VAN KAMPEN FOCUS PORTFOLIOS SERIES 242, 487, 2000-07-18

VAN KAMPEN FOCUS PORTFOLIOS SERIES 242
487, 2000-07-18

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MEMORANDUM OF CHANGES
VAN KAMPEN FOCUS PORTFOLIOS, SERIES 242

The Prospectus filed with Amendment No. 1 of the Registration Statement
on Form S-6 has been revised to reflect information regarding the deposit of Van
Kampen Focus Portfolios, Series 242 on July 18, 2000. An effort has been made to
set forth below each of the major changes and also to reflect the same by
blacklining the marked counterparts of the Prospectus submitted with the
Amendment.

Cover Page. The date of the Prospectus has been completed.

Pages 2-3. "The Summary of Essential Financial Information" section and "Fee
Table" have been completed.

Pages 4-18. Revisions have been made and the portfolios have been completed.

Pages 19-37. The descriptions of the Securities issuers have been completed.

Pages 38-40. The Report of Independent Certified Public Accountants and
Statements of Condition have been completed.

FILE NO. 333-39880
CIK #1104595

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004

Amendment No. 1
to
Form S-6

For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.

A. Exact Name of Trust: VAN KAMPEN FOCUS PORTFOLIOS, SERIES 242

B. Name of Depositor: VAN KAMPEN FUNDS INC.

C. Complete address of Depositor's principal executive offices:

One Parkview Plaza
Oakbrook Terrace, Illinois 60181

D. Name and complete address of agents for service:

CHAPMAN AND CUTLER VAN KAMPEN FUNDS INC.
Attention: Mark J. Kneedy Attention: A. Thomas Smith III, General Counsel
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181

E. Title of securities being registered: Units of proportionate interest

F. Approximate date of proposed sale to the public:

AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE
REGISTRATION STATEMENT

/ X / Check box if it is proposed that this filing will become effective at 8:00
a.m. on July 18, 2000 pursuant to Rule 487.

VAN KAMPEN
FOCUS PORTFOLIOS(SM)
A DIVISION OF VAN KAMPEN FUNDS INC.

BANDWIDTH &
TELECOMMUNICATIONS PORTFOLIO
Series 11A
Series 11B

BIOTECHNOLOGY &
PHARMACEUTICAL PORTFOLIO
Series 11A
Series 11B

GLOBAL WIRELESS PORTFOLIO
Series 4A
Series 4B

GREAT INTERNATIONAL FIRMS PORTFOLIO
Series 13

SEMICONDUCTOR PORTFOLIO
Series 3A
Series 3B

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

Van Kampen Focus Portfolios, Series 242 includes the unit investment trusts
described above (the "Portfolios"). Each Portfolio seeks to increase the value
of your investment by investing in a diversified portfolio of stocks. With the
exception of the Great International Firms Portfolio, we offer each investment
in two separate Portfolios with different maturity options. Series A Portfolios
terminate in 15 months for investors with shorter investment horizons. Series B
Portfolios terminate in five years for investors with longer investment
horizons. Of course, we cannot guarantee that a Portfolio will achieve its
objective.

JULY 18, 2000

YOU SHOULD READ THIS PROSPECTUS AND RETAIN IT FOR FUTURE REFERENCE.

--------------------------------------------------------------------------------
The Securities and Exchange Commission has not approved or disapproved of the
Units or passed upon the adequacy or accuracy of this prospectus.
Any contrary representation is a criminal offense.

<TABLE>

SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
JULY 18, 2000
<CAPTION>
GREAT
INTERNATIONAL
SERIES A SERIES B FIRMS
PUBLIC OFFERING PRICE PORTFOLIOS PORTFOLIOS PORTFOLIO
------------ ------------ ------------
<S> <C> <C> <C>
Aggregate value of Securities per Unit (1) $ 9.900 $ 9.900 $ 9.900
Sales charge 0.295 0.450 0.450
Less deferred sales charge 0.195 0.350 0.350
Public offering price per Unit (2) $ 10.000 $ 10.000 $ 10.000

GENERAL INFORMATION
Initial Date of Deposit July 18, 2000
Mandatory Termination Date - Series A Portfolios November 6, 2001
Mandatory Termination Date - All Other Portfolios July 19, 2005
Record Date - Series A Portfolios April 10, 2001
Distribution Date - Series A Portfolios April 25, 2001
Record Dates - All Other Portfolios (4) June 10 and December 10
Distribution Dates - All Other Portfolios (4) June 25 and December 25
<CAPTION>
PORTFOLIO INFORMATION
ESTIMATED ESTIMATED ESTIMATED
AGGREGATE INITIAL ANNUAL REDEMPTION ORGANIZATIONAL
INITIAL VALUE OF DISTRIBUTION DIVIDENDS PRICE PER COSTS PER
PORTFOLIO UNITS (3) SECURITIES (1) PER UNIT (4)(5) PER UNIT (5) UNIT (6) UNIT (1)
----------------------- -------------- ------------- ------------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
Bandwidth & Tele-
communications Series A 15,155 $ 150,025 N/A $ 0.00250 $ 9.705 $ 0.02268
Bandwidth & Tele-
communications Series B 15,155 $ 150,025 N/A $ 0.00250 $ 9.550 $ 0.02704
Biotechnology &
Pharmaceutical Series A 15,028 $ 148,768 $ 0.01 $ 0.01810 $ 9.705 $ 0.01549
Biotechnology &
Pharmaceutical Series B 15,028 $ 148,768 $ 0.01 $ 0.01810 $ 9.550 $ 0.02416
Global Wireless Series A 15,153 $ 150,006 N/A $ 0.01035 $ 9.705 $ 0.01653
Global Wireless Series B 15,153 $ 150,006 N/A $ 0.01035 $ 9.550 $ 0.02517
Great International
Firms Portfolio 30,166 $ 298,637 $ 0.06 $ 0.10515 $ 9,530 $ 0.01153
Semiconductor Series A 15,312 $ 151,583 N/A $ 0.00143 $ 9.705 $ 0.01300
Semiconductor Series B 15,312 $ 151,583 N/A $ 0.00143 $ 9.550 $ 0.02386

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

(1) Each Security is valued at the most recent closing sale price as of the
close of the New York Stock Exchange on the most recent business day before
the Initial Date of Deposit. You will bear all or a portion of the expenses
incurred in organizing and offering your Portfolio. The public offering
price includes the estimated amount of these costs. The Trustee will deduct
these expenses from your Portfolio at the end of the initial offering
period (approximately three months). The estimated amount for each
Portfolio is described above and is included in the "Estimated Costs Over
Time" on the next page.

(2) The public offering price will include any accumulated dividends or cash in
the Income or Capital Accounts of a Portfolio.

(3) At the close of the New York Stock Exchange on the Initial Date of Deposit,
the number of Units may be adjusted so that the public offering price per
Unit equals $10. The number of Units and fractional interest of each Unit
in a Portfolio will increase or decrease to the extent of any adjustment.

(4) The initial Record Date for the Series B Portfolios and the Great
International Firms Portfolio is April 10, 2001 and the initial
Distribution Date for such Portfolios is April 25, 2001. Thereafter, the
record and distribution dates for these Portfolios will occur in June and
December of each year.

(5) This estimate is based on the most recently declared quarterly dividends or
interim and final dividends accounting for any foreign withholding taxes.
Actual dividends may vary due to a variety of factors. See "Risk Factors".

(6) The redemption price is reduced by any remaining deferred sales charge. See
"Rights of Unitholders--Redemption of Units". The redemption price includes
the estimated organizational and offering costs. The redemption price will
not include these costs after the initial offering period.
</TABLE>

<TABLE>
FEE TABLE
<CAPTION>
GREAT
INTERNATIONAL
SERIES A SERIES B FIRMS
PORTFOLIOS PORTFOLIOS PORTFOLIO
---------- ---------- ----------
<S> <C> <C> <C>
TRANSACTION FEES (AS % OF OFFERING PRICE)
Initial sales charge (1)..................................... 1.00% 1.00% 1.00%
Deferred sales charge (2).................................... 1.95% 3.50% 3.50%
---------- ---------- ----------

Maximum sales charge......................................... 2.95% 4.50% 4.50%
========== ========== ==========

Maximum sales charge on reinvested dividends................. 0.00% 0.00% 0.00%
========== ========== ==========

<CAPTION>
TRUSTEE'S FEE SUPERVISORY ESTIMATED TOTAL
AND OPERATING AND EVALUATION ANNUAL EXPENSES
ESTIMATED ANNUAL EXPENSES PER UNIT EXPENSES FEES PER UNIT
-------------- ------------- ------------
<S> <C> <C> <C>
Bandwidth & Telecommunications Series A........... $ 0.00978 $ 0.00500 $ 0.01478
Bandwidth & Telecommunications Series B........... $ 0.01239 $ 0.00500 $ 0.01739
Biotechnology & Pharmaceutical Series A........... $ 0.00978 $ 0.00500 $ 0.01478
Biotechnology & Pharmaceutical Series B........... $ 0.01239 $ 0.00500 $ 0.01739
Global Wireless Series A.......................... $ 0.00978 $ 0.00500 $ 0.01478
Global Wireless Series B.......................... $ 0.01239 $ 0.00500 $ 0.01739
Great International Firms Portfolio............... $ 0.05347 $ 0.00500 $ 0.05847
Semiconductor Series A............................ $ 0.00978 $ 0.00500 $ 0.01478
Semiconductor Series B............................ $ 0.01239 $ 0.00500 $ 0.01739

<CAPTION>
ESTIMATED COSTS OVER TIME (3) ONE YEAR THREE YEARS FIVE YEARS TEN YEARS
-------------- ------------- ------------- --------------
<S> <C> <C>
Bandwidth & Telecommunications Series A........... $ 33 $ 81 N/A N/A
Bandwidth & Telecommunications Series B........... $ 49 $ 53 $ 57 N/A
Biotechnology & Pharmaceutical Series A........... $ 33 $ 80 N/A N/A
Biotechnology & Pharmaceutical Series B........... $ 49 $ 53 $ 57 N/A
Global Wireless Series A.......................... $ 33 $ 80 N/A N/A
Global Wireless Series B.......................... $ 49 $ 53 $ 57 N/A
Great International Firms Portfolio............... $ 52 $ 64 $ 77 N/A
Semiconductor Series A............................ $ 32 $ 78 N/A N/A
Semiconductor Series B............................ $ 49 $ 53 $ 57 N/A
</TABLE>

This fee table is intended to assist you in understanding the costs that you
will bear and to present a comparison of fees. The "Estimated Costs Over Time"
example illustrates the expenses you would pay on a $1,000 investment assuming a
5% annual return and redemption at the end of each period. This example assumes
that you reinvest all distributions at the end of each year. The Series A
Portfolio examples assume that you reinvest your investment into a new trust
when the Portfolio terminates at the end of each 15-month period. Of course, you
should not consider this example a representation of actual past or future
expenses or annual rate of return which may differ from those assumed for this
example. The sales charge and expenses are described under "Public Offering" and
"Portfolio Operating Expenses".

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

(1) The initial sales charge is the difference between the maximum sales charge
and the deferred sales charge.

(2) The deferred sales charge for Series A Portfolios is actually equal to
$0.195 per Unit. The deferred sales charge for Series B Portfolios and the
Great International Firms Portfolio is actually equal to $0.35 per Unit.
These amounts will exceed the percentages above if the public offering
price per Unit falls below $10 and will be less than the percentage above
if the public offering price per Unit exceeds $10. The deferred sales
charge accrues daily from October 10, 2000 through March 9, 2001. Your
Portfolio pays a proportionate amount of this charge on the 10th day of
each month beginning in the accrual period until paid in full.

(3) These examples include the estimated expenses incurred in establishing and
offering your Portfolio. The amount of these expenses is described on the
preceding page.

BANDWIDTH & TELECOMMUNICATIONS PORTFOLIOS

Each Portfolio seeks to increase the value of your Units over time by
investing in a portfolio of common stocks of companies diversified within the
communications industry. Technological advancements have made it possible for
people to communicate in ways that were not possible in the past. We designed
these Portfolios to benefit from companies leading in these advancements.
Cellular phones, the Internet, e-mail and personal pagers have rapidly changed
the way people communicate.

[INSERT CHART HERE]

Bandwidth measures the connection that links data from one place to another.
With the popularity of the telecommunications and internet sectors increasing,
the demand to send data over these connections is increasing. Greater bandwidth
makes it possible for these industries to operate by passing digital signals
through a medium such as glass fibers at higher capacities. The greater the
bandwidth, the greater the information carrying capacity.

o We believe that in the next few years the telecommunications industry could
develop in a manner similar to that of the computer industry since the late
1970s. This is partly due to deregulation and increased competition but is
primarily due to the increase in demand for greater bandwidth resulting
from the growth of the Internet. (Source: Canada NewsWire, 1999).

o Revenue from the integration of voice and data on a single network is
estimated to exceed $2 billion in 2003. (Source: Jupiter Communications,
1999).

o Telecommunications speed is currently doubling every 150 days. (Source:
PricewaterhouseCoopers Technology Center).

o The volume of Internet traffic is currently doubling every 100 days. If
this trend continues, the total volume of data carried over the world's
telecommunications infrastructure will exceed that of voice by 2002.
(Source: PricewaterhouseCoopers Technology Center; A.D. Little).

There is no assurance that these trends will continue or that expectations
will actually occur. If these trends do not continue or if current expectations
are not realized, your investment could be adversely affected. Of course, we
cannot guarantee that your Portfolio will achieve its objective. The value of
your Units may fall below the price you paid for the Units. You should read the
"Risk Factors" section before you invest.

TWO MATURITY OPTIONS. Because different investors have different investment
horizons, we offer two portfolios with different maturities that invest in the
same companies. You should consider Series A if you intend to hold your
investment for 15 months or less. You should consider Series B if you intend to
hold your investment for approximately five years. In either case, you should
consider the impact of price volatility when selecting the appropriate Series.
While Series A and Series B invest in the same companies, they are separate
portfolios and have different sales charges and expenses. As a result, the
performance and exact composition of each Portfolio may differ, although the
Sponsor does not believe that the composition of the portfolios will differ
materially.

<TABLE>
SERIES A PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
BANDWIDTH
<S> <C> <C> <C> <C>
50 Analog Devices, Inc. $ 88.313 0.00% $ 4,415.63
27 Applied Micro Circuits Corporation 159.313 0.00 4,301.44
17 Broadcom Corporation 261.500 0.00 4,445.50
21 Brocade Communications Systems, Inc. 210.000 0.00 4,410.00
63 Cisco Systems, Inc. 69.625 0.00 4,386.38
82 Conexant Systems, Inc. 55.313 0.00 4,535.63
36 Copper Mountain Networks, Inc. 123.875 0.00 4,459.50
15 Corning, Inc. 279.250 0.26 4,188.75
32 Extreme Networks, Inc. 135.375 0.00 4,332.00
30 GlobeSpan, Inc. 145.688 0.00 4,370.63
37 JDS Uniphase Corporation 115.813 0.00 4,285.06
25 Juniper Networks, Inc. 174.188 0.00 4,354.69
+ 75 Nokia Oyj 56.375 0.29 4,228.13
53 Nortel Networks Corporation 79.313 0.09 4,203.56
37 ONI Systems Corporation 113.563 0.00 4,201.81
3 19 PMC-Sierra, Inc. 229.563 0.00 4,361.69
104 Powerwave Technologies, Inc. 42.000 0.00 4,368.00
30 Redback Networks Inc. 142.063 0.00 4,261.88
49 Scientific-Atlanta, Inc. 85.938 0.05 4,210.94
11 SDL, Inc. 394.000 0.00 4,334.00
30 Sycamore Networks, Inc. 150.063 0.00 4,501.88
+ 183 Telefonaktiebolaget LM Ericsson AB 23.375 0.21 4,277.63
75 TriQuint Semiconductor, Inc. 58.500 0.00 4,387.50
23 Turnstone Systems, Inc. 186.000 0.00 4,278.00
58 Vitesse Semiconductor Corporation 73.563 0.00 4,266.63
TELECOM/CARRIERS
+ 87 China Mobile (Hong Kong) Limited 48.938 0.00 4,257.56
28 COLT Telecom Group plc 155.000 0.00 4,340.00
180 McLeodUSA, Inc. 23.125 0.00 4,162.50
102 Metromedia Fiber Networks, Inc. 41.063 0.00 4,188.38
60 Nextel Communications, Inc. 68.813 0.00 4,128.75
95 NEXTLINK Communications, Inc. 41.938 0.00 3,984.06
76 Qwest Communications International, Inc. 54.563 0.00 4,146.75
64 Sprint Corporation (PCS Group) 64.625 0.00 4,136.00
29 VoiceStream Wireless Corporation 147.000 0.00 4,263.00
87 WorldCom, Inc. 46.563 0.00 4,050.94
---------- -------------
1,990 $ 150,024.80
========== =============

See "Notes to Portfolios".
</TABLE>

<TABLE>
SERIES B PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- -------------
<S> <C> <C> <C> <C>
BANDWIDTH
50 Analog Devices, Inc. $ 88.313 0.00% $ 4,415.63
27 Applied Micro Circuits Corporation 159.313 0.00 4,301.44
17 Broadcom Corporation 261.500 0.00 4,445.50
21 Brocade Communications Systems, Inc. 210.000 0.00 4,410.00
63 Cisco Systems, Inc. 69.625 0.00 4,386.38
82 Conexant Systems, Inc. 55.313 0.00 4,535.63
36 Copper Mountain Networks, Inc. 123.875 0.00 4,459.50
15 Corning, Inc. 279.250 0.26 4,188.75
32 Extreme Networks, Inc. 135.375 0.00 4,332.00
30 GlobeSpan, Inc. 145.688 0.00 4,370.63
37 JDS Uniphase Corporation 115.813 0.00 4,285.06
25 Juniper Networks, Inc. 174.188 0.00 4,354.69
+ 75 Nokia Oyj 56.375 0.29 4,228.13
53 Nortel Networks Corporation 79.313 0.09 4,203.56
37 ONI Systems Corporation 113.563 0.00 4,201.81
3 19 PMC-Sierra, Inc. 229.563 0.00 4,361.69
104 Powerwave Technologies, Inc. 42.000 0.00 4,368.00
30 Redback Networks Inc. 142.063 0.00 4,261.88
49 Scientific-Atlanta, Inc. 85.938 0.05 4,210.94
11 SDL, Inc. 394.000 0.00 4,334.00
30 Sycamore Networks, Inc. 150.063 0.00 4,501.88
+ 183 Telefonaktiebolaget LM Ericsson AB 23.375 0.21 4,277.63
75 TriQuint Semiconductor, Inc. 58.500 0.00 4,387.50
23 Turnstone Systems, Inc. 186.000 0.00 4,278.00
58 Vitesse Semiconductor Corporation 73.563 0.00 4,266.63
TELECOM/CARRIERS
+ 87 China Mobile (Hong Kong) Limited 48.938 0.00 4,257.56
28 COLT Telecom Group plc 155.000 0.00 4,340.00
180 McLeodUSA, Inc. 23.125 0.00 4,162.50
102 Metromedia Fiber Networks, Inc. 41.063 0.00 4,188.38
60 Nextel Communications, Inc. 68.813 0.00 4,128.75
95 NEXTLINK Communications, Inc. 41.938 0.00 3,984.06
76 Qwest Communications International, Inc. 54.563 0.00 4,146.75
64 Sprint Corporation (PCS Group) 64.625 0.00 4,136.00
29 VoiceStream Wireless Corporation 147.000 0.00 4,263.00
87 WorldCom, Inc. 46.563 0.00 4,050.94
---------- -------------
1,990 $ 150,024.80
========== =============

See "Notes to Portfolios".

</TABLE>

BIOTECHNOLOGY & PHARMACEUTICAL PORTFOLIOS

Each Portfolio seeks to increase the value of your Units over time by
investing in a portfolio of common stocks of companies diversified within the
biotechnology and pharmaceuticals industry. Van Kampen designed each Portfolio
to benefit from companies that are positioned for growth in these industries.
Biotechnology and pharmaceuticals have increased the length and quality of life
for millions of people. The Biotechnology Industry Organization estimates that
over 80 biotech drugs and vaccines have helped more than 200 million people
worldwide over the last 25 years. According to this organization, more than 350
drugs and vaccines are currently in human clinical trials, including treatments
for cancer, AIDs, Alzheimer's and heart disease. Biotechnology also appears to
be revolutionizing other areas such as medical diagnostics, agriculture,
forensics and environmental cleanup and preservation.

[INSERT CHART HERE]

The pharmaceutical industry is highly developed in the United States where
demand for many drugs appears to remain constant. However, worldwide drug sales
may have the potential for increased demand. Factors that could potentially
contribute to the growth of this industry include discoveries in drug design and
molecular biology, more favorable treatment by the Food and Drug Administration
in drug reviews, and accelerated demand for drugs in Third World countries.

Two worldwide trends appear to be providing growth potential for the
biotechnology and pharmaceutical industries: the aging of the baby boom
generation and an increase in life expectancy. A recent study by the World
Health Organization, estimates that the over-60 age population could rise
globally from 580 million in 1998 to over one billion by 2020. This segment of
the current U.S. population accounts for more than one-third of the total
consumption of prescription medicines but represents less than 15% of total U.S.
population. Developments in biotechnology and pharmaceuticals that target major
ailments of the elderly may cause growth in these sectors in the years ahead.
Consider these factors:

o Standard & Poor's estimates that total industry-wide revenues in
biotechnology could increase to $26 billion in 2000.

o Total drug delivery is estimated to grow from $12 billion to nearly $60
billion over the next decade.

o Worldwide sales of all pharmaceutical products are estimated to exceed $360
billion in 2000.

(Sources: Standard & Poor's Industry Survey, September 9, 1999 and
December 16, 1999)

There is no assurance that these trends will continue or that expectations
will actually occur. Your investment could be adversely affected if these trends
do not continue or if current expectations are not realized.

Of course, we cannot guarantee that your Portfolio will achieve its
objective. The value of your Units may fall below the price you paid for the
Units. You should read the "Risk Factors" section before you invest.

<TABLE>

SERIES A PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
BIOTECHNOLOGY
101 Amgen, Inc. $ 72.4375 0.00% $ 7,316.19
116 Cephalon, Inc. 71.3750 0.00 8,279.50
71 COR Therapeutics, Inc. 103.7500 0.00 7,366.25
48 Genentech, Inc. 153.5000 0.00 7,368.00
45 Gilead Sciences, Inc. 82.7500 0.00 3,723.75
23 Human Genome Sciences, Inc. 159.4375 0.00 3,667.06
29 IDEC Pharmaceuticals Corporation 126.8125 0.00 3,677.56
126 Immunex Corporation 57.8750 0.00 7,292.25
86 Lexicon Genetics, Inc. 45.2500 0.00 3,891.50
36 Medarex, Inc. 98.9375 0.00 3,561.75
100 MedImmune, Inc. 71.1250 0.00 7,112.50
30 Millennium Pharmaceuticals, Inc. 122.1250 0.00 3,663.75
70 QLT PhotoTherapeutics, Inc. 58.0000 0.00 4,060.00
GENERIC DRUGS
58 Alpharma, Inc. 62.5000 0.29 3,625.00
167 IVAX Corporation 44.5000 0.00 7,431.50
MAJOR PHARMACEUTICALS
38 Eli Lilly and Company 98.5000 1.06 3,743.00
240 Pfizer, Inc. 46.1250 0.78 11,070.00
199 Pharmacia Corporation 55.7500 0.86 11,094.25
MEDICAL SPECIALTIES
60 ALZA Corporation 63.8750 0.00 3,832.50
MEDICAL/DENTAL DISTRIBUTORS
48 Andrx Corporation 77.5625 0.00 3,723.00
OTHER PHARMACEUTICALS
49 Allergan, Inc. 74.8125 0.43 3,665.81
60 Biovail Corporation 62.0625 0.00 3,723.75
73 Celgene Corporation 49.0000 0.00 3,577.00
72 Forest Laboratories, Inc. 104.0625 0.00 7,492.50
56 Sepracor Inc. 131.3125 0.00 7,353.50
133 Teva Pharmaceutical Industries, Limited 56.0625 0.33 7,456.31
---------- -------------
2,134 $ 148,768.18
========== =============

See "Notes to Portfolios".
</TABLE>

<TABLE>
SERIES B PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
BIOTECHNOLOGY
101 Amgen, Inc. $ 72.4375 0.00% $ 7,316.19
116 Cephalon, Inc. 71.3750 0.00 8,279.50
71 COR Therapeutics, Inc. 103.7500 0.00 7,366.25
48 Genentech, Inc. 153.5000 0.00 7,368.00
45 Gilead Sciences, Inc. 82.7500 0.00 3,723.75
23 Human Genome Sciences, Inc. 159.4375 0.00 3,667.06
29 IDEC Pharmaceuticals Corporation 126.8125 0.00 3,677.56
126 Immunex Corporation 57.8750 0.00 7,292.25
86 Lexicon Genetics, Inc. 45.2500 0.00 3,891.50
36 Medarex, Inc. 98.9375 0.00 3,561.75
100 MedImmune, Inc. 71.1250 0.00 7,112.50
30 Millennium Pharmaceuticals, Inc. 122.1250 0.00 3,663.75
70 QLT PhotoTherapeutics, Inc. 58.0000 0.00 4,060.00
GENERIC DRUGS
58 Alpharma, Inc. 62.5000 0.29 3,625.00
167 IVAX Corporation 44.5000 0.00 7,431.50
MAJOR PHARMACEUTICALS
38 Eli Lilly and Company 98.5000 1.06 3,743.00
240 Pfizer, Inc. 46.1250 0.78 11,070.00
199 Pharmacia Corporation 55.7500 0.86 11,094.25
MEDICAL SPECIALTIES
60 ALZA Corporation 63.8750 0.00 3,832.50
MEDICAL/DENTAL DISTRIBUTORS
48 Andrx Corporation 77.5625 0.00 3,723.00
OTHER PHARMACEUTICALS
49 Allergan, Inc. 74.8125 0.43 3,665.81
60 Biovail Corporation 62.0625 0.00 3,723.75
73 Celgene Corporation 49.0000 0.00 3,577.00
72 Forest Laboratories, Inc. 104.0625 0.00 7,492.50
56 Sepracor Inc. 131.3125 0.00 7,353.50
133 Teva Pharmaceutical Industries, Limited 56.0625 0.33 7,456.31
---------- -------------
2,134 $ 148,768.18
========== =============

See "Notes to Portfolios".
</TABLE>

GLOBAL WIRELESS PORTFOLIOS

Each Portfolio seeks to increase the value of your Units over time by
investing in a portfolio of U.S. and foreign stocks of companies diversified
within the wireless telecommunications industry. In an age of constant
technological advances, people want convenient and affordable items to make
their lives easier. Improvements in technology seek to make tools faster, more
powerful, smaller, and more user-friendly. While initially cost prohibitive, Van
Kampen believes that wireless phones and service providers have witnessed growth
in recent years because competition and improved technologies have brought the
price of airtime and phones down.

[INSERT CHART HERE]

The wireless telecommunication industry is truly global. Wireless companies
have seen new opportunities due to strong growth in subscriber demand in many
regions around the world. In developing countries where communication systems
either do not exist or are very primitive, wireless systems have been growing
and are expected to continue to grow because they are more cost effective to set
up than traditional wireline systems.

The industry is beginning to use developing technologies to provide more
services. It is already possible to get Internet access through some wireless
phones and data and information delivery may be available in the future. As
bandwidth and digital information processing technologies continue to improve
and grow, wireless communications will reap the benefits. Consider the
following:

o Industry reports estimate that nearly 250 million subscribers worldwide
have moved to forms of wireless technology. The number of subscribers has
nearly tripled over the past three years. (Standard & Poor's Industry
Surveys, Telecommunications: Wireless).

o Only the growth of the Internet has been faster than wireless service
companies and equipment manufacturers recently. Revenues for U.S. based
wireless services are projected to be nearly $50 billion in 2000. (Standard
& Poor's Industry Surveys, Telecommunications: Wireless).

o The role of wireless should expand over time until it becomes a commonplace
part of everyday life. Wireless is the ideal solution in a data rich
environment reliant on fast-paced communications.

o Industry reports project that global wireless subscribers could grow from a
projected 469 million at the end of 1999 to 1,26 billion in 2005 -- a
global penetration of nearly 20% up from about 7.5% today. (The Yankee
Group 1999).

o By 2004, one-third of all Europeans are estimated to regularly use their
mobile phones to access Internet services. (Forrester Research 1999).

o Standard & Poor's estimates that the percentage of U.S. consumers using
wireless services will grow from 4.30% in 1992 to 35% by the end of 2000.
(Standard & Poor's Industry Surveys, Telecommunications: Wireless, July
1999. Based on Census Bureau and Cellular Telecommunications Industry
Association data).

We cannot guarantee that your Portfolio will achieve its objective. The value
of your Units may fall below the price you paid for the Units. You should read
the "Risk Factors" section before you invest.

<TABLE>

SERIES A PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
CARRIERS
+ 102 China Mobile (Hong Kong) Limited $ 48.938 0.00% $ 4,991.63
+ 88 Deutsche Telekom AG 56.063 0.90 4,933.50
+ 33 France Telecom S.A. 148.000 0.54 4,884.00
71 Nextel Communications, Inc. 68.813 0.00 4,885.69
116 SK Telecom Company, Limited 43.438 0.04 5,038.75
75 Sprint Corporation (PCS Group) 64.625 0.00 4,846.88
+ 69 Telefonica S.A. 70.563 0.00 4,868.81
+ 106 Vodafone AirTouch Plc 47.313 0.43 5,015.13
34 VoiceStream Wireless Corporation 147.000 0.00 4,998.00
102 WorldCom, Inc. 46.563 0.00 4,749.38
INFRASTRUCTURE
32 Applied Micro Circuits Corporation 159.313 0.00 5,098.00
+ 133 ARM Holdings plc 36.438 0.00 4,846.19
20 Broadcom Corporation 261.500 0.00 5,230.00
21 Check Point Software Technologies Ltd. 261.313 0.00 5,487.56
30 CIENA Corporation 160.938 0.00 4,828.13
73 Cisco Systems, Inc. 69.625 0.00 5,082.63
18 Corning, Inc. 279.250 0.26 5,026.50
43 JDS Uniphase Corporation 115.813 0.00 4,979.94
29 Juniper Networks, Inc. 174.188 0.00 5,051.44
128 Motorola, Inc. 38.375 0.42 4,912.00
+ 88 Nokia Oyj 56.375 0.29 4,961.00
62 Nortel Networks Corporation 79.313 0.09 4,917.38
3 22 PMC-Sierra, Inc. 229.563 0.00 5,050.38
121 Powerwave Technologies, Inc. 42.000 0.00 5,082.00
34 Redback Networks Inc. 142.063 0.00 4,830.13
53 RF Micro Devices, Inc. 93.750 0.00 4,968.75
13 SDL, Inc. 394.000 0.00 5,122.00
35 Sycamore Networks, Inc. 150.063 0.00 5,252.19
+ 213 Telefonaktiebolaget LM Ericsson AB 23.375 0.21 4,978.88
87 TriQuint Semiconductor, Inc. 58.500 0.00 5,089.50
---------- -------------
2,051 $ 150,006.37
========== =============

See "Notes to Portfolios".
</TABLE>

<TABLE>
SERIES B PORTFOLIO
--------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
CARRIERS
+ 102 China Mobile (Hong Kong) Limited $ 48.938 0.00% $ 4,991.63
+ 88 Deutsche Telekom AG 56.063 0.90 4,933.50
+ 33 France Telecom S.A. 148.000 0.54 4,884.00
71 Nextel Communications, Inc. 68.813 0.00 4,885.69
116 SK Telecom Company, Limited 43.438 0.04 5,038.75
75 Sprint Corporation (PCS Group) 64.625 0.00 4,846.88
+ 69 Telefonica S.A. 70.563 0.00 4,868.81
+ 106 Vodafone AirTouch Plc 47.313 0.43 5,015.13
34 VoiceStream Wireless Corporation 147.000 0.00 4,998.00
102 WorldCom, Inc. 46.563 0.00 4,749.38
INFRASTRUCTURE
32 Applied Micro Circuits Corporation 159.313 0.00 5,098.00
+ 133 ARM Holdings plc 36.438 0.00 4,846.19
20 Broadcom Corporation 261.500 0.00 5,230.00
21 Check Point Software Technologies Ltd. 261.313 0.00 5,487.56
30 CIENA Corporation 160.938 0.00 4,828.13
73 Cisco Systems, Inc. 69.625 0.00 5,082.63
18 Corning, Inc. 279.250 0.26 5,026.50
43 JDS Uniphase Corporation 115.813 0.00 4,979.94
29 Juniper Networks, Inc. 174.188 0.00 5,051.44
128 Motorola, Inc. 38.375 0.42 4,912.00
+ 88 Nokia Oyj 56.375 0.29 4,961.00
62 Nortel Networks Corporation 79.313 0.09 4,917.38
3 22 PMC-Sierra, Inc. 229.563 0.00 5,050.38
121 Powerwave Technologies, Inc. 42.000 0.00 5,082.00
34 Redback Networks Inc. 142.063 0.00 4,830.13
53 RF Micro Devices, Inc. 93.750 0.00 4,968.75
13 SDL, Inc. 394.000 0.00 5,122.00
35 Sycamore Networks, Inc. 150.063 0.00 5,252.19
+ 213 Telefonaktiebolaget LM Ericsson AB 23.375 0.21 4,978.88
87 TriQuint Semiconductor, Inc. 58.500 0.00 5,089.50
---------- -------------
2,051 $ 150,006.37
========== =============

See "Notes to Portfolios".
</TABLE>

GREAT INTERNATIONAL FIRMS PORTFOLIO

The Portfolio seeks to provide the potential for capital appreciation by
investing in a portfolio of foreign stocks. In selecting the portfolio, we
targeted industry-leading companies in countries around the world. The Portfolio
seeks to benefit from companies that are well known, have solid balance sheets
and occupy strong positions in their markets and industries. The companies
represented in the portfolio may share a variety of traits, among others:

[INSERT CHART HERE]

o Headquartered in a developed and industrialized country outside the United
States

o Leading market share in their industry

o Attractive stock price valuation

o Diversified line of products and/or services

o Well-capitalized

o Leading company in their country

The Portfolio will seek to maintain, as nearly as practicable, an equal
dollar amount of each of the stocks in the portfolio as new Units are issued.
The Portfolio may not be able to achieve this goal because some foreign markets
require that stock transactions be executed in round lots (for example, 1000
shares).

From 1989 through 1999, the U.S. stock market (as represented by the Standard
& Poor's 500 Index) has ranked among the top five markets in total return only
four times and has never ranked first. International firms across the globe are
expanding their businesses, exporting to more countries and becoming better
known to the investment community. By investing in international stocks, you may
benefit from greater growth potential and added diversity than by concentrating
in U.S. securities alone.

The table below illustrates that no single stock market has dominated over
time and that foreign markets have generally offered returns superior to those
available in the U.S. The table shows the total returns of the top performing
stock markets in developed coun- tries for each of the years indicated (as
represented by Morgan Stanley Capital International indices) compared with the
U.S. market (as represented by the Standard & Poor's 500 Index).

TOTAL RETURN TOTAL RETURN
TOP PERFORMING MARKET UNITED STATES MARKET
---------------------- --------------------
1989 101% (Austria) 31%
1990 6% (United Kingdom) (3%)
1991 43% (Hong Kong) 30%
1992 27% (Hong Kong) 7%
1993 110% (Hong Kong) 10%
1994 51% (Finland) 1%
1995 42% (Switzerland) 37%
1996 41% (Spain) 23%
1997 45% (Switzerland) 33%
1998 122% (Finland) 29%
1999 151% (Finland) 21%

The table represents historical performance of unmanaged indices which are
composites of equity securities considered representative of equity performance
in the countries specified. The historical performance is shown for illustrative
purposes only, represents past performance which is not indicative of future
performance of the Portfolio and does not include sales charges or expenses
which are imposed on Units.

As with any investment, we cannot guarantee that the Portfolio will achieve
its objective. The value of your Units may fall below the price you paid for the
Units. You should read the "Risk Factors" section before you invest.

<TABLE>

PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
262 Akzo Nobel N.V. $ 42.676 1.87% $ 11,181.16
153 Alcatel 76.452 0.46 11,697.12
252 AstraZeneca Group plc 44.004 1.50 11,089.06
2,593 Banca Intesa S.p.A. 4.450 1.27 11,539.67
1,000 The Bank of Tokyo-Mitsubishi, Ltd 10.837 0.62 10,837.35
1,268 BP Amoco Plc 8.665 2.16 10,986.93
1,935 British Airways plc 5.831 4.59 11,283.64
848 British Telecommunications Plc 13.906 2.35 11,791.87
130 Deutsche Bank AG 90.880 1.07 11,814.42
222 Koninklijke (Royal) Philips Electronics N.V. 52.514 0.45 11,658.05
754 Marconi Plc 15.610 0.50 11,769.98
+ 75 NEC Corporation 152.500 0.14 11,437.50
2,000 Nissan Motor Co., Ltd. 5.363 0.00 10,726.19
888 News Corporation, Limited 13.175 0.11 11,699.71
207 Nokia Oyj 56.777 0.28 11,752.77
+ 48 Nomura Securities Co., Ltd. 226.000 0.44 10,848.00
+ 79 NTT DoCoMo, Inc. 143.750 0.02 11,356.25
558 Reuters Group Plc 20.739 1.06 11,572.16
189 Royal Dutch Petroleum Company 59.990 2.00 11,338.16
100 Ryohin Keikaku Co., Ltd. 122.175 0.28 12,217.49
+ 112 Sony Corporation 104.000 0.16 11,648.00
1,972 Telecom Argentina Stet - France Telecom S.A. 5.951 3.91 11,734.80
501 Telefonaktiebolaget LM Ericsson AB 23.446 0.20 11,746.22
478 Telefonica S.A. 23.882 0.00 11,415.50
80 UBS AG 146.685 1.81 11,734.82
2,489 Vodafone AirTouch Plc 4.725 0.42 11,760.23
---------- ------------
19,193 $ 298,637.05
========== ============

See "Notes to Portfolios".
</TABLE>

Unless otherwise noted, all of the Securities listed above are issued by foreign
companies and are traded on foreign securities exchanges.

SEMICONDUCTOR PORTFOLIOS

Each Portfolio seeks to increase the value of your Units over time by
investing in a portfolio of common stocks of companies diversified within the
semiconductor industry. Semiconductors support equipment that allows your
personal computers, mobile phones, VCRs, DVD players, automobiles, stereos,
personal digital assistants, home appliances, and some children's toys to
function. Semiconductors are the microchips and microprocessors that enable
electronic devices to process millions of bits of data in a fraction of a
second. These chips and processors are also responsible for remembering the
information stored in your electronic devices after you turn them off.
Semiconductors were the critical factor that ignited the computer industry
revolution and they are the key to the development of almost every technology
today. Without continued development in this industry, technological tools will
go no further.

[INSERT CHART HERE]

The pace of change in the semiconductor industry is rapid, driven by fierce
competition and ever-improving technology. Innovations are constantly improving
chips and enable them to perform ever more powerful computing tasks at ever
increasing speeds.

The emergence of a global, networked economy that values rapid exchanges of
information is changing the face of the industry. The development of the
networking infrastructure, the proliferation of the Internet and wireless
communications and the need for greater bandwidth all suggest continued demand
for semiconductor devices upon which the information age relies. Consider the
following:

o In a study released in 1998, the Semiconductor Industry Association (SIA)
reported that among all manufacturing sectors, the chip industry has become
the leading contributor to the nation's Gross Domestic Product. This figure
is 20% higher than that of the motor vehicle parts and accessories industry.

o The Semiconductor Industry Association's 1999 forecast calls for the industry
to grow 21% with sales of $174 billion in 2000, with continued growth of 20%
in 2001 and $209 billion in sales.

o Standard & Poor's believes that the semiconductor industry is in the early
stages of a multi-year recovery. (Standard & Poor's Industry Surveys,
Semiconductors).

o Van Kampen believes that semiconductor unit volume sales have grown
sufficiently to offset the impact of falling prices. Since 1974, this
relationship between falling prices and unit volume growth has produced
annual industry sales growth averaging 17%. (Standard & Poor's Industry
Surveys, Semiconductors).

o Market research firm International Data Corp. predicts that computers selling
for less than $1,500 could grow from a recent 39% of the U.S. consumer market
to nearly 50% in 2001.

<TABLE>

SERIES A PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
ANALOG SEMICONDUCTORS
52 Analog Devices, Inc. $ 88.313 0.00% $ 4,592.25
68 STMicroelectronics N.V. 67.875 0.04 4,615.50
APPLICATION SPECIFIC INTEGRATED
CIRCUITS (ASICS)
33 Extreme Networks, Inc. 135.375 0.00 4,467.38
26 Juniper Networks, Inc. 174.188 0.00 4,528.88
75 LSI Logic Corporation 59.813 0.00 4,485.94
68 QUALCOMM, Inc. 69.813 0.00 4,747.25
COMMUNICATION INTEGRATED CIRCUITS (ICS)
29 Applied Micro Circuits Corporation 159.313 0.00 4,620.06
18 Broadcom Corporation 261.500 0.00 4,707.00
42 Exar Corporation 111.313 0.00 4,675.13
3 20 PMC-Sierra, Inc. 229.563 0.00 4,591.25
62 Vitesse Semiconductor Corporation 73.563 0.00 4,560.88
DIGITAL SIGNAL PROCESSORS (DSPS)
63 Texas Instruments, Inc. 73.688 0.12 4,642.31
DRAM/SRAM
83 Cypress Semiconductor Corporation 55.563 0.00 4,611.69
47 Micron Technology, Inc. 95.500 0.00 4,488.50
FOUNDRIES
123 Taiwan Semiconductor Manufacturing
Company Ltd. 36.438 0.00 4,481.81
MICROPROCESSORS
31 Intel Corporation 146.313 0.05 4,535.69
OPTOELECTRONICS INTEGRATED CIRCUITS
16 Corning, Inc. 279.250 0.26 4,468.00
39 JDS Uniphase Corporation 115.813 0.00 4,516.69
12 SDL, Inc. 394.000 0.00 4,728.00
PROGRAMMABLE LOGIC DEVICES (PLDS)
38 Altera Corporation 122.063 0.00 4,638.38
48 Xilinx, Inc. 96.625 0.00 4,638.00
RADIO FREQUENCY ICS
48 RF Micro Devices, Inc. 93.750 0.00 4,500.00
79 TriQuint Semiconductor, Inc. 58.500 0.00 4,621.50
SEMICONDUCTOR CAPITAL EQUIPMENT
50 Applied Materials, Inc. 94.063 0.00 4,703.13
96 ASM Lithography Holding N.V. 47.125 0.00 4,524.00
79 Credence Systems Corporation 58.875 0.00 4,651.13
70 KLA-Tencor Corporation 63.688 0.00 4,458.13
117 Lam Research Corporation 39.563 0.00 4,628.81
41 Newport Corporation 110.063 0.02 4,512.56
68 Novellus Systems, Inc. 68.500 0.00 4,658.00
60 Teradyne, Inc. 78.250 0.00 4,695.00
76 Varian Semiconductor Equipment
Associates, Inc. 62.688 0.00 4,764.25
SILICON CARBIDE
30 Cree, Inc. 150.875 0.00 4,526.25
---------- -------------
1,807 $ 151,583.35
========== =============

See "Notes to Portfolios".
</TABLE>

<TABLE>
SERIES B PORTFOLIO
------------------------------------------------------------------------------------------------------------------
<CAPTION>
CURRENT COST OF
NUMBER MARKET VALUE DIVIDEND SECURITIES TO
OF SHARES NAME OF ISSUER (1) PER SHARE (2) YIELD (3) PORTFOLIO (2)
---------- ----------------------------------- --------------- ----------- ------------
<S> <C> <C> <C> <C>
ANALOG SEMICONDUCTORS
52 Analog Devices, Inc. $ 88.313 0.00% $ 4,592.25
68 STMicroelectronics N.V. 67.875 0.04 4,615.50
APPLICATION SPECIFIC INTEGRATED
CIRCUITS (ASICS)
33 Extreme Networks, Inc. 135.375 0.00 4,467.38
26 Juniper Networks, Inc. 174.188 0.00 4,528.88
75 LSI Logic Corporation 59.813 0.00 4,485.94
68 QUALCOMM, Inc. 69.813 0.00 4,747.25
COMMUNICATION INTEGRATED CIRCUITS (ICS)
29 Applied Micro Circuits Corporation 159.313 0.00 4,620.06
18 Broadcom Corporation 261.500 0.00 4,707.00
42 Exar Corporation 111.313 0.00 4,675.13
3 20 PMC-Sierra, Inc. 229.563 0.00 4,591.25
62 Vitesse Semiconductor Corporation 73.563 0.00 4,560.88
DIGITAL SIGNAL PROCESSORS (DSPS)
63 Texas Instruments, Inc. 73.688 0.12 4,642.31
DRAM/SRAM
83 Cypress Semiconductor Corporation 55.563 0.00 4,611.69
47 Micron Technology, Inc. 95.500 0.00 4,488.50
FOUNDRIES
123 Taiwan Semiconductor Manufacturing
Company Ltd. 36.438 0.00 4,481.81
MICROPROCESSORS
31 Intel Corporation 146.313 0.05 4,535.69
OPTOELECTRONICS INTEGRATED CIRCUITS
16 Corning, Inc. 279.250 0.26 4,468.00
39 JDS Uniphase Corporation 115.813 0.00 4,516.69
12 SDL, Inc. 394.000 0.00 4,728.00
PROGRAMMABLE LOGIC DEVICES (PLDS)
38 Altera Corporation 122.063 0.00 4,638.38
48 Xilinx, Inc. 96.625 0.00 4,638.00
RADIO FREQUENCY ICS
48 RF Micro Devices, Inc. 93.750 0.00 4,500.00
79 TriQuint Semiconductor, Inc. 58.500 0.00 4,621.50
SEMICONDUCTOR CAPITAL EQUIPMENT
50 Applied Materials, Inc. 94.063 0.00 4,703.13
96 ASM Lithography Holding N.V. 47.125 0.00 4,524.00
79 Credence Systems Corporation 58.875 0.00 4,651.13
70 KLA-Tencor Corporation 63.688 0.00 4,458.13
117 Lam Research Corporation 39.563 0.00 4,628.81
41 Newport Corporation 110.063 0.02 4,512.56
68 Novellus Systems, Inc. 68.500 0.00 4,658.00
60 Teradyne, Inc. 78.250 0.00 4,695.00
76 Varian Semiconductor Equipment
Associates, Inc. 62.688 0.00 4,764.25
SILICON CARBIDE
30 Cree, Inc. 150.875 0.00 4,526.25
---------- -------------
1,807 $ 151,583.35
========== =============

See "Notes to Portfolios".
</TABLE>

NOTES TO PORTFOLIOS

(1) The Securities are initially represented by "regular way" contracts for the
performance of which an irrevocable letter of credit has been deposited
with the Trustee. Contracts to acquire Securities were entered into on July
17, 2000 and have settlement dates ranging from July 19, 2000 to July 31,
2000 (see "The Portfolios").

(2) The market value of each Security is based on the most recent closing sale
price as of the close of the New York Stock Exchange on the business day
prior to the Initial Date of Deposit. Other information regarding the
Securities, as of the Initial Date of Deposit, is as follows:

PROFIT
COST TO (LOSS) TO
SPONSOR SPONSOR
-------------- --------------
Bandwidth & Telecommunications Series A $150,012 $ 13
Bandwidth & Telecommunications Series B $150,012 $ 13
Biotechnology & Pharmaceutical Series A $148,791 $ (23)
Biotechnology & Pharmaceutical Series B $148,791 $ (23)
Global Wireless Series A $150,006 $ --
Global Wireless Series B $150,006 $ --
Great International Firms Portfolio $298,959 $ (322)
Semiconductor Series A $151,577 $ 6
Semiconductor Series B $151,577 $ 6

"+" indicates that the stock is held in the form of American Depositary
Receipts or similar receipts.

"3" indicates that the stock is a foreign common stock traded on a U.S.
securities exchange.

(3) Current Dividend Yield for each Security is based on the estimated annual
dividends per share and the Security's market value as of the time
described in the previous note. Estimated annual dividends per share are
calculated by annualizing the most recently declared dividends or by adding
the most recent interim and final dividends declared and reflect any
foreign withholding taxes.

THE SECURITIES. A brief description of each of the issuers of the Securities
is listed below.

BANDWIDTH & TELECOMMUNICATIONS TRUSTS

Analog Devices, Inc. Analog Devices, Inc. designs, manufactures, and markets
integrated circuits used in analog and digital signal processing. The company's
products are used in communications, computer, industrial, instrumentation,
military/aerospace, automotive, and high-performance consumer electronics
applications. Analog Devices sells its products worldwide.

Applied Micro Circuits Corporation. Applied Micro Circuits Corporation
designs, develops, manufactures, and markets high-performance, high-bandwidth
silicon solutions for the world's communications infrastructure. The company
provides products for the automated test equipment, high-speed computing, and
military markets.

Broadcom Corporation. Broadcom Corporation provides integrated silicon
solutions that enable broadband digital data transmission of voice, data, and
video content to the home and within the business enterprise. The company
designs, develops, and supplies integrated circuits for cable set-top boxes,
cable modems, high-speed networking, direct satellite and digital broadcast, and
digital subscriber line.

Brocade Communications Systems, Inc. Brocade Communications Systems, Inc.
provides switching solutions for storage area networks (SAN). The company's
switching solutions utilize the fiber channel interconnect protocol. Brocade's
family of SilkWorm switches enables a company to manage growth of its data
storage requirements, improve the data transfer performance, and increase the
size of its SAN.

China Mobile (Hong Kong) Limited. China Mobile (Hong Kong) Limited, through
its subsidiaries, provides cellular telecommunications services in the People's
Republic of China.

Cisco Systems, Inc. Cisco Systems, Inc. supplies data networking products to
the corporate enterprise and public wide area service provider markets. The
company offers a variety of products including routers, LAN switches, frame
relay/ATM, and remote access concentrators. Cisco's clients include utilities,
corporations, universities, governments, and small to medium-size businesses
worldwide.

COLT Telecom Group plc. COLT Telecom Group plc provides telecommunications
and internet services to commercial and governmental customers in Europe. The
company currently has operations in twenty European cities in nine countries and
plans to be providing service in approximately 30 additional cities by the end
of 2001.

Conexant Systems, Inc. Conexant Systems, Inc. provides semiconductor
products for communications electronics. The company offers products for use in
wireless communications, network access, network processing, digital
entertainment, personal imaging, and personal computing. Conexant has design,
engineering, marketing, sales, and service facilities in the United States and
other countries around the world.

Copper Mountain Networks, Inc. Copper Mountain Networks, Inc. supplies
high-speed DSL-based communications products for the broadband access market.
The company's solutions enable telecommunications service providers to provide
high-speed connectivity over the existing copper wire telephone infrastructure
to the business, multi-tenant unit and residential markets.

Corning, Inc. Corning, Inc. conducts operations in the telecommunications,
advanced materials, and information display industries. The company produces
optical fiber, cable, and photonic components for the telecommunications
industry, as well as produces glass panels, funnels, liquid crystal display
glass and projection video lens assemblies for the information display industry.

Extreme Networks, Inc. Extreme Networks, Inc. provides switching solutions
for local area networks (LAN). The company uses its custom ASICs and common
hardware, software, and management architecture to offer customers LAN
solutions.

GlobeSpan, Inc. GlobeSpan, Inc. develops advanced digital subscriber line
(DSL) integrated circuits. The company's circuits enable high-speed data
transmission over the existing network of copper telephone wires known as the
local loop. GlobeSpan sells its circuits as chip sets to manufacturers of DSL
equipment for incorporation into products that are sold to telecommunications
service providers.

JDS Uniphase Corporation. JDS Uniphase Corporation provides advanced
fiberoptic components and modules. The company's products are sold to
telecommunications and cable television system providers worldwide. Products
include semiconductor lasers, high-speed external modulators, transmitters,
amplifiers, couplers, multiplexers, and optical switches. JDS also designs,
manufactures, and markets laser subsystems.

Juniper Networks, Inc. Juniper Networks, Inc. provides Internet
infrastructure solutions for Internet service providers and other
telecommunications service providers. The company delivers next generation
Internet backbone routers that are designed for service provider networks.

McLeodUSA, Inc. McLeodUSA, Inc. provides communications services to business
and residential customers in the Midwestern and Rocky Mountain regions of the
United States. The company's communications services include local, long
distance, data, voice mail, and Internet access.

Metromedia Fiber Network, Inc. Metromedia Fiber Network, Inc. provides
high-bandwidth, fiber optic communications infrastructure to carrier and
corporate/government customers in the United States and Europe.

Nextel Communications, Inc. Nextel Communications, Inc. provides digital and
analog wireless communications services to its customers in the United States.
The company markets its products under the Nextel brand name. Nextel's network
offers an integrated wireless communications tool with digital cellular,
text/numeric paging, and a digital two-way radio feature.

NEXTLINK Communications, Inc. NEXTLINK Communications, Inc. provides local,
long distance, and enhanced communications services to commercial customers. The
company operates facilities based networks providing switched local and long
distance services throughout the U.S. NEXTLINK's products consist of local and
long distance, calling cards, toll-free calling, voice messaging, and other
communications services.

Nokia Oyi. Nokia Oyj is an international telecommunications company. The
company develops and manufactures mobile phones, networks and systems for
cellular and fixed networks. Nokia also develops and supplies access networks,
multimedia equipment and other telecom related products. The company provides
its products and services worldwide.

Nortel Networks Corporation. Nortel Networks Corporation provides telephony,
data, wireless, and wireline products and services for the Internet. The company
serves carrier, service provider, and enterprise customers on a worldwide basis.

ONI Systems Corporation. ONI Systems Corporation develops, markets, and
sells optical networking equipment. The company's equipment addresses the
bandwidth and service limitations of regional and metropolitan networks.

PMC-Sierra, Inc. PMC-Sierra, Inc. designs, develops, markets, and supports
semiconductor networking solutions. The company's products are used in the high
speed transmission and networking systems which are used to restructure the
global telecommunications and data communications infrastructure.

Powerwave Technologies, Inc. Powerwave Technologies, Inc. designs,
manufactures, and markets ultra-linear radio frequency power amplifiers for use
in the wireless communications market. The company manufactures both single and
multi-carrier radio frequency power amplifiers for a variety of frequency ranges
and transmission protocols. Powerwave markets its products worldwide.

Qwest Communications International Inc. Qwest Communications International
Inc. provides broadband Internet-based data, voice, and image communications for
businesses and consumers. The company's Qwest Macro Capacity Fiber Network
operates in North America. Qwest is also building a high-capacity European fiber
optic, Internet-based network with its joint venture partner.

Redback Networks Inc. Redback Networks Inc. provides advanced networking
solutions. The company's solutions enable carriers, cable multiple system
operators, and service providers to rapidly deploy high-speed broadband access
to the Internet and corporate networks. Redback's subscriber management system
connects and manages subscribers using digital subscriber line, cable, and
wireless technologies.

Scientific-Atlanta, Inc. Scientific-Atlanta, Inc. provides products and
services for advanced communications networks which deliver voice, data, and
video. The company's products connect information generators with information
users via broadband terrestrial and satellite networks, and include applications
for the converging of cable, telephone, and data networks.

SDL, Inc. SDL, Inc. designs, manufactures, and markets semiconductor lasers,
fiber optic related products, and optoelectronic systems. The company's products
are used in the telecommunications, cable television, dense wavelength division
multiplexing, and satellite communications markets.

Sprint Corporation (PCS Group). Sprint Corporation (PCS Group) operates a
100% digital, 100% personal cellular communication system (PCS) nationwide
wireless network in the United States. The company currently serves the United
States, Puerto Rico and the US Virgin Islands.

Sycamore Networks, Inc. Sycamore Networks, Inc. develops and markets
software-based optical networking products. The company's customers include
local exchange carriers, incumbent local exchange carriers, long distance
carriers, Internet service providers, cable operators, international telephone
companies, and wholesale carriers.

Telefonaktiebolaget LM Ericsson AB. Telefonaktiebolaget LM Ericsson AB
develops and produces advanced systems and products for wired and mobile
communications in public and private networks. The product line includes digital
and analog systems for telephones and networks, microwave radio links, radar
surveillance systems, and business systems. The company produces and markets
worldwide.

TriQuint Semiconductor, Inc. TriQuint Semiconductor, Inc. designs, develops,
manufactures, and markets a variety of high performance analog and mixed signal
integrated circuits for the communications markets. The company utilizes its
proprietary gallium arsenide technology to enable its products to overcome the
performance barriers of silicon devices in various applications. TriQuint's
products are sold worldwide.

Turnstone Systems, Inc. Turnstone Systems, Inc. provides loop management
solutions. The company's solutions enable local exchange carriers to deploy and
maintain digital subscriber line (DSL) services. Turnstone's Copper CrossConnect
CX100 product is sold through a direct sales force and through an original
equipment manufacturer relationship with Lucent Technologies, Inc.

Vitesse Semiconductor Corporation. Vitesse Semiconductor Corporation
designs, develops, manufactures, and markets digital high-bandwidth
communications and automatic test equipment (ATE) integrated circuits.
The company's products address the needs of telecommunications, data
communications, and ATE equipment manufacturers who demand a combination of
high-speed, high-complexity, and low-power dissipation.

VoiceStream Wireless Corporation. VoiceStream Wireless Corporation provides
personal communications services (PCS) under the VoiceStream brand name. The
company operates in urban areas primarily located in the Western United States.

WorldCom, Inc. WorldCom, Inc. provides a broad range of communications,
outsourcing, and managed network services worldwide. The company provides long
distance, local, and wireless communications, including voice, data, Internet,
and international services.

BIOTECHNOLOGY & PHARMACEUTICAL TRUSTS

Allergan, Inc. Allergan, Inc. provides eye care and specialty pharmaceutical
products through-out the world. The company's products are marketed to the eye
care pharmaceutical, ophthalmic surgical device, over-the-counter contact lens
care, movement disorder, and dermatological markets. Allergan markets its
products under brand names such as Alphagan, Botox, and Complete.

Alpharma, Inc. Alpharma, Inc. develops, manufactures, and markets specialty
generic and proprietary human pharmaceutical and animal health products. The
company's products include generic liquid and topical pharmaceuticals, specialty
antibiotics, animal health feed additives for poultry and livestock, and
vaccines for farmed fish. Alpharma has operations worldwide.

ALZA Corporation. ALZA Corporation is a research-based pharmaceutical
products company with drup delivery technologies. The company applies its
technologies to develop pharmaceutical products with enhanded therapeutic value
for its own portfolio, as well as for other pharmaceutical companies. ALZA's
sales and marketing efforts are currently focused in urology and oncology.

Amgen, Inc. Amgen, Inc. discovers, develops, manufactures, and markets human
therapeutics based on cellular and molecular biology. The company focuses its
research on secreted protein and small molecule therapeutics, with particular
emphasis on neuroscience and cancer. Amgen concentrates on the areas of
hematology, cancer, infectious disease, endocrinology, neurobiology, and
inflammation.

Andrx Corporation. Andrx Corporation formulates and commercializes oral
controlled-released pharmaceuticals. The company develops generic versions of
selected high sales volume controlled-release brand name pharmaceuticals, and
develops its own brand name formulations of certain existing drugs. Andrx also
distributes pharmaceutical products manufactured by third parties.

Biovail Corporation. Biovail Corporation is an international,
fully-integrated pharmaceutical company that develops, tests, and manufactures
drugs. The company utilizes controlled-release, rapid dissolve, enhanced
absorption and taste masking technologies. Biovail markets its products directly
in Canada and through strategic licensing partners internationally.

Celgene Corporation. Celgene Corporation develops and commercializes human
pharmaceuticals and agrochemicals. The company employs small molecule
immunotherapeutic compound development and biocatalytic chiral chemistry
technology platforms. Celgene's lead compound, Thalomid, is in clinical trials
for the treatment of a variety of cancers and is being marketed for the
treatment of ENL, a complication of leprosy. Cephalon, Inc. Cephalon, Inc.
discovers, develops, and markets biopharmaceutical products to treat
neurological disorders and cancer. The company's PROVOGIL treats excessive
daytime sleepiness associated with narcolepsy.

COR Therapeutics, Inc. COR Therapeutics, Inc. discovers, develops, and
commercializes pharmaceutical products for the treatment and prevention of
severe cardiovascular diseases. The company currently has research and
development programs that seek to address the critical needs in unstable angina,
acute myocardial infarction, deep vein thrombosis, and restenosis.

Eli Lilly and Company. Eli Lilly and Company discovers, develops,
manufactures, and sells pharmaceutical products for humans and animals. The
company's products are sold in countries around the world. Eli Lilly's products
include neuroscience products, endocrine productsd, anti-infectives,
cardiovascular agents, oncology products, and antiulcer agent, and animal health
products.

Forest Laboratories, Inc. Forest Laboratories, Inc. develops, manufactures,
and sells both branded and generic forms of ethical products which require a
physician's prescription. The company also manufactures non-prescription
pharmaceutical products sold over-the-counter, which are used for the treatment
of a wide range of illnesses. Forest's products are marketed in the United
States and eastern Europe.

Genentech, Inc. Genentech, Inc., a biotechnology company, discovers,
develops, manufactures, and markets human pharmaceuticals. The company markets
biotechnology products directly in the United States.

Gilead Sciences, Inc. Gilead Sciences, Inc. discovers, develops, and
commercializes therapeutics for viral diseases. The company markets VISTIDE for
the treatment of CMV retinitis, a sight-threatening viral infection in patients
with AIDS. Gilead is also developing products to treat diseases caused by HIV,
hepatitis B virus, and influenza virus.

Human Genome Sciences, Inc. Human Genome Sciences, Inc. researches and
develops proprietary pharmaceutical and diagnostic products. The company's
products predict, prevent, detect, treat, and cure disease based on the
discovery of human and microbial genes.

IDEC Pharmaceuticals Corporation. IDEC Pharmaceuticals Corporation, a
biopharmaceutical company, researches, develops, and commercializes targeted
therapies for the treatment of cancer and autoimmune and inflammatory diseases.
The company's "Rtuxan" product treats certain B-cell NHLs. IDEC also develops
products for the treatment of certain solid tumor cancers and various autoimmune
diseases.

Immunex Corporation. Immunex Corporation is a biopharmaceutical company that
discovers, develops, manufactures, and markets therapeutic products. The
company's products are used to treat human diseases, including cancer,
infectious diseases, and immunological disorders. Immunex sells its products
around the world.

IVAX Corporation. IVAX Corporation researches, develops, manufactures, and
markets generic and branded pharmaceuticals in the United States and
international markets. The company's primary focus is pharmaceuticals with an
emphasis on oncology and respiratory products, as well as specialty generic
pharmaceuticals. IVAX also provides veterinary products and diagnostic products.

Lexicon Genetics, Inc. Lexicon Genetics, Inc. is involved in the design,
development, and application of gene trapping and mutagenesis technologies for
gene discovery and functional genomics.

Medarex, Inc. Medarex, Inc. is a biopharmaceutical company developing
antibody-based therapeutics to fight cancer and other life-threatening and
debilitating diseases. The company has several products in clinical development
for the treatment of cancers and leukemia, autoimmune diseases, and ophthalmic
conditions. Medarex also creates and develops human antibodies for itself and
others.

MedImmune, Inc. MedImmune, Inc. develops and markets products that address
medical needs in areas such as infectious diseases, transplantation medicine,
autoimmune diseases and cancer. The company currently sells Synagis, RespiGam,
and CytoGam primarily in the United States.

Millennium Pharmaceuticals, Inc. Millennium Pharmaceuticals, Inc. is a drug
discovery and development company. The company incorporates large-scale
genetics, genomics, high throughput screening, and informatics in an integrated
life science and technology platform. The platform is applied in discovering and
developing proprietary therapeutic and diagnostic human healthcare products and
services.

Pfizer, Inc. Pfizer, Inc. is a research-based, global pharmaceutical company
that discovers, develops, manufactures, and markets medicines for humans and
animals. The company's products include prescription pharmaceuticals,
non-prescription self-medications, and animal health products such as
anti-infective medicines and vaccines.

Pharmacia Corporation. Pharmacia Corporation is a global life sciences
company that applies biological sciences to an integrated system of agriculture,
food, and human health. The company manufactures and sells pharmaceuticals,
agricultural products, and food ingredients.

QLT PhotoTherapeutics, Inc. QLT PhotoTherapeutics Inc. develops and
commercializes pharmaceutical products for use in photodynamic therapy. The
company currently provides PHOTOFRIN, a photodynamic therapy drug used in the
treatment of various cancers. QLT is also developing Visudyne, a therapy to
treat the wet form of age-related macular degeneration.

Seprpcor Inc. Sepracor Inc. develops and commercializes potentially improved
versions of widely-prescribed drugs. The company's ICE pharmaceuticals are being
developed as proprietary, single-isomer or active-metabolite versions of these
drugs.

Teva Pharmaceutical Industries, Limited. Teva Pharmaceutical Industries,
Limited is a pharmaceutical company with more than 70% of its sales outside
Israel, primarily in the United States. The company develops, manufactures and
markets branded and generic human pharmaceuticals, bulk pharmaceutical
chemicals, medical disposable and veterinary products.

GLOBAL WIRELESS TRUSTS

ARM Holdings plc. ARM Holdings plc designs RISC microprocessors and related
technology and software, and sells development systems to enhance embedded
applications. The company licenses and sells its technology and products to
international electronics companies, which in turn manufacture, market, and sell
microprocessors and application specific integrated circuits and related
products.

Check Point Software Technologies Ltd. Check Point Software Technologies
Ltd. provides Internet security. The company's integrated architecture includes
network security, traffic control, and Internet Protocal address management.
Check Point Software solutions enable customers to implement centralized
policy-based management with enterprise-wide distributed deployment.

China Mobile (Hong Kong) Limited. China Mobile (Hong Kong) Limited, through
its subsidiaries, provides cellular telecommunications services in the People's
Republic of China.

CIENA Corporation. CIENA Corporation provides optical networking equipment.
The company offers products for telecommunications and data communications
service providers worldwide. CIENA's customers include long distance carriers,
competitive local exchange carriers, Internet service providers, and wholesale
carriers. The company offers optical transport, intelligent switching, and
multi-service delivery systems.

Deutsche Telekom AG. Deutsche Telekom AG owns, operates and leases public
telecommunications networks and offers network applications services. The
company provides local and long distance telephone services, as well as
integrated voice and data digital services and maintains a large cable televison
network. Deutsche Telekom also offers mobile, paging and on-line services to
German and international customers.

France Telecom S.A. France Telecom S.A. provides telecommunications services
in France. The company operates a network of approximately 33.7 million
telephone lines for homes and businesses and a mobile telecommunications service
with over four million subscribers. France Telecom also provides almost all
other aspects of voice, data and image transmission, including television
broadcasting and cable services.

Motorola, Inc. Motorola, Inc. provides integrated communications solutions
and embedded electronic solutions. The company offers software-enhanced wireless
telephones, two-way radios, messaging and satellite communications products and
systems, as well as networking and Internet-access products. Customers include
consumers, network operators, and commercial, government, and industrial
customers.

RF Micro Devices, Inc. RF Micro Devices, Inc. designs, develops, and markets
proprietary radio frequency integrated circuits. The company's products are used
for wireless communications applications such as cellular and PCS, cordless
telephony, wireless LANs, wireless local loop, industrial radios, wireless
security and remote meter reading.

SK Telecom Co., Ltd. SK Telecom Co., Ltd., an affiliate of SK Group, offers
mobile telecommunications and paging services in Korea and India. The company
provides subscribers with cellular services such as wireless fax and data
transmissions. SK Telecom provides Internet services such as news, electronic
mail, web-hosting, chatting, and online games.

Telefonica S.A. Telefonica S.A. provides telecommunications services to
industrial, residential and municipal customers throughout Spain and in
Argentina, Peru, Brazil, Venezuela, Puerto Rico, Portugal, El Salvador and the
United States. The company retails telephones, mobile phones and telefaxes and
offers videoconferencing and audio-visual communications such as television
broadcasting.

Vodafone AirTouch plc. Vodafone AirTouch ppc. provides mobile
telecommunications services. The company supplies customers with digital and
analogue cellular telephone, paging and mobile data and Internet services. The
Group, via a 50% joint venture with VivendiNet, operates the `VIZZAVI' brand
Internet portal company in Europe. Vodafone has agreements in over 100 countries
and across 230 networks.

GREAT INTERNATIONAL FIRMS TRUST

Akzo Nobel N.V. Akzo Nobel N.V. produces and markets chemicals, coatings and
pharmaceuticals. The company manufactures polymers, catalysts, pulp and paper
chemicals, salt, base chemicals, paint, automobile finishes, industrial
coatings, resins, oral contraceptives, antidepressants, cardiovascular drugs,
diagnostic kits, home pregnancy kits and veterinary drugs.

Alcatel. Alcatel develops, produces and distributes telecommunications
equipment and cables and offers telecommunications services. The company
manufactures and markets mobile telephones, microwave radio systems, switching
equipment and underwater networks, printed circuit boards, inductive components,
converters and optronics and solutions for utilities, cable TV operators and the
Internet.

AstraZeneca Group plc. AstraZeneca Group plc is a holding company. Through
its subsidiaries, the group researches, manufactures and sells pharmaceutical
and agrochemical products and medical products. The goup foucses its operationis
on seven therapeutic areas: gastrointestinal, cardiovascular, onclology,
respiratory, central nervous system, pain control, anaesthesia and infection.

Banca Intesa S.p.A. Banca Intesa S.p.A. is an Itialioan Banking Group which
provides commercial banking, merchant banking, mutual funds, bank assurance,
real estate, factoring, lease financing, and other services. The Bank has
branches throughout Italy, full branches in London, New York, Singapore, and
Hong Kong, and representative offices throughout the world.

Bank of Tokyo-Mitsubishi, Limited. Bank of Tokyo-Misubishi, Limited provides
a broad range of financial services to businesses, government, and private
individuals. The bank, through its global subsidiaries, offers commercial,
investment, and trust banking products and services.

BP Amoco plc. BP Amoco plc is an oil and petrochemicals company. The company
explores for and produces oil and natural gas, refines, markets, and supplies
petroleum products, and manufactures and markets chemicals. BP Amoco's chemicals
include acetic acid, acrylonitrile, ethylene and polyethylene. The company has
operations in more than 70 countries.

British Airways plc. British Airways plc provides international and domestic
passenger and cargo airline services, which extend to over 165 destinations in
over 85 countries. They also own a percentage of a number of airlines, including
Qantas, Deutsche BA and Go Fly Limited. Group services/interests include
computer reservation systems, travel services, airline marketing and "oneworld",
and alliance with seven airlines.

British Telecommunications plc. British Telecommunications plc provides
elecommunications services. The company provides local and long-distance
telephone call products and services in the United Kingdom telephone exchange
lines to homes and businesses, international telephone calls to and from the
United Kingdom, telecommunications equipment for customers' premises, and
Internet and data services. BT has operations in approximately 52 countries.

Deutsche Bank AG. Deutsche Bank AG provides a broad range of banking,
investment, fund management, securities, credit card, mortgage, leasing and
insurance services worldwide. The company provides its services to retailers and
private clients, corporations and financial institutions, as well as
multi-national conglomerates. Deutsche Bank also offers a variety of financial
consulting and advisory services.

Koninklijke (Royal) Philips Electronics N.V. Koninklijke (Royal) Philips
Electronics N.V. manufactures lighting, consumer electronics, multimedia
devices, domestic appliances and personal care items, semiconductors, medical
devices, communication systems, and industrial electronics. The company sells
its products worldwide.

Marconi plc. Marconi plc is an international company which specializes in
the communications marketplace. The group, which markets high technology
products, operates via three divisions: Communications, supplying communications
and data networking equipment and solutions: Systems, which applies electronic
and information solutions in a range of industries: and Capital, providing
funding for investment.

NEC Corporation. NEC Corporation manufactures and markets computers,
telecommunication devices, electric appliances, circuit boards, and medical
equipment instruments. The company also serves as an information provider for
computer communication. NEC operates worldwide.

News Corporation, Limited. News Corporation, Limited is an international
media company. The company's operations include the production and distribution
of motion pictures and television programming. The company provides television,
satellite, and cable broadcasting and the publication of newspapers, magazines,
books and promotional inserts. News Corp. also provides electronic commerce and
aircraft leasing.

Nissan Motor Co., Ltd. Nissan Motor Co., Ltd. manufactures and markets motor
vehicles and auto parts. The company has overseas production bases in the United
States and the United Kingdom. Nissan Motor also produces industrial machines
such as towing tractors and forklifts in Japan, Spain, and the United States.

Nokia Oyj. Nokia Oyj is an international telecommunications company. The
company develops and manufactures mobile phones, networks and systems for
cellular and fixed networks. Nokia also develops and supplies access networks,
multimedia equipment and other telecom related products. The company provides
its products and services worldwide.

Nomura Securities Co., Ltd. Nomura Securities Co., Ltd. Is a comprehensive
financial service company. The company provides financial services such as
dealing, brokerage, underwriting, and distribution of securities.

NTT DoCoMo, Inc. NTT DoCoMo, Inc. provides various types of
telecommunication services including cellular phones, personal handyphone
systems (PHS), paging, satelllite mobile communication, and wireless Private
Branch Exchange system services. The company also sells cellular phones, PHS,
car phones, and pagers.

Reuters Group plc. Reuters Group plc is an international news and
information organization. The company provides economic and financial
information to the business community, in addition to supplying various news
services. Reuters Financial Television covers world markets and international
news through over 180 bureaus in some 160 countries.

Royal Dutch Petroleum Company. Royal Dutch Petroleum Company owns 60% of the
Royal Dutch/Shell Group of companies. Through this interest, the company
explores for, produces, refines, and markets petroleum products, manufactures
chemicals, mines coal and non-ferrous metals, and produces solar cells. Royal
Dutch operates in approximately 135 countries.

Ryohin Keikaku Co., Ltd. Ryohin Keikaku Co., Ltd. Is a retailer and
wholesaler of Mujirushi Ryohin brand products, which were originally a generic
private-brand product. The company's product line includes knitwear, food, and
household items.

SONY Corporation. SONY Corporation develops and manufactures consumer and
industrial electronic equipment. The company's products include audio and video
equipment, televisions, displays, semiconductors, electronic components,
computers and computer peripherals, and telecommunication equipment.

Telecom Argentina Stet - France Telecom S.A. Telecom Argentina Stet - France
Telecom S.A. provides telecommunications services including local, long-distance
and international service in the northern half of Argentina. The company,
through its subsidiaries, also provides cellular telecommunications service,
publishes telephone directories and provides a paging service within the same
area of Argentina.

UBS AG. UBS AG provides a wide range of global banking and financial
services. The bank offers corporate and institutional banking, retail banking
and basic banking services, corporate finance, merchant banking, investment
counseling, asset and portfolio management, trading and risk management.

Vodafone AirTouch plc. Vodafone AirTouch plc provides mobile
telecommunications services. The company supplies customers with digital and
analogue cellular telephone, paging and personal communications services. The
group offers its services in France, Australia, Egypt, Fiji, Germany, Greece,
Malta, the Netherlands, New Zealand, South Africa, Sweden, Uganda and the United
States.

SEMICONDUCTOR TRUSTS

Altera Corporation. Altera Corporation designs, manufactures, and markets
programmable logic devices and associated development tools. Programmable logic
devices are semiconductor integrated circuits that offer on-site programmability
to customers. The company's products, including a variety of programmable logic
devices, serve the telecommunications, data communications, and industrial
applications markets.

Applied Materials, Inc. Applied Materials, Inc. develops, manufactures,
markets, and services semiconductor wafer fabrication equipment and related
spare parts for the worldwide semiconductor industry. The company's customers
include semiconductor wafer manufacturers and semiconductor integrated circuit
manufacturers.

ASM Lithography Holding N.V. ASM Lithography Holding N.V. develops,
manufactures, markets and services photolithography projection systems, known as
wafer steppers and step and scan. The company supplies its products to
integrated circuit manufacturers that use them to produce semiconductors. ASM's
customers are located in the United States, Asia and Western Europe.

Credence Systems Corporation. Credence Systems Corporation designs,
manufactures, sells, and services automatic test equipment used for testing
semiconductor integrated circuits. The company also develops, licenses, and
distributes related software products. Credence's customers include
semiconductor manufacturers as well as assembly and test services companies.

Cree, Inc. Cree, Inc. develops and manufactures semiconductor materials and
electronic devices made from silicon carbide (SiC). The company uses proprietary
technology to make enabling compound semiconductors such as blue and green light
emitting diodes, SiC crystals used in the production of unique gemstones, and
SiC wafers that are sold for device production and research.

Cypress Semiconductor Corporation. Cypress Semiconductor Corporation
designs, develops, manufactures, and markets a line of digital and mixed-signal
integrated circuits. The company's circuits are used in the data communications,
telecommunications, computers, and instrumentation systems markets. Cypress'
products are marketed worldwide through a network of sales offices,
distributors, and sales representative firms.

Exar Corporation. Exar Corporation designs, develops, and markets analog and
mixed-signal integrated circuits for use in communications and video and imaging
products. The company also produces digital integrated circuits in
communications products, as well as general purpose analog integrated circuits.

Extreme Networks, Inc. Extreme Networks, Inc. provides switching solutions
for local area networks (LAN). The company uses its custom ASICs and a common
hardware, software, and management architecture to offer customers LAN
solutions.

Intel Corporation. Intel Corporation designs, manufactures, and sells
computer components and related products. The company's major products include
microprocessors, chipsets, embedded processors and microcontrollers, flash
memory products, graphics products, network and communications products, systems
management software, conferencing products, and digital imaging products.

KLA-Tencor Corporation. KLA-Tencor Corporation manufactures yield management
and process monitoring systems for the semiconductor industry. The company's
systems are used to analyze product and process quality at critical steps in the
manufacture of circuits. The systems also provide feedback so that fabrication
problems can be identified. KLA-Tencor operates sales, service, and application
centers worldwide.

Lam Research Corporation. Lam Research Corporation manufactures, markets,
and services semiconductor processing equipment used in the making of integrated
circuits. The company's products are used to deposit special films on a silicon
wafer and etch away portions of various films to create a circuit design. Lam
sells its products around the world.

LSI Logic Corporation. LSI Logic Corporation designs, develops,
manufactures, and markets integrated circuits and storage systems. The company
offers products and services for a variety of electronic systems applications
and are marketed to original equipment manufacturers in the networking,
telecommunications and wireless, computers, consumer products, and storage
industries.

Micron Technology, Inc. Micron Technology, Inc., through its subsidiaries,
manufactures and markets semiconductor memory and enhancement products for
workstations and personal computers. The company's products include dynamic
random access memory chips (DRAMs), static random access memory chips (SRAMs),
memory modules, graphics accelerators, and radio frequency identification
products.

Newport Corporation. Newport Corporation designs, manufactures, and markets
components, instruments, and integrated systems to fiber-optic communications,
semiconductor equipment, computer peripherals, and scientific research markets.
The company's customers include Fortune 500 corporations, technology companies,
and research laboratories in commercial, academic, and government sectors
worldwide.

Novellus Systems, Inc. Novellus Systems, Inc. manufactures, markets, and
services advanced automated wafer fabrication systems for the deposition of thin
films. The company supplies deposition systems used in the fabrication of
integrated circuits. Novellus has subsidiaries in the United Kingdom, France,
Germany, China, Japan, the Netherlands, Singapore, and Taiwan.

QUALCOMM, Inc. QUALCOMM, Inc. develops and delivers digital wireless
communications products and services based on the company's CDMA digital
technology. The company's business areas include integrated CDMA chipsets and
systems software, technology licensing, Eudora email software for Windows and
Macintosh platforms, and satellite based systems including Omnitracs and
Globalstar systems.

STMicroelectronics N.V. STMicroelectronics N.V. designs, develops,
manufactures, and markets semiconductor integrated circuits and discrete
devices. The company's products are used in the telecommunications, consumer,
automotive, computer, and industrial sectors. Customers are located in North
America, Europe, Asia/Pacific, and Japan.

Taiwan Semiconductor Manufacturing Company Ltd. Taiwan Semiconductor
Manufacturing Company Ltd. manufactures integrated circuits based on its
proprietary designs. The company offers a comprehensive set of integrated
circuit fabrication processes to manufacture CMOS logic, mixed-mode, volatile
and non-volatile memory and BiCMOS chips. Taiwan Semiconductor is an affiliate
of Philips Electronics N.V.

Teradyne, Inc. Teradyne, Inc. manufactures automatic test systems and
related software for the electronics and communications industries. The
company's products include systems to test semiconductors, circuit boards,
telephone lines and networks, and software. Teradyne also manufactures
backplanes and associated connectors used in electronic systems.

Texas Instruments, Inc. Texas Instruments, Inc. provides semiconductor
products, as well as designs and supplies digital signal processing and analog
technologies. The company also conducts businesses in materials and controls,
educational and productivity solutions, and digital imaging. Texas Instruments
has manufacturing or sales operations in countries around the world.

TriQuint Semiconductor, Inc. TriQuint Semiconductor, Inc. designs, develops,
manufactures, and markets a variety of high performance analog and mixed signal
integrated circuits for the communications markets. The company utilizes its
proprietary gallium arsenide technology to enable its products to overcome the
performance barriers of silicon devices in various ap plications. TriQuint's
products are sold worldwide.

Varian Semiconductor Equipment Associates, Inc. Varian Semiconductor
Equipment Associates, Inc. designs, manufactures, markets, and services
semiconductor processing equipment used in the fabrication of integrated
circuits. The company supplies ion implantation systems used to manufacture
semiconductor chips.

Xilinx, Inc. Xilinx, Inc. designs, develops, and markets complete
programmable logic solutions. The company's solutions include advanced
integrated circuits, software design tools, predefined system functions
delivered as cores of logic, and field engineering support. Xilinx sells its
products through several channels of distribution to customers in the United
States and overseas.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen Funds Inc. and the Unitholders of
Van Kampen Focus Portfolios, Series 242:
We have audited the accompanying statements of condition and the related
portfolios of Van Kampen Focus Portfolios, Series 242 as of July 18, 2000.
The statements of condition and portfolios are the responsibility of the
Sponsor. Our responsibility is to express an opinion on such financial
statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements. Our procedures included confirmation of an
irrevocable letter of credit deposited to purchase securities by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Sponsor, as
well as evaluating the overall financial statement presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen Focus Portfolios,
Series 242 as of July 18, 2000, in conformity with accounting principles
generally accepted in the United States of America.

GRANT THORNTON LLP

Chicago, Illinois
July 18, 2000

<TABLE>

STATEMENTS OF CONDITION
AS OF JULY 18, 2000
<CAPTION>
BANDWIDTH BANDWIDTH BIOTECHNOLOGY
& TELECOM- & TELECOM- &
MUNICATIONS MUNICATIONS PHARMACEUTICAL
SERIES A SERIES B SERIES A
---------------- ---------------- ---------------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 150,025 $ 150,025 $ 148,768
--------------- ---------------- ---------------
Total $ 150,025 $ 150,025 $ 148,768
=============== ================ ===============

LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 344 $ 410 $ 233
Deferred sales charge liability (3) 2,955 5,304 2,930
Interest of Unitholders--
Cost to investors (4) 151,550 151,550 150,280
Less: Gross underwriting commission and
organizational costs (2)(4)(5) 4,824 7,239 4,675
--------------- ---------------- ---------------
Net interest to Unitholders (4) 146,726 144,311 145,605
--------------- ---------------- ---------------
Total $ 150,025 $ 150,025 $ 148,768
=============== ================ ===============

(1) The value of the Securities is determined by Interactive Data Corporation
on the bases set forth under "Public Offering--Offering Price". The
contracts to purchase Securities are collateralized by separate irrevocable
letters of credit which have been deposited with the Trustee.

(2) A portion of the Public Offering Price represents an amount sufficient to
pay for all or a portion of the costs incurred in establishing a Portfolio.
The amount of these costs are set forth in the "Fee Table." A distribution
will be made as of the close of the initial offering period to an account
maintained by the Trustee from which this obligation of the investors will
be satisfied.

(3) Represents the amount of mandatory distributions from a Portfolio on the
bases set forth under "Public Offering".

(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering-- Offering Price".

(5) Assumes the maximum sales charge.
</TABLE>

<TABLE>

STATEMENTS OF CONDITION
AS OF JULY 18, 2000
<CAPTION>
BIOTECHNOLOGY
& GLOBAL GLOBAL
PHARMACEUTICAL WIRELESS WIRELESS
SERIES B SERIES A SERIES B
--------------- ---------------- ---------------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 148,768 $ 150,006 $ 150,006
--------------- ---------------- ---------------
Total $ 148,768 $ 150,006 $ 150,006
=============== ================ ===============

LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 363 $ 251 $ 381
Deferred sales charge liability (3) 5,260 2,955 5,304
Interest of Unitholders--
Cost to investors (4) 150,280 151,530 151,530
Less: Gross underwriting commission and
organizational costs (2)(4)(5) 7,135 4,730 7,209
--------------- ---------------- ---------------
Net interest to Unitholders (4) 143,145 146,800 144,321
--------------- ---------------- ---------------
Total $ 148,768 $ 150,006 $ 150,006
=============== ================ ===============

(3) Represents the amount of mandatory distributions from a Portfolio on the
bases set forth under "Public Offering".

(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering-- Offering Price".

(5) Assumes the maximum sales charge.

</TABLE>

<TABLE>

STATEMENTS OF CONDITION
AS OF JULY 18, 2000
<CAPTION>
GREAT SEMI- SEMI-
INTERNATIONAL CONDUCTOR CONDUCTOR
FIRMS PORTFOLIO SERIES A SERIES B
--------------- --------------- ---------------
<S> <C> <C> <C>
INVESTMENT IN SECURITIES
Contracts to purchase Securities (1) $ 298,637 $ 151,583 $ 151,583
--------------- ---------------- ---------------
Total $ 298,637 $ 151,583 $ 151,583
=============== ================ ===============

LIABILITIES AND INTEREST OF UNITHOLDERS
Liabilities--
Organizational costs (2) $ 348 $ 199 $ 365
Deferred sales charge liability (3) 10,558 2,986 5,359
Interest of Unitholders--
Cost to investors (4) 301,660 153,120 153,120
Less: Gross underwriting commission and
organizational costs (2)(4)(5) 13,929 4,722 7,261
--------------- ---------------- ---------------
Net interest to Unitholders (4) 287,731 148,398 145,859
--------------- ---------------- ---------------
Total $ 298,637 $ 151,583 $ 151,583
=============== ================ ===============

(3) Represents the amount of mandatory distributions from a Portfolio on the
bases set forth under "Public Offering".

(4) The aggregate public offering price and the aggregate sales charge are
computed on the bases set forth under "Public Offering-- Offering Price".

(5) Assumes the maximum sales charge.
</TABLE>

THE PORTFOLIOS
--------------------------------------------------------------------------------

The Portfolios were created under the laws of the State of New York pursuant
to a Trust Indenture and Trust Agreement (the "Trust Agreement"), dated the date
of this Prospectus (the "Initial Date of Deposit"), among Van Kampen Funds Inc.,
as Sponsor, Van Kampen Investment Advisory Corp., as Supervisor, The Bank of New
York, as Trustee, and American Portfolio Evaluation Services, a division of Van
Kampen Investment Advisory Corp., as Evaluator.
The Portfolios offer investors the opportunity to purchase Units representing
proportionate interests in portfolios of actively traded equity securities. A
Portfolio may be an appropriate medium for investors who desire to participate
in a portfolio of stocks with greater diversification than they might be able to
acquire individually.
On the Initial Date of Deposit, the Sponsor deposited delivery statements
relating to contracts for the purchase of the Securities and an irrevocable
letter of credit in the amount required for these purchases with the Trustee. In
exchange for these contracts the Trustee delivered to the Sponsor documentation
evidencing the ownership of Units of the Portfolios. Unless otherwise terminated
as provided in the Trust Agreement, the Portfolios will terminate on the
Mandatory Termination Date and any remaining Securities will be liquidated or
distributed by the Trustee within a reasonable time. As used in this Prospectus
the term "Securities" means the securities (including contracts to purchase
these securities) listed in each "Portfolio" and any additional securities
deposited into each Portfolio.
Additional Units of a Portfolio may be issued at any time by depositing in
the Portfolio (i) additional Securities, (ii) contracts to purchase Securities
together with cash or irrevocable letters of credit or (iii) cash (or a letter
of credit) with instructions to purchase additional Securities. As additional
Units are issued by a Portfolio, the aggregate value of the Securities will be
increased and the fractional undivided interest represented by each Unit will be
decreased. The Sponsor may continue to make additional deposits into a Portfolio
following the Initial Date of Deposit provided that the additional deposits will
be in amounts which will maintain, as nearly as practicable, the same percentage
relationship among the number of shares of each Security in the Portfolio that
existed immediately prior to the subsequent deposit (an equal dollar amount of
each Security in the Great International Firms Portfolio). Due to round lot
requirements in certain foreign securities markets and market value
fluctuations, the Great International Firms Portfolio may not be able to invest
equally in each Security on the Initial or any subsequent Date of Deposit.
Investors may experience a dilution of their investments and a reduction in
their anticipated income because of fluctuations in the prices of the Securities
between the time of the deposit and the purchase of the Securities and because
the Portfolios will pay the associated brokerage or acquisition fees.
Each Unit of a Portfolio initially offered represents an undivided interest
in that Portfolio. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being deposited
by the Sponsor, the fractional undivided interest in that Portfolio represented
by each unredeemed Unit will increase or decrease accordingly, although the
actual interest in the Portfolio will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which may
include the Sponsor, or until the termination of the Trust Agreement.
Each Portfolio consists of (a) the Securities (including contracts for the
purchase thereof) listed under the applicable "Portfolio" as may continue to be
held from time to time in the Portfolio, (b) any additional Securities acquired
and held by the Portfolio pursuant to the provisions of the Trust Agreement and
(c) any cash held in the related Income and Capital Accounts. Neither the
Sponsor nor the Trustee shall be liable in any way for any failure in any of the
Securities.

OBJECTIVES AND SECURITIES SELECTION
--------------------------------------------------------------------------------

Each Portfolio seeks to increase the value of your investment by investing in
a portfolio of stocks. We cannot guarantee that a Portfolio will achieve its
objective. We describe the objective and selection criteria for each Portfolio
in the individual Portfolio sections beginning on page 4.
You should note that we applied the selection criteria to the Securities for
inclusion in the Portfolios as of the Initial Date of Deposit. After this date,
the Securities may no longer meet the selection criteria. Should a Security no
longer meet the selection criteria, we will generally not remove the Security
from its Portfolio.
A balanced investment portfolio incorporates various style and capitalization
characteristics. We offer unit trusts with a variety of styles and
capitalizations to meet your needs. We determine style characteristics (growth
or value) based on the criteria used in selecting the Portfolio. Generally, a
growth portfolio includes companies in a growth phase of their business with
increasing earnings. A value portfolio generally includes companies with low
relative price-earnings ratios that we believe are undervalued. We determine
market capitalizations as follows based on the weighted median market
capitalization of a portfolio: Small-Cap -- less than $1.7 billion; Mid-Cap --
$1.7 billion to $10.8 billion; and Large-Cap -- over $10.8 billion. We determine
all style and capitalization characteristics as of the Initial Date of Deposit
and the characteristics may vary thereafter. We will not remove a Security from
a Portfolio as a result of any change in characteristics.

RISK FACTORS
--------------------------------------------------------------------------------

Price Volatility. The Portfolios invest in stocks of U.S. and foreign
companies. The value of Units will fluctuate with the value of these stocks and
may be more or less than the price you originally paid for your Units. The
market value of stocks sometimes moves up or down rapidly and unpredictably.
Because the Portfolios are unmanaged, the Trustee will not sell stocks in
response to market fluctuations as is common in managed investments. In
addition, because some Portfolios hold a relatively small number of stocks, you
may encounter greater market risk than in a more diversified investment. As with
any investment, we cannot guarantee that the performance of a Portfolio will be
positive over any period of time.
Dividends. Common stocks represent ownership interests in the issuers and are
not obligations of the issuers. Accordingly, common stockholders have a right to
receive dividends only after the company has provided for payment of its
creditors, bondholders and preferred stockholders. Common stocks do not assure
dividend payments. Dividends are paid only when declared by an issuer's board of
directors and the amount of any dividend may vary over time.
Single Industry. Many of the Portfolios invest in a single industry or in a
limited number of industries. Any negative impact on the related industry will
have a greater impact on the value of Units than on an investment diversified
over several industries. You should understand the risks of these industries
before you invest.
Telecommunications Issuers. The Bandwidth & Telecommunications, Global
Wireless and Great International Firms Portfolios invest significantly in
telecommunications companies. These companies are subject to substantial
governmental regulation. For example, the United States government and state
governments regulate permitted rates of return and the kinds of services that a
company may offer. This industry has experienced substantial deregulation in
recent years. Deregulation may lead to fierce competition for market share and
can have a negative impact on certain companies. Competitive pressures are
intense and telecommunications stocks can experience rapid volatility. Certain
telecommunications products may become outdated very rapidly. A company's
performance can be hurt if the company fails to keep pace with technological
advances. Certain smaller companies in the portfolio may involve greater risk
than larger, established issuers. Smaller companies may have limited product
lines, markets or financial resources. Their securities may trade in lower
volumes than larger companies. As a result, the prices of these securities may
fluctuate more than the prices of other issuers. You should also review the
following section discussing technology companies because these companies may
involve similar risks.
Technology Issuers. The Great International Firms and Semiconductor
Portfolios invest significantly in technology companies. These companies include
companies that are involved in computer and business services, enterprise
software/technical software, Internet and computer software, Internet-related
services, networking and telecommunications equipment, telecommunications
services, electronics products, server hardware, computer hardware and
peripherals, semiconductor capital equipment and semiconductors. These companies
face risks related to rapidly changing technology, rapid product obsolescence,
cyclical market patterns, evolving industry standards and frequent new product
introductions. An unexpected change in technology can have a significant
negative impact on a company. The failure of a company to introduce new products
or technologies or keep pace with rapidly changing technology, can have a
negative impact on the company's results. Technology stocks tend to experience
substantial price volatility and speculative trading. Announcements about new
products, technologies, operating results or marketing alliances can cause stock
prices to fluctuate dramatically. At times, however, extreme price and volume
fluctuations are unrelated to the operating performance of a company. This can
impact your ability to redeem your Units at a price equal to or greater than
what you paid.
The market for certain products may have only recently begun to develop, is
rapidly evolving or is characterized by increasing suppliers. Key components of
some technology products are available only from limited sources. This can
impact the cost of and ability to acquire these components. Some technology
companies serve highly concentrated customer bases with a limited number of
large customers. Any failure to meet the standard of these customers can result
in a significant loss or reduction in sales. Many products and technologies are
incorporated into other products. As a result, some companies are highly
dependent on the performance of other technology companies. We cannot guarantee
that these customers will continue to place additional orders or will place
orders in similar quantities as in the past.
Health Care Issuers. The Biotechnology & Pharmaceutical invests significantly
in health care companies. These issuers include companies involved in advanced
medical devices and instruments, drugs and biotechnology, managed care, hospital
management/health services and medical supplies. These companies face
substantial government regulation and approval procedures. Congress and the
president have proposed a variety of legislative changes concerning health care
issuers from time to time. Government regulation, and any change in regulation,
can have a significantly unfavorable effect on the price and availability of
products and services.
Drug and medical products companies also face the risk of increasing
competition from new products or services, generic drug sales, termination of
patent protection for drug or medical supply products and the risk that a
product will never come to market. The research and development costs of
bringing a new drug or medical product to market are substantial. This process
involves lengthy government review with no guarantee of approval. These
companies may have losses and may not offer proposed products for several years,
if at all. The failure to gain approval for a new drug or product can have a
substantial negative impact on a company and its stock.
Health care facility operators face risks related to demand for services, the
ability of the facility to provide required services, confidence in the
facility, management capabilities, competition, efforts by insurers and
government agencies to limit rates, expenses, the cost and possible
unavailability of malpractice insurance, and termination or restriction of
government financial assistance (such as Medicare, Medicaid or similar
programs).
Foreign Stocks. Because the Global Wireless and Great International Firms
Portfolios invest in stocks of foreign companies, these Portfolios involve
additional risks that differ from an investment in domestic stocks. Other
Portfolios may also invest in foreign companies that involve the same risks.
These risks include the risk of losses due to future political and economic
developments, international trade conditions, foreign withholding taxes and
restrictions on foreign investments and exchange of securities. These Portfolios
also involve the risk that fluctuations in exchange rates between the U.S.
dollar and foreign currencies may negatively affect the value of the stocks.
These Portfolios involve the risk that information about the stocks is not
publicly available or is inaccurate due to the absence of uniform accounting and
financial reporting standards. In addition, some foreign securities markets are
less liquid than U.S. markets. This could cause a Portfolio to buy stocks at a
higher price or sell stocks at a lower price than would be the case in a highly
liquid market. Foreign securities markets are often more volatile and involve
higher trading costs than U.S. markets, and foreign companies, securities
markets and brokers are also generally not subject to the same level of
supervision and regulation as in the U.S. Certain stocks may be held in the form
of American Depositary Receipts or other similar receipts ("ADRs"). ADRs
represent receipts for foreign common stock deposited with a custodian (which
may include the Trustee). The ADRs in the Portfolios, if any, trade in the U.S.
in U.S. dollars and are registered with the Securities and Exchange Commission.
ADRs generally involve the same types of risks as foreign common stock held
directly. Some ADRs may experience less liquidity than the underlying common
stocks traded in their home maket.
Europe. The Global Wireless and Great International Firms Portfolios invest
in stocks principally traded in Europe. These Portfolios involve additional
risks that differ from an investment in United States companies. In recent
years, many European countries have participated in the European Economic and
Monetary Union (EMU) seeking to develop a unified European economy. For this
reason and others, many European countries have experienced significant
political, social and economic change in recent years. Any negative consequences
resulting from these changes could affect the value of your Portfolio.
On January 1, 1999, eleven EMU member countries introduced a new European
currency called the Euro. This may result in uncertainties for European
securities markets and operation of your Portfolio. This introduction requires
the redenomination of European debt and equity securities over a period of time.
This could result in various accounting differences and/or tax treatments that
otherwise would not likely occur. As part of the Euro conversion, participating
countries will no longer control their own monetary policies by directing
independent interest rates or currency transactions. Instead, a new European
Central Bank has authority to direct monetary policy, including money supply of
the national currencies of the participating countries to the Euro. Certain EMU
members, including the United Kingdom, are not implementing the Euro at this
time. This could raise additional questions and complications within European
markets. European markets could face significant difficulties if the Euro
introduction does not take place as planned. These difficulties could include
such things as severe currency fluctuations and market disruptions. No one can
predict whether all phases of the conversion will take place as scheduled or
whether future difficulties will occur. No one can predict the impact of the
conversion. All of these issues could have a negative impact on the value of
your Units.
Pacific Region. The Global Wireless and Great International Firms Portfolios
invest in stocks that principally trade in Pacific region countries. These
Portfolios involve additional risks that differ from an investment in United
States companies. Social, political and economic instability has been
significantly greater in Pacific region countries than that typically associated
with the United States and Western European countries. Any instability could
significantly disrupt Pacific region markets and could adversely affect the
value of Units. Pacific region countries are in various stages of economic
development. Some economies are substantially less developed than the U.S.
economy. Adverse conditions in these countries can negatively impact the
economies of countries in the region with more developed markets.
Many of these countries depend significantly on international trade. As a
result, protective trade barriers and the economic conditional of their trading
partners can hurt these economies. These countries may also be sensitive to
world commodity prices and vulnerable to recession in other countries. While
some Pacific region countries have experienced rapid growth, many countries have
immature financial sectors, economic problems or archaic legal systems. Pacific
region economies have experienced significant difficulties in recent years. Some
of these difficulties include substantial declines in the value of currencies,
gross domestic product and corporate earnings, political turmoil and stock
market volatility. In 1997, a significant drop in Thailand's currency set off a
wave of currency depreciations throughout South and Southeast Asia. Most of the
area's stock markets fell dramatically in reaction to these events. Consumer
demand in these countries has been weak due to a general reduction in global
growth. Interest rates and inflation have also increased in many of these
countries.
No FDIC Guarantee. An investment in your Portfolio is not a deposit of any
bank and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

PUBLIC OFFERING
--------------------------------------------------------------------------------

General. Units are offered at the Public Offering Price which includes the
underlying value of the Securities, the initial sales charge, and cash, if any,
in the Income and Capital Accounts. The "Fee Table" describes the sales charges
in detail. If any deferred sales charge payment date is not a business day, we
will charge the payment on the next business day. If you purchase Units after
the initial deferred sales charge payment, you will only pay that portion of the
payments not yet collected. A portion of the Public Offering Price includes an
amount of Securities to pay for all or a portion of the costs incurred in
establishing your Portfolio, including the cost of preparing documents relating
to the Portfolio (such as the prospectus, trust agreement and closing documents,
federal and state registration fees, the initial fees and expenses of the
Trustee and legal and audit expenses). Beginning on March 10, 2001, the
secondary market sales charge for Series B Portfolios and the Great
International Firms Portfolio will be 4.50% and will not include deferred
payments. The sales charge for these Portfolios will reduce by 0.5% on each
subsequent July 18 to a minimum of 3.00%. The initial offering period sales
charge is reduced as follows:

Great
International
Firms and
Series A Series B
Transaction Portfolio Portfolio
Amount* Sales Charge Sales Charge
-------------- -------------- --------------

Less than $50,000 2.95% 4.50%

$50,000 - $99,999 2.70 4.25
$100,000 - $249,999 2.50 4.00
$250,000 - $499,999 2.25 3.50
$500,000 - $999,999 2.00 2.50
$1,000,000 or more 1.50 1.50
---------------
*The breakpoint sales charges are also applied on a Unit basis utilizing a
breakpoint equivalent in the above table of $10 per Unit and will be applied on
whichever basis is more favorable to the investor.

Any sales charge reduction is the responsibility of the selling broker,
dealer or agent. An investor may aggregate purchases of Units of the Portfolios
for purposes of qualifying for volume purchase discounts listed above. The
reduced sales charge structure will also apply on all purchases by the same
person from any one dealer of units of Van Kampen-sponsored unit investment
trusts which are being offered in the initial offering period (a) on any one day
(the "Initial Purchase Date") or (b) on any day subsequent to the Initial
Purchase Date if the units purchased are of a unit investment trust purchased on
the Initial Purchase Date. In the event units of more than one trust are
purchased on the Initial Purchase Date, the aggregate dollar amount of such
purchases will be used to determine whether purchasers are eligible for a
reduced sales charge. Such aggregate dollar amount will be divided by the public
offering price per unit of each respective trust purchased to determine the
total number of units which such amount could have purchased of each individual
trust. Purchasers must then consult the applicable trust's prospectus to
determine whether the total number of units which could have been purchased of a
specific trust would have qualified for a reduced sales charge and the amount of
such reduction. To determine the applicable sales charge reduction it is
necessary to accumulate all purchases made on the Initial Purchase Date and all
purchases made in accordance with (b) above. Units purchased in the name of the
spouse of a purchaser or in the name of a child of such purchaser ("immediate
family members") will be deemed to be additional purchases by the purchaser for
the purposes of calculating the applicable sales charge. The reduced sales
charges will also be applicable to a trustee or other fiduciary purchasing
securities for one or more trust estate or fiduciary accounts. If you purchase
Units on more than one day to achieve the discounts described in this paragraph,
the discount allowed on any single day will apply only to Units purchased on
that day (a retroactive discount is not given on all prior purchases).
A portion of the sales charge is waived for certain accounts described in
this paragraph. Purchases by these accounts are subject only to the portion of
the deferred sales charge that is retained by the Sponsor. Please refer to the
section called "Wrap Fee and Advisory Accounts" for additional information on
these purchases. Units may be purchased in the primary or secondary market at
the Public Offering Price less the concession the Sponsor typically allows to
brokers and dealers for purchases by (1) investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for brokerage
services, financial planning, investment advisory or asset management service,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed, (2) bank trust
departments investing funds over which they exercise exclusive discretionary
investment authority and that are held in a fiduciary, agency, custodial or
similar capacity, (3) any person who for at least 90 days, has been an officer,
director or bona fide employee of any firm offering Units for sale to investors
or their immediate family members (as described above) and (4) officers and
directors of bank holding companies that make Units available directly or
through subsidiaries or bank affiliates. Notwithstanding anything to the
contrary in this Prospectus, such investors, bank trust departments, firm
employees and bank holding company officers and directors who purchase Units
through this program will not receive sales charge reductions for quantity
purchases.
During the initial offering period of the Portfolios offered in this
prospectus, unitholders of any Van Kampen-sponsored unit investment trust may
utilize their redemption or termination proceeds to purchase Units of all
Portfolios offered in this prospectus at the Public Offering Price per Unit less
1%.
Employees, officers and directors (including their spouses, children,
grandchildren, parents, grandparents, siblings, mothers-in-law, fathers-in-law,
sons-in-law, daughters-in-law, and trustees, custodians or fiduciaries for the
benefit of such persons) of the Van Kampen Funds Inc. and its affiliates,
dealers and their affiliates and vendors providing services to the Sponsor may
purchase Units at the Public Offering Price less the applicable dealer
concession.
Your Portfolio will charge the deferred sales charge per Unit regardless of
any discounts. However, if you are eligible to receive a discount such that the
sales charge you must pay is less than the applicable deferred sales charge, you
will be credited the difference between your sales charge and the deferred sales
charge at the time you buy your Units. If you elect to have distributions
reinvested into additional Units of your Portfolio, in addition to the
reinvestment Units you receive you will also be credited additional Units with a
dollar value sufficient to cover the amount of any remaining deferred sales
charge to be collected on such Units at the time of reinvestment. The dollar
value of these Units will fluctuate over time.

The minimum purchase is 100 Units (25 Units for retirement accounts) but may
vary by selling firm. However, in connection with fully disclosed transactions
with the Sponsor, the minimum purchase requirement will be that number of Units
set forth in the contract between the Sponsor and the related broker or agent.
Offering Price. The Public Offering Price of Units will vary from the amounts
stated under "Summary of Essential Financial Information" in accordance with
fluctuations in the prices of the underlying Securities in the Portfolios. The
initial price of the Securities was determined by Interactive Data Corporation,
a firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities. The Evaluator will generally determine the value of the
Securities as of the Evaluation Time on each business day and will adjust the
Public Offering Price of Units accordingly. This Public Offering Price will be
effective for all orders received prior to the Evaluation Time on each business
day. The Evaluation Time is the close of the New York Stock Exchange on each
Portfolio business day. Orders received by the Trustee or Sponsor for purchases,
sales or redemptions after that time, or on a day which is not a business day,
will be held until the next determination of price. The term "business day", as
used herein and under "Rights of Unitholders--Redemption of Units", excludes
Saturdays, Sundays and holidays observed by the New York Stock Exchange. The
term "business day" also excludes any day on which more than 33% of the
Securities are not traded on their principal trading exchange due to a customary
business holiday on that exchange.
The aggregate underlying value of the Securities during the initial offering
period is determined on each business day by the Evaluator in the following
manner: If the Securities are listed on a national or foreign securities
exchange or the Nasdaq Stock Market, Inc., this evaluation is generally based on
the closing sale prices on that exchange or market unless it is determined that
these prices are inappropriate as a basis for valuation) or, if there is no
closing sale price on that exchange or market, at the closing asked prices. If
the Securities are not listed on a national or foreign securities exchange or
the Nasdaq Stock Market, Inc. or, if so listed and the principal market therefor
is other than on the exchange or market, the evaluation shall generally be based
on the current asked price on the over-the-counter market (unless it is
determined that these prices are inappropriate as a basis for evaluation). If
current asked prices are unavailable, the evaluation is generally determined (a)
on the basis of current asked prices for comparable securities, (b) by
appraising the value of the Securities on the asked side of the market or (c) by
any combination of the above. The value of any foreign securities is based on
the applicable currency exchange rate as of the Evaluation Time. The value of
the Securities for purposes of secondary market transactions and redemptions is
described under "Rights of Unitholders--Redemption of Units".
In offering the Units to the public, neither the Sponsor nor any
broker-dealers are recommending any of the individual Securities but rather the
entire pool of Securities in a Portfolio, taken as a whole, which are
represented by the Units.
Unit Distribution. Units will be distributed to the public by the Sponsor,
broker-dealers and others at the Public Offering Price. Units repurchased in the
secondary market, if any, may be offered by this Prospectus at the secondary
market Public Offering Price in the manner described above.
The Sponsor intends to qualify Units for sale in a number of states. Brokers,
dealers and others will be allowed a concession or agency commission in
connection with the distribution of Units during the initial offering period as
described below.

Great
International
Firms and
Series A Series B
Transaction Portfolio Portfolio
Amount* Concession Concession
-------------- -------------- --------------
Less than $50,000 2.25% 3.50%
$50,000 - $99,999 2.00 3.25
$100,000 - $249,999 1.75 3.00
$250,000 - $499,999 1.50 2.50
$500,000 - $999,999 1.25 1.50
$1,000,000 or more 0.75 0.75
---------------
*The breakpoint concessions or agency commissions are also applied on a Unit
basis using a breakpoint equivalent of $10 per Unit and are applied on whichever
basis is more favorable to the distributor.

In addition to the regular concession or agency commission earned by selling
firms, during the initial offering period any firm that distributes 500,000 -
999,999 Units will receive additional compensation of $.005 per Unit; any firm
that distributes 1,000,000 - 1,999,999 Units will receive $.01 per Unit; any
firm that distributes 2,000,000 - 2,999,999 Units will receive $.015 per Unit;
and any firm that distributes 3,000,000 Units or more will receive $.02 per
Unit. A firm may aggregate Units of a Series A Portfolio and a Series B
Portfolio of the same industry sector type to qualify for these compensation
levels but may not aggregate among different sectors. For example, Units of
Global Wireless Portfolio, Series 3A and Series 4B may be aggregated but Units
of Global Wireless Portfolio, Series 4A may not be aggregated with Units of
Semiconductor Portfolio, Series 3B.
Any discount provided to investors will be borne by the selling dealer or
agent as indicated under "General" above. For transactions involving unitholders
of other Van Kampen unit investment trusts who use their redemption or
termination proceeds to purchase Units of the Portfolios, the total concession
or agency commission will amount to 1.30% per Unit for Series A Portfolios and
2.50% per Unit for Series B Portfolios and the Great International Firms
Portfolio. For all secondary market transactions the total concession or agency
commission will amount to 70% of the sales charge. Notwithstanding anything to
the contrary herein, in no case shall the total of any concessions, agency
commissions and any additional compensation allowed or paid to any broker,
dealer or other distributor of Units with respect to any individual transaction
exceed the total sales charge applicable to such transaction. The Sponsor
reserves the right to reject, in whole or in part, any order for the purchase of
Units and to change the amount of the concession or agency commission to dealers
and others from time to time.
Broker-dealers, banks and/or others may be eligible to participate in a
program in which such firms receive from the Sponsor a nominal award for each of
their representatives who have sold a minimum number of units of unit investment
trusts created by the Sponsor during a specified time period. In addition, at
various times the Sponsor may implement other programs under which the sales
forces of brokers, dealers, banks and/or others may be eligible to win other
nominal awards for certain sales efforts, or under which the Sponsor will
reallow to such brokers, dealers, banks and/or others that sponsor sales
contests or recognition programs conforming to criteria established by the
Sponsor, or participate in sales programs sponsored by the Sponsor, an amount
not exceeding the total applicable sales charges on the sales generated by such
persons at the public offering price during such programs. Also, the Sponsor in
its discretion may from time to time pursuant to objective criteria established
by the Sponsor pay fees to qualifying entities for certain services or
activities which are primarily intended to result in sales of Units of the
Portfolios. Such payments are made by the Sponsor out of its own assets, and not
out of the assets of any Portfolio. These programs will not change the price
Unitholders pay for their Units or the amount that a Portfolio will receive from
the Units sold.
Sponsor Compensation. The Sponsor will receive a gross sales commission equal
to the total sales charge applicable to each transaction. Any sales charge
discount provided to investors will be borne by the selling dealer or agent. In
addition, the Sponsor will realize a profit or loss as a result of the
difference between the price paid for the Securities by the Sponsor and the cost
of the Securities to each Portfolio on the Initial Date of Deposit as well as on
subsequent deposits. See "Notes to Portfolios". The Sponsor has not participated
as sole underwriter or as manager or as a member of the underwriting syndicates
or as an agent in a private placement for any of the Securities. The Sponsor may
realize profit or loss as a result of the possible fluctuations in the market
value of the Securities, since all proceeds received from purchasers of Units
are retained by the Sponsor. In maintaining a secondary market, the Sponsor will
realize profits or losses in the amount of any difference between the price at
which Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge) or from a redemption of repurchased Units
at a price above or below the purchase price. Cash, if any, made available to
the Sponsor prior to the date of settlement for the purchase of Units may be
used in the Sponsor's business and may be deemed to be a benefit to the Sponsor,
subject to the limitations of the Securities Exchange Act of 1934.
The Sponsor or an affiliate may have participated in a public offering of one
or more of the Securities. The Sponsor, an affiliate or their employees may have
a long or short position in these Securities or related securities. An affiliate
may act as a specialist or market maker for these Securities. An officer,
director or employee of the Sponsor or an affiliate may be an officer or
director for issuers of the Securities.
Purchases and sales of Securities by your Portfolio may impact the value of
the Securities. This may especially be the case during the initial offering of
Units, upon Portfolio termination and in the course of satisfying large Unit
redemptions. Any publication of a list of Securities, or a list of anticipated
Securities, to be included in a Portfolio may also cause increased buying
activity in certain Securities. Once this information becomes public, investors
may purchase individual Securities appearing in such a publication and may do so
during or prior to the initial offering of Units. It is possible that these
investors could include investment advisory and brokerage firms of the Sponsor
or its affiliates or firms that are distributing Units. This activity may cause
your Portfolio to purchase stocks at a higher price than those buyers who effect
purchases prior to purchases by your Portfolio.
Market for Units. Although it is not obligated to do so, the Sponsor
currently intends to maintain a market for Units and to purchase Units at the
secondary market repurchase price (which is described under "Right of
Unitholders--Redemption of Units"). The Sponsor may discontinue purchases of
Units or discontinue purchases at this price at any time. In the event that a
secondary market is not maintained, a Unitholder will be able to dispose of
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units". Unitholders should contact
their broker to determine the best price for Units in the secondary market.
Units sold prior to the time the entire deferred sales charge has been collected
will be assessed the amount of any remaining deferred sales charge at the time
of sale. The Trustee will notify the Sponsor of any tendered of Units for
redemption. If the Sponsor's bid in the secondary market equals or exceeds the
Redemption Price per Unit, it may purchase the Units not later than the day on
which Units would have been redeemed by the Trustee. The Sponsor may sell
repurchased Units at the secondary market Public Offering Price per Unit.

RETIREMENT ACCOUNTS
--------------------------------------------------------------------------------

Units are available for purchase in connection with certain types of
tax-sheltered retirement plans, including Individual Retirement Accounts for the
individuals, Simplified Employee Pension Plans for employees, qualified plans
for self-employed individuals, and qualified corporate pension and profit
sharing plans for employees. The minimum purchase for these accounts is reduced
to 25 Units but may vary by selling firm. The purchase of Units may be limited
by the plans' provisions and does not itself establish such plans.

WRAP FEE AND ADVISORY ACCOUNTS
--------------------------------------------------------------------------------

Units may be available for purchase by investors who purchase Units through
registered investment advisers, certified financial planners and registered
broker-dealers who in each case either charge periodic fees for brokerage
services, financial planning, investment advisory or asset management service,
or provide such services in connection with the establishment of an investment
account for which a comprehensive "wrap fee" charge is imposed. You should
consult your financial professional to determine whether you can benefit from
these accounts. For these purchases you generally only pay the portion of the
sales charge that is retained by your Portfolio's Sponsor, Van Kampen Funds Inc.
This table illustrates the transaction fees you will pay as a percentage of the
public offering price per Unit.

Great
International
Firms and
Series A Series B
Portfolios Portfolios
---------- ----------
Fee paid on purchase 0.00% 0.00%
Deferred sponsor retention 0.70 1.00
--------- ---------
Total 0.70% 1.00%
========= =========

You should consult the "Public Offering--General" section for specific
information on this and other sales charge discounts.

RIGHTS OF UNITHOLDERS
--------------------------------------------------------------------------------

Distributions. Dividends and any net proceeds from the sale of Securities
received by a Portfolio will generally be distributed to Unitholders on each
Distribution Date to Unitholders of record on the preceding Record Date. These
dates are listed under "Summary of Essential Financial Information". A person
becomes a Unitholder of record on the date of settlement (generally three
business days after Units are ordered). Unitholders may elect to receive
distributions in cash or to have distributions reinvested into additional Units.
Distributions may also be reinvested into Van Kampen mutual funds. See "Rights
of Unitholders--Reinvestment Option".
Dividends received by a Portfolio are credited to the Income Account of the
Portfolio. Other receipts (e.g., capital gains, proceeds from the sale of
Securities, etc.) are credited to the Capital Account. Proceeds received on the
sale of any Securities, to the extent not used to meet redemptions of Units or
pay deferred sales charges, fees or expenses, will be distributed to
Unitholders. Proceeds received from the disposition of any Securities after a
record date and prior to the following distribution date will be held in the
Capital Account and not distributed until the next distribution date. Any
distribution to Unitholders consists of each Unitholder's pro rate share of the
available cash in the Income and Capital Accounts as of the related Record Date.
Reinvestment Option. Unitholders may have distributions automatically
reinvested in additional Units under the Automatic Reinvestment Option without a
sales charge (to the extent Units may be lawfully offered for sale in the state
in which the Unitholder resides) through two options, if available. Brokers and
dealers can use the Dividend Reinvestment Service through Depository Trust
Company or purchase the Automatic Reinvestment Option CUSIP, if available. To
participate in this reinvestment option, a Unitholder must file with the Trustee
a written notice of election, together with any certificate representing Units
and other documentation that the Trustee may then require, at least five days
prior to the related Record Date. A Unitholder's election will apply to all
Units owned by the Unitholder and will remain in effect until changed by the
Unitholder. If Units are unavailable for reinvestment, distributions will be
paid in cash. Purchases of additional Units made pursuant to the reinvestment
plan will be made at the net asset value for Units as of the Evaluation Time on
the Distribution Date.
In addition, under the Guaranteed Reinvestment Option Unitholders may elect
to have distributions automatically reinvested in certain Van Kampen mutual
funds (the "Reinvestment Funds"). Each Reinvestment Fund has investment
objectives which differ from those of the Portfolios. The prospectus relating to
each Reinvestment Fund describes its investment policies and how to begin
reinvestment. A Unitholder may obtain a prospectus for the Reinvestment Funds
from the Sponsor. Purchases of shares of a Reinvestment Fund will be made at a
net asset value computed on the Distribution Date. Unitholders with an existing
Guaranteed Reinvestment Option account (whereby a sales charge is imposed on
distribution reinvestments) may transfer their existing account into a new
account which allows purchases of Reinvestment Fund shares at net asset value.
A participant may elect to terminate his or her reinvestment plan and receive
future distributions in cash by notifying the Trustee in writing no later than
five days before a distribution date. The Sponsor, each Reinvestment Fund, and
its investment adviser shall have the right to suspend or terminate these
reinvestment plans at any time.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay Street,
20th Floor, New York, New York 10286. Certificates must be tendered to the
Trustee, duly endorsed or accompanied by proper instruments of transfer with
signature guaranteed (or by providing satisfactory indemnity in connection with
lost, stolen or destroyed certificates) and by payment of applicable
governmental charges, if any. On the seventh day following the tender, the
Unitholder will be entitled to receive in cash an amount for each Unit equal to
the Redemption Price per Unit next computed on the date of tender. The "date of
tender" is deemed to be the date on which Units are received by the Trustee,
except that with respect to Units received by the Trustee after the Evaluation
Time or on a day which is not a Portfolio business day, the date of tender is
deemed to be the next business day.
Unitholders tendering 1,000 or more Units of a Portfolio for redemption may
request an in kind distribution of Securities equal to the Redemption Price per
Unit on the date of tender. Unitholders may not request an in kind distribution
during the five business days prior to a Portfolio's termination. Portfolios
generally do not offer in kind distributions of portfolio securities that are
held in foreign markets. An in kind distribution will be made by the Trustee
through the distribution of each of the Securities in book-entry form to the
account of the Unitholder's broker-dealer at Depository Trust Company. Amounts
representing fractional shares will be distributed in cash. The Trustee may
adjust the number of shares of any Security included in a Unitholder's in kind
distribution to facilitate the distribution of whole shares.
The Trustee may sell Securities to satisfy Unit redemptions. To the extent
that Securities are redeemed in kind or sold, the size of a Portfolio will be,
and the diversity of a Portfolio may be, reduced. Sales may be required at a
time when Securities would not otherwise be sold and may result in lower prices
than might otherwise be realized. The price received upon redemption may be more
or less than the amount paid by the Unitholder depending on the value of the
Securities at the time of redemption. Special federal income tax consequences
will result if a Unitholder requests an in kind distribution. See "Taxation".
The Redemption Price per Unit and the secondary market repurchase price per
Unit are equal to the pro rate share of each Unit in each Portfolio determined
on the basis of (i) the cash on hand in the Portfolio, (ii) the value of the
Securities in the Portfolio and (iii) dividends receivable on the Securities in
the Portfolio trading ex-dividend as of the date of computation, less (a)
amounts representing taxes or other governmental charges payable out of the
Portfolio, (b) the accrued expenses of the Portfolio and (c) any unpaid deferred
sales charge payments. During the initial offering period, the redemption price
and the secondary market repurchase price will also include estimated
organizational costs. For these purposes, the Evaluator may determine the value
of the Securities in the following manner: If the Securities are listed on a
national or foreign securities exchange or the Nasdaq Stock Market, Inc., this
evaluation is generally based on the closing sale prices on that exchange or
market (unless it is determined that these prices are inappropriate as a basis
for valuation) or, if there is no closing sale price on that exchange or market,
at the closing bid prices. If the Securities are not so listed or, if so listed
and the principal market therefor is other than on the exchange or market, the
evaluation may be based on the current bid price on the over-the-counter market.
If current bid prices are unavailable or inappropriate, the evaluation may be
determined (a) on the basis of current bid prices for comparable securities, (b)
by appraising the Securities on the bid side of the market or (c) by any
combination of the above. The value of any foreign securities is based on the
applicable currency exchange rate as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the SEC determines that
trading on that Exchange is restricted or an emergency exists, as a result of
which disposal or evaluation of the Securities is not reasonably practicable, or
for other periods as the SEC may permit.
Certificates. Ownership of Units is evidenced in book entry form unless a
Unitholder makes a written request to the Trustee that ownership be in
certificate form. Units are transferable by making a written request to the
Trustee and, in the case of Units in certificate form, by presentation of the
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign the written
request, and certificate or transfer instrument, exactly as his name appears on
the records of the Trustee and on the face of any certificate with the signature
guaranteed by a participant in the Securities Transfer Agents Medallion Program
("STAMP") or a signature guarantee program accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not limited
to, trust instruments, certificates of death, appointments as executor or
administrator or certificates of corporate authority. Fractional certificates
will not be issued. The Trustee may require a Unitholder to pay a reasonable fee
for each certificate reissued or transferred and to pay any governmental charge
that may be imposed in connection with each transfer or interchange. Destroyed,
stolen, mutilated or lost certificates will be replaced upon delivery to the
Trustee of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Reports Provided. Unitholders will receive a statement of dividends and other
amounts received by a Portfolio for each distribution. Within a reasonable time
after the end of each year, each person who was a Unitholder during that year
will receive a statement describing dividends and capital received, actual
Portfolio distributions, Portfolio expenses, a list of the Securities and other
Portfolio information. Unitholders may obtain the Evaluator's evaluations of the
Securities upon request.

PORTFOLIO ADMINISTRATION
--------------------------------------------------------------------------------

Portfolio Administration. The Portfolios are not managed funds and, except as
provided in the Portfolio Agreement, Securities generally will not be sold or
replaced. The Sponsor may, however, direct that Securities be sold in certain
limited circumstances to protect the Portfolio based on advice from the
Supervisor. These situations may include events such as the issuer having
defaulted on payment of any of its outstanding obligations or the price of a
Security has declined to such an extent or other credit factors exist so that in
the opinion of the Sponsor retention of the Security would be detrimental to the
Portfolio. If a public tender offer has been made for a Security or a merger or
acquisition has been announced affecting a Security, the Trustee may either sell
the Security or accept a tender offer for cash if the Supervisor determines that
the sale or tender is in the best interest of Unitholders. The Trustee will
distribute any cash proceeds to Unitholders. In addition, the Trustee may sell
Securities to redeem Units or pay Portfolio expenses or deferred sales charges.
If securities or property are acquired by a Portfolio, the Sponsor may direct
the Trustee to sell the securities or property and distribute the proceeds to
Unitholders or to accept the securities or property for deposit in the
Portfolio. Should any contract for the purchase of any of the Securities fail,
the Sponsor will (unless substantially all of the moneys held in the Portfolio
to cover the purchase are reinvested in substitute Securities in accordance with
the Trust Agreement) refund the cash and sales charge attributable to the failed
contract to all Unitholders on or before the next distribution date.
With respect to the Great International Firms Portfolio only, the Sponsor may
direct the reinvestment of proceeds of the sale of Securities if the sale is the
direct result of serious adverse credit factors which, in the opinion of the
Sponsor, would make retention of the Securities detrimental to the Portfolio. In
such a case, the Sponsor may, but is not obligated to, direct the reinvestment
of sale proceeds in any other securities that meet the criteria for inclusion in
the Portfolio on the Initial Date of Deposit. The Sponsor may also instruct the
Trustee to take action necessary to ensure that the Portfolio continues to
satisfy the qualifications of a regulated investment company and to avoid
imposition of tax on undistributed income of the Portfolio.
When your Portfolio sells Securities, the composition and diversity of the
Securities in the Portfolio may be altered. In order to obtain the best price
for a Portfolio, it may be necessary for the Supervisor to specify minimum
amounts (generally 100 shares) in which blocks of Securities are to be sold. In
effecting purchases and sales of a Portfolio's securities, the Sponsor may
direct that orders be placed with and brokerage commissions be paid to brokers,
including brokers which may be affiliated with the Portfolios, the Sponsor or
dealers participating in the offering of Units. In addition, in selecting among
firms to handle a particular transaction, the Sponsor may take into account
whether the firm has sold or is selling units of unit investment trusts which it
sponsors.
Amendment of the Trust Agreement. The Trustee and the Sponsor may amend the
Trust Agreement without the consent of Unitholders to correct any provision
which may be defective or to make other provisions that will not adversely
affect Unitholders (as determined in good faith by the Sponsor and the Trustee).
The Trust Agreement may not be amended to increase the number of Units or permit
acquisition of securities in addition to or substitution for the Securities
(except as provided in the Trust Agreement). The Trustee will notify Unitholders
of any amendment.
Termination. Each Portfolio will terminate on the Mandatory Termination Date
or upon the sale or other disposition of the last Security held in the
Portfolio. A Portfolio may be terminated at any time with consent of Unitholders
representing two-thirds of the outstanding Units or by the Trustee when the
value of the Portfolio is less than $500,000 ($3,000,000 if the value of the
Portfolio has exceeded $15,000,000) (the "Minimum Termination Value").
Unitholders will be notified of any termination. The Trustee may begin to sell
Securities in connection with a Portfolio termination nine business days before,
and no later than, the Mandatory Termination Date. Approximately thirty days
before this date, the Trustee will notify Unitholders of the termination and
provide a form enabling qualified Unitholders to elect an in kind distribution
of Securities. See "Rights of Unitholders--Redemption of Units". This form must
be returned at least five business days prior to the Mandatory Termination Date.
Unitholders will receive a final cash distribution within a reasonable time
after the Mandatory Termination Date. All distributions will be net of Portfolio
expenses and costs. Unitholders will receive a final distribution statement
following termination. The Information Supplement contains further information
regarding termination of the Portfolios. See "Additional Information".
Limitations on Liabilities. The Sponsor, Evaluator, Supervisor and Trustee
are under no liability for taking any action or for refraining from taking any
action in good faith pursuant to the Trust Agreement, or for errors in judgment,
but shall be liable only for their own willful misfeasance, bad faith or gross
negligence (negligence in the case of the Trustee) in the performance of their
duties or by reason of their reckless disregard of their obligations and duties
hereunder. The Trustee is not be liable for depreciation or loss incurred by
reason of the sale by the Trustee of any of the Securities. In the event of the
failure of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and is not be liable for any action taken by it in good faith under
the Trust Agreement. The Trustee is not liable for any taxes or other
governmental charges imposed on the Securities, on it as Trustee under the Trust
Agreement or on a Portfolio which the Trustee may be required to pay under any
present or future law of the United States of America or of any other taxing
authority having jurisdiction. In addition, the Trust Agreement contains other
customary provisions limiting the liability of the Trustee. The Trustee, Sponsor
and Supervisor may rely on any evaluation furnished by the Evaluator and have no
responsibility for the accuracy thereof. Determinations by the Evaluator shall
be made in good faith upon the basis of the best information available to it.
Sponsor. Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Portfolio. The Sponsor is an indirect subsidiary of Morgan Stanley Dean Witter &
Co. Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has its principal offices at 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999,
the total stockholders' equity of Van Kampen Funds Inc. was $141,554,861
(audited). The Information Supplement contains additional information about the
Sponsor.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Portfolios as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its unit investment trust
division offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668.
The Bank of New York is subject to supervision and examination by the
Superintendent of Banks of the State of New York and the Board of Governors of
the Federal Reserve System, and its deposits are insured by the Federal Deposit
Insurance Corporation to the extent permitted by law. Additional information
regarding the Trustee is set forth in the Information Supplement, including the
Trustee's qualifications and duties, its ability to resign, the effect of a
merger involving the Trustee and the Sponsor's ability to remove and replace the
Trustee. See "Additional Information".
Performance Information. The Sponsor may from time to time in its advertising
and sales materials compare the then current estimated returns on the Portfolios
and returns over specified time periods on other similar Van Kampen trusts
(which may show performance net of expenses and charges which the Portfolios
would have charged) with returns on other taxable investments such as the common
stocks comprising the Dow Jones Industrial Average, the S&P 500, other
investment indices, corporate or U.S. government bonds, bank CDs, money market
accounts or money market funds, or with performance data from Lipper Analytical
Services, Inc., Morningstar Publications, Inc. or various publications, each of
which has characteristics that may differ from those of the Portfolios.
Information on percentage changes in the dollar value of Units may be included
from time to time in advertisements, sales literature, reports and other
information furnished to current or prospective Unitholders. Total return
figures may not be averaged and may not reflect deduction of the sales charge,
which would decrease return. No provision is made for any income taxes payable.
Past performance may not be indicative of future results. The Portfolios are not
managed and Unit price and return fluctuate with the value of common stocks in
the portfolios, so there may be a gain or loss when Units are sold. As with
other performance data, performance comparisons should not be considered
representative of a Portfolio's relative performance for any future period.

TAXATION
-------------------------------------------------------------------------------

Great International Firms Portfolio
The Great International Firms Portfolio intends to elect and qualify on a
continuing basis for special federal income tax treatment as a "regulated
investment company" under the Internal Revenue Code of 1986, as amended (the
"Code"). If the Portfolio so qualifies and timely distributes to Unitholders 90%
or more of its taxable income (without regard to its net capital gain, i.e., the
excess of its net long-term capital gain over its net short-term capital loss),
it will not be subject to federal income tax on the portion of its taxable
income (including any net capital gain) that it distributes to Unitholders. In
addition, to the extent the Portfolio timely distributes to Unitholders at least
98% of its taxable income (including any net capital gain), it will not be
subject to the 4% excise tax on certain undistributed income of "regulated
investment companies." Because the Portfolio intends to timely distribute its
taxable income (including any net capital gain), it is anticipated that the
Portfolio will not be subject to federal income tax or the excise tax.
Distributions to Unitholders of the Portfolio's taxable income, other than
distributions which are designated as capital gain dividends, will be taxable as
ordinary income to Unitholders, except that to the extent that distributions to
a Unitholder in any year exceed the Portfolio's current and accumulated earnings
and profits, they will be treated as a return of capital and will reduce the
Unitholder's basis in his Units and, to the extent that they exceed his basis,
will be treated as a gain from the sale of his Units as discussed below.
Although distributions generally will be treated as distributed when paid,
distributions declared in October, November or December payable to Unitholders
of record on a specified date in one of those months and paid during January of
the following year will be treated as having been distributed by the Portfolio
(and received by the Unitholder) on December 31 of the year such distributions
are declared.
Distributions of the Portfolio's net capital gain which are properly
designated as capital gain dividends by the Portfolio will be taxable to
Unitholders as long-term capital gain, regardless of the length of time the
Units have been held by a Unitholder. A Unitholder may recognize a taxable gain
or loss if the Unitholder sells or redeems his Units. Any gain or loss arising
from (or treated as arising from) the sale or redemption of Units will generally
be a capital gain or loss, except in the case of a dealer or a financial
institution. The Internal Revenue Service Restructuring and Reform Act of 1998
(the "1998 Tax Act") provides that for taxpayers other than corporations, net
capital gain (which is defined as net long-term capital gain over net short-term
capital loss for the taxable year) is generally subject to a maximum marginal
stated tax rate of 20% (10% in the case of certain taxpayers in the lowest tax
bracket). Capital gain or loss is long-term if the holding period for the asset
is more than one year, and is short-term if the holding period for the asset is
one year or less. The date on which a Unit is acquired (i.e., the "trade date")
is excluded for purposes for determining the holding period of the Unit. Capital
gains realized from assets held for one year or less are taxed at the same rates
as ordinary income. Note that if a Unitholder holds Units for six months or less
and subsequently sells such Units at a loss, the loss will be treated as a
long-term capital loss to the extent that any long-term capital gain
distribution is made with respect to such Units during the six-month period or
less that the Unitholder owns the Units.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered
"conversion transactions" effective for transactions entered into after April
30, 1993. Unitholders and prospective investors should consult with their tax
advisers regarding the potential effect of this provision on their investment in
Units. The Taxpayer Relief Act of 1997 (the "1997 Tax Act") includes provisions
that treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g. short sales, offsetting notional principal
contracts, futures or forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not loss) and for purposes of
determining the holding period.
Generally, the tax basis of a Unitholder includes sales charges, and such
charges are not deductible. A portion of the sales charge for the Portfolio is
deferred. The income (or proceeds from redemption) a Unitholder must take into
account for federal income tax purposes is not reduced by amounts deducted to
pay the deferred sales charge.
Distributions which are taxable as ordinary income to Unitholders will
constitute dividends for federal income tax purposes. When Units are held by
corporate Unitholders, Portfolio distributions may qualify for the 70% dividends
received deduction, subject to limitations otherwise applicable to the
availability of the deduction, to the extent the distribution is attributable to
dividends received by the Portfolio from United States corporations (other than
real estate investment trusts) and is designated by the Portfolio as being
eligible for such deduction. To the extent dividends received by the Portfolio
are attributable to foreign corporations, a corporation that owns Units will not
be entitled to the dividends received deduction with respect to its pro rata
portion of such dividends, since the dividends received deduction is generally
available only with respect to dividends paid by domestic corporations. The
Portfolio will provide each Unitholder with information annually concerning what
part of the Portfolio distributions are eligible for the dividends received
deduction.
The Portfolio may elect to pass through to the Unitholders the foreign income
and similar taxes paid by the Portfolio in order to enable such Unitholders to
take a credit (or deduction) for foreign income taxes paid by the Portfolio. If
such an election is made, Unitholders of the Portfolio, because they are deemed
to own a pro rata portion of the foreign securities held by the Portfolio, must
include in their gross income, for federal income tax purposes, both their
portion of dividends received by the Portfolio and also their portion of the
amount which the Portfolio deems to be the Unitholders' portion of foreign
income taxes paid with respect to, or withheld from, dividends, interest or
other income of the Portfolio from its foreign investments. Unitholders may then
subtract from their federal income tax the amount of such taxes withheld, or
else treat such foreign taxes as deductions from gross income; however, as in
the case of investors receiving income directly from foreign sources, the above
described tax credit or deduction is subject to certain limitations. The 1997
Tax Act imposes a required holding period for such credits. Unitholders should
consult their tax advisers regarding this election and its consequences to them.
Under the Code, certain miscellaneous itemized deductions, such as investment
expenses, tax return preparation fees and employee business expenses, will be
deductible by individuals only to the extent they exceed 2% of adjusted gross
income. Miscellaneous itemized deductions subject to this limitation under
present law do not include expenses incurred by the Portfolio so long as the
Units are held by or for 500 or more persons at all times during the taxable
year or another exception is met. In the event the Units are held by fewer than
500 persons, additional taxable income may be realized by the individual (and
other noncorporate) Unitholders in excess of the distributions received from the
Portfolio.
Distributions reinvested into additional Units of the Portfolio will be taxed
to a Unitholder in the manner described above (i.e., as ordinary income,
long-term capital gain or as a return of capital).
The federal tax status of each year's distributions will be reported to
Unitholders and to the Internal Revenue Service. Each Unitholder will be
requested to provide the Unitholder's taxpayer identification number to the
Trustee and to certify that the Unitholder has not been notified that payments
to the Unitholder are subject to back-up withholding. If the proper taxpayer
identification number and appropriate certification are not provided when
requested, distributions by the Portfolio to such Unitholder (including amounts
received upon the redemption of Units) will be subject to back-up withholding.
The foregoing discussion relates only to the federal income tax status of the
Portfolio and to the tax treatment of distributions by the Portfolio to United
States Unitholders.
A Unitholder who is a foreign investor (i.e., an investor other than a United
States citizen or resident or a United States corporation, partnership, estate
or trust) should be aware that, generally, subject to applicable tax treaties,
distributions from the Portfolio which constitute dividends for Federal income
tax purposes (other than dividends which the Portfolio designates as capital
gain dividends) will be subject to United States income taxes, including
withholding taxes. However, distributions received by a foreign investor from
the Portfolio that are designated by the Portfolio as capital gain dividends
should not be subject to United States Federal income taxes, including
withholding taxes, if all of the following conditions are met (i) the capital
gain dividend is not effectively connected with the conduct by the foreign
investor of a trade or business within the United States, (ii) the foreign
investor (if an individual) is not present in the United States for 183 days or
more during his or her taxable year, and (iii) the foreign investor provides all
certification which may be required of his status (foreign investors may contact
the Sponsor to obtain a Form W-8 which must be filed with the Trustee and
refiled every three calendar years thereafter). Foreign investors should consult
their tax advisers with respect to United States tax consequences of ownership
of Units. Units in the Portfolio and Portfolio distributions may also be subject
to state and local taxation and Unitholders should consult their tax advisers in
this regard.

All Other Portfolios
The following is a general discussion of certain of the federal income tax
consequences of the purchase, ownership and disposition of the Units of all
Portfolios other than the Great International Firms Portfolio. The summary is
limited to investors who hold the Units as "capital assets" (generally, property
held for investment within the meaning of Section 1221 of the Internal Revenue
Code of 1986 (the "Code")). Unitholders should consult their tax advisers in
determining the federal, state, local and any other tax consequences of the
purchase, ownership and disposition of Units in the Portfolio. For purposes of
the following discussion and opinion, it is assumed that each Security in the
Portfolio is equity for federal income tax purposes.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. Your Portfolio is not an association taxable as a corporation for federal
income tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Portfolio under the Code; and the income of
the Portfolio will be treated as income of the Unitholders thereof under the
Code. Each Unitholder will be considered to have received his pro rata share of
income derived from each Security when such income is considered to be received
by the Portfolio.
2. Each Unitholder will have a taxable event when the Portfolio disposes of a
Security (whether by sale, exchange, liquidation, redemption, or otherwise) or
upon the sale or redemption of Units by such Unitholder (except to the extent an
in kind distribution of stock is received by such Unitholder as described
below). The price a Unitholder pays for his Units, generally including sales
charges, is allocated among his pro rata portion of each Security held by the
Portfolio (in proportion to the fair market values thereof on the valuation date
nearest the date the Unitholder purchase his Units) in order to determine his
initial tax basis for his pro rata portion of each Security held by the
Portfolio. Unitholders should consult their own tax advisers with regard to
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of dividends as defined by Section 316 of the Code paid by a corporation
with respect to a Security held by the Portfolio are taxable as ordinary income
to the extent of such corporation's current and accumulated "earnings and
profits". A Unitholder's pro rata portion of dividends paid on such Security
which exceeds such current and accumulated earnings and profits will first
reduce a Unitholder's tax basis in such Security, and to the extent that such
dividends exceed a Unitholder's tax basis in such Security shall generally be
treated as capital gain. In general, the holding period for such capital gain
will be determined by the period of time a Unitholder has held his Units.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Portfolio will generally be
considered a capital gain, except in the case of a dealer or a financial
institution. A Unitholder's portion of loss, if any, upon the sale or redemption
of Units or the disposition of Securities held by the Portfolio will generally
be considered a capital loss (except in the case of a dealer or a financial
institution). Unitholders should consult their tax advisers regarding the
recognition of such capital gains and losses for federal income tax purposes.
Deferred Sales Charge. Generally, the tax basis of a Unitholder includes
sales charges, and such charges are not deductible. A portion of the sales
charge for the Portfolio is deferred. The income (or proceeds from redemption) a
Unitholder must take into account for federal income tax purposes is not reduced
by amounts deducted to pay the deferred sales charge. Unitholders should consult
their own tax advisers as to the income tax consequences of the deferred sales
charge.
Dividends Received Deduction. A Unitholder will be considered to have
received all of the dividends paid on his pro rata portion of each Security when
such dividends are received by the Portfolio regardless of whether such
dividends are used to pay a portion of a deferred sales charge. Unitholders will
be taxed in this manner regardless of whether distributions from the Portfolio
are actually received by the Unitholder or are automatically reinvested. A
corporation that owns Units will generally be entitled to a 70% dividends
received deduction with respect to such Unitholder's pro rata portion of
dividends received by the Portfolio (to the extent such dividends are taxable as
ordinary income, as discussed above, and are attributable to domestic
corporations) in the same manner as if such corporation directly owned the
Securities paying such dividends (other than corporate Unitholders, such as "S"
corporations, which are not eligible for the deduction because of their special
characteristics and other than for purposes of special taxes such as the
accumulated earnings tax and the personal holding corporation tax). However, a
corporation owning Units should be aware that Sections 246 and 246A of the Code
impose additional limitations on the eligibility of dividends for the 70%
dividends received deduction. These limitations include a requirement that stock
(and therefore Units) must generally be held at least 46 days (as determined
under Section 246(c) of the Code). Final regulations have been issued which
address special rules that must be considered in determining whether the 46 day
holding requirement is met. Moreover, the allowable percentage of the deduction
will be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by such
corporation.
To the extent dividends received by the Portfolio are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations. Unitholders should
consult with their tax advisers with respect to the limitations on and possible
modifications to the dividends received deduction.
Limitations on Deductibility of Portfolio Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Portfolio is deductible
by the Unitholder to the same extent as though the expense had been paid
directly by him. As a result of the Tax Reform Act of 1986, certain
miscellaneous itemized deductions, such as investment expenses, tax return
preparation fees and employee business expenses will be deductible by an
individual only to the extent they exceed 2% of such individual's adjusted gross
income. Unitholders may be required to treat some or all of the expenses of the
Portfolio as miscellaneous itemized deductions subject to this limitation.
Unitholders should consult with their own tax advisers regarding the
deductibility of Portfolio expenses.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Portfolio or Disposition of Units. As discussed above, a Unitholder may
recognize taxable gain (or loss) when a Security is disposed of by the Portfolio
or if the Unitholder disposes of a Unit. The Internal Revenue Service
Restructing and Reform Act of 1998 (the "1998 Tax Act") provides that for
taxpayers other than corporations, net capital gain (which is defined as net
long-term capital gain over net short-term capital loss for the taxable year)
realized from property (with certain exclusions) is subject to a maximum
marginal stated tax rate of 20% (10% in the case of certain taxpayers in the
lowest tax bracket). Capital gain or loss is long-term if the holding period for
the asset is more than one year, and is short-term if the holding period for the
asset is one year or less. The date on which a Unit is acquired (i.e., the
"trade date") is excluded for purposes of determining the holding period of the
Unit. Capital gains realized from assets held for one year or less are taxed at
the same rates as ordinary income.
In addition, please note that capital gains may be recharacterized as
ordinary income in the case of certain financial transactions that are
considered "conversion transactions" effective for transactions entered into
after April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Portfolio including his pro
rata portion of all Securities represented by a Unit.
The Taxpayer Relief Act of 1997 (the "1997 Tax Act") includes provisions that
treat certain transactions designed to reduce or eliminate risk of loss and
opportunities for gain (e.g., short sales, offsetting notional principal
contracts, futures or forward contracts or similar transactions) as constructive
sales for purposes of recognition of gain (but not of loss) and for purposes of
determining the holding period. Unitholders should consult their own tax
advisers with regard to any such constructive sales rules.
Special Tax Consequences of In Kind Distributions Upon Redemption of Units or
Termination of the Portfolio. As discussed in "Rights of Unitholders--Redemption
of Units", under certain circumstances a Unitholder tendering Units for
redemption may request an in kind distribution. A Unitholder may also under
certain circumstances request an in kind distribution upon the termination of
the Portfolio. See "Rights of Unitholders--Redemption of Units. As previously
discussed, prior to the redemption of Units or the termination of the Portfolio,
a Unitholder is considered as owning a pro rata portion of each of the
Portfolio's assets for federal income tax purposes. The receipt of an in kind
distribution will result in a Unitholder receiving whole shares of stock plus,
possibly, cash.
The potential tax consequences that may occur under an in kind distribution
with respect to each Security held by the Portfolio will depend on whether or
not a Unitholder receives cash in addition to Securities. A "Security" for this
purpose is a particular class of stock issued by a particular corporation. A
Unitholder will not recognize gain or loss if a Unitholder only receives
Securities in exchange for his or her pro rata portion in the Securities held by
the Portfolio. However, if a Unitholder also receives cash in exchange for a
fractional share of such Security held by the Portfolio, such Unitholder will
generally recognize gain or loss based upon the difference between the amount of
cash received by the Unitholder and his tax basis in such fractional share of a
Security held by the Portfolio.
Because the Portfolio will own many Securities, a Unitholder who requests an
in kind distribution will have to analyze the tax consequences with respect to
each Security owned by the Portfolio. The amount of taxable gain (or loss)
recognized upon such exchange will generally equal the sum of the gain (or loss)
recognized under the rules described above by such Unitholder with respect to
each Security owned by the Portfolio. Unitholders who request an in kind
distribution are advised to consult their tax advisers in this regard.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax
basis in his Units will generally equal the price paid by such Unitholder of his
Units. The cost of the Units is allocated among the Securities held in the
Portfolio in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of each
Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Portfolio will be reduced to the extent dividends paid with respect
to such Security are received by the Portfolio which are not taxable as ordinary
income as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the Unitholder
has not been notified that payments to the Unitholder are subject to back-up
withholding. If the proper taxpayer identification number and appropriate
certification are not provided when requested, distributions by the Portfolio to
such Unitholder (including amounts received upon the redemption of Units) will
be subject to back-up withholding. Distributions by the Portfolio (other than
those that are not treated as United States source income, if any) will
generally be subject to United States income taxation and withholding in the
case of Units held by non-resident alien individuals, foreign corporations or
other non-United States persons. Such persons should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a
trade or business within the United States that is earned by non-U.S.
Unitholders and derived from dividends of foreign corporations will not be
subject to U.S. withholding tax provided that less than 25 percent of the gross
income of the foreign corporations for a three-year period ending with the close
of its taxable year preceding payment was effectively connected to the conduct
of a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the United
States and a foreign country. Non-U.S. Unitholders should consult their own tax
advisers regarding the imposition of U.S. withholding on distributions from the
Portfolio.
It should be noted that payments to the Portfolio of dividends on Securities
that are attributable to foreign corporations may be subject to foreign
withholding taxes and Unitholders should consult their tax advisers regarding
the potential tax consequences relating to the payment of any such withholding
taxes by the Portfolio. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because, under the grantor
trust rules, an investor is deemed to have paid directly his share of foreign
taxes that have been paid or accrued, if any, an investor may be entitled to a
foreign tax credit or deduction for United States tax purposes with respect to
such taxes. The 1997 Tax Act imposes a required holding period for such credits.
Investors should consult their tax advisers with respect to foreign withholding
taxes and foreign tax credits.
At the termination of the Portfolio, the Trustee will furnish to each
Unitholder of the Portfolio a statement containing information relating to the
dividends received by the Portfolio on the Securities, the gross proceeds
received by the Portfolio from the disposition of any Security (resulting from
redemption or the sale of any Security), and the fees and expenses paid by the
Portfolio. The Trustee will also furnish annual information returns to
Unitholders and to the Internal Revenue Service.
In the opinion of special counsel to the Portfolio for New York tax matters,
the Portfolio is not an association taxable as a corporation and the income of
the Portfolio will be treated as the income of the Unitholders under the
existing income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S.
Unitholders ("U.S. Unitholders") with regard to federal and certain aspects of
New York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers in
this regard. As used herein, the term "U.S. Unitholder" means an owner of a Unit
of the Portfolio that (a) is (i) for United States federal income tax purposes a
citizen or resident of the United States, (ii) a corporation, partnership or
other entity created or organized in or under the laws of the United States or
of any political subdivision thereof, or (iii) an estate or trust the income of
which is subject to United States federal income taxation regardless of its
source or (b) does not qualify as a U.S. Unitholder in paragraph (a) but whose
income from a Unit is effectively connected with such Unitholder's conduct of a
United States trade or business. The term also includes certain former citizens
of the United States whose income and gain on the Units will be taxable.
Unitholders should consult their tax advisers regarding potential foreign, state
or local taxation with respect to the Units.

PORTFOLIO OPERATING EXPENSES
--------------------------------------------------------------------------------

Compensation of Sponsor, Supervisor and Evaluator. The Sponsor will not
receive any fees in connection with its activities relating to the Portfolios.
However, the Supervisor and Evaluator, which are affiliates of the Sponsor, will
receive the annual fee for portfolio supervisory and evaluation services set
forth in the "Fee Table". These fees may exceed the actual costs of providing
these services to the Portfolios but at no time will the total amount received
for supervisory and evaluation services rendered to all Van Kampen unit
investment trusts in any calendar year exceed the aggregate cost of providing
these services in that year.
Trustee's Fee. For its services the Trustee will receive the fee from each
Portfolio set forth in the "Fee Table" (which includes the estimated amount of
miscellaneous Portfolio expenses). The Trustee benefits to the extent there are
funds in the Capital and Income Accounts since these Accounts are non-interest
bearing to Unitholders and the amounts earned by the Trustee are retained by the
Trustee. Part of the Trustee's compensation for its services to each Portfolio
is expected to result from the use of these funds.
Miscellaneous Expenses. The following additional charges are or may be
incurred by a Portfolio: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of such
Portfolio, (b) fees of the Trustee for extraordinary services, (c) expenses of
the Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect a Portfolio and the rights and interests
of Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of a Portfolio without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities held in a Portfolio,
(i) any offering costs incurred after the end of the initial offering period and
(j) expenditures incurred in contacting Unitholders upon termination of a
Portfolio. Each Portfolio may pay the expenses of updating its registration
statement each year. Unit investment trust sponsors have historically paid these
expenses.
General. The fees and expenses of a Portfolio will accrue on a daily basis.
The deferred sales charge, fees and expenses are generally paid out of the
Capital Account of the related Portfolio. When these amounts are paid by or
owing to the Trustee, they are secured by a lien on the related portfolio. It is
expected that Securities will be sold to pay these amounts which will result in
capital gains or losses to Unitholders. See "Taxation". The Supervisor's,
Evaluator's and Trustee's fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the category
"All Services Less Rent of Shelter" in the Consumer Price Index or, if this
category is not published, in a comparable category.

OTHER MATTERS
--------------------------------------------------------------------------------

Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Winston & Strawn has acted as counsel to the Trustee
and as special counsel for New York tax matters.
Independent Certified Public Accountants. The statements of condition and the
related portfolios included in this Prospectus have been audited by Grant
Thornton LLP, independent certified public accountants, as set forth in their
report in this Prospectus, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing.

ADDITIONAL INFORMATION
--------------------------------------------------------------------------------

This Prospectus does not contain all the information set forth in the
Registration Statement filed by your Portfolio with the SEC. The Information
Supplement, which has been filed with the SEC, includes more detailed
information concerning the Securities, investment risks and general information
about the Portfolio. Information about your Portfolio (including the Information
Supplement) can be reviewed and copied at the SEC's Public Reference Room in
Washington, D.C. You may obtain information about the Public Reference Room by
calling 1-202-942-8090. Reports and other information about your Portfolio are
available on the EDGAR Database on the SEC's Internet site at
http://www.sec.gov. Copies of this information may be obtained, after paying a
duplication fee, by electronic request at the following e-mail address:
[email protected] or by writing the SEC's Public Reference Section, Washington,
D.C. 20549-0102.

TABLE OF CONTENTS
--------------------------------------------------------------------------------

Title Page
----- ----
Summary of Essential Financial Information.. 2
Fee Table................................... 3
Bandwidth & Telecommunications Portfolios... 4
Biotechnology & Pharmaceutical Portfolios... 7
Global Wireless Portfolios.................. 10
Great International Firms Portfolio......... 13
Semiconductor Portfolios.................... 15
Notes to Portfolios......................... 18
The Securities.............................. 19
Report of Independent Certified
Public Accountants....................... 34
Statements of Condition .................... 35
The Portfolios.............................. A-1
Objectives and Securities Selection......... A-1
Risk Factors................................ A-2
Public Offering............................. A-5
Retirement Accounts......................... A-9
Wrap Fee and Advisory Accounts.............. A-9
Rights of Unitholders....................... A-9
Portfolio Administration.................... A-12
Taxation.................................... A-14
Portfolio Operating Expenses................ A-20
Other Matters............................... A-20
Additional Information...................... A-21

--------------
When Units of the Portfolios are no longer available this prospectus may be used
as a preliminary prospectus for a future Portfolio. If this prospectus is used
for future Portfolios you should note the following:

The information in this prospectus is not complete with respect to future
Portfolio series and may be changed. No person may sell Units of future
Portfolios until a registration statement is filed with the Securities and
Exchange Commission and is effective. This prospectus is not an offer to sell
Units and is not soliciting an offer to buy Units in any state where the offer
or sale is not permitted.

PROSPECTUS

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

JULY 18, 2000

Van Kampen
Focus Portfolios(SM)

Bandwidth & Telecommunications
Portfolio, Series 11A
Bandwidth & Telecommunications
Portfolio, Series 11B

Biotechnology & Pharmaceutical
Portfolio, Series 11A
Biotechnology & Pharmaceutical
Portfolio, Series 11B

Global Wireless Portfolio, Series 4A
Global Wireless Portfolio, Series 4B

Great International Firms Portfolio, Series 13

Semiconductor Portfolio, Series 3A
Semiconductor Portfolio, Series 3B

Van Kampen Funds Inc.

1 Parkview Plaza
P.O.Box 5555
Oakbrook Terrace, Illinois 60181-5555

Please retain this prospectus for future reference.

Van Kampen
Information Supplement

Van Kampen Focus Portfolios, Series 242

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

This Information Supplement provides additional information concerning the
risks and operations of the Portfolio which is not described in the Prospectus.
This Information Supplement should be read in conjunction with the Prospectus.
This Information Supplement is not a prospectus, does not include all of the
information that an investor should consider before investing in a Portfolio and
may not be used to offer or sell Units without the Prospectus. Copies of the
Prospectus can be obtained by contacting the Sponsor at 1 Parkview Plaza, P.O.
Box 5555, Oakbrook Terrace, Illinois 60181-5555 or by contacting your broker.
This Information Supplement is dated as of the date of the Prospectus and all
capitalized terms have been defined in the Prospectus.

Table of Contents
Page
Risk Factors 2
The Portfolios 5
Sponsor Information 6
Trustee Information 7
Portfolio Termination 8

RISK FACTORS
Price Volatility. Because the Portfolios invest in common stocks of U.S.
and foreign companies, you should understand the risks of investing in common
stocks before purchasing Units. These risks include the risk that the financial
condition of the company or the general condition of the stock market may worsen
and the value of the stocks (and therefore Units) will fall. Common stocks are
especially susceptible to general stock market movements. The value of common
stocks often rises or falls rapidly and unpredictably as market confidence and
perceptions of companies change. These perceptions are based on factors
including expectations regarding government economic policies, inflation,
interest rates, economic expansion or contraction, political climates and
economic or banking crises. The value of Units will fluctuate with the value of
the stocks in a Portfolio and may be more or less than the price you originally
paid for your Units. As with any investment, we cannot guarantee that the
performance of a Portfolio will be positive over any period of time. Because the
Portfolios are unmanaged, the Trustee will not sell stocks in response to market
fluctuations as is common in managed investments. In addition, because some
Portfolios hold a relatively small number of stocks, you may encounter greater
market risk than in a more diversified investment.
Dividends. Common stocks represent ownership interests in a company and are
not obligations of the company. Accordingly, common stockholders have a right to
receive payments from the company that is subordinate to the rights of
creditors, bondholders or preferred stockholders of the company. This means that
common stockholders have a right to receive dividends only if a company's board
of directors declares a dividend and the company has provided for payment of all
of its creditors, bondholders and preferred stockholders. If a company issues
additional debt securities or preferred stock, the owners of these securities
will have a claim against the company's assets before common stockholders if the
company declares bankruptcy or liquidates its assets even though the common
stock was issued first. As a result, the company may be less willing or able to
declare or pay dividends on its common stock.
Foreign Stocks. Because certain Portfolios invest in foreign common stocks,
they involve additional risks that differ from an investment in domestic stocks.
Investments in foreign securities may involve a greater degree of risk than
those in domestic securities. There is generally less publicly available
information about foreign companies in the form of reports and ratings similar
to those that are published about issuers in the United States. Also, foreign
issuers are generally not subject to uniform accounting, auditing and financial
reporting requirements comparable to those applicable to United States issuers.
With respect to certain foreign countries, there is the possibility of adverse
changes in investment or exchange control regulations, expropriation,
nationalization or confiscatory taxation, limitations on the removal of funds or
other assets of a Portfolio, political or social instability, or diplomatic
developments which could affect United States investments in those countries.
Moreover, industrial foreign economies may differ favorably or unfavorably from
the United States' economy in terms of growth of gross national product, rate of
inflation, capital reinvestment, resource self-sufficiency and balance of
payments position. Foreign securities markets are generally not as developed or
efficient as those in the United States. While growing in volume, they usually
have substantially less volume than the New York Stock Exchange, and securities
of some foreign issuers are less liquid and more volatile than securities of
comparable United States issuers. Fixed commissions on foreign exchanges are
generally higher than negotiated commissions on United States exchanges. There
is generally less government supervision and regulation of securities exchanges,
brokers and listed issuers than in the United States.
Foreign Currencies. Certain Portfolios also involve the risk that
fluctuations in exchange rates between the U.S. dollar and foreign currencies
may negatively affect the value of the stocks. For example, if a foreign stock
rose 10% in price but the U.S. dollar gained 5% against the related foreign
currency, a U.S. investor's return would be reduced to about 5%. This is because
the foreign currency would "buy" fewer dollars or, conversely, a dollar would
buy more of the foreign currency. Many foreign currencies have fluctuated widely
against the U.S. dollar for a variety of reasons such as supply and demand of
the currency, investor perceptions of world or country economies, political
instability, currency speculation by institutional investors, changes in
government policies, buying and selling of currencies by central banks of
countries, trade balances and changes in interest rates. A Portfolio's foreign
currency transactions will be conducted with foreign exchange dealers acting as
principals on a spot (i.e., cash) buying basis. These dealers realize a profit
based on the difference between the price at which they buy the currency (bid
price) and the price at which they sell the currency (offer price). The
Evaluator will estimate the currency exchange rates based on current activity in
the related currency exchange markets, however, due to the volatility of the
markets and other factors, the estimated rates may not be indicative of the rate
a Portfolio might obtain had the Trustee sold the currency in the market at that
time.
Liquidity. Whether or not the stocks in a Portfolio are listed on a stock
exchange, the stocks may delist from the exchange or principally trade in an
over-the-counter market. As a result, the existence of a liquid trading market
could depend on whether dealers will make a market in the stocks. We cannot
guarantee that dealers will maintain a market or that any market will be liquid.
The value of the stocks could fall if trading markets are limited or absent.
Additional Units. The Sponsor may create additional Units of a Portfolio by
depositing into the Portfolio additional stocks or cash with instructions to
purchase additional stocks. A cash deposit could result in a dilution of your
investment and anticipated income because of fluctuations in the price of the
stocks between the time of the deposit and the purchase of the stocks and
because the Portfolio will pay brokerage fees.
Voting. Only the Trustee may sell or vote the stocks in a Portfolio. While
you may sell or redeem your Units, you may not sell or vote the stocks in your
Portfolio. The Sponsor will instruct the Trustee how to vote the stocks. The
Trustee will vote the stocks in the same general proportion as shares held by
other shareholders if the Sponsor fails to provide instructions.
Technology Issuers. Certain Portfolios are concentrated in issuers within the
technology industry. A portfolio concentrated in a single industry may present
more risk than a portfolio broadly diversified over several industries. These
Portfolios, and therefore Unitholders, may be particularly susceptible to a
negative impact resulting from adverse market conditions or other factors
affecting technology issuers because any negative impact on the technology
industry will not be diversified among issuers within other unrelated
industries. Accordingly, an investment in Units should be made with an
understanding of the characteristics of the technology industry and the risks
which such an investment may entail.
Technology companies generally include companies involved in the development,
design, manufacture and sale of computers, computer related equipment, computer
networks, communications systems, telecommunications products, electronic
products, and other related products, systems and services. The market for
technology products and services, especially those specifically related to the
Internet, is characterized by rapidly changing technology, rapid product
obsolescence, cyclical market patterns, evolving industry standards and frequent
new product introductions. The success of the issuers of the Securities depends
in substantial part on the timely and successful introduction of new products.
An unexpected change in one or more of the technologies affecting an issuer's
products or in the market for products based on a particular technology could
have a material adverse affect on an issuer's operating results. Furthermore,
there can be no assurance that the issuers of the Securities will be able to
respond timely to compete in the rapidly developing marketplace.
The market for certain technology products and services may have only
recently begun to develop, is rapidly evolving and is characterized by an
increasing number of market entrants. Additionally, certain technology companies
may have only recently commenced operations or offered equity securities to the
public. Such companies are in the early stage of development and have a limited
operating history on which to analyze future operating results. It is important
to note that following its initial public offering a security is likely to
experience substantial stock price volatility and speculative trading.
Accordingly, there can be no assurance that upon redemption of Units or
termination of a Portfolio a Unitholder will receive an amount greater than or
equal to the Unitholder's initial investment.
Based on trading history, factors such as announcements of new products or
development of new technologies and general conditions of the industry have
caused and are likely to cause the market price of technology common stocks to
fluctuate substantially. In addition, technology company stocks have experienced
extreme price and volume fluctuations that often have been unrelated to the
operating performance of such companies. This market volatility may adversely
affect the market price of the Securities and therefore the ability of a
Unitholder to redeem units, or roll over Units into a new trust, at a price
equal to or greater than the original price paid for such Units.
Some key components of certain products of technology issuers are currently
available only from single sources. There can be no assurance that in the future
suppliers will be able to meet the demand for components in a timely and cost
effective manner. Accordingly, an issuer's operating results and customer
relationships could be adversely affected by either an increase in price for, or
and interruption or reduction in supply of, any key components. Additionally,
many technology issuers are characterized by a highly concentrated customer base
consisting of a limited number of large customers who may require product
vendors to comply with rigorous and constantly developing industry standards.
Any failure to comply with such standards may result in a significant loss or
reduction of sales. Because many products and technologies are incorporated into
other related products, certain companies are often highly dependent on the
performance of other computer, electronics and communications companies. There
can be no assurance that these customers will place additional orders, or that
an issuer of Securities will obtain orders of similar magnitude as past orders
form other customers. Similarly, the success of certain companies is tied to a
relatively small concentration of products or technologies with intense
competition between companies. Accordingly, a decline in demand of such
products, technologies or from such customers could have a material adverse
impact on issuers of the Securities.
Telecommunications Issuers. Because certain Portfolios are concentrated in
the telecommunications industry, the value of the Units of these Portfolios may
be susceptible to factors affecting the telecommunications industry. The
telecommunications industry is subject to governmental regulation and the
products and services of telecommunications companies may be subject to rapid
obsolescence. These factors could affect the value of Units. Telephone companies
in the United States, for example, are subject to both state and federal
regulations affecting permitted rates of returns and the kinds of services that
may be offered. Certain types of companies represented in a portfolio are
engaged in fierce competition for a share of the market of their products. As a
result, competitive pressures are intense and the stocks are subject to rapid
price volatility. While a portfolio concentrates on the securities of
established suppliers of traditional telecommunication products and services, a
Portfolio may also invest in smaller telecommunications companies which may
benefit from the development of new products and services. These smaller
companies may present greater opportunities for capital appreciation, and may
also involve greater risk than large, established issuers. Such smaller
companies may have limited product lines, market or financial resources, and
their securities may trade less frequently and in limited volume than the
securities of larger, more established companies. As a result, the prices of the
securities of such smaller companies may fluctuate to a greater degree than the
prices of securities of other issuers.
Health Care Issuers. An investment in Units of certain Portfolios should be
made with an understanding of the problems and risks inherent in the healthcare
industry in general. Healthcare companies involved in advanced medical devices
and instruments, drugs and biotech, managed care, hospital management/health
services and medical supplies have potential risks unique to their sector of the
healthcare field. These companies are subject to governmental regulation of
their products and services, a factor which could have a significant and
possibly unfavorable effect on the price and availability of such products or
services. Furthermore, such companies face the risk of increasing competition
from new products or services, generic drug sales, termination of patent
protection for drug or medical supply products and the risk that technological
advances will render their products obsolete. The research and development costs
of bringing a drug to market are substantial, and include lengthy governmental
review processes with no guarantee that the product will ever come to market.
Many of these companies may have losses and not offer certain products for
several years. Such companies may also have persistent losses during a new
product's transition from development to production, and revenue patterns may be
erratic. In addition, healthcare facility operators may be affected by events
and conditions including, among other things, demand for services, the ability
of the facility to provide the services required, physicians' confidence in the
facility, management capabilities, competition with other hospitals, efforts by
insurers and governmental agencies to limit rates, legislation establishing
state rate-setting agencies, expenses, government regulation, the cost and
possible unavailability of malpractice insurance and the termination or
restriction of governmental financial assistance, including that associated with
Medicare, Medicaid and other similar third-party payor programs.
Legislative proposals concerning healthcare are proposed in Congress from
time to time. These proposals span a wide range of topics, including cost and
price controls (which might include a freeze on the prices of prescription
drugs), national health insurance, incentives for competition in the provision
of healthcare services, tax incentives and penalties related to healthcare
insurance premiums and promotion of pre-paid healthcare plans. The Sponsor is
unable to predict the effect of any of these proposals, if enacted, on the
issuers of Securities in the Portfolio.

THE PORTFOLIOS
In seeking the Portfolios' objectives, the Sponsor considered the ability
of the Securities to outpace inflation. While inflation is currently relatively
low, the United States has historically experienced periods of double-digit
inflation. While the prices of securities will fluctuate, over time securities
have outperformed the rate of inflation, and other less risky investments, such
as government bonds and U.S. Treasury bills. Past performance is, however, no
guarantee of future results.
Investors should note that the above criteria were applied to the
Securities for inclusion in the Portfolios as of the Initial Date of Deposit.
Should a Security no longer meet the criteria used for selection for a
Portfolio, such Security will not as a result thereof be removed from a
portfolio.
The table below illustrates the performance of the Standard & Poor's 500
Index, the Standard & Poor's Pharmaceutical Index, and the Nasdaq Biotechnology
Index.

S&P S & P Nasdaq
Pharmaceutical 500 Biotechnology
Index Index Index
-------- -------- -----------
1994 16.43% 1.32% (18.44%)
1995 59.22 37.44 88.54
1996 24.09 22.90 (0.33)
1997 50.27 33.30 (0.07)
1998 47.26 28.50 44.28
1999 (11.56) 20.99 101.84

Performance is measured from December 31, 1993 because that is the first date
that information is available for the Nasdaq Biotechnology Index. The S&P 500
and the S&P Pharmaceutical Index performance includes the reinvestment of
dividends. The Nasdaq Biotechnology Index performance does not include the
reinvestment of dividends as these stocks do not typically pay dividends are
that information is not available for the index. Source: FactSet Research
Systems, Inc. and Bloomberg.
When it comes to equity investing, many people only consider U.S. stocks.
However, hundreds of well-known businesses exist outside of the United States
that are leaders in their respective markets and industries. Ignoring these
foreign firms may mean passing up an important investment opportunity.
International equities can add diversity and growth potential to your Portfolio.
The Great International Firms Portfolio provides access to foreign stocks, is
diversified and is backed by Van Kampen's comprehensive research. This Portfolio
may provide capital appreciation potential from a portfolio of stocks from
around the world.
The table below illustrates that no single stock market has dominated over
time and that foreign markets have generally offered returns superior to those
available in the U.S. The table shows the total returns of the top performing
stock markets in developed countries for each of the years indicated (as
represented by Morgan Stanley Capital International indices) compared with the
U.S. market (as represented by the Standard and Poor's 500 Index).

TOTAL RETURNS OF WORLD'S TOP PERFORMING DEVELOPED EQUITY MARKETS

1995 1996
------------------ -----------------
Switzerland: 44.12% Spain: 40.05%
USA: 37.14% Sweden: 37.21%
Sweden: 33.36% Portugal: 35.70%
Spain: 29.83% Finland: 33.94%
Netherlands: 27.71% Hong Kong: 33.08%

1997 1998
------------------ -----------------
Portugal: 46.74% Finland: 121.64%
Switzerland: 44.25% Belgium: 67.75%
Italy: 35.48% Italy: 52.52%
Denmark: 34.52% Spain: 49.90%
USA: 33.38% France: 41.54%

1999
------------------
Finland: 150.71%
Malaysia: 107.24%
Singapore: 97.08%
Sweden: 77.76%
Japan: 60.56%

All figures do not take into consideration taxes or any sales charges,
commissions or fees that an investor would incur in connection with these
investments. The S&P 500 Index measures the performance of 500 stocks from 83
industrial groups. U.S. Treasury bonds are considered long-term investments and
are subject to price fluctuations. The value of long-term bonds decline as
interest rates rise. Stock indices are unmanaged, statistical composites and do
not include payment of any sales charges or fees an investor would pay to
purchase the securities they represent. Furthermore, an investment cannot be
made in an index. U.S. Treasury bills are short-term obligations of the U.S.
government that are purchased at a discount and mature at face value. U.S.
government securities are backed by the full faith and credit of the government.
The Consumer Price Index is a statistical measure of the annual rate of
inflation; it is not an investment. The historical performance of these indices
is shown for illustrative purposes only; it is not meant to forecast, imply or
guarantee the future performance of any particular investment vehicle or the
Portfolio. Securities in which the Portfolio invests will be different from
those in these indices. Common stocks involve greater risks than government
bonds and CDs, as they are more volatile and have greater potential for loss of
principal.

SPONSOR INFORMATION
Van Kampen Funds Inc., a Delaware corporation, is the Sponsor of the
Portfolios. The Sponsor is an indirect subsidiary of Van Kampen Investments Inc.
Van Kampen Investments Inc. is a wholly owned subsidiary of MSAM Holdings II,
Inc., which in turn is a wholly owned subsidiary of Morgan Stanley Dean Witter &
Co. ("MSDW").
MSDW, together with various of its directly and indirectly owned
subsidiaries, is engaged in a wide range of financial services through three
primary businesses: securities, asset management and credit services. These
principal businesses include securities underwriting, distribution and trading;
merger, acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research services; credit
services; asset management; trading of futures, options, foreign exchange
commodities and swaps (involving foreign exchange, commodities, indices and
interest rates); and real estate advice, financing and investing.
Van Kampen Funds Inc. specializes in the underwriting and distribution of
unit investment trusts and mutual funds with roots in money management dating
back to 1926. The Sponsor is a member of the National Association of Securities
Dealers, Inc. and has its principal offices at 1 Parkview Plaza, P.O. Box 5555,
Oakbrook Terrace, Illinois 60181-5555, (630) 684-6000. As of November 30, 1999,
the total stockholders' equity of Van Kampen Funds Inc. was $141,554,861
(audited). (This paragraph relates only to the Sponsor and not to the Portfolio
or to any other Series thereof. The information is included herein only for the
purpose of informing investors as to the financial responsibility of the Sponsor
and its ability to carry out its contractual obligations. More detailed
financial information will be made available by the Sponsor upon request.)
As of March 31, 2000, the Sponsor and its Van Kampen affiliates managed or
supervised more than $100 billion of investment products. The Sponsor and its
Van Kampen affiliates managed $84.2 billion of assets for more than 63 open-end
mutual funds, 39 closed-end funds and more than 2,700 unit trusts as of March
31, 2000. All of Van Kampen's open-end funds, closed-ended funds and unit
investment trusts are professionally distributed by leading financial firms
nationwide. Since 1976, the Sponsor has serviced over two million investor
accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its affairs
are taken over by public authorities, then the Trustee may (i) appoint a
successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Portfolios as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.

TRUSTEE INFORMATION
The Trustee is The Bank of New York, a trust company organized under the
laws of New York. The Bank of New York has its unit investment trust division
offices at 101 Barclay Street, New York, New York 10286 (800) 221-7668. The Bank
of New York is subject to supervision and examination by the Superintendent of
Banks of the State of New York and the Board of Governors of the Federal Reserve
System, and its deposits are insured by the Federal Deposit Insurance
Corporation to the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Portfolios. In
accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for each Portfolio.
Such records shall include the name and address of, and the number of Units of
each Portfolio held by, every Unitholder. Such books and records shall be open
to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may from
time to time be required under any applicable state or federal statute, rule or
regulation. The Trustee is required to keep a certified copy or duplicate
original of the Trust Agreement on file in its office available for inspection
at all reasonable times during the usual business hours by any Unitholder,
together with a current list of the Securities held in each Portfolio.
Under the Trust Agreement, the Trustee or any successor trustee may resign
and be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date specified
in such notice when such resignation is to take effect. The Sponsor upon
receiving notice of such resignation is obligated to appoint a successor trustee
promptly. If, upon such resignation, no successor trustee has been appointed and
has accepted the appointment within 30 days after notification, the retiring
Trustee may apply to a court of competent jurisdiction for the appointment of a
successor. The Sponsor may remove the Trustee and appoint a successor trustee as
provided in the Trust Agreement at any time with or without cause. Notice of
such removal and appointment shall be mailed to each Unitholder by the Sponsor.
Upon execution of a written acceptance of such appointment by such successor
trustee, all the rights, powers, duties and obligations of the original trustee
shall vest in the successor. The resignation or removal of a Trustee becomes
effective only when the successor trustee accepts its appointment as such or
when a court of competent jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.

PORTFOLIO TERMINATION
A Portfolio may be liquidated at any time by consent of Unitholders
representing 66 2/3% of the Units of such Portfolio then outstanding or by the
Trustee when the value of the Securities owned by a Portfolio, as shown by any
evaluation, is less than $500,000 ($3,000,000 if the value of the Portfolio has
exceeded $15,000,000). A Portfolio will be liquidated by the Trustee in the
event that a sufficient number of Units of such Portfolio not yet sold are
tendered for redemption by the Sponsor, so that the net worth of such Portfolio
would be reduced to less than 40% of the value of the Securities at the time
they were deposited in such Portfolio. If a Portfolio is liquidated because of
the redemption of unsold Units by the Sponsor, the Sponsor will refund to each
purchaser of Units the entire sales charge paid by such purchaser. The Trust
Agreement will terminate upon the sale or other disposition of the last Security
held thereunder, but in no event will it continue beyond the Mandatory
Termination Date.
Commencing during the period beginning nine business days prior to, and no
later than, the Mandatory Termination Date, Securities will begin to be sold in
connection with the termination of the Portfolios. The Sponsor will determine
the manner, timing and execution of the sales of the Securities. The Sponsor
shall direct the liquidation of the Securities in such manner as to effectuate
orderly sales and a minimal market impact. In the event the Sponsor does not so
direct, the Securities shall be sold within a reasonable period and in such
manner as the Trustee, in its sole discretion, shall determine. At least 30 days
before the Mandatory Termination Date the Trustee will provide written notice of
any termination to all Unitholders of the appropriate Portfolio and in the case
of a Portfolio will include with such notice a form to enable Unitholders owning
1,000 or more Units to request an in kind distribution of the U.S.-traded
Securities. To be effective, this request must be returned to the Trustee at
least five business days prior to the Mandatory Termination Date. On the
Mandatory Termination Date (or on the prior business day if a holiday) the
Trustee will deliver each requesting Unitholder's pro rata number of whole
shares of the U.S.-traded Securities in a Portfolio to the account of the
broker-dealer or bank designated by the Unitholder at Depository Trust Company.
The value of the Unitholder's fractional shares of the Securities will be paid
in cash. Unitholders with less than 1,000 Units, Unitholders in a Portfolio with
1,000 or more Units not requesting an in kind distribution will receive a cash
distribution from the sale of the remaining Securities within a reasonable time
following the Mandatory Termination Date. Regardless of the distribution
involved, the Trustee will deduct from the funds of the appropriate Portfolio
any accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of liquidation
and any amounts required as a reserve to provide for payment of any applicable
taxes or other governmental charges. Any sale of Securities in a Portfolio upon
termination may result in a lower amount than might otherwise be realized if
such sale were not required at such time. The Trustee will then distribute to
each Unitholder of each Portfolio his pro rata share of the balance of the
Income and Capital Accounts of such Portfolio.
Within 60 days of the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in the
same manner.

CONTENTS OF REGISTRATION STATEMENTS

This Amendment to the Registration Statement comprises the following
papers and documents:

The facing sheet
The Prospectus
The signatures
The consents of independent public accountants and legal counsel

The following exhibits:

1.1 Copy of Trust Agreement.

3.1 Opinion and consent of counsel as to legality of securities being
registered.

3.2 Opinion of counsel as to the federal income tax status of securities being
registered.

3.3 Opinion and consent of counsel as to New York tax status of securities
being registered.

4.1 Consent of Interactive Data Corporation.

4.2 Consent of Independent Certified Public Accountants.

SIGNATURES

The Registrant, Van Kampen Focus Portfolios, Series 242, hereby
identifies Van Kampen Merritt Equity Opportunity Trust, Series 1, Series 2,
Series 4 and Series 7 and Van Kampen American Capital Equity Opportunity Trust,
Series 13, Series 14, Series 57 and Series 89 for purposes of the
representations required by Rule 487 and represents the following: (1) that the
portfolio securities deposited in the series as to the securities of which this
Registration Statement is being filed do not differ materially in type or
quality from those deposited in such previous series; (2) that, except to the
extent necessary to identify the specific portfolio securities deposited in, and
to provide essential financial information for, the series with respect to the
securities of which this Registration Statement is being filed, this
Registration Statement does not contain disclosures that differ in any material
respect from those contained in the registration statements for such previous
series as to which the effective date was determined by the Commission or the
staff; and (3) that it has complied with Rule 460 under the Securities Act of
1933.

Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen Focus Portfolios, Series 242 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 Chicago and State of
Illinois on the 18th day of July 2000.

Van Kampen Focus Portfolios, Series 242
By Van Kampen Funds Inc.

By Christine K. Putong
------------------------------
Assistant Vice President

Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on July 18, 2000
by the following persons who constitute a majority of the Board of Directors of
Van Kampen Funds Inc.

SIGNATURE TITLE

Richard F. Powers III Chairman and Chief Executive )

Officer )

John H. Zimmermann III President

A. Thomas Smith III Executive Vice President, )
General Counsel and Secretary )

Michael H. Santo Executive Vice President and Chief )
Operations and Technology Officer

Christine K. Putong
----------------------------
(Attorney-in-fact*)

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

*An executed copy of each of the related powers of attorney is filed
herewith or was filed with the Securities and Exchange Commission in connection
with the Registration Statement on Form S-6 of Van Kampen Focus Portfolios,
Series 136 (File No. 333-70897) and the same are hereby incorporated herein by
this reference.