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VAN KAMPEN SENIOR FLOATING RATE FUND
SUPPLEMENT DATED MAY 12, 2000
TO THE
PROSPECTUS DATED DECEMBER 10, 1999,
SUPERCEDING THE SUPPLEMENT DATED APRIL 24, 2000
The Prospectus is hereby supplemented as follows:
The information on the inside back cover of the Prospectus is hereby
supplemented by adding the following:
Independent Accountants
Deloitte & Touche LLP
Two Prudential Plaza
180 North Stetson
Chicago, IL 60601-6710
RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
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VAN KAMPEN SENIOR FLOATING RATE FUND
SUPPLEMENT DATED MAY 12, 2000
TO THE
STATEMENT OF ADDITIONAL INFORMATION DATED DECEMBER 10, 1999,
SUPERCEDING SUPPLEMENTS DATED JANUARY 31, 2000 AND APRIL 24, 2000
(1) The section of the Statement of Additional Information entitled "NET
ASSET VALUE" is hereby deleted and replaced with the following:
NET ASSET VALUE
The net asset value per share of the Fund's Shares is determined by
calculating the total value of the Fund's assets, deducting its total
liabilities, and dividing the result by the number of Shares outstanding. The
net asset value will be computed on each business day as of 5:00 p.m. Eastern
time. The Fund reserves the right to calculate the net asset value more
frequently if deemed desirable.
Senior Loans will be valued by the Fund following guidelines established
and periodically reviewed by the Fund's Board of Trustees. Subject to criteria
established by the Fund's Board of Trustees about the availability and
reliability of market indicators obtained from independent pricing sources,
certain Senior Loans will be valued at the mean of bid and ask market indicators
supplied by independent sources approved by the Fund's Board of Trustees. All
other Senior Loans will be valued by considering a number of factors including
consideration of market indicators, transactions in instruments which the
Adviser believes may be comparable (including comparable credit quality,
interest rate, interest rate redetermination period and maturity), the credit
worthiness of the Borrower, the current interest rate, the period until next
interest rate redetermination and the maturity of such Senior Loan interests.
Consideration of comparable instruments may include commercial paper, negotiable
certificates of deposit and short-term variable rate securities which have
adjustment periods comparable to the Senior Loan interests in the Fund's
portfolio. The fair value of Senior Loans are reviewed and approved by the
Fund's Valuation Committee and by the Fund's Trustees. To the extent that an
active secondary trading market in Senior Loan interests develops to a reliable
degree, the Fund may rely to an increasing extent on market prices and
quotations in valuing Senior Loan interests in the Fund's portfolio. The Fund
and Trustees will continue to monitor developments in the Senior Loan market and
will make modifications to the current valuation methodology as deemed
appropriate.
It is expected that the Fund's net asset value will fluctuate as a function
of interest rate and credit factors. Because of the short-term, adjustable rate
nature of such instruments held by the Fund, however, the Fund's net asset value
is expected to fluctuate less in response to changes in interest rates than the
net asset values of investment companies with portfolios consisting primarily of
traditional longer-term, fixed-income securities. In light of the senior nature
of Senior Loan interests that may be included in the Fund's portfolio and taking
into account the Fund's access to non-public information with respect to
Borrowers relating to such Senior Loans interests, the Fund does not currently
believe that consideration on a systematic basis of ratings provided by any
nationally recognized statistical rating organization or price fluctuations with
respect to long-or short-term debt of such Borrowers subordinate to the Senior
Loans of such Borrowers is necessary for a determination of the value of such
Senior Loan interests. Accordingly, the Fund generally will not systematically
consider (but may consider in certain instances) and, in any event, will not
rely upon such ratings or price fluctuations in determining the value of Senior
Loan interests in the Fund's portfolio.
Securities other than Senior Loans held in the Fund's portfolio (other than
short-term obligations, but including listed issues) may be valued on the basis
of prices furnished by one or more pricing services that determine prices for
normal, institutional-size trading units of such securities using market
information, transactions for comparable securities and various relationships
between securities that are generally recognized by institutional traders. In
certain circumstances, portfolio securities will be valued at the last sale
price on the exchange that is the primary market for the securities, or the last
quoted bid price for those securities for which the over-the-counter market is
the primary market or for listed securities in which there were no sales during
the day. The value of interest rate swaps will be determined in accordance with
a discounted present value formula and then confirmed by obtaining a bank
quotation.
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Short-term obligations held by the Fund that mature in 60 days or less are
valued at amortized cost, if their original term to maturity when acquired by
the Fund was 60 days or less, or are valued at amortized cost using their value
on the 61st day prior to maturity, if their original term to maturity when
acquired by the Fund was more than 60 days, unless in each case this is
determined not to represent fair value. Repurchase agreements will be valued at
cost plus accrued interest. Securities for which there exist no price quotations
or valuations and all other assets are valued at fair value as determined in
good faith by or on behalf of the Trustees.
Through December 31, 1999, the Fund's net asset value has ranged from a
high of $10.00 to a low of $9.93 since its commencement of investment operations
on December 19, 1997.
(2) The Statement of Additional Information is hereby supplemented as
follows:
INDEPENDENT ACCOUNTANTS
Independent accountants for the Fund perform an annual audit of the Fund's
financial statements. The Fund's Board of Trustees has engaged Deloitte & Touche
LLP, located at Two Prudential Plaza, 180 North Stetson, Chicago, Illinois
60601-6710, to be the Fund's independent accountants.
KPMG LLP, located at 303 West Wacker Drive, Chicago, Illinois 60601
("KPMG"), ceased being the Fund's independent accountants effective April 14,
2000. The cessation of the client-auditor relationship between the Fund and KPMG
was based solely on a possible future business relationship by KPMG with an
affiliate of the Fund's investment adviser.
(3) The section of the Statement of Additional Information entitled
"Trustees and Officers" is hereby amended by deleting all information pertaining
to Peter W. Hegel, effective May 31, 2000.
RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
