VAN KAMPEN AMERICAN CAPITAL
BALANCED FUND
Supplement dated September 5, 1996 to the Prospectus dated
September 1, 1995, as previously supplemented on October 12, 1995,
January 9, 1996, June 1, 1996 and July 1, 1996.
On July 25, 1996, the Trustees of the Van Kampen American Capital Balanced
Fund (the "Balanced Fund"), a series of the Van Kampen American
Capital Equity Trust (the "Equity Trust"), approved an Agreement and
Plan of Reorganization between the Balanced Fund and the Van Kampen American
Capital Equity Income Fund (the "Equity Income Fund"), a fund advised
by Van Kampen American Capital Asset Management, Inc., providing for the
transfer of assets and liabilities of the Balanced Fund to the Equity Income
Fund in exchange for shares of beneficial interest of the Equity Income Fund
at its net asset value per share (the "Reorganization").
Van Kampen American Capital Asset Management, Inc. and Van Kampen American
Capital Investment Advisory Corp., the investment adviser to the Equity Trust,
are wholly owned subsidiaries of Van Kampen American Capital, Inc., which is a
wholly owned subsidiary of VK/AC Holding, Inc.
The Reorganization is subject to approval by the holders of a majority of
the outstanding shares of the Balanced Fund. Further details of the proposed
Reorganization will be contained in the proxy statement/prospectus expected to
be mailed to shareholders in 1996.
The Equity Income Fund's net assets as of July 31, 1996 were approximately
$949.5 million. Its objective is to provide investors with the highest
possible income consistent with safety of principal. An important secondary
investment objective is to provide investors with long-term growth of capital.
The investment objective of the Balanced Fund is to seek to provide investors
with current income, while seeking to provide investors with capital growth.
Each Fund seeks to achieve its respective investment objective(s) by investing
in a diversified portfolio of equity and debt securities. Under normal market
conditions, the Equity Income Fund invests at least 65% of its total assets in
incomeproducing equity securities, which for purposes of the Equity Income
Fund includes without limitation dividend paying common and preferred stocks,
interest-paying convertible debentures or bonds or zero coupon convertible
securities; while the Balanced Fund invests a minimum of at least 25% of its
total assets in equity securities, which for purposes of the Balanced Fund
includes common and preferred stocks but does not include convertible
securities.
The Balanced Fund will continue its normal operations prior to the
Reorganization.
