<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
A Farewell from the Chairman..................... 3
Performance Results.............................. 4
Performance in Perspective....................... 5
Glossary of Terms................................ 6
Portfolio Management Review...................... 7
Portfolio Highlights............................. 10
Portfolio of Investments......................... 11
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>
GI ANR 1/99
<PAGE> 2
LETTER TO SHAREHOLDERS
December 21, 1998
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 [PHOTO]
personal retirement planning. The
coming millennium promises to hold
even more opportunities.
To lead us into this new era of DENNIS J. MCDONNELL AND DON G. POWELL
investing, we are proud to announce
that Richard F. Powers III has joined
Van Kampen as President and Chief Executive Officer, and he will assume the
additional role of Chairman of Van Kampen in 1999. He comes to us from our
parent company, Morgan Stanley Dean Witter & Co., where he served as Executive
Vice President and Director of Marketing. Dick Powers brings 27 years of
experience in the financial services industry, including vast expertise in
product management, strategic planning, and brand development. While at Morgan
Stanley Dean Witter, he developed many of the firm's core products and services.
You'll hear more from Dick Powers in the coming months as he becomes
increasingly involved in matters related to your fund and joins Dennis McDonnell
in addressing you in future shareholder reports. (See Don Powell's farewell to
shareholders on page 3.)
ECONOMIC REVIEW
The economic picture changed from rosy to uncertain during the reporting
period, as the Asian financial crisis led 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 the past several months. With this backdrop,
American and foreign investors alike pursued a flight to quality--seeking the
relative safety of large-cap stocks and government bonds. In recent weeks,
however, the global financial situation has improved as dozens of foreign
central banks have reduced interest rates in an effort to stimulate their
economies.
Despite the global turmoil, the United States experienced only a moderate
slowdown in growth. In response to declining corporate profits and mounting
international concerns, the Federal Reserve lowered interest rates three times,
with 0.25 percent cuts in the federal funds rate 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,
albeit slowly. A continuation of low inflation--only a 1.5 percent increase in
the consumer price index over the last 12 months--also helped sustain the
domestic economy and keep inflation-adjusted interest rates attractive.
Continued on page 2
1
<PAGE> 3
MARKET OVERVIEW
Despite bouts of volatility, the stock market experienced impressive growth
during the reporting period. The Dow Jones Industrial Average rose more than
16.5 percent during the 12 months and hit a record high of 9374 before falling
back to more moderate levels. Large-cap stocks were responsible for much of this
growth as investors favored the perceived stability of large, high-quality
companies. The strongest sectors during the year were health care, technology,
and communications, while commodity-based stocks--especially those of oil
companies--suffered from declining prices. Small-cap stocks also significantly
underperformed the rest of the market, with the Russell 2000 index actually
losing 8.4 percent during the past 12 months.
OUTLOOK
We anticipate that the U.S. economy will continue to grow at a moderate pace
and that inflation will remain low. The global financial situation is already
showing signs of improvement, although the road to recovery will be steep and
slow. It should be aided in January by the launch of the euro, the new European
transnational currency.
In the long-term, we are optimistic that the stock market will continue its
record growth, although we anticipate significant volatility as the strength of
the market is tested. With declining profits and limited pricing power, many
corporations may produce disappointing earnings in 1999. Combined with growing
questions about corporate and government reactions to the Y2K computer problem,
we could see an increasingly nervous 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]
Don G. Powell
Chairman
Van Kampen Asset Management Inc.
[SIG]
Dennis J. McDonnell
President
Van Kampen Asset Management Inc.
2
<PAGE> 4
A FAREWELL FROM THE CHAIRMAN
------------------------ - ------------------------
Dear Shareholder,
Since I became president and chief executive officer in 1987, much has
changed in our business. However, one thing has remained constant through these
years--my commitment to you, the fund shareholder. Through the many events at
Van Kampen that have marked the passage of time--including several mergers,
company name changes, and leadership changes--we have always focused on
providing superior investment results and the highest level of customer service
to help you meet your investment objectives. I'm proud to say that during my
tenure, Van Kampen won eight consecutive awards for high-quality customer
service--more consecutive service awards than any other firm in the financial
services industry.(1) My successor, Dick Powers, shares this commitment to
meeting your needs and providing innovative and efficient ways to help you work
with your financial advisor to reach your financial goals.
Although my official retirement begins on January 1, 1999, I will remain
active in the industry and the community. I plan to continue my service as a
member of the board of directors of the Investment Company Institute, the
leading mutual fund industry association, and I will remain a trustee of your
Fund.
In closing, I want to say farewell to all of you. Thank you for your support
of Van Kampen over the years and for giving me the opportunity to serve you.
Best wishes,
Don G. Powell
Don G. Powell
------------------------ - ------------------------
(1)American Capital, which merged with Van Kampen in 1995, received the DALBAR
Service Award annually from 1990 to 1994. The award was called the Quality
Tested Service Seal until 1997.
3
<PAGE> 5
PERFORMANCE RESULTS FOR THE PERIOD ENDED NOVEMBER 30, 1998
VAN KAMPEN GROWTH AND INCOME FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
One-year total return based on NAV(1).... 16.21% 15.38% 15.37%
One-year total return(2)................. 9.54% 10.38% 14.37%
Five-year average annual total
return(2)................................ 17.01% 17.30% 17.47%
Ten-year average annual total
return(2)................................ 14.94% N/A N/A
Life-of-Fund average annual total
return(2)................................ 10.11% 17.05% 17.05%
Commencement date........................ 08/01/46 08/02/93 08/02/93
</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 November 30, 1998. Fund shares, when
redeemed, may be worth more or less than their original cost.
Market forecasts provided in this report may not necessarily come to pass.
4
<PAGE> 6
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.
The 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 Growth and Income Fund vs. Standard & Poor's 500-Stock Index and
the Lipper Growth and Income Fund Index (November 30, 1988 through November
30, 1998)
[GRAPH]
<TABLE>
<CAPTION>
VAN KAMPEN GROWTH STANDARD & POOR'S LIPPER GROWTH AND
AND INCOME FUND 500 STOCK INDEX INCOME FUND INDEX
------------------- ---------------------- ------------------------
<S> <C> <C> <C>
Nov 1988 9425.00 10000.00 10000.00
9845.00 10237.00 10153.00
10348.00 10966.00 10764.00
10186.00 10648.00 10632.00
10390.00 10962.00 10845.00
10799.00 11511.00 11286.00
11257.00 11915.00 11672.00
10901.00 11927.00 11637.00
11586.00 12981.00 12418.00
11962.00 13183.00 12686.00
11871.00 13203.00 12605.00
11154.00 12870.00 12234.00
Nov 1989 11348.00 13083.00 12394.00
11383.00 13471.00 12563.00
10523.00 12544.00 11849.00
10882.00 12652.00 12021.00
11179.00 13064.00 12239.00
10777.00 12713.00 11894.00
11818.00 13882.00 12784.00
11790.00 13882.00 12699.00
11548.00 13810.00 12615.00
10435.00 12507.00 11588.00
9938.00 11983.00 10991.00
9896.00 11903.00 10820.00
Nov 1990 10521.00 12616.00 11459.00
10787.00 13052.00 11810.00
11193.00 13594.00 12420.00
11963.00 14508.00 13235.00
12263.00 14941.00 13495.00
12241.00 14946.00 13555.00
12705.00 15522.00 14096.00
12152.00 14908.00 13447.00
12728.00 15577.00 14020.00
13054.00 15883.00 14346.00
12978.00 15705.00 14240.00
13285.00 15891.00 14462.00
Nov 1991 12792.00 15193.00 13839.00
14049.00 17011.00 15088.00
14027.00 16673.00 15071.00
14281.00 16832.00 15352.00
13938.00 16583.00 15072.00
14194.00 17046.00 15349.00
14349.00 17062.00 15509.00
14093.00 16899.00 15250.00
14586.00 17565.00 15748.00
14362.00 17143.00 15472.00
14563.00 17432.00 15681.00
14687.00 17468.00 15750.00
Nov 1992 15127.00 17997.00 16284.00
15386.00 18305.00 16541.00
15662.00 18434.00 16797.00
15806.00 18628.00 17047.00
16274.00 19102.00 17520.00
15885.00 18617.00 17303.00
16189.00 19040.00 17634.00
16406.00 19193.00 17745.00
16565.00 19091.00 17840.00
17140.00 19748.00 18511.00
17358.00 19687.00 18534.00
17628.00 20069.00 18821.00
Nov 1993 17296.00 19810.00 18519.00
17898.00 20142.00 18959.00
18504.00 20797.00 19609.00
18022.00 20172.00 19112.00
17336.00 19385.00 18345.00
17591.00 19608.00 18594.00
17732.00 19851.00 18815.00
17287.00 19468.00 18441.00
17784.00 20081.00 18946.00
18452.00 20836.00 19665.00
18091.00 20419.00 19203.00
18277.00 20846.00 19416.00
Nov 1994 17506.00 20022.00 18698.00
17601.00 20416.00 18881.00
18159.00 20911.00 19176.00
18809.00 21666.00 19894.00
19276.00 22397.00 20361.00
19822.00 23024.00 20923.00
20524.00 23860.00 21625.00
20974.00 24528.00 22033.00
21837.00 25308.00 22772.00
21900.00 25300.00 22990.00
22570.00 26472.00 23675.00
22208.00 26340.00 23353.00
Nov 1995 23343.00 27421.00 24357.00
23880.00 28060.00 24760.00
24485.00 28976.00 25496.00
24703.00 29176.00 25852.00
25087.00 29565.00 26182.00
25155.00 29962.00 26582.00
25661.00 30646.00 26970.00
25606.00 30888.00 26855.00
24437.00 29475.00 25761.00
25165.00 30030.00 26537.00
26178.00 31836.00 27721.00
26688.00 32668.00 28349.00
Nov 1996 28559.00 35065.00 30175.00
28189.00 34486.00 29879.00
29325.00 36601.00 31211.00
29582.00 36818.00 31477.00
28553.00 35417.00 30381.00
29619.00 37485.00 31504.00
31623.00 39681.00 33337.00
32759.00 41586.00 34644.00
35286.00 44835.00 37130.00
33626.00 42260.00 35737.00
35355.00 44697.00 37543.00
33968.00 43155.00 36296.00
Nov 1997 34634.00 45080.00 37309.00
35092.00 45975.00 37909.00
35367.00 46442.00 38009.00
37626.00 49714.00 40394.00
39797.00 52375.00 42263.00
40115.00 52850.00 42490.00
39840.00 51855.00 41809.00
40515.00 54099.00 42312.00
39602.00 53471.00 41276.00
34524.00 45675.00 35446.00
35857.00 48728.00 37037.00
38266.00 52640.00 39727.00
Nov 1998 40249.00 55753.00 41641.00
- --------------------------------
Fund's Total Return
1 Year Avg. Annual = 9.54%
5 Year Avg. Annual = 17.01%
10 Year Avg. Annual = 14.94%
Inception Avg. Annual = 10.11%
- --------------------------------
</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.
5
<PAGE> 7
GLOSSARY OF TERMS
BLUE-CHIP STOCKS: Stocks of large, well-known companies that have a long record
of growth. Examples of blue-chip stocks include General Motors,
International Business Machines (IBM), Coca-Cola, and General Electric.
CAPITALIZATION: The size of a company, as measured by the value of its stock.
Morningstar, Inc., an independent mutual fund rating service, defines
"small-cap" as less than $1 billion, "mid-cap" as between $1 billion and $5
billion, and "large-cap" as more than $5 billion.
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.
FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank system of the United States. Its
policy-making committee, called the Federal Open Market Committee, meets
eight times a year to establish monetary policy and monitor the economic
pulse of the United States.
GROWTH INVESTING: An investment strategy that seeks to identify stocks that tend
to offer greater-than-average earnings growth. Growth stocks typically trade
at higher prices than value stocks, due to their higher expected earnings
growth.
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.
P/E RATIO: The price-to-earnings ratio shows the "multiple" of earnings at which
a stock is selling. The P/E ratio is calculated by dividing a stock's
current price by its current earnings per share. A high multiple means that
investors are optimistic about future growth and have bid up the stock's
price.
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, they trade at prices below the value that value investors believe
they are actually worth.
6
<PAGE> 8
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN GROWTH AND INCOME FUND
We recently spoke with the management team of the Van Kampen Growth and Income
Fund about the key events and economic forces that shaped the markets during the
fiscal year ended November 30, 1998. The team is led by James A. Gilligan,
portfolio manager, Scott A. Carroll, portfolio comanager; and Stephen L. Boyd,
chief investment officer for equity investments. The following excerpts reflect
their views on the Fund's performance during this time.
Q HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT IN WHICH THE FUND OPERATED
DURING THIS 12-MONTH PERIOD?
A Although the majority of the reporting period was dominated by global
instability, the market found a new source of inspiration during the last
few months of the Fund's fiscal year: the Federal Reserve Board.
Domino-effect currency devaluations in Asia, Eastern Europe, Russia, and Latin
America precipitated several months of market volatility as investors fled
risk-sensitive securities and embraced the relative safety of U.S. Treasuries.
The Dow Jones Industrial Average, which reached a record high in July, reflected
plummeting investor confidence by shedding approximately 1000 points in the
third quarter of 1998.
In September, however, a lull settled over the market as the Federal Reserve
Board implemented its first rate cut in two years. Investors, recognizing that
the U.S. economy remained fundamentally sound despite global uncertainty,
returned to the stock market with growing enthusiasm. As a result, the Dow
recovered much of its earlier losses. During the final weeks of the reporting
period, the Fed continued to support a thriving stock market and to orchestrate
a turnaround in the global economy by approving two additional interest rate
cuts in quick succession. This triple-action rate cut lowered the federal funds
rate by a total of 75 basis points and stemmed lingering recession fears.
Q AGAINST THIS BACKDROP, WHAT TYPE OF COMPANIES PERFORMED ESPECIALLY WELL?
A As has been true for the past several years, large-capitalization stocks,
in the main, outperformed mid- and small-capitalization stocks during the
period, reflecting investors' preference for established companies with
more stable earnings prospects. However, mid- and small-cap stocks waged a
strong comeback at the end of the period, as some blue-chip companies posted
earnings disappointments. In certain sectors such as technology and health care,
small-cap companies won the performance race against their larger cousins but
weren't quite able to catch up across the broad market.
7
<PAGE> 9
Q TELL US ABOUT SOME OF THE MAJOR SECTORS AND SPECIFIC HOLDINGS REPRESENTED
IN THE PORTFOLIO.
A The Fund's largest sector position during the period was in health
care--which, happily, was one of the better-performing sectors represented
in the portfolio. In a market that was battered by volatility, we found
ample opportunity to add what we felt were overlooked stocks to the Fund's
portfolio at compelling prices. With this in mind, we increased the Fund's
allocation to hospital and retirement services companies, which are emerging
from a difficult period of adjustment to changes in Medicare. Many stocks in
this sector have growth potential and low price-to-earnings ratios, which
creates some desirable value situations. This was the case for two of the new
securities we added during the period, HCR Manor Care and United HealthCare. We
also studied pharmaceutical companies for new ideas or new product debuts that
might boost stock performance, which was the case for Pharmacia & Upjohn.
In addition to health care, we favored the technology sector during the
period. As we discussed in your last report, this sector had been one of the
portfolio's most troubled performers earlier in the year due to lingering
problems in Asia. However, technology stocks soared during the last quarter of
the Fund's fiscal year, and we were able to find ample opportunity in the midst
of uncertainty. One of our largest holdings, International Business Machines
(IBM), continued to turn in outstanding performance thanks to the company's
focus on mainframe computers and services. At the same time, semiconductor
companies which benefited from an improved balance in supply and demand saw a
better pricing environment.
We continue to be pleased with developments in the utility industry.
Telephone stocks in general turned in strong performances, buoyed by increased
merger and acquisition activity. Electric stocks presented something of a mixed
bag; one success was Northeast Utilities, which appreciated in anticipation of
restarting one of the company's nuclear plants.
Finally, we maintained a small but successful percentage of the portfolio in
retail stocks. Our best-performing stock in this sector, and perhaps in the
portfolio, was Tommy Hilfiger, which was added to the portfolio in late 1997.
Overall, retail stocks performed very well during the period because of
increases in consumer spending. Past performance cannot guarantee future
results.
Q WERE THERE ANY DISAPPOINTMENTS IN THE PORTFOLIO?
A Finance, the Fund's second-largest sector, was a source of concern during
the period. Financial companies fared very poorly because of international
credit problems. Because we saw tensions increasing in this sector, we
reduced or eliminated some of our bank holdings that had the highest levels of
credit exposure, including a number of large banks with significant involvement
in emerging-market loans. On the buy side, we added regional banks such as PNC
to the portfolio. PNC had experienced prior difficulties but showed signs of
improvement during the period. We also reinforced our investments in insurance
companies such as American General and Equitable, two of our largest holdings,
which benefited from consolidation within the industry.
8
<PAGE> 10
In the last report, we mentioned some of the factors that negatively
affected Philip Morris for much of the year. Although that stock's net return is
still depressed, we have seen some improvement in the last month, especially in
light of a $206 billion settlement of state lawsuits which unveiled near the end
of the reporting period. For additional Fund portfolio highlights, please refer
to page 10.
Q SO, HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A The Fund achieved a total return of 16.21 percent(1) (Class A shares at
net asset value) for the 12-month period ended November 30, 1998. By
comparison, the Standard & Poor's 500-Stock Index returned 21.27 percent,
and the Lipper Growth and Income Fund Index produced a total return of 11.61
percent for the same period. The S&P 500-Stock Index is a broad-based index that
reflects the general performance of the stock market, and the Lipper Growth and
Income Fund Index reflects the average performance of all growth and income
funds. These indices are statistical composites that do not reflect 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 4
for additional Fund performance results.
Q WHAT DO YOU SEE HAPPENING IN THE MARKET OVER THE COMING MONTHS?
A Although the U.S. economy is still growing and experiencing low inflation,
we don't believe the full impact of global economic difficulties has been
felt yet on U.S. companies. As domestic firms begin to report their
year-end earnings, we expect to see more evidence that companies have been
negatively affected by economic weakness abroad. In the near term, this will
likely result in continued volatility for the stock market and the Fund. Over
the long term, we believe that investors will continue to seek companies with
strong fundamentals, consistent historical track records, promising growth
prospects, and attractive valuations. We feel that the Growth and Income Fund,
with its emphasis on the attempt to identify such companies, should be well
positioned in this environment.
[SIG.]
James A. Gilligan
Portfolio Manager
[SIG.]
Scott A. Carroll
Portfolio Comanager
[SIG.]
Stephen L. Boyd
Chief Investment Officer
for Equity Investments
Please see footnotes on page 4
9
<PAGE> 11
PORTFOLIO HIGHLIGHTS
VAN KAMPEN GROWTH AND INCOME FUND
TOP TEN HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
PERCENTAGE OF
TOP TEN HOLDINGS THESE INVESTMENTS
AS OF NOVEMBER 30, 1998 12 MONTHS AGO
<S> <C> <C>
International Business Machines
Corp. ........................... 3.85% ......... 2.99%
Philip Morris Cos., Inc. .......... 3.20% ......... 2.25%
Chase Manhattan Corp. ............. 2.10% ......... 1.78%
American Home Products Corp. ...... 2.10% ......... 1.14%
Rhone-Poulenc, SA--ADR (France) ... 2.06% ......... 1.19%
Texaco, Inc. ...................... 1.96% ......... 2.01%
Mobile Corp. ...................... 1.92% ......... N/A
Pharmacia & Upjohn, Inc. .......... 1.78% ......... 1.37%
US WEST Media Group ............... 1.77% ......... 1.00%
Waste Management, Inc. ............ 1.71% ......... 0.57%
</TABLE>
N/A = Not Applicable
TOP FIVE PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1998
<S> <C>
Health Care ............... 17.4%
Finance ................... 15.2%
Technology ................ 15.0%
Utilities ................. 12.8%
Consumer Non-Durables ..... 10.7%
</TABLE>
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1997
<S> <C>
Finance ................... 17.3%
Technology ................ 13.4%
Health Care ............... 11.8%
Utilities ................. 11.2%
Consumer Non-Durables ..... 9.8%
</TABLE>
ASSET ALLOCATION AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF AS OF
NOVEMBER 30, 1998 NOVEMBER 30, 1997
<S> <C> <C>
Common Stocks .................. 87.7% ...... 86.6%
Convertibles ................... 2.2% ...... 4.4%
Commercial Paper ............... 3.0% ...... 2.1%
U.S. Government Agency
Obligations .................. 7.1% ...... 6.9%
</TABLE>
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS
November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 88.4%
CONSUMER DISTRIBUTION 0.5%
Sysco Corp.................................................. 232,400 $ 6,260,275
--------------
CONSUMER DURABLES 0.5%
Black & Decker Corp......................................... 138,500 7,504,969
--------------
CONSUMER NON-DURABLES 9.8%
Anheuser Busch Cos., Inc.................................... 192,700 11,682,438
Benckiser NV, Class B - ADR (Netherlands)................... 178,000 10,457,500
Colgate - Palmolive Co...................................... 229,010 19,608,981
Hershey Foods Corp.......................................... 200,400 13,476,900
Philip Morris Cos., Inc..................................... 724,000 40,498,750
Ralston Purina Group........................................ 565,100 19,672,544
Unilever NV - ADR (Netherlands)............................. 138,100 10,676,856
Whitman Corp................................................ 413,000 9,344,125
--------------
135,418,094
--------------
CONSUMER SERVICES 0.9%
H & R Block, Inc............................................ 282,800 12,708,325
--------------
ENERGY 9.1%
Atlantic Richfield Co....................................... 324,500 21,579,250
Coastal Corp................................................ 580,800 20,255,400
El Paso Energy Corp......................................... 429,200 14,646,450
Mobil Corp.................................................. 281,900 24,296,256
Texaco, Inc................................................. 431,100 24,815,194
Valero Energy Corp.......................................... 267,200 5,611,200
YPF Sociedad Anonima, Class D - ADR (Argentina)............. 531,400 15,676,300
--------------
126,880,050
--------------
FINANCE 13.8%
Aetna, Inc.................................................. 155,600 12,029,825
Allstate Corp............................................... 193,400 7,881,050
American General Corp....................................... 306,100 21,560,919
Arden Realty, Inc. (REIT)................................... 324,900 7,472,700
Bank of Tokyo - Mitsubishi, Ltd. - ADR (Japan).............. 904,700 9,555,894
BankBoston Corp............................................. 89,700 3,733,763
Chase Manhattan Corp........................................ 418,500 26,548,594
Citigroup, Inc.............................................. 308,000 15,457,750
Equitable Cos., Inc......................................... 353,100 19,508,775
Exel Ltd.................................................... 136,800 10,277,100
First Union Corp............................................ 261,510 15,886,732
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (CONTINUED)
Fleet Financial Group, Inc.................................. 320,800 $ 13,373,350
PNC Bank Corp............................................... 293,700 15,143,906
Washington Mutual, Inc...................................... 348,450 13,502,437
--------------
191,932,795
--------------
HEALTHCARE 15.8%
Alza Corp. (a).............................................. 312,300 16,317,675
American Home Products Corp................................. 497,400 26,486,550
Beckman Coulter, Inc........................................ 231,900 11,189,175
Columbia / HCA Healthcare Corp.............................. 307,700 7,577,113
HCR Manor Care, Inc. (a).................................... 51,000 1,619,250
IMS Health, Inc............................................. 212,900 14,131,237
Merck & Co., Inc............................................ 120,500 18,662,437
Mylan Labs., Inc............................................ 542,400 18,000,900
PacifiCare Health Systems, Class B (a)...................... 147,530 11,110,853
Pharmacia & Upjohn, Inc..................................... 431,400 22,459,762
Rhodia, SA - ADR (France) (a)............................... 394,900 6,071,588
Rhone-Poulenc, SA - ADR (France), Warrants (expiring
11/05/01) (a)............................................. 239,000 941,063
Rhone-Poulenc, SA, Class A - ADR (France)................... 501,100 25,055,000
St. Jude Medical, Inc....................................... 301,400 8,759,438
Teva Pharmaceutical Industries Ltd. - ADR (Israel).......... 208,800 9,082,800
United HealthCare Corp...................................... 261,200 11,786,650
Watson Pharmaceuticals, Inc. (a)............................ 190,700 10,273,962
--------------
219,525,453
--------------
PRODUCER MANUFACTURING 5.1%
AlliedSignal, Inc........................................... 375,600 16,526,400
Ingersoll-Rand Co........................................... 401,700 18,804,581
Philips Electronics NV - ADR (Netherlands).................. 216,400 13,700,825
Waste Management, Inc....................................... 503,355 21,581,346
--------------
70,613,152
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 4.6%
Boise Cascade Corp.......................................... 278,900 8,837,644
Crown Cork & Seal Co., Inc.................................. 434,600 14,667,750
Fort James Corp............................................. 203,300 7,954,112
Imperial Chemical Industries PLC - ADR (United Kingdom)..... 253,500 9,601,312
Monsanto Co................................................. 122,000 5,528,125
Raychem Corp................................................ 491,900 16,755,344
--------------
63,344,287
--------------
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
RETAIL 3.1%
Federated Department Stores, Inc. (a)....................... 345,900 $ 14,419,706
Gap, Inc.................................................... 181,200 13,329,525
Tommy Hilfiger Corp. (a).................................... 247,800 14,991,900
--------------
42,741,131
--------------
TECHNOLOGY 13.6%
Adobe Systems, Inc.......................................... 481,100 21,529,225
BMC Software, Inc. (a)...................................... 362,200 18,494,837
Computer Associates International, Inc...................... 189,000 8,363,250
Electronic Data Systems Corp................................ 236,200 9,211,800
First Data Corp............................................. 276,200 7,371,088
International Business Machines Corp........................ 294,900 48,658,500
Micron Technology, Inc...................................... 221,100 9,134,194
Motorola, Inc. ............................................. 90,300 5,598,600
Oracle Corp. (a)............................................ 289,200 9,905,100
Quantum Corp. (a)........................................... 536,600 11,872,275
Texas Instruments, Inc...................................... 167,700 12,808,087
Xerox Corp.................................................. 153,600 16,512,000
Xilinx, Inc. (a)............................................ 187,200 9,500,400
--------------
188,959,356
--------------
UTILITIES 11.6%
BEC Energy.................................................. 261,600 10,791,000
BellSouth Corp.............................................. 128,000 11,168,000
Consolidated Edison, Inc.................................... 349,500 17,758,969
Edison International........................................ 381,500 10,491,250
FPL Group, Inc.............................................. 23,700 1,451,625
GPU, Inc.................................................... 314,600 13,783,412
GTE Corp.................................................... 193,500 11,997,000
Illinova Corp............................................... 203,000 5,493,688
Niagara Mohawk Power Corp................................... 1,086,600 16,706,475
Northeast Utilities......................................... 889,000 14,001,750
Peco Energy Co. ............................................ 134,000 5,376,750
SBC Communications, Inc..................................... 136,700 6,553,056
Sprint Corp................................................. 167,500 12,185,625
Sprint Corp. (PCS Group) (a)................................ 83,750 1,340,000
US WEST Media Group......................................... 359,300 22,366,425
--------------
161,465,025
--------------
TOTAL COMMON STOCKS 88.4%............................................. 1,227,352,912
--------------
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- -----------------------------------------------------------------------------------------
<S> <C> <C>
PREFERRED STOCK 0.4%
Fresenius National Med Care, Inc. (convertible into common
stock) (a)................................................ 10,000 $ 380
Microsoft Corp., $2.196 dividend per share (convertible into
common stock)............................................. 58,000 5,647,750
--------------
5,648,130
--------------
CONVERTIBLE CORPORATE OBLIGATIONS 2.2%
Deutsche Bank Finance - 144A (Netherlands) ($18,000,000 par, 0% coupon,
02/12/17 maturity) (c)............................................... 10,102,500
Hewlett-Packard Co. LYON - 144A ($8,375,000 par, 0% coupon, 10/14/17
maturity) (c)........................................................ 4,574,844
Merrill Lynch STRYPES (66,100 shares, 6.00% coupon, 06/01/99 maturity,
convertible into 54,175 Cox Communication common shares)............. 2,891,834
Roche Holdings, Inc. LYON (Switzerland) ($17,000,000 par, 0% coupon,
04/20/10 maturity)................................................... 10,752,500
Sandoz Ltd. (Switzerland) ($1,310,000 par, 2.00% coupon, 10/06/02
maturity)............................................................ 2,333,437
--------------
30,655,115
--------------
TOTAL LONG-TERM INVESTMENTS 91.0%
(Cost $1,000,245,080)................................................ 1,263,656,157
--------------
SHORT-TERM INVESTMENTS 10.2%
COMMERCIAL PAPER 3.0%
General Electric Capital Corp. ($42,350,000 par, yielding 5.421%,
12/01/98 maturity)................................................... 42,343,624
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 7.2%
Federal Home Loan Bank Discount Notes ($25,000,000 par, yielding
4.839%, 12/30/98 maturity) (b)....................................... 24,903,332
Federal Home Loan Mortgage Discount Notes ($25,000,000 par, yielding
5.351%, 12/22/98 maturity) (b)....................................... 24,923,000
Federal National Mortgage Association Discount Notes ($20,500,000 par,
yielding 5.397%, 12/15/98 maturity) (b).............................. 20,457,588
Federal National Mortgage Association Discount Notes ($30,000,000 par,
yielding 5.137%, 02/18/99 maturity) (b).............................. 29,667,000
--------------
99,950,920
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $142,293,768).................................................. 142,294,544
--------------
TOTAL INVESTMENTS 101.2%
(Cost $1,142,538,848)................................................ 1,405,950,701
LIABILITIES IN EXCESS OF OTHER ASSETS (1.2%).......................... (16,674,689)
--------------
NET ASSETS 100.0%...................................................... $1,389,276,012
==============
</TABLE>
(a) Non-income producing security as this stock currently does not declare
dividends.
(b) Assets segregated for open futures transactions.
(c) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be resold only in
transactions exempt from registration which are normally those transactions
with qualified institutional buyers.
ADR--American Depository Receipt.
LYON--Liquid yield option note.
STRYPES--Structured yield product exchangeable for common stock.
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,142,538,848)..................... $1,405,950,701
Cash........................................................ 11,588
Receivables:
Fund Shares Sold.......................................... 2,325,848
Dividends................................................. 1,941,085
Investments Sold.......................................... 1,225,575
Interest.................................................. 26,711
Other....................................................... 52,797
--------------
Total Assets.......................................... 1,411,534,305
--------------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 18,250,999
Variation Margin on Futures............................... 2,060,500
Distributor and Affiliates................................ 895,509
Investment Advisory Fee................................... 429,294
Income Distributions...................................... 46,096
Accrued Expenses............................................ 385,973
Trustees Deferred Compensation and Retirement Plans......... 189,922
--------------
Total Liabilities..................................... 22,258,293
--------------
NET ASSETS.................................................. $1,389,276,012
==============
NET ASSETS CONSIST OF:
Capital..................................................... $1,045,565,528
Net Unrealized Appreciation................................. 271,665,940
Accumulated Net Realized Gain............................... 71,437,419
Accumulated Undistributed Net Investment Income............. 607,125
--------------
NET ASSETS.................................................. $1,389,276,012
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $901,274,388 and 47,732,314 shares of
beneficial interest issued and outstanding)............. $ 18.88
Maximum sales charge (5.75%* of offering price)......... 1.15
--------------
Maximum offering price to public........................ $ 20.03
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $442,355,314 and 23,564,263 shares of
beneficial interest issued and outstanding)............. $ 18.77
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $45,646,310 and 2,430,676 shares of
beneficial interest issued and outstanding)............. $ 18.78
==============
*On sales of $50,000 or more, the sales charge will be
reduced.
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1998
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 17,988,248
Interest.................................................... 8,898,666
------------
Total Income............................................ 26,886,914
------------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $2,051,684, $4,051,930 and $419,277,
respectively)............................................. 6,522,891
Investment Advisory Fee..................................... 4,967,237
Shareholder Services........................................ 3,053,395
Custody..................................................... 84,900
Legal....................................................... 41,830
Trustees' Fees and Expenses................................. 37,646
Other....................................................... 763,893
------------
Total Expenses.............................................. 15,471,792
------------
NET INVESTMENT INCOME....................................... $ 11,415,122
============
REALIZED AND UNREALIZED GAIN/LOSS:
Investments............................................. $ 70,407,764
Futures................................................. 2,215,134
------------
Net Realized Gain........................................... 72,622,898
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 170,134,229
------------
End of the Period:
Investments............................................. 263,411,853
Futures................................................. 8,254,087
------------
271,665,940
------------
Net Unrealized Appreciation During the Period............... 101,531,711
------------
NET REALIZED AND UNREALIZED GAIN............................ $174,154,609
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $185,569,731
============
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended November 30, 1998 and 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1998 November 30, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 11,415,122 $ 10,747,126
Net Realized Gain.................................... 72,622,898 142,774,617
Net Unrealized Appreciation During the Period........ 101,531,711 31,725,750
-------------- --------------
Change in Net Assets from Operations................. 185,569,731 185,247,493
-------------- --------------
Distributions from Net Investment Income:
Class A Shares..................................... (10,777,270) (8,812,655)
Class B Shares..................................... (2,403,630) (1,691,267)
Class C Shares..................................... (246,229) (185,706)
-------------- --------------
(13,427,129) (10,689,628)
-------------- --------------
Distributions from Net Realized Gain:
Class A Shares..................................... (92,498,080) (38,290,040)
Class B Shares..................................... (41,387,552) (13,977,897)
Class C Shares..................................... (4,313,012) (1,489,104)
-------------- --------------
(138,198,644) (53,757,041)
-------------- --------------
Total Distributions.............................. (151,625,773) (64,446,669)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 33,943,958 120,800,824
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 608,114,596 357,663,305
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 139,051,242 58,449,265
Cost of Shares Repurchased........................... (541,465,227) (204,209,399)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 205,700,611 211,903,171
-------------- --------------
TOTAL INCREASE IN NET ASSETS......................... 239,644,569 332,703,995
NET ASSETS:
Beginning of the Period.............................. 1,149,631,443 816,927,448
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of $607,125 and
$2,619,132, respectively).......................... $1,389,276,012 $1,149,631,443
============== ==============
</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 November 30,
---------------------------------------------------
Class A Shares 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period................................ $18.716 $16.786 $ 14.81 $ 12.26 $ 14.08
------- ------- ------- ------- -------
Net Investment Income................. .200 .226 .243 .28 .29
Net Realized and Unrealized
Gain/Loss........................... 2.441 3.032 2.851 3.455 (.1025)
------- ------- ------- ------- -------
Total from Investment Operations........ 2.641 3.258 3.094 3.735 .1875
------- ------- ------- ------- -------
Less:
Distributions from Net Investment
Income.............................. .230 .230 .250 .2925 .27
Distributions from Net Realized
Gain................................ 2.245 1.098 .868 .8925 1.7375
------- ------- ------- ------- -------
Total Distributions..................... 2.475 1.328 1.118 1.185 2.0075
------- ------- ------- ------- -------
Net Asset Value, End of the Period...... $18.882 $18.716 $16.786 $ 14.81 $ 12.26
======= ======= ======= ======= =======
Total Return (a)........................ 16.21% 21.27% 22.35% 33.34% 1.21%
Net Assets at End of the Period (In
millions)............................. $ 901.3 $ 773.3 $ 584.6 $ 381.6 $ 205.4
Ratio of Expenses to Average Net Assets
(b)................................... .92% .94% 1.04% 1.15% 1.16%
Ratio of Net Investment Income to
Average Net Assets (b)................ 1.13% 1.33% 1.68% 2.24% 2.25%
Portfolio Turnover...................... 76% 94% 110% 108% 102%
</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 years ended November 30, 1995 and 1997, 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 November 30,
-------------------------------------------------
Class B Shares 1998 1997 1996 1995 1994
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period................................ $18.630 $16.721 $ 14.77 $12.25 $14.07
------- ------- ------- ------ ------
Net Investment Income................. .071 .097 .142 .17 .17
Net Realized and Unrealized
Gain/Loss........................... 2.426 3.020 2.827 3.455 (.1025)
------- ------- ------- ------ ------
Total from Investment Operations........ 2.497 3.117 2.969 3.625 .0675
------- ------- ------- ------ ------
Less
Distributions from
Net Investment Income................. .110 .110 .150 .2125 .15
Distributions from Net Realized
Gain................................ 2.245 1.098 .868 .8925 1.7375
------- ------- ------- ------ ------
Total Distributions..................... 2.355 1.208 1.018 1.105 1.8875
------- ------- ------- ------ ------
Net Asset Value, End of Period.......... $18.772 $18.630 $16.721 $14.77 $12.25
======= ======= ======= ====== ======
Total Return(a)......................... 15.38% 20.37% 21.38% 32.15% .36%
Net Assets at End of the Period (In
millions)............................. $ 442.4 $ 340.8 $ 210.3 $ 98.4 $ 18.5
Ratio of Expenses to Average Net
Assets (b)............................ 1.69% 1.72% 1.83% 1.99% 2.02%
Ratio of Net Investment Income to
Average Net Assets (b)................ .36% .55% .89% 1.25% 1.51%
Portfolio Turnover...................... 76% 94% 110% 108% 102%
</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 years ended November 30, 1995 and 1997, 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 November 30,
-----------------------------------------------------
Class C Shares 1998 1997 1996 1995 1994
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period............................... $18.643 $ 16.734 $ 14.78 $ 12.26 $ 14.07
------- -------- -------- ------- -------
Net Investment Income................ .072 .096 .139 .18 .17
Net Realized and Unrealized
Gain/Loss.......................... 2.419 3.021 2.833 3.445 (.0925)
------- -------- -------- ------- -------
Total from Investment Operations....... 2.491 3.117 2.972 3.625 .0775
------- -------- -------- ------- -------
Less:
Distributions from Net Investment
Income............................. .110 .110 .150 .2125 .15
Distributions from Net Realized
Gain............................... 2.245 1.098 .868 .8925 1.7375
------- -------- -------- ------- -------
Total Distributions.................... 2.355 1.208 1.018 1.105 1.8875
------- -------- -------- ------- -------
Net Asset Value, End of the Period..... $18.779 $ 18.643 $ 16.734 $ 14.78 $ 12.26
======= ======== ======== ======= =======
Total Return (a)....................... 15.37% 20.28% 21.43% 32.23% .36%
Net Assets at End of the Period (In
millions)............................ $ 45.6 $ 35.5 $ 22.1 $ 10.4 $ 3.5
Ratio of Expenses to Average Net
Assets (b)........................... 1.69% 1.72% 1.83% 1.97% 2.01%
Ratio of Net Investment Income to
Average Net Assets (b)............... .36% .55% .89% 1.35% 1.50%
Portfolio Turnover..................... 76% 94% 110% 108% 102%
</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 years ended November 30, 1995 and 1997, 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
November 30, 1998
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Growth and Income Fund, formerly known as Van Kampen American Capital
Growth and Income Fund, (the "Fund") is organized as a Delaware business trust,
and is registered as a diversified open-end management investment company under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is to provide income and long-term growth of capital by investing principally in
income-producing equity securities including common stock and convertible
securities. The Fund commenced investment operations on August 1, 1946. The
distribution of the Fund's Class B and Class C shares commenced on August 2,
1993.
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
were valued at the last bid price. Starting in early December 1998, these
securities will be valued at the mean of bid and asked prices. The impact of the
change is not considered material. 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 November 30, 1998, there were no
when issued or delayed delivery purchase commitments.
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 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 EXPENSES--Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Original issue discounts on
debt securities purchased are amortized over the expected 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 gains or losses recognized for tax purposes on
open futures at November 30, 1998, and the deferral of losses for tax purposes
resulting from wash sales.
At November 30, 1998, for federal income tax purposes the cost of long-and
short-term investments is $1,144,599,573; the aggregate gross unrealized
appreciation is $289,016,163 and the aggregate gross unrealized depreciation is
$27,665,035, resulting in net unrealized appreciation on long- and short-term
investments of $261,351,128.
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
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
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.
For federal income tax purposes, the following information is furnished
with respect to the distributions paid by the Fund during its taxable year ended
November 30, 1998. The Fund designated $81,752,232 as a 20% rate capital gain
distribution. In January, 1999, the Fund will provide tax information to
shareholders for the 1998 calendar year.
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 $150 million...................................... .50 of 1%
Next $100 million....................................... .45 of 1%
Next $100 million....................................... .40 of 1%
Over $350 million....................................... .35 of 1%
</TABLE>
For the year ended November 30, 1998, the Fund recognized expenses of
approximately $41,800 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 November 30, 1998, the Fund recognized expenses of
approximately $310,600 representing Van Kampen Funds Inc.'s or its affiliates'
(collectively "Van Kampen") cost of providing accounting services to the Fund.
Van Kampen Investor Services, Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the year ended November 30,
1998, the Fund recognized expenses of approximately $2,353,400. 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
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
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.
For the year ended November 30, 1998, the Fund paid brokerage commissions to
Morgan Stanley Dean Witter & Co., an affiliate of Van Kampen, totaling $375.
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 November 30, 1998, capital aggregated $644,640,721, $363,757,370 and
$37,167,437 for Classes A, B, and C, respectively. For the year ended November
30, 1998, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................. 24,895,780 $ 446,127,507
Class B................................. 7,916,780 142,709,294
Class C................................. 1,081,258 19,277,795
------------ -------------
Total Sales............................... 33,893,818 $ 608,114,596
============ =============
Dividend Reinvestment:
Class A................................. 5,811,162 $ 95,421,131
Class B................................. 2,446,668 39,889,597
Class C................................. 229,289 3,740,514
------------ -------------
Total Dividend Reinvestment............... 8,487,119 $ 139,051,242
============ =============
Repurchases:
Class A................................. (24,293,403) $(436,053,298)
Class B................................. (5,090,880) (91,529,090)
Class C................................. (785,695) (13,882,839)
------------ -------------
Total Repurchases......................... (30,169,978) $(541,465,227)
============ =============
</TABLE>
24
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1998
- --------------------------------------------------------------------------------
At November 30, 1997, capital aggregated $539,145,381, $272,687,569 and
$28,031,967 for Classes A, B, and C, respectively. For the year ended November
30, 1997, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 12,661,054 $ 214,097,873
Class B.................................. 7,448,409 127,830,907
Class C.................................. 936,448 15,734,525
----------- -------------
Total Sales................................ 21,045,911 $ 357,663,305
=========== =============
Dividend Reinvestment:
Class A.................................. 2,817,850 $ 43,169,689
Class B.................................. 925,904 14,037,324
Class C.................................. 81,806 1,242,252
----------- -------------
Total Dividend Reinvestment................ 3,825,560 $ 58,449,265
=========== =============
Repurchases:
Class A.................................. (8,984,896) $(150,897,486)
Class B.................................. (2,659,743) (45,883,568)
Class C.................................. (431,229) (7,428,345)
----------- -------------
Total Repurchases.......................... (12,075,868) $(204,209,399)
=========== =============
</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)
November 30, 1998
- --------------------------------------------------------------------------------
For the year ended November 30, 1998, Van Kampen, as Distributor for the
Fund, received net commissions on sales of the Fund's Class A shares of
approximately $506,700 and CDSC on the redeemed shares of Classes B and C of
approximately $724,000. 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 $965,344,115 and $888,924,902,
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 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 the 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 stock index futures. These contracts are generally used as
a substitute for purchasing and selling specific securities. 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)
November 30, 1998
- --------------------------------------------------------------------------------
Transactions in futures contracts for the year ended November 30, 1998, were
as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ----------------------------------------------------------------------
<S> <C>
Outstanding at November 30, 1997........................... 170
Futures Opened............................................. 960
Futures Closed............................................. (870)
---------
Outstanding at November 30, 1998........................... 260
=========
</TABLE>
The futures contracts outstanding as of November 30, 1998, and the
description and unrealized appreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS APPRECIATION
- --------------------------------------------------------------------------
<S> <C> <C>
Long Contracts:
S&P 500 Index Futures Dec 1998 (Current
Notional Value of $290,625 per contract)...... 260 $ 8,254,087
========= ============
</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 November 30, 1998, are payments retained by Van Kampen of
approximately $3,462,900.
7. CAPITAL GAIN DISTRIBUTION
On December 9, 1998, the Fund declared and paid a long-term capital gain of
$1.1095 per share payable to shareholders of record on that date.
27
<PAGE> 29
REPORT OF INDEPENDENT ACCOUNTANTS
To the Shareholders and Board of Trustees of
Van Kampen Growth and Income 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 Growth and Income Fund
(the "Fund") at November 30, 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
November 30, 1998 by correspondence with the custodian, provide a reasonable
basis for the opinion expressed above.
PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
January 11, 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
U.S. Real Estate
Utility
Value
International/Global
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 adviser 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 GROWTH AND INCOME 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. MORRELL*
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
* "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.
TAX NOTICE TO CORPORATE SHAREHOLDERS
For 1998, 30.37% of the dividends
taxables as ordinary income qualified
for the 70% dividends received
deduction for corporations.
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 which, 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 redemption 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 GROWTH AND INCOME FUND
THIS PAGE INTENTIONALLY LEFT BLANK
32
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> GROWTH AND INCOME - C1A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 1,142,538,848<F1>
<INVESTMENTS-AT-VALUE> 1,405,950,701<F1>
<RECEIVABLES> 5,519,219<F1>
<ASSETS-OTHER> 4,328<F1>
<OTHER-ITEMS-ASSETS> 60,057<F1>
<TOTAL-ASSETS> 1,411,534,305<F1>
<PAYABLE-FOR-SECURITIES> 0<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 22,258,293<F1>
<TOTAL-LIABILITIES> 22,258,293<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 644,640,721
<SHARES-COMMON-STOCK> 47,732,314
<SHARES-COMMON-PRIOR> 41,318,775
<ACCUMULATED-NII-CURRENT> 607,125<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 71,437,419<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 271,665,940<F1>
<NET-ASSETS> 901,274,388
<DIVIDEND-INCOME> 17,988,248<F1>
<INTEREST-INCOME> 8,898,666<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (15,471,792)<F1>
<NET-INVESTMENT-INCOME> 11,415,122<F1>
<REALIZED-GAINS-CURRENT> 72,622,898<F1>
<APPREC-INCREASE-CURRENT> 101,531,711<F1>
<NET-CHANGE-FROM-OPS> 185,569,731<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (10,777,270)
<DISTRIBUTIONS-OF-GAINS> (92,498,080)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 24,895,780
<NUMBER-OF-SHARES-REDEEMED> (24,293,403)
<SHARES-REINVESTED> 5,811,162
<NET-CHANGE-IN-ASSETS> 127,941,276
<ACCUMULATED-NII-PRIOR> 2,619,132<F1>
<ACCUMULATED-GAINS-PRIOR> 137,013,165<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 4,967,237<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 15,471,792<F1>
<AVERAGE-NET-ASSETS> 866,085,330
<PER-SHARE-NAV-BEGIN> 18,716
<PER-SHARE-NII> 0.200
<PER-SHARE-GAIN-APPREC> 2.441
<PER-SHARE-DIVIDEND> (0.230)
<PER-SHARE-DISTRIBUTIONS> (2.245)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 18.882
<EXPENSE-RATIO> 0.92
<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> GROWTH AND INCOME - C1B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 1,142,538,848<F1>
<INVESTMENTS-AT-VALUE> 1,405,950,701<F1>
<RECEIVABLES> 5,519,219<F1>
<ASSETS-OTHER> 4,328<F1>
<OTHER-ITEMS-ASSETS> 60,057<F1>
<TOTAL-ASSETS> 1,411,534,305<F1>
<PAYABLE-FOR-SECURITIES> 0<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 22,258,293<F1>
<TOTAL-LIABILITIES> 22,258,293<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 363,757,370
<SHARES-COMMON-STOCK> 23,564,263
<SHARES-COMMON-PRIOR> 18,291,695
<ACCUMULATED-NII-CURRENT> 607,125<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 71,437,419<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 271,665,940<F1>
<NET-ASSETS> 442,355,314
<DIVIDEND-INCOME> 17,988,248<F1>
<INTEREST-INCOME> 8,898,666<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (15,471,792)<F1>
<NET-INVESTMENT-INCOME> 11,415,122<F1>
<REALIZED-GAINS-CURRENT> 72,622,898<F1>
<APPREC-INCREASE-CURRENT> 101,531,711<F1>
<NET-CHANGE-FROM-OPS> 185,569,731<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (2,403,630)
<DISTRIBUTIONS-OF-GAINS> (41,387,552)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,916,780
<NUMBER-OF-SHARES-REDEEMED> (5,090,880)
<SHARES-REINVESTED> 2,446,668
<NET-CHANGE-IN-ASSETS> 101,586,553
<ACCUMULATED-NII-PRIOR> 2,619,132<F1>
<ACCUMULATED-GAINS-PRIOR> 137,013,165<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 4,967,237<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 15,471,792<F1>
<AVERAGE-NET-ASSETS> 405,392,917
<PER-SHARE-NAV-BEGIN> 18.630
<PER-SHARE-NII> 0.071
<PER-SHARE-GAIN-APPREC> 2.426
<PER-SHARE-DIVIDEND> (0.110)
<PER-SHARE-DISTRIBUTIONS> (2.245)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 18.772
<EXPENSE-RATIO> 1.69
<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> GROWTH AND INCOME - C1C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> NOV-30-1998
<INVESTMENTS-AT-COST> 1,142,538,848<F1>
<INVESTMENTS-AT-VALUE> 1,405,950,701<F1>
<RECEIVABLES> 5,519,219<F1>
<ASSETS-OTHER> 4,328<F1>
<OTHER-ITEMS-ASSETS> 60,057<F1>
<TOTAL-ASSETS> 1,411,534,305<F1>
<PAYABLE-FOR-SECURITIES> 0<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 22,258,293<F1>
<TOTAL-LIABILITIES> 22,258,293<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,167,437
<SHARES-COMMON-STOCK> 2,430,676
<SHARES-COMMON-PRIOR> 1,905,824
<ACCUMULATED-NII-CURRENT> 1,663,595<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 71,437,419<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 271,665,940<F1>
<NET-ASSETS> 45,646,310
<DIVIDEND-INCOME> 17,988,248<F1>
<INTEREST-INCOME> 8,898,666<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (15,471,792)<F1>
<NET-INVESTMENT-INCOME> 11,415,122<F1>
<REALIZED-GAINS-CURRENT> 72,622,898<F1>
<APPREC-INCREASE-CURRENT> 101,531,711<F1>
<NET-CHANGE-FROM-OPS> 185,569,731<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (246,229)
<DISTRIBUTIONS-OF-GAINS> (4,313,012)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,081,258
<NUMBER-OF-SHARES-REDEEMED> (785,695)
<SHARES-REINVESTED> 229,289
<NET-CHANGE-IN-ASSETS> 10,116,740
<ACCUMULATED-NII-PRIOR> 2,619,132<F1>
<ACCUMULATED-GAINS-PRIOR> 137,013,165<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 4,967,237<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 15,471,792<F1>
<AVERAGE-NET-ASSETS> 41,949,220
<PER-SHARE-NAV-BEGIN> 18.643
<PER-SHARE-NII> 0.072
<PER-SHARE-GAIN-APPREC> 2.419
<PER-SHARE-DIVIDEND> (0.110)
<PER-SHARE-DISTRIBUTIONS> (2.245)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 18.779
<EXPENSE-RATIO> 1.69
<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>
