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SIGNATURE NICK DALMASO
TITLE ATTORNEY
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Trustees of
Van Kampen American Capital Bond Fund
In planning and performing our audit of the financial statements of Van Kampen
American Capital Bond Fund for the year ended June 30, 1998, we considered its
internal control, including control activities for safeguarding securities, in
order to determine our auditing procedures for the purpose of expressing our
opinion on the financial statements and to comply with the requirements of Form
N-SAR, not to provide assurance on the internal control.
The management of Van Kampen American Capital Bond Fund is responsible for
establishing and maintaining internal control. In fulfilling this
responsibility, estimates and judgments by management are required to assess the
expected benefits and related costs of controls. Generally, controls that are
relevant to an audit pertain to the entity's objective of preparing financial
statements for external purposes that are fairly presented in conformity with
generally accepted accounting principles. Those controls include the
safeguarding of assets against unauthorized acquisition, use, or disposition.
Because of inherent limitations in internal control, errors or fraud may occur
and not be detected. Also, projection of any evaluation of internal control to
future periods is subject to the risk that it may be come inadequate because of
changes in conditions or that the effectiveness of the design and operation may
deteriorate.
Our consideration of the internal control would not necessarily disclose all
matters in the internal control that might be material weaknesses under
standards established by the American Institute of Certified Public Accountants.
A material weakness is a condition in which the design or operation of one or
more specified internal control components does not reduce to a relatively low
level the risk that errors or fraud in amounts that would be material in
relation to the financial statements being audited may occur and not be detected
within a timely period by employees in the normal course of performing their
assigned functions. However, we noted no matters involving the internal control
and its operation, including controls for safeguarding securities, that we
consider to be material weaknesses as defined above at June 30, 1998.
This report is intended solely for the information and use of the Board of
Trustees and management of Van Kampen American Capital Bond Fund and the
Securities and Exchange Commission.
ERNST & YOUNG LLP
Houston, Texas
July 22, 1998
Joint Annual Meeting of Shareholders of
Van Kampen American Capital Bond Fund held on December 19, 1997
1. PROPOSAL I
To vote to elect eight trustees to serve until their respective
successors are duly elected and qualified.
Number of Shares/Votes
For Authority Withheld
David C. Arch 7,668,524.051 76,987.222
Rod Dammeyer 7,669,243.662 76,267.611
Howard J. Kerr 7,668,564.051 76,947.222
Dennis J. McDonnell 7,668,674.932 76,836.341
Steven Muller 7,664,414.662 81,096.611
Theodore A. Myers 7,664,859.051 80,652.222
Hugo F. Sonnenschein 7,669,453.662 76,057.611
Wayne W. Whalen 7,669,737.662 75,773.611
2. PROPOSAL II
To ratify the selection of Ernst & Young LLP as independent
accountants.
For 7,629,476.586
Against 35,089.396
Abstain 89,945.291
NSAR ITEM 77O
VKAC Bond Fund
10f-3 Transactions
<TABLE>
<CAPTION>
Amount of shares Date of
Underwriting # Underwriting Purchased From Purchased % of Underwriting Purchase
<S> <C> <C> <C> <C> <C>
1 Raytheon Bear Stearns 500,000 0.017% 08/07/97
2 Raytheon First Boston 250,000 0.008% 08/07/97
3 Cablevision Merrill Lynch 1,250,000 0.250% 12/05/97
Systems
4 Cablevision Bear Stearns 1,500,000 0.500% 02/03/98
Systems
5 Beckman Coulter Merrill Lynch 1,500,000 0.375% 02/25/98
6 R&B Falcon Corp. First Boston 1,000,000 0.091% 04/08/98
7 Tenet Healthcare Donaldson, Lufkin 8,500,000 0.708% 05/08/98
Corporation & Jenrette
8 Owens-Illinois, Inc. Salomon Smith 1,250,000 0.227% 05/14/98
Barney
9 Tyco International J.P. Morgan 4,000,000 0.200% 06/04/98
Group
</TABLE>
<PAGE>
Other Firms participating in Underwriting:
Underwriting for #1 & 2
- -----------------------
Bear, Stearns & Co., Inc.
Credit Suisse First Boston Corporation
Morgan Stanley & Co., Incorporated
Goldman, Sachs & Co.
Merrill Lynch, Inc.
J.P. Morgan Securities Inc.
Chase Securities Inc.
Lehman Brothers Inc.
Salomon Brothers Inc.
ABN AMRO Chicago Corp.
BancAmerica Securities, Inc.
BT Securities Corp.
CIBC Wood Gundy Securities Corp.
Citicorp Securities, Inc.
Deutsche Morgan Grenfell Inc.
First Chicago Capital Markets, Inc.
SBC Warburg Inc.
Scotia Capital Markets Inc.
UBS Securities LLC
Blaylock & Partners, L.P.
Muriel Siebert & Co. Inc.
Underwriting for #3 & 4
- -----------------------
Morgan Stanley & Co., Inc.
Salomon Brothers Inc.
Underwriting for #5
- -------------------
Salomon Smith Barney
Citicorp Securities, Inc.
Credit Suisse First Boston
Morgan Stanley Dean Witter
BancAmerica Robertson Stephens
First Chicago Capital Markets, Inc.
Goldman, Sachs & Co.
Underwriting for #6
- -------------------
Chase Securities Inc.
Donaldson, Lufkin & Jenrette Securities Corporation
Morgan Stanley & Co. Incorporated
Underwriting for #9
- -------------------
Morgan Stanley & Co. Incorporated
Lehman Brothers Inc.
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Credit Suisse First Boston Corporation
Donaldson, Lufkin & Jenrette Securities Corporation
BT Alex.Brown Incorporated
First Chicago Capital Markets, Inc.
NationsBanc Montgomery Securities LLC
ABN AMRO Incorporated
Credit Lyonnais Securities Inc.
First Union Capital Markets Inc.
Scotia Capital Markets Inc.
Bear, Stearns & Co. Inc.
Citicorp Securities, Inc.
PaineWebber Incorporated
UBS Securities LLC
BancAmerica Robertson Stephens
BNY Capital Markets Inc.
Commerzbank Capital Markets Corporation
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<NAME> BOND FUND
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