<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Glossary of Terms................................ 4
Portfolio Management Review...................... 5
Portfolio Highlights............................. 9
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 17
Statement of Operations.......................... 18
Statement of Changes in Net Assets............... 19
Financial Highlights............................. 20
Notes to Financial Statements.................... 23
</TABLE>
EMG SAR 4/99
<PAGE> 2
LETTER TO SHAREHOLDERS
March 19, 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
The U.S. economy continued to grow at a robust pace in 1998, despite
financial problems abroad. In the fourth quarter, the nation's gross domestic
product (GDP) rose at an astounding 6.1 percent annual rate, surprising most
economists, whose estimates had been much more conservative. Preliminary
indications suggest a strong first quarter of 1999 as well.
During the past six months, a series of interest rate cuts by the Federal
Reserve helped the U.S. economy avoid the economic slump plaguing many global
markets. 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 foster
continued growth. In addition, the outlook for troubled areas such as Asia and
Latin America improved significantly, and most experts agree that these
economies are on the slow road to recovery.
Despite the improvements abroad and record economic growth in the United
States, inflation remained at bay as commodity prices tumbled. This low
inflationary environment--only a 1.6 percent increase in the consumer price
index in 1998--contributed to the strong domestic economy and kept
inflation-adjusted interest rates attractive. A low level of unemployment,
vibrant consumer spending, and an active housing market also supported the
positive economic conditions.
Continued on page 2
1
<PAGE> 3
MARKET REVIEW
The stock market bounced back from the lows we experienced six months ago,
when concerns about the global economic slowdown had reached a peak.
Large-company stocks displayed the most resilience, as the market continued to
favor their earnings strength and perceived stability. These high-quality,
liquid stocks propelled the Dow Jones Industrial Average to new highs, even
though many areas of the stock market--including the small-to mid-size growth
sector--remained sluggish. With the recent performance of blue-chip companies,
many investors chose to invest less heavily in smaller companies, which
performed well during the period. The Russell 2000 Stock Index, which represents
small-cap stocks, returned 16 percent during the past six months, compared with
a return of more than 29 percent for the larger companies composing the Standard
& Poor's 500-Stock Index.
OUTLOOK
Our outlook for the domestic economy remains positive, although growth may
lessen toward the second half of the year. We look for a slow but steady rise in
inflation throughout 1999 to more normal, but certainly not alarming levels.
Internationally, low interest rates and improving financial conditions should
continue to support the economic improvements we've witnessed in Asia and Latin
America.
We believe the domestic markets could still favor higher-quality securities
such as large-company stocks and investment-grade bonds in the near term. In
addition, we anticipate continued day-to-day volatility in the markets, although
we probably won't see sustained high or low periods during the next six months.
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 FEBRUARY 28, 1999
VAN KAMPEN EMERGING GROWTH FUND
<TABLE>
<CAPTION>
A Shares B Shares C Shares
<S> <C> <C> <C>
TOTAL RETURNS
Six-month total return based on NAV(1)... 43.56% 43.00% 43.02%
Six-month total return(2)................ 35.32% 38.00% 42.02%
One-year total return(2)................. 18.34% 19.56% 23.58%
Five-year average annual total
return(2)................................ 19.63% 19.94% 20.09%
Ten-year average annual total
return(2)................................ 21.11% N/A N/A
Life-of-Fund average annual total
return(2)................................ 17.81% 21.03% 19.87%
Commencement Date........................ 10/02/70 04/20/92 07/06/93
</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 February 28, 1999. Fund shares, when
redeemed, may be worth more or less than their original cost.
Because the prices of common stocks and other securities fluctuate, the value of
an investment in the Fund will vary upon the Fund's investment performance.
Foreign securities may magnify volatility due to changes in foreign exchange
rates, the political and economic uncertainties in foreign countries, and the
potential lack of liquidity, government supervision, and regulation.
Market forecasts provided in this report may not necessarily come to pass.
3
<PAGE> 5
GLOSSARY OF TERMS
BOTTOM-UP INVESTING: A management style that emphasizes the analysis of
individual stocks, rather than economic and market cycles.
CLASS A SHARES: When Class A shares of a fund are purchased, the share price
includes the net asset value plus a one-time sales charge (or "load"). In
most cases, there is no redemption fee (contingent deferred sales charge).
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.
EARNINGS ESTIMATES: A company's forecast for their net income during a given
period.
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.
FUNDAMENTALS: Characteristics of a company, such as revenue growth, earnings
growth, financial strength, market share, and quality of management.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic
indicator that measures the change in the cost of purchased goods and
services.
MARKET CAPITALIZATION: The size of a company, as measured by the value of its
issued and outstanding stock.
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.
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.
VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.
4
<PAGE> 6
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN EMERGING GROWTH FUND
We recently spoke to the management team of the Van Kampen Emerging Growth Fund
about the key events and economic forces that shaped the markets during the past
six months. The team includes Gary M. Lewis, portfolio manager; Dudley
Brickhouse, Janet Luby, and David Walker, 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 six months ended
February 28, 1999.
Q WHAT WERE SOME OF THE MARKET FACTORS THAT AFFECTED THE FUND DURING THE
REPORTING PERIOD?
A The reporting period began bleakly, as investors sought to recover from a
significant market decline on August 31, 1998; on that day the Dow Jones
Industrial Average fell more than 6 percent. Despite economic troubles in
Russia, Asia, and Latin America, U.S. markets soon recovered. Inflation remained
tame, enabling the Federal Reserve Board to lower interest rates three times
before year-end in an effort to sustain economic growth. By October companies
began to report better-than-expected third-quarter earnings, reminding investors
that the U.S. economy was still fundamentally solid. The volatile stock market
began to rise again, with the Dow setting a new record in January before
declining slightly from its high by the end of the reporting period.
Q IN LIGHT OF MARKET VOLATILITY, HOW DID YOU MANAGE THE FUND?
A We have confidence in our investment strategy, so we continued to rely
upon it throughout the market's highs and lows. As always, we looked for
stocks with rising earnings expectations and rising valuations, and we
invested in those companies we believed had the potential to outperform earnings
expectations. Conversely, we sold stocks if their underlying companies' earnings
estimates or valuations were declining. We consistently manage the Fund from the
"bottom up," meaning that we evaluate each company individually before deciding
to invest.
That said, the reporting period presented a challenge because a shrinking
number of stocks met our requirements--especially in September and October. At
that time, few companies had rising valuations, so we looked for stocks whose
valuations were declining the least. Once the situation began to stabilize in
October, we found it easier to identify companies that satisfied our criteria.
Q WHAT STOCKS HAD THE GREATEST POSITIVE IMPACT ON THE FUND?
A The Fund was supported primarily by its substantial weighting in
technology stocks. Tech companies, especially those whose businesses are
Internet-related, generally enjoyed the greatest success during the
reporting period. America Online, the
5
<PAGE> 7
nation's leading Internet service provider and the Fund's largest holding, was
among our biggest winners, as its stock rose 267 percent during the reporting
period. Yahoo!, which provides a well-known Internet directory, was equally
impressive; its stock price increased by 275 percent. Other technology stocks
that helped the Fund's performance during the reporting period were Cisco
Systems, which produces routers and switches for computer networks, and EMC,
which makes data storage systems.
A number of our retail holdings also benefited the Fund during the reporting
period, including
- Best Buy, a leading consumer electronics and appliance retailer;
- Ann Taylor, a women's apparel retailer;
- Abercrombie & Fitch, which specializes in men's and women's casual
apparel; and
- Intimate Brands, which sells women's products under the brand names
Victoria's Secret and Bath and Body Works.
On the health care front, biotechnology firms such as Biogen and Medimmune
also proved to be successful acquisitions.
Of course, not all stocks in the Fund performed as favorably, and there is
no guarantee that any of these stocks will perform as well in the future. For
additional Fund performance highlights, please turn to page 9.
Q WHICH STOCKS HURT THE FUND'S PERFORMANCE?
A One of the Fund's weak performers was HBO & Co., a company that provides
software solutions to the health care industry. The stock suffered
primarily because of concerns about HBO's proposed merger with McKesson
and the perception that the merger was not consistent with HBO's traditional
strategic direction. The stock had been a sizeable holding in the Fund for some
time, but we completely eliminated our position by the end of November.
Another health care holding that did not perform as well as expected was
Omnicare, which provides pharmacy services to institutions that provide
long-term care. This company continued to underperform because of worries about
the profitability of the company's client base, with regard to future Medicare
funding. Although we believe the fundamentals for this company remain solid, we
sold this stock in early February for a moderate loss. Part of our
stock-selection discipline is to let go of holdings like Omnicare that aren't
being rewarded by the market, even if the reasons we originally invested in the
stock haven't changed.
BMC Software was also a disappointing performer for the Fund over the
reporting period. Its poor results could be attributed to concerns about the
company's growth prospects in some of its core businesses as well as about
changes in its accounting system, which resulted in a restatement of BMC's
earnings. We eliminated the stock during the course of the reporting period, as
it continued to fall short of our investment criteria.
6
<PAGE> 8
Q HOW DID THE FUND PERFORM?
A The Fund was an outstanding performer during the reporting period,
achieving a six-month total return of 43.56 percent(1) as of February 28,
1999 (Class A shares at net asset value). By comparison, the Standard &
Poor's 400 MidCap Index returned 27.60 percent; and the Russell 2000 Stock Index
returned 16.79 percent.
The Fund invests primarily in companies whose market capitalization falls
within the range of the companies composing the Standard & Poor's 400 MidCap
Index. This range is between approximately $170 million and $14 billion, as of
March 31, 1999. The S&P 400 MidCap Index is a broad-based index that reflects
the general performance of 400 domestic mid-cap stocks and the Russell 2000
Stock Index reflects the general performance of small-cap stocks. 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
represented by these indices. Please refer to the chart on page 3 for additional
performance results.
Compared to its peers, the Fund has performed extremely well. For the
12-month period ended February 28, 1999, the Fund's total return (Class A shares
at net asset value) ranked it 15 out of 351 funds in the mid-cap category,
according to Lipper Analytical Services, while the Fund ranked 7 out of 119
funds for the five-year period and 2 out of 42 for the ten-year period. Lipper
also recently named the Fund the top-performing mid-cap fund (out of 11 funds
total) for the 25-year period ended December 31, 1998. Lipper calculations are
based on changes in net asset value with dividends reinvested. Lipper
calculations do not include sales charges; if they had, results might have been
less favorable. Past performance does not guarantee future results.
Q WHAT IS YOUR OUTLOOK FOR THE FUND FOR THE UPCOMING SIX MONTHS?
A Historically speaking, stock valuations are still relatively high, which
makes the market vulnerable to a sharp drop if bad news rattles investors.
At the same time, central banks around the world, including the Fed, have
been implementing policies designed to bolster lagging economies. We anticipate
that these actions may benefit stocks and help limit the potential for negative
corporate earnings surprises. Finally, we continue to monitor the "year 2000"
computer problem, because the companies in which the Fund primarily
invests--small- and mid-cap firms--are the most likely to be affected.
Valuations for small-cap stocks continue to be near relative lows when
compared to valuations for large-cap stocks. This suggests a potentially bright
future for the Fund, because such relative lows have historically been followed
by small-cap outperformance, although past performance can't guarantee future
performance. If small- and mid-cap stocks begin to consistently outperform, the
Emerging Growth Fund may be well-positioned to take advantage of these
conditions.
7
<PAGE> 9
Q GARY, MARCH MARKS YOUR 10-YEAR ANNIVERSARY MANAGING THE EMERGING GROWTH
FUND--A LONG TIME IN THE MUTUAL FUND BUSINESS. WHAT ARE YOUR THOUGHTS AS
YOU LOOK BACK ON THESE LAST 10 YEARS?
A On behalf of my management team, I thank all of you for the trust you have
placed in us, and we are gratified to have been able to deliver strong
results--as we indicated earlier with regard to our Lipper ranking, the
Fund has been one of the top-returning mid-cap growth funds of the 1990s. Our
investment approach has remained essentially the same over the decade, with our
execution improving over time. One of our keys to success has been that we are
never satisfied with past performance and always strive to do even better. We
hope the next decade will be as rewarding as the last 10 years have been.
<TABLE>
<S> <C> <C>
[SIG] [SIG] [SIG]
Gary M. Lewis Dudley Brickhouse Janet Luby
Portfolio Manager Portfolio Comanager Portfolio Comanager
[SIG] [SIG]
David Walker Stephen L. Boyd
Portfolio Comanager Chief Investment
Officer
Equity Investments
</TABLE>
Please see footnotes on page 3
8
<PAGE> 10
PORTFOLIO HIGHLIGHTS
VAN KAMPEN EMERGING GROWTH FUND
PORTFOLIO HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
PERCENTAGE OF
TOP TEN HOLDINGS AS OF THESE INVESTMENTS
FEBRUARY 28, 1999 SIX MONTHS AGO
<S> <C> <C> <C>
America Online, Inc. ................ 6.4% ................. 2.7%
EMC Corp. ........................... 4.6% ................. 2.1%
Best Buy Co., Inc. .................. 3.3% ................. 2.0%
Providian Financial Corp. ........... 3.0% ................. 1.2%
Dell Computer Corp. ................. 2.6% ................. 6.1%
Biogen, Inc. ........................ 1.9% ................. 0.9%
Compuware Corp. ..................... 1.5% ................. 2.9%
Lexmark International Group, Inc. ... 1.5% ................. 1.2%
Cardinal Health, Inc. ............... 1.5% ................. N/A
Clear Channel Communications,
Inc. .............................. 1.3% ................. 1.6%
</TABLE>
N/A = Not Applicable
TOP FIVE PORTFOLIO HOLDINGS BY SECTOR AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<S> <C>
AS OF FEBRUARY 28, 1999
Technology .................................... 43%
Consumer Distribution ......................... 20%
Consumer Services ............................. 12%
Health Care ................................... 10%
Finance ....................................... 6%
AS OF AUGUST 31, 1998
Technology .................................... 36%
Consumer Distribution ......................... 20%
Consumer Services ............................. 13%
Health Care ................................... 10%
Finance ....................................... 8%
</TABLE>
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 96.3%
CONSUMER DISTRIBUTION 19.1%
Abercrombie & Fitch Co., Class A (a)............... 750,000 $ 57,000,000
American Eagle Outfitters (a)...................... 100,000 6,881,250
Ann Taylor Stores Corp. (a)........................ 500,000 18,906,250
Bed Bath & Beyond, Inc. (a)........................ 600,000 17,662,500
Best Buy Co., Inc. (a)............................. 1,850,000 171,587,500
Cardinal Health, Inc. ............................. 1,034,250 74,659,922
CDW Computer Centers, Inc. (a)..................... 140,000 9,747,500
Circuit City Stores, Inc. ......................... 550,000 29,837,500
Costco Cos., Inc. (a).............................. 200,000 16,062,500
CVS Corp. ......................................... 450,000 23,850,000
Dollar Tree Stores, Inc. (a)....................... 450,000 18,000,000
Express Scripts, Inc., Class A (a)................. 250,000 16,140,625
Family Dollar Stores, Inc. ........................ 1,400,000 28,000,000
Gap, Inc. ......................................... 850,000 54,984,375
Hollywood Entertainment Corp. (a).................. 300,000 8,231,250
Home Depot, Inc. .................................. 1,050,000 62,671,875
Insight Enterprises, Inc. (a)...................... 300,000 6,975,000
Intimate Brands, Inc., Class A..................... 625,000 24,570,312
Lason Holdings, Inc. (a)........................... 150,000 8,128,125
Lexmark International Group, Inc., Class A (a)..... 727,300 75,048,269
Lowe's Cos., Inc. ................................. 900,000 53,381,250
Micro Warehouse, Inc. (a).......................... 150,000 2,962,500
Safeway, Inc. (a).................................. 822,500 47,499,375
Staples, Inc. (a).................................. 2,137,500 62,855,859
TJX Cos., Inc. .................................... 1,675,000 47,842,187
Tommy Hilfiger Corp. (a)........................... 350,000 24,171,875
Tricon Global Restaurants, Inc. (a)................ 400,000 24,800,000
U.S. Foodservice (a)............................... 250,000 11,609,375
Williams Sonoma, Inc. (a).......................... 500,000 17,093,750
--------------
1,021,160,924
--------------
CONSUMER DURABLES 0.9%
Gentex Corp. (a)................................... 300,000 6,506,250
Harley Davidson, Inc. ............................. 400,000 23,125,000
Kaufman & Broad Home Corp. ........................ 103,700 2,333,250
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
CONSUMER DURABLES (CONTINUED)
Pulte Corp. ....................................... 200,000 $ 4,812,500
Shaw Industries, Inc. ............................. 500,000 10,968,750
--------------
47,745,750
--------------
CONSUMER NON-DURABLES 0.9%
Coors Adolph Co. .................................. 250,000 14,890,625
Linens 'n Things, Inc. (a)......................... 850,000 30,600,000
--------------
45,490,625
--------------
CONSUMER SERVICES 11.9%
Amazon, Inc. (a)................................... 100,000 12,812,500
Brinker International, Inc. (a).................... 515,000 14,902,812
Cablevision Systems Corp., Class A (a)............. 650,000 42,250,000
Chancellor Media Corp., Class A (a)................ 1,500,000 65,625,000
Clear Channel Communications, Inc. (a)............. 1,150,000 69,000,000
CMG Information Services Inc. (a).................. 250,000 30,656,250
Comcast Corp., Class A............................. 500,000 35,468,750
Consolidated Graphics, Inc. (a).................... 175,000 10,631,250
Earthlink Network, Inc. (a)........................ 385,700 23,214,319
Echostar Communications Corp., Class A (a)......... 275,000 13,475,000
Education Management Corp. (a)..................... 200,000 5,375,000
Fox Entertainment Group, Inc., Class A (a)......... 450,000 11,700,000
International Network Services (a)................. 400,000 20,450,000
Interpublic Group of Cos., Inc. ................... 405,000 30,299,062
Jacor Communications, Inc., Class A (a)............ 723,900 50,492,025
Meredith Corp. .................................... 200,000 6,750,000
Metris Cos., Inc. ................................. 215,000 9,245,000
Metzler Group, Inc. (a)............................ 350,000 14,875,000
Modis Professional Services, Inc. (a).............. 700,000 9,581,250
Omnicom Group, Inc. ............................... 675,000 44,718,750
Outdoor Systems, Inc. (a).......................... 812,500 22,699,219
SFX Entertainment, Inc., Class A (a)............... 300,000 18,337,500
Tele-Communications, Inc., Class A (a)............. 800,000 43,100,000
Valassis Communications, Inc. (a).................. 350,000 16,800,000
Viacom, Inc., Class B.............................. 150,000 13,256,250
--------------
635,714,937
--------------
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
ENERGY 0.1%
Marine Drilling Cos., Inc. (a)..................... 497,900 $ 3,174,113
National Oilwell, Inc. (a)......................... 200,000 1,775,000
--------------
4,949,113
--------------
FINANCE 6.2%
AmSouth Bancorp.................................... 225,000 10,575,000
Capital One Financial Corp. ....................... 400,000 51,050,000
Fifth Third Bancorp................................ 202,500 13,377,656
Finova Group, Inc. ................................ 150,000 7,621,875
Firstar Corp. ..................................... 348,150 29,157,563
Knight/Trimark Group, Inc., Class A (a)............ 55,400 1,925,150
Northern Trust Corp. .............................. 300,000 26,812,500
Old Kent Financial Corp. .......................... 350,000 15,356,250
Protective Life Corp. ............................. 250,000 8,625,000
Providian Financial Corp. ......................... 1,500,000 153,187,500
Zions Bancorp...................................... 225,000 14,400,000
--------------
332,088,494
--------------
HEALTHCARE 9.8%
Allergan, Inc. .................................... 550,000 44,825,000
Amgen, Inc. (a).................................... 250,000 31,218,750
Bard, C.R., Inc. .................................. 200,000 11,275,000
Biogen, Inc. (a)................................... 1,000,000 96,125,000
Biomatrix, Inc. ................................... 200,000 13,900,000
Biomet, Inc. ...................................... 250,000 9,171,875
Cree Research, Inc. (a)............................ 150,000 4,903,125
Elan Corp. PLC-ADR (Ireland)....................... 200,000 15,337,500
Forest Labs, Inc. (a).............................. 350,000 17,303,125
Genzyme Corp. (a).................................. 400,000 18,000,000
Guidant Corp. ..................................... 950,000 54,150,000
Immunex Corp. (a).................................. 450,000 63,675,000
Medicis Pharmaceutical Corp., Class A (a).......... 300,000 11,325,000
Medimmune, Inc. (a)................................ 550,000 30,250,000
Medquist, Inc. (a)................................. 200,000 6,837,500
Medtronic, Inc. ................................... 150,000 10,593,750
MiniMed, Inc. (a).................................. 150,000 12,787,500
Patterson Dental Co. (a)........................... 175,000 7,087,500
Quintiles Transnational Corp. (a).................. 76,400 3,294,750
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
HEALTHCARE (CONTINUED)
VISX, Inc. (a)..................................... 400,000 $ 24,700,000
Watson Pharmaceuticals, Inc. (a)................... 480,000 23,190,000
Wellpoint Health Networks, Inc., Class A (a)....... 150,000 11,831,250
--------------
521,781,625
--------------
PRODUCER MANUFACTURING 3.4%
Allied Waste Industries, Inc. (a).................. 787,500 15,356,250
American Power Conversion Corp. (a)................ 600,000 21,525,000
Danaher Corp. ..................................... 450,000 21,712,500
Federal Mogul Corp. ............................... 380,000 18,691,250
Metromedia Fiber Network, Inc., Class A (a)........ 1,065,200 46,336,200
Tyco International Ltd............................. 800,000 59,550,000
--------------
183,171,200
--------------
TECHNOLOGY 41.5%
Affiliated Computer Services, Inc., Class A (a).... 225,000 10,406,250
Altera Corp. ...................................... 700,000 34,037,500
America Online, Inc. (a)........................... 3,700,000 329,068,750
American Management Systems (a).................... 400,000 13,350,000
Applied Materials, Inc. (a)........................ 525,000 29,203,125
Applied Micro Circuits Corp. (a)................... 200,000 7,850,000
Broadcom Corp., Class A (a)........................ 170,000 10,231,875
Cisco Systems, Inc. (a)............................ 675,000 66,023,437
Citrix Systems, Inc. (a)........................... 725,000 55,915,625
Compuware Corp. (a)................................ 1,378,100 77,087,469
Comverse Technology, Inc. (a)...................... 350,000 25,112,500
Concord Communications, Inc. (a)................... 200,000 11,325,000
Concord EFS, Inc. (a).............................. 500,000 15,968,750
CSG Systems International, Inc. (a)................ 525,000 37,406,250
Dell Computer Corp. (a)............................ 1,650,000 132,206,250
Electronics for Imaging, Inc. (a).................. 255,000 8,909,063
EMC Corp. (a)...................................... 2,300,000 235,462,500
Fiserv, Inc. (a)................................... 300,000 14,100,000
Flextronics International Corp. (a)................ 450,000 16,959,375
Gemstar International Group Ltd. (a)............... 715,000 45,760,000
General Instrument Corp. (a)....................... 555,000 16,233,750
Geotel Communications Corp. (a).................... 225,000 9,689,063
Gilat Satellite Networks Ltd (a)................... 200,000 11,850,000
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Global Crossing Ltd. (a)........................... 200,000 $ 11,800,000
Gulfstream Aerospace Corp. (a)..................... 675,000 30,206,250
IMR Global Corp. .................................. 195,000 3,534,375
Intel Corp. ....................................... 300,000 35,981,250
Intuit, Inc. (a)................................... 200,000 19,787,500
Jabil Circuit, Inc. (a)............................ 600,000 19,575,000
Keane, Inc. (a).................................... 150,000 4,640,625
Legato Systems, Inc. (a)........................... 500,000 24,625,000
Lucent Technologies, Inc. (a)...................... 250,000 25,390,625
Macromedia, Inc. (a)............................... 650,000 19,865,625
Mastech Corp. (a).................................. 300,000 7,481,250
Mercury Interactive Corp. (a)...................... 250,000 16,203,125
Microsoft Corp. (a)................................ 175,000 26,271,875
Mindspring Enterprises, Inc. (a)................... 375,000 32,062,500
Network Appliance, Inc. (a)........................ 1,200,000 50,400,000
Network Solutions, Inc., Class A (a)............... 104,400 18,948,600
New Era of Networks, Inc. (a)...................... 337,400 21,045,325
Nokia Corp. -- ADR (Finland)....................... 463,500 62,862,187
Oracle Corp. (a)................................... 600,000 33,525,000
Pegrine Systems, Inc. (a).......................... 300,000 7,687,500
PMC Sierra, Inc. .................................. 175,000 12,403,125
Qlogic Corp. (a)................................... 230,000 13,368,750
Rational Software Corp. (a)........................ 950,000 28,203,125
Sanmina Corp. (a).................................. 150,000 7,837,500
Sapient Corp. (a).................................. 150,000 10,031,250
SEI Investments Co. ............................... 125,000 12,375,000
Siebel Systems, Inc. (a)........................... 275,000 12,100,000
Solectron Corp. (a)................................ 300,000 13,406,250
SunGard Data Systems, Inc. (a)..................... 650,000 25,756,250
Sykes Enterprises, Inc. (a)........................ 200,000 5,700,000
Symbol Technologies, Inc. ......................... 450,000 23,850,000
Teradyne, Inc. (a)................................. 400,000 19,050,000
Texas Instruments, Inc. ........................... 500,000 44,593,750
Uniphase Corp. (a)................................. 300,000 26,437,500
USWeb Corp. (a).................................... 400,000 13,475,000
Verisign, Inc. (a)................................. 200,000 19,600,000
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Veritas DGC, Inc. (a).............................. 200,000 $ 1,887,500
Veritas Software Corp. (a)......................... 762,500 54,137,500
Vitesse Semiconductor Corp. (a).................... 950,000 43,640,625
Waters Corp. (a)................................... 345,000 32,106,562
Xilinx, Inc. (a)................................... 450,000 31,387,500
Xircom, Inc. (a)................................... 350,000 11,900,000
Yahoo!, Inc. (a)................................... 400,000 61,400,000
--------------
2,210,697,331
--------------
TRANSPORTATION 0.9%
Comair Holdings, Inc. ............................. 450,000 16,931,250
Skywest, Inc. ..................................... 125,000 3,929,688
Southwest Airlines Co. ............................ 950,000 28,618,750
--------------
49,479,688
--------------
UTILITIES 1.6%
Century Telephone Enterprises, Inc. ............... 500,000 30,875,000
Global Telesystems Group, Inc. (a)................. 200,000 11,100,000
Qwest Communications International, Inc. (a)....... 550,000 33,790,625
RF Micro Devices, Inc. (a)......................... 150,000 11,550,000
--------------
87,315,625
--------------
TOTAL COMMON STOCKS 96.3%.................................... 5,139,595,312
SUBSCRIPTION WARRANT 0.0%
BJ Services Co. (40,000 common stock warrants expiring
04/12/00)................................................... 310,000
--------------
TOTAL LONG-TERM INVESTMENTS 96.3%
(Cost $3,232,042,092)..................................... 5,139,905,312
SHORT-TERM INVESTMENTS 2.7%
COMMERCIAL PAPER 0.0%
General Electric Capital Corp. ($2,035,000 par, yielding
6.350%, 03/01/99 maturity).................................. 2,034,178
--------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 2.7%
Federal Home Loan Bank Consolidated Discount Notes
($20,000,000 par, yielding 4.729%, 03/03/99 maturity)....... 19,994,113
Federal Home Loan Mortgage Discount Notes ($20,000,000 par,
yielding 5.045%, 03/11/99 maturity)......................... 19,972,333
Federal Home Loan Mortgage Discount Notes ($25,000,000 par,
yielding 4.733%, 03/22/99 maturity)......................... 24,931,458
Federal Home Loan Mortgage Discount Notes ($17,000,000 par,
yielding 4.956%, 04/09/99 maturity)......................... 16,910,127
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Market Value
- --------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT AGENCY OBLIGATIONS (CONTINUED)
Federal National Mortgage Association Discount Notes
($30,000,000 par, yielding 4.796%, 05/19/99 maturity)....... $ 29,673,000
Federal National Mortgage Association Discount Notes
($30,000,000 par, yielding 4.837%, 06/24/99 maturity)....... 29,529,000
--------------
141,010,031
--------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $143,092,813)....................................... 143,044,209
--------------
TOTAL INVESTMENTS 99.0%
(Cost $3,375,134,905)....................................... 5,282,949,521
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%................... 51,889,759
--------------
NET ASSETS 100.0%............................................ $5,334,839,280
==============
</TABLE>
(a) Non-income producing security as this stock currently does not declare
dividends.
See Notes to Financial Statements
16
<PAGE> 18
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $3,375,134,905)..................... $5,282,949,521
Receivables:
Investments Sold.......................................... 86,871,619
Fund Shares Sold.......................................... 36,733,828
Dividends................................................. 463,642
Other....................................................... 22,616
--------------
Total Assets............................................ 5,407,041,226
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 41,868,100
Fund Shares Repurchased................................... 23,620,257
Distributor and Affiliates................................ 3,508,966
Investment Advisory Fee................................... 1,856,997
Income Distributions...................................... 76,174
Accrued Expenses............................................ 1,009,923
Trustees' Deferred Compensation and Retirement Plans........ 261,529
--------------
Total Liabilities....................................... 72,201,946
--------------
NET ASSETS.................................................. $5,334,839,280
==============
NET ASSETS CONSIST OF:
Capital..................................................... $3,175,432,033
Net Unrealized Appreciation................................. 1,907,814,616
Accumulated Net Realized Gain............................... 271,896,282
Accumulated Net Investment Loss............................. (20,303,651)
--------------
NET ASSETS.................................................. $5,334,839,280
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $3,002,743,699 and 61,017,248 shares of
beneficial interest issued and outstanding)............. $ 49.21
Maximum sales charge (5.75%* of offering price)......... 3.00
--------------
Maximum offering price to public........................ $ 52.21
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $2,063,032,559 and 45,099,095 shares of
beneficial interest issued and outstanding)............. $ 45.74
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $269,063,022 and 5,782,237 shares of
beneficial interest issued and outstanding)............. $ 46.53
==============
</TABLE>
* On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
17
<PAGE> 19
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 6,997,405
Dividends................................................... 2,799,809
--------------
Total Income............................................ 9,797,214
--------------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Class
A, B and C of $2,779,396, $8,734,270 and $1,082,037,
respectively)............................................. 12,595,703
Investment Advisory Fee..................................... 10,132,974
Shareholder Services........................................ 5,799,517
Custody..................................................... 128,514
Legal....................................................... 107,590
Trustees' Fees and Expenses................................. 30,028
Other....................................................... 1,116,437
--------------
Total Expenses.......................................... 29,910,763
--------------
NET INVESTMENT LOSS......................................... $ (20,113,549)
==============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 271,230,901
Futures................................................... 1,859,208
--------------
Net Realized Gain........................................... 273,090,109
--------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 569,329,117
End of the Period:
Investments............................................. 1,907,814,616
--------------
Net Unrealized Appreciation During the Period............... 1,338,485,499
--------------
NET REALIZED AND UNREALIZED GAIN............................ $1,611,575,608
==============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,591,462,059
==============
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended February 28, 1999
and the Year Ended August 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Month Ended Year Ended
February 28, 1999 August 31, 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss........................... $ (20,113,549) $ (32,447,765)
Net Realized Gain............................. 273,090,109 416,497,597
Net Unrealized Appreciation/Depreciation
During the Period........................... 1,338,485,499 (480,322,858)
--------------- ---------------
Change in Net Assets from Operations.......... 1,591,462,059 (96,273,026)
--------------- ---------------
Distributions from Net Realized Gain:
Class A Shares.............................. (128,077,213) (187,557,556)
Class B Shares.............................. (97,410,164) (124,329,647)
Class C Shares.............................. (11,807,693) (14,246,695)
--------------- ---------------
Total Distributions......................... (237,295,070) (326,133,898)
--------------- ---------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES.................................. 1,354,166,989 (422,406,924)
--------------- ---------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold..................... 3,505,084,815 4,635,449,750
Net Asset Value of Shares Issued Through
Dividend Reinvestment....................... 220,421,748 306,065,324
Cost of Shares Repurchased.................... (3,257,923,359) (4,337,043,496)
--------------- ---------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS................................ 467,583,204 604,471,578
--------------- ---------------
TOTAL INCREASE IN NET ASSETS.................. 1,821,750,193 182,064,654
NET ASSETS:
Beginning of the Period....................... 3,513,089,087 3,331,024,433
--------------- ---------------
End of the Period (Including accumulated net
investment loss of $20,303,651 and $190,102,
respectively)............................... $ 5,334,839,280 $ 3,513,089,087
=============== ===============
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended August 31,
Six Months Ended --------------------------------------------
Class A Shares February 28, 1999(a) 1998(a) 1997 1996(a) 1995(a)
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the
Period................... $36.129 $ 40.844 $ 34.347 $ 31.59 $ 24.37
------- -------- -------- -------- --------
Net Investment
Income/Loss.............. (.119) (.212) (.127) (.096) .05
Net Realized and
Unrealized Gain/Loss..... 15.510 (.750) 8.177 6.043 7.79
------- -------- -------- -------- --------
Total from Investment
Operations............... 15.391 (.962) 8.050 5.947 7.84
Less Distributions from
Net Realized Gain........ 2.309 3.753 1.553 3.190 .62
------- -------- -------- -------- --------
Net Asset Value, End of
the Period............... $49.211 $ 36.129 $ 40.844 $ 34.347 $ 31.59
======= ======== ======== ======== ========
Total Return (b)........... 43.56%* (2.19%) 24.44% 20.54% 33.11%
Net Assets at End of the
Period (In millions)..... $3,002.7 $1,990.8 $1,970.7 $1,438.5 $1,029.2
Ratio of Expenses to
Average Net Assets (c)... .98% 1.00% 1.05% 1.10% 1.14%
Ratio of Net Investment
Income/Loss to Average
Net Assets (c)........... (.54%) (.50%) (.30%) (.29%) .19%
Portfolio Turnover......... 50%* 103% 92% 91% 101%
</TABLE>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Total Return is based upon Net Asset Value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(c) For the years ended August 31, 1997 and 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
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended August 31,
Six Months Ended ---------------------------------------
Class B Shares February 28, 1999(a) 1998(a) 1997 1996(a) 1995(a)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period............ $33.840 $ 38.789 $ 32.938 $ 30.65 $ 23.86
------- -------- -------- ------- -------
Net Investment Loss........ (.273) (.515) (.270) (.349) (.16)
Net Realized and Unrealized
Gain/Loss................ 14.486 (.681) 7.674 5.827 7.57
------- -------- -------- ------- -------
Total from Investment
Operations............... 14.213 (1.196) 7.404 5.478 7.41
Less Distributions from Net
Realized Gain............ 2.309 3.753 1.553 3.190 .62
------- -------- -------- ------- -------
Net Asset Value, End of the
Period................... $45.744 $ 33.840 $ 38.789 $32.938 $ 30.65
======= ======== ======== ======= =======
Total Return (b)........... 43.00%* (2.98%) 23.51% 19.61% 32.01%
Net Assets at End of the
Period (In millions)..... $2,063.0 $1,357.6 $1,220.4 $ 757.3 $ 450.5
Ratio of Expenses to
Average Net Assets (c)... 1.77% 1.79% 1.85% 1.90% 1.97%
Ratio of Net Investment
Loss to Average Net
Assets (c)............... (1.34%) (1.29%) (1.10%) (1.10%) (.64%)
Portfolio Turnover......... 50%* 103% 92% 91% 101%
</TABLE>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Total Return is based upon Net Asset Value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(c) For the years ended August 31, 1997 and 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
21
<PAGE> 23
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended August 31,
Six Months Ended -------------------------------------
Class C Shares February 28, 1999(a) 1998(a) 1997 1996(a) 1995(a)
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................. $34.391 $39.351 $33.384 $ 31.02 $24.14
------- ------- ------- ------- ------
Net Investment Loss........ (.277) (.523) (.273) (.354) (.16)
Net Realized and Unrealized
Gain/Loss................ 14.728 (.684) 7.793 5.908 7.66
------- ------- ------- ------- ------
Total from Investment
Operations................. 14.451 (1.207) 7.520 5.554 7.50
Less Distributions from Net
Realized Gain.............. 2.309 3.753 1.553 3.190 .62
------- ------- ------- ------- ------
Net Asset Value, End of the
Period..................... $46.533 $34.391 $39.351 $33.384 $31.02
======= ======= ======= ======= ======
Total Return (b)............. 43.02%* (2.96%) 23.56% 19.60% 32.01%
Net Assets at End of the
Period (In millions)....... $ 269.1 $ 164.7 $ 139.9 $ 82.4 $ 41.8
Ratio of Expenses to Average
Net Assets (c)............. 1.76% 1.79% 1.85% 1.89% 1.96%
Ratio of Net Investment Loss
to Average Net
Assets (c)................. (1.33%) (1.29%) (1.10%) (1.10%) (.63%)
Portfolio Turnover........... 50%* 103% 92% 91% 101%
</TABLE>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Total Return is based upon Net Asset Value which does not include payment of
maximum sales charge or contingent deferred sales charge.
(c) For the years ended August 31, 1997 and 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
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Emerging Growth 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 seeks capital
appreciation by principally investing in common stock of small- and medium-sized
companies that are considered to be emerging growth companies. The Fund
commenced investment operations on October 2, 1970. The distribution of the
Fund's Class B and Class C shares commenced on April 20, 1992 and July 6, 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.
Unlisted securities and listed securities for which the last sales price is not
available are valued at the mean of the bid and asked prices or, if not
available, their fair value as determined using 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 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.
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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. 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.
Accumulated realized gain/loss differs for financial and tax reporting
purposes as a result of the deferral for tax purposes of losses resulting from
wash sales.
At February 28, 1999, for federal income tax purposes, cost of long- and
short-term investments is $3,376,224,532; the aggregate gross unrealized
appreciation is $1,984,678,415 and the aggregate gross unrealized depreciation
is $77,953,426, resulting in net unrealized appreciation of $1,906,724,989.
E. DISTRIBUTION OF INCOME AND GAINS--The Fund declares and pays dividends
annually from net investment income and from net realized gains, if any.
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.
24
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- -------------------------------------------------------------------
<S> <C>
First $350 million.................................... .575 of 1%
Next $350 million..................................... .525 of 1%
Next $350 million..................................... .475 of 1%
Over $1.05 billion.................................... .425 of 1%
</TABLE>
For the six months ended February 28, 1999, the Fund recognized expenses of
approximately $107,600 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 six months ended February 28, 1999, the Fund recognized expenses of
approximately $409,400 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. ("VKIS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
February 28, 1999, the Fund recognized expenses of approximately $4,512,300.
Transfer agency fees are determined through negotiations with the Fund's Board
of Trustees and are based on competitive 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.
25
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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 February 28, 1999, capital aggregated $1,564,379,944, $1,416,386,230 and
$194,665,859 for Classes A, B, and C, respectively. For the six months ended
February 28, 1999, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 69,830,968 $ 3,065,051,934
Class B.................................. 8,108,468 333,299,110
Class C.................................. 2,596,694 106,733,771
----------- ---------------
Total Sales................................ 80,536,130 $ 3,505,084,815
=========== ===============
Dividend Reinvestment:
Class A.................................. 2,789,895 $ 118,941,945
Class B.................................. 2,309,441 91,592,399
Class C.................................. 245,102 9,887,404
----------- ---------------
Total Dividend Reinvestment................ 5,344,438 $ 220,421,748
=========== ===============
Repurchases:
Class A.................................. (66,706,221) $(2,952,952,440)
Class B.................................. (5,436,290) (229,677,495)
Class C.................................. (1,848,290) (75,293,424)
----------- ---------------
Total Repurchases.......................... (73,990,801) $(3,257,923,359)
=========== ===============
</TABLE>
26
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
At August 31, 1998, capital aggregated $1,333,338,505, $1,221,172,216 and
$153,338,108 for Classes A, B, and C, respectively. For the year ended August
31, 1998, transactions, were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................. 95,621,832 $ 4,044,478,378
Class B................................. 11,867,712 474,169,896
Class C................................. 2,870,475 116,801,476
------------ ---------------
Total Sales............................... 110,360,019 $ 4,635,449,750
============ ===============
Dividend Reinvestment:
Class A................................. 4,998,669 $ 177,702,686
Class B................................. 3,474,757 116,334,867
Class C................................. 353,446 12,027,771
------------ ---------------
Total Dividend Reinvestment............... 8,826,872 $ 306,065,324
============ ===============
Repurchases:
Class A................................. (93,766,322) $(3,988,507,130)
Class B................................. (6,687,281) (267,187,091)
Class C................................. (1,991,360) (81,349,275)
------------ ---------------
Total Repurchases......................... (102,444,963) $(4,337,043,496)
============ ===============
</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
27
<PAGE> 29
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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>
For the six months ended February 28, 1999, Van Kampen, as Distributor for
the Fund, received net commissions on sales of the Fund's Class A shares of
approximately $817,100 and CDSC on redeemed shares of approximately $1,602,000.
Sales charges do not represent expenses to the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $2,365,598,316 and $2,163,331,709,
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 unrealized appreciation/depreciation. Upon disposition, a
realized gain or loss is recognized accordingly, except when 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
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
28
<PAGE> 30
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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).
Transactions in futures contracts for the six months ended February 28,
1999, were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ----------------------------------------------------------------------
<S> <C>
Outstanding at August 31, 1998.............................. -0-
Futures Opened.............................................. 495
Futures Closed.............................................. (495)
---
Outstanding at February 28, 1999............................ -0-
===
</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 six months ended February 28, 1999, are payments retained by Van Kampen
of approximately $7,070,400.
29
<PAGE> 31
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
30
<PAGE> 32
VAN KAMPEN EMERGING GROWTH 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
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 East 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.
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 and other pertinent
data. After September 30, 1999, the report must, if used with prospective
investors, be accompanied by a quarterly performance update.
31
<PAGE> 33
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.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> EMG GROWTH A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<INVESTMENTS-AT-COST> 3,375,134,905<F1>
<INVESTMENTS-AT-VALUE> 5,282,949,521<F1>
<RECEIVABLES> 124,069,089<F1>
<ASSETS-OTHER> 22,616<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 5,407,041,226<F1>
<PAYABLE-FOR-SECURITIES> 41,868,100<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 30,333,846<F1>
<TOTAL-LIABILITIES> 72,201,946<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,564,379,944
<SHARES-COMMON-STOCK> 61,017,248
<SHARES-COMMON-PRIOR> 55,102,606
<ACCUMULATED-NII-CURRENT> (20,303,651)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 271,896,282<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 1,907,814,616<F1>
<NET-ASSETS> 3,002,743,699
<DIVIDEND-INCOME> 2,799,809<F1>
<INTEREST-INCOME> 6,997,405<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (29,910,763)<F1>
<NET-INVESTMENT-INCOME> (20,113,549)<F1>
<REALIZED-GAINS-CURRENT> 273,090,109<F1>
<APPREC-INCREASE-CURRENT> 1,338,485,499<F1>
<NET-CHANGE-FROM-OPS> 1,591,462,059<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (128,077,213)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 69,830,968
<NUMBER-OF-SHARES-REDEEMED> (66,706,221)
<SHARES-REINVESTED> 2,789,895
<NET-CHANGE-IN-ASSETS> 1,011,934,275
<ACCUMULATED-NII-PRIOR> (190,102)<F1>
<ACCUMULATED-GAINS-PRIOR> 236,101,243<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 10,132,974<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 29,910,763<F1>
<AVERAGE-NET-ASSETS> 2,587,687,918
<PER-SHARE-NAV-BEGIN> 36.129
<PER-SHARE-NII> (0.119)
<PER-SHARE-GAIN-APPREC> 15.510
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (2.309)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 49.211
<EXPENSE-RATIO> 0.98
<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> EMG GROWTH B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<INVESTMENTS-AT-COST> 3,375,134,905<F1>
<INVESTMENTS-AT-VALUE> 5,282,949,521<F1>
<RECEIVABLES> 124,069,089<F1>
<ASSETS-OTHER> 22,616<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 5,407,041,226<F1>
<PAYABLE-FOR-SECURITIES> 41,868,100<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 30,333,846<F1>
<TOTAL-LIABILITIES> 72,201,946<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 1,416,386,230
<SHARES-COMMON-STOCK> 45,099,095
<SHARES-COMMON-PRIOR> 40,117,476
<ACCUMULATED-NII-CURRENT> (20,303,651)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 271,896,282<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 1,907,814,616<F1>
<NET-ASSETS> 2,063,032,559
<DIVIDEND-INCOME> 2,799,809<F1>
<INTEREST-INCOME> 6,997,405<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (29,910,763)<F1>
<NET-INVESTMENT-INCOME> (20,113,549)<F1>
<REALIZED-GAINS-CURRENT> 273,090,109<F1>
<APPREC-INCREASE-CURRENT> 1,338,485,499<F1>
<NET-CHANGE-FROM-OPS> 1,591,462,059<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (97,410,164)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 8,108,468
<NUMBER-OF-SHARES-REDEEMED> (5,436,290)
<SHARES-REINVESTED> 2,309,441
<NET-CHANGE-IN-ASSETS> 705,440,060
<ACCUMULATED-NII-PRIOR> (190,102)<F1>
<ACCUMULATED-GAINS-PRIOR> 236,101,243<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 10,132,974<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 29,910,763<F1>
<AVERAGE-NET-ASSETS> 1,764,296,781
<PER-SHARE-NAV-BEGIN> 33.840
<PER-SHARE-NII> (0.273)
<PER-SHARE-GAIN-APPREC> 14.486
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (2.309)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 45.744
<EXPENSE-RATIO> 1.77
<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> EMG GROWTH C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<INVESTMENTS-AT-COST> 3,375,134,905<F1>
<INVESTMENTS-AT-VALUE> 5,282,949,521<F1>
<RECEIVABLES> 124,069,089<F1>
<ASSETS-OTHER> 22,616<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 5,407,041,226<F1>
<PAYABLE-FOR-SECURITIES> 41,868,100<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 30,333,846<F1>
<TOTAL-LIABILITIES> 72,201,946<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 194,665,859
<SHARES-COMMON-STOCK> 5,782,237
<SHARES-COMMON-PRIOR> 4,788,731
<ACCUMULATED-NII-CURRENT> (20,303,651)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> 271,896,282<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 1,907,814,616<F1>
<NET-ASSETS> 269,063,022
<DIVIDEND-INCOME> 2,799,809<F1>
<INTEREST-INCOME> 6,997,405<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (29,910,763)<F1>
<NET-INVESTMENT-INCOME> (20,113,549)<F1>
<REALIZED-GAINS-CURRENT> 273,090,109<F1>
<APPREC-INCREASE-CURRENT> 1,338,485,499<F1>
<NET-CHANGE-FROM-OPS> 1,591,462,059<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> (11,807,693)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,596,694
<NUMBER-OF-SHARES-REDEEMED> (1,848,290)
<SHARES-REINVESTED> 245,102
<NET-CHANGE-IN-ASSETS> 104,375,858
<ACCUMULATED-NII-PRIOR> (190,102)<F1>
<ACCUMULATED-GAINS-PRIOR> 236,101,243<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 10,132,974<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 29,910,763<F1>
<AVERAGE-NET-ASSETS> 218,567,263
<PER-SHARE-NAV-BEGIN> 34.391
<PER-SHARE-NII> (0.277)
<PER-SHARE-GAIN-APPREC> 14.728
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> (2.309)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 46.533
<EXPENSE-RATIO> 1.76
<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>
