<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Performance in Perspective....................... 4
Glossary of Terms................................ 5
Portfolio Management Review...................... 6
Portfolio Highlights............................. 9
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 15
Statement of Operations.......................... 16
Statement of Changes in Net Assets............... 17
Financial Highlights............................. 18
Notes to Financial Statements.................... 21
Report of Independent Accountants................ 28
</TABLE>
COM ANR 2/99
<PAGE> 2
LETTER TO SHAREHOLDERS
January 20, 1999
Dear Shareholder,
The past decade has been a remarkable time for investors. Together, we've
witnessed one of the greatest bull markets in investment history, unprecedented
growth in mutual fund investing, and a surge in personal retirement planning.
The coming millennium promises to hold even more opportunities.
To lead us into this new era of investing, Richard F. Powers III has joined
Van Kampen as Chairman and Chief Executive Officer. He comes to us from our
parent company, Morgan Stanley Dean Witter & Co., where he served as Executive
Vice President and Director of Marketing. He brings 27 years of experience in
the financial services industry, including an extensive background in product
management, strategic planning and brand development.
Although former Chairman Don G. Powell retired on January 1, he will remain
active in the industry and the community. Mr. Powell plans to continue his
service as a member of the board of directors of the Investment Company
Institute, the leading mutual fund industry association, and he will remain a
trustee of your fund.
ECONOMIC OVERVIEW
Despite a stormy year in the global economy, the United States ended 1998
with only a moderate slowdown in growth. The nation's gross domestic product, a
measure of economic health, grew 3.9 percent during the year, matching 1997's
growth rate and indicating that our nation's economy remains strong. A
continuation of low inflation--only a 1.6 percent increase in the consumer price
index over the last 12 months--also helped sustain the domestic economy and kept
inflation-adjusted interest rates attractive.
Although the year ended on a positive note, the economic environment was
quite unsettled in the third quarter, with the Asian financial crisis
contributing to slowing corporate profits in the United States. Given the
uncertainty surrounding emerging market nations and the near-collapse of a major
U.S. hedge fund, the stock and bond markets experienced significant volatility
during this period. With instability as a backdrop, American and foreign
investors alike pursued a flight to quality--seeking the relative safety of
large-company stocks and government bonds.
In the last few months of the year the global financial situation improved
in conjunction with the Federal Reserve's interest rate decreases. In response
to declining corporate profits and mounting international concerns, the Fed
lowered interest rates three times, with 0.25 percent cuts in September,
October, and November. These rate cuts, coupled with a wave of corporate mergers
and cost-cutting measures, lent the support needed to keep the economy growing.
Dozens of foreign central banks also reduced interest rates in an effort to
stimulate their economies. These actions gave a boost to investor confidence and
encouraged a return to a more diversified range of investments in the last few
months of the year.
Continued on page 2
1
<PAGE> 3
MARKET REVIEW
Despite bouts of volatility, the stock market experienced impressive returns
during 1998. Large-company stocks were responsible for much of this as investors
favored the perceived stability of established, high-quality companies. The Dow
Jones Industrial Average rose more than 16 percent during the year and hit a
record high of 9374 in November before falling back to more moderate levels.
Technology companies generally fared well during the year, with the
technology-heavy Nasdaq composite index up almost 40 percent for the year. On
the other hand, commodity-based stocks--especially those of oil
companies--suffered from declining commodity prices. Small-company stocks also
significantly underperformed the rest of the market, with the Russell 2000 index
actually losing 3.45 percent during the 12-month period.
OUTLOOK
Our outlook for the domestic economy is positive, and we anticipate
continued low inflation and healthy economic growth. However, the aftereffects
of the global economic slowdown may continue to put pressure on corporate
earnings in the first half of the year. Internationally, we anticipate that low
interest rates and declining inflation will lead to improvements in troubled
areas such as Asia and Latin America. With the successful launch of the euro,
the new European transnational currency, we believe that many foreign markets
will become increasingly attractive in 1999.
In the long term, we are optimistic that the stock market will continue its
record growth, although we could experience additional volatility in the months
ahead if concerns about high stock valuations and increasing earnings pressure
become more pronounced. Combined with growing questions about corporate and
government reactions to the Year 2000 computer problem, we could see an
increasingly cautious market by mid-year.
Additional details about your fund, including a question-and-answer section
with your portfolio management team, are provided in this report. As always, we
are pleased to have the opportunity to share with you the progress of your
investment.
Sincerely,
[SIG.]
Richard F. Powers III
Chairman
Van Kampen Asset Management Inc.
[SIG.]
Dennis J. McDonnell
President
Van Kampen Asset Management Inc.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1998
VAN KAMPEN COMSTOCK FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
One-year total return based on NAV(1).... 20.12% 19.13% 19.13%
One-year total return(2)................. 13.20% 14.13% 18.13%
Five-year average annual total
return(2)................................ 18.74% 19.04% 19.20%
Ten-year average annual total
return(2)................................ 16.40% N/A N/A
Life-of-Fund average annual total
return(2)................................ 12.89% 17.70% 18.73%
Commencement date........................ 10/07/68 10/19/92 10/26/93
</TABLE>
N/A = Not Applicable
(1)Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (5.75% for A shares) or contingent deferred
sales charge for early withdrawal (5% for B shares and 1% for C shares).
(2)Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or contingent
deferred sales charge for early withdrawal (B and C shares).
See the Prior Performance section of the current prospectus. An investment
should be made with an understanding of the risks that an investment in equity
securities entails. These include the risk that the financial condition of the
issuers of the securities in the portfolio, or the condition of the stock market
in general, may worsen and therefore, the value of Fund shares may decline. Past
performance does not guarantee future results. Investment return and net asset
value will fluctuate with market conditions. Market volatility may have
adversely affected fund performance since December 31, 1998. Fund shares, when
redeemed, may be worth more or less than their original cost.
The types of securities in which the Fund invests may be subject to special
risks including currency exchange, rate fluctuations, and political and economic
instability.
Market forecasts provided in this report may not necessarily come to pass.
3
<PAGE> 5
PUTTING YOUR FUND'S PERFORMANCE IN PERSPECTIVE
As you evaluate your progress toward achieving your financial goals, it is
important to track your investment performance at regular intervals. A
comparison of your Fund's performance to an applicable benchmark can:
- Illustrate the market environment in which your Fund is being managed
- Reflect the impact of favorable market trends or difficult market
conditions
- Help you evaluate how your Fund's management team has responded to
opportunities and challenges
The following graph compares your Fund's performance to that of the Standard
& Poor's 500-Stock Index and the Lipper Growth and Income Fund Index over time.
These indices are broad-based, statistical composites that do not include any
commissions or sales charges that would be paid by an investor purchasing the
securities they represent.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Van Kampen Comstock Fund vs. the Standard & Poor's 500-Stock Index and the
Lipper Growth and Income Fund Index (December 31, 1988 through December 31,
1998)
[GRAPH]
<TABLE>
<CAPTION>
STANDARD & POOR'S 500- LIPPER GROWTH & INCOME
VAN KAMPEN COMSTOCK FUND STOCK INDEX FUND INDEX
------------------------ ---------------------- ----------------------
<S> <C> <C> <C>
Dec 1988 9424.00 10000.00 10000.00
10130.00 10711.00 10601.00
9957.00 10401.00 10471.00
10231.00 10708.00 10682.00
10728.00 11244.00 11116.00
11110.00 11639.00 11496.00
11023.00 11651.00 11461.00
11938.00 12680.00 12231.00
12133.00 12877.00 12495.00
12053.00 12896.00 12415.00
11765.00 12572.00 12049.00
12003.00 12780.00 12207.00
Dec 1989 12301.00 13159.00 12373.00
11408.00 12253.00 11670.00
11545.00 12358.00 11840.00
11890.00 12761.00 12055.00
11645.00 12418.00 11715.00
12813.00 13560.00 12591.00
12789.00 13560.00 12507.00
12692.00 13489.00 12425.00
11637.00 12217.00 11413.00
11097.00 11705.00 10825.00
11032.00 11627.00 10656.00
11645.00 12324.00 11286.00
Dec 1990 11888.00 12749.00 11632.00
12362.00 13278.00 12233.00
13144.00 14172.00 13035.00
13402.00 14594.00 13292.00
13350.00 14599.00 13350.00
13991.00 15162.00 13884.00
13308.00 14562.00 13244.00
13999.00 15216.00 13809.00
14407.00 15515.00 14130.00
14174.00 15340.00 14025.00
14523.00 15522.00 14244.00
14016.00 14840.00 13631.00
Dec 1991 15685.00 16617.00 14860.00
15327.00 16286.00 14844.00
15479.00 16442.00 15121.00
15130.00 16199.00 14844.00
15420.00 16651.00 15117.00
15554.00 16667.00 15275.00
15231.00 16507.00 15021.00
15814.00 17157.00 15511.00
15518.00 16745.00 15239.00
15761.00 17027.00 15445.00
15940.00 17063.00 15513.00
16559.00 17580.00 16039.00
Dec 1992 16710.00 17881.00 16291.00
16778.00 18007.00 16544.00
17000.00 18196.00 16790.00
17350.00 18659.00 17256.00
16947.00 18185.00 17042.00
17271.00 18598.00 17369.00
17378.00 18748.00 17477.00
17398.00 18648.00 17571.00
17990.00 19290.00 18232.00
18027.00 19230.00 18254.00
18156.00 19603.00 18537.00
17799.00 19350.00 18240.00
Dec 1993 18230.00 19675.00 18673.00
18830.00 20314.00 19314.00
18352.00 19704.00 18824.00
17533.00 18935.00 18069.00
17793.00 19153.00 18314.00
17838.00 19391.00 18532.00
17336.00 19016.00 18163.00
17834.00 19615.00 18660.00
18490.00 20353.00 19369.00
17875.00 19946.00 18913.00
18056.00 20362.00 19123.00
17375.00 19558.00 18416.00
Dec 1994 17561.00 19942.00 18596.00
18142.00 20426.00 18887.00
18864.00 21163.00 19594.00
19426.00 21878.00 20054.00
19907.00 22490.00 20607.00
20664.00 23306.00 21299.00
21069.00 23959.00 21701.00
21918.00 24721.00 22429.00
22006.00 24713.00 22643.00
22778.00 25858.00 23318.00
22337.00 25729.00 23001.00
23439.00 26785.00 23989.00
Dec 1995 23911.00 27409.00 24386.00
24848.00 28303.00 25111.00
25012.00 28500.00 25462.00
25599.00 28879.00 25787.00
26178.00 29267.00 26182.00
26349.00 29936.00 26564.00
26336.00 30172.00 26450.00
25259.00 28791.00 25373.00
25926.00 29333.00 26137.00
26922.00 31097.00 27303.00
27179.00 31910.00 27922.00
29154.00 34251.00 29720.00
Dec 1996 29253.00 33686.00 29428.00
30045.00 35752.00 30740.00
30183.00 35964.00 31002.00
29206.00 34595.00 29923.00
29862.00 36616.00 31029.00
31951.00 38761.00 32834.00
32816.00 40622.00 34121.00
35283.00 43795.00 36570.00
34892.00 41279.00 35198.00
37014.00 43660.00 36977.00
35611.00 42154.00 35749.00
Dec 1997 36891.00 44034.00 36747.00
38004.00 44909.00 37338.00
38403.00 45365.00 37436.00
40679.00 48560.00 39785.00
42855.00 51160.00 41626.00
43051.00 51624.00 41850.00
42070.00 50652.00 41178.00
42299.00 52844.00 41674.00
41118.00 52230.00 40654.00
36390.00 44615.00 34912.00
39771.00 47598.00 36478.00
42712.00 51419.00 39128.00
44739.00 54460.00 41013.00
Dec 1998 45650.00 57717.00 42408.00
</TABLE>
The above chart reflects the performance of Class A shares of the Fund. The
performance of Class A shares will differ from that of other share classes of
the Fund because of the difference in sales charges and/or expenses paid by
shareholders investing in the different share classes. The Fund's performance
assumes reinvestment of all distributions, and includes payment of the maximum
sales charge (5.75% for A shares).
While past performance is not indicative of future performance, the above
information provides a broader vantage point from which to evaluate the
discussion of the Fund's performance found in the following pages.
Fund's Total Return
1 Year Avg. Annual = 13.20%
5 Year Avg. Annual = 18.74%
10 Year Avg. Annual = 16.40%
4
<PAGE> 6
GLOSSARY OF TERMS
CYCLICAL STOCKS: Stocks within industries where earnings tend to rise quickly
when the economy strengthens and fall quickly when the economy weakens.
Examples of cyclical stocks include housing, automobiles, and paper
companies. Noncyclical or defensive stocks are typically less sensitive to
changes in the economy. These include utilities, grocery stores, and
pharmaceutical companies.
DOW JONES INDUSTRIAL AVERAGE: The oldest and most widely recognized stock market
average, which reflects the performance of 30 actively traded stocks of
well-established, blue-chip companies.
FUNDAMENTALS: Characteristics of a company, such as revenue growth, earnings
growth, financial strength, market share, and quality of management.
MARKET CAPITALIZATION: The size of a company, as measured by the value of its
issued and outstanding stock. The definition used by Morningstar, an
independent mutual fund rating service, places companies in one of three
flexible categories that grow or shrink along with the market. According to
Morningstar, as of December 31, 1998,
- LARGE CAPS have market capitalizations greater than $8.4 billion
- MID CAPS have market capitalizations between $1.3 and $8.4 billion
- SMALL CAPS have market capitalizations less than $1.3 billion
NET ASSET VALUE (NAV): The value of a mutual fund share, calculated by deducting
a fund's liabilities from the total assets in its portfolio and dividing
this amount by the number of shares outstanding. The NAV does not include
any initial or contingent deferred sales charge.
STANDARD & POOR'S 500-STOCK INDEX: A broad-based measurement of changes in
stock-market conditions based on the average performance of 500 widely held
common stocks. The index, which tracks industrial, transportation,
financial, and utility stocks, provides a guide to the overall health of the
U.S. stock market. The S&P 500 is a much broader index than the Dow Jones
Industrial Average and reflects the stock market more accurately.
VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue,
book value, and cash flow.
VALUE INVESTING: A strategy that seeks to identify stocks that are sound
investments but are temporarily out of favor in the marketplace. As a
result, the stocks trade at prices below the value that value investors
believe they are actually worth.
5
<PAGE> 7
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN COMSTOCK FUND
We recently spoke to the management team of the Van Kampen Comstock Fund about
the events and economic forces that shaped the markets during the past year. The
team includes B. Robert Baker, Jr., portfolio manager; Jason Leder and Edie B.
Terreson, portfolio comanagers; and Stephen L. Boyd, chief investment officer
for equity investments. The following excerpts reflect their views on the Fund's
performance during the 12-month period ended December 31, 1998.
Q CAN YOU DESCRIBE THE STOCK MARKET ENVIRONMENT FOR THE FUND DURING THE PAST
YEAR?
A The year was marked by market volatility--both upward and downward. During
the first half of the year, steady economic growth and low inflation
allowed the U.S. stock market to overcome the negative effects of the
Asian economic crisis. After peaking at 9337 in July, however, the market
succumbed to overseas turmoil, as analysts slashed their earnings estimates for
U.S. companies. In the third quarter, the Dow tumbled below 7600 on the way to
its worst quarterly performance in eight years. The fourth quarter saw a
turnaround, as a series of interest rate cuts by the Federal Reserve Board
helped restore investors' confidence in the stock market. After this tumultuous
year, the Dow closed 1998 with an 18 percent gain.
Q WHAT WAS YOUR STRATEGY IN SEEKING TO MEET THE
FUND'S OBJECTIVE?
A We consistently seek to identify undervalued stocks that have the
potential for future price appreciation. To do this, we look for companies
that are temporarily out of favor in the marketplace, because their stock
prices are usually lower than what we think these companies are actually worth.
Then, we look for factors that might move the stock from being undervalued to
being fairly valued. This catalyst could come from within the company in the
form of new management, operational enhancements, restructuring, or
reorganization. It could also be an external factor, such as an improvement in
industry conditions or a regulatory change. When we find a company that is
undervalued and has an identifiable catalyst, we consider adding that company to
the portfolio.
Q HOW DID YOU APPLY THIS STRATEGY DURING THE PAST YEAR?
A As the stock market surged upward in the first half of 1998, stock
valuations became extremely high. We found lower, more favorable
valuations among noncyclical, or "defensive," stocks--stocks of companies
whose earnings aren't closely tied to the health of the economy. As a result, we
made sizable investments in electric utilities and consumer nondurables,
particularly tobacco.
When the stock market began to slide downward, the Fund benefited from its
defensive holdings, which performed well despite the market decline. We sold
some of our
6
<PAGE> 8
electric utilities and tobacco stocks for a profit and used the proceeds to
purchase stocks in economically sensitive industries, such as paper and steel,
where valuations had improved substantially in light of the market retreat.
Q IS YOUR HEAVY EXPOSURE TO DEFENSIVE STOCKS AN INDICATION THAT YOU
ANTICIPATE A BEAR MARKET?
A Not at all. Right now, we are finding value among electric utilities,
consumer nondurables, and health care services, as well as economically
sensitive stocks such as papers and steels. Consequently, we've allocated
a significant portion of the Fund's assets to stocks in these areas. Our
allocations typically don't reflect our opinion on the direction of the stock
market. Generally, we adopt a neutral position on the stock market and focus
instead on the potential of individual companies.
Q WHICH STOCKS SUPPORTED FUND PERFORMANCE?
A Our best-performing stocks came from a variety of industries. Texas
Utilities and Houston Industries were some of our stronger holdings in the
electric utilities sector. In the paper industry, Union Camp has risen
more than 30 percent since mid-year, due in part to International Paper's bid to
purchase the company. Waste Management, one of our largest holdings, also rose
sharply during the reporting period. Its acquisition by USA Waste led to an
increase of more than 23 percent this year. Philip Morris performed extremely
well, both in anticipation of and following the settlement of several state
lawsuits against the tobacco industry. Micron Technology, a leading
semiconductor company, appreciated nearly 70 percent during the fourth quarter
alone as this industry showed signs of recovery.
These are just a few examples among many that contributed to the Fund's
positive performance for the year. Remember, not all stocks in the portfolio
performed as favorably, and there is no guarantee that any of these stocks will
perform as well in the future. For additional portfolio highlights, please refer
to page 9.
Q WHAT FACTORS WORKED AGAINST THE FUND?
A Aside from the challenges presented by a volatile market, the Fund
encountered a few obstacles this year. In the first half of the year,
tobacco stocks hindered the Fund's performance amid uncertainty about the
outcome of legal and legislative issues in the tobacco industry. However, a
recent settlement propelled our tobacco holdings, including RJR Nabisco and
Philip Morris, and they finished the year on a high note. Despite the
settlement, RJR Nabisco's stock price declined nearly 23 percent for the year.
Many stocks of economically sensitive industries, including gold and oil,
performed poorly as commodity prices declined around the world. In fact, the
Goldman Sachs Commodity Index lost 38 percent for the year. We have increased
the Fund's exposure in these areas, however, due to the extremely low relative
valuations.
7
<PAGE> 9
Q HOW DID THE FUND PERFORM DURING THE PAST 12 MONTHS?
A The Fund performed very well this year, far outpacing the average return
of its mutual fund peers. The Fund achieved a one-year total return of
20.12 percent(1) (Class A shares at net asset value) as of December 31,
1998. By comparison, the Standard & Poor's 500-Stock Index returned 28.52
percent, and the Lipper Growth and Income Fund Index, which more closely
resembles the Fund, returned 13.58 percent. The S&P 500-Stock Index is a
broad-based, unmanaged index that reflects the general performance of the stock
market, and the Lipper Growth and Income Fund Index reflects the average
performance of the 30 largest growth and income funds.
Keep in mind that these indices are statistical composites that do not
include any commissions or sales charges that would be paid by an investor
purchasing the securities or investments they represent. Please refer to the
chart on page 3 for additional Fund performance results.
Q WHAT IS YOUR OUTLOOK FOR THE FUND FOR THE NEXT SIX MONTHS?
A As we closed out 1998, the U.S. economy was still growing steadily,
inflation remained low, and the stock market was near its all-time high.
Stock prices reflect this good news, and stocks appear to be fully valued.
With the soaring stock market countered by global uncertainty, we believe
value-oriented funds may be well suited for this environment. While enormous
liquidity and consequent demand for stocks could drive prices even higher,
valuation levels are already high enough that investors who participate in the
stock market must generally assume a higher degree of risk. Because large growth
stocks are highly valued by almost any historical measure, the Fund's focus on
undervalued stocks may be attractive to investors looking for stock market
exposure. The Comstock Fund's "keen eye for value makes it one of the category's
most attractive options," according to Morningstar, an independent mutual fund
rating agency.*
[SIG.]
B. Robert Baker, Jr.
Portfolio Manager
[SIG.]
Jason Leder
Portfolio Comanager
[SIG.]
Edie B. Terreson
Portfolio Comanager
[SIG.]
Stephen L. Boyd
Chief Investment Officer
Equity Investments
- ---------------
* Morningstar Mutual Funds, December 6, 1998.
Please see footnotes on page 3
8
<PAGE> 10
PORTFOLIO HIGHLIGHTS
VAN KAMPEN COMSTOCK FUND
PORTFOLIO HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
PERCENTAGE OF
TOP TEN HOLDINGS THESE INVESTMENTS
AS OF DECEMBER 31, 1998 TWELVE MONTHS AGO
<S> <C> <C>
Tenet Healthcare Corp. ....... 4.3% ......... N/A
Waste Management, Inc. ....... 4.2% ......... 2.8%
Rhone-Poulenc, SA, Class A--
ADR (France) ............... 2.4% ......... N/A
RJR Nabisco Holdings Corp. ... 2.2% ......... 1.6%
Dial Corp. ................... 2.1% ......... 2.7%
Kimberly Clark Corp. ......... 2.1% ......... 1.2%
AMBAC Financial Group,
Inc. ....................... 2.0% ......... 1.3%
Texas Utilities Co. .......... 2.0% ......... 3.0%
SunGard Data Systems, Inc. ... 1.9% ......... 1.6%
Providian Financial Corp. .... 1.9% ......... N/A
</TABLE>
N/A = Not Applicable
TOP FIVE PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<S> <C>
AS OF DECEMBER 31, 1998
Utilities........................................ 18%
Finance.......................................... 15%
Health Care...................................... 14%
Raw Materials/Processing Industries.............. 12%
Consumer Non-Durables............................ 10%
AS OF DECEMBER 31, 1997
Utilities........................................ 27%
Finance.......................................... 13%
Raw Materials/Processing Industries.............. 10%
Consumer Non-Durables............................ 9%
Technology....................................... 8%
</TABLE>
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 95.9%
CONSUMER DISTRIBUTION 4.2%
CompUSA, Inc. (a)........................................... 1,104,000 $ 14,421,000
Dillards Department Stores Inc., Class A.................... 145,000 4,114,375
Federated Department Stores, Inc. (a)....................... 454,000 19,777,375
Payless Shoesource Inc. (a)................................. 394,400 18,684,700
Saks, Inc. (a).............................................. 893,200 28,191,625
--------------
85,189,075
--------------
CONSUMER NON-DURABLES 9.4%
Dial Corp................................................... 1,418,200 40,950,525
Kimberly Clark Corp......................................... 731,000 39,839,500
Mattel, Inc................................................. 345,000 7,870,313
Philip Morris Cos., Inc..................................... 633,000 33,865,500
RJR Nabisco Holdings Corp................................... 1,415,000 42,007,812
Tommy Hilfiger Corp. (a).................................... 420,000 25,200,000
--------------
189,733,650
--------------
CONSUMER SERVICES 0.5%
Mirage Resorts Inc. (a)..................................... 723,000 10,799,813
--------------
ENERGY 9.3%
Amoco Corp.................................................. 336,000 20,286,000
Apache Corp................................................. 314,000 7,948,125
Atlantic Richfield Co....................................... 330,000 21,532,500
British Petroleum Co. PLC -- ADR (United Kingdom)........... 108,000 9,679,500
Burlington Resources, Inc................................... 220,000 7,878,750
Chevron Corp................................................ 264,000 21,895,500
Enron Oil & Gas Company..................................... 436,000 7,521,000
ENSCO International, Inc.................................... 940,000 10,046,250
Halliburton Co.............................................. 310,000 9,183,750
Rowan Cos., Inc. (a)........................................ 900,000 9,000,000
Texaco, Inc................................................. 377,000 19,933,875
Ultramar Diamond Shamrock................................... 530,000 12,852,500
Unocal Corp................................................. 648,000 18,913,500
USX -- Marathon Group....................................... 202,700 6,106,337
YPF Sociedad Anonima, Class D -- ADR (Argentina)............ 147,000 4,106,812
--------------
186,884,399
--------------
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE 13.9%
AMBAC Financial Group, Inc.................................. 638,900 $ 38,453,794
American Bankers Insurance Group, Inc....................... 83,000 4,015,125
Bank One Corp............................................... 87,600 4,473,075
BankAmerica Corp............................................ 243,397 14,634,245
Bear Stearns Cos., Inc...................................... 438,400 16,385,200
Chase Manhattan Corp........................................ 249,000 16,947,562
CIT Group Inc., Class A..................................... 515,000 16,383,437
CMAC Investment Corp........................................ 437,700 20,106,844
Conseco, Inc................................................ 369,000 11,277,562
Everest Reinsurance Holdings, Inc........................... 185,000 7,203,438
LandAmerica Financial Group, Inc............................ 198,100 11,056,456
Liberty Financial Cos., Inc................................. 150,300 4,058,100
Nationwide Financial Services, Inc., Class A................ 88,900 4,595,019
Providian Financial Corp.................................... 490,500 36,787,500
Torchmark, Inc.............................................. 55,000 1,942,188
United Asset Management Corp................................ 285,800 7,430,800
Washington Mutual, Inc...................................... 935,900 35,739,681
Wells Fargo Company......................................... 694,500 27,736,593
--------------
279,226,619
--------------
HEALTHCARE 13.7%
American Home Products Corp................................. 582,300 32,790,769
Bausch & Lomb, Inc.......................................... 505,300 30,318,000
HEALTHSOUTH Corp. (a)....................................... 1,125,000 17,367,188
Mylan Laboratories, Inc..................................... 408,000 12,852,000
Pharmacia & Upjohn, Inc..................................... 360,000 20,385,000
Rhone-Poulenc, SA, Class A -- ADR (France).................. 912,600 45,858,150
Tenet Healthcare Corp. (a).................................. 3,171,700 83,257,125
United HealthCare Corp...................................... 733,000 31,564,812
--------------
274,393,044
--------------
PRODUCER MANUFACTURING 9.2%
American Power Conversion Corp. (a)......................... 674,700 32,680,781
Bouygues Offshore SA -- ADR (France)........................ 43,300 460,063
Cognex Corp. (a)............................................ 1,176,900 23,538,000
Kennametal Inc.............................................. 506,000 10,752,500
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
PRODUCER MANUFACTURING (CONTINUED)
LucasVarity PLC -- ADR (United Kingdom)..................... 282,000 $ 9,447,000
Parker Hannifin Corp........................................ 176,000 5,764,000
U.S. Filter Corp. (a)....................................... 940,000 21,502,500
Waste Management, Inc....................................... 1,725,750 80,463,093
--------------
184,607,937
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 11.7%
Barrick Gold Corp........................................... 628,000 12,246,000
Bethlehem Steel Corp. (a)................................... 2,328,000 19,497,000
Boise Cascade Corp.......................................... 990,000 30,690,000
British Steel PLC -- ADR (United Kingdom)................... 964,000 14,098,500
Champion International Corp................................. 636,000 25,758,000
Freeport-McMoRan Copper & Gold, Inc., Class B............... 1,215,600 12,687,825
Georgia Pacific Group....................................... 184,000 10,775,500
Homestake Mining Co......................................... 1,083,000 9,950,063
Imperial Chemical Industries PLC -- ADR (United Kingdom).... 460,000 16,071,250
Louisiana-Pacific Corp...................................... 882,000 16,151,625
Newmont Mining Corp......................................... 338,000 6,105,125
Placer Dome, Inc............................................ 944,000 10,856,000
Smurfit-Stone Container Corp. (a)........................... 993,960 15,716,992
Union Camp Corp............................................. 150,000 10,125,000
USX -- U.S. Steel, Inc...................................... 1,020,000 23,460,000
--------------
234,188,880
--------------
TECHNOLOGY 6.1%
Amkor Technology, Inc. (a).................................. 447,200 4,835,350
Avnet, Inc.................................................. 109,000 6,594,500
Comverse Technology, Inc. (a)............................... 85,000 6,035,000
ECI Telecommunications Limited.............................. 403,000 14,356,875
Electronics for Imaging, Inc. (a)........................... 155,000 6,229,063
Etec Systems, Inc. (a)...................................... 270,000 10,800,000
Micron Technology, Inc. (a)................................. 257,360 13,012,765
Quantum Corp. (a)........................................... 891,000 18,933,750
SunGard Data Systems, Inc. (a).............................. 931,800 36,980,812
VLSI Technology, Inc. (a)................................... 373,100 4,080,781
--------------
121,858,896
--------------
TRANSPORTATION 0.5%
Canadian National Railway Co................................ 200,000 10,375,000
--------------
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES 17.4%
Baltimore Gas & Electric Co................................. 318,000 $ 9,818,250
BEC Energy.................................................. 516,000 21,252,750
Bell Atlantic Corp.......................................... 352,000 19,998,000
Carolina Power & Light Co................................... 200,000 9,412,500
Central & South West Corp................................... 416,000 11,414,000
DTE Energy Co............................................... 363,000 15,563,625
Entergy Corp................................................ 330,000 10,271,250
FirstEnergy Corp............................................ 320,000 10,420,000
Florida Progress Corp....................................... 140,000 6,273,750
GPU, Inc.................................................... 345,000 15,244,688
Houston Industries, Inc..................................... 1,140,000 36,622,500
Idacorp Inc................................................. 611,000 22,110,562
Illinova Corp............................................... 296,000 7,400,000
New Century Energies, Inc................................... 239,000 11,651,250
Northeast Utilities (a)..................................... 152,000 2,432,000
Northern States Power Co.................................... 339,000 9,407,250
OGE Energy Corp............................................. 673,000 19,517,000
PacifiCorp.................................................. 412,000 8,677,750
Pinnacle West Capital Corp.................................. 276,000 11,695,500
Public Service Co. of New Mexico............................ 783,100 16,004,606
Public Service Enterprise Group............................. 250,000 10,000,000
TECO Energy, Inc............................................ 210,000 5,919,375
Texas Utilities Co.......................................... 804,000 37,536,750
U.S. West, Inc.............................................. 306,000 19,775,250
--------------
348,418,606
--------------
TOTAL LONG-TERM INVESTMENTS 95.9%
(Cost $1,615,956,227)................................................ 1,925,675,919
--------------
SHORT-TERM INVESTMENTS 5.5%
U.S. GOVERNMENT AGENCY OBLIGATIONS 4.4%
Federal Home Loan Bank Consolidated Discount Notes
($34,000,000 par, yielding 5.14%, 01/08/99 maturity) (b)............... 33,966,283
Federal Home Loan Mortgage Corporation Discount Notes
($800,000 par, yielding 5.14%, 01/08/99 maturity)...................... 799,207
Federal National Mortgage Association Discount Notes
($20,000,000 par, yielding 4.89%, 01/27/99 maturity)................... 19,930,233
Federal National Mortgage Association Discount Notes
($7,500,000 par, yielding 4.86%, 02/02/99 maturity) (b)................ 7,468,000
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
Federal National Mortgage Association Discount Notes
($25,000,000 par, yielding 5.06%, 02/04/99 maturity)................... $ 24,881,944
--------------
87,045,667
--------------
COMMERCIAL PAPER 1.1%
General Electric Capital Corp.
($22,465,000 par, yielding 5.00%, 01/04/99 maturity)................... 22,452,519
--------------
TOTAL SHORT-TERM INVESTMENTS 5.5%
(Cost $109,498,186).................................................. 109,498,186
--------------
TOTAL INVESTMENTS 101.4%
(Cost $1,725,454,413)................................................ 2,035,174,105
LIABILITIES IN EXCESS OF OTHER ASSETS (1.4%).......................... (28,170,776)
--------------
NET ASSETS 100.0%..................................................... $2,007,003,329
==============
</TABLE>
(a) Non-income producing security as this stock currently does not declare
dividends.
(b) Assets segregated for open futures transactions.
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,725,454,413)..................... $2,035,174,105
Cash........................................................ 5,835
Receivables:
Investments Sold.......................................... 7,403,401
Fund Shares Sold.......................................... 6,200,058
Dividends................................................. 3,481,209
Variation Margin on Futures............................... 86,125
Other....................................................... 58,765
--------------
Total Assets.......................................... 2,052,409,498
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 32,345,107
Fund Shares Repurchased................................... 9,189,722
Distributor and Affiliates................................ 1,359,516
Income Distributions...................................... 1,043,458
Investment Advisory Fee................................... 783,722
Accrued Expenses............................................ 460,182
Trustees' Deferred Compensation and Retirement Plans........ 224,462
--------------
Total Liabilities..................................... 45,406,169
--------------
NET ASSETS.................................................. $2,007,003,329
==============
NET ASSETS CONSIST OF:
Capital..................................................... $1,656,969,553
Net Unrealized Appreciation................................. 309,805,817
Accumulated Net Realized Gain............................... 37,263,154
Accumulated Undistributed Net Investment Income............. 2,964,805
--------------
NET ASSETS.................................................. $2,007,003,329
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,752,434,323 and 106,893,693 shares of
beneficial interest issued and outstanding)........... $ 16.39
Maximum sales charge (5.75%* of offering price)......... 1.00
--------------
Maximum offering price to public........................ $ 17.39
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $204,697,651 and 12,494,408 shares of
beneficial interest issued and outstanding)........... $ 16.38
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $49,871,355 and 3,044,224 shares of
beneficial interest issued and outstanding)........... $ 16.38
==============
</TABLE>
*On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
15
<PAGE> 17
STATEMENT OF OPERATIONS
For the Year Ended December 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 37,764,960
Interest.................................................... 7,380,310
------------
Total Income............................................ 45,145,270
------------
EXPENSES:
Investment Advisory Fee..................................... 8,622,243
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $3,539,925, $1,577,357 and $240,949,
respectively)............................................. 5,358,231
Shareholder Services........................................ 2,761,705
Custody..................................................... 110,222
Legal....................................................... 66,805
Trustees' Fees and Expenses................................. 37,388
Other....................................................... 956,651
------------
Total Expenses.......................................... 17,913,245
------------
NET INVESTMENT INCOME....................................... $ 27,232,025
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $248,030,695
Futures................................................... 2,329,674
------------
Net Realized Gain........................................... 250,360,369
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 255,707,460
------------
End of the Period:
Investments............................................... 309,719,692
Futures................................................... 86,125
------------
309,805,817
------------
Net Unrealized Appreciation During the Period............... 54,098,357
------------
NET REALIZED AND UNREALIZED GAIN............................ $304,458,726
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $331,690,751
============
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended December 31, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, 1998 December 31, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................. $ 27,232,025 $ 24,433,536
Net Realized Gain..................................... 250,360,369 267,175,662
Net Unrealized Appreciation During the Period......... 54,098,357 97,119,326
-------------- -------------
Change in Net Assets from Operations.................. 331,690,751 388,728,524
-------------- -------------
Distributions from Net Investment Income:
Class A Shares...................................... (26,565,926) (20,935,347)
Class B Shares...................................... (1,559,063) (802,099)
Class C Shares...................................... (279,636) (68,046)
----------- -------------
(28,404,625) (21,805,492)
-------------- -------------
Distributions from Net Realized Gain:
Class A Shares...................................... (252,009,151) (214,376,498)
Class B Shares...................................... (26,759,641) (16,706,248)
Class C Shares...................................... (5,604,576) (1,451,558)
-------------- -------------
(284,373,368) (232,534,304)
-------------- -------------
Total Distributions................................... (312,777,993) (254,339,796)
-------------- -------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... 18,912,758 134,388,728
-------------- -------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................. 1,592,909,683 817,288,119
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................ 288,459,416 234,713,290
Cost of Shares Repurchased............................ (1,546,025,177) (855,710,525)
-------------- -------------
Net Change in Net Assets from Capital Transactions.... 335,343,922 196,290,884
-------------- -------------
TOTAL INCREASE IN NET ASSETS.......................... 354,256,680 330,679,612
NET ASSETS:
Beginning of the Period............................... 1,652,746,649 1,322,067,037
-------------- -------------
End of the Period (Including accumulated undistributed
net investment income of $2,964,805 and $4,137,405,
respectively)....................................... $2,007,003,329 $1,652,746,649
============== ==============
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------
Class A Shares 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period.............................. $16.204 $ 14.785 $ 14.54 $ 12.40 $ 16.38
------- -------- -------- -------- --------
Net Investment Income................. .268 .275 .264 .26 .31
Net Realized and Unrealized
Gain/Loss........................... 2.875 3.966 2.828 4.1125 (.92)
------- -------- -------- -------- --------
Total from Investment Operations...... 3.143 4.241 3.092 4.3725 (.61)
------- -------- -------- -------- --------
Less:
Distributions from and in Excess of
Net Investment Income............. .280 .250 .255 .27 .3225
Distributions from Net Realized
Gain.............................. 2.673 2.572 2.592 1.9625 3.0475
------- -------- -------- -------- --------
Total Distributions................... 2.953 2.822 2.847 2.2325 3.37
------- -------- -------- -------- --------
Net Asset Value, End of the Period.... $16.394 $ 16.204 $ 14.785 $ 14.54 $ 12.40
======= ======== ======== ======== ========
Total Return (a)...................... 20.12% 29.92% 22.34% 36.16% (3.67%)
Net Assets at End of the Period (In
millions)........................... $1,752.4 $1,518.7 $1,240.9 $1,071.4 $ 871.6
Ratio of Expenses to Average Net
Assets (b).......................... .91% .94% 1.00% .96% 1.01%
Ratio of Net Investment Income to
Average Net Assets (b).............. 1.59% 1.71% 1.71% 1.82% 1.93%
Portfolio Turnover.................... 102% 114% 176% 151% 136%
</TABLE>
(a) Total Return is based upon Net Asset Value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(b) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
18
<PAGE> 20
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
------------------------------------------------
Class B Shares 1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......... $16.209 $14.802 $ 14.56 $ 12.42 $ 16.40
------- ------- ------- ------- --------
Net Investment Income........................ .131 .145 .144 .14 .16
Net Realized and Unrealized Gain/Loss........ 2.876 3.964 2.825 4.1125 (.905)
------- ------- ------- ------- --------
Total from Investment Operations............. 3.007 4.109 2.969 4.2525 (.745)
------- ------- ------- ------- --------
Less:
Distributions from and in Excess of Net
Investment Income........................ .160 .130 .135 .15 .1875
Distributions from Net Realized Gain....... 2.673 2.572 2.592 1.9625 3.0475
------- ------- ------- ------- --------
Total Distributions.......................... 2.833 2.702 2.727 2.1125 3.235
------- ------- ------- ------- --------
Net Asset Value, End of the Period........... $16.383 $16.209 $14.802 $ 14.56 $ 12.42
======= ======= ======= ======= ========
Total Return (a)............................. 19.13% 28.88% 21.39% 34.99% (4.41%)
Net Assets at End of the Period (In
millions).................................. $ 204.7 $ 123.1 $ 75.4 $ 45.2 $ 22.0
Ratio of Expenses to Average Net Assets
(b)........................................ 1.70% 1.74% 1.80% 1.79% 1.84%
Ratio of Net Investment Income to Average Net
Assets (b)................................. .79% .92% .91% .96% 1.12%
Portfolio Turnover........................... 102% 114% 176% 151% 136%
</TABLE>
(a) Total Return is based upon Net Asset Value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(b) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
19
<PAGE> 21
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended December 31
---------------------------------------------------
Class C Shares 1998 1997 1996 1995 1994 (a)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period............................... $16.210 $14.805 $ 14.56 $ 12.41 $ 16.39
------- ------- ------- ------- -----------
Net Investment Income.................. .127 .144 .151 .15 .18
Net Realized and Unrealized
Gain/Loss............................ 2.878 3.963 2.821 4.1125 (.925)
------- ------- ------- ------- -----------
Total from Investment Operations....... 3.005 4.107 2.972 4.2625 (.745)
------- ------- ------- ------- -----------
Less:
Distributions from and in Excess of
Net Investment Income.............. .160 .130 .135 .15 .1875
Distributions from Net Realized
Gain............................... 2.673 2.572 2.592 1.9625 3.0475
------- ------- ------- ------- -----------
Total Distributions.................... 2.833 2.702 2.727 2.1125 3.235
------- ------- ------- ------- -----------
Net Asset Value, End of the Period..... $16.382 $16.210 $14.805 $ 14.56 $ 12.41
======= ======= ======= ======= ===========
Total Return (b)....................... 19.13% 28.89% 21.38% 35.11% (4.43%)
Net Assets at End of the Period (In
millions)............................ $ 49.9 $ 10.9 $ 5.8 $ 4.1 $ 2.3
Ratio of Expenses to Average Net Assets
(c).................................. 1.71% 1.74% 1.80% 1.79% 1.85%
Ratio of Net Investment Income to
Average Net Assets (c)............... .78% .92% .92% .97% 1.15%
Portfolio Turnover..................... 102% 114% 176% 151% 136%
</TABLE>
(a) Based on average shares outstanding.
(b) Total Return is based upon Net Asset Value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(c) For the year ended December 31, 1996, the impact on the Ratios of Expenses
and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
20
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS
December 31, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Comstock Fund (the "Fund") is organized as a Delaware business trust
and is registered as a diversified open-end investment management company under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is capital growth and income through investments in common and preferred stock,
and debt securities convertible into common and preferred stock. The Fund
commenced investment operations on October 7, 1968. The distribution of the
Fund's Class B and Class C shares commenced on October 19, 1992 and October 26,
1993, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments in securities listed on a securities exchange
are valued at their sale price as of the close of such securities exchange.
Fixed income investments are stated at value using market quotations or
indications of value obtained from an independent pricing service. Unlisted
securities and listed securities for which the last sales price is not available
are valued at the mean of the last reported bid and asked price. For those
securities where quotations or prices are not available, valuations are
determined in accordance with procedures established in good faith by the Board
of Trustees. Short-term securities with remaining maturities of 60 days or less
are valued at amortized cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Fund may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Fund will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At December 31, 1998, there were no
when issued or delayed delivery purchase commitments.
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
The Fund may invest in repurchase agreements which are short-term
investments whereby the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other investment
companies advised by Van Kampen Asset Management, Inc. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are fully collateralized by the underlying debt security.
The Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not less than
the repurchase proceeds due the Fund.
C. INCOME AND EXPENSE--Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discounts are amortized over
the life of each applicable security. Premiums on debt securities are not
amortized. Expenses of the Fund are allocated on a pro rata basis to each class
of shares, except for distribution and service fees and transfer agency costs
which are unique to each class of shares.
D. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of the deferral of losses for tax purposes
resulting from wash sales and the mark to market of open futures contracts at
December 31, 1998.
At December 31, 1998, for federal income tax purposes, cost of long- and
short-term investments is $1,740,200,182, the aggregate gross unrealized
appreciation is $354,312,311 and the aggregate gross unrealized depreciation is
$59,338,388, resulting in net unrealized appreciation on long- and short-term
investments of $294,973,923.
E. DISTRIBUTION OF INCOME AND GAINS--The Fund declares and pays dividends
quarterly from net investment income. Net realized gains, if any, are
distributed annually. Distributions from net realized gains for book purposes
may include short-term capital gains and gains on option and futures
transactions. All short-term capital gains and a portion of option and futures
gains are included in ordinary income for tax purposes.
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
For federal income tax purposes, the following information is furnished with
respect to the distributions paid by the Fund during its taxable year ended
December 31, 1998. The Fund designated and paid $178,162,651 as a 20% rate gain
distribution. Shareholders were sent a 1998 Form 1099-DIV in January 1999,
representing their proportionate share of this capital gain distribution.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide facilities and investment advice to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- ---------------------------------------------------------------------
<S> <C>
First $1 billion...................................... .50 of 1%
Next $1 billion....................................... .45 of 1%
Next $1 billion....................................... .40 of 1%
Over $3 billion....................................... .35 of 1%
</TABLE>
For the year ended December 31, 1998, the Fund recognized expenses of
approximately $66,800 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.
For the year ended December 31, 1998, the Fund recognized expenses of
approximately $429,400 representing Van Kampen Funds Inc. or its affiliates'
(collectively "Van Kampen") cost of providing accounting services to the Fund.
Van Kampen Investor Services Inc. ("VKIS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the year ended
December 31, 1998, the Fund recognized expenses of approximately $2,111,400.
Beginning in 1998, the transfer agency fees are determined through negotiations
with the Fund's Board of Trustees and are based on competitive market
benchmarks.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Fund. The maximum
annual benefit per trustee under the plan is $2,500.
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of shares of beneficial interest, Classes
A, B and C, each with a par value of $.01 per share. There are an unlimited
number of shares of each class authorized.
At December 31, 1998, capital aggregated $1,406,164,043, $198,652,059 and
$52,153,451 for Classes A, B and C, respectively. For the year ended December
31, 1998, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 83,732,230 $ 1,415,589,727
Class B.................................. 5,791,567 97,707,747
Class C.................................. 4,751,195 79,612,209
----------- ---------------
Total Sales................................ 94,274,992 $ 1,592,909,683
=========== ===============
Dividend Reinvestment:
Class A.................................. 15,656,535 $ 256,645,127
Class B.................................. 1,608,779 26,272,540
Class C.................................. 342,409 5,541,749
----------- ---------------
Total Dividend Reinvestment................ 17,607,723 $ 288,459,416
=========== ===============
Repurchases:
Class A.................................. (86,217,522) $(1,460,462,850)
Class B.................................. (2,505,505) (42,032,661)
Class C.................................. (2,722,355) (43,529,666)
----------- ---------------
Total Repurchases.......................... (91,445,382) $(1,546,025,177)
=========== ===============
</TABLE>
24
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
At December 31, 1997, capital aggregated $1,194,392,039, $116,704,433 and
$10,529,159 for Classes A, B, and C, respectively. For the year ended December
31, 1997, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................... 45,998,404 $ 744,890,923
Class B................................... 3,397,175 54,818,021
Class C................................... 1,047,262 17,579,175
----------- -------------
Total Sales................................. 50,442,841 $ 817,288,119
=========== =============
Dividend Reinvestment:
Class A................................... 13,786,947 $ 217,128,859
Class B................................... 1,028,368 16,221,126
Class C................................... 86,370 1,363,305
----------- -------------
Total Dividend Reinvestment................. 14,901,685 $ 234,713,290
=========== =============
Repurchases:
Class A................................... (49,991,503) $(810,383,665)
Class B................................... (1,916,981) (30,944,192)
Class C................................... (852,871) (14,382,668)
----------- -------------
Total Repurchases........................... (52,761,355) $(855,710,525)
=========== =============
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares will
automatically convert to Class A Shares after the eighth year following
purchase. The CDSC for Class B and C shares will be imposed on most redemptions
made within five years of the purchase for Class B and one year of the purchase
for Class C as detailed in the following schedule.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
-----------------------
YEAR OF REDEMPTION CLASS B CLASS C
- -------------------------------------------------------------------------
<S> <C> <C>
First........................................... 5.00% 1.00%
Second.......................................... 4.00% None
Third........................................... 3.00% None
Fourth.......................................... 2.50% None
Fifth........................................... 1.50% None
Sixth and Thereafter............................ None None
</TABLE>
25
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
For the year ended December 31, 1998, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $631,500 and CDSC on redeemed shares of approximately $346,800.
Sales charges do not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $1,795,883,719 and $1,744,734,440,
respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or to generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in unrealized appreciation/depreciation. Upon disposition, a
realized gain or loss is recognized accordingly, except when exercising a call
option contract or taking delivery of a security underlying a futures contract.
In these instances, the recognition of gain or loss is postponed until the
disposal of the security underlying the option or futures contract.
During the period, the Fund invested in futures contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Fund
generally invests in exchange traded stock index futures. These contracts are
generally used to provide the return of an index without purchasing all of the
securities underlying the index or to manage the Fund's overall exposure to the
equity markets. Upon entering into futures contracts, the Fund maintains, in a
segregated account with its custodian, securities with a value equal to its
obligation under the futures contracts. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin). The risk of loss associated
with a futures contract is in excess of the variation margin reflected on the
Statement of Assets and Liabilities.
26
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998
- --------------------------------------------------------------------------------
Transactions in futures contracts for the year ended December 31, 1998, were
as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ----------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1997............................ -0-
Futures Opened.............................................. 223
Futures Closed.............................................. (173)
----
Outstanding at December 31, 1998............................ 50
====
</TABLE>
The futures contracts outstanding as of December 31, 1998, and the
description and unrealized appreciation is as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS APPRECIATION
- ------------------------------------------------------------------------
<S> <C> <C>
Long Contracts:
S&P 500 Future March 1999
(Current Notional Value $311,375 per
contract).................................... 50 $86,125
== =======
</TABLE>
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.
Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these fees
for the year ended December 31, 1998, are payments retained by Van Kampen of
approximately $1,635,310.
27
<PAGE> 29
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Van Kampen Comstock Fund:
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen Comstock Fund (the
"Fund") at December 31, 1998, and the results of its operations, the changes in
its net assets and the financial highlights for each of the periods presented,
in conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these financial statements in accordance with generally
accepted auditing standards which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at December 31, 1998 by
correspondence with the custodian and brokers, provide a reasonable basis for
the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
February 1, 1999
28
<PAGE> 30
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation
Reserve
Tax Free Money
Senior Loan
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these
funds, ask your financial advisor for
a prospectus, which contains more
complete information, including sales
charges, risks, and expenses. Please
read it carefully before you invest
or send money.
To view a current Van Kampen fund
prospectus or to receive additional
fund information, choose from one of
the following:
- - visit our Web site at
WWW.VANKAMPEN.COM--to view a prospectus, select Download Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Telecommunications Device for the Deaf users, call 1-800-421-2833.
- - e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us
29
<PAGE> 31
VAN KAMPEN COMSTOCK FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
RICHARD M. DEMARTINI*
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
JACK E. NELSON
DON G. POWELL*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
PAUL G. YOVOVICH
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and Chief
Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
PAUL R. WOLKENBERG*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
ASSET MANAGEMENT INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR
SERVICES INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
200 E. Randolph Drive
Chicago, Illinois 60601
TAX NOTICE TO CORPORATE SHAREHOLDERS
For 1998, 23.28% of the dividends taxable as ordinary income qualified for
the 70% dividends received deduction for corporations.
* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C) Van Kampen Funds Inc., 1999 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data. After June 30, 1999, the report, if used with prospective
investors, must be accompanied by a quarterly performance update, if applicable.
30
<PAGE> 32
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Fund's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Fund's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Fund's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Fund. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Fund may invest that, in turn, may adversely affect
the net asset value of the Fund. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act, which may limit the legal rights regarding the use of such
statements in the case of dispute.
31
<PAGE> 33
VAN KAMPEN FUNDS
YOUR NOTES:
32
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> COMSTOCK CLASS A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,725,454,413<F1>
<INVESTMENTS-AT-VALUE> 2,035,174,105<F1>
<RECEIVABLES> 17,170,793<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 64,600<F1>
<TOTAL-ASSETS> 2,052,409,498<F1>
<PAYABLE-FOR-SECURITIES> 32,345,107<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,061,062<F1>
<TOTAL-LIABILITIES> 45,406,169<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,406,164,043
<SHARES-COMMON-STOCK> 106,893,693
<SHARES-COMMON-PRIOR> 93,722,450
<ACCUMULATED-NII-CURRENT> 2,964,805<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 37,263,154<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 309,805,817<F1>
<NET-ASSETS> 1,752,434,323
<DIVIDEND-INCOME> 37,764,960<F1>
<INTEREST-INCOME> 7,380,310<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,913,245)<F1>
<NET-INVESTMENT-INCOME> 27,232,025<F1>
<REALIZED-GAINS-CURRENT> 250,360,369<F1>
<APPREC-INCREASE-CURRENT> 54,098,357<F1>
<NET-CHANGE-FROM-OPS> 331,690,751<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (26,565,926)
<DISTRIBUTIONS-OF-GAINS> (252,009,151)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 83,732,230
<NUMBER-OF-SHARES-REDEEMED> (86,217,522)
<SHARES-REINVESTED> 15,656,535
<NET-CHANGE-IN-ASSETS> 233,779,390
<ACCUMULATED-NII-PRIOR> 4,137,405<F1>
<ACCUMULATED-GAINS-PRIOR> 71,276,153<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 8,622,243<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,913,245<F1>
<AVERAGE-NET-ASSETS> 1,624,671,815
<PER-SHARE-NAV-BEGIN> 16.204
<PER-SHARE-NII> 0.268
<PER-SHARE-GAIN-APPREC> 2.875
<PER-SHARE-DIVIDEND> (0.280)
<PER-SHARE-DISTRIBUTIONS> (2.673)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.394
<EXPENSE-RATIO> 0.91
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> COMSTOCK CLASS B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,725,454,413<F1>
<INVESTMENTS-AT-VALUE> 2,035,174,105<F1>
<RECEIVABLES> 17,170,793<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 64,600<F1>
<TOTAL-ASSETS> 2,052,409,498<F1>
<PAYABLE-FOR-SECURITIES> 32,345,107<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,061,062<F1>
<TOTAL-LIABILITIES> 45,406,169<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 198,652,059
<SHARES-COMMON-STOCK> 12,494,408
<SHARES-COMMON-PRIOR> 7,599,567
<ACCUMULATED-NII-CURRENT> 2,964,805<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 37,263,154<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 309,805,817<F1>
<NET-ASSETS> 204,697,651
<DIVIDEND-INCOME> 37,764,960<F1>
<INTEREST-INCOME> 7,380,310<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,913,245)<F1>
<NET-INVESTMENT-INCOME> 27,232,025<F1>
<REALIZED-GAINS-CURRENT> 250,360,369<F1>
<APPREC-INCREASE-CURRENT> 54,098,357<F1>
<NET-CHANGE-FROM-OPS> 331,690,751<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (1,559,063)
<DISTRIBUTIONS-OF-GAINS> (26,759,641)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 5,791,567
<NUMBER-OF-SHARES-REDEEMED> (2,505,505)
<SHARES-REINVESTED> 1,608,779
<NET-CHANGE-IN-ASSETS> 81,514,805
<ACCUMULATED-NII-PRIOR> 4,137,405<F1>
<ACCUMULATED-GAINS-PRIOR> 71,276,153<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 8,622,243<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,913,245<F1>
<AVERAGE-NET-ASSETS> 157,844,881
<PER-SHARE-NAV-BEGIN> 16.209
<PER-SHARE-NII> 0.131
<PER-SHARE-GAIN-APPREC> 2.876
<PER-SHARE-DIVIDEND> (0.160)
<PER-SHARE-DISTRIBUTIONS> (2.673)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.383
<EXPENSE-RATIO> 1.70
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> COMSTOCK CLASS C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 1,725,454,413<F1>
<INVESTMENTS-AT-VALUE> 2,035,174,105<F1>
<RECEIVABLES> 17,170,793<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 64,600<F1>
<TOTAL-ASSETS> 2,052,409,498<F1>
<PAYABLE-FOR-SECURITIES> 32,345,107<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,061,062<F1>
<TOTAL-LIABILITIES> 45,406,169<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 52,153,451
<SHARES-COMMON-STOCK> 3,044,224
<SHARES-COMMON-PRIOR> 672,975
<ACCUMULATED-NII-CURRENT> 2,964,805<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 37,263,154<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 309,805,817<F1>
<NET-ASSETS> 49,871,355
<DIVIDEND-INCOME> 37,764,960<F1>
<INTEREST-INCOME> 7,380,310<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (17,913,245)<F1>
<NET-INVESTMENT-INCOME> 27,232,025<F1>
<REALIZED-GAINS-CURRENT> 250,360,369<F1>
<APPREC-INCREASE-CURRENT> 54,098,357<F1>
<NET-CHANGE-FROM-OPS> 331,690,751<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (279,636)
<DISTRIBUTIONS-OF-GAINS> (5,604,576)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 4,751,195
<NUMBER-OF-SHARES-REDEEMED> (2,722,355)
<SHARES-REINVESTED> 342,409
<NET-CHANGE-IN-ASSETS> 38,962,485
<ACCUMULATED-NII-PRIOR> 4,137,405<F1>
<ACCUMULATED-GAINS-PRIOR> 71,276,153<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 8,622,243<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 17,913,245<F1>
<AVERAGE-NET-ASSETS> 24,103,182
<PER-SHARE-NAV-BEGIN> 16.210
<PER-SHARE-NII> 0.127
<PER-SHARE-GAIN-APPREC> 2.878
<PER-SHARE-DIVIDEND> (0.160)
<PER-SHARE-DISTRIBUTIONS> (2.673)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.382
<EXPENSE-RATIO> 1.71
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis.
</FN>
</TABLE>
