VAN KAMPEN EQUITY TRUST, N-30D, 2000-11-29

VAN KAMPEN EQUITY TRUST
N-30D, 2000-11-29

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<PAGE> 1

<TABLE>
<S> <C>
Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 6
TOP FIVE SECTORS 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 10

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 11
FINANCIAL STATEMENTS 15
NOTES TO FINANCIAL STATEMENTS 21
VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 28
FUND OFFICERS AND IMPORTANT ADDRESSES 29
</TABLE>

Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2

OVERVIEW

LETTER TO SHAREHOLDERS
October 20, 2000

Dear Shareholder,

The first three quarters of 2000 proved to be especially volatile, with all of
the major markets declining in the spring and spending the following months
trying to recover. To manage one's portfolio during such unpredictable times
requires investment-management experience, and the following pages should give
you some insight into how we have performed in this difficult environment.

In this report, the portfolio managers will explain how your investment
performed during the reporting period and describe the strategies they used to
manage your fund during that span. The report will also show you how your
investment has performed over time. Helpful charts summarize the fund's largest
investments, and you can examine the complete portfolio to see all of your
fund's holdings as of the end of your fund's reporting period.

At Van Kampen, we place a high priority on providing you and
your financial advisor with the information you need to help
you monitor your investments during all types of markets. With
nearly four generations of investment-management experience,
we've been around long enough to understand that by investing
with Van Kampen you're entrusting us with much more than your money. Your
investments may help make it possible to afford your next house, keep up with
rising college costs, or enjoy a comfortable retirement.

No matter what your reasons for investing, we're thankful that you've chosen to
place your investments with Van Kampen. We will continue to apply our
generations of money-management experience to helping you pursue life's true
wealth.

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments

1
<PAGE> 3

ECONOMIC SNAPSHOT

ECONOMIC GROWTH
ECONOMIC GROWTH WAS STRONG DURING THE REPORTING PERIOD, UNDERPINNED BY LOW
UNEMPLOYMENT AND RISING PRODUCTIVITY, YET THERE WERE SIGNS THAT A HEALTHY
SLOWDOWN WAS UNDERWAY. GROSS DOMESTIC PRODUCT, THE PRIMARY MEASURE OF ECONOMIC
GROWTH, INCREASED AT A 2.7 PERCENT ANNUALIZED RATE FOR THE THIRD QUARTER OF
2000. FOLLOWING MILD FIRST- AND SECOND-QUARTER DATA, THIS THIRD-QUARTER FIGURE
OFFERS FURTHER EVIDENCE THAT GROWTH MIGHT BE SETTLING BACK TO A MORE MODERATE
AND SUSTAINABLE PACE THAN ITS RAPID RATE IN LATE 1999.

CONSUMER SPENDING AND EMPLOYMENT
CONCERNS ABOUT INFLATION REMAINED AT BAY DUE IN PART TO A GRADUAL SLOWDOWN IN
CONSUMER SPENDING. RISING INTEREST RATES, HIGHER ENERGY COSTS, AND A
DISAPPOINTING STOCK MARKET BEGAN TO TEMPER RETAIL SALES, WHICH LEVELED OFF FROM
THE BLISTERING PACE OF LATE 1999 AND EARLY 2000. AND WHILE CONSUMER SPENDING WAS
BRISK, THE OVERALL TREND HAS BEEN DOWNWARD THIS YEAR.

THE JOBLESS RATE CONTINUED TO BE EXTREMELY LOW BY HISTORICAL STANDARDS, BUT
RECENT CUTS IN MANUFACTURING PAYROLLS SUPPORT THE POPULAR BELIEF THAT THE
ECONOMY IS MODERATING. ALTHOUGH EMPLOYER COSTS SUCH AS WAGES AND BENEFITS WERE
RISING AT THE END OF 1999 AND IN THE BEGINNING OF 2000, OVER THE PAST SIX MONTHS
THE EMPLOYMENT COST INDEX HAS SHOWN MARKED DECELERATION, WHICH SHOULD HELP EASE
INFLATION CONCERNS.

INTEREST RATES AND INFLATION
THE FEDERAL RESERVE BOARD (THE FED) RAISED INTEREST RATES FOUR TIMES DURING THE
LAST 12 MONTHS IN AN EFFORT TO WARD OFF INFLATION BY CURBING ECONOMIC GROWTH.
OVER THE SAME PERIOD, THE CONSUMER PRICE INDEX ROSE 3.5 PERCENT, WHICH INDICATED
THAT INFLATION GENERALLY REMAINS UNDER CONTROL.

THE FED HAS ACKNOWLEDGED THE RISK OF RISING INFLATION AND WILL STAY ON GUARD, AS
RISING ENERGY COSTS AND LOW UNEMPLOYMENT THREATEN TO PROPEL THIS FIGURE UPWARD
IN THE COMING MONTHS. AS LONG AS INFLATION IS CONTAINED AND THE PACE OF ECONOMIC
GROWTH REMAINS FAVORABLE, THE FED IS LIKELY TO HOLD INTEREST RATES STEADY IN THE
SHORT TERM, WHICH COULD HELP STABILIZE THE STOCK AND BOND MARKETS.

2
<PAGE> 4

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998--September 30, 2000)
[BAR GRAPH]

<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.70
</TABLE>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(September 30, 1998--September 30, 2000)

[LINE GRAPH]

<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Sep 98 5.25 1.50
5.00 1.50
4.75 1.50
Dec 98 4.75 1.60
4.75 1.70
4.75 1.60
Mar 99 4.75 1.70
4.75 2.30
4.75 2.10
Jun 99 5.00 2.00
5.00 2.10
5.25 2.30
Sep 99 5.25 2.60
5.25 2.60
5.50 2.60
Dec 99 5.50 2.70
5.50 2.70
5.75 3.20
Mar 00 6.00 3.70
6.00 3.00
6.50 3.10
Jun 00 6.50 3.70
6.50 3.70
6.50 3.30
Sep 00 6.50 3.50
</TABLE>

Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percent
change of the Consumer Price Index for all urban consumers at the end of each
month.

3
<PAGE> 5

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of September 30, 2000)

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C>
Six-month total return based on
NAV(1) 12.15% 11.76% 11.77%
-------------------------------------------------------------------------
Six-month total return(2) 5.72% 7.76% 10.77%
-------------------------------------------------------------------------
One-year total return(2) 35.27% 38.42% 41.44%
-------------------------------------------------------------------------
Five-year average annual total
return(2) 19.34% 19.71% 19.85%
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 14.41% 14.62%(3) 14.39%
-------------------------------------------------------------------------
Commencement date 07/28/93 07/28/93 08/13/93
-------------------------------------------------------------------------
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (5.75% for Class A Shares) or
contingent deferred sales charge ("CDSC"). On purchases of Class A Shares of
$1 million or more, a CDSC of 1% may be imposed on certain redemptions made
within one year of purchase. Returns for Class B Shares are calculated
without the effect of the maximum 4% CDSC, charged on certain redemptions
made within one year of purchase and declining to 0% after the sixth year.
Returns for Class C Shares are calculated without the effect of the maximum
1% CDSC, charged on certain redemptions made within one year of purchase. If
the sales charges were included, total returns would be lower. These returns
do include Rule 12b-1 fees of up to .25% for Class A Shares and 1% for Class
B and Class C Shares.

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (5.75% for Class A
Shares) or contingent deferred sales charge ("CDSC") for Class B and C
Shares and Rule 12b-1 fee. On purchases of Class A Shares of $1 million or
more, a CDSC of 1% may be imposed on certain redemptions made within one
year of purchase. Returns for Class B Shares are calculated with the effect
of the maximum 4% CDSC, charged on certain redemptions made within one year
of purchase and declining to 0% after the sixth year. Returns for Class C
Shares are calculated with the effect of the maximum 1% CDSC, charged on
certain redemptions made within one year of purchase. The Rule 12b-1 fee for
Class A Shares is up to .25% and for Class B and Class C Shares is 1%.

(3) The total return reflects the conversion of Class B Shares into Class A
Shares six years after the end of the calendar month in which the shares
were purchased. See footnote 3 in the Notes to Financial Statements for
additional information.

An investment in the Fund is subject to investment risks, and you could lose
money on your investment in the Fund. Please review the Risk/Return Summary
of the Prospectus for further details on investment risks. Fund shares, when
redeemed, may be worth more or less than their original cost. Past
performance is no guarantee of future results. Investment return and net
asset value will fluctuate with market conditions.

4
<PAGE> 6

Because the Fund concentrates investments in the utility industry, it may be
more susceptible to any economic, political or regulatory occurrence
effecting this industry. Foreign securities involve the risk of fluctuations
in foreign exchange rates, future political and economic developments.
Lower-rated securities are referred to as "junk bonds" and are considered
speculative with regards to payment of interest and principal.

As a result of recent market activity, current performance may vary from the
figures shown.

Market forecasts provided in this report may not necessarily come to pass.

5
<PAGE> 7

PORTFOLIO AT A GLANCE

TOP TEN HOLDINGS

(as a percentage of long-term investments--September 30, 2000)

1. CALPINE 9.5%
Owns and operates power plants and
sells electricity predominately in
the United States.

2. CHINA MOBILE 4.5%
Provides cellular telecommunica-
tions services in China.

3. NRG ENERGY 4.3%
Owns and operates power plants
predominately in the United States.

4. DYNEGY 3.9%
Markets natural gas and other energy
sources in the United States, Canada,
and the United Kingdom.

5. PECO ENERGY 3.7%
Provides electricity and natural gas
to customers in Pennsylvania.

6. COASTAL 3.4%
Explores for and produces oil and
natural gas.

7. ENRON 3.1%
Explores for and produces natural gas
and crude oil and develops and
distributes energy throughout the
United States.

8. RELIANT ENERGY 2.8%
Provides electric and natural gas
services to customers in the United
States, South America, and India.

9. DUKE ENERGY 2.7%
Provides electricity and natural gas
to customers in the United States and
abroad.

10. CALPINE CAPITAL TRUST 2.5%
See "Calpine" above.
</TABLE>

TOP FIVE SECTORS*

(as a percentage of long-term investments)

[BAR GRAPH]

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------ --------------
<S> <C> <C>
Electric Utilities 49.2 34.7
Telecommunications 14.8 30.4
Oil, Gas Pipeline and Distribution 10.5 11.8
Technology 10.2 6.9
Energy 5.9 0.0
</TABLE>

* These sectors represent broad groupings of related industries.

6
<PAGE> 8

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN UTILITY FUND ABOUT
THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND INFLUENCED THE
FUND'S RETURN DURING THE SIX MONTHS ENDED SEPTEMBER 30, 2000. THE TEAM IS LED BY
CHRISTINE DRUSCH, SENIOR PORTFOLIO MANAGER, WHO HAS MANAGED THE FUND SINCE
AUGUST 1997 AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1985. SHE IS JOINED
BY PORTFOLIO MANAGERS DAVID MCLAUGHLIN AND SEAN CONNER. THE FOLLOWING DISCUSSION
REFLECTS THEIR VIEWS ON THE FUND'S PERFORMANCE.

Q HOW WOULD YOU CHARACTERIZE
THE MARKET DURING THE REPORTING PERIOD, AND TO WHAT DO YOU ATTRIBUTE THE
FUND'S PERFORMANCE?

A The stock market was volatile
across all industries. The Federal Reserve Board attempted to moderate economic
growth by hiking interest rates, which caused many investors to wonder whether
high-growth, high-valuation companies--many of which are in the technology and
telecommunications sectors--could sustain such lofty valuations. A sell-off
occurred in the spring as investors moved out of high-growth names and turned
their focus to "old economy" stocks, including utility securities. This rotation
to utilities helped the utility sector outperform the broad market for the
six-month period ended September 30, 2000.

In this market environment, the fund returned 12.15 percent for the six
months ended September 30, 2000 (Class A shares at net asset value; if the
maximum sales charge of 5.75 percent were included, the return would have been
lower). Past performance is no guarantee of future results. As a result of
recent market activity, current performance may vary from the figure shown.
Please refer to the chart and footnotes on page 4 for additional fund
performance results. Although utility companies have typically been considered
"old economy," they have recently benefited from the demands of the "new
economy." For example, the explosion of computer, Internet, and wireless
telephone usage has created a need for uninterrupted service to home and
corporate users. This demand has fueled new growth in traditional utility
companies. Furthermore, the deregulation of the utilities industries is
generating increased competition, which is propelling companies to heighten
their investment in technology and service in order to maintain market share.

7
<PAGE> 9

The fund underperformed its benchmark, the Standard & Poor's Utilities
Index, which returned 41.33 percent during the reporting period. This
underperformance was largely due to the fund's weighting in telecommunications
services, as defined by the fund's prospectus as part of the utilities industry.
Conversely, the benchmark index does not represent telecommunications services
and therefore was not impacted by its poor performance. However, the fund
outperformed its peer group, the Lipper Utility Fund Index, which returned 4.39
percent during the reporting period. The S&P Utilities Index is a broad-based,
unmanaged index that reflects the general performance of electric utility
stocks. The Lipper Utility Fund Index is a statistical composite of the 30
largest utility funds in the Lipper database. As noted, past performance is no
guarantee of future results. The indexes are statistical composites that do not
include any commissions or sales charges that would be paid by an investor
purchasing the securities represented by the indexes. Such costs would lower the
performance of the indexes. It is not possible to invest directly in an index.

Q GIVEN THIS ENVIRONMENT OF
HEIGHTENED DEMAND AND INDUSTRY DEREGULATION, WHAT WAS YOUR STRATEGY IN
MANAGING THE FUND?

A During the reporting period, we
focused primarily on power producers and natural gas. Within electricity, we
have seen demand outpace supply for the last few years because of the booming
economy--new wealth has spurred demand for comfort goods such as air
conditioners--and the Internet. When people think about the Internet and how it
has revolutionized the way we do business, it may not be obvious that all this
new technology cannot be powered without electricity. If the Internet is in fact
the backbone of the new economy, this may bode well for electric companies.

The increased demand for electricity has benefited power producers who have
embraced deregulation. When utilities were regulated by the federal government,
it was beneficial for these companies to spend because they were guaranteed a
return on their investment. Companies built nuclear plants and windmill farms.
Now that the utilities industry is no longer regulated, companies are not
necessarily guaranteed a return on what they are spending because they must
compete for customers. The established companies have been afraid to build, and
they have not added any new electricity capacity for the past few years. That is
how some independent power producers--those that formed after deregulation--have
been able to grow so quickly. They were building new capacity when nobody else
was, and therefore had excess power generation to sell when shortages occurred.
In general, we increased the fund's exposure to these types of companies.

As with electricity, the demand for natural gas has been greater than the
supply. In the United States, natural gas production has been declining, even
though more and more rigs are employed in the search for natural gas. The
problem is that the newly

8
<PAGE> 10

discovered reserves have not been high-production reserves. Therefore, the
country's ability to produce natural gas has been declining. So, as demand has
increased, natural gas prices have increased, and the fund benefited during the
reporting period from its holdings in this industry.

Q CAN YOU GIVE SOME EXAMPLES OF
STOCKS THAT CONTRIBUTED TO THE FUND'S PERFORMANCE DURING THE PERIOD?

A The best-performing stock for the
reporting period was Calpine, a domestic company that is building electricity
generation plants and is an established player in California, one of the key
areas with electricity shortages. Calpine continued to surprise with its
earnings growth and margins expansion.

Two other independent power producers, NRG Energy and Southern Companies,
have also benefited from deregulation by selling excess power generation, and
their stock prices have increased as well. Energy producers generally performed
well during the reporting period, benefiting not only from the demands of new
technology but also from the hot summers in Texas, California, and the Midwest.

In natural gas, Enron was a top performer for the fund. They have profited
from rising natural gas prices and have recently expanded into other
commodities, including bandwidth.

Keep in mind that not all stocks in the fund performed well, nor is there
any guarantee that these stocks will perform as well or will be held by the fund
in the future.

Q WHAT AREAS HAVE BEEN WEAK FOR
THE FUND?

A In general, telecommunications
has been a weak area of the utilities market recently, and we have cut back on
the fund's telecommunications exposure. After questions arose last spring about
the sustainability of technology and telecommunications valuations, we have seen
a slowdown in telecommunications growth as investors became concerned about that
sector. Disappointments during the reporting period included Neon Communications
(a fiber-optic network operator), Sprint (a local, long-distance, and wireless
telephone service provider), and CoreComm (a local and long-distance telephone
and Internet access provider).

Q WHAT IS YOUR OUTLOOK FOR THE
UPCOMING MONTHS?

A We believe electricity demand will
continue to be strong, while supply may lag, and therefore companies that can
exploit the shortages during the winter may profit. Of course, we could have a
mild winter, and power producers may not see the profits they expect.
Regardless, we anticipate natural gas prices to continue to be higher than
average because there may not be enough oil to offset demand. Although the
telecommunications industry has suffered recently, we believe it may be only a
matter of time before the weaker players are flushed out and investor demand
picks up again.

9
<PAGE> 11

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

CLASS A SHARES: Most Van Kampen mutual fund shares are typically divided into
three groupings, called Class A, Class B, and Class C shares, each with varying
fees and sales charges. Some Van Kampen mutual funds offer D shares as well.

DEREGULATION: The process of allowing utility companies to engage in open
competition to offer customers new and expanded services, as ushered in by
revised state legislation.

FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank of the United States. Its policy-making
committee, called the Federal Open Market Committee, meets at least eight times
a year to establish monetary policy and monitor the economic pulse of the United
States.

NET ASSET VALUE (NAV): The value of a mutual fund share, calculated by deducting
a fund's liabilities from the total assets in its portfolio and dividing this
amount by the number of shares outstanding. The NAV does not include any initial
or contingent deferred sales charges.

NEW ECONOMY: Refers to companies among the electronic and high-tech sectors such
as the Internet, telecommunications, biochemicals, and semiconductors.

OLD ECONOMY: Refers to established companies among more traditional sectors such
as industrial and manufacturing services.

VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue, book
value, and cash flow.

10
<PAGE> 12

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON AND PREFERRED STOCKS 79.0%
ELECTRIC UTILITIES 41.1%
Calpine Capital Trust..................................... 32,100 $ 5,745,900
Calpine Corp. (a)......................................... 212,500 22,179,687
CMS Energy Corp........................................... 89,200 2,402,825
Consolidated Edison, Inc. ................................ 40,000 1,365,000
Constellation Energy Group................................ 64,200 3,193,950
Dominion Resources, Inc. ................................. 48,600 2,821,837
DQE, Inc. ................................................ 52,500 2,106,563
DTE Energy Co. ........................................... 50,000 1,912,500
Duke Energy Corp. ........................................ 73,800 6,328,350
Edison International...................................... 36,200 699,113
FirstEnergy Corp. ........................................ 138,000 3,717,375
GPU, Inc. ................................................ 43,975 1,426,439
IPALCO Enterprises, Inc. ................................. 102,700 2,349,262
Montana Power Co. ........................................ 45,800 1,528,575
Niagara Mohawk Holdings, Inc. (a)......................... 127,700 2,011,275
Northeast Utilities....................................... 45,900 995,456
NRG Energy, Inc. (a)...................................... 277,300 10,121,450
NSTAR..................................................... 114,600 4,612,650
OGE Energy Corp. ......................................... 75,200 1,602,700
PECO Energy Co. .......................................... 142,300 8,618,044
Pinnacle West Capital Corp. .............................. 104,700 5,326,612
Public Service Co. of New Mexico.......................... 88,500 2,289,938
Reliant Energy, Inc. ..................................... 140,700 6,542,550
Sierra Pacific Resources.................................. 134,928 2,428,704
Southern Co. ............................................. 121,800 3,950,887
Southern Energy, Inc. (a)................................. 15,700 492,588
TXU Corp. ................................................ 29,300 1,161,013
TXU Corp.--Convertible Preferred, PRIDES.................. 14,800 690,975
UtiliCorp United, Inc. ................................... 96,000 2,484,000
Xcel Energy, Inc. ........................................ 75,950 2,088,625
--------------
113,194,843
--------------
</TABLE>

See Notes to Financial Statements

11
<PAGE> 13

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
ENERGY 5.0%
Dynegy, Inc. ............................................. 161,000 $ 9,177,000
Southern Union Co. (a).................................... 10,000 198,125
Williams Cos., Inc. ...................................... 104,800 4,427,800
--------------
13,802,925
--------------
NATURAL GAS PIPELINE AND DISTRIBUTION 3.6%
KeySpan Corp.............................................. 85,800 3,442,725
National Fuel Gas Co. .................................... 62,000 3,475,875
NICOR, Inc. .............................................. 50,000 1,809,375
Southwest Gas Corp. ...................................... 58,800 1,231,125
--------------
9,959,100
--------------
OIL & GAS PIPELINE AND DISTRIBUTION 8.6%
Coastal Corp. ............................................ 108,000 8,005,500
Columbia Energy Group..................................... 55,500 3,940,500
El Paso Energy Capital Trust I--Convertible Preferred..... 66,750 5,214,844
Enron Corp. .............................................. 72,800 6,379,100
--------------
23,539,944
--------------
TELECOMMUNICATIONS 9.8%
ALLTEL Corp. ............................................. 49,300 2,572,844
BellSouth Corp. .......................................... 69,400 2,793,350
Broadwing, Inc. (a)....................................... 41,000 1,048,062
Cable & Wireless, PLC--ADR (United Kingdom)............... 100,700 4,286,044
CoreComm Ltd. (a)......................................... 46,800 371,475
France Telecom--ADR (France).............................. 20,000 2,105,000
Jazztel, PLC--ADR (Spain) (a)............................. 1,100 24,750
Nippon Telegraph & Telephone Corp.--ADR (Japan)........... 31,800 1,558,200
Qwest Communications Intl., Inc. (a)...................... 76,781 3,690,287
SBC Communications, Inc. ................................. 66,400 3,320,000
Sprint Corp. (PCS Group).................................. 61,800 1,811,512
Tele Danmark A/S--ADS (Denmark)........................... 100,000 2,812,500
Tritel, Inc. (a).......................................... 2,400 34,350
Winstar Communications, Inc. (a).......................... 31,500 488,250
--------------
26,916,624
--------------
TECHNOLOGY 7.5%
Amdocs Ltd.--Convertible Preferred, TRACES................ 59,800 3,255,362
China Mobile Hong Kong Ltd.--ADR (China) (a).............. 328,000 10,639,500
NEON Communications, Inc. (a)............................. 60,000 2,092,500
TyCom, Ltd. (Bermuda) (a)................................. 120,000 4,605,000
--------------
20,592,362
--------------
UTILITIES 3.4%
Enel SpA--ADR (Italy) (a)................................. 10,000 392,000
Global Crossing Ltd. (Bermuda) (a)........................ 56,580 1,753,980
</TABLE>

See Notes to Financial Statements

12
<PAGE> 14

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
UTILITIES (CONTINUED)
Global Crossing Ltd.--Convertible Preferred, 144A--Private
Placement (Bermuda) (b)................................. 12,600 $ 2,439,675
NEXTLINK Communications, Inc., Class A (a)................ 45,000 1,583,438
Verizon Communications.................................... 39,900 1,932,656
WorldCom, Inc. (a)........................................ 45,000 1,366,875
--------------
9,468,624
--------------

TOTAL COMMON AND PREFERRED STOCKS 79.0%.............................. 217,474,422
--------------
</TABLE>

<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FIXED INCOME SECURITIES 6.1%
CABLE TELEVISION 1.0%
$1,000 Continental Cablevision, Inc................ 8.300% 05/15/06 $ 1,041,262
1,000 Cox Communications, Inc. ................... 6.875 06/15/05 987,232
700 Liberty Media Corp.--144A--Private Placement
(b)......................................... 4.000 11/15/29 670,985
------------
2,699,479
------------
ELECTRIC UTILITIES 0.7%
1,000 Texas Utilities Electric Co. ............... 8.250 04/01/04 1,033,010
1,000 Union Electric Co. ......................... 7.375 12/15/04 1,014,769
------------
2,047,779
------------
OIL & GAS PIPELINE AND DISTRIBUTION 0.4%
1,000 Enron Corp. ................................ 7.125 05/15/07 996,136
------------
TELECOMMUNICATIONS 2.8%
1,000 360 Communications Co. ..................... 7.125 03/01/03 1,000,485
900 GTE Corp. .................................. 9.375 12/01/00 903,291
1,000 Sprint Corp. ............................... 8.125 07/15/02 1,022,157
3,000 Telefonos de Mexico, SA (Mexico)............ 4.250 06/15/04 3,776,250
1,000 WorldCom, Inc. ............................. 7.750 04/01/07 1,024,418
------------
7,726,601
------------
</TABLE>

See Notes to Financial Statements

13
<PAGE> 15

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
TECHNOLOGY 1.2%
$1,956 Covad Communications Group, Inc.,
144A--Private Placement (b)................. 6.000% 09/15/05 $ 1,857,868
1,447 Hutchison Whampoa Ltd.--ADR (China)......... 2.875 09/15/03 1,459,661
------------
3,317,529
------------

TOTAL FIXED INCOME SECURITIES 6.1%..................................... 16,787,524
------------
TOTAL LONG-TERM INVESTMENTS 85.1%
(Cost $146,352,996)................................................... 234,261,946
SHORT-TERM INVESTMENTS 13.9%
Federal National Mortgage Association Discount Notes
($38,455,000 par, yielding 6.320%, 10/20/00 maturity)
(Cost $38,448,249).................................................... 38,448,249
------------
TOTAL INVESTMENTS 99.0%
(Cost $184,801,245)................................................... 272,710,195
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%............................. 2,659,693
------------

NET ASSETS 100.0%...................................................... $275,369,888
============
</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, as amended. These securities may be resold in
transactions exempt from registration which are normally transactions with
qualified institutional buyers.

ADR--American Depositary Receipts
ADS--American Depositary Shares
PRIDES--Preferred Redeemable Increased Dividend Securities
TRACES--Trust Automatic Common Exchange Securities

See Notes to Financial Statements

14
<PAGE> 16

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $184,801,245)....................... $272,710,195
Cash........................................................ 22,536
Receivables:
Fund Shares Sold.......................................... 4,145,411
Interest.................................................. 283,660
Dividends................................................. 223,792
Other....................................................... 10,479
------------
Total Assets............................................ 277,396,073
------------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 1,104,867
Investments Purchased..................................... 345,400
Distributor and Affiliates................................ 187,843
Investment Advisory Fee................................... 137,608
Trustees' Deferred Compensation and Retirement Plans........ 194,570
Accrued Expenses............................................ 55,897
------------
Total Liabilities....................................... 2,026,185
------------
NET ASSETS.................................................. $275,369,888
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $167,255,086
Net Unrealized Appreciation................................. 87,908,950
Accumulated Net Realized Gain............................... 20,224,121
Accumulated Distributions in Excess of Net Investment
Income.................................................... (18,269)
------------
NET ASSETS.................................................. $275,369,888
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $179,802,349 and 7,129,382 shares of
beneficial interest issued and outstanding)............. $ 25.22
Maximum sales charge (5.75%* of offering price)......... 1.54
------------
Maximum offering price to public........................ $ 26.76
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $74,485,532 and 2,962,934 shares of
beneficial interest issued and outstanding)............. $ 25.14
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $21,082,007 and 838,858 shares of
beneficial interest issued and outstanding)............. $ 25.13
============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

15
<PAGE> 17

Statement of Operations
For the Six Months Ended September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 2,092,483
Interest.................................................... 1,098,970
-----------
Total Income............................................ 3,191,453
-----------
EXPENSES:
Investment Advisory Fee..................................... 700,042
Distribution (12b-1) and Services Fees (Attributed to
Classes A, B and C of $162,266, $367,768 and $59,720,
respectively)............................................. 589,754
Shareholder Services........................................ 140,442
Trustees' Fees and Related Expenses......................... 18,233
Legal....................................................... 10,029
Custody..................................................... 9,866
Other....................................................... 98,957
-----------
Total Expenses.......................................... 1,567,323
Less Credits Earned on Cash Balances.................... 4,756
-----------
Net Expenses............................................ 1,562,567
-----------
NET INVESTMENT INCOME....................................... $ 1,628,886
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $11,472,102
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 73,435,949
End of the Period......................................... 87,908,950
-----------
Net Unrealized Appreciation During the Period............... 14,473,001
-----------
NET REALIZED AND UNREALIZED GAIN............................ $25,945,103
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $27,573,989
===========
</TABLE>

See Notes to Financial Statements

16
<PAGE> 18

Statement of Changes in Net Assets
For the Six Months Ended September 30, 2000 and the Year Ended
March 31, 2000 (Unaudited)

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
-----------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.............................. $ 1,628,886 $ 2,266,516
Net Realized Gain.................................. 11,472,102 15,579,388
Net Unrealized Appreciation During the Period...... 14,473,001 38,194,175
------------ ------------
Change in Net Assets from Operations............... 27,573,989 56,040,079
------------ ------------
Distributions from Net Investment Income........... (1,551,219) (2,284,696)
Distributions in Excess of Net Investment Income... -0- (95,936)
------------ ------------
Distributions from and in Excess of Net Investment
Income*.......................................... (1,551,219) (2,380,632)
Distributions from Net Realized Gain*.............. -0- (8,887,968)
------------ ------------
Total Distributions................................ (1,551,219) (11,268,600)
------------ ------------

NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES....................................... 26,022,770 44,771,479
------------ ------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.......................... 118,020,028 32,510,689
Net Asset Value of Shares Issued Through Dividend
Reinvestment..................................... 1,301,505 9,916,837
Cost of Shares Repurchased......................... (69,455,154) (40,829,395)
------------ ------------

NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS..................................... 49,866,379 1,598,131
------------ ------------

TOTAL INCREASE IN NET ASSETS....................... 75,889,149 46,369,610

NET ASSETS:
Beginning of the Period............................ 199,480,739 153,111,129
------------ ------------
End of the Period (Including accumulated
distributions in excess of net investment income
of $18,269 and $95,936, respectively)............ $275,369,888 $199,480,739
============ ============
* Distributions by Class
---------------------------------------------------
Distributions from and in Excess of Net Investment
Income:
Class A Shares................................... $ (1,182,738) (1,295,698)
Class B Shares................................... (300,401) (1,005,190)
Class C Shares................................... (68,080) (79,744)
------------ ------------
$ (1,551,219) $ (2,380,632)
============ ============
Distributions from Net Realized Gain:
Class A Shares................................... $ -0- $ (3,740,190)
Class B Shares................................... -0- (4,770,849)
Class C Shares................................... -0- (376,929)
------------ ------------
$ -0- $ (8,887,968)
============ ============
</TABLE>

See Notes to Financial Statements

17
<PAGE> 19

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS YEAR NINE MONTHS
ENDED ENDED ENDED YEAR ENDED JUNE 30,
SEPTEMBER 30, MARCH 31, MARCH 31, ------------------------
CLASS A SHARES 2000 2000 1999 1998 1997 1996
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF THE PERIOD............ $22.66 $17.47 $17.66 $16.44 $15.30 $13.39
------ ------ ------ ------ ------ ------
Net Investment Income.... 0.18 0.35 0.31 0.43 0.64 0.54
Net Realized and
Unrealized Gain........ 2.56 6.28 0.01 3.91 1.31 2.07
------ ------ ------ ------ ------ ------
Total from Investment
Operations............... 2.74 6.63 0.32 4.34 1.95 2.61
------ ------ ------ ------ ------ ------
Less:
Distributions from and in
Excess of Net
Investment Income...... 0.18 0.36 0.30 0.48 0.61 0.70
Distributions from and in
Excess of Net Realized
Gain................... -0- 1.08 0.21 1.69 0.20 -0-
Return of Capital
Distribution........... -0- -0- -0- 0.95 -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions........ 0.18 1.44 0.51 3.12 0.81 0.70
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD................... $25.22 $22.66 $17.47 $17.66 $16.44 $15.30
====== ====== ====== ====== ====== ======

Total Return (a)........... 12.15%* 39.44% 1.72%* 28.17% 13.20% 19.93%
Net Assets at End of the
Period (In millions)..... $179.8 $ 89.1 $ 62.1 $ 60.4 $ 52.5 $ 57.7
Ratio of Expenses to
Average Net Assets (b)... 1.16% 1.26% 1.24% 1.30% 1.41% 1.38%
Ratio of Net Investment
Income to Average Net
Assets (b)............... 1.81% 1.76% 2.29% 2.47% 4.03% 3.61%
Portfolio Turnover......... 10%* 32% 13%* 23% 102% 121%
</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

18
<PAGE> 20

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS YEAR NINE MONTHS
ENDED ENDED ENDED YEAR ENDED JUNE 30,
SEPTEMBER 30, MARCH 31, MARCH 31, ------------------------
CLASS B SHARES 2000 2000 1999 1998 1997 1996
--------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF THE PERIOD............. $22.60 $17.44 $17.63 $16.43 $15.30 $13.36
------ ------ ------ ------ ------ ------
Net Investment Income..... 0.14 0.20 0.21 0.31 0.52 0.43
Net Realized and
Unrealized Gain......... 2.51 6.26 0.01 3.89 1.30 2.08
------ ------ ------ ------ ------ ------
Total from Investment
Operations................ 2.65 6.46 0.22 4.20 1.82 2.51
------ ------ ------ ------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income.................. 0.11 0.22 0.20 0.36 0.49 0.57
Distributions from and in
Excess of Net Realized
Gain.................... -0- 1.08 0.21 1.69 0.20 -0-
Return of Capital
Distribution............ -0- -0- -0- 0.95 -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions......... 0.11 1.30 0.41 3.00 0.69 0.57
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.................... $25.14 $22.60 $17.44 $17.63 $16.43 $15.30
====== ====== ====== ====== ====== ======

Total Return (a)............ 11.76%* 38.30% 1.21%* 27.20% 12.30% 19.08%
Net Assets at End of the
Period (In millions)...... $ 74.5 $101.3 $ 84.1 $ 86.8 $ 83.3 $ 92.9
Ratio of Expenses to Average
Net Assets (b)............ 1.91% 2.01% 1.99% 2.07% 2.17% 2.13%
Ratio of Net Investment
Income to Average Net
Assets (b)................ 1.06% 1.01% 1.53% 1.74% 3.27% 2.86%
Portfolio Turnover.......... 10%* 32% 13%* 23% 102% 121%
</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

19
<PAGE> 21

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS YEAR NINE MONTHS
ENDED ENDED ENDED YEAR ENDED JUNE 30,
CLASS C SHARES SEPTEMBER 30, MARCH 31, MARCH 31, ------------------------
2000 2000 1999 1998 1997 1996
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF THE PERIOD............. $22.59 $17.43 $17.62 $16.43 $15.29 $13.36
------ ------ ------ ------ ------ ------
Net Investment Income..... 0.11 0.20 0.21 0.31 0.50 0.47
Net Realized and
Unrealized Gain......... 2.54 6.26 0.01 3.88 1.33 2.03
------ ------ ------ ------ ------ ------
Total from Investment
Operations................ 2.65 6.46 0.22 4.19 1.83 2.50
------ ------ ------ ------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income.................. 0.11 0.22 0.20 0.36 0.49 0.57
Distributions from and in
Excess of Net Realized
Gain.................... -0- 1.08 0.21 1.69 0.20 -0-
Return of Capital
Distribution............ -0- -0- -0- 0.95 -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions......... 0.11 1.30 0.41 3.00 0.69 0.57
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.................... $25.13 $22.59 $17.43 $17.62 $16.43 $15.29
====== ====== ====== ====== ====== ======

Total Return (a)............ 11.77%* 38.32% 1.22%* 27.14% 12.37% 19.00%
Net Assets at End of the
Period (In millions)...... $ 21.1 $ 9.2 $ 7.0 $ 5.9 $ 4.9 $ 5.0
Ratio of Expenses to Average
Net Assets (b)............ 1.91% 2.01% 1.99% 2.06% 2.17% 2.13%
Ratio of Net Investment
Income to Average Net
Assets (b)................ 1.06% 1.01% 1.53% 1.73% 3.23% 2.78%
Portfolio Turnover.......... 10%* 32% 13%* 23% 102% 121%
</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

20
<PAGE> 22

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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 seek 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.

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 accounting principles
generally accepted in the United States of America 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 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 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 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.

21
<PAGE> 23

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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.

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.

At September 30, 2000, for federal income tax purposes the cost of long- and
short-term investments is $184,801,245, the aggregate gross unrealized
appreciation is $94,377,522 and the aggregate gross unrealized depreciation is
$6,468,572, resulting in net unrealized appreciation on long- and short-term
investments of $87,908,950.

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.

Due to inherent differences in the recognition of expenses under generally
accepted accounting principles 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.

F. EXPENSE REDUCTIONS During the six months ended September 30, 2000, the Fund's
custody fee was reduced by $4,756 as a result of credits earned on overnight
cash balances.

22
<PAGE> 24

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE 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 six months ended September 30, 2000, the Fund recognized expenses of
approximately $4,300 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the six months ended September 30, 2000, the Fund recognized expenses of
approximately $17,900 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 six months ended September
30, 2000, the Fund recognized expenses of approximately $95,300. 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.

23
<PAGE> 25

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

3. CAPITAL TRANSACTIONS

At September 30, 2000, capital aggregated $126,464,242, $24,631,126 and
$16,159,718 for Classes A, B and C, respectively. For the six months ended
September 30, 2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................ 3,620,443 $ 79,760,749
Class B................................................ 1,186,868 27,356,215
Class C................................................ 463,053 10,903,064
---------- ------------
Total Sales.............................................. 5,270,364 $118,020,028
========== ============
Dividend Reinvestment:
Class A................................................ 42,623 $ 999,879
Class B................................................ 10,779 252,330
Class C................................................ 2,094 49,296
---------- ------------
Total Dividend Reinvestment.............................. 55,496 $ 1,301,505
========== ============
Repurchases:
Class A................................................ (464,769) $(10,684,448)
Class B................................................ (2,714,653) (58,064,322)
Class C................................................ (31,623) (706,384)
---------- ------------
Total Repurchases........................................ (3,211,045) $(69,455,154)
========== ============
</TABLE>

24
<PAGE> 26

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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>

25
<PAGE> 27

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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 six months ended September 30, 2000,
2,304,830 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 six months ended September 30, 2000, no Class C Shares
converted to Class A Shares. Class B and C Shares are offered without a front
end sales charge, but are subject to a contingent deferred sales charge (CDSC).
The CDSC will be imposed on most redemptions made within six years of the
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 AS A
PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO 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 six months ended September 30, 2000, Van Kampen, as Distributor for
the Fund, received net commissions on sales of the Fund's Class A Shares of
approximately $69,000 and CDSC on redeemed shares of approximately $36,300.
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 $42,066,941 and $19,651,362,
respectively.

26
<PAGE> 28

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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% 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 six months ended September 30, 2000, are payments retained by Van
Kampen of approximately $311,700.

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-rata percentage of
quarterly net assets. The Fund has not borrowed against the credit facility
during the period.

27
<PAGE> 29

VAN KAMPEN FUNDS

THE VAN KAMPEN
FAMILY OF FUNDS

Growth

Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology

Growth and Income

Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value

Global/International

Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income*
Tax Managed Global Franchise
Worldwide High Income

Income

Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income

Capital Preservation

Reserve
Tax Free Money

Senior Loan

Prime Rate Income Trust
Senior Floating Rate

Tax Free

California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal**
Insured Tax Free Income
Intermediate Term Municipal
Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income

To find out more about any of these funds, ask your financial advisor for a
prospectus, which contains more complete information, including sales charges,
risks, and ongoing expenses. Please read it carefully before you invest or send
money.

To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:

- visit our Web site at
WWW.VANKAMPEN.COM--
to view a prospectus, select
Download Prospectus [COMPUTER ICON]

- call us at 1-800-341-2911
weekdays from 7:00 a.m. to 7:00 p.m.
central time. Telecommunications
Device for the Deaf users, call
1-800-421-2833.

[PHONE ICON]

- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us

[MAIL ICON]

* Closed to new investors

** Open to new investors for a limited time

28
<PAGE> 30

FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN UTILITY FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN
JERRY D. CHOATE
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY

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 L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer

RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents

INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

DISTRIBUTOR

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

SHAREHOLDER SERVICING AGENT

VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 418256
Kansas City, Missouri 64121-9256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

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

INDEPENDENT AUDITORS(1)

ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP to
be the Fund's independent auditors. PricewaterhouseCoopers LLP ceased being
the Fund's independent auditors effective May 18, 2000. The cessation of the
client-auditor relationship between the Fund and PricewaterhouseCoopers was
based solely on a possible future business relationship by
PricewaterhouseCoopers with an affiliate for the Fund's investment Adviser.

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

(SM) denotes a service mark of Van Kampen Funds Inc.

This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares,
the sales charges on shares of the Fund, and other pertinent data. After March
31, 2001, the report, if used with prospective investors, must be accompanied by
a quarterly performance update.

29
<PAGE> 31

<TABLE>
<S> <C>
Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 6
TOP FIVE SECTORS 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 11

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 12
FINANCIAL STATEMENTS 16
NOTES TO FINANCIAL STATEMENTS 22
FUND OFFICERS AND IMPORTANT ADDRESSES 29
</TABLE>

Apply our
generations of
money-management
experience
to helping you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 32

OVERVIEW

LETTER TO SHAREHOLDERS
October 20, 2000

Dear Shareholder,
The first three quarters of 2000 proved to be especially volatile, with all of
the major markets declining in the spring and spending the following months
trying to recover. To manage one's portfolio during such unpredictable times
requires investment-management experience, and the following pages should give
you some insight into how we have performed in this difficult environment.

At Van Kampen, we place a high priority on providing you and
your financial advisor with the information you need to help
you monitor your investments during all types of markets. With
nearly four generations of investment-management experience, we've been around
long enough to understand that by investing with Van Kampen you're entrusting us
with much more than your money. Your investments may help make it possible to
afford your next house, keep up with rising college costs, or enjoy a
comfortable retirement.

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments

1
<PAGE> 33

ECONOMIC SNAPSHOT

2
<PAGE> 34

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998--September 30, 2000)
[BAR GRAPH]

<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.8
Dec 98 5.9
Mar 99 3.5
Jun 99 2.5
Sep 99 5.7
Dec 99 8.3
Mar 00 4.8
Jun 00 5.6
Sep 00 2.7
</TABLE>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(September 30, 1998--September 30, 2000)

[LINE GRAPH]

3
<PAGE> 35

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of September 30, 2000)

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six-month total return based on
NAV(1) -5.05% -5.41% -5.40%
-------------------------------------------------------------------------
Six-month total return(2) -10.50% -10.14% -6.34%
-------------------------------------------------------------------------
One-year total return(2) 68.64% 72.59% 76.68%
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 38.07% 38.80% 38.99%
-------------------------------------------------------------------------
Commencement date 05/29/96 05/29/96 05/29/96
-------------------------------------------------------------------------
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (5.75% for Class A Shares) or
contingent deferred sales charge ("CDSC"). On purchases of Class A Shares of
$1 million or more, a CDSC of 1% may be imposed on certain redemptions made
within one year of purchase. Returns for Class B Shares are calculated
without the effect of the maximum 5% CDSC, charged on certain redemptions
made within one year of purchase and declining to 0% after the fifth year.
Returns for Class C Shares are calculated without the effect of the maximum
1% CDSC, charged on certain redemptions made within one year of purchase. If
the sales charges were included, total returns would be lower.

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (5.75% for Class A
Shares) or contingent deferred sales charge ("CDSC"). On purchases of Class
A Shares of $1 million or more, a CDSC of 1% may be imposed on certain
redemptions made within one year of purchase. Returns for Class B Shares are
calculated with the effect of the maximum 5% CDSC, charged on certain
redemptions made within one year of purchase and declining to 0% after the
fifth year. Returns for Class C Shares are calculated with the effect of the
maximum 1% CDSC, charged on certain redemptions made within one year of
purchase.

The Fund's performance during the period was largely attributable to
investments in the technology sector, which performed favorably for the
period. Additionally, securities purchased during initial public offerings
contributed to the Fund's return. There is no guarantee that this
performance record or the circumstances leading to it can be replicated in
the future.

4
<PAGE> 36

Although the Fund may invest its assets in securities of larger sized
companies, the Fund invests primarily in equity securities of small- and
mid-sized companies. These types of companies may have limited product
lines, markets or financial resources and their securities may be subject to
more erratic market movements than those of larger companies. Foreign
investments may magnify volatility due to changes in foreign exchange rates,
the political and economic uncertainties in foreign countries, and the
potential lack of liquidity, government supervision, and regulation.

Market forecasts provided in this report may not necessarily come to pass.

5
<PAGE> 37

PORTFOLIO AT A GLANCE

TOP TEN HOLDINGS

(as a percentage of long-term investments--September 30, 2000)

1. NEWPORT 2.9%
Manufactures components for the
aerospace, communications, and
semiconductor industries.

2. CHECK POINT SOFTWARE
TECHNOLOGIES 2.9%
Provides Internet security by
blocking viruses and other unwanted
Web content.

3. SDL 2.8%
Sells bandwidth-enhancing products
for fiber-optic and satellite commu-
nication networks.

4. ALZA 2.5%
Develops pharmaceuticals and
drug-delivery systems, such as the
skin patch.

5. EXTREME NETWORKS 2.5%
Provides networking solutions to the
computer and Internet industries.

6. INTERWOVEN 2.5%
Provides content-management software
for Web sites of large businesses.

7. JUNIPER NETWORKS 2.4%
Produces hardware and software to
route traffic on the Internet.

8. APPLIED MICRO CIRCUITS 2.3%
Develops high-speed integrated
circuits for data and
telecommunications.

9. IDEC PHARMACEUTICALS 2.3%
Develops pharmaceuticals for treating
cancer and other diseases.

10. MICROMUSE 2.2%
Produces software that monitors and
manages information-technology
infrastructures.
</TABLE>

TOP FIVE SECTORS*

(as a percentage of long-term investments)

[BAR GRAPH]

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------ --------------
<S> <C> <C>
Technology 48.5 62.9
Pharmaceuticals 12.8 1.0
Energy 8.3 5.2
Health Care 7.2 3.2
Consumer Services 7.1 8.0
</TABLE>

* These sectors represent broad groupings of related industries.

6
<PAGE> 38

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN AGGRESSIVE GROWTH
FUND ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND
INFLUENCED THE FUND'S RETURN DURING THE SIX-MONTH PERIOD ENDED SEPTEMBER 30,
2000. THE TEAM IS CO-LED BY SENIOR PORTFOLIO MANAGER GARY LEWIS AND SENIOR
PORTFOLIO MANAGER DUDLEY BRICKHOUSE. LEWIS HAS MANAGED THE FUND SINCE ITS
INCEPTION IN 1996 AND HAS BEEN IN THE INVESTMENT INDUSTRY SINCE 1979. BRICKHOUSE
HAS MANAGED THE FUND SINCE 1997 AND HAS BEEN IN THE INVESTMENT INDUSTRY SINCE
1990. THEY ARE JOINED BY SENIOR PORTFOLIO MANAGERS JANET LUBY AND DAVID WALKER
AND PORTFOLIO MANAGER MATTHEW HART.

[PHOTO] [PHOTO] [PHOTO] [PHOTO] [PHOTO]

Q WERE YOU PLEASED WITH THE
FUND'S PERFORMANCE OVER THE PAST SIX MONTHS, CONSIDERING THE MARKET
CONDITIONS YOU WERE UP AGAINST?

A It is safe to say we were pleased
but not entirely satisfied. Although the fund's return of -5.05 percent
outperformed the Russell 2500(R) Growth Index, it underperformed the Russell
2000(R) Index, for the six months ended September 30, 2000 (Class A shares at
net asset value; if the maximum sales charge of 5.75 percent were included, the
return would have been lower). Past performance is no guarantee of future
results, and as a result of recent market activity, fund performance may vary
from the figures shown. By comparison, the Russell 2000(R) Index returned -2.68
percent, and the Russell 2500(R) Growth Index, which more closely resembles the
fund, returned -9.65 percent. The Russell 2000(R) Index reflects the general
performance of small-cap stocks, and the Russell 2500(R) Growth Index measures
the performance of those Russell 2500(R) companies with higher price-to-book
ratios and higher forecasted growth values. These indexes are statistical
composites that do not include any commissions or sales charges that would be
paid by an investor purchasing the securities they represent. Such costs would
lower the performance of the indexes. It is not possible to invest directly in
an index. Please refer to the chart and footnotes on page 4 for additional fund
performance results.

The fund recovered quite nicely from the significant market correction that
took place in the spring. The first two months of the fiscal year, April and May
of 2000, saw sharp declines in

7
<PAGE> 39

stock prices, especially in the technology-laden NASDAQ index, which dipped
close to 3000 in late May, down from its peak of 5048 on March 10. Some of the
selling was simple profit-taking, as investors took advantage of the run-up in
prices that occurred between October 1999 and March 2000 and reacted to the
notion that stock valuations had reached unjustifiably high levels.

Another important factor in the sell-off was the Federal Reserve Board's
push to control the growth rate of the economy and keep inflation in check.
Concerned that brisk economic growth would ignite inflation, the Fed hiked key
short-term interest rates four times over the past year, the last increase
coming in May 2000. Many investors worried that rising interest rates would slow
the economy, dampen business investment and consumer spending, and put pressure
on corporate earnings.

These fears hit some of the more speculative stocks in the technology sector
especially hard. Many of these stocks were trading at lofty valuations, some
with triple-digit price-to-earnings ratios. When investors sensed that corporate
earnings might be squeezed, they bailed out of what they considered to be the
most vulnerable stocks.

Prices have recovered somewhat since then, though we continue to see
volatility as the market tries to gauge the impact of rising interest rates,
higher commodities prices, and other factors. Corporate earnings are once again
in the spotlight, as investors are favoring companies with more visible, more
reliable earnings prospects.

Even though the fund is weighted primarily in technology stocks, we believe
our strategy has positioned the fund to hold stocks that may offer excellent
potential in the current market environment. We try to anticipate a firm's
earnings potential, seeking out those with rising earnings expectations and
rising valuations, because these are the stocks the market has historically
rewarded with higher prices.

Q THE FUND WAS REOPENED TO NEW
INVESTORS ON MAY 1, 2000, AFTER HAVING BEEN CLOSED TO NEW INVESTORS SINCE
DECEMBER 1999. WERE YOU CONCERNED THAT THE FUND WAS REOPENING DURING A
DIFFICULT TIME FOR THE STOCK MARKET, AND DID IT AFFECT YOUR APPROACH?

A We weren't concerned about the
timing of the fund's reopening because we believe our approach is solid. We
decided to reopen the fund because we sensed that the explosion in new
technologies was still in its early stages. Telecommunications, e-commerce, and
other technologically advanced sectors of the economy were on the verge of
breakthroughs that had the potential to spur demand and accelerate the pace at
which these industries develop. We wanted to be in a position to participate in
the investment opportunities that may emerge as we identify the companies that
could benefit from this expansion.

The most significant adjustment to the portfolio was to broaden the fund's
focus to include stocks with larger

8
<PAGE> 40

market capitalizations. While the fund could always invest in companies of any
size, it had previously focused on small and mid-sized companies. But with the
rapid growth of the market, many of these firms are now much larger in terms of
capitalization. Also, the net assets of the fund have been expanding, making it
difficult to invest strictly in smaller companies while still remaining true to
the fund's approach of selecting companies based on rising earnings expectations
and rising valuations. So, we thought it seemed to be the right time to reopen
the fund, and we remain confident in the fund's investment approach.

Q HAS THIS BROADENING FOCUS
SIGNIFICANTLY CHANGED THE COMPOSITION OF THE FUND'S INVESTMENTS?

A No, not significantly. The fund
remained heavily invested in the technology sector during the reporting period.
In fact, 8 of the fund's top 10 holdings were in technology, representing 21
percent of the fund's long-term investments. This is a market sector that, in
our opinion, continues to hold promise as demand rises for wireless
telecommunications, broad-bandwidth data traffic, and Internet-based commerce
software and services.

We also believed the health-care sector offered a number of opportunities.
For example, certain specialty pharmaceutical companies stand to benefit from
the aging population, the expiration of competitors' drug patents, and a strong
pipeline of new products. One such company, Alza, is among the fund's top 10
holdings.

Another area we liked was the energy sector, including the drilling, oil
services, and power-producer industries. Strong demand has driven up the prices
of crude oil and natural gas amid shrinking inventories and supply shortages.
Calpine, an independent power producer, is one of the fund's top 15 holdings.

Q WHAT ARE SOME OF THE STOCKS
THAT PERFORMED WELL FOR THE FUND?

A In the technology portion of the
portfolio, we saw strong performance from Integrated Device Technology, a
manufacturer of semiconductors; Newport, a maker of capital equipment for the
manufacture of optical network components; and Extreme Networks, a network
equipment and consulting firm. All of these companies benefited from the
explosion in Internet traffic and the growing need for data exchange and
storage.

Strong health-care stocks included medical testing firm Quest Diagnostics
and pharmaceutical makers Alza and Ivax. We also benefited from the solid
performance of Noble Drilling and Nabors Industries in the oil services field.

Of course, not all of the stocks in the fund performed as favorably, nor is
there any guarantee that any of these stocks will continue to perform or will be
held by the fund in the future. For additional fund highlights, please refer to
page 6.

9
<PAGE> 41

Q WHICH STOCKS PERFORMED BELOW
YOUR EXPECTATIONS DURING THE PERIOD?

A The fund had weak performance
from two of its semiconductor capital equipment stocks, Varian and KLA-Tencor,
due to the industry's declining book-to-bill ratio--a measure of the
semiconductor industry's health--and expectations of lower corporate spending on
computers and other components. Vishay Intertechnology and AVX Corporation, both
of which make electronic components such as capacitors and resistors for cell
phones, VCRs, and photocopiers, were hurt by overcapacity and falling prices.

The fund was also stung when Motorola and Nokia missed quarterly earnings
estimates. The fund did not own these stocks, but their weaker-than-expected
earnings affected the prices of other related stocks that the fund held at the
time. Alpha Industries and Anadigics, for example, are wireless component
suppliers that were hurt by the disappointing earnings of Motorola and Nokia and
by declining sales estimates for handheld cellular phones.

Q WHAT IS YOUR OUTLOOK FOR
THE MARKET?

A Overall, we are bullish on the
stock market, especially the technology sector. In the short term, investors
will likely continue to focus on corporate earnings. The fourth quarter of 2000
started with profit warnings from traditional technology bellwethers, which
triggered a fairly severe sell-off among these stocks. We anticipate that the
market may move into a more favorable environment over the rest of the year.

We believe the Federal Reserve Board may hold interest rates steady at the
next meeting of the Federal Open Market Committee. The market appears to be
anticipating no further rate increases until next year, as the economy appears
to be growing more slowly with inflation under control.

We expect to keep the fund fully invested, with only about 2 percent of its
assets in cash and a very similar portfolio composition to what we have now.
This includes an emphasis on technology stocks that should benefit from Internet
usage, computer networking, and e-commerce. We will continue to let our
investment process point the way to stocks that are likely to be rewarded in
this environment, as we rely heavily on our research capabilities to identify
the stocks that will be powered by strong earnings expectations and rising
valuations.

10
<PAGE> 42

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

CLASS A SHARES: Van Kampen mutual fund shares are divided into three groupings,
called Class A, Class B, and Class C shares, each with varying fees and sales
charges.

EARNINGS ESTIMATE: A forecast for a company's net income during a given period.
An earnings estimate can come from the company's management as well as from
independent analysts.

FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank of the United States. Its policy-making
committee, called the Federal Open Market Committee, meets eight times a year to
establish monetary policy and monitor the economic pulse of the United States.

MARKET CAPITALIZATION: The size of a company, as measured by the value of its
issued and outstanding stock.

PRICE-TO-EARNINGS (P/E) RATIO: Shows the "multiple" of earnings at which a stock
is selling. The P/E ratio is calculated by dividing a stock's current price by
its current earnings per share. A high multiple means that investors are
optimistic about future growth and have bid up the stock's price.

VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue, book
value, and cash flow.

VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.

11
<PAGE> 43

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS* 99.4%
CONSUMER DISTRIBUTION 0.9%
CDW Computer Centers, Inc. (a)............................ 250,000 $ 17,250,000
PC Connection, Inc. (a)................................... 150,000 8,550,000
--------------
25,800,000
--------------
CONSUMER SERVICES 7.0%
Apollo Group, Inc., Class A (a)........................... 50,000 1,018,750
Arthur J. Gallagher & Co.................................. 200,000 11,825,000
Celestica, Inc. (a)....................................... 200,000 13,850,000
Golden West Financial Corp................................ 500,000 26,812,500
Macrovision Corp. (a)..................................... 400,000 32,400,000
Metris Companies, Inc. (a)................................ 500,000 19,750,000
Plexus Corp. (a).......................................... 500,000 35,250,000
Sanmina Corp. (a)......................................... 300,000 28,087,500
The Cheesecake Factory, Inc. (a).......................... 150,000 6,487,500
The PMI Group, Inc........................................ 250,000 16,937,500
--------------
192,418,750
--------------
ENERGY 8.3%
ENSCO International, Inc.................................. 800,000 30,600,000
EOG Resources, Inc. (a)................................... 800,000 31,100,000
Global Marine, Inc. (a)................................... 1,000,000 30,875,000
Kinder Morgan, Inc. (a)................................... 400,000 16,375,000
Nabors Industries, Inc. (a)............................... 800,000 41,920,000
Noble Drilling Corp. (a).................................. 600,000 30,150,000
Smith International, Inc. (a)............................. 500,000 40,781,250
Spinnaker Exploration Co. (a)............................. 150,000 5,231,250
--------------
227,032,500
--------------
FINANCE 2.6%
A.G. Edwards, Inc......................................... 700,000 36,618,750
AmeriCredit Corp. (a)..................................... 400,000 11,525,000
Investors Financial Services Corp. (a).................... 200,000 12,625,000
Silicon Valley Bancshares (a)............................. 200,000 11,646,875
--------------
72,415,625
--------------
HEALTHCARE 7.1%
Gilead Sciences, Inc. (a)................................. 200,000 21,937,500
Laboratory Corporation of America Holdings (a)............ 250,000 29,937,500
LifePoint Hospitals, Inc. (a)............................. 200,000 7,100,000
</TABLE>

See Notes to Financial Statements

12
<PAGE> 44

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
HEALTHCARE (CONTINUED)
Medicis Pharmaceutical Corp., Class A (a)................. 100,000 $ 6,150,000
Oxford Health Plans, Inc. (a)............................. 1,000,000 30,734,375
QLT PhotoTherapeutics, Inc. (a)........................... 400,000 28,350,000
Quest Diagnostics, Inc. (a)............................... 400,000 45,900,000
Universal Health Services, Inc., Class B (a).............. 300,000 25,687,500
--------------
195,796,875
--------------
PHARMACEUTICALS 12.7%
ALZA Corp. (a)............................................ 800,000 69,200,000
Andrx Group (a)........................................... 600,000 56,025,000
Celgene Corp. (a)......................................... 100,000 5,950,000
Cor Therapeutics, Inc. (a)................................ 500,000 31,156,250
Forest Laboratories, Inc. (a)............................. 200,000 22,937,500
IDEC Pharmaceuticals Corp. (a)............................ 350,000 61,375,781
IVAX Corp. (a)............................................ 700,000 32,200,000
MiniMed, Inc. (a)......................................... 200,000 17,875,000
Noven Pharmaceuticals, Inc. (a)........................... 200,000 8,550,000
Shire Pharmaceuticals Group PLC--ADR (United Kingdom)
(a)..................................................... 150,000 7,743,750
Teva Pharmaceutical Industries Ltd.--ADR (Israel)......... 500,000 36,593,750
--------------
349,607,031
--------------
PRODUCER MANUFACTURING 6.7%
Active Power, Inc. (a).................................... 200,000 12,400,000
C&D Technologies, Inc. (a)................................ 200,000 11,350,000
C-MAC Industries, Inc. (a)................................ 150,000 8,625,000
Cooper Cameron Corp. (a).................................. 144,600 10,655,213
Elantec Semiconductor, Inc. (a)........................... 300,000 29,887,500
Newport Corp. (a)......................................... 500,000 79,632,812
Power-One, Inc. (a)....................................... 500,000 30,257,812
--------------
182,808,337
--------------
TELECOMMUNICATIONS 1.4%
Cosine Communications, Inc. (a)........................... 50,000 2,778,125
Exar Corp. (a)............................................ 150,000 18,150,000
Natural MicroSystems Corp. (a)............................ 300,000 16,139,063
--------------
37,067,188
--------------
TECHNOLOGY 48.2%
Applied Micro Circuits Corp. (a).......................... 300,000 62,118,750
Ariba, Inc. (a)........................................... 300,000 42,979,687
Art Technology Group, Inc. (a)............................ 200,000 18,950,000
Avici Systems, Inc. (a)................................... 100,000 9,512,500
BEA Systems, Inc. (a)..................................... 600,000 46,725,000
Brocade Communications Systems, Inc. (a).................. 200,000 47,200,000
CacheFlow, Inc. (a)....................................... 200,000 28,600,000
Check Point Software Technologies, Ltd. (a)............... 500,000 78,750,000
</TABLE>

See Notes to Financial Statements

13
<PAGE> 45

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
CIENA Corp. (a)........................................... 400,000 $ 49,125,000
Cirrus Logic, Inc. (a).................................... 700,000 28,218,750
Extreme Networks, Inc. (a)................................ 600,000 68,700,000
Finisar Corp. (a)......................................... 300,000 14,512,500
Flextronics International Ltd. (a)........................ 200,000 16,425,000
i2 Technologies, Inc. (a)................................. 300,000 56,118,750
Integrated Device Technology, Inc. (a).................... 600,000 54,300,000
Interwoven, Inc. (a)...................................... 600,000 67,837,500
Jabil Circuit, Inc. (a)................................... 200,000 11,350,000
Juniper Networks, Inc. (a)................................ 300,000 65,681,250
Manugistics Group, Inc. (a)............................... 250,000 24,531,250
McDATA Corp., Class B (a)................................. 350,000 43,011,719
Mercury Interactive Corp. (a)............................. 300,000 47,025,000
Micrel, Inc. (a).......................................... 150,000 10,050,000
Micromuse, Inc. (a)....................................... 300,000 60,281,250
MMC Networks, Inc. (a).................................... 200,000 25,300,000
Netegrity, Inc. (a)....................................... 200,000 14,000,000
Network Appliance, Inc. (a)............................... 250,000 31,843,750
Polycom, Inc. (a)......................................... 300,000 20,090,625
Rational Software Corp. (a)............................... 500,000 34,687,500
Redback Networks, Inc. (a)................................ 250,000 40,984,375
SDL, Inc. (a)............................................. 250,000 77,328,125
SEI Investments Co. (a)................................... 200,000 14,150,000
Semtech Corp. (a)......................................... 700,000 30,187,500
Siebel Systems, Inc. (a).................................. 400,000 44,525,000
SIPEX Corp. (a)........................................... 200,000 8,412,500
Tech Data Corp. (a)....................................... 300,000 12,825,000
TTM Technologies, Inc. (a)................................ 37,500 881,250
Veeco Instruments, Inc. (a)............................... 150,000 15,939,844
--------------
1,323,159,375
--------------
UTILITIES 4.5%
Calpine Corp. (a)......................................... 550,000 57,406,250
Dynegy, Inc., Class A..................................... 800,000 45,600,000
TranSwitch Corp. (a)...................................... 300,000 19,125,000
--------------
122,131,250
--------------
TOTAL LONG-TERM INVESTMENTS 99.4%
(Cost $2,005,302,492)............................................... 2,728,236,931
</TABLE>

See Notes to Financial Statements

14
<PAGE> 46

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
REPURCHASE AGREEMENT 1.0%
DLJ Mortgage Acceptance Corp. ($26,330,000 par collateralized by U.S.
Government obligations in a pooled cash account, dated 09/29/00, to
be sold on 10/02/00 at $26,344,152) (Cost $26,330,000).............. $ 26,330,000
--------------

TOTAL INVESTMENTS 100.4%
(Cost $2,031,632,492)............................................... 2,754,566,931

LIABILITIES IN EXCESS OF OTHER ASSETS -0.4%.......................... (11,244,169)
--------------

NET ASSETS 100.0%.................................................... $2,743,322,762
==============
</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

15
<PAGE> 47

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $2,031,632,492)..................... $2,754,566,931
Receivables:
Investments Sold.......................................... 207,384,872
Fund Shares Sold.......................................... 16,898,259
Dividends................................................. 132,000
Interest.................................................. 9,509
Unamortized Organizational Costs............................ 13,928
Other....................................................... 14,791
--------------
Total Assets............................................ 2,979,020,290
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 224,669,492
Fund Shares Repurchased................................... 6,790,981
Distributor and Affiliates................................ 2,323,737
Investment Advisory Fee................................... 1,492,625
Custodian Bank............................................ 3,038
Accrued Expenses............................................ 265,294
Trustees' Deferred Compensation and Retirement Plans........ 152,361
--------------
Total Liabilities....................................... 235,697,528
--------------
NET ASSETS.................................................. $2,743,322,762
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,647,474,432
Net Unrealized Appreciation................................. 722,934,439
Accumulated Net Realized Gain............................... 386,546,230
Accumulated Net Investment Loss............................. (13,632,339)
--------------
NET ASSETS.................................................. $2,743,322,762
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,409,664,515 and 39,658,512 shares of
beneficial interest issued and outstanding)............. $ 35.55
Maximum sales charge (5.75%* of offering price)......... 2.17
--------------
Maximum offering price to public........................ $ 37.72
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $1,077,777,694 and 31,445,056 shares of
beneficial interest issued and outstanding)............. $ 34.27
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $255,880,553 and 7,447,287 shares of
beneficial interest issued and outstanding)............. $ 34.36
==============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

16
<PAGE> 48

Statement of Operations
For the Six Months Ended September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 3,502,244
Dividends................................................... 584,928
------------
Total Income............................................ 4,087,172
------------
EXPENSES:
Investment Advisory Fee..................................... 7,774,424
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $1,467,361, $4,501,293 and $1,011,410,
respectively)............................................. 6,980,064
Shareholder Services........................................ 2,078,309
Custody..................................................... 135,549
Trustees' Fees and Related Expenses......................... 41,378
Legal....................................................... 38,038
Amortization of Organizational Costs........................ 10,528
Other....................................................... 603,404
------------
Total Expenses.......................................... 17,661,694
Less Credits Earned on Overnight Cash Balances.......... 61,226
------------
Net Expenses............................................ 17,600,468
------------
NET INVESTMENT LOSS......................................... $(13,513,296)
============
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $193,654,878
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 989,605,632
End of the Period......................................... 722,934,439
------------
Net Unrealized Depreciation During the Period............... (266,671,193)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(73,016,315)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(86,529,611)
============
</TABLE>

See Notes to Financial Statements

17
<PAGE> 49

Statement of Changes in Net Assets
For the Six Months Ended September 30, 2000 and the Year Ended
March 31, 2000 (Unaudited)

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss.............................. $ (13,513,296) $ (15,016,872)
Net Realized Gain................................ 193,654,878 285,606,283
Net Unrealized Appreciation/Depreciation During
the Period..................................... (266,671,193) 821,424,169
-------------- --------------
Change in Net Assets from Operations............. (86,529,611) 1,092,013,580
-------------- --------------
Distributions from Net Realized Gain:
Class A Shares................................. -0- (44,926,473)
Class B Shares................................. -0- (42,825,702)
Class C Shares................................. -0- (7,505,533)
-------------- --------------
Total Distributions.............................. -0- (95,257,708)
-------------- --------------

NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES..................................... (86,529,611) 996,755,872
-------------- --------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold........................ 859,265,126 1,278,094,894
Net Asset Value of Shares Issued Through Dividend
Reinvestment................................... -0- 84,362,153
Cost of Shares Repurchased....................... (386,410,124) (503,929,502)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS................................... 472,855,002 858,527,545
-------------- --------------
TOTAL INCREASE IN NET ASSETS..................... 386,325,391 1,855,283,417
NET ASSETS:
Beginning of the Period.......................... 2,356,997,371 501,713,954
-------------- --------------
End of the Period (Including accumulated net
investment loss of $13,632,339 and $119,043,
respectively).................................. $2,743,322,762 $2,356,997,371
============== ==============
</TABLE>

See Notes to Financial Statements

18
<PAGE> 50

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS YEAR ENDED
ENDED YEAR ENDED ENDED JUNE 30,
CLASS A SHARES SEPTEMBER 30, MARCH 31, MARCH 31, ---------------
2000 (B) 2000 (B) 1999 (B) 1998 1997
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................... $ 37.44 $ 17.14 $13.68 $ 9.95 $ 9.12
--------- -------- ------ ------ ------
Net Investment Loss.......... (.13) (.24) (.13) (.13) (.07)
Net Realized and Unrealized
Gain/Loss.................. (1.76) 22.41 4.45 3.86 .90
--------- -------- ------ ------ ------
Total from Investment
Operations................... (1.89) 22.17 4.32 3.73 .83
Less Distributions from Net
Realized Gain................ -0- 1.87 .86 -0- -0-
--------- -------- ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD....................... $ 35.55 $ 37.44 $17.14 $13.68 $ 9.95
========= ======== ====== ====== ======

Total Return (a)............... -5.05%** 133.67% 33.72%** 37.49% 9.10%
Net Assets at End of the Period
(In millions)................ $ 1,409.7 $1,205.8 $242.6 $117.5 $ 84.0
Ratio of Expenses to Average
Net Assets*.................. 1.18% 1.25% 1.56% 1.44% 1.30%
Ratio of Net Investment Loss to
Average Net Assets*.......... (.82%) (.86%) (1.22%) (1.09%) (.81%)
Portfolio Turnover............. 143%** 139% 126%** 185% 186%

* 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 N/A 1.61% 1.61%
Ratio of Net Investment Loss to
Average Net Assets........... N/A N/A N/A (1.26%) (1.12%)
</TABLE>

** Non-Annualized

(b) Based on average shares outstanding.

N/A = Not Applicable

See Notes to Financial Statements

19
<PAGE> 51

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS YEAR ENDED
ENDED YEAR ENDED ENDED JUNE 30,
CLASS B SHARES SEPTEMBER 30, MARCH 31, MARCH 31, ---------------
2000 (B) 2000 (B) 1999 (B) 1998 1997
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................... $ 36.24 $ 16.75 $13.46 $ 9.87 $ 9.11
--------- ------- ------ ------ ------
Net Investment Loss.......... (.25) (.43) (.19) (.20) (.10)
Net Realized and Unrealized
Gain/Loss.................. (1.72) 21.79 4.34 3.79 .86
--------- ------- ------ ------ ------
Total from Investment
Operations................... (1.97) 21.36 4.15 3.59 .76
Less Distributions from Net
Realized Gain................ -0- 1.87 .86 -0- -0-
--------- ------- ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD....................... $ 34.27 $ 36.24 $16.75 $13.46 $ 9.87
========= ======= ====== ====== ======

Total Return (a)............... -5.41%** 131.91% 32.99%** 36.37% 8.34%
Net Assets at End of the Period
(In millions)................ $ 1,077.8 $ 948.5 $231.8 $148.4 $ 94.2
Ratio of Expenses to Average
Net Assets*.................. 1.94% 2.00% 2.33% 2.20% 2.05%
Ratio of Net Investment Loss to
Average Net Assets*.......... (1.58%) (1.61%) (1.99%) (1.85%) (1.55%)
Portfolio Turnover............. 143%** 139% 126%** 185% 186%

* 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 N/A 2.37% 2.35%
Ratio of Net Investment Loss to
Average Net Assets........... N/A N/A N/A (2.02%) (1.86%)
</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 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

20
<PAGE> 52

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
SIX MONTHS NINE MONTHS YEAR ENDED
ENDED YEAR ENDED ENDED JUNE 30,
CLASS C SHARES SEPTEMBER 30, MARCH 31, MARCH 31, ---------------
2000 (B) 2000 (B) 1999 (B) 1998 1997
----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD................... $ 36.33 $ 16.76 $13.47 $ 9.87 $ 9.11
------- ------- ------ ------ ------
Net Investment Loss.......... (.25) (.45) (.20) (.20) (.10)
Net Realized and Unrealized
Gain/Loss.................. 1.72 21.89 4.35 3.80 .86
------- ------- ------ ------ ------
Total from Investment
Operations................... (1.97) 21.44 4.15 3.60 .76
Less Distributions from Net
Realized Gain................ -0- 1.87 .86 -0- -0-
------- ------- ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD....................... $ 34.36 $ 36.33 $16.76 $13.47 $ 9.87
======= ======= ====== ====== ======

Total Return (a)............... -5.40%** 132.31% 32.96%** 36.47% 8.34%
Net Assets at End of the Period
(In millions)................ $ 255.9 $ 202.7 $ 27.4 $ 16.4 $ 10.8
Ratio of Expenses to Average
Net Assets*.................. 1.94% 2.01% 2.33% 2.20% 2.05%
Ratio of Net Investment Loss to
Average Net Assets*.......... (1.58%) (1.62%) (1.98%) (1.85%) (1.54%)
Portfolio Turnover............. 143%** 139% 126%** 185% 186%

* 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 N/A 2.36% 2.35%
Ratio of Net Investment Loss to
Average Net Assets........... N/A N/A N/A (2.02%) (1.85%)
</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

21
<PAGE> 53

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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. The Fund commenced investment operations on May 29,
1996 with three classes of common shares, Class A, Class B and Class C.

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

22
<PAGE> 54

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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.

At September 30, 2000, for federal income tax purposes, cost of long- and
short-term investments is $2,031,632,492; the aggregate gross unrealized
appreciation is $749,114,587 and the aggregate gross unrealized depreciation is
$26,180,148, resulting in net unrealized appreciation on long- and short-term
investments of $722,934,439.

F. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends
annually from net investment income and net realized gains, if any. For federal
income tax purposes, a net investment loss recognized in the current year cannot
be used to offset future years net investment income. Therefore, tax basis net
investment losses are reclassified to capital at the end of the Fund's fiscal
year.

G. EXPENSE REDUCTIONS During the six months ended September 30, 2000, the Fund's
custody fee was reduced by $61,226 as a result of credits earned on overnight
cash balances.

23
<PAGE> 55

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

2. INVESTMENT ADVISORY AGREEMENT AND
OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE 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 six months ended September 30, 2000, the Fund recognized expenses of
approximately $25,500, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the six months ended September 30, 2000, the Fund recognized expenses of
approximately $74,800, 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 six months ended September
30, 2000, the Fund recognized expenses of approximately $1,396,600. 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.

24
<PAGE> 56

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

3. CAPITAL TRANSACTIONS

At September 30, 2000, capital aggregated $869,204,040, $603,219,785 and
$175,050,607 for Classes A, B, and C, respectively. For the six months ended
September 30, 2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................... 16,478,106 $ 536,047,713
Class B............................................... 7,726,314 244,639,118
Class C............................................... 2,478,193 78,578,295
----------- -------------
Total Sales............................................. 26,682,613 $ 859,265,126
=========== =============
Dividend Reinvestment:
Class A............................................... -0- -0-
Class B............................................... -0- -0-
Class C............................................... -0- -0-
----------- -------------
Total Dividend Reinvestment............................. -0- -0-
=========== =============
Repurchases:
Class A............................................... (9,022,895) $(290,880,675)
Class B............................................... (2,452,067) (76,339,361)
Class C............................................... (611,171) (19,190,088)
----------- -------------
Total Repurchases....................................... (12,086,133) $(386,410,124)
=========== =============
</TABLE>

25
<PAGE> 57

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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>

Class B Shares purchased on or after June 1, 1996, 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 are purchased. Class B Shares purchased before June 1, 1996, and any
dividend reinvestment plan Class B Shares received on such shares, automatically
convert to Class A Shares six years after the end of the calendar month in which
the shares are purchased. For the six months ended September 30, 2000 and the
year ended March 31, 2000, 250,733 and 0 Class B Shares automatically converted
to Class A Shares, respectively, 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 C Shares received
thereon, automatically convert to Class A Shares ten years after the end of the
calendar month in which the shares are purchased. Class C Shares purchased on or
after January 1, 1997 do not possess a conversion feature. For the six months
ended September 30, and the year ended March 31, 2000 no Class C Shares
converted to Class A Shares. Class B and C Shares are offered without a front
end sales charge, but are subject to a contingent deferred sales charge (CDSC).
The CDSC will be imposed on most

26
<PAGE> 58

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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
AS A PERCENTAGE OF
DOLLAR AMOUNT
SUBJECT TO CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
First...................................................... 5.00% 1.00%
Second..................................................... 4.00% None
Third...................................................... 3.00% None
Fourth..................................................... 2.50% None
Fifth...................................................... 1.50% None
Sixth and Thereafter....................................... None None
</TABLE>

For the six months ended September 30, 2000, Van Kampen, as Distributor for
the Fund, received commissions on sales of the Fund's Class A shares of
approximately $731,000, and CDSC on redeemed shares of approximately $632,600.
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 $3,730,156,001 and $3,208,163,220,
respectively.

5. DISTRIBUTION AND SERVICE PLANS

Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these fees
for the six months ended September 30, 2000, are payments retained by Van Kampen
of approximately $4,188,700.

6. BORROWINGS

27
<PAGE> 59

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

Van Kampen, 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-rata percentage of quarterly
net assets. The Fund has not borrowed against the credit facility during the
period.

28
<PAGE> 60

FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN AGGRESSIVE GROWTH FUND

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 L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer

RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

DISTRIBUTOR

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

SHAREHOLDER SERVICING AGENT

VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

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

INDEPENDENT AUDITORS(1)

ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP
to be the Fund's independent auditors. PricewaterhouseCoopers LLP ceased
being the Fund's independent auditors effective May 18, 2000. The cessation
of the client-auditor relationship between the Fund and
PricewaterhouseCoopers was based solely on a possible future business
relationship by PricewaterhouseCoopers with an affiliate of the Fund's
investment Adviser.

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

(SM) denotes a service mark of Van Kampen Funds Inc.

This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charges on
shares of the Fund, and other pertinent
data. After March 31, 2001, the report, if used with prospective investors, must
be accompanied by a quarterly performance update.

29
<PAGE> 61

<TABLE>
<S> <C>
Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 6
TOP FIVE SECTORS 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 12

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 13
FINANCIAL STATEMENTS 17
NOTES TO FINANCIAL STATEMENTS 23

VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 30
FUND OFFICERS AND IMPORTANT ADDRESSES 31
</TABLE>

Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 62

OVERVIEW

LETTER TO SHAREHOLDERS
October 20, 2000

Dear Shareholder,

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments

1
<PAGE> 63

ECONOMIC SNAPSHOT

2
<PAGE> 64

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998 -- September 30, 2000)
[BAR GRAPH]

<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.70
</TABLE>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(September 30, 1998 -- September 30, 2000)

[LINE GRAPH]

3
<PAGE> 65

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of September 30, 2000)

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six-month total return based on
NAV(1) 2.46% 1.95% 1.95%
-------------------------------------------------------------------------
Six-month total return(2) -3.42% -3.05% .95%
-------------------------------------------------------------------------
One-year total return(2) 77.11% 81.19% 85.21%
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 39.74% 40.51% 40.56%
-------------------------------------------------------------------------
Commencement Date 12/27/95 12/27/95 12/27/95
-------------------------------------------------------------------------
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (5.75% for Class A Shares) or
contingent deferred sales charge ("CDSC") for Class B and Class C Shares. On
purchases of Class A Shares of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within one year of purchase. Returns for
Class B Shares are calculated without the effect of the maximum 5% CDSC,
charged on certain redemptions made within one year of purchase and
declining to 0% after the fifth year. Returns for Class C Shares are
calculated without the effect of the maximum 1% CDSC, charged on certain
redemptions made within one year of purchase. If the sales charges were
included, total returns would be lower. These returns do include Rule 12b-1
fees of up to .25% for Class A Shares and 1% for Class B and Class C Shares.

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (5.75% for Class A
Shares) or contingent deferred sales charge ("CDSC") for Class B and Class C
Shares and Rule 12b-1 fee. On purchases of Class A Shares of $1 million or
more, a CDSC of 1% may be imposed on certain redemptions made within one
year of purchase. Returns of Class B Shares are calculated with the effect
of the maximum 5% CDSC, charged on certain redemptions made within one year
of purchase and declining to 0% after the fifth year. Returns for Class C
Shares are calculated with the effect of the maximum 1% CDSC, charged on
certain redemptions made within one year of purchase. The Rule 12b-1 fee for
Class A Shares is up to .25% and for Class B and Class C Shares is 1%.

From the Fund's inception through the period ended September 30, 1999,
certain fees were waived and expenses were voluntarily reimbursed by the
Fund's adviser which had a material effect on the Fund's total return. Had
these fees not been waived and expenses reimbursed, the Fund's total return
would have been lower. The fee waiver and expense reimbursements were
voluntary in nature and have been discontinued at the Advisor's discretion.

4
<PAGE> 66

One factor impacting the Fund's total return for the life of the Fund was
the Fund's investments in initial public offerings (IPOs) in 1996. These
investments had a greater effect on fund performance in 1996 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 impact on performance as occurred in 1996.

The Fund's investments in less seasoned companies, special situations
involving new management, special projects and techniques, unusual
developments, mergers, or liquidations involve greater risks than more
conservative investments. Securities of foreign issuers may magnify
volatility of the Fund's portfolio due to changes in foreign exchange rates,
the political and economic uncertainties in foreign countries, and the
potential lack of liquidity, government supervision, and regulation.

Market forecasts provided in this report may not necessarily come to pass.

5
<PAGE> 67

PORTFOLIO AT A GLANCE

TOP TEN HOLDINGS

(as a percentage of long-term investments--September 30, 2000)

1. BROCADE COMMUNICATIONS
SYSTEMS 2.5%
Enables companies to manage growth of
their data storage requirements.

2. WATERS 2.4%
Makes high-performance liquid-
chromatography instruments.

3. ARIBA 2.3%
Produces business-to-business
e-commerce software.

4. RATIONAL SOFTWARE 2.1%
Develops systems to help automate and
simplify the software-development
process.

5. PE BIOSYSTEMS 1.9%
Develops instruments and other
products for the life-science
industry.

6. CALPINE 1.9%
Owns and operates power plants and
sells electricity predominately in
the United States.

7. CDW COMPUTER CENTERS 1.9%
Sells a broad range of computer
products and accessories.

8. APPLIED MICRO CIRCUITS 1.8%
Develops high-speed integrated
circuits for data and
telecommunications.

9. SIEBEL 1.6%
Helps enable electronic business-
to-business commerce.

10. PALM 1.6%
Manufactures and markets handheld
computing devices.
</TABLE>

TOP FIVE SECTORS*

(as a percentage of long-term investments)

[BAR GRAPH]

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------ --------------
<S> <C> <C>
Technology 57.5 58.1
Health Care 15.9 4.5
Consumer Services 7.4 10.8
Energy 6.1 6.7
Consumer Distribution 5.9 8.7
</TABLE>

* These sectors represent broad groupings of related industries.

6
<PAGE> 68

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN GROWTH FUND ABOUT
THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND INFLUENCED THE
FUND'S RETURN DURING THE SIX MONTHS ENDED SEPTEMBER 30, 2000. THE TEAM IS LED BY
JEFF D. NEW, SENIOR PORTFOLIO MANAGER, WHO HAS MANAGED THE FUND SINCE ITS
INCEPTION IN DECEMBER 1995 AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1987.
HE IS JOINED BY MICHAEL DAVIS AND MARY JAYNE MALY, SENIOR PORTFOLIO MANAGERS.
THE FOLLOWING DISCUSSION REFLECTS THEIR VIEWS ON THE FUND'S PERFORMANCE.

Q HOW WOULD YOU CHARACTERIZE THE
MARKET CONDITIONS DURING THE PAST SIX MONTHS, AND TO WHAT DO YOU ATTRIBUTE
THE FUND'S PERFORMANCE?

A Market conditions were
challenging, but we believe the fund's portfolio was well positioned to handle
the market's volatility and declining performance. Corporate earnings were
strong during most of the period but began to slip as rising interest rates
began to curb consumer spending and as investors saw indications that the
economy might be slowing, albeit to a sustainable pace. Despite favorable
economic growth and controlled inflation, these earnings concerns contributed to
market volatility, particularly among large-capitalization growth stocks whose
valuations had been high by historical standards. However, because the fund
invests primarily in stocks of mid-size companies, which were less affected by
the volatility of the market during this period, it was able to hold its ground.

The reporting period opened in April on a sour note, as all major market
indexes fell significantly in the spring, with technology stocks among the
hardest hit. Subsequently, speculation in the stock market began to subside. In
other words, many of the high-risk "concept" companies that had not yet
demonstrated an ability to generate earnings saw their stock prices fall
dramatically. This was especially true within the technology sector, where many
unproven "dot.com" stocks--the darlings of Wall Street in 1999--suddenly fell.
Instead, investors began to favor value stocks and more proven companies with
histories of strong earnings. The market rallied in August, but September
brought more declines across the broad market, with the technology sector
getting pummeled once again.

The fund weathered this difficult environment competently because it did not
own the market's most speculative stocks, which fell so precipitously during the
period. Furthermore, we made a number of strategic decisions within the
technology and health-care sectors that helped fund performance.

7
<PAGE> 69

THE MANAGERS' INVESTMENT APPROACH

WE PURCHASE STOCKS THAT MEET OUR CRITERIA OF POSITIVE FUTURE FUNDAMENTALS AND
ATTRACTIVE CURRENT PRICES. BY OUR DEFINITION, A COMPANY WITH POSITIVE FUTURE
FUNDAMENTALS HAS AT LEAST ONE OF THE FOLLOWING TRAITS: CONSISTENT EARNINGS
GROWTH; ACCELERATING EARNINGS GROWTH; BETTER-THAN-EXPECTED FUNDAMENTALS; OR AN
UNDERLYING CHANGE IN A COMPANY, INDUSTRY, OR REGULATORY ENVIRONMENT. WE EVALUATE
STOCKS USING A "BOTTOM-UP" APPROACH--IN OTHER WORDS, ON A COMPANY-BY-COMPANY
BASIS.

As a result of our favorable stock selection and the fund's strict investment
strategy, the fund returned 2.46 percent for the six months ended September 30,
2000 (Class A shares at net asset value; if the maximum sales charge of 5.75
percent were included, the return would have been lower). Due to recent market
activity, fund performance may vary from the figure shown. By comparison, the
Standard & Poor's 500 Index returned -3.60 percent. Of course, past performance
is no guarantee of future results. The S&P 500 Index is a broad-based, unmanaged
index that reflects the general performance of the stock market. It is a
statistical composite that does not include any commissions or sales charges
that would be paid by an investor purchasing the securities it represents. Such
costs would lower the performance of the index. It is not possible to invest
directly in an index. Please refer to the chart and footnotes on page 4 for
additional fund performance results.

Q AFTER BEING CLOSED SINCE MARCH 1997, THE FUND REOPENED TO NEW INVESTORS ON
JULY 28, 2000. HOW DID THIS AFFECT THE FUND?

A The reopening of the fund did not affect the investment process we use to
manage the fund (see sidebar). The total assets of the fund remained relatively
low. At this time, we do not anticipate any negative impact to the fund related
to its reopening. If the fund's assets increase, there could be some benefit to
shareholders through operating efficiencies and economies of scale.

Q WHAT IS YOUR INVESTMENT STRATEGY, AND HOW DID YOU ADJUST YOUR STRATEGY IN
RESPONSE TO THE MARKET ENVIRONMENT?

A Our core investment strategy remains consistent, regardless of

8
<PAGE> 70

market conditions (see sidebar). When the economy slows, however, as during the
reporting period, individual companies can become vulnerable. Therefore, we are
even more determined to identify companies in the fund's portfolio that may have
slowing growth or disappointing earnings, so that we may act quickly to reduce
or sell the holding.

Q YOU MENTIONED THAT THE PORTFOLIO WAS WELL POSITIONED--WHICH AREAS OF THE
MARKET PRESENTED ATTRACTIVE OPPORTUNITIES?

A The fund's largest weighting was in the technology sector, where half of the
fund's assets were invested at the end of the reporting period. Although many
technology stocks declined during the period, as we mentioned earlier many of
these were among the less-proven technology companies, including a large number
of Internet firms. We limited the fund's technology holdings to companies we
believed had a long-term ability to create earnings. The market rewarded these
stocks, so the fund's large position added to its performance.

Health care represented a significant weighting in the portfolio, and this
was a notable change over the course of the last six months. In the early part
of the year, biotechnology stocks were extremely expensive. However, with the
volatile markets and investors abandoning these stocks in favor of more
time-tested companies, a collapse occurred among these stocks. This presented us
with a buying opportunity. We purchased several biotechnology stocks that
exhibited positive future fundamentals at prices we liked because we believed
their companies had strong business models. We believe that the stocks we
selected may benefit shareholders as investors continue to favor companies that
appear to have a long-term positive future over companies with weak business
models and unproven products.

Finally, the fund's weighting in energy stocks remained fairly consistent
during the period, reflecting our enthusiasm for this sector. Energy prices were
high, which stimulated the demand for drilling and related services, and stock
prices have risen accordingly.

Q CAN YOU DESCRIBE A FEW OF THE STOCKS THAT MADE THE GREATEST POSITIVE
CONTRIBUTION TO FUND PERFORMANCE?

A The fund's best-performing stocks came from a variety of market sectors.
They included:

- Ariba--An established leader in business-to-business Internet commerce, Ariba
provides top global companies with the strategies and software to help them
sell their products over the Internet. This stock is a relatively new purchase
for the fund.

- Waters--This firm is a leading supplier of high-performance instrumentation
used in the health-care, chemical, and environmental industries. Recent
earnings growth has been driven primarily by pharmaceutical and biotechnology
companies that use its products to accelerate their discovery of new drugs.

- Chico's FAS--A women's apparel retailer, Chico's has been one of the

9
<PAGE> 71

few retail stocks to deliver consistently strong earnings numbers in this
environment of slowing consumer spending.

- Calpine--This independent power company has been expanding rapidly under
utility deregulation. Found in the utility sector, the stock has performed as
a "growth" utility.

- CDW Computer Center--This mail-order computer reseller caters to small and
mid-size businesses. Thanks to its well-trained sales force, strong client
relationships, and inventory management skills, the company has continued to
surpass earnings estimates.

- Alza--This health-care company's recent success has been supported by Federal
Drug Administration approval for its new drug for treating Attention Deficit
and Hyperactivity Disorder (ADHD). Although there are other approved therapies
for ADHD, Alza's drug has a competitive advantage in that it can be
administered once daily, and therefore is convenient for children.

Of course, not all of the stocks in the fund performed as favorably, nor is
there any guarantee that any of these stocks will continue to perform as well in
the future. For additional fund highlights, please refer to page 6.

Q WHAT STOCKS HURT FUND PERFORMANCE?

A Among the fund's worst performers were Pacific Sunwear and Whitehall
Jewelers, both retail companies that showed disappointing earnings. Pacific
Sunwear focuses on the fashion-sensitive teen market, and the company's
misjudgment of fashion trends caused it to fall short of expected earnings.
Whitehall Jewelers simply suffered from the slowing economy, as consumers began
to limit "luxury" purchases. Both stocks were sold.

Radio One and Hispanic Broadcasting were two radio stocks that hurt the
fund's performance. Radio stocks had performed well in the recent past.
Advertising revenues for many media companies had been on the rise as Internet
firms and other thriving businesses spent advertising dollars to attract
insatiable consumers amid the strong economy. However, the cooling of economic
growth has caused a concurrent slowdown in ad spending that has been negative to
media companies. We sold the fund's holdings in these radio stocks, as well as
other media and entertainment stocks, which contributed to the large reduction
in the fund's consumer staples exposure.

The communications services sector, which includes a broad range of
telecommunications companies, performed poorly during the period. Many of these
firms are in a capital-spending mode, and Wall Street is

10
<PAGE> 72

concerned that they won't be able to generate a substantial return on this
spending, so the stocks are out of favor. We think the capital spending cycle
will go on for a while, so we are hesitant to invest in this area until we see
some good returns on investment. As such, we sold all of the fund's holdings in
this sector, including McLeods USA, an upper-Midwestern telecommunications
company.

Also, some of the fund's semiconductor holdings performed poorly. Atmel and
LSI Logic, which were both sold from the fund's portfolio, saw price declines
during the period because of their commodity-oriented product lines. Investors
believe that these stocks are cyclical and have peaked, and their stock prices
fell as a result.

Q DO YOU THINK THAT MARKET CONDITIONS WILL BE MORE FAVORABLE IN THE NEAR TERM?

A Predicting the stock market is very difficult and is something we do not
focus on. Our focus is in constructing a portfolio of individual stocks that
meet our investment criteria. However, we expect a continuation of slowing
economic growth and believe that the Fed is finished raising interest rates for
now. We believe that the most likely economic scenario will be a "soft landing,"
meaning that economic growth will slow to a healthy rate of positive growth
without triggering a recession.

Within the stock market, valuations are in better shape than in the recent
past. Stock valuations, while historically high, have come down somewhat, taking
some of the excess out of the market in sectors that had been significantly
overvalued. Internet mania probably peaked in March, and, as we mentioned
earlier, speculation in the stock market has subsided.

Q WHAT IS YOUR OUTLOOK FOR THE FUND?

A Given the slowing economy, it will be critical for us to identify companies
with good fundamentals and the potential to achieve their earnings targets.
We believe that the biggest risk to individual stocks--and, consequently, to the
fund--will be companies with disappointing earnings. Our strategy in managing
the fund is based largely on identifying those companies whose earnings outlooks
are positive and attainable, consistent with the investment discipline that has
provided strong fund performance over time.

11
<PAGE> 73

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

CLASS A SHARES: Van Kampen mutual fund shares are divided into three groupings,
called Class A, Class B, and Class C shares, each with varying fees and sales
charges.

FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank of the United States. Its policy-making
committee, called the Federal Open Market Committee, meets eight times a year to
establish monetary policy and monitor the economic pulse of the United States.

FUNDAMENTALS: Characteristics of a company, such as revenue growth, earnings
growth, financial strength, market share, and quality of management.

MARKET CAPITALIZATION: The size of a company, as measured by the value of its
issued and outstanding stock.

VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue, book
value, and cash flow.

VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.

12
<PAGE> 74

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS* 97.6%
CONSUMER DISTRIBUTION 5.8%
Bed Bath & Beyond, Inc. (a)................................. 54,000 $ 1,317,094
Cardinal Health, Inc........................................ 21,000 1,851,937
Chico's FAS, Inc. (a)....................................... 91,000 3,094,000
Pier 1 Imports, Inc......................................... 99,000 1,342,688
RadioShack Corp............................................. 39,000 2,520,375
Starbucks Corp. (a)......................................... 38,400 1,538,400
Tiffany & Co................................................ 44,000 1,696,750
Venator Group, Inc. (a)..................................... 181,000 2,239,875
------------
15,601,119
------------
CONSUMER DURABLES 1.2%
Harley Davidson, Inc........................................ 65,000 3,111,875
------------

CONSUMER SERVICES 7.2%
Brinker International, Inc. (a)............................. 40,000 1,205,000
Cheesecake Factory (a)...................................... 37,500 1,621,875
Hilton Hotels Corp.......................................... 175,000 2,023,437
International Game Technology (a)........................... 69,000 2,320,125
Macrovision Corp. (a)....................................... 23,000 1,863,000
Mandalay Resort Group (a)................................... 74,000 1,896,250
Metro-Goldwyn-Mayer, Inc. (a)............................... 39,080 937,920
Park Place Entertainment Corp. (a).......................... 146,000 2,208,250
RARE Hospitality International, Inc. (a).................... 54,000 1,100,250
Robert Half International, Inc. (a)......................... 33,000 1,144,688
Starwood Hotels & Resorts, Class B.......................... 54,000 1,687,500
TMP Worldwide, Inc. (a)..................................... 17,600 1,416,800
------------
19,425,095
------------
ENERGY 5.9%
Baker Hughes, Inc........................................... 56,000 2,079,000
BJ Services Co. (a)......................................... 19,000 1,161,375
ENSCO International, Inc.................................... 53,000 2,027,250
Global Marine, Inc. (a)..................................... 53,000 1,636,375
Nabors Industries, Inc. (a)................................. 27,000 1,414,800
Noble Drilling Corp. (a).................................... 67,000 3,366,750
</TABLE>

See Notes to Financial Statements

13
<PAGE> 75

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
ENERGY (CONTINUED)
Smith International, Inc. (a)............................... 37,000 $ 3,017,812
Transocean Sedco Forex, Inc................................. 21,000 1,231,125
------------
15,934,487
------------
FINANCE 3.5%
Capital One Financial Corp.................................. 35,000 2,452,187
Federated Investors, Inc., Class B.......................... 22,000 544,500
Knight Trading Group, Inc. (a).............................. 14,000 504,000
Lehman Brothers Holdings, Inc............................... 4,000 591,000
Providian Financial Corp.................................... 29,000 3,683,000
T. Rowe Price Associates, Inc............................... 14,000 657,125
USA Education, Inc.......................................... 10,000 481,875
Waddell & Reed Financial, Inc., Class A..................... 17,500 542,500
------------
9,456,187
------------
HEALTHCARE 15.6%
Allergan, Inc............................................... 31,000 2,617,562
Alpharma, Inc., Class A..................................... 35,000 2,139,375
Alza Corp. (a).............................................. 32,000 2,768,000
Andrx Group (a)............................................. 24,000 2,241,000
Celgene Corp. (a)........................................... 34,000 2,023,000
Forest Laboratories, Inc. (a)............................... 19,000 2,179,062
Human Genome Sciences, Inc. (a)............................. 12,000 2,077,500
IDEC Pharmaceuticals Corp. (a).............................. 15,000 2,630,391
IVAX Corp. (a).............................................. 45,000 2,070,000
Medimmune, Inc. (a)......................................... 32,000 2,472,000
Millennium Pharmaceuticals, Inc. (a)........................ 18,000 2,629,125
PE Corp. -- PE Biosystems Group............................. 43,900 5,114,350
Protein Design Labs, Inc. (a)............................... 12,000 1,446,000
Sepracor, Inc. (a).......................................... 11,000 1,349,563
Stryker Corp................................................ 28,000 1,202,250
Techne Corp. (a)............................................ 12,000 1,344,000
Teva Pharmaceutical Industries Ltd. - ADR (Israel).......... 19,000 1,390,563
Universal Health Services, Inc., Class B (a)................ 16,000 1,370,000
Wellpoint Health Networks, Inc. (a)......................... 29,000 2,784,000
------------
41,847,741
------------
TECHNOLOGY 56.1%
ADC Telecommunications, Inc. (a)............................ 95,200 2,559,988
Adobe Systems, Inc.......................................... 23,300 3,617,325
Advanced Micro Devices, Inc. (a)............................ 38,600 911,925
Altera Corp. (a)............................................ 60,000 2,865,000
Amdocs Ltd. (a)............................................. 23,000 1,434,625
Amphenol Corp., Class A (a)................................. 12,000 683,250
Analog Devices, Inc. (a).................................... 40,000 3,302,500
</TABLE>

See Notes to Financial Statements

14
<PAGE> 76

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Applied Micro Circuits Corp. (a)............................ 23,000 $ 4,762,437
Ariba, Inc. (a)............................................. 43,000 6,160,422
BEA Systems, Inc. (a)....................................... 41,000 3,192,875
Broadcom Corp., Class A (a)................................. 14,000 3,412,500
Brocade Communications Systems, Inc. (a).................... 28,000 6,608,000
CDW Computer Centers, Inc. (a).............................. 71,000 4,899,000
Celestica, Inc. (a)......................................... 31,000 2,146,750
Check Point Software Technologies Ltd. (a).................. 16,000 2,520,000
CIENA Corp. (a)............................................. 14,000 1,719,375
Commerce One, Inc. (a)...................................... 20,000 1,570,000
Comverse Technology, Inc. (a)............................... 15,000 1,620,000
Cypress Semiconductor Corp. (a)............................. 24,400 1,014,125
Digital Lightwave, Inc. (a)................................. 13,000 944,125
Dynegy, Inc., Class A....................................... 54,000 3,078,000
Extreme Networks, Inc. (a).................................. 20,000 2,290,000
Flextronics International Ltd. (a).......................... 23,000 1,888,875
GlobeSpan, Inc. (a)......................................... 15,000 1,830,000
i2 Technologies, Inc. (a)................................... 20,000 3,741,250
Inktomi Corp. (a)........................................... 13,000 1,482,000
Integrated Device Technology, Inc. (a)...................... 33,000 2,986,500
Jabil Circuit, Inc. (a)..................................... 32,800 1,861,400
Juniper Networks, Inc. (a).................................. 6,800 1,488,775
Linear Technology Corp...................................... 32,000 2,072,000
McDATA Corp., Class B (a)................................... 10,800 1,327,219
Mercury Interactive Corp. (a)............................... 23,000 3,605,250
Micrel, Inc. (a)............................................ 18,000 1,206,000
Microchip Technology, Inc. (a).............................. 42,000 1,388,625
Micromuse, Inc. (a)......................................... 18,000 3,616,875
Micron Technology, Inc. (a)................................. 37,000 1,702,000
MMC Networks, Inc. (a)...................................... 20,000 2,530,000
Network Appliance, Inc. (a)................................. 11,000 1,401,125
Novellus Systems, Inc. (a).................................. 23,500 1,094,219
Palm, Inc. (a).............................................. 77,000 4,076,187
PeopleSoft, Inc. (a)........................................ 34,000 949,875
Plantronics, Inc. (a)....................................... 20,000 760,000
PMC Sierra, Inc. (a)........................................ 12,000 2,583,000
Polycom, Inc. (a)........................................... 44,000 2,946,625
QLogic Corp. (a)............................................ 19,600 1,724,800
Rational Software Corp. (a)................................. 80,000 5,550,000
Redback Networks, Inc. (a).................................. 22,000 3,606,625
Sanmina Corp. (a)........................................... 32,000 2,996,000
</TABLE>

See Notes to Financial Statements

15
<PAGE> 77

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
TECHNOLOGY (CONTINUED)
Scientific Atlanta, Inc..................................... 40,000 $ 2,545,000
SDL, Inc. (a)............................................... 7,800 2,412,638
SEI Investments Co.......................................... 9,900 700,425
Siebel Systems, Inc. (a).................................... 38,000 4,229,875
Sycamore Networks, Inc. (a)................................. 8,000 864,000
TIBCO Software, Inc. (a).................................... 30,000 2,533,125
TranSwitch Corp. (a)........................................ 54,000 3,442,500
VeriSign, Inc. (a).......................................... 6,000 1,215,375
Vitesse Semiconductor Corp. (a)............................. 22,000 1,956,625
Waters Corp. (a)............................................ 70,000 6,230,000
Xilinx, Inc. (a)............................................ 35,300 3,022,562
------------
150,879,572
------------
UTILITIES 2.3%
Calpine Corp. (a)........................................... 47,000 4,905,625
Newport Corp................................................ 5,000 796,328
Southern Energy, Inc. (a)................................... 15,900 498,863
------------
6,200,816
------------

TOTAL LONG-TERM INVESTMENTS 97.6%
(Cost $182,601,555)................................................ 262,456,892

REPURCHASE AGREEMENT 1.9%
Warburg Dillon Reed ($5,145,000 par collaterized by U.S. Government
obligations in a pooled cash account, dated 09/29/00, to be sold on
10/02/00 at $5,147,787)
(Cost $5,145,000).................................................. 5,145,000
------------

TOTAL INVESTMENTS 99.5%
(Cost $187,746,555)................................................ 267,601,892
OTHER ASSETS IN EXCESS OF LIABILITIES 0.5%.......................... 1,219,641
------------

NET ASSETS 100.0%.................................................... $268,821,533
============
</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

16
<PAGE> 78

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $187,746,555)....................... $267,601,892
Cash........................................................ 5,146
Receivables:
Investments Sold.......................................... 11,589,473
Fund Shares Sold.......................................... 1,445,183
Dividends................................................. 19,721
Unamortized Organizational Costs............................ 3,147
Other....................................................... 5,120
------------
Total Assets............................................ 280,669,682
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 11,072,978
Distributor and Affiliates................................ 228,839
Fund Shares Repurchased................................... 210,780
Investment Advisory Fee................................... 159,217
Trustees' Deferred Compensation and Retirement Plans........ 103,664
Accrued Expenses............................................ 72,671
------------
Total Liabilities....................................... 11,848,149
------------
NET ASSETS.................................................. $268,821,533
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $125,525,901
Net Unrealized Appreciation................................. 79,855,337
Accumulated Net Realized Gain............................... 65,193,512
Accumulated Net Investment Loss............................. (1,753,217)
------------
NET ASSETS.................................................. $268,821,533
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $124,696,771 and 3,026,400 shares of
beneficial interest issued and outstanding)............. $ 41.20
Maximum sales charge (5.75%* of offering price)......... 2.51
------------
Maximum offering price to public........................ $ 43.71
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $129,098,322 and 3,241,566 shares of
beneficial interest issued and outstanding)............. $ 39.83
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $15,026,440 and 377,799 shares of
beneficial interest issued and outstanding)............. $ 39.77
============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

17
<PAGE> 79

Statement of Operations
For the Six Months Ended September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 84,907
Interest.................................................... 155,230
-----------
Total Income............................................ 240,137
-----------
EXPENSES:
Investment Advisory Fee..................................... 823,310
Distribution (12b-1) and Service Fees (Attributed to Class
A, B, and C of $125,368, $539,043 and $57,234,
respectively)............................................. 721,645
Shareholder Services........................................ 195,398
Trustees' Fees and Related Expenses......................... 16,556
Legal....................................................... 10,737
Custody..................................................... 10,704
Amortization of Organizational Costs........................ 2,958
Other....................................................... 121,165
-----------
Total Expenses.......................................... 1,902,473
Less Credits Earned on Cash Balances.................... 486
-----------
Net Expenses............................................ 1,901,987
-----------
NET INVESTMENT LOSS......................................... $(1,661,850)
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $13,328,442
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 85,519,899
End of the Period......................................... 79,855,337
-----------
Net Unrealized Depreciation During the Period............... (5,664,562)
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 7,663,880
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 6,002,030
===========
</TABLE>

See Notes to Financial Statements

18
<PAGE> 80

Statement of Changes in Net Assets
For the Six Months Ended September 30, 2000 and the Year Ended March 31, 2000
(Unaudited)

Distributions from Net Realized Gain:
Class A Shares.................................... -0- (7,810,884)
Class B Shares.................................... -0- (9,299,741)
Class C Shares.................................... -0- (972,786)
------------ ------------
Total Distributions................................. -0- (18,083,411)
------------ ------------

NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES............................. 6,002,030 96,262,727
------------ ------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold........................... 95,015,749 25,872,275
Net Asset Value of Shares Issued Through Dividend
Reinvestment...................................... -0- 16,663,811
Cost of Shares Repurchased.......................... (65,846,529) (45,486,452)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.. 29,169,220 (2,950,366)
------------ ------------
TOTAL INCREASE IN NET ASSETS........................ 35,171,250 93,312,361
NET ASSETS:
Beginning of the Period............................. 233,650,283 140,337,922
------------ ------------
End of the Period (Including accumulated net
investment loss of $1,753,217 and $91,367,
respectively)..................................... $268,821,533 $233,650,283
============ ============
</TABLE>

See Notes to Financial Statements

19
<PAGE> 81

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
SIX MONTHS YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED ENDED OPERATIONS)
CLASS A SHARES SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 2000(A) 1999(A) 1998 1997(A) 1996
----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING
OF THE PERIOD.............. $ 40.22 $ 23.30 $ 23.46 $ 17.88 $ 13.70 $ 10.00
------- ------- ------- ------- ------- -------
Net Investment
Income/Loss.............. (.20) (.32) (.18) (.14) .03 (.04)
Net Realized and Unrealized
Gain..................... 1.18 20.61 .60 6.71 4.81 3.74
------- ------- ------- ------- ------- -------
Total from Investment
Operations................. .98 20.29 .42 6.57 4.84 3.70
------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain..................... -0- 3.37 .58 .99 .35 -0-
Return of Capital
Distribution............. -0- -0- -0- -0- .31 -0-
------- ------- ------- ------- ------- -------
Total Distributions......... -0- 3.37 .58 .99 .66 -0-
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD..................... $ 41.20 $ 40.22 $ 23.30 $ 23.46 $ 17.88 $ 13.70
======= ======= ======= ======= ======= =======

Total Return* (b)........... 2.46%** 93.18% 2.18%** 38.52% 36.00% 37.00%**
Net Assets at End of the
Period (In millions)....... $ 124.7 $ 106.3 $ 60.1 $ 64.9 $ 53.1 $ .1
Ratio of Expenses to Average
Net Assets*................ 1.32% 1.44% 1.64% 1.30% 1.32% 1.46%
Ratio of Net Investment
Income/Loss to Average Net
Assets*.................... (1.10%) (1.14%) (1.19%) (.64%) .19% (.79%)
Portfolio Turnover.......... 72%** 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 N/A 1.68% 1.58% 2.31% 15.69%
Ratio of Net Investment Loss
to Average Net Assets...... N/A 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

20
<PAGE> 82

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
SIX MONTHS YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED ENDED OPERATIONS)
CLASS B SHARES SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 2000(A) 1999(A) 1998 1997(A) 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................. $ 39.06 $ 22.87 $ 23.17 $ 17.80 $ 13.70 $ 10.00
------- ------- ------- ------- ------- -------
Net Investment Loss......... (.34) (.52) (.30) (.27) (.09) (.04)
Net Realized and Unrealized
Gain...................... 1.11 20.08 .58 6.63 4.85 3.74
------- ------- ------- ------- ------- -------
Total from Investment
Operations.................. .77 19.56 .28 6.36 4.76 3.70
------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain...................... -0- 3.37 .58 .99 .35 -0-
Return of Capital
Distribution.............. -0- -0- -0- -0- .31 -0-
------- ------- ------- ------- ------- -------
Total Distributions.......... -0- 3.37 .58 .99 .66 -0-
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD...................... $ 39.83 $ 39.06 $ 22.87 $ 23.17 $ 17.80 $ 13.70
======= ======= ======= ======= ======= =======

Total Return* (b)............ 1.95%** 91.74% 1.60%** 37.56% 35.32% 37.00%**
Net Assets at End of the
Period (In millions)........ $ 129.1 $ 115.6 $ 72.8 $ 79.7 $ 55.0 $ .1
Ratio of Expenses to Average
Net Assets*................. 2.08% 2.18% 2.40% 2.05% 2.07% 1.46%
Ratio of Net Investment Loss
to Average Net Assets*...... (1.86%) (1.89%) (1.95%) (1.40%) (.56%) (.74%)
Portfolio Turnover........... 72%** 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 N/A 2.44% 2.34% 3.04% 15.70%
Ratio of Net Investment Loss
to Average Net Assets....... N/A 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 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

21
<PAGE> 83

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
DECEMBER 27,
1995
NINE (COMMENCEMENT
SIX MONTHS YEAR MONTHS YEAR YEAR OF INVESTMENT
ENDED ENDED ENDED ENDED ENDED OPERATIONS)
CLASS C SHARES SEPTEMBER 30, MARCH 31, MARCH 31, JUNE 30, JUNE 30, TO JUNE 30,
2000(A) 2000(A) 1999(A) 1998 1997(A) 1996
---------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................. $ 39.01 $ 22.87 $ 23.17 $ 17.79 $ 13.70 $ 10.00
------- ------- ------- ------- ------- -------
Net Investment Loss......... (.33) (.52) (.30) (.31) (.10) (.04)
Net Realized and Unrealized
Gain...................... 1.09 20.03 .58 6.68 4.85 3.74
------- ------- ------- ------- ------- -------
Total from Investment
Operations.................. .76 19.51 .28 6.37 4.75 3.70
------- ------- ------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Realized
Gain...................... -0- 3.37 .58 .99 .35 -0-
Return of
Capital Distribution...... -0- -0- -0- -0- .31 -0-
------- ------- ------- ------- ------- -------
Total Distributions.......... -0- 3.37 .58 .99 .66 -0-
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD...................... $ 39.77 $ 39.01 $ 22.87 $ 23.17 $ 17.79 $ 13.70
======= ======= ======= ======= ======= =======

Total Return* (b)............ 1.95%** 91.52% 1.60%** 37.56% 35.32% 37.00%**
Net Assets at End of the
Period (In millions)........ $ 15.0 $ 11.8 $ 7.4 $ 9.2 $ 8.3 $ .1
Ratio of Expenses to Average
Net Assets*................. 2.08% 2.19% 2.41% 2.05% 2.07% 1.46%
Ratio of Net Investment Loss
to Average Net Assets*...... (1.86%) (1.89%) (1.96%) (1.39%) (.57%) (.74%)
Portfolio Turnover........... 72%** 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 N/A 2.45% 2.34% 3.04% 15.70%
Ratio of Net Investment Loss
to Average Net Assets....... N/A 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

22
<PAGE> 84

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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. 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

23
<PAGE> 85

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

maintain the value of the underlying security at not less than the repurchase
proceeds due the Fund.

C. INCOME AND EXPENSES Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. Discount on debt securities
purchased are accreted over the expected life of each applicable security.
Premiums on debt securities are not amortized. 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 as a result of losses relating to wash sale transactions.

At September 30, 2000, for federal income tax purposes the cost of long- and
short-term investments is $187,898,320, the aggregate gross unrealized
appreciation is $84,747,068 and the aggregate gross unrealized depreciation is
$5,043,496, resulting in net unrealized appreciation on long- and short-term
investments of $79,703,572.

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.

24
<PAGE> 86

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

G. EXPENSE REDUCTIONS During the six months ended September 30, 2000, the Fund's
custody fee was reduced by $486 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 six months ended September 30, 2000, the Fund recognized expenses of
approximately $4,300, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

For the six months ended September 30, 2000, the Fund recognized expenses of
approximately $21,100, 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 of the Fund. For the six months ended September
30, 2000, the Fund recognized expenses of approximately $138,700. 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 September 30, 2000, Van Kampen owned 7,000 shares of Class A and 1,500
shares each of Classes B and C, respectively.

25
<PAGE> 87

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

3. CAPITAL TRANSACTIONS

At September 30, 2000, capital aggregated $59,991,769, $58,408,472, and
$7,125,660 for Classes A, B, and C, respectively. For the six months ended
September 30, 2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................. 1,997,353 $ 72,692,937
Class B................................................. 497,073 18,934,438
Class C................................................. 88,096 3,388,374
---------- ------------
Total Sales............................................... 2,582,522 $ 95,015,749
========== ============
Dividend Reinvestment:
Class A................................................. -0- $ -0-
Class B................................................. -0- -0-
Class C................................................. -0- -0-
---------- ------------
Total Dividend Reinvestment............................... -0- $ -0-
========== ============
Repurchases:
Class A................................................. (1,613,097) $(57,774,920)
Class B................................................. (214,796) (7,621,666)
Class C................................................. (12,595) (449,943)
---------- ------------
Total Repurchases......................................... (1,840,488) $(65,846,529)
========== ============
</TABLE>

26
<PAGE> 88

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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>

27
<PAGE> 89

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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. Class B and C Shares are
offered without a front end sales charge, but are subject to a contingent
deferred sales charge (CDSC). 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
AS A PERCENTAGE OF
DOLLAR AMOUNT SUBJECT
TO CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
First...................................................... 5.00% 1.00%
Second..................................................... 4.00% None
Third...................................................... 3.00% None
Fourth..................................................... 2.50% None
Fifth...................................................... 1.50% None
Sixth and thereafter....................................... None None
</TABLE>

For the six months ended September 30, 2000, Van Kampen, as Distributor for
the Fund, received net commissions on sales of the Fund's Class A Shares of
approximately $68,800 and CDSC on the redeemed shares of Classes B and C of
approximately $36,300. 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 $190,736,239 and $158,284,918,
respectively.

5. DISTRIBUTION AND SERVICE PLANS

28
<PAGE> 90

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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 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.

29
<PAGE> 91

VAN KAMPEN FUNDS

THE VAN KAMPEN
FAMILY OF FUNDS

Growth

Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology

Growth and Income

Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value

Global/International

Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income*
Tax Managed Global Franchise
Worldwide High Income

Income

Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income

Capital Preservation

Reserve
Tax Free Money

Senior Loan

Prime Rate Income Trust
Senior Floating Rate

Tax Free

To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:

- visit our Web site at
WWW.VANKAMPEN.COM--
to view a prospectus, select
Download Prospectus [COMPUTER ICON]

- call us at 1-800-341-2911
weekdays from 7:00 a.m. to 7:00 p.m.
central time. Telecommunications
Device for the Deaf users, call
1-800-421-2833.

[PHONE ICON]

- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us

[MAIL ICON]

* Closed to new investors

** Open to new investors for a limited time

30
<PAGE> 92

FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN GROWTH FUND

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 L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer

RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

DISTRIBUTOR

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

SHAREHOLDER SERVICING AGENT

VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

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

INDEPENDENT AUDITORS(1)

ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP
to be the Fund's independent auditors. PricewaterhouseCoopers LLP ceased
being the Fund's independent auditors effective May 18, 2000. The cessation
of the client-auditor relationship between the Fund and
PricewaterhouseCoopers was based solely on a possible future business
relationship by PricewaterhouseCoopers with an affiliate of the Fund's
investment Adviser.

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

(SM) denotes a service mark of Van Kampen Funds Inc.

This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data. After March 31,
2001, the report, if used with prospective investors, must be accompanied by a
quarterly performance update.

31
<PAGE> 93

<TABLE>
<S> <C>
Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 5
TOP FIVE SECTORS 5
Q&A WITH YOUR PORTFOLIO MANAGERS 6
GLOSSARY OF TERMS 9

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 10
FINANCIAL STATEMENTS 16
NOTES TO FINANCIAL STATEMENTS 22

VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 28
FUND OFFICERS AND IMPORTANT ADDRESSES 29
</TABLE>

Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 94

OVERVIEW

LETTER TO SHAREHOLDERS
October 20, 2000

Dear Shareholder,

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments

1
<PAGE> 95

ECONOMIC SNAPSHOT

2
<PAGE> 96

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998--September 30, 2000)
[BAR GRAPH]

<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.70
</TABLE>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(September 30, 1998--September 30, 2000)

[LINE GRAPH]

3
<PAGE> 97

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of September 30, 2000)

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six-month total return based on
NAV(1) 11.79% 11.64% 11.75%
-------------------------------------------------------------------------
Six-month total return(2) 5.36% 6.64% 10.75%
-------------------------------------------------------------------------
One-year total return(2) 8.07% 8.83% 12.94%
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 3.42% 4.38% 7.54%
-------------------------------------------------------------------------
Commencement date 06/21/99 06/21/99 06/21/99
-------------------------------------------------------------------------
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (5.75% for Class A shares) or
contingent deferred sales charge ("CDSC") for Class B and C shares. On
purchases of Class A shares of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within one year of purchase. Returns for
Class B shares are calculated without the effect of the maximum 5% CDSC,
charged on certain redemptions made within one year of purchase and
declining to 0% after the fifth year. Returns for Class C shares are
calculated without the effect of the maximum 1% CDSC, charged on certain
redemptions made within one year of purchase. If the sales charges were
included, total returns would be lower. These returns do include Rule 12b-1
fees of up to .25% for Class A Shares and 1% for Class B and Class C Shares.

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (5.75% for Class A
shares) or contingent deferred sales charge ("CDSC") for Class B and C
shares and Rule 12b-1 fee. On purchases of Class A shares of $1 million or
more, a CDSC of 1% may be imposed on certain redemptions made within one
year of purchase. Returns for Class B shares are calculated with the effect
of the maximum 5% CDSC, charged on certain redemptions made within one year
of purchase and declining to 0% after the fifth year. Returns for Class C
shares are calculated with the effect of the maximum 1% CDSC, charged on
certain redemptions made within one year of purchase. The Rule 12b-1 fee for
Class A Shares is up to .25% and for Class B and Class C Shares is 1%.

Market forecasts provided in this report may not necessarily come to pass.

4
<PAGE> 98

PORTFOLIO AT A GLANCE

TOP TEN HOLDINGS

(as a percentage of long-term investments--September 30, 2000)

1. ONEOK 1.5%
Explores for and produces oil and
gas, and distributes natural gas in
Oklahoma and Kansas.

2. PROVINCE HEALTHCARE 1.3%
Operates hospitals and provides
medical services in the United
States.

3. STANDARD PACIFIC 1.2%
Develops single-family homes in the
western United States.

4. ENERGEN 1.2%
Explores for and produces oil and
gas, and distributes natural gas in
Alabama.

5. PARK ELECTROCHEMICAL 1.2%
Manufactures components used in
computers, cellular phones, and other
electronics.

6. SEITEL 1.1%
Provides geophysical data and
services to the petroleum industry.

7. SILICON VALLEY BANCSHARES 1.1%
Provides financial services to the
technology and life sciences
industries.

8. AMERIPATH 1.1%
Manages a network of pathological
physicians in the United States.

9. PUBLIC SERVICE COMPANY OF
NEW MEXICO 1.1%
Distributes electricity and natural
gas in New Mexico.

10. WMS INDUSTRIES 1.1%
Manufactures slot machines and other
gaming products for the casino
industry.
</TABLE>

TOP FIVE SECTORS

(as a percentage of long-term investments)

[BAR GRAPH]

<TABLE>
<CAPTION>
SEPTEMBER 30, 2000 MARCH 31, 2000
------------------ --------------
<S> <C> <C>
Finance 23.7 20.4
Utilities 10.5 8.9
Technology 7.0 19.2
Energy 6.7 7.3
Consumer Durables 6.6 6.1
</TABLE>

5
<PAGE> 99

[PHOTO]

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN SMALL CAP
VALUE FUND ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND
INFLUENCED THE FUND'S RETURN DURING THE SIX MONTHS ENDED SEPTEMBER 30, 2000. THE
TEAM IS LED BY JOHN CUNNIFF, SENIOR PORTFOLIO MANAGER, WHO HAS MANAGED THE FUND
SINCE ITS INCEPTION IN JUNE 1999, AND HAS WORKED IN THE INVESTMENT INDUSTRY
SINCE 1992. THE FOLLOWING DISCUSSION REFLECTS HIS VIEWS ON THE FUND'S
PERFORMANCE.

Q HOW WOULD YOU CHARACTERIZE
THE MARKET DURING THE REPORTING PERIOD, AND TO WHAT DO YOU ATTRIBUTE THE
FUND'S PERFORMANCE?

A Investors saw record volatility in
the stock market. The technology sell-off in the spring helped take some of the
speculation out of the market by punishing high-valuation stocks whose earnings
were unproven, but also contributed to the volatility, particularly among
large-capitalization stocks. The broad market fell during the reporting period,
with the Standard & Poor's 500 Index returning -3.60 percent and the
technology-heavy NASDAQ Index dropping 19.61 percent. In this turbulent
environment, smaller-cap, value-oriented stocks performed well, as they were
less affected by concerns about high valuations.

We seek to maintain our "value with a catalyst" management strategy (see
sidebar) in all market environments, and this helped the fund's return during
the period. The fund returned 11.79 percent during the volatile six months ended
September 30, 2000 (Class A shares at net asset value; if the maximum sales
charge of 5.75 percent were included, the return would have been lower). Past
performance is no guarantee of future results. As a result of recent market
activity, current performance may vary from the figures shown. By comparison,
the Russell 2000(R) Value Index returned 9.43 percent during the same period.
This broad-based index measures the performance of those Russell 2000(R)
companies with lower price-to-book ratios and lower forecasted growth values.
This index is a statistical composite that doesn't include any commissions or
fees that would be paid by an investor purchasing the securities it represents.
Such costs would lower the performance of the index. It is not possible to
invest directly in an index. Please refer to the chart and footnotes on page 4
for additional fund performance results.

6
<PAGE> 100

THE MANAGERS' INVESTMENT STRATEGY

WE REFER TO OUR INVESTMENT STRATEGY AS "VALUE WITH A CATALYST." WE SEARCH FOR
UNDERVALUED SMALL-CAP COMPANIES BY USING COMMON VALUATION MEASURES, SUCH AS
PRICE-TO-EARNINGS RATIO. FOR EACH STOCK WE CONSIDER FOR PURCHASE, WE SEARCH FOR
A SPARK (OR CATALYST)--SUCH AS A CHANGE IN MANAGEMENT, A NEW PRODUCT, OR NEW
INDUSTRY REGULATIONS--THAT MAY IGNITE THE COMPANY'S GROWTH PROSPECTS AND REVEAL
THE POTENTIAL VALUE HIDDEN IN THE CURRENT STOCK PRICE. WE MAY ALSO LOOK FOR
RISING EARNINGS EXPECTATIONS, WHICH WE BELIEVE CAN INDICATE THAT A CATALYST IS
PRESENT. IF A STOCK MEETS OUR CRITERIA, WE THEN CONSIDER IT FOR INVESTMENT. OUR
STOCK SELECTION PROCESS IS "BOTTOM-UP," THE FUND IS DIVERSIFIED ACROSS MULTIPLE
INDUSTRIES, AND WE NORMALLY REMAIN FULLY INVESTED IN MOST SITUATIONS.

Q WHICH AREAS OF THE MARKET
HELPED PERFORMANCE DURING THE REPORTING PERIOD?

A Given the strong performance
of the financials sector during the reporting period, the fund's large position
in this sector benefited the performance of the fund. Individual holdings in the
fund's financials allocation included regional stocks, regional brokerage firms,
and real estate investment trusts.

Despite the shakiness in the technology sector, several of the fund's
technology stocks migrated out of the small-cap arena into mid-size stocks
because of the stocks' market performance, which helped the fund capture gains
as the stocks were sold. Notably, International Rectifier, a power semiconductor
manufacturer, was sold from the fund's portfolio for a profit, as it no longer
met our investment discipline.

Finally, some of the fund's health-care stocks performed well during the
period. Quest Diagnostics and Laboratory Corporation of America provide
outsourcing of clinical diagnostics from HMOs and other health-care providers.
Consolidation within the industry has helped these companies improve their
operating environments, and their stock prices appreciated as a result. Province
Healthcare had a strong record of acquiring and improving hospitals in rural
markets, and this stock also supported fund performance.

Of course, not all stocks in the fund performed as favorably, nor is there
any guarantee that any of these stocks will continue to perform as well or will
be held by the fund in the future. For additional portfolio highlights, please
refer to page 5.

7
<PAGE> 101

Q DID ANY STOCKS HURT THE FUND?

A Most notably, two semiconductor
stocks hurt the performance of the fund during the reporting period: Lam
Research and S3. These stocks reacted poorly to Intel's announcement of a
revenue shortfall in September, as investors subsequently fled the industry
given concerns over sales growth expectations. Also, Georgia Gulf, a chemical
company, was hurt by inventory and margin issues with its polyvinyl chloride
(PVC) business during the period.

Q WHAT DO YOU SEE AHEAD FOR
THE FUND FOR THE UPCOMING SIX MONTHS?

A Small-cap value stocks continue
to be attractively priced relative to the broad stock market. In this
environment, we will maintain our philosophy of seeking small-cap value
companies that have catalysts for change.

8
<PAGE> 102

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

BOTTOM-UP INVESTING: A management style that emphasizes the analysis of
individual stocks, rather than economic and market cycles.

MARKET CAPITALIZATION: The size of a company, as measured by the value of its
issued and outstanding stock.

VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue, book
value, and cash flow.

VALUE INVESTING: A strategy that seeks to identify stocks that are sound
investments but are temporarily out of favor in the marketplace. As a result,
the stocks trade at prices below what value investors believe the stocks are
actually worth.

VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.

9
<PAGE> 103

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCKS 96.2%
BUILDINGS & MATERIALS 3.9%
Astec Industries, Inc. (a).................................. 150 $ 1,641
D.R. Horton, Inc. .......................................... 7,085 121,773
Granite Construction, Inc. ................................. 2,350 56,988
NCI Building Systems, Inc. (a).............................. 6,100 89,212
Nortek, Inc. (a)............................................ 6,050 105,875
Pulte Corp. ................................................ 3,700 122,100
Texas Industries, Inc. ..................................... 3,050 97,219
-----------
594,808
-----------
BUSINESS SERVICES 3.7%
ABM Industries, Inc. ....................................... 5,100 138,656
CDI Corp. (a)............................................... 3,300 52,800
John H. Harland Co. ........................................ 5,800 88,813
United Stationers, Inc. .................................... 2,850 76,594
URS Corp. (a)............................................... 6,300 83,475
Wallace Computer Series, Inc. .............................. 7,550 115,137
-----------
555,475
-----------
CAPITAL GOODS 1.6%
Applied Industrial Technologies, Inc. ...................... 6,500 112,531
Donaldson, Inc. ............................................ 2,900 63,800
Manitowoc, Inc. ............................................ 2,600 50,050
Sauer, Inc. ................................................ 1,200 13,200
Tecumseh Prods Co., Class A................................. 50 2,094
-----------
241,675
-----------
CONSUMER DISTRIBUTION 5.4%
Anixter International, Inc. (a)............................. 4,000 116,500
Cato Corp., Class A......................................... 7,500 93,750
Dillard's, Inc., Class A.................................... 9,000 95,625
Footstar, Inc. (a).......................................... 3,200 103,400
Furniture Brands International, Inc. (a).................... 6,250 103,906
Group 1 Automotive, Inc. (a)................................ 8,550 92,981
InterTAN, Inc. (a).......................................... 5,000 72,188
PEP Boys Manny Moe & Jack................................... 7,350 36,750
Spiegel, Inc., Class A (a).................................. 13,450 94,150
Systemax, Inc. (a).......................................... 4,100 11,275
-----------
820,525
-----------
</TABLE>

See Notes to Financial Statements

10
<PAGE> 104

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
CONSUMER DURABLES 6.4%
Aaron Rents, Inc., Class B.................................. 6,850 $ 88,194
Armstrong Holdings, Inc. ................................... 7,000 83,562
BorgWarner, Inc. ........................................... 3,000 99,375
JAKKS Pacific, Inc. (a)..................................... 6,000 56,437
Smith A.O. Corp. ........................................... 1,200 15,075
Standard Pacific Corp. ..................................... 10,000 180,000
Stoneridge, Inc. (a)........................................ 100 963
Toro Co. ................................................... 3,350 105,525
Tower Automotive, Inc. (a).................................. 8,200 76,875
WMS Industries, Inc. ....................................... 7,000 157,500
Woodward Governor Co. ...................................... 2,300 102,494
-----------
966,000
-----------
CONSUMER NON-DURABLES 6.0%
Agribrands International, Inc. (a).......................... 1,400 61,075
Corn Products International, Inc. .......................... 4,650 105,787
Fleming Cos, Inc. .......................................... 5,700 74,456
International Multifoods Corp. ............................. 900 15,638
Mail-Well, Inc. (a)......................................... 300 1,331
Movado Group, Inc. ......................................... 400 6,950
Performance Food Group Co. (a).............................. 2,150 80,894
Quiksilver, Inc. (a)........................................ 6,250 120,312
Riviana Foods, Inc. ........................................ 250 4,172
Smithfield Foods, Inc. (a).................................. 3,850 101,063
Springs Industries, Inc. ................................... 3,400 95,838
Suiza Foods Corp. (a)....................................... 1,700 86,169
Universal Corp. ............................................ 5,300 155,687
-----------
909,372
-----------
CONSUMER SERVICES 5.0%
Aztar Corp. (a)............................................. 7,200 110,700
Banta Corp. ................................................ 6,000 146,250
Dollar Thrifty Automotive Group. (a)........................ 5,850 115,538
Extended Stay America, Inc. (a)............................. 8,650 114,613
Landry's Seafood Restaurants, Inc. (a)...................... 9,300 63,356
Lee Enterprises, Inc. ...................................... 2,000 57,750
Lone Star Steakhouse & Saloon (a)........................... 7,550 55,681
Pulitzer, Inc. ............................................. 500 21,475
Ruby Tuesday, Inc. ......................................... 6,200 69,750
-----------
755,113
-----------
</TABLE>

See Notes to Financial Statements

11
<PAGE> 105

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
ENERGY 6.4%
Cascade Natural Gas Corp.................................... 7,300 $ 127,750
Helmerich & Payne, Inc. .................................... 2,100 75,863
Lone Star Technologies, Inc. (a)............................ 2,000 92,300
Louis Dreyfus Natural Gas Corp. (a)......................... 3,300 130,763
Parker Drilling Co. (a)..................................... 12,000 84,000
Pioneer Natural Resources Co. .............................. 10,700 151,806
RPC, Inc. .................................................. 2,600 30,550
Seitel, Inc. ............................................... 11,500 165,312
Tesoro Petroleum Corp. (a).................................. 7,000 69,563
TransMontaigne, Inc. (a).................................... 7,900 39,006
-----------
966,913
-----------
FINANCE 22.8%
Advanta Corp., Class A...................................... 7,900 88,875
Affiliated Managers Group, Inc. (a)......................... 2,100 119,569
AmerUs Group Co. ........................................... 4,250 109,437
BancFirst Corp. ............................................ 2,050 65,344
Capstead Mortgage Corp. .................................... 290 2,610
Cathay Bancorp, Inc. ....................................... 1,500 73,125
Commerce Group, Inc. ....................................... 4,000 115,750
Commonwealth Bancorp, Inc. ................................. 4,150 60,175
Community Trust Bancorp, Inc. .............................. 1,980 30,814
Crown American Reality...................................... 10,750 65,172
Delphi Financial Group, Inc. ............................... 2,316 93,798
Dime Community Bancshares, Inc. ............................ 5,150 127,462
EastGroup Properties, Inc. ................................. 2,950 65,638
FelCor Lodging Trust, Inc. ................................. 5,000 115,625
First Citizens Bancshares, Inc. ............................ 1,550 110,922
GBC Bancorp of California................................... 3,300 112,406
Glimcher Realty Trust....................................... 5,250 78,422
Great Lakes REIT, Inc. ..................................... 2,650 46,044
Innkeepers USA Trust........................................ 7,000 71,750
Kansas City Life Insurance Co. ............................. 2,150 70,950
Leucadia National Corp. .................................... 3,950 105,662
LNR Property Corp. ......................................... 5,100 112,837
Medical Assurance, Inc. .................................... 3,205 39,261
Meristar Hospitality Corp. ................................. 5,600 113,400
National Discount Brokers Group, Inc. (a)................... 3,000 92,813
OceanFirst Financial Corp. ................................. 6,800 141,100
Prentiss Properties Trust................................... 4,200 109,725
PS Business Parks, Inc. .................................... 2,800 76,300
R & G Financial Corp., Class B.............................. 11,600 111,650
Reckson Associates Realty Corp. ............................ 5,000 127,500
</TABLE>

See Notes to Financial Statements

12
<PAGE> 106

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
FINANCE (CONTINUED)
RLI Corp. .................................................. 2,650 $ 102,191
Silicon Valley Bancshares (a)............................... 2,800 163,056
Southwest Securities Group, Inc. ........................... 3,121 91,289
Triad Guaranty, Inc. (a).................................... 3,800 113,050
UICI (a).................................................... 12,500 87,500
Webster Financial Corp. .................................... 4,100 110,444
WFS Financial, Inc. (a)..................................... 7,000 118,562
-----------
3,440,228
-----------
HEALTHCARE 4.9%
Ameripath, Inc. (a)......................................... 11,100 160,950
Apria Healthcare Group, Inc. (a)............................ 8,900 124,044
Bindley Western Industries, Inc. ........................... 4,716 150,912
Chattem, Inc. (a)........................................... 2,800 26,775
Herbalife International, Inc., Class A...................... 450 4,162
Laboratory Corp. of America Holdings (a).................... 700 83,825
Province Healthcare Co. (a)................................. 4,725 188,705
-----------
739,373
-----------
PRODUCER MANUFACTURING 4.5%
Advanced Energy Industries, Inc. (a)........................ 400 13,200
Aeroflex, Inc. (a).......................................... 875 42,547
AGCO Corp. ................................................. 10,000 118,750
ArvinMeritor Inc. .......................................... 7,250 106,484
Cummins Engine Co., Inc. ................................... 4,000 119,750
Federal-Mogul Corp. ........................................ 10,000 54,375
Kent Electronics Corp. (a).................................. 3,100 74,013
Louisiana-Pacific Corp. .................................... 10,000 91,875
Scott Technologies Inc. (a)................................. 3,300 58,472
-----------
679,466
-----------
RAW MATERIALS/PROCESSING INDUSTRIES 6.4%
AMCOL International Corp.................................... 5,100 24,863
Buckeye Technologies, Inc. (a).............................. 3,250 67,437
Commercial Metals Co. ...................................... 3,450 87,975
Dexter Corp. ............................................... 850 51,000
Georgia Gulf Corp. ......................................... 4,000 45,750
Gibraltor Steel Corp. ...................................... 6,600 108,900
H.B. Fuller Co. ............................................ 1,800 51,750
Mueller Industries, Inc. (a)................................ 3,800 85,262
PolyOne Corp. .............................................. 8,800 64,350
Quanex Corp. ............................................... 6,150 117,234
Reliance Steel & Aluminum Co. .............................. 5,225 110,052
</TABLE>

See Notes to Financial Statements

13
<PAGE> 107

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
RAW MATERIALS/PROCESSING INDUSTRIES (CONTINUED)
Rock Tennessee Co., Class A................................. 6,800 $ 67,575
Ryerson Tull, Inc. ......................................... 2,300 21,706
Scotts Co., Class A (a)..................................... 1,100 36,850
Spartech Corp. ............................................. 1,400 21,788
-----------
962,492
-----------
TECHNOLOGY 6.7%
Amkor Technology, Inc. (a).................................. 1,850 48,331
Anicom, Inc. (a)............................................ 5,000 0
AVT Corp. (a)............................................... 2,300 12,794
C-Cube Microsystems, Inc. (a)............................... 5,000 102,500
Cypress Semiconductor Corp. (a)............................. 1,100 45,719
Genrad, Inc. (a)............................................ 3,350 36,850
Global Crossing Ltd. (a).................................... 1,895 58,745
Kaman Corp., Class A........................................ 5,700 71,962
Lam Research Corp. (a)...................................... 2,500 52,344
Metricom, Inc. (a).......................................... 1,500 38,625
Motient Corp. (a)........................................... 2,400 33,900
MTS Systems Corp. .......................................... 10,550 73,850
Park Electrochemical Corp. ................................. 3,100 172,437
Primex Technologies, Inc. .................................. 4,200 122,062
S3, Inc. (a)................................................ 5,650 58,266
Triumph Group, Inc. (a)..................................... 2,450 87,894
-----------
1,016,279
-----------
TRANSPORTATION 2.4%
America West Holdings Corp., Class B (a).................... 3,050 37,172
American Freightways Corp. (a).............................. 6,900 109,537
Covenant Transport, Inc., Class A (a)....................... 4,600 42,837
Landstar Systems, Inc. (a).................................. 950 42,394
MS Carriers, Inc. (a)....................................... 2,600 40,625
Rollins Truck Leasing Corp. ................................ 6,200 39,138
US Freightways Corp. ....................................... 2,400 54,450
-----------
366,153
-----------
UTILITIES 10.1%
Energen Corp. .............................................. 5,800 172,550
Equitable Resources, Inc. .................................. 1,200 76,050
General Communication, Inc., Class A (a).................... 14,000 100,187
Madison Gas & Electric Co. ................................. 5,100 116,025
Northwest Natural Gas Co. .................................. 4,000 91,000
Northwestern Corp. ......................................... 5,250 102,375
NUI Corp. .................................................. 4,050 122,259
Oneok, Inc. ................................................ 5,600 222,600
Public Service Co. of New Mexico............................ 6,200 160,425
</TABLE>

See Notes to Financial Statements

14
<PAGE> 108

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
UTILITIES (CONTINUED)
RGS Energy Group, Inc. ..................................... 4,800 $ 135,300
Southwestern Energy Co. .................................... 10,050 87,938
Tekelec, Inc. (a)........................................... 600 19,725
Western Gas Resources, Inc. ................................ 4,800 120,300
-----------
1,526,734
-----------
TOTAL LONG-TERM INVESTMENTS 96.2%
(Cost $13,599,895)................................................ 14,540,606

REPURCHASE AGREEMENT 3.7%
State Street Bank & Trust Co. ($560,000 par collateralized by U.S.
Government obligations in a pooled cash account, dated 9/29/00, to
be sold on 10/02/00 at $560,299)
(Cost $560,000)................................................... 560,000
-----------

TOTAL INVESTMENTS 99.9%
(Cost $14,159,895)................................................ 15,100,606
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1%......................... 14,445
-----------

NET ASSETS 100.0%.................................................. $15,115,051
===========
</TABLE>

(a) Non-income producing security as this stock currently does not declare
dividends.

See Notes to Financial Statements

15
<PAGE> 109

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $14,159,895)........................ $15,100,606
Cash........................................................ 5,044
Receivables:
Investments sold.......................................... 226,435
Fund Shares Sold.......................................... 47,864
Dividends................................................. 18,525
-----------
Total Assets............................................ 15,398,474
-----------
LIABILITIES:
Payables:
Investments Purchased..................................... 169,681
Fund Shares Repurchased................................... 41,880
Distributor and Affiliates................................ 1,856
Accrued Expenses............................................ 51,275
Trustees' Deferred Compensation and Retirement Plans........ 18,731
-----------
Total Liabilities....................................... 283,423
-----------
NET ASSETS.................................................. $15,115,051
===========
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $13,376,004
Net Unrealized Appreciation................................. 940,711
Accumulated Net Realized Gain............................... 785,571
Accumulated Undistributed Net Investment Income............. 12,765
-----------
NET ASSETS.................................................. $15,115,051
===========
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $6,810,673 and 619,041 shares of
beneficial interest issued and outstanding)............. $ 11.00
Maximum sales charge (5.75%* of offering price)......... .67
-----------
Maximum offering price to public........................ $ 11.67
===========
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $5,144,812 and 470,429 shares of
beneficial interest issued and outstanding)............. $ 10.94
===========
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $3,159,566 and 288,792 shares of
beneficial interest issued and outstanding)............. $ 10.94
===========
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

16
<PAGE> 110

Statement of Operations
For the Six Months Ended September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends................................................... $ 113,796
Interest.................................................... 19,375
----------
Total Income............................................ 133,171
----------
EXPENSES:
Investment Advisory Fee..................................... 48,011
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $6,888, $22,896 and $13,566,
respectively)............................................. 43,350
Registration Fee............................................ 27,258
Reports to Shareholders..................................... 21,931
Shareholder Services........................................ 21,836
Accounting.................................................. 12,000
Trustees' Fees and Related Expenses......................... 11,666
Custody..................................................... 7,030
Legal....................................................... 5,968
Other....................................................... 7,423
----------
Total Expenses.......................................... 206,473
Expense Reduction ($48,011 Investment Advisory Fee and
$35,851 Other)........................................ 83,862
Less Credits Earned on Cash Balances.................... 453
----------
Net Expenses............................................ 122,158
----------
NET INVESTMENT INCOME....................................... $ 11,013
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 776,738
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 192,274
End of the Period......................................... 940,711
----------
Net Unrealized Appreciation During the Period............... 748,437
----------
NET REALIZED AND UNREALIZED GAIN............................ $1,525,175
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,536,188
==========
</TABLE>

See Notes to Financial Statements

17
<PAGE> 111

Statement of Changes in Net Assets
For the Six Months Ended September 30, 2000 and the Period June 21, 1999
(Commencement of Investment Operations) through March 31, 2000 (Unaudited)

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
SIX MONTHS ENDED INVESTMENT OPERATIONS)
SEPTEMBER 30, 2000 TO MARCH 31, 2000
--------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income........................ $ 11,013 $ 8,955
Net Realized Gain............................ 776,738 8,727
Net Unrealized Appreciation During the
Period..................................... 748,437 192,274
----------- ----------
Change in Net Assets from Operations......... 1,536,188 209,956
----------- ----------
Distributions from Net Investment Income..... -0- (8,955)
Distributions in Excess of Net Investment
Income..................................... -0- (12,718)
----------- ----------
Distributions from and in Excess of Net
Investment Income*......................... -0- (21,673)
----------- ----------

NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................. 1,536,188 188,283
----------- ----------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.................... 5,501,916 9,555,139
Net Asset Value of Shares Issued Through
Dividend Reinvestment...................... -0- 16,500
Cost of Shares Repurchased................... (1,866,602) (816,373)
----------- ----------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS............................... 3,635,314 8,755,266
----------- ----------
TOTAL INCREASE IN NET ASSETS................. 5,171,502 8,943,549
NET ASSETS:
Beginning of the Period...................... 9,943,549 1,000,000
----------- ----------
End of the Period (Including accumulated
undistributed net investment income of
$12,765 and $1,752, respectively).......... $15,115,051 $9,943,549
=========== ==========

* Distributions by Class:
---------------------------------------------

Distributions from and in Excess of Net
Investment Income:
Class A Shares............................. $ -0- $ (14,958)
Class B Shares............................. -0- (4,541)
Class C Shares............................. -0- (2,174)
----------- ----------
$ -0- $ (21,673)
=========== ==========
</TABLE>

See Notes to Financial Statements

18
<PAGE> 112

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS A SHARES SIX MONTHS ENDED INVESTMENT OPERATIONS)
SEPTEMBER 30, 2000 TO MARCH 31, 2000
--------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD..... $ 9.81 $10.00
------ ------
Net Investment Income...................... .03 .05
Net Realized and Unrealized Gain/Loss...... 1.16 (.18)
------ ------
Total from Investment Operations............. 1.19 (.13)
Less Distributions from and in Excess of Net
Investment Income.......................... -0- .06
------ ------
NET ASSET VALUE, END OF THE PERIOD........... $11.00 $ 9.81
====== ======

Total Return (a)............................. 11.79%** (.92%)**
Net Assets at End of the Period (In
millions).................................. $ 6.8 $ 4.3
Ratio of Expenses to Average Net Assets*
(b)........................................ 1.50% 1.48%
Ratio of Net Investment Income to Average Net
Assets*.................................... .60% .67%
Portfolio Turnover........................... 28%** 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)........................................ 2.81% 8.29%
Ratio of Net Investment Loss to Average Net
Assets..................................... (.71%) (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

19
<PAGE> 113

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS B SHARES SIX MONTHS ENDED INVESTMENT OPERATIONS)
SEPTEMBER 30, 2000 TO MARCH 31, 2000
--------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF PERIOD......... $ 9.78 $10.00
------ ------
Net Investment Income/Loss................. (.01) .01
Net Realized and Unrealized Gain/Loss...... 1.17 (.20)
------ ------
Total from Investment Operations............. 1.16 (.19)
Less Distributions from and in Excess of Net
Investment Income.......................... -0- .03
------ ------
NET ASSET VALUE, END OF THE PERIOD........... $10.94 $ 9.78
====== ======

Total Return (a)............................. 11.64%** (1.81%)**
Net Assets at End of the Period (In
millions).................................. $ 5.1 $ 3.7
Ratio of Expenses to Average Net Assets*
(b)........................................ 2.25% 2.23%
Ratio of Net Investment Loss to Average Net
Assets*.................................... (.15%) (.08%)
Portfolio Turnover........................... 28%** 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)........................................ 3.59% 9.04%
Ratio of Net Investment Loss to Average Net
Assets..................................... (1.49%) (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 to 0% after the fifth year. If the sales charge was included,
total returns would be lower.

See Notes to Financial Statements

20
<PAGE> 114

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

<TABLE>
<CAPTION>
JUNE 21, 1999
(COMMENCEMENT OF
CLASS C SHARES SIX MONTHS ENDED INVESTMENT OPERATIONS)
SEPTEMBER 30, 2000 TO MARCH 31, 2000
--------------------------------------------
<S> <C> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD..... $ 9.78 $10.00
------ ------
Net Investment Loss........................ (.01) .01
Net Realized and Unrealized Gain/Loss...... 1.17 (.20)
------ ------
Total from Investment Operations............. 1.16 (.19)
Less Distributions from and in Excess of Net
Investment Income.......................... -0- .03
------ ------
NET ASSET VALUE, END OF THE PERIOD........... $10.94 $ 9.78
====== ======

Total Return (a)............................. 11.75%** (1.81%)**
Net Assets at End of the Period (In
millions).................................. $ 3.2 $ 2.0
Ratio of Expenses to Average Net Assets*
(b)........................................ 2.25% 2.23%
Ratio of Net Investment Loss to Average Net
Assets*.................................... (.15%) (.08%)
Portfolio Turnover........................... 28%** 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)........................................ 3.57% 9.04%
Ratio of Net Investment Loss to Average Net
Assets..................................... (1.47%) (6.89%)
</TABLE>

** Non-Annualized

See Notes to Financial Statements

21
<PAGE> 115

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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

22
<PAGE> 116

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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.

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 September 30, 2000, for federal income tax purposes, cost of long- and
short-term investments is $14,160,956, the aggregate gross unrealized
appreciation is $2,334,508 and the aggregate gross unrealized depreciation is
$1,394,858, resulting in net unrealized appreciation on long- and short-term
investments of $939,650.

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.

F. EXPENSE REDUCTIONS During the six months ended September 30, 2000, the Fund's
custody fee was reduced by $453 as a result of credits earned on overnight cash
balances.

23
<PAGE> 117

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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:

For the six months ended September 30, 2000, the Adviser voluntarily waived
$48,011 of its investment advisory fees and assumed $35,851 of the Fund's other
expenses. This waiver is voluntary in nature and can be discontinued at the
Adviser's discretion.

For the six months ended September 30, 2000, the Fund recognized expenses of
approximately $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. All of this expense has been assumed by Van Kampen.

For the six months ended September 30, 2000, the Fund recognized expenses of
approximately $5,800 representing Van Kampen Funds Inc. or its affiliates'
(collectively "Van Kampen") cost of providing 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 six months ended September
30, 2000, the Fund recognized expenses of approximately $8,500. 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.

24
<PAGE> 118

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

3. CAPITAL TRANSACTIONS

At September 30, 2000, capital aggregated $6,058,009, $4,526,581 and $2,791,414
for Classes A, B and C, respectively. For the six months ended September 30,
2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A................................................... 251,051 $ 2,594,788
Class B................................................... 161,334 1,629,271
Class C................................................... 126,776 1,277,857
-------- -----------
Total Sales................................................. 539,161 $ 5,501,916
======== ===========
Dividend Reinvestment:
Class A................................................... -0- $ -0-
Class B................................................... -0- -0-
Class C................................................... -0- -0-
-------- -----------
Total Dividend Reinvestment................................. -0- $ -0-
======== ===========
Repurchases:
Class A................................................... (73,156) $ (776,103)
Class B................................................... (64,976) (682,499)
Class C................................................... (38,142) (408,000)
-------- -----------
Total Repurchases........................................... (176,274) $(1,866,602)
======== ===========
</TABLE>

25
<PAGE> 119

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

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 Shares 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 and C Shares are
offered without a front end sales charge, but are subject to a contingent
deferred sales charge (CDSC). The CDSC will be imposed on most redemptions made
within five years of the 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
AS A PERCENTAGE OF
DOLLAR AMOUNT
SUBJECT TO 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>

26
<PAGE> 120

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

For the six months ended September 30, 2000, Van Kampen, as Distributor for
the Fund, received commissions on sales of the Fund's Class A Shares of
approximately $6,100 and CDSC on redeemed shares of approximately $2,900. 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 $7,114,482 and $3,439,315, 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.

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.

27
<PAGE> 121

VAN KAMPEN FUNDS

THE VAN KAMPEN
FAMILY OF FUNDS

Growth

Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology

Growth and Income

Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value

Global/International

Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income*
Tax Managed Global Franchise
Worldwide High Income

Income

Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income

Capital Preservation

Reserve
Tax Free Money

Senior Loan

Prime Rate Income Trust
Senior Floating Rate

Tax Free

To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:

- visit our Web site at
WWW.VANKAMPEN.COM--
to view a prospectus, select
Download Prospectus [COMPUTER ICON]

- call us at 1-800-341-2911
weekdays from 7:00 a.m. to 7:00 p.m.
central time. Telecommunications
Device for the Deaf users, call
1-800-421-2833.

[PHONE ICON]

- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us

[MAIL ICON]

* Closed to new investors

** Open to new investors for a limited time

28
<PAGE> 122

FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN SMALL CAP VALUE FUND

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 L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer

RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents

INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

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

INDEPENDENT AUDITORS(1)
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP
to be the Fund's independent auditors.

PricewaterhouseCoopers LLP ceased being the Fund's independent auditors
effective May 18, 2000. The cessation of the client-auditor relationship
between the Fund and PricewaterhouseCoopers was based solely on a possible
future business relationship by PricewaterhouseCoopers with an affiliate of
the Fund's investment adviser.

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

(SM) denotes a service mark of Van Kampen Funds Inc.

This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charges on
shares of the Fund, and other
pertinent data. After February 28, 2001, the report if used with prospective
investors, must be accompanied by a monthly performance update.

29
<PAGE> 123

<TABLE>
<S> <C>
Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
TOP TEN HOLDINGS 5
TOP FIVE SECTORS 5
Q&A WITH YOUR PORTFOLIO MANAGERS 6
GLOSSARY OF TERMS 10

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 11
FINANCIAL STATEMENTS 13
NOTES TO FINANCIAL STATEMENTS 19

VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 23
FUND OFFICERS AND IMPORTANT ADDRESSES 24
</TABLE>

Our generations
of money-
management
experience
may help you
pursue life's
true wealth.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 124

OVERVIEW

LETTER TO SHAREHOLDERS
October 20, 2000

Dear Shareholder,

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments

1
<PAGE> 125

ECONOMIC SNAPSHOT

2
<PAGE> 126

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES
(September 30, 1998 -- September 30, 2000)
[BAR GRAPH]

<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Sep 98 3.80
Dec 98 5.90
Mar 99 3.50
Jun 99 2.50
Sep 99 5.70
Dec 99 8.30
Mar 00 4.80
Jun 00 5.60
Sep 00 2.70
</TABLE>

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(September 30, 1998 -- September 30, 2000)

[LINE GRAPH]

3
<PAGE> 127

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of September 30, 2000)

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Life-of-Fund average annual
total return(1) 4.50% 4.30% 4.30%
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) -1.51% -0.70% 3.30%
-------------------------------------------------------------------------
Commencement date 06/26/00 06/26/00 06/26/00
-------------------------------------------------------------------------
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (5.75% on Class A Shares) or
contingent deferred sales charge ("CDSC"). On purchases of Class A Shares of
$1 million or more, a CDSC of 1% may be imposed on certain redemptions made
within one year of purchase. Returns for Class B Shares are calculated
without the effect of the maximum 5% CDSC, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
fifth year. Returns for Class C Shares are calculated without the effect of
the maximum 1% CDSC, charged on certain redemptions made within one year of
purchase. If the sales charges were included, total returns would be lower.
These returns do include Rule 12b-1 fees of up to .25% for Class A Shares
and 1% for Class B and Class C Shares.

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of maximum sales charge (5.75% for Class A
Shares) or contingent deferred sales charge ("CDSC") for Class B and Class C
Shares and Rule 12b-1 fee. On purchases of Class A Shares of $1 million or
more, a CDSC of 1% may be imposed on certain redemptions made within one
year of purchase. Returns for Class B Shares are calculated with the effect
of the maximum 5% CDSC, charged on certain redemptions made within one year
of purchase and declining thereafter to 0% after the fifth year. Returns for
Class C Shares are calculated with the effect of the maximum 1% CDSC,
charged on certain redemptions made within one year of purchase. The Rule
12b-1 fee for Class A Shares is up to .25% and for Class B and Class C
Shares is 1%.

An investment in the Fund is subject to Investment risks, and you could lose
money on your investment in the Fund. Please review the Risk/Return Summary
of the Prospectus for further details on investment risks. Fund shares, when
redeemed, may be worth more or less than their original cost. Past
performance is no guarantee of future results. Investment return and net
asset value will fluctuate with market conditions.

As a result of recent market activity, current performance may vary from the
figures shown.

Market forecasts provided in this report may not necessarily come to pass.

4
<PAGE> 128

PORTFOLIO AT A GLANCE

TOP TEN HOLDINGS

(as a percentage of long-term investments--September 30, 2000)

1. JUNIPER NETWORKS 6.1%
Produces hardware and software to
route traffic on the Internet.

2. SIEBEL 6.0%
Helps enable electronic business-to-
business commerce.

3. CIENA 5.8%
Develops systems to improve and
expand data and telecommunications
networks worldwide.

4. APPLIED MICRO CIRCUITS 5.7%
Develops high-speed integrated
circuits for data and
telecommunications.

5. CHECK POINT
SOFTWARE TECHNOLOGIES 5.3%
Provides Internet security by
blocking viruses and other unwanted
Web content.

6. ADOBE SYSTEMS 5.2%
Develops computer software products
and technologies.

7. EMC 4.9%
Provides products and services that
help companies store and access large
amounts of computer data.

8. LEHMAN BROTHERS 4.7%
Provides financial services to
governments, corporations, and
consumers worldwide.

9. CAPITAL ONE 4.4%
Provides credit card, loan, and other
financial services to consumers in
the United States.

10. CALPINE 4.3%
Owns and operates power plants and
sells electricity predominately in
the United States.
</TABLE>

TOP FIVE SECTORS

(as a percentage of long-term investments--September 30, 2000)

[BAR GRAPH]

<TABLE>
<S> <C>
Finance 19
Computers - Software 16.50
Communication Technology - Equipment 13.40
Electronics Semiconductors 11.60
Energy 11.40
</TABLE>

5
<PAGE> 129

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN SELECT GROWTH FUND
ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND INFLUENCED
THE FUND'S RETURN SINCE ITS INCEPTION ON JUNE 26, 2000. THE TEAM IS LED BY
SENIOR PORTFOLIO MANAGER GARY LEWIS, WHO HAS MANAGED THE FUND SINCE INCEPTION
AND HAS WORKED IN THE INVESTMENT INDUSTRY SINCE 1979, AND BY SENIOR PORTFOLIO
MANAGER JANET LUBY, WHO HAS ALSO MANAGED THE FUND SINCE INCEPTION AND HAS WORKED
IN THE INVESTMENT INDUSTRY SINCE 1989. THEY ARE JOINED BY SENIOR PORTFOLIO
MANAGERS DUDLEY BRICKHOUSE AND DAVID WALKER AND PORTFOLIO MANAGER MATTHEW HART.
THE FOLLOWING DISCUSSION REFLECTS THEIR VIEWS ON THE FUND'S PERFORMANCE.

[PHOTO] [PHOTO] [PHOTO] [PHOTO] [PHOTO]

Q IN LIGHT OF THE MARKET CONDITIONS
YOU'VE ENCOUNTERED THUS FAR, HOW WOULD YOU DESCRIBE THE FUND'S PERFORMANCE
IN ITS FIRST THREE MONTHS OF OPERATIONS?

A We believe the fund is off to a
good start, having achieved a total return of 4.50 percent for the period since
its inception (June 26, 2000, through September 30, 2000; Class A shares at net
asset value; if the maximum sales charge of 5.75 percent were included, the
return would have been lower). Past performance is no guarantee of future
results, and due to recent market activity, fund performance may vary from the
figure shown. Please refer to the chart and footnotes on page 4 for additional
portfolio performance results.

This compares favorably to the performance of the Standard & Poor's 500
Index, which declined by 1.00 percent over the same period. The S&P 500 Index,
an unmanaged, capitalization-weighted measure of 500 stocks, is a statistical
composite that does not include any commissions or sales charges that would be
paid by an investor purchasing the securities it represents. Such costs would
lower the performance of the index. It is not possible to invest directly in an
index. Past performance is no guarantee of future results.

The stock market has been trying to shake off the effects of the sharp
decline that occurred earlier this year, particularly in April and May. Some
stocks have rebounded nicely, but what

6
<PAGE> 130

we've seen is a narrow market. That is, only a select group of stocks have
contributed significantly to the market's recovery.

This type of market is precisely why the Van Kampen Select Growth Fund was
established earlier this year. When the performance of a few stocks is carrying
the performance of the market as a whole, good stock selection is a must. It is
imperative that portfolio managers not only invest in the right sectors, but
then they must also find the specific stocks within those sectors with the
potential to outperform. Because the fund is nondiversified, our approach is to
limit the fund's portfolio to fewer stocks than a typical diversified fund.
Specifically, we are looking for stocks with strong and improving fundamentals
accompanied by rising earnings expectations and rising valuations.

Q WHAT WERE SOME OF THE
CHALLENGES YOU FACED IN MANAGING THE FUND?

A Even though the fund was
launched in June when the market was trying to recover from the declines of
April and May, we were not overly concerned with the timing of the fund's
inception. We seek capital appreciation over the long term.

An important factor in the market's performance since the fund's inception
has been the Federal Reserve Board's push to control the growth of the economy
and keep inflation in check. Concerned that brisk economic growth would ignite
inflation, the Fed raised key short-term interest rates four times over the past
year, with the last increase in May 2000. Many investors worried that rising
interest rates would slow the economy, dampen business investment and consumer
spending, and put pressure on corporate earnings.

These fears hit companies in the technology sector especially hard. Investor
concern over any real or perceived slowdown resulted in harsh reactions to
stocks considered to be the most vulnerable to an economic slowdown.

Stock prices have been flat since then, although continued market volatility
suggests investors are struggling to assess the impact of interest rates, higher
commodities prices, political uncertainty, and other factors. Corporate earnings
are once again in the spotlight, and investors are on the lookout for companies
with more visible, more reliable earnings prospects.

Q WHAT ARE SOME OF THE RISKS OF
YOUR INVESTMENT STRATEGY?

A The primary concern with this
approach is that the fund's assets are focused in a relatively small number of
issues--25 stocks as of September 30--which accentuates each stock's
contribution to the portfolio's overall performance. Because the fund is
nondiversified, it can take sizable positions in each individual stock. That
means both the potential gains and the potential losses are magnified.

This underscores the need for thorough and insightful research. Our stock
selection process begins with a search for stocks that we believe are likely to
sustain their earnings momentum, as evidenced by rising

7
<PAGE> 131

earnings expectations and rising valuations. Then we generally try to visit with
key executives to help us identify their strengths and their depth of experience
and to discuss and evaluate their business model.

Q IN WHAT AREAS OF THE MARKET
DID THE FUND INVEST DURING THE PERIOD?

A As of September 30, slightly more
than half of the fund's net assets were invested in technology stocks,
accounting for seven of the fund's top 10 holdings. This is a market sector
that, in our opinion, continued to hold promise as demand for "anywhere to
anywhere" connectivity drives the need for bandwidth to accommodate the
exploding growth of data and Internet traffic.

Financial stocks were the second largest allocation in the portfolio,
representing 18.5 percent of net assets. We believe this sector offered a number
of opportunities, particularly in the brokerage, insurance, and specialty
finance arenas, as these companies have benefited from an improving
interest-rate environment and a stronger fundamental outlook.

Energy stocks represented 11.1 percent of net assets. Strong demand
accompanied by limited supply contributed to strength in commodity prices and
the associated increase in earnings expectations. Power capacity shortages
helped independent power producers, such as Calpine Corporation, which was one
of the fund's top 10 holdings.

Q WHAT ARE SOME OF THE STOCKS
THAT PERFORMED WELL DURING THE PERIOD FOR THE FUND?

A Check Point Software, Ciena
Corporation, Siebel Systems, and Juniper Networks were among the fund's
top-performing technology stocks. All of these firms have gained from the rapid
growth in Internet traffic and the related need for bandwidth, security, and
software.

In the financial sector, we have seen strong performance from Lehman
Brothers Holdings, which benefited from strength in its core trading and
underwriting business, and from Marsh & McLennan, an insurance firm with good
earnings and an improving pricing structure.

In health care, the stock of UnitedHealth Group, a large health maintenance
organization, has been buoyed by the company's ability to increase prices while
keeping costs in check.

Q WHICH STOCKS PERFORMED
BELOW YOUR EXPECTATIONS DURING THE PERIOD?

A We were disappointed by the
performance of Kohl's Corporation, an operator of a department store chain. Even
though their fundamentals were

8
<PAGE> 132

solid and their management team was quite strong, their stock has been punished
by investor fears of a weakening retail environment.

Also, earnings disappointments hurt some of the historically strong
technology stocks. This dragged down some of the other technology issues held by
the fund during the reporting period, such as Micron Technology, a semiconductor
manufacturer.

Q WHAT IS YOUR OUTLOOK FOR
THE MARKET?

A In general, we're still quite bullish.
The leadership we have seen from the financials and the utilities bodes well for
the market. Also, historically, the fourth quarter of the year has been strong
for technology stocks, as companies accelerate spending to exhaust their budgets
for computer equipment, supplies, and services.

Nevertheless, the fourth quarter of 2000 started with profit warnings from
traditional technology leaders like Apple, Dell, and Intel, which triggered a
fairly severe sell-off. We expect to get the bad news out of the way early in
the quarter and move into a more constructive environment over the rest of the
year.

In the short term, investors will likely continue to focus on corporate
earnings, so we expect to see persistent volatility in stock prices as the
market reacts to various earnings announcements. The market appears to be
anticipating no further rate increases until next year, as the economy appears
to be growing more slowly with inflation under control. Barring an unforeseen
external shock, we remain optimistic with regard to the overall environment for
stocks.

9
<PAGE> 133

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

CLASS A SHARES: Most Van Kampen mutual fund shares are divided into three
groupings, called Class A, Class B, and Class C shares, each with varying fees
and sales charges. Some Van Kampen mutual funds are offered in D shares by
separate prospectus.

DIVERSIFICATION: A method of portfolio allocation and management aimed at
balancing investment risk and return; a balanced portfolio may combine stocks,
bonds, and cash equivalents.

EARNINGS ESTIMATE: A forecast for a company's net income during a given period.
An earnings estimate can come from the company's management as well as from
independent analysts.

FUNDAMENTALS: Characteristics of a company, such as revenue growth, earnings
growth, financial strength, market share, and quality of management.

VALUATION: The estimated or determined worth of a stock, based on financial
measures such as the stock's current price relative to earnings, revenue, book
value, and cash flow.

VOLATILITY: A measure of the fluctuation in the market price of a security. A
security that is volatile has frequent and large swings in price.

10
<PAGE> 134

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
COMMON STOCK 97.5%
COMMUNICATIONS TECHNOLOGY--EQUIPMENT 13.1%
Alcatel SA--ADR (France).................................... 300,000 $ 18,862,500
CIENA Corp. (a)............................................. 600,000 73,687,500
Corning, Inc. .............................................. 175,000 51,975,000
SDL, Inc. (a)............................................... 80,000 24,745,000
--------------
169,270,000
--------------
COMPUTERS--HARDWARE 5.9%
Juniper Networks, Inc. (a).................................. 350,000 76,628,125
--------------
COMPUTERS--NETWORKING 8.8%
EMC Corp. (a)............................................... 625,000 61,953,125
Sun Microsystems, Inc. ..................................... 445,000 51,953,750
--------------
113,906,875
--------------
COMPUTERS--SOFTWARE 16.1%
Adobe Systems, Inc. ........................................ 425,000 65,981,250
Check Point Software Technologies Ltd. (a).................. 425,000 66,937,500
Siebel Systems, Inc. (a).................................... 675,000 75,135,937
--------------
208,054,687
--------------
CONSUMER DISTRIBUTION 1.9%
Kohl's Corp. (a)............................................ 425,000 24,517,188
--------------
ELECTRONICS--MANUFACTURING 3.7%
Sanmina Corp. (a)........................................... 510,000 47,748,750
--------------
ELECTRONICS--SEMICONDUCTORS 11.3%
Altera Corp. (a)............................................ 550,000 26,262,500
Analog Devices, Inc. (a).................................... 575,000 47,473,438
Applied Micro Circuits Corp. (a)............................ 350,000 72,471,875
--------------
146,207,813
--------------
ENERGY 11.1%
Anadarko Petroleum Corp. ................................... 625,000 41,537,500
Calpine Corp. (a)........................................... 520,000 54,275,000
Coastal Corp. .............................................. 650,000 48,181,250
--------------
143,993,750
--------------
FINANCE 18.5%
American International Group, Inc........................... 500,000 47,843,750
Capital One Financial Corp.................................. 800,000 56,050,000
</TABLE>

See Notes to Financial Statements

11
<PAGE> 135

YOUR FUND'S INVESTMENTS

September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
MARKET
DESCRIPTION SHARES VALUE
<S> <C> <C>
FINANCE (CONTINUED)
Lehman Brothers Holdings, Inc............................... 400,000 $ 59,100,000
Marsh & McLennan Cos., Inc.................................. 375,000 49,781,250
Merrill Lynch & Co., Inc.................................... 402,500 26,565,000
--------------
239,340,000
--------------
HEALTHCARE 7.1%
Cardinal Health, Inc........................................ 600,000 52,912,500
UnitedHealth Group, Inc..................................... 400,000 39,500,000
--------------
92,412,500
--------------

TOTAL LONG-TERM INVESTMENTS 97.5%
(Cost $1,120,564,498).............................................. 1,262,079,688

REPURCHASE AGREEMENT 0.7%
State Street Bank & Trust Co. ($8,629,000 par collateralized by U.S.
Government Obligations in a pooled cash account, dated 09/29/00, to
be sold on 10/02/00 at $8,633,602)
(Cost $8,629,000).................................................. 8,629,000
--------------
TOTAL INVESTMENTS 98.2%
(Cost $1,129,193,498).............................................. 1,270,708,688

OTHER ASSETS IN EXCESS OF LIABILITIES 1.8%.......................... 24,006,526
--------------

NET ASSETS 100.0%................................................... $1,294,715,214
==============
</TABLE>

(a) Non-income producing security as this stock does not currently declare
dividends.

ADR--American Depository Receipt

See Notes to Financial Statements

12
<PAGE> 136

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,129,193,498)..................... $1,270,708,688
Cash........................................................ 2,331
Receivables:
Investments Sold.......................................... 100,507,110
Fund Shares Sold.......................................... 11,636,979
Dividends................................................. 124,201
--------------
Total Assets............................................ 1,382,979,309
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 85,017,260
Distributor and Affiliates................................ 1,268,289
Fund Shares Repurchased................................... 1,008,077
Investment Advisory Fee................................... 734,697
Accrued Expenses............................................ 231,892
Trustees' Deferred Compensation and Retirement Plans........ 3,880
--------------
Total Liabilities....................................... 88,264,095
--------------
NET ASSETS.................................................. $1,294,715,214
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,252,097,455
Net Unrealized Appreciation................................. 141,515,190
Accumulated Net Investment Loss............................. (4,509,499)
Accumulated Net Realized Loss............................... (94,387,932)
--------------
NET ASSETS.................................................. $1,294,715,214
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $244,865,711 and 23,442,401 shares of
beneficial interest issued and outstanding)............. $ 10.45
Maximum sales charge (5.75%* of offering price)......... 0.64
--------------
Maximum offering price to public........................ $ 11.09
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $857,277,559 and 82,211,436 shares of
beneficial interest issued and outstanding)............. $ 10.43
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $192,571,944 and 18,468,206 shares of
beneficial interest issued and outstanding)............. $ 10.43
==============
</TABLE>

* On sales of $50,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

13
<PAGE> 137

Statement of Operations
For the Period Ended September 30, 2000 (Unaudited)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 717,248
Dividends................................................... 483,943
------------
Total Income............................................ 1,201,191
------------
EXPENSES:
Investment Advisory Fee..................................... 2,078,165
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $122,220, $1,975,087 and $433,642,
respectively)............................................. 2,530,949
Shareholder Services........................................ 676,638
Custody..................................................... 22,513
Legal....................................................... 12,911
Trustees' Fees and Related Expenses......................... 5,044
Other....................................................... 384,470
------------
Total Expenses.......................................... 5,710,690
------------
NET INVESTMENT LOSS......................................... $ (4,509,499)
============
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Loss........................................... $(94,387,932)
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... -0-
End of the Period......................................... 141,515,190
------------
Net Unrealized Appreciation During the Period............... 141,515,190
------------
NET REALIZED AND UNREALIZED GAIN............................ $ 47,127,258
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 42,617,759
============
</TABLE>

See Notes to Financial Statements

14
<PAGE> 138

Statement of Changes in Net Assets
For the Period June 26, 2000 (Commencement of Investment Operations) through
September 30, 2000 (Unaudited)

<TABLE>
<CAPTION>
JUNE 26, 2000
(COMMENCEMENT OF
INVESTMENT OPERATIONS)
TO SEPTEMBER 30, 2000
----------------------
<S> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Loss......................................... $ (4,509,499)
Net Realized Loss........................................... (94,387,932)
Net Unrealized Appreciation During the Period............... 141,515,190
--------------

NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES......... 42,617,759
--------------

FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................................... 1,275,305,365
Cost of Shares Repurchased.................................. (23,207,910)
--------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.......... 1,252,097,455
--------------
TOTAL INCREASE IN NET ASSETS................................ 1,294,715,214
NET ASSETS:
Beginning of the Period..................................... -0-
--------------
End of the Period (Including accumulated net investment loss
of $4,509,499)............................................ $1,294,715,214
==============
</TABLE>

See Notes to Financial Statements

15
<PAGE> 139

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 26, 2000
(COMMENCEMENT OF
CLASS A SHARES INVESTMENT OPERATIONS)
TO SEPTEMBER 30, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $10.00
------
Net Investment Loss....................................... (.02)
Net Realized and Unrealized Gain.......................... .47
------
Total from Investment Operations............................ .45
------
NET ASSET VALUE, END OF THE PERIOD.......................... $10.45
======

Total Return (a)............................................ 4.50%*
Net Assets at End of the Period (In millions)............... $244.9
Ratio of Expenses to Average Net Assets..................... 1.36%
Ratio of Net Investment Loss to Average Net Assets.......... (0.94%)
Portfolio Turnover.......................................... 77%*
</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
sale charges were included, total returns would be lower.

See Notes to Financial Statements

16
<PAGE> 140

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 26, 2000
(COMMENCEMENT OF
CLASS B SHARES INVESTMENT OPERATIONS)
TO SEPTEMBER 30, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF PERIOD........................ $10.00
------
Net Investment Loss....................................... (.04)
Net Realized and Unrealized Gain.......................... .47
------
Total from Investment Operations............................ .43
------
NET ASSET VALUE, END OF THE PERIOD.......................... $10.43
======

Total Return (a)............................................ 4.30%*
Net Assets at End of the Period (In millions)............... $857.3
Ratio of Expenses to Average Net Assets..................... 2.10%
Ratio of Net Investment Loss to Average Net Assets.......... (1.68%)
Portfolio Turnover.......................................... 77%*
</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 charges were
included, total returns would be lower.

See Notes to Financial Statements

17
<PAGE> 141

Financial Highlights
(Unaudited)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIOD INDICATED.

<TABLE>
<CAPTION>
JUNE 26, 2000
(COMMENCEMENT OF
CLASS C SHARES INVESTMENT OPERATIONS)
TO SEPTEMBER 30, 2000
----------------------
<S> <C>
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $10.00
------
Net Investment Loss....................................... (.04)
Net Realized and Unrealized Gain.......................... .47
------
Total from Investment Operations............................ .43
------
NET ASSET VALUE, END OF THE PERIOD.......................... $10.43
======

Total Return (a)............................................ 4.30%*
Net Assets at End of the Period (In millions)............... $192.6
Ratio of Expenses to Average Net Assets..................... 2.10%
Ratio of Net Investment Loss to Average Net Assets.......... (1.68%)
Portfolio Turnover.......................................... 77%*
</TABLE>

* Non-Annualized

See Notes to Financial Statements

18
<PAGE> 142

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Select Growth Fund (the "Fund") is organized as a series of Van
Kampen Equity Trust (the "Trust"), a Delaware business trust, and is registered
as a non-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 non-diversified portfolio of
common stocks and other equity securities of growth companies considered by the
Fund's adviser to be unusually attractive growth opportunities on an individual
company basis. The Fund commenced investment operations on June 26, 2000 with
three classes of common shares: Class A, Class B, and Class C.

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.

19
<PAGE> 143

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

maintain the value of the underlying security at not less than the repurchase
proceeds due the Fund.

C. INCOME AND EXPENSE Interest income is recorded on an accrual basis and
dividend income is recorded on the ex-dividend date. 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 September 30, 2000, for federal income tax purposes, cost of long- and
short-term investments is $1,129,193,498, the aggregate gross unrealized
appreciation is $154,039,457 and the aggregate gross unrealized depreciation is
$12,524,267, resulting in net unrealized appreciation on long- and short-term
investments of $141,515,190.

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.......................................... .75 of 1%
Next $500 million........................................... .70 of 1%
Over $1 billion or thereafter............................... .65 of 1%
</TABLE>

For the period ended September 30, 2000, the Fund recognized expenses of
approximately $12,900 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.

20
<PAGE> 144

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

For the period ended September 30, 2000, the Fund recognized expenses of
approximately $12,600 representing Van Kampen Funds Inc. or its affiliates'
(collectively "Van Kampen") cost of providing accounting 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 period ended September 30,
2000, the Fund recognized expenses of approximately $528,500. 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.

3. CAPITAL TRANSACTIONS

At September 30, 2000, capital aggregated $238,730,971, $827,250,024 and
$186,116,460 for Classes A, B and C, respectively. For the period ended
September 30, 2000, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................. 24,527,626 $ 249,929,851
Class B............................................. 82,922,205 834,552,982
Class C............................................. 18,925,057 190,822,532
----------- --------------
Total Sales........................................... 126,374,888 $1,275,305,365
=========== ==============
Repurchases:
Class A............................................. (1,085,225) $ (11,198,880)
Class B............................................. (710,769) (7,302,958)
Class C............................................. (456,851) (4,706,072)
----------- --------------
Total Repurchases..................................... (2,252,845) $ (23,207,910)
=========== ==============
</TABLE>

Class B shares 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. For the period ended
September 30, 2000, no Class B shares converted to Class A shares. Class C
shares do not possess a conversion feature. Class B and C shares are offered
without a

21
<PAGE> 145

NOTES TO
FINANCIAL STATEMENTS

September 30, 2000 (Unaudited)

front end sales charge, but are subject to a contingent deferred sales charge
(CDSC). 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 within one year of the
purchase for Class C as detailed in the following schedule.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
AS A PERCENTAGE OF DOLLAR
AMOUNT SUBJECT TO 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 period ended September 30, 2000, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $970,700 and CDSC on redeemed shares of approximately $228,100.
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 $2,039,371,506 and $824,419,077,
respectively.

5. DISTRIBUTION AND SERVICE PLANS

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 September 30, 2000, are payments retained by Van Kampen of
approximately $983,200.

22
<PAGE> 146

VAN KAMPEN FUNDS

THE VAN KAMPEN
FAMILY OF FUNDS

Growth

Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology

Growth and Income

Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value

Global/International

Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income*
Tax Managed Global Franchise
Worldwide High Income

Income

Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income

Capital Preservation

Reserve
Tax Free Money

Senior Loan

Prime Rate Income Trust
Senior Floating Rate

Tax Free

To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:

- visit our Web site at
WWW.VANKAMPEN.COM--
to view a prospectus, select
Download Prospectus [COMPUTER ICON]

- call us at 1-800-341-2911
weekdays from 7:00 a.m. to 7:00 p.m.
central time. Telecommunications
Device for the Deaf users, call
1-800-421-2833.

[PHONE ICON]

- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us

[MAIL ICON]

* Closed to new investors

** Open to new investors for a limited time

23
<PAGE> 147

FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN SELECT GROWTH FUND

BOARD OF TRUSTEES
J. MILES BRANAGAN
JERRY D. CHOATE
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY

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 L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer

RICHARD A. CICCARONE*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

DISTRIBUTOR

VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 418256
Kansas City, Missouri 64121-9256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

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

INDEPENDENT AUDITORS

ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606

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

(SM) denotes a service mark of Van Kampen Funds Inc.

of the Fund which contains additional information on how to purchase shares, the
sales charges on shares of the Fund, and other pertinent data. After February
28, 2001, the report, if used with prospective investors, must be accompanied by
a quarterly performance update.