shares Prospectus, the
Statement of Additional Information and the Fund's Annual and Semiannual Reports
may be obtained without charge from our web site at www.vankampen.com or any of
these materials may be obtained without charge by writing or calling Van Kampen
Funds Inc. at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace, Illinois
60181-5555 or (800) 847-2424 (or (800) 421-2833 for the hearing impaired).

TABLE OF CONTENTS

PAGE
----

General Information......................................... B-2
Investment Objectives, Investment Strategies and Risks...... B-3
Strategic Transactions...................................... B-8
Investment Restrictions..................................... B-14
Trustees and Officers....................................... B-17
Investment Advisory Agreement............................... B-26
Fund Management............................................. B-28
Other Agreements............................................ B-29
Distribution and Service.................................... B-30
Transfer Agent.............................................. B-34
Portfolio Transactions and Brokerage Allocation............. B-34
Shareholder Services........................................ B-36
Redemption of Shares........................................ B-38
Contingent Deferred Sales Charge-Class A.................... B-38
Waiver of Contingent Deferred Sales Charges................. B-39
Taxation.................................................... B-40
Fund Performance............................................ B-45
Other Information........................................... B-49
Financial Statements........................................ B-55

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED DECEMBER 30, 2005.

HYI SAI 12/05

GENERAL INFORMATION

The Fund was originally incorporated in Texas on July 11, 1978 under the
name American Capital High Yield Investments, Inc. The Fund was reincorporated
by merger into a Maryland corporation on July 2, 1992, under the name American
Capital High Income Corporate Bond Fund, Inc. As of August 5, 1995, the Fund was
reorganized as a series of the Trust under the name Van Kampen American Capital
High Income Corporate Bond Fund. On July 14, 1998, the Fund and the Trust
adopted the name Van Kampen High Income Corporate Bond Fund. On December 17,
2004, the Fund and the Trust adopted their present names. The Trust is a
statutory trust organized under the laws of the State of Delaware.

Van Kampen Asset Management (the "Adviser"), Van Kampen Funds Inc. (the
"Distributor"), and Van Kampen Investor Services Inc. ("Investor Services") are
wholly owned subsidiaries of Van Kampen Investments Inc. ("Van Kampen
Investments"), which is an indirect wholly owned subsidiary of Morgan Stanley.
The principal office of each of the Trust, the Fund, the Adviser, the
Distributor and Van Kampen Investments is located at 1221 Avenue of the
Americas, New York, New York 10020. The principal office of Investor Services is
located at 2800 Post Oak Boulevard, Houston, Texas 77056.

The authorized capitalization of the Trust consists of an unlimited number
of shares of beneficial interest, par value $0.01 per share, which can be
divided into series, such as the Fund, and further subdivided into classes of
each series. Each share represents an equal proportionate interest in the assets
of the series with each other share in such series and no interest in any other
series. No series is subject to the liabilities of any other series. The
Declaration of Trust provides that shareholders are not liable for any
liabilities of the Trust or any of its series, requires inclusion of a clause to
that effect in every agreement entered into by the Trust or any of its series
and indemnifies shareholders against any such liability.

The Fund currently offers four classes of shares, designated as Class A
Shares, Class B Shares, Class C Shares and Class I Shares. Other classes may be
established from time to time in accordance with the provisions of the
Declaration of Trust. Each class of shares of the Fund generally is identical in
all respects except that each class of shares is subject to its own sales charge
schedule and its own distribution and service expenses. Each class of shares
also has exclusive voting rights with respect to its distribution and service
fees.

Shares of the Trust entitle their holders to one vote per share; however,
separate votes are taken by each series on matters affecting an individual
series and separate votes are taken by each class of a series on matters
affecting an individual class of such series. For example, a change in
investment policy for a series would be voted upon by shareholders of only the
series involved and a change in the distribution or service fee for a class of a
series would be voted upon by shareholders of only the class of such series
involved. Except as otherwise described in a Prospectus or herein, shares do not
have cumulative voting rights, preemptive rights or any conversion, subscription
or exchange rights.

The Trust does not contemplate holding regular meetings of shareholders to
elect trustees or otherwise. However, the holders of 10% or more of the
outstanding shares may by written request require a meeting to consider the
removal of trustees by a vote of a majority of the shares then outstanding cast
in person or by proxy at such meeting. The Fund will assist such holders in
communicating with other shareholders of the Fund to the extent required by the
Investment Company Act of 1940, as amended (the "1940 Act"), or rules or
regulations promulgated by the Securities and Exchange Commission ("SEC").

In the event of liquidation, each of the shares of the Fund is entitled to
its portion of all of the Fund's net assets after all debts and expenses of the
Fund have been paid. The liquidation proceeds to holders of classes of shares
with higher distribution fees and transfer agency costs are likely to be less
than the liquidation proceeds to holders of classes of shares with lower
distribution fees and transfer agency costs.

The trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote (or such higher vote as may be required by the
1940 Act or other applicable law) and except that the trustees cannot amend the
Declaration of Trust to impose any liability on

B-2

shareholders, make any assessment on shares or impose liabilities on the
trustees without approval from each affected shareholder or trustee, as the case
may be.

Statements contained in this Statement of Additional Information as to the
contents of any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement of which
this Statement of Additional Information forms a part, each such statement being
qualified in all respects by such reference.

As of December 2, 2005, no person was known by the Fund to own beneficially
or to hold of record 5% or more of the outstanding Class A Shares, Class B
Shares, Class C Shares or Class I Shares of the Fund, except as follows:

APPROXIMATE
PERCENTAGE OF
CLASS OWNERSHIP ON
NAME AND ADDRESS OF HOLDER OF SHARES DECEMBER 2, 2005
-------------------------- --------- ----------------

Edward Jones & Co. ......................................... A 24%
Attn: Mutual Fund B 8%
Shareholder Accounting C 7%
201 Progress Pkwy
Maryland Hts, MO 63043-3009
Morgan Stanley DW Inc. ..................................... B 12%
2000 Westchester Avenue C 13%
Purchase, NY 10577 I 92%
Citigroup Global Markets Inc. .............................. B 5%
Attn: Cindy Tempesta, 7th Floor C 9%
333 West 34th Street
New York, NY 10001-2402
MLPF&S for the Sole Benefit of its Customers................ C 6%
Attn: Fund Administration 97BY5
4800 Dear Lake Dr. East, 2nd Floor
Jacksonville, FL 32246-6484
Morgan Stanley & Co. FBO.................................... I 8%
X-Entity 0111C
Equity-Swaps
1585 Broadway
New York, NY 10036-8200

INVESTMENT OBJECTIVES, INVESTMENT STRATEGIES AND RISKS

The following disclosure supplements the disclosure set forth under the
caption "Investment Objectives, Principal Investment Strategies and Risks" in a
Prospectus and does not, standing alone, present a complete or accurate
explanation of the matters disclosed. Readers must refer also to this caption in
a Prospectus for a complete presentation of the matters disclosed below.

CONVERTIBLE SECURITIES

A convertible security is a bond, debenture, note, preferred stock, warrant
or other security that may be converted into or exchanged for a prescribed
amount of common stock or other security of the same or a different issuer or
into cash within a particular period of time at a specified price or formula. A
convertible security generally entitles the holder to receive interest paid or
accrued on debt securities or the dividend paid on preferred stock until the
convertible security matures or is redeemed, converted or exchanged. Before
conversion, convertible securities generally have characteristics similar to
both debt and equity securities. The value of convertible securities tends to
decline as interest rates rise and, because of the conversion feature,

B-3

tends to vary with fluctuations in the market value of the underlying equity
securities. Convertible securities ordinarily provide a stream of income with
generally higher yields than those of common stock of the same or similar
issuers. Convertible securities generally rank senior to common stock in a
corporation's capital structure but are usually subordinated to comparable
nonconvertible securities. Convertible securities generally do not participate
directly in any dividend increases or decreases of the underlying securities
although the market prices of convertible securities may be affected by any such
dividend changes or other changes in the underlying securities.

Equity-linked securities are instruments whose value is based upon the
value of one or more underlying equity securities, a reference rate or an index.
Equity-linked securities come in many forms and may include features, among
others, such as the following: (i) may be issued by the issuer of the underlying
equity security or by a company other than the one to which the instrument is
linked (usually an investment bank), (ii) may convert into equity securities,
such as common stock, within a stated period from the issue date or may be
redeemed for cash or some combination of cash and the linked security at a value
based upon the value of the underlying equity security within a stated period
from the issue date, (iii) may have various conversion features prior to
maturity at the option of the holder or the issuer or both, (iv) may limit the
appreciation value with caps or collars of the value of the underlying equity
security and (v) may have fixed, variable or no interest payments during the
life of the security which reflect the actual or a structured return relative to
the underlying dividends of the linked equity security. Generally these
securities are designed to give investors enhanced yield opportunities to the
equity securities of an issuer, but these securities may involve a limited
appreciation potential, downside exposure, or a finite time in which to capture
the yield advantage. For example, certain securities may provide a higher
current dividend income than the dividend income on the underlying security
while capping participation in the capital appreciation of such security. Other
securities may involve arrangements with no interest or dividend payments made
until maturity of the security or an enhanced principal amount received at
maturity based on the yield and value of the underlying equity security during
the security's term or at maturity. Besides enhanced yield opportunities,
another advantage of using such securities is that they may be used for
portfolio management or hedging purposes to reduce the risk of investing in a
more volatile underlying equity security. There may be additional types of
convertible securities with features not specifically referred to herein in
which the Fund may invest consistent with its investment objective and policies.

Investments in equity-linked securities may subject the Fund to additional
risks not ordinarily associated with investments in other equity securities.
Because equity-linked securities are sometimes issued by a third party other
than the issuer of the linked security, the Fund is subject to risks if the
underlying stock underperforms and if the issuer defaults on the payment of the
dividend or the common stock at maturity. In addition, the trading market for
particular equity-linked securities may be less liquid, making it difficult for
the Fund to dispose of a particular security when necessary and reduced
liquidity in the secondary market for any such securities may make it more
difficult to obtain market quotations for valuing the Fund's portfolio.

PREFERRED STOCKS

Preferred stock generally has a preference as to dividends and upon
liquidation over an issuer's common stock but ranks junior to other income
securities in an issuer's capital structure. Preferred stock generally pays
dividends in cash (or additional shares of preferred stock) at a defined rate
but, unlike interest payments on other income securities, preferred stock
dividends are payable only if declared by the issuer's board of directors.
Dividends on preferred stock may be cumulative, meaning that, in the event the
issuer fails to make one or more dividend payments on the preferred stock, no
dividends may be paid on the issuer's common stock until all unpaid preferred
stock dividends have been paid. Preferred stock also may provide that, in the
event the issuer fails to make a specified number of dividend payments, the
holders of the preferred stock will have the right to elect a specified number
of directors to the issuer's board. Preferred stock also may be subject to
optional or mandatory redemption provisions.

B-4

DURATION

Duration is a measure of the expected life of an income security that was
developed as an alternative to the concept of "term to maturity." Duration
incorporates an income security's yield, coupon interest payments, final
maturity and call features into one measure. Traditionally an income security's
"term to maturity" has been used as a proxy for the sensitivity of the
security's price to changes in interest rates. However, "term to maturity"
measures only the time an income security provides its final payment taking no
account of the pattern of the security's payments of interest or principal prior
to maturity. Duration is a measure of the expected life of an income security on
a present value basis expressed in years. It measures the length of the time
interval between the present and the time when the interest and principal
payments are scheduled (or in the case of a callable bond, expected to be
received), weighing them by the present value of the cash to be received at each
future point in time. For any debt security with interest payments occurring
prior to the payment of principal, duration is always less than maturity, and
for zero coupon issues, duration and term to maturity are equal. In general, the
lower the coupon rate of interest or the longer the maturity, or the lower the
yield-to-maturity of an income security, the longer its duration; conversely,
the higher the coupon rate of interest, the shorter the maturity or the higher
the yield-to-maturity of an income security, the shorter its duration. There are
some situations where even the standard duration calculation does not properly
reflect the interest rate exposure of a security. For example, floating and
variable rate securities often have final maturities of ten or more years;
however, their interest rate exposure corresponds to the frequency of the coupon
reset. Another example where the interest rate exposure is not properly captured
by the duration is the case of mortgage pass-through securities. The stated
final maturity of such securities is generally 30 years, but current prepayment
rates are more critical in determining the securities' interest rate exposure.
In these and other similar situations, the Adviser will use more sophisticated
analytical techniques that incorporate the economic life of a security into the
determination of its interest rate exposure.

SECURITIES OF FOREIGN ISSUERS

The Fund may purchase foreign securities in the form of American Depositary
Receipts ("ADRs") and European Depositary Receipts ("EDRs") or other securities
representing underlying shares of foreign companies. These securities are not
necessarily denominated in the same currency as the underlying securities but
generally are denominated in the currency of the market in which they are
traded. ADRs are receipts typically issued by an American bank or trust company
which evidence ownership of underlying securities issued by a foreign
corporation. ADRs are publicly traded on exchanges or over-the-counter in the
United States and are issued through "sponsored" or "unsponsored" arrangements.
In a sponsored ADR arrangement, the foreign issuer assumes the obligation to pay
some or all of the depositary's transaction fees, whereas under an unsponsored
arrangement, the foreign issuer assumes no obligations and the depositary's
transaction fees are paid by the ADR holders. In addition, less information is
available in the United States about an unsponsored ADR than about a sponsored
ADR and financial information about a company may not be as reliable for an
unsponsored ADR as it is for a sponsored ADR. The Fund may invest in ADRs
through both sponsored and unsponsored arrangements. EDRs are receipts issued in
Europe by banks or depositories which evidence a similar ownership arrangements.

Foreign Currency Exchange Risks. To the extent the Fund invests in
securities denominated or quoted in currencies other than the U.S. dollar, the
Fund will be affected by changes in foreign currency exchange rates (and
exchange control regulations) which affect the value of investments in the Fund
and the income and appreciation or depreciation of the investments. Changes in
foreign currency exchange ratios relative to the U.S. dollar will affect the
U.S. dollar value of the Fund's assets denominated in that currency and the
Fund's yield on such assets. In addition, the Fund will incur costs in
connection with conversions between various currencies.

The Fund's foreign currency exchange transactions may be conducted on a
spot basis (that is, cash basis) at the spot rate for purchasing or selling
currency prevailing in the foreign currency exchange market. The Fund also may
enter into contracts with banks, brokers or dealers to purchase or sell
securities or foreign currencies at a future date ("forward contracts"). A
foreign currency forward contract is a negotiated agreement between the
contracting parties to exchange a specified amount of currency at a specified
future

B-5

time at a specified rate. The rate can be higher or lower than the spot rate
between the currencies that are the subject of the contract.

The Fund may attempt to protect against adverse changes in the value of the
U.S. dollar in relation to a foreign currency by entering into a forward
contract for the purchase or sale of the amount of foreign currency invested or
to be invested or by buying or selling a foreign currency option of futures
contract for such amount. Such strategies may be employed before the Fund
purchases a foreign security traded in the currency which the Fund anticipates
acquiring or between the date the foreign security is purchased or sold and the
date on which payment therefor is made or received. Seeking to protect against a
change in the value of a foreign currency in the foregoing manner does not
eliminate Fluctuations in the prices of portfolio securities or prevent losses
if the prices of such securities decline. Furthermore, such transactions reduce
or preclude the opportunity for gain if the value of the currency should move in
the direction opposite to the position taken. Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than if it had not
entered into such contracts. The Fund is not required to enter into such
transactions with regard to its foreign currency-denominated securities. It also
should be realized that this method of protecting the value of portfolio
securities against a decline in the value of a currency does not eliminate
fluctuations in the underlying prices of the securities. It simply establishes a
rate of exchange which one can achieve at some future point in time. In
addition, although such contracts tend to minimize the risk of loss due to a
decline in the value of the hedged currency, at the same time, they tend to
limit any potential gain which might result should the value of such currency
increase.

The Fund may cross-hedge currencies by entering into a transaction to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which a portfolio has or expects to have
portfolio exposure. The Fund may also engage in proxy hedging, which is defined
as entering into positions in one currency to hedge investments denominated in
another currency, where two currencies are economically linked. The Fund's entry
into forward contracts, as well as any use of proxy or cross hedging techniques,
will generally require the Fund to segregate cash and/or liquid securities at
least equal to the Fund's obligations throughout the duration of the contract.
The Fund may combine forward contracts with investments in securities
denominated in other currencies to achieve desired security and currency
exposures. Such combinations are generally referred to as synthetic securities.
For example, in lieu of purchasing a foreign bond, the Fund may purchase a U.S.
dollar-denominated security and at the same time enter into a forward contract
to exchange U.S. dollars for the contract's underlying currency at a future
date. By matching the amount of U.S. dollars to be exchanged with the
anticipated value of the U.S. dollar-denominated security, the Fund may be able
to lock in the foreign currency value of the security and adopt a synthetic
position reflecting the credit quality of the U.S. dollar-denominated security.

To the extent required by the rules and regulations of the SEC, the Fund
will segregate cash and/or liquid securities in an amount at least equal to the
value of the Fund's total assets committed to the consummation of forward
foreign currency exchange contracts. If the value of the segregated assets
declines, additional cash and/or liquid securities will be segregated on a daily
basis so that the value of the segregated assets will be at least equal to the
amount of the Fund's commitments with respect to such contracts.

BRADY BONDS

Brady Bonds are created through the exchange of existing commercial bank
loans to foreign entities for new obligations in connection with debt
restructuring under a plan introduced by former U.S. Secretary of the Treasury
Nicholas F. Brady (the "Brady Plan"). Brady Bonds may be collateralized or
uncollateralized and issued in various currencies (although most are U.S.
dollar-denominated) and they are actively traded in the over-the-counter
secondary market. The Fund may purchase Brady Bonds either in the primary or
secondary markets. The price and yield of Brady Bonds purchased in the secondary
market will reflect the market conditions at the time of purchase, regardless of
the stated face amount and the stated interest rate. With respect to Brady Bonds
with no or limited collateralization, the Fund will rely for payment of interest
and principal primarily on the willingness and ability of the issuing government
to make payment in accordance with the terms of the bonds.

B-6

U.S. dollar-denominated, collateralized Brady Bonds, which may be fixed
rate par bonds or floating rate discount bonds, are generally collateralized in
full as to principal due at maturity by U.S. Treasury zero coupon obligations
which have the same maturity as the Brady Bonds. Interest payments on these
Brady Bonds generally are collateralized by cash or securities in an amount
that, in the case of fixed rate bonds, is equal to at least one year of rolling
interest payments or, in the case of floating rate bonds, initially is equal to
at least one year's rolling interest payments based on the applicable interest
rate at that time and is adjusted at regular intervals thereafter. Certain Brady
Bonds are entitled to "value recovery payments" in certain circumstances, which
in effect constitute supplemental interest payments but generally are not
collateralized. Brady Bonds are often viewed as having three or four valuation
components: (i) the collateralized repayment of principal at final maturity;
(ii) the collateralized interest payments; (iii) the uncollateralized interest
payments; and (iv) any uncollateralized repayment of principal at maturity
(these uncollateralized amounts constitute the "residual risk"). In the event of
a default with respect to collateralized Brady Bonds as a result of which the
payment obligations of the issuer are accelerated, the U.S. Treasury zero coupon
obligations held as collateral for the payment of principal will not be
distributed to investors, nor will such obligations be sold and the proceeds
distributed. The collateral will be held to the scheduled maturity of the
defaulted Brady Bonds by the collateral agent, at which time the face amount of
the collateral will equal the principal payments which would have then been due
on the Brady Bonds in the normal course. In addition, in light of the residual
risk of the Brady Bonds and, among other factors, the history of defaults with
respect to commercial bank loans by public and private entities of countries
issuing Brady Bonds, investments in Brady Bonds should be viewed as speculative.

REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreements with broker-dealers, banks and
other financial institutions to earn a return on temporarily available cash. A
repurchase agreement is a short-term investment in which the purchaser (i.e.,
the Fund) acquires ownership of a security and the seller agrees to repurchase
the obligation at a future time and set price, thereby determining the yield
during the holding period. Repurchase agreements involve certain risks in the
event of default by the other party. The Fund may enter into repurchase
agreements with broker-dealers, banks and other financial institutions deemed to
be creditworthy by the Adviser under guidelines approved by the Fund's Board of
Trustees. The Fund will not invest in repurchase agreements maturing in more
than seven days if any such investment, together with any other illiquid
securities held by the Fund, would exceed the Fund's limitation on illiquid
securities described herein. The Fund does not bear the risk of a decline in the
value of the underlying security unless the seller defaults under its repurchase
obligation. In the event of the bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses including: (a) possible decline in the value of
the underlying security during the period while the Fund seeks to enforce its
rights thereto; (b) possible lack of access to income on the underlying security
during this period; and (c) expenses of enforcing its rights.

For the purpose of investing in repurchase agreements, the Adviser may
aggregate the cash that certain funds advised or subadvised by the Adviser or
certain of its affiliates would otherwise invest separately into a joint
account. The cash in the joint account is then invested in repurchase agreements
and the funds that contributed to the joint account share pro rata in the net
revenue generated. The Adviser believes that the joint account produces
efficiencies and economies of scale that may contribute to reduced transaction
costs, higher returns, higher quality investments and greater diversity of
investments for the Fund than would be available to the Fund investing
separately. The manner in which the joint account is managed is subject to
conditions set forth in an exemptive order from the SEC permitting this
practice, which conditions are designed to ensure the fair administration of the
joint account and to protect the amounts in that account.

Repurchase agreements are fully collateralized by the underlying securities
and are considered to be loans under the 1940 Act. The Fund pays for such
securities only upon physical delivery or evidence of book entry transfer to the
account of a custodian or bank acting as agent. The seller under a repurchase
agreement will be required to maintain the value of the underlying securities
marked-to-market daily at not less than the

B-7

repurchase price. The underlying securities (normally securities of the U.S.
government, its agencies or instrumentalities) may have maturity dates exceeding
one year.

ILLIQUID SECURITIES

The Fund may invest up to 15% of its net assets in illiquid securities,
which includes securities that are not readily marketable, repurchase agreements
which have a maturity of longer than seven days and generally includes
securities that are restricted from sale to the public without registration
under the Securities Act of 1933, as amended (the "1933 Act"). However, the Fund
shall not invest in such securities in excess of 10% of its net assets without
prior approval of the Fund's Board of Trustees. The sale of such securities
often requires more time and results in higher brokerage charges or dealer
discounts and other selling expenses than does the sale of liquid securities
trading on national securities exchanges or in the over-the-counter markets.
Restricted securities are often purchased at a discount from the market price of
unrestricted securities of the same issuer reflecting the fact that such
securities may not be readily marketable without some time delay. Investments in
securities for which market quotations are not readily available are valued at
their fair value as determined in good faith by the Adviser in accordance with
procedures approved by the Fund's Board of Trustees. Ordinarily, the Fund would
invest in restricted securities only when it receives the issuer's commitment to
register the securities without expense to the Fund. However, registration and
underwriting expenses (which typically range from 7% to 15% of the gross
proceeds of the securities sold) may be paid by the Fund. Restricted securities
which can be offered and sold to qualified institutional buyers under Rule 144A
under the 1933 Act ("144A Securities") and are determined to be liquid under
guidelines adopted by and subject to the supervision of the Fund's Board of
Trustees are not subject to the limitation on illiquid securities. Such 144A
Securities are subject to monitoring and may become illiquid to the extent
qualified institutional buyers become, for a time, uninterested in purchasing
such securities. Factors used to determine whether 144A Securities are liquid
include, among other things, a security's trading history, the availability of
reliable pricing information, the number of dealers making quotes or making a
market in such security and the number of potential purchasers in the market for
such security. For purposes hereof, investments by the Fund in securities of
other investment companies will not be considered investments in restricted
securities to the extent permitted by (i) the 1940 Act, as amended from time to
time, (ii) the rules and regulations promulgated by the SEC under the 1940 Act,
as amended from time to time, or (iii) an exemption or other relief (such as "no
action" letters issued by the staff of the SEC interpreting or providing
guidance on the 1940 Act or regulations thereunder) from the provisions of the
1940 Act, as amended from time to time.

STRATEGIC TRANSACTIONS

The Fund may, but is not required to, use various investment strategies as
described below ("Strategic Transactions") to earn income, to facilitate
portfolio management and to mitigate risks. Techniques and instruments may
change over time as new instruments and strategies are developed or as
regulatory changes occur. Although the Adviser seeks to use such transactions to
further the Fund's investment objectives, no assurance can be given that the use
of these transactions will achieve this result. The Fund's activities involving
Strategic Transactions may be limited by the requirements of the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code" or "Code"), for
qualification as a regulated investment company.

SELLING CALL AND PUT OPTIONS

Purpose. The principal reason for selling options is to obtain, through
receipt of premiums, a greater current return than would be realized on the
underlying securities alone. Such current return could be expected to fluctuate
because premiums earned from an option selling program and dividend or interest
income yields on portfolio securities vary as economic and market conditions
change. Selling options on portfolio securities is likely to result in a higher
portfolio turnover rate.

Selling Options. The purchaser of a call option pays a premium to the
seller (i.e., the writer) for the right to buy the underlying security from the
seller at a specified price during a certain period. The Fund would write call
options only on a covered basis or for cross-hedging purposes. A call option is
covered if, at all times

B-8

during the option period, the Fund owns or has the right to acquire securities
of the type that it would be obligated to deliver if any outstanding option were
exercised. An option is for cross-hedging purposes if it is not covered by the
security subject to the option, but is designed to provide a hedge against
another security which the Fund owns or has the right to acquire. In such
circumstances, the Fund collateralizes the option by segregating cash and/or
liquid securities in an amount at least equal to the market value of the
underlying security, marked to market daily, while the option is outstanding.

The purchaser of a put option pays a premium to the seller (i.e., the
writer) for the right to sell the underlying security to the writer at a
specified price during a certain period. The Fund would sell put options only on
a secured basis, which means that, at all times during the option period, the
Fund would segregate cash and/or liquid securities in an amount at least equal
to the exercise price of the option, or would hold a put on the same underlying
security at an equal or greater exercise price.

Closing Purchase Transactions and Offsetting Transactions. To terminate its
position as a writer of a call or put option, the Fund could enter into a
"closing purchase transaction," which is the purchase of a call (put) on the
same underlying security and having the same exercise price and expiration date
as the call (put) previously sold by the Fund. The Fund would realize a gain
(loss) if the premium plus commission paid in the closing purchase transaction
is lesser (greater) than the premium it received on the sale of the option. The
Fund would also realize a gain if an option it has written lapses unexercised.

The Fund could sell options that are listed on an exchange as well as
options which are privately negotiated in over-the-counter transactions. The
Fund could close out its position as a seller of an option only if a liquid
secondary market exists for options of that series, but there is no assurance
that such a market will exist, particularly in the case of over-the-counter
options, since they can be closed out only with the other party to the
transaction. Alternatively, the Fund could purchase an offsetting option, which
would not close out its position as a seller, but would provide an asset of
equal value to its obligation under the option sold. If the Fund is not able to
enter into a closing purchase transaction or to purchase an offsetting option
with respect to an option it has sold, it will be required to maintain the
securities subject to the call or the collateral securing the option until a
closing purchase transaction can be entered into (or the option is exercised or
expires) even though it might not be advantageous to do so.

Risks of Writing Options. By selling a call option, the Fund loses the
potential for gain on the underlying security above the exercise price while the
option is outstanding; by selling a put option the Fund might become obligated
to purchase the underlying security at an exercise price that exceeds the then
current market price.

PURCHASING CALL AND PUT OPTIONS

The Fund could purchase call options to protect against anticipated
increases in the prices of securities it wishes to acquire. Alternatively, call
options could be purchased for capital appreciation. Since the premium paid for
a call option is typically a small fraction of the price of the underlying
security, a given amount of funds will purchase call options covering a much
larger quantity of such security than could be purchased directly. By purchasing
call options, the Fund could benefit from any significant increase in the price
of the underlying security to a greater extent than had it invested the same
amount in the security directly. However, because of the very high volatility of
option premiums, the Fund would bear a significant risk of losing the entire
premium if the price of the underlying security did not rise sufficiently, or if
it did not do so before the option expired.

Put options may be purchased to protect against anticipated declines in the
market value of either specific portfolio securities or of the Fund's assets
generally. Alternatively, put options may be purchased for capital appreciation
in anticipation of a price decline in the underlying security and a
corresponding increase in the value of the put option. The purchase of put
options for capital appreciation involves the same significant risk of loss as
described above for call options.

In any case, the purchase of options for capital appreciation would
increase the Fund's volatility by increasing the impact of changes in the market
price of the underlying securities on the Fund's net asset value.

B-9

OVER THE COUNTER OPTIONS

The Fund is authorized to purchase and sell over-the-counter options ("OTC
Options"). OTC Options are purchased from or sold to securities dealers,
financial institutions of other parties ("Counterparties") through direct
bilateral agreement with the Counterparty. The Fund will sell only OTC Options
(other than OTC currency options) that are subject to a buy-back provision
permitting the Fund to require to the Counterparty to sell the option back to
the Fund at a formula price within seven days. The staff of the SEC currently
takes the position that, in general, OTC Options on securities other than U.S.
Government securities purchased by the Fund, and portfolio securities covering
OTC Options sold by the Fund, are illiquid securities subject to the Fund's
limitation on illiquid securities.

FUTURES CONTRACTS

The Fund may engage in transactions involving futures contracts and options
on futures contracts in accordance with the rules and interpretations of the
Commodity Futures Trading Commission under which the Fund would be exempt from
registration as a "commodity pool."

An index futures contract is an agreement pursuant to which a party agrees
to take or make delivery of an amount of cash equal to a specified dollar amount
multiplied by the difference between the index value at a specified time and the
price at which the futures contract originally was struck. No physical delivery
of the underlying securities in the index is made.

Currently, securities index futures contracts can be purchased with respect
to several indices on various exchanges. Differences in the securities included
in the indices may result in differences in correlation of the futures contracts
with movements in the value of the securities being hedged.

An interest rate futures contract is an agreement pursuant to which a party
agrees to take or make delivery of a specified debt security (such as U.S.
Treasury bonds or notes), or to take or make delivery of cash based upon the
change in value of a basket or index of securities at a specified future time
and at a specified price.

Initial and Variation Margin. In contrast to the purchase or sale of a
security, no price is paid or received upon the purchase or sale of a futures
contract. Initially, the Fund is required to deposit an amount of cash and/or
liquid securities equal to a percentage (which will normally range between 1%
and 10%) of the contract amount with either a futures commission merchant
pursuant to rules and regulations promulgated under the 1940 Act or with its
custodian in an account in the broker's name. This amount is known as initial
margin. The nature of initial margin in futures contract transactions is
different from that of margin in securities transactions in that futures
contract margin does not involve the borrowing of funds by the customer to
finance the transaction. Rather, the initial margin is in the nature of a
performance bond or good faith deposit on the contract, which is returned to the
Fund upon termination of the futures contract and satisfaction of its
contractual obligations. Subsequent payments to and from the initial margin
account, called variation margin, are made on a daily basis as the price of the
underlying securities or index fluctuates, making the long and short positions
in the futures contract more or less valuable, a process known as marking to
market.

For example, when the Fund purchases a futures contract and the price of
the underlying security or index rises, that position increases in value, and
the Fund receives a variation margin payment equal to that increase in value.
Conversely, where the Fund purchases a futures contract and the value of the
underlying security or index declines, the position is less valuable, and the
Fund is required to make a variation margin payment.

At any time prior to expiration of the futures contract, the Fund may elect
to terminate the position by taking an opposite position. A final determination
of variation margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or a gain.

Futures Contract Strategies. When the Fund anticipates a significant
market or market sector advance, the purchase of a futures contract affords a
hedge against not participating in the advance at a time when the Fund is
otherwise fully invested ("anticipatory hedge"). Such purchase of a futures
contract would serve as a

B-10

temporary substitute for the purchase of individual securities, which may be
purchased in an orderly fashion once the market has stabilized. As individual
securities are purchased, an equivalent amount of futures contracts could be
terminated by offsetting sales. The Fund may sell futures contracts in
anticipation of or in a general market or market sector decline that may
adversely affect the market value of the Fund's securities ("defensive hedge").
To the extent that the Fund's portfolio of securities changes in value in
correlation with the underlying security or index, the sale of futures contracts
would substantially reduce the risk to the Fund of a market decline and, by so
doing, provides an alternative to the liquidation of securities positions in the
Fund. Ordinarily transaction costs associated with futures contract transactions
are lower than transaction costs that would be incurred in the purchase and sale
of the underlying securities.

Special Risks Associated with Futures Contract Transactions. There are
several risks connected with the use of futures contracts. These include the
risk of imperfect correlation between movements in the price of the futures
contracts and of the underlying securities or index; the risk of market
distortion; the risk of illiquidity; and the risk of error in anticipating price
movement.

There may be an imperfect correlation (or no correlation) between movements
in the price of the futures contracts and of the securities being hedged. The
risk of imperfect correlation increases as the composition of the securities
being hedged diverges from the securities upon which the futures contract is
based. If the price of the futures contract moves less than the price of the
securities being hedged, the hedge will not be fully effective. To compensate
for the imperfect correlation, the Fund could buy or sell futures contracts in a
greater dollar amount than the dollar amount of securities being hedged if the
historical volatility of the securities being hedged is greater than the
historical volatility of the securities underlying the futures contract.
Conversely, the Fund could buy or sell futures contracts in a lesser dollar
amount than the dollar amount of securities being hedged if the historical
volatility of the securities being hedged is less than the historical volatility
of the securities underlying the futures contracts. It is also possible that the
value of futures contracts held by the Fund could decline at the same time as
portfolio securities being hedged; if this occurred, the Fund would lose money
on the futures contract in addition to suffering a decline in value in the
portfolio securities being hedged.

There is also the risk that the price of futures contracts may not
correlate perfectly with movements in the securities or index underlying the
futures contract due to certain market distortions. First, all participants in
the futures contract market are subject to margin depository and maintenance
requirements. Rather than meet additional margin depository requirements,
investors may close futures contracts through offsetting transactions, which
could distort the normal relationship between the futures contract market and
the securities or index underlying the futures contract. Second, from the point
of view of speculators, the deposit requirements in the futures contract market
are less onerous than margin requirements in the securities markets. Therefore,
increased participation by speculators in the futures contract markets may cause
temporary price distortions. Due to the possibility of price distortion in the
futures contract markets and because of the imperfect correlation between
movements in futures contracts and movements in the securities underlying them,
a correct forecast of general market trends by the Adviser may still not result
in a successful hedging transaction.

There is also the risk that futures contract markets may not be
sufficiently liquid. Futures contracts may be closed out only on an exchange or
board of trade that provides a market for such futures contracts. Although the
Fund intends to purchase or sell futures contract only on exchanges and boards
of trade where there appears to be an active secondary market, there can be no
assurance that an active secondary market will exist for any particular contract
or at any particular time. In the event of such illiquidity, it might not be
possible to close a futures contract position and, in the event of adverse price
movement, the Fund would continue to be required to make daily payments of
variation margin. Since the securities being hedged would not be sold until the
related futures contract is sold, an increase, if any, in the price of the
securities may to some extent offset losses on the related futures contract. In
such event, the Fund would lose the benefit of the appreciation in value of the
securities.

Successful use of futures contracts is also subject to the Adviser's
ability to correctly predict the direction of movements in the market. For
example, if the Fund hedges against a decline in the market, and market

B-11

prices instead advance, the Fund will lose part or all of the benefit of the
increase in value of its securities holdings because it will have offsetting
losses in futures contracts. In such cases, if the Fund has insufficient cash,
it may have to sell portfolio securities at a time when it is disadvantageous to
do so to meet the daily variation margin.

Although the Fund intends to enter into futures contracts only if there is
an active market for such contracts, there is no assurance that an active market
will exist for the contracts at any particular time. Most U.S. futures contract
exchanges and boards of trade limit the amount of fluctuation permitted in
futures contract prices during a single trading day. Once the daily limit has
been reached in a particular contract, no trades may be made that day at a price
beyond that limit. It is possible that futures contract prices would move to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures contract positions and
subjecting some futures contract traders to substantial losses. In such event,
and in the event of adverse price movements, the Fund would be required to make
daily cash payments of variation margin. In such circumstances, an increase in
the value of the portion of the portfolio being hedged, if any, may partially or
completely offset losses on the futures contract. However, there is no guarantee
that the price of the securities being hedged will, in fact, correlate with the
price movements in a futures contract and thus provide an offset to losses on
the futures contract.

The Fund will not enter into futures contracts or options transactions
(except for closing transactions) other than for bona fide hedging purposes if,
immediately thereafter, the sum of its initial margin and premiums on open
futures contracts and options exceed 5% of the fair market value of the Fund's
assets; however, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation. To prevent leverage in connection with the purchase of futures
contracts by the Fund, the Fund will segregate cash and/or liquid securities in
an amount at least equal to the market value of the obligation under the futures
contracts (less any related margin deposits).

OPTIONS ON FUTURES CONTRACTS

The Fund could also purchase and write options on futures contracts. An
option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option period. As a writer of an option on
a futures contract, the Fund would be subject to initial margin and maintenance
requirements similar to those applicable to futures contracts. In addition, net
option premiums received by the Fund are required to be included as initial
margin deposits. When an option on a futures contract is exercised, delivery of
the futures contract position is accompanied by cash representing the difference
between the current market price of the futures contract and the exercise price
of the option. The Fund could purchase put options on futures contracts in lieu
of, and for the same purposes as the sale of a futures contract; at the same
time, it could write put options at a lower strike price (a "put bear spread")
to offset part of the cost of the strategy to the Fund. The purchase of call
options on futures contracts is intended to serve the same purpose as the actual
purchase of the futures contracts.

Risks of Transactions in Options on Futures Contracts. In addition to the
risks described above which apply to all options transactions, there are several
special risks relating to options on futures contracts. The Adviser will not
purchase options on futures contracts on any exchange unless in the Adviser's
opinion, a liquid secondary exchange market for such options exists. Compared to
the use of futures contracts, the purchase of options on futures contracts
involves less potential risk to the Fund because the maximum amount at risk is
the premium paid for the options (plus transaction costs). However, there may be
circumstances, such as when there is no movement in the price of the underlying
security or index, when the use of an option on a future contract would result
in a loss to the Fund when the use of a future contract would not.

ADDITIONAL RISKS OF OPTIONS, FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security or futures
contract (whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether such
options are written on the

B-12

same or different exchanges or are held or written on one or more accounts or
through one or more brokers). Option positions of all investment companies
advised by the Adviser are combined for purposes of these limits. An exchange
may order the liquidation of positions found to be in violation of these limits
and it may impose other sanctions or restrictions. These position limits may
restrict the number of listed options which the Fund may write.

In the event of the bankruptcy of a broker through which the Fund engages
in transactions in options, futures contracts or options on futures contracts,
the Fund could experience delays and/or losses in liquidating open positions
purchased or incur a loss of all or part of its margin deposits. Transactions
are entered into by the Fund only with brokers or financial institutions deemed
creditworthy by the Adviser.

SWAPS, CAPS, FLOORS AND COLLARS

Among the Strategic Transactions into which the Fund may enter are interest
rate and index swaps and the purchase or sale of related caps, floors and
collars. The Fund expects to enter into these transactions primarily to preserve
a return or spread on a particular investment or portion of its portfolio, as a
duration management technique or to protect against any increase in the price of
securities the Fund anticipates purchasing at a later date. The Fund intends to
use these transactions as hedges and not as speculative investments and will not
sell interest rate caps or floors where it does not own securities or other
instruments providing the income stream the Fund may be obligated to pay.

Interest rate swaps involve the exchange by the Fund with another party of
their respective commitments to pay or receive interest, e.g., an exchange of
floating rate payments for fixed rate payments with respect to a notional amount
of principal. The purchase of an interest rate cap entitles the purchaser, to
the extent that a specified index exceeds a predetermined interest rate, to
receive payments of interest on a contractually-based principal amount from the
party selling the interest rate cap. The purchase of an interest rate floor
entitles the purchaser, to the extent that a specified index falls below a
predetermined interest rate, to receive payments of interest on a
contractually-based principal amount from the party selling the interest rate
floor. An interest rate collar combines the elements of purchasing a cap and
selling a floor. The collar protects against an interest rate rise above the
maximum amount but foregoes the benefit of an interest rate decline below the
minimum amount. Interest rate swaps, caps, floors and collars will be treated as
illiquid securities and will, therefore, be subject to the Fund's investment
restriction limiting investment in illiquid securities.

An index swap is an agreement to swap cash flows on a notional amount based
on changes in the values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional principal amount from
the party selling such cap to the extent that a specified index exceeds a
predetermined interest rate or amount. The purchase of a floor entitles the
purchaser to receive payments on a notional principal amount from the party
selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

The Fund may enter into credit default swap contracts or credit-linked
notes for hedging purposes or to gain exposure to a credit in which the Fund may
otherwise invest. A credit default swap is an agreement between two parties to
exchange the credit risk of an issuer (reference entity). A buyer of a credit
default swap is said to buy protection by paying periodic fees in return for a
contingent payment from the seller if the reference entity has a credit event
such as bankruptcy, a failure to pay outstanding obligations or deteriorating
credit while the swap is outstanding. A seller of a credit default swap is said
to sell protection and thus collects the periodic fees and profits if the credit
of the reference entity remains stable or improves while the swap is outstanding
but the seller in a credit default swap contract would be required to pay an
agreed-upon amount to the buyer in the event of an adverse credit event of the
reference entity. A credit-linked note is a synthetic security, typically issued
by a special purpose vehicle, that trades like a bond issued by the reference
entity but with the economics of the credit default swap. For this security, the
buyer of protection sells the note. The buyer of protection (note seller) will
pay periodic payments and profit if the reference entity defaults. Unlike the
swap, the buyer of protection in a credit-linked note will receive money at the
time of transaction from the sale of the note, and will return this money at the
contract's maturity if no credit event occurs. Conversely, the

B-13

seller of protection purchases the notes. As with a credit default swap, the
note purchaser (protection seller) receives periodic payments. Unlike the swap
transaction, the protection seller must pay for the note at the time of the
transaction and will collect this money at the contract's maturity if no credit
event occurs.

The Fund will enter into swap, cap or floor transactions only with
counterparties approved by the Adviser in accordance with guidelines established
by the Fund's Board of Trustees. The Adviser will monitor the creditworthiness
of counterparties to the Fund's swap, cap, floor and collar transactions on an
ongoing basis. If there is a default by the other party to such a transaction,
the Fund will have contractual remedies pursuant to the agreements related to
the transaction. The Fund may enter into swaps, caps, floors and collars on
either an asset-based or liability-based basis, and will usually enter into
swaps on a net basis, i.e., the two payment streams are netted out, with the
Fund receiving or paying, as the case may be, only the net amount of the two
payments. The net amount of the excess, if any, of the Fund's obligations over
its entitlements with respect to each swap will be accrued on a daily basis and
the Fund segregates an amount of cash and/or liquid securities having an
aggregate net asset value at least equal to the accrued excess. If the Fund
enters into a swap transaction on other than a net basis, the Fund would
segregate the full amount accrued on a daily basis of the Fund's obligations
with respect to the swap. To the extent the Fund sells (i.e., writes) caps,
floors and collars, it will segregate cash and/or liquid securities having an
aggregate net asset value at least equal to the full amount, accrued on a daily
basis, of the Fund's net obligations with respect to the caps, floors or
collars.

The use of swaps is a highly specialized activity which involves investment
techniques and risks different from those associated with ordinary portfolio
securities transactions. If the Adviser is incorrect in its forecasts of the
market values, interest rates and other applicable factors, the investment
performance of the Fund would diminish compared with what it would have been if
these investment techniques were not used. The use of swaps, caps, collars and
floors may also have the effect of shifting the recognition of income between
current and future periods.

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

Many Strategic Transactions, in addition to other requirements, require
that the Fund segregate cash and/or liquid securities to the extent Fund
obligations are not otherwise "covered" through ownership of the underlying
security, financial instrument or currency. In general, either the full amount
of any obligation by the Fund to pay or deliver securities or assets must be
covered at all times by the securities, instruments or currency required to be
delivered (or securities convertible into the needed securities without
additional consideration), or, subject to any applicable regulatory
restrictions, the Fund must segregate cash and/or liquid securities in an amount
at least equal to the current amount of the obligation. In the case of a futures
contract or an option on a futures contract, the Fund must deposit initial
margin and possible daily variation margin in addition to segregating cash
and/or liquid securities sufficient to meet its obligation to purchase or
provide securities or currencies, or to pay the amount owed at the expiration of
an index-based futures contract. Strategic Transactions may be covered by other
means when consistent with applicable regulatory policies. The Fund also may
enter into offsetting transactions so that its combined position, coupled with
any segregated cash and/or liquid securities, equals its net outstanding
obligation.

INVESTMENT RESTRICTIONS

The Fund has adopted the following fundamental investment restrictions
which may not be changed without shareholder approval by the vote of a majority
of its outstanding voting securities, which is defined by the 1940 Act as the
lesser of (i) 67% or more of the Fund's voting securities present at a meeting,
if the holders of more than 50% of the Fund's outstanding voting securities are
present or represented by proxy; or (ii) more than 50% of the Fund's outstanding
voting securities. The percentage limitations contained in the restrictions and
policies set forth herein apply at the time of purchase of securities. With
respect to the limitations on illiquid securities and borrowings, the percentage
limitations apply at the time of purchase and on an ongoing basis. These
restrictions provide that the Fund shall not:

1. Borrow money, except that the Fund may borrow for temporary purposes in
amounts not exceeding 5% of the market or other fair value (taken at
the lower of cost or current value) of its total assets
B-14

(not including the amount borrowed). Secured temporary borrowings may
take the form of reverse repurchase agreements, pursuant to which the
Fund would sell portfolio securities for cash and simultaneously agree
to repurchase such securities at a specified date for the same amount
of cash plus an interest component. Pledge its assets or assign or
otherwise encumber them in excess of 3.25% of its net assets (taken at
market value at the time of pledging) and then only to secure
borrowings effected within the limitations set forth in the preceding
sentence. Notwithstanding the foregoing, the Fund may engage in
transactions in options, futures contracts and options on futures
contracts and make margin deposits and payments in connection
therewith.

2. Engage in the underwriting of securities except insofar as the Fund may
be deemed an underwriter under the 1933 Act in disposing of a portfolio
security.

3. Make short sales of securities, but it may engage in transactions in
options, futures contracts, and options on futures contracts.

4. Purchase securities on margin, except for such short-term credits as
may be necessary for the clearance of purchases and sales of portfolio
securities, and it may engage in transactions in options, futures
contracts and options on futures contracts and make margin deposits and
payments in connection therewith.

5. Purchase or sell real estate, although it may purchase securities of
issuers which engage in real estate operations, securities which are
secured by interests in real estate, or securities representing
interests in real estate.

6. Purchase or sell commodities or commodity futures contracts, except
that the Fund may enter into transactions in futures contracts and
options on futures contracts.

7. Make loans of money or securities, except (a) by the purchase of debt
obligations in which the Fund may invest consistent with its investment
objectives and policies; (b) by investment in repurchase agreements or
(c) by lending its portfolio securities, subject to limitations
described elsewhere in this Statement of Additional Information.

8. Purchase oil, gas or other mineral leases, rights or royalty contracts
or exploration or development programs, except that the Fund may invest
in the securities of companies which invest in or sponsor such
programs.

9. Invest in securities issued by other investment companies except as
part of a merger, reorganization or other acquisition and except to the
extent permitted by (i) the 1940 Act, as amended from time to time,
(ii) the rules and regulations promulgated by the SEC under the 1940
Act, as amended from time to time, or (iii) an exemption or other
relief from the provisions of the 1940 Act, as amended from time to
time.

10. Invest for the purpose of exercising control or management of another
company, except that the Fund may purchase securities of other
investment companies to the extent permitted by (i) the 1940 Act, as
amended from time to time, (ii) the rules and regulations promulgated
by the SEC under the 1940 Act, as amended from time to time, or (iii)
an exemption or other relief from the provisions of the 1940 Act, as
amended from time to time.

11. Invest in securities of any company if, to the knowledge of the Fund,
any officer or director of the Fund or of the Adviser owns more than
1/2 of 1% of the outstanding securities of such company, and such
officers and directors who own more than 1/2 of 1% own in the aggregate
more than 5% of the outstanding securities of such company.

12. Invest more than 5% of the market or other fair value of its assets in
warrants, or more than 2% of such value in warrants which are not
listed on the New York or American Stock Exchanges. Warrants attached
to other securities are not subject to these limitations.

13. Invest more than 15% of its net assets (determined at the time of
investment) in illiquid securities and repurchase agreements which have
a maturity of longer than seven days.
B-15

14. With respect to 75% of its assets, invest more than 5% of its assets in
the securities of any one issuer (except the U.S. government) or
purchase more than 10% of the outstanding voting securities of any one
issuer, except that the Fund may purchase securities of other
investment companies to the extent permitted by (i) the 1940 Act, as
amended from time to time, (ii) the rules and regulations promulgated
by the SEC under the 1940 Act, as amended from time to time, or (iii)
an exemption or other relief from the provisions of the 1940 Act, as
amended from time to time.

15. Invest more than 25% of the value of its total assets in securities of
issuers in any particular industry (except obligations of the U.S.
government).

16. Issue senior securities, as defined in the 1940 Act, except that this
restriction shall not be deemed to prohibit the Fund from (i) making
and collateralizing any permitted borrowings, (ii) making any permitted
loans of its portfolio securities, or (iii) entering into repurchase
agreements, utilizing options, futures contracts, options on futures
contracts and other investment strategies and instruments that would be
considered "senior securities" but for the maintenance by the Fund of a
segregated account with its custodian or some other form of "cover."

NON-FUNDAMENTAL INVESTMENT RESTRICTION

The Fund will not invest 25% or more of the value of its total assets in
securities of issuers in any particular industry (except obligations of the U.S.
government).

B-16

TRUSTEES AND OFFICERS

The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees and the Fund's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Fund
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments,
the Adviser, the Distributor, Van Kampen Advisors Inc., Van Kampen Exchange
Corp. and Investor Services. The term "Fund Complex" includes each of the
investment companies advised by the Adviser as of the date of this Statement of
Additional Information. Trustees serve until reaching their retirement age or
until their successors are duly elected and qualified. Officers are annually
elected by the trustees.

INDEPENDENT TRUSTEES

NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE

David C. Arch (60) Trustee Trustee Chairman and Chief Executive Officer of Blistex 69
Blistex Inc. since 2003 Inc., a consumer health care products
1800 Swift Drive manufacturer. Director of the Heartland
Oak Brook, IL 60523 Alliance, a nonprofit organization serving
human needs based in Chicago. Director of St.
Vincent de Paul Center, a Chicago based day
care facility serving the children of low
income families. Board member of the Illinois
Manufacturers' Association.

Jerry D. Choate (67) Trustee Trustee Prior to January 1999, Chairman and Chief 67
33971 Selva Road since 1999 Executive Officer of the Allstate Corporation
Suite 130 ("Allstate") and Allstate Insurance Company.
Dana Point, CA 92629 Prior to January 1995, President and Chief
Executive Officer of Allstate. Prior to August
1994, various management positions at Allstate.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

David C. Arch (60) Trustee/Director/
Blistex Inc. Managing General
1800 Swift Drive Partner of funds in
Oak Brook, IL 60523 the Fund Complex.

Jerry D. Choate (67) Trustee/Director/
33971 Selva Road Managing General
Suite 130 Partner of funds in
Dana Point, CA 92629 the Fund Complex.
Director of Amgen
Inc., a
biotechnological
company, and Director
of Valero Energy
Corporation, an
independent refining
company.

B-17

Rod Dammeyer (65) Trustee Trustee President of CAC, L.L.C., a private company 69
CAC, L.L.C. since 2003 offering capital investment and management
4350 LaJolla Village Drive advisory services. Prior to February 2001, Vice
Suite 980 Chairman and Director of Anixter International,
San Diego, CA 92122-6223 Inc., a global distributor of wire, cable and
communications connectivity products. Prior to
July 2000, Managing Partner of Equity Group
Corporate Investment (EGI), a company that
makes private investments in other companies.

Linda Hutton Heagy (57) Trustee Trustee Managing Partner of Heidrick & Struggles, an 67
Heidrick & Struggles since 1995 executive search firm. Trustee on the
233 South Wacker Drive University of Chicago Hospitals Board, Vice
Suite 7000 Chair of the Board of the YMCA of Metropolitan
Chicago, IL 60606 Chicago and a member of the Women's Board of
the University of Chicago. Prior to 1997,
Partner of Ray & Berndtson, Inc., an executive
recruiting firm. Prior to 1996, Trustee of The
International House Board, a fellowship and
housing organization for international graduate
students. Prior to 1995, Executive Vice
President of ABN AMRO, N.A., a bank holding
company. Prior to 1990, Executive Vice
President of The Exchange National Bank.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

Rod Dammeyer (65) Trustee/Director/
CAC, L.L.C. Managing General
4350 LaJolla Village Drive Partner of funds in
Suite 980 the Fund Complex.
San Diego, CA 92122-6223 Director of
Stericycle, Inc.,
Ventana Medical
Systems, Inc., and
GATX Corporation, and
Trustee of The
Scripps Research
Institute. Prior to
January 2005, Trustee
of the University of
Chicago Hospitals and
Health Systems. Prior
to April 2004,
Director of
TheraSense, Inc.
Prior to January
2004, Director of
TeleTech Holdings
Inc. and Arris Group,
Inc. Prior to May
2002, Director of
Peregrine Systems
Inc. Prior to
February 2001,
Director of IMC
Global Inc. Prior to
July 2000, Director
of Allied Riser
Communications Corp.,
Matria Healthcare
Inc., Transmedia
Networks, Inc., CNA
Surety, Corp. and
Grupo Azcarero Mexico
(GAM).

Linda Hutton Heagy (57) Trustee/Director/
Heidrick & Struggles Managing General
233 South Wacker Drive Partner of funds in
Suite 7000 the Fund Complex.
Chicago, IL 60606

B-18

R. Craig Kennedy (53) Trustee Trustee Director and President of the German Marshall 67
1744 R Street, NW since 1995 Fund of the United States, an independent U.S.
Washington, DC 20009 foundation created to deepen understanding,
promote collaboration and stimulate exchanges
of practical experience between Americans and
Europeans. Formerly, advisor to the Dennis
Trading Group Inc., a managed futures and
option company that invests money for
individuals and institutions. Prior to 1992,
President and Chief Executive Officer, Director
and member of the Investment Committee of the
Joyce Foundation, a private foundation.

Howard J Kerr (70) Trustee Trustee Prior to 1998, President and Chief Executive 69
14 Huron Trace since 2003 Officer of Pocklington Corporation, Inc., an
Galena, IL 61036 investment holding company. Director of the
Marrow Foundation.

Jack E. Nelson (69) Trustee Trustee President of Nelson Investment Planning 67
423 Country Club Drive since 1995 Services, Inc., a financial planning company
Winter Park, FL 32789 and registered investment adviser in the State
of Florida. President of Nelson Ivest Brokerage
Services Inc., a member of the NASD, Securities
Investors Protection Corp. and the Municipal
Securities Rulemaking Board. President of
Nelson Sales and Services Corporation, a
marketing and services company to support
affiliated companies.

Hugo F. Sonnenschein (65) Trustee Trustee President Emeritus and Honorary Trustee of the 69
1126 E. 59th Street since 2003 University of Chicago and the Adam Smith
Chicago, IL 60637 Distinguished Service Professor in the
Department of Economics at the University of
Chicago. Prior to July 2000, President of the
University of Chicago. Trustee of the
University of Rochester and a member of its
investment committee. Member of the National
Academy of Sciences, the American Philosophical
Society and a fellow of the American Academy of
Arts and Sciences.

Suzanne H. Woolsey, Ph.D. (64) Trustee Trustee Chief Communications Officer of the National 67
815 Cumberstone Road since 1999 Academy of Sciences/National Research Council,
Harwood, MD 20776 an independent, federally chartered policy
institution, from 2001 to November 2003 and
Chief Operating Officer from 1993 to 2001.
Director of the Institute for Defense Analyses,
a federally funded research and development
center, Director of the German Marshall Fund of
the United States, Director of the Rocky
Mountain Institute and Trustee of Colorado
College. Prior to 1993, Executive Director of
the Commission on Behavioral and Social
Sciences and Education at the National Academy
of Sciences/National Research Council. From
1980 through 1989, Partner of Coopers &
Lybrand.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

R. Craig Kennedy (53) Trustee/Director/
1744 R Street, NW Managing General
Washington, DC 20009 Partner of funds in
the Fund Complex.

Howard J Kerr (70) Trustee/Director/
14 Huron Trace Managing General
Galena, IL 61036 Partner of funds in
the Fund Complex.
Director of the Lake
Forest Bank & Trust.

Jack E. Nelson (69) Trustee/Director/
423 Country Club Drive Managing General
Winter Park, FL 32789 Partner of funds in
the Fund Complex.

Hugo F. Sonnenschein (65) Trustee/Director/
1126 E. 59th Street Managing General
Chicago, IL 60637 Partner of funds in
the Fund Complex.
Director of Winston
Laboratories, Inc.

Suzanne H. Woolsey, Ph.D. (64) Trustee/Director/
815 Cumberstone Road Managing General
Harwood, MD 20776 Partner of funds in
the Fund Complex.
Director of Fluor
Corp., an
engineering,
procurement and
construction
organization, since
January 2004 and
Director of Neurogen
Corporation, a
pharmaceutical
company, since
January 1998.

B-19

INTERESTED TRUSTEE*

NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN
OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE

Wayne W. Whalen* (66) Trustee Trustee Partner in the law firm of Skadden, Arps, 69
333 West Wacker Drive since 1995 Slate, Meagher & Flom LLP, legal counsel to
Chicago, IL 60606 funds in the Fund Complex.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE HELD BY TRUSTEE

Wayne W. Whalen* (66) Trustee/Director/
333 West Wacker Drive Managing General
Chicago, IL 60606 Partner of funds in
the Fund Complex.
Director of the
Abraham Lincoln
Presidential Library
Foundation.

------------------------------------

* Mr. Whalen is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act) of certain funds in the Fund Complex by reason of he and his
firm currently providing legal services as legal counsel to such funds in the
Fund Complex.

B-20

OFFICERS

TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS

Ronald E. Robison (66) President and Officer President of funds in the Fund Complex since September 2005
1221 Avenue of the Americas Principal since 2003 and Principal Executive Officer of funds in the Fund Complex
New York, NY 10020 Executive since May 2003. Managing Director of Van Kampen Advisors
Officer Inc. since June 2003. Director of Investor Services since
September 2002. Director of the Adviser, Van Kampen
Investments and Van Kampen Exchange Corp., since January
2005. Managing Director of Morgan Stanley and Morgan
Stanley & Co. Incorporated. Managing Director and Director
of Morgan Stanley Investment Management Inc. Chief
Administrative Officer, Managing Director and Director of
Morgan Stanley Investment Advisors Inc. and Morgan Stanley
Services Company Inc. Managing Director and Director of
Morgan Stanley Distributors Inc. and Morgan Stanley
Distribution Inc. Chief Executive Officer and Director of
Morgan Stanley Trust. Executive Vice President and Principal
Executive Officer of the Institutional and Retail Morgan
Stanley Funds. Director of Morgan Stanley SICAV. Previously
Chief Global Operations Officer of Morgan Stanley Investment
Management Inc. and Executive Vice President of funds in the
Fund Complex from May 2003 to September 2005.

Joseph J. McAlinden (62) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas President and since 2002 Stanley Investment Advisors Inc., and Morgan Stanley
New York, NY 10020 Chief Investment Investment Management Inc. and Director of Morgan Stanley
Officer Trust for over 5 years. Executive Vice President and Chief
Investment Officer of funds in the Fund Complex. Managing
Director and Chief Investment Officer of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc. since
December 2002.

Amy R. Doberman (43) Vice President Officer Managing Director and General Counsel, U.S. Investment
1221 Avenue of the Americas since 2004 Management; Managing Director of Morgan Stanley Investment
New York, NY 10020 Management Inc., Morgan Stanley Investment Advisers Inc. and
the Adviser. Vice President of the Morgan Stanley
Institutional and Retail Funds since July 2004 and Vice
President of funds in the Fund Complex since August 2004.
Previously, Managing Director and General Counsel of
Americas, UBS Global Asset Management from July 2000 to July
2004 and General Counsel of Aeltus Investment Management,
Inc. from January 1997 to July 2000.

Stefanie V. Chang (39) Vice President Officer Executive Director of Morgan Stanley Investment Management
1221 Avenue of the Americas and Secretary since 2003 Inc. Vice President and Secretary of funds in the Fund
New York, NY 10020 Complex.

John L. Sullivan (50) Chief Compliance Officer Chief Compliance Officer of funds in the Fund Complex since
1 Parkview Plaza Officer since 1996 August 2004. Prior to August 2004, Director and Managing
Oakbrook Terrace, IL 60181 Director of Van Kampen Investments, the Adviser, Van Kampen
Advisors Inc. and certain other subsidiaries of Van Kampen
Investments, Vice President, Chief Financial Officer and
Treasurer of funds in the Fund Complex and head of Fund
Accounting for Morgan Stanley Investment Management Inc.
Prior to December 2002, Executive Director of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc.

Phillip G. Goff (42) Chief Financial Officer Executive Director of Morgan Stanley Investment Management
1 Parkview Plaza Officer and since 2005 Inc. since June 2005. Chief Financial Officer and Treasurer
Oakbrook Terrace, IL 60181 Treasurer of funds in the Fund Complex since August 2005. Prior to
June 2005, Vice President and Chief Financial Officer of
Enterprise Capital Management, Inc., an investment holding
company.

B-21

COMPENSATION

Each trustee/director/managing general partner (hereinafter referred to in
this section as "trustee") who is not an affiliated person (as defined in the
1940 Act) of Van Kampen Investments, the Adviser or the Distributor (each a
"Non-Affiliated Trustee") is compensated by an annual retainer and meeting fees
for services to the funds in the Fund Complex. Each fund in the Fund Complex
(except Van Kampen Exchange Fund) provides a deferred compensation plan to its
Non-Affiliated Trustees that allows such trustees to defer receipt of their
compensation until retirement and earn a return on such deferred amounts.
Amounts deferred are retained by the Fund and earn a rate of return determined
by reference to the return on the common shares of the Fund or other funds in
the Fund Complex as selected by the respective Non-Affiliated Trustee. To the
extent permitted by the 1940 Act, the Fund may invest in securities of those
funds selected by the Non-Affiliated Trustees in order to match the deferred
compensation obligation. The deferred compensation plan is not funded and
obligations thereunder represent general unsecured claims against the general
assets of the Fund. Deferring compensation has the same economic effect as if
the Non-Affiliated Trustee reinvested his or her compensation into the funds.
Each fund in the Fund Complex (except Van Kampen Exchange Fund) provides a
retirement plan to its Non-Affiliated Trustees that provides Non-Affiliated
Trustees with compensation after retirement, provided that certain eligibility
requirements are met. Under the retirement plan, a Non-Affiliated Trustee who is
receiving compensation from the Fund prior to such Non-Affiliated Trustee's
retirement, has at least 10 years of service (including years of service prior
to adoption of the retirement plan) and retires at or after attaining the age of
60, is eligible to receive a retirement benefit per year for each of the 10
years following such retirement from the Fund. Non-Affiliated Trustees retiring
prior to the age of 60 or with fewer than 10 years but more than 5 years of
service may receive reduced retirement benefits from the Fund.

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

Fund Complex
---------------------------------------------
Aggregate
Aggregate Estimated
Pension or Maximum Total
Retirement Annual Compensation
Aggregate Benefits Benefits from before
Compensation Accrued as the Fund Deferral from
from the Part of Complex Upon Fund
Name(1) Fund(2) Expenses(3) Retirement(4) Complex(5)
------- ------------ ----------- ------------- -------------

INDEPENDENT TRUSTEES
David C. Arch $1,622 $35,277 $112,500 $192,530
Jerry D. Choate 1,449 82,527 98,000 200,002
Rod Dammeyer 1,622 63,782 112,500 208,000
Linda Hutton Heagy 1,612 24,465 107,500 184,784
R. Craig Kennedy 1,612 16,911 107,500 200,002
Howard J Kerr 1,622 140,743 111,250 208,000
Jack E. Nelson 1,612 97,294 88,500 200,002
Hugo F. Sonnenschein 1,622 64,476 112,500 208,000
Suzanne H. Woolsey 1,612 58,450 107,500 200,002

INTERESTED TRUSTEE
Wayne W. Whalen(1) 1,622 72,001 112,500 208,000

------------------------------------

(1) Trustees not eligible for compensation are not included in the Compensation
Table. Mr. Whalen is an "interested person" (within the meaning of Section
2(a)(19) of the 1940 Act) of the Fund and certain other funds in the Fund
Complex. J. Miles Branagan retired as a member of the Board of Trustees of
the

B-22

Fund and other funds in the Fund Complex on December 31, 2004. Richard F.
Powers III and Mitchell M. Merin resigned as members of the Board of
Trustees of the Fund and other funds in the Fund Complex on September 22,
2005.

(2) The amounts shown in this column represent the aggregate compensation before
deferral with respect to the Fund's fiscal year ended August 31, 2005. The
following trustees deferred compensation from the Fund during the fiscal
year ended August 31, 2005: Mr. Choate, $1,449; Mr. Dammeyer, $1,622; Ms.
Heagy, $1,612; Mr. Nelson, $1,612; Mr. Sonnenschein, $1,622; and Mr. Whalen,
$1,622. The cumulative deferred compensation (including interest) accrued
with respect to each trustee, including former trustees, from the Fund as of
the Fund's fiscal year ended August 31, 2005 is as follows: Mr. Branagan,
$32,176; Mr. Choate, $21,135; Mr. Dammeyer, $5,293; Ms. Heagy, $29,680; Mr.
Kennedy, $28,980; Mr. Miller, $1,998; Mr. Nelson, $67,302; Mr. Rees, $2,443;
Mr. Robinson, $4,744; Mr. Rooney, $3,781; Mr. Sisto, $34,907; Mr.
Sonnenschein, $6,042; and Mr. Whalen, $45,031. The deferred compensation
plan is described above the Compensation Table.

(3) The amounts shown in this column represent the sum of the retirement
benefits accrued by the operating funds in the Fund Complex for each of the
trustees for the funds' respective fiscal years ended in 2004. The
retirement plan is described above the Compensation Table.

(4) For each trustee, this is the sum of the estimated maximum annual benefits
payable by the funds in the Fund Complex as of the date of this Statement of
Additional Information for each year of the 10-year period commencing in the
year of such trustee's anticipated retirement. The retirement plan is
described above the Compensation Table.

(5) The amounts shown in this column represent the aggregate compensation paid
by all of the funds in the Fund Complex as of December 31, 2004 before
deferral by the trustees under the deferred compensation plan. Because the
funds in the Fund Complex have different fiscal year ends, the amounts shown
in this column are presented on a calendar year basis.

BOARD COMMITTEES

The Board of Trustees has three standing committees (an audit committee, a
brokerage and services committee and a governance committee). Each committee is
comprised solely of "Independent Trustees," which is defined for purposes herein
as trustees who: (1) are not "interested persons" of the Fund as defined by the
1940 Act and (2) are "independent" of the Fund as defined by the New York Stock
Exchange, American Stock Exchange and Chicago Stock Exchange listing standards.

The Board's audit committee consists of Jerry D. Choate, Rod Dammeyer and
R. Craig Kennedy. In addition to being Independent Trustees as defined above,
each of these trustees also meets the additional independence requirements for
audit committee members as defined by the New York Stock Exchange, American
Stock Exchange and Chicago Stock Exchange listing standards. The audit committee
makes recommendations to the Board of Trustees concerning the selection of the
Fund's independent registered public accounting firm, reviews with such
independent registered public accounting firm the scope and results of the
Fund's annual audit and considers any comments which the independent registered
public accounting firm may have regarding the Fund's financial statements, books
of account or internal controls. The Board of Trustees has adopted a formal
written charter for the audit committee which sets forth the audit committee's
responsibilities. The audit committee has reviewed and discussed the financial
statements of the Fund with management as well as with the independent
registered public accounting firm of the Fund, and discussed with the
independent registered public accounting firm the matters required to be
discussed under the Statement of Auditing Standards No. 61. The audit committee
has received the written disclosures and the letter from the independent
registered public accounting firm required under Independence Standards Board
Standard No. 1 and has discussed with the independent registered public
accounting firm its independence. Based on this review, the audit committee
recommended to the Board of Trustees of the Fund that the Fund's audited
financial statements be included in the Fund's annual report to shareholders for
the most recent fiscal year for filing with the SEC.

B-23

The Board's brokerage and services committee consists of Linda Hutton
Heagy, Hugo F. Sonnenschein and Suzanne H. Woolsey. The brokerage and services
committee reviews the Fund's allocation of brokerage transactions and
soft-dollar practices and reviews the transfer agency and shareholder servicing
arrangements with Investor Services.

The Board's governance committee consists of David C. Arch, Howard J Kerr
and Jack E. Nelson. In addition to being Independent Trustees as defined above,
each of these trustees also meets the additional independence requirements for
nominating committee members as defined by the New York Stock Exchange, American
Stock Exchange and Chicago Stock Exchange listing standards. The governance
committee identifies individuals qualified to serve as Independent Trustees on
the Board and on committees of the Board, advises the Board with respect to
Board composition, procedures and committees, develops and recommends to the
Board a set of corporate governance principles applicable to the Fund, monitors
corporate governance matters and makes recommendations to the Board, and acts as
the administrative committee with respect to Board policies and procedures,
committee policies and procedures and codes of ethics. The Independent Trustees
of the Fund select and nominate any other nominee Independent Trustees for the
Fund. While the Independent Trustees of the Fund expect to be able to continue
to identify from their own resources an ample number of qualified candidates for
the Board of Trustees as they deem appropriate, they will consider nominations
from shareholders to the Board. Nominations from shareholders should be in
writing and sent to the Independent Trustees as described below.

During the Fund's last fiscal year, the Board of Trustees held 16 meetings.
During the Fund's last fiscal year, the audit committee of the Board held 4
meetings, the brokerage and services committee of the Board held 4 meetings and
the governance committee of the Board held 4 meetings.

SHAREHOLDER COMMUNICATIONS

Shareholders may send communications to the Board of Trustees. Shareholders
should send communications intended for the Board by addressing the
communication directly to the Board (or individual Board members) and/or
otherwise clearly indicating in the salutation that the communication is for the
Board (or individual Board members) and by sending the communication to either
the Fund's office or directly to such Board member(s) at the address specified
for such trustee above. Other shareholder communications received by the Fund
not directly addressed and sent to the Board will be reviewed and generally
responded to by management, and will be forwarded to the Board only at
management's discretion based on the matters contained therein.

SHARE OWNERSHIP

Excluding deferred compensation balances as described in the Compensation
Table, as of December 31, 2004, the most recently completed calendar year prior
to the date of this Statement of Additional Information, each trustee of the
Fund beneficially owned equity securities of the Fund and all of the funds in
the Fund Complex overseen by the trustee in the dollar range amounts specified
below.

2004 TRUSTEE BENEFICIAL OWNERSHIP OF SECURITIES

INDEPENDENT TRUSTEES

TRUSTEES
--------------------------------------------------------------------
ARCH CHOATE DAMMEYER HEAGY KENNEDY KERR
---- ------ -------- ----- ------- ----

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND....... none none none $1- $10,001- none
$10,000 $50,000
AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES OVERSEEN BY TRUSTEE
IN THE
FUND COMPLEX....................................... $50,001- $1- over $50,001- over $1-
$100,000 $10,000 $100,000 $100,000 $100,000 $10,000

TRUSTEES
---------------------------------
NELSON SONNENSCHEIN WOOLSEY
------ ------------ -------

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND....... none none none
AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES OVERSEEN BY TRUSTEE
IN THE
FUND COMPLEX....................................... $1- $10,001- $10,001-
10,000 $50,000 $50,000

B-24

INTERESTED TRUSTEE

TRUSTEE
-------
WHALEN
------

DOLLAR RANGE OF EQUITY SECURITIES IN THE FUND............... $10,001-$50,000
AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES IN ALL
REGISTERED INVESTMENT COMPANIES OVERSEEN BY TRUSTEE IN THE
FUND COMPLEX.............................................. over $100,000

Including deferred compensation balances (which are amounts deferred and
thus retained by each Fund as described in the Compensation Table), as of
December 31, 2004, the most recently completed calendar year prior to the date
of this Statement of Additional Information, each trustee of the Fund had in the
aggregate, combining beneficially owned equity securities and deferred
compensation of the Fund and of all of the funds in the Fund Complex overseen by
the trustee, the dollar range amounts specified below.

2004 TRUSTEE BENEFICIAL OWNERSHIP AND DEFERRED COMPENSATION

INDEPENDENT TRUSTEES

TRUSTEES
---------------------------------------------------------------------------------------------------
ARCH CHOATE DAMMEYER HEAGY KENNEDY KERR NELSON SONNENSCHEIN WOOLSEY
---- ------ -------- ----- ------- ---- ------ ------------ -------

DOLLAR RANGE OF EQUITY
SECURITIES AND DEFERRED
COMPENSATION IN THE FUND... none none none $1- $10,001- none none none none
10,000 $50,000
AGGREGATE DOLLAR RANGE OF
EQUITY SECURITIES AND
DEFERRED COMPENSATION IN
ALL REGISTERED INVESTMENT
COMPANIES OVERSEEN BY
TRUSTEE IN THE FUND
COMPLEX.................... $50,001- over over over over over over over $10,001-
$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $50,000

INTERESTED TRUSTEE

TRUSTEE
-------
WHALEN
------

DOLLAR RANGE OF EQUITY SECURITIES AND DEFERRED COMPENSATION
IN THE FUND............................................... $10,001-$50,000
AGGREGATE DOLLAR RANGE OF EQUITY SECURITIES AND DEFERRED
COMPENSATION IN ALL REGISTERED INVESTMENT COMPANIES
OVERSEEN BY TRUSTEE IN THE FUND COMPLEX................... over $100,000

As of December 2, 2005, the trustees and officers of the Fund as a group
owned less than 1% of the shares of the Fund.

CODE OF ETHICS

The Fund, the Adviser and the Distributor have adopted a Code of Ethics
(the "Code of Ethics") that sets forth general and specific standards relating
to the securities trading activities of their employees. The Code of Ethics does
not prohibit employees from acquiring securities that may be purchased or held
by the Fund, but is intended to ensure that all employees conduct their personal
transactions in a manner that does not interfere with the portfolio transactions
of the Fund or other Van Kampen funds, or that such employees take unfair
advantage of their relationship with the Fund. Among other things, the Code of
Ethics prohibits certain types of transactions absent prior approval, imposes
various trading restrictions (such as time periods during which personal
transactions may or may not be made) and requires quarterly reporting of
securities transactions and other reporting matters. All reportable securities
transactions and other required reports are to be reviewed by appropriate
personnel for compliance with the Code of Ethics. Additional restrictions apply
to portfolio managers, traders, research analysts and others who may have access
to nonpublic information about the trading activities of the Fund or other Van
Kampen funds or who otherwise are involved in the investment advisory process.
Exceptions to these and other provisions of the Code of Ethics may be granted in
particular circumstances after review by appropriate personnel.

B-25

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objectives. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Fund's Board of Trustees,
and permits its officers and employees to serve without compensation as trustees
or officers of the Fund if elected to such positions. The Fund, however, bears
the costs of its day-to-day operations, including service fees, distribution
fees, custodian fees, legal and independent registered public accounting firm
fees, the costs of reports and proxies to shareholders, compensation of trustees
of the Fund (other than those who are affiliated persons of the Adviser,
Distributor or Van Kampen Investments) and all other ordinary business expenses
not specifically assumed by the Adviser. The Advisory Agreement also provides
that the Adviser shall not be liable to the Fund for any actions or omissions if
it acted without willful misfeasance, bad faith, negligence or reckless
disregard of its obligations under the Advisory Agreement.

The fee payable to the Adviser is reduced by any commissions, tender
solicitation and other fees, brokerage or similar payments received by the
Adviser or any other direct or indirect majority owned subsidiary of Van Kampen
Investments in connection with the purchase and sale of portfolio investments
less any direct expenses incurred by such subsidiary of Van Kampen Investments,
in connection with obtaining such commissions, fees, brokerage or similar
payments. The Adviser agrees to use its best efforts to recapture tender
solicitation fees and exchange offer fees for the Fund's benefit and to advise
the trustees of the Fund of any other commissions, fees, brokerage or similar
payments which may be possible for the Adviser or any other direct or indirect
majority owned subsidiary of Van Kampen Investments to receive in connection
with the Fund's portfolio transactions or other arrangements which may benefit
the Fund.

The Advisory Agreement also provides that, in the event the ordinary
business expenses of the Fund for any fiscal year exceed the most restrictive
expense limitation applicable in the states where the Fund's shares are
qualified for sale, the compensation due the Adviser will be reduced by the
amount of such excess and that, if a reduction in and refund of the advisory fee
is insufficient, the Adviser will pay the Fund monthly an amount sufficient to
make up the deficiency, subject to readjustment during the year. Ordinary
business expenses include the investment advisory fee and other operating costs
paid by the Fund except (1) interest and taxes, (2) brokerage commissions, (3)
certain litigation and indemnification expenses as described in the Advisory
Agreement and (4) payments made by the Fund pursuant to the distribution plans.

ADVISORY FEES

FISCAL YEAR
ENDED AUGUST 31,
------------------------------------
2005 2004 2003
---------- ---------- ----------

The Adviser received the approximate advisory fees of.... $3,756,900 $3,225,800 $3,091,000

LITIGATION INVOLVING THE ADVISER

The Adviser, certain affiliates of the Adviser, and certain investment
companies advised by the Adviser or its affiliates, including the Fund, were
named as defendants in a number of similar class action complaints which were
consolidated. The consolidated amended complaint also names as defendants
certain individual trustees and directors of certain investment companies
advised by affiliates of the Adviser; the complaint does not, however, name the
individual trustees of any Van Kampen funds. The complaint generally alleges
that defendants violated their statutory disclosure obligations and fiduciary
duties by failing properly to disclose (i) that the Adviser and certain
affiliates of the Adviser allegedly offered economic incentives to brokers and
others to steer investors to the funds advised by the Adviser or its affiliates
rather than funds managed by other companies, and (ii) that the funds advised by
the Adviser or its affiliates, including the Fund, allegedly paid excessive
commissions to brokers in return for their alleged efforts to steer investors to
these funds. The

B-26

complaint seeks, among other things, unspecified compensatory damages,
rescissionary damages, fees and costs. The defendants' motion to dismiss this
action is pending. After defendants moved to dismiss, the plaintiffs filed a
motion for leave to amend the complaint, which is also pending. The proposed
amendment drops all claims against the named investment companies, which are
listed only as nominal defendants. The proposed amendment raises similar claims
against the Adviser and its affiliates with respect to the investment companies
advised by the Adviser or its affiliates, and, in addition, alleges that
affiliates of the Adviser received undisclosed compensation for steering
investors into thirteen non-affiliated fund families. The defendants intend to
continue to defend this action vigorously. While the defendants believe that
they have meritorious defenses, the ultimate outcome of this matter is not
presently determinable at this stage of litigation.

The Adviser and certain affiliates of the Adviser are also named as
defendants in a derivative suit which additionally names as defendants
individual trustees of certain Van Kampen funds; the named investment companies,
including the Fund, are listed as nominal defendants. The complaint alleges that
defendants caused the Van Kampen funds to pay economic incentives to a
proprietary sales force to promote the sale of Van Kampen funds. The complaint
also alleges that the Van Kampen funds paid excessive commissions to Morgan
Stanley and its affiliates in connection with the sales of the funds. The
complaint seeks, among other things, the removal of the current trustees of the
funds, rescission of the management contracts for the funds, disgorgement of
profits by Morgan Stanley and its affiliates and monetary damages. This
complaint has been coordinated with the action described in the preceding
paragraph. The defendants have moved to dismiss this action and otherwise intend
to defend it vigorously. This action is currently stayed until the later of (i)
a ruling on the motion to dismiss the action described in the preceding
paragraph or (ii) a ruling on a motion to dismiss the action described in the
next paragraph. While the defendants believe that they have meritorious
defenses, the ultimate outcome of this matter is not presently determinable at
this stage of litigation.

The plaintiff in the action described in the preceding paragraph filed a
separate derivative action against the Adviser, certain affiliates of the
Adviser, the individual trustees of certain Van Kampen funds, and certain
unaffiliated entities. The named investment companies, including the Fund, are
listed as nominal defendants. The complaint alleges that certain unaffiliated
entities engaged in or facilitated market timing and late trading in the Van
Kampen funds, and that the Adviser, certain affiliates of the Adviser, and the
trustees failed to prevent and/or detect such market timing and late trading.
The complaint seeks, among other things, the removal of the current trustees of
the funds, rescission of the management contracts and distribution plans for the
funds, disgorgement of fees and profits from the Adviser and its affiliates, and
monetary damages. The court recently granted in part and denied in part the
defendants' motion to dismiss this action. The court dismissed all claims
against the individual trustees, and also dismissed all claims against the
Adviser and its affiliates except for a claim that the Adviser received
excessive compensation for services during the one-year period preceding the
filing of the action.

The Adviser and one of the investment companies advised by the Adviser were
named as defendants in a class action complaint generally alleging that the
defendants breached their duties of care to long-term shareholders of the
investment company by valuing portfolio securities at the closing prices of the
foreign exchanges on which they trade without accounting for significant market
information that became available after the close of the foreign exchanges but
before calculation of net asset value. As a result, the complaint alleged,
short-term traders were able to exploit stale pricing information to capture
arbitrage profits that diluted the value of shares held by long-term investors.
The complaint sought unspecified compensatory damages, punitive damages, fees
and costs. The case was recently dismissed with prejudice but remains subject to
ongoing appeals.

The Adviser, one of the investment companies advised by the Adviser, the
Distributor, and certain officers and trustees of the investment company are
defendants in a class action filed in 2001 alleging that the defendants issued a
series of prospectuses and registration statements in connection with the
issuance of shares of the fund that were materially false and misleading. Among
other things, the complaint alleges that the prospectuses and registration
statements contained misleading descriptions of the method defendants used to
value senior loan interests in the fund's portfolio, and that defendants
materially overstated the net asset value of the fund. The court recently held a
final hearing on the fairness of the settlement, but has not yet issued a
ruling. The fund will not pay any amount towards the settlement under the terms
of the proposed settlement.

B-27

FUND MANAGEMENT

OTHER ACCOUNTS MANAGED BY THE PORTFOLIO MANAGERS

As of August 31, 2005, Gordon Loery managed ten mutual funds with a total
of approximately $2.0 billion in assets; five pooled investment vehicles other
than mutual funds with a total of approximately $1.0 million in assets; and one
other account with a total of approximately one thousand dollars in assets.

As of August 31, 2005, Josheua Givelber managed seven mutual funds with a
total of approximately $1.8 billion in assets; no pooled investment vehicles
other than mutual funds; and no other accounts.

Because the portfolio managers manage assets for other investment
companies, pooled investment vehicles, and/or other accounts (including
institutional clients, pension plans and certain high net worth individuals),
there may be an incentive to favor one client over another resulting in
conflicts of interest. For instance, the Adviser may receive fees from certain
accounts that are higher than the fee it receives from the Fund, or it may
receive a performance-based fee on certain accounts. In those instances, the
portfolio managers may have an incentive to favor the higher and/or
performance-based fee accounts over the Fund. Except as described above, the
portfolio managers of the Fund do not currently manage assets for other
investment companies, pooled investment vehicles or other accounts that charge a
performance fee. The Adviser has adopted trade allocation and other policies and
procedures that it believes are reasonably designed to address these and other
conflicts of interest.

PORTFOLIO MANAGER COMPENSATION STRUCTURE

Portfolio managers receive a combination of base compensation and
discretionary compensation, comprised of a cash bonus and several deferred
compensation programs described below. The methodology used to determine
portfolio manager compensation is applied across all accounts managed by the
portfolio manager.

Base salary compensation. Generally, portfolio managers receive base salary
compensation based on the level of their position with the Adviser.

Discretionary compensation. In addition to base compensation, portfolio
managers may receive discretionary compensation.

Discretionary compensation can include:

- Cash Bonus;

- Morgan Stanley's Equity Incentive Compensation Program (EICP) awards -- a
mandatory program that defers a portion of discretionary year-end
compensation into restricted stock units or other awards based on Morgan
Stanley common stock that are subject to vesting and other conditions;

- Investment Management Deferred Compensation Plan (IMDCP) awards -- a
mandatory program that defers a portion of discretionary year-end
compensation and notionally invests it in designated funds advised by the
Adviser or its affiliates. The award is subject to vesting and other
conditions. Portfolio managers must notionally invest a minimum of 25% to
a maximum of 50% of the IMDCP deferral into a combination of the
designated funds they manage that are included in the IMDCP fund menu;

- Voluntary Deferred Compensation Plans -- voluntary programs that permit
certain employees to elect to defer a portion of their discretionary
year-end compensation and directly or notionally invest the deferred
amount: (1) across a range of designated investment funds, including
funds advised by the Adviser or its affiliates: and/or (2) in Morgan
Stanley stock units.

Several factors determine discretionary compensation, which can vary by
portfolio management team and circumstances. In order of relative importance,
these factors include:

- Investment performance. A portfolio manager's compensation is linked to
the pre-tax investment performance of the funds/accounts managed by the
portfolio manager. Investment performance is

B-28

calculated for one-, three- and five-year periods measured against an
appropriate securities market index (or indices) for the funds/accounts
managed by the portfolio manager. In the case of the Fund, the Fund's
investment performance is measured against the JP Morgan Global High
Yield Index (formerly known as the Chase Global High Yield Index) and the
Lipper High Yield Bond Fund Index and against appropriate rankings or
ratings prepared by Lipper Inc., Morningstar Inc. or similar independent
services which monitor Fund performance. Other funds/accounts managed by
the same portfolio manager may be measured against this same index and
same rankings or ratings, if appropriate, or against other indices and
other rankings or ratings that are deemed more appropriate given the size
and/or style of such funds/accounts as set forth in such funds'/accounts'
disclosure materials and guidelines. The assets managed by the portfolio
managers in funds, pooled investment vehicles and other accounts are
described in "Other Accounts Managed by the Portfolio Managers" above.
Generally, the greatest weight is placed on the three- and five-year
periods.

- Revenues generated by the investment companies, pooled investment
vehicles and other accounts managed by the portfolio manager.

- Contribution to the business objectives of the Adviser.

- The dollar amount of assets managed by the portfolio manager.

- Market compensation survey research by independent third parties.

- Other qualitative factors, such as contributions to client objectives.

- Performance of Morgan Stanley and Morgan Stanley Investment Management,
and the overall performance of the Global Investor Group, a department
within Morgan Stanley Investment Management that includes all investment
professionals.

SECURITIES OWNERSHIP OF PORTFOLIO MANAGERS

As of August 31, 2005, the dollar range of securities beneficially owned by
each portfolio manager in the Fund is shown below:

Gordon Loery--$10,001-$50,000*

Josheua Givelber--$10,001-$50,000*

-----------------------------------------

* Not included in the table above, the portfolio manager has made investments in
one or more other mutual funds managed by the same portfolio management team
pursuant to a similar strategy.

OTHER AGREEMENTS

ACCOUNTING SERVICES AGREEMENT

The Fund has entered into an accounting services agreement pursuant to
which the Adviser provides accounting services to the Fund supplementary to
those provided by the custodian. Such services are expected to enable the Fund
to more closely monitor and maintain its accounts and records. The Fund pays all
costs and expenses related to such services, including all salary and related
benefits of accounting personnel, as well as the overhead and expenses of office
space and the equipment necessary to render such services. The Fund shares
together with the other Van Kampen funds in the cost of providing such services
with 25% of such costs shared proportionately based on the respective number of
classes of securities issued per fund and the remaining 75% of such costs based
proportionately on the respective net assets per fund.

CHIEF COMPLIANCE OFFICER EMPLOYMENT AGREEMENT

The Fund has entered into an employment agreement with John Sullivan and
Morgan Stanley pursuant to which Mr. Sullivan, an employee of Morgan Stanley,
serves as Chief Compliance Officer of the Fund and other Van Kampen funds. The
Fund's Chief Compliance Officer and his staff are responsible for administering

B-29

the compliance policies and procedures of the Fund and other Van Kampen funds.
The Fund reimburses Morgan Stanley for the costs and expenses of such services,
including compensation and benefits, insurance, occupancy and equipment,
information processing and communication, office services, conferences and
travel, postage and shipping. The Fund shares together with the other Van Kampen
funds in the cost of providing such services with 25% of such costs shared
proportionately based on the respective number of classes of securities issued
per fund and the remaining 75% of such costs based proportionately on the
respective net assets per fund.

FUND PAYMENTS PURSUANT TO THESE AGREEMENTS

FISCAL YEAR ENDED AUGUST 31,
------------------------------
2005 2004 2003
-------- -------- --------

Pursuant to these agreements, Morgan Stanley or its
affiliates have received from the Fund approximately*..... $48,600 $35,600 $47,100

------------------------------------

* The Fund began accruing expenses under the Chief Compliance Officer Employment
Agreement on July 15, 2004.

DISTRIBUTION AND SERVICE

The Distributor acts as the principal underwriter of the Fund's shares
pursuant to a written agreement (the "Distribution and Service Agreement"). The
Distributor has the exclusive right to distribute shares of the Fund through
authorized dealers on a continuous basis. The Distributor's obligation is an
agency or "best efforts" arrangement under which the Distributor is required to
take and pay for only such shares of the Fund as may be sold to the public. The
Distributor is not obligated to sell any stated number of shares. The
Distributor bears the cost of printing (but not typesetting) prospectuses used
in connection with this offering and certain other costs including the cost of
supplemental sales literature and advertising. The Distribution and Service
Agreement is renewable from year to year if approved (a)(i) by the Fund's Board
of Trustees or (ii) by a vote of a majority of the Fund's outstanding voting
securities and (b) by a vote of a majority of trustees who are not parties to
the Distribution and Service Agreement or interested persons of any party, by
votes cast in person at a meeting called for such purpose. The Distribution and
Service Agreement provides that it will terminate if assigned, and that it may
be terminated without penalty by either party on 90 days' written notice. Total
underwriting commissions on the sale of shares of the Fund for the last three
fiscal years are shown in the chart below.

AMOUNTS
TOTAL UNDERWRITING RETAINED BY
COMMISSIONS DISTRIBUTOR
------------------ -----------

Fiscal year ended August 31, 2005........................... $1,195,020 $144,365
Fiscal year ended August 31, 2004........................... $1,071,921 $120,490
Fiscal year ended August 31, 2003........................... $1,596,882 $142,200

B-30

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

TOTAL SALES CHARGE
--------------------------- REALLOWED
AS % OF AS % OF TO DEALERS
OFFERING NET AMOUNT AS A % OF
SIZE OF INVESTMENT PRICE INVESTED OFFERING PRICE)
------------------ -------- ---------- ---------------

Less than $100,000................................... 4.75% 4.99% 4.25%
$100,000 but less than $250,000...................... 3.75% 3.90% 3.25%
$250,000 but less than $500,000...................... 2.75% 2.83% 2.25%
$500,000 but less than $1,000,000.................... 2.00% 2.04% 1.75%
$1,000,000 or more................................... * * *
----------------------------------------------------------------------------------------------------------

* No sales charge is payable at the time of purchase on investments of $1
million or more, although the Fund may impose a contingent deferred sales
charge of 1.00% on certain redemptions made within eighteen months of the
purchase. With respect to shares purchased prior to December 1, 2004, a
contingent deferred sales charge of 1.00% may be imposed on certain
redemptions made within one year of the purchase. The eighteen-month period
(or one-year period, as applicable) ends on the first business day of the
nineteenth month (or thirteenth month, as applicable) after the purchase date.
A commission or transaction fee will be paid by the Distributor at the time of
purchase directly out of the Distributor's assets (and not out of the Fund's
assets) to authorized dealers who initiate and are responsible for purchases
of $1 million or more computed on a percentage of the dollar value of such
shares sold as follows: 1.00% on sales of $1 million to $2 million, plus 0.75%
on the next $1 million, plus 0.50% on the next $2 million, and 0.25% on the
excess over $5 million. Authorized dealers will be eligible to receive the
ongoing service fee with respect to such shares commencing in the second year
following purchase. Proceeds from the distribution and service fees paid by
the Fund during the first twelve months are paid to the Distributor and are
used by the Distributor to defray its distribution and service related
expenses. With respect to shares purchased prior to December 1, 2004, a
commission or transaction fee was paid by the Distributor at the time of
purchase directly out of the Distributor's assets (and not out of the Fund's
assets) to authorized dealers who initiated and were responsible for purchases
of $1 million or more computed on a percentage of the dollar value of such
shares sold as follows: 1.00% on sales to $2 million, plus 0.80% on the next
$1 million, plus 0.50% on the excess over $3 million.

With respect to sales of Class B Shares and Class C Shares of the Fund, a
commission or transaction fee generally will be paid by the Distributor at the
time of purchase directly out of the Distributor's assets (and not out of the
Fund's assets) to authorized dealers who initiate and are responsible for such
purchases computed based on a percentage of the dollar value of such shares sold
of 4.00% on Class B Shares and 1.00% on Class C Shares.

Proceeds from any contingent deferred sales charge and any distribution
fees on Class B Shares and Class C Shares of the Fund are paid to the
Distributor and are used by the Distributor to defray its distribution related
expenses in connection with the sale of the Fund's shares, such as the payment
to authorized dealers for selling such shares. With respect to Class C Shares,
the authorized dealers generally receive from the Distributor ongoing
distribution fees of up to 0.75% of the average daily net assets of the Fund's
Class C Shares annually commencing in the second year after purchase.

With respect to Class I Shares, there are no sales charges paid by
investors. Commissions or transaction fees may be paid by the Distributor to
authorized dealers.

The Fund has adopted a distribution plan (the "Distribution Plan") with
respect to each of its Class A Shares, Class B Shares and Class C Shares
pursuant to Rule 12b-1 under the 1940 Act. The Fund also adopted a service plan
(the "Service Plan") with respect to each of its Class A Shares, Class B Shares
and Class C Shares. There is no distribution plan or service plan in effect for
Class I Shares. The Distribution Plan and the Service Plan sometimes are
referred to herein as the "Plans." The Plans provide that the Fund may spend a
portion of the Fund's average daily net assets attributable to each such class
of shares in connection

B-31

with the distribution of the respective class of shares and in connection with
the provision of ongoing services to shareholders of such class, respectively.
The Distribution Plan and the Service Plan are being implemented through the
Distribution and Service Agreement with the Distributor of each such class of
the Fund's shares, sub-agreements between the Distributor and members of the
NASD who are acting as securities dealers and NASD members or eligible
non-members who are acting as brokers or agents and similar agreements between
the Fund and financial intermediaries who are acting as brokers (collectively,
"Selling Agreements") that may provide for their customers or clients certain
services or assistance, which may include, but not be limited to, processing
purchase and redemption transactions, establishing and maintaining shareholder
accounts regarding the Fund, and such other services as may be agreed to from
time to time and as may be permitted by applicable statute, rule or regulation.
Brokers, dealers and financial intermediaries that have entered into sub-
agreements with the Distributor and sell shares of the Fund are referred to
herein as "financial intermediaries."

Certain financial intermediaries may be prohibited under law from providing
certain underwriting or distribution services. If a financial intermediary was
prohibited from acting in any capacity or providing any of the described
services, the Distributor would consider what action, if any, would be
appropriate. The Distributor does not believe that termination of a relationship
with a financial intermediary would result in any material adverse consequences
to the Fund.

The Distributor must submit quarterly reports to the Fund's Board of
Trustees setting forth separately by class of shares all amounts paid under the
Distribution Plan and the purposes for which such expenditures were made,
together with such other information as from time to time is reasonably
requested by the trustees. The Plans provide that they will continue in full
force and effect from year to year so long as such continuance is specifically
approved by a vote of the trustees, and also by a vote of the disinterested
trustees, cast in person at a meeting called for the purpose of voting on the
Plans. Each of the Plans may not be amended to increase materially the amount to
be spent for the services described therein with respect to any class of shares
without approval by a vote of a majority of the outstanding voting shares of
such class, and all material amendments to either of the Plans must be approved
by the trustees and also by the disinterested trustees. Each of the Plans may be
terminated with respect to any class of shares at any time by a vote of a
majority of the disinterested trustees or by a vote of a majority of the
outstanding voting shares of such class.

For Class A Shares in any given year in which the Plans are in effect, the
Plans generally provide for the Fund to pay the Distributor the lesser of (i)
the amount of the Distributor's actual expenses incurred during such year less
any deferred sales charges (if any) it received during such year (the "actual
net expenses") or (ii) the distribution and service fees at the rates specified
in the Prospectus applicable to that class of shares (the "plan fees").
Therefore, to the extent the Distributor's actual net expenses in a given year
are less than the plan fees for such year, the Fund only pays the actual net
expenses. Alternatively, to the extent the Distributor's actual net expenses in
a given year exceed the plan fees for such year, the Fund only pays the plan
fees for such year. For Class A Shares, there is no carryover of any
unreimbursed actual net expenses to succeeding years.

The Plans for Class B Shares and Class C Shares are similar to the Plans
for Class A Shares, except that any actual net expenses which exceed plan fees
for a given year are carried forward and are eligible for payment in future
years by the Fund so long as the Plans remain in effect. Thus, for each of the
Class B Shares and Class C Shares, in any given year in which the Plans are in
effect, the Plans generally provide for the Fund to pay the Distributor the
lesser of (i) the applicable amount of the Distributor's actual net expenses
incurred during such year for such class of shares plus any actual net expenses
from prior years that are still unpaid by the Fund for such class of shares or
(ii) the applicable plan fees for such class of shares. Except as may be
mandated by applicable law, the Fund does not impose any limit with respect to
the number of years into the future that such unreimbursed actual net expenses
may be carried forward (on a Fund level basis). These unreimbursed actual net
expenses may or may not be recovered through plan fees or contingent deferred
sales charges in future years.

Because of fluctuations in net asset value, the plan fees with respect to a
particular Class B Share or Class C Share may be greater or less than the amount
of the initial commission (including carrying cost) paid

B-32

by the Distributor with respect to such share. In such circumstances, a
shareholder of a share may be deemed to incur expenses attributable to other
shareholders of such class.

As of August 31, 2005, there were approximately $3,745,800 and $0 of
unreimbursed distribution-related expenses with respect to Class B Shares and
Class C Shares, respectively, representing approximately 2% and 0% of the Fund's
net assets attributable to Class B Shares and Class C Shares, respectively. If
the Plans were terminated or not continued, the Fund would not be contractually
obligated to pay the Distributor for any expenses not previously reimbursed by
the Fund or recovered through contingent deferred sales charges.

For the fiscal year ended August 31, 2005, the Fund's aggregate expenses
paid under the Plans for Class A Shares were $1,266,260 or 0.24% of the Class A
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for payments made to financial intermediaries for distributing and
servicing Class A Shareholders and for administering the Class A Share Plans.
For the fiscal year ended August 31, 2005, the Fund's aggregate expenses paid
under the Plans for Class B Shares were $2,020,599 or 1.00% of the Class B
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for the following payments: $1,508,187 for commissions and
transaction fees paid to financial intermediaries in respect of sales of Class B
Shares of the Fund and $512,412 for fees paid to financial intermediaries for
servicing Class B Shareholders and administering the Class B Share Plans. For
the fiscal year ended August 31, 2005, the Fund's aggregate expenses paid under
the Plans for Class C Shares were $551,467 or 1.00% of the Class C Shares'
average daily net assets. Such expenses were paid to reimburse the Distributor
for the following payments: $37,391 for commissions and transaction fees paid to
financial intermediaries in respect of sales of Class C Shares of the Fund and
$514,076 for fees paid to financial intermediaries for servicing Class C
Shareholders and administering the Class C Share Plans.

In addition to reallowances or commissions described above, the Distributor
may from time to time implement programs under which an authorized dealer's
sales force may be eligible to win nominal awards for certain sales efforts or
under which the Distributor will reallow to any authorized dealer that sponsors
sales contests or recognition programs conforming to criteria established by the
Distributor, or participates in sales programs sponsored by the Distributor, an
amount not exceeding the total applicable sales charges on the sales generated
by the authorized dealer at the public offering price during such programs.
Also, the Distributor in its discretion may from time to time, pursuant to
objective criteria established by the Distributor, pay fees to, and sponsor
business seminars for, qualifying authorized dealers for certain services or
activities which are primarily intended to result in sales of shares of the Fund
or other Van Kampen funds. Fees may include payment for travel expenses,
including lodging, incurred in connection with trips taken by invited registered
representatives for meetings or seminars of a business nature.

The Adviser and/or the Distributor may pay compensation, out of their own
funds and not as an expense of the Fund, to Morgan Stanley DW and certain other
authorized dealers in connection with the sale or retention of Fund shares
and/or shareholder servicing. For example, the Adviser or the Distributor may
pay additional compensation to Morgan Stanley DW and to other authorized dealers
for the purpose of promoting the sale of Fund shares, providing the Fund and
other Van Kampen Funds with "shelf space" or a higher profile with the
authorized dealer's financial advisors and consultants, placing the Fund and
other Van Kampen Funds on the authorized dealer's preferred or recommended fund
list, granting the Distributor access to the authorized dealer's financial
advisors and consultants, providing assistance in training and educating the
authorized dealer's personnel, furnishing marketing support and other specified
services, maintaining share balances and/or for sub-accounting, administrative
or transaction processing services. Such payments are in addition to any
distribution fees, service fees and/or transfer agency fees that may be payable
by the Fund. The additional payments may be based on factors, including level of
sales (based on gross or net sales or some specified minimum sales or some other
similar criteria related to sales of the Fund and/or some or all other Van
Kampen funds), amount of assets invested by the authorized dealer's customers
(which could include current or aged assets of the Fund and/or some or all other
Van Kampen funds), the Funds advisory fees, some other agreed upon amount, or
other measures as determined from time to time by the Adviser and/or
Distributor.

B-33

With respect to Morgan Stanley DW financial advisors and intermediaries,
these payments currently include the following amounts: (1) for shares sold
through Morgan Stanley DW's Mutual Fund Network (excluding sales through Morgan
Stanley DW 401(k) platforms), (a) an amount equal to 0.20% of value (at the time
of sale) of gross sales of Fund shares and (b) for those shares purchased on or
after January 1, 2001, an ongoing annual fee in an amount up to 0.05% of the
value of such Fund shares held for a one-year period or more; and (2) for shares
sold through Morgan Stanley DW 401(k) platforms, an ongoing annual fee in an
amount up to 0.20% of the value of such Fund shares held.

With respect to other authorized dealers, these payments currently include
the following amounts: (1) other than sales through 401(k) platforms, (a) an
amount up to 0.25% of the value (at the time of sale) of gross sales of Fund
shares and (b) an ongoing annual fee in an amount up to 0.10% of the value of
such Fund shares; and (2) for shares sold through 401(k) platforms, an ongoing
annual fee in an amount up to 0.20% of the value of such Fund shares held. You
should review carefully any disclosure by your authorized dealer as to its
compensation.

The prospect of receiving, or the receipt of, such compensation, as
described above, by Morgan Stanley DW or other authorized dealers may provide
Morgan Stanley DW or other authorized dealers, and their representatives or
employees, with an incentive to favor sales of shares of the Fund over other
investment options with respect to which Morgan Stanley DW or an authorized
dealer does not receive additional compensation (or receives lower levels of
additional compensation). These payment arrangements, however, will not change
the price that an investor pays for shares of the Fund. Investors may wish to
take such payment arrangements into account when considering and evaluating any
recommendations relating to Fund shares.

The Distributor has entered into agreements with the following firms
whereby certain shares of the Fund will be offered pursuant to such firms'
retirement plan alliance program(s): (i) The Prudential Insurance Company of
America, (ii) Merrill Lynch, Pierce, Fenner & Smith Incorporated, (iii) Buck
Consultants, Inc., (iv) Vanguard Marketing Corporation (a wholly-owned
subsidiary of The Vanguard Group, Inc.), (v) American Century Retirement Plan
Services Inc., (vi) Fidelity Brokerage Services, Inc. & National Financial
Services Corporation, (vii) First Union National Bank, (viii) Franklin
Templeton, (ix) Great West Life & Annuity Insurance Company/Benefits Corp
Equities, Inc., (x) GoldK Investment Services, Inc., (xi) Huntington Bank, (xii)
AMVESCAP Retirement, Inc. (formerly Invesco Retirement and Benefit Services,
Inc.), (xiii) Lincoln National Life Insurance Company, (xiv) Morgan Stanley DW
Inc., (xv) National Deferred Compensation, (xvi) Wells Fargo, N.A. on behalf of
itself and its Affiliated Banks, (xvii) Smith Barney, Inc., (xviii) SunGard
Institutional Brokerage Inc., (xix) Union Bank of California, N.A., (xx) ABN
AMRO Trust Services Company, (xxi) ING Financial Advisers, LLC, (xxii) Northern
Trust Retirement Consulting, LLC, and (xxiii) MetLife Securities, Inc. Trustees
and other fiduciaries of retirement plans seeking to invest in multiple fund
families through a broker-dealer retirement plan alliance program should contact
the firms mentioned above for further information concerning the program(s)
including, but not limited to, minimum size and operational requirements as well
as the availability of Class A Shares at net asset value or other share classes.

TRANSFER AGENT

The Fund's transfer agent, shareholder service agent and dividend
disbursing agent is Van Kampen Investor Services Inc. The transfer agency fees
are determined through negotiations with the Fund and are approved by the Fund's
Board of Trustees. The transfer agency fees are based on competitive benchmarks.

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

The Adviser is responsible for decisions to buy and sell securities for the
Fund, the selection of brokers and dealers to effect the transactions and the
negotiation of prices and any brokerage commissions on such transactions. While
the Adviser will be primarily responsible for the placement of the Fund's
portfolio business, the policies and practices in this regard are subject to
review by the Fund's Board of Trustees.

B-34

As most transactions made by the Fund are principal transactions at net
prices, the Fund generally incurs little or no brokerage costs. The portfolio
securities in which the Fund invests are normally purchased directly from the
issuer or in the over-the-counter market from an underwriter or market maker for
the securities. Purchases from underwriters of portfolio securities include a
commission or concession paid by the issuer to the underwriter and purchases
from dealers serving as market makers include a spread or markup to the dealer
between the bid and asked price. Sales to dealers are effected at bid prices.
The Fund may also purchase certain money market instruments directly from an
issuer, in which case no commissions or discounts are paid, or may purchase and
sell listed securities on an exchange, which are effected through brokers who
charge a commission for their services.

The Adviser is responsible for placing portfolio transactions and does so
in a manner deemed fair and reasonable to the Fund and not according to any
formula. The primary consideration in all portfolio transactions is prompt
execution of orders in an effective manner at the most favorable price. In
selecting broker-dealers and in negotiating prices and any brokerage commissions
on such transactions, the Adviser considers the firm's reliability, integrity
and financial condition and the firm's execution capability, the size and
breadth of the market for the security, the size of and difficulty in executing
the order, and the best net price. There are many instances when, in the
judgment of the Adviser, more than one firm can offer comparable execution
services. In selecting among such firms, consideration may be given to those
firms which supply research and other services in addition to execution
services. The Adviser is authorized to pay higher commissions to brokerage firms
that provide it with investment and research information than to firms which do
not provide such services if the Adviser determines that such commissions are
reasonable in relation to the overall services provided. No specific value can
be assigned to such research services which are furnished without cost to the
Adviser. Since statistical and other research information is only supplementary
to the research efforts of the Adviser to the Fund and still must be analyzed
and reviewed by its staff, the receipt of research information is not expected
to reduce its expenses materially. The investment advisory fee is not reduced as
a result of the Adviser's receipt of such research services. Services provided
may include (a) furnishing advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; (b)
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody). Research
services furnished by firms through which the Fund effects its securities
transactions may be used by the Adviser in servicing all of its advisory
accounts; not all of such services may be used by the Adviser in connection with
the Fund.

The Adviser also may place portfolio transactions, to the extent permitted
by law, with brokerage firms affiliated with the Fund, the Adviser or the
Distributor and with brokerage firms participating in the distribution of the
Fund's shares if it reasonably believes that the quality of execution and the
commission are comparable to that available from other qualified firms.
Similarly, to the extent permitted by law and subject to the same considerations
on quality of execution and comparable commission rates, the Adviser may direct
an executing broker to pay a portion or all of any commissions, concessions or
discounts to a firm supplying research or other services.

The Adviser may place portfolio transactions at or about the same time for
other advisory accounts, including other investment companies. The Adviser seeks
to allocate portfolio transactions equitably whenever concurrent decisions are
made to purchase or sell securities for the Fund and another advisory account.
In some cases, this procedure could have an adverse effect on the price or the
amount of securities available to the Fund. In making such allocations among the
Fund and other advisory accounts, the main factors considered by the Adviser are
the respective sizes of the Fund and other advisory accounts, the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and opinions of the persons responsible
for recommending the investment.

Certain broker-dealers, through which the Fund may effect securities
transactions, are affiliated persons (as defined in the 1940 Act) of the Fund or
affiliated persons of such affiliates, including Morgan Stanley or its
subsidiaries. The Fund's Board of Trustees has adopted certain policies
incorporating the standards of
B-35

Rule 17e-1 issued by the SEC under the 1940 Act which require that the
commissions paid to affiliates of the Fund must be reasonable and fair compared
to the commissions, fees or other remuneration received or to be received by
other brokers in connection with comparable transactions involving similar
securities during a comparable period of time. The rule and procedures also
contain review requirements and require the Adviser to furnish reports to the
trustees and to maintain records in connection with such reviews. After
consideration of all factors deemed relevant, the trustees will consider from
time to time whether the advisory fee for the Fund will be reduced by all or a
portion of the brokerage commission paid to affiliated brokers.

Unless otherwise disclosed below, the Fund paid no commissions to
affiliated brokers during the last three fiscal years. The Fund paid the
following commissions to brokers during the fiscal years shown:

AFFILIATED
BROKERS
--------------
ALL MORGAN STANLEY
BROKERS DW INC.
------- --------------

Commissions Paid:
Fiscal year ended August 31, 2005......................... $ 103 $0
Fiscal year ended August 31, 2004......................... $27,092 $0
Fiscal year ended August 31, 2003......................... $ 155 $0

Fiscal Year 2005 Percentages:
Commissions with affiliate to total commissions...................... 0%
Value of brokerage transactions with affiliate to total
transactions...................................................... 0%

During the fiscal year ended August 31, 2005, the Fund paid no brokerage
commissions to brokers selected primarily on the basis of research services
provided to the Adviser.

SHAREHOLDER SERVICES

The Fund offers a number of shareholder services designed to facilitate
investment in its shares at little or no extra cost to the investor. Below is a
description of such services. The following information supplements the section
in the Fund's Prospectuses captioned "Shareholder Services."

INVESTMENT ACCOUNT

Each shareholder has an investment account under which the investor's
shares of the Fund are held by Investor Services, the Fund's transfer agent.
Investor Services performs bookkeeping, data processing and administrative
services related to the maintenance of shareholder accounts. Except as described
in the Prospectuses and this Statement of Additional Information, after each
share transaction in an account, the shareholder receives a statement showing
the activity in the account. Each shareholder who has an account in any of the
Van Kampen funds will receive statements quarterly from Investor Services
showing any reinvestments of dividends and capital gain dividends and any other
activity in the account since the preceding statement. Such shareholders also
will receive separate confirmations for each purchase or sale transaction other
than reinvestment of dividends and capital gain dividends and systematic
purchases or redemptions. Additional shares may be purchased at any time through
authorized dealers or by mailing a check and detailed instructions directly to
Investor Services.

SHARE CERTIFICATES

Generally, the Fund will not issue share certificates. However, upon
written or telephone request to the Fund, a share certificate will be issued
representing shares (with the exception of fractional shares) of the Fund. A
shareholder will be required to surrender such certificates upon an exchange or
redemption of the shares represented by the certificate. In addition, if such
certificates are lost the shareholder must write to Van Kampen Funds Inc., c/o
Investor Services, PO Box 947, Jersey City, New Jersey 07303-0947, requesting an
"Affidavit of Loss" and obtain a Surety Bond in a form acceptable to Investor
Services. On the date the letter is received, Investor Services will calculate
the fee for replacing the lost certificate equal to no more than 1.50% of the
net asset value of the issued shares, and bill the party to whom the replacement
certificate was mailed.

B-36

RETIREMENT PLANS

Eligible investors may establish individual retirement accounts ("IRAs");
SEP; 401(k) plans; 403(b)(7) plans in the case of employees of public school
systems and certain non-profit organizations; or other pension or profit sharing
plans. Documents and forms containing detailed information regarding these plans
are available from the Distributor.

AUTOMATED CLEARING HOUSE ("ACH") DEPOSITS

Shareholders can use ACH to have redemption proceeds up to $50,000
deposited electronically into their bank accounts. Redemption proceeds
transferred to a bank account via the ACH plan are available to be credited to
the account on the second business day following normal payment. To utilize this
option, the shareholder's bank must be a member of ACH. In addition, the
shareholder must fill out the appropriate section of the account application
form. The shareholder must also include a voided check or deposit slip from the
bank account into which redemption proceeds are to be deposited together with
the completed application. Once Investor Services has received the application
and the voided check or deposit slip, such shareholder's designated bank
account, following any redemption, will be credited with the proceeds of such
redemption. Once enrolled in the ACH plan, a shareholder may terminate
participation at any time by writing Investor Services or by calling (800)
847-2424 ((800) 421-2833 for the hearing impaired).

DIVIDEND DIVERSIFICATION

A shareholder may elect, by completing the appropriate section of the
account application form or by calling (800) 847-2424 ((800) 421-2833 for the
hearing impaired), to have all dividends and capital gain dividends paid on a
class of shares of the Fund invested into shares of the same class of any of the
Participating Funds (as defined in the Prospectuses) so long as the investor has
a pre-existing account for such class of shares of the other fund. Both accounts
must be of the same type, either non-retirement or retirement. If the accounts
are retirement accounts, they must both be for the same class and of the same
type of retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit
Sharing plans) and for the benefit of the same individual. If a qualified,
pre-existing account does not exist, the shareholder must establish a new
account subject to any requirements of the Participating Fund into which
distributions will be invested. Distributions are invested into the selected
Participating Fund, provided that shares of such Participating Fund are
available for sale, at its net asset value per share as of the payable date of
the distribution from the Fund.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a monthly, quarterly, semiannual or annual
withdrawal plan if the shareholder owns shares in a single account valued at
$10,000 or more at the next determined net asset value per share at the time the
plan is established. If a shareholder owns shares in a single account valued at
$5,000 or more at the next determined net asset value per share at the time the
plan is established, the shareholder may establish a quarterly, semiannual or
annual withdrawal plan. This plan provides for the orderly use of the entire
account, not only the income but also the capital, if necessary. Each payment
represents the proceeds of a redemption of shares on which any capital gain or
loss will be recognized. The plan holder may arrange for periodic checks in any
amount not less than $25. Such a systematic withdrawal plan may also be
maintained by an investor purchasing shares for a retirement plan and may be
established on a form made available by the Fund. See "Shareholder
Services -- Retirement Plans."

Class B Shareholders and Class C Shareholders who establish a systematic
withdrawal plan may redeem up to 12% annually of the shareholder's initial
account balance without incurring a contingent deferred sales charge. Initial
account balance means the amount of the shareholder's investment at the time the
election to participate in the plan is made.

Under the plan, sufficient shares of the Fund are redeemed to provide the
amount of the periodic withdrawal payment. Dividends and capital gain dividends
on shares held in accounts with systematic withdrawal plans are reinvested in
additional shares at the next determined net asset value per share. If periodic
withdrawals continuously exceed reinvested dividends and capital gain dividends,
the shareholder's
B-37

original investment will be correspondingly reduced and ultimately exhausted.
Redemptions made concurrently with the purchase of additional shares ordinarily
will be disadvantageous to the shareholder because of the duplication of sales
charges. Any gain or loss realized by the shareholder upon redemption of shares
is a taxable event. The Fund reserves the right to amend or terminate the
systematic withdrawal program upon 30 days' notice to its shareholders.

REINSTATEMENT PRIVILEGE

A Class A Shareholder or Class B Shareholder who has redeemed shares of the
Fund may reinstate any portion or all of the net proceeds of such redemption
(and may include that amount necessary to acquire a fractional share to round
off his or her purchase to the next full share) in Class A Shares of the Fund. A
Class C Shareholder who has redeemed shares of the Fund may reinstate any
portion or all of the net proceeds of such redemption (and may include that
amount necessary to acquire a fractional share to round off his or her purchase
to the next full share) in Class C Shares of the Fund with credit given for any
contingent deferred sales charge paid upon such redemption, provided that such
shareholder has not previously exercised this reinstatement privilege with
respect to Class C Shares of the Fund. Shares acquired in this manner will be
deemed to have the original cost and purchase date of the redeemed shares for
purposes of applying the contingent deferred sales charge (if any) to subsequent
redemptions. Reinstatements are made at the net asset value per share (without a
sales charge) next determined after the order is received, which must be made
within 180 days after the date of the redemption provided that shares of the
Fund are available for sale. Reinstatement at net asset value per share is also
offered to participants in eligible retirement plans for repayment of principal
(and interest) on their borrowings on such plans, provided that shares of the
Fund are available for sale. There is no reinstatement privilege for Class I
Shares of the Fund. Any gain or loss realized by the shareholder upon redemption
of shares is a taxable event regardless of whether the shareholder reinstates
all or any portion of the net proceeds of the redemption. Any such loss may be
disallowed, to the extent of the reinstatement, under the "wash sale" rules if
the reinstatement occurs within 30 days after such redemption. In that event,
the shareholder's adjusted tax basis in the shares acquired pursuant to the
reinstatement will be increased by the amount of the disallowed loss, and the
shareholder's holding period for such shares will include the holding period for
the redeemed shares.

REDEMPTION OF SHARES

Redemptions are not made on days during which the New York Stock Exchange
(the "Exchange") is closed. The right of redemption may be suspended and the
payment therefor may be postponed for more than seven days during any period
when (a) the Exchange is closed for other than customary weekends or holidays;
(b) the SEC determines trading on the Exchange is restricted; (c) the SEC
determines an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund to fairly determine the value of its net assets; or (d)
the SEC, by order, so permits.

In addition, if the Fund's Board of Trustees determines that payment wholly
or partly in cash would be detrimental to the best interests of the remaining
shareholders of the Fund, the Fund may pay the redemption proceeds in whole or
in part by a distribution-in-kind of portfolio securities held by the Fund in
lieu of cash in conformity with applicable rules of the SEC. A
distribution-in-kind may result in recognition by the shareholder of a gain or
loss for federal income tax purposes when such securities are distributed, and
the shareholder may have brokerage costs and a gain or loss for federal income
tax purposes upon the shareholder's disposition of such securities.

CONTINGENT DEFERRED SALES CHARGE-CLASS A

As described in the Fund's Class A Shares, Class B Shares and Class C
Shares Prospectus under "Purchase of Shares -- Class A Shares," there is no
sales charge payable on Class A Shares at the time of purchase on investments of
$1 million or more, but a contingent deferred sales charge ("CDSC-Class A") may
be imposed on certain redemptions made within eighteen months of purchase. With
respect to shares purchased prior to December 1, 2004, a CDSC-Class A may be
imposed on certain redemptions made within

B-38

one year of purchase. For purposes of the CDSC-Class A, when shares of a
Participating Fund are exchanged for shares of another Participating Fund, the
purchase date for the shares acquired by exchange will be assumed to be the date
on which shares were purchased in the fund from which the exchange was made. If
the exchanged shares themselves are acquired through an exchange, the purchase
date is assumed to carry over from the date of the original election to purchase
shares subject to a CDSC-Class A rather than a front-end load sales charge. In
determining whether a CDSC-Class A is payable, it is assumed that shares being
redeemed first are any shares in the shareholder's account not subject to a
CDSC-Class A, followed by shares held the longest in the shareholder's account.
The CDSC-Class A is assessed on an amount equal to the lesser of the then
current market value or the cost of the shares being redeemed. Accordingly, no
CDSC-Class A is imposed on increases in net asset value above the initial
purchase price. In addition, no CDSC-Class A is assessed on shares derived from
reinvestment of dividends or capital gain dividends.

WAIVER OF CONTINGENT DEFERRED SALES CHARGES

As described in the Fund's Class A Shares, Class B Shares and Class C
Shares Prospectus under "Redemption of Shares," redemptions of Class B Shares
and Class C Shares will be subject to a contingent deferred sales charge
("CDSC-Class B and C"). The CDSC-Class A (defined above) and CDSC-Class B and C
are waived on redemptions in the circumstances described below:

REDEMPTION UPON DEATH OR DISABILITY

The Fund will waive the CDSC-Class B and C on redemptions following the
death or disability of a Class B Shareholder and Class C Shareholder. An
individual will be considered disabled for this purpose if he or she meets the
definition thereof in Section 72(m)(7) of the Internal Revenue Code, which in
pertinent part defines a person as disabled if such person "is unable to engage
in any substantial gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result in death or to be
of long-continued and indefinite duration." While the Fund does not specifically
adopt the balance of the Code's definition which pertains to furnishing the
Secretary of Treasury with such proof as he or she may require, the Distributor
will require satisfactory proof of death or disability before it determines to
waive the CDSC-Class B and C.

In cases of death or disability, the CDSC-Class B and C will be waived
where the decedent or disabled person is either an individual shareholder or
owns the shares as a joint tenant with right of survivorship or is the
beneficial owner of a custodial or fiduciary account, and where the redemption
is made within one year of the death or initial determination of disability.
This waiver of the CDSC-Class B and C applies to a total or partial redemption,
but only to redemptions of shares held at the time of the death or initial
determination of disability.

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

The Fund will waive the CDSC-Class A and the CDSC-Class B and C when a
total or partial redemption is made in connection with certain distributions
from retirement plans. The CDSC-Class A and the CDSC-Class B and C will be
waived upon the tax-free rollover or transfer of assets to another retirement
plan invested in one or more Participating Funds; in such event, as described
below, the Fund will "tack" the period for which the original shares were held
on to the holding period of the shares acquired in the transfer or rollover for
purposes of determining what, if any, CDSC-Class A or CDSC-Class B and C is
applicable in the event that such acquired shares are redeemed following the
transfer or rollover. The CDSC-Class A and the CDSC-Class B and C also will be
waived on any redemption which results from the return of an excess contribution
or other contribution pursuant to Internal Revenue Code Section
408(d)(4) or (5), the return of excess contributions or excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2) or the financial hardship of the
employee pursuant to U.S. Treasury regulation Section 1.401(k)-1(d)(2). In
addition, the CDSC-Class A and the CDSC-Class B and C will be waived on any
minimum distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC-Class A or the CDSC-Class B and
C for any distributions from IRAs or other retirement plans not specifically
described above.

B-39

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

A shareholder may elect to participate in a systematic withdrawal plan with
respect to the shareholder's investment in the Fund. Under the systematic
withdrawal plan, a dollar amount of a participating shareholder's investment in
the Fund will be redeemed systematically by the Fund on a periodic basis, and
the proceeds sent to the designated payee of record. The amount to be redeemed
and frequency of the systematic withdrawals will be specified by the shareholder
upon his or her election to participate in the systematic withdrawal plan.

The amount of the shareholder's investment in the Fund at the time the
election to participate in the systematic withdrawal plan is made with respect
to the Fund is hereinafter referred to as the "initial account balance." If the
initial account balance is $1 million or more and the shareholder purchased
Class A Shares without a sales charge, those Class A Shares will, in most
instances, be subject to a CDSC-Class A if redeemed within eighteen months of
their date of purchase. However, if the shareholder participates in a systematic
withdrawal program, as described herein, any applicable CDSC-Class A will be
waived on those Class A Shares. The amount to be systematically redeemed from
the Fund without the imposition of a CDSC-Class B and C may not exceed a maximum
of 12% annually of the shareholder's initial account balance. The Fund reserves
the right to change the terms and conditions of the systematic withdrawal plan
and the ability to offer the systematic withdrawal plan.

NO INITIAL COMMISSION OR TRANSACTION FEE

The Fund will waive the CDSC-Class A in circumstances under which no
commission or transaction fee is paid to authorized dealers at the time of
purchase of Class A Shares. The Fund will waive the CDSC-Class B and C in
certain 401(k) plans in circumstances under which no commission or transaction
fee is paid to authorized dealers at the time of purchase of Class B Shares and
Class C Shares. See "Purchase of Shares -- Waiver of Contingent Deferred Sales
Charge" in the Class A Shares, Class B Shares and Class C Shares Prospectus.

INVOLUNTARY REDEMPTIONS OF SHARES

The Fund reserves the right to redeem shareholder accounts with balances
of less than a specified dollar amount as set forth in the Class A Shares, Class
B Shares and Class C Shares Prospectus. Prior to such redemptions, shareholders
will be notified in writing and allowed a specified period of time to purchase
additional shares to bring the value of the account up to the required minimum
balance. The Fund will waive the CDSC-Class A and the CDSC-Class B and C upon
such involuntary redemption.

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class A and the CDSC-Class B and C when a total
or partial redemption is made by the Adviser with respect to its investments in
the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

The Fund intends to qualify each year to be treated as a regulated
investment company under Subchapter M of the Internal Revenue Code. To qualify
as a regulated investment company, the Fund must comply with certain
requirements of the Code relating to, among other things, the sources of its
income and diversification of its assets.

If the Fund so qualifies and distributes each year to its shareholders at
least 90% of its investment company taxable income (generally including ordinary
income and net short-term capital gain, but not net capital gain, which is the
excess of net long-term capital gain over net short-term capital loss) and meets
certain other requirements, it will not be required to pay federal income taxes
on any income it distributes to shareholders. The Fund intends to distribute at
least the minimum amount necessary to satisfy the 90%

B-40

distribution requirement. The Fund will not be subject to federal income tax on
any net capital gain distributed to shareholders and designated as capital gain
dividends.

To avoid a nondeductible 4% excise tax, the Fund will be required to
distribute, by December 31st of each year, at least an amount equal to the sum
of (i) 98% of its ordinary income for such year, (ii) 98% of its capital gain
net income (the latter of which generally is computed on the basis of the
one-year period ending on October 31st of such year) and (iii) any amounts that
were not distributed in previous taxable years. For purposes of the excise tax,
any ordinary income or capital gain net income retained by, and subject to
federal income tax in the hands of, the Fund will be treated as having been
distributed.

If the Fund failed to qualify as a regulated investment company or failed
to satisfy the 90% distribution requirement in any taxable year, the Fund would
be taxed as an ordinary corporation on its taxable income (even if such income
were distributed to its shareholders) and all distributions out of earnings and
profits would be taxed to shareholders as ordinary income. In addition, the Fund
could be required to recognize unrealized gains, pay taxes and make
distributions (which could be subject to interest charges) before requalifying
for taxation as a regulated investment company.

Some of the Fund's investment practices are subject to special provisions
of the Code that, among other things, may (i) disallow, suspend or otherwise
limit the allowance of certain losses or deductions, (ii) convert lower taxed
long-term capital gain into higher taxed short-term capital gain or ordinary
income, (iii) convert an ordinary loss or a deduction into a capital loss (the
deductibility of which is more limited) and/or (iv) cause the Fund to recognize
income or gain without a corresponding receipt of cash with which to make
distributions in amounts necessary to satisfy the 90% distribution requirement
and the distribution requirements for avoiding income and excise taxes. The Fund
will monitor its transactions and may make certain tax elections to mitigate the
effect of these rules and prevent disqualification of the Fund as a regulated
investment company.

Investments of the Fund in securities issued at a discount or providing for
deferred interest or payment of interest in kind are subject to special tax
rules that will affect the amount, timing and character of distributions to
shareholders. For example, with respect to securities issued at a discount, the
Fund generally will be required to accrue as income each year a portion of the
discount and to distribute such income each year to maintain its qualification
as a regulated investment company and to avoid income and excise taxes. To
generate sufficient cash to make distributions necessary to satisfy the 90%
distribution requirement and to avoid income and excise taxes, the Fund may have
to dispose of securities that it would otherwise have continued to hold.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions of the Fund's investment company taxable income are taxable
to shareholders as ordinary income to the extent of the Fund's earnings and
profits, whether paid in cash or reinvested in additional shares. Distributions
of the Fund's net capital gains designated as capital gain dividends, if any,
are taxable to shareholders as long-term capital gains regardless of the length
of time shares of the Fund have been held by such shareholders. Distributions in
excess of the Fund's earnings and profits will first reduce the adjusted tax
basis of a shareholder's shares and, after such adjusted tax basis is reduced to
zero, will constitute capital gain to such shareholder (assuming such shares are
held as a capital asset).

The Jobs and Growth Tax Relief Reconciliation Act of 2003 (the "2003 Tax
Act") contains provisions that reduce the U.S. federal income tax rates on (1)
long-term capital gains received by individuals and (2) "qualified dividend
income" received by individuals from certain domestic and foreign corporations.
The reduced rates for capital gains generally apply to long-term capital gains
from sales or exchanges recognized on or after May 6, 2003, and cease to apply
for taxable years beginning after December 31, 2008. The reduced rate for
dividends generally applies to "qualified dividend income" received in taxable
years beginning after December 31, 2002, and ceases to apply for taxable years
beginning after December 31, 2008. Fund shareholders, as well as the Fund
itself, must also satisfy certain holding period and other requirements in order
for the reduced rate for dividends to apply. Because the Fund may invest a
portion of its assets in preferred stocks and securities convertible into common
stock, ordinary income dividends paid by the Fund

B-41

may be eligible for the reduced rate applicable to "qualified dividend income."
No assurance can be given as to what percentage of the ordinary income dividends
paid by the Fund will consist of "qualified dividend income." To the extent that
distributions from the Fund are designated as capital gain dividends, such
distributions will be eligible for the reduced rates applicable to long-term
capital gains. No assurance can be given that Congress will not repeal the
reduced U.S. federal income tax rates on long-term capital gains and "qualified
dividend income" prior to the scheduled expiration of these rates under the 2003
Tax Act. For a summary of the maximum tax rates applicable to capital gains
(including capital gain dividends), see "Capital Gains Rates" below.

Shareholders receiving distributions in the form of additional shares
issued by the Fund will be treated for federal income tax purposes as receiving
a distribution in an amount equal to the fair market value of the shares
received, determined as of the distribution date. The basis of such shares will
equal their fair market value on the distribution date.

The Fund will inform shareholders of the source and tax status of all
distributions promptly after the close of each calendar year. Distributions from
the Fund generally will not be eligible for the corporate dividends received
deduction.

Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in such month and paid during January of the
following year will be treated as having been distributed by the Fund and
received by the shareholders on the December 31st prior to the date of payment.
In addition, certain other distributions made after the close of a taxable year
of the Fund may be "spilled back" and treated as paid by the Fund (except for
purposes of the 4% excise tax) during such taxable year. In such case,
shareholders will be treated as having received such dividends in the taxable
year in which the distribution was actually made.

Income from investments in foreign securities received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries and
U.S. possessions. Such taxes will not be deductible or creditable by
shareholders. Tax conventions between certain countries and the United States
may reduce or eliminate such taxes.

Certain foreign currency gains or losses attributable to currency exchange
rate fluctuations are treated as ordinary income or loss. Such income or loss
may increase or decrease (or possibly eliminate) the Fund's income available for
distribution. If, under the rules governing the tax treatment of foreign
currency gains and losses, the Fund's income available for distribution is
decreased or eliminated, all or a portion of the dividends declared by the Fund
may be treated for federal income tax purposes as a return of capital or, in
some circumstances, as capital gains. Generally, a shareholder's adjusted tax
basis in Fund shares will be reduced to the extent that an amount distributed to
such shareholder is treated as a return of capital.

SALE OF SHARES

The sale of shares (including transfers in connection with a redemption or
repurchase of shares) may be a taxable transaction for federal income tax
purposes. Selling shareholders will generally recognize a gain or loss in an
amount equal to the difference between their adjusted tax basis in the shares
sold and the amount received. If the shares are held as a capital asset, the
gain or loss will be a capital gain or loss. For a summary of the maximum tax
rates applicable to capital gains, see "Capital Gains Rates" below. Any loss
recognized upon a taxable disposition of shares held for six months or less will
be treated as a long-term capital loss to the extent of any capital gain
dividends received with respect to such shares. For purposes of determining
whether shares have been held for six months or less, the holding period is
suspended for any periods during which the shareholder's risk of loss is
diminished as a result of holding one or more other positions in substantially
similar or related property or through certain options or short sales.

CAPITAL GAINS RATES

As a consequence of the 2003 Tax Act, the maximum tax rate applicable to
net capital gains recognized by individuals and other non-corporate taxpayers
investing in the Fund is (i) the same as the maximum

B-42

ordinary income tax rate for capital assets held for one year or less or (ii)
for net capital gains recognized on or after May 6, 2003, 15% for capital assets
held for more than one year (20% for net capital gains recognized in taxable
years beginning after December 31, 2008). The maximum long-term capital gains
rate for corporations is 35%.

WITHHOLDING ON PAYMENTS TO NON-U.S. SHAREHOLDERS

For purposes of this and the following paragraphs, a "Non-U.S. Shareholder"
shall include any shareholder who is not:

- an individual who is a citizen or resident of the United States;

- a corporation or partnership created or organized under the laws of the
United States or any state or political subdivision thereof;

- an estate, the income of which is subject to U.S. federal income taxation
regardless of its source; or

- a trust that (i) is subject to the primary supervision of a U.S. court
and which has one or more U.S. fiduciaries who have the authority to
control all substantial decisions of the trust, or (ii) has a valid
election in effect under applicable U.S. Treasury regulations to be
treated as a U.S. person.

A Non-U.S. Shareholder generally will be subject to withholding of U.S.
federal income tax at a 30% rate (or lower applicable treaty rate), rather than
backup withholding (discussed below), on dividends from the Fund (other than
capital gain dividends, interest-related dividends and short-term capital gain
dividends) that are not "effectively connected" with a U.S. trade or business
carried on by such shareholder, provided that the shareholder furnishes to the
Fund a properly completed Internal Revenue Service ("IRS") Form W-8BEN
certifying the shareholder's non-United States status.

The American Jobs Creation Act of 2004 (the "2004 Tax Act") permits the
Fund to pay "interest-related dividends" and "short-term capital gain dividends"
to Non-U.S. Shareholders without having to withhold on such dividends at the 30%
rate. Under the 2004 Tax Act, the amount of "interest-related dividends" that
the Fund may pay each year is limited to the amount of "qualified interest
income" received by the Fund during that year, less the amount of the Fund's
expenses properly allocable to such interest income. "Qualified interest income"
includes, among other items, interest paid on debt obligations of a U.S. issuer
and interest paid on deposits with U.S. banks, subject to certain exceptions.
Under the 2004 Tax Act, the amount of "short-term capital gain dividends" that
the Fund may pay each year generally is limited to the excess of the Fund's net
short-term capital gains over its net long-term capital losses, without any
reduction for the Fund's expenses allocable to such gains (with exceptions for
certain gains). The exemption from 30% withholding tax for "short-term capital
gain dividends" does not apply with respect to Non-U.S. Shareholders that are
present in the United States for more than 182 days during the taxable year. If
the Fund's income for a taxable year includes "qualified interest income" or net
short-term capital gains, the Fund may designate dividends as "interest-related
dividends" or "short-term capital gain dividends" by written notice mailed to
Non-U.S. Shareholders not later than 60 days after the close of the Fund's
taxable year. These provisions apply to dividends paid by the Fund with respect
to the Fund's taxable years beginning on or after January 1, 2005 and will cease
to apply to dividends paid by the Fund with respect to the Fund's taxable years
beginning after December 31, 2007. No assurance can be given that Congress will
not repeal these provisions prior to their scheduled expiration under the 2004
Tax Act.

Non-effectively connected capital gain dividends and gains realized from
the sale of shares will not be subject to U.S. federal income tax in the case of
(i) a Non-U.S. Shareholder that is a corporation and (ii) an individual Non-U.S.
Shareholder who is not present in the United States for more than 182 days
during the taxable year (assuming that certain other conditions are met).
However, certain Non-U.S. Shareholders may nonetheless be subject to backup
withholding and information reporting on capital gain dividends and redemption
proceeds paid to them upon the sale of their shares. See "Backup Withholding"
and "Information Reporting" below.

B-43

If income from the Fund or gains realized from the sale of shares are
effectively connected with a Non-U.S. Shareholder's U.S. trade or business, then
such amounts will not be subject to the 30% withholding described above, but
rather will be subject to U.S. federal income tax on a net basis at the tax
rates applicable to U.S. citizens and residents or domestic corporations. To
establish that income from the Fund or gains realized from the sale of shares
are effectively connected with a U.S. trade or business, a Non-U.S. Shareholder
must provide the Fund with a properly completed IRS Form W-8ECI certifying that
such amounts are effectively connected with the Non-U.S. Shareholder's U.S.
trade or business. Non-U.S. Shareholders that are corporations may also be
subject to an additional "branch profits tax" with respect to income from the
Fund that is effectively connected with a U.S. trade or business.

The tax consequences to a Non-U.S. Shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described in
this section. To claim tax treaty benefits Non-U.S. Shareholders will be
required to provide the Fund with a properly completed IRS Form W-8BEN
certifying their entitlement to the benefits. In addition, in certain cases
where payments are made to a Non-U.S. Shareholder that is a partnership or other
pass-through entity, both the entity and the persons holding an interest in the
entity will need to provide certification. For example, an individual Non-U.S.
Shareholder who holds shares in the Fund through a non-U.S. partnership must
provide an IRS Form W-8BEN to claim the benefits of an applicable tax treaty.
Non-U.S. Shareholders are advised to consult their advisers with respect to the
tax implications of purchasing, holding and disposing of shares of the Fund.

BACKUP WITHHOLDING

The Fund may be required to withhold federal income tax at a rate of 28%
(through 2010) ("backup withholding") from dividends and redemption proceeds
paid to non-corporate shareholders. This tax may be withheld from dividends paid
to a shareholder (other than a Non-U.S. Shareholder) if (i) the shareholder
fails to properly furnish the Fund with its correct taxpayer identification
number or to certify its non-U.S. status (in the case of a Non-U.S.
Shareholder), (ii) the IRS notifies the Fund that the shareholder has failed to
properly report certain interest and dividend income to the IRS and to respond
to notices to that effect or (iii) when required to do so, the shareholder fails
to certify that the taxpayer identification number provided is correct, that the
shareholder is not subject to backup withholding and that the shareholder is a
U.S. person (as defined for U.S. federal income tax purposes). Redemption
proceeds may be subject to backup withholding under the circumstances described
in (i) above.

Generally, dividends paid to Non-U.S. Shareholders that are subject to the
30% federal income tax withholding described above under "Withholding on
Payments to Non-U.S. Shareholders" are not subject to backup withholding. To
avoid backup withholding on capital gain dividends, interest-related dividends,
short-term capital gain dividends and redemption proceeds from the sale of
shares, Non-U.S. Shareholders must provide a properly completed IRS Form W-8BEN
certifying their non-United States status.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from payments made to a shareholder may be refunded or
credited against such shareholder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the IRS.

INFORMATION REPORTING

The Fund must report annually to the IRS and to each shareholder (other
than a Non-U.S. Shareholder) the amount of dividends, capital gain dividends or
redemption proceeds paid to such shareholder and the amount, if any, of tax
withheld pursuant to backup withholding rules with respect to such amounts. In
the case of a Non-U.S. Shareholder, the Fund must report to the IRS and such
shareholder the amount of dividends, capital gain dividends, interest-related
dividends, short-term capital gain dividends and redemption proceeds paid that
are subject to withholding (including backup withholding, if any) and the amount
of tax withheld, if any, with respect to such amounts. This information may also
be made available to the tax authorities in the Non-U.S. Shareholder's country
of residence.

B-44

GENERAL

The federal income tax discussion set forth above is for general
information only. Shareholders and prospective investors should consult their
advisers regarding the specific federal tax consequences of purchasing, holding
and disposing of shares of the Fund, as well as the effects of state, local and
foreign tax laws and any proposed tax law changes.

FUND PERFORMANCE

From time to time the Fund may advertise its total return for prior
periods. Any such advertisement would include at least average annual total
return quotations for one-year, five-year and ten-year periods (or life of the
Fund, if shorter). Other total return quotations, aggregate or average, over
other time periods may also be included.

The total return of the Fund for a particular period represents the
increase (or decrease) in the value of a hypothetical investment in the Fund
from the beginning to the end of the period. Total return is calculated by
subtracting the value of the initial investment from the ending value and
showing the difference as a percentage of the initial investment; the
calculation assumes the initial investment is made at the current maximum public
offering price (which includes the maximum sales charge for Class A Shares);
that all income dividends or capital gain dividends during the period are
reinvested in Fund shares at net asset value; and that any applicable contingent
deferred sales charge has been paid. The Fund's total return will vary depending
on market conditions, the securities comprising the Fund's portfolio, the Fund's
operating expenses and unrealized net capital gains or losses during the period.
Since Class A Shares of the Fund were offered at a maximum sales charge of 6.75%
prior to June 12, 1989, actual Fund total return would have been somewhat less
than that computed on the basis of the current maximum sales charge. Total
return is based on historical earnings and asset value fluctuations and is not
intended to indicate future performance. No adjustments are made to reflect any
income taxes payable by shareholders on dividends or capital gain dividends paid
by the Fund or to reflect that 12b-1 fees may have changed over time.

Average annual total return quotations are computed by finding the average
annual compounded rate of return over the period that would equate the initial
amount invested to the ending redeemable value.

Total return is calculated separately for Class A Shares, Class B Shares,
Class C Shares and Class I Shares of the Fund. Total return figures for Class A
Shares include the maximum sales charge. Total return figures for Class B Shares
and Class C Shares include any applicable contingent deferred sales charge.
Because of the differences in sales charges and distribution fees, the total
returns for each class of shares will differ.

The after-tax returns of the Fund may also be advertised or otherwise
reported. This is generally calculated in a manner similar to the computation of
average annual total returns discussed above, except that the calculation also
reflects the effect of taxes on returns.

The Fund may, in supplemental sales literature, advertise non-standardized
total return figures representing the cumulative, non-annualized total return of
each class of shares of the Fund from a given date to a subsequent given date.
Cumulative non-standardized total return is calculated by measuring the value of
an initial investment in a given class of shares of the Fund at a given time,
deducting the maximum initial sales charge, if any, determining the value of all
subsequent reinvested distributions, and dividing the net change in the value of
the investment as of the end of the period by the amount of the initial
investment and expressing the result as a percentage. Non-standardized total
return will be calculated separately for each class of shares. Non-standardized
total return calculations do not reflect the imposition of a contingent deferred
sales charge, and if any contingent deferred sales charge imposed at the time of
redemption were reflected, it would reduce the performance quoted.

In addition to total return information, the Fund may also advertise its
current "yield." Yield figures are based on historical earnings and are not
intended to indicate future performance. Yield is determined by analyzing the
Fund's net income per share for a 30-day (or one-month) period (which period
will be stated in

B-45

the advertisement), and dividing by the maximum offering price per share on the
last day of the period. A "bond equivalent" annualization method is used to
reflect a semiannual compounding.

For purposes of calculating yield quotations, net income is determined by a
standard formula prescribed by the SEC to facilitate comparison with yields
quoted by other investment companies. Net income computed for this formula
differs from net income reported by the Fund in accordance with generally
accepted accounting principles and from net income computed for federal income
tax reporting purposes. Thus the yield computed for a period may be greater or
less than the Fund's then current dividend rate.

The Fund's yield is not fixed and will fluctuate in response to prevailing
interest rates and the market value of portfolio securities, and as a function
of the type of securities owned by the Fund, portfolio maturity and the Fund's
expenses.

Yield quotations should be considered relative to changes in the net asset
value of the Fund's shares, the Fund's investment policies, and the risks of
investing in shares of the Fund. The investment return and principal value of an
investment in the Fund will fluctuate so that an investor's shares, when
redeemed, may be worth more or less than their original cost.

Yield and total return are calculated separately for Class A Shares, Class
B Shares, Class C Shares and Class I Shares of the Fund. Total return figures
for Class A Shares include the maximum sales charge. Total return figures for
Class B Shares and Class C Shares include any applicable contingent deferred
sales charge. Because of the differences in sales charges and distribution fees,
the total returns for each class of shares will differ.

From time to time, the Fund may include in its sales literature and
shareholder reports a quotation of the current "distribution rate" for each
class of shares of the Fund. Distribution rate is a measure of the level of
income and short-term capital gain dividends, if any, distributed for a
specified period. Distribution rate differs from yield, which is a measure of
the income actually earned by the Fund's investments, and from total return
which is a measure of the income actually earned by the Fund's investments plus
the effect of any realized and unrealized appreciation or depreciation of such
investments during a stated period. Distribution rate is, therefore, not
intended to be a complete measure of the Fund's performance. Distribution rate
may sometimes be greater than yield since, for instance, it may not include the
effect of amortization of bond premiums, and may include non-recurring
short-term capital gains and premiums from futures transactions engaged in by
the Fund. Distribution rates will be computed separately for each class of the
Fund's shares.

From time to time, the Fund's marketing materials may include an update
from the portfolio manager or the Adviser and a discussion of general economic
conditions and outlooks. The Fund's marketing materials may also show the Fund's
asset class diversification, top sector holdings and largest holdings. Materials
may also mention how the Distributor believes the Fund compares relative to
other Van Kampen funds. Materials may also discuss the Dalbar Financial Services
study from 1984 to 1994 which studied investor cash flow into and out of all
types of mutual funds. The ten-year study found that investors who bought mutual
fund shares and held such shares outperformed investors who bought and sold. The
Dalbar study conclusions were consistent regardless of whether shareholders
purchased their funds' shares in direct or sales force distribution channels.
The study showed that investors working with a professional representative have
tended over time to earn higher returns than those who invested directly. The
performance of the funds purchased by investors in the Dalbar study and the
conclusions based thereon are not necessarily indicative of future performance
of such funds or conclusions that may result from similar studies in the future.
The Fund may also be marketed on the internet.

In reports or other communications to shareholders or in advertising
material, the Fund may compare its performance with that of other mutual funds
as listed in the rankings or ratings prepared by Lipper Analytical Services,
Inc., CDA, Morningstar Mutual Funds or similar independent services which
monitor the performance of mutual funds with the Consumer Price Index, Salomon
Brothers Corporate Bond Index, Shearson Lehman Corporate Bond Index, Merrill
Lynch Corporate Master Index, Merrill Lynch Corporate and Government Index,
Bloomberg Financial Markets Indices, other appropriate indices of investment
securities, or with investment or savings vehicles. The performance information
may also include evaluations

B-46

of the Fund published by nationally recognized ranking or rating services and by
nationally recognized financial publications. Such comparative performance
information will be stated in the same terms in which the comparative data or
indices are stated. Such advertisements and sales material may also include a
yield quotation as of a current period. In each case, such total return and
yield information, if any, will be calculated pursuant to rules established by
the SEC and will be computed separately for each class of the Fund's shares. For
these purposes, the performance of the Fund, as well as the performance of other
mutual funds or indices, do not reflect sales charges, the inclusion of which
would reduce the Fund's performance. The Fund will include performance data for
each class of shares of the Fund in any advertisement or information including
performance data of the Fund.

The Fund may also utilize performance information in hypothetical
illustrations. For example, the Fund may, from time to time: (1) illustrate the
benefits of tax-deferral by comparing taxable investments to investments made
through tax-deferred retirement plans; (2) illustrate in graph or chart form, or
otherwise, the benefits of dollar cost averaging by comparing investments made
pursuant to a systematic investment plan to investments made in a rising market;
(3) illustrate allocations among different types of mutual funds for investors
at different stages of their lives; and (4) in reports or other communications
to shareholders or in advertising material, illustrate the benefits of
compounding at various assumed rates of return.

The Fund's Annual Report and Semiannual Report contain additional
performance information. A copy of the Annual Report or Semiannual Report may be
obtained without charge from our web site at www.vankampen.com or by calling or
writing the Fund at the telephone number or address printed on the cover of this
Statement of Additional Information.

CLASS A SHARES

The Fund's average annual total return assuming payment of the maximum
sales charge, for Class A Shares of the Fund for (i) the one-year period ended
August 31, 2005 was 1.85%, (ii) the five-year period ended August 31, 2005 was
1.20% and (iii) the ten-year period ended August 31, 2005 was 4.11%.

The Fund's yield with respect to Class A Shares for the 30-day period
ending August 31, 2005 was 6.10%. The Fund's current distribution rate with
respect to Class A Shares for the month ending August 31, 2005 was 6.68%.

The Fund's cumulative non-standardized total return, including payment of
the maximum sales charge, with respect to Class A Shares from October 2, 1978
(commencement of distribution of Class A Shares of the Fund) to August 31, 2005
was 559.64%.

The Fund's cumulative non-standardized total return, excluding payment of
the maximum sales charge, with respect to Class A Shares from October 2, 1978
(commencement of distribution of Class A Shares of the Fund) to August 31, 2005
was 592.76%.

The yield for Class A Shares is not fixed and will fluctuate in response to
prevailing interest rates and the market value of portfolio securities, and as a
function of the type of securities owned by the Fund, portfolio maturity and the
Fund's expenses.

CLASS B SHARES

The Fund's average annual total return for Class B Shares listed below
reflects the conversion of such shares into Class A Shares. Class B Shares
purchased before June 1, 1996, including Class B Shares received from
reinvestment of distributions through the dividend reinvestment plan on such
shares, automatically converted to Class A Shares six years after the end of the
calendar month in which the shares were purchased. Class B Shares purchased on
or after June 1, 1996, including Class B Shares received from reinvestment of
distributions through the dividend reinvestment plan on such shares,
automatically convert to Class A Shares eight years after the end of the
calendar month in which the shares were purchased.

B-47

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class B Shares of the Fund for (i) the one-year
period ended August 31, 2005 was 2.36%, (ii) the five-year period ended August
31, 2005 was 1.23% and (iii) the ten-year period ended August 31, 2005 was
4.13%.

The Fund's yield with respect to Class B Shares for the 30-day period
ending August 31, 2005 was 5.60%. The Fund's current distribution rate with
respect to Class B Shares for the month ending August 31, 2005 was 6.21%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to Class B Shares from July
2, 1992 (commencement of distribution of Class B Shares of the Fund) to August
31, 2005 was 101.42%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to Class B Shares from July
2, 1992 (commencement of distribution of Class B Shares of the Fund) to August
31, 2005 was 101.42%.

The yield for Class B Shares is not fixed and will fluctuate in response to
prevailing interest rates and the market value of portfolio securities, and as a
function of the type of securities owned by the Fund, portfolio maturity and the
Fund's expenses.

CLASS C SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class C Shares of the Fund for (i) the one-year
period ended August 31, 2005 was 5.18%, (ii) the five-year period ended August
31, 2005 was 1.37% and (iii) ten-year period ended August 31, 2005 was 3.80%.

The Fund's yield with respect to Class C Shares for the 30-day period
ending August 31, 2005 was 5.69%. The Fund's current distribution rate with
respect to Class B Shares for the month ending August 31, 2005 was 6.33%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to Class C Shares from July
6, 1993 (commencement of distribution of Class C Shares of the Fund) to August
31, 2005 was 66.13%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to Class C Shares from July
6, 1993 (commencement of distribution of Class C Shares of the Fund) to August
31, 2005 was 66.13%.

The yield for Class C Shares is not fixed and will fluctuate in response to
prevailing interest rates and the market value of portfolio securities, and as a
function of the type of securities owned by the Fund, portfolio maturity and the
Fund's expenses.

CLASS I SHARES

The Fund's average annual total return (non-annualized) for Class I Shares
of the Fund for the approximately five-month period from March 23, 2005
(commencement of distribution of Class I Shares of the Fund) to August 31, 2005
was 2.69%.

The Fund's yield with respect to Class I Shares for the 30-day period
ending August 31, 2005 was 6.65%.

The Fund's cumulative non-standardized total return with respect to Class I
Shares of the Fund from March 23, 2005 (commencement of distribution of Class I
Shares of the Fund) to August 31, 2005 was 2.69%.

The yield for Class I Shares is not fixed and will fluctuate in response to
prevailing interest rates and the market value of portfolio securities, and as a
function of the type of securities owned by the Fund, portfolio maturity and the
Fund's expenses.

B-48

These results are based on historical earnings and asset value fluctuations
and are not intended to indicate future performance. Such information should be
considered in light of the Fund's investment objective and policies as well as
the risks incurred in the Fund's investment practices.

OTHER INFORMATION

DISCLOSURE OF PORTFOLIO HOLDINGS

The Fund's Board of Trustees and the Adviser have adopted policies and
procedures regarding disclosure of portfolio holdings information (the
"Policy"). Pursuant to the Policy, information concerning the Fund's portfolio
holdings may be disclosed only if such disclosure is consistent with the
antifraud provisions of the federal securities laws and the fiduciary duties
owed by the Fund and the Adviser to the Fund's shareholders. The Fund and the
Adviser may not receive compensation or any other consideration (which includes
any agreement to maintain assets in the Fund or in other investment companies or
accounts managed by the Adviser or any affiliated person of the Adviser) in
connection with the disclosure of portfolio holdings information of the Fund.
The Fund's Policy is implemented and overseen by the Portfolio Holdings Review
Committee (the "PHRC"), which is described in more detail below.

Public Portfolio Holdings Information Disclosure Policy. Portfolio holdings
information will be deemed public when it has been posted to the Fund's public
web site. On its public web site, the Fund currently makes available:

- Calendar Quarters: Complete portfolio holdings as of the end of each
calendar quarter disclosed with a minimum lag time of 30 calendar days.

- Monthly: Top 10 (or top 15) largest portfolio holdings as of the end of
each month disclosed with a minimum lag time of 15 business days.

The Fund provides a complete schedule of portfolio holdings for the second and
fourth fiscal quarters in its Semiannual and Annual Reports, and for the first
and third fiscal quarters in its filings with the SEC on Form N-Q.

Non-Public Portfolio Holdings Information Policy. All portfolio holdings
information that has not been disseminated in a manner making it available to
investors generally as described above is considered non-public portfolio
holdings information for the purposes of the Policy. Pursuant to the Policy,
disclosing non-public portfolio holdings information to third parties may occur
only when the Fund has a legitimate business purpose for doing so and the
recipients of such information are subject to a duty of confidentiality, which
prohibits such recipients from disclosing or trading on the basis of the
non-public portfolio holdings information. Any disclosure of non-public
portfolio holdings information made to third parties must be approved by both
the Fund's Board of Trustees (or a designated committee thereof) and the PHRC.
The Policy provides for disclosure of non-public portfolio holdings information
to certain pre-authorized categories of entities, executing broker-dealers and
shareholders, in each case under specific restrictions and limitations described
below, and the Policy provides a process for approving any other entities.

Pre-Authorized Categories. Pursuant to the Policy, the Fund may disclose
non-public portfolio holdings information to certain third parties who fall
within pre-authorized categories. These third parties include fund rating
agencies, information exchange subscribers, consultants and analysts, portfolio
analytics providers, and service providers, provided that the third party
expressly agrees to maintain the non-public portfolio holdings information in
confidence and not to trade portfolio securities based on the non-public
portfolio holdings information. Subject to the terms and conditions of any
agreement between the Adviser or the Fund and the third party, if these
conditions for disclosure are satisfied, there shall be no restriction on the
frequency with which Fund non-public portfolio holdings information is released,
and no lag period shall apply. In addition, persons who owe a duty of trust or
confidence to the Fund or the Adviser (including legal counsel) may receive
non-public portfolio holdings information without entering into a non-disclosure
agreement. The PHRC is responsible for monitoring and reporting on such entities
to the Fund's Board of Trustees. Procedures to monitor the use of such
non-public portfolio holdings information may include requiring annual

B-49

certifications that the recipients have utilized such information only pursuant
to the terms of the agreement between the recipient and the Adviser and, for
those recipients receiving information electronically, acceptance of the
information will constitute reaffirmation that the third party expressly agrees
to maintain the disclosed information in confidence and not to trade portfolio
securities based on the material non-public portfolio holdings information.

Broker-Dealer Interest Lists. Pursuant to the Policy, the Adviser may
provide "interest lists" to broker-dealers who execute securities transactions
for the Fund. Interest lists may specify only the CUSIP numbers and/or ticker
symbols of the securities held in all registered management investment companies
advised by the Adviser or affiliates of the Adviser on an aggregate basis.
Interest lists will not disclose portfolio holdings on a fund by fund basis and
will not contain information about the number or value of shares owned by a
specified fund. The interest lists may identify the investment strategy to which
the list relates, but will not identify particular funds or portfolio
managers/management teams. Broker-dealers need not execute a non-disclosure
agreement to receive interest lists.

Shareholders In-Kind Distributions. The Fund's shareholders may, in some
circumstances, elect to redeem their shares of the Fund in exchange for their
pro rata share of the securities held by the Fund. In such circumstances,
pursuant to the Policy, such Fund shareholders may receive a complete listing of
the portfolio holdings of the Fund up to seven (7) calendar days prior to making
the redemption request provided that they represent orally or in writing that
they agree not to disclose or trade on the basis of the portfolio holdings
information.

Attribution Analyses. Pursuant to the Policy, the Fund may discuss or
otherwise disclose performance attribution analyses (i.e., mention the effects
of having a particular security in the portfolio) where such discussion is not
contemporaneously made public, provided that the particular holding has been
disclosed publicly. Any discussion of the analyses may not be more current than
the date the holding was disclosed publicly.

Transition Managers. Pursuant to the Policy, the Fund may disclose
portfolio holdings to transition managers, provided that the Fund has entered
into a non-disclosure or confidentiality agreement with the party requesting
that the information be provided to the transition manager and the party to the
non-disclosure agreement has, in turn, entered into a non-disclosure or
confidentiality agreement with the transition manager.

Other Entities. Pursuant to the Policy, the Fund or the Adviser may
disclose non-public portfolio holdings information to a third party who does not
fall within the pre-approved categories, and who are not executing
broker-dealers, shareholders receiving in-kind distributions, persons receiving
attribution analyses, or transition managers; however, prior to the receipt of
any non-public portfolio holdings information by such third party, the recipient
must have entered into a non-disclosure agreement and the disclosure arrangement
must have been approved by the PHRC and the Fund's Board of Trustees (or a
designated committee thereof). The PHRC will report to the Board of Trustees of
the Fund on a quarterly basis regarding any other approved recipients of
non-public portfolio holdings information.

PHRC and Board of Trustees Oversight. The PHRC, which consists of executive
officers of the Fund and the Adviser, is responsible for overseeing and
implementing the Policy and determining how portfolio holdings information will
be disclosed on an ongoing basis. The PHRC will periodically review and has the
authority to amend the Policy as necessary. The PHRC will meet at least
quarterly to (among other matters):

- address any outstanding issues relating to the Policy;

- monitor the use of information and compliance with non-disclosure
agreements by current recipients of portfolio holdings information;

- review non-disclosure agreements that have been executed with prospective
third parties and determine whether the third parties will receive
portfolio holdings information;

- generally review the procedures to ensure that disclosure of portfolio
holdings information is in the best interests of Fund shareholders; and

B-50

- monitor potential conflicts of interest between Fund shareholders, on the
one hand and those of the Adviser, the Distributor or affiliated persons
of the Fund, the Adviser or the Distributor, on the other hand, regarding
disclosure of portfolio holdings information.

The PHRC will regularly report to the Board of Trustees on the Fund's disclosure
of portfolio holdings information and the proceedings of PHRC meetings.

Ongoing Arrangements of Portfolio Holdings Information. The Adviser and/or
the Fund have entered into ongoing arrangements to make available public and/or
non-public information about the Fund's portfolio holdings. The Fund currently
may disclose portfolio holdings information based on ongoing arrangements to the
following pre-authorized parties:

NAME INFORMATION DISCLOSED FREQUENCY (1) LAG TIME
---- ---------------------- ------------------- --------------------

SERVICE PROVIDERS
State Street Bank and Trust
Company(*).................... Full portfolio Daily basis (2)
holdings
Institutional Shareholder
Services (ISS) (proxy voting
agent) (*).................... Full portfolio Twice a month (2)
holdings
FT Interactive Data Pricing
Service Provider (*).......... Full portfolio As needed (2)
holdings
Van Kampen Investor Services,
Inc. (*)...................... Full portfolio As needed (2)
holdings
David Hall (*).................. Full portfolio On a semi-annual (3)
holdings and fiscal basis
Windawi(*)...................... Full portfolio On a semi/annual (3)
holdings fiscal basis
FUND RATING AGENCIES
Lipper (*)...................... Full portfolio Monthly and Approximately 1 day
holdings quarterly basis after previous month
end and
approximately 30
days after quarter
end, respectively
Morningstar (**)................ Full portfolio Quarterly basis Approximately 30
holdings days after quarter
end
Standard & Poor's (*)........... Full portfolio Monthly As of previous month
holdings end
CONSULTANTS AND ANALYSTS
Arnerich Massena & Associates,
Inc. (*)...................... Top Ten and Full Quarterly basis (6) Approximately 10-12
portfolio holdings days after quarter
end
Bloomberg (**).................. Full portfolio Quarterly basis Approximately 30
holdings days after quarter
end
Callan Associates (*)........... Top Ten and Full Monthly and Approximately 10-12
portfolio holdings quarterly basis, days after
respectively (6) month/quarter end
Cambridge Associates (*)........ Top Ten and Full Quarterly basis (6) Approximately 10-12
portfolio holdings days after quarter
end

B-51

NAME INFORMATION DISCLOSED FREQUENCY (1) LAG TIME
---- ---------------------- ------------------- --------------------

CTC Consulting, Inc. (**)....... Top Ten and Full Quarterly basis Approximately 15
portfolio holdings days after quarter
end and
approximately 30
days after quarter
end, respectively
Evaluation Associates (*)....... Top Ten and Full Monthly and Approximately 10-12
portfolio holdings quarterly basis, days after
respectively (6) month/quarter end
Fund Evaluation Group (**)...... Top Ten portfolio Quarterly basis At least 15 days
holdings (4) after quarter end
Jeffrey Slocum & Associates
(*)........................... Full portfolio Quarterly basis (6) Approximately 10-12
holdings (5) days after quarter
end
Hammond Associates (**)......... Full portfolio Quarterly basis At least 30 days
holdings (5) after quarter end
Hartland & Co. (**)............. Full portfolio Quarterly basis At least 30 days
holdings (5) after quarter end
Hewitt Associates (*)........... Top Ten and Full Monthly and Approximately 10-12
portfolio holdings quarterly basis, days after
respectively (6) month/quarter end
Merrill Lynch (*)............... Full portfolio Monthly basis Approximately 1 day
holdings after previous month
end
Mobius (**)..................... Top Ten portfolio Monthly basis At least 15 days
holdings (4) after month end
Nelsons (**).................... Top Ten holdings (4) Quarterly basis At least 15 days
after quarter end
Prime Buchholz & Associates,
Inc. (**)..................... Full portfolio Quarterly basis At least 30 days
holdings(5) after quarter end
PSN (**)........................ Top Ten holdings (4) Quarterly basis At least 15 days
after quarter end
PFM Asset
Management LLC (*)............ Top Ten and Full Quarterly basis (6) Approximately 10-12
portfolio holdings days after quarter
end
Russell Investment
Group/Russell/ Mellon
Analytical
Services, Inc. (**)........... Top Ten and Full Monthly and At least 15 days
portfolio holdings quarterly basis after month end and
at least 30 days
after quarter end,
respectively
Stratford Advisory
Group, Inc. (*)............... Top Ten portfolio Quarterly basis (6) Approximately 10-12
holdings (7) days after quarter
end
Thompson Financial (**)......... Full portfolio Quarterly basis At least 30 days
holdings (5) after quarter end

B-52

NAME INFORMATION DISCLOSED FREQUENCY (1) LAG TIME
---- ---------------------- ------------------- --------------------

Watershed Investment
Consultants, Inc. (*)......... Top Ten and Full Quarterly basis (6) Approximately 10-12
portfolio holdings days after quarter
end
Yanni Partners (**)............. Top Ten portfolio Quarterly basis At least 15 days
holdings (4) after quarter end

------------------------------------

(*) This entity has agreed to maintain Fund non-public portfolio holdings
information in confidence and not to trade portfolio securities based on
the non-public portfolio holdings information.

(**) The Fund does not currently have a non-disclosure agreement in place with
this entity and therefore this entity can only receive publicly available
information.

(1) Dissemination of portfolio holdings information to entities listed above
may occur less frequently than indicated (or not at all).

(2) Information will typically be provided on a real time basis or as soon
thereafter as possible.

(3) As needed after the end of the semi-annual and/or annual period.

(4) Full portfolio holdings will also be provided upon request from time to
time on a quarterly basis, with at least a 30 day lag.

(5) Top Ten portfolio holdings will also be provided upon request from time to
time, with at least a 15 day lag.

(6) This information will also be provided upon request from time to time.

(7) Full portfolio holdings will also be provided upon request from time to
time.

The Fund may also provide Fund portfolio holdings information, as part of
its normal business activities, to persons who owe a duty of trust or confidence
to the Fund or the Adviser. These persons currently are (i) the Fund's
independent registered public accounting firm (as of the Fund's fiscal year end
and on an as needed basis), (ii) counsel to the Fund (on an as needed basis),
(iii) counsel to the independent trustees (on an as needed basis) and (iv)
members of the Board of Trustees (on an as needed basis).

CUSTODY OF ASSETS

Except for segregated assets held by a futures commission merchant pursuant
to rules and regulations promulgated under the 1940 Act, all securities owned by
the Fund and all cash, including proceeds from the sale of shares of the Fund
and of securities in the Fund's investment portfolio, are held by State Street
Bank and Trust Company, One Lincoln Street, Boston, Massachusetts 02111, as
custodian. The custodian also provides accounting services to the Fund.

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the Fund's independent registered public accounting
firm.

PROXY VOTING POLICY AND PROXY VOTING RECORD

The Board of Trustees believes that the voting of proxies on securities
held by the Fund is an important element of the overall investment process. As
such, the Board has delegated the responsibility to vote such proxies to the
Adviser. The following is a summary of the Adviser's Proxy Voting Policy ("Proxy
Policy").

The Adviser uses its best efforts to vote proxies on securities held in the
Fund as part of its authority to manage, acquire and dispose of Fund assets. In
this regard, the Adviser has formed a Proxy Review Committee ("Committee")
comprised of senior investment professionals that is responsible for creating
and implementing the Proxy Policy. The Committee meets monthly but may meet more
frequently as conditions warrant. The Proxy Policy provides that the Adviser
will vote proxies in the best interests of clients consistent

B-53

with the objective of maximizing long-term investment returns. The Proxy Policy
provides that the Adviser generally will vote proxies in accordance with
pre-determined guidelines contained in the Proxy Policy. The Adviser may vote in
a manner that is not consistent with the pre-determined guidelines, provided
that the vote is approved by the Committee. The Adviser generally will not vote
a proxy if it has sold the affected security between the record date and the
meeting date.

The Proxy Policy provides that, unless otherwise determined by the
Committee, votes will be cast in the manner described below:

- Generally, routine proposals will be voted in support of management.

- With regard to the election of trustees/directors, where no conflict
exists and where no specific governance deficiency has been noted, votes
will be cast in support of management's nominees.

- The Adviser will vote in accordance with management's recommendation with
respect to certain non-routine proposals (i.e., reasonable capitalization
changes, stock repurchase programs, stock splits, certain
compensation-related matters, certain anti-takeover measures, etc.).

- The Adviser will vote against certain non-routine proposals (i.e.,
unreasonable capitalization changes, establishment of cumulative voting
rights for the election of directors, requiring supermajority shareholder
votes to amend by-laws, indemnification of auditors, etc.)
(notwithstanding management support).

- The Adviser will vote in its discretion with respect to certain
non-routine proposals (i.e., mergers, acquisitions, take-overs,
spin-offs, etc.) which may have a substantive financial or best interest
impact on an issuer.

- The Adviser will vote for certain proposals it believes call for
reasonable charter provisions or corporate governance practices (i.e.,
requiring auditors to attend annual shareholder meetings, requiring that
members of compensation, nominating and audit committees be independent,
reducing or eliminating supermajority voting requirements, etc.).

- The Adviser will vote against certain proposals it believes call for
unreasonable charter provisions or corporate governance practices (i.e.,
proposals to declassify boards, proposals to require a company to prepare
reports that are costly to provide or that would require duplicative
efforts or expenditure that are of a non-business nature or would provide
no pertinent information from the perspective of institutional
shareholders, etc.).

- Certain other proposals (i.e., proposals requiring directors to own large
amounts of company stock to be eligible for election, proposals requiring
diversity of board membership relating to broad-based social, religious
or ethnic groups, etc.) generally are evaluated by the Committee based on
the nature of the proposal and the likely impact on shareholders.

While the proxy voting process is well-established in the United States and
other developed markets with a number of tools and services available to assist
an investment manager, voting proxies of non-U.S. companies located in certain
jurisdictions, particularly emerging markets, may involve a number of problems
that may restrict or prevent the Adviser's ability to vote such proxies. As a
result, non-U.S. proxies will be voted on a best efforts basis only, after
weighing the costs and benefits to the Fund of voting such proxies.

Conflicts of Interest. If the Committee determines that an issue raises a
material conflict of interest, or gives rise to a potential material conflict of
interest, the Committee will request a special committee to review, and
recommend a course of action with respect to, the conflict in question and that
special committee will have sole discretion to cast a vote.

Third Parties. To assist in its responsibility for voting proxies, the
Adviser may retain third-party services as experts in the proxy voting and
corporate governance area. These proxy research providers are referred to herein
as "Research Providers." The services provided to the Adviser by the Research
Providers include in-depth research, global issuer analysis, and voting
recommendations. While the Adviser may review and utilize recommendations made
by the Research Providers in making proxy voting decisions, it is in no way
obligated

B-54

to follow such recommendations. In addition to research, the Research Providers
provide vote execution, reporting, and recordkeeping. The Committee carefully
monitors and supervises the services provided by the Research Providers.

Further Information. A copy of the Proxy Policy, as well as the Fund's
most recent proxy voting record filed with the SEC, are available without charge
on our web site at www.vankampen.com. The Fund's proxy voting record is also
available without charge on the SEC's web site at www.sec.gov.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

An independent registered public accounting firm for the Fund performs an
annual audit of the Fund's financial statements. The Fund's Board of Trustees
has engaged Ernst & Young LLP, located at 233 South Wacker Drive, Chicago,
Illinois 60606, to be the Fund's independent registered public accounting firm.

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom LLP.

FINANCIAL STATEMENTS

The audited financial statements of the Fund are incorporated herein by
reference to the Annual Report to shareholders of the Fund dated August 31,
2005. The Annual Report may be obtained by following the instructions on the
cover of this Statement of Additional Information. The Annual Report is included
as part of the Fund's filing on Form N-CSR as filed with the SEC on October 28,
2005. The Annual Report may be reviewed and copied at the SEC's Public Reference
Room in Washington, DC or on the EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the operation of the SEC's Public Reference
Room may be obtained by calling the SEC at (202) 551-8090. You can also request
copies of these materials, upon payment of a duplicating fee, by electronic
request at the SEC's e-mail address (publicinfo@sec.gov) or by writing the
Public Reference Section of the SEC, Washington, DC 20549-0102.

B-55

PART C: OTHER INFORMATION

ITEM 23. EXHIBITS.

(a)(1) First Amended and Restated Agreement and Declaration of
Trust (36)
(2) First Certificate of Amendment (36)
(3) Second Certificate of Amendment (41)
(4) Fourth Amended and Restated Certificate of Designation (51)
(b) Amended and Restated Bylaws (36)
(c)(1) Specimen Class A Shares Certificate (40)
(2) Specimen Class B Shares Certificate (40)
(3) Specimen Class C Shares Certificate (40)
(4) Specimen Class I Shares Certificate (49)
(d)(1) Investment Advisory Agreement (40)
(2) Amendment Number One to the Investment Advisory Agreement+
(e)(1) Distribution and Service Agreement (40)
(2) Form of Dealer Agreement (47)
(f)(1) Form of Trustee Deferred Compensation Plan (43)
(2) Form of the Trustee Retirement Plan (43)
(g)(1)(a) Custodian Contract (40)
(b) Amendment dated May 24, 2001 to the Custodian Contract (46)
(c) Amendment dated October 3, 2005 to the Custodian Contract+
(2) Transfer Agency and Service Agreement (40)
(h)(1) Data Access Services Agreement (38)
(2)(a) Fund Accounting Agreement (40)
(b) Amendment to Fund Accounting Agreement (47)
(i)(1) Opinion and Consent of Skadden, Arps, Slate, Meagher & Flom
LLP (49)
(2) Consent of Skadden, Arps, Slate, Meagher & Flom LLP+
(j) Consent of Ernst & Young LLP+
(k) Not Applicable
(l) Not Applicable
(m)(1) Plan of Distribution pursuant to Rule 12b-1 (38)
(2) Form of Shareholder Assistance Agreement (38)
(3) Form of Administrative Services Agreement (38)
(4) Form of Shareholder Servicing Agreement (46)
(5) Amended and Restated Service Plan (46)
(n) Third Amended and Restated Multi-Class Plan (49)
(p)(1) Code of Ethics of the Investment Adviser and Distributor
(49)
(2) Code of Ethics of the Fund (44)
(q) Power of Attorney+
(z)(1) List of certain investment companies in response to Item
27(a)+
(2) List of officers and directors of Van Kampen Funds Inc. in
response to Item 27(b)+

-------------------------

(36) Incorporated herein by reference to Post-Effective Amendment No. 36 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 22, 1995.

(38) Incorporated herein by reference to Post-Effective Amendment No. 38 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 26, 1996.

C-1

(40) Incorporated herein by reference to Post-Effective Amendment No. 40 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 24, 1997.

(41) Incorporated herein by reference to Post-Effective Amendment No. 41 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
October 22, 1998.

(43) Incorporated herein by reference to Post-Effective Amendment No. 43 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 23, 1999.

(44) Incorporated herein by reference to Post-Effective Amendment No. 44 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 22, 2000.

(46) Incorporated herein by reference to Post-Effective Amendment No. 46 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 20, 2002.

(47) Incorporated herein by reference to Post-Effective Amendment No. 47 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 19, 2003.

(49) Incorporated herein by reference to Post-Effective Amendment No. 49 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
August 27, 2004.

(51) Incorporated herein by reference to Post-Effective Amendment No. 51 to
Registrant's Registration Statement on Form N-1A, File No. 2-62115, filed
December 29, 2004.

+ Filed herewith.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

See the Statement of Additional Information.

ITEM 25. INDEMNIFICATION.

Pursuant to Del. Code Ann. Title 12 Section 3817, a Delaware statutory
trust may provide in its governing instrument for the indemnification of its
officers and trustees from and against any and all claims and demands
whatsoever.

Reference is made to Article 8, Section 8.4 of the Registrant's First
Amended and Restated Agreement and Declaration of Trust, as amended (the
"Agreement and Declaration of Trust"). Article 8; Section 8.4 of the First
Amended and Restated Agreement and Declaration of Trust provides that each
officer and trustee of the Registrant shall be indemnified by the Registrant
against all liabilities incurred in connection with the defense or disposition
of any action, suit or other proceeding, whether civil or criminal, in which the
officer or trustee may be or may have been involved by reason of being or having
been an officer or trustee, except that such indemnity shall not protect any
such person against a liability to the Registrant or any shareholder thereof to
which such person would otherwise be subject by reason of (i) not acting in good
faith in the reasonable belief that such person's actions were not in the best
interests of the Trust, (ii) willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties involved in the conduct of his or her office or
(iii) for a criminal proceeding, not having a reasonable cause to believe that
such conduct was unlawful (collectively, "Disabling Conduct"). Absent a court
determination that an officer or trustee seeking indemnification was not liable
on the merits or guilty of Disabling Conduct in the conduct of his or her
office, the decision by the Registrant to indemnify such person must be based
upon the reasonable determination of independent counsel or non-party
independent trustees, after review of the facts, that such officer or trustee is
not guilty of Disabling Conduct in the conduct of his or her office.

The Registrant has purchased insurance on behalf of its officers and
trustees protecting such persons from liability arising from their activities as
officers or trustees of the Registrant. The insurance does not protect or
purport to protect such persons from liability to the Registrant or to its
shareholders to which such officer or trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their office.

C-2

Conditional advancing of indemnification monies may be made if the trustee
or officer undertakes to repay the advance unless it is ultimately determined
that he or she is entitled to the indemnification and only if the following
conditions are met: (1) the trustee or officer provides a security for the
undertaking; (2) the Registrant is insured against losses arising from lawful
advances; or (3) a majority of a quorum of the Registrant's disinterested,
non-party trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that a recipient of
the advance ultimately will be found entitled to indemnification.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by the trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.

Pursuant to Section 7 of the Distribution and Service Agreement, the
Registrant agrees to indemnify and hold harmless Van Kampen Funds Inc. (the
"Distributor") and each of its trustees and officers and each person if any, who
controls the Distributor within the meaning of Section 15 of the 1933 Act
against any loss, liability, claim damages or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damages,
or expense and reasonable counsel fees) arising by reason of any person
acquiring any shares, based upon the ground that the Registration Statement,
prospectus, shareholder reports or other information filed or made public by the
Registrant (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements not misleading under the 1933 Act, or
any other statute or the common law. The Registrant does not agree to indemnify
the Distributor or hold it harmless to the extent that the statement or omission
was made in reliance upon, and in conformity with, information furnished to the
Registrant by or on behalf of the Distributor. In no case is the indemnity of
the Registrant in favor of the Distributor or any person indemnified to be
deemed to protect the Distributor or any person against any liability to the
Fund or its security holders to which the Distributor or any person against any
liability to the Fund or its security holders to which the Distributor or such
person would otherwise be subject by reason of willful misfeasance, bad faith or
gross negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the agreement.

Pursuant to the agreement by which Van Kampen Investor Services Inc.
("Investor Services") is appointed transfer agent of the Fund, the Registrant
agrees to indemnify and hold Investor Services harmless against any losses,
damages, costs, charges, payments, liabilities and expenses (including
reasonable counsel fees) arising out of or attributable to:

(1) the performance of Investor Services under the agreement provided that
Investor Services acted in good faith with due diligence and without negligence
or willful misconduct.

(2) reliance by Investor Services on, or reasonable use by, Investor
Services of information, records and documents which have been prepared on
behalf of, or have been furnished by, the Fund, or the carrying out by Investor
Services of any instructions or requests of the Fund.

(3) the offer or sale of the Fund's shares in violation of any federal or
state law or regulation or ruling by any federal agency unless such violation
results from any failure by Investor Services to comply with written
instructions from the Fund that such offers or sales were not permitted under
such law, rule or regulation.

(4) the refusal of the Fund to comply with terms of the agreement, or the
Fund's lack of good faith, negligence or willful misconduct or breach of any
representation or warranty made by the Fund under the

C-3

agreement provided that if the reason for such failure is attributable to any
action of the Fund's investment adviser or distributor or any person providing
accounting or legal services to the Fund, Investor Services only will be
entitled to indemnification if such entity is otherwise entitled to the
indemnification from the Fund.

See also "Investment Advisory Agreement" in the Statement of Additional
Information.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

See "Investment Advisory Services" in the Prospectuses and "Trustees and
Officers" and "Investment Advisory Agreement" in the Statement of Additional
Information for information regarding the business of Van Kampen Asset
Management (the "Adviser"). For information as to the business, profession,
vocation and employment of a substantial nature of each of the directors and
officers of the Adviser, reference is made to the Adviser's current Form ADV
(File No. 801-1669) filed under the Investment Advisers Act of 1940, as amended,
incorporated herein by reference.

ITEM 27. PRINCIPAL UNDERWRITERS.

(a) The sole principal underwriter is Van Kampen Funds Inc. (the "Distributor")
which acts as principal underwriter for certain investment companies and
unit investment trusts. See Exhibit (z)(1) incorporated herein.

(b) The Distributor, which is an affiliated person of the Registrant, is the
only principal underwriter for the Registrant. The name, principal business
address and position and office with the Distributor of its directors and
officers are disclosed in Exhibit (z)(2). Except as disclosed under the
heading "Trustees and Officers" in Part B of this Registration Statement or
Exhibit (z)(2), none of such persons has any position or office with
Registrant.

ITEM 28. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents of the Registrant required by
Section 31(a) of the Investment Company Act of 1940, as amended, and the rules
promulgated thereunder to be maintained (i) by the Registrant will be maintained
at its offices located at 1 Parkview Plaza, Oakbrook Terrace, Illinois
60181-5555, or at Van Kampen Investor Services Inc., Harborside Financial
Center, Plaza 2, Jersey City, New Jersey 07303-0947, or at the State Street Bank
and Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts 02171; (ii)
by the Adviser, will be maintained at its offices located at 1 Parkview Plaza,
Oakbrook Terrace, Illinois 60181-5555; and (iii) by Van Kampen Funds Inc., the
principal underwriter, will be maintained at its offices located at 1 Parkview
Plaza, Oakbrook Terrace, Illinois 60181-5555.

ITEM 29. MANAGEMENT SERVICES.

Not applicable.

ITEM 30. UNDERTAKINGS.

Not applicable.

C-4

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended, the Registrant,
VAN KAMPEN HIGH YIELD FUND, certifies that it meets all of the requirements for
effectiveness of this Amendment to the Registration Statement pursuant to Rule
485(b) under the 1933 Act and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of New York, and State of New York, on the 21st day of
December, 2005.

VAN KAMPEN HIGH YIELD FUND

By: /s/ AMY R. DOBERMAN

---------------------------------------

Amy R. Doberman, Vice President

Pursuant to the requirements of the 1933 Act, this Amendment to the
Registration Statement has been signed on December 21, 2005 by the following
persons in the capacities indicated:

SIGNATURES TITLES
---------- ------

Principal Executive Officer:
/s/ RONALD E. ROBISON* President and Principal Executive Officer
-----------------------------------------------------
Ronald E. Robison

Principal Financial Officer:

/s/ PHILLIP G. GOFF* Chief Financial Officer and Treasurer
-----------------------------------------------------
Phillip G. Goff

Trustees:

/s/ DAVID C. ARCH* Trustee
-----------------------------------------------------
David C. Arch

/s/ JERRY D. CHOATE* Trustee
-----------------------------------------------------
Jerry D. Choate

/s/ ROD DAMMEYER* Trustee
-----------------------------------------------------
Rod Dammeyer

/s/ LINDA HUTTON HEAGY* Trustee
-----------------------------------------------------
Linda Hutton Heagy

/s/ R. CRAIG KENNEDY* Trustee
-----------------------------------------------------
R. Craig Kennedy

/s/ HOWARD J KERR* Trustee
-----------------------------------------------------
Howard J Kerr

/s/ JACK E. NELSON* Trustee
-----------------------------------------------------
Jack E. Nelson

/s/ HUGO F. SONNENSCHEIN* Trustee
-----------------------------------------------------
Hugo F. Sonnenschein

/s/ WAYNE W. WHALEN* Trustee
-----------------------------------------------------
Wayne W. Whalen

/s/ SUZANNE H. WOOLSEY* Trustee
-----------------------------------------------------
Suzanne H. Woolsey
------------

* Signed by Amy R. Doberman pursuant to a power of attorney filed herewith.

December 21, 2005
/s/ AMY R. DOBERMAN
-----------------------------------------------------
Amy R. Doberman
Attorney-in-Fact

VAN KAMPEN HIGH YIELD FUND

INDEX TO EXHIBITS TO POST-EFFECTIVE AMENDMENT NO. 52 TO FORM N-1A

AS SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION

EXHIBIT
NUMBER EXHIBIT
------- -------

(d)(2) Amendment Number One to the Investment Advisory Agreement
(g)(1)(c) Amendment dated October 3, 2005 to the Custodian Contract
(i)(2) Consent of Skadden, Arps, Slate, Meagher & Flom LLP
(j) Consent of Ernst & Young LLP
(q) Power of Attorney
(z)(1) List of certain investment companies in response to Item
27(a)
(2) List of officers and directors of Van Kampen Funds Inc. in
response to Item 27(b)