VAN KAMPEN EQUITY TRUST, 485BPOS, 2000-07-27

VAN KAMPEN EQUITY TRUST
485BPOS, 2000-07-27

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 27, 2000

REGISTRATION NOS. 33-8122
811-4805
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933 [X]
Post-Effective Amendment No. 38 [X]
and
REGISTRATION STATEMENT UNDER
THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 39 [X]
</TABLE>

VAN KAMPEN EQUITY TRUST

(Exact Name of Registrant as Specified in Declaration of Trust)

1 Parkview Plaza, PO Box 5555, Oakbrook Terrace, Illinois 60181-5555
(Address of Principal Executive Offices) (Zip Code)

(630) 684-6000
Registrant's Telephone Number, including Area Code

A. THOMAS SMITH III
Executive Vice President, General Counsel and Secretary
Van Kampen Investments Inc.
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, Illinois 60181-5555
(Name and Address of Agent for Service)

------------------------

Copies to:

WAYNE W. WHALEN, ESQ.
THOMAS A. HALE, ESQ.
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
(312) 407-0700
------------------------

Approximate Date of Proposed Public Offering: As soon as practicable
following effectiveness of this Registration Statement.

It is proposed that this filing will become effective:

[ ] immediately upon filing pursuant to paragraph (b)

X on July 28, 2000 pursuant to paragraph (b)

[ ] 60 days after filing pursuant to paragraph (a)(1)

[ ] on (date) pursuant to paragraph (a)(1)

[ ] 75 days after filing pursuant to paragraph (a)(2)

[ ] on (date) pursuant to paragraph (a)(2) of Rule 485

If appropriate check the following box:
[ ] this post-effective amendment designates a new effective date for
a previously filed post-effective amendment.

Title of Securities Being Registered: Shares of Beneficial Interest, par value
$0.01 per share.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE> 2

EXPLANATORY NOTE

This Post-Effective Amendment No. 38 to the Registration Statement contains
five Prospectuses and five Statements of Additional Information describing the
Van Kampen Aggressive Growth Fund, Van Kampen Growth Fund, Van Kampen Select
Growth Fund, Van Kampen Small Cap Value Fund and Van Kampen Utility Fund
(collectively, the "Applicable Series"). This Amendment is not intended to amend
the prospectuses and statements of additional information of other series of the
Registrant. The Registration Statement is organized as follows:

Facing Page

Prospectus relating to each Applicable Series

Statement of Additional Information relating to each Applicable Series

Part C Information

Exhibits

No changes are being made to the prospectuses and statements of additional
information of the Van Kampen Small Cap Growth Fund of the Registrant included
in Post-Effective Amendment No. 35 to the Registration Statement, filed with the
Commission on February 4, 2000 or the Van Kampen Small Company Growth Fund of
the Registrant included in Post-Effective Amendment No. 34 to the Registration
Statement, filed with the Commission on January 21, 2000.

<PAGE> 3

VAN KAMPEN
AGGRESSIVE GROWTH FUND

Van Kampen Aggressive Growth Fund's investment objective is to seek capital
growth. The Fund's investment adviser seeks to achieve the Fund's investment
objective by investing primarily in common stocks and other equity securities of
small- and medium-sized growth companies.

Shares of the Fund have not been approved or disapproved by the Securities and
Exchange Commission (SEC) or any state regulator, and neither the SEC nor any
state regulator has passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.

This prospectus is dated JULY 28, 2000

Class A Shares

Class B Shares

Class C Shares

PROSPECTUS

[VAN KAMPEN FUNDS LOGO]
<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary................................ 3
Fees and Expenses of the Fund...................... 5
Investment Objective, Policies and Risks........... 6
Investment Advisory Services....................... 10
Purchase of Shares................................. 12
Redemption of Shares............................... 18
Distributions from the Fund........................ 20
Shareholder Services............................... 20
Federal Income Taxation............................ 22
Financial Highlights............................... 24
</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 representations must not be relied upon
as having been authorized by the Fund, the Fund's investment adviser or the
Fund's distributor. This prospectus does not constitute an offer by the Fund or
by the Fund's 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 Fund to make such an offer in such jurisdiction.
<PAGE> 5

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Fund is a mutual fund with the investment objective to seek capital growth.

INVESTMENT STRATEGIES

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objective by investing at least 65% of the Fund's total
assets in common stocks or other equity securities of companies that the Fund's
investment adviser believes have an above-average potential for capital growth.
The Fund's investment adviser uses a "bottom-up" approach to stock selection
focusing on those companies that exhibit rising earnings expectations and rising
valuations. The Fund generally sells securities when earnings expectations
flatten or decline. The Fund focuses primarily on equity securities of small-
and medium-sized companies, although the Fund may invest in securities of
larger-sized companies that the Fund's investment adviser believes have an
above-average potential for capital growth. The Fund may invest up to 20% of its
total assets in securities of foreign issuers. The Fund may purchase and sell
certain derivative instruments, such as options, futures and options on futures,
for various portfolio management purposes.

INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objective.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Fund will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in common
stocks and other equity securities generally are affected by changes in the
stock markets, which fluctuate substantially over time, sometimes suddenly and
sharply. Different types of stocks tend to shift in and out of favor depending
on market and economic conditions. Thus, the value of the Fund's investments
will vary and at times may be lower or higher than that of other types of
investments. The Fund emphasizes a growth style of investing and focuses
primarily on small- and medium-sized companies. The market values of such
securities may be more volatile than other types of investments. The returns on
such 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 Fund may
invest) often fluctuate more than stock prices of larger companies. It is
possible that the stocks of small- and medium-sized companies will be more
volatile and underperform the overall stock market. Historically, stocks of
small- and medium-sized companies have sometimes gone through extended periods
when they did not perform as well as stocks of larger-sized companies. The Fund
may from time to time emphasize certain sectors of the market. To the extent the
Fund invests a significant portion of its assets in securities of companies in
the same sector of the market, it is more susceptible to economic, political,
regulatory and other occurrences influencing those sectors.

RISKS OF AGGRESSIVE GROWTH STOCKS. Companies that the Fund's investment adviser
believes have significant growth potential are often companies with new, limited
or cyclical product lines, markets or financial resources and the management of
such companies may be dependent upon one or a few key people. The stocks of such
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 Fund may own securities of 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.

3
<PAGE> 6

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; and risks that the transactions
may not be liquid.

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

INVESTOR PROFILE

In light of the Fund's investment objective and strategies, the Fund may be
appropriate for investors who:

- Seek capital growth over the long term

- Do not seek current income from their investment

- Are willing to take on the increased risks of investing in smaller- and
medium-sized companies in exchange for potentially higher capital growth

- Can withstand substantial volatility in the value of their shares of the Fund

- Wish to add to their investment portfolio a fund that invests primarily in
common stocks of smaller-and medium-sized growth companies

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

An investment in the Fund may not be appropriate for all investors. The Fund 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 Fund. An investment in the Fund is intended to be a long-term
investment, and the Fund should not be used as a trading vehicle.

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Fund is to look at how its
performance has varied from year-to-year. The following chart shows the annual
returns of the Fund's Class A Shares over the three calendar years prior to the
date of this prospectus. Sales loads are not reflected in this chart. If these
sales loads had been included, the returns shown below would have been lower.
Remember that the past performance of the Fund is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
1997 13.67
1998 35.40
1999* 130.59
</TABLE>

* The Fund's performance during the one year period shown is largely
attributable to investments in the technology sector, which performed
favorably for the period. Additionally, the Fund's returns for this period
included investments in initial public offerings. This performance was
achieved during a rising market, and there is no guarantee that this
performance record or the circumstances leading to it can be replicated in the
future. As the Fund expects to have a substantial portion of its assets
invested in equity securities of small- and mid-sized companies, the Fund will
be subject to more volatility and more erratic market movements.

The Fund's return for the six-month period ended June 30, 2000 was 4.40%.

The annual return variability of the Fund's Class B Shares and Class C Shares
would be substantially similar to that shown for the Class A Shares because all
of the Fund's shares are invested in the same portfolio of securities; however,
the actual annual returns of the Class B Shares and Class C Shares would be
lower than the annual returns shown for the Fund's Class A Shares because of
differences in the expenses borne by each class of shares.

During the three-year period shown in the bar chart, the highest quarterly
return for Class A Shares was 56.80% (for the quarter ended December 31, 1999)
and the lowest quarterly return for Class A Shares was -19.16% (for the quarter
ended March 31, 1997).

4
<PAGE> 7

COMPARATIVE PERFORMANCE

As a basis for evaluating the Fund's performance and risks, the table below
shows how the Fund's performance compares with two broad-based market indices
that the Fund's investment adviser believes are appropriate benchmarks for the
Fund: the Russell 2000 Stock Index* (a small capitalization company index that
measures performance of 2,000 small-cap stocks), and the Russell 2500 Growth
Index** (a small-capitalization index of companies in the Russell 2500 Index**
with higher price-to-book ratios and higher forecasted growth values). The
Fund's performance figures include the maximum sales charges paid by investors.
The indices' performance figures do not include any commissions or sales charges
that would be paid by investors purchasing the securities represented by those
indices. An investment can not be made directly in the indices. Average annual
total returns are shown for the periods ended December 31, 1999 (the most
recently completed calendar year prior to the date of this prospectus). Remember
that the past performance of the Fund is not indicative of its future
performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Since
December 31, 1999 1 Year Inception
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Van Kampen Aggressive
Growth Fund--Class A Shares 117.35% 42.32%(1)
Russell 2000 Stock Index 21.26% 11.21%(2)
Russell 2500 Growth Index 55.48% 17.60%(2)
...........................................................
Van Kampen Aggressive Growth
Fund--Class B Shares 123.83% 43.34%(1)
Russell 2000 Stock Index 21.26% 11.21%(2)
Russell 2500 Growth Index 55.48% 17.60%(2)
...........................................................
Van Kampen Aggressive Growth
Fund--Class C Shares 128.00% 43.70%(1)
Russell 2000 Stock Index 21.26% 11.21%(2)
Russell 2500 Growth Index 55.48% 17.60%(2)
...........................................................
</TABLE>

Inception dates: (1) 5/29/96, (2) 5/31/96.

*Based on the Fund's asset composition, the Fund's investment adviser believes
the Russell 2500 Growth Stock Index provides a more accurate narrow-based
benchmark for the Fund. The Russell 2000 Stock Index will not be shown in
future reports.

**The Russell 2000 Stock Index, the Russell 2500 Growth Index and the Russell
2500 Index are subsets of the Russell 3000 Index, an index of the 3000 largest
U.S. companies based on total market capitalization, which represents
approximately 98% of the investable U.S. equity market.

FEES AND EXPENSES
OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------------------------------------------------------------
<S> <C> <C> <C> <C>
SHAREHOLDER FEES
(fees paid directly from your investment)
------------------------------------------------------------
Maximum sales charge
(load) imposed on
purchases (as a
percentage of 5.75%(1) None None
offering price)
............................................................
Maximum deferred
sales charge (load)
(as a percentage of
the lesser of
original purchase
price or redemption
proceeds) None(2) 5.00%(3) 1.00%(4)
............................................................
Maximum sales charge
(load) imposed on
reinvested dividends
None None None
............................................................
Redemption fee None None None
............................................................
Exchange fee None None None
............................................................
ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
------------------------------------------------------------
Management fees 0.70% 0.70% 0.70%
............................................................
Distribution and/or
service (12b-1)
fees(5) 0.25% 1.00%(6) 1.00%(6)
............................................................
Other expenses 0.30% 0.30% 0.31%
............................................................
Total annual fund
operating expenses
1.25% 2.00% 2.01%
............................................................
</TABLE>

(1) Reduced for purchases of $50,000 and over. See "Purchase of Shares -- Class
A Shares."

(2) Investments of $1 million or more are not subject to any sales charge at the
time of purchase, but a deferred sales charge of 1.00% may be imposed on
certain redemptions made within one year of the purchase. See "Purchase of
Shares -- Class A Shares."

(3) The maximum deferred sales charge is 5.00% in the first year after purchase,
declining thereafter as follows:

Year 1-5.00%

Year 2-4.00%

Year 3-3.00%

Year 4-2.50%

Year 5-1.50%

After-None

See "Purchase of Shares -- Class B Shares."

(4) The maximum deferred sales charge is 1.00% in the first year after purchase
and 0.00% thereafter. See "Purchase of Shares -- Class C Shares."

5
<PAGE> 8

(6) Because distribution and/or service (12b-1) fees are paid out of the Fund's
assets on an ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same each year (except for the ten-year
amounts for Class B Shares which reflect the conversion of Class B Shares to
Class A Shares after eight years). Although your actual costs may be higher or
lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $695 $949 $1,222 $1,999
......................................................................
Class B Shares $703 $927 $1,228 $2,134*
......................................................................
Class C Shares $304 $630 $1,083 $2,338
......................................................................
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $695 $949 $1,222 $1,999
......................................................................
Class B Shares $203 $627 $1,078 $2,134*
......................................................................
Class C Shares $204 $630 $1,083 $2,338
......................................................................
</TABLE>

* Based on conversion to Class A Shares after eight years.

INVESTMENT OBJECTIVE,
POLICIES AND RISKS

The Fund's investment objective is to seek capital growth. Any income received
from the investment of portfolio securities is incidental to the Fund's
investment objective. The Fund's investment objective is a fundamental policy
and may not be changed without shareholder approval by a majority of the Fund's
outstanding voting securities, as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"). There are risks inherent in all investments in
securities; accordingly there can be no assurance that the Fund will achieve its
investment objective.

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objective by investing at least 65% of the Fund's total
assets in common stocks or other equity securities that the Fund's investment
adviser believes have an above-average potential for capital growth. In
selecting securities for investment, the Fund focuses primarily on equity
securities of small- and medium-sized companies, although the Fund may invest
its assets in securities of larger-sized companies that the Adviser believes
have an above-average potential for capital growth. Under current market
conditions, the Fund's investment adviser generally defines small-and
medium-sized companies by reference to those companies within or below the
capitalization range of companies represented in the Standard & Poor's MidCap
400 Index, an unmanaged market-weighted index of 400 domestic mid-cap stocks
(which consists of companies in the capitalization range of approximately $88
million to $13.7 billion as of June 30, 2000). Investments in such companies may
offer greater opportunities for capital growth than larger, more established
companies, but also may involve special risks. The Fund may invest in securities
that have above-average volatility of price movement. Because prices of common
stocks and other equity securities fluctuate, the value of an investment in the
Fund will vary based upon the Fund's investment performance.

The Fund's primary approach is to seek what the Fund's investment adviser
believes to be attractive growth opportunities on an individual company basis.
The Fund's investment adviser uses a "bottom-up" disciplined style of investing.
The Fund focuses on those companies that exhibit rising earnings expectations
and rising valuations. In selecting securities for investment, the Fund
generally seeks companies that appear to be positioned to produce an attractive
level of future earnings through the development of new products, services or
markets or as a result of changing markets or industry conditions. The Fund's
investment adviser expects that many of the companies in which the Fund invests
will, at the time of investment, be experiencing high rates of earnings growth.
The securities of such companies may trade at higher prices to earnings ratios
relative to more established companies and rates of earnings growth

6
<PAGE> 9

may be higher than the market average. Stock prices of these companies may tend
to be more volatile.

The companies and industries in which the Fund invests will change over time
depending on the Fund's investment adviser's assessment of growth opportunities.
Although the Fund will limit its investments to 25% of its total assets in any
single industry, a significant portion of the Fund's assets may be invested in
securities of companies in the same sector of the market. This may occur, for
example, when the Fund's investment adviser believes that several companies in
the same sector each offer unusually attractive growth opportunities. To the
extent that the Fund invests a significant portion of its assets in a limited
number of market sectors, the Fund will be more susceptible to economic,
political, regulatory and other factors influencing such sectors.

The Fund does not limit its investments to any single group or type of security.
The Fund may invest in unseasoned issuers and in securities involving special
circumstances, such as initial public offerings, companies with new management
or management reliant upon one or a few key people, special products and
techniques, limited or cyclical product lines, markets or resources, or unusual
developments, such as mergers, liquidations, bankruptcies or leveraged buyouts.
Investments in unseasoned companies and special circumstances 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. In addition, investments made in anticipation of future events may, if
delayed or never achieved, cause stock prices to fall.

Although the Fund may invest in companies of any size, the Fund focuses
primarily on small- and medium-sized companies. The securities of small- or
medium-sized companies may be subject to more abrupt or erratic market movements
and may have lower trading volumes or more erratic trading than securities of
larger-sized 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-sized, more established companies. Thus, the
Fund may be subject to greater investment risk than that assumed through
investment in the securities of larger-sized, more established companies. In
periods of increased market volatility, the Fund may invest a greater portion of
its assets in the equity securities of larger-sized companies.

The Fund may dispose of a security whenever, in the opinion of the Fund's
investment adviser, factors indicate it is desirable to do so. The Fund
generally sells securities when earnings expectations or valuations flatten or
decline. Other factors may include changes in the company's fundamentals or
relative market performance, changes in the appreciation possibilities offered
by individual securities, a change in the market trend or other factors
affecting an individual security, a change in economic or market factors in
general or with respect to a particular industry, and other circumstances
bearing on the desirability of a given investment. In addition, if an individual
stock position appreciates to a point where it begins to account for a larger
percentage of the Fund's assets, the Fund's investment adviser may sell a
portion of the position held.

The Fund invests primarily in common stocks. 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 Fund invests primarily in common stocks, the Fund may invest in other
equity securities including preferred stocks and securities convertible into
common stocks. 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 or mandatory
redemption provisions.

7
<PAGE> 10

rise and, because of the conversion feature, tends to vary with fluctuations in
the market value of the underlying equity securities. Convertible securities
ordinarily provide a stream of income with generally higher yields than those of
common stock of the same or similar issuers. Convertible securities generally
rank senior to common stock in a corporation's capital structure but are usually
subordinated to comparable nonconvertible securities. Convertible securities
generally do not participate directly in any dividend increases or decreases of
the underlying equity security although the market prices of convertible
securities may be affected by any such dividend changes or other changes in the
underlying security.

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.
Warrants do not carry with them the right to dividends and they do not represent
any rights in the assets of the issuer. As a result, any such investments may be
considered to be more speculative than most other types of equity investments.

The Fund also may invest in debt securities of various maturities considered
"investment grade" at the time of investment. A subsequent reduction in rating
does not require the Fund to dispose of a security. Investment grade securities
are securities rated BBB or higher by Standard & Poor's ("S&P") or rated Baa or
higher by Moody's Investors Service, Inc. ("Moody's") or comparably rated by any
other nationally recognized statistical rating organization or, if unrated, are
considered by the Fund's investment adviser to be of comparable quality.
Securities rated BBB by S&P or Baa by Moody's are in the lowest of the four
investment grade categories and are considered by the rating agencies to be
medium-grade obligations which possess speculative characteristics so that
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than in the case of
higher-rated securities. The market prices of debt securities generally
fluctuate inversely with changes in interest rates so that the value of
investments in such securities can be expected to decrease as interest rates
rise and increase as interest rates fall.

RISKS OF INVESTING IN

SECURITIES OF FOREIGN ISSUERS

The Fund may invest up to 20% of its total assets in securities of foreign
issuers. Securities of foreign issuers 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), the
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 conversion costs) and possible
difficulty in enforcing contractual obligations or taking judicial action.
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 and financial reporting disclosure
requirements than domestic issuers. There is generally less government
regulation of stock exchanges, brokers and listed companies abroad than in the
United States, 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 foreign exchanges,
brokers and dealers than there is in the United States, the Fund may experience
settlement difficulties or delays not usually encountered in the United States.

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

The Fund may invest in securities of issuers in developing or emerging market
countries. Investments in securities of issuers in developing or emerging market
countries are subject to greater risks than investments in securities of
developed countries since emerging market countries tend to have economic
structures that are less diverse and

8
<PAGE> 11

mature and political systems that are less stable than developed countries.

In addition to the increased risks of investing in foreign securities, there are
often increased transactions costs associated with investing in foreign
securities including the costs incurred in connection with converting
currencies, higher foreign brokerage or dealer costs, and higher settlement
costs or custodial costs.

Many European countries have adopted or are in the process of adopting a single
European currency, commonly referred to as the "euro." The long-term
consequences of the euro conversion on foreign exchange rates, interest rates
and the value of European securities, all of which may adversely affect the
Fund, are still uncertain.

STRATEGIC TRANSACTIONS

The Fund may, but is not required to, use various investment strategic
transactions described below to facilitate portfolio management and mitigate
risks. Although the Fund's investment adviser seeks to use the practices to
further the Fund's investment objective, no assurance can be given that these
practices will achieve this result.

The Fund may purchase and sell derivative instruments such as exchange-listed
and over-the-counter put and call options on securities, financial futures,
equity and fixed-income indices and other financial instruments, purchase and
sell financial futures contracts and options thereon, and enter into various
currency transactions such as currency forward contracts, currency futures
contracts, currency swaps, or options on currencies or currency futures.
Collectively, all of the above are referred to as "Strategic Transactions." The
Fund generally seeks to use Strategic Transactions as a portfolio management or
hedging technique to seek to protect against possible adverse changes in the
market value of securities held in or to be purchased for the Fund's portfolio,
protect the Fund's unrealized gains, facilitate the sale of certain securities
for investment purposes, protect against changes in currency exchange rates, or
establish positions in the derivatives markets as a temporary substitute for
purchasing or selling particular securities.

Strategic Transactions have risks including the imperfect correlation between
the value of such instruments and the underlying assets, the possible default of
the other party to the transaction or illiquidity of the derivative instrument.
Furthermore, the ability to successfully use Strategic Transactions depends on
the Fund's investment adviser's ability to predict pertinent market movements,
which cannot be assured. Thus, the use of Strategic Transactions may result in
losses greater than if they had not been used, may require the Fund to sell or
purchase portfolio securities at inopportune times or for prices other than
current market values, may limit the amount of appreciation the Fund can
otherwise realize on an investment, or may cause the Fund to hold a security
that it might otherwise sell. The use of currency transactions can result in the
Fund incurring losses because of the imposition of exchange controls, suspension
of settlements or the inability of the Fund to deliver or receive a specified
currency. Additionally, amounts paid as premiums and cash or other assets held
in margin accounts with respect to Strategic Transactions are not otherwise
available to the Fund for investment purposes.

A more complete discussion of Strategic Transactions and their risks is
contained in the Fund's Statement of Additional Information. The Statement of
Additional Information can be obtained by investors free of charge as described
on the back cover of this prospectus.

OTHER INVESTMENTS AND RISK FACTORS

For cash management purposes, the Fund may engage in repurchase agreements with
broker-dealers, banks and other financial institutions to earn a return on
temporarily available cash. Such transactions are subject to the risk of default
by the other party. It is currently the policy of the Fund not to invest more
than 25% of its total assets at the time of purchase in securities subject to
reverse repurchase agreements.

The Fund may purchase and sell securities on a "when-issued" and "delayed
delivery" basis. The Fund accrues no income on such securities until the Fund
actually takes delivery of such securities. These transactions are subject to
market fluctuation; the value of the securities at delivery may be more or less
than their purchase price. The value or yield generally available on comparable
securities when delivery occurs may be higher than the value or yield on the
securities obtained pursuant to such transactions. Because the Fund relies on
the buyer or seller to consummate the transaction, failure by the other party to
complete the transaction may result in the Fund missing the opportunity of
obtaining a price or yield considered to be advantageous. The Fund will

9
<PAGE> 12

engage in when-issued and delayed delivery transactions for the purpose of
acquiring securities consistent with the Fund's investment objective and
policies and not for the purpose of investment leverage.

The Fund may lend its portfolio securities in an amount up to 50% of its total
assets to broker-dealers, banks or other institutional borrowers of securities.
Such loans must be callable at any time and the borrower at all times during the
loan must maintain cash or liquid securities as collateral or provide the Fund
an irrevocable letter of credit equal to at least 100% of the value of the
securities loaned (including accrued interest). During the time portfolio
securities are on loan, the Fund receives any dividends or interest paid on such
securities and receives the interest earned on the collateral which is invested
in short-term instruments or receives an agreed-upon amount of interest income
from the borrower who has delivered the collateral or letter of credit. As with
any extensions of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower of the securities fail
financially.

The Fund may invest up to 15% of the Fund's net assets in illiquid securities
and certain restricted securities. Such securities may be difficult or
impossible to sell at the time and the price that the Fund would like. Thus, the
Fund may have to sell such securities at a lower price, sell other securities
instead to obtain cash or forego other investment opportunities.

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund 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
Fund's investment adviser believes the potential for capital growth has lessened
or for other reasons. The portfolio turnover rate may vary from year to year. A
high portfolio turnover rate (100% or more) increases a fund's transactions
costs (including brokerage commissions or dealer costs) and high portfolio
turnover may result in the realization of more short-term capital gains than if
a fund had lower portfolio turnover. Increases in a fund's transaction costs
would adversely impact that fund's performance. The turnover rate will not be a
limiting factor, however, if the Fund's investment adviser considers portfolio
changes appropriate.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, the Fund may on a temporary basis hold cash or invest 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 and in investment grade corporate debt securities. Under normal market
conditions, the potential for capital growth on these securities will tend to be
lower than the potential for capital growth on other securities that may be
owned by the Fund. In taking such a defensive position, the Fund would not be
pursuing and may not achieve its investment objective.

INVESTMENT ADVISORY SERVICES

THE ADVISER. Van Kampen Investment Advisory Corp. is the Fund's investment
adviser (the "Adviser" or "Advisory Corp."). 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 three
million retail investor accounts, extensive capabilities for managing
institutional portfolios, and more than $100 billion under management or
supervision as of June 30, 2000. Van Kampen Investments' more than 50 open-end
and 39 closed-end funds and more than 2,700 unit investment trusts are
professionally distributed by leading authorized dealers nationwide. Van Kampen
Funds Inc., the distributor of the Fund (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, Oakbrook Terrace, Illinois 60181-5555.

10
<PAGE> 13

Agreement"), the Fund pays the Adviser a monthly fee computed based upon an
annual rate applied to the average daily net assets of the Fund as follows:

<TABLE>
<CAPTION>
Average Daily Net Assets % Per Annum
-----------------------------------------------
<S> <C> <C> <C>
First $500 million 0.75%
...............................................
Next $500 million 0.70%
...............................................
Over $1 billion 0.65%
...............................................
</TABLE>

Applying this fee schedule, the effective advisory fee rate was 0.70% of the
Fund's average daily net assets for the Fund's fiscal year ended March 31, 2000.
The Fund's average daily net assets are determined by taking the average of all
of the determinations of the net assets during a given calender month. Such fee
is payable for each calender month as soon as practicable after the end of that
month.

Under the Advisory Agreement, the Adviser furnishes offices, necessary
facilities and equipment, and provides administrative services to the Fund. The
Fund pays all charges and expenses of its day-to-day operations, including
service fees, distribution fees, custodian fees, legal and independent
accountant fees, the costs of reports and proxies to shareholders, compensation
of trustees of the Trust (other than those who are affiliated persons of the
Adviser, Distributor or Van Kampen Investments), and all other ordinary business
expenses not specifically assumed by the Adviser.

From time to time, the Adviser or the Distributor may voluntarily undertake to
reduce the Fund's expenses by reducing the fees payable to them or by reducing
other expenses of the Fund in accordance with such limitations as the Adviser or
Distributor may establish.

The Adviser may utilize, at its own expense, credit analysis, research and
trading support services provided by its affiliate, Van Kampen Asset Management
Inc. ("Asset Management").

PERSONAL INVESTMENT POLICIES. The Fund, Adviser and the Distributor have adopted
Codes of Ethics designed to recognize the fiduciary relationships among the
Fund, the Adviser, the Distributor and their respective employees. The Codes of
Ethics 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 pre-clearance and
other procedures designed to prevent conflicts of interest.

PORTFOLIO MANAGEMENT. The Fund is managed by a team of portfolio managers.
Senior Portfolio Managers Gary M. Lewis and Dudley Brickhouse are the co-lead
managers of the Fund. Mr. Lewis has overall responsibility for the team of
portfolio managers which also manages the Van Kampen Emerging Growth, Van Kampen
Select Growth and Van Kampen Technology Funds in addition to the Fund. Mr. Lewis
has been a Senior Vice President of the Adviser and Asset Management since
September 1995. Mr. Lewis became a Vice President and Portfolio Manager of Asset
Management in June 1991. Mr. Lewis has been employed by Asset Management since
September 1986. He has been affiliated with the Fund since its inception.

Mr. Brickhouse has been a Senior Portfolio Manager since April 2000, and a
Portfolio Manager and Vice President of the Adviser and Asset Management since
December 1998. Mr. Brickhouse became an Associate Portfolio Manager of the
Adviser and Asset Management in September 1997. Prior to September 1997, Mr.
Brickhouse was a Vice President and Portfolio Manager with NationsBank, where he
had worked since 1985. He has been affiliated with the Fund since September
1997.

Senior Portfolio Managers Janet Luby and David Walker and Portfolio Manager
Matthew Hart are responsible as co-managers for the day-to-day management of the
Fund's investment portfolio.

Mr. Hart has been a Portfolio Manager since January 1998, and a Vice President
of the Adviser and Asset Management since December 1998. Mr. Hart became an
Associate Portfolio Manager of the Adviser and Asset Management in August 1997.
Prior to August 1997, Mr. Hart held various positions within the portfolio area
of AIM Capital Management, Inc., where he had worked since June 1992. Mr. Hart's
last position in the AIM portfolio area was as a convertible bonds analyst. He
has been affiliated with the Fund since February 2000.

11
<PAGE> 14

of Asset Management in July 1995. Prior to July 1995, Ms. Luby spent eight years
at AIM Capital Management, Inc., where she worked five years in the accounting
department and three years in the investment area. Her last position in the AIM
investment area was as a senior securities analyst. Ms. Luby also has been the
portfolio manager for various unit investment trusts managed by the Adviser or
its affiliates since August 1999. She has been affiliated with the Fund since
its inception.

Mr. Walker has been a Senior Portfolio Manager since April 2000, and a Portfolio
Manager and Vice President of the Adviser and Asset Management since December
1998. Mr. Walker became an Assistant Vice President of the Adviser and Asset
Management in June 1995. Prior to April 1996, Mr. Walker was a Quantitative
Analyst of Asset Management and has worked for Asset Management since October
1990. Mr. Walker also has been the portfolio manager for various unit investment
trusts managed by the Adviser or its affiliates since September 1997. He has
been affiliated with the Fund since its inception.

PURCHASE OF SHARES

GENERAL

This prospectus offers three classes of shares of the Fund, designated as Class
A Shares, Class B Shares and Class C Shares. Other classes of shares of the Fund
may be offered through one or more separate prospectuses of the Fund. By
offering multiple classes of shares, the Fund permits each investor to choose
the class of shares that is most beneficial given the type of investor, the
amount to be invested and the length of time the investor expects to hold the
shares.

Initial investments generally must be at least $1,000 for each class of shares
offered herein, and subsequent investments must be at least $25 for each class
of shares offered herein. Minimum investment amounts may be waived by the
Distributor for plans involving periodic investments and for certain retirement
accounts.

Each class of shares represents an interest in the same portfolio of investments
of the Fund and has the same rights except that (i) Class A Shares generally
bear the sales charge expenses at the time of purchase while Class B Shares and
Class C Shares generally bear the sales charge expenses at the time of
redemption and any expenses (including higher distribution fees and transfer
agency costs) resulting from such deferred sales charge arrangement, (ii) each
class of shares has exclusive voting rights with respect to approvals of the
Rule 12b-1 distribution plan and the service plan (each as described below)
under which the class's distribution fee and/or the service fee is paid, (iii)
each class of shares has different exchange privileges, (iv) certain classes of
shares are subject to a conversion feature and (v) certain classes of shares
have different shareholder service options available.

The offering price of the Fund's shares is based upon the Fund's net asset value
per share (plus sales charges, where applicable). The net asset values per share
of the Class A Shares, Class B Shares and Class C Shares are generally expected
to be substantially the same. In certain circumstances, however, the per share
net asset values of the classes of shares may differ from one another,
reflecting the daily expense accruals of the higher distribution fees and
transfer agency costs applicable to the Class B Shares and Class C Shares and
the differential in the dividends that may be paid on each class of shares.

The net asset value per share for each class of shares of the Fund is determined
once daily as of the close of trading on the New York Stock Exchange (the
"Exchange") (currently 4:00 p.m., New York time) each day the Exchange is open
for trading except on any day on which no purchase or redemption orders are
received or there is not a sufficient degree of trading in the Fund's portfolio
securities such that the Fund's net asset value per share might be materially
affected. The Fund's Board of Trustees reserves the right to calculate the net
asset value per share and adjust the offering price more frequently than once
daily if deemed desirable. Net asset value per share for each class is
determined by dividing the value of the Fund's portfolio securities, cash and
other assets (including accrued interest) attributable to such class, less all
liabilities (including accrued expenses) attributable to such class, by the
total number of shares of the class outstanding. Such computation is made by
using prices as of the close of trading on the Exchange and (i) valuing
securities listed or traded on a national securities exchange at the last
reported sale price, and if there has been no sale that day, at the mean between
the last reported bid and asked prices, (ii) valuing over-the-counter securities
at the last reported sale price from the National Association of Securities
Dealer's Automated Quotations ("NASDAQ") and, if there has been no sale that
day,

12
<PAGE> 15

at the mean between the last reported bid and asked prices and (iii) valuing
securities for which market quotations are not readily available and any other
assets at fair value as determined in good faith by the Adviser in accordance
with procedures established by the Fund's Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued on an
amortized cost basis, which approximates market value.

The Fund has adopted a distribution plan (the "Distribution Plan") with respect
to each of its Class A Shares, Class B Shares and Class C Shares pursuant to
Rule 12b-1 under the 1940 Act. The Fund also has adopted a service plan (the
"Service Plan") with respect to each such class of its shares. Under the
Distribution Plan and the Service Plan, the Fund pays distribution fees in
connection with the sale and distribution of its shares and service fees in
connection with the provision of ongoing services to shareholders of each such
class and the maintenance of the shareholders' accounts.

The amount of distribution and service fees varies among the classes offered by
the Fund. Because these fees are paid out of the Fund's assets on an ongoing
basis, these fees will increase the cost of your investment in the Fund. By
purchasing a class of shares subject to higher distribution and service fees,
you may pay more over time than on a class of shares with other types of sales
charge arrangements. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by the rules of the
National Association of Securities Dealers, Inc. ("NASD"). The net income
attributable to a class of shares will be reduced by the amount of the
distribution and service fees and other expenses of the Fund associated with
that class of shares. To assist investors in comparing classes of shares, the
tables under the Prospectus heading "Fees and Expenses of the Fund" provide a
summary of sales charges and expenses and an example of the sales charges and
expenses of the Fund applicable to each class of shares offered herein.

The shares are offered to the public on a continuous basis through the
Distributor as principal underwriter, which is located at 1 Parkview Plaza,
Oakbrook Terrace, Illinois 60181-5555. Shares also are offered through members
of the NASD who are acting as securities dealers ("dealers") and NASD members or
eligible non-NASD members who are acting as brokers or agents for investors
("brokers"). "Dealers" and "brokers" are sometimes referred to herein as
"authorized dealers."

Shares may be purchased on any business day by completing the account
application form and forwarding the account application, directly or through an
authorized dealer, to the Fund's shareholder service agent, Van Kampen Investor
Services Inc. ("Investor Services"), a wholly owned subsidiary of Van Kampen
Investments. When purchasing shares of the Fund through this prospectus,
investors must specify whether the purchase is for Class A Shares, Class B
Shares or Class C Shares by selecting the correct Fund number on the account
application. Sales personnel of authorized dealers distributing the Fund's
shares are entitled to receive compensation for selling such shares and may
receive differing compensation for selling Class A Shares, Class B Shares or
Class C Shares.

The offering price for shares is based upon the next calculation of net asset
value per share (plus sales charges, where applicable) after an order is
received by Investor Services. Orders received by authorized dealers prior to
the close of the Exchange are priced based on the date of receipt, provided such
order is transmitted to Investor Services prior to Investor Services' close of
business on such date. Orders received by authorized dealers after the close of
the Exchange or transmitted to Investor Services after its close of business are
priced based on the date of the next determined net asset value per share
provided they are received by Investor Services prior to Investor Services'
close of business on such date. It is the responsibility of authorized dealers
to transmit orders received by them to Investor Services so they will be
received in a timely manner.

The Fund and the Distributor reserve the right to refuse any order for the
purchase of shares. The Fund also reserves the right to suspend the sale of the
Fund's shares in response to conditions in the securities markets or for other
reasons. Shares of the Fund may be sold in foreign countries where permissible.

Investor accounts will automatically be credited with additional shares of the
Fund after any Fund distributions, such as dividends and capital gain dividends,
unless the investor instructs the Fund otherwise. Investors wishing to receive
cash instead of additional shares should contact the Fund by telephone at (800)
341-2911 or by writing to the

13
<PAGE> 16

Fund, c/o Van Kampen Investor Services Inc., PO Box 218256, Kansas City, MO
64121-8256.

CLASS A SHARES

Class A Shares of the Fund are sold at net asset value plus an initial maximum
sales charge of up to 5.75% of the offering price (or 6.10% of the net amount
invested), reduced on investments of $50,000 or more as follows:

CLASS A SHARES

SALES CHARGE SCHEDULE

<TABLE>
<CAPTION>
As % of As % of
Size of Offering Net Amount
Investment Price Invested
----------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.10%
..........................................................
$50,000 but less than
$100,000 4.75% 4.99%
..........................................................
$100,000 but less than
$250,000 3.75% 3.90%
..........................................................
$250,000 but less than
$500,000 2.75% 2.83%
..........................................................
$500,000 but less than
$1,000,000 2.00% 2.04%
..........................................................
$1,000,000 or more * *
..........................................................
</TABLE>

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. The contingent deferred sales charge is assessed on
an amount equal to the lesser of the then current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

Under the Distribution Plan and the Service Plan, the Fund may spend up to a
total of 0.25% per year of the Fund's average daily net assets with respect to
the Class A Shares of the Fund. From such amount, under the Service Plan, the
Fund may spend up to 0.25% per year of the Fund's average daily net assets with
respect to the Class A Shares of the Fund.

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within five years of purchase as
shown in the table as follows:

CLASS B SHARES

SALES CHARGE SCHEDULE

<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge
as a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
------------------------------------------------
<S> <C> <C> <C>
First 5.00%
................................................
Second 4.00%
................................................
Third 3.00%
................................................
Fourth 2.50%
................................................
Fifth 1.50%
................................................
Sixth and After None
................................................
</TABLE>

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class B
Shares in an amount of $500,000 or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

The amount of the contingent deferred sales charge, if any, varies depending on
the number of years from the time of payment for each purchase of Class B Shares
until the time of redemption of such shares.

14
<PAGE> 17

In determining whether a contingent deferred sales charge applies to a
redemption, it is assumed that the shares being redeemed first are any shares in
the shareholder's Fund account that are not subject to a contingent deferred
sales charge, followed by shares held the longest in the shareholder's account.

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to the Class B Shares of the Fund.
In addition, under the Service Plan, the Fund may spend up to 0.25% per year of
the Fund's average daily net assets with respect to the Class B Shares of the
Fund.

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class C
Shares in an amount of $1 million or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to the Class C Shares of the Fund.
In addition, under the Service Plan, the Fund may spend up to 0.25% per year of
the Fund's average daily net assets with respect to the Class C Shares of the
Fund.

CONVERSION FEATURE

Class B Shares purchased on or after June 1, 1996, including Class B Shares
received from reinvestment of distributions through the dividend reinvestment
plan on such shares, automatically convert to Class A Shares eight years after
the end of the calendar month in which the shares were purchased. Class B Shares
purchased before June 1, 1996, including Class B Shares received from
reinvestment of distributions through the dividend reinvestment plan on such
shares, automatically convert to Class A Shares six years after the end of the
calendar month in which the shares were purchased. Class C Shares purchased
before January 1, 1997, including Class C Shares received from reinvestment of
distributions through the dividend reinvestment plan on such shares,
automatically convert to Class A Shares ten years after the end of the calendar
month in which such shares were purchased. Such conversion will be on the basis
of the relative net asset values per share, without the imposition of any sales
load, fee or other charge. The conversion schedule applicable to a share of the
Fund acquired through the exchange privilege from another Van Kampen fund
participating in the exchange program is determined by reference to the Van
Kampen fund from which such share was originally purchased.

The conversion of such shares to Class A Shares is subject to the continuing
availability of an opinion of counsel to the effect that (i) the assessment of
the higher distribution fee and transfer agency costs with respect to such
shares does not result in the Fund's dividends or capital gain dividends
constituting "preferential dividends" under the federal income tax law and (ii)
the conversion of shares does not constitute a taxable event under federal
income tax law. The conversion may be suspended if such an opinion is no longer
available and such shares might continue to be subject to the higher aggregate
fees applicable to such shares for an indefinite period.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

15
<PAGE> 18

liquidation of a shareholder's account as described under the Prospectus heading
"Redemption of Shares." Subject to certain limitations, a shareholder who has
redeemed Class C Shares of the Fund may reinvest in Class C Shares at net asset
value with credit for any contingent deferred sales charge if the reinvestment
is made within 180 days after the redemption. For a more complete description of
contingent deferred sales charge waivers, please refer to the Fund's Statement
of Additional Information or contact your authorized dealer.

QUANTITY DISCOUNTS

Investors purchasing Class A Shares may, under certain circumstances described
below, be entitled to pay reduced or no sales charges. Investors, or their
authorized dealers, must notify the Fund at the time of the purchase order
whenever a quantity discount is applicable to purchases. Upon such notification,
an investor will pay the lowest applicable sales charge. Quantity discounts may
be modified or terminated at any time. For more information about quantity
discounts, investors should contact their authorized dealer or the Distributor.

A person eligible for a reduced sales charge includes an individual, his or her
spouse and children under 21 years of age and any corporation, partnership or
sole proprietorship which is 100% owned, either alone or in combination, by any
of the foregoing; a trustee or other fiduciary purchasing for a single trust or
for a single fiduciary account, or a "company" as defined in Section 2(a)(8) of
the 1940 Act.

As used herein, "Participating Funds" refers to certain open-end investment
companies advised by Asset Management or Advisory Corp. and distributed by the
Distributor as determined from time to time by the Fund's Board of Trustees.

VOLUME DISCOUNTS. The size of investment shown in the Class A Shares sales
charge table applies to the total dollar amount being invested by any person in
shares of the Fund, or in any combination of shares of the Fund and shares of
other Participating Funds, although other Participating Funds may have different
sales charges.

CUMULATIVE PURCHASE DISCOUNT. The size of investment shown in the Class A Shares
sales charge table may also be determined by combining the amount being invested
in shares of the Participating Funds plus the current offering price of all
shares of the Participating Funds currently owned.

LETTER OF INTENT. A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating investments over a 13-month period
to determine the sales charge as outlined in the Class A Shares sales charge
table. The size of investment shown in the Class A Shares sales charge table
includes purchases of shares of the Participating Funds over a 13-month period
based on the total amount of intended purchases plus the value of all shares of
the Participating Funds previously purchased and still owned. An investor may
elect to compute the 13-month period starting up to 90 days before the date of
execution of a Letter of Intent. Each investment made during the period receives
the reduced sales charge applicable to the total amount of the investment goal.
The initial purchase must be for an amount equal to at least 5% of the minimum
total purchase amount of the level selected. If trades not initially made under
a Letter of Intent subsequently qualify for a lower sales charge through the
90-day backdating provisions, an adjustment will be made at the expiration of
the Letter of Intent to give effect to the lower sales charge. Such adjustment
in sales charge will be used to purchase additional shares. The Fund initially
will escrow shares totaling 5% of the dollar amount of the Letter of Intent to
be held by Investor Services in the name of the shareholder. In the event the
Letter of Intent goal is not achieved within the specified period, the investor
must pay the difference between the sales charge applicable to the purchases
made and the reduced sales charges previously paid. Such payments may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain the difference.

OTHER PURCHASE PROGRAMS

Purchasers of Class A Shares may be entitled to reduced or no initial sales
charges in connection with the unit investment trust reinvestment program and
purchases by registered representatives of selling firms or purchases by persons
affiliated with the Fund or the Distributor. The Fund reserves the right to
modify or terminate these arrangements at any time.

16
<PAGE> 19

if the administrator of an investor's unit investment trust program meets
certain uniform criteria relating to cost savings by the Fund and the
Distributor. The total sales charge for all other investments made from unit
investment trust distributions will be 1.00% of the offering price (1.01% of net
asset value). Of this amount, the Distributor will pay to the authorized dealer,
if any, through which such participation in the qualifying program was initiated
0.50% of the offering price as a dealer concession or agency commission. Persons
desiring more information with respect to this program, including the terms and
conditions that apply to the program, should contact their authorized dealer or
the Distributor.

The administrator of such a unit investment trust must have an agreement with
the Distributor pursuant to which the administrator will (1) submit a single
bulk order and make payment with a single remittance for all investments in the
Fund during each distribution period by all investors who choose to invest in
the Fund through the program and (2) provide Investor Services with appropriate
backup data for each investor participating in the program in a computerized
format fully compatible with Investor Services' processing system.

To obtain these special benefits, all dividends and other distributions from the
Fund must be reinvested in additional shares and there can not be any systematic
withdrawal program. There will be no minimum for reinvestments from unit
investment trusts. The Fund will send account activity statements to such
participants on a quarterly basis only, even if their investments are made more
frequently. The Fund reserves the right to modify or terminate this program at
any time.

NET ASSET VALUE PURCHASE OPTIONS. Class A Shares of the Fund may be purchased at
net asset value, generally upon written assurance that the purchase is made for
investment purposes and that the shares will not be resold except through
redemption by the Fund, by:

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
Dean Witter & Co. and any of its subsidiaries and such persons' families and
their beneficial accounts.

(2) Current or retired directors, officers and employees of Morgan Stanley Dean
Witter & Co. and any of its subsidiaries; employees of an investment
subadviser to any fund described in (1) above or an affiliate of such
subadviser; and such persons' families and their beneficial accounts.

(3) Directors, officers, employees and, when permitted, registered
representatives, of financial institutions that have a selling group
agreement with the Distributor and their spouses and children under 21 years
of age when purchasing for any accounts they beneficially own, or, in the
case of any such financial institution, when purchasing for retirement plans
for such institution's employees; provided that such purchases are otherwise
permitted by such institutions.

(4) Registered investment advisers who charge a fee for their services, trust
companies and bank trust departments investing on their own behalf or on
behalf of their clients. The Distributor may pay authorized dealers through
which purchases are made an amount up to 0.50% of the amount invested, over
a 12-month period.

(5) Trustees and other fiduciaries purchasing shares for retirement plans which
invest in multiple fund families through broker-dealer retirement plan
alliance programs that have entered into agreements with the Distributor and
which are subject to certain minimum size and operational requirements.
Trustees and other fiduciaries should refer to the Statement of Additional
Information for further details with respect to such alliance programs.

(6) Beneficial owners of shares of Participating Funds held by a retirement plan
or held in a tax-advantaged retirement account who purchase shares of the
Fund with proceeds from distributions from such a plan or retirement account
other than distributions taken to correct an excess contribution.

(7) Accounts as to which a bank or broker-dealer charges an account management
fee ("wrap accounts"), provided the bank or broker-dealer has a separate
agreement with the Distributor.

17
<PAGE> 20

Section 501(c)(3) of the Code and assets held by an employer or trustee in
connection with an eligible deferred compensation plan under Section 457 of
the Code. Such plans will qualify for purchases at net asset value provided,
for plans initially establishing accounts with the Distributor in the
Participating Funds after January 1, 2000, that (1) the total plan assets
are at least $1 million or (2) such shares are purchased by an employer
sponsored plan with more than 100 eligible employees. Such plans that have
been established with a Participating Fund or have received proposals from
the Distributor prior to January 1, 2000 based on net asset value purchase
privileges previously in effect will be qualified to purchase shares of the
Participating Funds at net asset value. Section 403(b) and similar accounts
for which Van Kampen Trust Company serves as custodian will not be eligible
for net asset value purchases based on the aggregate investment made by the
plan or the number of eligible employees, except under certain uniform
criteria established by the Distributor from time to time. For purchases on
February 1, 1997 and thereafter, a commission will be paid on purchases as
follows: 1.00% on sales to $2 million, plus 0.80% on the next $1 million,
plus 0.50% on the next $47 million, plus 0.25% on the excess over $50
million.

(9) Individuals who are members of a "qualified group." For this purpose, a
qualified group is one which (i) has been in existence for more than six
months, (ii) has a purpose other than to acquire shares of the Fund or
similar investments, (iii) has given and continues to give its endorsement
or authorization, on behalf of the group, for purchase of shares of the Fund
and Participating Funds, (iv) has a membership that the authorized dealer
can certify as to the group's members and (v) satisfies other uniform
criteria established by the Distributor for the purpose of realizing
economies of scale in distributing such shares. A qualified group does not
include one whose sole organizational nexus, for example, is that its
participants are credit card holders of the same institution, policy holders
of an insurance company, customers of a bank or broker-dealer, clients of an
investment adviser or other similar groups. Shares purchased in each group's
participants account in connection with this privilege will be subject to a
contingent deferred sales charge of 1.00% in the event of redemption within
one year of purchase, and a commission will be paid to authorized dealers
who initiate and are responsible for such sales to each individual as
follows: 1.00% on sales to $2 million, plus 0.80% on the next $1 million and
0.50% on the excess over $3 million.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents, and a person's spouse's parents.

Purchase orders made pursuant to clause (4) may be placed either through
authorized dealers as described above or directly with Investor Services by the
investment adviser, trust company or bank trust department, provided that
Investor Services receives federal funds for the purchase by the close of
business on the next business day following acceptance of the order. An
authorized dealer may charge a transaction fee for placing an order to purchase
shares pursuant to this provision or for placing a redemption order with respect
to such shares. Authorized dealers will be paid a service fee as described above
on purchases made under options (3) through (9) above. The Fund may terminate,
or amend the terms of, offering shares of the Fund at net asset value to such
groups at any time.

REDEMPTION OF
SHARES

Generally shareholders may redeem for cash some or all of their shares without
charge by the Fund (other than applicable sales charge) at any time. As
described under the Prospectus heading "Purchase of Shares," redemptions of
Class B Shares and Class C Shares may be subject to a contingent deferred sales
charge. In addition, certain redemptions of Class A Shares for shareholder
accounts of $1 million or more may be subject to a contingent deferred sales
charge. Redemptions completed through an authorized dealer or a
custodian/trustee of a retirement plan account may involve additional fees
charged by the dealer or custodian/trustee.

18
<PAGE> 21

form as described below. Such payment may be postponed or the right of
redemption suspended as provided by the rules of the SEC. Such payment may,
under certain circumstances, be paid wholly or in part by a distribution-in-kind
of portfolio securities. A distribution-in-kind will result in recognition by
the shareholder of a gain or loss for federal income tax purposes when such
securities are distributed, and the shareholder may have brokerage costs and a
gain or loss for federal income tax purposes upon the shareholder's subsequent
disposition of such securities. If the shares to be redeemed have been recently
purchased by check, Investor Services may delay the payment of redemption
proceeds until it confirms the purchase check has cleared, which may take up to
15 days. A taxable gain or loss may be recognized by the shareholder upon
redemption of shares. Certificated shares must be properly endorsed for transfer
and must accompany a written redemption request.

WRITTEN REDEMPTION REQUESTS. Shareholders may request a redemption of shares by
written request in proper form sent directly to Van Kampen Investor Services
Inc., PO Box 218256, Kansas City, MO 64121-8256. The request for redemption
should indicate the number of shares or dollar amount to be redeemed, the Fund
name and class designation of such shares and the shareholder's account number.
The redemption request must be signed by all persons in whose names the shares
are registered. Signatures must conform exactly to the account registration. If
the proceeds of the redemption exceed $50,000, or if the proceeds are not to be
paid to the record owner at the record address, or if the record address has
changed within the previous 30 days, signature(s) must be guaranteed by one of
the following: a bank or trust company; a broker-dealer; a credit union; a
national securities exchange, registered securities association or clearing
agency; a savings and loan association; or a federal savings bank.

Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption request to be in proper form.
In some cases, however, additional documents may be necessary. Certificated
shares may be redeemed only by written request. The certificates for the shares
being redeemed must be properly endorsed for transfer and must accompany the
redemption request. Generally, in the event a redemption is requested by and
registered to a corporation, partnership, trust, fiduciary, estate or other
legal entity owning shares of the Fund, a copy of the corporate resolution or
other legal documentation appointing the authorized signer and certified within
the prior 120 days must accompany the redemption request. Retirement plan
distribution requests should be sent to the plan custodian/trustee to be
forwarded to Investor Services. Contact the plan custodian/trustee for further
information.

In the case of written redemption requests sent directly to Investor Services,
the redemption price is the net asset value per share next determined after the
request in proper form is received by Investor Services.

AUTHORIZED DEALER REDEMPTION REQUESTS. Shareholders may place redemption
requests through an authorized dealer. The redemption price for such shares is
the net asset value per share next calculated after an order in proper form is
received by an authorized dealer provided such order is transmitted to the
Distributor prior to the Distributor's close of business on such day. It is the
responsibility of authorized dealers to transmit redemption requests received by
them to the Distributor so they will be received prior to such time. Redemptions
completed through an authorized dealer may involve additional fees charged by
the dealer.

19
<PAGE> 22

Investments, Investor Services or the Fund will be liable for following
telephone instructions which it reasonably believes to be genuine. Telephone
redemptions may not be available if the shareholder cannot reach Investor
Services by telephone, whether because all telephone lines are busy or for any
other reason; in such case, a shareholder would have to use the Fund's other
redemption procedure previously described. Requests received by Investor
Services prior to 4:00 p.m., New York time, will be processed at the next
determined net asset value per share. These privileges are available for most
accounts other than retirement accounts or accounts with shares represented by
certificates. If an account has multiple owners, Investor Services may rely on
the instructions of any one owner.

For redemptions authorized by telephone, amounts of $50,000 or less may be
redeemed daily if the proceeds are to be paid by check and amounts of at least
$1,000 up to $1 million may be redeemed daily if the proceeds are to be paid by
wire. The proceeds must be payable to the shareholder(s) of record and sent to
the address of record for the account or wired directly to their predesignated
bank account. This privilege is not available if the address of record has been
changed within 30 days prior to a telephone redemption request. Proceeds from
redemptions payable by wire transfer are expected to be wired on the next
business day following the date of redemption. The Fund reserves the right at
any time to terminate, limit or otherwise modify this redemption privilege.

OTHER REDEMPTION INFORMATION. The Fund may redeem any shareholder account that
has a value on the date of the notice of redemption less than the minimum
initial investment as specified in this prospectus. At least 60 days' advance
written notice of any such involuntary redemption will be provided to the
shareholder and such shareholder will be given an opportunity to purchase the
required value of additional shares at the next determined net asset value
without sales charge. Any involuntary redemption may only occur if the
shareholder account is less than the minimum initial investment due to
shareholder redemptions.

DISTRIBUTIONS FROM THE FUND

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

DIVIDENDS. Dividends from stocks and interest earned from other investments are
the Fund's main sources of net investment income. The Fund's present policy,
which may be changed at any time by the Fund's Board of Trustees, is to
distribute all or substantially all of its net investment income at least
annually as dividends to shareholders. Dividends are automatically applied to
purchase additional shares of the Fund at the next determined net asset value
unless the shareholder instructs otherwise.

The per share dividends on Class B Shares and Class C Shares may be lower than
the per share dividends on Class A Shares as a result of the higher distribution
fees and transfer agency costs applicable to such classes of shares.

CAPITAL GAIN DIVIDENDS. The Fund may realize capital gains or losses when it
sells securities, depending on whether the sales prices for the securities are
higher or lower than purchase prices. The Fund distributes any capital gains to
shareholders at least annually. As in the case of dividends, capital gain
dividends are automatically reinvested in additional shares of the Fund at the
next determined net asset value unless the shareholder instructs otherwise.

SHAREHOLDER SERVICES

Listed below are some of the shareholder services the Fund offers to investors.
For a more complete description of the Fund's shareholder services, such as
investment accounts, share certificates, retirement plans, automated clearing
house deposits, dividend diversification and the systematic withdrawal plan,
please refer to the Fund's Statement of Additional Information or contact your
authorized dealer.

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written

20
<PAGE> 23

instruction or by telephone, you may also perform certain transactions through
the internet. Please refer to our web site at www.vankampen.com for further
instruction regarding internet transactions. Van Kampen Investments and its
subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated
through the internet are genuine. Such procedures include requiring use of a
personal identification number prior to acting upon internet instructions and
providing written confirmation of instructions communicated through the
internet. If reasonable procedures are employed, none of Van Kampen Investments,
Investor Services or the Fund will be liable for following instructions received
through the internet which it reasonably believes to be genuine. If an account
has multiple owners, Investor Services may rely on the instructions of any one
owner.

REINVESTMENT PLAN. A convenient way for investors to accumulate additional
shares is by accepting dividends and capital gain dividends in shares of the
Fund. Such shares are acquired at net asset value per share (without sales
charge) on the applicable payable date of the dividend or capital gain dividend.
Unless the shareholder instructs otherwise, the reinvestment plan is automatic.
This instruction may be made by telephone by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired) or by writing to Investor Services. The
investor may, on the account application or prior to any declaration, instruct
that dividends and/or capital gain dividends be paid in cash, be reinvested in
the Fund at the next determined net asset value, or be invested in another
Participating Fund at the next determined net asset value.

AUTOMATIC INVESTMENT PLAN. An automatic investment plan is available under which
a shareholder can authorize Investor Services to debit the shareholder's bank
account on a regular basis to invest predetermined amounts in the Fund.
Additional information is available from the Distributor or your authorized
dealer.

EXCHANGE PRIVILEGE. Shares of the Fund may be exchanged for shares of the same
class of any Participating Fund based on the next determined net asset value per
share of each fund after requesting the exchange without any sales charge,
subject to certain limitations. Shares of the Fund may be exchanged for shares
of any Participating Fund only if shares of that Participating Fund are
available for sale; however, during periods of suspension of sales, shares of a
Participating Fund may be available for sale only to existing shareholders of a
Participating Fund. Shareholders seeking an exchange into a Participating Fund
should obtain and read the current prospectus for such fund prior to
implementing an exchange. A prospectus of any of the Participating Funds may be
obtained from any authorized dealer or the Distributor.

To be eligible for exchange, shares of the Fund must have been registered in the
shareholder's name for at least 30 days prior to an exchange. Shares of the Fund
registered in a shareholder's name for less than 30 days may only be exchanged
upon receipt of prior approval of the Adviser. It is the policy of the Adviser,
under normal circumstances, not to approve such requests.

When shares that are subject to a contingent deferred sales charge are exchanged
among Participating Funds, the holding period for purposes of computing the
contingent deferred sales charge is based upon the date of the initial purchase
of such shares from a Participating Fund. When such shares are redeemed and not
exchanged for shares of another Participating Fund, the shares are subject to
the contingent deferred sales charge schedule imposed by the Participating Fund
from which such shares were originally purchased.

Exchanges of shares are sales of shares of one Participating Fund and purchases
of shares of another Participating Fund. The sale may result in a gain or loss
for federal income tax purposes. If the shares sold have been held for less than
91 days, the sales charge paid on such shares is carried over and included in
the tax basis of the shares acquired.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services or by contacting the telephone transaction line at (800)
421-5684, through FundInfo(R) (automated telephone system) at (800) 847-2424 or
through the internet at www.vankampen.com. A shareholder automatically has these
exchange privileges unless the shareholder indicates otherwise by checking the
applicable box on the account application form. Van Kampen Investments and it
subsidiaries, including, Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated by
telephone are genuine. Such procedures include requiring certain personal
identification information prior to acting upon telephone instructions,
tape-recording telephone communications, and providing written confirmation of

21
<PAGE> 24

instructions communicated by telephone. If reasonable procedures are employed,
none of Van Kampen Investments, Investor Services or the Fund will be liable for
following telephone instructions which it reasonably believes to be genuine. If
the exchanging shareholder does not have an account in the fund whose shares are
being acquired, a new account will be established with the same registration,
dividend and capital gain dividend options (except dividend diversification) and
authorized dealer of record as the account from which shares are exchanged,
unless otherwise specified by the shareholder. In order to establish a
systematic withdrawal plan for the new account or reinvest dividends from the
new account into another fund, however, an exchanging shareholder must submit a
specific request. The Fund reserves the right to reject any order to acquire its
shares through exchange. In addition, the Fund and other Participating Funds may
restrict exchanges by shareholders engaged in excessive trading by limiting or
disallowing the exchange privilege to such shareholders. For further information
on these restrictions, see the Fund's Statement of Additional Information. The
Fund may modify, restrict or terminate the exchange privilege at any time on 60
days' notice to its shareholders of any termination or material amendment.

For purposes of determining the sales charge rate previously paid on Class A
Shares, all sales charges paid on the exchanged security and on any security
previously exchanged for such security or for any of its predecessors shall be
included. If the exchanged security was acquired through reinvestment, that
security is deemed to have been sold with a sales charge rate equal to the rate
previously paid on the security on which the dividend or distribution was paid.
If a shareholder exchanges less than all of such shareholder's securities, the
security upon which the highest sales charge rate was previously paid is deemed
exchanged first.

Exchange requests received on a business day prior to the time shares of the
funds involved in the request are priced will be processed on the date of
receipt. "Processing" a request means that shares of the fund which the
shareholder is redeeming will be redeemed at the net asset value per share next
determined on the date of receipt. Shares of the fund that the shareholder is
purchasing will also normally be purchased at the net asset value per share,
plus any applicable sales charge, next determined on the date of receipt.
Exchange requests received on a business day after the time shares of the funds
involved in the request are priced will be processed on the next business day in
the manner described herein.

FEDERAL INCOME

TAXATION

Distributions of the Fund's investment company taxable income (consisting
generally of taxable income and net short-term capital gain) are taxable to
shareholders as ordinary income to the extent of the Fund's earnings and
profits, whether paid in cash or reinvested in additional shares. Distributions
of the Fund's net capital gain (which is the excess of net long-term capital
gain over net short-term capital loss) as capital gain dividends, if any, are
taxable to shareholders as long-term capital gains, whether paid in cash or
reinvested in additional shares, and regardless of how long the shares of the
Fund have been held by such shareholders. The Fund expects that its
distributions will consist primarily of ordinary income and capital gain
dividends. Distributions in excess of the Fund's earnings and profits will first
reduce the adjusted tax basis of a holder's shares and, after such adjusted tax
basis is reduced to zero, will constitute capital gains to such holder (assuming
such shares are held as a capital asset). Although distributions generally are
treated as taxable in the year they are paid, distributions declared in October,
November or December, payable to shareholders of record on a specified date in
such month and paid during January of the following year will be treated as
having been distributed by the Fund and received by the shareholders on the
December 31st prior to the date of payment. The Fund will inform shareholders of
the source and tax status of all distributions promptly after the close of each
calendar year.

The sale or exchange of shares may be a taxable transaction for federal income
tax purposes. Shareholders who sell their shares will generally recognize a gain
or loss in an amount equal to the difference between their adjusted tax basis in
the shares sold and the amount received. If the shares are held by the
shareholder as a capital asset, the gain or loss will be a capital gain or loss.
Any recognized capital gains may be taxed at different rates depending on how
long the shareholder held such shares.

The Fund is required, in certain circumstances, to withhold 31% of dividends and
certain other

22
<PAGE> 25

payments, including redemptions, paid to shareholders who do not furnish to the
Fund their correct taxpayer identification number (in the case of individuals,
their social security number) and certain required certifications or who are
otherwise subject to backup withholding.

Foreign shareholders, including shareholders who are non-resident aliens, may be
subject to U.S. withholding tax on certain distributions (whether received in
cash or in shares) at a rate of 30% or such lower rate as prescribed by an
applicable treaty. Prospective foreign investors should consult their tax
advisers concerning the tax consequences to them of an investment in shares.

The Fund intends to qualify as a regulated investment company under federal
income tax law. If the Fund so qualifies and distributes each year to its
shareholders at least 90% of its investment company taxable income, the Fund
will not be required to pay federal income taxes on any income it distributes to
shareholders. If the Fund distributes less than an amount equal to the sum of
98% of its ordinary income and 98% of its capital gain net income, then the Fund
will be subject to a 4% excise tax on the undistributed amounts.

The federal income tax discussion set forth above is for general information
only. Prospective investors should consult their own tax advisers regarding the
specific federal tax consequences of purchasing, holding and disposing of shares
of the Fund, as well as the effects of state, local and foreign tax law and any
proposed tax law changes.

23
<PAGE> 26

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information for the year ended March 31, 2000 has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Fund's most recent
financial statements, is 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. The information for the nine-month period
ended March 31, 1999, the years ended June 30, 1998 and 1997, and the period
from May 29, 1996 to June 30, 1996 has been audited by KPMG LLP. This
information should be read in conjunction with the financial statements and
notes thereto included in the Statement of Additional Information.

<TABLE>
<CAPTION>
Class A Shares
Nine Months May 29, 1996
Year Ended Ended (Commencement of
March 31, March 31, Year Ended June 30, Investment Operations)
2000(a) 1999(a) 1998 1997 to June 30, 1996
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the
Period................. $17.137 $13.676 $9.948 $9.118 $9.430
------- ------- ------- ------ ------
Net Investment Loss.... (.234) (.125) (.135) (.065) (.002)
Net Realized and
Unrealized
Gain/Loss............ 22.414 4.445 3.863 .895 (.310)
------- ------- ------- ------ ------
Total from Investment
Operations............. 22.180 4.320 3.728 .830 (.312)
------- ------- ------- ------ ------
Less Distributions from
Net Realized Gain...... 1.874 .859 -0- -0- -0-
------- ------- ------- ------ ------
Net Asset Value, End of
the Period............. $37.443 $17.137 $13.676 $9.948 $9.118
------- ------- ------- ------ ------
Total Return............ 133.67%(b) 33.72%**(b) 37.49%(b) 9.10%(b) (3.29%)**(b)
Net Assets at End of the
Period (In millions)... $1,205.8 $242.6 $117.5 $84.0 $30.3
Ratio of Expenses to
Average Net Assets*.... 1.25% 1.56% 1.44% 1.30% 1.29%
Ratio of Net Investment
Loss to Average Net
Assets*................ (.86%) (1.22%) (1.09%) (.81%) (.50%)
Portfolio Turnover...... 139% 126%** 185% 186% 4%**
* 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..... N/A N/A 1.61% 1.61% 2.05%
Ratio of Net Investment
Loss to Average Net
Assets................. N/A N/A (1.26%) (1.12%) (1.25%)

<CAPTION>
Class B Shares
Nine Months May 29, 1996
Year Ended Ended (Commencement of
March 31, March 31, Year Ended June 30, Investment Operations)
2000(a) 1999(a) 1998 1997 to June 30, 1996
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the
Period................. $16.747 $13.461 $9.867 $9.112 $9.430
------- ------- ------- ------ ------
Net Investment Loss.... (.422) (.197) (.204) (.105) (.006)
Net Realized and
Unrealized
Gain/Loss............ 21.791 4.342 3.798 .860 (.312)
------- ------- ------- ------ ------
Total from Investment
Operations............. 21.369 4.145 3.594 .755 (.318)
------- ------- ------- ------ ------
Less Distributions from
Net Realized Gain...... 1.874 .859 -0- -0- -0-
------- ------- ------- ------ ------
Net Asset Value, End of
the Period............. $36.242 $16.747 $13.461 $9.867 $9.112
------- ------- ------- ------ ------
Total Return............ 131.91%(c) 32.99%**(c) 36.37%(c) 8.34%(c) (3.39%)**(c)
Net Assets at End of the
Period (In millions)... $948.5 $231.8 $148.4 $94.2 $25.5
Ratio of Expenses to
Average Net Assets*.... 2.00% 2.33% 2.20% 2.05% 2.06%
Ratio of Net Investment
Loss to Average Net
Assets*................ (1.61%) (1.99%) (1.85%) (1.55%) (1.28%)
Portfolio Turnover...... 139% 126%** 185% 186% 4%**
* If certain expenses
the ratios would hav
Ratio of Expenses to
Average Net Assets..... N/A N/A 2.37% 2.35% 2.81%
Ratio of Net Investment
Loss to Average Net
Assets................. N/A N/A (2.02%) (1.86%) (2.04%)

<CAPTION>
Class C Shares
Nine Months May 29, 1996
Year Ended Ended (Commencement of
March 31, March 31, Year Ended June 30, Investment Operations)
2000(a) 1999(a) 1998 1997 to June 30, 1996
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the
Period................. $16.762 $13.470 $9.869 $9.113 $9.430
------- ------- ------- ------ ------
Net Investment Loss.... (.447) (.197) (.203) (.103) (.006)
Net Realized and
Unrealized
Gain/Loss............ 21.887 4.348 3.804 .859 (.311)
------- ------- ------- ------ ------
Total from Investment
Operations............. 21.440 4.151 3.601 .756 (.317)
------- ------- ------- ------ ------
Less Distributions from
Net Realized Gain...... 1.874 .859 -0- -0- -0-
------- ------- ------- ------ ------
Net Asset Value, End of
the Period............. $36.328 $16.762 $13.470 $9.869 $9.113
------- ------- ------- ------ ------
Total Return............ 132.31%(d) 32.96%**(d) 36.47%(d) 8.34%(d) (3.39%)**(d)
Net Assets at End of the
Period (In millions)... $202.7 $27.4 $16.4 $10.8 $3.9
Ratio of Expenses to
Average Net Assets*.... 2.01% 2.33% 2.20% 2.05% 2.05%
Ratio of Net Investment
Loss to Average Net
Assets*................ (1.62%) (1.98%) (1.85%) (1.54%) (1.28%)
Portfolio Turnover...... 139% 126%** 185% 186% 4%**
* If certain expenses
the ratios would hav
Ratio of Expenses to
Average Net Assets..... N/A N/A 2.36% 2.35% 2.81%
Ratio of Net Investment
Loss to Average Net
Assets................. N/A N/A (2.02%) (1.85%) (2.04%)
</TABLE>

** Non-Annualized.

(a) Based on average shares outstanding.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year of purchase. If the
sales charges were included, total returns would be lower.

(c) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 5%, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
fifth year. If the sales charge was included, total returns would be lower.

(d) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower.

N/A = Not applicable.

See Notes to Financial Statements.

24
<PAGE> 27

BOARD OF TRUSTEES

AND OFFICERS

BOARD OF TRUSTEES

<TABLE>
<S> <C>
J. Miles Branagan Richard F. Powers, III*
Jerry D. Choate Phillip B. Rooney
Linda Hutton Heagy Fernando Sisto
R. Craig Kennedy Wayne W. Whalen*, Chairman
Mitchell M. Merin* Suzanne H. Woolsey
Jack E. Nelson
</TABLE>

OFFICERS

Richard F. Powers, III*

President

Stephen L. Boyd*

Executive Vice President and Chief Investment Officer

A. Thomas Smith III*

Vice President and Secretary

John H. Zimmermann, III*

Vice President

Michael H. Santo*

Vice President

Richard A. Ciccarone*

Vice President

John R. Reynoldson*

Vice President

John L. Sullivan*

Vice President, Chief Financial Officer and Treasurer

* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.

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

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

WEB SITE
www.vankampen.com

VAN KAMPEN AGGRESSIVE GROWTH FUND

1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Investment Adviser
VAN KAMPEN INVESTMENT ADVISORY CORP.
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 218256
Kansas City, MO 64121-8256

Attn: Van Kampen Aggressive Growth Fund

Custodian
STATE STREET BANK AND TRUST COMPANY
225 West Franklin Street, PO Box 1713
Boston, MA 02105-1713

Attn: Van Kampen Aggressive Growth Fund

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

Independent Auditors

ERNST & YOUNG LLP

233 South Wacker Drive

Chicago, IL 60606

<PAGE> 28

VAN KAMPEN
AGGRESSIVE GROWTH FUND

Class A Shares

Class B Shares

Class C Shares

PROSPECTUS

JULY 28, 2000,

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

You will find additional information about the
Fund in its annual and semiannual reports to
shareholders. The annual report explains the
market conditions and investment strategies
affecting the Fund's performance during its
last fiscal year.

You can ask questions or obtain a free copy of
the Fund's reports or its 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
Fund's reports can also be ordered from our
web site at www.vankampen.com.

Information about the Fund, including its
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 on the
EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the
operation of the SEC's Public Reference Room
may be obtained by calling the SEC at
1-202-942-8090. You can also request copies of
these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail
address ([email protected]), or by writing
the Public Reference Section of the SEC,
Washington, DC 20549-0102.

[VAN KAMPEN FUNDS LOGO]

The Fund's Investment Company Act
File No. is 811-4805.
AGG PRO
7/00
65125

<PAGE> 29

VAN KAMPEN
GROWTH FUND

Van Kampen Growth Fund's investment objective is to seek capital growth. The
Fund's investment adviser seeks to achieve the Fund's investment objective by
investing primarily in common stocks and other equity securities of growth
companies.

This prospectus is dated JULY 28, 2000.

[VAN KAMPEN FUNDS LOGO]
<PAGE> 30

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary................................ 3
Fees and Expenses of the Fund...................... 5
Investment Objective, Policies and Risks........... 6
Investment Advisory Services....................... 10
Purchase of Shares................................. 11
Redemption of Shares............................... 17
Distributions from the Fund........................ 19
Shareholder Services............................... 19
Federal Income Taxation............................ 21
Financial Highlights............................... 22
</TABLE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Fund's investment objective is to seek capital growth.

INVESTMENT STRATEGIES

INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objective.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Fund will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in common
stocks and other equity securities generally are affected by changes in the
stock markets, which fluctuate substantially over time, sometimes suddenly and
sharply. The Fund emphasizes a growth style of investing. The market values of
growth securities 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. Different types of
stocks tend to shift in and out of favor depending on market and economic
conditions. Thus, the value of the Fund's investments will vary and at times may
be lower or higher than that of other types of investments. During an overall
stock market decline, stock prices of smaller or unseasoned companies in which
the Fund may invest often fluctuate more and may fall more than the stock prices
of larger-sized companies. The Fund may from time to time emphasize certain
sectors of the market. To the extent the Fund invests a significant portion of
its assets in securities of companies in the same sector of the market, it is
more susceptible to economic, political, regulatory and other occurrences
influencing those sectors.

RISKS OF USING DERIVATIVE INSTRUMENTS. In general terms, a derivative instrument
is one whose value depends on (or is derived from) the value of an underlying
asset, interest rate or index. Options, futures and options on futures are
examples of derivative instruments. Derivative instruments involve risks
different from direct investments in underlying securities. These risks include
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; and risks that the transactions may not be liquid.

INVESTOR PROFILE

In light of the Fund's investment objective and strategies, the Fund may be
appropriate for investors who:

- Seek capital growth over the long term

- Do not seek current income from their investment

- Can withstand substantial volatility in the value of their shares of the Fund

- Wish to add to their investment portfolio a fund that emphasizes a growth
style of investing in common stocks and other equity securities

3
<PAGE> 32

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Fund is to look at how its
performance has varied from year-to-year. The following chart shows the annual
returns of the Fund's Class A Shares over the four calendar years prior to the
date of this prospectus. Sales loads are not reflected in this chart. If these
sales loads had been included, the returns shown below would have been lower.
Remember that the past performance of the Fund is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
1996* 61.99
1997* 27.01
1998 23.30
1999 59.07
</TABLE>

*Prior to February 3, 1997, the Fund had not engaged in a broad continuous
public offering of its shares, had sold shares to only a limited number of
investors and had not been subject to redemption requests. One factor impacting
the Fund's 1996 performance was the Fund's investments in initial public
offerings (IPOs). These investments had a greater effect on the Fund's 1996
performance than similar investments made in subsequent years, in part because
of the smaller size of the Fund in 1996. There is no assurance that the Fund's
future investments in IPOs will have the same effect on performance as the IPOs
did in 1996.

The Fund's return for the six-month period ended June 30, 2000 was 16.23%.

During the four-year period shown in the bar chart, the highest quarterly return
for Class A Shares was 46.43% (for the quarter ended December 31, 1999) and the
lowest quarterly return for Class A Shares was -22.85% (for the quarter ended
September 30, 1998).

4
<PAGE> 33

COMPARATIVE PERFORMANCE

As a basis for evaluating the Fund's performance and risks, the table below
shows how the Fund's performance compares with the Standard & Poor's 500 Index*,
a broad-based market index that the Fund's investment adviser believes is an
appropriate benchmark for the Fund, and with the Lipper Growth Fund Index**, an
index of funds with similar investment objectives. The Fund's performance
figures include the maximum sales charges paid by investors. The indices'
performance figures do not include any commissions or sales charges that would
be paid by investors purchasing the securities represented by those indices. An
investment can not be made directly in the indices. Average annual total returns
are shown for the periods ended December 31, 1999 (the most recently completed
calendar year prior to the date of this prospectus). Remember that the past
performance of the Fund is not indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Since
December 31, 1999 1 Year Inception
---------------------------------------------
<S> <C> <C> <C> <C>
Van Kampen Growth
Fund -- Class A
Shares 49.91% 39.80%(1)
Standard & Poor's
500 Index 21.04% 26.43%(2)
Lipper Growth
Fund Index 27.96% 24.84%(2)
.............................................
Van Kampen Growth
Fund -- Class B
Shares 52.84% 40.92%(1)
Standard & Poor's
500 Index 21.04% 26.43%(2)
Lipper Growth
Fund Index 27.96% 24.84%(2)
.............................................
Van Kampen Growth
Fund -- Class C
Shares 56.73% 41.01%(1)
Standard & Poor's
500 Index 21.04% 26.43%(2)
Lipper Growth
Fund Index 27.96% 24.84%(2)
.............................................
</TABLE>

Inception dates: (1) 12/27/95, (2) 12/28/95.

* The Standard & Poor's 500 Index is a market-weighted index of 500 widely held
common stocks of companies chosen for market size, liquidity and industry
group representation.

** Since Lipper Analytical Services has reclassified how it categorizes many of
its indices, the Fund's investment adviser believes the new system is less
applicable for this Fund. As a result, the Lipper Growth Fund index will not
be shown in future prospectuses of the Fund.

FEES AND EXPENSES
OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
-----------------------------------------------------
<S> <C> <C> <C> <C>
Management fees 0.75% 0.75% 0.75%
............................................................
Distribution and/or
service (12b-1)
fees(5) 0.25% 1.00%(6) 1.00%(6)
............................................................
Other expenses 0.44% 0.43% 0.44%
............................................................
Total annual fund
operating expenses 1.44% 2.18% 2.19%
............................................................
</TABLE>

(1) Reduced for purchases of $50,000 and over. See "Purchase of Shares -- Class
A Shares."
(2) Investments of $1 million or more are not subject to any sales charge at the
time of purchase, but a deferred sales charge of 1.00% may be imposed on
certain redemptions made within one year of the purchase. See "Purchase of
Shares -- Class A Shares."

(3) The maximum deferred sales charge is 5.00% in the first year after purchase,
declining thereafter as follows:

Year 1-5.00%
Year 2-4.00%
Year 3-3.00%
Year 4-2.50%
Year 5-1.50%
After-None
See "Purchase of Shares -- Class B Shares."
(4) The maximum deferred sales charge is 1.00% in the first year after purchase
and 0.00% thereafter. See "Purchase of Shares -- Class C Shares."

5
<PAGE> 34

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $713 $1,004 $1,317 $2,200
.......................................................................
Class B Shares $721 $982 $1,320 $2,326*
.......................................................................
Class C Shares $322 $685 $1,175 $2,524
.......................................................................
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $713 $1,004 $1,317 $2,200
.......................................................................
Class B Shares $221 $682 $1,170 $2,326*
.......................................................................
Class C Shares $222 $685 $1,175 $2,524
.......................................................................
</TABLE>

* Based on conversion to Class A Shares after eight years.

INVESTMENT OBJECTIVE,
POLICIES AND RISKS

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objective by investing primarily in common stocks and
other equity securities of growth companies. Growth companies are those
companies with established records or future prospects of growth in sales or
earnings and companies with new products, services or processes that the Fund's
investment adviser believes offer above-average potential for capital growth.
The Fund's primary approach is to seek what the Fund's investment adviser
believes to be unusually attractive growth investments on an individual company
basis based on a combination of positive future business fundamentals and
attractive current valuations. By the investment adviser's definition, a company
with positive future business fundamentals has at least one of the following
traits: consistent earnings growth; accelerating earnings growth; better than
expected business fundamentals; or an underlying change in a company, industry
or regulatory environment. Investments in such companies may have above average
volatility of price movement. The Fund may invest in cyclical industries when
the Fund's investments adviser believes such industries are in or are entering
into a growth cycle and have above-average potential for capital growth. Because
prices of common stocks and other equity securities fluctuate, the value of an
investment in the Fund will vary. The Fund 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.

The Fund does not limit its investments to any single group or type of security.
The Fund may invest in unseasoned issuers and in securities involving special

6
<PAGE> 35

circumstances, such as initial public offerings, companies with new management
or management reliant on one or a few key people, special products and
techniques, limited or cyclical product lines, markets or resources, or unusual
developments, such as mergers, liquidations, bankruptcies or leveraged buyouts.
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. In addition, investments made in anticipation of future events may, if
delayed or never achieved, cause stock prices to fall. Similarly, investments in
small- or medium-sized companies may be subject to more abrupt or erratic market
movements and may have lower trading volumes or more erratic trading than
securities of larger-sized companies or the market averages in general. Such
companies may be subject to a greater degree of change in earnings and business
prospects than are larger, more established companies.

The Fund may dispose of a security whenever, in the opinion of the Fund's
investment adviser, factors indicate it is desirable to do so. Such factors
include a 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.

While the Fund invests primarily in common stocks, the Fund may invest in
preferred stocks and securities convertible into common stocks or other equity
securities. 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 or mandatory
redemption provisions.

A convertible security is a bond, debenture, note, preferred stock, warrant or
other security that may be converted into or exchanged for a prescribed amount
of common stock or other equity security of the same or a different issuer or
into cash within a particular period of time at a specified price or formula. A
convertible security generally entitles the holder to receive interest paid or
accrued on debt or the dividend paid on preferred stock until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities generally have characteristics similar to both debt and
equity securities. The value of convertible securities tends to decline as
interest rates rise and, because of the conversion feature, tends to vary with
fluctuations in the market value of the underlying equity securities.
Convertible securities ordinarily provide a stream of income with generally
higher yields than those of common stock of the same or similar issuers.
Convertible securities generally rank senior to common stock in a corporation's
capital structure but are usually subordinated to comparable nonconvertible
securities. Convertible securities generally do not participate directly in any
dividend increases or decreases of the underlying equity security although the
market prices of convertible securities may be affected by any such dividend
changes or other changes in the underlying security. 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. Warrants do not carry
with them the right to dividends and they do not represent any rights in the
assets of the issuer. As a result, any such investments may be considered to be
more speculative than most other types of equity investments.

7
<PAGE> 36

circumstances are more likely to lead to a weakened capacity to make principal
and interest payments than in the case of higher-rated securities. The market
prices of debt securities generally fluctuate inversely with changes in interest
rates so that the value of investments in such securities can be expected to
decrease as interest rates rise and increase as interest rates fall. The market
prices of longer-term debt securities generally tends to fluctuate more in
response to changes in interest rates than short-term debt securities.

RISKS OF INVESTING IN

SECURITIES OF FOREIGN ISSUERS

The Fund may invest up to 25% of its total assets in securities of foreign
issuers. Securities of foreign issuers 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), the
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 conversion costs) and possible
difficulty in enforcing contractual obligations or taking judicial action.
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 and financial reporting
disclosure requirements than domestic issuers. There is generally less
government regulation of stock exchanges, brokers and listed companies abroad
than in the United States, 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 foreign exchanges,
brokers and dealers than there is in the United States, the Fund may experience
settlement difficulties or delays not usually encountered in the United States.

STRATEGIC TRANSACTIONS

8
<PAGE> 37

purposes, protect against changes in currency exchange rates, or establish
positions in the derivatives markets as a temporary substitute for purchasing or
selling particular securities.

Strategic Transactions have risks including the imperfect correlation between
the value of such instruments and the underlying assets, the possible default of
the other party to the transaction or illiquidity of the derivative instrument.
Furthermore, the ability to successfully use Strategic Transactions depends on
the investment adviser's ability to predict pertinent market movements, which
cannot be assured. Thus, the use of Strategic Transactions may result in losses
greater than if they had not been used, may require the Fund to sell or purchase
portfolio securities at inopportune times or for prices other than current
market values, may limit the amount of appreciation the Fund can otherwise
realize on an investment, or may cause the Fund to hold a security that it might
otherwise sell. The use of currency transactions can result in the Fund
incurring losses because of the imposition of exchange controls, suspension of
settlements or the inability of the Fund to deliver or receive a specified
currency. Additionally, amounts paid as premiums or cash or other assets held in
margin accounts with respect to Strategic Transactions are not otherwise
available to the Fund for investment purposes.

OTHER INVESTMENTS AND RISK FACTORS

For cash management purposes, the Fund may engage in repurchase agreements with
broker-dealers, banks and other financial institutions to earn a return on
temporarily available cash. Such transactions are subject to the risk of default
by the other party. It is currently the policy of the Fund not to invest more
than 20% of its total assets at the time of purchase in securities subject to
repurchase agreements.

The Fund may lend its portfolio securities in an amount up to 50% of its total
assets to broker-dealers, banks or other institutional borrowers of securities.
Such loans must be callable at any time and the borrower at all times during the
loan must maintain cash or liquid securities as collateral or provide the Fund
an irrevocable letter of credit equal to at least 100% of the value of the
securities loaned (including accrued interest). During the time portfolio
securities are on loan, the Fund receives any dividends or interest paid on such
securities and receives the interest earned on the collateral which is invested
in short-term instruments or receives an agreed-upon amount of interest income
from the borrower who had delivered the collateral or letter of credit. As with
any extensions of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower of the securities fail
financially.

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund 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
Fund's investment adviser believes the potential for capital growth has
lessened, or for other reasons. The portfolio turnover rate may vary from year
to year. A high portfolio turnover rate (100% or more) increases a fund's
transactions costs (including brokerage commissions or dealer costs) and high
portfolio turnover may result in the realization of more short-term capital
gains than if a fund had lower portfolio turnover. Increases in a fund's
transactions

9
<PAGE> 38

costs would adversely impact that fund's performance. The turnover rate will not
be a limiting factor, however, if the Fund's investment adviser considers
portfolio changes appropriate.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, the Fund may, on a temporary basis, hold cash or invest 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, and in investment grade corporate debt securities. Under normal market
conditions, the potential for capital growth on these securities will tend to be
lower than the potential for capital growth on other securities that may be
owned by the Fund. In taking such a defensive position, the Fund would not be
pursuing and may not achieve its investment objective.

INVESTMENT ADVISORY SERVICES

ADVISORY AGREEMENT. The Fund 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 between the Adviser and the
Fund (the "Advisory Agreement"), the Fund pays the Adviser a monthly fee
computed based upon an annual rate applied to the average daily net assets of
the Fund as follows:

<TABLE>
<CAPTION>
Average Daily Net Assets % Per Annum
-----------------------------------------------
<S> <C> <C> <C>
First $500 million 0.75 of 1.00%
...............................................
Next $500 million 0.70 of 1.00%
...............................................
Over $1 billion 0.65 of 1.00%
...............................................
</TABLE>

Applying this fee schedule, the effective advisory fee rate was 0.75% of the
Fund's average daily net assets for the Fund's fiscal year ended March 31, 2000.

The Fund's average daily net assets are determined by taking the average of all
of the determinations of the net assets during a given calendar month. Such fee
is payable for each calendar month as soon as practicable after the end of the
month.

Under the Advisory Agreement, the Adviser furnishes offices, necessary
facilities and equipment and provides administrative services to the Fund. The
Fund pays all charges and expenses of its day-to-day operations, including
service fees, distribution fees, custodian fees, legal and independent
accountant fees, the costs of reports and proxies to shareholders, compensation
of trustees of the Trust (other than those who are affiliated persons of the
Adviser, Distributor or Van Kampen Investments), and all other ordinary business
expenses not specifically assumed by the Adviser.

The Adviser may utilize, at its own expense, credit analysis, research and
trading support services provided by its affiliate, Van Kampen Asset Management
Inc. ("Asset Management").

PERSONAL INVESTMENT POLICIES. The Fund, the Adviser and the Distributor have
adopted Codes of Ethics designed to recognize the fiduciary relationships among
the Fund, the Adviser, the Distributor and their respective employees. The Codes
of Ethics 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 pre-clearance and
other procedures designed to prevent conflicts of interest.

PORTFOLIO MANAGEMENT. The Fund's portfolio management team is headed by Jeff D.
New, Senior

10
<PAGE> 39

Portfolio Manager. Mr. New has been a Senior Vice President and Senior Portfolio
Manager of the Adviser and Asset Management since December 1997. Prior to
December 1997, Mr. New was a Vice President and Portfolio Manager of the Adviser
and Asset Management. Prior to December 1994, he was an Associate Portfolio
Manager of Asset Management. Mr. New joined the Adviser in 1995 and Asset
Management in 1990. Mr. New has been primarily responsible for managing the
Fund's investment portfolio since its inception.

Senior Portfolio Managers Michael Davis and Mary Jayne Maly are responsible as
co-managers for the day-to-day management of the Fund's investment portfolio.
Mr. Davis has been a Senior Portfolio Manager of the Adviser and Asset
Management since April 2000, and a Vice President and Portfolio Manager of the
Adviser and Asset Management 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 a co-manager of the Fund
since March 1998.

Ms. Maly has been a Senior Portfolio Manager since April 2000, and a Vice
President and Portfolio Manager of the Adviser and Asset Management since July
1998. From July 1997 to June 1998, she was a Vice President at Morgan Stanley
Asset Management Inc. and assisted in the management of the Morgan Stanley
Institutional Real Estate Funds and the Van Kampen American Capital Real Estate
Securities Fund. Prior to July 1997, Ms. Maly was a Vice President and Portfolio
Manager of the Adviser and Asset Management. Prior to November 1992, she was a
Vice President and Senior Equity Analyst at Texas Commerce Investment Management
Company. Ms. Maly has been a co-manager of the Fund since July 1998.

PURCHASE OF SHARES

GENERAL

The Fund offers three classes of shares designated as Class A Shares, Class B
Shares and Class C Shares. By offering three classes of shares, the Fund permits
each investor to choose the class of shares that is most beneficial given the
amount to be invested and the length of time the investor expects to hold the
shares.

Initial investments generally must be at least $1,000 for each class of shares,
and subsequent investments must be at least $25 for each class of shares.
Minimum investment amounts may be waived by the Distributor for plans involving
periodic investments and for certain retirement accounts.

11
<PAGE> 40

Exchange and (i) valuing securities listed or traded on a national securities
exchange at the last reported sale price, and if there has been no sale that
day, at the mean between the last reported bid and asked prices, (ii) valuing
over-the-counter securities at the last reported sale price from the National
Association of Securities Dealers Automated Quotations ("NASDAQ") and, if there
has been no sale that day at the mean between the last reported bid and asked
prices and (iii) valuing securities at the mean between the last reported bid
and asked prices, (iv) valuing any securities for which market quotations are
not readily available and any other assets at fair value as determined in good
faith by the Adviser in accordance with procedures established by the Fund's
Board of Trustees. Short-term securities with remaining maturities of 60 days or
less are valued on an amortized cost basis, which approximates market value.

Shares may be purchased on any business day by completing the account
application form and forwarding the account application, directly or through an
authorized dealer, to the Fund's shareholder service agent, Van Kampen Investor
Services Inc. ("Investor Services"), a wholly owned subsidiary of Van Kampen
Investments. When purchasing shares of the Fund, investors must specify whether
the purchase is for Class A Shares, Class B Shares or Class C Shares by
selecting the correct Fund number on the account application. Sales personnel of
authorized dealers distributing the Fund's shares are entitled to receive
compensation for selling such shares and may receive differing compensation for
selling Class A Shares, Class B Shares or Class C Shares.

12
<PAGE> 41

of additional shares should contact the Fund by telephone at (800) 341-2911 or
by writing to the Fund, c/o Van Kampen Investor Services Inc., PO Box 218256,
Kansas City, MO 64121-8256.

CLASS A SHARES

SALES CHARGE SCHEDULE

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. The contingent deferred sales charge is assessed on
an amount equal to the lesser of the then current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

Under the Distribution Plan and the Service Plan, the Fund may spend up to a
total of 0.25% per year of the Fund's average daily net assets with respect to
Class A Shares of the Fund. From such amount, under the Service Plan, the Fund
may spend up to 0.25% per year of the Fund's average daily net assets with
respect to Class A Shares of the Fund.

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within five years of purchase as
shown in the table as follows:

CLASS B SHARES

SALES CHARGE SCHEDULE

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to Class B Shares of the Fund. In
addition, under the Service Plan, the Fund may spend up to 0.25% per year of the
Fund's average daily net assets with respect to Class B Shares of the Fund.

13
<PAGE> 42

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class C
Shares in an amount of $1 million or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

Under the Distribution Plan, the Fund may spend up to 0.75% per year of the
Fund's average daily net assets with respect to Class C Shares of the Fund. In
addition, under the Service Plan, the Fund may spend up to 0.25% per year of the
Fund's average daily net assets with respect to Class C Shares of the Fund.

CONVERSION FEATURE

Class B Shares, including Class B Shares received from reinvestment of
distributions through the dividend reinvestment plan on such shares,
automatically convert to Class A Shares eight years after the end of the
calendar month in which the shares were purchased. Such conversion will be on
the basis of the relative net asset values per share, without the imposition of
any sales load, fee or other charge. The conversion schedule applicable to a
share of the Fund acquired through the exchange privilege from another Van
Kampen fund participating in the exchange program is determined by reference to
the Van Kampen fund from which such share was originally purchased.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

The contingent deferred sales charge is waived on redemptions of Class B Shares
and Class C Shares (i) within one year following the death or disability (as
disability is defined by federal income tax law) of a shareholder, (ii) for
required minimum distributions from an individual retirement account ("IRA") or
certain other retirement plan distributions, (iii) for withdrawals under the
Fund's systematic withdrawal plan but limited to 12% annually of the initial
value of the account, (iv) if no commission or transaction fee is paid to
authorized dealers at the time of purchase of such shares and (v) if made by the
Fund's involuntary liquidation of a shareholder's account as described under the
Prospectus heading "Redemption of Shares." Subject to certain limitations, a
shareholder who has redeemed Class C Shares of the Fund may reinvest in Class C
Shares at net asset value with credit for any contingent deferred sales charge
if the reinvestment is made within 180 days after the redemption. For a more
complete description of contingent deferred sales charge waivers, please refer
to the Fund's Statement of Additional Information or contact your authorized
dealer.

QUANTITY DISCOUNTS

14
<PAGE> 43

LETTER OF INTENT. A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating investments over a 13-month period
to determine the sales charge as outlined in the Class A Shares sales charge
table. The size of investment shown in the Class A Shares sales charge table
includes purchases of shares of the Participating Funds over a 13-month period
based on the total amount of intended purchases plus the value of all shares of
the Participating Funds previously purchased and still owned. An investor may
elect to compute the 13-month period starting up to 90 days before the date of
execution of a Letter of Intent. Each investment made during the period receives
the reduced sales charge applicable to the total amount of the investment goal.
The initial purchase must be for an amount equal to at least 5% of the minimum
total purchase amount of the level selected. If trades not initially made under
a Letter of Intent subsequently qualify for a lower sales charge through the
90-day backdating provisions, an adjustment will be made at the expiration of
the Letter of Intent to give effect to the lower sales charge. Such adjustment
in sales charge will be used to purchase additional shares. The Fund initially
will escrow shares totaling 5% of the dollar amount of the Letter of Intent to
be held by Investor Services in the name of the shareholder. In the event the
Letter of Intent goal is not achieved within the specified period, the investor
must pay the difference between the sales charge applicable to the purchases
made and the reduced sales charge previously paid. Such payments may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain the difference.

OTHER PURCHASE PROGRAMS

UNIT INVESTMENT TRUST REINVESTMENT PROGRAM. The Fund permits unitholders of unit
investment trusts to reinvest distributions from such trusts in Class A Shares
of the Fund at net asset value per share and with no minimum initial or
subsequent investment requirement, if the administrator of an investor's unit
investment trust program meets certain uniform criteria relating to cost savings
by the Fund and the Distributor. The total sales charge for all other
investments made from unit investment trust distributions will be 1.00% of the
offering price (1.01% of net asset value). Of this amount, the Distributor will
pay to the authorized dealer, if any, through which such participation in the
qualifying program was initiated 0.50% of the offering price as a dealer
concession or agency commission. Persons desiring more information with respect
to this program, including the terms and conditions that apply to the program,
should contact their authorized dealer or the Distributor.

NET ASSET VALUE PURCHASE OPTIONS. Class A Shares of the Fund may be purchased at
net asset value, generally upon written assurance that the purchase is

15
<PAGE> 44

made for investment purposes and that the shares will not be resold except
through redemption by the Fund, by:

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
Dean Witter & Co. and any of its subsidiaries and such persons' families and
their beneficial accounts.

(7) Accounts as to which a bank or broker-dealer charges an account management
fee ("wrap accounts"), provided the bank or broker-dealer has a separate
agreement with the Distributor.

(8) Trusts created under pension, profit sharing or other employee benefit plans
qualified under Section 401(a) of the Internal Revenue Code of 1986, as
amended (the "Code"), or custodial accounts held by a bank created pursuant
to Section 403(b) of the Code and sponsored by nonprofit organizations
defined under Section 501(c)(3) of the Code and assets held by an employer
or trustee in connection with an eligible deferred compensation plan under
Section 457 of the Code. Such plans will qualify for purchases at net asset
value provided, for plans initially establishing accounts with the
Distributor in the Participating Funds after January 1, 2000, that (1) the
total plan assets are at least $1 million or (2) such shares are purchased
by an employer sponsored plan with more than 100 eligible employees. Such
plans that have been established with a Participating Fund or have received
proposals from the Distributor prior to January 1, 2000 based on net asset
value purchase privileges previously in effect will be qualified to purchase
shares of the Participating Funds at net asset value. Section 403(b) and
similar accounts for which Van Kampen Trust Company serves as custodian will
not be eligible for net asset value purchases based on the aggregate
investment made by the plan or the number of eligible employees, except
under certain uniform criteria established by the Distributor from time to
time. For purchases on February 1, 1997 and thereafter, a commission will be
paid on purchases as follows: 1.00% on sales to $2 million, plus 0.80% on
the next $1 million, plus 0.50% on the next $47 million, plus 0.25% on the
excess over $50 million.

16
<PAGE> 45

for example, is that its participants are credit card holders of the same
institution, policy holders of an insurance company, customers of a bank or
broker-dealer, clients of an investment adviser or other similar groups.
Shares purchased in each group's participants account in connection with
this privilege will be subject to a contingent deferred sales charge of
1.00% in the event of redemption within one year of purchase, and a
commission will be paid to authorized dealers who initiate and are
responsible for such sales to each individual as follows: 1.00% on sales to
$2 million, plus 0.80% on the next $1 million and 0.50% on the excess over
$3 million.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents, and a person's spouse's parents.

REDEMPTION OF
SHARES

Except as specified below under "Telephone Redemption Requests," payment for
shares redeemed generally will be made by check mailed within seven days after
receipt by Investor Services of the redemption request and any other necessary
documents in proper form as described below. Such payment may be postponed or
the right of redemption suspended as provided by the rules of the SEC. Such
payment may, under certain circumstances, be paid wholly or in part by a
distribution-in-kind of portfolio securities. A distribution-in-kind will result
in recognition by the shareholder of a gain or loss for federal income tax
purposes when such securities are distributed, and the shareholder may have
brokerage costs and a gain or loss for federal income tax purposes upon the
shareholder's subsequent disposition of such securities. If the shares to be
redeemed have been recently purchased by check, Investor Services may delay the
payment of redemption proceeds until it confirms the purchase check has cleared,
which may take up to 15 days. A taxable gain or loss may be recognized by the
shareholder upon redemption of shares. Certificated shares must be properly
endorsed for transfer and must accompany a written redemption request.

17
<PAGE> 46

being redeemed must be properly endorsed for transfer and must accompany the
redemption request. Generally, in the event a redemption is requested by and
registered to a corporation, partnership, trust, fiduciary, estate or other
legal entity owning shares of the Fund, a copy of the corporate resolution or
other legal documentation appointing the authorized signer and certified within
the prior 120 days must accompany the redemption request. Retirement plan
distribution requests should be sent to the plan custodian/trustee to be
forwarded to Investor Services. Contact the plan custodian/trustee for further
information.

TELEPHONE REDEMPTION REQUESTS. The Fund permits redemption of shares by
telephone and for redemption proceeds to be sent to the address of record for
the account or to the bank account of record as described below. A shareholder
automatically has telephone redemption privileges unless the shareholder
indicates otherwise by checking the applicable box on the account application
form. For accounts that are not established with telephone redemption
privileges, a shareholder may call the Fund at (800) 341-2911 to request that a
copy of the Telephone Redemption Authorization form be sent to the shareholder
for completion. To redeem shares, contact the telephone transaction line at
(800) 421-5684. Shares may also be redeemed by telephone through FundInfo(R)
(automated telephone system), which is accessible 24 hours a day, seven days a
week at (800) 847-2424. Van Kampen Investments and its subsidiaries, including
Investor Services, and the Fund employ procedures considered by them to be
reasonable to confirm that instructions communicated by telephone are genuine.
Such procedures include requiring certain personal identification information
prior to acting upon telephone instructions, tape-recording telephone
communications and providing written confirmation of instructions communicated
by telephone. If reasonable procedures are employed, none of Van Kampen
Investments, Investor Services or the Fund will be liable for following
telephone instructions which it reasonably believes to be genuine. Telephone
redemptions may not be available if the shareholder cannot reach Investor
Services by telephone, whether because all telephone lines are busy or for any
other reason; in such case, a shareholder would have to use the Fund's other
redemption procedure previously described. Requests received by Investor
Services prior to 4:00 p.m., New York time, will be processed at the next
determined net asset value per share. These privileges are available for most
accounts other than retirement accounts or accounts with shares represented by
certificates. If an account has multiple owners, Investor Services may rely on
the instructions of any one owner.

18
<PAGE> 47

DISTRIBUTIONS FROM THE FUND

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

DIVIDENDS. Dividends from stocks and interest earned from other investments are
the Fund's main sources of net investment income. The Fund's present policy,
which may be changed at any time by the Fund's Board of Trustees, is to
distribute all, or substantially all, of its net investment income at least
annually as dividends to shareholders. Dividends are automatically applied to
purchase additional shares of the Fund at the next determined net asset value
unless the shareholder instructs otherwise.

SHAREHOLDER SERVICES

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written instruction or by telephone, you may also perform certain
transactions through the internet. Please refer to our web site at
www.vankampen.com for further instructions regarding internet transactions. Van
Kampen Investments and its subsidiaries, including Investor Services, and the
Fund employ procedures considered by them to be reasonable to confirm that
instructions communicated through the internet are genuine. Such procedures
include requiring use of a personal identification number prior to acting upon
internet instructions and providing written confirmation of instructions
communicated through the internet. If reasonable procedures are employed, none
of Van Kampen Investments, Investor Services or the Fund will be liable for
following instructions received through the internet which it reasonably
believes to be genuine. If an account has multiple owners, Investor Services may
rely on the instructions of any one owner.

REINVESTMENT PLAN. A convenient way for investors to accumulate additional
shares is by accepting dividends and capital gain dividends in shares of the
Fund. Such shares are acquired at net asset value per share (without sales
charge) on the applicable payable date of the dividend or capital gain dividend.
Unless the shareholder instructs otherwise, the reinvestment plan is automatic.
This instruction may be made by telephone by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired) or by writing to Investor Services. The
investor may, on the account application form or prior to any declaration,
instruct that dividends and/or capital gain dividends be paid in cash, be
reinvested in the Fund at the next determined net asset value, or be invested in
another Participating Fund at the next determined net asset value.

19
<PAGE> 48

such fund prior to implementing an exchange. A prospectus of any of the
Participating Funds may be obtained from any authorized dealer or the
Distributor.

To be eligible for exchange, shares of the Fund must have been registered in the
shareholder's name for at least 30 days prior to an exchange. Shares of the Fund
registered in a shareholder's name for less than 30 days may only be exchanged
upon receipt of prior approval of the Adviser. It is the policy of the Adviser
under normal circumstances, not to approve such requests.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services, by contacting the telephone transaction line at (800)
421-5684, through FundInfo(R) (automated telephone system) at (800) 847-2424 or
through the internet at www.vankampen.com. A shareholder automatically has these
exchange privileges unless the shareholder indicates otherwise by checking the
applicable box on the account application form. Van Kampen Investments and its
subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated by
telephone are genuine. Such procedures include requiring certain personal
identification information prior to acting upon telephone instructions,
tape-recording telephone communications, and providing written confirmation of
instructions communicated by telephone. If reasonable procedures are employed,
none of Van Kampen Investments, Investor Services or the Fund will be liable for
following telephone instructions which it reasonably believes to be genuine. If
the exchanging shareholder does not have an account in the fund whose shares are
being acquired, a new account will be established with the same registration,
dividend and capital gain dividend options (except dividend diversification) and
authorized dealer of record as the account from which shares are exchanged,
unless otherwise specified by the shareholder. In order to establish a
systematic withdrawal plan for the new account or reinvest dividends from the
new account into another fund, however, an exchanging shareholder must submit a
specific request. The Fund reserves the right to reject any order to acquire its
shares through exchange. In addition, the Fund and other Participating Funds may
restrict exchanges by shareholders engaged in excessive trading by limiting or
disallowing the exchange privilege to such shareholders. For further information
on these restrictions, see the Fund's Statement of Additional Information. The
Fund may modify, restrict or terminate the exchange privilege at any time on 60
days' notice to its shareholders of any termination or material amendment.

Exchange requests received on a business day prior to the time shares of the
funds involved in the request are priced will be processed on the date of
receipt. "Processing" a request means that shares of the fund which the
shareholder is redeeming will be redeemed at the net asset value per share next
determined on the date of receipt. Shares of the fund that the shareholder is
purchasing will also normally be purchased at the net asset value per share,
plus any applicable sales charge, next determined on the date of receipt.
Exchange requests received on a business day after the time that shares of the
funds involved in the request are priced will be processed on the next business
day in the manner described herein.

20
<PAGE> 49

FEDERAL INCOME TAXATION

The Fund is required, in certain circumstances, to withhold 31% of dividends and
certain other payments, including redemptions, paid to shareholders who do not
furnish to the Fund their correct taxpayer identification number (in the case of
individuals, their social security number) and certain required certifications
or who are otherwise subject to backup withholding.

21
<PAGE> 50

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information for the year ended March 31, 2000 has been audited by
PricewaterhouseCoopers LLP, whose report, along with the Fund's most recent
financial statements, is 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. The information for the nine-month period
ended March 31, 1999, the years ended June 30, 1998 and 1997, and the period
from December 27, 1995 to June 30, 1996 has been audited by KPMG LLP. This
information should be read in conjunction with the financial statements and
notes thereto included in the Statement of Additional Information.

<TABLE>
<CAPTION>
CLASS A SHARES CLASS B SHARES
DECEMBER 27, 1995
YEAR NINE MONTH (COMMENCEMENT OF YEAR NINE MONTH
ENDED PERIOD ENDED INVESTMENT ENDED PERIOD ENDED
MARCH 31, MARCH 31, YEAR ENDED JUNE 30, OPERATIONS) MARCH 31, MARCH 31,
2000(A) 1999(A) 1998 1997(A) TO JUNE 30, 1996 2000(A) 1999(A)
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period............. $23.298 $23.463 $17.878 $13.696 $10.000 $22.869 $23.173
------- ------- ------- ------- ------- ------- -------
Net Investment
Income/Loss............. (.322) (.185) (0.136) 0.031 (0.044) (.521) (.299)
Net Realized and
Unrealized Gain......... 20.615 .604 6.711 4.810 3.740 20.089 .579
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations................ 20.293 .419 6.575 4.841 3.696 19.568 .280
------- ------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain.................... 3.374 .584 0.990 0.353 -0- 3.374 .584
Return of Capital
Distribution............ -0- -0- -0- 0.306 -0- -0- -0-
------- ------- ------- ------- ------- ------- -------
Total Distributions......... 3.374 .584 0.990 0.659 -0- 3.374 .584
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period.................... $40.217 $23.298 $23.463 $17.878 $13.696 $39.063 $22.869
======= ======= ======= ======= ======= ======= =======
Total Return *.............. 93.18%(b) 2.18%(b)** 38.52%(b) 36.00%(b) 37.00%(b)** 91.74%(c) 1.60(c)**
Net Assets at End of the
Period (In millions)...... $106.3 $60.1 $64.9 $53.1 $0.1 $115.6 $72.8
Ratio of Expenses to Average
Net Assets *.............. 1.44% 1.64% 1.30% 1.32% 1.46% 2.18% 2.40%
Ratio of Net Investment
Income/Loss to Average Net
Assets *.................. (1.14%) (1.19%) (0.64%) 0.19% (0.79%) (1.89%) (1.95%)
Portfolio Turnover.......... 170% 82%** 125% 139% 94%** 170% 82%**
* If certain fees 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...... N/A 1.68% 1.58% 2.31% 15.69% N/A 2.44%
Ratio of Net Investment
Income to Average Net
Assets.................. N/A (1.23%) (0.92%) (0.80%) (15.02%) N/A (1.99%)

<CAPTION>
CLASS B SHARES
DECEMBER 27, 1995
(COMMENCEMENT OF
INVESTMENT
YEAR ENDED JUNE 30, OPERATIONS)
1998 1997(A) TO JUNE 30, 1996
<S> <C> <C> <C>
Net Asset Value, Beginning
of the Period............. $17.796 $13.695 $10.000
------- ------- -------
Net Investment
Income/Loss............. (0.270) (0.093) (0.045)
Net Realized and
Unrealized Gain......... 6.637 4.853 3.740
------- ------- -------
Total from Investment
Operations................ 6.367 4.760 3.695
------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain.................... 0.990 0.353 -0-
Return of Capital
Distribution............ -0- 0.306 -0-
------- ------- -------
Total Distributions......... 0.990 0.659 -0-
------- ------- -------
Net Asset Value, End of the
Period.................... $23.173 $17.796 $13.695
======= ======= =======
Total Return *.............. 37.56%(c) 35.32%(c) 37.00%(c)**
Net Assets at End of the
Period (In millions)...... $79.7 $55.0 $0.1
Ratio of Expenses to Average
Net Assets *.............. 2.05% 2.07% 1.46%
Ratio of Net Investment
Income/Loss to Average Net
Assets *.................. (1.40%) (0.56%) (0.74%)
Portfolio Turnover.......... 125% 139% 94%**
* If certain fees 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...... 2.34% 3.04% 15.70%
Ratio of Net Investment
Income to Average Net
Assets.................. (1.68%) (1.53%) (14.97%)

<CAPTION>
CLASS C SHARES
DECEMBER 27, 1995
YEAR NINE MONTH (COMMENCEMENT OF
ENDED PERIOD ENDED INVESTMENT
MARCH 31, MARCH 31, YEAR ENDED JUNE 30, OPERATIONS)
2000(A) 1999(A) 1998 1997(A) TO JUNE 30, 1996
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period............. $22.867 $23.173 $17.793 $13.695 $10.000
------- ------- ------- ------- -------
Net Investment
Income/Loss............. (.520) (.300) (0.311) (0.096) (0.045)
Net Realized and
Unrealized Gain......... 20.039 .578 6.681 4.853 3.740
------- ------- ------- ------- -------
Total from Investment
Operations................ 19.519 .278 6.370 4.757 3.695
------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain.................... 3.374 .584 0.990 0.353 -0-
Return of Capital
Distribution............ -0- -0- -0- 0.306 -0-
------- ------- ------- ------- -------
Total Distributions......... 3.374 .584 0.990 0.659 -0-
------- ------- ------- ------- -------
Net Asset Value, End of the
Period.................... $39.012 $22.867 $23.173 $17.793 $13.695
======= ======= ======= ======= =======
Total Return *.............. 91.52%(d) 1.60%(d)** 37.56%(d) 35.32%(d) 37.00%(d)**
Net Assets at End of the
Period (In millions)...... $11.8 $7.4 $9.2 $8.3 $0.1
Ratio of Expenses to Average
Net Assets *.............. 2.19% 2.41% 2.05% 2.07% 1.46%
Ratio of Net Investment
Income/Loss to Average Net
Assets *.................. (1.89%) (1.96%) (1.39%) (0.57%) (0.74%)
Portfolio Turnover.......... 170% 82%** 125% 139% 94%**
* If certain fees 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...... N/A 2.45% 2.34% 3.04% 15.70%
Ratio of Net Investment
Income to Average Net
Assets.................. N/A (2.00%) (1.68%) (1.55%) (14.97%)
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year or purchase. If the
sales charges were included, total returns would be lower.

See Financial Statements and Notes Thereto

22
<PAGE> 51

BOARD OF TRUSTEES

AND OFFICERS

BOARD OF TRUSTEES

OFFICERS

Richard F. Powers, III*

President

Stephen L. Boyd*

Executive Vice President and Chief Investment Officer

A. Thomas Smith III*

Vice President and Secretary

John H. Zimmermann, III*

Vice President

Michael H. Santo*

Vice President

Richard A. Ciccarone*

Vice President

John R. Reynoldson*

Vice President

John L. Sullivan*

Vice President, Chief Financial Officer and Treasurer

* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.

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

FUNDINFO(R)

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

WEB SITE

www.vankampen.com

VAN KAMPEN GROWTH FUND

1 Parkview Plaza

PO Box 5555

Oakbrook Terrace, IL 60181-5555

Investment Adviser

VAN KAMPEN INVESTMENT ADVISORY CORP.

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 218256

Kansas City, MO 64121-8256

Attn: Van Kampen Growth Fund

Custodian

STATE STREET BANK AND TRUST COMPANY

225 West Franklin Street, PO Box 1713

Boston, MA 02105-1713

Attn: Van Kampen Growth Fund

Legal Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)

333 West Wacker Drive

Chicago, IL 60606

Independent Auditors

ERNST & YOUNG LLP

233 South Wacker Drive

Chicago, Illinois 60606

<PAGE> 52

VAN KAMPEN
GROWTH FUND

PROSPECTUS

JULY 28, 2000

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

Information about the Fund, including its
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's Public
Reference Room in Washington, D.C. or on the
EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the
operation of the SEC's Public Reference Room
may be obtained by calling the SEC at
1-202-942-8090. You can also request copies of
these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail
address ([email protected]), or by writing
the Public Reference Section of the SEC,
Washington, D.C. 20549-0102.

[VAN KAMPEN FUNDS LOGO]

The Fund's Investment Company Act File No. is 811-4805.

GF PRO 7/00

<PAGE> 53

[VAN KAMPEN FUNDS LOGO]

VAN KAMPEN
SELECT GROWTH FUND

Van Kampen Select Growth Fund's investment objective to seek capital
appreciation. The Fund's investment adviser seeks to achieve the Fund's
investment objective by investing primarily in a non-diversified portfolio of
common stocks and other equity securities of growth companies.

This prospectus is dated JULY 28, 2000

<PAGE> 54

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary................................ 3
Fees and Expenses of the Fund...................... 4
Investment Objective, Policies and Risks........... 5
Investment Advisory Services....................... 9
Purchase of Shares................................. 10
Redemption of Shares............................... 17
Distributions from the Fund........................ 18
Shareholder Services............................... 19
Federal Income Taxation............................ 20
</TABLE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Fund is a mutual fund with the investment objective to seek capital
appreciation.

INVESTMENT STRATEGIES

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objective by investing primarily in a non-diversified
portfolio of common stocks and other equity securities of growth companies. The
Fund's investment adviser uses a "bottom up" stock selection process seeking
attractive growth opportunities on an individual company basis. In selecting
securities for investment, the Fund's investment adviser seeks those companies
that it believes have rising earnings expectations and rising valuations. The
Fund generally sells securities when earnings expectations or valuations flatten
or decline. The Fund emphasizes a strategy that generally focuses its
investments in a relatively small number of companies and may invest up to 25%
of its total assets in a single issuer. The Fund may purchase or sell certain
derivative instruments, such as options, futures and options on futures, for
various portfolio management purposes.

INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objective.

MARKET RISK. Market risk is the possibility that the market values of securities
owned by the Fund will decline. Market risk may affect a single issuer,
industry, sector of the economy or the market as a whole. Investments in common
stocks and other equity securities generally are affected by changes in the
stock markets, which fluctuate substantially over time, sometimes suddenly and
sharply. The Fund emphasizes a "growth" style of investing. The market values of
growth securities 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. Different types of
stocks tend to shift in and out of favor depending on market and economic
conditions. Thus, the value of the Fund's investments will vary and at times may
be lower or higher than that of other types of investments. During an overall
stock market decline, stock prices of smaller- or medium-sized companies (in
which the Fund may invest) often fluctuate more than the stock prices of
larger-sized companies. Historically, smaller- and medium-sized company stocks
have sometimes gone through extended periods when they did not perform as well
as stocks of larger-sized companies.

NON-DIVERSIFICATION RISKS. The Fund is classified as a "non-diversified" fund,
which means the Fund may invest a greater portion of its assets in a more
limited number of issuers than a "diversified" fund. As a result, the Fund may
be subject to greater risk than a diversified fund because changes in the
financial condition or market assessment of a single issuer may cause greater
fluctuations in the value of the Fund's shares. In addition, as a result of the
Fund's stock selection process, a significant portion of the Fund's assets may
be invested in companies within the same industries or sectors of the market. To
the extent the Fund focuses its investments in this way, it may be more
susceptible to economic, political, regulatory and other occurrences influencing
those industries or market sectors.

RISKS OF USING DERIVATIVE INSTRUMENTS. In general terms, a derivative instrument
is one whose value depends on (or is derived from) the value of an underlying
asset, interest rate or index. Options, futures and options on futures are
examples of derivatives. Derivative instruments involve risks different from
direct investments in underlying securities. These risks include 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; and risks that the transactions may not be liquid.

3
<PAGE> 56

INVESTOR PROFILE

In light of the Fund's investment objective and strategies, the Fund 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 Fund shares

- Seek a fund with an investment strategy which selects a relatively small
number of companies

- Wish to add to their investment portfolio a fund that emphasizes a growth
style of investing in a portfolio of common stocks

An investment in the Fund may not be appropriate for all investors. The Fund 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 Fund. An investment in the Fund is intended to be a long term
investment, and the Fund should not be used as a trading vehicle.

PERFORMANCE INFORMATION

The Fund commenced investment operations on June 26, 2000. When the Fund has
completed a full calendar year of investment operations, this section will
include charts that show annual total returns, highest and lowest quarterly
returns and average total returns compared to a benchmark index selected for the
Fund. This information serves as a basis for investors to evaluate the Fund's
performance and risks by looking at how the Fund's performance varies from
year-to-year and how the Fund's performance compares to a broad-based market
index that the Fund's investment adviser believes is an appropriate benchmark
for the Fund. Past performance of the Fund is not indicative of its future
performance.

FEES AND EXPENSES
OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
---------------------------------------------------------------
<S> <C> <C> <C> <C>

SHAREHOLDER FEES

(fees paid directly from your investment)
---------------------------------------------------------------
</TABLE>

<TABLE>
<S> <C> <C> <C> <C>
Maximum sales charge
(load) imposed on
purchases (as a
percentage of offering 5.75%(1) None None
price)
...............................................................
Maximum deferred sales
charge (load)(as a
percentage of the lesser
of original purchase
price or redemption
proceeds) None(2) 5.00%(3) 1.00%(4)
...............................................................
Maximum sales charge
(load) imposed on
reinvested dividends
None None None
...............................................................
Redemption fees None None None
...............................................................
Exchange fee None None None
...............................................................
</TABLE>

ANNUAL FUND OPERATING EXPENSES

(expenses that are deducted from Fund assets)

<TABLE>
<S> <C> <C> <C> <C>
---------------------------------------------------------------
Management fees 0.75% 0.75% 0.75%
...............................................................
Distribution and/or
service (12b-1) fees(5)
0.25% 1.00%(6) 1.00%(6)
...............................................................
Other expenses(7) 0.20% 0.20% 0.20%
...............................................................
Total annual fund
operating expenses
1.20% 1.95% 1.95%
...............................................................
</TABLE>

4
<PAGE> 57

(5) Class A Shares are subject to an annual service fee of up to 0.25% of the
average daily net assets attributable to such class of shares. Class B
Shares and Class C Shares are each subject to a combined annual distribution
and service fee of up to 1.00% of the average daily net assets attributable
to such class of shares. See "Purchase of Shares."
(6) Because distribution and/or service (12b-1) fees are paid out of the Fund's
assets on an ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.
(7) Other expenses have been estimated for the Fund's current fiscal year.

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

The example assumes that you invest $10,000 in the Fund for the time periods
indicated and then redeem all of your shares at the end of those periods. The
example also assumes that your investment has a 5% return each year and that the
Fund's operating expenses remain the same each year. Although your actual costs
may be higher or lower, based on these assumptions your costs would be:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $690 $934 $1,197 $1,946
..................................................................
Class B Shares $698 $912 $1,202 $2,080*
..................................................................
Class C Shares $298 $612 $1,052 $2,275
..................................................................
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-----------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $690 $934 $1,197 $1,946
..................................................................
Class B Shares $198 $612 $1,052 $2,080*
..................................................................
Class C Shares $198 $612 $1,052 $2,275
..................................................................
</TABLE>

* Based on conversion to Class A Shares after eight years.

INVESTMENT OBJECTIVE,
POLICIES AND RISKS

The Fund's investment objective is to seek capital appreciation. Any income
received from portfolio securities is incidental to the Fund's investment
objective. The Fund's investment objective may be changed by the Fund's Board of
Trustees without shareholder approval, but no change is anticipated. If the
Fund's investment objective changes, the Fund will notify shareholders and
shareholders should consider whether the Fund remains an appropriate investment
in light of their then current financial position and needs. There are risks
inherent in all investments in securities; accordingly, there can be no
assurance that the Fund will achieve its investment objective.

Under normal market conditions, the Fund's investment adviser seeks to achieve
the Fund's investment objective by investing primarily in a non-diversified
portfolio of common stocks and other equity securities of growth companies. The
Fund's primary approach is to seek what the Fund's investment adviser believes
to be unusually attractive growth opportunities on an individual company basis.
The Fund's investment adviser uses a "bottom-up" disciplined style of investing.
The Fund's investment adviser relies on its research capabilities and
company/analyst meetings in reviewing companies. The Fund focuses on those
companies that exhibit rising earnings expectations and rising valuations. In
selecting securities for investment, the Fund generally seeks companies that
appear to be positioned to produce an attractive level of future earnings
through the development of new products, services or markets or as a result of
changing markets or industry conditions. The Fund's investment adviser expects
that many of the companies in which the Fund invests will, at the time of
investment, be experiencing high rates of earnings growth. The securities of
such companies may trade at higher price to earnings ratios relative to more
established companies and rates of earnings growth may be volatile.

The Fund does not limit its investments to any single group or type of security.
The Fund may invest in unseasoned issuers or in securities involving special
circumstances, such as initial public offerings, companies with new management
or management reliant on one or a few key people, special products and
techniques, limited or cyclical product lines, markets or resources or unusual
developments, such as mergers, liquidations, bankruptcies or leveraged buyouts.
Investments in unseasoned companies or companies with special circumstances, in
which the Fund can invest, 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. In addition, investments
made in anticipation of future events may, if delayed or never achieved, cause
stock prices to fall.

5
<PAGE> 58

The Fund emphasizes a strategy that focuses on larger investments in a few
select companies rather than smaller investments in a large number of issuers.
To the extent the Fund focuses its investments in this way, it may be subject to
more risk than a diversified fund because changes affecting a single issuer may
cause greater fluctuations in the value of the Fund's shares. The Fund's
investment adviser believes that an effective way to maximize return and reduce
the risks associated with its focused investment approach is through a program
of intensive research, careful selection of individual securities and continual
supervision of the Fund's portfolio. In addition, the Fund's stock selection
process may result in a significant portion of the Fund's assets being invested
in companies in the same industry or sector of the market. To the extent the
Fund's investments are invested in this way, it may be more susceptible to
economic, political, regulatory and other occurrences influencing those
industries or market sectors.

The Fund invests in companies of any capitalization range. To the extent the
Fund invests in securities of smaller- and medium-sized companies, the Fund will
be subject to risks of such securities, including being subject to more abrupt
or erratic market movements of such securities compared to securities of larger-
sized 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-sized companies. From time to time, under various
market conditions, the Fund may favor one market capitalization over another.

The Fund may dispose of a security whenever, in the opinion of the Fund's
investment adviser, factors indicate it is advisable to do so. The Fund
generally sells securities when earnings expectations or valuations flatten or
decline. Other factors may include changes in the company's operations or
relative market performance or appreciation possibilities offered by individual
securities, a change in the market trend or other factors affecting an
individual security, a change in economic or market factors in general or with
respect to a particular industry, and other circumstances bearing on the
desirability of a given investment. In addition, if an individual stock position
appreciates to a point where it begins to account for a larger percentage of the
Fund's assets, the Fund's investment adviser may sell a portion of the position
held.

While the Fund invests primarily in common stocks, the Fund may invest in other
equity securities including preferred stocks, convertible securities and rights
and warrants to purchase common or preferred stock. 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 or mandatory redemption provisions.

A convertible security is a bond, debenture, note, preferred stock or other
security that may be converted into or exchanged for a prescribed amount of
common stock or other equity security of the same or a different issuer or into
cash within a particular period of time at a specified price or formula. A
convertible security generally entitles the holder to receive interest paid or
accrued on debt securities or the dividend paid on preferred stock until the
convertible security matures or is redeemed, converted or exchanged. Before
conversion, convertible securities generally have characteristics similar to
both debt and equity securities. The value of convertible securities tends to
decline as interest rates rise and, because of the conversion feature, tends to
vary with fluctuations in the market value of the underlying equity securities.
Convertible securities ordinarily provide a stream of income with generally
higher yields than those of common stock of the same or similar issuers.
Convertible securities generally rank senior to common stock in a corporation's
capital structure but are usually subordinated to comparable nonconvertible
securities. Convertible securities generally do not participate directly in any
dividend increases or decreases of the underlying equity securities although the
market prices of the convertible securities may be affected by any dividend
changes or other changes in the underlying equity securities.

Rights and warrants entitle the holder to buy equity securities at a specific
price for a specific period of time. Rights typically have a substantially
shorter

6
<PAGE> 59

duration than do warrants. Rights and warrants may be considered more
speculative and less liquid than certain other types of investments in that they
do not entitle a holder to dividends or voting rights with respect to the
underlying securities nor do they represent any rights in the assets of the
issuing company. Rights and warrants may lack a secondary market.

RISKS OF INVESTING IN

SECURITIES OF FOREIGN ISSUERS

The Fund may invest a portion or all of its total assets in securities of
foreign issuers. Securities of foreign issuers 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), the 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 conversion costs) and
possible difficulty in enforcing contractual obligations or taking judicial
action. 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 and financial reporting
disclosure requirements than domestic issuers. There is generally less
government regulation of stock exchanges, brokers and listed companies abroad
than in the United States, 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 foreign exchanges,
brokers and dealers than there is in the United States, the Fund may experience
settlement difficulties or delays not usually encountered in the United States.

USING OPTIONS, FUTURES CONTRACTS

AND RELATED OPTIONS

The Fund may, but is not required to, use various investment strategic
transactions, including options, futures contracts and options on futures
contracts, in several different ways depending upon the status of the Fund's
portfolio and the Fund's investment adviser's expectations concerning the
securities markets. Although the Fund's investment adviser seeks to use the
practices to further the Fund's investment objective, no assurance can be given
that the use of these practices will achieve this result.

In times of stable or rising prices, the Fund generally seeks to be fully
invested in equity securities. Even when the Fund is 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 Fund
may also have cash on hand that has not yet been invested. The portion of the
Fund's assets that is invested in cash or cash equivalents does not fluctuate
with stock market prices, so that, in times of rising market prices, the Fund
may underperform the

7
<PAGE> 60

market in proportion to the amount of cash or cash equivalents in its portfolio.
By purchasing index futures contracts, however, the Fund can compensate for the
cash portion of its assets and may obtain performance equivalent to investing
100% of its assets in securities.

The Fund can engage in options transactions on securities (or stock index
options or options on futures) to attempt to manage the portfolio's risk in
advancing or declining markets. For example, the value of a put option generally
increases as the value of 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 Fund's investment portfolio.
If the market remains stable or advances, the Fund can refrain from exercising
the put and its portfolio will participate in the advance, having incurred only
the premium cost for the put.

Generally, the Fund expects that options will be purchased or sold on securities
exchanges. However, the Fund is 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.

The Fund may use futures in many ways. For example, if the Fund's investment
adviser forecasts a market decline, the Fund may seek to reduce its exposure to
the securities markets by increasing its cash position. By selling stock 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 Fund's portfolio securities. 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 reached,
the Fund could then liquidate securities in a more deliberate manner.

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. However, such transactions involve
risks different from the direct investment in underlying securities. For
example, there may be imperfect correlation between the value of the instruments
and the underlying assets. In addition, the use of such instruments includes the
risks of default by the other party to certain transactions. The Fund may incur
losses in using these instruments that partially or completely offset gains in
portfolio positions. These transactions may not be liquid and involve manager
risk. In addition, such transactions may involve commissions and other costs,
which may increase the Fund's expenses and reduce its return.

A more complete discussion of options, futures contracts and related options and
their risks is contained in the Fund's Statement of Additional Information. The
Statement of Additional Information can be obtained by investors free of charge
as described on the back cover of this prospectus.

OTHER INVESTMENTS AND RISK FACTORS

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund 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
Fund's investment adviser believes the potential for capital appreciation has
lessened, or for other reasons. The Fund's portfolio turnover rate may vary from
year to year. A high portfolio turnover rate (100% or more) increases a fund's
transactions costs, including brokerage commissions or dealer costs, and high
portfolio turnover may result in the realization of more short-term capital
gains than if a fund had lower portfolio turnover. Increases in a fund's
transaction costs would adversely impact that fund's performance. The turnover
rate will not be a limiting factor, however, if the Fund's investment adviser
considers portfolio changes appropriate.

8
<PAGE> 61

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, the Fund may on a temporary basis hold cash or invest 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.
Under normal market conditions, the potential for capital appreciation on these
securities will tend to be lower than the potential for capital appreciation on
other securities that may be owned by the Fund. In taking such a defensive
position, the Fund would not be pursuing and may not achieve its investment
objective.

INVESTMENT ADVISORY SERVICES

<TABLE>
<CAPTION>
Average Daily Net Assets % Per Annum
-----------------------------------------------------
<S> <C> <C> <C>
First $500 million 0.75%
.....................................................
Next $500 million 0.70%
.....................................................
Over $1 billion 0.65%
.....................................................
</TABLE>

The Adviser may utilize, at its own expense, credit analysis, research and
trading support services provided by its affiliate, Van Kampen Asset Management
Inc. ("Asset Management").

PORTFOLIO MANAGEMENT. The Fund is managed by a team of portfolio managers.
Senior Portfolio

9
<PAGE> 62

Managers Gary M. Lewis and Janet Luby are the co-lead managers of the Fund. Mr.
Lewis has overall responsibility for the team of portfolio managers which also
manage the Van Kampen Emerging Growth, Van Kampen Technology and Van Kampen
Aggressive Growth Funds in addition to this Fund. Mr. Lewis has been a Senior
Vice President of the Adviser and Asset Management since September 1995. Mr.
Lewis became a Vice President and Portfolio Manager of Asset Management in June
1991. Mr. Lewis has been employed by Asset Management since September 1986. He
has been affiliated with the Fund since its inception.

Ms. Luby has been a Senior Portfolio Manager since April 2000, and a Portfolio
Manager and Vice President of the Adviser and Asset Management since December
1998. Ms. Luby became an Assistant Vice President of the Adviser and Asset
Management in December of 1997 and an Associate Portfolio Manager of Asset
Management in July 1995. Prior to July 1995, Ms. Luby spent eight years at AIM
Capital Management, Inc. where she worked five years in the accounting
department and three years in the investment area. Her last position in the AIM
investment area was as a senior securities analyst. Ms. Luby also has been the
portfolio manager for various unit investment trusts managed by the Adviser or
its affiliates since August 1999. She has been affiliated with the Fund since
its inception.

Senior Portfolio Managers Dudley Brickhouse and David Walker and Portfolio
Manager Matthew Hart are responsible as co-managers for the day-to-day
management of the Fund's investment portfolio.

Mr. Brickhouse has been a Senior Portfolio Manager since April 2000, and a
Portfolio Manager and Vice President of the Adviser and Asset Management since
December 1998. Mr. Brickhouse became an Associate Portfolio Manager of the
Adviser and Asset Management in September 1997. Prior to September 1997, Mr.
Brickhouse was a Vice President and Portfolio Manager with NationsBank, where he
had worked since 1995. He has been affiliated with the Fund since its inception.

Mr. Hart has been a Portfolio Manager since January 1998, and a Vice President
of the Adviser and Asset Management since December 1998. Mr. Hart became an
Associate Portfolio Manager of the Adviser and Asset Management in August 1997.
Prior to August 1997, Mr. Hart worked in various positions within the portfolio
area of AIM Capital Management, Inc., where he had worked since June 1992. Mr.
Hart's last position in the AIM portfolio area was as a convertible bonds
analyst. He has been affiliated with the Fund since its inception.

Mr. Walker has been a Senior Portfolio Manager since April 2000, and a Portfolio
Manager and Vice President of the Adviser and Asset Management since December
1998. Mr. Walker became an Assistant Vice President of the Adviser and Asset
Management in June 1995. Prior to April 1996, Mr. Walker was a Quantitative
Analyst of Asset Management and has worked for Asset Management since October
1990. Mr. Walker is also a portfolio manager for various unit investment trusts
managed by the Adviser or its affiliates since September 1997. He has been
affiliated with the Fund since its inception.

PURCHASE OF SHARES

GENERAL

10
<PAGE> 63

The net asset value per share for each class of shares of the Fund is determined
once daily as of the close of trading on the New York Stock Exchange (the
"Exchange") (currently 4:00 p.m., New York time) each day the Exchange is open
for trading except on any day on which no purchase or redemption orders are
received or there is not a sufficient degree of trading in the Fund's portfolio
securities such that the Fund's net asset value per share might be materially
affected. The Fund's Board of Trustees reserves the right to calculate the net
asset value per share and adjust the offering price more frequently than once
daily if deemed desirable. Net asset value per share for each class is
determined by dividing the value of the Fund's portfolio securities, cash and
other assets (including accrued interest) attributable to such class, less all
liabilities (including accrued expenses) attributable to such class, by the
total number of shares of the class outstanding. Such computation is made by
using prices as of the close of trading on the Exchange and (i) valuing
securities listed or traded on a national securities exchange at the last
reported sale price, and if there has been no sale that day, at the mean between
the last reported bid and asked prices, (ii) valuing over-the-counter securities
at the last reported sale price from the National Association of Securities
Dealers Automated Quotations ("NASDAQ") and, if there has been no sale that day,
at the mean between the last reported bid and asked prices and (iii) valuing
securities for which market quotations are not readily available and any other
assets at fair value as determined in good faith by the Adviser in accordance
with procedures established by the Fund's Board of Trustees. Debt securities
with remaining maturities of 60 days or less are valued on an amortized cost
basis, which approximates market value.

The Fund has adopted a distribution plan (the "Distribution Plan") with respect
to each class of its shares pursuant to Rule 12b-1 under the Investment Company
Act of 1940, as amended (the "1940 Act"). The Fund also has adopted a service
plan (the "Service Plan") with respect to each class of its shares. Under the
Distribution Plan and the Service Plan, the Fund pays distribution fees in
connection with the sale and distribution of its shares and service fees in
connection with the provision of ongoing services to shareholders of each class
and the maintenance of the shareholders' accounts.

Shares may be purchased on any business day by completing the account
application form and forwarding the account application form, directly or
through an authorized dealer, to the Fund's shareholder service agent, Van
Kampen Investor Services Inc. ("Investor Services"), a wholly owned subsidiary
of Van Kampen Investments. When purchasing shares of the Fund, investors must
specify whether the purchase is for Class A Shares, Class B Shares or Class C
Shares by selecting the correct Fund number on the account application. Sales
personnel of authorized dealers distributing the

11
<PAGE> 64

Fund's shares are entitled to receive compensation for selling such shares and
may receive differing compensation for selling Class A Shares, Class B Shares or
Class C Shares.

CLASS A SHARES

SALES CHARGE SCHEDULE

<TABLE>
<CAPTION>
As % of As % of
Size of Offering Net Amount
Investment Price Invested
----------------------------------------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.10%
......................................................
$50,000 but less than
$100,000 4.75% 4.99%
..........................................................
$100,000 but less than
$250,000 3.75% 3.90%
..........................................................
$250,000 but less than
$500,000 2.75% 2.83%
..........................................................
$500,000 but less than
$1,000,000 2.00% 2.04%
..........................................................
$1,000,000 or more * *
..........................................................
</TABLE>

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. The contingent deferred sales charge is assessed
on an amount equal to the lesser of the then current market value or the
cost of the shares being redeemed. Accordingly, no sales charge is imposed
on increases in net asset value above the initial purchase price.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

12
<PAGE> 65

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within five years of purchase as
shown in the table as follows:

CLASS B SHARES

SALES CHARGE SCHEDULE

In determining whether a contingent deferred sales charge applies to a
redemption, it is assumed that the shares being redeemed first are any shares in
the shareholder's Fund account that are not subject to a contingent deferred
sales charge followed by shares held the longest in the shareholder's account.

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class C
Shares in an amount of $1 million or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

CONVERSION FEATURE

Class B Shares, including Class B Shares received from reinvestment of
distributions through the dividend reinvestment plan, automatically convert to
Class A Shares eight years after the end of the calendar month in which the
shares were purchased. Such conversion will be on the basis of the relative net
asset values per share, without the imposition of any sales load, fee or other
charge. The conversion schedule applicable to a share of the Fund acquired
through the exchange privilege from another Van Kampen fund participating in the
exchange program is determined by reference to the Van Kampen fund from which
such share was originally purchased.

13
<PAGE> 66

respect to such shares does not result in the Fund's dividends or capital gain
dividends constituting "preferential dividends" under the federal income tax law
and (ii) the conversion of shares does not constitute a taxable event under
federal income tax law. The conversion may be suspended if such an opinion is no
longer available and such shares might continue to be subject to the higher
aggregate fees applicable to such shares for an indefinite period.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

QUANTITY DISCOUNTS

14
<PAGE> 67

within the specified period, the investor must pay the difference between the
sales charge applicable to the purchases made and the reduced sales charges
previously paid. Such payments may be made directly to the Distributor or, if
not paid, the Distributor will liquidate sufficient escrowed shares to obtain
the difference.

OTHER PURCHASE PROGRAMS

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
Dean Witter & Co. and any of its subsidiaries and such persons' families and
their beneficial accounts.

15
<PAGE> 68

should refer to the Statement of Additional Information for further details
with respect to such alliance programs.

(7) Accounts as to which a bank or broker-dealer charges an account management
fee ("wrap accounts"), provided the bank or broker-dealer has a separate
agreement with the Distributor.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents, and a person's spouse's parents.

16
<PAGE> 69

REDEMPTION OF
SHARES

Except as specified below under "Telephone Redemption Requests," payment for
shares redeemed generally will be made by check mailed within seven days after
receipt by Investor Services of the redemption request and any other necessary
documents in proper form as described below. Such payment may be postponed or
the right of redemption suspended as provided by the rules of the SEC. Such
payment may, under certain circumstances, be paid wholly or in part by a
distribution-in-kind of portfolio securities. A distribution-in-kind will result
in recognition by the shareholder of a gain or loss for federal income tax
purposes when such securities are distributed, and the shareholder may have
brokerage costs and a gain or loss for federal income tax purposes upon a
shareholder's subsequent disposition of such securities. If the shares to be
redeemed have been recently purchased by check, Investor Services may delay the
payment of redemption proceeds until it confirms the purchase check has cleared,
which may take up to 15 days. A taxable gain or loss may be recognized by the
shareholder upon redemption of shares. Certificated shares must be properly
endorsed for transfer and must accompany a written redemption request.

Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption request to be in proper form.
In some cases, however, additional documents may be necessary. Certificated
shares may be redeemed only by written request. The certificates for the shares
being redeemed must be properly endorsed for transfer and must accompany the
written redemption request. Generally, in the event a redemption is requested by
and registered to a corporation, partnership, trust, fiduciary, estate or other
legal entity owning shares of the Fund, a copy of the corporate resolution or
other legal documentation appointing the authorized signer and certified within
the prior 120 days must accompany the redemption request. Retirement plan
distribution requests should be sent to the plan custodian/trustee to be
forwarded to Investor Services. Contact the plan custodian/trustee for further
information.

TELEPHONE REDEMPTION REQUESTS. The Fund permits redemption of shares by
telephone and for

17
<PAGE> 70

redemption proceeds to be sent to the address of record for the account or to
the bank account of record as described below. A shareholder automatically has
telephone redemption privileges unless the shareholder indicates otherwise by
checking the applicable box on the account application form. For accounts that
are not established with telephone redemption privileges, a shareholder may call
the Fund at (800) 341-2911 to request that a copy of the Telephone Redemption
Authorization form be sent to the shareholder for completion. To redeem shares,
contact the telephone transaction line at (800) 421-5684. Shares may also be
redeemed by telephone through FundInfo(R) (automated telephone system), which is
accessible 24 hours a day, seven days a week at (800) 847-2424. Van Kampen
Investments and its subsidiaries, including Investor Services, and the Fund
employ procedures considered by them to be reasonable to confirm that
instructions communicated by telephone are genuine. Such procedures include
requiring certain personal identification information prior to acting upon
telephone instructions, tape-recording telephone communications and providing
written confirmation of instructions communicated by telephone. If reasonable
procedures are employed, none of Van Kampen Investments, Investor Services or
the Fund will be liable for following telephone instructions which it reasonably
believes to be genuine. Telephone redemptions may not be available if the
shareholder cannot reach Investor Services by telephone, whether because all
telephone lines are busy or for any other reason; in such case, a shareholder
would have to use the Fund's other redemption procedure previously described.
Requests received by Investor Services prior to 4:00 p.m., New York time, will
be processed at the next determined net asset value per share. These privileges
are available for most accounts other than retirement accounts or accounts with
shares represented by certificates. If an account has multiple owners, Investor
Services may rely on the instructions of any one owner.

DISTRIBUTIONS FROM THE FUND

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

18
<PAGE> 71

automatically reinvested in additional shares of the Fund at the next determined
net asset value unless the shareholder instructs otherwise.

SHAREHOLDER SERVICES

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written instruction or by telephone, you may also perform certain
transactions through the internet. Please refer to our web site at
www.vankampen.com for further instruction. Van Kampen Investments and its
subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated
through the internet are genuine. Such procedures include requiring use of a
personal identification number prior to acting upon internet instructions and
providing written confirmation of instructions communicated through the
internet. If reasonable procedures are employed, none of Van Kampen Investments,
Investor Services or the Fund will be liable for following instructions received
through the internet which it reasonably believes to be genuine. If an account
has multiple owners, Investor Services may rely on the instructions of any one
owner.

19
<PAGE> 72

charge paid on such shares is carried over and included in the tax basis of the
shares acquired.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services, by contacting the telephone transaction line at (800)
421-5684, through FundInfo(R) (automated telephone system) at (800) 847-2424 or
through the internet at www.vankampen.com. A shareholder automatically has
exchange privileges unless the shareholder indicates otherwise by checking the
applicable box on the account application form. Van Kampen Investments and its
subsidiaries, including Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated by
telephone are genuine. Such procedures include requiring certain personal
identification information prior to acting upon telephone instructions,
tape-recording telephone communications, and providing written confirmation of
instructions communicated by telephone. If reasonable procedures are employed,
none of Van Kampen Investments, Investor Services or the Fund will be liable for
following telephone instructions which it reasonably believes to be genuine. If
the exchanging shareholder does not have an account in the fund whose shares are
being acquired, a new account will be established with the same registration,
dividend and capital gain dividend options (except dividend diversification) and
authorized dealer of record as the account from which shares are exchanged,
unless otherwise specified by the shareholder. In order to establish a
systematic withdrawal plan for the new account or reinvest dividends from the
new account into another fund, however, an exchanging shareholder must submit a
specific request. The Fund reserves the right to reject any order to acquire its
shares through exchange. In addition, the Fund and other Participating Funds may
restrict exchanges by shareholders engaged in excessive trading by limiting or
disallowing the exchange privilege to such shareholders. For further information
on these restrictions, see the Fund's Statement of Additional Information. The
Fund may modify, restrict or terminate the exchange privilege at any time on 60
days' notice to its shareholders of any termination or material amendment.

FEDERAL INCOME TAXATION

Distributions of the Fund's investment company taxable income (generally taxable
income and net short-term capital gain) are taxable to shareholders as ordinary
income to the extent of the Fund's earnings and profits, whether paid in cash or
reinvested in additional shares. Distributions of the Fund's net capital gain
(which is the excess of net long-term capital gain over net short-term capital
loss) as capital gain dividends, if any, are taxable to shareholders as
long-term capital gains, whether paid in cash or reinvested in additional
shares, and regardless of how long the shares of the Fund have been held by such
shareholders. The Fund expects that its distributions will consist primarily of
ordinary income and capital gain dividends. Distributions in excess of the
Fund's earnings and profits will first reduce the adjusted tax basis of a
holder's shares and, after such adjusted tax basis is reduced to zero, will
constitute capital gains to such holder (assuming such shares are held as a
capital asset). Although distributions generally are treated as taxable in the
year they are paid, distributions declared in October, November or December,
payable to shareholders of record on a specified date in such month and paid
during January of the following year will be treated as having been

20
<PAGE> 73

distributed by the Fund and received by the shareholders on the December 31st
prior to the date of payment. The Fund will inform shareholders of the source
and tax status of all distributions promptly after the close of each calendar
year.

21
<PAGE> 74

BOARD OF TRUSTEES
AND OFFICERS

BOARD OF TRUSTEES

OFFICERS

Richard F. Powers, III*
President

Stephen L. Boyd*
Executive Vice President and Chief Investment Officer

A. Thomas Smith III*
Vice President and Secretary

John H. Zimmermann, III*

Vice President

Michael H. Santo*
Vice President

Richard A. Ciccarone*

Vice President

John R. Reynoldson*

Vice President

John L. Sullivan*

Vice President, Chief Financial Officer and Treasurer

* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.

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

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

WEB SITE
www.vankampen.com

VAN KAMPEN SELECT GROWTH FUND
1 Parkview Plaza
PO Box 5555
Oakbrook Terrace, IL 60181-5555

Investment Adviser
VAN KAMPEN INVESTMENT ADVISORY CORP.
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 218256
Kansas City, MO 64121-8256
Attn: Van Kampen Select Growth Fund

Custodian
STATE STREET BANK AND TRUST COMPANY
225 West Franklin Street, PO Box 1713
Boston, MA 02105-1713
Attn: Van Kampen Select Growth Fund

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

Independent Auditors

ERNST & YOUNG LLP

233 South Wacker Drive

Chicago, IL 60606

<PAGE> 75

[VAN KAMPEN FUNDS LOGO]

The Fund's Investment Company Act
File No. is 811-4805.
SG PRO 7/00
65103

VAN KAMPEN

SELECT GROWTH FUND

PROSPECTUS

JULY 28, 2000

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

Information about the Fund, including its
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's Public
Reference Room in Washington, DC or on the
EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the
operation of the SEC's Public Reference Room
may be obtained by calling the SEC at
1-202-942-8090. You can also request copies of
these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail
address ([email protected]), or by writing
the Public Reference Section of the SEC,
Washington, DC 20549-0102.
<PAGE> 76

VAN KAMPEN
SMALL CAP VALUE FUND

Van Kampen Small Cap Value Fund's investment objective is to seek capital
appreciation. The Fund's investment adviser seeks to achieve the Fund's
investment objective by investing primarily in a portfolio of equity securities
of small capitalization companies that the Fund's investment adviser believes
are undervalued.

This prospectus is dated JULY 28, 2000.

[VAN KAMPEN FUNDS LOGO]
<PAGE> 77

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary................................ 3
Fees and Expenses of the Fund...................... 5
Investment Objective, Policies and Risks........... 5
Investment Advisory Services....................... 9
Purchase of Shares................................. 10
Redemption of Shares............................... 16
Distributions from the Fund........................ 18
Shareholder Services............................... 18
Federal Income Taxation............................ 20
Financial Highlights............................... 22
</TABLE>

<PAGE> 78

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Fund's investment objective is to seek capital appreciation.

INVESTMENT STRATEGIES

The Fund's investment adviser seeks to achieve the Fund's investment objective
by investing primarily in a portfolio of equity securities of small
capitalization companies that the Fund's investment adviser believes are
undervalued. Under normal market conditions, the Fund invests at least 65% of
the Fund's total assets in equity securities of small capitalization companies.
The Fund's investments in equity securities include common and preferred stocks
and securities convertible into common and preferred stocks. The Fund emphasizes
a "value" style of investing seeking companies that the Fund's investment
adviser believes are undervalued with characteristics for improved valuations
relative to other companies. In selecting securities for investment, the Fund
uses a "bottom up" approach that focuses on individual stock selection over
economic and industry trends. Portfolio securities are typically sold when the
Fund's investment adviser's assessments of the capital appreciation potential of
such securities materially changes. The Fund may invest up to 10% of its total
assets in securities of foreign issuers. The Fund may purchase or sell certain
derivative instruments, such as options, futures and options on futures, for
various portfolio management purposes.

INVESTMENT RISKS

An investment in the Fund is subject to investment risks, and you could lose
money on your investment in the Fund. There can be no assurance that the Fund
will achieve its investment objective.

The Fund emphasizes a value style of investing and focuses primarily on small
capitalization companies. Value investing is subject to the risk that the
valuations never improve, and the returns on value equity securities may or may
not move in tandem with the returns on other styles of investing or the overall
stock market. During an overall stock market decline, stock prices of
small-sized companies often fluctuate more and may fall more than the stock
prices of larger-sized companies. It is possible that the stocks of
smaller-sized companies will be more volatile and underperform the overall stock
market. Historically, smaller-sized company stocks have sometimes gone through
extended periods when they did not perform as well as larger-sized company
stocks. Different types of stocks tend to shift in and out of favor depending on
market and economic conditions. Thus, the value of the Fund's investments will
vary and at times may be lower or higher than that of other types of
investments.

RISKS OF SMALL CAPITALIZATION COMPANIES. The Fund focuses its investments on
small capitalization companies which often are newer, less established
companies. Investing in such companies involves risks not ordinarily associated
with investments in large capitalization companies. Small capitalization
companies carry additional risks because their earnings generally tend to be
less predictable, they often have 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 market movements of equity
securities of small capitalization companies may be more abrupt or erratic than
the market movements of stocks of larger, more established companies or the
stock market in general. In addition, equity securities of small capitalization
companies generally are less liquid than those of larger capitalization
companies. This means that the Fund could have greater difficulty selling such
securities at the time and price that the Fund would like.

RISKS OF USING DERIVATIVE INSTRUMENTS. In general terms, a derivative instrument
is one whose value

3
<PAGE> 79

depends on (or is derived from) the value of an underlying asset, interest rate
or index. Options, futures and options on futures are examples of derivatives.
Derivative instruments involve risks different from direct investments in
underlying securities. These risks include 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; and
risks that the transactions may not be liquid.

INVESTOR PROFILE

In light of the Fund's investment objective and strategies, the Fund may be
appropriate for investors who:

- Seek capital appreciation over the long term

- Do not seek current income from their investment

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

- Can withstand volatility in the value of their shares of the Fund

- Wish to add to their investment portfolio a fund that emphasizes a "value"
style of investing in equity securities of small capitalization companies.

PERFORMANCE INFORMATION

The Small Cap Value Fund commenced investment operations as of June 21, 1999.
When the Fund has completed a full calendar year of investment operations, this
section will include charts that show annual total returns, highest and lowest
quarterly returns and average annual total returns compared to a benchmark index
selected for the Fund. This information serves as a basis for investors to
evaluate the Fund's performance and risks, by looking at how the Fund's
performance varies from year-to-year and how the Fund's performance compares to
a broad-based market index that the Fund's investment adviser believes is an
appropriate benchmark for the Fund. Past performance of the Fund is not
indicative of its future performance.

4
<PAGE> 80

FEES AND EXPENSES
OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------------------------------------------------------

SHAREHOLDER FEES
(fees paid directly from your investment)
------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum sales charge
(load) imposed on
purchases (as a
percentage of offering 5.75%(1) None None
price)
......................................................
Maximum deferred sales
charge (load) (as a
percentage of the
lesser of original
purchase price or
redemption proceeds) None(2) 5.00%(3) 1.00%(4)
......................................................
Maximum sales charge
(load) imposed on
reinvested dividends None None None
......................................................
Redemption fees None None None
......................................................
Exchange fee None None None
......................................................
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
------------------------------------------------------
Management fees(5) 0.75% 0.75% 0.75%
......................................................
Distribution and/or
service (12b-1)
fees(6) 0.25% 1.00%(7) 1.00%(7)
......................................................
Other expenses(5) 7.29% 7.29% 7.29%
......................................................
Total annual fund
operating expenses
8.29% 9.04% 9.04%
......................................................
</TABLE>

(1) Reduced for purchases of $50,000 and over. See "Purchase of Shares -- Class
A Shares."

(3) The maximum deferred sales charge is 5.00% in the first year after purchase,
declining thereafter as follows:

(5) The Fund's investment adviser is currently waiving or reimbursing all or a
portion of the Fund's management fees and other expenses such that actual
total annual fund operating expenses for the fiscal period ended March 31,
2000 were 1.48%, 2.23% and 2.23% for Class A Shares, Class B Shares and
Class C Shares, respectively. The fee waivers or expense reimbursements can
be terminated at any time.

(6) Class A Shares are subject to an annual service fee of up to 0.25% of the
average daily net assets attributable to such class of shares. Class B
Shares and Class C Shares are each subject to a combined annual distribution
and service fee of up to 1.00% of the average daily net assets attributable
to such class of shares. See "Purchase of Shares."

(7) Because distribution and/or service (12b-1) fees are paid out of the Fund's
assets on an ongoing basis, over time these fees will increase the cost of
your investment and may cost you more than paying other types of sales
charges.

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $1,343 $2,805 $4,173 $7,216
.........................................................................
Class B Shares $1,366 $2,816 $4,207 $7,314*
.........................................................................
Class C Shares $982 $2,551 $4,085 $7,409
.........................................................................
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
-------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $1,343 $2,805 $4,173 $7,216
.........................................................................
Class B Shares $886 $2,551 $4,085 $7,314*
.........................................................................
Class C Shares $886 $2,551 $4,085 $7,409
.........................................................................
</TABLE>

*Based on conversion to Class A Shares after eight years.

INVESTMENT OBJECTIVE,
POLICIES AND RISKS

The Fund's investment objective is to seek capital appreciation. Any income
received from the investment of portfolio securities is incidental to the Fund's
investment objective. The Fund's investment objective may be changed by the
Fund's Board of Trustees without shareholder approval, but no change is

5
<PAGE> 81

anticipated. If the Fund's investment objective changes, the Fund will notify
shareholders and shareholders should consider whether the Fund remains an
appropriate investment in light of their then current financial positions and
needs. There are risks inherent in all investments in securities; accordingly
there can be no assurance that the Fund will achieve its investment objective.

The Fund's investment adviser seeks to achieve the investment objective by
investing primarily in a portfolio of equity securities of small capitalization
companies that the Fund's investment adviser believes are undervalued. Under
normal market conditions, the Fund invests at least 65% of the Fund's total
assets in equity securities of small capitalization companies. Because prices of
common stocks and other equity securities fluctuate, the value of an investment
in the Fund will vary based upon the Fund's investment performance. The Fund
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.

Under current market conditions, the Fund's investment adviser defines small
capitalization companies by reference to those companies having market
capitalizations in the range of companies represented in the Russell 2000 Index,
a small capitalization company index (which currently consists of U.S. companies
in the market capitalization range of approximately $178 million to $1.3 billion
as of May 31, 2000). Under normal market conditions, the Fund invests
substantially all of its assets in such companies. Investments in smaller-sized
companies may offer greater opportunities for capital growth than larger-sized
companies, but also may involve special risks. Small capitalization companies
typically are subject to a greater degree of change in earnings and business
prospects than are larger companies and 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 companies or the market averages in general.

In selecting securities for investment, the Fund emphasizes a "value" style of
investing focusing on companies with promising growth prospects and attractive
valuations. The Fund seeks to identify those companies that are undervalued with
characteristics that might lead to improved valuation relative to other
companies. The catalyst for improved valuations could include, among other
things, changes in management, new product introductions or new industry
regulations. Stocks of different types, such as "value" or "growth" stocks tend
to shift in and out of favor depending on market and economic conditions. Thus,
the value of the Fund's investments will vary and at times may be lower or
higher than that of other types of funds. The Fund's investment adviser uses a
"bottom-up" investment approach, seeking attractive valuations and growth
opportunities on an individual company basis. This approach focuses on selecting
particular companies before looking at economic and industry trends.

The Fund does not limit its investments to any single group or type of security.
The Fund may invest in unseasoned companies and companies with special
circumstances such as initial public offerings, companies with new management or
management reliant upon one or a few key people, special products and
techniques, limited or cyclical product lines, markets or resources, or unusual
developments, such as mergers, liquidations, bankruptcies or leveraged buyouts.
Investments in unseasoned companies and special circumstances often involve much
greater risks than are inherent in other types of investments, and securities of
such companies may be more likely to experience unexpected significant
fluctuations in price. In addition, investments made in anticipation of future
events may, if delayed or never achieved, cause stock prices to fall.

The Fund may dispose of a security whenever, in the opinion of the Fund's
investment adviser, factors indicate it is desirable to do so. The Fund
generally sells a security when it has become overvalued or the company shows
deteriorating fundamentals. Other factors include changes in the relative market
performance or appreciation possibilities offered by individual securities, a
change in the market trend or other factors affecting an individual security, a
change in economic or market factors in general or with respect to a particular
industry, and other circumstances bearing on the desirability of a given
investment.

6
<PAGE> 82

While the Fund invests primarily in common stocks, the Fund may invest in other
equity securities including preferred stocks and securities convertible into
common and preferred stocks. 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 or
mandatory redemption provisions.

A convertible security is a bond, debenture, note, preferred stock, warrant or
other security that may be converted into or exchanged for a prescribed amount
of common stock or other equity security of the same or a different issuer or
into cash within a particular period of time at a specified price or formula. A
convertible security generally entitles the holder to receive interest paid or
accrued on debt securities or the dividend paid on preferred stock until the
convertible security matures or is redeemed, converted or exchanged. Before
conversion, convertible securities generally have characteristics similar to
both debt and equity securities. The value of convertible securities tends to
decline as interest rates rise and, because of the conversion feature, tends to
vary with fluctuations in the market value of the underlying equity securities.
Convertible securities ordinarily provide a stream of income with generally
higher yields than those of common stock of the same or similar issuers.
Convertible securities generally rank senior to common stock in a corporation's
capital structure but are usually subordinated to comparable nonconvertible
securities. Convertible securities generally do not participate directly in any
dividend increases or decreases of the underlying equity security although the
market prices of convertible securities may be affected by any such dividend
changes or other changes of the underlying equity security.

RISKS OF INVESTING IN

SECURITIES OF FOREIGN ISSUERS

The Fund may invest up to 10% of its total assets in securities of foreign
issuers. Securities of foreign issuers 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), the
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 conversion costs) and possible
difficulty in enforcing contractual obligations or taking judicial action.
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 and financial reporting
disclosure requirements than domestic issuers. There is generally less
government regulation of stock exchanges, brokers and listed companies abroad
than in the United States 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 foreign exchanges,
brokers and dealers than there is in the United States, the Fund may experience
settlement difficulties or delays not usually encountered in the United States.

7
<PAGE> 83

USING OPTIONS, FUTURES CONTRACTS

AND RELATED OPTIONS

The Fund may, but is not required to, use various investment strategic
transactions, including options, futures contracts and options on futures
contracts, in several different ways depending upon the status of the Fund's
portfolio and the investment adviser's expectations concerning the securities
markets. Although the Fund's investment adviser seeks to use the practices to
further the Fund's investment objective, no assurance can be given that the use
of these practices will achieve this result.

In times of stable or rising stock prices, the Fund generally seeks to be fully
invested in equity securities. Even when the Fund is 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 Fund
may also have cash on hand that has not yet been invested. The portion of the
Fund's assets that is invested in cash or cash equivalents does not fluctuate
with stock market prices, so that, in times of rising market prices, the Fund
may underperform the market in proportion to the amount of cash or cash
equivalents in its portfolio. By purchasing stock index futures contracts,
however, the Fund can compensate for the cash portion of its assets and may
obtain performance equivalent to investing 100% of its assets in equity
securities.

If the Fund's investment adviser forecasts a market decline, the Fund may seek
to reduce its exposure to the securities markets by increasing its cash
position. By selling stock 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 Fund's portfolio
securities. 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 Fund could then liquidate securities in a
more deliberate manner, reducing its futures position simultaneously to maintain
the desired balance, or it could maintain the hedged position.

The Fund can engage in options transactions on securities, securities indices or
on futures to attempt to manage the portfolio's 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 Fund's investment portfolio. If the market remains stable or
advances, the Fund can refrain from exercising the put and its portfolio will
participate in the advance, having incurred only the premium cost for the put.

Generally, the Fund expects that options will be purchased or sold on securities
exchanges. However the Fund is 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.

A more complete discussion of options, futures contracts and related options and
their risks is contained in the Fund's Statement of Additional Information. The
Statement of Additional Information may be obtained by investors free of charge
as described on the back cover of this prospectus.

8
<PAGE> 84

OTHER INVESTMENTS AND RISK FACTORS

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund 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
Fund's investment adviser believes the potential for capital appreciation has
lessened, or for other reasons. The portfolio turnover rate may vary from year
to year. A high portfolio turnover rate (100% or more) increases a fund's
transactions costs (including brokerage commissions or dealer costs) and high
portfolio turnover may result in the realization of more short-term capital
gains than if a fund had lower portfolio turnover. Increases in a fund's
transactions costs would adversely impact the fund's performance. The turnover
rate will not be a limiting factor, however, if the Fund's investment adviser
considers portfolio changes appropriate.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, the Fund may, on a temporary basis, hold cash or invest 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.
Under normal market conditions, the potential for capital appreciation on these
securities will tend to be lower than the potential for capital appreciation on
other securities that may be owned by the Fund. In taking such a defensive
position, the Fund would not be pursuing and may not achieve its investment
objective.

INVESTMENT ADVISORY SERVICES

<TABLE>
<CAPTION>
Average Daily Net Assets % Per Annum
-----------------------------------------------
<S> <C> <C> <C>
First $500 million 0.75
...............................................
Next $500 million 0.70
...............................................
Over $1 billion 0.65
...............................................
</TABLE>

Applying this fee schedule, the effective advisory fee rate was 0.75% of the
Fund's average daily net assets (before voluntary fee waivers) for the Fund's
fiscal period ended March 31, 2000. The Fund's average daily net assets are
determined by taking the average of all of the determinations of the net assets
during a given calendar month. Such fee is payable for each calendar month as
soon as practicable after the end of that month.

9
<PAGE> 85

The Adviser may utilize, at its own expense, credit analysis, research and
trading support services provided by its affiliate, Van Kampen Asset Management
Inc. ("Asset Management").

PORTFOLIO MANAGEMENT. The Fund is managed by John Cunniff, Senior Portfolio
Manager. Mr. Cunniff has been affiliated with the Fund since its inception. He
has been a Vice President and Director of Equity Research of the Adviser since
October 1995. He has been Vice President and Senior Portfolio Manager of the
Adviser and Asset Management since October 1995. Prior to that time, Mr. Cunniff
was a Portfolio Manager of Templeton Quantitative Advisors, a subsidiary of the
Franklin Group.

PURCHASE OF SHARES

GENERAL

10
<PAGE> 86

any day in which no purchase or redemption orders are received or there is not a
sufficient degree of trading in the Fund's portfolio securities such that the
Fund's net asset value per share might be materially affected. The Fund's Board
of Trustees reserves the right to calculate the net asset value per share and
adjust the offering price more frequently than once daily if deemed desirable.
Net asset value per share for each class is determined by dividing the value of
the Fund's portfolio securities, cash and other assets (including accrued
interest) attributable to such class, less all liabilities (including accrued
expenses) attributable to such class, by the total number of shares of the class
outstanding. Such computation is made by using prices as of the close of trading
on the Exchange and (i) valuing securities listed or traded on a national
securities exchange at the last reported sale price, or if there has been no
sale that day, at the mean between the bid and asked prices, (ii) valuing
over-the-counter securities at the mean between the last reported bid and asked
price is available from the National Association of Securities Dealers Automated
Quotations ("NASDAQ"), and, if there has been no sale that day, at the mean
between the last reported bid and asked prices, and (iii) valuing securities at
the last quoted bid price and (iv) valuing any securities for which market
quotations are not readily available and any other assets at fair value as
determined in good faith by the Adviser in accordance with procedures
established by the Fund's Board of Trustees. Short-term securities with
remaining maturities of 60 days or less are valued on an amortized cost basis,
which approximates market value.

Shares may be purchased on any business day by completing the account
application form and forwarding the account application, directly or through an
authorized dealer, to the Fund's shareholder service agent, Van Kampen Investor
Services Inc. ("Investor Services"), a wholly owned subsidiary of Van Kampen
Investments. When purchasing shares of the Fund, investors must specify whether
the purchase is for Class A Shares, Class B Shares or Class C Shares by
selecting the correct Fund number on the account application. Sales personnel of
authorized dealers distributing the Fund's shares are entitled to receive
compensation for selling such shares and may receive differing compensation for
selling Class A Shares, Class B Shares or Class C Shares.

11
<PAGE> 87

close of business are priced based on the date of the next determined net asset
value per share provided they are received by Investor Services prior to
Investor Services' close of business on such date. It is the responsibility of
authorized dealers to transmit orders received by them to Investor Services so
they will be received in a timely manner.

CLASS A SHARES

SALES CHARGE SCHEDULE

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. The contingent deferred sales charge is assessed on
an amount equal to the lesser of the then current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within five years of purchase as
shown in the table as follows:

CLASS B SHARES

SALES CHARGE SCHEDULE

The amount of the contingent deferred sales charge, if any, varies depending on
the number of years from

12
<PAGE> 88

the time of payment for each purchase of Class B Shares until the time of
redemption of such shares.

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class C
Shares in an amount of $1 million or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

CONVERSION FEATURE

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

13
<PAGE> 89

please refer to the Fund's Statement of Additional Information or contact your
authorized dealer.

QUANTITY DISCOUNTS

LETTER OF INTENT. A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating investments over a 13-month period
to determine the sales charge as outlined in the Class A Shares sales charge
table. The size of investment shown in the Class A Shares sales charge table
includes purchases of shares of the Participating Funds over a 13-month period
based on the total amount of intended purchases plus the value of all shares of
the Participating Funds previously purchased and still owned. An investor may
elect to compute the 13-month period starting up to 90 days before the date of
execution of a Letter of Intent. Each investment made during the period receives
the reduced sales charge applicable to the total amount of the investment goal.
The initial purchase must be for an amount equal to at least 5% of the minimum
total purchase amount of the level selected. If trades not initially made under
a Letter of Intent subsequently qualify for a lower sales charge through the
90-day backdating provisions, an adjustment will be made at the expiration of
the Letter of Intent to give effect to the lower sales charge. Such adjustment
in sales charge will be used to purchase additional shares. The Fund initially
will escrow shares totaling 5% of the dollar amount of the Letter of Intent to
be held by Investor Services in the name of the shareholder. In the event the
Letter of Intent goal is not achieved within the specified period, the investor
must pay the difference between the sales charge applicable to the purchases
made and the reduced sales charge previously paid. Such payments may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain the difference.

OTHER PURCHASE PROGRAMS

14
<PAGE> 90

concession or agency commission. Persons desiring more information with respect
to this program, including the terms and conditions that apply to the program,
should contact their authorized dealer or the Distributor.

NET ASSET VALUE PURCHASE OPTIONS. Class A Shares of the Fund may be purchased at
net asset value, generally, upon written assurance that the purchase is made for
investment purposes and that the shares will not be resold except through
redemption by the Fund, by:

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
Dean Witter & Co. and any of its subsidiaries and such persons' families and
their beneficial accounts.

(4) Registered investment advisers who charge a fee for their services, trust
companies and bank trust departments investing on their own behalf or on
behalf of their clients. The Distributor may pay authorized dealers through
which such purchases are made an amount up to 0.50% of the amount invested,
over a 12-month period.

(5) Trustees and other fiduciaries purchasing shares for retirement plans which
invest in multiple fund families through broker-dealer retirement plan
alliance programs that have entered into agreements with the Distributor and
which are subject to certain minimum size and operational requirements.
Trustees and other fiduciaries should refer to the Fund's Statement of
Additional Information for further details with respect to such alliance
programs.

(7) Accounts as to which a bank or broker-dealer charges an account management
fee ("wrap accounts"), provided the bank or broker-dealer has a separate
agreement with the Distributor.

15
<PAGE> 91

purchased by an employer sponsored plan with more than 100 eligible
employees. Such plans that have been established with a Participating Fund
or have received proposals from the Distributor prior to January 1, 2000
based on net asset value purchase privileges previously in effect will be
qualified to purchase shares of the Participating Funds at net asset value.
Section 403(b) and similar accounts for which Van Kampen Trust Company
serves as custodian will not be eligible for net asset value purchases based
on the aggregate investment made by the plan or the number of eligible
employees, except under certain uniform criteria established by the
Distributor from time to time. For purchases on February 1, 1997 and
thereafter, a commission will be paid on purchases as follows: 1.00% on
sales to $2 million, plus 0.80% on the next $1 million, plus 0.50% on the
next $47 million, plus 0.25% on the excess over $50 million.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents, and a person's spouse's parents.

REDEMPTION OF
SHARES

16
<PAGE> 92

be redeemed have been recently purchased by check, Investor Services may delay
the payment of redemption proceeds until it confirms that the purchase check has
cleared, which may take up to 15 days. A taxable gain or loss may be recognized
by the shareholder upon redemption of shares. Certificated shares must be
properly endorsed for transfer and must accompany a written redemption request.

Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption request to be in proper form.
In some cases, however, additional documents may be necessary. Certificated
shares may be redeemed only by written request. The certificates for the shares
being redeemed must be properly endorsed for transfer and must accompany the
redemption request. Generally in the event a redemption is requested by and
registered to a corporation, partnership, trust, fiduciary, estate or other
legal entity owning shares of the Fund, a copy of the corporate resolution or
other legal documentation appointing the authorized signer and certified within
the prior 120 days must accompany the redemption request. Retirement plan
distribution requests should be sent to the plan custodian/trustee to be
forwarded to Investor Services. Contact the plan custodian/trustee for further
information.

TELEPHONE REDEMPTION REQUESTS. The Fund permits redemption of shares by
telephone and for redemption proceeds to be sent to the address of record for
the account or to the bank account of record as described below. A shareholder
automatically has telephone redemption privileges unless the shareholder
indicates otherwise by checking the applicable box on the account application
form. For accounts that are not established with telephone redemption
privileges, a shareholder may call the Fund at (800) 341-2911 to request that a
copy of the Telephone Redemption Authorization form be sent to the shareholder
for completion. To redeem shares, contact the telephone transaction line at
(800) 421-5684. Shares may also be redeemed by phone through FundInfo(R)
(automated telephone system), which is accessible 24 hours a day, seven days a
week at (800) 847-2424. Van Kampen Investments and its subsidiaries, including
Investor Services, and the Fund employ procedures considered by them to be
reasonable to confirm that instructions communicated by telephone are genuine.
Such procedures include requiring certain personal identification information
prior to acting upon telephone instructions, tape-recording telephone
communications and providing written confirmation of instructions communicated
by telephone. If reasonable procedures are employed, none of Van Kampen
Investments, Investor Services or the Fund will be liable for following
telephone instructions which it reasonably believes to be genuine. Telephone
redemptions may not be available if the shareholder cannot reach Investor
Services by telephone, whether because all telephone lines are busy or for any
other reason; in such case, a shareholder would have to use the Fund's other
redemption procedure previously described. Requests received by Investor
Services

17
<PAGE> 93

prior to 4:00 p.m., New York time, will be processed at the next determined net
asset value per share. These privileges are available for most accounts other
than retirement accounts or accounts with shares represented by certificates. If
an account has multiple owners, Investor Services may rely on the instructions
of any one owner.

OTHER REDEMPTION INFORMATION. The Fund may redeem shares of any shareholder
account that has a value on the date of the notice of redemption less than the
minimum initial investment as specified in this prospectus. At least 60 days'
advance written notice of any such involuntary redemption will be provided to
the shareholder and such shareholder will be given an opportunity to purchase
the required value of additional shares at the next determined net asset value
without sales charge. Any involuntary redemption may only occur if the
shareholder account is less than the minimum initial investment due to
shareholder redemptions.

DISTRIBUTIONS FROM THE FUND

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

DIVIDENDS. Dividends from stocks and interest earned from other investments are
the Fund's main sources of net investment income. The Fund's present policy,
which may be changed at any time by the Fund's Board of Trustees, is to
distribute annually all or substantially all of its net investment income as
dividends to shareholders. Dividends are automatically applied to purchase
additional shares of the Fund at the next determined net asset value unless the
shareholder instructs otherwise.

SHAREHOLDER SERVICES

REINVESTMENT PLAN. A convenient way for investors to accumulate additional
shares is by accepting dividends and capital gain dividends in shares of the
Fund. Such shares are acquired at net asset value per share (without sales
charge) on the applicable payable date of the dividend or capital gain dividend.
Unless the shareholder instructs otherwise, the reinvestment plan is automatic.
This instruction may be made by telephone by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired) or by writing to Investor Services. The
investor may, on the initial account application or prior to any declaration,
instruct that dividends and/or capital gain dividends be paid in cash, be
reinvested in the Fund at the next determined net asset value, or be invested in
another

18
<PAGE> 94

Participating Fund at the next determined net asset value.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services, by contacting the telephone transaction line at (800)
421-5684, through FundInfo(R) (automated telephone system) at (800) 847-2424 or
through the internet at www.vankampen.com. A shareholder automatically has these
exchange privileges unless the shareholder indicates otherwise by checking the
applicable box on the account application form accompanying the prospectus. Van
Kampen Investments and its subsidiaries, including Investor Services, and the
Fund employ procedures considered by them to be reasonable to confirm that
instructions communicated by telephone are genuine. Such procedures include
requiring certain personal identification information prior to acting upon
telephone instructions, tape-recording telephone communications, and providing
written confirmation of instructions communicated by telephone. If reasonable
procedures are employed, none of Van Kampen Investments, Investor Services or
the Fund will be liable for following telephone instructions which it reasonably
believes to be genuine. If the exchanging shareholder does not have an account
in the fund whose shares are being acquired, a new account will be established
with the same registration, dividend and capital gain dividend options (except
dividend diversification) and authorized dealer of record as the account from
which shares are exchanged, unless otherwise specified by the shareholder. In
order to establish a systematic withdrawal plan for the new account or reinvest
dividends from the new account into another fund, however, an exchanging
shareholder must submit a specific request. The Fund reserves the right to
reject any order to acquire its shares through exchange. In addition, the Fund
and other Participating Funds may restrict exchanges by shareholders engaged in
excessive trading by limiting or disallowing the exchange privilege to such
shareholders. For further information on these restrictions, see the Fund's
Statement of Additional Information. The Fund may modify, restrict or terminate
the exchange privilege at any time on 60 days' notice to its shareholders of any
termination or material amendment.

19
<PAGE> 95

was acquired through reinvestment, that security is deemed to have been sold
with a sales charge rate equal to the rate previously paid on the security on
which the dividend or distribution was paid. If a shareholder exchanges less
than all of such shareholder's securities, the security upon which the highest
sales charge rate was previously paid is deemed exchanged first.

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written instruction or by telephone, you may also perform certain
transactions through the internet. Please refer to our web site at
www.vankampen.com for further instruction regarding internet transactions. Van
Kampen Investments and its subsidiaries, including Investor Services, and the
Fund employ procedures considered by them to be reasonable to confirm that
instructions communicated through the internet are genuine. Such procedures
include requiring use of a personal identification number prior to acting upon
internet instructions and providing written confirmation of instructions
communicated through the internet. If reasonable procedures are employed none of
Van Kampen Investments, Investor Services or the Fund will be liable for
following instructions received through the internet which it reasonably
believes to be genuine. If an account has multiple owners, Investor Services may
rely on the instructions of any one owner.

FEDERAL INCOME TAXATION

Distributions of the Fund's investment company taxable income (consisting
generally of taxable income and net short-term capital gain) are taxable to
shareholders as ordinary income to the extent of the Fund's earnings and
profits, whether paid in cash or reinvested in additional shares. Distributions
of the Fund's net capital gain (which is the excess of net long-term capital
gain over net short-term capital loss) as capital gain dividends, if any, are
taxable to shareholders as long-term capital gains, whether paid in cash or
reinvested in additional shares, and regardless of how long the shares of the
Fund have been held by such shareholders. The Fund expects that its
distributions will consist primarily of ordinary income and capital gain
dividends. Distributions in excess of the Fund's earnings and profits will first
reduce the adjusted tax basis of a holder's shares and, after such adjusted tax
basis is reduced to zero, will constitute capital gain to such holder (assuming
such shares are held as a capital asset). Although distributions generally are
treated as taxable in the year they are paid, distributions declared in October,
November or December, payable to shareholders of record on a specified date in
such month and paid during January of the following year will be treated as
having been distributed by the Fund and received by the shareholders on the
December 31st prior to the date of payment. The Fund will inform shareholders of
the source and tax status of all distributions promptly after the close of each
calendar year.

20
<PAGE> 96

Prospective foreign investors should consult their tax advisers concerning the
tax consequences to them of an investment in shares.

The federal income tax discussion set forth above is for general information
only. Prospective investors should consult their own tax advisers regarding the
specific federal tax consequences of purchasing, holding, and disposing of
shares of the Fund, as well as the effects of state, local and foreign tax law
and any proposed tax law changes.

21
<PAGE> 97

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance since commencement of investment operations. Certain
information reflects financial results for a single Fund share. The total
returns in the table represent the rate that an investor would have earned (or
lost) on an investment in the Fund (assuming reinvestment of all dividends and
distributions). This information has been audited by PricewaterhouseCoopers LLP,
whose report, along with the Fund's financial statements, is 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>
June 21, 1999
(Commencement of Investment Operations)
to March 31, 2000
Class A Class B Class C
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period.......... $10.000 $10.000 $10,000
------- ------- ------- ---
Net Investment Income............................ .053 .013 .013
Net Realized and Unrealized Loss................. (.181) (.205) (.202)
------- ------- ------- ---
Total from Investment Operations.................. (.128) (.192) (.189)
Less Distributions from and in Excess of Net
Investment Income................................. .064 .027 .027
------- ------- ------- ---
Net Asset Value, End of the Period................ $ 9.808 $ 9.781 $ 9.784
======= ======= ======= ===
Total Return...................................... (.92%)(a)** (1.81%)(b)** (1.81%)(c)**
Net Assets at End of the Period (in millions)..... $ 4.3 $ 3.7 $ 2.0
Ratio of Expenses to Average Net Assets* (d)...... 1.48% 2.23% 2.23%
Ratio of Net Investment Income to Average Net
Assets*........................................... .67% (.08%) (.08%)
Portfolio Turnover................................ 15%** 15%** 15%**
* 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 (d)..... 8.29% 9.04% 9.04%
Ratio of Net Investment Loss to Average Net
Assets.......................................... (6.14%) (6.89%) (6.89%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a contingent
deferred sales charge of 1%, may be imposed on certain redemptions made
within one year of purchase. If the sales charges were included, total
returns would be lower.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 5%,
charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the fifth year. If the sales charge was
included, total returns would be lower.

(c) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 1%,
charged on certain redemptions made within one year of purchase. If the
sales charge was included, total returns would be lower.

(d) The Ratio of Expenses to Average Net Assets does not reflect credits earned
on overnight cash balances. If these credits were reflected as a reduction
of expenses, the ratios would decrease by .02% for the period June 21, 1999
to March 31, 2000.

22
<PAGE> 98

BOARD OF TRUSTEES
AND OFFICERS

BOARD OF TRUSTEES

OFFICERS

Richard F. Powers, III*

President

Stephen L. Boyd*

Executive Vice President and Chief Investment Officer

A. Thomas Smith III*

Vice President and Secretary

John H. Zimmermann, III*

Vice President

Michael H. Santo*

Vice President

John R. Reynoldson*

Vice President

Richard A. Ciccarone*

Vice President

John L. Sullivan*

Vice President, Chief Financial Officer and Treasurer

* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.

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

FUNDINFO(R)

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

WEB SITE

www.vankampen.com

VAN KAMPEN SMALL CAP VALUE FUND

1 Parkview Plaza

PO Box 5555

Oakbrook Terrace, IL 60181-5555

Investment Adviser

VAN KAMPEN INVESTMENT ADVISORY CORP.

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 218256

Kansas City, MO 64121-8256

Attn: Van Kampen Small Cap Value Fund

Custodian

STATE STREET BANK AND TRUST COMPANY

225 West Franklin Street, PO Box 1713

Boston, MA 02105-1713

Attn: Van Kampen Small Cap Value Fund

Legal Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)

333 West Wacker Drive

Chicago, IL 60606

Independent Auditors

ERNST & YOUNG LLP

233 South Wacker Drive

Chicago, Il 60606

<PAGE> 99

VAN KAMPEN
SMALL CAP VALUE FUND

PROSPECTUS

JULY 28, 2000

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

Information about the Fund, including its
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's Public
Reference Room in Washington, DC or on the
EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the
operation of the SEC's Public Reference Room
may be obtained by calling the SEC at
1-202-942-8090. You can also request copies of
these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail
address ([email protected]), or by writing
the Public Reference Section of the SEC,
Washington DC, 20549-0102.

[VAN KAMPEN FUNDS LOGO]

The Fund's Investment Company Act
File No. is 811-4805.
SCV
PRO 7/00

<PAGE> 100

VAN KAMPEN
UTILITY FUND

Van Kampen Utility Fund's investment objective is to seek to provide its
shareholders with capital appreciation and current income. The Fund's investment
adviser seeks to achieve the Fund's investment objective by investing primarily
in a portfolio of common stocks and income securities issued by companies
engaged in the utilities industry.

This prospectus is dated JULY 28, 2000.

[VAN KAMPEN FUNDS LOGO]
<PAGE> 101

TABLE OF CONTENTS

<TABLE>
<S> <C>
Risk/Return Summary............................... 3
Fees and Expenses of the Fund..................... 6
Investment Objective, Policies and Risks.......... 6
Investment Advisory Services...................... 12
Purchase of Shares................................ 13
Redemption of Shares.............................. 19
Distributions from the Fund....................... 21
Shareholder Services.............................. 21
Federal Income Taxation........................... 23
Financial Highlights.............................. 25
Appendix--Description of Securities Ratings....... A-1
</TABLE>

RISK/RETURN SUMMARY

INVESTMENT OBJECTIVE

The Fund's investment objective is to seek to provide its shareholders with
capital appreciation and current income.

INVESTMENT STRATEGIES

The Fund's investment adviser seeks to achieve the Fund's investment objective
by investing primarily in a portfolio of common stocks and income securities
issued by companies engaged in the utilities industry. Under normal market
conditions, the Fund invests at least 80% of its total assets in such
securities. Companies engaged in the utilities industry include those involved
in the production, transmission, or distribution of electric energy, gas,
telecommunications services, or the provision of other utility or
utility-related goods or services. In selecting securities for investment, the
Fund's investment adviser focuses on securities that it believes offer capital
appreciation and current income at a reasonable risk. As a result, the Fund will
not necessarily invest in the highest-yielding securities permitted by the
Fund's investment policies if such investments would subject the Fund to
excessive risk. Portfolio securities are typically sold when the investment
adviser's assessments of the capital appreciation and current income potential
of such securities materially changes.

The Fund's investments in income securities may include preferred stock and debt
securities, including convertible securities, of various maturities which are
considered "investment-grade" quality at the time of investment. The Fund may
invest up to 20% of its total assets in lower-grade securities at the time of
investment, which securities are commonly referred to as "junk bonds" and
involve special risks as compared to investments in higher-grade securities.

The Fund may invest up to 35% of its total assets in securities of foreign
issuers. The Fund may purchase and sell certain derivative instruments, such as
options, futures and options on futures, for various portfolio management
purposes.

INVESTMENT RISKS

An investment in the Fund is subject to risks, and you could lose money on your
investment in the Fund. There can be no assurance that the Fund will achieve its
investment objective.

RISKS OF INVESTING IN A UTILITIES INDUSTRY-CONCENTRATED FUND. Because of the
Fund's policy of investing primarily in securities issued by companies engaged
in the utilities industry, the Fund is susceptible to economic, political or
regulatory (or deregulatory) risks or other occurrences associated with the
utilities industry. These risks can include, for example, increases in fuel and
other operating costs; high interest expenses for capital construction programs;
failure of regulatory authorities to approve rate changes; costs associated with
compliance of environmental and nuclear safety regulations; service interruption
due to environmental, operational or other mishaps; the effects of economic
slowdowns; surplus capacity and competition; changes in the overall regulatory
climate that may result in increased costs or the impairment of utility
companies to operate their facilities; or deregulation of certain utilities
creating competitive challenges, or mergers and acquisitions opportunities. The
rates charged by utility companies for utility-related goods or services and the
operations of utilities companies often are subject to review and limitations by
utilities' regulatory commissions which may directly impact utility companies'
growth and distributions.

CREDIT RISK. Credit risk refers to an issuer's ability to make timely payments
of interest and principal. The Fund invests in investment-grade securities and
may invest up to 20% of its total assets in securities below investment-grade
credit quality. Therefore, the Fund

3
<PAGE> 103

is subject to a higher level of credit risk than a fund that invests solely in
investment-grade securities. "Noninvestment-grade" securities are considered
speculative by recognized rating agencies with respect to the issuer's
continuing ability to pay interest and principal, and such securities have less
liquidity and a higher incidence of default than investments in higher-grade
securities.

INCOME RISK. The ability of the Fund's common stocks and preferred stocks to
generate income generally depends on the earnings and the continuing declaration
of dividends by the issuers of such securities. The interest on the Fund's debt
securities is generally affected by prevailing interest rates, which can vary
widely over the short and long term. If dividends are reduced or discontinued or
interest rates drop, your income from the Fund may drop as well.

INVESTOR PROFILE

In light of the Fund's investment objective and strategies, the Fund may be
appropriate for investors who:

- Seek capital appreciation over the long term

- Seek current income

- Are willing to take on the increased risks of an investment concentrated in
securities of companies operating in the same industry

- Wish to add to their investment portfolio a fund that invests primarily in
common stocks and income securities issued by companies engaged in the
utilities industry

4
<PAGE> 104

ANNUAL PERFORMANCE

One way to measure the risks of investing in the Fund is to look at how its
performance has varied from year-to-year. The following chart shows the annual
returns of the Fund's Class A Shares over the six calendar years prior to the
date of this prospectus. Sales loads are not reflected in this chart. If these
sales loads had been included, the returns shown below would have been lower.
Remember that the past performance of the Fund is not indicative of its future
performance.

<TABLE>
<CAPTION>
ANNUAL RETURN
-------------
<S> <C>
1994 -9.84
1995 25.69
1996 10.94
1997 25.70
1998 18.00
1999 14.51
</TABLE>

The Fund's return for the six-month period ended June 30, 2000 was 11.31%.

During the six-year period shown in the bar chart, the highest quarterly return
for Class A Shares was 13.12% (for the quarter ended December 31, 1999) and the
lowest quarterly return for Class A Shares was -7.24% (for the quarter ended
March 31, 1994).

COMPARATIVE PERFORMANCE

As a basis for evaluating the Fund's performance and risks, the table below
shows how the Fund's performance compares with the Standard & Poor's Utilities
Index*, a broad-based market index that the Fund's investment adviser believes
is an appropriate benchmark for the Fund. The Fund's performance figures include
the maximum sales charges paid by investors. The index performance figures do
not include any commissions or sales charges that would be paid by investors
purchasing the securities represented by the index. An investment can not be
made directly in the index. Average annual total returns are shown for the
periods ended December 31, 1999 (the most recently completed calendar year prior
to the date of this prospectus). Remember that the past performance of the Fund
is not indicative of its future performance.

<TABLE>
<CAPTION>
Average Annual
Total Returns
for the
Periods Ended Past Past Since
December 31, 1999 1 Year 5 Years Inception
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Van Kampen
Utility Fund --
Class A Shares 7.94% 17.43% 11.99%(1)

Standard & Poor's
Utilities Index -8.88% 13.66% 8.84%(3)
.......................................................
Van Kampen
Utility Fund --
Class B Shares 9.65% 17.72% 12.22%(1)**

Standard & Poor's
Utilities Index -8.88% 13.66% 8.84%(3)
.......................................................
Van Kampen
Utility Fund --
Class C Shares 12.65% 17.89% 12.05%(2)

Standard & Poor's
Utilities Index -8.88% 13.66% 8.84%(3)
.......................................................
</TABLE>

Inception dates: (1) 7/28/93, (2) 8/13/93, (3) 7/31/93.

* The Standard and Poor's Utilities Index is a broad-based, unmanaged index
that reflects the general performance of utility stocks.

** The "Since Inception" performance for Class B Shares reflects the conversion
of such shares into Class A Shares six years after purchase. Class B Shares
purchased on or after June 1, 1996 will convert to Class A Shares eight years
after purchase. See "Purchase of Shares."

5
<PAGE> 105

FEES AND EXPENSES
OF THE FUND

This table describes the fees and expenses that you may pay if you buy and hold
shares of the Fund.

<TABLE>
<CAPTION>
Class A Class B Class C
Shares Shares Shares
------------------------------------------------------

SHAREHOLDER FEES
(fees paid directly from your investment)
------------------------------------------------------
<S> <C> <C> <C> <C>
Maximum sales charge
(load) imposed on
purchases (as a
percentage of offering 5.75%(1) None None
price)
......................................................
Maximum deferred sales
charge (load) (as a
percentage of the
lesser of original
purchase price or
redemption proceeds) None(2) 4.00%(3) 1.00%(4)
......................................................
Maximum sales charge
(load) imposed on
reinvested dividends None None None
......................................................
Redemption fee None None None
......................................................
Exchange fee None None None
......................................................
</TABLE>

ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Fund assets)
------------------------------------------------------
Management fees 0.65% 0.65% 0.65%
......................................................
Distribution and/or
service
(12b-1) fees(5)
0.25% 1.00%(6) 1.00%(6)
......................................................
Other expenses 0.36% 0.36% 0.36%
......................................................
Total annual fund
operating expenses
1.26% 2.01% 2.01%
......................................................
</TABLE>

(1) Reduced for purchases of $50,000 and over. See "Purchase of Shares -- Class
A Shares."

(3) The maximum deferred sales charge is 4.00% in the first year after purchase,
declining thereafter as follows:

Year 1-4.00%
Year 2-3.75%
Year 3-3.50%
Year 4-2.50%
Year 5-1.50%
Year 6-1.00%
After-None
See "Purchase of Shares -- Class B Shares."
(4) The maximum deferred sales charge is 1.00% in the first year after purchase
and 0.00% thereafter. See "Purchase of Shares -- Class C Shares."

Example:

The following example is intended to help you compare the cost of investing in
the Fund with the costs of investing in other mutual funds.

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $696 $952 $1,227 $2,010
......................................................................
Class B Shares $604 $980 $1,233 $2,144*
......................................................................
Class C Shares $304 $630 $1,083 $2,338
......................................................................
</TABLE>

You would pay the following expenses if you did not redeem your shares:

<TABLE>
<CAPTION>
One Three Five Ten
Year Years Years Years
----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class A Shares $696 $952 $1,227 $2,010
......................................................................
Class B Shares $204 $630 $1,083 $2,144*
......................................................................
Class C Shares $204 $630 $1,083 $2,338
......................................................................
</TABLE>

* Based on conversion to Class A Shares after eight years.

INVESTMENT OBJECTIVE,
POLICIES AND RISKS

The Fund operates under the following fundamental investment policies which may
not be changed without shareholder approval by a majority of the Fund's
outstanding voting securities, as defined in the Investment Company Act of 1940,
as amended (the "1940 Act"). There are risks inherent in all investments in
securities; accordingly there can be no

6
<PAGE> 106

assurance that the Fund will achieve its investment objective.

- The Fund's investment objective is to provide its shareholders with capital
appreciation and current income. The Fund seeks to achieve its investment
objective by investing in a portfolio of common stocks and income securities
issued by companies engaged in the utilities industry. Income securities
include preferred stock and debt securities of various maturities. Companies
engaged in the utilities industry include those involved in the production,
transmission, or distribution of electric energy, gas, telecommunications
services, or the provision of other utility or utility-related goods or
services. Under normal market conditions, the Fund invests at least 80% of the
Fund's total assets in the securities of such companies.

- Under normal market conditions, the Fund may invest up to 20% of its total
assets in cash and securities (including common stocks, income securities and
money market instruments) of companies outside the utilities industry.

- The Fund may invest in income securities which are rated, at the time of
investment, BBB or higher by Standard & Poor's ("S&P") or rated Baa or higher
by Moody's Investors Service, Inc. ("Moody's") or comparably rated by any
other nationally recognized statistical rating organization ("NRSRO"). The
Fund may also invest up to 20% of its total assets in income securities rated
BB or B by S&P or Ba or B by Moody's or comparably rated by any other NRSRO or
unrated securities determined by the Fund's investment adviser to be of
comparable or higher quality. Lower-grade income securities are commonly
referred to as "junk bonds" and are regarded by S&P and Moody's as
predominately speculative with respect to the capacity to pay interest or
repay principal in accordance with their terms, assurance of interest and
principal payments or maintenance of other terms of the securities over any
long period of time may be small. While offering opportunities for higher
yields, lower-grade securities involve a greater degree of credit risk than
investment-grade income securities.

- The Fund may invest up to 35% of its total assets in securities of foreign
issuers.

The Fund's investment adviser seeks securities offering capital appreciation
together with current income that entail reasonable credit risk considered in
relation to the Fund's investment policies. In selecting securities for
investment, the Fund's investment adviser will consider a number of factors,
including historical growth rates; rates of return on capital; financial
condition and resources; geographic location and service area; management skills
and such factors pertinent to the utilities industry. Factors pertaining to the
utilities industry include the regulatory environment, energy sources, the costs
of alternative fuels and, in the case of electric utilities, the extent and
nature of involvement with nuclear powers. The Fund focuses on a security's
potential for capital appreciation, current and projected yields, prospective
growth in earnings and dividends in relation to price or earnings ratios and
investment risk. The Fund's investment adviser believes that securities issued
by utility companies often provide above-average dividend returns and
below-average price or earnings ratios which are factors that not only provide
current income but also generally tend to moderate risk. The Fund may not
necessarily invest in the highest-yielding utility securities permitted by the
Fund's investment policies if such investments would subject the Fund to
excessive risk.

Companies engaged in the utilities industry include a variety of entities
involved in (i) the production, transmission or distribution of electric energy,
(ii) the provision of natural gas, (iii) the provision of telephone, mobile
communication and other telecommunications services or (iv) the provision of
other utility or utility-related goods or services. The rate of return of
issuers of utility securities are often subject to review and limitations by
utilities' regulatory commissions and tend to fluctuate with marginal financing
costs. Rate changes generally lag changes in financing costs, and thus can
favorably or unfavorably affect the earnings or dividend payments on utility
securities depending upon whether such rates and costs are declining or rising.
The public utilities industry has experienced significant changes in recent
years, primarily due to increased competition through deregulation.

Legislation and regulation have significant impacts on the utility industry.
Competition and technological advances has over time often provided better-
positioned utility companies with opportunities for enhanced profitability,
although increased competition and other structural changes has often adversely
affected the profitability of other utilities.

The telecommunications industry has experienced significant changes as local and
long distance telephone companies, wireless communications companies and cable
television providers compete to provide services and as new technologies
develop. Regulation may limit rates charged by such providers based on an
authorized level of earnings, a price index, or another formula. Regulation may
also limit

7
<PAGE> 107

the use of new technologies and hamper efficient depreciation of existing
assets.

Gas and electric utility companies are affected by changes in fuel prices and
interest rates. Many gas utilities generally have been adversely affected by
oversupply conditions, and by increased competition from other providers of
utility services. Certain electric utilities with uncompleted nuclear power
facilities may have problems completing and licensing such facilities.
Regulatory changes with respect to nuclear and conventionally fueled generating
facilities could increase costs or impair the ability of electric companies to
operate such facilities.

Other utility companies are emerging as new technologies develop and as old
technologies are refined. Such issuers include entities engaged in cogeneration,
waste disposal system provision, solid waste electric generation, independent
power producers and non-utility generators.

Companies engaged in the public utilities industry historically have been
subject to a variety of risks depending, in part, on such factors as the type of
utility company involved and its geographic location. Such risks include
increases in fuel and other operating costs, high interest expenses for capital
construction programs, costs associated with compliance with environmental and
nuclear safety regulations, service interruption due to environmental,
operational or other mishaps, the effects of economic slowdowns, surplus
capacity, competition and changes in the overall regulatory climate. In
particular, regulatory changes with respect to nuclear and conventionally fueled
generating facilities could increase costs or impair the ability of utility
companies to operate such facilities, thus reducing utility companies' earnings
or resulting in losses. There can be no assurance that regulatory policies or
accounting standard changes will not negatively affect utility companies'
earnings or dividends. Companies engaged in the public utilities industry are
subject to regulation by various authorities and may be affected by the
imposition of special tariffs and changes in tax laws. To the extent that rates
are established or reviewed by regulatory authorities, companies engaged in the
public utilities industry are subject to the risk that such authority will not
authorize increased rates. Regulatory authorities also may restrict a company's
access to new markets, thereby diminishing the company's long-term prospects. In
addition, individual sectors of the utility market are subject to additional
risks. In addition, because of the Fund's policy of concentrating its
investments in utility securities, the Fund may be more susceptible than a fund
without such a policy to any single economic, political or regulatory occurrence
affecting the public utilities industry.

The Fund may dispose of a security whenever, in the opinion of the Fund'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 the
utilities 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 affecting
the desirability of a given investment.

PORTFOLIO SECURITIES. 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.

The Fund also invests in preferred stocks and securities convertible into common
stocks or other equity securities. 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 or
mandatory redemption provisions. The ability of common stocks and preferred
stocks to generate income is dependent on the earnings and continuing
declaration of dividends by the issuers of such securities. A convertible
security is a bond, debenture, note, preferred stock, warrant or other security
that may be converted into or exchanged for a prescribed amount of common stock
or other equity security of the same or different issuer or into cash within a
particular period of time at a specified price or formula. A convertible
security generally entitles the holder to receive interest paid or accrued on
debt securities or the dividend paid on preferred stock until the convertible
security matures or is redeemed, converted or exchanged. Before conversion,
convertible securities generally have characteristics similar to both debt and
equity securities. The value of convertible securities tends to decline as
interest rates rise and, because of the

8
<PAGE> 108

conversion feature, tends to vary with fluctuations in the market value of the
underlying equity security. Convertible securities ordinarily provide a stream
of income with generally higher yields than those of common stock of the same or
similar issuers. Convertible securities generally rank senior to common stock in
a corporation's capital structure but are usually subordinated to comparable
nonconvertible securities. Convertible securities generally do not participate
directly in any dividend increases or decreases of the underlying equity
security although the market prices of convertible securities may be affected by
any such dividend changes or other changes in the underlying equity security.

The Fund may invest in debt securities of various maturities. Debt securities of
a corporation or other entity generally entitle the holder to receive interest,
at a fixed, variable or floating interest rate, during the term of the security
and repayment of principal at maturity or redemption. The Fund invests primarily
in debt securities considered investment-grade at the time of purchase. A
subsequent reduction in rating does not require the Fund to dispose of a
security. Investment-grade securities are securities rated BBB or higher by S&P
or rated Baa or higher by Moody's or comparably rated by any other NRSRO.
Securities rated BBB by S&P or rated Baa by Moody's are in the lowest of the
four investment-grade categories and are considered by the rating agencies to be
medium-grade obligations which possess speculative characteristics so that
changes in economic conditions or other circumstances are more likely to lead to
a weakened capacity to make principal and interest payments than in the case of
higher-grade securities. The market prices of debt securities generally
fluctuate inversely with changes in interest rates so that the value of
investments in such securities can be expected to decrease as interest rates
rise and increase as interest rates fall and such changes may be greater among
debt securities with longer durations. The ratings assigned by the ratings
agencies represent their opinions of the quality of the debt securities they
undertake to rate, but not the market value risk of such securities. It should
be emphasized that ratings are general and are not absolute standards of
quality. For further description of securities ratings, see appendix to this
prospectus. The Fund may invest up to 20% of its total assets in securities
rated below investment-grade which involve, among other things, greater credit
risk. See "Risks of Lower-Grade Debt Securities" below.

RISKS OF INVESTING IN

SECURITIES OF FOREIGN ISSUERS

The Fund may invest up to 35% of its total assets in securities of foreign
issuers. Securities of foreign issuers 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), the
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 conversion costs) and possible
difficulty in enforcing contractual obligations or taking judicial action.
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 and financial reporting
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 foreign exchanges,
brokers and dealers than there is in the U.S., the Fund may experience
settlement difficulties or delays not usually encountered in the U.S.

9
<PAGE> 109

mature and political systems that are less stable than developed countries.

RISK OF INVESTING IN

LOWER-GRADE DEBT SECURITIES

Under normal market conditions, the Fund may invest up to 20% of its total
assets in debt securities below investment-grade. The Fund may invest in
lower-grade debt securities rated at the time of purchase BB or B by S&P or
rated Ba or B by Moody's or comparably rated by any other NRSRO or, if unrated,
believed by the Fund's investment adviser to be of comparable quality. Such
lower-grade debt securities are commonly referred to as "junk bonds" and involve
special risks as compared to investments in higher-grade securities. Lower-
grade debt securities are regarded by S&P and Moody's as predominately
speculative with respect to the capacity to pay interest or repay principal in
accordance with their terms. Lower-grade debt securities involve greater risks,
such as greater credit risk, greater market risk and volatility, greater
liquidity concerns and potentially greater manager risk. For a complete
description of securities ratings, see the appendix to this prospectus.

Lower-grade debt securities are more susceptible to nonpayment of interest and
principal and default than higher-grade securities. Adverse changes in the
economy or the individual issuer often have a more significant impact on the
ability of lower-grade issuers to make payments, meet projected goals or obtain
additional financing. When an issuer of such securities is in financial
difficulties, the Fund may incur additional expenditures or invest additional
assets in an effort to obtain partial or full recovery on amounts due. While all
debt securities fluctuate inversely with changes in interest rates, the prices
of lower-grade securities generally are less sensitive to changes in interest
rates and are more sensitive to real or perceived general adverse economic
changes or specific issuer developments. A significant increase in market
interest rates or general economic developments could severely disrupt the
market for such securities and the market values of such securities. Such
securities also often experience more volatility in prices than higher-grade
securities. Lack of liquidity in a security makes the sale of the security more
difficult in a timely manner, at least without price concessions. The market for
lower-grade securities may have less available information available, further
complicating evaluations and valuations of such securities, and placing more
emphasis on the investment adviser's experience, judgment and analysis than
other securities.

UNDERSTANDING

QUALITY RATINGS

Securities ratings are based on the issuer's ability to pay interest and
repay the principal. Securities with ratings above the line are considered
"investment-grade," while those with ratings below the line are regarded as
"noninvestment-grade," or "junk bonds." A detailed explanation of these
ratings can be found in the appendix to this prospectus.

<TABLE>
<CAPTION>
S&P Moody's Meaning
------------------------------------------------------
<C> <S> <C>
AAA Aaa Highest quality
......................................................
AA Aa High quality
......................................................
Aa A Above-average quality
......................................................
BBB Baa Average quality
------------------------------------------------------
BB Ba Below-average quality
......................................................
B B Marginal quality
......................................................
CCC Caa Poor quality
......................................................
CC Ca Highly speculative
......................................................
C C Lowest quality
......................................................
D -- In default
......................................................
</TABLE>

For further information regarding investing in lower-grade securities, see the
Fund's Statement of Additional Information.

STATEGIC TRANSACTIONS

The Fund may, but is not required to, use various investment strategic
transactions described below to

10
<PAGE> 110

earn income, facilitate portfolio management and mitigate risks. Although the
Fund's investment adviser seeks to use the practices to further the Fund's
investment objective, no assurance can be given that these practices will
achieve this result.

Strategic Transactions have risks including the imperfect correlation between
the value of such instruments and the underlying assets, the possible default of
the other party to the transaction or illiquidity of the derivative instrument.
Furthermore, the ability to successfully use Strategic Transactions depends on
the Fund's investment adviser's ability to predict pertinent market movements,
which cannot be assured. Thus, the use of Strategic Transactions may result in
losses greater than if they had not been used, may require the Fund to sell or
purchase portfolio securities at inopportune times or for prices other than
current market values, may limit the amount of appreciation the Fund can
otherwise realize on an investment, or may cause the Fund to hold a security
that it might otherwise sell. The use of currency transactions can result in the
Fund incurring losses because of the imposition of exchange controls, suspension
of settlements or the inability to deliver or receive a specified currency. In
addition, amounts paid as premiums or cash or other assets held in margin
accounts with respect to Strategic Transactions are not otherwise available to
the Fund for investment purposes.

OTHER INVESTMENTS AND RISK FACTORS

For cash management purposes, the Fund may engage in repurchase agreements with
broker-dealers, banks and other financial institutions to earn a return on
temporarily available cash. Such transactions are subject to the risk of default
by the other party. It is currently the policy of the Fund not to invest more
than 20% of its total assets at the time of purchase in securities subject to
repurchase agreements.

11
<PAGE> 111

risks of delay in recovery and in some cases even loss of rights in the
collateral should the borrower of the securities fail financially.

Further information about these types of investments and other investment
practices that may be used by the Fund is contained in the Fund's Statement of
Additional Information.

The Fund 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
Fund's investment adviser believes the potential for capital appreciation or
income has lessened, or for other reasons. The portfolio turnover rate may vary
from year to year. A high portfolio turnover rate (100% or more) increases a
fund's transactions costs (including brokerage commissions or dealer costs) and
high portfolio turnover may result in the realization of more short-term capital
gains than if a fund had lower portfolio turnover. Increases in a fund's
transaction costs would adversely impact that fund's performance. The turnover
rate will not be a limiting factor, however, if the Fund's investment adviser
considers portfolio changes appropriate.

TEMPORARY DEFENSIVE STRATEGY. When market conditions dictate a more "defensive"
investment strategy, the Fund may on a temporary basis hold cash or invest 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 and in investment grade corporate debt securities. Under normal market
conditions, the potential for capital appreciation and current income on these
securities will tend to be lower than the potential for capital appreciation and
current income on other securities that may be owned by the Fund. In taking such
a defensive position, the Fund would not be pursuing and may not achieve its
investment objective.

INVESTMENT ADVISORY SERVICES

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS % PER ANNUM
-------------------------------------------------------
<S> <C> <C> <C>
First $500 million 0.65%
.......................................................
Next $500 million 0.60%
.......................................................
Over $1 billion 0.55%
.......................................................
</TABLE>

Applying this fee schedule, the effective advisory fee rate was 0.65% of the
Fund's average daily net assets for the Fund's fiscal year ended March 31, 2000.
The Fund's average daily net assets are determined by taking the average of all
of the determinations of the net assets during a given calendar month. Such fee
is payable for each calendar month as soon as practicable after the end of that
month.

Under the Advisory Agreement, the Adviser furnishes offices, necessary
facilities and equipment,

12
<PAGE> 112

and provides administrative services to the Fund. The Fund pays all charges and
expenses of its day-to-day operations, including service fees, distribution
fees, custodian fees, legal and independent accountant fees, the costs of
reports and proxies to shareholders, compensation of trustees of the Trust
(other than those who are affiliated persons of the Adviser, Distributor or Van
Kampen Investments), and all other ordinary business expenses not specifically
assumed by the Adviser.

The Adviser may utilize, at its own expense, credit analysis, research and
trading support services provided by its affiliate, Van Kampen Asset Management
Inc. ("Asset Management").

PERSONAL INVESTMENT POLICIES. The Fund, the Adviser and the Distributor have
adopted Codes of Ethics designed to recognize the fiduciary relationships among
the Fund, the Adviser, the Distributor and their employees. The Codes of Ethics
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 pre-clearance and other
procedures designed to prevent conflicts of interest.

PORTFOLIO MANAGEMENT. Christine Drusch, Senior Portfolio Manager, has been
primarily responsible for managing the Fund's investment portfolio since January
1998. David McLaughlin has shared responsibility for the day-to-day management
of the Fund's investment portfolio since October 1998.

Ms. Drusch has been a Senior Vice President of the Adviser and Asset Management
since December 1999, and since December 1998 she was a Vice President of the
Adviser and Asset Management. Prior to December 1998, Ms. Drusch was an
Assistant Vice President of the Adviser and Asset Management since September
1995. Prior to September 1995, Ms. Drusch was an Associate Portfolio Manager of
Asset Management, and has worked for Asset Management since July 1991. Ms.
Drusch has been affiliated with the Fund since August 1997.

Mr. McLaughlin has been a Vice President of the Adviser and Asset Management
since June 1995, and he was an Assistant Vice President of Asset Management
since March 1994. Prior to June 1995, Mr. McLaughlin was a Senior Equity Trader
for the Adviser. Mr. McLaughlin has worked for Asset Management since 1986. Mr.
McLaughlin has been affiliated with the Fund since October 1998.

PURCHASE OF SHARES

GENERAL

Each class of shares represents an interest in the same portfolio of investments
of the Fund and has the same rights except that (i) Class A Shares generally
bear the sales charge expenses at the time of purchase while Class B Shares and
Class C Shares generally bear the sales charge expenses at the time of
redemption and any expenses (including higher distribution fees and transfer
agency costs) resulting from such deferred sales charge arrangement, (ii) each
class of shares has exclusive voting rights with respect to approvals of the
Rule 12b-1 distribution plan and the service plan (each as described below)
under which its distribution fee and/or the service fee is paid, (iii) each
class of shares has different exchange privileges, (iv) certain classes of
shares are subject to a conversion feature and (v) certain classes of shares
have different shareholder service options available.

13
<PAGE> 113

daily expense accruals of the higher distribution fees and transfer agency costs
applicable to the Class B Shares and Class C Shares and the differential in the
dividends that may be paid on each class of shares.

The net asset value per share for each class of shares of the Fund is determined
once daily as of the close of trading on the New York Stock Exchange (the
"Exchange") (currently 4:00 p.m., New York time) each day the Exchange is open
for trading except on any day on which no purchase or redemption orders are
received or there is not a sufficient degree of trading in the Fund's portfolio
securities such that the Fund's net asset value per share might be materially
affected. The Fund's Board of Trustees reserves the right to calculate the net
asset value per share and adjust the offering price more frequently than once
daily if deemed desirable. Net asset value per share for each class is
determined by dividing the value of the Fund's portfolio securities, cash and
other assets (including accrued interest) attributable to such class, less all
liabilities (including accrued expenses) attributable to such class, by the
total number of shares of the class outstanding. Portfolio securities are valued
by using market quotations, prices provided by market makers or estimates of
market values obtained from yield data relating to instruments or securities
with similar characteristics in accordance with procedures established by the
Fund's Board of Trustees. Securities or other assets for which market quotations
are not readily available are valued at a fair value as determined in good faith
by the Adviser in accordance with procedures established by the Fund's Board of
Trustees. Short-term investments with maturities of 60 days or less when
purchased are valued at amortized cost which approximates fair value at which it
is expected such securities may be resold.

Shares may be purchased on any business day by completing the account
application form and forwarding the account application, directly or through an
authorized dealer, to the Fund's shareholder service agent, Van Kampen Investor
Services Inc. ("Investor Services"), a wholly owned subsidiary of Van Kampen
Investments. When purchasing shares of the Fund, investors must specify whether
the purchase is for Class A Shares, Class B Shares or Class C Shares by
selecting the correct Fund number on the account application. Sales personnel of
authorized dealers distributing the Fund's shares are entitled to receive
compensation for selling such shares and may receive differing compensation for
selling Class A Shares, Class B Shares or Class C Shares.

14
<PAGE> 114

Services' close of business on such date. Orders received by authorized dealers
after the close of the Exchange or transmitted to Investor Services after its
close of business are priced based on the date of the next determined net asset
value per share provided they are received by Investor Services prior to
Investor Services' close of business on such date. It is the responsibility of
authorized dealers to transmit orders received by them to Investor Services so
they will be received in a timely manner.

CLASS A SHARES

SALES CHARGE SCHEDULE

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. The contingent deferred sales charge is assessed on
an amount equal to the lesser of the then current market value or the cost of
the shares being redeemed. Accordingly, no sales charge is imposed on
increases in net asset value above the initial purchase price.

No sales charge is imposed on Class A Shares received from reinvestment of
dividends or capital gain dividends.

CLASS B SHARES

Class B Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge if redeemed within six years of purchase as
shown in the table as follows:

CLASS B SHARES

SALES CHARGE SCHEDULE

<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge
as a Percentage of
Dollar Amount
Year Since Purchase Subject to Charge
------------------------------------------------
<S> <C> <C> <C>
First 4.00%
................................................
Second 3.75%
................................................
Third 3.50%
................................................
Fourth 2.50%
................................................
Fifth 1.50%
................................................
Sixth 1.00%
................................................
Seventh and After None
................................................
</TABLE>

15
<PAGE> 115

CLASS C SHARES

Class C Shares of the Fund are sold at net asset value and are subject to a
contingent deferred sales charge of 1.00% of the dollar amount subject to charge
if redeemed within one year of purchase.

The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends. It
is presently the policy of the Distributor not to accept any order for Class C
Shares in an amount of $1 million or more because it ordinarily will be more
advantageous for an investor making such an investment to purchase Class A
Shares.

CONVERSION FEATURE

Class B Shares purchased on or after June 1, 1996, including Class B Shares
received from reinvestment of distributions through the dividend reinvestment
plan on such shares, automatically convert to Class A Shares eight years after
the end of the calendar month in which the shares were purchased. Class B Shares
purchased before June 1, 1996, including Class B shares received from
reinvestment of distributions through the dividend reinvestment plan on such
shares, automatically convert to Class A Shares six years after the end of the
calendar month in which the shares were purchased. Class C Shares purchased
before January 1, 1997, including Class C Shares received from reinvestment of
distributions through the dividend reinvestment plan on such shares,
automatically convert to Class A Shares ten years after the end of the calendar
month in which such shares were purchased. Such conversion will be on the basis
of the relative net asset values per share, without the imposition of any sales
load, fee or other charge. The conversion schedule applicable to a share of the
Fund acquired through the exchange privilege from another Van Kampen fund
participating in the exchange program is determined by reference to the Van
Kampen fund from which such share was originally purchased.

WAIVER OF CONTINGENT DEFERRED SALES CHARGE

16
<PAGE> 116

purchase of such shares and (v) if made by the Fund's involuntary liquidation of
a shareholder's account as described under the Prospectus heading "Redemption of
Shares." Subject to certain limitations, a shareholder who has redeemed Class C
Shares of the Fund may reinvest in Class C Shares at net asset value with credit
for any contingent deferred sales charge if the reinvestment is made within 180
days after the redemption. For a more complete description of contingent
deferred sales charge waivers, please refer to the Fund's Statement of
Additional Information or contact your authorized dealer.

QUANTITY DISCOUNTS

LETTER OF INTENT. A Letter of Intent provides an opportunity for an investor to
obtain a reduced sales charge by aggregating investments over a 13-month period
to determine the sales charge as outlined in the Class A Shares sales charge
table. The size of investment shown in the Class A Shares sales charge table
includes purchases of shares of the Participating Funds over a 13-month period
based on the total amount of intended purchases plus the value of all shares of
the Participating Funds previously purchased and still owned. An investor may
elect to compute the 13-month period starting up to 90 days before the date of
execution of a Letter of Intent. Each investment made during the period receives
the reduced sales charge applicable to the total amount of the investment goal.
The initial purchase must be for an amount equal to at least 5% of the minimum
total purchase amount of the level selected. If trades not initially made under
a Letter of Intent subsequently qualify for a lower sales charge through the
90-day backdating provisions, an adjustment will be made at the expiration of
the Letter of Intent to give effect to the lower sales charge. Such adjustment
in sales charge will be used to purchase additional shares. The Fund initially
will escrow shares totaling 5% of the dollar amount of the Letter of Intent to
be held by Investor Services in the name of the shareholder. In the event the
Letter of Intent goal is not achieved within the specified period, the investor
must pay the difference between the sales charge applicable to the purchases
made and the reduced sales charge previously paid. Such payments may be made
directly to the Distributor or, if not paid, the Distributor will liquidate
sufficient escrowed shares to obtain the difference.

OTHER PURCHASE PROGRAMS

17
<PAGE> 117

requirement, if the administrator of an investor's unit investment trust program
meets certain uniform criteria relating to cost savings by the Fund and the
Distributor. The total sales charge for all other investments made from unit
investment trust distributions will be 1.00% of the offering price (1.01% of net
asset value). Of this amount, the Distributor will pay to the authorized dealer,
if any, through which such participation in the qualifying program was initiated
0.50% of the offering price as a dealer concession or agency commission. Persons
desiring more information with respect to this program, including the terms and
conditions that apply to the program, should contact their authorized dealer or
the Distributor.

(1) Current or retired trustees or directors of funds advised by Morgan Stanley
Dean Witter & Co. and any of its subsidiaries and such persons' families and
their beneficial accounts.

(7) Accounts as to which a bank or broker-dealer charges an account management
fee ("wrap accounts"), provided the bank or broker-dealer has a separate
agreement with the Distributor.

18
<PAGE> 118

nonprofit organizations defined under Section 501(c)(3) of the Code and
assets held by an employer or trustee in connection with an eligible
deferred compensation plan under Section 457 of the Code. Such plans will
qualify for purchases at net asset value provided, for plans initially
establishing accounts with the Distributor in the Participating Funds after
January 1, 2000 that (1) the total plan assets are at least $1 million or
(2) such shares are purchased by an employer sponsored plan with more than
100 eligible employees. Such plans that have been established with a
Participating Fund or have received proposals from the Distributor prior to
January 1, 2000 based on net asset value purchase privileges previously in
effect will be qualified to purchase shares of the Participating Funds at
net asset value. Section 403(b) and similar accounts for which Van Kampen
Trust Company serves as custodian will not be eligible for net asset value
purchases based on the aggregate investment made by the plan or the number
of eligible employees, except under certain uniform criteria established by
the Distributor from time to time. For purchases on February 1, 1997 and
thereafter, a commission will be paid on purchases as follows: 1.00% on
sales to $2 million, plus 0.80% on the next $1 million, plus 0.50% on the
next $47 million, plus 0.25% on the excess over $50 million.

The term "families" includes a person's spouse, children and grandchildren under
21 years of age, parents, and a person's spouse's parents.

REDEMPTION OF
SHARES

Except as specified below under "Telephone Redemption Requests," payment for
shares redeemed generally will be made by check mailed within seven days after
receipt by Investor Services of

19
<PAGE> 119

the redemption request and any other necessary documents in proper form as
described below. Such payment may be postponed or the right of redemption
suspended as provided by the rules of the SEC. Such payment may, under certain
circumstances, be paid wholly or in part by a distribution-in-kind of portfolio
securities. A distribution-in-kind will result in recognition by the shareholder
of a gain or loss for federal income tax purposes when such securities are
distributed, and the shareholder may have brokerage costs and a gain or loss for
federal income tax purposes upon the shareholder's subsequent disposition of
such securities. If the shares to be redeemed have been recently purchased by
check, Investor Services may delay the payment of redemption proceeds until it
confirms the purchase check has cleared, which may take up to 15 days. A taxable
gain or loss may be recognized by the shareholder upon redemption of shares.
Certificated shares must be properly endorsed for transfer and must accompany a
written redemption request.

20
<PAGE> 120

tions and providing written confirmation of instructions communicated by
telephone. If reasonable procedures are employed, none of Van Kampen
Investments, Investor Services or the Fund will be liable for following
telephone instructions which it reasonably believes to be genuine. Telephone
redemptions may not be available if the shareholder cannot reach Investor
Services by telephone, whether because all telephone lines are busy or for any
other reason; in such case, a shareholder would have to use the Fund's other
redemption procedure previously described. Requests received by Investor
Services prior to 4:00 p.m., New York time, will be processed at the next
determined net asset value per share. These privileges are available for most
accounts other than retirement accounts or accounts with shares represented by
certificates. If an account has multiple owners, Investor Services may rely on
the instructions of any one owner.

DISTRIBUTIONS FROM THE FUND

In addition to any increase in the value of shares which the Fund may achieve,
shareholders may receive distributions from the Fund of dividends and capital
gain dividends.

DIVIDENDS. Dividends from stocks and interest earned from other investments are
the Fund's main sources of net investment income. The Fund's present policy,
which may be changed at any time by the Fund's Board of Trustees, is to
distribute net investment income quarterly as dividends to shareholders.
Dividends are automatically applied to purchase additional shares of the Fund at
the next determined net asset value unless the shareholder instructs otherwise.

SHAREHOLDER SERVICES

INTERNET TRANSACTIONS. In addition to performing transactions on your account
through written

21
<PAGE> 121

AUTOMATIC INVESTMENT PLAN. An automatic investment plan is available under which
a shareholder can authorize Investor Services to debit a shareholder's bank
account on a regular basis to invest predetermined amounts in the Fund.
Additional information is available from the Distributor or your authorized
dealer.

To be eligible for exchange, shares of the Fund must have been registered in the
shareholder's name for at least 30 days prior to an exchange. Shares of the Fund
registered in a shareholder's name for less than 30 days may only be exchanged
upon receipt of prior approval of the Adviser. It is the policy of the Adviser
under normal circumstances, not to approve such requests.

A shareholder wishing to make an exchange may do so by sending a written request
to Investor Services, by contacting the telephone transaction line at (800)
421-5684 through FundInfo(R) (automated telephone system) at (800) 847-2424 or
through the internet at www.vankampen.com. A shareholder automatically has these
exchange privileges unless the shareholder indicates otherwise by checking the
applicable box on the account application form. Van Kampen Investments and its
subsidiaries, including, Investor Services, and the Fund employ procedures
considered by them to be reasonable to confirm that instructions communicated by
telephone are genuine. Such procedures include requiring certain personal
identification information prior to acting upon telephone instructions,
tape-recording telephone

22
<PAGE> 122

communications, and providing written confirmation of instructions communicated
by telephone. If reasonable procedures are employed, none of Van Kampen
Investments, Investor Services or the Fund will be liable for following
telephone instructions which it reasonably believes to be genuine. If the
exchanging shareholder does not have an account in the fund whose shares are
being acquired, a new account will be established with the same registration,
dividend and capital gain dividend options (except dividend diversification) and
authorized dealer of record as the account from which shares are exchanged,
unless otherwise specified by the shareholder. In order to establish a
systematic withdrawal plan for the new account or reinvest dividends from the
new account into another fund, however, an exchanging shareholder must submit a
specific request. The Fund reserves the right to reject any order to acquire its
shares through exchange. In addition, the Fund and other Participating Funds may
restrict exchanges by shareholders engaged in excessive trading by limiting or
disallowing the exchange privilege to such shareholders. For further information
on these restrictions, see the Fund's Statement of Additional Information. The
Fund may modify, restrict or terminate the exchange privilege at any time on 60
days' notice to its shareholders of any termination or material amendment.

FEDERAL INCOME TAXATION

The Fund is required, in certain circumstances, to withhold 31% of dividends and
certain other

23
<PAGE> 123

24
<PAGE> 124

FINANCIAL HIGHLIGHTS

The financial highlights table is intended to help you understand the Fund's
financial performance for the periods indicated. Certain information reflects
financial results for a single Fund share. The total returns in the table
represent the rate that an investor would have earned (or lost) on an investment
in the Fund (assuming reinvestment of all dividends and distributions). This
information has been audited by PricewaterhouseCoopers LLP, whose report, along
with the Fund's most recent financial statements, is 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. The
information for the nine-month period ended March 31, 1999 and the years ended
June 30, 1998, 1997, 1996 and 1995 has been audited by KPMG LLP. This
information should be read in conjunction with the financial statements and
notes thereto included in the Statement of Additional Information.

<TABLE>
<CAPTION>
Class A Shares Class B Shares
Nine
Year Months Year
Ended Ended Ended
March 31, March 31, Year Ended June 30, March 31,
2000 1999 1998 1997 1996 1995 2000
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>

Net Asset Value, Beginning
of the Period $17.465 $17.657 $16.441 $15.298 $13.386 $12.906 $17.437
------- ------- ------- ------- ------- ------- -------
Net Investment Income .351 .310 .429 .637 .538 .595 .203
Net Realized and Unrealized
Gain 6.276 .013 3.909 1.317 2.077 .485 6.259
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations 6.627 .323 4.338 1.954 2.615 1.080 6.462
------- ------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net
Investment Income .360 .300 .480 .610 .703 .600 .220
Distributions from and in
Excess of Net
Realized Gain 1.076 .215 1.691 .201 -0- -0- 1.076
Return of Capital
Distribution -0- -0- .951 -0- -0- -0- -0-
------- ------- ------- ------- ------- ------- -------
Total Distributions 1.436 .515 3.122 .811 .703 .600 1.296
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $22.656 $17.465 $17.657 $16.441 $15.298 $13.386 $22.603
======= ======= ======= ======= ======= ======= =======
Total Return 39.44%(a) 1.72%(a)* 28.17%(a) 13.20%(a) 19.93%(a) 8.70%(a) 38.30%(b)

Net Assets at End of the
Period (In millions) $89.1 $62.1 $60.4 $52.5 $57.7 $50.4 $101.3
Ratio of Expenses to Average
Net Assets(d) 1.26% 1.24% 1.30% 1.41% 1.38% 1.34% 2.01%
Ratio of Net Investment
Income to Average Net
Assets(d) 1.76% 2.29% 2.47% 4.03% 3.61% 4.55% 1.01%
Portfolio Turnover 32% 13%* 23% 102% 121% 109% 32%

<CAPTION>
Class B Shares
Nine
Months Year
Ended Ended
March 31, Year Ended June 30, March 31,
1999 1998 1997 1996 1995 2000
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period $17.632 $16.434 $15.296 $13.356 $12.880 $17.426
------- ------- ------- ------- ------- -------
Net Investment Income .208 .309 .519 .426 .507 .204
Net Realized and Unrealized
Gain .012 3.891 1.314 2.080 .461 6.258
------- ------- ------- ------- ------- -------
Total from Investment
Operations .220 4.200 1.833 2.506 .968 6.462
------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net
Investment Income .200 .360 .494 .566 .492 .220
Distributions from and in
Excess of Net
Realized Gain .215 1.691 .201 -0- -0- 1.076
Return of Capital
Distribution -0- .951 -0- -0- -0- -0-
------- ------- ------- ------- ------- -------
Total Distributions .415 3.002 .695 .566 .492 1.296
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period $17.437 $17.632 $16.434 $15.296 $13.356 $22.592
======= ======= ======= ======= ======= =======
Total Return 1.21%(b)* 27.20%(b) 12.30%(b) 19.08%(b) 7.80%(b) 38.32%(c)
Net Assets at End of the
Period (In millions) $84.1 $86.8 $83.3 $92.9 $81.0 $9.2
Ratio of Expenses to Average
Net Assets(d) 1.99% 2.07% 2.17% 2.13% 2.05% 2.01%
Ratio of Net Investment
Income to Average Net
Assets(d) 1.53% 1.74% 3.27% 2.86% 3.84% 1.01%
Portfolio Turnover 13%* 23% 102% 121% 109% 32%

<CAPTION>
Class C Shares
Nine
Months
Ended
March 31, Year Ended June 30,
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period $17.619 $16.426 $15.290 $13.356 $12.868
------- ------- ------- ------- -------
Net Investment Income .209 .308 .503 .470 .482
Net Realized and Unrealized
Gain .013 3.887 1.328 2.030 .498
------- ------- ------- ------- -------
Total from Investment
Operations .222 4.195 1.831 2.500 .980
------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net
Investment Income .200 .360 .494 .566 .492
Distributions from and in
Excess of Net
Realized Gain .215 1.691 .201 -0- -0-
Return of Capital
Distribution -0- .951 -0- -0- -0-
------- ------- ------- ------- -------
Total Distributions .415 3.002 .695 .566 .492
------- ------- ------- ------- -------
Net Asset Value, End of the
Period $17.426 $17.619 $16.426 $15.290 $13.356
======= ======= ======= ======= =======
Total Return 1.22%(c)* 27.14%(c) 12.37%(c) 19.00%(c) 7.88%(c)
Net Assets at End of the
Period (In millions) $7.0 $5.9 $4.9 $5.0 $1.3
Ratio of Expenses to Average
Net Assets(d) 1.99% 2.06% 2.17% 2.13% 2.09%
Ratio of Net Investment
Income to Average Net
Assets(d) 1.53% 1.73% 3.23% 2.78% 3.80%
Portfolio Turnover 13%* 23% 102% 121% 109%
</TABLE>

* Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year of purchase. If the
sales charges were included, total returns would be lower.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
sixth year. If the sales charge was included, total returns would be lower.

(c) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower.

(d) For the years ended June 30, 1997 and 1996, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to the
Adviser's reimbursement of certain expenses was less than 0.01%.

See Financial Statements and Notes Thereto

25
<PAGE> 125

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 opinion of the
creditworthiness of an obligor with respect to a financial 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 obligor 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; and

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> 126

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 highlights derivative, hybrid and certain other obligations that
S&P believes may experience high volatility or high variability in expected
returns as a result of noncredit risks. Examples include: obligations linked or
indexed to equities, currencies, or commodities; certain swaps and options; and
interest-only and principal-only mortgage securities.

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 obligor's capacity to meet its
financial commitment on the obligation 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 obligor is somewhat more susceptible to the adverse
effects of changes in circumstances and economic conditions than obligations in
higher ratings degree of safety is not as high as for issues designated "A-1".

A-3: Issues carrying this designation exhibit adequate protective parameters.
However adverse economic conditions or changing circumstances are more likely to
lead to a weakening capacity of the obligor to meet its financial commitment on
the obligation, 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
financial obligation inasmuch as it does not comment as to market price or
suitability for a particular investor. The ratings are

A- 2
<PAGE> 127

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 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)

A- 3
<PAGE> 128

rating symbols and their meanings (as published by Moody's Investors 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 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.

A- 4
<PAGE> 129

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.

-- 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> 130

BOARD OF TRUSTEES

AND OFFICERS

BOARD OF TRUSTEES

OFFICERS

Richard F. Powers, III*

President

Stephen L. Boyd*

Executive Vice President and Chief Investment Officer

A. Thomas Smith III*

Vice President and Secretary

John H. Zimmermann, III*

Vice President

Michael H. Santo*

Vice President

Richard A. Ciccarone*

Vice President

John R. Reynoldson*

Vice President

John L. Sullivan*

Vice President, Chief Financial Officer and Treasurer

* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.

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

FUNDINFO(R)

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

WEB SITE

www.vankampen.com

VAN KAMPEN UTILITY FUND

1 Parkview Plaza

PO Box 5555

Oakbrook Terrace, IL 60181-5555

Investment Adviser

VAN KAMPEN INVESTMENT ADVISORY CORP.

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 218256

Kansas City, MO 64121-8256

Attn: Van Kampen Utility Fund

Custodian

STATE STREET BANK AND TRUST COMPANY

225 West Franklin Street, PO Box 1713

Boston, MA 02105-1713

Attn: Van Kampen Utility Fund

Legal Counsel

SKADDEN, ARPS, SLATE, MEAGHER & FLOM (ILLINOIS)

333 West Wacker Drive

Chicago, IL 60606

Independent Auditors

ERNST & YOUNG LLP

233 South Wacker Drive

Chicago, IL 60606

<PAGE> 131

VAN KAMPEN
UTILITY FUND

PROSPECTUS

JULY 28, 2000

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

Information about the Fund, including its
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's Public
Reference Room in Washington, DC or on the
EDGAR database on the SEC's internet site
(http://www.sec.gov). Information on the
operation of the SEC's Public Reference Room
may be obtained by calling the SEC at
1-202-942-8090. You can also request copies of
these materials upon payment of a duplicating
fee, by electronic request at the SEC's e-mail
address ([email protected]), or by writing
the Public Reference Section of the SEC,
Washington, DC 20549-0102.

[VAN KAMPEN FUNDS LOGO]

The Fund's Investment Company Act
File No. is 811-4805.
UTLF PRO
7/00

65142
<PAGE> 132

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN
AGGRESSIVE GROWTH FUND

Van Kampen Aggressive Growth Fund (the "Fund") is a mutual fund with the
investment objective to seek capital growth. The Fund's investment adviser seeks
to achieve the Fund's investment objective by investing primarily in common
stocks and other equity securities of small- and medium-sized growth companies.

The Fund is organized as a diversified series of the Van Kampen Equity
Trust, an open-end, management investment company (the "Trust").

This Statement of Additional Information is not a prospectus. This
Statement of Additional Information should be read in conjunction with the
Fund's prospectus (the "Prospectus") dated as of the same date as this Statement
of Additional Information. This Statement of Additional Information does not
include all the information that a prospective investor should consider before
purchasing shares of the Fund. Investors should obtain and read the Prospectus
prior to purchasing shares of the Fund. A Prospectus may be obtained without
charge by writing or calling Van Kampen Funds Inc. at 1 Parkview Plaza, PO Box
5555, Oakbrook Terrace, Illinois 60181-5555 or (800) 341-2911 (or (800) 421-2833
for the hearing impaired).

---------------------------------------------

TABLE OF CONTENTS
---------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information......................................... B-2
Investment Objective, Policies and Risks.................... B-4
Strategic Transactions...................................... B-8
Investment Restrictions..................................... B-16
Trustees and Officers....................................... B-18
Investment Advisory Agreement............................... B-28
Other Agreements............................................ B-29
Distribution and Service.................................... B-30
Transfer Agent.............................................. B-34
Portfolio Transactions and Brokerage Allocation............. B-35
Shareholder Services........................................ B-36
Redemption of Shares........................................ B-39
Contingent Deferred Sales Charge-Class A.................... B-40
Waiver of Class B and Class C Contingent Deferred Sales
Charges................................................... B-40
Taxation.................................................... B-42
Fund Performance............................................ B-46
Other Information........................................... B-49
Report of Independent Accountants........................... F-1
Financial Statements........................................ F-2
Notes to Financial Statements............................... F-13
</TABLE>

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED JULY 28, 2000.

AGG SAI 7/00

<PAGE> 133

GENERAL INFORMATION

The Trust is an unincorporated business trust established under the laws of
the State of Delaware by an Agreement and Declaration of Trust (the "Declaration
of Trust") dated May 10, 1995. The Declaration of Trust permits the Trustees to
create one or more separate investment portfolios and issue a series of shares
for each portfolio, such as the Fund. The Trustees may create one or more
classes of shares for each series.

The Trust was originally organized in 1987 under the name Van Kampen
Merritt Equity Trust as a Massachusetts business trust (the "Massachusetts
Trust"). The Massachusetts Trust was reorganized into the Trust under the name
Van Kampen American Capital Equity Trust on July 31, 1995. The Trust was created
for facilitating the Massachusetts Trust reorganization into a Delaware business
trust. On July 14, 1998, the Trust adopted its current name.

The Fund was originally organized as a series of the Trust under the name
Van Kampen American Capital Aggressive Growth Fund on April 26, 1996. On July
14, 1998, the Fund adopted its current name.

Van Kampen Investment Advisory Corp. (the "Adviser" or "Advisory Corp."),
Van Kampen Funds Inc. (the "Distributor"), and Van Kampen Investor Services Inc.
("Investor Services") are wholly owned subsidiaries of Van Kampen Investments
Inc. ("Van Kampen Investments"), which is an indirect wholly owned subsidiary of
Morgan Stanley Dean Witter & Co. ("Morgan Stanley Dean Witter"). The principal
office of the Trust, the Fund, the Adviser, the Distributor and Van Kampen
Investments is located at 1 Parkview Plaza, Oakbrook Terrace, Illinois
60181-5555. The principal office of Investor Services is located at 7501 Tiffany
Springs Parkway, Kansas City, Missouri 64153.

Morgan Stanley Dean Witter is a preeminent global financial services firm
that maintains leading market positions in each of its three primary businesses:
securities; asset management; and credit services.

The authorized capitalization of the Trust consists of an unlimited number
of shares of beneficial interest, par value $0.01 per share, which can be
divided into series, such as the Fund, and further subdivided into classes of
each series. Each share represents an equal proportionate interest in the assets
of the series with each other share in such series and no interest in any other
series. No series is subject to the liabilities of any other series. The
Declaration of Trust provides that shareholders are not liable for any
liabilities of the Trust or any of its series, requires inclusion of a clause to
that effect in every agreement entered into by the Trust or any of its series
and indemnifies shareholders against any such liability.

B-2
<PAGE> 134

investment policy for a series would be voted upon by shareholders of only the
series involved and a change in the distribution fee for a class of a series
would be voted upon by shareholders of only the class of such series involved.
Except as otherwise described in the Prospectus or herein, shares do not have
cumulative voting rights, preemptive rights or any conversion, subscription or
exchange rights.

The Trust does not contemplate holding regular meetings of shareholders to
elect Trustees or otherwise. However, the holders of 10% or more of the
outstanding shares may by written request require a meeting to consider the
removal of Trustees by a vote of two-thirds of the shares then outstanding cast
in person or by proxy at such meeting. The Fund will assist such holders in
communicating with other shareholders of the Fund to the extent required by the
Investment Company Act of 1940, as amended (the "1940 Act"), or rules or
regulations promulgated by the Securities and Exchange Commission ("SEC").

In the event of liquidation, each of the shares of the Fund is entitled to
its portion of all of the Fund's net assets after all debts and expenses of the
Fund have been paid. Since Class B Shares and Class C Shares have higher
distribution fees and transfer agency costs, the liquidation proceeds to holders
of Class B Shares and Class C Shares are likely to be less than to holders of
Class A Shares.

The Trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the Trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote present at a meeting of shareholders (or such
higher vote as may be required by the 1940 Act or other applicable law) and
except that the Trustees cannot amend the Declaration of Trust to impose any
liability on shareholders, make any assessment on shares or impose liabilities
on the Trustees without approval from each affected shareholder or Trustee, as
the case may be.

Statements contained in this Statement of Additional Information as to the
contents of any contract or other document referred to are not necessarily
complete, and, in each instance, reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement of which
this Statement of Additional Information forms a part, each such statement being
qualified in all respects by such reference.

B-3
<PAGE> 135

As of July 3, 2000, no person was known by the Fund to own beneficially or
to hold of record 5% or more of the outstanding Class A Shares, Class B Shares
or Class C Shares of the Fund, except as follows:

<TABLE>
<CAPTION>
Amount of
Ownership at Class Percentage
Name and Address of Holder July 3, 2000 of Shares Ownership
-------------------------- ------------- --------- ----------
<S> <C> <C> <C>
Van Kampen Trust Company................... 4,442,320 A 12.28%
2800 Post Oak Blvd. 5,737,904 B 20.31%
Houston, TX 77056
Northern Trust Co TR....................... 4,620,960 A 12.78%
FBO Morgan Stanley
Deferred Profit Sharing Plan
PO Box 92956
Chicago, IL 60675-2956
Edward Jones & Co.......................... 2,433,626 A 6.73%
Attn: Mutual Fund
Shareholder Accounting
201 Progress Pkwy
Maryland Hts, MO 63043-3009
Merrill Lynch Pierce Fenner & Smith Inc.... 4,398,842 A 12.16%
For the Sole Benefit of its Customers 1,658,871 B 5.87%
Attn: Fund Administration 710,913 C 11.18%
4800 Deer Lake Drive East
2nd Floor
Jacksonville, FL 32246-6484
</TABLE>

------------------------------------

Van Kampen Trust Company acts as custodian for certain employee benefit
plans and individual retirement accounts.

INVESTMENT OBJECTIVE, POLICIES AND RISKS

The following disclosure supplements the disclosure set forth under the
same caption in the Prospectus and does not, standing alone, present a complete
or accurate explanation of the matters disclosed. Readers must refer also to
this caption in the Prospectus for a complete presentation of the matters
disclosed below.

REPURCHASE AGREEMENTS

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under guidelines approved by the Fund's Board of Trustees. The Fund will not
invest in repurchase agreements maturing in more than seven days if any such
investment, together with any other illiquid securities held by the Fund, would
exceed the Fund's limitation on illiquid securities described herein. The Fund
does not bear the risk of a decline in the value of the underlying security
unless the seller defaults under its repurchase obligation. In the event of the
bankruptcy or other default of a seller of a repurchase agreement, the Fund
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 Fund 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, the Adviser may
aggregate the cash that certain funds advised or subadvised by the 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 that contributed to the joint account share pro rata in the net
revenue generated. The 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 Fund than would be available to the Fund investing
separately. The manner in which the joint account is managed is subject to
conditions set forth in an exemptive order from the SEC permitting 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 securities
and are considered to be loans under the 1940 Act. The Fund 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, its agencies or
instrumentalities) may have maturity dates exceeding one year.

BORROWING AND REVERSE REPURCHASE AGREEMENTS

The Fund may borrow money for investment purposes. The Fund may borrow
money from banks and engage in reverse repurchase agreements in an amount up to
33 1/3% of the Fund's total assets (including the amount borrowed). The Fund may
also borrow money in an amount up to 5% of the Fund's total assets for temporary
purposes. The Fund has no current intention to borrow money other than for
temporary purposes.

Borrowing by the Fund creates an opportunity for increased net income but,
at the same time, creates special risk considerations such as potential changes
in the net asset value of the shares and in the yield on the Fund's portfolio.
To the extent that the Fund is otherwise fully invested and the Adviser believes
that additional investment opportunities exist with the potential for capital
growth, the Fund may employ leverage for the purpose of acquiring portfolio
securities. Such utilization of leverage is considered speculative, and involves
risks. The assets of the Fund, including any additional assets which may be
purchased with the proceeds of any borrowings, will consist primarily of common
stocks and other equity securities of growth companies, the prices of which are
volatile. In the event that the values of the Fund's portfolio securities do not
appreciate or, in fact, depreciate, the Fund would be forced to liquidate a
portion of its portfolio, which could be

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significant depending upon the magnitude of the decline in value of the Fund's
assets, to pay interest on, and repay the principal of, any such borrowings.
Even in the event that any assets purchased with the proceeds of such borrowings
appreciate as anticipated by the Adviser, a portion of the Fund's assets may be
required to be liquidated to meet scheduled principal and interest payments with
respect to such borrowings. Any such liquidations may be at inopportune times
and prices. Utilization of investment leverage would result in a higher
volatility of the net asset value of the Fund. The effect of leverage in a
declining market would result in a greater decrease in net asset value to
holders of the Fund's shares than if the Fund were not leveraged.

Reverse repurchase agreements involve sales by the Fund of portfolio assets
concurrently with an agreement by the Fund to repurchase the same assets at a
later date at a fixed price. During the reverse repurchase agreement period, the
Fund continues to receive principal and interest payments on these securities.
The Fund will establish a segregated account with its custodian in which it will
maintain cash or liquid securities equal in value to its obligations in respect
of reverse repurchase agreements and, accordingly, the Fund will not treat such
obligations as senior securities for purposes of the 1940 Act. Reverse
repurchase agreements involve the risk that the market value of the securities
retained by the Fund may decline below the price of the securities the Fund has
sold but is obligated to repurchase under the agreement. In the event the buyer
of securities under a reverse repurchase agreement files for bankruptcy or
becomes insolvent, the Fund's use of the proceeds of the agreement may be
restricted pending a determination by the other party, or its trustee or
receiver, whether to enforce the Fund's obligation to repurchase the securities.

LENDING OF PORTFOLIO SECURITIES

Consistent with applicable legal and regulatory requirements, the Fund may
lend its portfolio securities to broker-dealers, banks and other institutional
borrowers of securities provided that such loans are at all times secured by
collateral that is at least equal to the market value, determined daily, of the
loaned securities and such loans are callable at any time by the Fund. The
advantage of such loans is that the Fund continues to receive the interest or
dividends on the loaned securities, while at the same time earning interest on
the collateral which is invested in short-term obligations or the Fund receives
an agreed-upon amount of interest from the borrower of the security. The Fund
may pay reasonable finders', administrative and custodial fees in connection
with loans of its securities. There is no assurance as to the extent to which
securities loans can be effected.

If the borrower fails to return the borrowed securities or maintain the
requisite amount of collateral, the loan automatically terminates, and the Fund
could use the collateral to replace the securities while holding the borrower
liable for any excess of replacement cost over collateral. As with any
extensions of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower of the securities fail
financially. However, these loans of portfolio securities will only be made to
firms deemed by the Fund's Adviser to be creditworthy and when the consideration
which can be earned from such loans is believed to justify the attendant risks.
On termination of the loan, the borrower is required to return the securities to
the Fund; any gains or loss in the market price during the loan would inure to
the Fund.

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When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate, to permit the exercise of such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan.

"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS

The Fund may purchase and sell portfolio securities on a "when-issued" and
"delayed delivery" basis. No income accrues to the Fund on securities in
connection with such purchase transactions prior to the date the Fund actually
takes delivery of such securities. These transactions are subject to market
fluctuation; the value of the securities at delivery may be more or less than
their purchase price, and yields generally available on comparable securities
when delivery occurs may be higher or lower than yields on the securities
obtained pursuant to such transactions. Because the Fund relies on the buyer or
seller, as the case may be, to consummate the transaction, failure by the other
party to complete the transaction may result in the Fund missing the opportunity
of obtaining a price or yield considered to be advantageous. When the Fund is
the buyer in such a transaction, however, it will maintain, in a segregated
account with its custodian, cash or portfolio securities having an aggregate
value equal to the amount of such purchase commitments until payment is made.
The Fund will make commitments to purchase securities on such basis only with
the intention of actually acquiring these securities, but the Fund may sell such
securities prior to the settlement date if such sale is considered to be
advisable. To the extent the Fund engages in "when-issued" and "delayed
delivery" transactions, it will do so for the purpose of acquiring securities
for the Fund's portfolio consistent with the Fund's investment objectives and
policies and not for the purpose of investment leverage.

SHORT SALES AGAINST THE BOX

The Fund may engage in "short-sales against the box." A short sale is a
transaction in which the Fund would sell securities it does not own (but has
borrowed) in anticipation of a decline in the market price of securities. A
short-sale against the box is a transaction where at all times when the short
position is open the Fund owns an equal amount of such securities or securities
convertible or exchangeable into such securities without payment of additional
consideration. The Fund will not engage in short sales other than against the
box.

PORTFOLIO TURNOVER

The Fund's portfolio turnover rate is calculated by dividing the lesser of
purchases or sales of portfolio securities for a fiscal year by the average
monthly value of the Fund's portfolio securities during such fiscal year. The
turnover rate may vary greatly from year to year as well as within a year.

ILLIQUID SECURITIES

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Act"). The sale of such securities often requires more time and results in
higher brokerage charges or dealer discounts and other selling expenses than
does the sale of liquid securities trading on national securities exchanges or
in the over-the-counter markets. Restricted securities are often purchased at a
discount from the market price of unrestricted securities of the same issuer
reflecting the fact that such securities may not be readily marketable without
some time delay. Investments in securities for which market quotations are not
readily available are valued at fair value as determined in good faith by the
Adviser in accordance with procedures approved by the Fund's Board of Trustees.
Ordinarily, the Fund would invest in restricted securities only when it receives
the issuer's commitment to register the securities without expense to the Fund.
However, registration and underwriting expenses (which typically range from 7%
to 15% of the gross proceeds of the securities sold) may be paid by the Fund.
Restricted securities which can be offered and sold to qualified institutional
buyers under Rule 144A under the 1933 Act ("144A Securities") and are determined
to be liquid under guidelines adopted by and subject to the supervision of the
Fund's Board of Trustees are not subject to the limitation on illiquid
securities. Such 144A Securities are subject to monitoring and may become
illiquid to the extent qualified institutional buyers become, for a time,
uninterested in purchasing such securities. Factors used to determine whether
144A Securities are liquid include, among other things, a security's trading
history, the availability of reliable pricing information, the number of dealers
making quotes or making a market in such security and the number of potential
purchasers in the market for such security. For purposes hereof, investments by
the Fund in securities of other investment companies will not be considered
investments in restricted securities to the extent permitted by (i) the 1940
Act, as amended from time to time, (ii) the rules and regulations promulgated by
the SEC under the 1940 Act, as amended from time to time, or (iii) an exemption
or other relief (such as "no action" letters issued by the staff of the SEC
interpreting or providing guidance on the 1940 Act or regulations thereunder)
from the provisions of the 1940 Act, as amended from time to time.

STRATEGIC TRANSACTIONS

The Fund may, but is not required to, use various investment strategies as
described below to facilitate portfolio management and mitigate risks.
Techniques and instruments may change over time as new instruments and
strategies are developed or regulatory changes occur. Although the Fund's
Adviser seeks to use such transactions to further the Fund's investment
objective, no assurance can be given that the use of these transactions will
achieve this result.

In the course of pursuing these investment strategies, the Fund may
purchase and sell derivative securities such as exchange-listed and
over-the-counter put and call options on securities, financial futures, equity,
fixed-income and interest rate indices and other financial instruments, purchase
and sell financial futures contracts and options thereon, and enter into various
currency transactions such as currency forward contracts, currency futures
contracts, currency swaps or options on currency or currency futures
(collectively, all the above are called "Strategic Transactions"). Among other
things, Strategic Transactions may be used to attempt to protect against
possible changes in the market value of securities held in or to be purchased
for the Fund's portfolio resulting from securities markets or currency exchange
markets, to protect the Fund's unrealized gains in the value of its portfolio
securities, to facilitate the sale of such securities for investment

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purposes, or to establish a position in the derivatives markets as a temporary
substitute for purchasing or selling particular securities.

Any or all of these investment techniques may be used at any time and there
is no particular strategy that dictates the use of one technique rather than
another, as use of any Strategic Transaction is a function of numerous variables
including market conditions. The ability of the Fund to utilize these Strategic
Transactions successfully will depend on the Adviser's ability to predict
pertinent market movements, which cannot be assured. The Fund will comply with
applicable regulatory requirements when implementing these strategies,
techniques and instruments.

Strategic Transactions have risks associated with them including possible
default by the other party to the transaction, illiquidity and, to the extent
the Adviser's view as to certain market movements is incorrect, the risk that
the use of such Strategic Transactions could result in losses greater than if
they had not been used. Use of put and call options may result in losses to the
Fund, force the sale or purchase of portfolio securities at inopportune times or
for prices other than current market values, limit the amount of appreciation
the Fund can realize on its investments or cause the Fund to hold a security it
might otherwise sell. The use of currency transactions can result in the Fund
incurring losses as a result of a number of factors including the imposition of
exchange controls, suspension of settlements, or the inability to deliver or
receive a specified currency. The use of options and futures transactions
entails certain other risks. In particular, the variable degree of correlation
between price movements of futures contracts and price movements in the related
portfolio position of the Fund creates the possibility that losses on the
hedging instrument may be greater than gains in the value of the Fund's
position. In addition, futures and options markets may not be liquid in all
circumstances and certain over-the-counter options may have no markets. As a
result, in certain markets, the Fund might not be able to close out a
transaction without incurring substantial losses, if at all. Although the use of
these futures contracts and options transactions for hedging should tend to
minimize the risk of loss due to a decline in the value of the hedged position,
at the same time they tend to limit any potential gain which might result from
an increase in value of such position. Finally, the daily variation margin
requirements for futures contracts would create a greater ongoing potential
financial risk than would purchases of options, where the exposure is limited to
the cost of the initial premium. Losses resulting from the use of Strategic
Transactions would reduce net asset value, and possibly income, and such losses
can be greater than if the Strategic Transactions had not been utilized. Income
earned or deemed to be earned, if any, by the Fund from its Strategic
Transactions will generally be taxable.

OPTIONS

Put options and call options typically have similar structural
characteristics and operational mechanics regardless of the underlying
instrument on which they are purchased or sold. Thus, the following general
discussion relates to each of the particular types of options discussed in
greater detail below. In addition, many Strategic Transactions involving options
require segregation of Fund assets in special accounts, as described below under
"Use of Segregated and Other Special Accounts."

A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index,

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currency or other instrument at the exercise price. For instance, the Fund's
purchase of a put option on a security might be designed to protect its holdings
in the underlying instrument (or, in some cases, a similar instrument) against a
substantial decline in the market value by giving the Fund the right to sell
such instrument at the option exercise price. A call option, upon payment of a
premium, gives the purchaser of the option the right to buy, and the seller the
obligation to sell, the underlying instrument at the exercise price. The Fund's
purchase of a call option on a security, financial future, index, currency or
other instrument might be intended to protect the Fund against an increase in
the price of the underlying instrument that it intends to purchase in the future
by fixing the price at which it may purchase such instrument. An American style
put or call option may be exercised at any time during the option period while a
European style put or call option may be exercised only upon expiration or
during a fixed period prior thereto. The Fund is authorized to purchase and sell
exchange listed options and over-the-counter options ("OTC options"). Exchange
listed options are issued by a regulated intermediary such as the Options
Clearing Corporation ("OCC"), which guarantees the performance of the
obligations of the parties to such options. The discussion below uses the OCC as
a paradigm, but is also applicable to other financial intermediaries.

With certain exceptions, OCC issued and exchange listed options generally
settle by physical delivery of the underlying security or currency, although in
the future cash settlement may become available. Index options and Eurodollar
instruments are cash settled for the net amount, if any, by which the option is
"in-the-money" (i.e., where the value of the underlying instrument exceeds, in
the case of a call option, or is less than, in the case of a put option, the
exercise price of the option) at the time the option is exercised. Frequently,
rather than taking or making delivery of the underlying instrument through the
process of exercising the option, listed options are closed by entering into
offsetting purchase or sale transactions that do not result in ownership of the
new option.

The Fund's ability to close out its position as a purchaser or seller of an
OCC or exchange listed put or call option is dependent, in part, upon the
liquidity of the option market. Among the possible reasons for the absence of a
liquid option market on an exchange are: (i) insufficient trading interest in
certain options; (ii) restrictions on transactions imposed by an exchange; (iii)
trading halts, suspensions or other restrictions imposed with respect to
particular classes or series of options or underlying securities including
reaching daily price limits; (iv) interruption of the normal operations of the
OCC or an exchange; (v) inadequacy of the facilities of an exchange or OCC to
handle current trading volume; or (vi) a decision by one or more exchanges to
discontinue the trading of options (or a particular class or series of options),
in which event the relevant market for that option on that exchange would cease
to exist, although outstanding options on that exchange would generally continue
to be exercisable in accordance with their terms.

The hours of trading for listed options may not coincide with the hours
during which the underlying financial instruments are traded. To the extent that
the option markets close before the markets for the underlying financial
instruments, significant price and rate movements can take place in the
underlying markets that cannot be reflected in the option markets.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty.

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In contrast to exchange listed options, which generally have standardized terms
and performance mechanics, all the terms of an OTC option, including such terms
as method of settlement, term, exercise price, premium, guarantees and security,
are set by negotiation of the parties.

Unless the parties provide for it, there is no central clearing or guaranty
function in an OTC option. As a result, if the Counterparty fails to make or
take delivery of the security, currency or other instrument underlying an OTC
option it has entered into with the Fund or fails to make a cash settlement
payment due in accordance with the terms of that option, the Fund will lose any
premium it paid for the option as well as any anticipated benefit of the
transaction. Accordingly, the Adviser must assess the creditworthiness of each
such Counterparty or any guarantor or credit enhancement of the Counterparty's
credit to determine the likelihood that the terms of the OTC option will be
satisfied. The Fund will engage in OTC option transactions only with U.S.
government securities dealers recognized by the Federal Reserve Bank of New York
as "primary dealers", or broker dealers, domestic or foreign banks or other
financial institutions which have received (or the guarantors of the obligation
of which have received) a short-term credit rating of "A-1" from Standard &
Poor's ("S&P") or "P-1" from Moody's Investors Service, Inc. ("Moody's") or an
equivalent rating from any other nationally recognized statistical rating
organization ("NRSRO"). The staff of the SEC currently takes the position that,
in general, over-the-counter options on securities purchased by the Fund, and
portfolio securities "covering" the amount of the Fund's obligation pursuant to
an over-the-counter option sold by it (the cost of the sell-back plus the
in-the-money amount, if any) are illiquid, and are subject to the Fund's
limitation on illiquid securities described herein.

If the Fund sells a call option, the premium that it receives may serve as
a partial hedge, to the extent of the option premium, against a decrease in the
value of the underlying securities or instruments in its portfolio or will
increase the Fund's income. The sale of put options can also provide income.

The Fund may purchase and sell call or put options on securities, including
U.S. Treasury and agency securities, foreign sovereign debt, mortgage-backed
securities, corporate debt securities, Eurodollar instruments and foreign debt
securities that are traded on U.S. and foreign securities exchanges and in the
over-the-counter markets and related futures on such securities, indices,
currencies and futures. All calls sold by the Fund must be "covered" (i.e., the
Fund must own the securities or futures contract subject to the call) or must
meet the asset segregation requirements described below as long as the call is
outstanding. Even though the Fund will receive the option premium to help
protect it against loss, a call sold by the Fund exposes the Fund during the
term of the option to possible loss of opportunity to realize appreciation in
the market price of the underlying security or instrument and may require the
Fund to hold a security or instrument which it might otherwise have sold. In
selling put options, there is a risk that the Fund may be required to buy the
underlying security at a disadvantageous price above the market price.

FUTURES

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initial and variation margin as described below. The purchase of a futures
contract creates a firm obligation by the Fund, as purchaser, to take delivery
from the seller the specific type of financial instrument called for in the
contract at a specific future time for a specified price. The sale of a futures
contract creates a firm obligation by the Fund, as seller, to deliver to the
buyer the specific type of financial instrument called for in the contract at a
specific future time for a specified price (or, with respect to index futures
and Eurodollar instruments, the net cash amount). Options on futures contracts
are similar to options on securities except that an option on a futures contract
gives the purchaser the right in return for the premium paid to assume a
position in a futures contract and obligates the seller to deliver such option.

The Fund's use of financial futures and options thereon will in all cases
be consistent with applicable regulatory requirements and in particular the
rules and regulations of the Commodity Futures Trading Commission ("CFTC") and
will be entered into only for bona fide hedging, risk management or other
portfolio management purposes. Typically, maintaining a futures contract or
selling an option thereon requires the Fund to deposit with a financial
intermediary as security for its obligations an amount of cash or other
specified assets (initial margin) which initially is typically 1% to 10% of the
face amount of the contract (but may be higher in some circumstances).
Additional cash or assets (variation margin) may be required to be deposited
thereafter on a daily basis as the mark to market value of the contract
fluctuates. The purchase of options on financial futures involves payment of a
premium for the option without any further obligation on the part of the Fund.
If the Fund exercises an option on a futures contract it will be obligated to
post initial margin (and potential subsequent variation margin) for the
resulting futures position just as it would for any position. Futures contracts
and options thereon are generally settled by entering into an offsetting
transaction but there can be no assurance that the position can be offset prior
to settlement at an advantageous price nor that delivery will occur.

The Fund will not enter into a futures contract or related option (except
for closing transactions) for other than bona fide hedging purposes if,
immediately thereafter, the sum of the amount of its initial margin and premiums
on open futures contracts and options thereon would exceed 5% of the Fund's
total assets (taken at current value); however, in the case of an option that is
in-the-money at the time of the purchase, the in-the-money amount may be
excluded in calculating the 5% limitation. The segregation requirements with
respect to futures contracts and options thereon are described below.

OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES

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multiplied by a formula value. The seller of the option is obligated, in return
for the premium received, to make delivery of this amount. The gain or loss on
an option on an index depends on price movements in the instruments making up
the market, market segment, industry or other composite on which the underlying
index is based, rather than price movements in individual securities, as is the
case with respect to options on securities.

CURRENCY TRANSACTIONS

The Fund may engage in currency transactions with Counterparties in order
to manage the value of currencies against fluctuations in relative value.
Currency transactions include forward currency contracts, exchange listed
currency futures, exchange listed and OTC options on currencies, and currency
swaps. A forward currency contract involves a privately negotiated obligation to
purchase or sell (with delivery generally required) a specific currency at a
future date, which may be any fixed number of days from the date of the contract
agreed upon by the parties, at a price set at the time of the contract. A
currency swap is an agreement to exchange cash flows based on the notional
difference among two or more currencies and operates similarly to an interest
rate swap, which is described below. The Fund may enter into currency
transactions with Counterparties rated A-1 or P-1 by S&P or Moody's,
respectively, or that have an equivalent rating from an NRSRO or (except for OTC
options) are determined to be of equivalent credit quality by the Adviser.

The Fund's dealings in forward currency contracts and other currency
transactions such as futures, options, options on futures and swaps will be
limited to hedging involving either specific transactions or portfolio
positions. Transaction hedging is entering into a currency transaction with
respect to specific assets or liabilities of the Fund, which will generally
arise in connection with the purchase or sale of its portfolio securities or the
receipt of income therefrom. Position hedging is entering into a currency
transaction with respect to portfolio security positions denominated or
generally quoted in that currency.

The Fund will not enter into a transaction to hedge currency exposure to an
extent greater, after netting all transactions intended to wholly or partially
offset other transactions, than the aggregate market value (at the time of
entering into the transaction) of the securities held in its portfolio that are
denominated or generally quoted in or currently convertible into such currency
other than with respect to cross-hedging or proxy hedging as described below.

The Fund may also cross-hedge currencies by entering into transactions to
purchase or sell one or more currencies that are expected to decline in value
relative to other currencies to which the Fund has or in which Fund expects to
have portfolio exposure.

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example, if the Adviser considers the Austrian schilling is linked to the German
deutschemark (the "D-mark"), the Fund holds securities denominated in Austrian
schillings and the Adviser believes that the value of schillings will decline
against the U.S. dollar, the Adviser may enter into a contract to sell D-marks
and buy dollars. Currency hedging involves some of the same risks and
considerations as other transactions with similar instruments. Currency
transactions can result in losses to the Fund if the currency being hedged
fluctuates in value to a degree or in a direction that is not anticipated.
Further, there is the risk that the perceived linkage between various currencies
may not be present or may not be present during the particular time that the
Fund is engaging in proxy hedging. If the Fund enters into a currency hedging
transaction, the Fund will comply with the asset segregation requirements
described below.

Risks of Currency Transactions. Currency transactions are subject to risks
different from other transactions. Because currency control is of great
importance to the issuing governments and influences economic planning and
policy, purchases and sales of currency and related instruments can be
negatively affected by government exchange controls, blockages, and
manipulations or exchange restrictions imposed by governments. These can result
in losses to the Fund if it is unable to deliver or receive currency or funds in
settlement of obligations and could also cause hedges it has entered into to be
rendered useless, resulting in full currency exposure as well as incurring
transaction costs. Buyers and sellers of currency futures are subject to the
same risks that apply to the use of futures generally. Further, settlement of a
currency futures contract for the purchase of most currencies must occur at a
bank based in the issuing nation. Trading options on currency futures is
relatively new, and the ability to establish and close out positions on such
options is subject to the maintenance of a liquid market which may not always be
available. Currency exchange rates may fluctuate based on factors extrinsic to
that country's economy.

COMBINED TRANSACTIONS

Fund may enter into multiple transactions, including multiple options
transactions, multiple futures transactions and multiple currency transactions
(including forward currency contracts) and any combination of futures, options
and currency transactions ("component" transactions), instead of a single
Strategic Transaction, as part of a single or combined strategy when, in the
opinion of the Adviser, it is in the best interests of the Fund to do so. A
combined transaction will usually contain elements of risk that are present in
each of its component transactions. Although combined transactions are normally
entered into based on the Adviser's judgment that the combined strategies will
reduce risk or otherwise more effectively achieve the desired portfolio
management goal, it is possible that the combination will instead increase such
risks or hinder achievement of the portfolio management objective.

RISKS OF STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES

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economic factors, (ii) lesser availability than in the United States of data on
which to make trading decisions, (iii) delays in the Fund's ability to act upon
economic events occurring in foreign markets during non-business hours in the
United States, (iv) the imposition of different exercise and settlement terms
and procedures and margin requirements than in the United States, and (v) lower
trading volume and liquidity.

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

Many Strategic Transactions, in addition to other requirements, require
that the Fund segregate cash or liquid securities with its custodian to the
extent Fund obligations are not otherwise "covered" through ownership of the
underlying security, financial instrument or currency. In general, either the
full amount of any obligation by the Fund to pay or deliver securities or assets
must be covered at all times by the securities, instruments or currency required
to be delivered, or, subject to any regulatory restrictions, an amount of cash
or liquid securities at least equal to the current amount of the obligation must
be segregated with the custodian. The segregated assets cannot be sold or
transferred unless equivalent assets are substituted in their place or it is no
longer necessary to segregate them. For example, a call option written by the
Fund will require the Fund to hold the securities subject to the call (or
securities convertible into the needed securities without additional
consideration) or to segregate cash or liquid securities sufficient to purchase
and deliver the securities if the call is exercised. A call option sold by the
Fund on an index will require the Fund to own portfolio securities which
correlate with the index or to segregate cash or liquid securities equal to the
excess of the index value over the exercise price on a current basis. A put
option written by the Fund requires the Fund to segregate cash or liquid
securities equal to the exercise price. A currency contract which obligates the
Fund to buy or sell currency will generally require the Fund to hold an amount
of that currency or liquid securities denominated in that currency equal to the
Fund's obligations or to segregate cash or liquid securities equal to the amount
of the Fund's obligation.

OTC options entered into by the Fund, including those on securities,
currency, financial instruments or indices and OCC issued and exchange listed
index options will generally provide for cash settlement. As a result, when the
Fund sells these instruments it will only segregate an amount of assets equal to
its accrued net obligations, as there is no requirement for payment or delivery
of amounts in excess of the net amount. These amounts will equal 100% of the
exercise price in the case of a non cash-settled put, the same as an OCC
guaranteed listed option sold by the Fund, or the in-the-money amount plus any
sell-back formula amount in the case of a cash-settled put or call. In addition,
when the Fund sells a call option on an index at a time when the in-the-money
amount exceeds the exercise price, the Fund will segregate, until the option
expires or is closed out, cash or liquid securities equal in value to such
excess. OCC issued and exchange listed options sold by the Fund other than those
above generally settle with physical delivery, and the Fund will segregate an
amount of assets equal to the full value of the option. OTC options settling
with physical delivery, or with an election of either physical delivery or cash
settlement, will be treated the same as other options settling with physical
delivery.

In the case of a futures contract or an option thereon, the Fund must
deposit initial margin and possible daily variation margin in addition to
segregating assets sufficient to meet its obligation to purchase or provide
securities or currencies, or to pay the amount

B-15
<PAGE> 147

owed at the expiration of an index-based futures contract. Such assets may
consist of cash or liquid securities.

Strategic Transactions may be covered by other means when consistent with
applicable regulatory policies. The Fund also may enter into offsetting
transactions so that its combined position, coupled with any segregated assets,
equals its net outstanding obligation in related options and Strategic
Transactions. For example, the Fund could purchase a put option if the strike
price of that option is the same or higher than the strike price of a put option
sold by the Fund. Moreover, instead of segregating assets if the Fund held a
futures or forward contract, it could purchase a put option on the same futures
or forward contract with a strike price as high or higher than the price of the
contract held. Other Strategic Transactions also may be offset in combinations.
If the offsetting transaction terminates at the time of or after the primary
transaction no segregation is required, but if it terminates prior to such time,
assets equal to any remaining obligation would need to be segregated.

The Fund's activities involving Strategic Transactions may be limited by
the requirements of Subchapter M of the Internal Revenue Code of 1986, as
amended (the "Code"), for qualification as a regulated investment company.

INVESTMENT RESTRICTIONS

The Fund has adopted the following fundamental investment restrictions
which may not be changed without shareholder approval by the vote of a majority
of its outstanding voting securities which is defined by the 1940 Act as the
lesser of (i) 67% or more of the Fund's voting securities present at a meeting,
if the holders of more than 50% of the outstanding voting securities of the Fund
are present or represented by proxy; or (ii) more than 50% of the Fund's
outstanding voting securities. The percentage limitations contained in the
restrictions and policies set forth herein apply at the time of purchase of
securities. With respect to the limitations on illiquid securities and
borrowings, the percentage limitations apply at the time of purchase and on an
ongoing basis. The Fund shall not:

1. Purchase any securities (other than obligations issued or guaranteed by
the U.S. government or by its instrumentalities), if, as a result, more
than 5% of the Fund's total assets (taken at current value) would then be
invested in securities of a single issuer or, if, as a result, such Fund
would hold more than 10% of the outstanding voting securities of an
issuer; except that up to 25% of the Fund's total assets may be invested
without regard to such limitation and except that the Fund may purchase
securities of other investment companies without regard to such limitation
to the extent permitted by (i) the 1940 Act, as amended from time to time,
(ii) the rules and regulations promulgated by the SEC under the 1940 Act,
as amended from time to time or (iii) an exemption or other relief from
the provisions of the 1940 Act, as amended from time to time.

2. Invest more than 25% of its assets in a single industry, provided,
however, that this limitation excludes shares of other open-end investment
companies owned by the Fund but includes the Fund's pro rata portion of
the securities and other assets owned by any such company. (Neither the
U.S. government nor any of its agencies or instrumentalities will be
considered an industry for purposes of this restriction.)

B-16
<PAGE> 148

3. Issue senior securities, borrow money from banks or enter into reverse
repurchase agreements with banks in the aggregate in excess of 33 1/3% of
the Fund's total assets (after giving effect to any such borrowing); which
amount excludes no more than 5% of its total assets in borrowings and
reverse repurchase agreements with any entity for temporary purposes. The
Fund will not mortgage, pledge or hypothecate any assets other than in
connection with issuances of senior securities, borrowings, delayed
delivery and when issued transactions and strategic transactions.

4. Make loans of money or property to any person, except (i) to the extent
the securities in which the Fund may invest are considered to be loans,
(ii) through the loan of portfolio securities, and (iii) to the extent
that the Fund may lend money or property in connection with maintenance of
the value of, or the Fund's interest with respect to, the securities owned
by the Fund.

5. Sell any securities "short," unless at all times when a short position is
open the Fund owns an equal amount of the securities or of securities
convertible into, or exchangeable without further consideration for,
securities of the same issue as the securities sold short.

6. Act as an underwriter of securities, except to the extent the Fund may be
deemed to be an underwriter in connection with the sale of securities held
in its portfolio.

7. Make investments for the purpose of exercising control or participation in
management, except to the extent that exercise by the Fund of its rights
under agreements related to portfolio securities would be deemed to
constitute such control or participation and except that the Fund may
purchase securities of other investment companies to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions of
the 1940 Act, as amended from time to time.

8. Invest in securities issued by other investment companies except as part
of a merger, reorganization or other acquisition and except to the extent
permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as
amended from time to time, or (iii) an exemption or other relief from the
provisions of the 1940 Act, as amended from time to time.

9. Invest in interests in oil, gas, or other mineral exploration or
development programs, except pursuant to the exercise by the Fund of its
rights under agreements relating to portfolio securities.

10. Purchase or sell real estate, commodities or commodity contracts, except
to the extent that the securities that the Fund may invest in are
considered to be interests in real estate, commodities or commodity
contracts or to the extent the Fund exercises its rights under agreements
relating to portfolio securities (in which case the Fund may liquidate
real estate acquired as a result of a default on a mortgage), and except
to the extent that Strategic Transactions the Fund may engage in are
considered to be commodities or commodities contracts.

B-17
<PAGE> 149

TRUSTEES AND OFFICERS

The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees and the Fund's officers appointed by the Board of
Trustees. The tables below list the trustees and officers of the Fund and
executive officers of the Fund's investment adviser and their principal
occupations for the last five years and their affiliations, if any, with Van
Kampen Investments Inc. ("Van Kampen Investments"), Van Kampen Investment
Advisory Corp. ("Advisory Corp."), Van Kampen Asset Management Inc. ("Asset
Management"), Van Kampen Funds Inc. (the "Distributor"), Van Kampen Management
Inc., Van Kampen Advisors Inc., Van Kampen Insurance Agency of Illinois Inc.,
Van Kampen Insurance Agency of Texas Inc., Van Kampen System Inc., Van Kampen
Recordkeeping Services Inc., American Capital Contractual Services, Inc., Van
Kampen Trust Company, Van Kampen Exchange Corp. and Van Kampen Investor Services
Inc. ("Investor Services"). Advisory Corp. and Asset Management sometimes are
referred to herein collectively as the "Advisers". For purposes hereof, the term
"Fund Complex" includes each of the open-end investment companies advised by the
Advisers (excluding Van Kampen Exchange Fund).

TRUSTEES

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
J. Miles Branagan......................... Private investor. Trustee/Director of each of
1632 Morning Mountain Road the funds in the Fund Complex. Co-founder, and
Raleigh, NC 27614 prior to August 1996, Chairman, Chief Executive
Date of Birth: 07/14/32 Officer and President, MDT Corporation (now
Age: 68 known as Getinge/Castle, Inc., a subsidiary of
Getinge Industrier AB), a company which
develops, manufactures, markets and services
medical and scientific equipment.
Jerry D. Choate........................... Director of Amgen Inc., a biotechnological
53 Monarch Bay Drive company. Trustee/Director of each of the funds
Dana Point, CA 92629 in the Fund Complex. Prior to January 1999,
Date of Birth: 09/16/38 Chairman and Chief Executive Officer of The
Age: 61 Allstate Corporation ("Allstate") and Allstate
Insurance Company. Prior to January 1995,
President and Chief Executive Officer of
Allstate. Prior to August 1994, various
management positions at Allstate.
Linda Hutton Heagy........................ Managing Partner of Heidrick & Stuggles, an
Sears Tower executive search firm. Trustee/Director of each
233 South Wacker Drive of the funds in the Fund Complex. Prior to
Suite 7000 1997, Partner, Ray & Berndtson, Inc., an
Chicago, IL 60606 executive recruiting and management consulting
Date of Birth: 06/03/48 firm. Formerly, Executive Vice President of ABN
Age: 52 AMRO, N.A., a Dutch bank holding company. Prior
to 1992, Executive Vice President of La Salle
National Bank. Trustee on the University of
Chicago Hospitals Board, Vice Chair of the
Board of The YMCA of Metropolitan Chicago and a
member of the Women's Board of the University
of Chicago. Prior to 1996, Trustee of The
International House Board, a fellowship and
housing organization for international graduate
students.
</TABLE>

B-18
<PAGE> 150

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
R. Craig Kennedy.......................... President and Director, German Marshall Fund of
11 DuPont Circle, N.W. the United States, an independent U.S.
Washington, D.C. 20016 foundation created to deepen understanding,
Date of Birth: 02/29/52 promote collaboration and stimulate exchanges
Age: 48 of practical experience between Americans and
Europeans. Trustee/Director of each of the
funds in the Fund Complex. Formerly, advisor to
the Dennis Trading Group Inc., a managed
futures and option company that invests money
for individuals and institutions. Prior to
1992, President and Chief Executive Officer,
Director and Member of the Investment Committee
of the Joyce Foundation, a private foundation.
Mitchell M. Merin*........................ President and Chief Operating Officer of Asset
Two World Trade Center Management of Morgan Stanley Dean Witter since
66th Floor December 1998. President and Director since
New York, NY 10048 April 1997 and Chief Executive Officer since
Date of Birth: 08/13/53 June 1998 of Morgan Stanley Dean Witter
Age: 46 Advisors Inc. and Morgan Stanley Dean Witter
Services Company Inc. Chairman, Chief Executive
Officer and Director of Morgan Stanley Dean
Witter Distributors Inc. since June 1998.
Chairman and Chief Executive Officer since June
1998, and Director since January 1998, of
Morgan Stanley Dean Witter Trust FSB. Director
of various Morgan Stanley Dean Witter
subsidiaries. President of the Morgan Stanley
Dean Witter Funds and Discover Brokerage Index
Series since May 1999. Trustee/Director of each
of the funds in the Fund Complex. Previously
Chief Strategic Officer of Morgan Stanley Dean
Witter Advisors Inc. and Morgan Stanley Dean
Witter Services Company Inc. and Executive Vice
President of Morgan Stanley Dean Witter
Distributors Inc. April 1997-June 1998, Vice
President of the Morgan Stanley Dean Witter
Funds and Discover Brokerage Index Series May
1997-April 1999, and Executive Vice President
of Dean Witter, Discover & Co.
Jack E. Nelson............................ President and owner, Nelson Investment Planning
423 Country Club Drive Services, Inc., a financial planning company
Winter Park, FL 32789 and registered investment adviser in the State
Date of Birth: 02/13/36 of Florida. President and owner, Nelson Ivest
Age: 64 Brokerage Services Inc., a member of the
National Association of Securities Dealers,
Inc. and Securities Investors Protection Corp.
Trustee/Director of each of the funds in the
Fund Complex.
</TABLE>

B-19
<PAGE> 151

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Richard F. Powers, III*................... Chairman, President and Chief Executive Officer
1 Parkview Plaza of Van Kampen Investments. Chairman, Director
P.O. Box 5555 and Chief Executive Officer of the Advisers,
Oakbrook Terrace, IL 60181-5555 the Distributor, Van Kampen Advisors Inc. and
Date of Birth: 02/02/46 Van Kampen Management Inc. Director and officer
Age: 54 of certain other subsidiaries of Van Kampen
Investments. Trustee/Director and President of
each of the funds in the Fund Complex. Trustee,
President and Chairman of the Board of other
investment companies advised by the Advisers
and their affiliates, and Chief Executive
Officer of Van Kampen Exchange Fund. Prior to
May 1998, Executive Vice President and Director
of Marketing at Morgan Stanley Dean Witter and
Director of Dean Witter Discover & Co. and Dean
Witter Realty. Prior to 1996, Director of Dean
Witter Reynolds Inc.
Phillip B. Rooney......................... Vice Chairman (since April 1997) and Director
One ServiceMaster Way (since 1994) of The ServiceMaster Company, a
Downers Grove, IL 60515 business and consumer services company.
Date of Birth: 07/08/44 Director of Illinois Tool Works, Inc., a
Age: 56 manufacturing company and the Urban Shopping
Centers Inc., a retail mall management company.
Trustee, University of Notre Dame.
Trustee/Director of each of the funds in the
Fund Complex. Prior to 1998, Director of Stone
Smurfit Container Corp., a paper manufacturing
company. From May 1996 through February 1997 he
was President, Chief Executive Officer and
Chief Operating Officer of Waste Management,
Inc., an environmental services company, and
from November 1984 through May 1996 he was
President and Chief Operating Officer of Waste
Management, Inc.

Fernando Sisto............................ Professor Emeritus. Prior to August 1996, a
155 Hickory Lane George M. Bond Chaired Professor with Stevens
Closter, NJ 07624 Institute of Technology, and prior to 1995,
Date of Birth: 08/02/24 Dean of the Graduate School, Stevens Institute
Age: 75 of Technology. Director, Dynalysis of
Princeton, a firm engaged in engineering
research. Trustee/Director of each of the funds
in the Fund Complex.

Wayne W. Whalen*.......................... Partner in the law firm of Skadden, Arps,
333 West Wacker Drive Slate, Meagher & Flom (Illinois), legal counsel
Chicago, IL 60606 to the funds in the Fund Complex, and other
Date of Birth: 08/22/39 investment companies advised by the Advisers.
Age: 60 Trustee/Director of each of the funds in the
Fund Complex, and Trustee/ Managing General
Partner of other investment companies advised
by the Advisers.
</TABLE>

B-20
<PAGE> 152

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Suzanne H. Woolsey........................ Chief Operating Officer of the National Academy
2101 Constitution Ave., N.W. of Sciences/National Research Council, an
Room 206 independent, federally chartered policy
Washington, D.C. 20418 institution, since 1993. Director of Neurogen
Date of Birth: 12/27/41 Corporation, a pharmaceutical company, since
Age: 58 January 1998. Director of the German Marshall
Fund of the United States, Trustee of Colorado
College, and Vice Chair of the Board of the
Council for Excellence in Government. Trustee/
Director of each of the funds in the Fund
Complex. Prior to 1993, Executive Director of
the Commission on Behavioral and Social
Sciences and Education at the National Academy
of Sciences/National Research Council. From
1980 through 1989, Partner of Coopers &
Lybrand.
</TABLE>

------------------------------------

* Such trustee is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act). Mr. Whalen is an interested person of the Fund by reason of
his firm currently acting as legal counsel to the Fund. Messrs. Merin and
Powers are interested persons of the Fund and the Advisers by reason of their
positions with Morgan Stanley Dean Witter or its affiliates.

B-21
<PAGE> 153

OFFICERS

Messrs. Smith, Santo, Ciccarone, Reynoldson, Sullivan and Zimmermann are
located at 1 Parkview Plaza, Oakbrook Terrace, IL 60181-5555. Mr. Boyd is
located at 2800 Post Oak Blvd., Houston, TX 77056.

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>

A. Thomas Smith III.................. Executive Vice President, General Counsel,
Date of Birth: 12/14/56 Secretary and Director of Van Kampen Investments,
Age: 43 the Advisers, Van Kampen Advisors Inc., Van Kampen
Vice President and Secretary Management Inc., the Distributor, American Capital
Contractual Services, Inc., Van Kampen Exchange
Corp., Van Kampen Recordkeeping Services Inc.,
Investor Services, Van Kampen Insurance Agency of
Illinois Inc. and Van Kampen System Inc. Vice
President and Secretary/Vice President, Principal
Legal Officer and Secretary of other investment
companies advised by the Advisers or their
affiliates. Vice President and Secretary of each of
the funds in the Fund Complex. Prior to January
1999, Vice President and Associate General Counsel
to New York Life Insurance Company ("New York
Life"), and prior to March 1997, Associate General
Counsel of New York Life. Prior to December 1993,
Assistant General Counsel of The Dreyfus
Corporation. Prior to August 1991, Senior
Associate, Willkie Farr & Gallagher. Prior to
January 1989, Staff Attorney at the Securities and
Exchange Commission, Division of Investment
Management, Office of Chief Counsel.

Michael H. Santo..................... Executive Vice President, Chief Administrative
Date of Birth: 10/22/55 Officer and Director of Van Kampen Investments, the
Age: 44 Advisers, the Distributor, Van Kampen Advisors
Vice President Inc., Van Kampen Management Inc. and Van Kampen
Investor Services Inc., and serves as a Director or
Officer of certain other subsidiaries of Van Kampen
Investments. Vice President of each of the funds in
the Fund Complex and certain other investment
companies advised by the Advisers and their
affiliates. Prior to 1998, Senior Vice President
and Senior Planning Officer for Individual Asset
Management of Morgan Stanley Dean Witter and its
predecessor since 1994. From 1990-1994, First Vice
President and Assistant Controller in Dean Witter's
Controller's Department.
</TABLE>

B-22
<PAGE> 154

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>
Stephen L. Boyd...................... Executive Vice President and Chief Investment
Date of Birth: 11/16/40 Officer of Van Kampen Investments, and President
Age: 59 and Chief Operating Officer of the Advisers.
Executive Vice President and Chief Executive Vice President and Chief Investment
Investment Officer Officer of each of the funds in the Fund Complex
and certain other investment companies advised by
the Advisers or their affiliates. Prior to April
2000, Executive Vice President and Chief Investment
Officer for Equity Investments of the Advisers.
Prior to October 1998, Vice President and Senior
Portfolio Manager with AIM Capital Management, Inc.
Prior to February 1998, Senior Vice President and
Portfolio Manager of Van Kampen American Capital
Asset Management, Inc., Van Kampen American Capital
Investment Advisory Corp. and Van Kampen American
Capital Management, Inc.
Richard A. Ciccarone................. Senior Vice President and Co-head of the Fixed
Date of Birth: 06/15/52 Income Department of the Advisers, Van Kampen
Age: 48 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he served as Co-head of Municipal
Investments and Director of Research of the
Advisers, Van Kampen Management Inc. and Van Kampen
Advisors Inc. Mr. Ciccarone first joined the
Adviser in June 1983, and worked for the Adviser
until May 1989, with his last position being a Vice
President. From June 1989 to April 1996, he worked
at EVEREN Securities (formerly known as Kemper
Securities), with his last position at EVEREN being
an Executive Vice President. Since April 1996, Mr.
Ciccarone has been a Senior Vice President of the
Advisers, Van Kampen Management Inc. and Van Kampen
Advisors Inc.
John R. Reynoldson................... Senior Vice President and Co-head of the Fixed
Date of Birth: 05/15/53 Income Department of the Advisers, Van Kampen
Age: 47 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he managed the investment grade
taxable group for the Adviser since July 1999. From
July 1988 to June 1999, he managed the government
securities bond group for Asset Management. Mr.
Reynoldson has been with Asset Management since
April 1987, and has been a Senior Vice President of
Asset Management since July 1988. He has been a
Senior Vice President of the Adviser and Van Kampen
Management Inc. since June 1995 and Senior Vice
President of Van Kampen Advisors Inc. since June
2000.

John L. Sullivan..................... Senior Vice President of Van Kampen Investments and
Date of Birth: 08/20/55 the Advisers. Vice President, Chief Financial
Age: 44 Officer and Treasurer of each of the funds in the
Vice President, Chief Financial Fund Complex and certain other investment companies
Officer and Treasurer advised by the Advisers or their affiliates.
</TABLE>

B-23
<PAGE> 155

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>
John H. Zimmermann, III.............. Senior Vice President and Director of Van Kampen
Date of Birth: 11/25/57 Investments, President and Director of the
Vice President Distributor, and President of Van Kampen Insurance
Age: 42 Agency of Illinois Inc. Vice President of each of
the funds in the Fund Complex. From November 1992
to December 1997, Mr. Zimmermann was Senior Vice
President of the Distributor.
</TABLE>

Each trustee/director holds the same position with each of the funds in the
Fund Complex. As of the date of this Statement of Additional Information, there
are 60 operating funds in the Fund Complex. Each trustee/director who is not an
affiliated person of Van Kampen Investments, the Advisers or the Distributor
(each a "Non-Affiliated Trustee") is compensated by an annual retainer and
meeting fees for services to the funds in the Fund Complex. Each fund in the
Fund Complex provides a deferred compensation plan to its Non-Affiliated
Trustees that allows trustees/directors to defer receipt of their compensation
and earn a return on such deferred amounts. Deferring compensation has the
economic effect as if the Non-Affiliated Trustee reinvested his or her
compensation into the funds. Each fund in the Fund Complex provides a retirement
plan to its Non-Affiliated Trustees that provides Non-Affiliated Trustees with
compensation after retirement, provided that certain eligibility requirements
are met as more fully described below.

The compensation of each Non-Affiliated Trustee includes an annual retainer
in an amount equal to $50,000 per calendar year, due in four quarterly
installments on the first business day of each quarter. Payment of the annual
retainer is allocated among the funds in the Fund Complex on the basis of the
relative net assets of each fund as of the last business day of the preceding
calendar quarter. The compensation of each Non-Affiliated Trustee includes a per
meeting fee from each fund in the Fund Complex in the amount of $200 per
quarterly or special meeting attended by the Non-Affiliated Trustee, due on the
date of the meeting, plus reasonable expenses incurred by the Non-Affiliated
Trustee in connection with his or her services as a trustee, provided that no
compensation will be paid in connection with certain telephonic special
meetings.

Under the deferred compensation plan, each Non-Affiliated Trustee generally
can elect to defer receipt of all or a portion of the compensation earned by
such Non-Affiliated Trustee until retirement. Amounts deferred are retained by
the Fund and earn a rate of return determined by reference to the return on the
common shares of such Fund or other funds in the Fund Complex as selected by the
respective Non-Affiliated Trustee, with the same economic effect as if such
Non-Affiliated Trustee had invested in one or more funds in the Fund Complex. To
the extent permitted by the 1940 Act, the Fund may invest in securities of those
funds selected by the Non-Affiliated Trustees in order to match the deferred
compensation obligation. The deferred compensation plan is not funded and
obligations thereunder represent general unsecured claims against the general
assets of the Fund.

B-24
<PAGE> 156

per year for each of the ten years following such retirement from such Fund.
Non-Affiliated Trustees retiring prior to the age of 60 or with fewer than 10
years but more than 5 years of service may receive reduced retirement benefits
from such Fund. Each trustee/director has served as a member of the Board of
Trustees of the Fund since he or she was first appointed or elected in the year
set forth below. The retirement plan contains a Fund Complex retirement benefit
cap of $60,000 per year.

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

<TABLE>
<CAPTION>
Fund Complex
---------------------------------------------
Aggregate
Aggregate Estimated
Pension or Maximum Total
Retirement Annual Compensation
Aggregate Benefits Benefits from before
Compensation Accrued as the Fund Deferral from
from the Part of Upon Fund
Name(1) Registrant(2) Expenses(3) Retirement(4) Complex(5)
------- ------------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
J. Miles Branagan $9,540 $40,303 $60,000 $126,000
Jerry D. Choate(1) 8,340 0 60,000 88,700
Linda Hutton Heagy 9,540 5,045 60,000 126,000
R. Craig Kennedy 9,540 3,571 60,000 125,600
Jack E. Nelson 9,540 21,664 60,000 126,000
Phillip B. Rooney 9,540 7,787 60,000 113,400
Fernando Sisto 9,540 72,060 60,000 126,000
Wayne W. Whalen 9,540 15,189 60,000 126,000
Suzanne H. Woolsey(1) 6,940 0 60,000 88,700
</TABLE>

------------------------------------

(1) Trustees not eligible for compensation are not included in the Compensation
Table. Mr. Choate and Ms. Woolsey became members of the Board of Trustees
for the Fund and other funds in the Fund Complex on May 26, 1999 and
therefore do not have a full year of information to report. Paul G. Yovovich
resigned as a member of the Board of Trustees for the Fund and other funds
in the Fund Complex on April 14, 2000.

(2) The amounts shown in this column represent the aggregate compensation before
deferral from all operating series of the Trust during the fiscal year ended
March 31, 2000. The details of aggregate compensation before deferral for
each operating series of the Registrant during the fiscal year ended March
31, 2000 are shown in Table A below. The details of compensation deferred
for each operating series of the Registrant during the fiscal year ended
March 31, 2000 are shown in Table B below. Amounts deferred are retained by
the Fund and earn a rate of return determined by reference to either the
return on the common shares of the Fund or other funds in the Fund Complex
as selected by the respective Non-Affiliated Trustee, with the same economic
effect as if such Non-Affiliated Trustee had invested in one or more funds
in the Fund Complex. To the extent permitted by the 1940 Act, each fund may
invest in securities of those funds selected by the Non-Affiliated Trustees
in order to match the deferred compensation obligation. The details of
cumulative deferred compensa-

B-25
<PAGE> 157

tion (including interest) for each operating series of the Registrant as of
March 31, 2000 are shown in Table C below. The deferred compensation plan is
described above the Compensation Table.

(3) The amounts shown in this column represent the sum of the retirement
benefits accrued by the operating investment companies in the Fund Complex
for each of the trustees for the funds' respective fiscal years ended in
1999. The retirement plan is described above the Compensation Table.

(4) For each trustee, this is the sum of the estimated maximum annual benefits
payable by the funds in the Fund Complex for each year of the 10-year period
commencing in the year of such trustee's anticipated retirement. The
retirement plan is described above the Compensation Table. Each
Non-Affiliated Trustee has served as a member of the Board of Trustees since
the year set forth in Table D below.

(5) The amounts shown in this column represent the aggregate compensation paid
by all of the funds in the Fund Complex as of December 31, 1999 before
deferral by the trustees under the deferred compensation plan. Because the
funds in the Fund Complex have different fiscal year ends, the amounts shown
in this column are presented on a calendar year basis. Certain trustees
deferred all or a portion of their aggregate compensation from the Fund
Complex during the calendar year ended December 31, 1999. The deferred
compensation earns a rate of return determined by reference to the return on
the shares of the funds in the Fund Complex as selected by the respective
Non-Affiliated Trustee, with the same economic effect as if such Non-
Affiliated Trustee had invested in one or more funds in the Fund Complex. To
the extent permitted by the 1940 Act, the Fund may invest in securities of
those investment companies selected by the Non-Affiliated Trustees in order
to match the deferred compensation obligation. The Advisers and their
affiliates also serve as investment adviser for other investment companies;
however, with the exception of Mr. Whalen, the Non-Affiliated Trustees were
not trustees of such investment companies. Combining the Fund Complex with
other investment companies advised by the Advisers and their affiliates, Mr.
Whalen received Total Compensation of $279,250 during the calendar year
ended December 31, 1999.

The Fund, the Adviser and the Distributor have adopted Codes of Ethics
(collectively, the "Code of Ethics") that set forth general and specific
standards relating to the securities trading activities of their employees. The
Code of Ethics does not prohibit employees from acquiring securities that may be
purchased or held by the Fund, but is intended to ensure that all employees
conduct their personal transactions in a manner that does not interfere with the
portfolio transactions of the Fund or other Van Kampen funds, or that such
employees take unfair advantage of their relationship with the Fund. Among other
things, the Code of Ethics prohibits certain types of transactions absent prior
approval, imposes various trading restrictions (such as time periods during
which personal transactions may or may not be made) and requires quarterly
reporting of securities transactions and other matters. All reportable
securities transactions and other required reports are to be reviewed by
appropriate personnel for compliance with the Code of Ethics. Additional
restrictions apply to portfolio managers, traders, research analysts and others
who may have access to nonpublic information about the trading activities of the
Fund or other Van Kampen funds or who otherwise are involved in the investment
advisory process. Exceptions to these and other provisions of the Code of Ethics
may be granted in particular circumstances after review by appropriate
personnel.

B-26
<PAGE> 158

As of July 3, 2000, the trustees and officers of the Fund as a group owned
less than 1% of the shares of the Fund.

TABLE A

2000 AGGREGATE COMPENSATION FROM THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL ----------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 3/31 $2,340 $2,140 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $1,940
Great American Companies
Fund(1)....................... 3/31 1,202 1,002 1,202 1,202 1,202 1,202 1,202 1,202 802
Growth Fund..................... 3/31 1,388 1,188 1,388 1,388 1,388 1,388 1,388 1,388 988
Mid Cap Value Fund(1)........... 3/31 1,201 1,001 1,201 1,201 1,201 1,201 1,201 1,201 801
Prospector Fund(1).............. 3/31 1,203 1,003 1,203 1,203 1,203 1,203 1,203 1,203 803
Select Growth Fund*............. 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund............ 3/31 801 801 801 801 801 801 801 801 601
Utility Fund.................... 3/31 1,405 1,205 1,405 1,405 1,405 1,405 1,405 1,405 1,005
------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Trust Total............ $9,540 $8,340 $9,540 $9,540 $9,540 $9,540 $9,540 $9,540 $6,940
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000. Such trustees received an organizational meeting fee of
$200/trustee paid by the Adviser in connection with the Fund's organization.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

TABLE B

2000 AGGREGATE COMPENSATION DEFERRED FROM

THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL ----------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 3/31 $2,340 $1,778 $2,340 $1,170 $2,340 $2,340 $1,170 $2,340 $ 0
Great American Companies
Fund(1)....................... 3/31 1,202 802 1,202 601 1,202 1,202 601 1,202 0
Growth Fund..................... 3/31 1,388 940 1,388 694 1,388 1,388 694 1,388 0
Mid Cap Value Fund(1)........... 3/31 1,201 801 1,201 601 1,201 1,201 601 1,201 0
Prospector Fund(1).............. 3/31 1,203 803 1,203 602 1,203 1,203 602 1,203 0
Select Growth Fund*............. 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund............ 3/31 801 801 801 400 801 801 400 801 0
Utility Fund.................... 3/31 1,405 952 1,405 703 1,405 1,405 703 1,405 0
------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Trust Total............ $9,540 $6,877 $9,540 $4,771 $9,540 $9,540 $4,771 $9,540 $ 0
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

B-27
<PAGE> 159

TABLE C

2000 CUMULATIVE COMPENSATION DEFERRED

(PLUS INTEREST) FROM THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
CURRENT TRUSTEES
FISCAL ---------------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund....... 3/31 $15,694 $2,622 $12,224 $7,764 $28,302 $13,161 $ 6,960 $18,446 $0
Growth Fund.................. 3/31 11,377 1,453 7,665 7,594 19,459 11,021 5,405 13,700 0
Select Growth Fund*.......... 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund......... 3/31 999 1,247 899 557 1,155 1,377 566 1,063 0
Utility Fund................. 3/31 12,628 1,475 12,464 27,182 37,021 10,454 8,316 29,366 0
------- ------ ------- ------- ------- ------- ------- ------- --
Equity Trust Total.......... $40,698 $6,797 $33,252 $43,097 $85,937 $36,013 $21,247 $62,575 $0

<CAPTION>
FORMER TRUSTEES
------------------------------------------------
FUND NAME GAUGHAN MILLER REES ROBINSON YOVOVICH
--------- ------- ------ ---- -------- --------
<S> <C> <C> <C> <C> <C>
Aggressive Growth Fund....... $ 0 $ 3,074 $ 0 $11,674 $3,183
Growth Fund.................. 0 1,962 375 8,680 2,006
Select Growth Fund*.......... 0 0 0 0 0
Small Cap Value Fund......... 0 0 0 0 921
Utility Fund................. 1,142 13,406 3,285 26,162 2,040
------ ------- ------ ------- ------
Equity Trust Total.......... $1,142 $18,442 $3,660 $46,516 $8,150
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March 31,
2000.

TABLE D

YEAR OF ELECTION OR APPOINTMENT TO EACH SERIES OF THE TRUST

<TABLE>
<CAPTION>
TRUSTEE
--------------------------------------------------------------------------------
FUND NAME BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 1996 1999 1996 1996 1996 1997 1996 1996 1999
Growth Fund..................... 1995 1999 1995 1995 1995 1997 1995 1995 1999
Select Growth Fund*............. 2000 2000 2000 2000 2000 2000 2000 2000 2000
Small Cap Value Fund............ 1999 1999 1999 1999 1999 1999 1999 1999 1999
Utility Fund.................... 1995 1999 1995 1993 1993 1997 1995 1993 1999
---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>

------------------------------------

* The Select Growth Fund commenced investment operations in June 2000.

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objective. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Fund's Board of Trustees,
and permits its officers and employees to serve without compensation as trustees
of the Trust or officers of the Fund if elected to such positions. The Fund
however, bears the cost of its day-to-day operations, including service fees,
distribution fees, custodian fees, legal and independent accountant fees, the
cost of reports and proxies to shareholders, compensation of trustees of the
Trust (other than those who are affiliated persons of the Adviser, Distributor
or Van Kampen Investments), and all other ordinary business expenses not
specifically assumed by the Adviser. The Advisory Agreement also provides that
the Adviser shall not be liable to the Fund for any error of judgment or of law,
or for any loss suffered by the Fund in connection with the matters to which the
Advisory Agreement relates, except a loss resulting from willful misfeasance,
bad faith, or gross negligence on the part of the Adviser in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under the Advisory Agreement.

B-28
<PAGE> 160

The Advisory Agreement also provides that, in the event the expenses of the
Fund for any fiscal year exceed the most restrictive expense limitations
applicable in any jurisdiction in which the Fund's shares are qualified for
offer and sale (excluding any expenses permitted to be excluded from the
computation under applicable law or regulation), the compensation due the
Adviser will be reduced by the amount of such excess and that, if a reduction in
and refund of the advisory fee is insufficient, the Adviser will pay the Fund
monthly an amount sufficient to make up the deficiency, subject to readjustment
during the fiscal year.

The Advisory Agreement may be continued from year to year if specifically
approved at least annually (a)(i) by the Fund's Board of Trustees or (ii) by a
vote of a majority of the Fund's outstanding voting securities and (b) by a vote
of a majority of the Trustees who are not parties to the agreement or interested
persons of any such party by votes cast in person at a meeting called for such
purpose. The Advisory Agreement provides that it shall terminate automatically
if assigned and that it may be terminated without penalty by either party on 60
days' written notice.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, the Adviser received
approximately $8,558,600, $1,777,900 and $1,414,500, respectively, in advisory
fees from the Fund.

OTHER AGREEMENTS

Accounting Services Agreement. The Fund has entered into an accounting
services agreement pursuant to which Advisory Corp. provides accounting services
to the Fund supplementary to those provided by the custodian. Such services are
expected to enable the Fund to more closely monitor and maintain its accounts
and records. The Fund pays all costs and expenses related to such services,
including all salary and related benefits of accounting personnel, as well as
the overhead and expenses of office space and the equipment necessary to render
such services. The Fund shares together with the other Van Kampen funds in the
cost of providing such services with 25% of such costs shared proportionately
based on the respective number of classes of securities issued per fund and the
remaining 75% of such costs based proportionately on the respective net assets
per fund.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Advisory Corp. received
approximately $151,200, $86,600 and $76,100, respectively, in accounting
services fees from the Fund.

Legal Services Agreement. The Fund and certain of the other Van Kampen
funds advised by the Adviser or its affiliates and distributed by the
Distributor have entered into legal services agreements pursuant to which Van
Kampen Investments provides legal services, including without limitation:
accurate maintenance of the fund's minute books and records, preparation and
oversight of the fund's regulatory reports, and other information provided to
shareholders, as well as responding to day-to-day legal issues on behalf of the
funds. Payment by the funds for such services is made on a cost basis for the
salary and salary-related benefits, including but not limited to bonuses, group
insurance and other regular wages for the employment of personnel, as well as
overhead and the expenses related to the office space and the equipment
necessary to render the legal services. Other

B-29
<PAGE> 161

funds distributed by the Distributor also receive legal services from Van Kampen
Investments. Of the total costs for legal services provided to funds distributed
by the Distributor, one half of such costs are allocated equally to each fund
and the remaining one half of such costs are allocated to specific funds based
on monthly time records.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Van Kampen Investments
received approximately $14,900, $5,500 and $10,000, respectively, in legal
services fees from the Fund.

DISTRIBUTION AND SERVICE

The Distributor acts as the principal underwriter of the Fund's shares
pursuant to a written agreement (the "Distribution and Service Agreement"). The
Distributor has the exclusive right to distribute shares of the Fund through
authorized dealers on a continuous basis. The Distributor's obligation is an
agency or "best efforts" arrangement under which the Distributor is required to
take and pay for only such shares of the Fund as may be sold to the public. The
Distributor is not obligated to sell any stated number of shares. The
Distributor bears the cost of printing (but not typesetting) prospectuses used
in connection with this offering and certain other costs including the cost of
supplemental sales literature and advertising. The Distribution and Service
Agreement is renewable from year to year if approved (a)(i) by the Fund's
Trustees or (ii) by a vote of a majority of the Fund's outstanding voting
securities and (b) by a vote of a majority of Trustees who are not parties to
the Distribution and Service Agreement or interested persons of any party, by
votes cast in person at a meeting called for such purpose. The Distribution and
Service Agreement provides that it will terminate if assigned, and that it may
be terminated without penalty by either party on 90 days' written notice. Total
underwriting commissions on the sale of shares of the Fund for the last three
fiscal years/period are shown in the chart below.

<TABLE>
<CAPTION>
Total Amounts
Underwriting Retained by
Commissions Distributor
------------ -----------
<S> <C> <C>
Fiscal year ended March 31, 2000....................... $6,829,570 $869,569
Fiscal period ended March 31, 1999..................... $1,005,397 $137,952
Fiscal year ended June 30, 1998........................ $ 876,086 $140,600
</TABLE>

B-30
<PAGE> 162

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

<TABLE>
<CAPTION>
Total Sales Charge
------------------------- Reallowed
As % of As % of Net To Dealers
Size of Offering Amount As a % of
Investment Price Invested Offering Price
------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000........................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000.............. 4.75% 4.99% 4.00%
$100,000 but less than $250,000............. 3.75% 3.90% 3.00%
$250,000 but less than $500,000............. 2.75% 2.83% 2.25%
$500,000 but less than $1,000,000........... 2.00% 2.04% 1.75%
$1,000,000 or more.......................... * * *
------------------------------------------------------------------------------------------------
</TABLE>

* No sales charge is payable at the time of purchase on investments of $1
million or more, although the Fund may impose a contingent deferred sales
charge of 1.00% on certain redemptions made within one year of the purchase. A
commission or transaction fee will be paid by the Distributor at the time of
purchase directly out of the Distributor's assets (and not out of the Fund's
assets) to authorized dealers who initiate and are responsible for purchases
of $1 million or more computed on a percentage of the dollar value of such
shares sold as follows: 1.00% on sales to $2 million, plus 0.80% on the next
$1 million and 0.50% on the excess over $3 million. For single purchases of
$20 million or more by an individual retail investor the Distributor will pay,
at the time of purchase and directly out of the Distributor's assets (and not
out of the Fund's assets), a commission or transaction fee of 1.00% to
authorized dealers who initiate and are responsible for such purchases. The
commission or transaction fee of 1.00% will be computed on a percentage of the
dollar value of such shares sold.

With respect to sales of Class B Shares and Class C Shares of the Fund, a
commission or transaction fee generally will be paid by the Distributor at the
time of purchase directly out of the Distributor's assets (and not out of the
Fund's assets) to authorized dealers who initiate and are responsible for such
purchases computed based on a percentage of the dollar value of such shares sold
of 4.00% on Class B Shares and 1.00% on Class C Shares.

Proceeds from any contingent deferred sales charge and any distribution
fees on Class B Shares and Class C Shares of the Fund are paid to the
Distributor and are used by the Distributor to defray its distribution related
expenses in connection with the sale of the Fund's shares, such as the payment
to authorized dealers for selling such shares. With respect to Class C Shares,
the authorized dealers generally are paid the ongoing commission and transaction
fees of up to 0.75% of the average daily net assets of the Fund's Class C Shares
annually commencing in the second year after purchase.

B-31
<PAGE> 163

sponsored by the Distributor, an amount not exceeding the total applicable sales
charges on the sales generated by the authorized dealer at the public offering
price during such programs. Also, the Distributor in its discretion may from
time to time, pursuant to objective criteria established by the Distributor, pay
fees to, and sponsor business seminars for, qualifying authorized dealers for
certain services or activities which are primarily intended to result in sales
of shares of the Fund or other Van Kampen funds. Fees may include payment for
travel expenses, including lodging, incurred in connection with trips taken by
invited registered representatives for meetings or seminars of a business
nature. In some instances additional compensation or promotional incentives may
be offered to brokers, dealers or financial intermediaries that have sold or may
sell significant amounts of shares during specified periods of time. The
Distributor may provide additional compensation to Edward D. Jones & Co. or an
affiliate thereof based on a combination of its quarterly sales of shares of the
Fund and other Van Kampen funds and increases in net assets of the Fund and
other Van Kampen funds over specified thresholds. All of the foregoing payments
are made by the Distributor out of its own assets. Such fees paid for such
services and activities with respect to the Fund will not exceed in the
aggregate 1.25% of the average total daily net assets of the Fund on an annual
basis. These programs will not change the price an investor will pay for shares
or the amount that a Fund will receive from such sale.

The Fund has adopted a distribution plan (the "Distribution Plan") with
respect to each class of its shares pursuant to Rule 12b-1 under the 1940 Act.
The Fund also has adopted a service plan (the "Service Plan") with respect to
each class of its shares. The Distribution Plan and the Service Plan sometimes
are referred to herein as the "Plans." The Plans provide that the Fund may spend
a portion of the Fund's average daily net assets attributable to each class of
shares in connection with distribution of the respective class of shares and in
connection with the provision of ongoing services to shareholders of such class,
respectively. The Distribution Plan and the Service Plan are being implemented
through the Distribution and Service Agreement with the Distributor of each
class of the Fund's shares, sub-agreements between the Distributor and members
of the NASD who are acting as securities dealers and NASD members or eligible
non-members who are acting as brokers or agents and similar agreements between
the Fund and financial intermediaries who are acting as brokers (collectively,
"Selling Agreements") that may provide for their customers or clients certain
services or assistance, which may include, but not be limited to, processing
purchase and redemption transactions, establishing and maintaining shareholder
accounts regarding the Fund, and such other services as may be agreed to from
time to time and as may be permitted by applicable statute, rule or regulation.
Brokers, dealers and financial intermediaries that have entered into
sub-agreements with the Distributor and sell shares of the Fund are referred to
herein as "financial intermediaries."

Certain financial intermediaries may be prohibited under law from providing
certain underwriting or distribution services. If a financial intermediary were
prohibited from acting in any capacity or providing any of the described
services, the Distributor would consider what action, if any, would be
appropriate. The Distributor does not believe that termination of a relationship
with a financial intermediary would result in any material adverse consequences
to the Fund.

The Distributor must submit quarterly reports to the Board of Trustees of
the Trust, of which the Fund is a series, setting forth separately by class of
shares all amounts paid

B-32
<PAGE> 164

under the Distribution Plan and the purposes for which such expenditures were
made, together with such other information as from time to time is reasonably
requested by the Trustees. The Plans provide that they will continue in full
force and effect from year to year so long as such continuance is specifically
approved by a vote of the Trustees, and also by a vote of the disinterested
Trustees, cast in person at a meeting called for the purpose of voting on the
Plans. Each of the Plans may not be amended to increase materially the amount to
be spent for the services described therein with respect to any class of shares
without approval by a vote of a majority of the outstanding voting shares of
such class, and all material amendments to either of the Plans must be approved
by the Trustees and also by the disinterested Trustees. Each of the Plans may be
terminated with respect to any class of shares at any time by a vote of a
majority of the disinterested Trustees or by a vote of a majority of the
outstanding voting shares of such class.

For Class A Shares in any given year in which the Plans are in effect, the
Plans generally provide for the Fund to pay the Distributor the lesser of (i)
the amount of the Distributor's actual expenses incurred during such year less
any deferred sales charges (if any) it received during such year (the "actual
net expenses") or (ii) the distribution and service fees at the rates specified
in the Prospectus (the "plan fees"). Therefore, to the extent the Distributor's
actual net expenses in a given year are less than the plan fees for such year,
the Fund only pays the actual net expenses. Alternatively, to the extent the
Distributor's actual net expenses in a given year exceed the plan fees for such
year, the Fund only pays the plan fees for such year. For Class A Shares, there
is no carryover of any unreimbursed actual net expenses to succeeding years.

The Plans for Class B Shares and Class C Shares are similar to the Plans
for Class A Shares, except that any actual net expenses which exceed plan fees
for a given year are carried forward and are eligible for payment in future
years by the Fund so long as the Plans remain in effect. Thus, for each of the
Class B Shares and Class C Shares, in any given year in which the Plans are in
effect, the Plans generally provide for the Fund to pay the Distributor the
lesser of (i) the applicable amount of the Distributor's actual net expenses
incurred during such year for such class of shares plus any actual net expenses
from prior years that are still unpaid by the Fund for such class of shares or
(ii) the applicable plan fees for such class of shares. Except as may be
mandated by applicable law, the Fund does not impose any limit with respect to
the number of years into the future that such unreimbursed actual net expenses
may be carried forward (on a Fund level basis). These unreimbursed actual net
expenses may or may not be recovered through plan fees or contingent deferred
sales charges in future years.

Because of fluctuation in net asset value, the plan fees with respect to a
particular Class B Share or Class C Share may be greater or less than the amount
of the initial commission (including carrying cost) paid by the Distributor with
respect to such share. In such circumstances, a shareholder of a share may be
deemed to incur expenses attributable to other shareholders of such class. As of
March 31, 2000, there were $10,678,923 and $677,543 of unreimbursed
distribution-related expenses with respect to Class B Shares and Class C Shares,
respectively, representing 1.13% and 0.33% of the Fund's net assets attributable
to Class B Shares and Class C Shares, respectively. If the Plans are terminated
or not continued, the Fund would not be contractually obligated to pay the
Distributor for any expenses not previously reimbursed by the Fund or recovered
through contingent deferred sales charges.

B-33
<PAGE> 165

Because the Fund is a series of the Trust, amounts paid to the Distributor
as reimbursement for expenses of one series of the Trust may indirectly benefit
the other funds which are series of the Trust. The Distributor will endeavor to
allocate such expenses among such funds in an equitable manner. The Distributor
will not use the proceeds from the contingent deferred sales charge applicable
to a particular class of shares to defray distribution-related expenses
attributable to any other class of shares.

For the fiscal year ended March 31, 2000, the Fund's aggregate expenses
paid under the Plans for Class A Shares were $908,097 or 0.25% of the Class A
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for payments made to financial intermediaries for servicing Fund
shareholders and for administering the Class A Share Plans. For the fiscal year
ended March 31, 2000, the Fund's aggregate expenses paid under the Plans for
Class B Shares were $4,236,725 or 1.00% of the Class B Shares' average daily net
assets. Such expenses were paid to reimburse the Distributor for the following
payments: $3,272,169 for commissions and transaction fees paid to financial
intermediaries in respect of sales of Class B Shares of the Fund and $964,556
for fees paid to financial intermediaries for servicing Class B shareholders and
administering the Class B Share Plans. For the fiscal year ended March 31, 2000,
the Fund's aggregate expenses paid under the Plans for Class C Shares were
$743,176 or 1.00% of the Class C Shares' average daily net assets. Such expenses
were paid to reimburse the Distributor for the following payments: $496,857 for
commissions and transaction fees paid to financial intermediaries in respect of
sales of Class C Shares of the Fund and $246,319 for fees paid to financial
intermediaries for servicing Class C shareholders and administering the Class C
Share Plans.

The Distributor has entered into agreements with the following firms: (i)
Fidelity Investments Institutional Operations Company, Inc., (ii) Fidelity
Brokerage Services, Inc. & National Financial Services Corporation, (iii) First
Union National Bank, (iv) GreatWest Life & Annuity Insurance
Company/BenefitsCorp Equities, Inc., (v) Hewitt Associates, LLC, (vi) Huntington
Bank, (vii) Invesco Retirement and Benefit Services, Inc., (viii) Lincoln
National Life Insurance Company, (ix) Merrill Lynch Pierce, Fenner & Smith,
Incorporated, (x) Dean Witter Reynolds, Inc., (xi) National Deferred
Compensation, Inc., (xii) Nationwide Investment Services Corporation, (xiii)
Wells Fargo Bank, N.A. on behalf of itself and its affiliated banks, (xiv) The
Prudential Insurance Company of America, (xv) Delaware Charter Guarantee & Trust
under the trade name of Trustar(SM) Retirement Services and (xvi) Union Bank of
CA, N.A. Shares of the Fund will be offered pursuant to such firm's retirement
plan alliance program(s). Trustees and other fiduciaries of retirement plans
seeking to invest in multiple fund families through broker-dealer retirement
plan alliance program should contact the firms mentioned above for further
information concerning the program(s) including, but not limited to, minimum
size and operational requirements.

TRANSFER AGENT

The Fund's transfer agent, shareholder service agent and dividend
disbursing agent is Van Kampen Investor Services Inc. The transfer agency prices
are determined through negotiations with the Fund's Board of Trustees and are
based on competitive benchmarks.

B-34
<PAGE> 166

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

The Adviser is responsible for decisions to buy and sell securities for the
Fund, the selection of brokers and dealers to effect the transactions and the
negotiation of prices and any brokerage commissions on such transactions. While
the Adviser will be primarily responsible for the placement of the Fund's
portfolio business, the policies and practices in this regard will at all times
be subject to review by the Board of Trustees of the Fund.

The Adviser is responsible for placing portfolio transactions and does so
in a manner deemed fair and reasonable to the Fund and not according to any
formula. The primary consideration in all portfolio transactions is prompt
execution of orders in an effective manner at the most favorable price. In
selecting broker-dealers and in negotiating prices and any brokerage commissions
on such transactions, the Adviser considers the firm's reliability, integrity
and financial condition and the firm's execution capability, the size and
breadth of the market for the security, the size of and difficulty in executing
the order, and the best net price. There are many instances when, in the
judgment of the Adviser, more than one firm can offer comparable execution
services. In selecting among such firms, consideration may be given to those
firms which supply research and other services in addition to execution
services. The Adviser is authorized to pay higher commissions to brokerage firms
that provide it with investment and research information than to firms which do
not provide such services if the Adviser determines that such commissions are
reasonable in relation to the overall services provided. No specific value can
be assigned to such research services which are furnished without cost to the
Adviser. Since statistical and other research information is only supplementary
to the research efforts of the Adviser to the Fund and still must be analyzed
and reviewed by its staff, the receipt of research information is not expected
to reduce its expenses materially. The investment advisory fee is not reduced as
a result of the Adviser's receipt of such research services. Services provided
may include (a) furnishing advice as to the value of securities, the
advisability of investing in, purchasing or selling securities, and the
availability of securities or purchasers or sellers of securities; (b)
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody). Research
services furnished by firms through which the Fund effects its securities
transactions may be used by the Adviser in servicing all of its advisory
accounts; not all of such services may be used by the Adviser in connection with
the Fund. The Adviser also may place portfolio transactions, to the extent
permitted by law, with brokerage firms affiliated with the Fund, the Adviser or
the Distributor and with brokerage firms participating in the distribution of
the Fund's shares if it reasonably believes that the quality of execution and
the commission are comparable to that available from other qualified firms.
Similarly, to the extent permitted by law and subject to the same considerations
on quality of execution and comparable commission rates, the Adviser may direct
an executing broker to pay a portion or all of any commissions, concessions or
discounts to a firm supplying research or other services or to a firm
participating in the distribution of the Fund's shares.

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<PAGE> 167

have an adverse effect on the price or the amount of securities available to the
Fund. In making such allocations among the Fund and other advisory accounts, the
main factors considered by the Adviser are the respective sizes of the Fund and
other advisory accounts, the respective investment objectives, the relative size
of portfolio holdings of the same or comparable securities, the availability of
cash for investment, the size of investment commitments generally held and
opinions of the persons responsible for recommending the investment.

Effective October 31, 1996, Morgan Stanley & Co. Incorporated ("Morgan
Stanley") became an affiliate of the Adviser. Effective May 31, 1997, Dean
Witter Reynolds, Inc. ("Dean Witter") became an affiliate of the Adviser. The
Fund's Board of Trustees has adopted certain policies incorporating the
standards of Rule 17e-1 issued by the SEC under the 1940 Act which require that
the commissions paid to affiliates of the Fund must be reasonable and fair
compared to the commissions, fees or other remuneration received or to be
received by other brokers in connection with comparable transactions involving
similar securities during a comparable period of time. The rule and procedures
also contain review requirements and require the Adviser to furnish reports to
the Trustees and to maintain records in connection with such reviews. After
consideration of all factors deemed relevant, the Trustees will consider from
time to time whether the advisory fee for the Fund will be reduced by all or a
portion of the brokerage commission given to affiliated brokers.

The Fund paid the following commissions to all brokers and affiliated
brokers during the years/period shown:

Commissions Paid:

<TABLE>
<CAPTION>
Affiliated
Brokers
-----------------
All Morgan Dean
Brokers Stanley Witter
------- ------- ------
<S> <C> <C> <C>
Fiscal year ended March 31, 2000................... $1,149,589 $16,850 $-0-
Fiscal period ended March 31, 1999................. $ 349,381 $ -0- $-0-
Fiscal year ended June 30, 1998.................... $ 519,606 $ -0- $-0-
Fiscal 2000 Percentages:
Commissions with affiliate to total
commissions................................... 1.470% 0%
Value of brokerage transactions with affiliate to
total
transactions.................................. 0.052% 0%
</TABLE>

During the fiscal year ended March 31, 2000, the Fund paid $749,729 in
brokerage commissions on transactions totaling $555,259,147 to brokers selected
primarily on the basis of research services provided to the Adviser.

SHAREHOLDER SERVICES

The Fund offers a number of shareholder services designed to facilitate
investment in its shares at little or no extra cost to the investor. Below is a
description of such services. The following information supplements the section
in the Fund's Prospectus captioned "Shareholder Services."

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<PAGE> 168

INVESTMENT ACCOUNT

Each shareholder has an investment account under which the investor's
shares of the Fund are held by Investor Services, the Fund's transfer agent.
Investor Services performs bookkeeping, data processing and administrative
services related to the maintenance of shareholder accounts. Except as described
in the Prospectus and this Statement of Additional Information, after each share
transaction in an account, the shareholder receives a statement showing the
activity in the account. Each shareholder who has an account in any of the
Participating Funds (as defined in the Prospectus) will receive statements
quarterly from Investor Services showing any reinvestments of dividends and
capital gain dividends and any other activity in the account since the preceding
statement. Such shareholders also will receive separate confirmations for each
purchase or sale transaction other than reinvestment of dividends and capital
gain dividends and systematic purchases or redemptions. Additional shares may be
purchased at any time through authorized dealers or by mailing a check directly
to Investor Services.

SHARE CERTIFICATES

Generally, the Fund will not issue share certificates. However, upon
written or telephone request to the Fund, a share certificate will be issued
representing shares (with the exception of fractional shares) of the Fund. A
shareholder will be required to surrender such certificates upon an exchange or
redemption of the shares represented by the certificate. In addition, if such
certificates are lost the shareholder must write to Van Kampen Funds Inc., c/o
Investor Services, PO Box 218256, Kansas City, MO 64121-8256, requesting an
"Affidavit of Loss" and obtain a Surety Bond in a form acceptable to Investor
Services. On the date the letter is received, Investor Services will calculate
the fee for replacing the lost certificate equal to no more than 1.50% of the
net asset value of the issued shares, and bill the party to whom the replacement
certificate was mailed.

RETIREMENT PLANS

Eligible investors may establish individual retirement accounts ("IRAs");
SEP; 401(k) plans; Section 403(b)(7) plans in the case of employees of public
school systems and certain non-profit organizations; or other pension or profit
sharing plans. Documents and forms containing detailed information regarding
these plans are available from the Distributor. Van Kampen Trust Company serves
as custodian under the IRA, 403(b)(7) and Money Purchase and Profit Sharing
Keogh plans.

AUTOMATED CLEARING HOUSE("ACH") DEPOSITS

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<PAGE> 169

check or deposit slip, such shareholder's designated bank account, following any
redemption, will be credited with the proceeds of such redemption. Once enrolled
in the ACH plan, a shareholder may terminate participation at any time by
writing Investor Services or by calling (800) 341-2911 ((800) 421-2833 for the
hearing impaired).

DIVIDEND DIVERSIFICATION

A shareholder may, upon written request by completing the appropriate
section of the account application form or by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired), elect to have all dividends and capital gain
dividends paid on a class of shares of the Fund invested into shares of the same
class of any Participating Fund so long as the investor has a pre-existing
account for such class of shares of the other fund. Both accounts must be of the
same type, either non-retirement or retirement. If the accounts are retirement
accounts, they must both be for the same class and of the same type of
retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit Sharing
Keogh plans) and for the benefit of the same individual. If a qualified,
pre-existing account does not exist, the shareholder must establish a new
account subject to minimum investment and other requirements of the fund into
which distributions would be invested. Distributions are invested into the
selected fund at its net asset value per share as of the payable date of the
distribution from the Fund.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a monthly, quarterly, semiannual or annual
withdrawal plan if the shareholder owns shares in a single account valued at
$10,000 or more at the next determined net asset value per share at the time the
plan is established. If a shareholder owns shares in a single account valued at
$5,000 or more at the next determined net asset value per share at the time the
plan is established, the shareholder may establish a quarterly, semiannual or
annual withdrawal plan. This plan provides for the orderly use of the entire
account, not only the income but also the capital, if necessary. Each payment
represents the proceeds of a redemption of shares on which any capital gain or
loss will be recognized. The planholder may arrange for periodic checks in any
amount, not less than $25. Such a systematic withdrawal plan may also be
maintained by an investor purchasing shares for a retirement plan established on
a form made available by the Fund. See "Shareholder Services -- Retirement
Plans."

Class B Shareholders and Class C Shareholders who establish a systematic
withdrawal plan may redeem up to 12% annually of the shareholder's initial
account balance without incurring a contingent deferred sales charge. Initial
account balance means the amount of the shareholder's investment at the time the
election to participate in the plan is made.

Under the plan, sufficient shares of the Fund are redeemed to provide the
amount of the periodic withdrawal payment. Dividends and capital gain dividends
on shares held in accounts with systematic withdrawal plans are reinvested in
additional shares at the next determined net asset value per share. If periodic
withdrawals continuously exceed reinvested dividends and capital gain dividends,
the shareholder's original investment will be correspondingly reduced and
ultimately exhausted. Redemptions made concurrently with the purchase of
additional shares ordinarily will be disadvantageous to the shareholder because
of the duplication of sales charges. Any gain or loss realized by the
shareholder

B-38
<PAGE> 170

upon redemption of shares is a taxable event. The Fund reserves the right to
amend or terminate the systematic withdrawal program upon 30 days' notice to its
shareholders.

EXCHANGE PRIVILEGE

All shareholders are limited to eight exchanges per fund during a rolling
365-day period.

Exchange privileges will be suspended on a particular fund if more than
eight exchanges out of that fund are made by a shareholder during a rolling
365-day period. If exchange privileges are suspended, subsequent exchange
requests during the stated period will not be processed. Exchange privileges
will be restored when the account history shows fewer than eight exchanges in
the rolling 365-day period.

This policy does not apply to money market funds, systematic exchange
plans, or employer-sponsored retirement plans.

REINSTATEMENT PRIVILEGE

A Class A Shareholder or Class B Shareholder who has redeemed shares of the
Fund may reinstate any portion or all of the net proceeds of such redemption in
Class A Shares of the Fund. A Class C Shareholder who has redeemed shares of the
Fund may reinstate any portion or all of the net proceeds of such redemption in
Class C Shares of the Fund with credit given for any contingent deferred sales
charge paid upon such redemption. Such reinstatement is made at the net asset
value per share (without sales charge) next determined after the order is
received, which must be made within 180 days after the date of the redemption.
Reinstatement at net asset value per share is also offered to participants in
those eligible retirement plans held or administered by Van Kampen Trust Company
for repayment of principal (and interest) on their borrowings on such plans.

REDEMPTION OF SHARES

Redemptions are not made on days during which the New York Stock Exchange
(the "Exchange") is closed. The right of redemption may be suspended and the
payment therefor may be postponed for more than seven days during any period
when (a) the Exchange is closed for other than customary weekends or holidays;
(b) the SEC determines trading on the Exchange is restricted; (c) the SEC
determines an emergency exists as a result of which disposal by the Fund of
securities owned by it is not reasonably practicable or it is not reasonably
practicable for the Fund to fairly determine the value of its net assets; or (d)
the SEC, by order, so permits.

In addition, if the Fund's Board of Trustees determines that payment wholly
or partly in cash would be detrimental to the best interests of the remaining
shareholders of the Fund, the Fund may pay the redemption proceeds in whole or
in part by a distribution-in-kind of portfolio securities held by the Fund in
lieu of cash in conformity with applicable rules of the SEC. A
distribution-in-kind will result in recognition by the shareholder of a gain or
loss for federal income tax purposes when such securities are distributed, and
the shareholder may have brokerage charges and a gain or loss for federal income
tax purposes upon the shareholder's subsequent disposition of such securities.

B-39
<PAGE> 171

CONTINGENT DEFERRED SALES CHARGE-CLASS A

As described in the Prospectus under "Purchase of Shares -- Class A
Shares," there is no sales charge payable on Class A Shares at the time of
purchase on investments of $1 million or more, but a contingent deferred sales
charge ("CDSC -- Class A") may be imposed on certain redemptions made within one
year of purchase. For purposes of the CDSC-Class A, when shares of one fund are
exchanged for shares of another fund, the purchase date for the shares of the
fund exchanged into will be assumed to be the date on which shares were
purchased in the fund from which the exchange was made. If the exchanged shares
themselves are acquired through an exchange, the purchase date is assumed to
carry over from the date of the original election to purchase shares subject to
a CDSC-Class A rather than a front-end load sales charge. In determining whether
a CDSC-Class A is payable, it is assumed that shares being redeemed first are
any shares in the shareholder's account not subject to a contingent deferred
sales charge followed by shares held the longest in the shareholder's account.
The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends.

WAIVER OF CLASS B AND CLASS C CONTINGENT

DEFERRED SALES CHARGES

As described in the Prospectus under "Redemption of Shares," redemptions of
Class B Shares and Class C Shares will be subject to a contingent deferred sales
charge ("CDSC -- Class B and C"). The CDSC-Class B and C is waived on
redemptions of Class B Shares and Class C Shares in the circumstances described
below:

REDEMPTION UPON DEATH OR DISABILITY

The Fund will waive the CDSC-Class B and C on redemptions following the
death or disability of a Class B shareholder and Class C shareholder. An
individual will be considered disabled for this purpose if he or she meets the
definition thereof in Section 72(m)(7) of the Internal Revenue Code of 1986, as
amended (the "Code"), which in pertinent part defines a person as disabled if
such person "is unable to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment which can be
expected to result in death or to be of long-continued and indefinite duration."
While the Fund does not specifically adopt the balance of the Code's definition
which pertains to furnishing the Secretary of Treasury with such proof as he or
she may require, the Distributor will require satisfactory proof of death or
disability before it determines to waive the CDSC-Class B and C.

In cases of death or disability, the CDSC-Class B and C will be waived
where the decedent or disabled person is either an individual shareholder or
owns the shares as a joint tenant with right of survivorship or is the
beneficial owner of a custodial or fiduciary account, and where the redemption
is made within one year of the death or initial determination of disability.
This waiver of the CDSC-Class B and C applies to a total or partial redemption,
but only to redemptions of shares held at the time of the death or initial
determination of disability.

B-40
<PAGE> 172

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

The Fund will waive the CDSC-Class B and C when a total or partial
redemption is made in connection with certain distributions from retirement
plans. The CDSC-Class B and C will be waived upon the tax-free rollover or
transfer of assets to another retirement plan invested in one or more
Participating Funds; in such event, as described below, the Fund will "tack" the
period for which the original shares were held on to the holding period of the
shares acquired in the transfer or rollover for purposes of determining what, if
any, CDSC-Class B and C is applicable in the event that such acquired shares are
redeemed following the transfer or rollover. The charge also will be waived on
any redemption which results from the return of an excess contribution pursuant
to Section 408(d)(4) or (5) of the Code, the return of excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2), the financial hardship of the
employee pursuant to U.S. Treasury Regulations Section 1.401(k)-(1)(d)(2) or
from the death or disability of the employee (see Code Section 72(m)(7) and
72(t)(2)(A)(ii)). In addition, the charge will be waived on any minimum
distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC-Class B and C for any
distributions from IRAs or other retirement plans not specifically described
above.

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

A shareholder may elect to participate in a systematic withdrawal plan with
respect to the shareholder's investment in the Fund. Under the systematic
withdrawal plan, a dollar amount of a participating shareholder's investment in
the Fund will be redeemed systematically by the Fund on a periodic basis, and
the proceeds sent to the designated payee of record. The amount to be redeemed
and frequency of the systematic withdrawals will be specified by the shareholder
upon his or her election to participate in the systematic withdrawal plan. The
CDSC-Class B and C will be waived on redemptions made under the systematic
withdrawal plan.

The amount of the shareholder's investment in the Fund at the time the
election to participate in the systematic withdrawal plan is made with respect
to the Fund is hereinafter referred to as the "initial account balance." The
amount to be systematically redeemed from the Fund without the imposition of a
CDSC-Class B and C may not exceed a maximum of 12% annually of the shareholder's
initial account balance. The Fund reserves the right to change the terms and
conditions of the systematic withdrawal plan and the ability to offer the
systematic withdrawal plan.

NO INITIAL COMMISSION OR TRANSACTION FEE

The Fund will waive the CDSC-Class B and C in circumstances under which no
commission or transaction fee is paid to authorized dealers at the time of
purchase of shares. See "Purchase of Shares -- Waiver of Contingent Deferred
Sales Charge" in the Prospectus.

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<PAGE> 173

INVOLUNTARY REDEMPTIONS OF SHARES

The Fund reserves the right to redeem shareholder accounts with balances of
less than a specified dollar amount as set forth in the Prospectus. Prior to
such redemptions, shareholders will be notified in writing and allowed a
specified period of time to purchase additional shares to bring the value of the
account up to the required minimum balance. The Fund will waive the CDSC-Class B
and C upon such involuntary redemption.

REINVESTMENT OF REDEMPTION PROCEEDS

A shareholder who has redeemed Class C Shares of the Fund may reinvest at
net asset value, with credit for any CDSC-Class C paid on the redeemed shares,
any portion or all of his or her redemption proceeds (plus that amount necessary
to acquire a fractional share to round off his or her purchase to the nearest
full share) in Class C Shares of the Fund, provided that the reinvestment is
effected within 180 days after such redemption and the shareholder has not
previously exercised this reinvestment privilege with respect to Class C Shares
of the Fund. Shares acquired in this manner will be deemed to have the original
cost and purchase date of the redeemed shares for purposes of applying the
CDSC-Class C to subsequent redemptions.

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class B and C when a total or partial
redemption is made by the Adviser with respect to its investments in the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

The Trust and each of its series, including the Fund, will be treated as
separate corporations for federal income tax purposes. The Fund has elected and
qualified, and intends to continue to qualify each year, to be treated as a
regulated investment company under Subchapter M of the Code. To qualify as a
regulated investment company, the Fund must comply with certain requirements of
the Code relating to, among other things, the source of its income and
diversification of its assets.

If the Fund so qualifies and distributes each year to its shareholders at
least 90% of its investment company taxable income (generally including taxable
income and net short-term capital gain, but not net capital gain, which is the
excess of net long-term capital gain over net short-term capital loss), and
meets certain other requirements, it will not be required to pay federal income
taxes on any income it distributes to shareholders. The Fund intends to
distribute at least the minimum amount of investment company taxable income
necessary to satisfy the 90% distribution requirement. The Fund will not be
subject to federal income tax on any net capital gain distributed to
shareholders.

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<PAGE> 174

purposes of the excise tax, any ordinary income or capital gain net income
retained by, and subject to federal income tax in the hands of, the Fund will be
treated as having been distributed.

If the Fund failed to qualify as a regulated investment company or failed
to satisfy the 90% distribution requirement in any taxable year, the Fund would
be taxed as an ordinary corporation on its taxable income (even if such income
were distributed to its shareholders) and all distributions out of earnings and
profits would be taxed to shareholders as ordinary income. In addition, the Fund
could be required to recognize unrealized gains, pay taxes and interest charges
and make distributions before requalifying for taxation as a regulated
investment company.

Some of the Fund's investment practices are subject to special provisions
of the Code that may, among other things, (i) disallow, suspend or otherwise
limit the allowance of certain losses or deductions, (ii) convert lower taxed
long-term capital gain into higher taxed short-term capital gain or ordinary
income, (iii) convert an ordinary loss or a deduction into a capital loss (the
deductibility of which is more limited) and (iv) cause the Fund to recognize
income or gain without a corresponding receipt of cash with which to make
distributions in amounts necessary to satisfy the 90% distribution requirement
and the distribution requirements for avoiding income and excise taxes. The Fund
will monitor its transactions and may make certain tax elections in order to
mitigate the effect of these rules and prevent disqualification of the Fund as a
regulated investment company.

PASSIVE FOREIGN INVESTMENT COMPANIES. The Fund may invest in non-U.S.
corporations that could be classified as "passive foreign investment companies"
as defined for federal income tax purposes. For federal income tax purposes,
such an investment may, among other things, cause the Fund to recognize income
or gain without a corresponding receipt of cash, to incur an interest charge on
taxable income that is deemed to have been deferred and/or to recognize ordinary
income that would otherwise have been treated as capital gain.

DISTRIBUTIONS TO SHAREHOLDERS

Distributions of the Fund's investment company taxable income are taxable
to shareholders as ordinary income to the extent of the Fund's earnings and
profits, whether paid in cash or reinvested in additional shares. Distributions
of the Fund's net capital gain as capital gain dividends, if any, are taxable to
shareholders as long-term capital gains regardless of the length of time shares
of the Fund have been held by such shareholders. Distributions in excess of the
Fund's earnings and profits will first reduce the adjusted tax basis of a
holder's shares and, after such adjusted tax basis is reduced to zero, will
constitute capital gains to such holder (assuming such shares are held as a
capital asset). For a summary of the maximum tax rates applicable to capital
gains (including capital gain dividends), see "Capital Gains Rates" below.
Tax-exempt shareholders not subject to federal income tax on their income
generally will not be taxed on distributions from the Fund.

Shareholders receiving distributions in the form of additional shares
issued by the Fund will be treated for federal income tax purposes as receiving
a distribution in an amount equal to the fair market value of the shares
received, determined as of the

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<PAGE> 175

distribution date. The basis of such shares will equal the fair market value on
the distribution date.

The Fund will inform shareholders of the source and tax status of all
distributions promptly after the close of each calendar year. Some portion of
the distributions from the Fund may be eligible for the dividends received
deduction for corporations if the Fund receives qualifying dividends during the
year and if certain requirements of the Code are satisfied.

Although dividends generally will be treated as distributed when paid,
dividends declared in October, November or December, payable to shareholders of
record on a specified date in such month and paid during January of the
following year will be treated as having been distributed by the Fund and
received by the shareholders on the December 31st prior to the date of payment.
In addition, certain other distributions made after the close of a taxable year
of the Fund may be "spilled back" and treated as paid by the Fund (except for
purposes of the 4% excise tax) during such taxable year. In such case,
shareholders will be treated as having received such dividends in the taxable
year in which the distribution was actually made.

Income from investments in foreign securities received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries and
U.S. possessions. Such taxes will not be deductible or creditable by
shareholders. Tax conventions between certain countries and the United States
may reduce or eliminate such taxes.

SALE OF SHARES

The sale of shares (including transfers in connection with a redemption or
repurchase of shares) may be a taxable transaction for federal income tax
purposes. Selling shareholders will generally recognize gain or loss in an
amount equal to the difference between their adjusted tax basis in the shares
sold and the amount received. If the shares sold are held as a capital asset,
the gain or loss will be a capital gain or loss. For a summary of the maximum
tax rates applicable to capital gains (including capital gain dividends), see
"Capital Gains Rates" below. Any loss recognized upon a taxable disposition of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any capital gain dividends received with respect to such
shares. For purposes of determining whether shares have been held for six months
or less, the holding period is suspended for any periods during which the
shareholder's risk of loss is diminished as a result of holding one or more
other positions in substantially similar or related property or through certain
options or short sales.

CAPITAL GAINS RATES

The maximum tax rate applicable to net capital gains recognized by
individuals and other non-corporate taxpayers investing in the Fund is (i) the
same as the maximum ordinary income tax rate for capital assets held for one
year or less or (ii) 20% for capital assets held for more than one year. The
maximum long-term capital gains rate for corporations is 35%.

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NON-U.S. SHAREHOLDERS

A shareholder who is not (i) a citizen or resident of the United States,
(ii) a corporation or partnership created or organized under the laws of the
United States or any state thereof, (iii) an estate, the income of which is
subject to United States federal income taxation regardless of its source or
(iv) a trust whose administration is subject to the primary supervision of a
United States court and which has one or more United States fiduciaries who have
the authority to control all substantial decisions of the trust (a "Non-U.S.
Shareholder") generally will be subject to withholding of United States federal
income tax at a 30% rate (or lower applicable treaty rate) on dividends from the
Fund (other than capital gain dividends) that are not "effectively connected"
with a United States trade or business carried on by such shareholder.

Non-effectively connected capital gain dividends and gains realized from
the sale of shares will not be subject to United States federal income tax in
the case of (i) a Non-U.S. Shareholder that is a corporation and (ii) an
individual Non-U.S. Shareholder who is not present in the United States for more
than 182 days during the taxable year (assuming that certain other conditions
are met). However, certain Non-U.S. Shareholders may nonetheless be subject to
backup withholding on capital gain dividends and gross proceeds paid to them
upon the sale of their shares. See "Backup Withholding" below.

If income from the Fund or gains realized from the sale of shares is
effectively connected with a Non-U.S. Shareholder's United States trade or
business, then such amounts will be subject to United States federal income tax
on a net basis at the tax rates applicable to United States citizens or domestic
corporations. Non-U.S. Shareholders that are corporations may also be subject to
an additional "branch profits tax" with respect to income from the Fund that is
effectively connected with a United States trade or business.

United States Treasury regulations, generally effective for payments made
after December 31, 2000, modify the withholding, backup withholding and
information reporting rules, including the procedures to be followed by foreign
investors in establishing foreign status. Prospective foreign investors should
consult their tax advisers concerning the applicability and effect of such
Treasury regulations on an investment in shares of the Fund.

The tax consequences to a Non-U.S. Shareholder entitled to claim the
benefits of an applicable tax treaty may be different from those described in
this section. Non-U.S. Shareholders may be required to provide appropriate
documentation to establish their entitlement to the benefits of such a treaty.
Foreign investors are advised to consult their tax advisers with respect to the
tax implications of purchasing, holding and disposing of shares of the Fund.

BACKUP WITHHOLDING

The Fund may be required to withhold federal income tax at a rate of 31%
("backup withholding") from dividends and redemption proceeds paid to
non-corporate shareholders. This tax may be withheld from dividends if (i) the
shareholder fails to furnish the Fund with its correct taxpayer identification
number, (ii) the IRS notifies the Fund that the shareholder has failed to
properly report certain interest and dividend income to the IRS and to respond
to notices to that effect or (iii) when required to do so, the shareholder

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fails to certify that he or she is not subject to backup withholding. Redemption
proceeds may be subject to withholding under the circumstances described in (i)
above.

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from payments made to a Shareholder may be refunded or
credited against such shareholder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the IRS.

INFORMATION REPORTING

The fund must report annually to the IRS and to each shareholder (other
than a Non-U.S. Shareholder) the amount of dividends paid to such shareholder
and the amount, if any, of tax withheld pursuant to backup withholding rules
with respect to such dividends. In the case of a Non-U.S. Shareholder, the Fund
must report to the IRS and such shareholder the aggregate amount of dividends
paid that are subject to backup withholding (if any) and the amount of tax
withheld with respect to such dividends pursuant to the backup withholding
rules. This information may also be made available to the tax authorities in the
Non-U.S. Shareholder's country of residence. Generally, dividends paid to
Non-U.S. Shareholders that are subject to the 30% federal income tax withholding
described above under "Non-U.S. Shareholders" are not subject to backup
withholding.

GENERAL

The federal income tax discussion set forth above is for general
information only. Prospective investors and shareholders should consult their
tax advisers regarding the specific federal tax consequences of purchasing,
holding and disposing of shares, as well as the effects of state, local and
foreign tax law and any proposed tax law changes.

FUND PERFORMANCE

From time to time the Fund may advertise its total return for prior
periods. Any such advertisement would include at least average annual total
return quotations for one-year, five-year and ten-year periods. Other total
return quotations, aggregate or average, over other time periods may also be
included.

The total return of the Fund for a particular period represents the
increase (or decrease) in the value of a hypothetical investment in the Fund
from the beginning to the end of the period. Total return is calculated by
subtracting the value of the initial investment from the ending value and
showing the difference as a percentage of the initial investment; the
calculation assumes the initial investment is made at the current maximum public
offering price (which includes the maximum sales charge for Class A Shares);
that all income dividends or capital gain dividends during the period are
reinvested in Fund shares at net asset value; and that any applicable contingent
deferred sales charge has been paid. The Fund's total return will vary depending
on market conditions, the securities comprising the Fund's portfolio, the Fund's
operating expenses and unrealized net capital gains or losses during the period.
Total return is based on historical earnings and asset value fluctuations and is
not intended to indicate future performance. No adjustments are made to reflect
any income taxes payable by shareholders on dividends and capital gain dividends
paid by the Fund or to reflect the fact that 12b-1 fees may have changed over
time.

B-46
<PAGE> 178

Average annual total return quotations are computed by finding the average
annual compounded rate of return over the period that would equate the initial
amount invested to the ending redeemable value.

The Fund may, in supplemental sales literature, advertise non-standardized
total return figures representing the cumulative, non-annualized total return of
each class of shares of the Fund from a given date to a subsequent given date.
Cumulative non-standardized total return is calculated by measuring the value of
an initial investment in a given class of shares of the Fund at a given time,
deducting the maximum initial sales charge, if any, determining the value of all
subsequent reinvested distributions, and dividing the net change in the value of
the investment as of the end of the period by the amount of the initial
investment and expressing the result as a percentage. Non-standardized total
return will be calculated separately for each class of shares.

Non-standardized total return calculations do not reflect the imposition of
a contingent deferred sales charge, and if any contingent deferred sales charge
imposed at the time of redemption were reflected, it would reduce the
performance quoted.

Total return is calculated separately for Class A Shares, Class B Shares
and Class C Shares of the Fund. Total return figures for Class A Shares include
the maximum sales charge. Total return figures for Class B Shares and Class C
Shares include any applicable contingent deferred sales charge. Because of the
differences in sales charges and distribution fees, the total returns for each
class of shares will differ.

From time to time, the Fund may include in its sales literature and
shareholder reports a quotation of the current "distribution rate" for each
class of shares of the Fund. Distribution rate is a measure of the level of
income and short-term capital gain dividends, if any, distributed for a
specified period. Distribution rate differs from yield, which is a measure of
the income actually earned by the Fund's investments, and from total return
which is a measure of the income actually earned by the Fund's investments plus
the effect of any realized and unrealized appreciation or depreciation of such
investments during a stated period. Distribution rate is, therefore, not
intended to be a complete measure of the Fund's performance. Distribution rate
may sometimes be greater than yield since, for instance, it may not include the
effect of amortization of bond premiums, and may include non-recurring
short-term capital gains and premiums from futures transactions engaged in by
the Fund. Distribution rates will be computed separately for each class of the
Fund's shares.

From time to time marketing materials may provide a portfolio manager
update, an Adviser update and discuss general economic conditions and outlooks.
The Fund's marketing materials may also show the Fund's asset class
diversification, top sector holdings and largest holdings. Materials may also
mention how the Distributor believes the Fund compares relative to other Van
Kampen funds. Materials may also discuss the Dalbar Financial Services study
from 1984 to 1994 which studied investor cash flow into and out of all types of
mutual funds. The ten-year study found that investors who bought mutual fund
shares and held such shares outperformed investors who bought and sold. The
Dalbar study conclusions were consistent regardless of whether shareholders
purchased their fund shares in direct or sales force distribution channels. The
study showed that investors working with a professional representative have
tended over time to earn higher returns than those who invested directly. The
performance of the funds purchased by the

B-47
<PAGE> 179

investors in the Dalbar study and the conclusions based thereon are not
necessarily indicative of future performance of such funds or conclusions that
may result from similar studies in the future. The Fund may also be marketed on
the internet.

In reports or other communications to shareholders or in advertising
material, the Fund may compare its performance with that of other mutual funds
as listed in the rankings or ratings prepared by Lipper Analytical Services,
Inc., CDA, Morningstar Mutual Funds or similar independent services which
monitor the performance of mutual funds with the Consumer Price Index, the Dow
Jones Industrial Average, Standard & Poor's indices, NASDAQ Composite Index,
other appropriate indices of investment securities, or with investment or
savings vehicles. The performance information may also include evaluations of
the Fund published by nationally recognized ranking or rating services and by
nationally recognized financial publications. Such comparative performance
information will be stated in the same terms in which the comparative data or
indices are stated. Such advertisements and sales material may also include a
yield quotation as of a current period. In each case, such total return and
yield information, if any, will be calculated pursuant to rules established by
the SEC and will be computed separately for each class of the Fund's shares. For
these purposes, the performance of the Fund, as well as the performance of other
mutual funds or indices, do not reflect sales charges, the inclusion of which
would reduce the Fund's performance. The Fund will include performance data for
each class of shares of the Fund in any advertisement or information including
performance data of the Fund.

The Fund may also utilize performance information in hypothetical
illustrations. For example, the Fund may, from time to time: (1) illustrate the
benefits of tax-deferral by comparing taxable investments to investments made
through tax-deferred retirement plans; (2) illustrate in graph or chart form, or
otherwise, the benefits of dollar cost averaging by comparing investments made
pursuant to a systematic investment plan to investments made in a rising market;
(3) illustrate allocations among different types of mutual funds for investors
at different stages of their lives; and (4) in reports or other communications
to shareholders or in advertising material, illustrate the benefits of
compounding at various assumed rates of return.

The Fund's Annual Report and Semiannual Report contain additional
performance information. A copy of the Annual Report or Semiannual Report may be
obtained without charge by calling or writing the Fund at the telephone number
and address printed on the cover of this Statement of Additional Information.

CLASS A SHARES

The Fund's average annual total return, assuming payment of the maximum
sales charge, for Class A Shares of the Fund for (i) the one-year period ended
March 31, 2000 was 120.18% and (ii) the approximately three-year, ten-month
period since May 29, 1996, the commencement of investment operations for Class A
Shares of the Fund, through March 31, 2000 was 45.97%.

The Class A shares cumulative non-standardized total return, including
payments of the maximum sales charge, with respect to the Class A Shares from
its inception to March 31, 2000 was 327.02%.

B-48
<PAGE> 180

The Fund's cumulative non-standardized total return, excluding payment of
the maximum sales charge, with respect to the Class A Shares from its inception
to March 31, 2000 was 353.29%.

CLASS B SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class B Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 126.91% and (ii) the approximately three-year,
ten-month period since May 29, 1996, the commencement of investment operations
for Class B Shares of the Fund, through March 31, 2000 was 46.91%.

The Class B Shares cumulative non-standardized total return, including
payment of the contingent deferred sales charge, with respect to the Class B
Shares from May 29, 1996 (the commencement of distribution of Class B Shares) to
March 31, 2000 was 337.71%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class B Shares from
May 29, 1996 (the commencement of distribution of Class B Shares) to March 31,
2000 was 340.21%.

CLASS C SHARES

The average annual total return, assuming payment of the contingent
deferred sales charge, for Class C Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 131.31%, and (ii) the approximately three-year,
ten-month period since May 29, 1996, the commencement of investment operations
for Class C Shares of the Fund, through March 31, 2000 was 47.21%.

The Class C Shares cumulative non-standardized total return, including
payment of the contingent deferred sales charge, with respect to the Class C
Shares from May 29, 1996 (the commencement of distribution of Class C Shares) to
March 31, 2000 was 341.22%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class C Shares from
May 29, 1996 (the commencement of distribution of Class C Shares) to March 31,
2000 was 341.22%.

These results are based on historical earnings and asset value fluctuations
and are not intended to indicate future performance. Such information should be
considered in light of the Fund's investment objective and policies as well as
the risks incurred in the Fund's investment practices.

OTHER INFORMATION

CUSTODY OF ASSETS

All securities owned by the Fund and all cash, including proceeds from the
sale of shares of the Fund and of securities in the Fund's investment portfolio,
are held by State

B-49
<PAGE> 181

Street Bank and Trust Company, 225 West Franklin Street, Boston, Massachusetts
02110, as custodian. The custodian also provides accounting services to the
Fund.

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the independent accountants.

INDEPENDENT AUDITORS

Independent auditors perform an annual audit of the financial statements of
the Fund. The Trust's Board of Trustees has engaged Ernst & Young LLP, located
at 233 South Wacker Drive, Chicago, Illinois 60606, to be the independent
auditors. The change in independent auditors was approved by the Fund's audit
committee and the Fund's Board of Trustees, including Trustees who are not
"interested persons" of the Fund (as defined in the 1940 Act).

PricewaterhouseCoopers LLP, located at 200 East Randolph Drive, Chicago,
Illinois 60601 ("PWC"), ceased being the Fund's independent accountants
effective May 25, 2000. The cessation of the client-auditor relationship between
the Fund and PWC was based solely on a possible future business relationship by
PWC with an affiliate of the Fund's investment adviser. The change in
independent accountants was approved by the Trust's audit committee and the
Trust's Board of Trustees, including Trustees who are not "interested persons"
of the Fund (as defined in the 1940 Act).

KPMG LLP, located at 303 West Wacker Drive, Chicago, Illinois 60601
("KPMG"), ceased being the Fund's independent accountants effective April 14,
2000. The cessation of the client-auditor relationship between the Fund and KPMG
was based solely on a possible future business relationship by KPMG with an
affiliate of the Fund's investment adviser. The change in independent
accountants was approved by the Fund's audit committee and the Fund's Board of
Trustees, including Trustees who are not "interested persons" of the Fund (as
defined in the 1940 Act).

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).

B-50
<PAGE> 182

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of Van Kampen Aggressive Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen Aggressive Growth Fund
(the "Fund") at March 31, 2000, and the results of its operations, the changes
in its net assets and the financial highlights for the year then ended in
conformity with accounting principles generally accepted in the United States.
These financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at March 31, 2000 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above. The
statement of changes in net assets and the financial highlights for each of the
periods ended on or prior to March 31, 1999 were audited by other independent
accountants whose report dated May 6, 1999 expressed an unqualified opinion
thereon.

PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
May 5, 2000

F-1
<PAGE> 183

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

March 31, 2000
THE FOLLOWING PAGES DETAIL THE SPECIFIC HOLDINGS OF YOUR FUND AT THE END OF THE
REPORTING PERIOD.

<TABLE>
<CAPTION>
DESCRIPTION SHARES MARKET VALUE
<S> <C> <C>
COMMON STOCKS* 96.7%
CONSUMER DISTRIBUTION 2.1%
Anixter International, Inc. (a)............................ 200,000 $ 5,575,000
Emulex Corp. (a)........................................... 350,000 38,193,750
Whitehall Jewellers, Inc. (a).............................. 225,000 5,287,500
--------------
49,056,250
--------------
CONSUMER NON-DURABLES 0.5%
Kenneth Cole Productions, Inc., Class A (a)................ 300,000 11,775,000
--------------

CONSUMER SERVICES 7.7%
Adelphia Business Solutions, Class A (a)................... 325,000 20,028,125
Aether Systems, Inc. (a)................................... 23,100 4,192,650
Albany Molecular Research, Inc. (a)........................ 100,000 5,837,500
Cox Radio, Inc., Class A (a)............................... 40,000 3,360,000
Diamond Technology Partners, Inc., Class A (a)............. 172,500 11,341,875
Hispanic Broadcasting Corp. (a)............................ 200,000 22,650,000
Macrovision Corp. (a)...................................... 400,000 34,450,000
Photon Dynamics, Inc. (a).................................. 85,000 5,865,000
Proxicom, Inc. (a)......................................... 350,000 15,509,375
Quanta Services, Inc. (a).................................. 125,000 7,585,937
Radio One, Inc., Class A (a)............................... 175,000 11,659,375
TMP Worldwide, Inc. (a).................................... 240,000 18,660,000
ValueVision International, Inc., Class A (a)............... 300,000 12,412,500
Vignette Corp. (a)......................................... 50,000 8,012,500
--------------
181,564,837
--------------
ENERGY 5.0%
ENSCO International, Inc. ................................. 800,000 28,900,000
Newfield Exploration Co. (a)............................... 175,000 6,168,750
Patterson Energy, Inc. (a)................................. 500,000 15,875,000
Rowan Cos., Inc. (a)....................................... 500,000 14,718,750
Santa Fe International Corp. .............................. 150,000 5,550,000
Smith International, Inc. (a).............................. 275,000 21,312,500
Stone Energy Corp. (a)..................................... 150,000 7,387,500
Triton Energy Ltd. ........................................ 500,000 17,531,250
--------------
117,443,750
--------------
</TABLE>

See Notes to Financial Statements

F-2
<PAGE> 184

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
DESCRIPTION SHARES MARKET VALUE
<S> <C> <C>
FINANCE 1.7%
London Pacific Group Ltd.--ADR (United Kingdom)............ 700,000 $ 16,275,000
Silicon Valley Bancshares (a).............................. 350,000 25,156,250
--------------
41,431,250
--------------
FINANCIAL SERVICES 0.3%
TD Waterhouse Group, Inc. (a).............................. 300,000 7,500,000
--------------

HEALTHCARE 3.1%
Hooper Holmes, Inc. ....................................... 100,000 3,431,250
Jones Pharma, Inc. ........................................ 750,000 22,781,250
Medicis Pharmaceutical Corp., Class A (a).................. 125,000 5,000,000
MedImmune, Inc. (a)........................................ 60,000 10,447,500
PolyMedica Corp. (a)....................................... 175,000 10,281,250
Priority Healthcare Corp., Class B (a)..................... 150,000 7,537,500
QLT PhotoTherapeutics, Inc. (a)............................ 150,000 8,287,500
Zoll Medical Corp. (a)..................................... 85,000 4,356,250
--------------
72,122,500
--------------
PHARMACEUTICALS 0.9%
Biovail Corp. (a).......................................... 200,000 8,862,500
Celgene Corp. (a).......................................... 40,000 3,982,500
Cor Therapeutics, Inc. (a)................................. 135,000 8,899,453
--------------
21,744,453
--------------
PRODUCER MANUFACTURING 7.1%
Advanced Energy Industries, Inc. (a)....................... 100,000 5,100,000
Advanced Fibre Communications, Inc. (a).................... 200,000 12,537,500
Amphenol Corp., Class A (a)................................ 55,000 5,623,750
Asyst Technologies, Inc. (a)............................... 650,000 38,025,000
Cooper Cameron Corp. (a)................................... 125,000 8,359,375
Cree Research, Inc. (a).................................... 250,000 28,218,750
Elantec Semiconductor, Inc. (a)............................ 175,000 12,873,437
Electro Scientific Industries, Inc. (a).................... 200,000 11,600,000
Helix Technology Corp. .................................... 250,000 15,015,625
Insituform Technologies, Inc., Class A (a)................. 175,000 5,359,375
Kopin Corp. (a)............................................ 150,000 10,312,500
LTX Corp. (a).............................................. 150,000 6,778,125
Newport Corp............................................... 50,000 6,750,000
--------------
166,553,437
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 0.2%
Maverick Tube Corp. (a).................................... 175,000 5,676,563
--------------
</TABLE>

See Notes to Financial Statements

F-3
<PAGE> 185

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
DESCRIPTION SHARES MARKET VALUE
<S> <C> <C>
TELECOMMUNICATIONS 4.0%
Exar Corp. (a)............................................. 232,500 $ 16,638,282
LCC International, Inc. (a)................................ 250,000 9,906,250
Natural MicroSystems Corp. (a)............................. 100,000 8,575,000
Network Plus Corp. (a)..................................... 175,000 7,087,500
Next Level Communications, Inc., Class A (a)............... 16,700 1,816,125
OTG Software, Inc. (a)..................................... 12,800 516,000
Primus Telecommunications Group, Inc. (a).................. 150,000 7,753,125
Tekelec, Inc. (a).......................................... 150,000 5,568,750
Telaxis Communications Corp. (a)........................... 11,200 673,225
Terayon Communication Systems, Inc. (a).................... 125,000 25,625,000
UTStarcom, Inc. (a)........................................ 21,300 1,662,731
Westell Technologies, Inc., Class A (a).................... 250,000 7,968,750
--------------
93,790,738
--------------
TECHNOLOGY 60.8%
724 Solutions, Inc. (a) ................................... 29,000 3,610,500
Actuate Corp. (a).......................................... 120,000 6,457,500
Advanced Digital Information Corp. (a)..................... 1,050,000 35,962,500
Allaire Corp. (a).......................................... 250,000 18,906,250
Alpha Industries, Inc. .................................... 200,000 19,000,000
ANADIGICS, Inc. (a)........................................ 350,000 23,100,000
Applied Micro Circuits Corp. (a)........................... 300,000 45,018,750
AppNet, Inc. (a)........................................... 75,000 3,525,000
Arrowpoint Communications, Inc. (a)........................ 4,900 580,573
Aspect Development, Inc. (a)............................... 300,000 19,312,500
Aspen Technology, Inc. (a)................................. 150,000 6,056,250
Audiovox Corp., Class A (a)................................ 301,000 13,131,125
AVX Corp. ................................................. 200,000 15,162,500
BroadVision, Inc. (a)...................................... 235,000 10,545,625
Brocade Communications Systems, Inc. (a)................... 112,000 20,083,000
Business Objects SA--ADR (France) (a)...................... 550,000 54,725,000
C-COR.net Corp. (a)........................................ 325,000 15,925,000
Check Point Software Technologies, Ltd.--ADR (Israel) 200,000 34,212,500
(a)......................................................
Copper Mountain Networks, Inc. (a)......................... 200,000 16,387,500
Credence Systems Corp. (a)................................. 350,000 43,793,750
Cymer, Inc. (a)............................................ 325,000 16,250,000
Davox Corp. (a)............................................ 150,000 4,012,500
Digital Lightwave, Inc. (a)................................ 100,000 6,231,250
Efficient Networks, Inc. (a)............................... 175,000 27,256,250
Exodus Communications, Inc. (a)............................ 130,000 18,265,000
Extreme Networks, Inc. (a)................................. 125,000 9,875,000
Foundry Networks, Inc. (a)................................. 74,200 10,666,250
Gemstar International Group Ltd. (a)....................... 259,200 22,291,200
Harmonic, Inc. (a)......................................... 400,000 33,300,000
</TABLE>

See Notes to Financial Statements

F-4
<PAGE> 186

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
DESCRIPTION SHARES MARKET VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Informatica Corp. (a)...................................... 150,000 $ 11,521,875
Informix Corp. (a)......................................... 650,000 11,009,375
Integrated Device Technology, Inc. (a)..................... 300,000 11,887,500
Intersil Holding Corp., Class A (a)........................ 45,200 2,336,275
Iona Technologies--ADR (Ireland) (a)....................... 100,000 7,400,000
ISS Group, Inc. (a)........................................ 250,000 29,125,000
JDS Uniphase Corp. (a)..................................... 500,000 60,281,250
KEMET Corp. (a)............................................ 362,000 22,896,500
Keynote Systems, Inc. (a).................................. 125,000 12,781,250
Lam Research Corp. (a)..................................... 225,000 10,139,062
LSI Logic Corp. (a)........................................ 200,000 14,525,000
Mercury Interactive Corp. (a).............................. 250,000 19,812,500
Micrel, Inc. (a)........................................... 230,000 22,080,000
Micromuse, Inc. (a)........................................ 450,000 62,465,625
MRV Communications, Inc. (a)............................... 50,000 4,581,250
NetIQ Corp. (a)............................................ 20,700 1,383,019
Novellus Systems, Inc. (a)................................. 225,000 12,628,125
OpenTV Corp., Class A (a).................................. 31,100 3,681,462
Orbotech, Ltd. (a)......................................... 97,500 8,287,500
PC-Tel, Inc. (a)........................................... 28,900 2,174,725
Peregrine Systems, Inc. (a)................................ 500,000 33,531,250
PerkinElmer, Inc. ......................................... 125,000 8,312,500
Pharmacopeia, Inc. (a)..................................... 300,000 14,700,000
Pinnacle Systems, Inc. (a)................................. 300,000 9,975,000
Polycom, Inc. (a).......................................... 150,000 11,878,125
Powerwave Technologies, Inc. (a)........................... 250,000 31,250,000
Proxim, Inc. (a)........................................... 100,000 11,968,750
QIAGEN NV--ADR (Netherlands) (a)........................... 40,000 5,440,000
QLogic Corp. (a)........................................... 340,000 46,070,000
Radisys Corp. (a).......................................... 105,000 6,313,125
RADVision Ltd. (a)......................................... 13,000 680,875
Redback Networks, Inc. (a)................................. 50,000 14,996,875
SanDisk Corp. (a).......................................... 175,000 21,437,500
Scient Corp. (a)........................................... 50,000 4,534,375
SDL, Inc. (a).............................................. 450,000 95,793,750
Selectica, Inc. (a)........................................ 20,600 1,817,950
Semtech Corp. (a).......................................... 300,000 19,218,750
Silicon Image, Inc. (a).................................... 22,900 1,640,213
Silicon Storage Technology, Inc. (a)....................... 125,000 9,234,375
St Assembly Test Services Ltd.--ADR (Singapore) (a)........ 28,400 1,377,400
Symyx Technologies, Inc. (a)............................... 27,400 1,181,625
Techne Corp. (a)........................................... 250,000 17,250,000
Three-Five Systems, Inc. (a)............................... 200,000 12,000,000
</TABLE>

See Notes to Financial Statements

F-5
<PAGE> 187

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
DESCRIPTION SHARES MARKET VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Titan Corp. (a)............................................ 500,000 $ 25,500,000
TranSwitch Corp. (a)....................................... 187,500 18,023,438
TriQuint Semiconductor, Inc. (a)........................... 300,000 22,050,000
Turnstone Systems, Inc. (a)................................ 8,400 966,000
Varian Semiconductor Equipment Associates, Inc. (a)........ 350,000 22,268,750
VERITAS Software Corp. (a)................................. 112,500 14,737,500
Versata, Inc. (a).......................................... 10,600 637,988
Virata Corp. (a)........................................... 25,700 2,566,788
Vishay Intertechnology, Inc. (a)........................... 350,000 19,468,750
Vitria Technology, Inc. (a)................................ 16,000 1,613,000
WebTrends Corp. (a)........................................ 150,000 10,800,000
Zomax, Inc. (a)............................................ 325,000 19,581,250
Zoran Corp. (a)............................................ 175,000 9,854,687
--------------
1,433,311,155
--------------
UTILITIES 3.3%
AirGate PCS, Inc. (a)...................................... 45,300 4,779,150
Calpine Corp. (a).......................................... 350,000 32,900,000
Clarent Corp. (a).......................................... 60,000 5,411,250
Illuminet Holdings, Inc. (a)............................... 13,100 644,970
RF Micro Devices, Inc. (a)................................. 250,000 33,593,750
--------------
77,329,120
--------------
TOTAL LONG-TERM INVESTMENTS 96.7%
(Cost $1,289,693,421)............................................... 2,279,299,053
REPURCHASE AGREEMENT 3.2%
Warburg Dillon Read ($74,975,000 par, collateralized by U.S.
Government obligations in a pooled cash account, dated 03/31/00, to
be sold on 04/03/00 at $75,012,987) (Cost $74,975,000).............. 74,975,000
--------------
TOTAL INVESTMENTS 99.9%
(Cost $1,364,668,421)............................................. 2,354,274,053
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1%........................... 2,723,318
--------------
NET ASSETS 100.0%.................................................... $2,356,997,371
==============
</TABLE>

(a) Non-income producing security as this stock currently does not declare
dividends.

ADR--American Depositary Receipt.

* The common stocks are classified by sectors which represent broad groupings
of related industries.

See Notes to Financial Statements

F-6
<PAGE> 188

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2000

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,364,668,421)..................... $2,354,274,053
Cash........................................................ 3,138
Receivables:
Investments Sold.......................................... 45,708,764
Fund Shares Sold.......................................... 16,791,054
Dividends................................................. 100,260
Interest.................................................. 12,691
Unamortized Organizational Costs............................ 24,456
Other....................................................... 19,397
--------------
Total Assets............................................ 2,416,933,813
--------------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 30,219,549
Investments Purchased..................................... 25,419,440
Distributor and Affiliates................................ 2,283,905
Investment Advisory Fee................................... 1,571,579
Accrued Expenses............................................ 322,723
Trustees' Deferred Compensation and Retirement Plans........ 119,246
--------------
Total Liabilities....................................... 59,936,442
--------------
NET ASSETS.................................................. $2,356,997,371
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,174,619,430
Net Unrealized Appreciation................................. 989,605,632
Accumulated Net Realized Gain............................... 192,891,352
Accumulated Net Investment Loss............................. (119,043)
--------------
NET ASSETS.................................................. $2,356,997,371
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,205,790,902 and 32,203,301 shares of
beneficial interest issued and outstanding)............. $ 37.44
Maximum sales charge (5.75%* of offering price)......... 2.28
--------------
Maximum offering price to public........................ $ 39.72
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $948,484,491 and 26,170,809 shares of
beneficial interest issued and outstanding)............. $ 36.24
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $202,721,978 and 5,580,265 shares of
beneficial interest issued and outstanding)............. $ 36.33
==============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

F-7
<PAGE> 189

Statement of Operations
For the Year Ended March 31, 2000

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 4,411,270
Dividends (Net of foreign withholding taxes of $8,640)...... 348,204
--------------
Total Income............................................ 4,759,474
--------------
EXPENSES:
Investment Advisory Fee..................................... 8,558,616
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $1,528,368, $5,124,708 and $920,433,
respectively)............................................. 7,573,509
Shareholder Services........................................ 2,506,653
Custody..................................................... 133,654
Legal....................................................... 63,152
Trustees' Fees and Related Expenses......................... 60,060
Amortization of Organizational Costs........................ 21,056
Other....................................................... 861,878
--------------
Total Expenses.......................................... 19,778,578
Less Credits Earned on Overnight Cash Balances.......... 2,232
--------------
Net Expenses............................................ 19,776,346
--------------
NET INVESTMENT LOSS......................................... $ (15,016,872)
==============
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 285,606,283
--------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 168,181,463
End of the Period......................................... 989,605,632
--------------
Net Unrealized Appreciation During the Period............... 821,424,169
--------------
NET REALIZED AND UNREALIZED GAIN............................ $1,107,030,452
==============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,092,013,580
==============
</TABLE>

See Notes to Financial Statements

F-8
<PAGE> 190

Statement of Changes in Net Assets
For the Year Ended March 31, 2000, Nine Months Ended March 31, 1999 and the Year
Ended June 30, 1998

<TABLE>
<CAPTION>
YEAR ENDED
MARCH NINE MONTHS ENDED YEAR ENDED
31, 2000 MARCH 31, 1999 JUNE 30, 1998
----------------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss................ $ (15,016,872) $ (3,914,828) $ (3,698,217)
Net Realized Gain.................. 285,606,283 17,607,525 46,196,606
Net Unrealized Appreciation During
the Period....................... 821,424,169 98,128,461 30,931,626
-------------- ------------ ------------
Change in Net Assets from
Operations....................... 1,092,013,580 111,821,158 73,430,015
-------------- ------------ ------------
Distributions from Net Realized
Gain:
Class A Shares................... (44,926,473) (8,188,984) -0-
Class B Shares................... (42,825,702) (10,090,918) -0-
Class C Shares................... (7,505,533) (1,152,760) -0-
-------------- ------------ ------------
Total Distributions................ (95,257,708) (19,432,662) -0-
-------------- ------------ ------------

NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES............ 996,755,872 92,388,496 73,430,015
-------------- ------------ ------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.......... 1,278,094,894 293,035,698 165,163,266
Net Asset Value of Shares Issued
Through Dividend Reinvestment.... 84,362,153 18,218,328 -0-
Cost of Shares Repurchased......... (503,929,502) (184,145,939) (145,403,812)
-------------- ------------ ------------
NET CHANGE IN NET ASSETS FROM
CAPITAL TRANSACTIONS............. 858,527,545 127,108,087 19,759,454
-------------- ------------ ------------
TOTAL INCREASE IN NET ASSETS....... 1,855,283,417 219,496,583 93,189,469
NET ASSETS:
Beginning of the Period............ 501,713,954 282,217,371 189,027,902
-------------- ------------ ------------
End of the Period (Including
accumulated net investment loss
of $119,043, $66,257 and $51,572,
respectively).................... $2,356,997,371 $501,713,954 $282,217,371
============== ============ ============
</TABLE>

See Notes to Financial Statements

F-9
<PAGE> 191

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
MAY 29, 1996
(COMMENCEMENT
NINE MONTHS YEAR ENDED OF INVESTMENT
YEAR ENDED ENDED JUNE 30, OPERATIONS) TO
CLASS A SHARES MARCH 31, MARCH 31, ---------------- JUNE 30,
2000 (B) 1999 (B) 1998 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $ 17.137 $13.676 $ 9.948 $9.118 $9.430
-------- ------- ------- ------ ------
Net Investment Loss........ (.234) (.125) (.135) (.065) (.002)
Net Realized and Unrealized
Gain/Loss................ 22.414 4.445 3.863 .895 (.310)
-------- ------- ------- ------ ------
Total from Investment
Operations................. 22.180 4.320 3.728 .830 (.312)
Less Distributions from Net
Realized Gain.............. 1.874 .859 -0- -0- -0-
-------- ------- ------- ------ ------
NET ASSET VALUE, END OF THE
PERIOD..................... $ 37.443 $17.137 $13.676 $9.948 $9.118
======== ======= ======= ====== ======

Total Return (a)............. 133.67% 33.72%** 37.49% 9.10% (3.29%)**
Net Assets at End of the
Period (In millions)....... $1,205.8 $ 242.6 $ 117.5 $ 84.0 $ 30.3
Ratio of Expenses to Average
Net Assets*................ 1.25% 1.56% 1.44% 1.30% 1.29%
Ratio of Net Investment Loss
to Average Net Assets*..... (.86%) (1.22%) (1.09%) (.81%) (.50%)
Portfolio Turnover........... 139% 126%** 185% 186% 4%**

* If certain expenses had not been waived by Van Kampen, Total Return would have been
lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................. N/A N/A 1.61% 1.61% 2.05%
Ratio of Net Investment Loss
to Average Net Assets...... N/A N/A (1.26%) (1.12%) (1.25%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year of purchase. If the
sales charges were included, total returns would be lower.

(b) Based on average shares outstanding.

N/A = Not Applicable

See Notes to Financial Statements

F-10
<PAGE> 192

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
MAY 29, 1996
(COMMENCEMENT
NINE MONTHS YEAR ENDED OF INVESTMENT
YEAR ENDED ENDED JUNE 30, OPERATIONS) TO
CLASS B SHARES MARCH 31, MARCH 31, ---------------- JUNE 30,
2000 (B) 1999 (B) 1998 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $16.747 $13.461 $ 9.867 $9.112 $9.430
------- ------- ------- ------ ------
Net Investment Loss........ (.422) (.197) (.204) (.105) (.006)
Net Realized and Unrealized
Gain/Loss................ 21.791 4.342 3.798 .860 (.312)
------- ------- ------- ------ ------
Total from Investment
Operations................. 21.369 4.145 3.594 .755 (.318)
Less Distributions from Net
Realized Gain.............. 1.874 .859 -0- -0- -0-
------- ------- ------- ------ ------
NET ASSET VALUE, END OF THE
PERIOD..................... $36.242 $16.747 $13.461 $9.867 $9.112
======= ======= ======= ====== ======

Total Return (a)............. 131.91% 32.99%** 36.37% 8.34% (3.39%)**
Net Assets at End of the
Period (In millions)....... $ 948.5 $ 231.8 $ 148.4 $ 94.2 $ 25.5
Ratio of Expenses to Average
Net Assets*................ 2.00% 2.33% 2.20% 2.05% 2.06%
Ratio of Net Investment Loss
to Average Net Assets*..... (1.61%) (1.99%) (1.85%) (1.55%) (1.28%)
Portfolio Turnover........... 139% 126%** 185% 186% 4%**

* If certain expenses had not been waived by Van Kampen, Total Return would have been
lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................. N/A N/A 2.37% 2.35% 2.81%
Ratio of Net Investment Loss
to Average Net Assets...... N/A N/A (2.02%) (1.86%) (2.04%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 5%, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
fifth year. If the sales charge was included, total returns would be lower.

(b) Based on average shares outstanding.

N/A = Not Applicable

See Notes to Financial Statements

F-11
<PAGE> 193

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
MAY 29, 1996
(COMMENCEMENT
NINE MONTHS YEAR ENDED OF INVESTMENT
YEAR ENDED ENDED JUNE 30, OPERATIONS) TO
CLASS C SHARES MARCH 31, MARCH 31, ---------------- JUNE 30,
2000 (B) 1999 (B) 1998 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $16.762 $13.470 $ 9.869 $9.113 $9.430
------- ------- ------- ------ ------
Net Investment Loss........ (.447) (.197) (.203) (.103) (.006)
Net Realized and Unrealized
Gain/Loss................ 21.887 4.348 3.804 .859 (.311)
------- ------- ------- ------ ------
Total from Investment
Operations................. 21.440 4.151 3.601 .756 (.317)
Less Distributions from Net
Realized Gain.............. 1.874 .859 -0- -0- -0-
------- ------- ------- ------ ------
NET ASSET VALUE, END OF THE
PERIOD..................... $36.328 $16.762 $13.470 $9.869 $9.113
======= ======= ======= ====== ======

Total Return (a)............. 132.31% 32.96%** 36.47% 8.34% (3.39%)**
Net Assets at End of the
Period (In millions)....... $ 202.7 $ 27.4 $ 16.4 $ 10.8 $ 3.9
Ratio of Expenses to Average
Net Assets*................ 2.01% 2.33% 2.20% 2.05% 2.05%
Ratio of Net Investment Loss
to Average Net Assets*..... (1.62%) (1.98%) (1.85%) (1.54%) (1.28%)
Portfolio Turnover........... 139% 126%** 185% 186% 4%**

* If certain expenses had not been waived by Van Kampen, Total Return would have been
lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................. N/A N/A 2.36% 2.35% 2.81%
Ratio of Net Investment Loss
to Average Net Assets...... N/A N/A (2.02%) (1.85%) (2.04%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower.

(b) Based on average shares outstanding.

N/A = Not Applicable

See Notes to Financial Statements

F-12
<PAGE> 194

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Aggressive Growth Fund (the "Fund") is organized as a separate
diversified series of Van Kampen Equity Trust (the "Trust"), a Delaware business
trust, which is registered as an open-end management investment company under
the Investment Company Act of 1940, as amended. The Fund's investment objective
is to seek capital growth by investing primarily in a diversified portfolio of
common stocks and other equity securities. The Fund commenced investment
operations on May 29, 1996 with three classes of common shares, Class A, Class B
and Class C.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

A. SECURITY VALUATION Investments in securities listed on a securities exchange
are valued at their sale price as of the close of such securities exchange.
Unlisted securities and listed securities for which the last sales price is not
available are valued at the mean of the bid and asked prices. For those
securities where quotations or prices are not available, valuations are
determined in accordance with procedures established in good faith by the Board
of Trustees. Short-term securities with remaining maturities of 60 days or less
are valued at amortized cost, which approximates market value.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.

The Fund may invest in repurchase agreements which are short-term
investments in which the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other investment
companies advised by Van Kampen Investment Advisory Corp. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are collateralized by the underlying debt security. The
Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain

F-13
<PAGE> 195

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

the value of the underlying security at not less than the repurchase proceeds
due the Fund.

C. INCOME AND EXPENSES Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Income and expenses of the Fund
are allocated on a pro rata basis to each class of shares, except for
distribution and service fees and transfer agency costs which are unique to each
class of shares.

D. ORGANIZATIONAL COSTS The Fund will reimburse Van Kampen Funds Inc. or its
affiliates (collectively "Van Kampen") for costs incurred in connection with the
Fund's organization in the amount of $105,000. These costs are being amortized
on a straight line basis over the 60 month period ending May 28, 2001. The
Adviser has agreed that in the event any of the initial shares of the Fund
originally purchased by Van Kampen are redeemed by the Fund during the
amortization period, the Fund will be reimbursed for any unamortized
organizational costs in the same proportion as the number of shares redeemed
bears to the number of initial shares held at the time of redemption.

E. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.

Accumulated net realized gain/loss differs for financial and tax reporting
purposes as a result of losses relating to wash sale transactions.

At March 31, 2000, for federal income tax purposes, cost of long- and short-
term investments is $1,365,546,684; the aggregate gross unrealized appreciation
is $1,019,181,282 and the aggregate gross unrealized depreciation is
$30,453,913, resulting in net unrealized appreciation on long- and short-term
investments of $988,727,369.

F. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends
annually from net investment income and net realized gains, if any. Due to
inherent differences in the recognition of income, expenses and realized
gains/losses under generally accepted accounting principles and federal income
tax purposes, permanent differences between book and tax basis reporting for the
year ended March 31, 2000, the nine months ended March 31, 1999 and for the year
ended June 30, 1998 have been identified and appropriately reclassified. For the
year ended March 31, 2000, a permanent difference related to net operating loss
which may be used as an offset against short-term gains for tax purposes
totaling $14,964,086 has been reclassified from accumulated net realized gains
to

F-14
<PAGE> 196

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

accumulated net investment loss. For the nine months ended March 31, 1999, a
permanent difference related to a net operating loss totaling $3,900,143 has
been reclassified from accumulated net investment loss to capital. For the year
ended June 30, 1998, a permanent difference related to net operating loss which
may be used as an offset against short-term gains for tax purposes totaling
$124,267 has been reclassified from accumulated net realized gains to
accumulated net investment loss. The $3,557,256 of remaining tax basis net
operating loss was reclassified from accumulated net investment loss to capital.

G. EXPENSE REDUCTIONS During the year ended March 31, 2000, the Fund's custody
fee was reduced by $2,232 as a result of credits earned on overnight cash
balances.

2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
<S> <C>
First $500 million.......................................... .75 of 1%
Next $500 million........................................... .70 of 1%
Over $1 billion............................................. .65 of 1%
</TABLE>

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $48,200, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $166,100, representing Van Kampen's cost of providing accounting
and legal services to the Fund.

Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the year ended March 31, 2000,
the Fund recognized expenses of approximately $1,931,100. Transfer agency fees
are determined through negotiations with the Fund's Board of Trustees and are
based on competitive market benchmarks.

Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.

The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation

F-15
<PAGE> 197

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Fund. The maximum
annual benefit per trustee under the plan is $2,500.

At March 31, 2000, Van Kampen owned 100 shares each of Classes A, B and C.

3. CAPITAL TRANSACTIONS

At March 31, 2000, capital aggregated $624,037,002, $434,920,028 and
$115,662,400 for Classes A, B, and C, respectively. For the year ended March 31,
2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A.............................................. 28,901,927 $ 792,938,804
Class B.............................................. 15,130,699 372,428,551
Class C.............................................. 4,427,215 112,727,539
----------- --------------
Total Sales............................................ 48,459,841 $1,278,094,894
=========== ==============
Dividend Reinvestment:
Class A.............................................. 1,492,984 $ 39,967,184
Class B.............................................. 1,455,968 37,811,488
Class C.............................................. 252,919 6,583,481
----------- --------------
Total Dividend Reinvestment............................ 3,201,871 $ 84,362,153
=========== ==============
Repurchases:
Class A.............................................. (12,345,867) $ (366,411,624)
Class B.............................................. (4,256,570) (116,693,001)
Class C.............................................. (732,790) (20,824,877)
----------- --------------
Total Repurchases...................................... (17,335,227) $ (503,929,502)
=========== ==============
</TABLE>

F-16
<PAGE> 198

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

At March 31, 1999, capital aggregated $157,542,638, $141,372,990 and
$17,176,257 for Classes A, B, and C, respectively. For the nine months ended
March 31, 1999, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................... 16,304,723 $ 225,416,282
Class B............................................... 4,260,040 58,630,954
Class C............................................... 654,046 8,988,462
----------- -------------
Total Sales............................................. 21,218,809 $ 293,035,698
=========== =============
Dividend Reinvestment:
Class A............................................... 617,711 $ 7,881,994
Class B............................................... 748,531 9,356,636
Class C............................................... 78,313 979,698
----------- -------------
Total Dividend Reinvestment............................. 1,444,555 $ 18,218,328
=========== =============
Repurchases:
Class A............................................... (11,356,554) $(151,245,333)
Class B............................................... (2,191,661) (28,721,224)
Class C............................................... (315,445) (4,179,382)
----------- -------------
Total Repurchases....................................... (13,863,660) $(184,145,939)
=========== =============
</TABLE>

At June 30, 1998, capital aggregated $77,375,241, $103,908,446 and
$11,600,254 for Classes A, B, and C, respectively. For the year ended June 30,
1998, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................... 9,586,041 $ 113,481,993
Class B............................................... 3,875,397 46,006,833
Class C............................................... 476,868 5,674,440
----------- -------------
Total Sales............................................. 13,938,306 $ 165,163,266
=========== =============
Repurchases:
Class A............................................... (9,437,958) $(112,683,409)
Class B............................................... (2,400,562) (28,531,040)
Class C............................................... (359,118) (4,189,363)
----------- -------------
Total Repurchases....................................... (12,197,638) $(145,403,812)
=========== =============
</TABLE>

F-17
<PAGE> 199

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares purchased
on or after June 1, 1996, and any dividend reinvestment plan Class B shares
received thereon, automatically convert to Class A shares eight years after the
end of the calendar month in which the shares were purchased. Class B shares
purchased before June 1, 1996, and any dividend reinvestment plan Class B shares
received thereon, automatically convert to Class A shares six years after the
end of the calendar month in which the shares were purchased. For the year ended
March 31, 2000, no Class B shares converted to Class A shares. Class C shares
purchased before January 1, 1997, and any dividend reinvestment plan Class C
shares received thereon, automatically convert to Class A shares ten years after
the end of the calendar month in which such shares were purchased. Class C
shares purchased on or after January 1, 1997 do not possess a conversion
feature. For the year ended March 31, 2000, no Class C shares converted to Class
A shares. The CDSC will be imposed on most redemptions made within five years of
the purchase for Class B and one year of the purchase for Class C as detailed in
the following schedule.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
First...................................................... 5.00% 1.00%
Second..................................................... 4.00% None
Third...................................................... 3.00% None
Fourth..................................................... 2.50% None
Fifth...................................................... 1.50% None
Sixth and Thereafter....................................... None None
</TABLE>

For the year ended March 31, 2000, Van Kampen, as Distributor for the Fund,
received commissions on sales of the Fund's Class A shares of approximately
$860,000, and CDSC on redeemed shares of approximately $655,600. Sales charges
do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $2,298,722,633 and $1,577,164,936,
respectively.

5. DERIVATIVE FINANCIAL INSTRUMENTS

A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

F-18
<PAGE> 200

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or to generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in the unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly, except when
taking delivery of a security underlying a futures contract. In this instance,
the recognition of gain or loss is postponed until the disposal of the security
underlying the futures contract.

Upon entering into futures contracts, the Fund maintains, in a segregated
account with its custodian, cash or liquid securities with a value equal to its
obligation under the futures contracts. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin). There were no transactions in
futures contracts during the year ended March 31, 2000.

6. DISTRIBUTION AND SERVICE PLANS

The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.

Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these fees
for the year ended March 31, 2000, are payments retained by Van Kampen of
approximately $3,811,700.

7. BORROWINGS

F-19
<PAGE> 201

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

the credit facility meets or exceeds $650 million on a complex-wide basis, each
fund will be limited to its pro-rata percentage based on the net assets of each
participating fund. Interest on borrowings is charged under the agreement at a
rate of 0.50% above the federal funds rate per annum. An annual commitment fee
of 0.09% per annum is charged on the unused portion of the credit facility,
which each fund incurs based on its pro-rata percentage of quarterly net assets.
The Fund has not borrowed against the credit facility during the period.

F-20
<PAGE> 202

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN
GROWTH FUND

Van Kampen Growth Fund (the "Fund") is a mutual fund with the investment
objective to seek capital growth. The Fund's investment adviser seeks to achieve
the Fund's investment objective by investing primarily in common stocks and
other equity securities of growth companies.

The Fund is organized as a diversified series of the Van Kampen Equity
Trust, an open-end, management investment company (the "Trust").

TABLE OF CONTENTS
---------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information......................................... B-2
Investment Objective, Policies and Risks.................... B-4
Strategic Transactions...................................... B-8
Investment Restrictions..................................... B-16
Trustees and Officers....................................... B-17
Investment Advisory Agreement............................... B-27
Other Agreements............................................ B-28
Distribution and Service.................................... B-29
Transfer Agent.............................................. B-33
Portfolio Transactions and Brokerage Allocation............. B-33
Shareholder Services........................................ B-35
Redemption of Shares........................................ B-38
Contingent Deferred Sales Charge-Class A.................... B-38
Waiver of Class B and Class C Contingent Deferred Sales
Charges................................................... B-39
Taxation.................................................... B-41
Fund Performance............................................ B-45
Other Information........................................... B-48
Report of Independent Accountants........................... F-1
Financial Statements........................................ F-2
Notes to Financial Statements............................... F-12
</TABLE>

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED JULY 28, 2000.

GF SAI 7/00

<PAGE> 203

GENERAL INFORMATION

The Fund was originally organized as a series of the Trust under the name
Van Kampen American Capital Growth Fund on September 7, 1995. On July 14, 1998,
the Fund adopted its current name.

Morgan Stanley Dean Witter is a pre-eminent global financial services firm
that maintains leading market positions in each of its three primary businesses:
securities; asset management; and credit services.

The Fund currently offers three classes of shares, designated Class A
Shares, Class B Shares and Class C Shares. Other classes may be established from
time to time in accordance with provisions of the Declaration of Trust. Each
class of shares of the Fund generally is identical in all respects except that
each class bears certain distribution expenses and has exclusive voting rights
with respect to its distribution fee. Shares of the Trust entitle their holders
to one vote per share; however, separate votes are taken by each series on
matters affecting an individual series and separate votes are taken by each
class of a series on matters affecting an individual class of such series. For
example, a change in investment policy for a series would be voted upon by
shareholders of only the series

B-2
<PAGE> 204

involved and a change in the distribution fee for a class of a series would be
voted upon by shareholders of only the class of such series involved. Except as
otherwise described in the Prospectus or herein, shares do not have cumulative
voting rights, preemptive rights or any conversion, subscription or exchange
rights.

The Trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the Trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote (or such higher vote as may be required by the
1940 Act or other applicable law) and except that the Trustees cannot amend the
Declaration of Trust to impose any liability on shareholders, make any
assessment on shares or impose liabilities on the Trustees without approval from
each affected shareholder or Trustee, as the case may be.

B-3
<PAGE> 205

<TABLE>
<CAPTION>
Amount of
Ownership at Class Percentage
Name and Address of Record Holder July 3, 2000 of Shares Ownership
--------------------------------- ------------- --------- ----------
<S> <C> <C> <C>
Edward Jones & Co.......................... 349,140.67 A 13.59%
Attn: Mutual Fund 22,810.23 C 7.57%
Shareholder Accounting
201 Progress Pkwy
Maryland Heights, MO 63043-3009
Merrill Lynch Pierce Fenner & Smith Inc.... 140,315.21 A 5.46%
For the Sole Benefit of its Customers 58,338.81 C 19.36%
Attn: Fund Administration
4800 Deer Lake Drive East
2nd Floor
Jacksonville, FL 32246-6484
Prudential Securities Inc. FBO............. 30,147.53 C 10.03%
Mr. Charles J. Greco
Equity Account
1155 Bodine Rd.
Chester Springs, PA 19425-2006
</TABLE>

INVESTMENT OBJECTIVE, POLICIES AND RISKS

REPURCHASE AGREEMENTS

B-4
<PAGE> 206

other illiquid securities held by the Fund, would exceed the Fund's limitation
on illiquid securities described herein. The Fund does not bear the risk of a
decline in the value of the underlying security unless the seller defaults under
its repurchase obligations. In the event of the bankruptcy or other default of a
seller of a repurchase agreement, the Fund 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 Fund 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.

BORROWING AND REVERSE REPURCHASE AGREEMENTS

B-5
<PAGE> 207

any assets purchased with the proceeds of such borrowings appreciate as
anticipated by the Adviser, a portion of the Fund's assets may be required to be
liquidated to meet scheduled principal and interest payments with respect to
such borrowings. Any such liquidations may be at inopportune times and prices.
Utilization of investment leverage would result in a higher volatility of the
net asset value of the Fund. The effect of leverage in a declining market would
result in a greater decrease in net asset value to holders of the Fund's shares
than if the Fund were not leveraged.

LENDING OF SECURITIES

Consistent with applicable legal and regulatory requirements, the Fund may
lend its portfolio securities to broker-dealers, banks and other institutional
borrowers of securities provided that such loans are at all times secured by
collateral that is at least equal to the market value, determined daily, of the
loaned securities and are callable at any time by the Fund. The advantage of
such loans is that the Fund continues to receive the interest or dividends on
the loaned securities, while at the same time earning interest on the collateral
which is invested in short-term obligations or the Fund receives on agreed-upon
amount of interest from the borrower of the security. The Fund may pay
reasonable finders', administrative and custodial fees in connection with loans
of its securities. There is no assurance as to the extent to which securities
loans can be effected.

If the borrower fails to return the borrowed securities or maintain the
requisite amount of collateral, the loan automatically terminates, and the Fund
could use the collateral to replace the securities while holding the borrower
liable for any excess of replacement cost over collateral. As with any
extensions of credit, there are risks of delay in recovery and in some cases
even loss of rights in the collateral should the borrower of the securities fail
financially. However, these loans of portfolio securities will only be made to
firms deemed by the Adviser to be creditworthy and when the consideration which
can be earned from such loans is believed to justify the attendant risks. On
termination of the loan, the borrower is required to return the securities to
the Fund; any gains or loss in the market price during the loan would inure to
the Fund.

When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be

B-6
<PAGE> 208

appropriate, to permit the exercise of such rights if the matters involved would
have a material effect on the Fund's investment in the securities which are the
subject of the loan.

"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS

PORTFOLIO TURNOVER

ILLIQUID SECURITIES

B-7
<PAGE> 209

and sold to qualified institutional buyers under Rule 144A under the 1933 Act
("144A Securities") and are determined to be liquid under guidelines adopted by
and subject to the supervision of the Fund's Board of Trustees are not subject
to the limitation on illiquid securities. Such 144A Securities are subject to
monitoring and may become illiquid to the extent qualified institutional buyers
become, for a time, uninterested in purchasing such securities. Factors used to
determine whether 144A Securities are liquid include, among other things, a
security's trading history, the availability of reliable pricing information,
the number of dealers making quotes or making a market in such security and the
number of potential purchasers in the market for such security. For purposes
hereof, investments by the Fund in securities of other investment companies will
not be considered investments in restricted securities to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief (such as "no action" letters issued
by the staff of the SEC interpreting or providing guidance on the 1940 Act or
regulations thereunder) from the provisions of the 1940 Act, as amended from
time to time.

STRATEGIC TRANSACTIONS

Strategic Transactions have risks associated with them including possible
default by the other party to the transaction, illiquidity and, to the extent
the Adviser's view as to

B-8
<PAGE> 210

certain market movements is incorrect, the risk that the use of such Strategic
Transactions could result in losses greater than if they had not been used. Use
of put and call options may result in losses to the Fund, force the sale or
purchase of portfolio securities at inopportune times or for prices other than
current market values, limit the amount of appreciation the Fund can realize on
its investments or cause the Fund to hold a security it might otherwise sell.
The use of currency transactions can result in the Fund incurring losses as a
result of a number of factors including the imposition of exchange controls,
suspension of settlements, or the inability to deliver or receive a specified
currency. The use of options and futures transactions entails certain other
risks. In particular, the variable degree of correlation between price movements
of futures contracts and price movements in the related portfolio position of
the Fund creates the possibility that losses on the hedging instrument may be
greater than gains in the value of the Fund's position. In addition, futures and
options markets may not be liquid in all circumstances and certain
over-the-counter options may have no markets. As a result, in certain markets,
the Fund might not be able to close out a transaction without incurring
substantial losses, if at all. Although the use of these futures contracts and
options transactions for hedging should tend to minimize the risk of loss due to
a decline in the value of the hedged position, at the same time they tend to
limit any potential gain which might result from an increase in value of such
position. Finally, the daily variation margin requirements for futures contracts
would create a greater ongoing potential financial risk than would purchases of
options, where the exposure is limited to the cost of the initial premium.
Losses resulting from the use of Strategic Transactions would reduce net asset
value, and possibly income, and such losses can be greater than if the Strategic
Transactions had not been utilized. Income earned or deemed to be earned, if
any, by the Fund from its Strategic Transactions will generally be taxable.

OPTIONS

A put option gives the purchaser of the option, upon payment of a premium,
the right to sell, and the writer the obligation to buy, the underlying
security, commodity, index, currency or other instrument at the exercise price.
For instance, the Fund's purchase of a put option on a security might be
designed to protect its holdings in the underlying instrument (or, in some
cases, a similar instrument) against a substantial decline in the market value
by giving the Fund the right to sell such instrument at the option exercise
price. A call option, upon payment of a premium, gives the purchaser of the
option the right to buy, and the seller the obligation to sell, the underlying
instrument at the exercise price. The Fund's purchase of a call option on a
security, financial future, index, currency or other instrument might be
intended to protect the Fund against an increase in the price of the underlying
instrument that it intends to purchase in the future by fixing the price at
which it may purchase such instrument. An American style put or call option may
be exercised at any time during the option period while a European style put or
call option may be exercised only upon expiration or during a fixed period prior
thereto. The Fund is

B-9
<PAGE> 211

authorized to purchase and sell exchange listed options and over-the-counter
options ("OTC options"). Exchange listed options are issued by a regulated
intermediary such as the Options Clearing Corporation ("OCC"), which guarantees
the performance of the obligations of the parties to such options. The
discussion below uses the OCC as a paradigm, but is also applicable to other
financial intermediaries.

OTC options are purchased from or sold to securities dealers, financial
institutions or other parties ("Counterparties") through direct bilateral
agreement with the Counterparty. In contrast to exchange listed options, which
generally have standardized terms and performance mechanics, all the terms of an
OTC option, including such terms as method of settlement, term, exercise price,
premium, guarantees and security, are set by negotiation of the parties.

B-10
<PAGE> 212

Counterparty's credit to determine the likelihood that the terms of the OTC
option will be satisfied. The Fund will engage in OTC option transactions only
with U.S. government securities dealers recognized by the Federal Reserve Bank
of New York as "primary dealers", or broker dealers, domestic or foreign banks
or other financial institutions which have received (or the guarantors of the
obligation of which have received) a short-term credit rating of "A-1" from
Standard & Poor's ("S&P") or "P-1" from Moody's Investors Service, Inc.
("Moody's") or an equivalent rating from any other nationally recognized
statistical rating organization ("NRSRO"). The staff of the SEC currently takes
the position that, in general, over-the-counter options on securities purchased
by the Fund, and portfolio securities "covering" the amount of the Fund's
obligation pursuant to an over-the-counter option sold by it (the cost of the
sell-back plus the in-the-money amount, if any) are illiquid, and are subject to
the Fund's limitation on illiquid securities described herein.

FUTURES

The Fund may enter into financial futures contracts or purchase or sell put
and call options on such futures as a hedge against anticipated interest rate,
currency, equity or fixed-income market changes and for risk management
purposes. Futures generally are bought and sold on the commodities exchanges
where they are listed with payment of initial and variation margin as described
below. The purchase of a futures contract creates a firm obligation by the Fund,
as purchaser, to take delivery from the seller the specific type of financial
instrument called for in the contract at a specific future time for a specified
price. The sale of a futures contract creates a firm obligation by the Fund, as
seller, to deliver to the buyer the specific type of financial instrument called
for in the contract at a specific future time for a specified price (or, with
respect to index futures and Eurodollar instruments, the net cash amount).
Options on futures contracts are similar to options on securities except that an
option on a futures contract gives the purchaser the right in return for the
premium paid to assume a position in a futures contract and obligates the seller
to deliver such option.

B-11
<PAGE> 213

OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES

The Fund also may purchase and sell call and put options on securities
indices and other financial indices and in so doing can achieve many of the same
objectives it would achieve through the sale or purchase of options on
individual securities or other instruments. Options on securities indices and
other financial indices are similar to options on a security or other instrument
except that, rather than settling by physical delivery of the underlying
instrument, they settle by cash settlement, i.e., an option on an index gives
the holder the right to receive, upon exercise of the option, an amount of cash
if the closing level of the index upon which the option is based exceeds, in the
case of a call, or is less than, in the case of a put, the exercise price of the
option (except if, in the case of an OTC option, physical delivery is
specified). This amount of cash is equal to the excess of the closing price of
the index over the exercise price of the option, which also may be multiplied by
a formula value. The seller of the option is obligated, in return for the
premium received, to make delivery of this amount. The gain or loss on an option
on an index depends on price movements in the instruments making up the market,
market segment, industry or other composite on which the underlying index is
based, rather than price movements in individual securities, as is the case with
respect to options on securities.

CURRENCY TRANSACTIONS

The Fund may engage in currency transactions with Counterparties in order
to manage the value of currencies against fluctuations in relative value.
Currency transactions

B-12
<PAGE> 214

include forward currency contracts, exchange listed currency futures, exchange
listed and OTC options on currencies, and currency swaps. A forward currency
contract involves a privately negotiated obligation to purchase or sell (with
delivery generally required) a specific currency at a future date, which may be
any fixed number of days from the date of the contract agreed upon by the
parties, at a price set at the time of the contract. A currency swap is an
agreement to exchange cash flows based on the notional difference among two or
more currencies and operates similarly to an interest rate swap, which is
described below. The Fund may enter into currency transactions with
Counterparties rated A-1 or P-1 by S&P or Moody's, respectively, or that have an
equivalent rating from an NRSRO or (except for OTC options) are determined to be
of equivalent credit quality by the Adviser.

To reduce the effect of currency fluctuations on the value of existing or
anticipated holdings of portfolio securities, the Fund may also engage in proxy
hedging. Proxy hedging is often used when the currency to which the Fund's
portfolio is exposed is difficult to hedge or to hedge against the dollar. Proxy
hedging entails entering into a forward contract to sell a currency whose
changes in value are generally considered to be linked to a currency or
currencies in which some or all of the Fund's portfolio securities are or are
expected to be denominated, and to buy U.S. dollars. The amount of the contract
would not exceed the value of the Fund's securities denominated in linked
currencies. For example, if the Adviser considers the Austrian schilling is
linked to the German deutschemark (the "D-mark"), the Fund holds securities
denominated in Austrian schillings and the Adviser believes that the value of
schillings will decline against the U.S. dollar, the Adviser may enter into a
contract to sell D-marks and buy dollars. Currency hedging involves some of the
same risks and considerations as other transactions with similar instruments.
Currency transactions can result in losses to the Fund if the currency being
hedged fluctuates in value to a degree or in a direction that is not
anticipated. Further, there is the risk that the perceived linkage between
various currencies may not be present or may not be present during the
particular time that the Fund is engaging in proxy hedging. If the Fund enters
into a currency hedging transaction, the Fund will comply with the asset
segregation requirements described below.

B-13
<PAGE> 215

COMBINED TRANSACTIONS

RISKS OF STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES

When conducted outside the United States, Strategic Transactions may not be
regulated as rigorously as in the United States, may not involve a clearing
mechanism and related guarantees, and are subject to the risk of governmental
actions affecting trading in, or the prices of, foreign securities, currencies
and other instruments. The value of such positions also could be adversely
affected by: (i) other complex foreign political, legal and economic factors,
(ii) lesser availability than in the United States of data on which to make
trading decisions, (iii) delays in the Fund's ability to act upon economic
events occurring in foreign markets during non-business hours in the United
States, (iv) the imposition of different exercise and settlement terms and
procedures and margin requirements than in the United States, and (v) lower
trading volume and liquidity.

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

B-14
<PAGE> 216

securities or assets must be covered at all times by the securities, instruments
or currency required to be delivered, or, subject to any regulatory
restrictions, an amount of cash or liquid securities at least equal to the
current amount of the obligation must be segregated with the custodian. The
segregated assets cannot be sold or transferred unless equivalent assets are
substituted in their place or it is no longer necessary to segregate them. For
example, a call option written by the Fund will require the Fund to hold the
securities subject to the call (or securities convertible into the needed
securities without additional consideration) or to segregate cash or liquid
securities sufficient to purchase and deliver the securities if the call is
exercised. A call option sold by the Fund on an index will require the Fund to
own portfolio securities which correlate with the index or to segregate cash or
liquid securities equal to the excess of the index value over the exercise price
on a current basis. A put option written by the Fund requires the Fund to
segregate cash or liquid securities equal to the exercise price. A currency
contract which obligates the Fund to buy or sell currency will generally require
the Fund to hold an amount of that currency or liquid securities denominated in
that currency equal to the Fund's obligations or to segregate cash or liquid
securities equal to the amount of the Fund's obligation.

B-15
<PAGE> 217

transaction terminates at the time of or after the primary transaction no
segregation is required, but if it terminates prior to such time, assets equal
to any remaining obligation would need to be segregated.

INVESTMENT RESTRICTIONS

1. Purchase any securities (other than obligations issued or guaranteed by
the U.S. government or by its instrumentalities), if, as a result, more
than 5% of the Fund's total assets (taken at current value) would then be
invested in securities of a single issuer or, if, as a result, such Fund
would hold more than 10% of the outstanding voting securities of an
issuer; except that up to 25% of the Fund's total assets may be invested
without regard to such limitations and except that the Fund may purchase
securities of other investment companies without regard to such limitation
to the extent permitted by (i) the 1940 Act, as amended from time to time,
(ii) the rules and regulations promulgated by the SEC under the 1940 Act,
as amended from time to time or (iii) an exemption or other relief from
the provisions of the 1940 Act, as amended from time to time.

3. Issue senior securities, borrow money from banks or enter into reverse
repurchase agreements with banks in the aggregate in excess of 33 1/3% of
the Fund's total assets (after giving effect to any such borrowing); which
amount excludes no more than 5% in borrowings and reverse repurchase
agreements with any entity for temporary purposes. The Fund will not
mortgage, pledge or hypothecate any assets other than in connection with
issuances of senior securities, borrowings, delayed delivery and when
issued transactions and strategic transactions.

B-16
<PAGE> 218

property in connection with maintenance of the value of, or the Fund's
interest with respect to, the securities owned by the Fund.

6. Act as an underwriter of securities, except to the extent the Fund may be
deemed to be an underwriter in connection with the sale of securities held
in its portfolio.

7. Make investments for the purpose of exercising control or participation in
management, except to the extent that exercise by the Fund of its rights
under agreements related to portfolio securities would be deemed to
constitute such control or participation and except that the Fund may
purchase securities of other investment companies to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from
time to time or (iii) an exemption or other relief from the provisions of
the 1940 Act, as amended from time to time.

9. Invest in interests in oil, gas, or other mineral exploration or
development programs, except pursuant to the exercise by the Fund of its
rights under agreements relating to portfolio securities.

TRUSTEES AND OFFICERS

B-17
<PAGE> 219

System Inc., Van Kampen Recordkeeping Services Inc., American Capital
Contractual Services, Inc., Van Kampen Trust Company, Van Kampen Exchange Corp.
and Van Kampen Investor Services Inc. ("Investor Services"). Advisory Corp. and
Asset Management sometimes are referred to herein collectively as the
"Advisers". For purposes hereof, the term "Fund Complex" includes each of the
open-end investment companies advised by the Advisers (excluding Van Kampen
Exchange Fund).

TRUSTEES

B-18
<PAGE> 220

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Mitchell M. Merin*........................ President and Chief Operating Officer of Asset
Two World Trade Center Management of Morgan Stanley Dean Witter since
66th Floor December 1998. President and Director since
New York, NY 10048 April 1997 and Chief Executive Officer since
Date of Birth: 08/13/53 June 1998 of Morgan Stanley Dean Witter
Age: 46 Advisors Inc. and Morgan Stanley Dean Witter
Services Company Inc. Chairman, Chief Executive
Officer and Director of Morgan Stanley Dean
Witter Distributors Inc. since June 1998.
Chairman and Chief Executive Officer since June
1998, and Director since January 1998, of
Morgan Stanley Dean Witter Trust FSB. Director
of various Morgan Stanley Dean Witter
subsidiaries. President of the Morgan Stanley
Dean Witter Funds and Discover Brokerage Index
Series since May 1999. Trustee/Director of each
of the funds in the Fund Complex. Previously
Chief Strategic Officer of Morgan Stanley Dean
Witter Advisors Inc. and Morgan Stanley Dean
Witter Services Company Inc. and Executive Vice
President of Morgan Stanley Dean Witter
Distributors Inc. April 1997-June 1998, Vice
President of the Morgan Stanley Dean Witter
Funds and Discover Brokerage Index Series May
1997-April 1999, and Executive Vice President
of Dean Witter, Discover & Co.
Jack E. Nelson............................ President and owner, Nelson Investment Planning
423 Country Club Drive Services, Inc., a financial planning company
Winter Park, FL 32789 and registered investment adviser in the State
Date of Birth: 02/13/36 of Florida. President and owner, Nelson Ivest
Age: 64 Brokerage Services Inc., a member of the
National Association of Securities Dealers,
Inc. and Securities Investors Protection Corp.
Trustee/Director of each of the funds in the
Fund Complex.
Richard F. Powers, III*................... Chairman, President and Chief Executive Officer
1 Parkview Plaza of Van Kampen Investments. Chairman, Director
P.O. Box 5555 and Chief Executive Officer of the Advisers,
Oakbrook Terrace, IL 60181-5555 the Distributor, Van Kampen Advisors Inc. and
Date of Birth: 02/02/46 Van Kampen Management Inc. Director and officer
Age: 54 of certain other subsidiaries of Van Kampen
Investments. Trustee/Director and President of
each of the funds in the Fund Complex. Trustee,
President and Chairman of the Board of other
investment companies advised by the Advisers
and their affiliates, and Chief Executive
Officer of Van Kampen Exchange Fund. Prior to
May 1998, Executive Vice President and Director
of Marketing at Morgan Stanley Dean Witter and
Director of Dean Witter Discover & Co. and Dean
Witter Realty. Prior to 1996, Director of Dean
Witter Reynolds Inc.
</TABLE>

B-19
<PAGE> 221

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Phillip B. Rooney......................... Vice Chairman (since April 1997) and Director
One ServiceMaster Way (since 1994) of The ServiceMaster Company, a
Downers Grove, IL 60515 business and consumer services company.
Date of Birth: 07/08/44 Director of Illinois Tool Works, Inc., a
Age: 56 manufacturing company and the Urban Shopping
Centers Inc., a retail mall management company.
Trustee, University of Notre Dame.
Trustee/Director of each of the funds in the
Fund Complex. Prior to 1998, Director of Stone
Smurfit Container Corp., a paper manufacturing
company. From May 1996 through February 1997 he
was President, Chief Executive Officer and
Chief Operating Officer of Waste Management,
Inc., an environmental services company, and
from November 1984 through May 1996 he was
President and Chief Operating Officer of Waste
Management, Inc.
Fernando Sisto............................ Professor Emeritus. Prior to August 1996, a
155 Hickory Lane George M. Bond Chaired Professor with Stevens
Closter, NJ 07624 Institute of Technology, and prior to 1995,
Date of Birth: 08/02/24 Dean of the Graduate School, Stevens Institute
Age: 75 of Technology. Director, Dynalysis of
Princeton, a firm engaged in engineering
research. Trustee/Director of each of the funds
in the Fund Complex.
Wayne W. Whalen*.......................... Partner in the law firm of Skadden, Arps,
333 West Wacker Drive Slate, Meagher & Flom (Illinois), legal counsel
Chicago, IL 60606 to the funds in the Fund Complex, and other
Date of Birth: 08/22/39 investment companies advised by the Advisers.
Age: 60 Trustee/Director of each of the funds in the
Fund Complex, and Trustee/ Managing General
Partner of other investment companies advised
by the Advisers.
Suzanne H. Woolsey........................ Chief Operating Officer of the National Academy
2101 Constitution Ave., N.W. of Sciences/National Research Council, an
Room 206 independent, federally chartered policy
Washington, D.C. 20418 institution, since 1993. Director of Neurogen
Date of Birth: 12/27/41 Corporation, a pharmaceutical company, since
Age: 58 January 1998. Director of the German Marshall
Fund of the United States, Trustee of Colorado
College, and Vice Chair of the Board of the
Council for Excellence in Government.
Trustee/Director of each of the funds in the
Fund Complex. Prior to 1993, Executive Director
of the Commission on Behavioral and Social
Sciences and Education at the National Academy
of Sciences/ National Research Council. From
1980 through 1989, Partner of Coopers &
Lybrand.
</TABLE>

------------------------------------

B-20
<PAGE> 222

OFFICERS

Messrs. Smith, Santo, Ciccarone, Reynoldson, Sullivan and Zimmermann are
located at 1 Parkview Plaza, Oakbrook Terrace, IL 60181-5555. Mr. Boyd is
located at 2800 Post Oak Blvd., Houston, TX 77056.

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>
A. Thomas Smith III.................. Executive Vice President, General Counsel,
Date of Birth: 12/14/56 Secretary and Director of Van Kampen Investments,
Age: 43 the Advisers, Van Kampen Advisors Inc., Van Kampen
Vice President and Secretary Management Inc., the Distributor, American Capital
Contractual Services, Inc., Van Kampen Exchange
Corp., Van Kampen Recordkeeping Services Inc.,
Investor Services, Van Kampen Insurance Agency of
Illinois Inc. and Van Kampen System Inc. Vice
President and Secretary/Vice President, Principal
Legal Officer and Secretary of other investment
companies advised by the Advisers or their
affiliates. Vice President and Secretary of each of
the funds in the Fund Complex. Prior to January
1999, Vice President and Associate General Counsel
to New York Life Insurance Company ("New York
Life"), and prior to March 1997, Associate General
Counsel of New York Life. Prior to December 1993,
Assistant General Counsel of The Dreyfus
Corporation. Prior to August 1991, Senior
Associate, Willkie Farr & Gallagher. Prior to
January 1989, Staff Attorney at the Securities and
Exchange Commission, Division of Investment
Management, Office of Chief Counsel.

B-21
<PAGE> 223

John R. Reynoldson................... Senior Vice President and Co-head of the Fixed
Date of Birth: 05/15/53 Income Department of the Advisers, Van Kampen
Age:47 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he managed the investment grade
taxable group for the Adviser since July 1999. From
July 1988 to June 1999, he managed the government
securities bond group for Asset Management. Mr.
Reynoldson has been with Asset Management since
April 1987, and has been a Senior Vice President of
Asset Management since July 1988. He has been a
Senior Vice President of the Adviser and Van Kampen
Management Inc. since June 1995 and Senior Vice
President of Van Kampen Advisors Inc. since June
2000.

B-22
<PAGE> 224

B-23
<PAGE> 225

or after attaining the age of 60, is eligible to receive a retirement benefit
equal to $2,500 per year for each of the ten years following such retirement
from such Fund. Non-Affiliated Trustees retiring prior to the age of 60 or with
fewer than 10 years but more than 5 years of service may receive reduced
retirement benefits from such Fund. Each trustee/director has served as a member
of the Board of Trustees of the Fund since he or she was first appointed or
elected in the year set forth below. The retirement plan contains a Fund Complex
retirement benefit cap of $60,000 per year.

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

------------------------------------

B-24
<PAGE> 226

the deferred compensation obligation. The details of cumulative deferred
compensation (including interest) for each operating series of the
Registrant as of March 31, 2000 are shown in Table C below. The deferred
compensation plan is described above the Compensation Table.

B-25
<PAGE> 227

advisory process. Exceptions to these and other provisions of the Code of Ethics
may be granted in particular circumstances after review by appropriate
personnel.

As of July 3, 2000, the trustees and officers of the Fund as a group owned
less than 1% of the shares of the Fund.

TABLE A

2000 AGGREGATE COMPENSATION FROM THE TRUST AND EACH SERIES

------------------------------------

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

TABLE B

2000 AGGREGATE COMPENSATION DEFERRED FROM

THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL ----------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 3/31 $2,340 $1,778 $2,340 $1,170 $2,340 $2,340 $1,170 $2,340 $ 0
Great American Companies
Fund(1)....................... 3/31 1,202 802 1,202 601 1,202 1,202 601 1,202 0
Growth Fund..................... 3/31 1,388 940 1,388 694 1,388 1,388 694 1,388 0
Mid Cap Value Fund(1)........... 3/31 1,201 801 1,201 601 1,201 1,201 601 1,201 0
Prospector Fund(1).............. 3/31 1,203 803 1,203 602 1,203 1,203 602 1,203 0
Select Growth Fund*............. 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund............ 3/31 801 801 801 400 801 801 400 801 0
Utility Fund.................... 3/31 1,405 952 1,405 703 1,405 1,405 703 1,405 0
------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Trust Total............ $9,540 $6,877 $9,540 $4,771 $9,540 $9,540 $4,771 $9,540 $ 0
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

B-26
<PAGE> 228

TABLE C

2000 CUMULATIVE COMPENSATION DEFERRED

(PLUS INTEREST) FROM THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
CURRENT TRUSTEES
FISCAL -----------------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund....... 3/31 $15,694 $2,622 $12,224 $7,764 $28,302 $13,161 $ 6,960 $18,446 $0
Growth Fund.................. 3/31 11,377 1,453 7,665 7,594 19,459 11,021 5,405 13,700 0
Select Growth Fund*.......... 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund......... 3/31 999 1,247 899 557 1,155 1,377 566 1,063 0
Utility Fund................. 3/31 12,628 1,475 12,464 27,182 37,021 10,454 8,316 29,366 0
------- ------ ------- ------- ------- ------- ------- ------- --
Equity Trust Total.......... $40,698 $6,797 $33,252 $43,097 $85,937 $36,013 $21,247 $62,575 $0

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March 31,
2000.

TABLE D

YEAR OF ELECTION OR APPOINTMENT TO EACH SERIES OF THE TRUST

------------------------------------

* The Select Growth Fund commenced investment operations in June 2000.

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objective. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Board of Trustees and
permits its officers and employees to serve without compensation as trustees of
the Trust or officers of the Fund if elected to such positions. The Fund,
however, bears the cost of its day-to-day operations, including service fees,
distribution fees, custodian fees, legal and independent accountant fees, the
costs of reports and proxies to shareholders, compensation of trustees of the
Trust (other than those who are affiliated persons of the Adviser, Distributor
or Van Kampen Investments), and all other ordinary business expenses not
specifically assumed by the Adviser. The Advisory Agreement also provides that
the Adviser shall not be liable to the Fund for error of judgment or of loss, or
for any loss suffered by the Fund in connection with the matters to which the
Advisory Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Adviser in the performance of
its obligations and duties, or by its reckless disregard of its obligations and
duties under the Advisory Agreement.

B-27
<PAGE> 229

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, the Adviser received
approximately $1,205,200, $698,900 and $628,500, respectively, in advisory fees
from the Fund.

OTHER AGREEMENTS

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Advisory Corp. received
approximately $54,200, $55,800 and $39,500, respectively, in accounting services
fees from the Fund.

B-28
<PAGE> 230

the total costs for legal services provided to funds distributed by the
Distributor, one half of such costs are allocated equally to each fund and the
remaining one half of such costs are allocated to specific funds based on
monthly time records.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Van Kampen Investments
received approximately $17,300, $6,300 and $10,600, respectively, in legal
services fees from the Fund.

DISTRIBUTION AND SERVICE

<TABLE>
<CAPTION>
Total Amounts
Underwriting Retained by
Commissions Distributor
------------ -----------
<S> <C> <C>
Fiscal year ended March 31, 2000....................... $126,600 $17,900
Fiscal period ended March 31, 1999..................... $109,154 $15,228
Fiscal year ended June 30, 1998........................ $236,777 $38,227
</TABLE>

B-29
<PAGE> 231

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

B-30
<PAGE> 232

The Distributor must submit quarterly reports to the Board of Trustees of
the Trust, of which the Fund is a series, setting forth separately by class of
shares all amounts paid

B-31
<PAGE> 233

Because of fluctuation in net asset value, the plan fees with respect to a
particular Class B Share or Class C Share may be greater or less than the amount
of the initial commission (including carrying cost) paid by the Distributor with
respect to such share. In such circumstances, a shareholder of a share may be
deemed to incur expenses attributable to other shareholders of such class. As of
March 31, 2000, there were $1,159,136 and $2,134 of unreimbursed
distribution-related expenses with respect to Class B Shares and Class C Shares,
respectively, representing 1.00% and 0.02% of the Fund's net assets attributable
to Class B Shares and Class C Shares, respectively. If the Plans are terminated
or not continued, the Fund would not be contractually obligated to pay the
Distributor for any expenses not previously reimbursed by the Fund or recovered
through contingent deferred sales charges.

B-32
<PAGE> 234

For the fiscal year ended March 31, 2000, the Fund's aggregate expenses
paid under the Plans for Class A Shares were $157,675 or 0.25% of the Class A
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for payments made to financial intermediaries for servicing Class A
shareholders and for administering the Class A Share Plans. For the fiscal year
ended March 31, 2000, the Fund's aggregate expenses paid under the Plans for
Class B Shares were $764,614 or 1.00% of the Class B Shares' average daily net
assets. Such expenses were paid to reimburse the Distributor for the following
payments: $574,442 for commissions and transaction fees paid to financial
intermediaries in respect of sales of Class B Shares of the Fund and $190,172
for fees paid to financial intermediaries for servicing Class B shareholders and
administering the Class B Share Plans. For the fiscal year ended March 31, 2000,
the Fund's aggregate expenses paid under the Plans for Class C Shares were
$80,632 or 1.00% of the Class C Shares' average daily net assets. Such expenses
were paid to reimburse the Distributor for the following payments: $25,276 for
commissions and transaction fees paid to financial intermediaries in respect of
sales of Class C Shares of the Fund and $55,356 for fees paid to financial
intermediaries for servicing Class C shareholders and administering the Class C
Share Plans.

From time to time, the Distributor may enter into agreements with
broker-dealers to offer the Fund through retirement plan alliance programs that
offer multiple fund families. These programs may have special investment
minimums and operational requirements. For more information, trustees and other
fiduciaries should contact the Distributor.

TRANSFER AGENT

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

B-33
<PAGE> 235

reliability, integrity and financial condition and the firm's execution
capability, the size and breadth of the market for the security, the size of and
difficulty in executing the order, and the best net price. There are many
instances when, in the judgment of the Adviser, more than one firm can offer
comparable execution services. In selecting among such firms, consideration may
be given to those firms which supply research and other services in addition to
execution services. The Adviser is authorized to pay higher commissions to
brokerage firms that provide it with investment and research information than to
firms which do not provide such services if the Adviser determines that such
commissions are reasonable in relation to the overall services provided. No
specific value can be assigned to such research services which are furnished
without cost to the Adviser. Since statistical and other research information is
only supplementary to the research efforts of the Adviser to the Fund and still
must be analyzed and reviewed by its staff, the receipt of research information
is not expected to reduce its expenses materially. The investment advisory fee
is not reduced as a result of the Adviser's receipt of such research services.
Services provided may include (a) furnishing advice as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities; (b)
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody). Research
services furnished by firms through which the Fund effects its securities
transactions may be used by the Adviser in servicing all of its advisory
accounts; not all of such services may be used by the Adviser in connection with
the Fund. The Adviser also may place portfolio transactions, to the extent
permitted by law, with brokerage firms affiliated with the Fund, the Adviser or
the Distributor and with brokerage firms participating in the distribution of
the Fund's shares if it reasonably believes that the quality of execution and
the commission are comparable to that available from other qualified firms.
Similarly, to the extent permitted by law and subject to the same considerations
on quality of execution and comparable commission rates, the Adviser may direct
an executing broker to pay a portion or all of any commissions, concessions or
discounts to a firm supplying research or other services or to a firm
participating in the distribution of the Fund's shares.

The Adviser may place portfolio transactions at or about the same time for
other advisory accounts, including other investment companies. The Adviser seeks
to allocate portfolio transactions equitably whenever concurrent decisions are
made to purchase or sell securities for the Fund and another advisory account.
In some cases, this procedure could have an adverse effect on the price or the
amount of securities available to the Fund. In making such allocations among the
Fund and other advisory accounts, the main factors considered by the Adviser are
the respective sizes of the Fund and other advisory accounts, the respective
investment objectives, the relative size of portfolio holdings of the same or
comparable securities, the availability of cash for investment, the size of
investment commitments generally held and opinions of the persons responsible
for recommending the investment.

B-34
<PAGE> 236

be reasonable and fair compared to the commissions, fees or other remuneration
received or to be received by other brokers in connection with comparable
transactions involving similar securities during a comparable period of time.
The rule and procedures also contain review requirements and require the Adviser
to furnish reports to the Trustees and to maintain records in connection with
such reviews. After consideration of all factors deemed relevant, the Trustees
will consider from time to time whether the advisory fee for the Fund will be
reduced by all or a portion of the brokerage commission given to affiliated
brokers.

The Fund paid the following commissions to all brokers and affiliated
brokers during the years/period shown:

Commissions Paid:

<TABLE>
<CAPTION>
Affiliated
Brokers
-----------------
All Morgan Dean
Brokers Stanley Witter
------- ------- ------
<S> <C> <C> <C>
Fiscal year ended March 31, 2000..................... $352,031 $14,581 $-0-
Fiscal period ended March 31, 1999................... $224,275 $ -0- $-0-
Fiscal year ended June 30, 1998...................... $259,035 $ -0- $-0-
Fiscal 2000 Percentages:
Commissions with affiliate to total commissions.... 4.14% 0%
Value of brokerage transactions with affiliate to
total
transactions.................................... .01% 0%
</TABLE>

During the fiscal year ended March 31, 2000, the Fund paid $266,343 in
brokerage commissions on transactions totaling $239,735,432 to brokers selected
primarily on the basis of research services provided to the Adviser.

SHAREHOLDER SERVICES

INVESTMENT ACCOUNT

B-35
<PAGE> 237

or redemptions. Additional shares may be purchased at any time through
authorized dealers or by mailing a check and detailed instructions directly to
Investor Services.

SHARE CERTIFICATES

RETIREMENT PLANS

AUTOMATED CLEARING HOUSE("ACH") DEPOSITS

Shareholders can use ACH to have redemption proceeds deposited
electronically into their bank accounts. Redemption proceeds transferred to a
bank account via the ACH plan are available to be credited to the account on the
second business day following normal payment. In order to utilize this option,
the shareholder's bank must be a member of ACH. In addition, the shareholder
must fill out the appropriate section of the account application. The
shareholder must also include a voided check or deposit slip from the bank
account into which redemption proceeds are to be deposited together with the
completed application. Once Investor Services has received the application and
the voided check or deposit slip, such shareholder's designated bank account,
following any redemption, will be credited with the proceeds of such redemption.
Once enrolled in the ACH plan, a shareholder may terminate participation at any
time by writing Investor Services or by calling (800) 341-2911 ((800) 421-2833
for the hearing impaired).

DIVIDEND DIVERSIFICATION

B-36
<PAGE> 238

are retirement accounts, they must both be for the same class and of the same
type of retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit
Sharing Keogh) and for the benefit of the same individual. If a qualified,
pre-existing account does not exist, the shareholder must establish a new
account subject to minimum investment and other requirements of the fund into
which distributions would be invested. Distributions are invested into the
selected fund at its net asset value per share as of the payable date of the
distribution from the Fund.

SYSTEMATIC WITHDRAWAL PLAN

EXCHANGE PRIVILEGE

All shareholders will be limited to eight exchanges per fund during a
rolling 365-day period.

B-37
<PAGE> 239

This policy does not apply to money market funds, systematic exchange
plans, or employer-sponsored retirement plans.

REINSTATEMENT PRIVILEGE

REDEMPTION OF SHARES

CONTINGENT DEFERRED SALES CHARGE-CLASS A

B-38
<PAGE> 240

CDSC-Class A is payable, it is assumed that shares being redeemed first are any
shares in the shareholder's account not subject to a contingent deferred sales
charge followed by shares held the longest in the shareholder's account. The
contingent deferred sales charge is assessed on an amount equal to the lesser of
the then current market value or the cost of the shares being redeemed.
Accordingly, no sales charge is imposed on increases in net asset value above
the initial purchase price. In addition, no sales charge is assessed on shares
derived from reinvestment of dividends or capital gain dividends.

WAIVER OF CLASS B AND CLASS C

CONTINGENT DEFERRED SALES CHARGES

As described in the Prospectus under "Redemption of Shares," redemptions of
Class B Shares and Class C Shares will be subject to a contingent deferred sales
charge ("CDSC-Class B and C"). The CDSC-Class B and C is waived on redemptions
of Class B Shares and Class C Shares in the circumstances described below:

REDEMPTION UPON DEATH OR DISABILITY

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

B-39
<PAGE> 241

Section 408(d)(4) or (5) of the Code, the return of excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2), the financial hardship of the
employee pursuant to U.S. Treasury Regulations Section 1.401(k)-1(d)(2), or from
the death or disability of the employee (see Code Section 72(m)(7) and
72(t)(2)(A)(ii)). In addition, the charge will be waived on any minimum
distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC-Class B and C for any
distributions from IRAs or other retirement plans not specifically described
above.

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

NO INITIAL COMMISSION OR TRANSACTION FEE

INVOLUNTARY REDEMPTIONS OF SHARES

REINVESTMENT OF REDEMPTION PROCEEDS

B-40
<PAGE> 242

Shares of the Fund, provided that the reinvestment is effected within 180 days
after such redemption and the shareholder has not previously exercised this
reinvestment privilege with respect to Class C Shares of the Fund. Shares
acquired in this manner will be deemed to have the original cost and purchase
date of the redeemed shares for purposes of applying the CDSC-Class C to
subsequent redemptions.

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class B and C when a total or partial
redemption is made by the Adviser with respect to its investments in the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

In order to avoid a 4% excise tax, the Fund will be required to distribute,
by December 31st of each year, at least an amount equal to the sum of (i) 98% of
its ordinary income for such year and (ii) 98% of its capital gain net income
(the latter of which generally is computed on the basis of the one-year period
ending on October 31st of such year), plus any amounts that were not distributed
in previous taxable years. For purposes of the excise tax, any ordinary income
or capital gain net income retained by, and subject to federal income tax in the
hands of, the Fund will be treated as having been distributed.

Some of the Fund's investment practices are subject to special provisions
of the Code that may, among other things, (i) disallow, suspend or otherwise
limit the allowance of

B-41
<PAGE> 243

certain losses or deductions, (ii) convert lower taxed long-term capital gain
into higher taxed short-term capital gain or ordinary income, (iii) convert an
ordinary loss or a deduction into a capital loss (the deductibility of which is
more limited) and (iv) cause the Fund to recognize income or gain without a
corresponding receipt of cash with which to make distributions in amounts
necessary to satisfy the 90% distribution requirement and the distribution
requirements for avoiding income and excise taxes. The Fund will monitor its
transactions and may make certain tax elections in order to mitigate the effect
of these rules and prevent disqualification of the Fund as a regulated
investment company.

DISTRIBUTIONS TO SHAREHOLDERS

B-42
<PAGE> 244

the Fund (except for purposes of the 4% excise tax) during such taxable year. In
such case, shareholders will be treated as having received such dividends in the
taxable year in which the distribution was actually made.

SALE OF SHARES

CAPITAL GAINS RATES

NON-U.S. SHAREHOLDERS

B-43
<PAGE> 245

that certain other conditions are met). However, certain Non-U.S. Shareholders
may nonetheless be subject to backup withholding on capital gain dividends and
gross proceeds paid to them upon the sale of their shares. See "Backup
Withholding" below.

BACKUP WITHHOLDING

INFORMATION REPORTING

The Fund must report annually to the IRS and to each shareholder (other
than a Non-U.S. Shareholder) the amount of dividends paid to such shareholder
and the amount, if any, of tax withheld pursuant to backup withholding rules
with respect to such dividends. In the case of a Non-U.S. Shareholder, the Fund
must report to the IRS and such shareholder the aggregate amount of dividends
paid that are subject to backup withholding (if any) and the amount of tax
withheld with respect to such dividends pursuant to the backup withholding
rules. This information may also be made available to the tax authorities in the
Non-U.S. Shareholder's country of residence. Generally,

B-44
<PAGE> 246

dividends paid to Non-U.S. Shareholders that are subject to the 30% federal
income tax withholding described above under "Non-U.S. Shareholders" are not
subject to backup withholding.

GENERAL

FUND PERFORMANCE

From time to time the Fund may advertise its total return for prior
periods. Any such advertisement would include at least average annual total
return quotations for one year, five year and ten year periods. Other total
return quotations, aggregate or average, over other time periods may also be
included.

The total return of the Fund for a particular period represents the
increase (or decrease) in the value of a hypothetical investment in the Fund
from the beginning to the end of the period. Total return is calculated by
subtracting the value of the initial investment from the ending value and
showing the difference as a percentage of the initial investment; the
calculation assumes the initial investment is made at the current maximum public
offering price (which includes the maximum sales charge for Class A Shares);
that all income dividends or capital gain dividends during the period are
reinvested in Fund shares at net asset value; and that any applicable contingent
deferred sales charge has been paid. The Fund's total return will vary depending
on market conditions, the securities comprising the Fund's portfolio, the Fund's
operating expenses and unrealized net capital gains or losses during the period.
Total return is based on historical earnings and asset value fluctuations and is
not intended to indicate future performance. No adjustments are made to reflect
any income taxes payable by shareholders on capital gain dividends paid by the
Fund or to reflect the fact that 12b-1 fees may have changed over time.

B-45
<PAGE> 247

the initial investment and expressing the result as a percentage.
Non-standardized total return will be calculated separately for each class of
shares.

B-46
<PAGE> 248

each class of the Fund's shares. For these purposes, the performance of the
Fund, as well as the performance of other mutual funds or indices, do not
reflect sales charges, the inclusion of which would reduce the Fund's
performance. The Fund will include performance data for each class of shares of
the Fund in any advertisement or information including performance data of the
Fund.

The Fund commenced investment operations on December 27, 1995. From
December 27, 1995 up to February 3, 1997, the Fund operated with a limited
amount of capital being invested by affiliates of the Fund's Adviser. Prior to
February 3, 1997, the Fund had not engaged in a broad continuous public offering
of its shares, had sold shares to only a limited number of public investors and
had not been subject to redemption requests. The Fund commenced a broad public
offering of its shares on February 3, 1997. The Fund was offered for a limited
time and then was closed to new investors on March 14, 1997 after raising new
assets of approximately $100,000,000. The Fund may, from time to time, reopen
and close the offering of its shares to new investors as market conditions
permit. Prior to February 3, 1997, the Fund had not engaged in a broad
continuous public offering of its shares, had sold shares to only a limited
number of investors and had not been subject to redemption requests. One factor
impacting the Fund's 1996 performance was the Fund's investments in initial
public offerings (IPOs). These investments had a greater effect on Fund's 1996
performance than similar investments made in subsequent years, in part because
of the smaller size of the Fund in 1996. There is no assurance that the Fund's
future investments in IPOs will have the same affect on performance as the IPOs
did in 1996. The Fund's investment results are based on historical performance
and are not intended to indicate future performance.

CLASS A SHARES

The Fund's average annual total return, assuming payment of the maximum
sales charge, for Class A Shares of the Fund for (i) the one-year period ended
March 31, 2000 was 82.09% and (ii) the approximately four-year, three-month
period since December 27, 1995, the commencement of investment operations for
Class A Shares of the Fund, through March 31, 2000 was 44.53%.

B-47
<PAGE> 249

The Fund's cumulative non-standardized total return, including payment of
the maximum sales charge, with respect to the Class A Shares from December 27,
1995 (commencement of distribution of Class A Shares) to March 31, 2000 was
380.20%.

The Fund's cumulative non-standardized total return, excluding payment of
the maximum sales charge, with respect to the Class A Shares from December 27,
1995 (commencement of distribution of Class A Shares) to March 31, 2000 was
409.50%.

CLASS B SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class B Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 86.74% and (ii) the approximately four-year,
three-month period since December 27, 1995, the commencement of investment
operations for Class B Shares of the Fund, through March 31, 2000 was 45.58%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to the Class B Shares from
December 27, 1995 (commencement of distribution of Class B Shares) to March 31,
2000 was 395.33%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class B Shares from
December 27, 1995 (commencement of distribution of Class B Shares) to March 31,
2000 was 396.83%.

CLASS C SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class C Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 90.52%, and (ii) the approximately four-year,
three-month period since December 27, 1995, the commencement of investment
operations for Class C Shares of the Fund, through March 31, 2000 was 45.65%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to the Class C Shares from
December 27, 1995 (commencement of distribution of Class C Shares) to March 31,
2000 was 396.25%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class C Shares from
December 27, 1995 (commencement of distribution of Class C Shares) to March 31,
2000 was 396.25%.

OTHER INFORMATION

CUSTODY OF ASSETS

All securities owned by the Fund and all cash, including proceeds from the
sale of shares of the Fund and of securities in the Fund's investment portfolio,
are held by State Street Bank and Trust Company, 225 West Franklin Street,
Boston, Massachusetts 02110, as custodian. The custodian also provides
accounting services to the Fund.

B-48
<PAGE> 250

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the independent accountants.

INDEPENDENT AUDITORS

Independent auditors perform an annual audit of the financial statements of
the Fund. The Trust's Board of Trustees has engaged Ernst & Young LLP, located
at 233 South Wacker Drive, Chicago, Illinois 60606, to be the independent
auditors. The change in independent auditors was approved by the Trust's audit
committee and the Trust's Board of Trustees, including Trustees who are not
"interested persons" of the Fund (as defined in the 1940 Act).

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).

B-49
<PAGE> 251

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of Van Kampen Growth Fund:

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen Growth Fund (the "Fund")
at March 31, 2000, and the results of its operations, the changes in its net
assets and the financial highlights for the year then ended in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at March
31, 2000 by correspondence with the custodian and brokers, provides a reasonable
basis for the opinion expressed above. The statement of changes in net assets
and the financial highlights for each of the periods ended on or prior to March
31, 1999 were audited by other independent accountants whose report dated May 5,
1999 expressed an unqualified opinion thereon.

PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
May 5, 2000

F-1
<PAGE> 252

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

March 31, 2000
THE FOLLOWING PAGES DETAIL THE SPECIFIC HOLDINGS OF YOUR FUND AT THE END OF THE
REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS* 95.1%
CONSUMER DISTRIBUTION 8.3%
Chico's Fas, Inc. (a)....................................... 148,000 $ 2,509,062
Pacific Sunwear of California, Inc. (a)..................... 81,500 3,137,750
Starbucks Corp. (a)......................................... 72,000 3,226,500
Tandy Corp.................................................. 47,000 2,385,250
Tiffany & Co................................................ 24,000 2,007,000
Too, Inc. (a)............................................... 95,000 2,998,437
Whitehall Jewellers, Inc. (a)............................... 100,000 2,350,000
Zale Corp. (a).............................................. 15,000 707,813
------------
19,321,812
------------
CONSUMER DURABLES 0.7%
Harley Davidson, Inc........................................ 21,000 1,666,875
------------

CONSUMER NON-DURABLES 0.4%
Jones Apparel Group, Inc. (a)............................... 30,000 956,250
------------

CONSUMER SERVICES 10.3%
Beasley Broadcast Group, Inc., Class A (a).................. 225,000 2,081,250
Brinker International, Inc. (a)............................. 53,000 1,573,437
EchoStar Communications Corp., Class A (a).................. 14,200 1,121,800
Hispanic Broadcasting Corp. (a)............................. 25,000 2,831,250
Mediacom Communications Corp., Class A (a).................. 31,500 439,031
Metro-Goldwyn-Mayer, Inc. (a)............................... 39,080 994,098
New York Times Co., Class A................................. 28,000 1,202,250
Outback Steakhouse, Inc. (a)................................ 59,000 1,891,687
Park Place Entertainment Corp. (a).......................... 113,000 1,306,563
Radio One, Inc., Class A (a)................................ 50,000 3,331,250
TMP Worldwide, Inc. (a)..................................... 21,000 1,632,750
Univision Communications, Inc., Class A (a)................. 19,000 2,147,000
USA Networks, Inc. (a)...................................... 53,000 1,195,813
Wind River Systems, Inc. (a)................................ 28,000 1,015,000
Young & Rubicam, Inc. (a)................................... 28,000 1,316,000
------------
24,079,179
------------
</TABLE>

See Notes to Financial Statements

F-2
<PAGE> 253

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
ENERGY 6.4%
BJ Services Co.............................................. 49,000 $ 3,619,875
ENSCO International, Inc.................................... 72,000 2,601,000
Nabors Industries, Inc. (a)................................. 45,000 1,746,562
Noble Drilling Corp. (a).................................... 61,000 2,527,687
Rowan Cos., Inc. (a)........................................ 45,000 1,324,688
Smith International, Inc. (a)............................... 41,000 3,177,500
------------
14,997,312
------------
FINANCE 3.6%
Capital One Financial Corp.................................. 34,000 1,629,875
E Trade Group, Inc.......................................... 32,000 964,000
Franklin Resources, Inc..................................... 23,000 769,062
Knight Trimark Group, Inc., Class A (a)..................... 14,000 714,000
Northern Trust Corp......................................... 10,000 675,625
SLM Holding Corp............................................ 24,000 799,500
Synovus Financial Corp...................................... 33,000 622,875
T. Rowe Price Associates, Inc............................... 24,000 948,000
U.S. Trust Corp............................................. 2,000 378,000
Waddell & Reed Financial, Inc., Class A..................... 17,000 719,313
Zions Bancorp............................................... 7,000 291,375
------------
8,511,625
------------
HEALTHCARE 4.3%
Alpharma, Inc., Class A..................................... 35,000 1,286,250
Biogen, Inc. (a)............................................ 16,000 1,118,000
Forest Laboratories, Inc. (a)............................... 15,000 1,267,500
Jones Pharma, Inc........................................... 25,500 774,563
Medimmune, Inc. (a)......................................... 6,000 1,044,750
PE Corp.--PE Biosystems Group............................... 34,000 3,281,000
Wellpoint Health Networks, Inc., (a)........................ 19,000 1,327,625
------------
10,099,688
------------
PRODUCER MANUFACTURING 0.4%
Corning, Inc................................................ 5,000 970,000
------------

TECHNOLOGY 55.3%
3Com Corp. (a).............................................. 25,000 1,390,625
Adaptec, Inc. (a)........................................... 16,000 618,000
ADC Telecommunications, Inc. (a)............................ 32,000 1,724,000
Adobe Systems, Inc.......................................... 15,000 1,669,687
ADTRAN, Inc. (a)............................................ 20,000 1,188,750
Altera Corp. (a)............................................ 40,000 3,570,000
Amdocs Ltd. (a)............................................. 13,000 957,938
Analog Devices, Inc. (a).................................... 52,000 4,189,250
</TABLE>

See Notes to Financial Statements

F-3
<PAGE> 254

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Apple Computer, Inc. (a).................................... 7,000 $ 950,688
Applied Micro Circuits Corp. (a)............................ 16,000 2,401,000
Atmel Corp. (a)............................................. 77,000 3,975,125
BEA Systems, Inc. (a)....................................... 16,000 1,174,000
Broadcom Corp., Class A (a)................................. 14,000 3,400,250
CDW Computer Centers, Inc. (a).............................. 27,000 2,279,812
Citrix Systems, Inc. (a).................................... 18,000 1,192,500
Comverse Technology, Inc. (a)............................... 12,000 2,268,000
Conexant Systems, Inc. (a).................................. 16,000 1,136,000
Covad Communications Group, Inc. (a)........................ 22,000 1,595,000
Credence Systems Corp. (a).................................. 7,000 875,875
Digital Lightwave, Inc. (a)................................. 13,000 810,063
Electronics for Imaging, Inc. (a)........................... 38,000 2,280,000
Exodus Communications, Inc. (a)............................. 29,000 4,074,500
Flextronics International Ltd. (a).......................... 19,000 1,338,312
Informix Corp. (a).......................................... 51,000 863,813
Inktomi Corp. (a)........................................... 13,000 2,535,000
Intuit, Inc. (a)............................................ 19,000 1,033,125
Jabil Circuit, Inc. (a)..................................... 34,000 1,470,500
JDS Uniphase Corp. (a)...................................... 63,000 7,595,437
Juniper Networks, Inc. (a).................................. 3,400 896,113
KLA--Tencor Corp. (a)....................................... 11,000 926,750
Lam Research Corp. (a)...................................... 25,000 1,126,563
Lattice Semiconductor Corp. (a)............................. 13,000 879,938
Lexmark International Group, Inc., Class A (a).............. 12,000 1,269,000
Linear Technology Corp...................................... 32,000 1,760,000
LSI Logic Corp. (a)......................................... 32,000 2,324,000
Mercury Interactive Corp. (a)............................... 10,000 792,500
Micrel, Inc. (a)............................................ 9,000 864,000
Microchip Technology, Inc. (a).............................. 20,000 1,315,000
Micron Technology, Inc. (a)................................. 5,000 630,000
Network Appliance, Inc. (a)................................. 33,000 2,730,750
Networks Associates, Inc. (a)............................... 48,000 1,548,000
Novellus Systems, Inc. (a).................................. 26,000 1,459,250
PMC Sierra, Inc. (a)........................................ 17,000 3,462,687
Polycom, Inc. (a)........................................... 45,000 3,563,437
Portal Software, Inc. (a)................................... 12,000 683,250
QLogic Corp. (a)............................................ 20,000 2,710,000
Rational Software Corp. (a)................................. 35,000 2,677,500
RealNetworks, Inc. (a)...................................... 16,000 911,000
RF Micro Devices, Inc. (a).................................. 11,000 1,478,125
</TABLE>

See Notes to Financial Statements

F-4
<PAGE> 255

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
ScanDisk Corp. (a).......................................... 15,000 $ 1,837,500
Sanmina Corp. (a)........................................... 32,000 2,162,000
Scientific Atlanta, Inc..................................... 40,000 2,537,500
SDL, Inc. (a)............................................... 6,000 1,277,250
Siebel Systems, Inc. (a).................................... 28,000 3,344,250
Symbol Technologies, Inc.................................... 24,000 1,975,500
Teradyne, Inc. (a).......................................... 23,000 1,891,750
Terayon Communication Systems, Inc. (a)..................... 4,000 820,000
TranSwitch Corp. (a)........................................ 27,000 2,595,375
VeriSign, Inc. (a).......................................... 13,000 1,943,500
VERITAS Software Corp. (a).................................. 36,000 4,716,000
Vignette Corp. (a).......................................... 6,000 961,500
Vitesse Semiconductor Corp. (a)............................. 20,000 1,925,000
VoiceStream Wireless Corp. (a).............................. 14,000 1,803,375
Waters Corp. (a)............................................ 35,000 3,333,750
Xilinx, Inc. (a)............................................ 41,000 3,395,312
------------
129,084,675
------------
TRANSPORTATION 0.8%
Kansas City Southern Industries, Inc........................ 21,000 1,804,688
------------

UTILITIES 4.6%
Broadwing, Inc. (a)......................................... 69,000 2,565,937
Calpine Corp. (a)........................................... 33,000 3,102,000
McLeodUSA, Inc. (a)......................................... 20,000 1,696,250
Nextel Communications, Inc., Class A (a).................... 16,000 2,372,000
NEXTLINK Communications, Inc., Class A (a).................. 9,000 1,113,188
------------
10,849,375
------------
TOTAL LONG-TERM INVESTMENTS 95.1%
(Cost $136,821,580)................................................ 222,341,479

REPURCHASE AGREEMENT 5.9%
SBC Warburg, Corp. ($13,750,000 par collateralized by U.S. Government
obligations in a pooled cash account, dated 03/31/00, to be sold on
04/03/00 at $13,756,967) (Cost $13,750,000).......................... 13,750,000
------------

TOTAL INVESTMENTS 101.0%
(Cost $150,571,580)................................................ 236,091,479
LIABILITIES IN EXCESS OF OTHER ASSETS (1.0%)........................ (2,441,196)
------------
NET ASSETS 100.0%................................................... $233,650,283
============
</TABLE>

(a) Non-income producing security as this stock currently does not declare
dividends.
* The common stocks are classified by sectors which represent broad groupings
of related industries.

See Notes to Financial Statements

F-5
<PAGE> 256

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2000

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $150,571,580)....................... $236,091,479
Cash........................................................ 127
Receivables:
Investments Sold.......................................... 6,147,920
Fund Shares Sold.......................................... 2,724,425
Dividends................................................. 16,045
Unamortized Organizational Costs............................ 6,105
Other....................................................... 5,511
------------
Total Assets............................................ 244,991,612
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 10,676,996
Distributor and Affiliates................................ 221,525
Investment Advisory Fee................................... 153,312
Fund Shares Repurchased................................... 125,948
Trustees' Deferred Compensation and Retirement Plans........ 92,375
Accrued Expenses............................................ 71,173
------------
Total Liabilities....................................... 11,341,329
------------
NET ASSETS.................................................. $233,650,283
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $ 96,356,681
Net Unrealized Appreciation................................. 85,519,899
Accumulated Net Realized Gain............................... 51,865,070
Accumulated Net Investment Loss............................. (91,367)
------------
NET ASSETS.................................................. $233,650,283
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $106,258,964 and 2,642,144 shares of
beneficial interest issued and outstanding)............. $ 40.22
Maximum sales charge (5.75%* of offering price)........... 2.45
------------
Maximum offering price to public.......................... $ 42.67
============
Class B Shares:
Net asset value and offering price per share (Based on net
assets of $115,598,099 and 2,959,289 shares of
beneficial interest issued and outstanding)............. $ 39.06
============
Class C Shares:
Net asset value and offering price per share (Based on net
assets of $11,793,220 and 302,298 shares of beneficial
interest issued and outstanding)........................ $ 39.01
============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

F-6
<PAGE> 257

Statement of Operations
For the Year Ended March 31, 2000

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 272,162
Interest.................................................... 213,777
------------
Total Income............................................ 485,939
------------
EXPENSES:
Investment Advisory Fee..................................... 1,205,210
Distribution (12b-1) and Service Fees (Attributed to Class
A, B, and C of $175,663, $821,276 and $84,440,
respectively)............................................. 1,081,379
Shareholder Services........................................ 403,011
Trustees' Fees and Related Expenses......................... 41,841
Custody..................................................... 41,228
Legal....................................................... 27,260
Amortization of Organizational Costs........................ 7,997
Other....................................................... 184,932
------------
Total Expenses.......................................... 2,992,858
Less Credits Earned on Cash Balances.................... 918
------------
Net Expenses............................................ 2,991,940
------------
NET INVESTMENT LOSS......................................... $ (2,506,001)
============
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 76,661,986
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 45,329,746
End of the Period......................................... 85,519,899
------------
Net Unrealized Appreciation During the Period............... 40,190,153
------------
NET REALIZED AND UNREALIZED GAIN............................ $116,852,139
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $114,346,138
============
</TABLE>

See Notes to Financial Statements

F-7
<PAGE> 258

Statement of Changes in Net Assets
For the Year Ended March 31, 2000, the Nine Months Ended March 31, 1999 and the
Year Ended June 30, 1998

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999 JUNE 30, 1998
--------------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss.................... $ (2,506,001) $ (1,603,898) $ (1,438,667)
Net Realized Gain/Loss................. 76,661,986 (3,953,208) 12,903,865
Net Unrealized Appreciation During the
Period............................... 40,190,153 6,336,602 31,450,153
------------ ------------ ------------
Change in Net Assets from Operations... 114,346,138 779,496 42,915,351
------------ ------------ ------------

Distributions from Net Realized Gain... (18,083,411) (3,378,184) (6,327,980)
Distributions in Excess of Net Realized
Gain................................. -0- (291,949) -0-
------------ ------------ ------------
Distributions from and in Excess of Net
Realized Gain*....................... (18,083,411) (3,670,133) (6,327,980)
------------ ------------ ------------

NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES................ 96,262,727 (2,890,637) 36,587,371
------------ ------------ ------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.............. 25,872,275 12,933,199 28,476,433
Net Asset Value of Shares Issued
Through Dividend Reinvestment........ 16,663,811 3,395,527 5,825,754
Cost of Shares Repurchased............. (45,486,452) (26,950,184) (33,462,669)
------------ ------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS......................... (2,950,366) (10,621,458) 839,518
------------ ------------ ------------
TOTAL INCREASE/DECREASE IN NET
ASSETS............................... 93,312,361 (13,512,095) 37,426,889
NET ASSETS:
Beginning of the Period................ 140,337,922 153,850,017 116,423,128
------------ ------------ ------------
End of the Period (Including
accumulated net investment loss of
$91,367, $54,616 and $47,131
respectively)........................ $233,650,283 $140,337,922 $153,850,017
============ ============ ============

*Distributions by Class
---------------------------------------

Distributions from and in Excess of Net
Realized Gain:
Class A Shares....................... $ (7,810,884) $ (1,555,668) $ (2,743,327)
Class B Shares....................... (9,299,741) (1,907,640) (3,159,670)
Class C Shares....................... (972,786) (206,825) (424,983)
------------ ------------ ------------
$(18,083,411) $ (3,670,133) $ (6,327,980)
============ ============ ============
</TABLE>

See Notes to Financial Statements

F-8
<PAGE> 259

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED OPERATIONS)
CLASS A SHARES MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 1999(A) 1998 1997(A) 1996
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD.............................. $23.298 $23.463 $17.878 $13.696 $10.000
------- ------- ------- ------- -------
Net Investment Income/Loss.......... (.322) (.185) (.136) .031 (.044)
Net Realized and Unrealized Gain.... 20.615 .604 6.711 4.810 3.740
------- ------- ------- ------- -------
Total from Investment Operations..... 20.293 .419 6.575 4.841 3.696
------- ------- ------- ------- -------
Less:
Distributions from and in Excess of
Net Realized Gain................. 3.374 .584 .990 .353 -0-
Return of Capital Distribution...... -0- -0- -0- .306 -0-
------- ------- ------- ------- -------
Total Distributions.................. 3.374 .584 .990 .659 -0-
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD... $40.217 $23.298 $23.463 $17.878 $13.696
======= ======= ======= ======= =======

Total Return* (b).................... 93.18% 2.18%** 38.52% 36.00% 37.00%**
Net Assets at End of the Period (In
millions)........................... $ 106.3 $ 60.1 $ 64.9 $ 53.1 $ .1
Ratio of Expenses to Average Net
Assets*............................. 1.44% 1.64% 1.30% 1.32% 1.46%
Ratio of Net Investment Income/Loss
to Average Net Assets*.............. (1.14%) (1.19%) (.64%) .19% (.79%)
Portfolio Turnover................... 170% 82%** 125% 139% 94%**

* If certain fees had not been assumed by Van Kampen, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Expenses to Average Net
Assets.............................. N/A 1.68% 1.58% 2.31% 15.69%
Ratio of Net Investment Loss to
Average Net Assets.................. N/A (1.23%) (.92%) (.80%) (15.02%)
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year or purchase. If the
sales charges were included, total returns would be lower.

N/A = Not Applicable
See Notes to Financial Statements

F-9
<PAGE> 260

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED OPERATIONS)
CLASS B SHARES MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 1999(A) 1998 1997(A) 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................... $22.869 $23.173 $17.796 $13.695 $10.000
------- ------- ------- ------- -------
Net Investment Loss.................. (.521) (.299) (.270) (.093) (.045)
Net Realized and Unrealized Gain..... 20.089 .579 6.637 4.853 3.740
------- ------- ------- ------- -------
Total from Investment Operations...... 19.568 .280 6.367 4.760 3.695
------- ------- ------- ------- -------
Less:
Distributions from and in Excess of
Net Realized Gain.................. 3.374 .584 .990 .353 -0-
Return of Capital Distribution....... -0- -0- -0- .306 -0-
------- ------- ------- ------- -------
Total Distributions................... 3.374 .584 .990 .659 -0-
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD.... $39.063 $22.869 $23.173 $17.796 $13.695
======= ======= ======= ======= =======

Total Return* (b)..................... 91.74% 1.60%** 37.56% 35.32% 37.00%**
Net Assets at End of the Period (In
millions)............................ $ 115.6 $ 72.8 $ 79.7 $ 55.0 $ .1
Ratio of Expenses to Average Net
Assets*.............................. 2.18% 2.40% 2.05% 2.07% 1.46%
Ratio of Net Investment Loss to
Average Net Assets*.................. (1.89%) (1.95%) (1.40%) (.56%) (.74%)
Portfolio Turnover.................... 170% 82%** 125% 139% 94%**

* If certain fees had not been assumed by Van Kampen, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Expenses to Average Net
Assets............................... N/A 2.44% 2.34% 3.04% 15.70%
Ratio of Net Investment Loss to
Average Net Assets................... N/A (1.99%) (1.68%) (1.53%) (14.97%)
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 5%, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
fifth year. If the sales charge was included, total returns would be lower.

N/A = Not Applicable

See Notes to Financial Statements

F-10
<PAGE> 261

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED OPERATIONS)
CLASS C SHARES MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 1999(A) 1998 1997(A) 1996
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................... $22.867 $23.173 $17.793 $13.695 $10.000
------- ------- ------- ------- -------
Net Investment Loss.................. (.520) (.300) (.311) (.096) (.045)
Net Realized and Unrealized Gain..... 20.039 .578 6.681 4.853 3.740
------- ------- ------- ------- -------
Total from Investment Operations...... 19.519 .278 6.370 4.757 3.695
------- ------- ------- ------- -------
Less:
Distributions from and in Excess of
Net Realized Gain.................. 3.374 .584 .990 .353 -0-
Return of Capital Distribution....... -0- -0- -0- .306 -0-
------- ------- ------- ------- -------
Total Distributions................... 3.374 .584 .990 .659 -0-
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD.... $39.012 $22.867 $23.173 $17.793 $13.695
======= ======= ======= ======= =======

Total Return* (b)..................... 91.52% 1.60%** 37.56% 35.32% 37.00%**
Net Assets at End of the Period (In
millions)............................ $ 11.8 $ 7.4 $ 9.2 $ 8.3 $ .1
Ratio of Expenses to Average Net
Assets*.............................. 2.19% 2.41% 2.05% 2.07% 1.46%
Ratio of Net Investment Loss to
Average Net Assets*.................. (1.89%) (1.96%) (1.39%) (.57%) (.74%)
Portfolio Turnover.................... 170% 82%** 125% 139% 94%**

* If certain fees had not been assumed by Van Kampen, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Expenses to Average Net
Assets............................... N/A 2.45% 2.34% 3.04% 15.70%
Ratio of Net Investment Loss to
Average Net Assets................... N/A (2.00%) (1.68%) (1.55%) (14.97%)
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower.

N/A = Not Applicable

See Notes to Financial Statements

F-11
<PAGE> 262

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Growth Fund (the "Fund") is organized as a diversified series of the
Van Kampen Equity Trust, a Delaware business trust, which is registered as an
open-end management investment company under the Investment Company Act of 1940,
as amended. The Fund's investment objective is to seek capital growth by
investing primarily in a diversified portfolio of common stocks and other equity
securities of growth companies. The Fund commenced investment operations on
December 27, 1995, with three classes of common shares, Class A, Class B and
Class C.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.

The Fund may invest in repurchase agreements, which are short-term
investments whereby the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other investment
companies advised by Van Kampen Investment Advisory Corp. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are fully collateralized by the underlying debt security.
The Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not less than
the repurchase proceeds due the Fund.

F-12
<PAGE> 263

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

C. INCOME AND EXPENSES Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discount on debt securities
purchased are amortized over the expected life of each applicable security.
Income and expenses of the Fund are allocated on a pro rata basis to each class
of shares, except for distribution and service fees and transfer agency costs
which are unique to each class of shares.

D. ORGANIZATIONAL COSTS The Fund has agreed to reimburse Van Kampen Funds Inc.
or its affiliates ("collectively Van Kampen") for costs incurred in connection
with the Fund's organization in the amount of $40,000. These costs are being
amortized on a straight line basis over the 60 month period ending December 27,
2000. The Adviser has agreed that in the event any of the initial shares of the
Fund originally purchased by Van Kampen are redeemed during the amortization
period, the Fund will be reimbursed for any unamortized organizational costs in
the same proportion as the number of shares redeemed bears to the number of
initial shares held at the time of redemption.

Net realized gains or losses may differ for financial and tax reporting
purposes.

At March 31, 2000, for federal income tax purposes the cost of long- and
short-term investments is $150,571,580, the aggregate gross unrealized
appreciation is $92,513,023 and the aggregate gross unrealized depreciation is
$6,993,124, resulting in net unrealized appreciation on long- and short-term
investments of $85,519,899.

F. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends
annually from net investment income. Net realized gains, if any, are distributed
annually. Distributions from net realized gains for book purposes may include
short-term capital gains and gains on futures transactions. All short-term
capital gains and a portion of gains on futures transactions are included in
ordinary income for tax purposes.

Due to inherent differences in the recognition of income, expenses and
realized gains/losses under generally accepted accounting principles and federal
income tax purposes, permanent differences between book and tax basis reporting
for the year ended March 31, 2000 have been identified and appropriately
reclassified. For the year ended March 31, 2000, a permanent difference related
to net operating loss which may be used as an offset against short-term gains
for tax

F-13
<PAGE> 264

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

purposes totaling $2,469,250 has been reclassified from accumulated net
investment loss to accumulated net realized gain.

G. EXPENSE REDUCTIONS During the year ended March 31, 2000, the Fund's custody
fee was reduced by $918 as a result of credits earned on overnight cash
balances.

2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $10,000, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $71,500, representing Van Kampen's cost of providing accounting
and legal services to the Fund.

Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent of the Fund. For the year ended March 31, 2000,
the Fund recognized expenses of approximately $291,100. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees and are based
on competitive market benchmarks.

Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.

The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Fund. The maximum
annual benefit per trustee under the plan is $2,500.

At March 31, 2000, Van Kampen owned 7,000 shares of Class A and 6,500 shares
each of Classes B and C, respectively.

F-14
<PAGE> 265

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

3. CAPITAL TRANSACTIONS

At March 31, 2000, capital aggregated $45,073,752, $47,095,700, and $4,187,229
for Classes A, B, and C, respectively. For the year ended March 31, 2000,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 548,998 $ 19,238,328
Class B................................................. 213,625 6,300,698
Class C................................................. 12,657 333,249
---------- ------------
Total Sales............................................... 775,280 $ 25,872,275
========== ============
Dividend Reinvestment:
Class A................................................. 254,319 $ 7,184,507
Class B................................................. 318,096 8,747,651
Class C................................................. 26,635 731,653
---------- ------------
Total Dividend Reinvestment............................... 599,050 $ 16,663,811
========== ============
Repurchases:
Class A................................................. (742,010) $(22,939,813)
Class B................................................. (756,123) (20,859,185)
Class C................................................. (60,627) (1,687,454)
---------- ------------
Total Repurchases......................................... (1,558,760) $(45,486,452)
========== ============
</TABLE>

F-15
<PAGE> 266

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

At March 31, 1999, capital aggregated $41,591,140, $52,906,982, and
$4,809,827 for Classes A, B, and C, respectively. For the nine months ended
March 31, 1999, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 337,597 $ 7,019,197
Class B................................................. 269,887 5,504,113
Class C................................................. 19,753 409,889
---------- ------------
Total Sales............................................... 627,237 $ 12,933,199
========== ============
Dividend Reinvestment:
Class A................................................. 71,540 $ 1,449,407
Class B................................................. 89,988 1,793,457
Class C................................................. 7,660 152,663
---------- ------------
Total Dividend Reinvestment............................... 169,188 $ 3,395,527
========== ============
Repurchases:
Class A................................................. (593,731) $(12,335,516)
Class B................................................. (616,839) (12,488,158)
Class C................................................. (102,252) (2,126,510)
---------- ------------
Total Repurchases......................................... (1,312,822) $(26,950,184)
========== ============
</TABLE>

F-16
<PAGE> 267

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

At June 30, 1998, capital aggregated $46,142,115, $58,925,789, and
$6,457,916 for Classes A, B, and C, respectively. For the year ended June 30,
1998, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 703,177 $ 14,445,936
Class B................................................. 623,694 12,750,067
Class C................................................. 63,730 1,280,430
---------- ------------
Total Sales............................................... 1,390,601 $ 28,476,433
========== ============
Dividend Reinvestment:
Class A................................................. 141,978 $ 2,548,516
Class B................................................. 166,305 2,960,278
Class C................................................. 17,807 316,960
---------- ------------
Total Dividend Reinvestment............................... 326,090 $ 5,825,754
========== ============
Repurchases:
Class A................................................. (1,052,014) $(21,445,447)
Class B................................................. (440,708) (9,047,981)
Class C................................................. (147,921) (2,969,241)
---------- ------------
Total Repurchases......................................... (1,640,643) $(33,462,669)
========== ============
</TABLE>

Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares and any
dividend reinvestment plan Class B shares received on such shares automatically
convert to Class A shares eight years after the end of the calendar month in
which the shares were purchased. The CDSC for Class B and C shares will be
imposed on most redemptions made within five years of the purchase for Class B
and one year of the purchase for Class C as detailed in the following schedule.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
First...................................................... 5.00% 1.00%
Second..................................................... 4.00% None
Third...................................................... 3.00% None
Fourth..................................................... 2.50% None
Fifth...................................................... 1.50% None
Sixth and thereafter....................................... None None
</TABLE>

For the year ended March 31, 2000, Van Kampen, as Distributor for the Fund,
received net commissions on sales of the Fund's Class A shares of approximately
$16,800 and CDSC on the redeemed shares of Classes B and C of approximately
$213,100. Sales charges do not represent expenses of the Fund.

F-17
<PAGE> 268

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $266,096,287 and $297,447,960,
respectively.

5. DERIVATIVE FINANCIAL INSTRUMENTS

A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in the unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly, except when
taking delivery of a security underlying a futures contract. In these instances,
the recognition of gain or loss is postponed until the disposal of the security
underlying futures contract.

The Fund may invest in futures contracts, a type of derivative. A futures
contract is an agreement involving the delivery of a particular asset on a
specified future date at an agreed upon price. The Fund generally invests in
stock index futures. These contracts are generally used as a substitute for
purchasing and selling specific securities. Upon entering into futures
contracts, the Fund maintains, in a segregated account with its custodian, cash
or liquid securities with a value equal to its obligation under the futures
contracts. During the period the futures contract is open, payments are received
from or made to the broker based upon changes in the value of the contract (the
variation margin).

There were no transactions in futures contracts during the year ended March
31, 2000.

6. DISTRIBUTION AND SERVICE PLANS

The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended, and a service plan
(collectively the "Plans"). The Plans govern payments for the distribution of
the Fund's shares, ongoing shareholder services and maintenance of shareholder
accounts.

7. BORROWINGS

In accordance with its investment policies, the Fund may borrow from banks for
temporary purposes and is subject to certain other customary restrictions.
Effective

F-18
<PAGE> 269

NOTES TO
FINANCIAL STATEMENTS
March 31, 2000

November 30, 1999, the Fund, in conjunction with certain other funds of Van
Kampen, has entered into a $650,000,000 committed line of credit facility with a
group of banks which expires on November 28, 2000, but is renewable with the
consent of the participating banks. Each fund is permitted to utilize the
facility in accordance with the restrictions of its prospectus. In the event the
demand for the credit facility meets or exceeds $650 million on a complex-wide
basis, each fund will be limited to its pro-rata percentage based on the net
assets of each participating fund. Interest on borrowings is charged under the
agreement at a rate of 0.50% above the federal funds rate per annum. An annual
commitment fee of 0.09% per annum is charged on the unused portion of the credit
facility, which each fund incurs based on its pro-rata percentage of quarterly
net assets. The Fund has not borrowed against the credit facility during the
period.

F-19
<PAGE> 270

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN
SELECT GROWTH FUND

Van Kampen Select Growth Fund (the "Fund") is a mutual fund with the
investment objective to seek capital appreciation. The Fund's investment adviser
seeks to achieve the Fund's investment objective by investing primarily in a
non-diversified portfolio of common stocks and other equity securities of growth
companies.

The Fund is organized as a non-diversified series of Van Kampen Equity
Trust, an open-end, management investment company (the "Trust").

---------------------------------------------

TABLE OF CONTENTS
---------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information......................................... B-2
Investment Objective, Policies and Risks.................... B-3
Options, Futures Contracts and Related Options.............. B-7
Investment Restrictions..................................... B-14
Trustees and Officers....................................... B-15
Investment Advisory Agreement............................... B-25
Other Agreements............................................ B-26
Distribution and Service.................................... B-27
Transfer Agent.............................................. B-30
Portfolio Transactions and Brokerage Allocation............. B-30
Shareholder Services........................................ B-32
Redemption of Shares........................................ B-34
Contingent Deferred Sales Charge-Class A.................... B-35
Waiver of Class B and Class C Contingent Deferred Sales
Charges................................................... B-35
Taxation.................................................... B-37
Fund Performance............................................ B-41
Other Information........................................... B-44
</TABLE>

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED JULY 28, 2000.

SG SAI 7/00

<PAGE> 271

GENERAL INFORMATION

The Fund is organized as a separate non-diversified series of the Trust.
The Trust is an unincorporated business trust organized under the laws of the
State of Delaware by an Agreement and Declaration of Trust (the "Declaration of
Trust") dated May 10, 1995. The Declaration of Trust permits the Trustees to
create one or more separate investment portfolios and issue a series of shares
for each portfolio, such as the Fund. The Trustees may create one or more
classes of shares for each such series.

The Fund was organized as a series of the Trust on January 28, 2000.

Morgan Stanley Dean Witter is a preeminent global financial services firm
that maintains leading market positions in each of its three primary businesses:
securities, asset management and credit services.

B-2
<PAGE> 272

shareholders of only the class of such series involved. Except as otherwise
described in the Prospectus or herein, shares do not have cumulative voting
rights, preemptive rights or any conversion, subscription or exchange rights.

The Trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the Trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote (or such higher vote as may be required by the
1940 Act or other applicable law) and except that the Trustees cannot amend the
Declaration of Trust to impose any liability on shareholders, make any
assessment on shares or impose liabilities on the Trustees without approval from
each affected shareholder or Trustee, as the case may be.

As of July 3, 2000, no person was known by the Fund to own beneficially or
to hold of record 5% or more of the outstanding Class A Shares, Class B Shares
or Class C Shares of the Fund.

INVESTMENT OBJECTIVE, POLICIES AND RISKS

REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreements with broker-dealers, banks or
other financial institutions 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 Fund) acquires ownership of a 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

B-3
<PAGE> 273

agreements involve certain risks in the event of default by the other party. The
Fund may enter into repurchase agreements with broker-dealers, banks or other
financial institutions deemed to be creditworthy by the Adviser under guidelines
approved by the Fund's Board of Trustees. The Fund will not invest in repurchase
agreements maturing in more than seven days if any such investment, together
with any other illiquid securities held by the Fund, would exceed the Fund's
limitation on illiquid securities described herein. The Fund does not bear the
risk of a decline in value of the underlying security unless the seller defaults
under its repurchase obligation. In the event of the bankruptcy or other default
of a seller of a repurchase agreement, the Fund 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 Fund 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.

PORTFOLIO TURNOVER

ILLIQUID SECURITIES

B-4
<PAGE> 274

fact that such securities may not be readily marketable without some time delay.
Investments in securities for which market quotations are not readily available
are valued at fair value as determined in good faith by the Adviser in
accordance with procedures approved by the Fund's Board of Trustees. Ordinarily,
the Fund would invest in restricted securities only when it receives the
issuer's commitment to register the securities without expense to the Fund.
However, registration and underwriting expenses (which typically may range from
7% to 15% of the gross proceeds of the securities sold) may be paid by the Fund.
Restricted securities which can be offered and sold to qualified institutional
buyers under Rule 144A under the 1933 Act ("144A Securities") and are determined
to be liquid under guidelines adopted by and subject to the supervision of the
Fund's Board of Trustees are not subject to the limitation on illiquid
securities. Such 144A Securities are subject to monitoring and may become
illiquid to the extent qualified institutional buyers become, for a time,
uninterested in purchasing such securities. Factors used to determine whether
144A Securities are liquid include, among other things, a security's trading
history, the availability of reliable pricing information, the number of dealers
making quotes or making a market in such security and the number of potential
purchasers in the market for such security. For purposes hereof, investments by
the Fund in securities of other investment companies will not be considered
investments in restricted securities to the extent permitted by (i) the 1940
Act, as amended from time to time, (ii) the rules and regulations promulgated by
the SEC under the 1940 Act, as amended from time to time, or (iii) an exemption
or other relief (such as "no action" letters issued by the staff of the SEC
interpreting or providing guidance on the 1940 Act or regulations thereunder)
from the provisions of the 1940 Act, as amended from time to time.

CONVERTIBLE SECURITIES

The Fund's investments in convertible securities may include securities
with enhanced convertible features or "equity-linked" features. These securities
come in many forms and may include features, among others, such as the
following: (i) may be issued by the issuer of the underlying equity security on
its own securities or securities it holds of another company or be issued by a
third party (typically a brokerage firm or other financial entity) on a security
of another company, (ii) may convert into equity securities, such as common
stock, or may be redeemed for cash or some combination of cash and the linked
security at a value based upon the value of the underlying equity security,
(iii) may have various conversion features prior to maturity at the option of
the holder or the issuer or both, (iv) may limit the appreciation value with
caps or collars of the value of underlying equity security and (v) may have
fixed, variable or no interest payments during the life of the security which
reflect the actual or a structured return relative to the underlying dividends
of the linked equity security. Generally these securities are designed to give
investors enhanced yield opportunities to the equity securities of an issuer,
but these securities may involve a limited appreciation potential, downside
exposure, or a finite time in which to capture the yield advantage. For example,
certain securities may provide a higher current dividend income than the
dividend income on the underlying security while capping participation in the
capital appreciation of such security. Other securities may involve arrangements
with no interest or dividend payments made until maturity of the security or an
enhanced principal amount received at maturity based on the yield and value of
the underlying equity security during the security's term or at maturity.
Besides enhanced yield opportunities, another advantage of using such securities
is that they may be used for portfolio management or hedging purposes to reduce
the risk of investing in a more volatile underlying equity security. There may
be additional types of convertible securities with

B-5
<PAGE> 275

features not specifically referred to herein in which the Fund may invest
consistent with its investment objective and policies.

Investments in enhanced convertible or equity-linked securities may subject
the Fund to additional risks not ordinarily associated with investments in
traditional convertible securities. Particularly when such securities are issued
by a third party on an underlying linked security of another company, the Fund
is subject to risks if the underlying security underperforms or the issuer
defaults on the payment of the dividend or the underlying security at maturity.
Additionally, the trading market for certain securities may be less liquid than
for other convertible securities making it difficult for the Fund to dispose of
a particular security in a timely manner, and reduced liquidity in the secondary
market for any such securities may make it more difficult to obtain market
quotations for valuing the Fund's portfolio.

WARRANTS

Warrants are in effect longer-term call options. They give the holder the
right to purchase a given number of shares of a particular company at specified
prices within certain periods of time. The purchaser of a warrant expects that
the market price of the security will exceed the purchase price of the warrant
plus the exercise price of the warrant, thus giving him a profit. Of course,
since the market price may never exceed the exercise price before the expiration
date of the warrant, the purchaser of the warrant risks the loss of the entire
purchase price of the warrant. Warrants generally trade in the open market and
may be sold rather than exercised. Warrants are sometimes sold in unit form with
other securities of an issuer. Units of warrants and common stock may be
employed in financing young, unseasoned companies. The purchase price of a
warrant varies with the exercise price of the warrant, the current market value
of the underlying security, the life of the warrant and various other investment
factors.

FOREIGN SECURITIES

The Fund also may purchase foreign securities in the form of American
Depositary Receipts ("ADRs") and European Depositary Receipts ("EDRs") or other
securities representing underlying shares of foreign companies. These securities
may not necessarily be denominated in the same currency as the underlying
securities but generally are denominated in the currency of the market in which
they are traded. ADRs are receipts typically issued by an American bank or trust
company which evidence ownership of underlying securities issued by a foreign
corporation. ADRs are publicly traded on exchanges or over-the-counter in the
United States and are issued through "sponsored" or "unsponsored" arrangements.
In a sponsored ADR arrangement, the foreign issuer assumes the obligation to pay
some or all of the depositary's transaction fees, whereas under an unsponsored
arrangement, the foreign issuer assumes no obligations and the depositary's
transaction fees are paid by the ADR holders. In addition, less information
generally is available for an unsponsored ADR than about a sponsored ADR and
financial information about a company may not be as reliable for an unsponsored
ADR as it is for a sponsored ADR. The Fund may invest in ADRs through both
sponsored and unsponsored arrangements. EDRs are receipts issued in Europe by
banks or depositaries which evidence similar ownership arrangement.

B-6
<PAGE> 276

NON-DIVERSIFICATION

The Fund is a "non-diversified" investment company, which means the Fund is
not limited in the proportion of its assets that may be invested in the
securities of a single issuer. However, the Fund intends to conduct its
operations so as to qualify as a "regulated investment company" for purposes of
the Internal Revenue Code of 1986, as amended (the "Code"). If the Fund
qualifies as a regulated investment company under the Code, it will be relieved
of any liability for federal income tax to the extent its earnings are
distributed to shareholders. In order to qualify, among other requirements, the
Fund must limit its investments so that, at the close of each quarter of the
Fund's taxable year, (i) not more than 25% of the market value of the Fund's
total assets is invested in securities of a single issuer (other than the U.S.
government, its agencies and instrumentalities, or other regulated investment
companies) or of two or more issuers which the Fund controls and which are
determined to be in the same or similar, or related, trades on businesses and
(ii) at least 50% of the market value of its total assets is invested in cash,
cash items, securities of the U.S. government, its agencies and
instrumentalities, securities of other regulated investment companies, and other
securities limited in respect of any one issuer to an amount not greater than 5%
of the market value of the Fund's total assets and to not more than 10% of the
outstanding voting securities of such issuer. Since the Fund, as a
non-diversified investment company, may invest in a smaller number of individual
issuers than a diversified investment company, an investment in the Fund may,
under certain circumstances, present greater risks to an investor than an
investment in a diversified company.

OPTIONS, FUTURES CONTRACTS AND RELATED OPTIONS

The Fund may, but is not required to, use various investment strategies as
described below to earn income, facilitate portfolio management, and mitigate
risks. Techniques and instruments may change over time as new instruments and
strategies are developed or regulatory changes occur. Although the Fund's
Adviser seeks to use such transactions to further the Fund's investment
objective, no assurance can be given that the use of these transactions will
achieve these results.

SELLING CALL AND PUT OPTIONS

Purpose. The principal reason for selling options is to obtain, through
receipt of premiums, a greater current return than would be realized on the
underlying securities alone. Such current return could be expected to fluctuate
because premiums earned from an option selling program and dividend or interest
income yields on portfolio securities vary as economic and market conditions
change. Selling options on portfolio securities is likely to result in a higher
portfolio turnover rate.

B-7
<PAGE> 277

hedge against another security which the Fund owns or has the right to acquire.
In such circumstances, the Fund collateralizes the option by maintaining in a
segregated account with the Fund's custodian cash or liquid securities in an
amount not less than the market value of the underlying security, marked to
market daily, while the option is outstanding.

The purchaser of a put option pays a premium to the seller (i.e., the
writer) for the right to sell the underlying security to the writer at a
specified price during a certain period. The Fund would sell put options only on
a secured basis, which means that, at all times during the option period, the
Fund would maintain in a segregated account with its custodian cash or liquid
securities in an amount of not less than the exercise price of the option, or
would hold a put on the same underlying security at an equal or greater exercise
price.

Closing Purchase Transactions and Offsetting Transactions. In order to
terminate its position as a writer of a call or put option, the Fund could enter
into a "closing purchase transaction," which is the purchase of a call (put) on
the same underlying security and having the same exercise price and expiration
date as the call (put) previously sold by the Fund. The Fund would realize a
gain (loss) if the premium plus commission paid in the closing purchase
transaction is lesser (greater) than the premium it received on the sale of the
option. The Fund would also realize a gain if an option it has written lapses
unexercised.

The Fund could sell options that are listed on an exchange as well as
options which are privately negotiated in over-the-counter transactions. The
Fund could close out its position as a seller of an option only if a liquid
secondary market exists for options of that series, but there is no assurance
that such a market will exist, particularly in the case of over-the-counter
options, since they can be closed out only with the other party to the
transaction. Alternatively, the Fund could purchase an offsetting option, which
would not close out its position as a seller, but would provide an asset of
equal value to its obligation under the option sold. If the Fund is not able to
enter into a closing purchase transaction or to purchase an offsetting option
with respect to an option it has sold, it will be required to maintain the
securities subject to the call or the collateral securing the option until a
closing purchase transaction can be entered into (or the option is exercised or
expires) even though it might not be advantageous to do so. The staff of the SEC
currently takes the position that, in general, over-the-counter options on
securities purchased by the Fund, and portfolio securities "covering" the amount
of the Fund's obligation pursuant to an over-the-counter option sold by it (the
cost of the sell-back plus the in-the-money amount, if any) are illiquid, and
are subject to the Fund's limitation on illiquid securities described herein.

Risks of Writing Options. By selling a call option, the Fund loses the
potential for gain on the underlying security above the exercise price while the
option is outstanding; by selling a put option the Fund might become obligated
to purchase the underlying security at an exercise price that exceeds the then
current market price.

PURCHASING CALL AND PUT OPTIONS

The Fund could purchase call options to protect against anticipated
increases in the prices of securities it wishes to acquire. Alternatively, call
options could be purchased for capital appreciation. Since the premium paid for
a call option is typically a small fraction of the price of the underlying
security, a given amount of funds will purchase call options covering a much
larger quantity of such security than could be purchased directly. By purchasing
call options, the Fund could benefit from any significant increase in the price
of

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the underlying security to a greater extent than had it invested the same amount
in the security directly. However, because of the very high volatility of option
premiums, the Fund would bear a significant risk of losing the entire premium if
the price of the underlying security did not rise sufficiently, or if it did not
do so before the option expired.

Put options may be purchased to protect against anticipated declines in the
market value of either specific portfolio securities or of the Fund's assets
generally. Alternatively, put options may be purchased for capital appreciation
in anticipation of a price decline in the underlying security and a
corresponding increase in the value of the put option. The purchase of put
options for capital appreciation involves the same significant risk of loss as
described above for call options.

In any case, the purchase of options for capital appreciation would
increase the Fund's volatility by increasing the impact of changes in the market
price of the underlying securities on the Fund's net asset value.

OPTIONS ON STOCK INDICES

Options on stock indices are similar to options on stock, but the delivery
requirements are different. Instead of giving the right to take or make delivery
of stock at a specified price, an option on a stock index gives the holder the
right to receive an amount of cash which amount will depend upon the closing
level of the stock index upon which the option is based being greater than (in
the case of a call) or less than (in the case of a put) the exercise price of
the option. The amount of cash received will be the difference between the
closing price of the index and the exercise price of the option, multiplied by a
specified dollar multiple. The writer of the option is obligated, in return for
the premium received, to make delivery of this amount.

Some stock index options are based on a broad market index such as the
Standard & Poor's 500 or the New York Stock Exchange Composite Index, or a
narrower index such as the Standard & Poor's 100. Indices are also based on an
industry or market segment such as the AMEX Oil and Gas Index or the Computer
and Business Equipment Index. A stock index fluctuates with changes in the
market values of the stocks included in the index. Options are currently traded
on several exchanges.

Gain or loss to the Fund on transactions in stock index options will depend
on price movements in the stock market generally (or in a particular industry or
segment of the market) rather than price movements of individual securities. As
with stock options, the Fund may offset its position in stock index options
prior to expiration by entering into a closing transaction on an exchange, or it
may let the option expire unexercised.

FUTURES CONTRACTS

The Fund may engage in transactions involving futures contracts and related
options in accordance with the rules and interpretations of the Commodity
Futures Trading Commission ("CFTC") under which the Fund would be exempt from
registration as a "commodity pool."

A stock index futures contract is an agreement pursuant to which a party
agrees to take or make delivery of an amount of cash equal to a specified dollar
amount multiplied by the difference between the stock index value at a specified
time and the price at which
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the futures contract originally was struck. No physical delivery of the
underlying stocks in the index is made.

Currently, stock index futures contracts can be purchased with respect to
several indices on various exchanges. Differences in the stocks included in the
indices may result in differences in correlation of the futures contracts with
movements in the value of the securities being hedged.

An interest rate futures contract is an agreement pursuant to which a party
agrees to take or make delivery of a specified debt security (such as U.S.
Treasury bonds or notes) at a specified future time and at a specified price.
The Fund also may invest in foreign stock index futures traded outside the
United States which involve additional risks including fluctuations in foreign
exchange rates, foreign currency exchange controls, political and economic
instability, differences in financial reporting and securities regulation and
trading, and foreign taxation issues.

Initial and Variation Margin. In contrast to the purchase or sale of a
security, no price is paid or received upon the purchase or sale of a futures
contract. Initially, the Fund is required to deposit with its custodian in an
account in the broker's name an amount of cash or liquid securities equal to a
percentage (which will normally range between 2% and 10%) of the contract
amount. This amount is known as initial margin. The nature of initial margin in
futures transactions is different from that of margin in securities transactions
in that futures contract margin does not involve the borrowing of funds by the
customer to finance the transaction. Rather, the initial margin is in the nature
of a performance bond or good faith deposit on the contract, which is returned
to the Fund upon termination of the futures contract and satisfaction of its
contractual obligations. Subsequent payments to and from the broker, called
variation margin, are made on a daily basis as the price of the underlying
securities or index fluctuates, making the long and short positions in the
futures contract more or less valuable, a process known as marking to market.

For example, when the Fund purchases a futures contract and the price of
the underlying security or index rises, that position increases in value, and
the Fund receives from the broker a variation margin payment equal to that
increase in value. Conversely, where the Fund purchases a futures contract and
the value of the underlying security or index declines, the position is less
valuable, and the Fund is required to make a variation margin payment to the
broker.

At any time prior to expiration of the futures contract, the Fund may elect
to terminate the position by taking an opposite position. A final determination
of variation margin is then made, additional cash is required to be paid by or
released to the Fund, and the Fund realizes a loss or a gain.

Futures Strategies. When the Fund anticipates a significant market or
market sector advance, the purchase of a futures contract affords a hedge
against not participating in the advance at a time when the Fund is otherwise
fully invested ("anticipatory hedge"). Such purchase of a futures contract would
serve as a temporary substitute for the purchase of individual securities, which
may be purchased in an orderly fashion once the market has stabilized. As
individual securities are purchased, an equivalent amount of futures contracts
could be terminated by offsetting sales. The Fund may sell futures contracts in
anticipation of or in a general market or market sector decline that may
adversely affect the market value of the Fund's securities ("defensive hedge").
To the extent that the Fund's portfolio of securities changes in value in
correlation with the underlying security or index, the sale of

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futures contracts would substantially reduce the risk to the Fund of a market
decline and, by so doing, provides an alternative to the liquidation of
securities positions in the Fund. Ordinarily transaction costs associated with
futures transactions are lower than transaction costs that would be incurred in
the purchase and sale of the underlying securities.

Special Risks Associated with Futures Transactions. There are several risks
connected with the use of futures contracts. These include the risk of imperfect
correlation between movements in the price of the futures contracts and of the
underlying securities or index; the risk of market distortion; the illiquidity
risk; and the risk of error in anticipating price movement.

There may be an imperfect correlation (or no correlation) between movements
in the price of the futures contracts and of the securities being hedged. The
risk of imperfect correlation increases as the composition of the securities
being hedged diverges from the securities upon which the futures contract is
based. If the price of the futures contract moves less than the price of the
securities being hedged, the hedge will not be fully effective. To compensate
for the imperfect correlation, the Fund could buy or sell futures contracts in a
greater dollar amount than the dollar amount of securities being hedged if the
historical volatility of the securities being hedged is greater than the
historical volatility of the securities underlying the futures contract.
Conversely, the Fund could buy or sell futures contracts in a lesser dollar
amount than the dollar amount of securities being hedged if the historical
volatility of the securities being hedged is less than the historical volatility
of the securities underlying the futures contracts. It is also possible that the
value of futures contracts held by the Fund could decline at the same time as
portfolio securities being hedged; if this occurred, the Fund would lose money
on the futures contract in addition to suffering a decline in value in the
portfolio securities being hedged.

There is also the risk that the price of futures contracts may not
correlate perfectly with movements in the securities or index underlying the
futures contract due to certain market distortions. First, all participants in
the futures market are subject to margin depository and maintenance
requirements. Rather than meet additional margin depository requirements,
investors may close futures contracts through offsetting transactions, which
could distort the normal relationship between the futures market and the
securities or index underlying the futures contract. Second, from the point of
view of speculators, the deposit requirements in the futures market are less
onerous than margin requirements in the securities markets. Therefore, increased
participation by speculators in the futures markets may cause temporary price
distortions. Due to the possibility of price distortion in the futures markets
and because of the imperfect correlation between movements in futures contracts
and movements in the securities underlying them, a correct forecast of general
market trends by the Adviser may still not result in a successful hedging
transaction.

There is also the risk that futures markets may not be sufficiently liquid.
Futures contracts may be closed out only on an exchange or board of trade that
provides a market for such futures contracts. Although the Fund intends to
purchase or sell futures only on exchanges and boards of trade where there
appears to be an active secondary market, there can be no assurance that an
active secondary market will exist for any particular contract or at any
particular time. In the event of such illiquidity, it might not be possible to
close a futures position and, in the event of adverse price movement, the Fund
would continue to be required to make daily payments of variation margin. Since
the securities being hedged would not be sold until the related futures contract
is sold, an increase, if any, in the price of

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the securities may to some extent offset losses on the related futures contract.
In such event, the Fund would lose the benefit of the appreciation in value of
the securities.

Successful use of futures is also subject to the Adviser's ability to
correctly predict the direction of movements in the market. For example, if the
Fund hedges against a decline in the market, and market prices instead advance,
the Fund will lose part or all of the benefit of the increase in value of its
securities holdings because it will have offsetting losses in futures contracts.
In such cases, if the Fund has insufficient cash, it may have to sell portfolio
securities at a time when it is disadvantageous to do so in order to meet the
daily variation margin.

Although the Fund intends to enter into futures contracts only if there is
an active market for such contracts, there is no assurance that an active market
will exist for the contracts at any particular time. Most U.S. futures exchanges
and boards of trade limit the amount of fluctuation permitted in futures
contract prices during a single trading day. Once the daily limit has been
reached in a particular contract, no trades may be made that day at a price
beyond that limit. It is possible that futures contract prices would move to the
daily limit for several consecutive trading days with little or no trading,
thereby preventing prompt liquidation of futures positions and subjecting some
futures traders to substantial losses. In such event, and in the event of
adverse price movements, the Fund would be required to make daily cash payments
of variation margin. In such circumstances, an increase in the value of the
portion of the portfolio being hedged, if any, may partially or completely
offset losses on the futures contract. However, as described above, there is no
guarantee that the price of the securities being hedged will, in fact, correlate
with the price movements in a futures contract and thus provide an offset to
losses on the futures contract.

The Fund will not enter into futures contracts or options transactions
(except for closing transactions) other than for bona fide hedging purposes if,
immediately thereafter, the sum of its initial margin and premiums on open
futures contracts and options exceed 5% of the fair market value of the Fund's
assets; however, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%
limitation. In order to prevent leverage in connection with the purchase of
futures contracts by the Fund, an amount of cash or liquid securities equal to
the market value of the obligation under the futures contracts (less any related
margin deposits) will be maintained in a segregated account with the custodian.

OPTIONS ON FUTURES CONTRACTS

The Fund could also purchase and write options on futures contracts. An
option on a futures contract gives the purchaser the right, in return for the
premium paid, to assume a position in a futures contract (a long position if the
option is a call and a short position if the option is a put) at a specified
exercise price at any time during the option period. As a writer of an option on
a futures contract, the Fund would be subject to initial margin and maintenance
requirements similar to those applicable to futures contracts. In addition, net
option premiums received by the Fund are required to be included as initial
margin deposits. When an option on a futures contract is exercised, delivery of
the futures position is accompanied by cash representing the difference between
the current market price of the futures contract and the exercise price of the
option. The Fund could purchase put options on futures contracts in lieu of, and
for the same purposes as, the sale of a futures contract; at the same time, it
could write put options at a lower strike price (a "put bear spread")

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to offset part of the cost of the strategy to the Fund. The purchase of call
options on futures contracts is intended to serve the same purpose as the actual
purchase of the futures contracts.

Risks of Transactions in Options on Futures Contracts. In addition to the
risks described above which apply to all options transactions, there are several
special risks relating to options on futures. The Adviser will not purchase
options on futures on any exchange unless in the Adviser's opinion, a liquid
secondary exchange market for such options exists. Compared to the use of
futures, the purchase of options on futures involves less potential risk to the
Fund because the maximum amount at risk is the premium paid for the options
(plus transaction costs). However, there may be circumstances, such as when
there is no movement in the price of the underlying security or index, when the
use of an option on a future would result in a loss to the Fund when the use of
a future would not.

ADDITIONAL RISKS OF OPTIONS, FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

Each of the exchanges has established limitations governing the maximum
number of call or put options on the same underlying security or futures
contract (whether or not covered) which may be written by a single investor,
whether acting alone or in concert with others (regardless of whether such
options are written on the same or different exchanges or are held or written on
one or more accounts or through one or more brokers). Option positions of all
investment companies advised by the Adviser are combined for purposes of these
limits. An exchange may order the liquidation of positions found to be in
violation of these limits and it may impose other sanctions or restrictions.
These position limits may restrict the number of listed options which the Fund
may write.

In the event of the bankruptcy of a broker through which the Fund engages
in transactions in options, futures or related options, the Fund could
experience delays or losses in liquidating open positions purchased or incur a
loss of all or part of its margin deposits with the broker. Transactions are
entered into by the Fund only with brokers or financial institutions deemed
creditworthy by the Adviser.

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

Many derivative transactions, in addition to other requirements, require
that the Fund segregate cash and liquid securities with its custodian to the
extent the Fund's obligations are not otherwise "covered" as described above. In
general, either the full amount of any obligation by the Fund to pay or deliver
securities or assets must be covered at all times by the securities, instruments
or currency required to be delivered (or securities convertible into the needed
securities without additional consideration), or, subject to applicable
regulatory restrictions, an amount of cash or liquid securities at least equal
to the current amount of the obligation must be segregated with the custodian.
The segregated assets cannot be sold or transferred unless equivalent assets are
substituted in their place or it is no longer necessary to segregate them. In
the case of a futures contract or an option thereon, the Fund must deposit
initial margin and possible daily variation margin in addition to segregating
cash and liquid securities sufficient to meet its obligation to purchase or
provide securities or currencies, or to pay the amount owed at the expiration of
an index-based futures contract. Derivative transactions may be covered by other
means when consistent with applicable regulatory policies. The Fund may also
enter into offsetting transactions so that its combined position, coupled with
any segregated cash and liquid securities, equals its net outstanding
obligation.

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INVESTMENT RESTRICTIONS

1. Issue senior securities nor borrow money, except the Fund may issue
senior securities or borrow money to the extent permitted by (i) the
1940 Act, as amended from time to time, (ii) the rules and regulations
promulgated by the SEC under the 1940 Act, as amended from time to time,
or (iii) an exemption or other relief applicable to the Fund from the
provisions of the 1940 Act, as amended from time to time.

2. Act as an underwriter of securities issued by others, except to the
extent that, in connection with the disposition of portfolio securities,
it may be deemed to be an underwriter under applicable securities laws.

3. Invest in any security if, as a result, 25% or more of the value of the
Fund's total assets, taken at market value at the time of each
investment, are in the securities of issuers in any particular industry
except (a) excluding securities issued or guaranteed by the U.S.
government and its agencies and instrumentalities or securities of state
and municipal governments or their political subdivisions, or (b) when
the Fund has taken a temporary defensive position, or (c) as otherwise
provided by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as
amended from time to time, or (iii) an exemption or other relief
applicable to the Fund from the provisions of the 1940 Act, as amended
from time to time.

4. Purchase or sell real estate except that the Fund may: (a) acquire or
lease office space for its own use, (b) invest in securities of issuers
that invest in real estate or interests therein or that are engaged in
or operate in the real estate industry, (c) invest in securities that
are secured by real estate or interests therein, (d) purchase and sell
mortgage-related securities, (e) hold and sell real estate acquired by
the Fund as a result of the ownership of securities and (f) as otherwise
permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as
amended from time to time, or (iii) an exemption or other relief
applicable to the Fund from the provisions of the 1940 Act, as amended
from time to time.

5. Purchase or sell physical commodities unless acquired as a result of
ownership of securities or other instruments; provided that this
restriction shall not prohibit the Fund from purchasing or selling
options, futures contracts and related options thereon, forward
contracts, swaps, caps, floors, collars and any other financial
instruments or from investing in securities or other instruments backed
by physical commodities or as otherwise permitted by (i) the 1940 Act,
as amended from time

B-14
<PAGE> 284

to time, (ii) the rules and regulations promulgated by the SEC under the
1940 Act, as amended from time to time, or (iii) an exemption or other
relief applicable to the Fund from the provisions of the 1940 Act, as
amended from time to time.

6. Make loans of money or property to any person, except (a) to the extent
that securities or interests in which the Fund may invest are considered
to be loans, (b) through the loan of portfolio securities, (c) by
engaging in repurchase agreements or (d) as may otherwise be permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief applicable to the
Fund from the provisions of the 1940 Act, as amended from time to time.

The Fund has an operating policy not to borrow money except for temporary
purposes and then in an amount not in excess of 5% of the value of the total
assets of the Fund at the time the borrowing is made.

TRUSTEES AND OFFICERS

TRUSTEES

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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Jerry D. Choate........................... Director of Amgen Inc., a biotechnological
53 Monarch Bay Drive company. Trustee/Director of each of the funds
Dana Point, CA 92629 in the Fund Complex. Prior to January 1999,
Date of Birth: 09/16/38 Chairman and Chief Executive Officer of The
Age: 61 Allstate Corporation ("Allstate") and Allstate
Insurance Company. Prior to January 1995,
President and Chief Executive Officer of
Allstate. Prior to August 1994, various
management positions at Allstate.
Linda Hutton Heagy........................ Managing Partner of Heidrick & Stuggles, an
Sears Tower executive search firm. Trustee/Director of each
233 South Wacker Drive of the funds in the Fund Complex. Prior to
Suite 7000 1997, Partner, Ray & Berndtson, Inc., an
Chicago, IL 60606 executive recruiting and management consulting
Date of Birth: 06/03/48 firm. Formerly, Executive Vice President of ABN
Age: 52 AMRO, N.A., a Dutch bank holding company. Prior
to 1992, Executive Vice President of La Salle
National Bank. Trustee on the University of
Chicago Hospitals Board, Vice Chair of the
Board of The YMCA of Metropolitan Chicago and a
member of the Women's Board of the University
of Chicago. Prior to 1996, Trustee of The
International House Board, a fellowship and
housing organization for international graduate
students.
R. Craig Kennedy.......................... President and Director, German Marshall Fund of
11 DuPont Circle, N.W. the United States, an independent U.S.
Washington, D.C. 20016 foundation created to deepen understanding,
Date of Birth: 02/29/52 promote collaboration and stimulate exchanges
Age: 48 of practical experience between Americans and
Europeans. Trustee/Director of each of the
funds in the Fund Complex. Formerly, advisor to
the Dennis Trading Group Inc., a managed
futures and option company that invests money
for individuals and institutions. Prior to
1992, President and Chief Executive Officer,
Director and Member of the Investment Committee
of the Joyce Foundation, a private foundation.
</TABLE>

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B-17
<PAGE> 287

Suzanne H. Woolsey........................ Chief Operating Officer of the National Academy
2101 Constitution Ave., N.W. of Sciences/National Research Council, an
Room 206 independent, federally chartered policy
Washington, D.C. 20418 institution, since 1993. Director of Neurogen
Date of Birth: 12/27/41 Corporation, a pharmaceutical company, since
Age: 58 January 1998. Director of the German Marshall
Fund of the United States, Trustee of Colorado
College, and Vice Chair of the Board of the
Council for Excellence in Government. Trustee/
Director of each of the funds in the Fund
Complex. Prior to 1993, Executive Director of
the Commission on Behavioral and Social
Sciences and Education at the National Academy
of Sciences/National Research Council. From
1980 through 1989, Partner of Coopers &
Lybrand.
</TABLE>

------------------------------------

* Such trustee is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act. Mr. Whalen is an interested person of the Fund by reason of
his firm currently acting as legal counsel to the Fund. Messrs. Merin and
Powers are interested persons of the Fund and the Advisers by reason of their
positions with Morgan Stanley Dean Witter or its affiliates.

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OFFICERS

Messrs. Smith, Santo, Ciccarone, Reynoldson, Sullivan and Zimmermann are
located at 1 Parkview Plaza, Oakbrook Terrace, IL 60181-5555. Mr. Boyd is
located at 2800 Post Oak Blvd., Houston, TX 77056.

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>

A. Thomas Smith III.................. Executive Vice President, General Counsel,
Date of Birth: 12/14/56 Secretary and Director of Van Kampen Investments,
Age: 43 the Advisers, Van Kampen Advisors Inc., Van Kampen
Vice President and Management Inc., the Distributor, American Capital
Secretary Contractual Services, Inc., Van Kampen Exchange
Corp., Van Kampen Recordkeeping Services Inc.,
Investor Services, Van Kampen Insurance Agency of
Illinois Inc. and Van Kampen System Inc. Vice
President and Secretary/Vice President, Principal
Legal Officer and Secretary of other investment
companies advised by the Advisers or their
affiliates. Vice President and Secretary of each of
the funds in the Fund Complex. Prior to January
1999, Vice President and Associate General Counsel
to New York Life Insurance Company ("New York
Life"), and prior to March 1997, Associate General
Counsel of New York Life. Prior to December 1993,
Assistant General Counsel of The Dreyfus
Corporation. Prior to August 1991, Senior
Associate, Willkie Farr & Gallagher. Prior to
January 1989, Staff Attorney at the Securities and
Exchange Commission, Division of Investment
Management, Office of Chief Counsel.

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<PAGE> 289

John R. Reynoldson................... Senior Vice President and Co-head of the Fixed
Date of Birth: 05/15/53 Income Department of the Advisers, Van Kampen
Age: 47 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he managed the investment grade
taxable group for the Adviser since July 1999. From
July 1988 to June 1999, he managed the government
securities bond group for Asset Management. Mr.
Reynoldson has been with Asset Management since
April 1987, and has been a Senior Vice President of
Asset Management since July 1988. He has been a
Senior Vice President of the Adviser and Van Kampen
Management Inc. since June 1995 and Senior Vice
President of Van Kampen Advisors Inc. since June
2000.

B-20
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B-21
<PAGE> 291

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

------------------------------------

(1) Trustees not eligible for compensation are not included in the Compensation
Table. Mr. Choate and Ms. Woolsey became members of the Board of Trustees
for funds in the Fund Complex on May 26, 1999 and therefore do not have a
full year of information to report. Paul G. Yovovich resigned as a member of
the Board of Trustees for the Fund and other funds in the Fund Complex on
April 14, 2000.

(2) For the Fund's first fiscal year, the estimated aggregate compensation from
the Fund per trustee is anticipated to be approximately $1,000-$2,000. The
amounts shown in this column represent the aggregate compensation before
deferral from all operating series of the Trust during the fiscal year ended
March 31, 2000. The details of aggregate compensation before deferral for
each operating series of the Registrant during the fiscal year ended March
31, 2000 are shown in Table A below. The details of compensation deferred
for each operating series of the Registrant during the fiscal year ended
March 31, 2000 are shown in Table B below. Amounts deferred are retained by
the Fund and earn a rate of return determined by reference to either the
return on the common shares of the Fund or other funds in the Fund Complex
as selected by the respective Non-Affiliated Trustee, with the same economic
effect as if such Non-Affiliated Trustee had invested in one or more funds
in the Fund Complex. To the extent permitted by the 1940 Act, each fund may
invest in securities of those funds selected by the Non-Affiliated Trustees
in order to match the deferred

B-22
<PAGE> 292

compensation obligation. The details of cumulative deferred compensation
(including interest) for each operating series of the Registrant as of March
31, 2000 are shown in Table C below. The deferred compensation plan is
described above the Compensation Table.

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<PAGE> 293

advisory process. Exceptions to these and other provisions of the Code of Ethics
may be granted in particular circumstances after review by appropriate
personnel.

As of July 3, 2000, the trustees and officers of the Fund as a group owned
less than 1% of the shares of the Fund.

TABLE A

2000 AGGREGATE COMPENSATION FROM THE TRUST AND EACH SERIES

------------------------------------

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

TABLE B

2000 AGGREGATE COMPENSATION DEFERRED FROM

THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL ----------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 3/31 $2,340 $1,778 $2,340 $1,170 $2,340 $2,340 $1,170 $2,340 $ 0
Great American Companies
Fund(1)....................... 3/31 1,202 802 1,202 601 1,202 1,202 601 1,202 0
Growth Fund..................... 3/31 1,388 940 1,388 694 1,388 1,388 694 1,388 0
Mid Cap Value Fund(1)........... 3/31 1,201 801 1,201 601 1,201 1,201 601 1,201 0
Prospector Fund(1).............. 3/31 1,203 803 1,203 602 1,203 1,203 602 1,203 0
Select Growth Fund*............. 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund............ 3/31 801 801 801 400 801 801 400 801 0
Utility Fund.................... 3/31 1,405 952 1,405 703 1,405 1,405 703 1,405 0
------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Trust Total............ $9,540 $6,877 $9,540 $4,771 $9,540 $9,540 $4,771 $9,540 $ 0
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

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<PAGE> 294

TABLE C

2000 CUMULATIVE COMPENSATION DEFERRED

(PLUS INTEREST) FROM THE TRUST AND EACH SERIES

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March 31,
2000.

TABLE D

YEAR OF ELECTION OR APPOINTMENT TO EACH SERIES OF THE TRUST

------------------------------------

* The Select Growth Fund commenced investment operations in June 2000.

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objective. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Fund's Board of Trustees,
and permits its officers and employees to serve without compensation as trustees
of the Trust or officers of the Fund if elected to such positions. The Fund,
however, bears the costs of its day-to-day operations, including service fees,
distribution fees, custodian fees, legal and independent accountant fees, the
costs of reports and proxies to shareholders, compensation of trustees of the
Trust (other than those who are affiliated persons of the Adviser, Distributor
or Van Kampen Investments), and all other ordinary business expenses not
specifically assumed by the Adviser. The Advisory Agreement also provides that
the Adviser shall not be liable to the Fund for any error of judgment or of law,
or for any loss suffered by the Fund in connection with the matters to which the
Advisory Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Adviser in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under the Advisory Agreement.

B-25
<PAGE> 295

The Advisory Agreement also provides that, in the event the expenses of the
Fund for any fiscal year exceed the most restrictive expense limitation
applicable in any jurisdiction in which the Fund's shares are qualified for
offer and sale (excluding any expenses permitted to be excluded from the
computation under applicable law or regulation), the compensation due the
Adviser will be reduced by the amount of such excess and that, if a reduction in
and refund of the advisory fee is insufficient, the Adviser will pay the Fund
monthly an amount sufficient to make up the deficiency, subject to readjustment
during the fiscal year.

OTHER AGREEMENTS

Legal Services Agreement. The Fund and certain of the other Van Kampen
funds advised by the Adviser or its affiliates and distributed by the
Distributor have entered into legal services agreements pursuant to which Van
Kampen Investments provides legal services, including without limitation:
accurate maintenance of each fund's minute books and records, preparation and
oversight of each fund's regulatory reports, and other information provided to
shareholders, as well as responding to day-to-day legal issues on behalf of the
funds. Payment by the funds for such services is made on a cost basis for the
salary and salary-related benefits, including but not limited to bonuses, group
insurance and other regular wages for the employment of personnel, as well as
overhead and the expenses related to the office space and the equipment
necessary to render the legal services. Other funds distributed by the
Distributor also receive legal services from Van Kampen Investments. Of the
total costs for legal services provided to funds distributed by the Distributor,
one half of such costs are allocated equally to each fund and the remaining one
half of such costs are allocated to specific funds based on monthly time
records.

B-26
<PAGE> 296

DISTRIBUTION AND SERVICE

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

With respect to sales of Class B Shares and Class C Shares of the Fund, a
commission or transaction fee generally will be paid by the Distributor at the
time of

B-27
<PAGE> 297

purchase directly out of the Distributor's assets (and not out of the Fund's
assets) to authorized dealers who initiate and are responsible for such
purchases computed based on a percentage of the dollar value of such shares sold
of 4.00% on Class B Shares and 1.00% on Class C Shares.

In addition to reallowances or commissions described above, the Distributor
may from time to time implement programs under which an authorized dealer's
sales force may be eligible to win nominal awards for certain sales efforts or
under which the Distributor will reallow to any authorized dealer that sponsors
sales contests or recognition programs conforming to criteria established by the
Distributor, or participates in sales programs sponsored by the Distributor, an
amount not exceeding the total applicable sales charges on the sales generated
by the authorized dealer at the public offering price during such programs.
Also, the Distributor in its discretion may from time to time, pursuant to
objective criteria established by the Distributor, pay fees to, and sponsor
business seminars for, qualifying authorized dealers for certain services or
activities which are primarily intended to result in sales of shares of the Fund
or other Van Kampen funds. Fees may include payment for travel expenses,
including lodging, incurred in connection with trips taken by invited registered
representatives for meetings or seminars of a business nature. In some instances
additional compensation or promotional incentives may be offered to brokers,
dealers or financial intermediaries that have sold or may sell significant
amounts of shares during specified periods of time. The Distributor may provide
additional compensation to Edward D. Jones & Co. or an affiliate thereof based
on a combination of its quarterly sales of shares of the Fund and other Van
Kampen funds and increases in net assets of the Fund and other Van Kampen funds
over specified thresholds. All of the foregoing payments are made by the
Distributor out of its own assets. Such fees paid for such services and
activities with respect to the Fund will not exceed in the aggregate 1.25% of
the average total daily net assets of the Fund on an annual basis. These
programs will not change the price an investor will pay for shares or the amount
that a Fund will receive from such sale.

B-28
<PAGE> 298

agents and similar agreements between the Fund and financial intermediaries who
are acting as brokers (collectively, "Selling Agreements") that may provide for
their customers or clients certain services or assistance, which may include,
but not be limited to, processing purchase and redemption transactions,
establishing and maintaining shareholder accounts regarding the Fund, and such
other services as may be agreed to from time to time and as may be permitted by
applicable statute, rule or regulation. Brokers, dealers and financial
intermediaries that have entered into sub-agreements with the Distributor and
sell shares of the Fund are referred to herein as "financial intermediaries."

The Distributor must submit quarterly reports to the Board of Trustees of
the Trust, of which the Fund is a series, setting forth separately by class of
shares all amounts paid under the Distribution Plan and the purposes for which
such expenditures were made, together with such other information as from time
to time is reasonably requested by the Trustees. The Plans provide that they
will continue in full force and effect from year to year so long as such
continuance is specifically approved by a vote of the Trustees, and also by a
vote of the disinterested Trustees, cast in person at a meeting called for the
purpose of voting on the Plans. Each of the Plans may not be amended to increase
materially the amount to be spent for the services described therein with
respect to any class of shares without approval by a vote of a majority of the
outstanding voting shares of such class, and all material amendments to either
of the Plans must be approved by the Trustees and also by the disinterested
Trustees. Each of the Plans may be terminated with respect to any class of
shares at any time by a vote of a majority of the disinterested Trustees or by a
vote of a majority of the outstanding voting shares of such class.

B-29
<PAGE> 299

applicable plan fees for such class of shares. Except as may be mandated by
applicable law, the Fund does not impose any limit with respect to the number of
years into the future that such unreimbursed actual net expenses may be carried
forward (on a Fund level basis). These unreimbursed actual net expenses may or
may not be recovered through plan fees or contingent deferred sales charges in
future years.

If the Plans are terminated or not continued, the Fund would not be
contractually obligated to pay the Distributor for any expenses not previously
reimbursed by the Fund or recovered through contingent deferred sales charges.

TRANSFER AGENT

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

B-30
<PAGE> 300

such research services which are furnished without cost to the Adviser. Since
statistical and other research information is only supplementary to the research
efforts of the Adviser to the Fund and still must be analyzed and reviewed by
its staff, the receipt of research information is not expected to reduce its
expenses materially. The investment advisory fee is not reduced as a result of
the Adviser's receipt of such research services. Services provided may include
(a) furnishing advice as to the value of securities, the advisability of
investing in, purchasing or selling securities, and the availability of
securities or purchasers or sellers of securities; (b) furnishing analyses and
reports concerning issuers, industries, securities, economic factors and trends,
portfolio strategy, and the performance of accounts; and (c) effecting
securities transactions and performing functions incidental thereto (such as
clearance, settlement and custody). Research services furnished by firms through
which the Fund effects its securities transactions may be used by the Adviser in
servicing all of its advisory accounts; not all of such services may be used by
the Adviser in connection with the Fund. The Adviser also may place portfolio
transactions, to the extent permitted by law, with brokerage firms affiliated
with the Fund, the Adviser or the Distributor and with brokerage firms
participating in the distribution of the Fund's shares if it reasonably believes
that the quality of execution and the commission are comparable to that
available from other qualified firms. Similarly, to the extent permitted by law
and subject to the same considerations on quality of execution and comparable
commission rates, the Adviser may direct an executing broker to pay a portion or
all of any commissions, concessions or discounts to a firm supplying research or
other services or to a firm participating in the distribution of the Fund's
shares.

B-31
<PAGE> 301

SHAREHOLDER SERVICES

INVESTMENT ACCOUNT

SHARE CERTIFICATES

RETIREMENT PLANS

B-32
<PAGE> 302

AUTOMATED CLEARING HOUSE("ACH") DEPOSITS

DIVIDEND DIVERSIFICATION

A shareholder, may upon written request by completing the appropriate
section of the account application form or by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired), elect to have all dividends and capital gain
dividends paid on a class of shares of the Fund invested into shares of the same
class of any Participating Fund so long as the investor has a pre-existing
account for such class of shares of the other fund. Both accounts must be of the
same type, either non-retirement or retirement. If the accounts are retirement
accounts, they must both be for the same class and of the same type of
retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit Sharing
Keogh plans) and for the benefit of the same individual. If a qualified,
pre-existing account does not exist, the shareholder must establish a new
account subject to minimum investment and other requirements of the fund into
which distributions would be invested. Distributions are invested into the
selected fund at its net asset value per share as of the payable date of the
distribution from the fund.

SYSTEMATIC WITHDRAWAL PLAN

Class B Shareholders and Class C Shareholders who establish a systematic
withdrawal plan may redeem up to 12% annually of the shareholder's initial
account balance without

B-33
<PAGE> 303

incurring a contingent deferred sales charge. Initial account balance means the
amount of the shareholder's investment at the time the election to participate
in the plan is made.

EXCHANGE PRIVILEGE

All shareholders are limited to eight exchanges per fund during a rolling
365-day period.

This policy does not apply to money market funds, systematic exchange
plans, or employer-sponsored retirement plans.

REINSTATEMENT PRIVILEGE

REDEMPTION OF SHARES

B-34
<PAGE> 304

practicable or it is not reasonably practicable for the Fund to fairly determine
the value of its net assets; or (d) the SEC, by order, so permits.

In addition, if the Fund's Board of Trustees determines that payment wholly
or partly in cash would be detrimental to the best interests of the remaining
shareholders of the Fund, the Fund may pay the redemption proceeds in whole or
in part by a distribution-in-kind of portfolio securities held by the Fund in
lieu of cash in conformity with applicable rules of the SEC. A
distribution-in-kind will result in recognition by the shareholder of a gain or
loss for federal income tax purposes when such securities are distributed, and
the shareholder may incur brokerage charges and a gain or loss for federal
income tax purposes upon a shareholder's subsequent disposition of such
securities.

CONTINGENT DEFERRED SALES CHARGE-CLASS A

As described in the Prospectus under "Purchase of Shares -- Class A
Shares," there is no sales charge payable on Class A Shares at the time of
purchase on investments of $1 million or more, but a contingent deferred sales
charge ("CDSC -- Class A") may be imposed on certain redemptions made within one
year of purchase. For purposes of the CDSC-Class A, when shares of one fund are
exchanged for shares of another fund, the purchase date for the shares of the
fund exchanged into will be assumed to be the date on which shares were
purchased in the fund from which the exchange was made. If the exchanged shares
themselves are acquired through an exchange, the purchase date is assumed to
carry over from the date of the original election to purchase shares subject to
a CDSC-Class A rather than a front-end load sales charge. In determining whether
a CDSC-Class A is payable, it is assumed that shares being redeemed first are
any shares in the shareholder's account not subject to a contingent deferred
sales charge, followed by shares held the longest in the shareholder's account.
The contingent deferred sales charge is assessed on an amount equal to the
lesser of the then current market value or the cost of the shares being
redeemed. Accordingly, no sales charge is imposed on increases in net asset
value above the initial purchase price. In addition, no sales charge is assessed
on shares derived from reinvestment of dividends or capital gain dividends.

WAIVER OF CLASS B AND CLASS C CONTINGENT
DEFERRED SALES CHARGES

REDEMPTION UPON DEATH OR DISABILITY

B-35
<PAGE> 305

impairment which can be expected to result in death or to be of long-continued
and indefinite duration." While the Fund does not specifically adopt the balance
of the Code's definition which pertains to furnishing the Secretary of Treasury
with such proof as he or she may require, the Distributor will require
satisfactory proof of death or disability before it determines to waive the
CDSC-Class B and C.

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

The Fund will waive the CDSC-Class B and C when a total or partial
redemption is made in connection with certain distributions from retirement
plans. The CDSC -- Class B and C will be waived upon the tax-free rollover or
transfer of assets to another retirement plan invested in one or more
Participating Funds; in such event, as described below, the Fund will "tack" the
period for which the original shares were held on to the holding period of the
shares acquired in the transfer or rollover for purposes of determining what, if
any, CDSC-Class B and C is applicable in the event that such acquired shares are
redeemed following the transfer or rollover. The charge also will be waived on
any redemption which results from the return of an excess contribution pursuant
to Section 408(d)(4) or (5) of the Code, the return of excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2), the financial hardship of the
employee pursuant to U.S. Treasury Regulations 1.401(k)-1(d)(2) or from the
death or disability of the employee (see Code Section 72(m)(7) and
72(t)(2)(A)(ii)). In addition, the charge will be waived on any minimum
distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC -- Class B and C for any
distributions from IRAs or other retirement plans not specifically described
above.

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

B-36
<PAGE> 306

exceed a maximum of 12% annually of the shareholder's initial account balance.
The Fund reserves the right to change the terms and conditions of the systematic
withdrawal plan and the ability to offer the systematic withdrawal plan.

NO INITIAL COMMISSION OR TRANSACTION FEE

INVOLUNTARY REDEMPTIONS OF SHARES

REINVESTMENT OF REDEMPTION PROCEEDS

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class B and C when a total or partial
redemption is made by the Adviser with respect to its investments in the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

The Fund intends to elect and to qualify, and intends to continue to
qualify each year, to be treated as a regulated investment company under
Subchapter M of the Code. To qualify as a regulated investment company, the Fund
must comply with certain requirements of the Code relating to, among other
things, the source of its income and diversification of its assets.

If the Fund so qualifies and distributes each year to its shareholders at
least 90% of its investment company taxable income (generally, taxable income
and net short-term capital gain, but not net capital gain, which is the excess
of net long-term capital gain over net short-term capital loss) and meets
certain other requirements, it will not be required to pay
B-37
<PAGE> 307

federal income taxes on any income it distributes to shareholders. The Fund
intends to distribute at least the minimum amount of investment company taxable
income necessary to satisfy the 90% distribution requirement. The Fund will not
be subject to federal income tax on any net capital gain distributed to
shareholders.

DISTRIBUTIONS TO SHAREHOLDERS

B-38
<PAGE> 308

constitute capital gains to such holder (assuming such shares are held as a
capital asset). For a summary of the maximum tax rates applicable to capital
gains (including capital gain dividends), see "Capital Gains Rates" below.
Tax-exempt shareholders not subject to federal income tax on their income
generally will not be taxed on distributions from the Fund.

Income from investments in foreign securities received by the Fund may be
subject to income, withholding or other taxes imposed by foreign countries and
U.S. possessions. Tax conventions between certain countries and the United
States may reduce or eliminate such taxes.

SALE OF SHARES

B-39
<PAGE> 309

CAPITAL GAINS RATES

NON-U.S. SHAREHOLDERS

B-40
<PAGE> 310

BACKUP WITHHOLDING

Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules from payments made to a shareholder may be refunded or
credited against such shareholder's U.S. federal income tax liability, if any,
provided that the required information is furnished to the IRS.

INFORMATION REPORTING

GENERAL

FUND PERFORMANCE

B-41
<PAGE> 311

all income dividends or capital gain dividends during the period are reinvested
in Fund shares at net asset value; and that any applicable contingent deferred
sales charge has been paid. The Fund's total return will vary depending on
market conditions, the securities comprising the Fund's portfolio, the Fund's
operating expenses and unrealized net capital gains or losses during the period.
Total return is based on historical earnings and asset value fluctuations and is
not intended to indicate future performance. No adjustments are made to reflect
any income taxes payable by shareholders on dividends and capital gain dividends
paid by the Fund or to reflect the fact that 12b-1 fees may have changed over
time.

B-42
<PAGE> 312

holdings and largest holdings. Materials may also mention how the Distributor
believes the Fund compares relative to other Van Kampen funds. Materials may
also discuss the Dalbar Financial Services study from 1984 to 1994 which studied
investor cash flow into and out of all types of mutual funds. The ten-year study
found that investors who bought mutual fund shares and held such shares
outperformed investors who bought and sold. The Dalbar study conclusions were
consistent regardless of whether shareholders purchased their funds' shares in
direct or sales force distribution channels. The study showed that investors
working with a professional representative have tended over time to earn higher
returns than those who invested directly. The performance of the funds purchased
by the investors in the Dalbar study and the conclusions based thereon are not
necessarily indicative of future performance of such funds or conclusions that
may result from similar studies in the future. The Fund may also be marketed on
the internet.

B-43
<PAGE> 313

OTHER INFORMATION

CUSTODY OF ASSETS

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the independent accountants.

INDEPENDENT AUDITORS

Independent auditors perform an annual audit of the financial statements of
the Fund. The Trust's Board of Trustees has engaged Ernst & Young LLP, located
at 233 South Wacker Drive, Chicago, Illinois 60606, to be the independent
accountants. The change in independent auditors was approved by the Trust's
audit committee and the Trust's Board of Trustees, including Trustees who are
not "interested persons" of the Fund (as defined in the 1940 Act, as amended).

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).

B-44
<PAGE> 314

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN
SMALL CAP VALUE FUND

Van Kampen Small Cap Value Fund (the "Fund") is a mutual fund with the
investment objective to seek capital appreciation. The Fund's investment adviser
seeks to achieve the Fund's investment objective by investing primarily in a
portfolio of equity securities of small capitalization companies that the Fund's
investment adviser believes are undervalued.

The Fund is organized as a diversified series of the Van Kampen Equity
Trust, an open-end, management investment company (the "Trust").

---------------------------------------------

TABLE OF CONTENTS
---------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information......................................... B-2
Investment Objective, Policies and Risks.................... B-4
Options, Futures Contracts and Related Options.............. B-6
Investment Restrictions..................................... B-13
Trustees and Officers....................................... B-14
Investment Advisory Agreement............................... B-24
Other Agreements............................................ B-25
Distribution and Service.................................... B-26
Transfer Agent.............................................. B-30
Portfolio Transactions and Brokerage Allocation............. B-30
Shareholder Services........................................ B-32
Redemption of Shares........................................ B-34
Contingent Deferred Sales Charge-Class A.................... B-35
Waiver of Class B and Class C Contingent Deferred Sales
Charge.................................................... B-35
Taxation.................................................... B-37
Fund Performance............................................ B-41
Other Information........................................... B-44
Report of Independent Accountants........................... F-1
Financial Statements........................................ F-2
Notes to Financial Statements............................... F-14
</TABLE>

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED JULY 28, 2000.

SCV SAI 7/00

<PAGE> 315

GENERAL INFORMATION

Van Kampen Investment Advisory Corp. (the "Adviser" or "Advisory Corp."),
Van Kampen Funds Inc. (the "Distributor") and Van Kampen Investor Services Inc.
("Investor Services") are wholly owned subsidiaries of Van Kampen Investments
Inc. ("Van Kampen Investments"), which is an indirect wholly owned subsidiary of
Morgan Stanley Dean Witter & Co. ("Morgan Stanley Dean Witter"). The principal
office of the Trust, the Fund, the Adviser, the Distributor and Van Kampen
Investments is located at 1 Parkview Plaza, Oakbrook Terrace, Illinois
60181-5555. The principal office of Investor Services is located at 7501 Tiffany
Springs Parkway, Kansas City, Missouri 64153.

B-2
<PAGE> 316

The Trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the Trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote (or such higher vote as may be required by the
1940 Act or other applicable law) and except that the Trustees cannot amend the
Declaration of Trust to impose any liability on shareholders, make any
assessment on shares or impose liabilities on the Trustees without approval from
each affected shareholder or Trustee, as the case may be.

B-3
<PAGE> 317

As of July 5, 2000, no person was known by the Fund to own beneficially or
to hold of record 5% or more of the outstanding Class A Shares, Class B Shares
or Class C Shares of the Fund, except as follows:

<TABLE>
<CAPTION>
AMOUNT OF CLASS
OWNERSHIP OF PERCENTAGE
NAME AND ADDRESS OF HOLDER AT JULY 5, 2000 SHARES OWNERSHIP
-------------------------- ---------------- ------ ----------
<S> <C> <C> <C>
Van Kampen Funds..................................... 3,200 A 5.95%
Attn: Dominick Cogliandro 2,400 B 5.22%
1 Chase Manhatten Plz 2,400 C 8.69%
New York, NY 10005-1401
Edward Jones & Co.................................... 59,757 A 11.12%
Attn: Mutual Fund Shareholding Accounting
201 Progress Pkwy
Maryland Hts, MO 63043-3009
NFSC FEBO #W18-023230................................ 41,141 A 7.66%
EPDSJ LTD
Attn: Ed Nesselroade
1521 Landfall Drive
Wilmington, NC 28405-4253
Mark A. Lane......................................... 31,109 A 5.79%
TOD DTD 11/05/99
308 London Hill RDW
Woodbine, GA 31569-3914
</TABLE>

INVESTMENT OBJECTIVE, POLICIES AND RISKS

REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreements with broker-dealers, banks and
other financial institutions 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 Fund) acquires ownership of a 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. The Fund may enter into repurchase
agreements with broker-dealers, banks and other financial institutions deemed to
be creditworthy by the Adviser under guidelines approved by the Fund's Board of
Trustees. The Fund will not invest in repurchase agreements maturing in more
than seven days if any such investment, together with any other illiquid
securities held by the Fund, would exceed the Fund's limitation on illiquid
securities described herein. The Fund does not bear the risk of decline in the
value of the underlying security unless the seller defaults under its repurchase
obligation. In the event of the bankruptcy or other default of a seller of a
repurchase agreement, the Fund could experience both delays in liquidating the
underlying securities and losses including: (a) possible decline in the value of
the

B-4
<PAGE> 318

underlying security during the period while the Fund 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.

PORTFOLIO TURNOVER

ILLIQUID SECURITIES

B-5
<PAGE> 319

and sold to qualified institutional buyers under Rule 144A under the 1933 Act
("144A Securities") and are determined to be liquid under guidelines adopted by
and subject to the supervision of the Fund's Board of Trustees are not subject
to the limitation on illiquid securities. Such 144A Securities are subject to
monitoring and may become illiquid to the extent qualified institutional buyers
become, for a time, uninterested in purchasing such securities. Factors used to
determine whether 144A Securities are liquid include, among other things, a
security's trading history, the availability of reliable pricing information,
the number of dealers making quotes or making a market in such security and the
number of potential purchasers in the market for such security. For purposes
hereof, investments by the Fund in securities of other investment companies will
not be considered investments in restricted securities to the extent permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief (such as "no-action" letters issued
by the staff of the SEC interpreting or providing guidance on the 1940 Act, as
amended from time to time, or regulations thereunder) from the provisions of the
1940 Act, as amended from time to time.

WARRANTS

OPTIONS, FUTURES CONTRACTS AND RELATED OPTIONS

SELLING CALL AND PUT OPTIONS

B-6
<PAGE> 320

as economic and market conditions change. Selling options on portfolio
securities is likely to result in a higher portfolio turnover rate.

Selling Options. The purchaser of a call option pays a premium to the
seller (i.e., the writer) for the right to buy the underlying security from the
seller at a specified price during a certain period. The Fund would write call
options only on a covered basis or for cross-hedging purposes. A call option is
covered if, at all times during the option period, the Fund would own or have
the right to acquire securities of the type that it would be obligated to
deliver if any outstanding option were exercised. An option is for cross-hedging
purposes if it is not covered by the security subject to the option, but is
designed to provide a hedge against another security which the Fund owns or has
the right to acquire. In such circumstances, the Fund collateralizes the option
by maintaining in a segregated account with the Fund's custodian cash or liquid
securities in an amount not less than the market value of the underlying
security, marked to market daily, while the option is outstanding.

B-7
<PAGE> 321

PURCHASING CALL AND PUT OPTIONS

The Fund could purchase call options to protect (i.e., hedge) against
anticipated increases in the prices of securities it wishes to acquire.
Alternatively, call options could be purchased for capital appreciation. Since
the premium paid for a call option is typically a small fraction of the price of
the underlying security, a given amount of funds will purchase call options
covering a much larger quantity of such security than could be purchased
directly. By purchasing call options, the Fund could benefit from any
significant increase in the price of the underlying security to a greater extent
than had it invested the same amount in the security directly. However, because
of the very high volatility of option premiums, the Fund would bear a
significant risk of losing the entire premium if the price of the underlying
security did not rise sufficiently, or if it did not do so before the option
expired.

OPTIONS ON STOCK INDICES

B-8
<PAGE> 322

FUTURES CONTRACTS

The Fund also may invest in foreign stock index futures traded outside the
United States which involve additional risks including fluctuations in foreign
exchange rates, foreign currency exchange controls, political and economic
instability, differences in financial reporting and securities regulation and
trading, and foreign taxation issues.

B-9
<PAGE> 323

index declines, the position is less valuable, and the Fund is required to make
a variation margin payment to the broker.

Special Risks Associated with Futures Transactions. There are several risks
connected with the use of futures contracts. These include the risk of imperfect
correlation between movements in the price of the futures contracts and of the
underlying securities or index; the risk of market distortion; the risk of
illiquidity; and the risk of error in anticipating price movement.

B-10
<PAGE> 324

B-11
<PAGE> 325

OPTIONS ON FUTURES CONTRACTS

ADDITIONAL RISKS OF OPTIONS, FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS

B-12
<PAGE> 326

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

INVESTMENT RESTRICTIONS

1. With respect to 75% of the Fund's total assets, invest more than 5% of
the value of its total assets in the securities of any one issuer (not
including federal government securities) or acquire more than 10% of
any class of the outstanding voting securities of any one issuer,
except that the Fund may purchase securities of other investment
companies to the extent permitted by (i) the 1940 Act, as amended from
time to time, (ii) the rules and regulations promulgated by the SEC
under the 1940 Act, as amended from time to time, or (iii) an exemption
or other relief from the provisions of the 1940 Act, as amended from
time to time.

B-13
<PAGE> 327

2. Issue senior securities and shall not borrow money except for temporary
purposes in an amount not exceeding 5% of the Fund's total assets.
Notwithstanding the foregoing, the Fund may enter into transactions in
options, futures contracts and related options and may make margin
deposits and payments in connection therewith.

3. Underwrite securities of other issuers, except that the Fund may
acquire restricted securities and other securities which, if sold,
might make the Fund an underwriter under federal securities laws.

4. Invest more than 25% of the value of its assets in any one industry,
provided, that this limitation excludes shares of other open-end
investment companies.

5. Make loans of money or property to any person, except (i) to the extent
the securities in which the Fund may invest are considered to be loans,
(ii) through the loan of portfolio securities, and (iii) to the extent
that the Fund may lend money or property in connection with maintenance
of the value of, or the Fund's interest with respect to, the securities
owned by the Fund.

6. Invest in real estate interests, although the Fund may invest
indirectly through media such as real estate investment trusts.

7. Invest in commodities or commodity contracts, except that the Fund may
enter into transactions in options, futures contracts or related
options.

8. Invest in securities issued by other investment companies except as
part of a merger, reorganization or other acquisition and except to the
extent permitted by (i) the 1940 Act, as amended from time to time,
(ii) the rules and regulations promulgated by the SEC under the 1940
Act, as amended from time to time, or (iii) an exemption or other
relief from the provisions of the 1940 Act, as amended from time to
time.

TRUSTEES AND OFFICERS

B-14
<PAGE> 328

TRUSTEES

B-15
<PAGE> 329

B-16
<PAGE> 330

Wayne W. Whalen*.......................... Partner in the law firm of Skadden, Arps,
333 West Wacker Drive Slate, Meagher & Flom (Illinois), legal counsel
Chicago, IL 60606 to the funds in the Fund Complex, and other
Date of Birth: 08/22/39 investment companies advised by the Advisers or
Age: 60 Van Kampen Management Inc. Trustee/Director of
each of the funds in the Fund Complex, and
Trustee/Managing General Partner of other
investment companies advised by the Advisers.

------------------------------------

B-17
<PAGE> 331

OFFICERS

Messrs. Smith, Santo, Ciccarone, Reynoldson, Sullivan and Zimmermann are
located at 1 Parkview Plaza, Oakbrook Terrace, IL 60181-5555. Mr. Boyd is
located at 2800 Post Oak Blvd., Houston, TX 77056.

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>

B-18
<PAGE> 332

Richard A. Ciccarone................. Senior Vice President and Co-head of the Fixed
Date of Birth: 06/15/52 Income Department of the Advisers, Van Kampen
Age: 48 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he served as Co-head of Municipal
Investments and Director of Research of the
Advisers, Van Kampen Management Inc. and Van Kampen
Advisors Inc. Mr. Ciccarone first joined the
Adviser in June 1983, and worked for the Adviser
until May 1989, with his last position being a Vice
President. From June 1989 to April 1996, he worked
at EVEREN Securities (formerly known as Kemper
Securities), with his last position at EVEREN being
an Executive Vice President. Since April 1996, Mr.
Ciccarone has been a Senior Vice President of the
Advisers, Van Kampen Management Inc. and Van Kampen
Advisors Inc.
John R. Reynoldson................... Senior Vice President and Co-head of the Fixed
Date of Birth: 05/15/53 Income Department of the Advisers, Van Kampen
Age: 47 Management Inc. and Van Kampen Advisors Inc. Prior
Vice President to May 2000, he managed the investment grade
taxable group for the Adviser since July 1999. From
July 1988 to June 1999, he managed the government
securities bond group for Asset Management. Mr.
Reynoldson has been with Asset Management since
April 1987, and has been a Senior Vice President of
Asset Management since July 1988. He has been a
Senior Vice President of the Adviser and Van Kampen
Management Inc. since June 1995 and Senior Vice
President of Van Kampen Advisors Inc. since June
2000.

B-19
<PAGE> 333

B-20
<PAGE> 334

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

------------------------------------

B-21
<PAGE> 335

B-22
<PAGE> 336

advisory process. Exceptions to these and other provisions of the Code of Ethics
may be granted in particular circumstances after review by appropriate
personnel.

As of July 3, 2000, the trustees and officers of the Fund as a group owned
less than 1% of the shares of the Fund.

TABLE A

2000 AGGREGATE COMPENSATION FROM THE TRUST AND EACH SERIES

------------------------------------

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

TABLE B

2000 AGGREGATE COMPENSATION DEFERRED FROM

THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL ----------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund.......... 3/31 $2,340 $1,778 $2,340 $1,170 $2,340 $2,340 $1,170 $2,340 $ 0
Great American Companies
Fund(1)....................... 3/31 1,202 802 1,202 601 1,202 1,202 601 1,202 0
Growth Fund..................... 3/31 1,388 940 1,388 694 1,388 1,388 694 1,388 0
Mid Cap Value Fund(1)........... 3/31 1,201 801 1,201 601 1,201 1,201 601 1,201 0
Prospector Fund(1).............. 3/31 1,203 803 1,203 602 1,203 1,203 602 1,203 0
Select Growth Fund*............. 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund............ 3/31 801 801 801 400 801 801 400 801 0
Utility Fund.................... 3/31 1,405 952 1,405 703 1,405 1,405 703 1,405 0
------ ------ ------ ------ ------ ------ ------ ------ ------
Equity Trust Total............ $9,540 $6,877 $9,540 $4,771 $9,540 $9,540 $4,771 $9,540 $ 0
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

B-23
<PAGE> 337

TABLE C

2000 CUMULATIVE COMPENSATION DEFERRED

(PLUS INTEREST) FROM THE TRUST AND EACH SERIES

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March 31,
2000.

TABLE D

YEAR OF ELECTION OR APPOINTMENT TO EACH SERIES OF THE TRUST

<TABLE>
<CAPTION>
TRUSTEE
--------------------------------------------------------------------------------
FUND NAME BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund...................... 1996 1999 1996 1996 1996 1997 1996 1996 1999
Growth Fund................................. 1995 1999 1995 1995 1995 1997 1995 1995 1999
Select Growth Fund(*)....................... 2000 2000 2000 2000 2000 2000 2000 2000 2000
Small Cap Value Fund........................ 1999 1999 1999 1999 1999 1999 1999 1999 1999
Utility Fund................................ 1995 1999 1995 1993 1993 1997 1995 1993 1999
---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>

------------------------------------

* The Select Growth Fund commenced investment operations in June 2000.

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objective. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Board of Trustees, and
permits its officers and employees to serve without compensation as trustees of
the Trust or officers of the Fund if elected to such positions. The Fund
however, bears the cost of its day-to-day operations, including service fees,
distribution fees, custodian fees, legal counsel and independent accountants
fees, the costs of reports and proxies to shareholders, compensation of trustees
of the Trust (other than those who are affiliated persons of the Adviser,
Distributor or Van Kampen Investments), and all other ordinary business expenses
not specifically assumed by the Adviser. The Advisory Agreement also provides
that the Adviser shall not be liable to the Fund for any error of judgement or
of law, or any loss suffered by the Fund in connection with the matters to which
the Advisory Agreement relates, except a loss resulting from the willful
misfeasance, bad faith or gross negligence on the part of the Adviser in the
performance of its obligations and duties,

B-24
<PAGE> 338

or by reason of its reckless disregard of its obligations and duties under the
Advisory Agreement.

The Advisory Agreement also provides that, in the event the expenses of the Fund
for any fiscal year exceed the most restrictive expense limitations applicable
in any jurisdiction in which the Fund's shares are qualified for offer and sale
(excluding any expenses permitted to be excluded from the computation under
applicable law or regulation), the compensation due the Adviser will be reduced
by the amount of such excess and that, if a reduction in and refund of the
advisory fee is insufficient, the Adviser will pay the Fund monthly an amount
sufficient to make up the deficiency, subject to readjustment during the fiscal
year.

During the fiscal period ended March 31, 2000, the Adviser received
approximately $24,300 in advisory fees from the Fund.

OTHER AGREEMENTS

During the fiscal period ended March 31, 2000, Advisory Corp. received
approximately $1,700 in accounting services fees from the Fund.

Legal Services Agreement. The Fund and certain of the other Van Kampen
funds advised by the Adviser or it affiliates and distributed by the Distributor
have entered into legal services agreements pursuant to which Van Kampen
Investments provides legal services, including without limitation: accurate
maintenance of each fund's minute books and records, preparation and oversight
of each fund's regulatory reports, and other information provided to
shareholders, as well as responding to day-to-day legal issues on behalf of the
funds. Payment by the fund's for such services is made on a cost basis for the
salary and salary-related benefits, including but not limited to bonuses, group
insurance and other regular wages for the employment of personnel, as well as
overhead and the expenses related to the office space and the equipment
necessary to render the legal

B-25
<PAGE> 339

services. Other funds distributed by the Distributor also receive legal services
from Van Kampen Investments. Of the total costs for legal services provided to
funds distributed by the Distributor, one half of such costs are allocated
equally to each fund and the remaining one half of such costs are allocated to
specific funds based on monthly time records.

During the fiscal period ended March 31, 2000, Van Kampen Investments did
not receive any legal fees from the Fund.

DISTRIBUTION AND SERVICE

The Distributor acts as the principal underwriter of the Fund's shares
pursuant to a written agreement (the "Distribution and Service Agreement"). The
Distributor has the exclusive right to distribute shares of the Fund through
authorized dealers on a continuous basis. The Distributor's obligation is an
agency or "best efforts" arrangement under which the Distributor is required to
take and pay for only such shares of the Fund as may be sold to the public. The
Distributor is not obligated to sell any stated number of shares. The
Distributor bears the cost of printing (but not typesetting) prospectuses used
in connection with this offering and certain other costs including the cost of
supplemental sales literature and advertising. The Distribution and Service
Agreement is renewable from year to year if approved (a)(i) by the Fund's
Trustees or (ii) by a vote of a majority of the Fund's outstanding voting
securities and (b) by a vote of a majority of Trustees who are not parties to
the Distribution and Service Agreement or interested persons of any party, by
votes cast in person at a meeting called for such purpose. The Distribution and
Service Agreement provides that it will terminate if assigned, and that it may
be terminated without penalty by either party on 90 days' written notice. Total
underwriting commissions on the sale of shares of the Fund for the fiscal period
ended March 31, 2000 was $81,830. The amount retained by the Distributor was
$11,124.

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

B-26
<PAGE> 340

the Distributor's assets (and not out of the Fund's assets) to authorized
dealers who initiate and are responsible for purchases of $1 million or more
computed on a percentage of the dollar value of such shares sold as follows:
1.00% on sales to $2 million, plus 0.80% on the next $1 million and 0.50% on
the excess over $3 million. For single purchases of $20 million or more by an
individual retail investor the Distributor will pay, at the time of purchase
and directly out of the Distributor's assets (and not out of the Fund's
assets) a commission or transaction fee of 1.00% to authorized dealers who
initiate and are responsible for such purchases. The commission or transaction
fee of 1.00% will be computed on a percentage of the dollar value of such
shares sold.

B-27
<PAGE> 341

will not change the price an investor will pay for shares or the amount that a
Fund will receive from such sale.

The Fund has adopted a distribution plan (the "Distribution Plan") with
respect to each class of its shares pursuant to Rule 12b-1 under the 1940 Act.
The Fund also has adopted a service plan (the "Service Plan") with respect to
each class of its shares. The Distribution Plan and the Service Plan sometimes
are referred to herein as the "Plans". The Plans provide that the Fund may spend
a portion of the Fund's average daily net assets attributable to each class of
shares in connection with distribution of the respective class of shares and in
connection with the provision of ongoing services to shareholders of such class,
respectively. The Distribution Plan and the Service Plan are being implemented
through the Distribution and Service Agreement with the Distributor of each
class of the Fund's shares, sub-agreements between the Distributor and members
of the NASD who are acting as securities dealers and NASD members or eligible
non-members who are acting as brokers or agents and similar agreements between
the Fund and financial intermediaries who are acting as brokers (collectively,
"Selling Agreements") that may provide for their customers or clients certain
services or assistance, which may include, but not be limited to, processing
purchase and redemption transactions, establishing and maintaining shareholder
accounts regarding the Fund, and such other services as may be agreed to from
time to time and as may be permitted by applicable statute, rule or regulation.
Brokers, dealers and financial intermediaries that have entered into
sub-agreements with the Distributor and sell shares of the Fund are referred to
herein as "financial intermediaries."

B-28
<PAGE> 342

extent the Distributor's actual net expenses in a given year are less than the
plan fees for such year, the Fund pays only the actual net expenses.
Alternatively, to the extent the Distributor's actual net expenses in a given
year exceed the plan fees for such year, the Fund only pays the plan fees for
such year. For Class A Shares, there is no carryover of any unreimbursed actual
net expenses to succeeding years.

As of March 31, 2000, there were $82,011 and $10,349 of unreimbursed
distribution related expenses with respect to Class B Shares and Class C Shares,
respectively, representing 2.24% and 0.53% of the Fund's average daily net
assets attributable to Class B Shares and Class C Shares, respectively. If the
Plans were terminated or not continued, the Fund would not be contractually
obligated to pay the Distributor for any expenses not previously reimbursed by
the Fund or recovered through contingent deferred sales charges.

For the fiscal period ended March 31, 2000, the Fund's aggregate expenses
paid under the Plans for Class A Shares were $1,598 or 0.25% of the Class A
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for payments made to financial intermediaries for servicing Fund
shareholders and for administering the Class A Share Plans. For the fiscal
period ended March 31, 2000, the Fund's aggregate expenses paid under the Plans
for Class B Shares were $7,814 or 1.00% of the Class B Shares' average daily net
assets. Such expenses were paid to reimburse the Distributor for the following
payments: $6,667 for commissions and transaction fees paid to financial
intermediaries in respect of sales of Class B Shares of the Fund and $1,147 for
fees paid to financial intermediaries for servicing Class B shareholders and
administering the Class B Share Plans. For the fiscal period ended March 31,
2000, the Fund's aggregate expenses paid under the Plans for Class C Shares were
$4,738 or 1.00% of the Class C Shares' average daily net assets. Such expenses
were paid to reimburse the Distributor for the following payments: $4,679 for
commissions and transaction fees paid to financial intermediaries in respect of
sales of Class C Shares of the Fund and $59 for fees paid to financial
intermediaries for servicing Class C shareholders and administering the Class C
Share Plans.

B-29
<PAGE> 343

The Distributor has entered into agreements with the following firms: (i)
Fidelity Brokerage Services, Inc. & National Financial Services Corporation,
(ii) First Union National Bank, (iii) GreatWest Life & Annuity Insurance
Company/BenefitsCorp Equities, Inc., (iv) Hewitt Associates, LLC, (v) Huntington
Bank, (vi) Invesco Retirement and Benefit Services, Inc., (vii) Lincoln National
Life Insurance Company, (viii) Merrill Lynch, Pierce, Fenner & Smith,
Incorporated, (ix) Dean Witter Reynolds, Inc., (x) National Deferred
Compensation, Inc., (xi) Nationwide Investment Services Corporation, (xii)
Norwest Bank Minnesota, N.A./Wells Fargo Bank, N.A., (xiii) The Prudential
Insurance Company of America, (xiv) Putnam Fiduciary Trust Company, (xv) Charles
Schwab & Co., Inc., (xvi) Smith Barney (xvii) Union Bank of California, N.A.
Shares of the Fund shall be offered pursuant to such firm's retirement plan
alliance program(s). Trustees and other fiduciaries of retirement plans seeking
to invest in multiple fund families through broker-dealer retirement plan
alliance programs should contact the firms mentioned above for further
information concerning the program(s) including, but not limited to, minimum
size and operational requirements.

TRANSFER AGENT

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

B-30
<PAGE> 344

which do not provide such services if the Adviser determines that such
commissions are reasonable in relation to the overall services provided. No
specific value can be assigned to such research services which are furnished
without cost to the Adviser. Since statistical and other research information is
only supplementary to the research efforts of the Adviser to the Fund and still
must be analyzed and reviewed by its staff, the receipt of research information
is not expected to reduce its expenses materially. The investment advisory fee
is not reduced as a result of the Adviser's receipt of such research services.
Services provided may include (a) furnishing advice as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities; (b)
furnishing analyses and reports concerning issuers, industries, securities,
economic factors and trends, portfolio strategy, and the performance of
accounts; and (c) effecting securities transactions and performing functions
incidental thereto (such as clearance, settlement and custody). Research
services furnished by firms through which the Fund effects its securities
transactions may be used by the Adviser in servicing all of its advisory
accounts; not all of such services may be used by the Adviser in connection with
the Fund. The Adviser also may place portfolio transactions, to the extent
permitted by law, with brokerage firms affiliated with the Fund, the Adviser or
the Distributor and with brokerage firms participating in the distribution of
the Fund's shares if it reasonably believes that the quality of execution and
the commission are comparable to that available from other qualified firms.
Similarly, to the extent permitted by law and subject to the same considerations
on quality of execution and comparable commission rates, the Adviser may direct
an executing broker to pay a portion or all of any commissions, concessions or
discounts to a firm supplying research or other services or to a firm
participating in the distribution of the Fund's shares.

B-31
<PAGE> 345

Fund will be reduced by all or a portion of the brokerage commission given to
affiliated brokers.

For the fiscal period ended March 31, 2000, the Fund paid $8,714 to all
brokers and none to the affiliated brokers. During the fiscal period ended March
31, 2000, the Fund did not pay any brokerage commissions on transactions
selected primarily on the basis of research services provided to the Adviser.

SHAREHOLDER SERVICES

INVESTMENT ACCOUNT

SHARE CERTIFICATES

Generally, the Fund will not issue share certificates. However, upon
written or telephone request to the Fund, a share certificate will be issued
representing shares (with the exception of fractional shares) of the Fund. A
shareholder will be required to surrender such certificates upon an exchange or
redemption of the shares represented by the certificate thereof. In addition, if
such certificates are lost the shareholder must write to Van Kampen Funds, Inc.,
c/o Investor Services, PO Box 218256, Kansas City, MO 64121-8256, requesting an
"Affidavit of Loss" and obtain a Surety Bond in a form acceptable to Investor
Services. On the date the letter is received, Investor Services will calculate
the fee for replacing the lost certificate equal to no more than 1.50% of the
net asset value of the issued shares, and bill the party to whom the replacement
certificate was mailed.

RETIREMENT PLANS

Eligible investors may establish individual retirement accounts ("IRAs");
SEP; 401(k) plans; Section 403(b)(7) plans in the case of employees of public
school systems

B-32
<PAGE> 346

and certain non-profit organizations; or other pension or profit sharing plans.
Documents and forms containing detailed information regarding these plans are
available from the Distributor. Van Kampen Trust Company serves as custodian
under the IRA, 403(b)(7) and Money Purchase and Profit Sharing Keogh plans.

AUTOMATED CLEARING HOUSE("ACH") DEPOSITS

Shareholders of Class A Shares can use ACH to have redemption proceeds
deposited electronically into their bank accounts. Redemption proceeds
transferred to a bank account via the ACH plan are available to be credited to
the account on the second business day following normal payment. In order to
utilize this option, the shareholder's bank must be a member of ACH. In
addition, the shareholder must fill out the appropriate section of the account
application. The shareholder must also include a voided check or deposit slip
from the bank account into which redemption proceeds are to be deposited
together with the completed application. Once Investor Services has received the
application and the voided check or deposit slip, such shareholder's designated
bank account, following any redemption, will be credited with the proceeds of
such redemption. Once enrolled in the ACH plan, a shareholder may terminate
participation at any time by writing Investor Services or by calling (800)
341-2911 (or (800) 421-2833 for the hearing impaired).

DIVIDEND DIVERSIFICATION

A shareholder may, upon written request by completing the appropriate
section of the account application form or by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired), elect to have all dividends and capital gain
dividends paid on a class of shares of the Fund invested into shares of the same
class of any Participating Fund so long as the investor has a pre-existing
account for such class of shares of the other fund. Both accounts must be of the
same type, either non-retirement or retirement. If the accounts are retirement
accounts, they must both be for the same class and of the same type of
retirement plan (e.g. IRA, 403(b)(7), 401(k), Keogh) and for the benefit of the
same individual. If a qualified, pre-existing account does not exist, the
shareholder must establish a new account subject to minimum investment and other
requirements of the fund into which distributions would be invested.
Distributions are invested into the selected fund at its net asset value per
share as of the payable date of the distribution.

SYSTEMATIC WITHDRAWAL PLAN

A shareholder may establish a monthly, quarterly, semi-annual or annual
withdrawal plan if the shareholder owns shares in a single account valued at
$10,000 or more at the next determined net asset value per share at the time the
plan is established. If a shareholder owns shares in a single account valued at
$5,000 or more at the next determined net asset value per share at the time the
plan is established, the shareholder may establish a quarterly, semiannual or
annual withdrawal plan. This plan provides for the orderly use of the entire
account, not only the income but also the capital, if necessary. Each payment
represents the proceeds of a redemption of shares on which any capital gain or
loss will be recognized. The planholder may arrange for periodic checks in any
amount, not less than $25. Such a systematic withdrawal plan may also be
maintained by an investor purchasing shares for a retirement plan established on
a form made available by the Fund. See "Shareholder Services -- Retirement
Plans."

B-33
<PAGE> 347

Under the plan, sufficient shares of the Fund are redeemed to provide the
amount of the periodic withdrawal payment. Dividends and capital gain dividends
on shares held in accounts with systematic withdrawal plans are reinvested in
additional shares at the next determined net asset value per share. If periodic
withdrawal continuously exceed reinvested dividends and capital gain dividends,
the shareholder's original investment will be correspondingly reduced and
ultimately exhausted. Redemptions made concurrently with the purchase of
additional shares ordinarily will be disadvantageous to the shareholder because
of the duplication of sales charges. Any gain or loss realized by the
shareholder upon redemption of shares is a taxable event. The Fund reserves the
right to amend or terminate the systematic withdrawal program upon 30 days'
notice to its shareholders.

EXCHANGE PRIVILEGE

All shareholders are limited to eight exchanges per fund during a rolling
365-day period.

Exchange privileges will be suspended on a particular fund if more than
eight exchanges out of that fund are made by a shareholder during a rolling
365-day period. If exchange privileges are suspended, subsequent exchange
requests will not be processed. Exchange privileges will be restored when the
account history shows fewer than eight exchanges in the rolling 365-day period.

This policy does not apply to money market funds, systematic exchange
plans, or employer-sponsored retirement plans.

REINSTATEMENT PRIVILEGE

REDEMPTION OF SHARES

Redemptions are not made on days during which the New York Stock Exchange
(the "Exchange") is closed. The right of redemption may be suspended and the
payment

B-34
<PAGE> 348

therefor may be postponed for more than seven days during any period when (a)
the Exchange is closed for other than customary weekends or holidays; (b) the
SEC determines trading on the Exchange is restricted; (c) the SEC determines an
emergency exists as a result of which disposal by the Fund of securities owned
by it is not reasonably practicable or it is not reasonably practicable for the
Fund to fairly determine the value of its net assets; or (d) the SEC, by order,
so permits.

In addition, if the Fund's Board of Trustees determines that payment wholly
or partly in cash would be detrimental to the best interests of the remaining
shareholders of the Fund, the Fund may pay the redemption proceeds in whole or
in part by a distribution-in-kind of portfolio securities held by the Fund in
lieu of cash in conformity with applicable rules of the SEC. A
distribution-in-kind will result in recognition by the shareholder of a gain or
loss for federal income tax purposes when such securities are distributed, and
the shareholder may incur brokerage charges and a gain or loss for federal
income tax purposes upon the shareholder's subsequent disposition of such
securities.

CONTINGENT DEFERRED SALES CHARGE-CLASS A

As described in the Prospectus under "Purchase of Shares -- Class A
Shares," there is no sales charge payable on Class A Shares at the time of
purchase on investments of $1 million or more, but a contingent deferred sales
charge ("CDSC -- Class A") may be imposed on certain redemptions made within one
year of purchase. For purposes of the CDSC-Class A, when shares of one fund are
exchanged for shares of another fund, the purchase date for the shares of the
fund exchanged into will be assumed to be the date on which shares were
purchased in the fund from which the exchange was made. If the exchanged shares
themselves are acquired through an exchange, the purchase date is assumed to
carry over from the date of the original election to purchase shares subject to
a CDSC-Class A rather than a front-end load sales charge. In determining whether
a CDSC-Class A is payable, it is assumed that shares being redeemed first are
any shares in the shareholder's account not subject to a contingent deferred
sales charge followed by shares held the longest in the shareholders account.
The contingent deferred sales charge is accessed on an amount equal to the
lesser of the then market value or the cost of the shares being redeemed.
Accordingly, no sales charge is imposed on increases in net asset value above
the initial purchase price. In addition, no sales charge is assessed on shares
derived from reinvestment of dividends or capital gain dividends.

WAIVER OF CLASS B AND CLASS C

CONTINGENT DEFERRED SALES CHARGE

REDEMPTION UPON DEATH OR DISABILITY

B-35
<PAGE> 349

Section 72(m)(7) of the Internal Revenue Code of 1986, as amended (the "Code"),
which in pertinent part defines a person as disabled if such person "is unable
to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or to be of long-continued and indefinite duration." While the Fund does
not specifically adopt the balance of the Code's definition which pertains to
furnishing the Secretary of Treasury with such proof as he or she may require,
the Distributor will require satisfactory proof of death or disability before it
determines to waive the CDSC-Class B and C.

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

The Fund will waive the CDSC-Class B and C when a total or partial
redemption is made in connection with certain distributions from retirement
plans. The CDSC-Class B and C will be waived upon the tax-free rollover or
transfer of assets to another retirement plan invested in one or more
Participating Funds; in such event, as described below, the Fund will "tack" the
period for which the original shares were held on to the holding period of the
shares acquired in the transfer or rollover for purposes of determining what, if
any, CDSC-Class B and C is applicable in the event that such acquired shares are
redeemed following the transfer or rollover. The charge also will be waived on
any redemption which results from the return of an excess contribution pursuant
to Section 408(d)(4) or (5) of the Code, the return of excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2), the financial hardship of the
employee pursuant to U.S. Treasury Regulation Section 1.401(k)-1(d)(2) or from
the death or disability of the employee (see Code Section 72(m)(7) and
72(t)(2)(A)(ii)). In addition, the charge will be waived on any minimum
distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC-Class B and C for any
distributions from IRAs or other retirement plans not specifically described
above.

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

B-36
<PAGE> 350

redeemed from the Fund without the imposition of a CDSC-Class B and C may not
exceed a maximum of 12% annually of the shareholder's initial account balance.
The Fund reserves the right to change the terms and conditions of the systematic
withdrawal plan and the ability to offer the systematic withdrawal plan.

NO INITIAL COMMISSION OR TRANSACTION FEE

INVOLUNTARY REDEMPTIONS OF SHARES

REINVESTMENT OF REDEMPTION PROCEEDS

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class B and C when a total or partial
redemption is made by the Adviser with respect to its investments in the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

The Fund has elected and qualified, and intends to continue to qualify each
year, to be treated as a regulated investment company under Subchapter M of the
Code. To qualify as a regulated investment company, the Fund must comply with
certain requirements of the Code relating to, among other things, the source of
its income and diversification of its assets.

If the Fund so qualifies and distributes each year to its shareholders at
least 90% of its investment company taxable income (generally including taxable
income and net short-term capital gain, but not net capital gain, which is the
excess of net long-term capital gain over net short-term capital losses) and
meets certain other requirements, it will not be required to pay federal income
taxes on any income it distributes to shareholders. The Fund intends to
distribute at least the minimum amount of investment company taxable

B-37
<PAGE> 351

income necessary to satisfy the 90% distribution requirement. The Fund will not
be subject to federal income tax on any net capital gain distributed to
shareholders.

DISTRIBUTIONS TO SHAREHOLDERS

B-38
<PAGE> 352

gain dividends), see "Capital Gains Rates" below. Tax-exempt shareholders not
subject to federal income tax on their income generally will not be taxed on
distributions from the Fund.

SALE OF SHARES

The sale of shares (including transfers in connection with a redemption or
repurchase of shares) may be a taxable transaction for federal income tax
purposes. Selling shareholders will generally recognize gain or loss in an
amount equal to the difference between their adjusted tax basis in the shares
sold and the amount received. If the shares sold are held as a capital asset,
the gain or loss will be a capital gain or loss. For a summary of the maximum
tax rates applicable to capital gains (including capital gain dividends) see
"Capital Gains Rates" below. Any loss recognized upon a taxable disposition of
shares held for six months or less will be treated as a long-term capital loss
to the extent of any capital gain dividends received with respect to such
shares. For purposes of determining whether shares have been held for six months
or less, the holding period is suspended for any periods during which the
shareholder's risk of loss is diminished as a result of holding one or more
other positions in substantially similar or related property or through certain
options or short sales.

B-39
<PAGE> 353

CAPITAL GAINS RATES

NON-U.S. SHAREHOLDERS.

B-40
<PAGE> 354

BACKUP WITHHOLDING.

The Fund may be required to withhold federal income tax at a rate of 31%
("backup withholding") from dividends and redemption proceeds paid to
non-corporate shareholders. This tax may be withheld from dividends if (i) the
shareholder fails to furnish the Fund with its correct taxpayer identification
number, (ii) the Internal Revenue Service ("IRS") notifies the Fund that the
shareholder has failed to properly report certain interest and dividend income
to the IRS and to respond to notices to that effect or (iii) when required to do
so, the shareholder fails to certify that he or she is not subject to backup
withholding. Redemption proceeds may be subject to withholding under the
circumstances described in (i) above.

INFORMATION REPORTING

In the case of a Non-U.S. Shareholder, the Fund must report to the IRS and
such shareholder the aggregate amount of dividends paid that are subject to
backup withholding (if any) and the amount of tax withheld with respect to such
dividends pursuant to the backup withholding rules. This information may also be
made available to the tax authorities in the Non-U.S. Shareholder's country of
residence. Generally, dividends paid to Non-U.S. Shareholders that are subject
to the 30% federal income tax withholding described above under "Non-U.S.
Shareholders" are not subject to backup withholding.

GENERAL

The federal income tax discussion set forth above is for general
information only. Prospective investors and shareholders should consult their
advisers regarding the specific federal tax consequences of purchasing, holding
and disposing of shares, as well as the effects of state, local and foreign tax
law and any proposed tax law changes.

FUND PERFORMANCE

From time to time the Fund may advertise its total return for prior
periods. Any such advertisement would include at least average annual total
return quotations for one year, five-year and ten-year periods. Other total
return quotations, aggregate or average, over other time periods may also be
included.

B-41
<PAGE> 355

public offering price (which includes the maximum sales charge for Class A
Shares); that all income dividends or capital gain dividends during the period
are reinvested in Fund shares at net asset value; and that any applicable
contingent deferred sales charge has been paid. The Fund's total return will
vary depending on market conditions, the securities comprising the Fund's
portfolio, the Fund's operating expenses and unrealized net capital gains or
losses during the period. Total return is based on historical earnings and asset
value fluctuations and is not intended to indicate future performance. No
adjustments are made to reflect any income taxes payable by shareholders on
capital gain dividends paid by the Fund.

Non-standardized total return calculations do not reflect the imposition of
a contingent deferred sales charge, and if any such contingent deferred sales
charge imposed at the time of redemption were reflected, it would reduce the
performance quoted.

From time to time, marketing materials may provide a portfolio manager
update, an Adviser update and discuss general economic conditions and outlooks.
The Fund's marketing materials may also show the Fund's asset class
diversification, top sector

B-42
<PAGE> 356

holdings and largest holdings. Materials may also mention how the Distributor
believes the Fund compares relative to other Van Kampen funds. Materials may
also discuss the Dalbar Financial Services study from 1984 to 1994 which studied
investor cash flow into and out of all types of mutual funds. The ten-year study
found that investors who bought mutual fund shares and held such shares
outperformed investors who bought and sold. The Dalbar study conclusions were
consistent regardless of whether purchased their fund shares in direct or sales
force distribution channels. The study showed that investors working with a
professional representative have tended over time to earn higher returns than
those who invested directly. The performance of the fund's purchased in the
Dalbar study and the conclusion based thereon are not necessarily indicative of
future performance of such funds or conclusions that may result from similar
studies in the future. The Fund may also be marketed on the internet.

B-43
<PAGE> 357

CLASS A SHARES

The Fund's average annual total return, assuming payment of the maximum
sales charge, for Class A Shares of the Fund from its inception to March 31,
2000 was -8.42%.

The Fund's cumulative non-standardized total return, including payment of
the maximum sales charge, with respect to the Class A Shares from its inception
to March 31, 2000 was -6.62%.

The Fund's cumulative non-standardized total return, excluding payment of
the maximum sales charge, with respect to the Class A Shares from its inception
to March 31, 2000 was -0.92%.

CLASS B SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class B Shares of the Fund from June 21, 1999
(commencement of distribution for Class B Shares), through March 31, 2000 was
-8.54%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, for Class B Shares of the Fund from June
21, 1999 (commencement of distribution of Class B Shares) to March 31, 2000 was
-6.71%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, for Class B Shares of the Fund from June
21, 1999 (commencement of distribution of Class B Shares) to March 31, 2000 was
-1.81%.

CLASS C SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class C Shares of the Fund from June 21, 1999
(commencement of distribution for Class C Shares), through March 31, 2000 was
-3.57%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to the Class C Shares from
June 21, 1999 (commencement of distribution of Class C Shares) to March 31, 2000
was -2.79%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class C Shares from
June 21, 1999 (commencement of distribution of Class C Shares) to March 31, 2000
was -1.81%.

OTHER INFORMATION

CUSTODY OF ASSETS

All securities owned by the Fund and all cash, including proceeds from the
sale of shares of the Fund and of securities in the Fund's investment portfolio,
are held by State

B-44
<PAGE> 358

Street Bank and Trust Company, 225 West Franklin Street, Boston, Massachusetts
02110, as custodian. The custodian also provides accounting services to the
Fund.

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the independent accountants.

INDEPENDENT AUDITORS

Independent auditors perform an annual audit of the financial statements of
the Fund. The Trust's Board of Trustees has engaged Ernst & Young LLP, located
at 233 South Wacker Drive, Chicago, Illinois 60606, to be the Fund's independent
auditors. The change in independent auditors was approved by the Fund's audit
committee and the Fund's Board of Trustees, including Trustees who are not
"interested persons" of the Fund (as defined in the 1940 Act).

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).

B-45
<PAGE> 359

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of Van Kampen Small Cap Value Fund:

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen Small Cap Value Fund
(the "Fund") at March 31, 2000, and the results of its operations, the changes
in its net assets and the financial highlights for the period June 21, 1999
(commencement of operations) through March 31, 2000 in conformity with
accounting principles generally accepted in the United States. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibility
is to express an opinion on these financial statements based on our audit. We
conducted our audit of these financial statements in accordance with auditing
standards generally accepted in the United States, which require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presentation.
We believe that our audit, which included confirmation of securities at March
31, 2000 by correspondence with the custodian and brokers, provides a reasonable
basis for the opinion expressed above.

PRICEWATERHOUSECOOPER LLP
Chicago, Illinois
May 5, 2000

F-1
<PAGE> 360

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

March 31, 2000
THE FOLLOWING PAGES DETAIL THE SPECIFIC HOLDINGS OF YOUR FUND AT THE END OF THE
REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS 94.6%
BUILDING & MATERIALS 4.2%
Astec Industries, Inc. (a).................................. 150 $ 3,984
Crossmann Communities, Inc. (a)............................. 250 3,961
D.R. Horton, Inc. .......................................... 4,000 52,250
Granite Construction, Inc. ................................. 350 9,450
NCI Building Systems, Inc. (a).............................. 4,100 77,131
Nortek, Inc. (a)............................................ 3,050 67,481
Pulte Corp. ................................................ 3,700 77,238
Texas Industries, Inc. ..................................... 1,550 48,244
US Home Corp. .............................................. 2,100 79,800
-----------
419,539
-----------
BUSINESS SERVICES 3.5%
ABM Industries, Inc. ....................................... 1,100 25,850
CDI Corp. (a)............................................... 2,300 43,700
John H. Harland Co. ........................................ 3,300 44,550
Mail-Well, Inc. (a)......................................... 300 2,606
United Stationers, Inc. .................................... 2,850 101,709
URS Corp. (a)............................................... 3,300 43,313
Wallace Computer Services, Inc. ............................ 7,550 89,184
-----------
350,912
-----------
CAPITAL GOODS 1.6%
Applied Industrial Technologies, Inc. ...................... 2,500 40,000
Donaldson, Inc. ............................................ 900 20,306
Manitowoc, Inc. ............................................ 1,600 43,300
Sauer, Inc. ................................................ 1,200 11,625
Standard Register Co. ...................................... 400 5,150
Tecumseh Products Co., Class A.............................. 50 2,200
Terex Corp. ................................................ 2,300 33,063
-----------
155,644
-----------
CONSUMER DISTRIBUTION 2.3%
Cato Corp., Class A......................................... 5,000 58,750
Footstar, Inc. (a).......................................... 700 19,775
Furniture Brands International, Inc. (a).................... 2,250 42,328
Group 1 Automotive, Inc. (a)................................ 750 8,719
PEP Boys Manny Moe & Jack................................... 4,350 25,828
</TABLE>

See Notes to Financial Statements

F-2
<PAGE> 361

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
CONSUMER DISTRIBUTION (CONTINUED)
Spiegel, Inc., Class A (a).................................. 4,450 $ 35,600
Systemax, Inc. (a).......................................... 4,100 37,413
-----------
228,413
-----------
CONSUMER DURABLES 3.0%
Aaron Rents, Inc., Class B.................................. 2,550 38,409
Arvin Industries, Inc. ..................................... 2,250 50,906
Kimball International, Inc., Class B........................ 1,000 11,000
Smith A.O. Corp. ........................................... 1,200 21,600
Stoneridge, Inc. (a)........................................ 100 1,150
Toro Co. ................................................... 1,850 55,385
Tower Automotive, Inc. (a).................................. 4,200 68,775
Woodward Governor Co. ...................................... 2,300 52,900
-----------
300,125
-----------
CONSUMER NON-DURABLES 5.8%
Agribrands International, Inc. (a).......................... 1,400 55,037
Corn Products International, Inc. .......................... 2,650 63,766
Fleming Cos, Inc. .......................................... 5,700 85,856
International Multifoods Corp. ............................. 900 12,037
Ivex Packaging Corp. (a).................................... 800 6,050
Michael Foods, Inc. ........................................ 200 4,200
Mikasa, Inc. ............................................... 1,000 7,438
Movado Group, Inc. ......................................... 400 4,025
Performance Food Group Co. (a).............................. 2,150 47,031
Pilgrims Pride Corp., Class A............................... 425 2,072
Quiksilver, Inc. (a)........................................ 250 4,391
Riviana Foods, Inc. ........................................ 250 3,969
Schweitzer Mauduit International, Inc. ..................... 1,400 18,112
Smithfield Foods, Inc. (a).................................. 2,850 57,000
Springs Industries, Inc. ................................... 1,400 53,200
Suiza Foods Corp. (a)....................................... 1,700 68,425
Universal Corp. ............................................ 5,300 79,831
Zapata Corp. (a)............................................ 650 3,088
-----------
575,528
-----------
CONSUMER SERVICES 4.0%
Avis Rent A Car, Inc. (a)................................... 4,150 73,144
Aztar Corp. (a)............................................. 5,700 54,150
Dollar Thrifty Automotive Group. (a)........................ 2,850 48,984
Extended Stay America, Inc. (a)............................. 1,650 12,375
Landry's Seafood Restaurants, Inc. (a)...................... 4,300 27,412
Lone Star Steakhouse & Saloon (a)........................... 5,550 56,541
Pulitzer, Inc. ............................................. 500 20,438
</TABLE>

See Notes to Financial Statements

F-3
<PAGE> 362

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
CONSUMER SERVICES (CONTINUED)
Ruby Tuesday, Inc. ......................................... 3,100 $ 54,250
Station Casinos, Inc. (a)................................... 2,200 47,987
-----------
395,281
-----------
ENERGY 6.9%
Cascade Natural Gas Corp.................................... 3,800 61,275
Helmerich & Payne, Inc. .................................... 3,400 105,400
HS Resources, Inc. (a)...................................... 2,900 61,262
Louis Dreyfus Natural Gas Corp. (a)......................... 3,300 112,200
Parker Drilling Co. (a)..................................... 12,000 60,000
Pioneer Natural Resources Co. .............................. 4,700 49,938
RPC, Inc. .................................................. 2,600 24,538
Seitel, Inc. ............................................... 7,000 55,562
Tesoro Petroleum Corp. (a).................................. 7,000 80,500
Tom Brown, Inc. (a)......................................... 1,400 25,725
TransMontaigne, Inc. (a).................................... 7,900 53,819
-----------
690,219
-----------
FINANCE 19.6%
Advanta Corp., Class A...................................... 3,400 69,063
Affiliated Managers Group, Inc. (a)......................... 1,600 76,000
Alfa Corp. ................................................. 1,350 23,963
Amerus Life Holdings, Inc. ................................. 3,250 58,906
BancFirst Corp. ............................................ 1,050 27,825
BancWest Corp. ............................................. 2,900 57,275
Bank United Corp., Class A.................................. 2,350 74,172
Capstead Mortgage Corp. .................................... 581 2,251
Cathay Bancorp, Inc. ....................................... 1,500 69,000
Chicago Title Corp. ........................................ 400 23,400
Commonwealth Bancorp, Inc. ................................. 3,150 39,966
Community Trust Bancorp, Inc. .............................. 1,980 35,640
Crown American Reality...................................... 750 3,984
Dain Rauscher Corp. ........................................ 1,400 92,312
Delphi Financial Group, Inc. ............................... 816 24,786
Dime Community Bancshares, Inc. ............................ 3,150 49,809
EastGroup Properties, Inc. ................................. 2,950 63,425
First Citizens Bancshares, Inc. ............................ 1,050 59,292
First Washington Realty Trust, Inc. ........................ 2,750 51,047
GBC Bancorp of California................................... 3,300 76,519
Glimcher Realty Trust....................................... 5,250 70,875
Great Lakes REIT, Inc. ..................................... 2,650 40,081
JP Realty, Inc. ............................................ 1,450 25,828
Kansas City Life Insurance Co. ............................. 2,050 49,456
Lasalle Hotel Properties.................................... 2,550 31,875
</TABLE>

See Notes to Financial Statements

F-4
<PAGE> 363

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
FINANCE (CONTINUED)
Leucadia National Corp. .................................... 3,950 $ 93,812
LNR Property Corp. ......................................... 2,400 45,750
Medical Assurance, Inc. .................................... 3,205 61,095
Meristar Hospitality Corp. ................................. 600 10,463
OceanFirst Financial Corp. ................................. 2,800 43,925
Prentiss Properties Trust................................... 2,200 49,088
PS Business Parks, Inc. .................................... 2,800 57,050
RLI Corp. .................................................. 1,650 55,275
Silicon Valley Bancshares (a)............................... 1,100 79,062
Southwest Securities Group, Inc. ........................... 110 4,778
Stewart Information Services Corp. ......................... 1,550 24,509
Summit Properties, Inc. .................................... 2,000 38,250
Triad Guaranty, Inc. (a).................................... 3,800 77,188
UICI (a).................................................... 8,500 56,313
Webster Financial Corp. .................................... 2,100 48,300
-----------
1,941,608
-----------
HEALTHCARE 5.1%
Alpharma, Inc., Class A .................................... 1,300 47,775
Ameripath, Inc. (a)......................................... 8,600 69,875
Apria Healthcare Group, Inc. (a)............................ 5,400 77,962
Bindley Western Industries, Inc. ........................... 1,716 23,273
Chattem, Inc. (a)........................................... 2,800 39,550
Herbalife International, Inc., Class A...................... 450 6,356
Laboratory Corp. of America Holdings (a).................... 17,000 73,313
Province Healthcare Co. (a)................................. 2,150 61,544
Quest Diagnostics, Inc. (a)................................. 2,800 111,300
-----------
510,948
-----------
PRODUCER MANUFACTURING 0.7%
AptarGroup, Inc. ........................................... 300 8,006
Scott Technologies, Inc. (a)................................ 3,300 62,288
-----------
70,294
-----------
RAW MATERIALS/PROCESSING INDUSTRIES 8.6%
AMCOL International Corp.................................... 3,900 59,963
Buckeye Technologies, Inc. (a).............................. 3,250 57,281
Commercial Metals Co........................................ 2,650 73,206
Dexter Corp. ............................................... 850 45,050
Ethyl Corp. ................................................ 15,000 45,938
Ferro Corp. ................................................ 450 8,016
Geon Co. ................................................... 2,400 51,600
Gibraltor Steel Corp. ...................................... 3,100 50,956
Glatfelter P.H. Co. ........................................ 600 6,375
H.B. Fuller Co. ............................................ 800 31,950
</TABLE>

See Notes to Financial Statements

F-5
<PAGE> 364

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
RAW MATERIALS/PROCESSING INDUSTRIES (CONTINUED)
Mueller Industries, Inc. (a)................................ 2,800 $ 85,050
Polymer Group, Inc. ........................................ 1,300 16,575
Quanex Corp. ............................................... 3,150 56,700
Reliance Steel & Aluminum Co. .............................. 3,225 72,159
Rock Tennessee Co., Class A................................. 6,800 66,300
Ryerson Tull, Inc. ......................................... 2,300 35,650
Scotts Co., Class A (a)..................................... 1,100 46,200
Spartech Corp. ............................................. 1,400 48,125
Universal Forest Products, Inc. ............................ 200 2,475
-----------
859,569
-----------
TECHNOLOGY 17.9%
Actel Corp. (a)............................................. 3,300 117,769
Alliance Semiconductor Corp. (a)............................ 3,800 81,463
American Mobile Satellite Corp. (a)......................... 2,400 57,600
Amkor Technology, Inc. (a).................................. 1,850 98,166
AVT Corp. (a)............................................... 2,300 27,169
Cypress Semiconductor Corp. (a)............................. 2,600 128,212
Genrad, Inc. (a)............................................ 5,350 66,206
InaCom Corp. (a)............................................ 15,400 42,350
Informix Corp. (a).......................................... 4,500 76,219
International Rectifier Corp. (a)........................... 2,850 108,656
Kaman Corp., Class A........................................ 2,700 26,325
Lam Research Corp. (a)...................................... 2,500 112,656
MTS Systems Corp. .......................................... 10,550 80,444
Park Electrochemical Corp. ................................. 3,100 75,950
PerkinElmer, Inc. .......................................... 2,150 142,975
Pinnacle Systems, Inc. (a).................................. 200 6,650
Primex Technologies, Inc. .................................. 3,200 68,200
S3, Inc. (a)................................................ 5,650 118,650
Tektronix, Inc. ............................................ 2,500 140,000
ThermoQuest Corp. (a)....................................... 4,300 72,025
Triumph Group, Inc. (a)..................................... 2,450 71,356
Xircom, Inc. (a)............................................ 1,700 62,900
-----------
1,781,941
-----------
TRANSPORTATION 3.0%
America West Holdings Corp., Class B (a).................... 3,050 47,275
American Freightways Corp. (a).............................. 2,900 43,319
Covenant Transport, Inc., Class A (a)....................... 1,600 25,400
Landstar System, Inc. (a)................................... 950 52,012
MS Carriers, Inc. (a)....................................... 1,600 37,600
</TABLE>

See Notes to Financial Statements

F-6
<PAGE> 365

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TRANSPORTATION (CONTINUED)
Rollins Truck Leasing Corp. ................................ 4,200 $ 35,438
US Freightways Corp. ....................................... 1,400 52,412
-----------
293,456
-----------
UTILITIES 8.4%
Black Hills Corp. .......................................... 250 5,516
Empire District Electric Co. ............................... 200 3,925
Energen Corp. .............................................. 4,800 76,500
Equitable Resources, Inc. .................................. 2,200 98,588
General Communication, Inc., Class A (a).................... 4,000 21,500
Idacorp, Inc. .............................................. 900 31,275
Laclede Gas Co. ............................................ 1,850 37,000
Madison Gas & Electric Co. ................................. 2,600 46,475
Northwest Natural Gas Co. .................................. 2,500 48,750
Northwestern Corp. ......................................... 3,250 67,031
NUI Corp. .................................................. 1,050 27,169
Oneok, Inc. ................................................ 3,600 90,000
Public Service Co. of New Mexico............................ 1,200 18,900
RGS Energy Group, Inc. ..................................... 3,800 80,750
South Jersey Industries, Inc. .............................. 1,200 33,825
Southwestern Energy Co. .................................... 7,550 50,019
TNP Enterprises, Inc. ...................................... 750 32,859
Western Gas Resources, Inc. ................................ 3,800 60,325
WPS Resources Corp. ........................................ 300 7,781
-----------
838,188
-----------
TOTAL LONG-TERM INVESTMENTS 94.6%
(Cost $9,219,391)............................................... 9,411,665

REPURCHASE AGREEMENT 6.1%
Goldman Sachs ($605,000 par collateralized by U.S. Government
obligations in a pooled cash account, dated 03/31/00, to be sold
on 4/3/00 at $605,313) (Cost $605,000).......................... 605,000
-----------

TOTAL INVESTMENTS 100.7%
(Cost $9,824,391)............................................... 10,016,665

LIABILITIES IN EXCESS OF OTHER ASSETS (0.7%)....................... (73,116)
-----------

NET ASSETS 100.0%.................................................. $ 9,943,549
===========
</TABLE>

(a) Non-income producing security as this stock currently does not declare
dividends.

See Notes to Financial Statements

F-7
<PAGE> 366

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2000

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $9,824,391)......................... $10,016,665
Receivables:
Fund Shares Sold.......................................... 151,550
Expense Reimbursement from Adviser........................ 123,904
Dividends................................................. 11,510
-----------
Total Assets............................................ 10,303,629
-----------
LIABILITIES:
Payables:
Investments Purchased..................................... 152,758
Fund Shares Repurchased................................... 31,672
Custodian Bank............................................ 14,264
Distributor and Affiliates................................ 8,448
Accrued Expenses............................................ 142,017
Trustees' Deferred Compensation and Retirement Plans........ 10,921
-----------
Total Liabilities....................................... 360,080
-----------
NET ASSETS.................................................. $ 9,943,549
===========
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $ 9,740,690
Net Unrealized Appreciation................................. 192,274
Accumulated Net Realized Gain............................... 8,833
Accumulated Undistributed Net Investment Income............. 1,752
-----------
NET ASSETS.................................................. $ 9,943,549
===========
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $4,326,666 and 441,146 shares of
beneficial interest issued and outstanding)........... $ 9.81
Maximum sales charge (5.75%* of offering price)......... .60
-----------
Maximum offering price to public........................ $ 10.41
===========
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $3,658,629 and 374,071 shares of
beneficial interest issued and outstanding)........... $ 9.78
===========
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $1,958,255 and 200,158 shares of
beneficial interest issued and outstanding)........... $ 9.78
===========
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

F-8
<PAGE> 367

Statement of Operations
For the Period June 21, 1999 (Commencement of Investment Operations) through
March 31, 2000

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 62,546
Interest.................................................... 8,092
--------
Total Income............................................ 70,638
--------
EXPENSES:
Registration Fee............................................ 70,227
Custody..................................................... 18,962
Trustees' Fees and Related Expenses......................... 13,957
Investment Advisory Fee..................................... 24,348
Audit....................................................... 18,453
Reports to Shareholders..................................... 110,559
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $3,756, $11,318 and $5,855, respectively)... 20,929
Shareholder Services........................................ 8,734
Legal....................................................... 434
Other....................................................... 2,589
--------
Total Expenses.......................................... 289,192
Expense Reduction ($24,348 Investment Advisory Fee and
$202,348 Other)....................................... 226,696
Less Credits Earned on Cash Balances.................... 813
--------
Net Expenses............................................ 61,683
--------
NET INVESTMENT INCOME....................................... $ 8,955
========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 8,727
--------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... -0-
End of the Period......................................... 192,274
--------
Net Unrealized Appreciation During the Period............... 192,274
--------
NET REALIZED AND UNREALIZED GAIN............................ $201,001
========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $209,956
========
</TABLE>

See Notes to Financial Statements

F-9
<PAGE> 368

Statement of Changes in Net Assets
For the Period June 21, 1999 (Commencement of Investment Operations) through
March 31, 2000

<TABLE>
<S> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income....................................... $ 8,955
Net Realized Gain........................................... 8,727
Net Unrealized Appreciation During the Period............... 192,274
----------
Change in Net Assets from Operations........................ 209,956
----------
Distributions from Net Investment Income.................... (8,955)
Distributions in Excess of Net Investment Income............ (12,718)
----------
Distributions from and in Excess of Net Investment
Income*................................................... (21,673)
----------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES......... 188,283
----------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................................... 9,555,139
Net Asset Value of Shares Issued Through Dividend
Reinvestment.............................................. 16,500
Cost of Shares Repurchased.................................. (816,373)
----------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.......... 8,755,266
----------
TOTAL INCREASE IN NET ASSETS................................ 8,943,549
NET ASSETS:
Beginning of the Period..................................... 1,000,000
----------
End of the Period (Including accumulated undistributed net
investment income of $1,752).............................. $9,943,549
==========

* Distributions by Class:
------------------------------------------------------------
Distributions from and in Excess of Net Investment Income:
Class A Shares............................................ $ (14,958)
Class B Shares............................................ (4,541)
Class C Shares............................................ (2,174)
----------
$ (21,673)
==========
</TABLE>

See Notes to Financial Statements

F-10
<PAGE> 369

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS A SHARES INVESTMENT OPERATIONS)
TO MARCH 31, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $10.000
-------
Net Investment Income..................................... .053
Net Realized and Unrealized Loss.......................... (.181)
-------
Total from Investment Operations............................ (.128)
Less Distributions from and in Excess of Net Investment
Income.................................................... .064
-------
NET ASSET VALUE, END OF THE PERIOD.......................... $ 9.808
=======

Total Return (a)............................................ (.92%)**
Net Assets at End of the Period (In millions)............... $ 4.3
Ratio of Expenses to Average Net Assets* (b)................ 1.48%
Ratio of Net Investment Income to Average Net Assets*....... .67%
Portfolio Turnover.......................................... 15%**
* If certain expenses had not been assumed by Van Kampen,
total return would have been lower and the ratios would
have been as follows:
Ratio of Expenses to Average Net Assets (b)................. 8.29%
Ratio of Net Investment Loss to Average Net Assets.......... (6.14%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a contingent
deferred sales charge of 1% may be imposed on certain redemptions made
within one year of purchase. If the sales charges were included, total
returns would be lower.

(b) The Ratio of Expenses to Average Net Assets does not reflect credits earned
on overnight cash balances. If these credits were reflected as a reduction
of expenses, the ratios would decrease by .02% for the period June 21, 1999
to March 31, 2000.

See Notes to Financial Statements

F-11
<PAGE> 370

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS B SHARES INVESTMENT OPERATIONS)
TO MARCH 31, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $10.000
-------
Net Investment Income..................................... .013
Net Realized and Unrealized Loss.......................... (.205)
-------
Total from Investment Operations............................ (.192)
Less Distributions from and in Excess of Net Investment
Income.................................................... .027
-------
NET ASSET VALUE, END OF THE PERIOD.......................... $ 9.781
=======

Total Return (a)............................................ (1.81%)**
Net Assets at End of the Period (In millions)............... $ 3.7
Ratio of Expenses to Average Net Assets* (b)................ 2.23%
Ratio of Net Investment Loss to Average Net Assets*......... (.08%)
Portfolio Turnover.......................................... 15%**
* If certain expenses had not been assumed by Van Kampen,
total return would have been lower and the ratios would
have been as follows:
Ratio of Expenses to Average Net Assets (b)................. 9.04%
Ratio of Net Investment Loss to Average Net Assets.......... (6.89%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 5%,
charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the fifth year. If the sales charge was
included, total returns would be lower.

See Notes to Financial Statements

F-12
<PAGE> 371

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS C SHARES INVESTMENT OPERATIONS)
TO MARCH 31, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $10.000
-------
Net Investment Loss....................................... .013
Net Realized and Unrealized Loss.......................... (.202)
-------
Total from Investment Operations............................ (.189)
Less Distributions from and in Excess of Net Investment
Income.................................................... .027
-------
NET ASSET VALUE, END OF THE PERIOD.......................... $ 9.784
=======

Total Return (a)............................................ (1.81%)**
Net Assets at End of the Period (In millions)............... $ 2.0
Ratio of Expenses to Average Net Assets* (b)................ 2.23%
Ratio of Net Investment Loss to Average Net Assets*......... (.08%)
Portfolio Turnover.......................................... 15%**
* If certain expenses had not been assumed by Van Kampen,
total return would have been lower and the ratios would
have been as follows:
Ratio of Expenses to Average Net Assets (b)................. 9.04%
Ratio of Net Investment Loss to Average Net Assets.......... (6.89%)
</TABLE>

** Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 1%,
charged on certain redemptions made within one year of purchase. If the
sales charge was included, total returns would be lower.

See Notes to Financial Statements

F-13
<PAGE> 372

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Small Cap Value Fund (the "Fund") is organized as a series of Van
Kampen Equity Trust (the "Trust"), a Delaware business trust, and is registered
as a diversified open-end investment management company under the Investment
Company Act of 1940, as amended. The Fund's investment objective is to seek
capital appreciation by investing primarily in a diversified portfolio of equity
securities of small capitalization companies that the Fund's investment adviser
believes are undervalued. The Fund commenced investment operations on June 21,
1999 with three classes of common shares, Class A, Class B, and Class C shares.

A. SECURITY VALUATION Investments in securities listed on a securities exchange
are valued at their sale price as of the close of such securities exchange.
Unlisted securities and listed securities for which the last sales price is not
available are valued at the mean of the bid and asked prices, or, if not
available, their fair value as determined in accordance with procedures
established in good faith by the Board of Trustees. Short-term securities with
remaining maturities of 60 days or less are valued at amortized cost which
approximates market value.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.

The Fund may invest in repurchase agreements which are short-term
investments whereby the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other investment
companies advised by Van Kampen Investment Advisory Corp. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are fully collateralized by the underlying debt security.
The Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to

F-14
<PAGE> 373

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

maintain the value of the underlying security at not less than the repurchase
proceeds due the Fund.

C. INCOME AND EXPENSE Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Income and expenses of the Fund
are allocated on a pro rata basis to each class of shares, except for
distribution and service fees and transfer agency costs which are unique to each
class of shares.

D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.

Net realized gains or losses may differ for financial and tax reporting
purposes as a result of post October 31 losses which are not recognized for tax
purposes until the first day of the following fiscal year.

At March 31, 2000, for federal income tax purposes, cost of long- and
short-term investments is $9,825,452, the aggregate gross unrealized
appreciation is $1,007,904 and the aggregate gross unrealized depreciation is
$816,691, resulting in net unrealized appreciation on long- and short-term
investments of $191,213.

E. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends
annually from net investment income. Net realized gains, if any, are distributed
annually. Distributions from net realized gains for book purposes may include
short-term capital gains and gains on option and futures transactions.

Due to inherent differences in the recognition of certain expenses under
generally accepted accounting principals and federal income tax purposes, the
amount of distributed net investment income may differ for a particular period.
These differences are temporary in nature, but may result in book basis
distribution in excess of net investment income for certain periods.

Due to inherent differences in the recognition of income and expenses under
generally accepted accounting principles and federal income tax purposes,
permanent differences between book and tax basis reporting for the current
fiscal year have been identified and appropriately reclassified. Permanent
differences related to the recognition of certain expenses that are not
deductible for tax purposes totaling $14,576 have been reclassified from
accumulated undistributed net investment income to capital. In addition,
permanent differences totaling $106 were reclassified from accumulated
undistributed net investment income to accumulated net realized gain.

F. EXPENSE REDUCTIONS During the period ended March 31, 2000, the Fund's custody
fee was reduced by $813 as a result of credits earned on overnight cash
balances.

F-15
<PAGE> 374

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide facilities and investment advice to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS % PER ANNUM
<S> <C>
First $500 million.......................................... .75 of 1%
Next $500 million........................................... .70 of 1%
Over $1 billion............................................. .65 of 1%
</TABLE>

For the period ended March 31, 2000, the Adviser voluntarily waived $24,348
of its investment advisory fees and assumed $202,348 of the Fund's other
expenses. This waiver is voluntary in nature and can be discontinued at the
Adviser's discretion.

For the period ended March 31, 2000, the Fund recognized expenses of
approximately $400 representing legal services provided by Skadden, Arps, Slate,
Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the Fund
is an affiliated person. All of this expense has been assumed by Van Kampen.

For the period ended March 31, 2000, the Fund recognized expenses of
approximately $1,700 representing Van Kampen Funds Inc. or its affiliates'
(collectively "Van Kampen") cost of providing accounting and legal services to
the Fund. All of this expense has been assumed by Van Kampen.

Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the period ended March 31,
2000, the Fund recognized expenses of approximately $6,900. All of this expense
has been assumed by Van Kampen. Transfer agency fees are determined through
negotiations with the Fund's Board of Trustees and are based on competitive
market benchmarks.

Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.

At March 31, 2000, Van Kampen owned 40,000 shares of Class A, 30,000 shares
of Class B, and 30,000 shares of Class C.

F-16
<PAGE> 375

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

3. CAPITAL TRANSACTIONS

At March 31, 2000, capital aggregated $4,239,324, $3,579,809 and $1,921,557 for
Classes A, B and C, respectively. For the period ended March 31, 2000,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................... 434,157 $4,160,669
Class B................................................... 387,489 3,699,051
Class C................................................... 177,518 1,695,419
------- ----------
Total Sales................................................. 999,164 $9,555,139
======= ==========
Dividend Reinvestment:
Class A................................................... 1,251 $ 11,585
Class B................................................... 388 3,590
Class C................................................... 143 1,325
------- ----------
Total Dividend Reinvestment................................. 1,782 $ 16,500
======= ==========
Repurchases:
Class A................................................... (34,262) $ (326,588)
Class B................................................... (43,806) (417,468)
Class C................................................... (7,503) (72,317)
------- ----------
Total Repurchases........................................... (85,571) $ (816,373)
======= ==========
</TABLE>

Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares and any
dividend reinvestment plan Class B shares automatically convert to Class A
Shares after the eighth year following purchase. The CDSC for Class B and C
shares will be imposed on most redemptions made within five years of the
purchase for Class B and one year of the purchase for Class C as detailed in the
following schedule.

F-17
<PAGE> 376

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

For the period ended March 31, 2000, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $10,900 and CDSC on redeemed shares of approximately $900. Sales
charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $9,878,644 and $667,981, respectively.

5. DISTRIBUTION AND SERVICE PLANS

The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940, as amended and a service plan
(collectively the "Plans"). The Plans govern payments for the distribution of
the Fund's shares, ongoing shareholder services and maintenance of shareholder
accounts.

Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these fees
for the period ended March 31, 2000, are payments retained by Van Kampen of
approximately $11,400.

6. BORROWINGS

In accordance with its investment policies, the Fund may borrow from banks for
temporary purposes and is subject to certain other customary restrictions.
Effective November 30, 1999, the Fund, in conjunction with certain other funds
of Van Kampen, has entered in to a $650,000,000 committed line of credit
facility with a group of banks which expires on November 28, 2000, but is
renewable with the consent of the participating banks. Each fund is permitted to
utilize the facility in accordance with the restrictions of its prospectus. In
the event the demand for the credit facility meets or exceeds $650 million on a
complex-wide basis, each fund will be limited to its pro-rata percentage based
on the net assets of each participating fund. Interest on borrowings is charged
under the agreement at a rate of 0.50% above the federal funds rate per annum.
An annual commitment fee of 0.09% per annum is charged on the unused portion of
the credit facility, which each fund incurs based on its pro-rate percentage of
quarterly net assets. The Fund has not borrowed against the credit facility
during the period.

F-18
<PAGE> 377

STATEMENT OF ADDITIONAL INFORMATION

VAN KAMPEN
UTILITY FUND

Van Kampen Utility Fund's (the "Fund") investment objective is to seek to
provide its shareholders with capital appreciation and current income. The
Fund's investment adviser seeks to achieve the Fund's investment objective by
investing primarily in a portfolio of common stocks and income securities issued
by companies engaged in the utilities industry.

The Fund is organized as a diversified series of the Van Kampen Equity
Trust, an open-end, management investment company (the "Trust").

TABLE OF CONTENTS
---------------------------------------------

<TABLE>
<CAPTION>
Page
----
<S> <C>
General Information......................................... B-2
Investment Objective, Policies and Risks.................... B-3
Strategic Transactions...................................... B-9
Investment Restrictions..................................... B-16
Trustees and Officers....................................... B-18
Investment Advisory Agreement............................... B-26
Other Agreements............................................ B-27
Distribution and Service.................................... B-27
Transfer Agent.............................................. B-31
Portfolio Transactions and Brokerage Allocation............. B-31
Shareholder Services........................................ B-32
Redemption of Shares........................................ B-35
Contingent Deferred Sales Charge-Class A.................... B-35
Waiver of Class B and Class C Contingent Deferred Sales
Charges................................................... B-35
Taxation.................................................... B-37
Fund Performance............................................ B-40
Other Information........................................... B-42
Report of Independent Accountants........................... F-1
Financial Statements........................................ F-2
Notes to Financial Statements............................... F-11
</TABLE>

THIS STATEMENT OF ADDITIONAL INFORMATION IS DATED JULY 28, 2000.

UTLF SAI 7/00

<PAGE> 378

GENERAL INFORMATION

The Fund was originally organized as a sub-trust of the Massachusetts Trust
under the name Van Kampen Merritt Utility Fund. The Fund was reorganized as a
series of the Trust under the name Van Kampen American Capital Utility Fund on
July 31, 1995. On July 14, 1998, the Fund adopted its current name.

B-2
<PAGE> 379

The Trustees may amend the Declaration of Trust (including with respect to
any series) in any manner without shareholder approval, except that the Trustees
may not adopt any amendment adversely affecting the rights of shareholders of
any series without approval by a majority of the shares of each affected series
outstanding and entitled to vote (or such higher vote as may be required by the
1940 Act or other applicable law) and except that the Trustees cannot amend the
Declaration of Trust to impose any liability on shareholders, make any
assessment on shares or impose liabilities on the Trustees without approval from
each affected shareholder or Trustee, as the case may be.

As of July 3, 1999, no person was known by the Fund to own beneficially or
to hold of record 5% or more of the outstanding Class A Shares, Class B Shares
or Class C Shares of the Fund, except as follows:

<TABLE>
<CAPTION>
Amount of
Ownership at Class Percentage
Name and Address of Record Holder July 3, 1999 of Shares Ownership
--------------------------------- ------------- --------- ----------
<S> <C> <C> <C>
Van Kampen Trust Company............................ 1,208,140.77 A 19.33%
2800 Post Oak Blvd. 295,544.42 B 11.66%
Houston, TX 77056 46,523.66 C 9.69%
Merrill Lynch Pierce Fenner & Smith Inc............. 37,832.38 C 7.88%
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East
2nd Floor
Jacksonville, FL 32246-6484
</TABLE>

------------------------------------

Van Kampen Trust Company acts as custodian for certain employee benefit
plans and individual retirement accounts.

INVESTMENT OBJECTIVE, POLICIES AND RISKS

UTILITIES INDUSTRY

The utilities industry has experienced significant changes in recent years.
Many companies in the utilities industry have been favorably effected by lower
fuel and financing costs, deregulation, the full or near completion of major
construction programs and an increasing customer base. In addition, many utility
companies have generated cash flows in excess of current operating expenses and
construction expenditures, permitting some degree of diversification into
unregulated businesses. Some electric utilities have also taken advantage of the
right to sell power outside of their historical territories.

The telecommunications industry is experiencing significant changes as
local and long distance telephone companies, wireless communications companies
and cable television providers begin to compete to provide telecommunications
services and as new technologies develop. It is anticipated that
telecommunications legislation also will have a significant impact on the
telecommunications industry. Competition and technological advances may over
time provide better-positioned utility companies with opportunities for enhanced
profitability although increased competition. However, other structural changes
could adversely

B-3
<PAGE> 380

affect the profitability of such utilities or other negative factors affecting
the utilities industry could develop in the future.

Gas and electric utility companies continue to be affected by changes in
fuel prices and interest rates. There has been a convergence of gas utilities
and electric utilities, as electric utilities begin to deregulate and customers
begin to use a single energy provider instead of multiple energy providers. Gas
companies have been deregulated to a greater extent than electric utilities and
appear to have developed more of the business practices necessary to operate in
a non-monopoly environment. Electric utilities, generally new to deregulation,
may be more likely to experience significant changes than gas companies which
may increase the risk of investing in electric utilities.

Other utility companies securities appear to be emerging as new
technologies develop and as old technologies are refined. Such issuers include
entities engaged in cogeneration, waste disposal system provision, solid waste
electric generation, independent power producers and non-utility generators.

RISKS OF INVESTING IN PUBLIC UTILITIES.

Utility companies that issue securities may be subject to a variety of
risks depending, in part, on such factors as the type of utility involved and
its geographic location. Such risks may include potential increases in operating
costs, increases in interest expenses for capital construction programs,
government regulation of rates charged to customers, costs associated with
compliance with environmental and other regulations, service interruption due to
environmental, operational or other mishaps, the effects of economic slowdowns,
surplus capacity and increased competition from other providers of utility
services. Utility companies often have their rates determined by state utility
commissions or other governmental authorities or, depending on the jurisdiction
and the nature of the issuer, such issuers may set their own rates. Changes in
service rates generally lag changes in financing costs, and thus can favorably
or unfavorably affect the ability of utility companies to maintain or increase
dividend rates on such securities, depending upon whether such rates and costs
are declining or rising. To the extent that rates are established or reviewed by
governmental authorities, the utility is subject to the risk that such authority
will not authorize increased rates. Utility companies are often subject to
regulation by various authorities and may be affected by the imposition of
special tariffs and charges. There can be no assurance that regulatory policies
or accounting standard changes will not negatively affect the ability of utility
companies to service principal, interest and dividend payments. Because of the
Fund's policy of investing at least 80% of its total assets in securities issued
by companies engaged in the utilities industry, the Fund is more susceptible
than an investment company without such a policy to economic, political,
environmental or regulatory occurrences affecting companies engaged in the
utilities industry. See "Investment Objective, Policies and Risks" in the
Prospectus.

Electric Utilities. Certain electric utilities with uncompleted nuclear
power facilities may have problems completing and licensing such facilities, and
there is public, regulatory and governmental concern with the cost and safety of
nuclear power facilities in general. Regulatory changes with respect to nuclear
and conventionally fueled generating facilities could increase costs or impair
the ability of such electric utilities to operate such facilities, thus reducing
their ability to service dividend payments with respect to utility securities.
Electric utilities that utilize nuclear power facilities must apply for
recommissioning from the Nuclear Regulatory Commission after 40 years. Failure
to obtain recommissioning could result in an interruption of service or the need
to purchase more expensive power from other entities and could subject the
utility to significant capital construction costs in connection with building
new nuclear or alternative-fuel power facilities, upgrading existing facilities
or converting such facilities to alternative fuels. Electric utilities that
utilize coal in connection with the production of electric power are
particularly susceptible to environmental regulation, including the requirements
of the federal Clean Air Act and of similar state laws. Such regulation may
necessitate large capital expenditures in order for the utility to achieve
compliance.

Gas Utilities. Many gas utilities generally have been adversely affected
by oversupply conditions, and by increased competition from other providers of
utility services. In addition, some gas utilities entered into long-term
contracts with respect to the purchase or sale of gas at fixed prices, which
prices have since changed significantly in the open market. In many cases, such
price changes have been to the disadvantage of the gas

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utility. Gas utilities are particularly susceptible to supply and demand
imbalances due to unpredictable climate conditions and other factors and are
subject to regulatory risks as well.

Telecommunications Utilities. Telecommunications regulation typically
limits rates charged, returns earned, providers of services, types of services,
ownership, areas served and terms for dealing with competitors and customers.
Telecommunications regulation generally has tended to be less stringent for
newer services, such as mobile services, than for traditional telephone service,
although there can be no assurances that such newer services will not be heavily
regulated in the future. Regulation may limit rates based on an authorized level
of earnings, a price index, or another formula. Telephone rate regulation may
include government-mandated cross-subsidies that limit the flexibility of
existing service providers to respond to competition. Regulation may also limit
the use of new technologies and hamper efficient depreciation of existing
assets. If regulation limits the use of new technologies by established carriers
or forces cross-subsidies, large private networks may emerge.

RISKS OF INVESTING IN LOWER-GRADE INCOME SECURITIES

The Fund may invest up to 20% of its total assets in lower-grade
securities, which securities are commonly known as "junk bonds." Securities
which are in the lower-grade categories generally offer a higher current yield
than higher-grade securities of similar maturities, but they also generally
involve greater risks, such as greater credit risk, greater market risk and
volatility, greater liquidity concerns and potentially greater manager risk.
Investors should carefully consider the risks of owning shares of a portfolio
which invests in lower-grade securities before investing in the Fund. The Fund
will not invest in securities that are in default or are in bankruptcy or
reorganization.

Credit risk relates to the issuer's ability to make timely payment of
interest and principal when due. Lower-grade securities are considered more
susceptible to nonpayment of interest and principal or default than higher-grade
securities. Increases in interest rates or changes in the economy may
significantly affect the ability of issuers of lower-grade securities to pay
interest and to repay principal, to meet projected financial goals or to obtain
additional financing. In the event that an issuer of securities held by the Fund
experiences difficulties in the timely payment of principal and interest and
such issuer seeks to restructure the terms of its borrowings, the Fund may incur
additional expenses and may determine to invest additional assets with respect
to such issuer or the project or projects to which the Fund's securities relate.
Further, the Fund may incur additional expenses to the extent that it is
required to seek recovery upon a default in the payment of interest or the
repayment of principal on its portfolio holdings, and the Fund may be unable to
obtain full recovery on such amounts.

Market risk relates to changes in market value of a security that occur as
a result of variation in the level of prevailing interest rates and yield
relationships in the income securities market and as a result of real or
perceived changes in credit risk. The value of the Fund's investments can be
expected to fluctuate over time. When interest rates decline, the value of a
portfolio invested in fixed income securities generally can be expected to rise.
Conversely, when interest rates rise, the value of a portfolio invested in fixed
income securities generally can be expected to decline. Income securities with
longer maturities, which may have higher yields, may increase or decrease in
value more than income securities with shorter maturities. However, the
secondary market prices of lower-grade income securities generally are less
sensitive to changes in interest rate and are more sensitive to general adverse
economic changes or specific developments with respect to the particular issuers
than are the secondary market prices of higher-grade income securities. A
significant increase in interest rates or a general economic downturn could
severely disrupt the market for lower-grade securities and adversely affect the
market value of such securities. Such events also could lead to a higher
incidence of default by issuers of lower-grade securities as compared with
higher-grade securities. In addition, changes in credit risks, interest rates,
the credit markets or periods of general economic uncertainty can be expected to
result in increased volatility in the market price of the lower-grade securities
in the Fund and thus in the net asset value of the Fund. Adverse publicity and
investor perceptions, whether or not based on rational analysis, may affect the
value, volatility and liquidity of lower-grade securities.

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The markets for lower-grade securities may be less liquid than the markets
for higher-grade securities. Liquidity relates to the ability of a fund to sell
a security in a timely manner at a price which reflects the value of that
security. To the extent that there is no established retail market for some of
the lower-grade securities in which the Fund may invest, trading in such
securities may be relatively inactive. Prices of lower-grade securities may
decline rapidly in the event a significant number of holders decide to sell.
Changes in expectations regarding an individual issuer of lower-grade securities
generally could reduce market liquidity for such securities and make their sale
by the Fund more difficult, at least in the absence of price concessions. The
effects of adverse publicity and investor perceptions may be more pronounced for
securities for which no established retail market exists as compared with the
effects on securities for which such a market does exist. An economic downturn
or an increase in interest rates could severely disrupt the market for such
securities and adversely affect the value of outstanding securities or the
ability of the issuers to repay principal and interest. Further, the Fund may
have more difficulty selling such securities in a timely manner and at their
stated value than would be the case for securities for which an established
retail market does exist.

The Fund's Adviser is responsible for determining the net asset value of
the Fund, subject to the supervision of the Fund's Board of Trustees. During
periods of reduced market liquidity or in the absence of readily available
market quotations for lower-grade securities held in the Fund's portfolio, the
ability of the Fund's Adviser to value the Fund's securities becomes more
difficult and the judgment of the Fund's Adviser may play a greater role in the
valuation of the Fund's securities due to the reduced availability of reliable
objective data.

Many lower-grade debt securities generally are not listed for trading on
any national securities exchange, and many issuers of lower-grade debt
securities choose not to have a rating assigned to their obligations by any
nationally recognized statistical rating organization. As a result, the Fund's
portfolio may consist of a higher portion of unlisted or unrated securities as
compared with an investment company that invests primarily in higher-grade
securities. Unrated securities are usually not as attractive to as many buyers
as are rated securities, a factor which may make unrated securities less
marketable. These factors may have the effect of limiting the availability of
the securities for purchase by the Fund and may also limit the ability of the
Fund to sell such securities at their fair value either to meet redemption
requests or in response to changes in the economy or the financial markets.
Further, to the extent the Fund owns or may acquire illiquid or restricted
lower-grade securities, these securities may involve special registration
responsibilities, liabilities and costs, and liquidity and valuation
difficulties.

The Fund will rely on its Adviser's judgment, analysis and experience in
evaluating the creditworthiness of an issue. The amount of available information
about the financial condition of certain lower-grade issuers may be less
extensive than other issuers. In its analysis, the Adviser may consider the
credit ratings of S&P and Moody's in evaluating securities although the Adviser
does not rely primarily on these ratings. Credit ratings of securities rating
organization evaluate only the safety of principal and interest payments not the
market risk. In addition, ratings are general and not absolute standards of
quality, and credit ratings are subject to the risk that the creditworthiness of
an issuer may change and the rating agencies may fail to change such ratings in
a timely fashion. A rating downgrade does not require the Fund to dispose of a
security. The Adviser continuously monitors the issuers of securities held in
the Fund. Because of the number of investment considerations involved in
investing in lower-grade securities, achievement of the Fund's investment
objective may be more dependent upon the Adviser's credit analysis than is the
case with investing in higher-grade securities.

New or proposed laws may have an impact on the market for lower-grade
securities. The Adviser is unable at this time to predict what effect, if any,
legislation may have on the market for lower-grade securities.

Special tax considerations are associated with investing in certain
lower-grade securities, such as zero coupon or pay-in-kind securities. The Fund
accrues income on these securities prior to the receipt of cash payments. The
Fund must distribute substantially all of its income to its shareholders to
qualify for pass-through treatment under federal income tax law and may,
therefore, have to dispose of its portfolio securities to satisfy distribution
requirements.

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REPURCHASE AGREEMENTS

The Fund may engage in repurchase agreements with broker-dealers, banks and
other financial institutions in order to earn a return on temporarily available
cash. The Fund may invest an amount up to 20% of its total assets at the time of
purchase in securities subject to repurchase agreements. A repurchase agreement
is a short-term investment in which the purchaser (i.e., the Fund) acquires
ownership of a 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. The Fund will enter into repurchase agreements with
broker-dealers, banks and other financial institutions deemed to be creditworthy
by the Adviser under guidelines approved by the Fund's Board of Trustees. The
Fund will not invest in repurchase agreements maturing in more than seven days
if any such investment, together with any other illiquid securities held by the
Fund, would exceed the Fund's limitation on illiquid securities described
herein. The Fund does not bear the risk of a decline in the value of the
underlying security unless the seller defaults under its repurchase obligation.
In the event of the bankruptcy or other default of a seller of a repurchase
agreement, the Fund 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 Fund 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.

BORROWING AND REVERSE REPURCHASE AGREEMENTS

The Fund may borrow money for investment purposes. The Fund may borrow
money from banks and engage in reverse repurchase agreements in an amount up to
33 1/3% of the Fund's total assets (including the amount borrowed). The Fund
also may borrow money in an amount up to 5% of the Fund's total assets for
temporary purposes. The Fund has no current intention to borrow money other than
for temporary purposes.

Borrowing by the Fund creates an opportunity for increased net income but,
at the same time, creates special risk considerations such as potential changes
in the net asset value of the shares and in the yield on the Fund's portfolio.
To the extent that the Fund is otherwise fully invested and the Adviser believes
that additional investment opportunities exist with the potential for capital
growth, the Fund may employ leverage for the purpose of acquiring portfolio
securities. Such utilization of leverage is considered speculative, and involves
risks. The assets of the Fund, including any additional assets which may be
purchased with the proceeds of any borrowings, will consist primarily of common
stocks and income securities issued by companies engaged in the utilities
industry, the prices of which may be volatile. In the event that the values of
the Fund's portfolio securities do not appreciate or, in fact, depreciate, the
Fund would be forced to liquidate a portion of its portfolio, which could be
significant depending upon the magnitude of the decline in value of the Fund's
assets, to pay interest on, and repay the principal of, any such borrowings.
Even in the event that any assets purchased with the proceeds of such borrowings
appreciate as anticipated by the Adviser, a portion of

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the Fund's assets may be required to be liquidated to meet scheduled principal
and interest payments with respect to such borrowings. Any such liquidations may
be at inopportune times and prices. Utilization of investment leverage would
result in a higher volatility of the net asset value of the Fund. The effect of
leverage in a declining market would result in a greater decrease in net asset
value to holders of the Fund's shares than if the Fund were not leveraged.

LENDING OF SECURITIES

Consistent with applicable legal and regulatory requirements, the Fund may
lend its portfolio securities to broker-dealers, banks and other institutional
borrowers of securities, provided that such loans are at all times secured by
cash collateral that is at least equal to the market value determined daily, of
the loaned securities and are callable at any time by the Fund. The advantage of
such loans is that the Fund continues to receive the interest or dividends on
the loaned securities, while at the same time earning interest on the collateral
which is invested in short-term obligations or an agreed-upon amount of interest
from the borrower of the security. The Fund may pay reasonable finders',
administrative and custodial fees in connection with loans of its securities.
There is no assurance as to the extent to which securities loans can be
effected.

If the borrower fails to maintain the requisite amount of collateral, the
loan automatically terminates, and the Fund could use the collateral to replace
the securities while holding the borrower liable for any excess of replacement
cost over collateral. As with any extensions of credit, there are risks of delay
in recovery and in some cases even loss of rights in the collateral should the
borrower of the securities fail financially. However, these loans of portfolio
securities will only be made to firms deemed by the Adviser to be creditworthy
and when the consideration which can be earned from such loans is believed to
justify the attendant risks. On termination of the loan, the borrower is
required to return the securities to the Fund; any gains or loss in the market
price during the loan would inure to the Fund.

When voting or consent rights which accompany loaned securities pass to the
borrower, the Fund will follow the policy of calling the loan, in whole or in
part as may be appropriate to permit the exercise of such rights if the matters
involved would have a material effect on the Fund's investment in the securities
which are the subject of the loan.

"WHEN-ISSUED" AND "DELAYED DELIVERY" TRANSACTIONS

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payment is made. The Fund will make commitments to purchase securities on such
basis only with the intention of actually acquiring these securities, but the
Fund may sell such securities prior to the settlement date if such sale is
considered to be advisable. To the extent the Fund engages in "when-issued" and
"delayed delivery" transactions, it will do so for the purpose of acquiring
securities for the Fund's portfolio consistent with the Fund's investment
objectives and policies and not for the purpose of investment leverage.

PORTFOLIO TURNOVER

ILLIQUID SECURITIES

The Fund may invest up to 15% of its net assets in illiquid securities,
which includes securities that are not readily marketable, repurchase agreements
which have a maturity of longer than seven days and generally includes
securities that are restricted from sale to the public without registration
under the Securities Act of 1933, as amended (the "1933 Act"). The sale of such
securities often requires more time and results in higher brokerage charges or
dealer discounts and other selling expenses than does the sale of liquid
securities trading on national securities exchanges or in the over-the-counter
markets. Restricted securities are often purchased at a discount from the market
price of unrestricted securities of the same issuer reflecting the fact that
such securities may not be readily marketable without some time delay.
Investments in securities for which market quotations are not readily available
are valued at fair value as determined in good faith by the Adviser in
accordance with procedures approved by the Fund's Board of Trustees. Ordinarily,
the Fund would invest in restricted securities only when it receives the
issuer's commitment to register the securities without expense to the Fund.
However, registration and underwriting expenses (which typically range from 7%
to 15% of the gross proceeds of the securities sold) may be paid by the Fund.
Restricted securities which can be offered and sold to qualified institutional
buyers under Rule 144A under the 1933 Act ("144A Securities") and are determined
to be liquid under guidelines adopted by and subject to the supervision of the
Fund's Board of Trustees are not subject to the limitation on illiquid
securities. Such 144A Securities are subject to monitoring and may become
illiquid to the extent qualified institutional buyers become, for a time,
uninterested in purchasing such securities. Factors used to determine whether
144A Securities are liquid include, among other things, a security's trading
history, the availability of reliable pricing information, the number of dealers
making quotes or making a market in such security and the number of potential
purchasers in the market for such security. For purposes hereof, investments by
the Fund in securities of other investment companies will not be considered
investments in restricted securities to the extent permitted by (i) the 1940
Act, as amended from time to time, (ii) the rules and regulations promulgated by
the SEC under the 1940 Act, as amended from time to time, or (iii) an exemption
or other relief (such as "no action" letters issued by the staff of the SEC
interpreting or providing guidance on the 1940 Act or regulations thereunder)
from the provisions of the 1940 Act, as amended from time to time.

STRATEGIC TRANSACTIONS

attempt to protect against possible changes in the market value of securities
held in or to be purchased for the Fund's portfolio resulting from securities
markets or currency exchange markets, to protect the Fund's unrealized gains in
the value of its portfolio securities, to facilitate the sale of such securities
for investment purposes, or to establish a position in the derivatives markets
as a temporary substitute for purchasing or selling particular securities.

OPTIONS

during a fixed period prior thereto. The Fund is authorized to purchase and sell
exchange listed options and over-the-counter options ("OTC options"). Exchange
listed options are issued by a regulated intermediary such as the Options
Clearing Corporation ("OCC"), which guarantees the performance of the
obligations of the parties to such options. The discussion below uses the OCC as
a paradigm, but is also applicable to other financial intermediaries.

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FUTURES

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OPTIONS ON SECURITIES INDICES AND OTHER FINANCIAL INDICES

CURRENCY TRANSACTIONS

and considerations as other transactions with similar instruments. Currency
transactions can result in losses to the Fund if the currency being hedged
fluctuates in value to a degree or in a direction that is not anticipated.
Further, there is the risk that the perceived linkage between various currencies
may not be present or may not be present during the particular time that the
Fund is engaging in proxy hedging. If the Fund enters into a currency hedging
transaction, the Fund will comply with the asset segregation requirements
described below.

COMBINED TRANSACTIONS

SWAPS, CAPS, FLOORS AND COLLARS

Among the Strategic Transactions into which the Fund may enter are interest
rate, currency and index swaps and the purchase or sale of related caps, floors
and collars. The Fund expects to enter into these transactions primarily to
preserve a return or spread on a particular investment or portion of its
portfolio, to protect against currency fluctuations, as a duration management
technique or to protect against any increase in the price of securities the Fund
anticipates purchasing at a later date. The Fund intends to use these
transactions as hedges and not as speculative investments and will not sell
interest rate caps or floors where it does not own securities or other
instruments providing the income stream the Fund may be obligated to pay.
Interest rate swaps involve the exchange by the Fund with another party of their
respective commitments to pay or receive interest, e.g., an exchange of floating
rate payments for fixed rate payments with respect to a notional amount of
principal. A currency swap is an agreement to exchange cash flows on a notional
amount of two or more currencies based on the relative value differential among
them and an index swap is an agreement to swap cash flows on a notional amount
based on changes in the values of the reference indices. The purchase of a cap
entitles the purchaser to receive payments on a notional principal amount from
the party selling such cap to the extent that a specified index exceeds a
predetermined interest rate or amount. The purchase of a floor entitles the
purchaser to receive payments on a notional principal amount from the party
selling such floor to the extent that a specified index falls below a
predetermined interest rate or amount. A collar is a combination of a cap and a
floor that preserves a certain return within a predetermined range of interest
rates or values.

The Fund may enter into swaps, caps, floors, collars on either an
asset-based or liability-based basis, depending on whether it is hedging its
assets or its liabilities and will usually enter into swaps on a net basis,
i.e., the two payment streams are netted out in a cash settlement on the payment
date or dates specified in the

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instrument, with the Fund receiving or paying, as the case may be, only the net
amount of the two payments. Inasmuch as these swaps, caps, floors and collars
are entered into for good faith hedging purposes, the Adviser and the Fund
believe such obligations do not constitute senior securities under the 1940 Act
and, accordingly, will not treat them as being subject to its borrowing
restrictions. The Fund will not enter into any swap, cap, floor or collar
transaction unless, at the time of entering into such transaction, the unsecured
long-term debt of the Counterparty, combined with any credit enhancements, is
rated at least "A" by S&P or Moody's or has an equivalent rating from an NRSRO
or is determined to be of equivalent credit quality by the Adviser. If there is
a default by the Counterparty, the Fund may have contractual remedies pursuant
to the agreements related to the transaction. A large number of banks and
investment banking firms now act both as principals and agents utilizing
standardized swap documentation. As a result, the swap market has become
relatively liquid. Caps, floors and collars are more recent innovations for
which standardized documentation has not yet been fully developed and,
accordingly, they are less liquid than swaps.

EURODOLLAR INSTRUMENTS

The Fund may make investments in Eurodollar instruments. Eurodollar
instruments are U.S. dollar-denominated futures contracts or options thereon
which are linked to the London Interbank Offered Rate ("LIBOR"), although
foreign currency-denominated instruments are available from time to time.
Eurodollar futures contracts enable purchasers to obtain a fixed rate for the
lending of funds and sellers to obtain a fixed rate for borrowings. The Fund
might use Eurodollar futures contracts and options thereon to hedge against
changes in LIBOR to which many interest rate swaps and income instruments are
linked.

RISKS OF STRATEGIC TRANSACTIONS OUTSIDE THE UNITED STATES

USE OF SEGREGATED AND OTHER SPECIAL ACCOUNTS

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securities denominated in that currency equal to the Fund's obligations or to
segregate cash or liquid securities equal to the amount of the Fund's
obligation.

With respect to swaps, the Fund will accrue the net amount of the excess,
if any, of its obligations over its entitlements with respect to each swap on a
daily basis and will segregate an amount of cash or liquid securities having a
value equal to the accrued excess. Caps, floors and collars require segregation
of assets with a value equal to the Fund's net obligation, if any.

INVESTMENT RESTRICTIONS

1. With respect to 75% of its total assets, purchase any securities (other
than obligations guaranteed by the U.S. government or by its agencies or
instrumentalities), if, as a result, more than 5% of the Fund's total
assets (determined at the time of investment) would then be invested in
securities of a
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single issuer or, if, as a result, the Fund would hold more than 10% of
the outstanding voting securities of an issuer, except that the Fund may
purchase securities of other investment companies without regard to such
limitation to the extent permitted by (i) the 1940 Act, as amended from
time to time, (ii) the rules and regulations promulgated by the SEC
under the 1940 Act, as amended from time to time or (iii) an exemption
or other relief from the provisions of the 1940 Act, as amended from
time to time.

2. Issue senior securities, borrow money from banks or enter into reverse
repurchase agreements with banks in the aggregate in excess of 33 1/3%
of the Fund's total assets (after giving effect to any such borrowing);
which amount includes no more than 5% in borrowings and reverse
repurchase agreements with any entity for temporary purposes. The Fund
will not mortgage, pledge or hypothecate any assets other than in
connection with issuances, borrowings, hedging transactions and risk
management techniques.

3. Make loans of money or property to any person, except (i) to the extent
the securities in which the Fund may invest are considered to be loans,
(ii) through the loan of portfolio securities, and (iii) to the extent
that the Fund may lend money or property in connection with maintenance
of the value of, or the Fund's interest with respect to, the securities
owned by the Fund.

4. Buy any securities "on margin." Neither the deposit of initial or
maintenance margin in connection with Strategic Transactions nor short
term credits as may be necessary for the clearance of transactions is
considered the purchase of a security on margin.

5. Sell any securities "short," write, purchase or sell puts, calls or
combinations thereof, or purchase or sell interest rate or other
financial futures or index contracts or related options, except in
connection with Strategic Transactions.

6. Act as an underwriter of securities, except to the extent the Fund may
be deemed to be an underwriter in connection with the sale of securities
held in its portfolio.

7. Make investments for the purpose of exercising control or participation
in management, except to the extent that exercise by the Fund of its
rights under agreements related to portfolio securities would be deemed
to constitute such control or participation and except that the Fund may
purchase securities of other investment companies to the extent
permitted by (i) the 1940 Act, as amended from time to time, (ii) the
rules and regulations promulgated by the SEC under the 1940 Act, as
amended from time to time, or (iii) an exemption or other relief from
the provisions of the 1940 Act, as amended from time to time.

8. Invest in securities issued by other investment companies except as part
of a merger, reorganization or other acquisition and except as permitted
by (i) the 1940 Act, as amended from time to time, (ii) the rules and
regulations promulgated by the SEC under the 1940 Act, as amended from
time to time, or (iii) an exemption or other relief from the provisions
of the 1940 Act, as amended from time to time.

9. Invest in oil, gas or mineral leases or in equity interests in oil, gas,
or other mineral exploration or development programs except pursuant to
the exercise by the Fund of its rights under agreements relating to
portfolio securities.

10. Purchase or sell real estate, commodities or commodity contracts,
except to the extent that the securities that the Fund may invest in
are considered to be interests in real estate, commodities or commodity
contracts or to the extent the Fund exercises its rights under
agreements relating to portfolio securities (in which case the Fund may
liquidate real estate acquired as a result of a default on a mortgage),
and except to the extent that Strategic Transactions the Fund may
engage in are considered to be commodities or commodities contracts.

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TRUSTEES AND OFFICERS

TRUSTEES

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
J. Miles Branagan......................... Private investor. Trustee/Director of each of the funds
1632 Morning Mountain Road in the Fund Complex. Co-founder, and prior to August
Raleigh, NC 27614 1996, Chairman, Chief Executive Officer and President,
Date of Birth: 07/14/32 MDT Corporation (now known as Getinge/Castle, Inc., a
Age: 68 subsidiary of Getinge Industrier AB), a company which
develops, manufactures, markets and services medical and
scientific equipment.
Jerry D. Choate........................... Director of Amgen Inc., a biotechnological company.
53 Monarch Bay Drive Trustee/Director of each of the funds in the Fund
Dana Point, CA 92629 Complex. Prior to January 1999, Chairman and Chief
Date of Birth: 09/16/38 Executive Officer of The Allstate Corporation
Age: 61 ("Allstate") and Allstate Insurance Company. Prior to
January 1995, President and Chief Executive Officer of
Allstate. Prior to August 1994, various management
positions at Allstate.
Linda Hutton Heagy........................ Managing Partner of Heidrick & Stuggles, an executive
Sears Tower search firm. Trustee/Director of each of the funds in the
233 South Wacker Drive Fund Complex. Prior to 1997, Partner, Ray & Berndtson,
Suite 7000 Inc., an executive recruiting and management consulting
Chicago, IL 60606 firm. Formerly, Executive Vice President of ABN AMRO,
Date of Birth: 06/03/48 N.A., a Dutch bank holding company. Prior to 1992,
Age: 52 Executive Vice President of La Salle National Bank.
Trustee on the University of Chicago Hospitals Board,
Vice Chair of the Board of The YMCA of Metropolitan
Chicago and a member of the Women's Board of the
University of Chicago. Prior to 1996, Trustee of The
International House Board, a fellowship and housing
organization for international graduate students.
R. Craig Kennedy.......................... President and Director, German Marshall Fund of the
11 DuPont Circle, N.W. United States, an independent U.S. foundation created to
Washington, D.C. 20016 deepen understanding, promote collaboration and stimulate
Date of Birth: 02/29/52 exchanges of practical experience between Americans and
Age: 48 Europeans. Trustee/Director of each of the funds in the
Fund Complex. Formerly, advisor to the Dennis Trading
Group Inc., a managed futures and option company that
invests money for individuals and institutions. Prior to
1992, President and Chief Executive Officer, Director and
Member of the Investment Committee of the Joyce
Foundation, a private foundation.
</TABLE>

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<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Mitchell M. Merin*........................ President and Chief Operating Officer of Asset Management
Two World Trade Center of Morgan Stanley Dean Witter since December 1998.
66th Floor President and Director since April 1997 and Chief
New York, NY 10048 Executive Officer since June 1998 of Morgan Stanley Dean
Date of Birth: 08/13/53 Witter Advisors Inc. and Morgan Stanley Dean Witter
Age: 46 Services Company Inc. Chairman, Chief Executive Officer
and Director of Morgan Stanley Dean Witter Distributors
Inc. since June 1998. Chairman and Chief Executive
Officer since June 1998, and Director since January 1998,
of Morgan Stanley Dean Witter Trust FSB. Director of
various Morgan Stanley Dean Witter subsidiaries.
President of the Morgan Stanley Dean Witter Funds and
Discover Brokerage Index Series since May 1999.
Trustee/Director of each of the funds in the Fund
Complex. Previously Chief Strategic Officer of Morgan
Stanley Dean Witter Advisors Inc. and Morgan Stanley Dean
Witter Services Company Inc. and Executive Vice President
of Morgan Stanley Dean Witter Distributors Inc. April
1997-June 1998, Vice President of the Morgan Stanley Dean
Witter Funds and Discover Brokerage Index Series May
1997-April 1999, and Executive Vice President of Dean
Witter, Discover & Co.
Jack E. Nelson............................ President and owner, Nelson Investment Planning Services,
423 Country Club Drive Inc., a financial planning company and registered
Winter Park, FL 32789 investment adviser in the State of Florida. President and
Date of Birth: 02/13/36 owner, Nelson Ivest Brokerage Services Inc., a member of
Age: 64 the National Association of Securities Dealers, Inc. and
Securities Investors Protection Corp. Trustee/Director of
each of the funds in the Fund Complex.
Richard F. Powers, III*................... Chairman, President and Chief Executive Officer of Van
1 Parkview Plaza Kampen Investments. Chairman, Director and Chief
P.O. Box 5555 Executive Officer of the Advisers, the Distributor, Van
Oakbrook Terrace, IL 60181-5555 Kampen Advisors Inc. and Van Kampen Management Inc.
Date of Birth: 02/02/46 Director and officer of certain other subsidiaries of Van
Age: 54 Kampen Investments. Trustee/Director and President of
each of the funds in the Fund Complex. Trustee, President
and Chairman of the Board of other investment companies
advised by the Advisers and their affiliates, and Chief
Executive Officer of Van Kampen Exchange Fund. Prior to
May 1998, Executive Vice President and Director of
Marketing at Morgan Stanley Dean Witter and Director of
Dean Witter Discover & Co. and Dean Witter Realty. Prior
to 1996, Director of Dean Witter Reynolds Inc.
Phillip B. Rooney......................... Vice Chairman (since April 1997) and Director (since
One ServiceMaster Way 1994) of The ServiceMaster Company, a business and
Downers Grove, IL 60515 consumer services company. Director of Illinois Tool
Date of Birth: 07/08/44 Works, Inc., a manufacturing company and the Urban
Age: 56 Shopping Centers Inc., a retail mall management company.
Trustee, University of Notre Dame. Trustee/Director of
each of the funds in the Fund Complex. Prior to 1998,
Director of Stone Smurfit Container Corp., a paper
manufacturing company. From May 1996 through February
1997 he was President, Chief Executive Officer and Chief
Operating Officer of Waste Management, Inc., an
environmental services company, and from November 1984
through May 1996 he was President and Chief Operating
Officer of Waste Management, Inc.
</TABLE>

B-19
<PAGE> 396

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
--------------------- --------------------------
<S> <C>
Fernando Sisto............................ Professor Emeritus. Prior to August 1996, a George M.
155 Hickory Lane Bond Chaired Professor with Stevens Institute of
Closter, NJ 07624 Technology, and prior to 1995, Dean of the Graduate
Date of Birth: 08/02/24 School, Stevens Institute of Technology. Director,
Age: 75 Dynalysis of Princeton, a firm engaged in engineering
research. Trustee/Director of each of the funds in the
Fund Complex.

Wayne W. Whalen*.......................... Partner in the law firm of Skadden, Arps, Slate, Meagher
333 West Wacker Drive & Flom (Illinois), legal counsel to the funds in the Fund
Chicago, IL 60606 Complex, and other investment companies advised by the
Date of Birth: 08/22/39 Advisers. Trustee/Director of each of the funds in the
Age: 60 Fund Complex, and Trustee/Managing General Partner of
other investment companies advised by the Advisers.

Suzanne H. Woolsey........................ Chief Operating Officer of the National Academy of
2101 Constitution Ave., N.W. Sciences/ National Research Council, an independent,
Room 206 federally chartered policy institution, since 1993.
Washington, D.C. 20418 Director of Neurogen Corporation, a pharmaceutical
Date of Birth: 12/27/41 company, since January 1998. Director of the German
Age: 58 Marshall Fund of the United States, Trustee of Colorado
College, and Vice Chair of the Board of the Council for
Excellence in Government. Trustee/Director of each of the
funds in the Fund Complex. Prior to 1993, Executive
Director of the Commission on Behavioral and Social
Sciences and Education at the National Academy of
Sciences/National Research Council. From 1980 through
1989, Partner of Coopers & Lybrand.
</TABLE>

------------------------------------

B-20
<PAGE> 397

OFFICERS

Messrs. Smith, Santo, Ciccarone, Reynoldson, Sullivan and Zimmermann are
located at 1 Parkview Plaza, PO Box 5555, Oakbrook Terrace, IL 60181-5555. Mr.
Boyd is located at 2800 Post Oak Blvd., Houston, TX 77056.

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>

A. Thomas Smith III.................. Executive Vice President, General Counsel, Secretary and
Date of Birth: 12/14/56 Director of Van Kampen Investments, the Advisers, Van Kampen
Age: 43 Advisors Inc., Van Kampen Management Inc., the Distributor,
Vice President and Secretary American Capital Contractual Services, Inc., Van Kampen
Exchange Corp., Van Kampen Recordkeeping Services Inc.,
Investor Services, Van Kampen Insurance Agency of Illinois
Inc. and Van Kampen System Inc. Vice President and
Secretary/Vice President, Principal Legal Officer and
Secretary of other investment companies advised by the
Advisers or their affiliates. Vice President and Secretary
of each of the funds in the Fund Complex. Prior to January
1999, Vice President and Associate General Counsel to New
York Life Insurance Company ("New York Life"), and prior to
March 1997, Associate General Counsel of New York Life.
Prior to December 1993, Assistant General Counsel of The
Dreyfus Corporation. Prior to August 1991, Senior Associate,
Willkie Farr & Gallagher. Prior to January 1989, Staff
Attorney at the Securities and Exchange Commission, Division
of Investment Management, Office of Chief Counsel.

Michael H. Santo..................... Executive Vice President, Chief Administrative Officer and
Date of Birth: 10/22/55 Director of Van Kampen Investments, the Advisers, the
Age: 44 Distributor, Van Kampen Advisors Inc., Van Kampen Management
Vice President Inc. and Van Kampen Investor Services Inc., and serves as a
Director or Officer of certain other subsidiaries of Van
Kampen Investments. Vice President of each of the funds in
the Fund Complex and certain other investment companies
advised by the Advisers and their affiliates. Prior to 1998,
Senior Vice President and Senior Planning Officer for
Individual Asset Management of Morgan Stanley Dean Witter
and its predecessor since 1994. From 1990-1994, First Vice
President and Assistant Controller in Dean Witter's
Controller's Department.

Stephen L. Boyd...................... Executive Vice President and Chief Investment Officer of Van
Date of Birth: 11/16/40 Kampen Investments, and President and Chief Operating
Age: 59 Officer of the Advisers. Executive Vice President and Chief
Executive Vice President and Chief Investment Officer of each of the funds in the Fund Complex
Investment Officer and certain other investment companies advised by the
Advisers or their affiliates. Prior to April 2000, Executive
Vice President and Chief Investment Officer for Equity
Investments of the Advisers. Prior to October 1998, Vice
President and Senior Portfolio Manager with AIM Capital
Management, Inc. Prior to February 1998, Senior Vice
President and Portfolio Manager of Van Kampen American
Capital Asset Management, Inc., Van Kampen American Capital
Investment Advisory Corp. and Van Kampen American Capital
Management, Inc.
</TABLE>

B-21
<PAGE> 398

<TABLE>
<CAPTION>
NAME, AGE, POSITIONS AND PRINCIPAL OCCUPATIONS
OFFICES WITH FUND DURING PAST 5 YEARS
------------------------ ---------------------
<S> <C>
Richard A. Ciccarone................. Senior Vice President and Co-head of the Fixed Income
Date of Birth: 06/15/52 Department of the Advisers, Van Kampen Management Inc. and
Age: 48 Van Kampen Advisors Inc. Prior to May 2000, he served as
Vice President Co-head of Municipal Investments and Director of Research of
the Advisers, Van Kampen Management Inc. and Van Kampen
Advisors Inc. Mr. Ciccarone first joined the Adviser in June
1983, and worked for the Adviser until May 1989, with his
last position being a Vice President. From June 1989 to
April 1996, he worked at EVEREN Securities (formerly known
as Kemper Securities), with his last position at EVEREN
being an Executive Vice President. Since April 1996, Mr.
Ciccarone has been a Senior Vice President of the Advisers,
Van Kampen Management Inc. and Van Kampen Advisors Inc.
John R. Reynoldson................... Senior Vice President and Co-head of the Fixed Income
Date of Birth: 05/15/53 Department of the Advisers, Van Kampen Management Inc. and
Age: 47 Van Kampen Advisors Inc. Prior to May 2000, he managed the
Vice President investment grade taxable group for the Adviser since July
1999. From July 1988 to June 1999, he managed the government
securities bond group for Asset Management. Mr. Reynoldson
has been with Asset Management since April 1987, and has
been a Senior Vice President of Asset Management since July
1988. He has been a Senior Vice President of the Adviser and
Van Kampen Management Inc. since June 1995 and Senior Vice
President of Van Kampen Advisors Inc. since June 2000.

John L. Sullivan..................... Senior Vice President of Van Kampen Investments and the
Date of Birth: 08/20/55 Advisers. Vice President, Chief Financial Officer and
Age: 44 Treasurer of each of the funds in the Fund Complex and
Vice President, Chief Financial certain other investment companies advised by the Advisers
Officer and Treasurer or their affiliates.

John H. Zimmermann, III.............. Senior Vice President and Director of Van Kampen
Date of Birth: 11/25/57 Investments, President and Director of the Distributor, and
Vice President President of Van Kampen Insurance Agency of Illinois Inc.
Age: 42 Vice President of each of the funds in the Fund Complex.
From November 1992 to December 1997, Mr. Zimmermann was
Senior Vice President of the Distributor.
</TABLE>

B-22
<PAGE> 399

Affiliated Trustee includes a per meeting fee from each fund in the Fund Complex
in the amount of $200 per quarterly or special meeting attended by the
Non-Affiliated Trustee, due on the date of the meeting, plus reasonable expenses
incurred by the Non-Affiliated Trustee in connection with his or her services as
a trustee, provided that no compensation will be paid in connection with certain
telephonic special meetings.

Under the retirement plan, a Non-Affiliated Trustee who is receiving
compensation from such Fund prior to such Non-Affiliated Trustee's retirement,
has at least 10 years of service (including years of service prior to adoption
of the retirement plan) and retires at or after attaining the age of 60, is
eligible to receive a retirement benefit equal to $2,500 per year for each of
the ten years following such retirement from such Fund. Non-Affiliated Trustees
retiring prior to the age of 60 or with fewer than 10 years but more than 5
years of service may receive reduced retirement benefits from such Fund. Each
trustee/director has served as a member of the Board of Trustees of the Fund
since he or she was first appointed or elected in the year set forth below. The
retirement plan contains a Fund Complex retirement benefit cap of $60,000 per
year.

Additional information regarding compensation and benefits for trustees is
set forth below for the periods described in the notes accompanying the table.

COMPENSATION TABLE

------------------------------------

B-23
<PAGE> 400

(5) The amounts shown in this column represent the aggregate compensation paid
by all of the funds in the Fund Complex as of December 31, 1999 before
deferral by the trustees under the deferred compensation plan. Because the
funds in the Fund Complex have different fiscal year ends, the amounts shown
in this column are presented on a calendar year basis. Certain trustees
deferred all or a portion of their aggregate compensation from the Fund
Complex during the calendar year ended December 31, 1999. The deferred
compensation earns a rate of return determined by reference to the return on
the shares of the funds in the Fund Complex as selected by the respective
Non-Affiliated Trustee, with the same economic effect as if such
Non-Affiliated Trustee had invested in one or more funds in the Fund
Complex. To the extent permitted by the 1940 Act, the Fund may invest in
securities of those investment companies selected by the Non-Affiliated
Trustees in order to match the deferred compensation obligation. The
Advisers and their affiliates also serve as investment adviser for other
investment companies; however, with the exception of Mr. Whalen, the
Non-Affiliated Trustees were not trustees of such investment companies.
Combining the Fund Complex with other investment companies advised by the
Advisers and their affiliates, Mr. Whalen received Total Compensation of
$279,250 during the calendar year ended December 31, 1999.

As of July 3, 2000, the trustees and officers of the Fund as a group owned
less than 1% of the shares of the Fund.

B-24
<PAGE> 401

TABLE A

2000 AGGREGATE COMPENSATION FROM THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL --------------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund......... 3/31 $2,340 $2,140 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $1,940
Great American Companies
Fund(1)...................... 3/31 1,202 1,002 1,202 1,202 1,202 1,202 1,202 1,202 802
Growth Fund.................... 3/31 1,388 1,188 1,388 1,388 1,388 1,388 1,388 1,388 988
Mid Cap Value Fund(1).......... 3/31 1,201 1,001 1,201 1,201 1,201 1,201 1,201 1,201 801
Prospector Fund(1)............. 3/31 1,203 1,003 1,203 1,203 1,203 1,203 1,203 1,203 803
Select Growth Fund*............ 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund........... 3/31 801 801 801 801 801 801 801 801 601
Utility Fund................... 3/31 1,405 1,205 1,405 1,405 1,405 1,405 1,405 1,405 1,005
------ ------- ------ ------ ------- ------- ------ ------- ------
Equity Trust Total........... $9,540 $8,340 $9,540 $9,540 $9,540 $9,540 $9,540 $9,540 $6,940
</TABLE>

------------------------------------

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

TABLE B

2000 AGGREGATE COMPENSATION DEFERRED FROM

THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
TRUSTEE
FISCAL --------------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund......... 3/31 $2,340 $1,778 $2,340 $1,170 $2,340 $2,340 $1,170 $2,340 $ 0
Great American Companies
Fund(1)...................... 3/31 1,202 802 1,202 601 1,202 1,202 601 1,202 0
Growth Fund.................... 3/31 1,388 940 1,388 694 1,388 1,388 694 1,388 0
Mid Cap Value Fund(1).......... 3/31 1,201 801 1,201 601 1,201 1,201 601 1,201 0
Prospector Fund(1)............. 3/31 1,203 803 1,203 602 1,203 1,203 602 1,203 0
Select Growth Fund*............ 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund........... 3/31 801 801 801 400 801 801 400 801 0
Utility Fund................... 3/31 1,405 952 1,405 703 1,405 1,405 703 1,405 0
------ ------- ------ ------ ------- ------- ------ ------- ------
Equity Trust Total........... $9,540 $6,877 $9,540 $4,771 $9,540 $9,540 $4,771 $9,540 $ 0
</TABLE>

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March
31, 2000.

(1) The Fund was liquidated during the Registrant's fiscal year ended March 31,
2000.

B-25
<PAGE> 402

TABLE C

2000 CUMULATIVE COMPENSATION DEFERRED

(PLUS INTEREST) FROM THE TRUST AND EACH SERIES

<TABLE>
<CAPTION>
CURRENT TRUSTEES
FISCAL ------------------------------------------------------------------------------------------
FUND NAME YEAR-END BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund....... 3/31 $15,694 $2,622 $12,224 $ 7,764 $28,302 $13,161 $ 6,960 $18,446 $0
Growth Fund.................. 3/31 11,377 1,453 7,665 7,594 19,459 11,021 5,405 13,700 0
Select Growth Fund*.......... 3/31 0 0 0 0 0 0 0 0 0
Small Cap Value Fund......... 3/31 999 1,247 899 557 1,155 1,377 566 1,063 0
Utility Fund................. 3/31 12,628 1,475 12,464 27,182 37,021 10,454 8,316 29,366 0
------- ------- ------- -------- ------- ------- ------- -------- --
Equity Trust Total.......... $40,698 $6,797 $33,252 $43,097 $85,937 $36,013 $21,247 $62,575 $0

------------------------------------

* The Select Growth Fund had not commenced investment operations as of March 31,
2000.

TABLE D

YEAR OF ELECTION OR APPOINTMENT TO EACH SERIES OF THE TRUST

<TABLE>
<CAPTION>
TRUSTEE
--------------------------------------------------------------------------------
FUND NAME BRANAGAN CHOATE HEAGY KENNEDY NELSON ROONEY SISTO WHALEN WOOLSEY
--------- -------- ------ ----- ------- ------ ------ ----- ------ -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Aggressive Growth Fund...................... 1996 1999 1996 1996 1996 1997 1996 1996 1999
Growth Fund................................. 1995 1999 1995 1995 1995 1997 1995 1995 1999
Select Growth Fund*......................... 2000 2000 2000 2000 2000 2000 2000 2000 2000
Small Cap Value Fund........................ 1999 1999 1999 1999 1999 1999 1999 1999 1999
Utility Fund................................ 1995 1999 1995 1993 1993 1997 1995 1993 1999
---- ---- ---- ---- ---- ---- ---- ---- ----
</TABLE>

------------------------------------

* The Select Growth Fund commenced investment operations in June 2000.

INVESTMENT ADVISORY AGREEMENT

The Fund and the Adviser are parties to an investment advisory agreement
(the "Advisory Agreement"). Under the Advisory Agreement, the Fund retains the
Adviser to manage the investment of the Fund's assets, including the placing of
orders for the purchase and sale of portfolio securities. The Adviser obtains
and evaluates economic, statistical and financial information to formulate
strategy and implement the Fund's investment objective. The Adviser also
furnishes offices, necessary facilities and equipment, provides administrative
services to the Fund, renders periodic reports to the Fund's Board of Trustees
and permits its officers and employees to serve without compensation as trustees
of the Trust or officers of the Fund if elected to such positions. The Fund,
however, bears the cost of its day-to-day operations, including service fees,
distribution fees, custodian fees, legal and independent accountant fees, the
costs of reports and proxies to shareholders, compensation of trustees of the
Trust (other than those who are affiliated persons of the Adviser, Distributor
or Van Kampen Investments) and all other ordinary business expenses not
specifically assumed by the Adviser. The Advisory Agreement also provides that
the Adviser shall not be liable to the Fund for any error of judgment or of law,
or for any loss suffered by the Fund in connection with the matters to which the
Advisory Agreement relates, except a loss resulting from willful misfeasance,
bad faith or gross negligence on the part of the Adviser in the performance of
its obligations and duties, or by reason of its reckless disregard of its
obligations and duties under the Advisory Agreement.

B-26
<PAGE> 403

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, the Adviser received
approximately $1,117,000, $761,100 and $939,100, respectively, in advisory fees
from the Fund.

OTHER AGREEMENTS

Accounting Services Agreement. The Fund has entered into an accounting
services agreement pursuant to which Advisory Corp. provides accounting services
supplementary to those provided by the custodian. Such services are expected to
enable the Fund to more closely monitor and maintain its accounts and records.
The Fund pays all costs and expenses related to such services, including all
salary and related benefits of accounting personnel, as well as the overhead and
expenses of office space and the equipment necessary to render such services.
The Fund shares together with the other Van Kampen funds in the cost of
providing such services with 25% of such costs shared proportionately based on
the respective number of classes of securities issued per fund and the remaining
75% of such costs based proportionately on the respective net assets per fund.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Advisory Corp. received
approximately $60,200, $58,500 and $54,100, respectively, in accounting services
fees from the Fund.

During the fiscal year ended March 31, 2000, the fiscal period ended March
31, 1999 and the fiscal year ended June 30, 1998, Van Kampen Investments
received approximately $10,500, $6,100 and $10,700, respectively, in legal
services fees from the Fund.

DISTRIBUTION AND SERVICE

B-27
<PAGE> 404

are not parties to the Distribution and Service Agreement or interested persons
of any party, by votes cast in person at a meeting called for such purpose. The
Distribution and Service Agreement provides that it will terminate if assigned,
and that it may be terminated without penalty by either party on 90 days'
written notice. Total underwriting commissions on the sale of shares of the Fund
for the last three fiscal years/period are shown in the chart below.

<TABLE>
<CAPTION>
Total Amounts
Underwriting Retained by
Commissions Distributor
------------ -----------
<S> <C> <C>
Fiscal year ended March 31, 2000............................ $ 209,289 $ 28,227
Fiscal period ended March 31, 1999.......................... $ 124,895 $ 17,776
Fiscal year ended June 30, 1998............................. $ 100,135 $ 15,982
</TABLE>

With respect to sales of Class A Shares of the Fund, the total sales
charges and concessions reallowed to authorized dealers at the time of purchase
are as follows:

CLASS A SHARES SALES CHARGE TABLE

<TABLE>
<CAPTION>
Total Sales Charge
------------------------- Reallowed
As % of As % of Net To Dealers
Size of Offering Amount As a % of
Investment Price Invested Offering Price
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $50,000.................................... 5.75% 6.10% 5.00%
$50,000 but less than $100,000....................... 4.75% 4.99% 4.00%
$100,000 but less than $250,000...................... 3.75% 3.90% 3.00%
$250,000 but less than $500,000...................... 2.75% 2.83% 2.25%
$500,000 but less than $1,000,000.................... 2.00% 2.04% 1.75%
$1,000,000 or more................................... * * *
---------------------------------------------------------------------------------------------------------
</TABLE>

* No sales charge is payable at the time of purchase on investments of $1
million or more, although for such investments the Fund may impose a
contingent deferred sales charge of 1.00% on certain redemptions made within
one year of the purchase. A commission or transaction fee will be paid by the
Distributor at the time of purchase directly out of the Distributor's assets
(and not out of the Fund's assets) to authorized dealers who initiate and are
responsible for purchases of $1 million or more computed on a percentage of
the dollar value of such shares sold as follows: 1.00% on sales to $2 million,
plus 0.80% on the next $1 million and 0.50% on the excess over $3 million. For
single purchases of $20 million or more by an individual retail investor the
Distributor will pay, at the time of purchase and directly out of the
Distributor's assets (and not out of the Fund's assets), a commission or
transaction fee of 1.00% to authorized dealers who initiate and are
responsible for such purchases. The commission or transaction fee of 1.00%
will be computed on a percentage of the dollar value of such shares sold.

B-28
<PAGE> 405

In addition to reallowances or commissions described above, the Distributor
may from time to time implement programs under which an authorized dealer's
sales force may be eligible to win nominal awards for certain sales efforts or
under which the Distributor will reallow to any authorized dealer that sponsors
sales contests or recognition programs conforming to criteria established by the
Distributor, or participates in sales programs sponsored by the Distributor, an
amount not exceeding the total applicable sales charges on the sales generated
by the authorized dealer at the public offering price during such programs.
Also, the Distributor in its discretion may from time to time, pursuant to
objective criteria established by the Distributor, pay fees to, and sponsor
business seminars for, qualifying authorized dealers for certain services or
activities which are primarily intended to result in sales of shares of the Fund
or other Van Kampen funds. Fees may include payment for travel expenses,
including lodging, incurred in connection with trips taken by invited registered
representatives for meetings or seminars of a business nature. In some instances
additional compensation or promotional incentives may be offered to brokers,
dealers or financial intermediaries that have sold or may sell significant
amounts of shares during specified periods of time. The Distributor may provide
additional compensation to Edward D. Jones & Co. or an affiliate thereof based
on a combination of its quarterly sales of shares of the Fund and other Van
Kampen Funds and increases in net assets of the Fund and other Van Kampen Funds
over specified thresholds. All of the foregoing payments are made by the
Distributor out of its own assets. Such fees paid for such services and
activities with respect to the Fund will not exceed in the aggregate 1.25% of
the average total daily net assets of the Fund on an annual basis. These
programs will not change the price an investor will pay for shares or the amount
that a Fund will receive from such sale.

The Fund has adopted a distribution plan (the "Distribution Plan") with
respect to each class of its shares pursuant to Rule 12b-1 under the 1940 Act.
The Fund also has adopted a service plan (the "Service Plan") with respect to
each class of its shares. The Distribution Plan and the Service Plan sometimes
are referred to herein as the "Plans". The Plans provide that the Fund may spend
a portion of the Fund's average daily net assets attributable to each class of
shares in connection with distribution of the respective class of shares and in
connection with the provision of ongoing services to shareholders of such class,
respectively. The Distribution Plan and the Service Plan are being implemented
through the Distribution and Service Agreement with the Distributor of each
class of the Fund's shares, sub-agreements between the Distributor and members
of the NASD who are acting as securities dealers and NASD members or eligible
non-members who are acting as brokers or agents and similar agreements between
the Fund and financial intermediaries who are acting as brokers (collectively,
"Selling Agreements") that may provide for their customers or clients certain
services or assistance, which may include, but not be limited to, processing
purchase and redemption transactions, establishing and maintaining shareholder
accounts regarding the Fund, and such other services as may be agreed to from
time to time and as may be permitted by applicable statute, rule or regulation.
Brokers, dealers and financial intermediaries that have entered into
sub-agreements with the Distributor and sell shares of the Fund are referred to
herein as "financial intermediaries."

B-29
<PAGE> 406

by a vote of a majority of the disinterested Trustees or by a vote of a majority
of the outstanding voting shares of such class.

Because of fluctuation in net asset value, the plan fees with respect to a
particular Class B Share or Class C Share may be greater or less than the amount
of the initial commission (including carrying cost) paid by the Distributor with
respect to such share. In such circumstances, a shareholder of a share may be
deemed to incur expenses attributable to other shareholders of such class. As of
March 31, 2000, there were $1,371,339 and $5,665 of unreimbursed
distribution-related expenses with respect to Class B Shares and Class C Shares,
respectively, representing 1.35% and 0.06% of the Fund's net assets attributable
to Class B Shares and Class C Shares, respectively. If the Plans are terminated
or not continued, the Fund would not be contractually obligated to pay the
Distributor for any expenses not previously reimbursed by the Fund or recovered
through contingent deferred sales charges.

For the fiscal year ended March 31, 2000, the Fund's aggregate expenses
paid under the Plans for Class A Shares were $171,510 or 0.25% of the Class A
Shares' average daily net assets. Such expenses were paid to reimburse the
Distributor for payments made to financial intermediaries for servicing Fund
shareholders and for administering the Class A Share Plans. For the fiscal year
ended March 31, 2000, the Fund's aggregate expenses paid under the Plans for
Class B Shares were $909,824 or 1.00% of the Class B Shares' average daily net
assets. Such expenses were paid to reimburse the Distributor for the following
payments: $682,883 for commissions and transaction fees paid to financial
intermediaries in respect of sales of Class B Shares of the Fund and $226,941
for fees paid to financial intermediaries for servicing Class B shareholders and
administering the Class B Share Plans. For the fiscal year ended March 31, 2000,
the Fund's aggregate expenses paid under the Plans for Class C Shares were
$71,576 or 1.00% of the Class C Shares' average daily net assets. Such expenses
were paid to reimburse the Distributor for the following payments: $23,427 for
commissions and transaction fees paid to financial intermediaries in respect of
sales of Class C Shares of the Fund and $48,149 for fees paid to financial
intermediaries for servicing Class C shareholders and administering the Class C
Share Plans.

B-30
<PAGE> 407

The Distributor has entered into agreements with the following firms: (i)
Merrill Lynch, Pierce, Fenner & Smith Incorporated, (ii) First Union National
Bank, (iii) The Prudential Insurance Company of America, (iv) Invesco Retirement
and Benefit Services, Inc., (v) Lincoln National Life Insurance Company, (vi)
National Deferred Compensation, Inc., (vii) Wells Fargo Bank, N.A. on behalf of
itself and its affiliates, (viii) Union Bank of CA, N.A. and (ix) Buck
Consultants, Inc. Shares of the Fund will be offered pursuant to such firm's
retirement plan alliance program(s). Trustees and other fiduciaries of
retirement plans seeking to invest in multiple fund families through
broker-dealer retirement plan alliance programs should contact the firms
mentioned above for further information concerning the program(s) including, but
not limited to, minimum investment size and operational requirements.

TRANSFER AGENT

PORTFOLIO TRANSACTIONS AND BROKERAGE ALLOCATION

B-31
<PAGE> 408

commissions, concessions or discounts to a firm supplying research or other
services or to a firm participating in the distribution of the Fund's shares.

The Fund paid the following commissions to all brokers and affiliated
brokers during the year/period shown:

Commissions Paid:

<TABLE>
<CAPTION>
Affiliated
Brokers
-----------------
All Morgan Dean
Brokers Stanley Witter
------- ------- ------
<S> <C> <C> <C>
Fiscal year ended March 31, 2000............................ $ 49,616 $-0- $-0-
Fiscal period ended March 31, 1999.......................... $ 54,163 $-0- $-0-
Fiscal year ended June 30, 1998............................. $108,173 $-0- $-0-
Fiscal 2000 Percentages:
Commissions with affiliate to total commissions........... 0% 0%
Value of brokerage transactions with affiliate to total
transactions........................................... 0% 0%
</TABLE>

During the fiscal year ended March 31, 2000, the Fund paid $65,304 in
brokerage commissions on transactions totaling $45,058,953 to brokers selected
primarily on the basis of research services provided to the Adviser.

SHAREHOLDER SERVICES

INVESTMENT ACCOUNT

B-32
<PAGE> 409

administrative services related to the maintenance of shareholder accounts.
Except as described in the Prospectus and this Statement of Additional
Information, after each share transaction in an account, the shareholder
receives a statement showing the activity in the account. Each shareholder who
has an account in any of the Participating Funds (as defined in the Prospectus)
will receive statements quarterly from Investor Services showing any
reinvestments of dividends and capital gain dividends and any other activity in
the account since the preceding statement. Such shareholders also will receive
separate confirmations for each purchase or sale transaction other than
reinvestment of dividends and capital gain dividends and systematic purchases or
redemptions. Additional shares may be purchased at any time through authorized
dealers or by mailing a check directly to Investor Services.

SHARE CERTIFICATES

RETIREMENT PLANS

AUTOMATED CLEARING HOUSE("ACH") DEPOSITS

DIVIDEND DIVERSIFICATION

A shareholder may, upon written request by completing the appropriate
section of the account application form or by calling (800) 341-2911 ((800)
421-2833 for the hearing impaired), elect to have all dividends and capital gain
dividends paid on a class of shares of the Fund invested into shares of the same
class of any Participating Fund so long as the investor has a pre-existing
account for such class of shares of the other fund. Both accounts must be of the
same type, either non-retirement or retirement. If the accounts are retirement
accounts, they must both be for the same class and of the same type of
retirement plan (e.g. IRA, 403(b)(7), 401(k), Money Purchase and Profit Sharing
Keogh) and for the benefit of the same individual. If a qualified, pre-existing
account does not exist, the shareholder must establish a new account subject to
minimum investment and other requirements of the fund into which distributions
would be invested. Distributions are

B-33
<PAGE> 410

invested into the selected fund at its net asset value per share as of the
payable date of the distribution from the Fund.

SYSTEMATIC WITHDRAWAL PLAN

EXCHANGE PRIVILEGE

All shareholders are limited to eight exchanges per fund during a rolling
365-day period.

This policy does not apply to money market funds, systematic exchange
plans, or employer-sponsored retirement plans.

REINSTATEMENT PRIVILEGE

B-34
<PAGE> 411

REDEMPTION OF SHARES

CONTINGENT DEFERRED SALES CHARGE-CLASS A

WAIVER OF CLASS B AND CLASS C

CONTINGENT DEFERRED SALES CHARGES

REDEMPTION UPON DEATH OR DISABILITY

B-35
<PAGE> 412

REDEMPTION IN CONNECTION WITH CERTAIN DISTRIBUTIONS FROM RETIREMENT PLANS

The Fund will waive the CDSC-Class B and C when a total or partial
redemption is made in connection with certain distributions from retirement
plans. The CDSC-Class B and C will be waived upon the tax-free rollover or
transfer of assets to another retirement plan invested in one or more
Participating Funds; in such event, as described below, the Fund will "tack" the
period for which the original shares were held on to the holding period of the
shares acquired in the transfer or rollover for purposes of determining what, if
any, CDSC-Class B and C is applicable in the event that such acquired shares are
redeemed following the transfer or rollover. The charge also will be waived on
any redemption which results from the return of an excess contribution pursuant
to Section 408(d)(4) or (5) of the Code, the return of excess deferral amounts
pursuant to Code Section 401(k)(8) or 402(g)(2), the financial hardship of the
employee pursuant to U.S. Treasury Regulations Section 1. 401(k)-1(d)(2), or
from the death or disability of the employee (see Code Section 72(m)(7) and
72(t)(2)(A)(ii)). In addition, the charge will be waived on any minimum
distribution required to be distributed in accordance with Code Section
401(a)(9).

The Fund does not intend to waive the CDSC-Class B and C for any
distributions from IRAs or other retirement plans not specifically described
above.

REDEMPTION PURSUANT TO THE FUND'S SYSTEMATIC WITHDRAWAL PLAN

NO INITIAL COMMISSION OR TRANSACTION FEE

INVOLUNTARY REDEMPTIONS OF SHARES

B-36
<PAGE> 413

REINVESTMENT OF REDEMPTION PROCEEDS

REDEMPTION BY ADVISER

The Fund may waive the CDSC-Class B and C when a total or partial
redemption is made by the Adviser with respect to its investments in the Fund.

TAXATION

FEDERAL INCOME TAXATION OF THE FUND

B-37
<PAGE> 414

DISTRIBUTIONS TO SHAREHOLDERS

SALE OF SHARES

B-38
<PAGE> 415

CAPITAL GAINS RATES

NON-U.S. SHAREHOLDERS

BACKUP WITHHOLDING

B-39
<PAGE> 416

INFORMATION REPORTING

GENERAL

FUND PERFORMANCE

Average annual total return quotations computed by finding the average
annual compounded rate of return over the period that would equate the initial
amount invested to the ending redeemable value.

B-40
<PAGE> 417

From time to time marketing materials may provide a portfolio manager
update, an Adviser update and discuss general economic conditions and outlooks.
The Fund's marketing materials may also show the Fund's asset class
diversification, top sector holdings and largest holdings. Materials may also
mention how the Distributor believes the Fund compares relative to other Van
Kampen funds. Materials may also discuss the Dalbar Financial Services study
from 1984 to 1994 which studied investor cash flow into and out of all types of
mutual funds. The ten-year study found the investors who bought mutual fund
shares and held such shares outperformed investors who bought and sold. The
Dalbar study conclusions were consistent regardless of whether shareholders
purchased their fund shares in direct or sales force distribution channels. The
study showed that investors working with a professional representative have
tended over time to earn higher returns than those who invested directly. The
performance of the funds purchased by the investors in the Dalbar study and the
conclusions based thereon are not necessarily indicative of future performance
of such funds or conclusions that may result from similar studies in the future.
The Fund may also be marketed on the internet.

B-41
<PAGE> 418

CLASS A SHARES

The Fund's average annual total return, assuming payment of the maximum
sales charge, for Class A Shares of the Fund for (i) the one-year period ended
March 31, 2000 was 31.39%, (ii) the five-year period ended March 31, 2000 was
19.54% and (iii) the approximately six-year, eight-month period since July 28,
1993, the commencement of distribution for Class A Shares of the Fund, through
March 31, 2000 was 13.60%.

The Fund's cumulative non-standardized total return, including payment of
the maximum sales charge, with respect to the Class A Shares from its inception
to March 31, 2000 was 134.23%.

The Fund's cumulative non-standardized total return, excluding payment of
the maximum sales charge, with respect to the Class A Shares from its inception
to March 31, 2000 was 148.48%.

CLASS B SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class B Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 34.30%, (ii) the five-year period ended March
31, 2000 was 19.84% and (iii) the approximately six-year, eight-month period
since July 28, 1993, the commencement of distribution for Class B Shares of the
Fund, through March 31, 2000 was 13.82%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to the Class B Shares from
June 28, 1993 (the commencement of distribution of Class B Shares) to March 31,
2000 was 137.38%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class B Shares from
June 28, 1993 (the commencement of distribution of Class B Shares) to March 31,
2000 was 137.38%.

CLASS C SHARES

The Fund's average annual total return, assuming payment of the contingent
deferred sales charge, for Class C Shares of the Fund for (i) the one-year
period ended March 31, 2000 was 37.32%, (ii) the five-year period ended March
31, 2000 was 20.00% and (iii) the approximately six-year, eight-month period
since August 13, 1993, the commencement of distribution for Class C Shares of
the Fund, through March 31, 2000 was 13.64%.

The Fund's cumulative non-standardized total return, including payment of
the contingent deferred sales charge, with respect to the Class C Shares from
August 13, 1993 (the commencement of distribution of Class C Shares) to March
31, 2000 was 133.40%.

The Fund's cumulative non-standardized total return, excluding payment of
the contingent deferred sales charge, with respect to the Class C Shares from
August 13, 1993 (the commencement of distribution of Class C Shares) to March
31, 2000 was 133.40%.

OTHER INFORMATION

CUSTODY OF ASSETS

B-42
<PAGE> 419

SHAREHOLDER REPORTS

Semiannual statements are furnished to shareholders, and annually such
statements are audited by the independent accountants.

INDEPENDENT AUDITORS

LEGAL COUNSEL

Counsel to the Fund is Skadden, Arps, Slate, Meagher & Flom (Illinois).

B-43
<PAGE> 420

REPORT OF INDEPENDENT ACCOUNTANTS

To the Shareholders and Board of Trustees of Van Kampen Utility Fund:

In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen Utility Fund (the
"Fund") at March 31, 2000, and the results of its operations, the changes in its
net assets and the financial highlights for the year then ended in conformity
with accounting principles generally accepted in the United States. These
financial statements and financial highlights (hereafter referred to as
"financial statements") are the responsibility of the Fund's management; our
responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit of these financial statements in accordance
with auditing standards generally accepted in the United States, which require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall financial
statement presentation. We believe that our audit, which included confirmation
of securities at March 31, 2000 by correspondence with the custodian and
brokers, provides a reasonable basis for the opinion expressed above. The
statement of changes in net assets and the financial highlights for each of the
periods ended on or prior to March 31, 1999 were audited by other independent
accountants whose report dated May 6, 1999 expressed an unqualified opinion
thereon.

PRICEWATERHOUSECOOPERS LLP
Chicago, Illinois
May 5, 2000

F-1
<PAGE> 421

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

March 31, 2000
THE FOLLOWING PAGES DETAIL THE SPECIFIC HOLDINGS OF YOUR FUND AT THE END OF THE
REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON AND PREFERRED STOCKS 85.8%
ELECTRIC UTILITIES 31.3%
Calpine Capital Trust....................................... 32,100 $ 2,804,737
Calpine Corp. (a)........................................... 176,700 16,609,800
Consolidated Edison, Inc. .................................. 40,000 1,160,000
DQE, Inc. .................................................. 109,900 5,000,450
DTE Energy Co. ............................................. 50,000 1,450,000
Edison International........................................ 36,200 599,563
FirstEnergy Corp. .......................................... 138,000 2,846,250
GPU, Inc. .................................................. 43,975 1,203,816
Independent Energy Holdings, PLC--ADR (United Kingdom)...... 75,000 3,365,625
Montana Power Co. .......................................... 45,800 2,931,200
New Century Energies, Inc. ................................. 49,000 1,473,062
Niagara Mohawk Holdings, Inc. (a)........................... 127,700 1,723,950
Northeast Utilities......................................... 45,900 986,850
NSTAR....................................................... 114,600 4,813,200
OGE Energy Corp. ........................................... 75,200 1,442,900
PECO Energy Co. ............................................ 60,700 2,238,312
Pinnacle West Capital Corp. ................................ 104,700 2,951,231
Public Service Co. of New Mexico............................ 88,500 1,393,875
Reliant Energy, Inc. ....................................... 114,800 2,690,625
Sierra Pacific Resources.................................... 134,928 1,686,600
Southern Co. ............................................... 75,800 1,648,650
Texas Utilities Co. ........................................ 29,300 869,844
Texas Utilities Co.--Convertible Preferred, PRIDES.......... 14,800 583,675
------------
62,474,215
------------
NATURAL GAS PIPELINE AND DISTRIBUTION 4.4%
KeySpan Corp. .............................................. 85,800 2,370,225
National Fuel Gas Co........................................ 31,000 1,381,438
NICOR, Inc. ................................................ 50,000 1,646,875
Southwest Gas Corp. ........................................ 58,800 1,120,875
WICOR, Inc. ................................................ 72,000 2,232,000
------------
8,751,413
------------
OIL & GAS PIPELINE AND DISTRIBUTION 10.5%
Coastal Corp. .............................................. 108,000 4,968,000
Columbia Energy Group....................................... 55,500 3,288,375
Dynegy, Inc. ............................................... 80,500 5,051,375
</TABLE>

See Notes to Financial Statements

F-2
<PAGE> 422

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
OIL & GAS PIPELINE AND DISTRIBUTION (CONTINUED)
El Paso Energy Capital Trust I--Convertible Preferred....... 41,750 $ 2,191,875
Enron Corp. ................................................ 72,800 5,450,900
------------
20,950,525
------------
TELECOMMUNICATIONS 24.0%
AirGate PCS, Inc. (a)....................................... 8,500 896,750
ALLTEL Corp. ............................................... 49,300 3,108,981
Bell Atlantic Corp. ........................................ 39,900 2,438,888
BellSouth Corp. ............................................ 69,400 3,261,800
Cable & Wireless, PLC--ADR (United Kingdom)................. 100,700 5,639,200
China Telecom--ADR (China).................................. 82,000 14,534,500
France Telecom--ADR (France)................................ 20,000 3,538,750
SBC Communications, Inc. ................................... 66,400 2,788,800
Sprint Corp. (PCS Group).................................... 61,800 3,893,400
Tele Danmark A/S--ADS (Denmark)............................. 100,000 4,643,750
U.S. West, Inc. ............................................ 44,400 3,224,550
------------
47,969,369
------------
TECHNOLOGY 6.4%
Amdocs Ltd., TRACES......................................... 59,800 3,707,600
Nippon Telegraph & Telephone Corp.--ADR (Japan)............. 31,800 2,506,237
NorthEast Optic Network, Inc. (a)........................... 60,000 5,073,750
PSI Net, Inc. .............................................. 26,700 908,217
Verio, Inc.................................................. 12,500 563,281
------------
12,759,085
------------
UTILITIES 9.2%
Broadwing, Inc. ............................................ 41,000 1,524,688
CoreComm Ltd. (a)........................................... 46,800 2,059,200
Enel SpA--ADR (Italy) (a)................................... 10,000 445,000
Global Crossing Ltd. (Bermuda) (a).......................... 56,580 2,316,244
Global Crossing Ltd.--Convertible Preferred, 144A--Private
Placement (Bermuda) (b)................................... 12,600 3,061,800
IPALCO Enterprises, Inc. ................................... 102,700 2,002,650
Jazztel, PLC--ADR (Spain) (a)............................... 1,100 89,031
MCI WorldCom, Inc. (a)...................................... 45,000 2,039,063
NEXTLINK Communications, Inc., Class A (a).................. 22,500 2,782,969
Tritel, Inc. (a)............................................ 2,400 91,800
Winstar Communications, Inc. (a)............................ 31,500 1,890,000
------------
18,302,445
------------

TOTAL COMMON AND PREFERRED STOCKS 85.8%............................. 171,207,052
------------
</TABLE>

See Notes to Financial Statements

F-3
<PAGE> 423

YOUR FUND'S INVESTMENTS

March 31, 2000

<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FIXED INCOME SECURITIES 7.4%
CABLE TELEVISION 1.6%
$ 700 AT&T Corp., 144A--Private Placement (b)..... 4.000% 11/15/29 $ 1,101,163
1,000 Continental Cablevision, Inc. .............. 8.300 05/15/06 1,031,189
1,000 Cox Communications, Inc. ................... 6.875 06/15/05 960,933
------------
3,093,285
------------
ELECTRIC UTILITIES 1.0%
1,000 Texas Utilities Electric Co. ............... 8.250 04/01/04 1,025,904
1,000 Union Electric Co. ......................... 7.375 12/15/04 1,000,605
------------
2,026,509
------------
OIL & GAS PIPELINE AND DISTRIBUTION 0.5%
1,000 Enron Corp. ................................ 7.125 05/15/07 958,687
------------
TELECOMMUNICATIONS 4.3%
1,000 360 Communications.......................... 7.125 03/01/03 994,496
900 GTE Corp. .................................. 9.375 12/01/00 914,073
1,000 Sprint Corp. ............................... 8.125 07/15/02 1,012,998
3,000 Telefonos de Mexico, SA (Mexico)............ 4.250 06/15/04 4,676,250
1,000 Worldcom, Inc. ............................. 7.750 04/01/07 1,017,914
------------
8,615,731
------------
TOTAL FIXED INCOME SECURITIES........................................... 14,694,212
------------
TOTAL LONG-TERM INVESTMENTS 93.2%
(Cost $112,465,315)..................................................... 185,901,264

SHORT-TERM INVESTMENTS 6.7%
Federal Home Loan Bank Discount Note
($13,441,000 par, yielding 4.034%, 04/03/00 maturity)
(Cost $13,436,482).................................................... 13,436,482
------------

TOTAL INVESTMENTS 99.9%
(Cost $125,901,797)................................................... 199,337,746
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1%............................. 142,993
------------

NET ASSETS 100.0%...................................................... $199,480,739
============
</TABLE>

(a) Non-Income producing security as this stock currently does not declare
dividends.

(b) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be resold in
transactions exempt from registration which are normally transactions with
qualified institutional buyers.

ADR--American Depository Receipts
ADS--American Depository Shares
PRIDES--Preferred Redeemable Increased Dividend Securities
TRACES--Trust Automatic Common Exchange Securities

See Notes to Financial Statements

F-4
<PAGE> 424

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2000

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $125,901,797)....................... $199,337,746
Cash........................................................ 13,429
Receivables:
Fund Shares Sold.......................................... 498,397
Interest.................................................. 280,004
Dividends................................................. 171,813
Other....................................................... 7,413
------------
Total Assets............................................ 200,308,802
------------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 248,781
Distributor and Affiliates................................ 198,067
Investment Advisory Fee................................... 110,311
Trustees' Deferred Compensation and Retirement Plans........ 188,401
Accrued Expenses............................................ 82,503
------------
Total Liabilities....................................... 828,063
------------
NET ASSETS.................................................. $199,480,739
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $117,388,707
Net Unrealized Appreciation................................. 73,435,949
Accumulated Net Realized Gain............................... 8,752,019
Accumulated Distributions in Excess of Net Investment
Income.................................................... (95,936)
------------
NET ASSETS.................................................. $199,480,739
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $89,062,633 and 3,931,085 shares of
beneficial interest issued and outstanding)............. $ 22.66
Maximum sales charge (5.75%* of offering price)......... 1.38
------------
Maximum offering price to public........................ $ 24.04
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $101,260,921 and 4,479,940 shares of
beneficial interest issued and outstanding)............. $ 22.60
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $9,157,185 and 405,334 shares of
beneficial interest issued and outstanding)............. $ 22.59
============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

F-5
<PAGE> 425

Statement of Operations
For the Year Ended March 31, 2000

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $2,941)...... $ 3,865,425
Interest.................................................... 1,313,257
-----------
Total Income............................................ 5,178,682
-----------
EXPENSES:
Distribution (12b-1) and Services Fees (Attributed to
Classes A, B and C of $179,843, $923,901 and $73,007,
respectively)............................................. 1,176,751
Investment Advisory Fee..................................... 1,116,969
Shareholder Services........................................ 292,898
Trustees' Fees and Related Expenses......................... 66,112
Custody..................................................... 31,838
Legal....................................................... 29,279
Other....................................................... 201,789
-----------
Total Expenses.......................................... 2,915,636
Less Credits Earned on Cash Balances.................... 3,470
-----------
Net Expenses............................................ 2,912,166
-----------
NET INVESTMENT INCOME....................................... $ 2,266,516
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $15,579,388
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 35,241,774
End of the Period......................................... 73,435,949
-----------
Net Unrealized Appreciation During the Period............... 38,194,175
-----------
NET REALIZED AND UNREALIZED GAIN............................ $53,773,563
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $56,040,079
===========
</TABLE>

See Notes to Financial Statements

F-6
<PAGE> 426

Statement of Changes in Net Assets
For the Year Ended March 31, 2000, the Nine Months Ended March 31, 1999 and the
Year Ended June 30, 1998

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED YEAR ENDED
MARCH 31, 2000 MARCH 31, 1999 JUNE 30, 1998
-----------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................. $ 2,266,516 $ 2,146,231 $ 2,919,996
Net Realized Gain................................. 15,579,388 3,971,978 5,691,843
Net Unrealized Appreciation/Depreciation During
the Period....................................... 38,194,175 (4,004,125) 26,338,865
------------ ------------ ------------
Change in Net Assets from Operations.............. 56,040,079 2,114,084 34,950,704
------------ ------------ ------------
Distributions from Net Investment Income.......... (2,284,696) (2,070,469) (3,302,950)
Distributions in Excess of Net Investment
Income........................................... (95,936) -0- (58,293)
------------ ------------ ------------
Distributions from and in Excess of Net Investment
Income*.......................................... (2,380,632) (2,070,469) (3,361,243)
------------ ------------ ------------
Distributions from Net Realized Gain.............. (8,887,968) (1,862,563) (13,156,292)
Distributions in Excess of Net Realized Gain...... -0- -0- (125,726)
------------ ------------ ------------
Distributions from and in Excess of Net Realized
Gain*............................................ (8,887,968) (1,862,563) (13,282,018)
------------ ------------ ------------
Return of Capital Distribution*................... -0- -0- (7,471,305)
------------ ------------ ------------
Total Distributions............................... (11,268,600) (3,933,032) (24,114,566)
------------ ------------ ------------

NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES....................................... 44,771,479 (1,818,948) 10,836,138
------------ ------------ ------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold......................... 32,510,689 25,006,965 33,570,538
Net Asset Value of Shares Issued Through Dividend
Reinvestment..................................... 9,916,837 3,332,371 21,003,724
Cost of Shares Repurchased........................ (40,829,395) (26,459,204) (53,035,786)
------------ ------------ ------------

NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS..................................... 1,598,131 1,880,132 1,538,476
------------ ------------ ------------

TOTAL INCREASE IN NET ASSETS...................... 46,369,610 61,184 12,374,614

NET ASSETS:
Beginning of the Period........................... 153,111,129 153,049,945 140,675,331
------------ ------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $(95,936),
$18,180 and $(57,582), respectively)............. $199,480,739 $153,111,129 $153,049,945
============ ============ ============
* Distributions by Class
--------------------------------------------------
Distributions from and in Excess of Net Investment
Income:
Class A Shares................................... $ (1,295,698) $ (1,031,678) $ (1,538,296)
Class B Shares................................... (1,005,190) (970,381) (1,714,845)
Class C Shares................................... (79,744) (68,410) (108,102)
------------ ------------ ------------
$ (2,380,632) $ (2,070,469) $ (3,361,243)
============ ============ ============
Distributions from and in Excess of Net Realized
Gain:
Class A Shares................................... $ (3,740,190) $ (740,901) $ (5,310,506)
Class B Shares................................... (4,770,849) (1,048,593) (7,494,154)
Class C Shares................................... (376,929) (73,069) (477,358)
------------ ------------ ------------
$ (8,887,968) $ (1,862,563) $(13,282,018)
============ ============ ============
Return of Capital Distribution:
Class A Shares................................... $ -0- $ -0- $ (2,987,603)
Class B Shares................................... -0- -0- (4,215,072)
Class C Shares................................... -0- -0- (268,630)
------------ ------------ ------------
$ -0- $ -0- $ (7,471,305)
============ ============ ============
</TABLE>

See Notes to Financial Statements

F-7
<PAGE> 427

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
YEAR NINE MONTHS
ENDED ENDED YEAR ENDED JUNE 30,
MARCH 31, MARCH 31, -------------------------------------
CLASS A SHARES 2000 1999 1998 1997 1996 1995
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD............................. $17.465 $17.657 $16.441 $15.298 $13.386 $12.906
------- ------- ------- ------- ------- -------
Net Investment Income.................. .351 .310 .429 .637 .538 .595
Net Realized and Unrealized Gain....... 6.276 .013 3.909 1.317 2.077 .485
------- ------- ------- ------- ------- -------
Total from Investment Operations........ 6.627 .323 4.338 1.954 2.615 1.080
------- ------- ------- ------- ------- -------
Less:
Distributions from and in Excess of Net
Investment Income.................... .360 .300 .480 .610 .703 .600
Distributions from and in Excess of Net
Realized Gain........................ 1.076 .215 1.691 .201 -0- -0-
Return of Capital Distribution......... -0- -0- .951 -0- -0- -0-
------- ------- ------- ------- ------- -------
Total Distributions..................... 1.436 .515 3.122 .811 .703 .600
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD...... $22.656 $17.465 $17.657 $16.441 $15.298 $13.386
======= ======= ======= ======= ======= =======

Total Return (a)........................ 39.44% 1.72%* 28.17% 13.20% 19.93% 8.70%
Net Assets at End of the Period (In
millions).............................. $ 89.1 $ 62.1 $ 60.4 $ 52.5 $ 57.7 $ 50.4
Ratio of Expenses to Average Net Assets
(b).................................... 1.26% 1.24% 1.30% 1.41% 1.38% 1.34%
Ratio of Net Investment Income to
Average Net Assets (b)................. 1.76% 2.29% 2.47% 4.03% 3.61% 4.55%
Portfolio Turnover...................... 32% 13%* 23% 102% 121% 109%
</TABLE>

* Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 5.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year of purchase. If the
sales charges were included, total returns would be lower.

(b) For the years ended June 30, 1997, and 1996, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.

See Notes to Financial Statements

F-8
<PAGE> 428

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
YEAR NINE MONTHS
ENDED ENDED YEAR ENDED JUNE 30,
MARCH 31, MARCH 31, -------------------------------------
CLASS B SHARES 2000 1999 1998 1997 1996 1995
--------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD................................ $17.437 $17.632 $16.434 $15.296 $13.356 $12.880
------- ------- ------- ------- ------- -------
Net Investment Income................. .203 .208 .309 .519 .426 .507
Net Realized and Unrealized Gain...... 6.259 .012 3.891 1.314 2.080 .461
------- ------- ------- ------- ------- -------
Total from Investment Operations....... 6.462 .220 4.200 1.833 2.506 .968
------- ------- ------- ------- ------- -------
Less:
Distributions from and in Excess of
Net Investment Income............... .220 .200 .360 .494 .566 .492
Distributions from and in Excess of
Net Realized Gain................... 1.076 .215 1.691 .201 -0- -0-
Return of Capital Distribution........ -0- -0- .951 -0- -0- -0-
------- ------- ------- ------- ------- -------
Total Distributions.................... 1.296 .415 3.002 .695 .566 .492
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD..... $22.603 $17.437 $17.632 $16.434 $15.296 $13.356
======= ======= ======= ======= ======= =======

Total Return (a)....................... 38.30% 1.21%* 27.20% 12.30% 19.08% 7.80%
Net Assets at End of the Period (In
millions)............................. $ 101.3 $ 84.1 $ 86.8 $ 83.3 $ 92.9 $ 81.0
Ratio of Expenses to Average Net Assets
(b)................................... 2.01% 1.99% 2.07% 2.17% 2.13% 2.05%
Ratio of Net Investment Income to
Average Net Assets (b)................ 1.01% 1.53% 1.74% 3.27% 2.86% 3.84%
Portfolio Turnover..................... 32% 13%* 23% 102% 121% 109%
</TABLE>

* Non-Annualized

(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum contingent deferred sales charge of 4%,
charged on certain redemptions made within one year of purchase and
declining thereafter to 0% after the sixth year. If the sales charge was
included, total returns would be lower.

See Notes to Financial Statements

F-9
<PAGE> 429

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
YEAR NINE MONTHS
ENDED ENDED YEAR ENDED JUNE 30,
MARCH 31, MARCH 31, -------------------------------------
CLASS C SHARES 2000 1999 1998 1997 1996 1995
-------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD............................. $17.426 $17.619 $16.426 $15.290 $13.356 $12.868
------- ------- ------- ------- ------- -------
Net Investment Income.................. .204 .209 .308 .503 .470 .482
Net Realized and Unrealized Gain....... 6.258 .013 3.887 1.328 2.030 .498
------- ------- ------- ------- ------- -------
Total from Investment Operations........ 6.462 .222 4.195 1.831 2.500 .980
------- ------- ------- ------- ------- -------
Less:
Distributions from and in Excess of Net
Investment Income.................... .220 .200 .360 .494 .566 .492
Distributions from and in Excess of Net
Realized Gain........................ 1.076 .215 1.691 .201 -0- -0-
Return of Capital Distribution......... -0- -0- .951 -0- -0- -0-
------- ------- ------- ------- ------- -------
Total Distributions..................... 1.296 .415 3.002 .695 .566 .492
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE PERIOD...... $22.592 $17.426 $17.619 $16.426 $15.290 $13.356
======= ======= ======= ======= ======= =======

Total Return (a)........................ 38.32% 1.22%* 27.14% 12.37% 19.00% 7.88%
Net Assets at End of the Period (In
millions).............................. $ 9.2 $ 7.0 $ 5.9 $ 4.9 $ 5.0 $ 1.3
Ratio of Expenses to Average Net Assets
(b).................................... 2.01% 1.99% 2.06% 2.17% 2.13% 2.09%
Ratio of Net Investment Income to
Average Net Assets (b)................. 1.01% 1.53% 1.73% 3.23% 2.78% 3.80%
Portfolio Turnover...................... 32% 13%* 23% 102% 121% 109%
</TABLE>

* Non-Annualized

See Notes to Financial Statements

F-10
<PAGE> 430

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Utility Fund (the "Fund") is organized as a series of the Van Kampen
Equity Trust, a Delaware business trust, and is registered as a diversified
open-end management investment company under the Investment Company Act of 1940,
as amended. The Fund's investment objective is to provide its shareholders with
capital appreciation and current income, through investment in common stocks and
income securities of companies engaged in the utilities industry. The Fund
commenced investment operations on July 28, 1993, with two classes of common
shares, Class A and Class B shares. The distribution of the Fund's Class C
shares commenced on August 13, 1993.

A. SECURITY VALUATION Portfolio securities are valued by using market quotations
or prices provided by market makers. Any securities for which current market
quotations are not readily available are valued at their fair value as
determined in good faith using procedures established by the Board of Trustees.
Securities with remaining maturities of 60 days or less are valued at amortized
cost, which approximates market value.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Fund may purchase and sell securities on a "when-issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Fund will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when-issued or delayed delivery
purchase commitments until payment is made. At March 31, 2000, there were no
when-issued or delayed delivery purchase commitments.

The Fund may invest in repurchase agreements, which are short-term
investments in which the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements, or transfer
uninvested cash balances into a pooled cash account along with other investment
companies

F-11
<PAGE> 431

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

advised by Van Kampen Investment Advisory Corp. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are fully collateralized by the underlying debt security.
The Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not less than
the repurchase proceeds due the Fund.

C. INCOME AND EXPENSES Dividend income is recorded net of applicable withholding
taxes on the ex-dividend date; interest income is recorded on an accrual basis.
Bond discount is accreted over the expected life of each applicable security.
Income and expenses of the Fund are allocated on a pro rata basis to each class
of shares, except for distribution and service fees and transfer agency costs
which are unique to each class of shares.

At March 31, 2000, for federal income tax purposes the cost of long- and
short-term investments is $125,901,797, the aggregate gross unrealized
appreciation is $78,120,331 and the aggregate gross unrealized depreciation is
$4,684,382, resulting in net unrealized appreciation on long- and short-term
investments of $73,435,949.

E. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends
quarterly from net investment income. Net realized gains, if any, are
distributed annually. Distributions from net realized gains for book purposes
may include short-term capital gains and gains on option and futures
transactions. All short-term capital gains and a portion of option and futures
gains are included as ordinary income for tax purposes.

F. EXPENSE REDUCTIONS During the year ended March 31, 2000, the Fund's custody
fee was reduced by $3,470 as a result of credits earned on overnight cash
balances.

F-12
<PAGE> 432

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS % PER ANNUM
<S> <C>
First $500 million.......................................... .65 of 1%
Next $500 million........................................... .60 of 1%
Over $1 billion............................................. .55 of 1%
</TABLE>

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $18,800 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the year ended March 31, 2000, the Fund recognized expenses of
approximately $70,700 representing Van Kampen's cost of providing accounting and
legal services to the Fund.

Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent of the Fund. For the year ended March 31, 2000,
the Fund recognized expenses of approximately $188,200. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees and are based
on competitive market benchmarks.

Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.

F-13
<PAGE> 433

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

3. CAPITAL TRANSACTIONS

At March 31, 2000, capital aggregated $56,388,062, $55,086,903 and $5,913,742
for Classes A, B and C, respectively. For the year ended March 31, 2000,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 827,297 $ 17,303,040
Class B................................................. 617,832 12,565,190
Class C................................................. 127,931 2,642,459
---------- ------------
Total Sales............................................... 1,573,060 $ 32,510,689
========== ============
Dividend Reinvestment:
Class A................................................. 233,973 $ 4,571,971
Class B................................................. 259,439 5,038,767
Class C................................................. 15,753 306,099
---------- ------------
Total Dividend Reinvestment............................... 509,165 $ 9,916,837
========== ============
Repurchases:
Class A................................................. (684,221) $(13,679,242)
Class B................................................. (1,219,325) (24,471,150)
Class C................................................. (137,567) (2,679,003)
---------- ------------
Total Repurchases......................................... (2,041,113) $(40,829,395)
========== ============
</TABLE>

F-14
<PAGE> 434

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

At March 31, 1999, capital aggregated $48,192,293, $61,954,096 and
$5,644,187 for Classes A, B and C, respectively. For the nine months ended March
31, 1999, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 544,379 $ 9,808,618
Class B................................................. 673,415 12,063,204
Class C................................................. 174,359 3,135,143
---------- ------------
Total Sales............................................... 1,392,153 $ 25,006,965
========== ============
Dividend Reinvestment:
Class A................................................. 85,041 $ 1,531,265
Class B................................................. 95,052 1,711,764
Class C................................................. 4,958 89,342
---------- ------------
Total Dividend Reinvestment............................... 185,051 $ 3,332,371
========== ============
Repurchases:
Class A................................................. (496,899) $ (8,902,999)
Class B................................................. (867,572) (15,566,941)
Class C................................................. (113,012) (1,989,264)
---------- ------------
Total Repurchases......................................... (1,477,483) $(26,459,204)
========== ============
</TABLE>

F-15
<PAGE> 435

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

At June 30, 1998, capital aggregated $45,755,409, $63,746,069 and $4,408,966
for Classes A, B and C, respectively. For the year ended June 30, 1998,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 1,328,514 $ 22,835,462
Class B................................................. 538,641 9,290,235
Class C................................................. 83,771 1,444,841
---------- ------------
Total Sales............................................... 1,950,926 $ 33,570,538
========== ============
Dividend Reinvestment:
Class A................................................. 540,406 $ 8,897,389
Class B................................................. 703,377 11,560,470
Class C................................................. 33,229 545,865
---------- ------------
Total Dividend Reinvestment............................... 1,277,012 $ 21,003,724
========== ============
Repurchases:
Class A................................................. (1,639,476) $(27,743,068)
Class B................................................. (1,388,187) (23,874,869)
Class C................................................. (83,492) (1,417,849)
---------- ------------
Total Repurchases......................................... (3,111,155) $(53,035,786)
========== ============
</TABLE>

Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares purchased
on or after June 1, 1996, and any dividend reinvestment plan Class B shares
received thereon, automatically convert to Class A shares eight years after the
end of the calendar month in which the shares were purchased. Class B shares
purchased before June 1, 1996, and any dividend reinvestment plan Class B shares
received thereon, automatically convert to Class A shares six years after the
end of the calendar month in which the shares were purchased. For the year ended
March 31, 2000, 237,933 Class B shares converted to Class A shares and are shown
in the above tables as sales of Class A shares and repurchases of Class B
shares. Class C shares purchased before January 1, 1997, and any dividend
reinvestment plan Class C shares received thereon, automatically convert to
Class A shares ten years after the end of the calendar month in which such
shares were purchased. Class C shares purchased on or after January 1, 1997 do
not possess a conversion feature. For the year ended March 31, 2000, no Class C
shares converted to Class A shares. The CDSC will be imposed on most redemptions
made within six years of the

F-16
<PAGE> 436

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

purchase for Class B shares and one year of the purchase for Class C shares as
detailed in the following schedule.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
First...................................................... 4.00% 1.00%
Second..................................................... 3.75% None
Third...................................................... 3.50% None
Fourth..................................................... 2.50% None
Fifth...................................................... 1.50% None
Sixth...................................................... 1.00% None
Seventh and Thereafter..................................... None None
</TABLE>

For the year ended March 31, 2000, Van Kampen, as Distributor for the Fund,
received net commissions on sales of the Fund's Class A shares of approximately
$30,300 and CDSC on redeemed shares of approximately $120,100. Sales charges do
not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $52,559,471 and $68,328,340,
respectively.

5. DISTRIBUTION AND SERVICE PLANS

Annual fees under the Plans of up to .25% for Class A net assets and 1.00%
each for Class B and Class C net assets are accrued daily. Included in these
fees for the year ended March 31, 2000, are payments retained by Van Kampen of
approximately $712,300.

6. BORROWINGS

F-17
<PAGE> 437

NOTES TO
FINANCIAL STATEMENTS

March 31, 2000

the consent of the participating banks. Each fund is permitted to utilize the
facility in accordance with the restrictions of its prospectus. In the event the
demand for the credit facility meets or exceeds $650 million on a complex-wide
basis, each fund will be limited to its pro-rata percentage based on the net
assets of each participating fund. Interest on borrowings is charged under the
agreement at a rate of 0.50% above the federal funds rate per annum. An annual
commitment fee of 0.09% per annum is charged on the unused portion of the credit
facility, which each fund incurs based on its pro-rata percentage of quarterly
net assets. The Fund has not borrowed against the credit facility during the
period.

F-18
<PAGE> 438

PART C: OTHER INFORMATION

ITEM 23. EXHIBITS.
(a)(1) Agreement and Declaration of Trust(4)
(2) Certificate of Amendment(6)

(3) Certificate of Designation for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund(6)
(ii) Van Kampen Growth Fund(6)
(iii) Van Kampen Aggressive Growth Fund(6)
(iv) Van Kampen Small Cap Value Fund(7)
(v) Van Kampen Small Company Growth Fund++
(vi) Van Kampen Small Cap Growth Fund++
(vii) Van Kampen Select Growth Fund(10)
</TABLE>

(b) By-Laws(7)

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund(4)
(ii) Van Kampen Growth Fund(4)
(iii) Van Kampen Aggressive Growth Fund(4)
(iv) Van Kampen Small Cap Value Fund(7)
(v) Van Kampen Small Company Growth Fund++
(vi) Van Kampen Small Cap Growth Fund++
(vii) Van Kampen Select Growth Fund(10)
</TABLE>

(d)(1) Investment Advisory Agreement for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund(5)
(ii) Van Kampen Growth Fund(5)
(iii) Van Kampen Aggressive Growth Fund(5)
(iv) Van Kampen Small Cap Value Fund(7)
(v) Van Kampen Small Company Growth Fund++
(vi) Van Kampen Small Cap Growth Fund++
(vii) Van Kampen Select Growth Fund(10)
</TABLE>

(2) Investment Subadvisory Agreement for Van Kampen Small Company
Growth Fund++

(e)(1) Distribution and Service Agreement for:

(2) Form of Dealer Agreement(9)
(3) Form of Broker Fully Disclosed Clearing Agreement(9)
(4) Form of Bank Fully Disclosed Clearing Agreement(9)
(f)(1) Form of Trustee Deferred Compensation Agreement(8)
(2) Form of Trustee Retirement Plan(8)
(g)(1) Custodian Contract(9)
(2) Transfer Agency and Service Agreement(5)
(h)(1) Fund Accounting Agreement(9)
(2) Amended and Restated Legal Services Agreement(9)

(i)(1) Opinion of Skadden, Arps, Slate, Meagher & Flom (Illinois)
for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund(1)
(ii) Van Kampen Growth Fund(2)
(iii) Van Kampen Aggressive Growth Fund(3)
(iv) Van Kampen Small Cap Value Fund(9)
(v) Van Kampen Small Company Growth Fund++
(vi) Van Kampen Small Cap Growth Fund++
(vii) Van Kampen Select Growth Fund(10)
</TABLE>

(2) Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)+

(j)(1) Opinion of KPMG LLP for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund+
(ii) Van Kampen Growth Fund+
(iii) Van Kampen Aggressive Growth Fund+
</TABLE>

(2) Consent of KPMG LLP for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund+
(ii) Van Kampen Growth Fund+
(iii) Van Kampen Aggressive Growth Fund+
(iv) Van Kampen Small Cap Value Fund+
</TABLE>

C-1
<PAGE> 439

(3) Consent of PricewaterhouseCoopers LLP for:

<TABLE>
<C> <S>
(i) Van Kampen Utility Fund+
(ii) Van Kampen Growth Fund+
(iii) Van Kampen Aggressive Growth Fund+
(iv) Van Kampen Small Cap Value Fund+
(v) Van Kampen Select Growth Fund+
</TABLE>

(4) Consent of Ernst and Young LLP with respect to Van Kampen
Utility Fund, Van Kampen Growth Fund, Van Kampen Aggressive
Growth Fund, Van Kampen Small Cap Value Fund, and Van Kampen
Select Growth Fund+

(k) Not Applicable
(l) Letter of Understanding relating to initial capital(4)

(m)(1) Distribution Plan pursuant to Rule 12b-1 for:

(2) Form of Shareholder Assistance Agreement(9)
(3) Form of Administrative Services Agreement(9)

(4) Service Plan for:

(n)(1) Amended Multi-Class Plan(5)

(2) Van Kampen Small Cap Value Fund Multi-Class Plan(9)

(p)(1) Code of Ethics of the Funds, Investment Adviser and
Distributor+

(2) Code of Ethics of the subadviser to Van Kampen Small Company
Growth Fund++

(q) Power of Attorney(10)

(z)(1) List of certain investment companies in response to Item 27(a)+
(2) List of Officers and Directors of Van Kampen Funds Inc. in
response to Item 27(b)+
---------------
(1) Incorporated herein by reference to Post-Effective Amendment No. 23 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on August 1, 1995.

(2) Incorporated herein by reference to Post-Effective Amendment No. 25 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on October 13, 1995.

(3) Incorporated herein by reference to Post-Effective Amendment No. 26 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on March 15, 1996.

(4) Incorporated herein by reference to Post-Effective Amendment No. 27 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on October 28, 1996.

(5) Incorporated herein by reference to Post-Effective Amendment No. 28 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on October 28, 1997.

(6) Incorporated herein by reference to Post-Effective Amendment No. 29 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on September 30, 1998.

(7) Incorporated herein by reference to Post-Effective Amendment No. 30 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on March 1, 1999.

(8) Incorporated herein by reference to Post-Effective Amendment No. 81 to Van
Kampen Harbor Fund's Registration Statement on Form N-1A, File Numbers
2-12685 and 811-734, filed April 29, 1999.

(9) Incorporated herein by reference to Post-Effective Amendment No. 32 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on June 16, 1999.

(10) Incorporated herein by reference to Post-Effective Amendment No. 37 to
Registrant's Registration Statement on Form N-1A, File No. 33-8122, filed
on April 24, 2000.

+ Filed herewith.

++ To be filed by further amendment.

ITEM 24. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

C-2
<PAGE> 440

ITEM 25. INDEMNIFICATION.

Pursuant to Del. Code Ann. Title 12, Section 3817, a Delaware business
trust may provide in its governing instrument for the indemnification of its
officers and trustees from and against any and all claims and demands
whatsoever.

Reference is made to Article 8, Section 8.4 of the Registrant's Agreement
and Declaration of Trust, as amended, Article 8, Section 8.4 of the Agreement
and Declaration of Trust provides that each officer and trustee of the
Registrant shall be indemnified by the Registrant against all liabilities
incurred in connection with the defense or disposition of any action, suit or
other proceeding, whether civil or criminal, in which the officer or trustee may
be or may have been involved by reason of being or having been an officer or
trustee, except that such indemnity shall not protect any such person against a
liability to the Registrant or any shareholder thereof to which such person
would otherwise be subject by reason of (i) not acting in good faith in the
reasonable belief that such person's actions were not in the best interests of
the Trust, (ii) willful misfeasance, bad faith, gross negligence or reckless
disregard of the duties involved in the conduct of such person's office or (iii)
for a criminal proceeding, not having a reasonable cause to believe that such
conduct was unlawful (collectively, "Disabling Conduct"). Absent a court
determination that an officer or trustee seeking indemnification was not liable
on the merits or guilty of Disabling Conduct in the conduct of such person's
office, the decision by the Registrant to indemnify such person must be based
upon the reasonable determination of independent legal counsel in a written
opinion or a majority of a quorum of non-party independent trustees, after
review of the facts, that such officer or trustee is not guilty of Disabling
Conduct, in the conduct of his or her office.

The Registrant has purchased insurance on behalf of its officers and
trustees protecting such persons from liability arising from their activities as
officers or trustees of the Registrant. The insurance does not protect or
purport to protect such persons from liability to the Registrant or to its
shareholders to which such officers or trustees would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their office.

Conditional advancing of indemnification monies may be made if the trustee
or officer undertakes to repay the advance and only if the following conditions
are met: (1) the trustee or officer provides a security for the undertaking; (2)
the Registrant is insured against losses arising from lawful advances; or (3) a
majority of a quorum of the Registrant's disinterested, non-party trustees, or
an independent legal counsel in a written opinion, shall determine, based upon a
review of readily available facts, that a recipient of the advance ultimately
will be found entitled to indemnification.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "1933 Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
1933 Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by the trustee, officer, or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such trustee, officer or controlling person in
connection with the shares being registered, the Registrant will, unless in the
opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the 1933 Act and
will be governed by the final adjudication of such issue.

Pursuant to Section 7 of the Distribution and Service Agreement, the
Registrant agrees to indemnify and hold harmless Van Kampen Funds Inc. (the
"Distributor") and each of its trustees and officers and each person, if any,
who controls the Distributor within the meaning of Section 15 of the 1933 Act
against any loss, liability, claim, damages or expense (including the reasonable
cost of investigating or defending any alleged loss, liability, claim, damages,
or expense and reasonable counsel fees) arising by reason of any person
acquiring any shares, based upon the ground that the Registration Statement,
prospectus, shareholder reports or other information filed or made public by the
Registrant (as from time to time amended) included an untrue statement of a
material fact or omitted to state a material fact required to be stated or
necessary in order to make the statements, in light of the circumstances, not
misleading under the 1933 Act, or any other
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<PAGE> 441

statute or the common law. The Registrant does not agree to indemnify the
Distributor or hold it harmless to the extent that the statement or omission was
made in reliance upon, and in conformity with, information furnished to the
Registrant by or on behalf of the Distributor. In no case is the indemnity of
the Registrant in favor of the Distributor or any person indemnified to be
deemed to protect the Distributor or any person against any liability to the
Fund or its security holders to which the Distributor or such person would
otherwise be subject by reason of willful misfeasance, bad faith or gross
negligence in the performance of its duties or by reason of its reckless
disregard of its obligations and duties under the agreement.

Pursuant to the agreement by which Van Kampen Investor Services Inc.
("Investor Services") is appointed transfer agent of the Fund, the Registrant
agrees to indemnify and hold Investor Services harmless against any losses,
damages, costs, charges, payments, liabilities and expenses (including
reasonable counsel fees) arising out of or attributable to:

(1) the performance of Investor Services under the agreement provided that
Investor Services acted in good faith with due diligence and without negligence
or willful misconduct.

(2) reliance by Investor Services on, or reasonable use by, Investor Services
of information, records and documents which have been prepared on behalf of, or
have been furnished by, the Fund, or the carrying out by Investor Services of
any instructions or requests of the Fund.

(3) the offer or sale of the Fund's shares in violation of any federal or
state law or regulation or ruling by any federal agency unless such violation
results from any failure by Investor Services to comply with written
instructions from the Fund that such offers or sales were not permitted under
such law, rule or regulation.

(4) the refusal of the Fund to comply with terms of the agreement, or the
Fund's lack of good faith, negligence or willful misconduct or breach of any
representation or warranty made by the Fund under the agreement provided that if
the reason for such failure is attributable to any action of the Fund's
investment adviser or distributor or any person providing accounting or legal
services to the Fund, Investor Services only will be entitled to indemnification
if such entity is otherwise entitled to the indemnification from the Fund.

See also "Investment Advisory Agreement" in each Statement of Additional
Information.

ITEM 26. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER:

See "Investment Advisory Services" in each Prospectus and "Investment
Advisory Agreement," "Other Agreements," and "Trustees and Officers" in each
Statement of Additional Information for information regarding the business of
Van Kampen Investment Advisory Corp. (the "Adviser"). For information as to the
business, profession, vocation or employment of a substantial nature of each
officer and director of the Adviser, reference is made to the Adviser's current
Form ADV (File No. 801-18161) filed under the Investment Advisers Act of 1940,
as amended, incorporated herein by reference.

ITEM 27. PRINCIPAL UNDERWRITERS

(a) The sole principal underwriter is Van Kampen Funds Inc. (the
"Distributor") which acts as principal underwriter for certain investment
companies and unit investment trusts. See Exhibit (z)(1) incorporated by
reference herein.

(b) Van Kampen Funds Inc., is an affiliated person of the Registrant and is
the only principal underwriter for the Registrant. The name, principal business
address and position and office with Van Kampen Funds Inc. of each of its
directors and officers are disclosed in Exhibit (z)(2). Except as disclosed
under the heading, "Trustees and Officers" in Part B of this Registration
Statement, none of such persons has any position or office with the Registrant.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents of the Registrant required by
Section 31(a) of the Investment Company Act of 1940, as amended, and the Rules
thereunder to be maintained (i) by the Registrant will be

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<PAGE> 442

maintained at its offices located at 1 Parkview Plaza, Oakbrook Terrace,
Illinois 60181-5555, or at Van Kampen Investor Services Inc., 7501 Tiffany
Springs Parkway, Kansas City, Missouri 64153, or at the State Street Bank and
Trust Company, 1776 Heritage Drive, North Quincy, Massachusetts 02171; (ii) by
the Adviser, will be maintained at its offices, located at 1 Parkview Plaza,
Oakbrook Terrace, Illinois 60181-5555; and (iii) by Van Kampen Funds Inc., the
principal underwriter, will be maintained at its offices located at 1 Parkview
Plaza, Oakbrook Terrace, Illinois 60181-5555.

ITEM 29. MANAGEMENT SERVICES.

Not applicable.

ITEM 30. UNDERTAKINGS.

Not applicable.

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<PAGE> 443

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, as amended (the
"1933 Act"), and the Investment Company Act of 1940, as amended, the Registrant,
VAN KAMPEN EQUITY TRUST, certifies that it meets all of the requirements for
effectiveness of this Amendment to the Registration Statement pursuant to Rule
485(b) under the 1933 Act and has duly caused this Amendment to the Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Oakbrook Terrace and the State of Illinois, on the
27th day of July, 2000.

VAN KAMPEN EQUITY TRUST

By: /s/ A. THOMAS SMITH III
-------------------------------------
A. Thomas Smith III, Secretary

Pursuant to the requirements of the 1933 Act, this Amendment to the
Registration Statement has been signed on July 27, 2000, by the following
persons in the capacities indicated.

<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<C> <S>
Principal Executive Officer:
/s/ RICHARD F. POWERS, III* Trustee and President
------------------------------------------------
Richard F. Powers, III
Principal Financial Officer:

/s/ JOHN L. SULLIVAN* Vice President, Chief Financial Officer and
------------------------------------------------ Treasurer
John L. Sullivan
Trustees:

/s/ J. MILES BRANAGAN* Trustee
------------------------------------------------
J. Miles Branagan

/s/ JERRY D. CHOATE* Trustee
------------------------------------------------
Jerry D. Choate

/s/ LINDA HUTTON HEAGY* Trustee
------------------------------------------------
Linda Hutton Heagy

/s/ R. CRAIG KENNEDY* Trustee
------------------------------------------------
R. Craig Kennedy

/s/ MITCHELL M. MERIN* Trustee
------------------------------------------------
Mitchell M. Merin

/s/ JACK E. NELSON* Trustee
------------------------------------------------
Jack E. Nelson

/s/ PHILLIP B. ROONEY* Trustee
------------------------------------------------
Phillip B. Rooney

/s/ FERNANDO SISTO* Trustee
------------------------------------------------
Fernando Sisto

/s/ WAYNE W. WHALEN* Trustee
------------------------------------------------
Wayne W. Whalen

/s/ SUZANNE H. WOOLSEY* Trustee
------------------------------------------------
Suzanne H. Woolsey
---------------
* Signed by A. Thomas Smith III pursuant to a power of attorney filed herewith.
/s/ A. THOMAS SMITH III July 27, 2000
------------------------------------------------
A. Thomas Smith III
Attorney-in-Fact
</TABLE>

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<PAGE> 444

SCHEDULE OF EXHIBITS TO

POST-EFFECTIVE AMENDMENT 38 TO FORM N-1A

AS SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION

<TABLE>
<CAPTION>
EXHIBIT
NUMBER EXHIBIT
------- -------
<S> <C> <C> <C>
(i) (2) -- Consent of Skadden, Arps, Slate, Meagher & Flom (Illinois)
(j) (1) -- Opinion of KPMG LLP for:
(i) -- Van Kampen Utility Fund
(ii) -- Van Kampen Growth Fund
(iii) -- Van Kampen Aggressive Growth Fund
(2) -- Consent of KPMG LLP for:
(i) -- Van Kampen Utility Fund
(ii) -- Van Kampen Growth Fund
(iii) -- Van Kampen Aggressive Growth Fund
(iv) -- Van Kampen Small Cap Value Fund
(3) -- Consent of PricewaterhouseCoopers LLP for:
(i) -- Van Kampen Utility Fund
(ii) -- Van Kampen Growth Fund
(iii) -- Van Kampen Aggressive Growth Fund
(iv) -- Van Kampen Small Cap Value Fund
(v) -- Van Kampen Select Growth Fund
(4) -- Consent of Ernst and Young LLP with respect to Van Kampen
Utility Fund, Van Kampen Growth Fund, Van Kampen Aggressive
Growth Fund, Van Kampen Small Cap Value Fund and Van Kampen
Select Growth Fund
(p) (1) -- Code of Ethics of the Funds, Investment Adviser and
Distributor
(z) (1) -- List of certain investment companies in response to Item
27(a)
(2) -- List of officers and directors of Van Kampen Funds Inc. in
response to Item 27(b)
</TABLE>