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VAN KAMPEN LIFE INVESTMENT TRUST -
MORGAN STANLEY REAL ESTATE SECURITIES PORTFOLIO
SUPPLEMENT DATED AUGUST 28 , 1998 TO THE PROSPECTUS DATED APRIL 30, 1998,
AS PREVIOUSLY SUPPLEMENTED ON JULY 14, 1998.
The prospectus, as previously supplemented, is being further amended and
supplemented to reflect the Board of Trustees appointment of Morgan Stanley
Asset Management Inc. ("MSAM") as Subadviser to the Portfolio effective October
1, 1998. The addition of MSAM will not impact the Portfolio's management team or
the day to day management of the Portfolio and will not result in any increase
of the Portfolio's expenses. The Prospectus is amended and supplemented as
follows:
The section of the Prospectus captioned "Prospectus Summary" is hereby
amended with the following:
INVESTMENT ADVISERS. Van Kampen Asset Management Inc. (the "Adviser") is the
Portfolio's investment adviser. Morgan Stanley Asset Management Inc. (the
"Subadviser") provides sub-advisory services to the Adviser.
The section of the Prospectus captioned "THE TRUST AND ITS MANAGEMENT" is
hereby amended with the following:
ADVISORY AGREEMENTS. The Trust retains the Adviser to manage the investment
of its assets and to place orders for the purchase and sale of its portfolio
securities. The Adviser has entered into a sub-advisory agreement (the
"Sub-advisory Agreement") with the Subadviser to assist it in performing its
investment advisory functions. Under an investment advisory agreement (the
"Advisory Agreement"), the Trust pays the Adviser a monthly fee computed on
average daily net assets of the Portfolio at the annual rate of 1.00% of the
Portfolio's average daily net assets. This fee is higher than that charged by
most other mutual funds but the Trustees believe it is justified by the
specialized nature of the Portfolio and is not necessarily higher than the fees
charged by certain mutual funds with investment objectives and policies similar
to those of the Portfolio.
Under the Advisory Agreement, the Trust also reimburses the Adviser for the
cost of the Portfolio's accounting services, which include maintaining its
financial books and records and calculating its daily net asset value. Operating
expenses paid by the Portfolio include shareholder service agency fees, service
fees, distribution fees, custodian fees, legal and accounting fees, the costs of
reports and proxies to shareholders, trustees' fees (other than those who are
affiliated persons as defined in the 1940 Act of the Adviser, Distributor,
Investor Services, Van Kampen or Morgan Stanley Dean Witter & Co.), and all
other business expenses not specifically assumed by the Adviser. For the fiscal
year ended December 31, 1997, advisory fees plus the cost of accounting services
payable by the Trust on behalf of
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the Portfolio were 1.01% of the Portfolio's average daily net assets. During the
same period, the Portfolio's total operating expenses were 1.07%. Pursuant to
the Sub-advisory Agreement, the Subadvisor receives on an annual basis 50% of
the compensation received by the Adviser.
From time to time the Adviser or the Subadviser may agree to waive its
investment advisory or subadvisory fees or any portion thereof or elect to
reimburse the Portfolio for ordinary business expenses in excess of an agreed
upon amount.
The section of the Prospectus captioned "THE TRUST AND ITS MANAGEMENT"
hereby is supplemented by adding the following:
THE SUBADVISER. The Subadviser is a wholly-owned subsidiary of Morgan
Stanley Group, Inc. and is an affiliate of the Adviser. The Subadviser provides
portfolio management and named fiduciary services to various closed-end and
open-end investment companies, taxable and nontaxable institutions,
international equities and fixed income securities. At June 30, 1998, the
Subadviser had, together with its affiliated investment management companies,
assets under management (including assets under fiduciary advisory control)
totaling approximately $167 billion. The Subadviser is a leader in the real
estate capital markets with 25 years of real estate financing experience. The
Subadviser has dedicated over 200 employees worldwide to real estate securities
research and market analysis and manages over $4 billion in private real estate
investment partnerships. The Subadviser also draws upon the research
capabilities of Morgan Stanley Group Inc. and its other affiliates as well as
the research and investment ideas of other companies whose brokerage services
the Subadviser utilizes. The address of the Subadviser is 1221 Avenue of the
Americas, New York, New York 10020.
LIT SPT 898
