VAN KAMPEN LIFE INVESTMENT TRUST, 497, 1999-05-28

VAN KAMPEN LIFE INVESTMENT TRUST
497, 1999-05-28

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<PAGE> 1

VAN KAMPEN
LIFE INVESTMENT TRUST

EMERGING GROWTH PORTFOLIO
ENTERPRISE PORTFOLIO
STRATEGIC STOCK PORTFOLIO
Shares of the Portfolios have not been approved or disapproved by the Securities
and Exchange Commission (SEC) or any state regulators, and neither the SEC nor
any state regulator has passed upon the accuracy or adequacy of this prospectus.
It is a criminal offense to suggest otherwise.

This prospectus is dated APRIL 30, 1999.

[VAN KAMPEN FUNDS LOGO]
<PAGE> 2

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summaries:

Emerging Growth Portfolio....................... 3

Enterprise Portfolio............................ 5

Strategic Stock Portfolio....................... 7

Life Investment Trust General Information......... 8

Investment Objectives and Policies:

Emerging Growth Portfolio....................... 9

Enterprise Portfolio............................ 10

Strategic Stock Portfolio....................... 11

Investment Practices.............................. 14

Investment Advisory Services...................... 18

Purchase of Shares................................ 20

Redemption of Shares.............................. 21

Dividends, Distributions and Taxes................ 21

Financial Highlights.............................. 23

Appendix A -- Description of Securities Ratings... A-1
</TABLE>

No dealer, salesperson, or any other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus, in connection with the offer contained in this prospectus and, if
given or made, such other information or representation must not be relied upon
as having been authorized by the Portfolios, the Portfolios' investment adviser
or the Portfolios' distributor. This prospectus does not constitute an offer by
the Portfolios or by the Portfolios' distributor to sell or a solicitation of an
offer to buy any of the securities offered hereby in any jurisdiction to any
person to whom it is unlawful for the Portfolios to make such an offer in such
jurisdiction.
<PAGE> 3

EMERGING GROWTH
PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Emerging Growth Portfolio is a mutual fund with an investment objective to
seek capital appreciation by investing in a portfolio of securities consisting
principally of common stocks of small- and medium-sized companies considered by
the Portfolio's investment adviser to be emerging growth companies. There can be
no assurance that the Portfolio will achieve its investment objective.

INVESTMENT STRATEGIES

Under normal market conditions, the Portfolio's management seeks to achieve the
investment objective by investing at least 65% of the Portfolio's total assets
in a portfolio of common stocks of small- and medium-sized emerging growth
companies. Emerging growth companies are those domestic or foreign companies
that the Portfolio's management believes are in the early stages of their life
cycles and have the potential to become major enterprises. Investing in such
companies involves risks not ordinarily associated with investments in larger,
more established companies. The Portfolio may invest up to 20% of its total
assets in securities of foreign issuers. The Portfolio may invest in certain
derivatives, such as options and futures, which may subject the Portfolio to
additional risks.

INVESTMENT RISKS

With its investments in common stocks of smaller-and medium-sized, less
established companies, the Portfolio has greater risks than a portfolio that
invests only in larger-sized, more seasoned companies.

An investment in the Portfolio is subject to investment risks, and you could
lose money on your investment in the Portfolio.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in equity
securities generally are affected by changes in the stock markets, which
fluctuate substantially over time, sometimes suddenly and sharply. During an
overall market decline, stock prices of small- and medium-sized companies (such
as those in which the Portfolio invests) often fluctuate more and often fall
more than the prices of larger sized company stocks. It is possible that the
stocks of small- and medium-sized companies will be more volatile and
underperform the overall stock market. Historically, smaller- and medium-sized
company stocks have sometimes gone through extended periods when they did not
perform as well as larger company stocks.

RISKS OF EMERGING GROWTH COMPANIES. Companies that the Portfolio's management
believe are emerging growth companies are often companies with limited product
lines, markets, distribution channels or financial resources and the management
of such companies may be dependent upon one or a few key people. The stocks of
emerging growth companies can therefore be subject to more abrupt or erratic
market movements than stocks of larger, more established companies or the stock
market in general.

FOREIGN RISKS. Because the Portfolio may own securities from foreign issuers, it
may be subject to risks not usually associated with owning securities of U.S.
issuers. These risks can include fluctuations in foreign currencies, foreign
currency exchange controls, political and economic instability, differences in
financial reporting, differences in securities regulation and trading, and
foreign taxation issues.

RISKS OF USING DERIVATIVE INVESTMENTS. In general terms, a derivative investment
is one whose value depends on (or is derived from) the value of an underlying
asset, interest rate or index. Options and futures are examples of derivatives.
Such transactions involve risks different from the direct investment in
underlying securities such as imperfect correlation between the value of the
instruments and the underlying assets; risks of default by the other party to
certain transactions; risks that the transactions may result in losses that
partially or completely offset gains in portfolio positions; risks that the
transactions may not be liquid; and manager risk.

MANAGER RISK. As with any managed fund, the Portfolio's management may not be
successful in selecting the best-performing securities and the Portfolio's
performance may lag behind that of similar funds.

An investment in the Portfolio is not a deposit of any bank or other insured
depository institution. Your

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investment is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.

INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek capital appreciation over the long term.

- - Are willing to take on the increased risks of investing in smaller- and
medium-sized, less established companies in exchange for potentially higher
capital appreciation.

- - Can withstand substantial volatility in the value of their shares of the
Portfolio.

- - Wish to add to their personal holdings a portfolio that invests primarily in
common stocks of small-and medium-sized emerging growth companies.

Investors should carefully consider the additional risks associated with
investments in smaller- and medium-sized, less established companies. An
investment in the Portfolio may not be appropriate for all investors. The
Portfolio is not intended to be a complete investment program, and investors
should consider their long-term investment goals and financial needs when making
an investment decision about the Portfolio. An investment in the Portfolio is
intended to be a long-term investment and the Portfolio should not be used as a
trading vehicle.

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Portfolio is to look at how its
performance varies from year to year. The following chart shows the annual
returns of the Portfolio over the past three calendar years prior to the date of
this prospectus. Sales charges or other expenses at the contract level are not
reflected in this chart. If sales charges or other expenses at the contract
level had been included, the returns shown below would have been lower. Remember
that the past performance of the Portfolio is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1996' 16.65
'1997' 20.42
'1998' 37.56
</TABLE>

The Portfolio commenced investment operations on July 3, 1995. The return from
July 3, 1995 to December 31, 1995 was 17.20%.

During the three-year period shown in the bar chart, the highest quarterly
return was 28.01% (for the quarter ended December 31, 1998) and the lowest
quarterly return was -12.05% (for the quarter ended September 30, 1998).

COMPARATIVE PERFORMANCE

This table shows how the Portfolio's performance compares with two broad-based
market indices that the Portfolio's management believes are applicable
benchmarks for the portfolio: the Russell 2000 Stock Index and the Standard &
Poor's Midcap 400 Index. The performance figures do not include sales charges or
other expenses at the contract level that would be paid by investors. Average
annual total returns are shown for the periods ended December 31, 1998 (the most
recently completed calendar year prior to the date of this prospectus). Remember
that the past

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performance of the Portfolio is not indicative of its future performance.

<TABLE>
<CAPTION>
AVERAGE ANNUAL
TOTAL RETURNS
FOR THE
PERIODS ENDED PAST SINCE
DECEMBER 31, 1998 1 YEAR INCEPTION
- ---------------------------------------------
<S> <C> <C>
Van Kampen
Emerging Growth
Portfolio 37.56% 26.31%(1)
- ---------------------------------------------
Russel 2000
Stock Index -2.55% 13.54%(2)
- ---------------------------------------------
Standard & Poor's
Midcap 400 Index 19.11% 23.00%(3)
- ---------------------------------------------
</TABLE>

Inception dates: (1) 7/3/95, (2) 6/30/95, (3) 7/6/95.

ENTERPRISE PORTFOLIO

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Enterprise Portfolio is a mutual fund with an investment objective to seek
capital appreciation through investments in securities believed by the
Portfolio's investment adviser to have above average potential for capital
appreciation. There can be no assurance that the Portfolio will achieve its
investment objective.

INVESTMENT STRATEGIES

Under normal market conditions, the Portfolio's management seeks to achieve the
investment objective by investing primarily in common stocks of "growth"
companies focusing on those securities believed to offer a combination of strong
business fundamentals at an attractive valuation. The Portfolio may invest up to
10% of its total assets in securities of foreign issuers. The Portfolio may
invest in certain derivatives, such as options and futures, which may subject
the Portfolio to additional risks.

INVESTMENT RISKS

An investment in the Portfolio is subject to investment risks, and you could
lose money on your investment in the Portfolio.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in common
stocks generally are affected by changes in the stock markets, which fluctuate
substantially over time, sometimes suddenly and sharply. The Portfolio
emphasizes a "growth" style of investing. The market values of "growth" common
stocks may be more volatile than other types of investments. The returns on
"growth" securities may or may not move in tandem with the returns on other
styles of investing or the overall stock markets. During an overall stock market
decline, stock prices of small- or medium-sized companies (in which the
Portfolio may invest) often fluctuate more than prices of larger companies.

An investment in the Portfolio is not a deposit of any bank or other insured
depository institution. Your investment is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government agency.

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<PAGE> 6

INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek capital appreciation over the long term.

- - Do not seek current income from their investment.

- - Can withstand substantial volatility in the value of their shares of the
Portfolio.

- - Wish to add to their personal investment holdings a portfolio that emphasizes
a "growth" style of investing in common stocks.

An investment in the Portfolio may not be appropriate for all investors. The
Portfolio is not intended to be a complete investment program, and investors
should consider their long-term investment goals and financial needs when making
an investment decision about the Portfolio. An investment in the Portfolio is
intended to be a long-term investment, and the Portfolio should not be used as a
trading vehicle.

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Portfolio is to look at how its
performance varies from year to year. The following chart shows the annual
returns of the Portfolio over the past ten calendar years prior to the date of
this prospectus. Sales charges or other expenses at the contract level are not
reflected in this chart. If sales charges or other expenses at the contract
level had been included, the returns shown below would have been lower. Remember
that the past performance of the Portfolio is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1989' 34.23
'1990' -6.84
'1991' 36.41
'1992' 7.48
'1993' 8.98
'1994' -3.39
'1995' 36.98
'1996' 25.80
'1997' 30.66
'1998' 25.00
</TABLE>

During the ten-year period shown in the bar chart, the highest quarterly return
was 24.94% (for the quarter ended December 31, 1998) and the lowest quarterly
return was -16.52% (for the quarter ended September 30, 1990).

COMPARATIVE PERFORMANCE

This table shows how the Portfolio's performance compares with the Standard &
Poor's 500-Stock Index, a broad-based market index that the Portfolio's
management believes is an applicable benchmark for the Portfolio. The
performance figures do not include sales charges or other expenses at the
contract level that would be paid by investors. Average annual total returns are
shown for the periods ended December 31, 1998 (the most recently completed
calendar year prior to the date of this prospectus). Remember that the past
performance of the Portfolio is not indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Past Past 10
December 31, 1998 1 Year 5 Years Years
- -------------------------------------------------------
<S> <C> <C> <C> <C>
Van Kampen
Enterprise
Portfolio 25.00% 21.95% 18.35%
.......................................................
Standard & Poor's
500-Stock Index 28.58% 24.06% 19.21%
.......................................................
</TABLE>

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STRATEGIC STOCK
PORTFOLIO
RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Strategic Stock Portfolio is a mutual fund with an investment objective to
seek an above average total return through a combination of potential capital
appreciation and dividend income, consistent with the preservation of invested
capital. There can be no assurance that the Portfolio will achieve its
investment objective.

INVESTMENT STRATEGIES

Under normal market conditions, the Portfolio's management seeks to achieve the
investment objective by investing in a portfolio of high dividend yielding
equity securities of companies included in the Dow Jones Industrial Average (the
"DJIA") or in the Morgan Stanley Capital International USA Index (the "MSCI USA
Index"). The Portfolio's investment adviser buys and sells investment securities
based primarily upon specific objective criteria (emphasizing dividend yield)
applied to DJIA and MSCI USA Index companies. The Portfolio may invest in
certain derivatives, such as options and futures, which may subject the
Portfolio to additional risks.

INVESTMENT RISKS

An investment in the Portfolio is subject to investment risks, and you could
lose money on your investment in the Portfolio.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Portfolio will decline. Market risk may affect a single issuer,
industry, sector of the economy, or the market as a whole. Investments in equity
securities generally are affected by changes in the stock markets, which
fluctuate substantially over time, sometimes suddenly and sharply. The Portfolio
emphasizes high dividend yielding stocks selected based upon specific objective
criteria. The market value of the Portfolio's equity securities may or may not
fluctuate in tandem with overall changes in the stock markets. The ability of
the Portfolio's investment holdings to generate income is dependent on the
earnings and the continuing declaration of dividends by the issuers of such
securities.

STYLE RISK. Securities are purchased and sold for the Portfolio based primarily
upon specific objective criteria. The Portfolio's style may not be as successful
in selecting the best-performing securities as other styles and may underperform
the overall market.

INVESTOR PROFILE

In light of its objective and investment strategies, the Portfolio may be
appropriate for investors who:

- - Seek an above average total return through a combination of potential capital
appreciation and dividend income.

- - Can withstand volatility in the value of their shares in the Portfolio.

- - Wish to add their personal investment holdings a portfolio that invests
primarily in equity securities.

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<PAGE> 8

ANNUAL PERFORMANCE

The following chart shows the annual return of the Portfolio over the one
calendar year prior to the date of this prospectus. Sales charges or other
expenses at the contract level are not reflected in this chart. If sales charges
or other expenses at the contract level had been included, the returns shown
below would have been lower. Remember that the past performance of the Portfolio
is not indicative of its future performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
'1998' 16.51
</TABLE>

The Portfolio commenced investment operations on November 3, 1997. The return
from November 3, 1997 to December 31, 1997 was 2.45%.

During the one-year period shown in the bar chart, the highest quarterly return
was 12.23% (for the quarter ended December 31, 1998) and the lowest quarterly
return was -5.51% (for the quarter ended September 30, 1998).

COMPARATIVE PERFORMANCE

This table shows how the Portfolio's performance compares with two broad-based
market indices that the Portfolio's management believes are applicable
benchmarks for the Portfolio: Dow Jones Industrial Average and the MSCI USA
Index. The performance figures do not include sales charges or other expenses at
the contract level that would be paid by investors. Average annual total returns
are shown for the periods ended December 31, 1998 (the most recently completed
calendar year prior to the date of this prospectus). Remember that the past
performance of the Portfolio is not indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Since
December 31, 1998 1 Year Inception
- ---------------------------------------------
<S> <C> <C> <C>
Van Kampen
Strategic Stock
Portfolio 16.51% 16.55%(1)
.............................................
Dow Jones
Industrial
Average 18.13% 21.88%(2)
.............................................
MSCI
USA Index 30.72% 32.61%(2)
.............................................
</TABLE>

Inception dates: (1) 11/3/97, (2) 10/31/97.

VAN KAMPEN LIFE
INVESTMENT TRUST
GENERAL INFORMATION

Van Kampen Life Investment Trust (the "Trust") is a diversified, open-end
management investment company which offers shares in eleven separate Portfolios
(the "Portfolios"), three of which are described herein and offered pursuant to
this Trust's prospectus. Each Portfolio is in effect a separate mutual fund.
Each Portfolio has its own income, expenses, assets, liabilities and net asset
value and each Portfolio issues its own shares. Shares of each Portfolio
represent an interest only in that Portfolio. Shares are sold only to separate
accounts (the "Accounts") of various insurance companies to fund the benefits of
variable annuity or variable life insurance policies (the "Contracts"). The
Accounts may invest in shares of the Portfolios in accordance with allocation
instructions received from contract owners ("Contract Owners"). Such allocation
rights, as well as sales charges and other expenses imposed on Contract Owners
by the Contracts, are further described in the accompanying Contract prospectus.

Each Portfolio of the Trust has a different investment objective(s) which it
pursues through its investment policies as described below under "Investment
Objectives and Policies." The section entitled "Investment Practices" provides
further discussion of certain investment techniques, strategies or risks that
are common to some or all of the Portfolios. The

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investment objective(s) of each Portfolio, is a fundamental policy and may not
be changed without shareholder approval of the holders of a majority of the
Portfolio's outstanding voting securities, as defined in the Investment Company
Act of 1940, as amended (the "1940 Act"). If there is a change in the objectives
of such Portfolio, shareholders should consider whether the Portfolio remains an
appropriate investment in light of their then current financial position and
needs. The differences in objectives and policies among the Portfolios can be
expected to affect the return of each Portfolio and the degree and types of
risks to which each Portfolio is subject. There are risks inherent in all
investments in securities; accordingly there can be no assurance that any
Portfolio will achieve its investment objective(s).

INVESTMENT OBJECTIVES

AND POLICIES

EMERGING GROWTH PORTFOLIO

The investment objective of the Emerging Growth Portfolio is to seek capital
appreciation by investing in a portfolio of securities consisting principally of
common stocks of small- and medium-sized companies considered by the Portfolio's
investment adviser to be emerging growth companies. Any ordinary income received
from securities owned by the Portfolio is entirely incidental to the Portfolio's
investment objective of capital appreciation. There are risks inherent in all
investments in securities; accordingly, there can be no assurance that the
Portfolio will achieve its investment objective.

As a fundamental investment policy, the Portfolio under normal conditions,
invests at least 65% of its total assets in common stocks of small- and medium-
sized companies both domestic and foreign, in the early stages of their life
cycles that the Portfolio's investment adviser believes have the potential to
become major enterprises. The Portfolio's investment adviser, under current
market conditions, generally defines small- and medium-sized companies by
reference to the Standard & Poor's Midcap 400 Index (which consists of companies
in the capitalization range of approximately $170 million to $14 billion as of
March 31, 1999). Investments in such companies may offer greater opportunities
for growth of capital than larger, more established companies, but also may
involve certain special risks. Emerging growth companies often have limited
product lines, markets, distribution channels or financial resources, and they
may be dependent upon one or a few key people for management. The securities of
such companies may be subject to more abrupt or erratic market movements than
securities of larger, more established companies or the market averages in
general.

The Portfolio does not limit its investments to any single group or type of
security. The Portfolio may invest in securities involving special situations,
such as new management, special products and techniques, unusual developments,
mergers or liquidations. Investments in unseasoned companies and special
situations often involve much greater risks than are inherent in other types of
investments, because securities of such companies may be more likely to
experience unexpected fluctuations in price.

The Portfolio's primary approach is to seek what the Portfolio's investment
adviser believes to be unusually attractive growth investments on an individual
company basis. The Portfolio may invest in securities that have above average
volatility of price movement. Because prices of common stocks and other
securities fluctuate, the value of an investment in the Portfolio will vary
based upon the Portfolio's investment performance. The Portfolio attempts to
reduce overall exposure to risk from declines in securities prices by spreading
its investments over many different companies in a variety of industries. There
is, however, no assurance that the Portfolio will be successful in achieving its
objective.

Common stocks are shares of a corporation or other entity that entitle the
holder to a pro rata share of the profits of the corporation, if any, without
preference over any other class of securities, including such entity's debt
securities, preferred stock and other senior equity securities. Common stock
usually carries with it the right to vote and frequently an exclusive right to
do so.

While the Portfolio invests principally in common stocks, the Portfolio may
invest to a limited extent in other securities such as preferred stocks,
convertible securities and warrants. Preferred stock generally has a preference
as to dividends and liquidation over an issuer's common stock but ranks junior
to debt securities in an issuer's capital structure. Unlike interest payments on
debt securities, preferred stock dividends are payable only if declared by the
issuer's

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<PAGE> 10

board of directors. Preferred stock also may be subject to optional or mandatory
redemption provisions. Generally, warrants are securities that may be exchanged
for a prescribed amount of common stock or other equity security of the issuer
within a particular period of time at a specified price or in accordance with a
specified formula.

The Portfolio may invest up to 20% of its total assets in securities of foreign
issuers. Such investments include certain risks not typically associated with
investments in U.S. securities. See "Investment Practices -- Foreign
Securities."

The Portfolio may engage in portfolio management strategies and techniques
involving options, futures contracts and related options which may subject the
Portfolio to additional risks. See "Investment Practices -- Using Options,
Futures Contracts and Options on Futures Contracts."

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

ENTERPRISE PORTFOLIO

The investment objective of the Enterprise Portfolio is to seek capital
appreciation through investments in securities believed by the Portfolio's
investment adviser to have above average potential for capital appreciation. Any
income received on securities owned by the Portfolio is entirely incidental to
the Portfolio's investment objective of capital appreciation. There are risks
inherent in all investments in securities; accordingly, there can be no
assurance that the Portfolio will achieve its investment objective.

Under normal market conditions, the Portfolio's investment adviser seeks to
achieve the investment objective by investing primarily in common stocks which
it believes have above-average potential for capital appreciation. The
Portfolio's primary approach is to seek what the Portfolio's investment adviser
believes to be unusually attractive growth investments on an individual company
basis. The Portfolio may invest in securities that have above average volatility
of price movement. Because prices of common stocks and other securities
fluctuate, the value of an investment in the Portfolio will vary. The Portfolio
attempts to reduce overall exposure to risk from declines in securities prices
by spreading its investments over many different companies in a variety of
industries.

While the Portfolio invests principally in common stocks, the Portfolio may
invest in preferred stocks and warrants. Preferred stock generally has a
preference as to dividends and liquidation over an issuer's common stock but
ranks junior to debt securities in an issuer's capital structure. Unlike
interest payments on debt securities, preferred stock dividends are payable only
if declared by the issuer's board of directors. Preferred stock also may be
subject to optional mandatory redemption provisions. Generally, warrants are
securities that may be exchanged for a prescribed amount of common stock or
other equity security of the issuer within a particular period of time at a
specified price or in accordance with a specific formula.

In selecting securities for investment, the Portfolio will generally focus on
common stocks of "growth" companies, including companies with new products,
services or processes. The investment adviser seeks such securities which it
believes offer a combination of strong business fundamentals at an attractive
price. Growth companies generally include those companies with established
records of growth in sales or earnings that the Portfolio's investment adviser
believes are entering into a growth cycle in their respective businesses, with
the expectation that the stock of such companies will increase in value. Stocks
of different types, such as "growth" stocks or "value" stocks, tend to shift in
and out of favor depending on market and economic conditions. Thus, the value of
the Portfolio's investments in "growth" stocks will vary and may at times be
lower or higher than that of other types of funds. The market values of "growth"
common stocks may be more volatile than other types of investments. The
Portfolio may invest in companies generating or applying new technologies, new
or improved distribution techniques or new services, which companies may benefit
from changing consumer demands or lifestyles, or companies that have projected
earnings in excess of the average for their sector or industry. In each case,
such companies have prospects that the Portfolio's investment adviser believes
are favorable for above-average capital appreciation. The Portfolio also may

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focus its investments on stocks of companies in cyclical industries during
periods when their securities appear attractive for capital appreciation.

The companies in which the Portfolio invests may be in any market capitalization
range, provided the Portfolio's investment adviser believes the investment is
consistent with the Portfolio's objective. The securities of small- or
medium-sized companies may be subject to more abrupt or erratic market movements
than securities of larger companies or the market averages in general. In
addition, such companies typically are subject to a greater degree of change in
earnings and business prospects than are larger companies. Thus, to the extent
the Portfolio invests in small- and medium-sized companies, the Portfolio may be
subject to greater investment risk than that assumed through investment in the
equity securities of larger-capitalization companies.

The Portfolio may dispose of a security whenever, in the opinion of the
Portfolio's investment adviser, factors indicate it is desirable to do so. Such
factors include change in economic or market factors in general or with respect
to a particular industry, a change in the market trend or other factors
affecting an individual security, changes in the relative market performance or
appreciation possibilities offered by individual securities and other
circumstances bearing on the desirability of a given investment.

The Portfolio generally holds a portion of its assets in investment grade
short-term debt securities and in investment grade corporate debt securities in
order to provide liquidity. Investment grade short-term debt investments include
securities issued or guaranteed by the U.S. government, its agencies or its
instrumentalities, prime commercial paper, certificates of deposit, bankers'
acceptances and other obligations of domestic banks having total assets of at
least $500 million and repurchase agreements. Investment grade corporate debt
securities include securities rated BBB or better by Standard & Poor's ("S&P")
or Baa or higher by Moody's Investors Service, Inc. ("Moody's"). A more complete
description of security ratings is contained in the appendix to this prospectus.
The market prices of such debt securities generally vary inversely with changes
in prevailing interest rates.

The Portfolio may invest up to 10% of its total assets, based on market value at
the time of each investment, in securities of foreign issuers. Such investments
include certain risks not typically associated with investments in U.S.
securities. See "Investment Practices -- Foreign Securities."

The Portfolio may engage in portfolio management strategies and techniques
involving options, futures contracts and options on futures which may subject
the Portfolio to additional risks. See "Investment Practices -- Using Options,
Futures Contracts and Options on Futures Contracts."

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

STRATEGIC STOCK PORTFOLIO

The investment objective of the Strategic Stock Portfolio is to seek an above
average total return through a combination of potential capital appreciation and
dividend income, consistent with the preservation of invested capital. There are
risks inherent in all investments in securities; accordingly, there can be no
assurance that the Portfolio will achieve its investment objective.

Under normal market conditions, the Portfolio's investment adviser seeks to
achieve the investment objective by investing in a portfolio of high dividend
yielding equity securities of companies included in the DJIA or in the MSCI USA
Index. The DJIA was first published in The Wall Street Journal in 1896.
Initially consisting of just 12 stocks, the DJIA expanded to 20 stocks in 1916
and to its present size of 30 stocks on October 1, 1928. The MSCI USA Index
consists of approximately 370 large domestic companies in the United States and
has existed since January 1, 1970.

The Portfolio's investment adviser selects investment securities for the
Portfolio based upon the Portfolio's strategic selection policies (the
"Strategic Selection Policies") as follows:

The ten highest dividend yielding securities in the DJIA are identified for
investment. In addition, all companies having securities in the MSCI USA Index
are reviewed by the Portfolio's investment adviser. Securities of companies in
the financial or utility sectors and companies having securities included in the
DJIA are excluded. The remaining pool of MSCI USA Index securities is further
evaluated and securities of companies that do not have positive one- and
three-year sales and earnings growth rates and two years of positive dividend
growth are excluded. The Portfolio's investment adviser also excludes MSCI USA
Index securities

11
<PAGE> 12

that are in the bottom 25% of all MSCI USA Index securities measured in terms of
total annual trading volume. MSCI USA Index securities of the remaining
companies are ranked by dividend yield, and the ten highest-yielding such MSCI
USA Index securities are identified for investment. In the event that this
process results in less than 10 remaining MSCI USA Index securities, those
companies with the most favorable one- and three-year sales and earnings
performance and two-year dividend performance as determined by the Portfolio's
investment adviser are added back until the number of MSCI USA Index securities
equals 10. Dividend yield for purposes of applying the foregoing investment
policies is calculated for each security by annualizing the last quarterly or
semi-annual ordinary dividend declared on the security and dividing the result
by the security's closing sale price on the applicable date. This yield is
historical and there can be no assurance that any dividends will be declared or
paid in the future.

At the commencement of the Portfolio's investment operations, the 20 securities
so identified at that time represented the Portfolio's initial investments.
Approximately monthly, the Portfolio's investment adviser employs the same
Strategic Selection Policies to identify a new list of 20 strategic securities.
Based on a rolling 12-month schedule, the investment adviser reviews and adjusts
the oldest one-twelfth portion of the Portfolio's assets so as to invest that
portion of the Portfolio's assets approximately equally in the new list of 20
strategic securities. For a more detailed discussion of the Portfolio's
investment policies, including the frequency of security re-evaluations and the
portion of the Portfolio's assets that the Portfolio's investment adviser
presently expects to re-evaluate at the end of each period, see the Statement of
Additional Information.

The Portfolio's investment adviser generally seeks to allocate cash available
for investment due to the sale of new shares of the Portfolio and the receipt of
dividends and interest income from Portfolio investments approximately
proportionately among its current list of strategic securities in the Portfolio.
To the extent that the Portfolio is required to dispose of securities in order
to satisfy redemption requests, make distributions, pay expenses or otherwise
raise cash for operational purposes, the Portfolio's investment adviser
generally intends to sell approximately proportionate amounts of securities from
all securities in the Portfolio.

Application of the foregoing Strategic Selection Policies is subject to and
limited by certain of the Portfolio's other investment policies and
restrictions, including restrictions and limitations which must be met in order
for the Portfolio to qualify for U.S. federal income tax purposes as a
"regulated investment company" under Subchapter M of the Internal Revenue Code
of 1986, as amended (the "Code"), or in order to comply with requirements of the
1940 Act. The Portfolio is subject to investment diversification requirements
that generally provide that the Portfolio may not, with respect to 75% of its
assets, invest more than 5% of its assets in the securities of any one issuer or
purchase more than 10% of the outstanding voting securities of any one issuer.
Further, the Portfolio generally may not invest more than 25% of the value of
its total assets in securities of issuers in any particular industry. The
Portfolio's satisfaction of these requirements will take precedent over the
Strategic Selection Policies. In addition, the Portfolio's investment adviser
will try to avoid transacting in odd-lots of securities in order to minimize
transaction costs. These limitations may, at times, cause the composition of the
Portfolio's investment portfolio to differ significantly from that which would
have resulted had the Strategic Selection Policies been fully implemented. In
selecting securities for investment or disposition at times that the Portfolio's
investment policies and restrictions do not permit full implementation of the
Strategic Selection Policies, the Portfolio's investment adviser will have sole
discretion to select securities for purchase or sale and generally will make
such selections in a manner that is consistent with the Portfolio's investment
objective and in a manner that it believes is consistent with the investment
rationale that is the basis for the Strategic Selection Policies.

The Portfolio will continue to hold securities, even though such securities may
not be included in the most recent list of strategic securities determined for
the review and adjustment of a portion of the Portfolio's assets. In addition,
although each new list of strategic securities will include only 20 securities,
because only a portion of the Portfolio's assets may be reviewed and adjusted at
any given time, the Portfolio's investment adviser expects that the number of
securities held by the Portfolio may over time increase and that the Portfolio
may at times hold forty or more different securities.

The Portfolio may invest up to 5% of its total assets in options on equity
securities indices, futures contracts on such indices and options on such
futures contracts for both hedging purposes and in an attempt to enhance gain.
The Portfolio also may invest up to 5% of its total assets in securities of
other registered investment companies that seek to provide

12
<PAGE> 13

investment results that generally correspond to the performance of securities
included in one or more broad market indices. Investment in securities of other
investment companies will subject the Portfolio to additional and potentially
duplicative costs and expenses, including investment management fees charged by
such registered investment companies. Pending investment and for temporary
defensive purposes the Portfolio may invest without limit in short-term, high
quality fixed income securities and in money-market instruments.

The DJIA is the property of Dow Jones & Company, Inc. Dow Jones & Company, Inc.
has not granted to the Portfolio a license to use the DJIA. Dow Jones & Company,
Inc. has not participated in any way in the creation of the Portfolio or in the
selection of the stocks included in such Portfolio and has not approved any
information herein relating thereto. Shares of the Portfolio are not designed so
that their prices will parallel or correlate with any movements in the DJIA, and
it is expected that their prices will not parallel or correlate with such
movements.

The MSCI USA Index is the property of Morgan Stanley Dean Witter & Co. ("Morgan
Stanley"). Morgan Stanley makes no representation or warranty, express or
implied, to the owners of shares of the Portfolio or any member of the public
regarding the advisability of investing in investment portfolios generally or in
the Portfolio particularly or the ability of the MSCI USA Index to track general
stock market performance. Morgan Stanley is the licensor of certain trademarks,
service marks and trade names of Morgan Stanley and of the MSCI USA Index which
is determined, composed and calculated by Morgan Stanley without regard to this
Portfolio. Morgan Stanley has no obligation to take the needs of this Portfolio
or the owners of this Portfolio into consideration in determining, composing or
calculating the MSCI USA Index. Morgan Stanley is not responsible for and has
not participated in the determination of the timing of, prices at, or quantities
of this Portfolio to be issued. Morgan Stanley has no obligation or liability to
owners of this Portfolio in connection with the administration, marketing or
trading of this Portfolio.

ALTHOUGH MORGAN STANLEY SHALL OBTAIN INFORMATION FOR INCLUSION IN OR FOR USE IN
THE CALCULATION OF THE INDICES FROM SOURCES WHICH MORGAN STANLEY CONSIDERS
RELIABLE, NEITHER MORGAN STANLEY NOR ANY OTHER PARTY GUARANTEES THE ACCURACY
AND/OR THE COMPLETENESS OF THE INDICES OR ANY DATA INCLUDED THEREIN. NEITHER
MORGAN STANLEY NOR ANY OTHER PARTY MAKES ANY WARRANTY, EXPRESS OR IMPLIED, AS TO
RESULTS TO BE OBTAINED BY LICENSEE, LICENSEE'S CUSTOMERS AND COUNTERPARTIES,
OWNERS OF THE PORTFOLIO, OR ANY OTHER PERSON OR ENTITY FROM THE USE OF THE
INDICES OR ANY DATA INCLUDED THEREIN IN CONNECTION WITH THE RIGHTS LICENSED
HEREUNDER OR FOR ANY OTHER USE. NEITHER MORGAN STANLEY NOR ANY OTHER PARTY MAKES
ANY EXPRESS OR IMPLIED WARRANTIES, AND MORGAN STANLEY HEREBY EXPRESSLY DISCLAIMS
ALL WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO THE INDEX OR ANY DATA INCLUDED THEREIN. WITHOUT LIMITING ANY OF THE
FOREGOING, IN NO EVENT SHALL MORGAN STANLEY OR ANY OTHER PARTY HAVE ANY
LIABILITY FOR ANY DIRECT, INDIRECT, SPECIAL, PUNITIVE, CONSEQUENTIAL OR ANY
OTHER DAMAGES (INCLUDING LOST PROFITS) EVEN IF NOTIFIED OF THE POSSIBILITY OF
SUCH DAMAGES.

RISK FACTORS. There is no guarantee that the investment objective of the
Portfolio will be achieved because it is subject to the continuing ability of
the respective issuers of equity securities in which the Portfolio invests to
declare and pay dividends and because the market value of such equity securities
can be affected by a variety of factors. Common stocks may be especially
susceptible to general stock market movements and to volatile increases and
decreases of value as market confidence in and perceptions of the issuers
change. There can be no assurance that the value of the underlying securities
will increase or that the issuers of the securities will pay dividends on
outstanding securities. The declaration of dividends by any issuer depends upon
several factors including the financial condition of the issuer and general
economic conditions. Risks associated with an investment in the Portfolio
include the possible deterioration of either the financial condition of the
issuers or the general condition of the stock market, and general price
volatility. The relatively high dividend yield of certain securities that the
Portfolio will acquire may reflect the market's assessment of the risk that the
company may reduce or eliminate the dividend in the current period or in the
future, or otherwise reflect the market's unfavorable assessment of the
company's performance outlook. The Portfolio's investment adviser generally will
not take these considerations into account in implementing the Strategic
Selection Policies and, accordingly, the Portfolio may at times acquire
securities of companies that the market and the Portfolio's investment adviser
believe are more susceptible to financial difficulty and

13
<PAGE> 14

corresponding adverse market performance than are other companies with
securities included in the DJIA or in the MSCI USA Index.

In addition, investors should be aware that the Portfolio is not "actively
managed." Except to raise cash for operational purposes, the Portfolio
ordinarily will not sell securities or re-evaluate its investments except as
periodically determined by the Portfolio's investment adviser. In addition, only
a portion of the Portfolio's assets may be reviewed and adjusted for any given
period. As a result, although the Portfolio may (but need not) dispose of a
security in certain events such as the issuer having defaulted on the payment on
any of its outstanding obligations or the price of a security having declined to
such an extent or other factors existing so that in the opinion of the
Portfolio's investment adviser the retention of such security would be
detrimental to the Portfolio, the adverse financial condition of a company will
not result in its elimination from the Portfolio prior to scheduled review and
adjustment except under extraordinary circumstances. Similarly, securities held
in the Portfolio ordinarily will not be sold by the Portfolio for the purpose of
taking advantage of market fluctuations or changes in anticipated rates of
appreciation.

Other investment practices and risks of the Portfolio are described under the
heading "Investment Practices."

INVESTMENT PRACTICES

REPURCHASE AGREEMENTS

Each Portfolio may enter into repurchase agreements with banks or broker-dealers
in order to earn a return on temporarily available cash. A repurchase agreement
is a short-term investment in which the purchaser (i.e., the Portfolio) acquires
ownership of a debt security and the seller agrees to repurchase the obligation
at a future time and set price, thereby determining the yield during the holding
period. Repurchase agreements involve certain risks in the event of default by
the other party. Each Portfolio may enter into repurchase agreements with banks
or broker-dealers deemed to be creditworthy by the Portfolio's investment
adviser under guidelines approved by the Portfolio's Board of Trustees. No
Portfolio will invest in repurchase agreements maturing in more than seven days
if any such investment, together with any other illiquid securities held by such
Portfolio, would exceed the Portfolio's limitation on illiquid securities
described below. In the event of the bankruptcy or other default of a seller of
a repurchase agreement, a Portfolio could experience both delays in liquidating
the underlying securities and losses including: (a) possible decline in the
value of the underlying security during the period while the Portfolio seeks to
enforce its rights thereto; (b) possible lack of access to income on the
underlying security during this period; and (c) expenses of enforcing its
rights.

For the purpose of investing in repurchase agreements, a Portfolio's investment
adviser may aggregate the cash that certain funds or portfolios advised or
subadvised by the investment adviser or certain of its affiliates would
otherwise invest separately into a joint account. The cash in the joint account
is then invested in repurchase agreements and the funds or portfolios that
contributed to the joint account share pro rata in the net revenue generated.
The investment adviser believes that the joint account produces efficiencies and
economies of scale that may contribute to reduced transaction costs, higher
returns, higher quality investments and greater diversity of investments for the
participating Portfolio than would be available to the Portfolio investing
separately. The manner in which the joint account is managed is subject to
conditions set forth in an exemptive order from the SEC authorizing this
practice, which conditions are designed to ensure the fair administration of the
joint account and to protect the amounts in that account.

Repurchase agreements are fully collateralized by the underlying debt securities
and are considered to be loans under the 1940 Act. A Portfolio pays for such
securities only upon physical delivery or evidence of book entry transfer to the
account of a custodian or bank acting as agent. The seller under a repurchase
agreement will be required to maintain the value of the underlying securities
marked-to-market daily at not less than the repurchase price. The underlying
securities (normally securities of the U.S. government, or its agencies and its
instrumentalities) may

14
<PAGE> 15

have maturity dates exceeding one year. A Portfolio does not bear the risk of a
decline in value of the underlying security unless the seller defaults under its
repurchase obligation.

FOREIGN SECURITIES

Each of the Portfolios listed below may invest in securities issued by foreign
issuers up to the following limits:

<TABLE>
<S> <C>
Emerging Growth Portfolio Up to 20% of total assets
- ----------------------------------------------------------
Enterprise Portfolio Up to 10% of total assets
- ----------------------------------------------------------
</TABLE>

Such securities may be denominated in U.S. dollars or in currencies other than
U.S. dollars. Investments in foreign securities present certain risks not
ordinarily associated with investments in securities of U.S. issuers. These
risks include fluctuations in foreign currency exchange rates, political,
economic or legal developments (including war or other instability,
expropriation of assets, nationalization and confiscatory taxation), imposition
of foreign exchange limitations (including currency blockage), withholding taxes
on dividend or interest payments or capital transactions or other restrictions,
higher transaction costs (including higher brokerage, custodial and settlement
costs and currency translation costs) and possible difficulty in enforcing
contractual obligations or taking judicial action. Also, foreign securities may
not be as liquid and may be more volatile than comparable domestic securities.

In addition, there often is less publicly available information about many
foreign issuers, and issuers of foreign securities are subject to different,
often less comprehensive, auditing, accounting, financial reporting and
disclosure requirements than domestic issuers. There is generally less
government regulation of stock exchanges, brokers and listed companies abroad
than in the U.S., and, with respect to certain foreign countries, there is a
possibility of expropriation or confiscatory taxation, or diplomatic
developments which could affect investment in those countries. Because there is
usually less supervision and governmental regulation of exchanges, brokers and
dealers than there is in the U.S., a Portfolio may experience settlement
difficulties or delays not usually encountered in the U.S.

Delays in making trades in foreign securities relating to volume constraints,
limitations or restrictions, clearance or settlement procedures, or otherwise
could impact yields and result in temporary periods when assets are not fully
invested or attractive investment opportunities are foregone.

A Portfolio's investments in securities of developing or emerging markets are
subject to greater risks than a Portfolio's investments in securities of
developed countries since emerging markets tend to have economic structures that
are less diverse and mature and political systems that are less stable than
developed countries.

Each of these Portfolios may purchase foreign securities in the form of American
Depository Receipts, European Depositary Receipts or other securities
representing underlying shares of foreign companies. The risks of foreign
investments should be considered carefully by an investor in a Portfolio that
invests in foreign securities.

FOREIGN CURRENCY TRANSACTIONS

Each Portfolio's securities that are denominated or quoted in currencies other
than the U.S. dollar will be affected by changes in foreign currency exchange
rates (and exchange control regulations) which affects the value of the
securities in the Portfolio and the income or dividends and appreciation or
depreciation of its investments. Changes in foreign currency exchange ratios
relative to the U.S. dollar will affect the U.S. dollar value of the Portfolio's
assets denominated in that currency and the Portfolio's yield on such assets. In
addition, the Portfolio will incur costs in connection with conversions between
various currencies. A Portfolio's foreign currency exchange transactions
generally will be conducted on a spot basis (that is, cash basis) at the spot
rate for purchasing or selling currency prevailing in the foreign currency
exchange market. A Portfolio purchases and sells foreign currency on a spot
basis in connection with the settlement of transactions in securities traded in
such foreign currency. The Portfolios do not purchase and sell foreign
currencies as an investment.

A Portfolio also may enter into contracts with banks or other foreign currency
brokers and dealers to purchase or sell foreign currencies at a future date
("forward contracts") and purchase and sell foreign currency futures contracts
to hedge against changes in foreign currency exchange rates. A foreign currency
forward contract is a negotiated agreement between the contracting parties to
exchange a specified amount of currency at a specified future time at a
specified rate. The rate can be higher or lower than

15
<PAGE> 16

the spot rate between the currencies that are the subject of the contract.

A Portfolio may attempt to hedge against changes in the value of the U.S. dollar
in relation to a foreign currency by entering into a forward contract for the
purchase or sale of the amount of foreign currency invested or to be invested,
or by buying or selling a foreign currency futures contract for such amount.
Futures contracts are described below under the heading "Investment
Practices -- Using Options, Futures Contracts and Options in Futures Contracts."
Such hedging strategies may be employed before a Portfolio purchases a foreign
security traded in the hedged currency which a Portfolio anticipates acquiring
or between the date the foreign security is purchased or sold and the date on
which payment therefore is made or received. Hedging against a change in the
value of a foreign currency in the foregoing manner does not eliminate
fluctuations in the price of portfolio securities or prevent losses if the
prices of such securities decline. Furthermore, such hedging transactions reduce
or preclude the opportunity for gain if the value of the hedged currency should
move in the direction opposite to the hedged position. Unanticipated changes in
currency prices may result in poorer overall performance for the Portfolio than
if it had not entered into such contracts.

The Portfolio's custodian will place cash or liquid securities in a segregated
account having a value equal to the aggregate amount of the Portfolio's
commitments under forward contracts. If the value of the securities placed in
the segregated account declines, additional cash or securities are placed in the
account on a daily basis so that the value of the account equals the amount of
the Portfolio's commitments with respect to such contracts. As an alternative to
maintaining all or part of the segregated account, the Portfolio may purchase a
call option permitting the Portfolio to purchase the amount of foreign currency
by a forward sale contract at a price no higher than the forward contract price
or the Portfolio may purchase a put option permitting the Portfolio to sell the
amount of foreign currency subject to a forward purchase contract at a price as
high or higher than the forward contract price.

ILLIQUID SECURITIES

Each of the Portfolios listed below may invest in illiquid securities and
certain restricted securities up to the following limits:

<TABLE>
<S> <C>
Emerging Growth Portfolio Up to 15% of net assets
- ------------------------------------------------------
Enterprise Portfolio Up to 5% of net assets
- ------------------------------------------------------
Strategic Stock Portfolio Up to 15% of net assets
- ------------------------------------------------------
</TABLE>

Such securities may be difficult or impossible to sell at the time and the price
that the Portfolio would like. Thus, the Portfolio may have to sell such
securities at a lower price, sell other securities instead to obtain cash or
forego other investment opportunities.

USING OPTIONS, FUTURES CONTRACTS AND OPTIONS
ON FUTURES CONTRACTS

Each Portfolio may use options, futures contracts or options on futures
contracts in several different ways, depending upon the status of a Portfolio's
portfolio securities and the investment adviser's expectations concerning the
securities or currency markets.

In times of stable or rising securities' prices, the Portfolios generally seek
to be fully invested. Even when the Portfolios are fully invested, however,
prudent management requires that at least a small portion of assets be available
as cash to honor redemption requests and for other short-term needs. The
Portfolios may also have cash on hand that has not yet been invested. The
portion of a Portfolio's assets that is invested in cash or cash equivalents
does not fluctuate with overall market prices, so that, in times of rising
market prices, the Portfolio may underperform the market in proportion to the
amount of cash or cash equivalents in the Portfolio. By purchasing stock or bond
index futures contracts, however, the Portfolios can compensate for the cash
portion of its assets and may obtain performance equivalent to investing all of
its assets in securities.

If the Portfolios' investment adviser forecasts a market decline, the Portfolios
may seek to reduce its exposure to the securities markets by increasing its cash
position. By selling stock or bond index futures contracts instead of Portfolio
securities, a similar result can be achieved to the extent that the performance
of the futures contracts correlates to the performance of the Portfolios'
investments. Sales of futures contracts frequently may be accomplished more
rapidly and at less cost than the actual sale of securities. Once the desired
hedged position has been effected, the Portfolios could then liquidate
securities

16
<PAGE> 17

in a more deliberate manner, reducing its futures position simultaneously to
maintain the desired balance, or it could maintain the hedged position.

As an alternative to futures contracts, the Portfolios can engage in options (or
stock or bond index options or stock or bond index futures options) to manage
the Portfolios' risk in advancing or declining markets. For example, the value
of a put option generally increases as the underlying security declines below a
specified level, value is protected against a market decline to the degree the
performance of the put correlates with the performance of the Portfolios'
investment portfolio. If the market remains stable or advances, the Portfolios
can refrain from exercising the put and the Portfolios will participate in the
advance, having incurred only the premium cost for the put.

The Portfolios are authorized to purchase and sell listed and over-the-counter
options ("OTC Options"). OTC Options are subject to certain additional risks
including default by the other party to the transaction and the liquidity of the
transactions.

In addition to futures and options on securities, the Portfolios may engage in
foreign currency futures and options. The Portfolios may use currency options to
increase its gross income or to protect it against declines in the U.S. dollar
value of foreign currency denominated securities and against increases in the
U.S. dollar cost of such securities to be acquired. As in the case of other
kinds of options, however, the selling of an option on a foreign currency
constitutes only a partial hedge, up to the amount of the premium received, and
the Portfolios could be required to cover its position by purchasing or selling
foreign currencies at disadvantageous exchange rates, thereby incurring losses.
The purchase of an option on a foreign currency may constitute an effective
hedge against fluctuations in exchange rates although, in the event of rate
movements adverse to a Portfolio's position, the Portfolio may forfeit the
entire amount of the premium plus related transaction costs. Options on foreign
currencies in which the Portfolios invest are traded on U.S. and foreign
exchanges or over-the-counter.
In certain cases, the options and futures markets provide investment or risk
management opportunities that are not available from direct investments in
securities. In addition, some strategies can be performed with greater ease and
at lower cost by utilizing the options and futures markets rather than
purchasing or selling portfolio securities or currencies. However, such
transactions involve risks different from the direct investment in underlying
securities such as imperfect correlation between the value of the instruments
and the underlying assets, risks of default by the other party to certain
transactions, risks that the transactions may incur losses that partially or
completely offset gains in portfolio positions, risks that the transactions may
not be liquid and manager risk. In addition, such transactions may involve
commissions and other costs, which may increase a Portfolio's expenses and
reduce its return. A more complete discussion of options, futures contracts and
related options and their risks is contained in the Statement of Additional
Information.

OTHER INVESTMENT PRACTICES AND RISK FACTORS

Although the Portfolios do not intend to engage in substantial short-term
trading, each may sell securities without regard to the length of time they have
been held in order to take advantage of new investment opportunities or when the
Portfolio's management believes the securities potential relative to the
respective Portfolio's investment objective has lessened or otherwise. Each
Portfolio's turnover rate is shown under the heading "Financial Highlights." The
portfolio turnover rate for each Portfolio may be expected to vary from year to
year. A high portfolio turnover rate (100% or more) increases the Portfolio's
transaction costs, including brokerage commissions or dealer costs, and may
result in the realization of more short-term capital gains than if the Portfolio
had lower portfolio turnover. The turnover rate will not be a limiting factor,
however, if the Portfolio's investment adviser considers portfolio changes
appropriate.

Further information about these types of investments and other investment
practices that may be used by the Portfolios is contained in the Statement of
Additional Information which can be obtained by investors free of charge as
described on the back cover of this prospectus.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, each Portfolio may invest on a temporary basis a portion or
all of its assets in securities issued or guaranteed by the U.S. government, its
agencies or instrumentalities, prime commercial paper, certificates of deposit,
bankers' acceptances and other obligations of domestic banks having total assets
of at least $500 million, and repurchase agreements. The

17
<PAGE> 18

effect of taking a defensive position may be that such Portfolio does not
achieve its investment objective(s).

YEAR 2000 RISKS

Like other mutual funds, financial and business organizations and individuals
around the world, the Portfolios could be adversely affected if the computer
systems used by the Portfolios' 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
Portfolios' 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 Portfolios' 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 Portfolios. In addition, the Year 2000 Problem may adversely affect the
markets and the issuers of securities in which the Portfolios may invest which,
in turn, may adversely affect the net asset values of the Portfolios. 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 Portfolios'
investments may be adversely affected. The statements above are subject to the
Year 2000 Information and Readiness Disclosure Act which Act may limit the legal
rights regarding the use of such statements in the case of a dispute.

INVESTMENT ADVISORY

SERVICES

THE INVESTMENT ADVISER

Van Kampen Asset Management Inc. is the investment adviser for each of the
Portfolios (the "Adviser"). The Adviser is a wholly owned subsidiary of Van
Kampen Investments Inc. ("Van Kampen Investments"). Van Kampen Investments is a
diversified asset management company with more than two million retail investor
accounts, extensive capabilities for managing institutional portfolios, and more
than $75 billion under management or supervision. Van Kampen Investments' more
than 50 open-end and 39 closed-end funds and more than 2,500 unit investment
trusts are professionally distributed by leading financial advisers nationwide.
Van Kampen Funds Inc., the distributor of the Portfolios (the "Distributor") and
the sponsor of the funds mentioned above, is also a wholly owned subsidiary of
Van Kampen Investments. Van Kampen Investments is an indirect wholly owned
subsidiary of Morgan Stanley Dean Witter & Co. The Adviser's principal office is
located at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace, Illinois 60181-5555.

ADVISORY AGREEMENTS

Each Portfolio retains the Adviser to manage the investment of its assets and to
place orders for the purchase and sale of its portfolio securities. Under an
investment advisory agreement (the "Combined Advisory Agreement") between the
Adviser and the Trust, on behalf of the Asset Allocation Portfolio, the Domestic
Income Portfolio, the Enterprise Portfolio, the Government Portfolio and the
Money Market Portfolio (the "Combined Portfolios") and under other advisory
agreements between the Adviser and the Trust on behalf of each remaining
Portfolio, the Trust pays the Adviser a monthly fee computed based upon an
annual rate applied to average daily net assets of the Portfolios as follows:

<TABLE>
<S> <C>
- -----------------------------------------

Asset Allocation Portfolio*, Domestic
Income Portfolio*, Enterprise Portfolio,
Government Portfolio* and Money Market
Portfolio* (based upon their combined
average daily net assets)

First $500 million........... 0.50%

Next $500 million............ 0.45%

Over $1 billion.............. 0.40%

(The resulting fee is prorated to
each of these Portfolios based upon
their respective average daily net
assets.)

*Not offered pursuant to this prospectus.
</TABLE>

18
<PAGE> 19
<TABLE>
<S> <C>

Emerging Growth Portfolio......... 0.70%
Strategic Stock Portfolio
First $500 million........... 0.50%
Over $500 million............ 0.45%
</TABLE>

After voluntary fee waivers applicable to certain Portfolios, each Portfolio
paid the Adviser an advisory fee for the fiscal year ended December 31, 1998 at
the effective rate applied to the Portfolio's average daily net assets as
follows:

<TABLE>
<S> <C>
- -----------------------------------------

Emerging Growth Portfolio......... 0.32%

Enterprise Portfolio.............. 0.46%

Strategic Stock Portfolio......... 0.00%
</TABLE>

Under each advisory agreement, the Portfolio 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. Other operating
expenses paid by the Portfolio include service fees, distribution fees,
custodial fees, legal and independent accountant fees, the costs of reports and
proxies to shareholders, trustees' fees (other than those who are affiliated
persons of the Adviser, Distributor or Van Kampen Investments) and all other
business expenses not specifically assumed by the Adviser.

The Adviser may utilize at is own expense credit analysis, research and trading
support services provided by its affiliate, Van Kampen Investment Advisory Corp.
("Advisory Corp.").

PERSONAL INVESTMENT POLICIES

The Trust, the Adviser and the Subadviser have adopted Codes of Ethics designed
to recognize the fiduciary relationship among the Trust, the Adviser and the
Subadviser and their employees. The Codes permit directors, trustees, officers
and employees to buy and sell securities for their personal accounts subject to
certain restrictions. Persons with access to certain sensitive information are
subject to preclearance and other procedures designed to prevent conflicts of
interest.

PORTFOLIO MANAGEMENT

The Portfolios have different portfolio managers and each portfolio manager is
an employee of the Adviser.

The Emerging Growth Portfolio is managed by a management team headed by Gary M.
Lewis, Senior Portfolio Manager. Mr. Lewis has been primarily responsible for
managing the Portfolio since its inception. Mr. Lewis has been Senior Vice
President of the Adviser since October 1995 and Advisory Corp. since June 1995.
Prior to October 1995, Mr. Lewis was Vice President and Portfolio Manager of the
Adviser. Portfolio Managers Dudley Brickhouse, David Walker and Janet Luby are
responsible as co-managers for the day-to-day management of the Portfolio. Mr.
Brickhouse has been a Portfolio Manager and Vice President of the Adviser and
Advisory Corp. since January 1999 and an Associate Portfolio Manager of the
Adviser since September 1997. Prior to September 1997, Mr. Brickhouse was with
NationsBank Investment Management. Mr. Brickhouse has been affiliated with the
Portfolio since September 1997. Mr. Walker has been a Portfolio Manager and Vice
President of the Adviser and Advisory Corp. since January 1999 and an Assistant
Vice President of the Adviser since June 1995. Prior to June 1995 Mr. Walker was
a Quantitative Analyst of the Adviser. Mr. Walker has been affiliated with the
Portfolio since May 1996. Ms. Luby, has been Portfolio Manager and Vice
President of the Adviser and Advisory Corp. since January 1999 and an Assistant
Vice President of the Adviser since December 1997. Prior to January 1997, Ms.
Luby was an Associate Portfolio Manager of the Adviser. Prior to July 1995, Ms.
Luby was with AIM Capital Management, Inc. Ms. Luby has been affiliated with the
Portfolio since May 1995.

The Enterprise Portfolio is managed by a management team headed by Jeff New,
Senior Portfolio Manager. Mr. New has been affiliated with the Portfolio since
1991, has assisted in co-managing the Portfolio since July 1994 and has been the
Senior Portfolio Manager of the Portfolio since December 1994. Mr. New has been
a Senior Vice President and Senior Portfolio Manager of the Adviser since
December 1997. Prior to December 1997, Mr. New was a Vice President and
Portfolio Manager of the Adviser. Prior to December 1994, he was an Associate
Portfolio Manager of the Adviser. He joined the Adviser in 1990. Portfolio
Managers Michael Davis and Mary Jayne Maly are responsible for the day-to-day
management of the Portfolio. Mr. Davis has been a Vice President and Portfolio

19
<PAGE> 20

Manager of the Adviser since March 1998. Prior to March 1998 he was the owner of
Davis Equity Research, a stock research company. Mr. Davis has been an
investment professional since 1983. Mr. Davis has been affiliated with the
Portfolio since March 1998. Ms. Maly has been a Vice President and Portfolio
Manager of the Adviser since July 1998. From July 1997 to June 1998, she was a
Vice President at the Subadviser and assisted in the management of the Morgan
Stanley Institutional Real Estate Funds and the Van Kampen Real Estate
Securities Fund. Prior to July 1997, she was a Vice President and Portfolio
Manager of the Adviser. Prior to November 1992, she was a Vice President and
Senior Equity Analyst at Texas Commerce Investment Management Company. Ms. Maly
has been affiliated with the Portfolio since July 1998.

The Strategic Stock Portfolio is managed by a management headed by John Cunniff,
Senior Portfolio Manager. Mr. Cunniff has had responsibility for the Portfolio
since its inception. Mr. Cunniff has been a Vice President and Director of
Equity Research with the Adviser since October 1995. Prior to October 1995, Mr.
Cunniff was a portfolio manager with Templeton Quantitative Advisors, a
subsidiary of the Franklin Group. Raj Wagle, Portfolio Manager, has been
affiliated with the Portfolio since April 1999. Mr. Wagle has been a Portfolio
Manager of the Adviser since April 1999 and Quantitative Equity Analyst since
February 1998. Prior to November 1997, he was an Equity Analyst with Aeltus
Investment Management. Prior to December 1995, he was an Equity Analyst with
Oppenheimer & Company.

PURCHASE OF SHARES

The Trust is offering its shares only to Accounts of various insurance companies
to fund the benefits of variable annuity or variable life insurance contracts.
The Trust does not foresee any disadvantage to holders of Contracts arising out
of the fact that the interests of the holders may differ from the interests of
holders of life insurance policies and that holders of one insurance policy may
differ from holders of other insurance policies. Nevertheless, the Trust's
Trustees intend to monitor events in order to identify any material
irreconcilable conflicts which may possibly arise and to determine what action,
if any, should be taken. The Contracts are described in the separate
prospectuses issued by participating insurance companies and accompanying this
Trust's prospectus.

The Trust continuously offers shares in each of the Portfolios to the Accounts
at prices equal to the respective per share net asset value of the Portfolio.
The Distributor, located at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace,
Illinois 60181-5555, acts as the distributor of the shares. Each of the Trust
and the Distributor reserves the right to refuse any order for the purchase of
shares. Net asset value is determined in the manner set forth below under
"Determination of Net Asset Value."

DETERMINATION OF NET ASSET VALUE

Net asset value per share is computed for each Portfolio as of the close of
trading (currently 4:00 p.m., New York time) each day the New York Stock
Exchange (the "Exchange") is open. See the accompanying prospectus for the
policies for information regarding holidays observed by the insurance company.
Net asset value of each Portfolio is determined by adding the total market value
of all portfolio securities held by the Portfolio, cash and other assets,
including accrued interest. All liabilities, including accrued expenses, of the
Portfolio are subtracted. The resulting amount is divided by the total number of
outstanding shares of the Portfolio to arrive at the net asset value of each
share. See "Determination of Net Asset Value" in the Statement of Additional
Information for further information.

Securities listed or traded on a national securities exchange are valued at the
last sale price. Unlisted securities and listed securities for which the last
sales price is not available are valued at the mean between the last reported
bid and asked prices. U.S. government and agency obligations are valued at the
mean between the last reported bid and asked prices. Listed options are valued
at the last reported sale price on the exchange on which such option is traded
or, if no sales are reported, at the mean between the last reported bid and
asked prices. Private placement securities are valued at the last reported bid
price. Securities for which market quotations are not readily available and
other assets are valued at a fair value in good faith by the Adviser in
accordance with procedures established by the Portfolio's Board of Trustees.
Short-term investments for all Portfolios are valued as described in the notes
to financial statements in the Statement of Additional Information.

Trading in securities on many foreign securities exchanges (including European
and Far Eastern securities exchange) and over-the-counter markets is normally
completed before the close of business on

20
<PAGE> 21

each business day in New York (i.e., a day on which the Exchange is open). In
addition, securities trading in a particular country or countries may not take
place on all business days for the Exchange or may take place on days which are
not business days for the Exchange. Changes in valuations on certain securities
may occur at times or on days on which a Portfolio's net asset value is not
calculated and on which a Portfolio does not effect sales, redemptions and
exchanges of its shares. The Portfolio calculates net asset value per share, and
therefore effects sales, redemptions and exchanges of its shares, as of the
close of trading on the Exchange each day the Exchange is open for trading. Such
calculation does not take place contemporaneously with the determination of the
prices of certain foreign portfolio securities used in such calculation. If
events materially affecting the value of such securities occur between the time
when their price is determined and the time when a Portfolio's net asset value
is calculated, such securities may be valued at fair value as determined in good
faith by the Adviser based in accordance with procedures established by the
Trustees.

REDEMPTION OF SHARES

Payment for shares tendered for redemption by the insurance company is made
ordinarily in cash within seven days after tender in proper form, except under
unusual circumstances as determined by the SEC. The redemption price will be the
net asset value next determined after the receipt of a request in proper form.
The market values of the securities in each Portfolio are subject to daily
fluctuations and the net asset value per share of each Portfolio's shares will
fluctuate accordingly. Therefore, the redemption value may be more or less than
the investor's cost.

DIVIDENDS,

DISTRIBUTIONS

AND TAXES

All dividends and capital gains distributions of each Portfolio are
automatically reinvested by the Account in additional shares of such Portfolio.

DIVIDENDS AND DISTRIBUTIONS. Dividends from stocks and interest earned from
other investments are the main source of income for these Portfolios.
Substantially all of this income, less expenses, is distributed to Accounts on
an annual basis. When a Portfolio sells portfolio securities, it may realize
capital gains or losses, depending on whether the prices of the securities sold
are higher or lower than the prices the Portfolio paid to purchase them. Net
capital gains represent the excess of net long term capital gains over net
short-term capital losses and any losses carried forward from prior years. Each
of these Portfolios distributes any net capital gains to Accounts no less
frequently than annually.

TAX STATUS OF THE PORTFOLIOS. Each Portfolio has elected to be taxed as a
"regulated investment company" under the Code. By maintaining its qualification
as a "regulated investment company," a Portfolio is not subject to federal
income taxes to the extent it distributes its net investment income and net
capital gains. If for any taxable year a Portfolio does not qualify for the
special tax treatment afforded regulated investment companies, all of its
taxable income, including any net capital gains, would be subject to tax at
regular corporate rates (without any deduction for distributions to
shareholders).

TAX TREATMENT TO INSURANCE COMPANY AS SHAREHOLDER. The investments of the
Accounts in the Portfolios are subject to the diversification requirements of
Section 817(h) of the Code, which must be met at the end of each quarter of the
year (or within 30 days thereafter). Regulations issued by the Secretary of the
Treasury have the effect of requiring the Accounts to invest no more than 55% of
their total assets in securities of any one issuer, no more than 70% in the
securities of any two issuers, no more than 80% in the securities of any three
issuers, and no more than 90% in the securities of any four issuers. For this
purpose, the U.S. Treasury and each U.S. Government agency and instrumentality
is considered to be a separate issuer. In the event the investments of the
Accounts in the Portfolios are not properly diversified under Code Section
817(h), then the policies funded by shares of the Portfolios will not be treated
as life insurance for federal income tax purposes and the owners of the policies
will be subject to taxation on their respective shares of the dividends and
distributions paid by the relevant Portfolios.

Dividends paid by each Portfolio from its ordinary income and distributions of
each Portfolio's net short-term capital gains are includable in the insurance
company's gross income. The tax treatment of such dividends and distributions
depends on

21
<PAGE> 22

the insurance company's tax status. To the extent that income of a Portfolio
represents dividends on equity securities rather than interest income, its
distributions are eligible for the 70% dividends received deduction applicable
in the case of a life insurance company as provided in the Code. The Trust will
send to the Accounts a written notice required by the Code designating the
amount and character of any distributions made during such year.

Under the Code, any distributions designated as being made from a Portfolio's
net capital gains are taxable to the insurance company as long-term capital
gains. Such distributions of net capital gains will be designated as capital
gain dividends in a written notice to the Accounts which accompanies the
distribution payments. Capital gain dividends are not eligible for the dividends
received deduction. Ordinary income dividends and capital gain dividends to the
insurance company may also be subject to state and local taxes.

As described in the accompanying prospectus for the Contracts, the insurance
company reserves the right to assess the Account a charge for any taxes paid by
it.

CERTAIN INVESTMENT PRACTICES OF PORTFOLIOS. Certain investment practices of a
Portfolio may be subject to special provisions of the Code that, among other
things, may defer the use of certain losses of the Portfolio and affect the
holding period of the securities held by the Portfolio and the character of the
gains or losses realized by the Portfolio. These provisions may also require the
Portfolio to recognize income or gain without receiving cash with which to make
distributions in the amounts necessary to maintain the Portfolio's qualification
as a regulated investment company and avoid income and excise taxes. Each
Portfolio will monitor its transactions and may make certain tax elections in
order to mitigate the effect of these rules and prevent disqualification of the
Portfolio as a regulated investment company.

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<PAGE> 23

FINANCIAL HIGHLIGHTS

The financial highlights tables are intended to help you understand each
Portfolio's financial performance for the periods shown. Certain information
reflects financial results for a single share of a Portfolio. The total returns
in the table represent the rate that an investor would have earned (or lost) on
an investment in a Portfolio (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
independent accountants, whose reports, along with each Portfolio's financial
statements, are included in the Statement of Additional Information and may be
obtained by shareholders without charge by calling the telephone number on the
back cover of this prospectus. This information should be read in conjunction
with the financial statements and notes thereto included in the Statement of
Additional Information.

<TABLE>
<CAPTION>
July 3, 1995
(Commencement of
Year Ended December 31, Investment Operations) to
Emerging Growth Portfolio 1998 1997 1996 December 31, 1995
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period...... $16.450 $13.660 $ 11.72 $10.00
------- ------- ------- ------

Net Investment Loss......................... (.014) (.007) (.016) (.08)
Net Realized and Unrealized Gain............ 6.186 2.797 1.956 1.80
------- ------- ------- ------

Total from Investment Operations.............. 6.172 2.790 1.940 1.72
Less Distributions in Excess of Net
Investment Income........................ .007 -0- -0- -0-
------- ------- ------- ------

Net Asset Value, End of the Period............ $22.615 $16.450 $13.660 $11.72
======= ======= ======= ======

Total Return*................................. 37.56% 20.42% 16.55% 17.20%**
Net Assets at End of the Period (In
millions)................................... $ 33.4 $ 10.5 $ 5.2 $ 2.3
Ratio of Expenses to Average Net Assets*...... .85% .85% .85% 2.50%
Ratio of Net Investment Loss to Average Net
Assets*..................................... (.23%) (.11%) (.17%) (1.45%)
Portfolio Turnover............................ 91% 116% 102% 41%**

*If certain expenses had not been assumed by
the Adviser, Total Return would have been
lower and the ratios would have been as
follows:
Ratio of Expenses to Average Net Assets....... 1.23% 2.14% 3.28% 5.40%
Ratio of Net Investment Loss to Average Net
Assets...................................... (.61%) (1.40%) (2.60%) (4.35%)
</TABLE>

** Non-Annualized

23
<PAGE> 24

<TABLE>
<CAPTION>
Year Ended December 31,
ENTERPRISE PORTFOLIO 1998 1997 1996 1995 1994
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period...... $18.106 $16.262 $ 14.69 $ 12.39 $ 14.57
------- ------- ------- ------- --------

Net Investment Income....................... .069 .091 .113 .32 .25
Net Realized and Unrealized Gain/Loss....... 4.441 4.734 3.417 4.22 (.7625)
------- ------- ------- ------- --------

Total from Investment Operations.............. 4.510 4.825 3.530 4.54 (.5125)
------- ------- ------- ------- --------

Less:

Distributions from Net Investment Income.... .017 .096 .109 .3175 .25

Distributions from Net Realized Gain........ .209 2.885 1.849 1.9225 1.4175
------- ------- ------- ------- --------

Total Distributions........................... .226 2.981 1.958 2.24 1.6675
------- ------- ------- ------- --------

Net Asset Value, End of the Period............ $22.390 $18.106 $16.262 $ 14.69 $ 12.39
======= ======= ======= ======= ========

Total Return*................................. 25.00% 30.66% 24.80% 36.98% (3.39%)
Net Assets at End of the Period (In
millions)................................... $ 123.6 $ 98.7 $ 84.8 $ 76.0 $ 67.5
Ratio of Expenses to Average Net Assets*...... .60% .60% .60% .60% .60%
Ratio of Net Investment Income to Average Net
Assets*..................................... .35% .47% .68% 2.06% 1.72%

Portfolio Turnover............................ 82% 82% 152% 145% 153%

*If certain expenses had not been assumed by
the Adviser, Total Return would have been
lower and the ratios would have been as
follows:
Ratio of Expense to Average Net Assets........ 64% .66% .75% .68% .68%
Ratio of Net Investment Income to Average Net
Assets...................................... .31% .41% .53% 1.98% 1.64%
</TABLE>

<TABLE>
<CAPTION>
November 3, 1997
Year Ended (Commencement of
December 31, Investment Operations) to
Strategic Stock Portfolio 1998 December 31, 1997
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net Asset Value, Beginning of the Period...... $10.245 $10.000
------- -------

Net Investment Income....................... .113 .027
Net Realized and Unrealized Gain............ 1.586 .218
------- -------

Total from Investment Operations.............. 1.699 .245

Less Distributions from Net Investment
Income...................................... .012 -0-
------- -------

Net Asset Value, End of the Period............ $11.932 $10.245
======= =======

Total Return*................................. 16.51% 2.45%**
Net Assets at End of the Period (In
millions)................................... $ 21.4 $ 2.5
Ratio of Expenses to Average Net Assets*...... .65% .61%
Ratio of Net Investment Income to Average Net
Assets*..................................... 2.01% 2.67%
Portfolio Turnover............................ 10% 0%**

*If certain expenses had not been assumed by
the Adviser, Total Return would have been
lower and the ratios would have been as
follows:
Ratio of Expenses to Average Net Assets....... 1.25% 2.59%
Ratio of Net Investment Income to Average Net
Assets...................................... 1.41% .68%
</TABLE>

** Non-Annualized

24
<PAGE> 25

APPENDIX --
DESCRIPTION OF
SECURITIES RATINGS

STANDARD & POOR'S -- A brief description of the applicable Standard & Poor's
(S&P) rating symbols and their meanings (as published by S&P) follow:

A S&P corporate or municipal debt rating is a current assessment of the
creditworthiness of an obligor with respect to a specific obligation. This
assessment may take into consideration obligors such as guarantors, insurers, or
lessees.

The debt rating is not a recommendation to purchase, sell, or hold a security,
inasmuch as it does not comment as to market price or suitability for a
particular investor.

The ratings are based on current information furnished by the issuer or obtained
by S&P from other sources it considers reliable. S&P does not perform an audit
in connection with any rating and may, on occasion, rely on unaudited financial
information. The ratings may be changed, suspended, or withdrawn as a result of
changes in, or unavailability of, such information, or based on other
circumstances.

The ratings are based, in varying degrees, on the following considerations:

1. Likelihood of payment -- capacity and willingness of the obligor to meet its
financial commitment on an obligation in accordance with the terms of the
obligation:

2. Nature of and provisions of the obligation:

3. Protection afforded by, and relative position of, the obligation in the event
of bankruptcy, reorganization, or other arrangement under the laws of
bankruptcy and other laws affecting creditor's rights.

1. LONG-TERM DEBT -- INVESTMENT GRADE

AAA: Debt rated "AAA" has the highest rating assigned by S&P. Capacity to meet
its financial commitment on the obligation is extremely strong.

AA: Debt rated "AA" differs from the highest rated issues only in small degree.
Capacity to meet its financial commitment on the obligation is very strong.

A: Debt rated "A" is somewhat more susceptible to the adverse effects of changes
in circumstances and economic conditions than obligations in higher rated
categories. Capacity to meet its financial commitment on the obligation is still
strong.

BBB: Debt rated "BBB" exhibits adequate protection parameters. However, adverse
economic conditions or changing circumstances are more likely to lead to a
weakened capacity to meet its financial commitment on the obligation.

SPECULATIVE GRADE

BB, B, CCC, CC, C: Debts rated "BB", "B", "CCC", "CC" and "C" are regarded as
having significant speculative characteristics. "BB" indicates the least degree
of speculation and "C" the highest. While such obligations will likely have some
quality and protective characteristics, these may be outweighed by large
uncertainties or major exposures to adverse conditions.

BB: Debt rated "BB" is less vulnerable to nonpayment than other speculative
issues. However, it faces major ongoing uncertainties or exposure to adverse
business, financial, or economic conditions which could lead to the obligor's
inadequate capacity to meet its financial commitment on the obligation.

B: Debt rated "B" is more vulnerable to nonpayment than obligations rated "BB",
but the obligor currently has the capacity to meet its financial commitment on
the obligation. Adverse business, financial, or economic conditions will likely
impair the obligor's capacity or willingness to meet its financial commitment on
the obligation.

CCC: Debt rated "CCC" is currently vulnerable to nonpayment, and is dependent
upon favorable business, financial, and economic conditions for the obligor to
meet its financial commitment on the obligation. In the event of adverse
business, financial, or economic conditions, the obligor is not likely to have
the capacity to meet its financial commitment on the obligation.

CC: Debt rated "CC" is currently highly vulnerable to nonpayment.

A-1
<PAGE> 26

C: The "C" rating may be used to cover a situation where a bankruptcy petition
has been filed or similar action has been taken, but payments on this obligation
are being continued.

D: Debt rated "D" is in payment default. The "D" rating category is used when
payments on an obligation are not made on the date due even if the applicable
grace period has not expired, unless S&P believes that such payments will be
made during such grace period. The "D" rating also will be used upon the filing
of a bankruptcy petition or the taking of a similar action if payments on an
obligation are jeopardized.

PLUS (+) OR MINUS (-): The ratings from "AA" to "CCC" may be modified by the
addition of a plus or minus sign to show relative standing within the major
rating categories.

r: This symbol is attached to the ratings of instruments with significant
noncredit risks. It highlights risks to principal or volatility of expected
returns which are not addressed in the credit rating. Examples include:
obligations linked or indexed to equities, currencies, or commodities;
obligations exposed to severe prepayment risk -- such as interest-only or
principal-only mortgage securities; and obligations with unusually risky
interest terms, such as inverse floaters.

DEBT OBLIGATIONS OF ISSUERS OUTSIDE THE UNITED STATES AND ITS TERRITORIES are
rated on the same basis as domestic corporate and municipal issues. The ratings
measure the creditworthiness of the obligor but do not take into account
currency exchange and related uncertainties.

BOND INVESTMENT QUALITY STANDARDS: Under present commercial bank regulations
issued by the Comptroller of the Currency, bonds rated in the top four
categories ("AAA", "AA", "A", "BBB", commonly known as "investment grade"
ratings) are generally regarded as eligible for bank investment. In addition,
the laws of various states governing legal investments impose certain ratings or
other standards for obligations eligible for investment by savings banks, trust
companies, insurance companies and fiduciaries generally.

2. COMMERCIAL PAPER

A S&P commercial paper rating is a current assessment of the likelihood of
timely payment of debt considered short-term in the relevant market.

Ratings are graded into several categories, ranging from "A-1" for the highest
quality obligations to "D" for the lowest. These categories are as follows:

A-1: The highest category indicates that the degree of safety regarding timely
payment is strong. Those issues determined to possess extremely strong safety
characteristics are denoted with a plus sign (+) designation.

A-2: Capacity for timely payment on issues with this designation is
satisfactory. However, the relative degree of safety is not as high as for
issues designated "A-1".

A-3: Issues carrying this designation have adequate capacity for timely payment.
They are, however, more vulnerable to the adverse effects of changes in
circumstances than obligations carrying the higher designations.

B: Issues rated "B" are regarded as having significant speculative
characteristics. The obligor currently has the capacity to meet its financial
commitment on the obligation; however, it faces major ongoing uncertainties
which could lead to the obligor's inadequate capacity to meet its financial
commitment on the obligation.

C: This rating is assigned to short-term debt obligations currently vulnerable
to nonpayment and is dependent upon favorable business, financial, and economic
conditions for the obligor to meet its financial commitment on the obligation.

D: Debt rated "D" is in payment default. The "D" rating category is used when
interest payments or principal payments are not made on the date due, even if
the applicable grace period has not expired, unless S&P believes that such
payments will be made during such grace period. The "D" rating also will be used
upon the filing of a bankruptcy petition or the taking of a similar action if
payments on an obligation are jeopardized.

A commercial paper rating is not a recommendation to purchase, sell or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained from other sources it considers reliable. S&P does
not perform an audit in connection with any rating and may, on occasion, rely on
unaudited financial information. The ratings may be changed, suspended or

A-2
<PAGE> 27

withdrawn as a result of changes in, or unavailability of, such information, or
based on other circumstances.

3. PREFERRED STOCK

A S&P preferred stock rating is an assessment of the capacity and willingness of
an issuer to pay preferred stock dividends and any applicable sinking fund
obligations. A preferred stock rating differs from a bond rating inasmuch as it
is assigned to an equity issue, which issue is intrinsically different from, and
subordinated to, a debt issue. Therefore, to reflect this difference, the
preferred stock rating symbol will normally not be higher than the bond rating
symbol assigned to, or that would be assigned to, the senior debt of the same
issuer.

The preferred stock ratings are based on the following considerations:

i. Likelihood of payment-capacity and willingness of the issuer to meet the
timely payment of preferred stock dividends and any applicable sinking fund
requirements in accordance with the terms of the obligation.

ii. Nature of, and provisions of, the issuer.

iii. Relative position of the issue in the event of bankruptcy, reorganization,
or other arrangements under the laws of bankruptcy and other laws affecting
creditors' rights.

AAA: This is the highest rating that may be assigned by S&P to a preferred stock
issue and indicates an extremely strong capacity to pay the preferred stock
obligations.

AA: A preferred stock issue rated "AA" also qualifies as a high-quality, fixed
income security. The capacity to pay preferred stock obligations is very strong,
although not as overwhelming as for issues rated "AAA".

A: An issue rated "A" is backed by a sound capacity to pay the preferred stock
obligations, although it is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions.

BBB: An issue rated "BBB" is regarded as backed by an adequate capacity to pay
the preferred stock obligations. Whereas it normally exhibits adequate
protection parameters, adverse economic conditions or changing circumstances are
more likely to lead to a weakened capacity to make payments for a preferred
stock in this category than for issues in the "A" category.

BB, B and CCC: Preferred stock rated "B", "B", and "CCC" are regarded, on
balance, as predominantly speculative with respect to the issuer's capacity to
pay preferred stock obligations.

"BB" indicates the lowest degree of speculation and "CCC" the highest. While
such issues will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions.

CC: The rating "CC" is reserved for a preferred stock issue in arrears on
dividends or sinking fund payments, but that is currently paying.

C: A preferred stock rated "C" is a nonpaying issue.

D: A preferred stock rated "D" is a nonpaying issue with the issuer in default
on debt instruments.

NR: This indicates that no rating has been requested, that there is insufficient
information on which to base a rating, or that S&P does not rate a particular
type of obligation as a matter of policy. PLUS (+) or MINUS (-): To provide more
detailed indications of preferred stock quality, ratings from "AA" to "CCC" may
be modified by the addition of a plus or minus sign to show relative standing
within the major rating categories.

A preferred stock rating is not a recommendation to purchase, sell, or hold a
security inasmuch as it does not comment as to market price or suitability for a
particular investor. The ratings are based on current information furnished to
S&P by the issuer or obtained by S&P from other sources it considers reliable.
S&P does not perform an audit in connection with any rating and may, on
occasion, rely on unaudited financial information. The ratings may be changed,
suspended, or withdrawn as a result of changes in, or unavailability of, such
information, or based on other circumstances.

MOODY'S INVESTORS SERVICE -- a brief description of the applicable Moody's
Investors Service (Moody's) rating symbols and their meanings (as published by
Moody's Investor Service) follows:

1. LONG-TERM DEBT

Aaa: Bonds which are rated Aaa are judged to be of the best quality. They carry
the smallest degree of investment risk and are generally referred to as "gilt
edged." Interest payments are protected by a large or

A-3
<PAGE> 28

by an exceptionally stable margin and principal is secure. While the various
protective elements are likely to change, such changes as can be visualized are
most unlikely to impair the fundamentally strong position of such issues.

Aa: Bonds which are rated Aa are judged to be of high quality by all standards.
Together with the Aaa group they comprise what are generally known as high grade
bonds. They are rated lower than the best bonds because margins of protection
may not be as large as in Aaa securities or fluctuation of protective elements
may be of greater amplitude or there may be other elements present which make
the long- term risks appear somewhat larger than the Aaa securities.

A: Bonds which are rated a possess many favorable investment attributes and are
to be considered as upper-medium-grade obligations. Factors giving security to
principal and interest are considered adequate, but elements may be present
which suggest a susceptibility to impairment some time in the future.

Baa: Bonds which are rated Baa are considered as medium-grade obligations,
(i.e., they are neither highly protected nor poorly secured). Interest payment
and principal security appear adequate for the present but certain protective
elements may be lacking or may be characteristically unreliable over any great
length of time. Such bonds lack outstanding investment characteristics and in
fact have speculative characteristics as well.

Ba: Bonds which are rated Ba are judged to have speculative elements; their
future cannot be considered as well-assured. Often the protection of interest
and principal payments may be very moderate, and thereby not well safeguarded
during both good and bad times over the future. Uncertainty of position
characterizes bonds in this class.

B: Bonds which are rated B generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small.

Caa: Bonds which are rated Caa are of poor standing. Such issues may be in
default or there may be present elements of danger with respect to principal or
interest.

Ca: Bonds which are rated Ca represent obligations which are speculative in a
high degree. Such issues are often in default or have other marked shortcomings.

C: Bonds which are rated C are the lowest rated class of bonds, and issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Note: Moody's applies numerical modifiers 1, 2, and 3 in each generic rating
classification from Aa to B. The modifier 1 indicates that the issue ranks in
the higher end of its generic rating category; the modifier 2 indicates a
mid-range ranking; and the modifier 3 indicates that the issue ranks in the
lower end of its generic rating category.

ABSENCE OF RATING: Where no rating has been assigned or where a rating has been
suspended or withdrawn, it may be for reasons unrelated to the quality of the
issue.

Should no rating be assigned, the reason may be one of the following:

1. An application for rating was not received or accepted.

2. The issue or issuer belongs to a group of securities that are not rated as a
matter of policy.

3. There is a lack of essential data pertaining to the issue or issuer.

4. The issue was privately placed, in which case the rating is not published in
Moody's publications.

Suspension or withdrawal may occur if new and material circumstances arise, the
effects of which preclude satisfactory analysis; if there is no longer available
reasonable up-to-date data to permit a judgment to be formed; if a bond is
called for redemption; or for other reasons.

2. SHORT-TERM DEBT

Moody's short-term debt ratings are opinions of the ability of issuers to repay
punctually senior debt obligations. These obligations have an original maturity
not exceeding one year unless explicitly noted.

Moody's employs the following three designations, all judged to be investment
grade, to indicate the relative repayment ability of rated issues:

Issuers rated Prime-1 (or supporting institutions) have a superior ability for
repayment of senior short-term debt obligations. Prime-1 repayment ability will
often be evidenced by many of the following characteristics:

- -- Leading market positions in well-established industries.

A-4
<PAGE> 29

- -- High rates of return on funds employed.

- -- Conservative capitalization structure with moderate reliance on debt and
ample asset protection.

- -- Broad margins is earnings coverage of fixed financial charges and high
internal cash generation.

- -- Well-established access to a range of financial markets and assured sources
of alternate liquidity.

Issuers rated Prime-2 (or supporting institutions) have a strong ability for
repayment of senior short-term debt obligations. This will normally be evidenced
by many of the characteristics cited above but to a lesser degree. Earnings
trends and coverage ratios, while sound, may be more subject to variation.
Capitalization characteristics, while still appropriate, may be more affected by
external conditions. Ample alternate liquidity is maintained.

Issuers rated Prime-3 (or supporting institutions) have an acceptable ability
for repayment of senior short-term obligations. The effect of industry
characteristics and market compositions may be more pronounced. Variability in
earnings and profitability may result in changes of the level of debt protection
measurements and may require relatively high financial leverage. Adequate
alternate liquidity is maintained.

Issuers rated Not Prime do not fall within any of the Prime rating categories.

3. PREFERRED STOCK

Preferred stock rating symbols and their definitions are as follows:

AAA: As issue which is rated "AAA" is considered to be a top-quality preferred
stock. This rating indicates good asset protection and the least risk of
dividend impairment within the universe of preferred stocks.

AA: An issue which is rated "AA" is considered a high-grade preferred stock.
This rating indicates that there is a reasonable assurance the earnings and
asset protection will remain relatively well maintained in the foreseeable
future.

A: An issue which is rated "A" is considered to be an upper-medium-grade
preferred stock. While risks are judged to be somewhat greater than in the "AAA"
and "AA" classifications, earnings and asset protections are, nevertheless,
expected to be maintained at adequate levels.

BAA: An issue which is rated "BAA" is considered to be a medium-grade preferred
stock, neither highly protected nor poorly secured. Earnings and asset
protection appear adequate at present but may be questionable over any great
length of time.

BA: An issue which is rated "BA" is considered to have speculative elements and
its future cannot be considered well assured. Earnings and asset protection may
be very moderate and not well safeguarded during adverse periods. Uncertainty of
position characterizes preferred stocks in this class.

B: An issue which is rated "B" generally lacks the characteristics of a
desirable investment. Assurance of dividend payments and maintenance of other
terms of the issue over any long period of time may be small.

CAA: An issue which is rated "CAA" is likely to be in arrears on dividend
payments. This rating designation does not purport to indicate the future status
of payments.

CA: An issue which is rated "CA" is speculative in a high degree and is likely
to be in arrears on dividends with little likelihood of eventual payment.

C: This is the lowest rated class of preferred or preference stock. Issues so
rated can be regarded as having extremely poor prospects of ever attaining any
real investment standing.

Moody's applies numerical modifiers 1, 2 and 3 in each rating classification.
The modifier 1 indicates that the security ranks in the higher end of its
generic rating category, the modifier 2 indicates a mid-range ranking, and the
modifier 3 indicates that the issue ranks in the lower end of its generic rating
category.

A-5
<PAGE> 30

FOR MORE INFORMATION

EXISTING SHAREHOLDERS OR PROSPECTIVE INVESTORS
Call your broker or (800) 341-2911
7:00 a.m. to 7:00 p.m. Central time Monday through Friday

DEALERS
For dealer information, selling agreements, wire orders, or redemptions, call
the Distributor at (800) 421-5666

TELECOMMUNICATIONS DEVICE FOR THE DEAF
For shareholder and dealer inquiries through Telecommunications Device for the
Deaf (TDD), call (800) 421-2833

FUND INFO(R)
For automated telephone services, call (800) 847-2424

WEB SITE
www.vankampen.com

VAN KAMPEN LIFE INVESTMENT TRUST
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Investment Adviser

VAN KAMPEN ASSET MANAGEMENT INC.
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Distributor

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Transfer Agent

VAN KAMPEN INVESTOR SERVICES INC.
PO Box 418256
Kansas City, MO 64141-9256
Attn: Van Kampen Life Investment Trust

Custodian

STATE STREET BANK AND TRUST COMPANY
225 West Franklin Street, PO Box 1713
Boston, MA 02105-1713
Attn: Van Kampen Life Investment Trust

Legal Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, IL 60606

Independent Accountants

PRICEWATERHOUSECOOPERS LLP
200 East Randolph Drive
Chicago, IL 60601
<PAGE> 31

VAN KAMPEN
LIFE INVESTMENT TRUST

PROSPECTUS

APRIL 30, 1999

A Statement of Additional Information, which
contains more details about the Trust and its
Portfolios, is incorporated by reference in
its entirety into this prospectus.

You will find additional information about the
Portfolios in their annual and semiannual
reports, which explain the market conditions
and investment strategies affecting the
Portfolios' recent performance.

You can ask questions or obtain a free copy of
the Portfolios' reports or the Statement of
Additional Information by calling (800)
341-2911 from 7:00 a.m. to 7:00 p.m., Central
time, Monday through Friday.
Telecommunications Device for the Deaf users
may call (800) 421-2833. A free copy of the
Portfolios' reports can also be ordered from
our web site at www.vankampen.com.

Information about the Trust and its
Portfolios, including the reports and
Statement of Additional Information, has been
filed with the Securities and Exchange
Commission (SEC). It can be reviewed and
copied at the SEC Public Reference Room in
Washington, DC or online at the SEC's web site
(http://www.sec.gov). For more information,
please call the SEC at (800) SEC-0330. You can
also request these materials by writing the
Public Reference Section of the SEC,
Washington DC, 20549-6009, and paying a
duplication fee.

[VAN KAMPEN FUNDS LOGO]

Investment Company Act File No. 811-4424.

LIT
SEC FIRST 5/99