VAN KAMPEN AMERICAN CAPITAL GOVERNMENT TARGET FUND, 485APOS, 1996-10-30

VAN KAMPEN AMERICAN CAPITAL GOVERNMENT TARGET FUND
485APOS, 1996-10-30

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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 30, 1996.

REGISTRATION NO. 811-6127
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM N-1A

<TABLE>
<S> <C>
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 11 [X]
</TABLE>

VAN KAMPEN AMERICAN CAPITAL GOVERNMENT TARGET FUND

(EXACT NAME OF REGISTRANT AS SPECIFIED IN DECLARATION OF TRUST)

ONE PARKVIEW PLAZA, OAKBROOK TERRACE, ILLINOIS, 60181

(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(630) 684-6000

(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

RONALD A. NYBERG, ESQ.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND CORPORATE SECRETARY
VAN KAMPEN AMERICAN CAPITAL, INC.
ONE PARKVIEW PLAZA
OAKBROOK TERRACE, IL 60181
(NAME AND ADDRESS OF AGENT FOR SERVICE)

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Copy to:

WAYNE W. WHALEN, ESQ.

THOMAS A. HALE, ESQ.

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

333 WEST WACKER DRIVE

CHICAGO, ILLINOIS, 60606

(312) 407-0700

It is proposed that this filing will become effective:
(check appropriate box)

[ ] immediately upon filing pursuant to paragraph (b)

[ ] on (date) pursuant to paragraph (b)

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

[ ] on (date) pursuant to paragraph (a)(i)
[ ] 75 days after filing pursuant to paragraph (a)(ii)
[ ] on (date) pursuant to paragraph (a)(ii) of Rule 485.

If appropriate, check the following box:

[ ] this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. AN
AMENDMENT TO THE REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES
MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME SUCH
AMENDMENT TO THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS PROSPECTUS
SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO
BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH
SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED OCTOBER 30, 1996

PART A

INFORMATION REQUIRED IN A PROSPECTUS

ITEMS 1, 2, 3 AND 5A OF PART A ARE OMITTED PURSUANT TO ITEM F.4. OF THE GENERAL
INSTRUCTIONS TO FORM N-1A.

ITEM 4. GENERAL DESCRIPTION OF REGISTRANT.

(a) (i) Van Kampen American Capital Government Target Fund, formerly known
as American Capital Government Target Series (the "Fund"), is a
diversified open-end investment company registered under the
Investment Company Act of 1940 (the "1940 Act"). The Fund was
originally organized under the laws of the Commonwealth of
Massachusetts as a Massachusetts business trust on June 14, 1990
and reorganized as a trust under the laws of Delaware on August
25, 1995.

The Fund will liquidate December 16, 1997 and proceeds will be
distributed to shareholders on a pro rata basis.

(ii) The Fund seeks to provide shareholders the highest rate of return
on their investments consistent with safety and liquidity by
investing at least 80% of its assets in obligations issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities.

The Fund invests primarily in debt securities issued or guaranteed
by the U.S. Government, its agencies or instrumentalities,
including mortgage-related securities issued by instrumentalities
of the U.S. Government. Under normal circumstances, at least 80%
of the assets of the Fund are invested in such securities. The
Fund may invest up to 20% of its assets in repurchase agreements
fully collateralized by U.S. Government securities and in certain
debt securities which are not U.S. Government securities but which
are rated at the time of purchase within the two highest grades
assigned by Moody's Investors Service ("Moody's") or Standard &
Poor's Corporation ("S&P") or any non-rated debt security
considered by the Adviser to be of comparable quality and in
commercial paper rated at the time of purchase in the highest
grade assigned by Moody's or S&P. The Fund may also purchase or
sell U.S. Government securities and mortgage-related securities on
a forward commitment basis. The Fund may invest in private and
government mortgage-related securities, including private mortgage
pass-through securities. The Fund may also invest in the interest
only ("IO") or principal only ("PO") components of such debt
securities described above. This includes "zero coupon" Treasury
securities and stripped securities. Currently the principal U. S.
Treasury security issued without coupons is the Treasury bill. The
Treasury has also recently made wire transferable "zero coupon"
Treasury securities available. However, in the last few years a
number of banks and brokerage firms have separated ("stripped")
the principal portions ("corpus") from the coupon portions of the
U.S. Treasury bonds and notes and sold them separately in the form
of receipts or certificates representing undivided interests in
these instruments (which instruments are generally held by a bank
in a custodial or trust account). Such custodial receipts or
certificates are not considered by the Fund to be U.S. Government
securities.

Stripped mortgage-related securities (hereinafter referred to as
"Stripped Mortgage Securities") are derivative multiclass mortgage
securities. Stripped Mortgage Securities may be issued by agencies
or instrumentalities of the U.S. Government, or by private
originators of, or investors in, mortgage loans, including savings
and loan associations, mortgage banks, commercial banks,
investment banks and special purpose subsidiaries of the
foregoing.

Stripped Mortgage Securities are usually structured with two
classes that receive different proportions of the interest and
principal distributions on a pool of mortgage assets. A common
type of Stripped Mortgage Securities will have one class receiving
some of the interest and most
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of the principal from the mortgage assets, while the other class
will receive most of the interest and the remainder of the
principal. In the most extreme case, one class will receive all of
the interest (the interest-only or "IO" class), while the other
class will receive all of the principal (the principal-only or
"PO" class). The yield to maturity on an IO class is extremely
sensitive to the rate of principal payments (including
prepayments) on the related underlying mortgage assets, and a
rapid rate of principal payments may have a material adverse
effect on the securities' yield to maturity. If the underlying
mortgage assets experience greater than anticipated prepayments of
principal, the Fund may fail to fully recoup their initial
investments in these securities even if the security is rated AAA
or Aaa. Holders of PO securities are not entitled to any periodic
payments of interest prior to maturity. Accordingly, such
securities usually trade at a deep discount from their face or par
value and are subject to greater fluctuations of market value in
response to changing interest rates than debt obligations of
comparable maturities which make current distributions of
interest. Current federal tax law requires that holders (such as
the Fund) of such securities accrue a portion of the discount at
which the security was purchased as income each year even though
the holders receive no interest payment in cash on the certificate
during the year. Such securities may involve greater risk than
securities issued directly by the U.S. Government, its agencies or
instrumentalities.

Although the market for government-issued IO and PO securities
backed by fixed-rate mortgages is increasingly liquid, certain of
such securities may not be readily marketable and will be
considered illiquid for purposes of the Fund's limitations on
investments in illiquid securities. The Trustees of the Fund will
establish guidelines and standards for determining whether a
particular government-issued IO or PO backed by fixed-rate
mortgages is liquid. Generally, such a security may be deemed
liquid if it can be disposed of promptly in the ordinary course of
business at a value reasonably close to that used in the
calculation of the net asset value per share. Stripped Mortgage
Securities, other than government-issued IO and PO securities
backed by fixed-rate mortgages, are presently considered by the
staff of the Securities and Exchange Commission ("SEC") to be
illiquid securities and thus subject to the Fund's limitation on
investment in illiquid securities.

The Fund may also invest in other mortgage-backed securities. A
mortgage-backed security is a general obligation of the issuer,
which is additionally secured by mortgage collateral.

The Fund may also invest in "zero coupon" Treasury securities
which are U.S. Treasury bills, notes and bonds which have been
stripped of their unmatured interest coupons and receipts or
certificates representing interests in such stripped debt
obligations and coupons.

"Zero coupon" Treasury securities do not entitle the holder to any
periodic payments of interest prior to maturity. Accordingly, such
securities usually trade at a deep discount from their face or par
value and will be subject to greater fluctuations of market value
in response to changing interest rates than debt obligations of
comparable maturities which make periodic distributions of
interest. On the other hand, because there are no periodic
interest payments to be reinvested prior to maturity, zero coupon
securities eliminate the reinvestment risk and lock in a rate of
return to maturity.

The Fund may enter into repurchase agreements with domestic banks
or broker-dealers in order to earn a return on temporarily
available cash. The Fund will not invest in repurchase agreements
maturing in more than seven days if any such investment, together
with any other illiquid securities held by the Fund, exceeds 10%
of the value of its net assets. The Fund may lend its portfolio
securities to broker-dealers and other financial institutions in
an amount up to 50% of the total assets, provided that such loans
are callable at any time by the Fund, and are at all times secured
by cash collateral that is at least equal to the market value,
determined daily, of the loaned securities. During the period of
the loan, the Fund receives the income on both the loaned
securities and the collateral and thereby increases its yield
after payment of lending fees.

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Loans of portfolio securities will only be made to borrowers
considered by the Adviser to be creditworthy.

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

(b) INAPPLICABLE

(c) Since the value of debt securities owned by the Fund will fluctuate
depending upon market factors and inversely with prevailing interest
rate levels, the net asset value of shares of the Fund will fluctuate.
Debt securities with longer maturities generally tend to produce higher
yields and are subject to greater market fluctuation as a result of
changes in interest rates than debt securities with shorter maturities.

Both non-government and government mortgage-related securities are
characterized by monthly payments to the holder, reflecting the monthly
payments made by the borrowers who received the underlying mortgage
loans. The payments to the security holders (such as the Fund), like
the payments on the underlying loans, represent both principal and
interest. Although the underlying mortgage loans are for specified
periods of time, such as twenty or thirty years, the borrowers can, and
typically do, pay them off sooner. Thus, the security holders
frequently receive prepayments of principal, in addition to the
principal which is part of the regular monthly payment. A borrower is
more likely to prepay a mortgage which bears a relatively high rate of
interest. In times of declining interest rates, some of the Fund's
higher yielding securities might be converted to cash, and the Fund
will be forced to accept lower interest rates when that cash is used to
purchase additional securities. The increased likelihood of prepayment
when interest rates decline also limits market price appreciation of
mortgage-related securities. If the Fund buys mortgage-related
securities at a premium, mortgage foreclosures or mortgage prepayments
may result in a loss to the Fund of up to the amount of the premium
paid since only timely payment of principal and interest is guaranteed.

Collateralized mortgage obligations ("CMOs") are issued in a number of
classes or series with different maturities. The classes or series are
retired in sequence as the underlying mortgages are repaid. Prepayment
may shorten the stated maturity of the obligation and can result in a
loss of premium, if any has been paid. Although the securities
underlying CMOs may be subject to a guarantee or third party support,
the CMO, itself, is not so guaranteed. Therefore, if the collateral
securing the CMO is insufficient to make payment, a holder could
sustain a loss. The Fund intends to invest in privately issued CMOs and
real estate mortgage investment conduits ("REMICs") only if they are
rated at the time of purchase in the two highest grades by a
nationally-recognized rating agency or in any non-rated CMO or REMIC
considered by the Adviser to be of comparable quality.

The Fund understands that the staff of the SEC considers certain
issuers of CMOs and REMICs to be investment companies for purposes of
Section 12(d)(1) of the 1940 Act. Absent exemption order relief from
the SEC, the Fund may not invest in securities of issuers which are
investment companies in excess of the limits set forth in Section
12(d)(1) of the 1940 Act.

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ITEM 5. MANAGEMENT OF THE FUND.

(a) The business of the Fund is managed under the direction of eleven
Trustees. The Adviser determines the investment of the Fund's assets,
provides administrative services and manages the Fund's business and
affairs.

(b) Van Kampen American Capital Asset Management, Inc. (the "Adviser"), One
Parkview Plaza, Oakbrook Terrace, Illinois 60181 serves as investment
adviser to the Fund.

The Adviser is a wholly owned subsidiary of Van Kampen American
Capital, Inc. ("Van Kampen American Capital"). Van Kampen American
Capital is a diversified asset management company with more than two
million retail investor accounts, extensive capabilities for managing
institutional portfolios, more than $57 billion under management or
supervision. Van Kampen American Capital's more than 40 open-end and 38
closed-end funds and more than 2,800 unit investment trusts are
professionally distributed by leading financial advisers nationwide.
Van Kampen American Capital is a wholly owned subsidiary of VK/AC
Holding, Inc. VK/AC Holding, Inc. is a wholly-owned subsidiary of MSAM
Holdings II, Inc. which, in turn, is a wholly-owned subsidiary of
Morgan Stanley Group Inc. The Adviser's principal office is located at
One Parkview Plaza, Oakbrook Terrace, Illinois 60181.

Morgan Stanley Group Inc. and various of its directly or indirectly
owned subsidiaries, including Morgan Stanley & Co. Incorporated, a
registered broker-dealer and investment manager adviser, and Morgan
Stanley International, are engaged in a wide range of financial
services. Their principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring and other
corporate finance advisory activities; merchant banking; stock
brokerage and research services; asset management; trading of futures,
options, foreign exchange, commodities and swaps (involving foreign
exchange, commodities, indices and interest rates); real estate advice,
financing and investing; and global custody, securities clearance
services and securities lending.

The Fund retains the Adviser to manage the investment of its assets and
to place orders for the purchase and sale of its portfolio securities.
Under an investment advisory agreement between the Adviser and the Fund
(the "Advisory Agreement"), the Fund pays the Adviser a monthly fee
computed on average daily net assets of the Fund at the annual rate of
0.50% of the Fund's average daily net assets. Under the Advisory
Agreement the Fund also reimburses the Adviser on a monthly basis for
the cost of the Fund's accounting services, which include maintaining
its financial books and records and calculating its daily net asset
value.

From time to time as the Adviser and/or the Distributor may deem
appropriate, they may voluntarily undertake to reduce the Fund's
expenses by reducing the fees payable to them to the extent of, or
bearing expenses in excess of, such limitations as they may establish.

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

(c) John R. Reynoldson is primarily responsible for the day-to-day
management of the Fund's investment portfolio. Mr. Reynoldson is Vice
President of the Fund and Senior Vice President of the Adviser. He has
served as Senior Vice President of the Adviser since July, 1991. He was
previously an investment vice president with the Adviser. Mr.
Reynoldson has been primarily responsible for managing the Fund's
investment portfolio since its inception.

(d) INAPPLICABLE

(e) ACCESS Investor Services, Inc. ("ACCESS"), P.O. Box 418256, Kansas
City, Missouri 64141-9256, serves as shareholder service agent for the
Fund. ACCESS, a wholly owned subsidiary of the Adviser's parent,
provides these services at cost plus a profit.

(f) The Fund's total expenses for its most recent fiscal year as a
percentage of average net assets is %.

4
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(g) (i) INAPPLICABLE

(ii) The Adviser is authorized to place portfolio transactions with
broker-dealers participating in the distribution of shares of
other Van Kampen American Capital mutual funds if it reasonably
believes that the quality of the execution is comparable to that
available from other qualified firms.

ITEM 5A. MANAGEMENT'S DISCUSSION OF FUND PERFORMANCE.

Information contained in Annual Report.

ITEM 6. CAPITAL STOCK AND OTHER SECURITIES.

(a) The Fund is authorized to issue an unlimited number of shares of
beneficial interest of $0.01 par value, in one or more series as may be
established from time to time in accordance with the provisions of the
Fund's Declaration of Trust. Shares issued are fully paid,
non-assessable and have no preemptive or conversion rights.
Shareholders are entitled to one vote for each full share held and to
fractional votes for fractional shares held in the election of Trustees
and on other matters submitted to the vote of shareholders. All shares
have equal voting rights.

A shareholder meeting seeking shareholder approval to liquidate the
Fund will be held within three months prior to the target termination
date unless no such meeting is then required under the 1940 Act as
confirmed by written interpretation by the staff of the SEC or an
exemptive order issued by the SEC.

Shareholders will be notified of the impending liquidation and the
other investment choices available in the Van Kampen American Capital
mutual funds.

The shareholders will be asked to notify the Fund if they wish to
receive payment of the liquidation proceeds in cash, or to exchange
their shares for shares of any fund that the Fund has the capability to
exchange into without payment of any additional sales charge.

The Fund will liquidate its portfolio and pay a liquidating
distribution in cash -- or effect exchanges, subject to obtaining any
necessary shareholder approval for the liquidation.

(b) [As of December 6, 1995, Amivest Corporation, 767 5th Avenue, 50th
Floor, New York, New York 10153, serving as investment adviser to a
number of pension and trust funds that hold shares of the Fund and for
which Amalgamated Bank of New York, P.O. Box 370, Cooper Station, New
York, New York 10003-0281, serves as custodian, held 48.55% of the
outstanding shares of the Fund, and, therefore, could be deemed to
control the Fund.]

(d) INAPPLICABLE

(e) Inquiries regarding the Fund or its shares should be made to the Fund
at 2800 Post Oak Boulevard, Houston, Texas 77056.

(f) The Fund declares annual distributions prior to the end of the year in
the amount of its net investment income. A distribution of net realized
capital gains, if any, is declared at the same time. Dividends and
capital gains distributions are automatically applied to purchase
additional shares of the Fund at the next determined net asset value
unless the shareholder instructs otherwise.

The Fund's Trustees are authorized to declare pro rata share splits at
its discretion. The Trustees currently intend to declare a reverse
share split immediately after the payment of each annual dividend and
any other distribution.

(g) The Fund intends to qualify as a regulated investment company under
Subchapter M of the Internal Revenue Code of 1986, as amended (the
"Code"). As such, the Fund will distribute all of its net income and
capital gains to its shareholders and such distributions will be
taxable as such to its

5
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shareholders; while shareholders may be proportionately liable for
taxes on income and gains of the Fund, shareholders not subject to tax
on their income will not be required to pay tax on amounts distributed
to them; the Fund will inform its shareholders of the amount and nature
of such income and gains distributed.

ITEM 7. PURCHASE OF SECURITIES BEING OFFERED.

(a) Van Kampen American Capital Distributors, Inc. (the "Distributor"), One
Parkview Plaza, Oakbrook Terrace, Illinois 60181, acts as the principal
underwriter of the Fund's shares pursuant to a written agreement (the
"Underwriting Agreement").

(b) Shares of the Fund are available only to current shareholders through
dividend reinvestments. Shares are offered at the next determined net
asset value per share, plus a sales charge as described below. Net
asset value per share is determined once daily as of the close of
trading (currently 4:00 p.m., New York time) each day the New York
Stock Exchange is open. Net asset value per share is determined by
dividing the value of the Fund's securities, cash and other assets
(including accrued interest) less all liabilities (including accrued
expenses) by the total number of shares outstanding. The price paid for
shares purchased is based on the next calculation of net asset value
plus a sales charge after an order is received by a dealer provided
such order is transmitted to the Distributor prior to its close of
business on such day. Orders received by dealers after the close of the
Exchange are priced based on the next close provided they are received
by the Distributor prior to the close of its business day on the day of
such next close. It is the responsibility of dealers to transmit orders
received by them to the Distributor so they will be received prior to
such time.

U.S. Government securities and other debt securities in which the Fund
invests are traded in the over-the-counter market and are valued at the
last available bid price. Such valuations are based on quotations of
one or more dealers that make markets in the securities as obtained
from such dealers or from a pricing service. Securities with a
remaining maturity of 60 days or less are valued on an amortized cost
basis, which approximates market value. Securities and assets for which
market quotations are not readily available are valued at fair value as
determined in good faith by or under the direction of the Trustees of
the Fund. Such valuations and procedures are reviewed periodically by
the Trustees.

(c) Shares of the Fund are available only to current shareholders through
dividend reinvestments. The Fund may make additional sales of its
shares either on a continuous basis or by periodic offerings of a
limited number of shares, but the Fund is not obligated to make any
such future offerings.

(d) INAPPLICABLE.

(e) INAPPLICABLE.

(f) The Fund has adopted a Distribution Plan (the "Plan") under which it
will pay up to 0.25% per annum of its average daily net assets to the
Distributor to reimburse the Distributor for service fees paid by it to
service organizations ("Service Organizations"). Payments by the Fund
under the Plan are to reimburse the Distributor for its payments to
Service Organizations for personal service and/or maintenance of
shareholder accounts for the Fund's shareholders who are also their
clients. Payments are based on an annual percentage of the value of the
Fund's shares held in shareholder accounts for which such Service
Organizations are responsible, at the rate of 0.25% annually. The Fund
is not obligated under the Plan to pay any service expense in excess of
such service fee. Distribution expenses accrued by the Distributor in
one fiscal year may not be paid from the service fees received from the
Fund in subsequent fiscal years. Thus, if the Plan was terminated or
not continued, no amounts (other than current amounts accrued but not
yet paid) would be owed by the Fund to the Distributor.

6
<PAGE> 8

ITEM 8. REDEMPTION OR REPURCHASE.

(a) Shareholders may redeem shares at net asset value at any time without
charge by submitting a written request in proper form to ACCESS at P.O.
Box 418256, Kansas City, Missouri 64141-9256.

The request for redemption must be signed by all persons in whose names
the shares are registered. Signatures must conform exactly to the
account registration. If the proceeds of the redemption exceed $50,000,
or if the proceeds are not to be paid to the record owner at the record
address, or if the record address has changed within the previous 30
days, signature(s) must be guaranteed by one of the following: a bank
or trust company; a broker/dealer; a credit union; a national
securities exchange, registered securities association or clearing
agency; a savings and loan association; or a federal savings bank.

Generally, a properly signed written request with any required signature
guarantee is all that is required for a redemption. In some cases,
however, other documents may be necessary. In the event the redemption
is requested by a corporation, partnership, trust, fiduciary, executor
or administrator, and the name and title of the individual(s)
authorizing such redemption is not shown in the account registration, a
copy of the corporate resolution or other legal documentation appointing
the authorized signer and certified within the prior 60 days must
accompany the redemption request. IRA redemption requests should be sent
to the IRA custodian to be forwarded to ACCESS. Where Van Kampen
American Capital Trust Company serves as IRA custodian, special IRA,
403(b)(7), or Keogh redemption forms must be obtained from and be
forwarded to Van Kampen American Capital Trust Company, P.O. Box 944,
Houston, TX 77001-0944. Contact the custodian for information.

Although the Fund does not impose a charge for redemptions, a custodian
of a retirement plan account may charge fees based on their independent
fee schedules. Shareholders may also place redemption requests through
an authorized investment dealer. Orders received from dealers must be at
least $500 unless transmitted via the FUNDSERV network.

In all cases, the redemption price is the net asset value per share next
determined after the request for redemption is received in proper form
by ACCESS. Payment for shares redeemed will be made by check mailed
within seven days after acceptance by ACCESS of the request and any
other necessary documents in proper order. Such payment may be postponed
or the right of redemption suspended as provided by the rules of the
SEC. If the shares to be redeemed have been recently purchased by check,
ACCESS may delay mailing a redemption check until it confirms that the
purchase check has cleared, usually a period of up to 15 days. Any
taxable gain or loss will be recognized by the shareholder upon
redemption of shares.

A shareholder who has redeemed shares of the Fund may reinstate any
portion or all of the net proceeds of such redemption in shares of the
Fund if then offered for sale or in shares of any other fund available
for purchase. Such reinstatement is made at the net asset value next
determined after the order is received, which must be within 120 days
after the date of the redemption.

The Fund also permits shareholders and the dealer representative of
record to redeem shares by telephone and to have redemption proceeds
sent to the address of record for the account or to the bank account of
record. Telephone redemptions may not be available if the shareholder
cannot reach ACCESS by telephone, whether because all telephone lines
are busy or for any other reason; in such case, a shareholder would have
to use the Fund's regular redemption procedure.

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

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Investments of $1 million or more and certain qualified 401(k)
retirement plans are not subject to any sales charge at the time of
purchase, but a contingent deferred sales charge of up to one percent is
imposed on certain redemptions made within one year of the purchase.

(b) INAPPLICABLE

(c) The Fund may redeem any shareholder account with a net asset value on
the date of the notice of redemption less than the minimum investment
as specified by the Trustees. At least 60 days advance written notice
of any such involuntary redemption is required and the shareholder is
given an opportunity to purchase the required value of additional
shares at the next determined net asset value without sales charge. Any
applicable contingent deferred sales charge will be deducted from the
proceeds of this redemption. Any involuntary redemption may only occur
if the shareholder account is less than the minimum initial investment
due to shareholder redemptions.

(d) Payment for shares redeemed may be postponed or the right of redemption
suspended as provided by the rules of the SEC. If shares to be redeemed
have been recently purchased by check, ACCESS may delay mailing a
redemption check until it confirms that the purchase check has cleared,
usually a period of up to 15 days.

ITEM 9. PENDING LEGAL PROCEEDINGS.

INAPPLICABLE

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<PAGE> 10

Information contained herein is subject to completion or amendment. An
amendment to the registration statement relating to these securities has
been filed with the Securities and Exchange Commission. These securities
may not be sold nor may offers to buy be accepted prior to the time such
amendment to the registration statement becomes effective. This statement
of additional information shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws
of any such State.

SUBJECT TO COMPLETION -- DATED OCTOBER 30, 1996

PART B

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.

ITEM 10. COVER PAGE.

Van Kampen American Capital Government Target Fund, formerly known as
American Capital Government Target Series (the "Fund"), is a diversified
open-end management investment company.

This Statement of Additional Information is not a Prospectus but contains
information in addition to and more detailed than that set forth in Part A and
should be read in conjunction with Part A. This Statement of Additional
Information is dated December 29, 1996.

ITEM 11. TABLE OF CONTENTS.

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
General Information and History............................................... 1
Investment Objectives and Policies............................................ 1
Management of the Fund........................................................ 3
Control Persons and Principal Holders of Securities........................... 7
Investment Advisory and Other Services........................................ 8
Brokerage Allocation and Other Practices...................................... 11
Capital Stock and Other Securities............................................ 15
Purchase, Redemption and Pricing of Securities Being Offered.................. 15
Tax Status.................................................................... 15
Underwriters.................................................................. 15
Calculation of Performance Data............................................... 15
Financial Statements.......................................................... C-1
</TABLE>

ITEM 12. GENERAL INFORMATION AND HISTORY.

The Fund and Van Kampen American Capital Asset Management, Inc. (the
"Adviser") have adopted Codes of Ethics designed to recognize the fiduciary
relationship between the Fund and the Adviser and its employees. The Codes
permit directors/trustees, officers and employees to buy and sell securities for
their personal accounts subject to certain restrictions. Persons with access to
certain sensitive information are subject to preclearance and other procedures
designed to prevent conflicts of interest.

ITEM 13. INVESTMENT OBJECTIVES AND POLICIES.

(a) See Item 4.

(b)INVESTMENT RESTRICTIONS

The Fund has adopted the following restrictions which may not be changed
without the approval of the holders of a majority of the Fund's
outstanding shares. Such majority is defined as the lesser of (i) 67% or
more of the voting securities are present or represented by proxy; or
(ii) more than 50% of the outstanding voting securities. The percentage
limitations contained in the restrictions and policies set forth herein
apply at the time of purchase of securities. These restrictions provide
that the Fund shall not:

1. Invest more than five percent of its assets in the securities of
any one issuer (except the U.S. Government, its agencies and
instrumentalities) or purchase more than ten percent of the
outstanding voting securities of any one issuer, except that the
Fund may purchase securities of other investment companies to the
extent permitted by (i) the 1940 Act, as amended from time to time,
(ii) the rules and regulations promulgated by the Securities and
Exchange Commission under the 1940 Act, as amended from time to
time, or (iii) an exemption or other relief from the provisions of
the 1940 Act.

<PAGE> 11

2. Borrow in excess of five percent of the market or other fair value
of its total assets, or pledge its assets to an extent greater than
five percent of the market or other fair value of its total assets.
Any such borrowings shall be from banks and shall be undertaken
only as a temporary measure for extraordinary or emergency
purposes.

3. Issue senior securities, as defined in the Investment Company Act
of 1940 (the "1940 Act").

4. Write puts, calls or combinations thereof.

5. Purchase or sell any commodity or commodity contracts.

6. Underwrite securities of other issuers, except insofar as the Fund
may be deemed to be an underwriter for purposes of the Securities
Act of 1933 in the resale of any unregistered securities owned by
the Fund; provided, however, the Fund shall not purchase any
unregistered securities if immediately after and as a result of
such purchase such securities, together with any other illiquid
securities held by the Fund, would constitute more than ten percent
of the Fund's total assets. Illiquid securities are securities
which are not readily marketable.

7. Make any investment in real estate, commodities or commodities
contracts, except that the Fund may purchase or sell securities
which are secured by real estate.

8. Make any investment which would cause more than 25% of the market
or other fair value of its total assets to be invested in the
securities of issuers all of which conduct their principal business
activities in the same industry. This restriction does not apply to
obligations issued or guaranteed by the U.S. Government, its
agencies or instrumentalities.

9. Make loans of money or securities, except that the Fund may invest
(a) by investment in repurchase agreements in accordance with
applicable requirements set forth in the Fund's Prospectus or (b)
by lending its portfolio securities in amounts not to exceed 50% of
the Fund's total assets, provided that such loans are secured by
cash collateral that is at least equal to the market value. The
Fund will not invest in repurchase agreements maturing in more than
seven days (unless subject to a demand feature) if any such
investment, together with any illiquid securities held by the Fund,
exceeds 10% of the market or other fair value of its total net
assets.

10. Make short sales of securities, unless at the time of the sale the
Fund owns an equal amount of such securities.

11. Purchase securities on margin, except that the Fund may obtain such
short-term credits as may be necessary for the clearance of
purchases and sales of securities.

12. Invest in warrants or rights except where acquired in units or
attached to other securities.

13. Invest in securities of any company if any officer or trustee of
the Fund or of the Adviser owns more than one-half of one percent
of the outstanding securities of such company, and such officers
and trustees own in the aggregate more than five percent of the
outstanding securities of such issuer.

14. Invest in interests in oil, gas, or other mineral exploration or
development programs, or invest in oil, gas or mineral leases.

(d) The Fund generally experiences a high rate of portfolio turnover, which
may vary from year to year. The rate of portfolio turnover is not a
limiting factor when the Adviser deems it desirable to purchase or sell
securities. A 100% turnover rate would occur, for example, if all the
securities held by the Fund were replaced in a period of one year.
Higher portfolio turnover involves correspondingly greater brokerage
commissions and other transaction costs, which are borne directly by
the Fund. The Fund anticipates that the turnover rate will not reach
100%.

2
<PAGE> 12

Over the last two fiscal years, the portfolio turnover rate has dropped
significantly. Given the approaching liquidation date of December 16,
1997, there has been less of a need to alter the portfolio structure.

ITEM 14. MANAGEMENT OF THE FUND.

(a) The Fund's Trustees and Officers and their principal occupations for
the past five years are listed below.

TRUSTEES AND OFFICERS

The tables below list the trustees and officers of the Trust (of which the
Fund is a separate series) and their principal occupations for the last five
years and their affiliations, if any, with Van Kampen American Capital
Investment Advisory Corp. (the "VK Adviser"), Van Kampen American Capital Asset
Management, Inc. (the "AC Adviser"), Van Kampen American Capital Distributors,
Inc. (the "Distributor"), Van Kampen American Capital, Inc. ("Van Kampen
American Capital"), VK/AC Holding, Inc. or ACCESS Investor Services, Inc.
("ACCESS"). For purposes hereof, the terms "Van Kampen American Capital Funds"
or "Fund Complex" includes each of the open-end investment companies advised by
the VK Adviser (excluding The Explorer Institutional Trust) and each of the
open-end investment companies advised by the AC Adviser (excluding the Van
Kampen American Capital Exchange Fund and the Common Sense Trust).

TRUSTEES

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
J. Miles Branagan.................. Co-founder, Chairman, Chief Executive Officer and
1632 Morning Mountain Road President of MDT Corporation, a company which develops
Raleigh, NC 27614 manufactures, markets and services medical and scientific
Date of Birth: 07/14/32 equipment. Trustee of each of the Van Kampen American
Capital Funds.
Linda Hutton Heagy................. Managing Partner, Paul Ray Berndtson, an executive
10 South Riverside Plaza recruiting and management consulting firm. Formerly,
Suite 720 Executive Vice President of ABN AMRO, N.A., a Dutch bank
Chicago, IL 60606 holding company. Prior to 1992, Executive Vice President
Date of Birth: 06/03/49 of La Salle National Bank. Trustee of each of the Van
Kampen American Capital Funds.
Roger Hilsman...................... Professor of Government and International Affairs
251-1 Hamburg Cove Emeritus, Columbia University. Trustee of each of the Van
Lyme, CT 06371 Kampen American Capital Funds.
Date of Birth: 11/23/19
R. Craig Kennedy................... President and Director, German Marshall Fund of the
11 DuPont Circle, N.W. United States. Formerly, advisor to the Dennis Trading
Washington, D.C. 20036 Group Inc. Prior to 1992, President and Chief Executive
Date of Birth: 02/29/52 Officer, Director and member of the Investment Committee
of the Joyce Foundation, a private foundation. Trustee of
each of the Van Kampen American Capital Funds.
</TABLE>

3
<PAGE> 13

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
Dennis J. McDonnell*............... President, Chief Operating Officer and a Director of the
One Parkview Plaza VK Adviser, the AC Adviser, Van Kampen American Capital
Oakbrook Terrace, IL 60181 Advisors, Inc. and Van Kampen American Capital
Date of Birth: 05/20/42 Management, Inc. Executive Vice President and a Director
of VK/AC Holding, Inc. and Van Kampen American Capital.
President and Director of Van Kampen Merritt Equity
Advisors Corp. Director of Van Kampen Merritt Equity
Holdings Corp. Director of McCarthy, Crisanti & Maffei,
Inc. Prior to September 1996, Chief Executive Officer
McCarthy, Crisanti & Maffei, Inc. and Chairman and
Director of MCM Asia Pacific Company, Limited. Prior to
July 1996, President, Chief Operating Officer and Trustee
of VSM Inc. and VCJ Inc. President, Chief Executive
Officer and Trustee of each of the Van Kampen American
Capital Funds. President, Chairman of the Board and
Trustee of other investment companies advised by the VK
Adviser. Executive Vice President of other investment
companies advised by the AC Adviser.

Donald C. Miller................... Prior to 1992, Director of Royal Group, Inc., a company
415 North Adams in insurance related businesses. Formerly Vice Chairman
Hinsdale, IL 60521 and Director of Continental Illinois National Bank and
Date of Birth: 03/31/20 Trust Company of Chicago and Continental Illinois
Corporation. Trustee and Co-Chairman of each of the Van
Kampen American Capital Funds.

Jack E. Nelson..................... President of Nelson Investment Planning Services, Inc., a
423 Country Club Drive financial planning company and registered investment
Winter Park, FL 32789 adviser. President of Nelson Investment Brokerage
Date of Birth: 02/13/36 Services Inc., a member of the National Association of
Securities Dealers, Inc. ("NASD") and Securities
Investors Protection Corp. ("SIPC"). Trustee of each of
the Van Kampen American Capital Funds.

Jerome L. Robinson................. President of Robinson Technical Products Corporation, a
115 River Road manufacturer and processor of welding alloys, supplies
Edgewater, NJ 07020 and equipment. Director of Pacesetter Software, a
Date of Birth: 10/10/22 software programming company specializing in white collar
productivity. Director of Panasia Bank. Trustee of each
of the Van Kampen American Capital Funds.

Fernando Sisto..................... George M. Bond Chaired Professor and, prior to 1995, Dean
155 Hickory Lane of Graduate School and Chairman, Department of Mechanical
Closter, NJ 07624-2322 Engineering, Stevens Institute of Technology. Director of
Date of Birth: 08/02/24 Dynalysis of Princeton, a firm engaged in engineering
research. Trustee and Co-Chairman of each of the Van
Kampen American Capital Funds.

Wayne W. Whalen*................... Partner in the law firm of Skadden, Arps, Slate, Meagher
333 West Wacker Drive & Flom (Illinois), legal counsel to the Van Kampen
Chicago, IL 60606 American Capital Funds, The Explorer Institutional Trust
Date of Birth: 08/22/39 and the closed-end investment companies advised by the VK
Adviser. Trustee of each of the Van Kampen American
Capital Funds, The Explorer Institutional Trust and the
closed-end investment companies advised by the VK
Adviser.
</TABLE>

4
<PAGE> 14

<TABLE>
<CAPTION>
PRINCIPAL OCCUPATIONS OR
NAME, ADDRESS AND AGE EMPLOYMENT IN PAST 5 YEARS
- ----------------------------------- ---------------------------------------------------------
<S> <C>
William S. Woodside................ Vice Chairman of the Board of LSG Sky Chefs, Inc., a
712 Fifth Avenue caterer of airline food. Formerly, Director of Primerica
40th Floor Corporation (currently known as The Traveler's Inc.).
New York, NY 10019 Formerly, Director of James River Corporation, a producer
Date of Birth: 01/31/22 of paper products. Trustee, and former President of
Whitney Museum of American Art. Formerly, Chairman of
Institute for Educational Leadership, Inc., Board of
Visitors, Graduate School of The City University of New
York, Academy of Political Science. Trustee of Committee
for Economic Development. Director of Public Education
Fund Network, Fund for New York City Public Education.
Trustee of Barnard College. Member of Dean's Council,
Harvard School of Public Health. Member of Mental Health
Task Force, Carter Center. Trustee of each of the Van
Kampen American Capital Funds.
</TABLE>

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

* Such trustees are "interested persons" (within the meaning of Section 2(a)(19)
of the 1940 Act). Mr. McDonnell is an interested person of the VK Adviser, the
AC Adviser and the Fund by reason of his positions with the VK Adviser and the
AC Adviser. Mr. Whalen is an interested person of the Fund by reason of his
firm acting as legal counsel to the Fund.

OFFICERS

The address for William N. Brown, Curtis W. Morell, Alan T. Sachtleben,
Paul R. Wolkenberg, Tanya M. Loden, Huey P. Falgout, Jr. and Robert Sullivan is
2800 Post Oak Blvd., Houston, TX 77056. The address for Peter W. Hegel, Ronald
A. Nyberg, Edward C. Wood III, John L. Sullivan, Nicholas Dalmaso, Scott E.
Martin, Weston B. Wetherell and Steven M. Hill is One Parkview Plaza, Oakbrook
Terrace, IL 60181.

Peter W. Hegel.......... Vice President Executive Vice President of the VK Adviser,
Date of Birth: AC Adviser, Van Kampen American Capital
06/25/56 Management, Inc. and Van Kampen American
Capital Advisors, Inc. Prior to September
1996, Director of McCarthy, Crisanti &
Maffei, Inc. Prior to July 1996, Director
of VSM Inc. Vice President of each of the
Van Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
</TABLE>

5
<PAGE> 15

<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
Curtis W. Morell........ Vice President and Senior Vice President of the VK Adviser and
Date of Birth: Chief Accounting the AC Adviser. Vice President and Chief
08/04/46 Officer Accounting Officer of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and AC Adviser.
Ronald A. Nyberg........ Vice President and Executive Vice President, General Counsel
Date of Birth: Secretary and Secretary of Van Kampen American
07/29/53 Capital and VK/AC Holding, Inc. Executive
Vice President, General Counsel and a
Director of the Distributor, the VK
Adviser, the AC Adviser, Van Kampen
American Capital Management, Inc., Van
Kampen Merritt Equity Advisors Corp. and
Van Kampen Merritt Equity Holdings Corp.
Executive Vice President, General Counsel
and Assistant Secretary of Van Kampen
American Capital Advisors, Inc., American
Capital Contractual Services, Inc., Van
Kampen American Capital Exchange
Corporation, Van Kampen American Capital
Services, Inc. and ACCESS. Executive Vice
President, General Counsel, Assistant
Secretary and Director of Van Kampen
American Capital Trust Company. Director of
ICI Mutual Insurance Co., a provider of
insurance to members of the Investment
Company Institute. Prior to September 1996,
General Counsel of McCarthy, Crisanti &
Maffei, Inc. Prior to July 1996, Executive
Vice President and General Counsel of VSM
Inc. and VCJ Inc. Vice President and
Secretary of each of the Van Kampen
American Capital Funds and other investment
companies advised by the VK Adviser and AC
Adviser.
Alan T. Sachtleben...... Vice President Executive Vice President of the VK Adviser
Date of Birth: and Van Kampen American Capital Management,
04/20/42 Inc. Executive Vice President and a
Director of the AC Adviser and Van Kampen
American Capital Advisors, Inc. Vice
President of each of the Van Kampen
American Capital Funds and other investment
companies advised by the VK Adviser and AC
Adviser.
Paul R. Wolkenberg...... Vice President Executive Vice President of VK/AC Holding,
Date of Birth: Inc., Van Kampen American Capital, the
11/10/44 Distributor and the AC Adviser. President,
Chief Executive Officer and a Director of
Van Kampen American Capital Trust Company
and ACCESS. Director of American Capital
Contractual Services, Inc. Vice President
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and AC Adviser.
Edward C. Wood III...... Vice President and Senior Vice President of the VK Adviser,
Date of Birth: Chief Financial Officer the AC Adviser and Van Kampen American
01/11/56 Capital Management, Inc. Vice President and
Chief Financial Officer of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
</TABLE>

6
<PAGE> 16

<TABLE>
<CAPTION>
POSITIONS AND PRINCIPAL OCCUPATIONS
NAME AND AGE OFFICES WITH FUND DURING PAST 5 YEARS
- ------------------------ ----------------------- -------------------------------------------
<S> <C> <C>
John L. Sullivan........ Treasurer First Vice President of the VK Adviser and
Date of Birth: the AC Adviser. Treasurer of each of the
08/20/55 Van Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
Tanya M. Loden.......... Controller Vice President of the VK Adviser and the AC
Date of Birth: Adviser. Controller of each of the Van
11/19/59 Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and AC Adviser.
Nicholas Dalmaso........ Assistant Secretary Assistant Vice President and Senior
Date of Birth: Attorney of Van Kampen American Capital.
03/01/65 Assistant Vice President and Assistant
Secretary of the Distributor, the VK
Adviser, the AC Adviser and Van Kampen
American Capital Management, Inc. Assistant
Vice President of Van Kampen American
Capital Advisors, Inc. Assistant Secretary
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and the AC
Adviser. Prior to May 1992, attorney for
Cantwell & Cantwell, a Chicago law firm.
Huey P. Falgout, Jr..... Assistant Secretary Assistant Vice President and Senior
Date of Birth: Attorney of Van Kampen American Capital.
11/15/63 Assistant Vice President and Assistant
Secretary of the Distributor, the VK
Adviser, the AC Adviser, Van Kampen
American Capital Management, Inc., Van
Kampen American Capital Advisors, Inc.,
American Capital Contractual Services,
Inc., Van Kampen American Capital Exchange
Corporation and ACCESS. Assistant Secretary
of each of the Van Kampen American Capital
Funds and other investment companies
advised by the VK Adviser and AC Adviser.
Scott E. Martin......... Assistant Secretary Senior Vice President, Deputy General
Date of Birth: Counsel and Assistant Secretary of Van
08/20/56 Kampen American Capital and VK/AC Holding,
Inc. Senior Vice President, Deputy General
Counsel and Secretary of the VK Adviser,
the AC Adviser, the Distributor, Van Kampen
American Capital Management, Inc., Van
Kampen American Capital Advisors, Inc.,
American Capital Contractual Services,
Inc., Van Kampen American Capital Exchange
Corporation, Van Kampen American Capital
Services, Inc., ACCESS, Van Kampen Merritt
Equity Advisors Corp. and Van Kampen
Merritt Equity Holdings Corp. Prior to
September 1996, Deputy General Counsel and
Secretary of McCarthy, Crisanti & Maffei,
Inc. Prior to July 1996, Senior Vice
President, Deputy General Counsel and
Secretary of VSM Inc. and VCJ Inc.
Assistant Secretary of each of the Van
Kampen American Capital Funds and other
investment companies advised by the VK
Adviser and the AC Adviser.
</TABLE>

7
<PAGE> 17

Each of the foregoing trustees and officers holds the same position with
each of the funds in the Fund Complex. As of December 31, 1995, there were 50
funds in the Fund Complex. Each trustee who is not an affiliated person of the
VK Adviser, the AC Adviser, the Distributor or Van Kampen American Capital (each
a "Non-Affiliated Trustee") is compensated by an annual retainer and meeting
fees for services to the funds in the Fund Complex. Each fund in the Fund
Complex provides a deferred compensation plan to its Non-Affiliated Trustees
that allows trustees to defer receipt of his or her compensation and earn a
return on such deferred amounts based upon the return of the common shares of
the funds in the Fund Complex as more fully described below. Each fund in the
Fund Complex also provides a retirement plan to its Non-Affiliated Trustees that
provides Non-Affiliated Trustees with compensation after retirement, provided
that certain eligibility requirements are met as more fully described below.

The compensation of each Non-Affiliated Trustee includes a retainer by the
funds in the Fund Complex advised by the AC Adviser (the "AC Funds") in an
amount equal to $35,000 per calendar year, due in four quarterly installments on
the first business day of each calendar quarter. The AC Funds pay each Non-
Affiliated Trustee a per meeting fee in the amount of $2,000 per regular
quarterly meeting attended by the Non-Affiliated Trustee, due on the date of
such meeting, plus reasonable expenses incurred by the Non-Affiliated Trustee in
connection with his or her services as a trustee. Payment of the annual retainer
and the regular meeting fee is allocated among the AC Funds (i) 50% on the basis
of the relative net assets of each AC Fund to the aggregate net assets of all
the AC Funds and (ii) 50% equally to each AC Fund, in each case as of the last
business day of the preceding calendar quarter. Each AC Fund participating in
any special meeting of the trustees generally pays each Non-Affiliated Trustee a
per meeting fee in the amount of $125 per special meeting attended by the
Non-Affiliated Trustee, due on the date of such meeting, plus reasonable
expenses incurred by the Non-Affiliated Trustee in connection with his or her
services as a trustee, provided that no compensation will be paid in connection
with certain telephonic special meetings.

The trustees have approved an aggregate compensation cap with respect to
funds in the Fund Complex of $84,000 per Non-Affiliated Trustee per year
(excluding any retirement benefits) for the period July 22, 1995 through
December 31, 1996, subject to the net assets and the number of funds in the Fund
Complex as of July 21, 1995 and certain other exceptions. In addition, each of
the VK Adviser or the AC Adviser, as the case may be, has agreed to reimburse
each fund in the Fund Complex through December 31, 1996 for any increase in the
aggregate trustee's compensation over the aggregate compensation paid by such
fund in its 1994 fiscal year, provided that if a fund did not exist for the
entire 1994 fiscal year appropriate adjustments will be made.

Each Non-Affiliated Trustee can elect to defer receipt of all or a portion
of the compensation earned by such Non-Affiliated Trustee until retirement.
Amounts deferred are retained by the Fund and earn a rate of

8
<PAGE> 18

return determined by reference to the return on the common shares of the Fund or
other funds in the Fund Complex as selected by the respective Non-Affiliated
Trustee. To the extent permitted by the 1940 Act, the Fund may invest in
securities of those funds selected by the Non-Affiliated Trustees in order to
match the deferred compensation obligation. The deferred compensation plan is
not funded and obligations thereunder represent general unsecured claims against
the general assets of the Fund.

The Fund adopted a retirement plan on January 25, 1996. Under the Fund's
retirement plan, a Non-Affiliated Trustee who is receiving trustee's fees from
the Fund prior to such Non-Affiliated Trustee's retirement, has at least ten
years of service and retires at or after attaining the age of 60, is eligible to
receive a retirement benefit equal to $2,500 per year for each of the ten years
following such trustee's retirement. Trustees retiring prior to the age of 60 or
with fewer than 10 years but more than 5 years of service may receive reduced
retirement benefits from a series. The retirement plan contains a Fund Complex
retirement benefit cap of $60,000 per year. The AC Adviser will reimburse the
Fund for expenses related to the retirement plan through December 31, 1996.

Additional information regarding compensation and benefits for trustees is
set forth below. The "Registrant" is the Trust, which currently consists of one
operating series. As indicated in the notes accompanying the table, the amounts
relate to either the Registrant's last fiscal year ended August 31, 1996 or the
Fund Complex' last calendar year ended December 31, 1995.

COMPENSATION TABLE

<TABLE>
<CAPTION>
ESTIMATED TOTAL
PENSION OR ANNUAL COMPENSATION
AGGREGATE RETIREMENT BENEFITS BEFORE DEFERRAL
COMPENSATION BENEFITS ACCRUED FROM FROM REGISTRANT
BEFORE DEFERRAL AS PART OF REGISTRANT AND FUND
FROM REGISTRANT UPON COMPLEX PAID TO
NAME(1) REGISTRANT(2) EXPENSES(3) RETIREMENT(4) TRUSTEE(5)
- --------------------------------------- ---------------- ---------------- ----------- ---------------
<S> <C> <C> <C> <C>
J. Miles Branagan...................... $-0- $84,250
Dr. Richard E. Caruso.................. -0- 57,250
Philip P. Gaughan...................... -0- 76,500
Linda Hutton Heagy..................... -0- 38,417
Dr. Roger Hilsman...................... -0- 91,250
R. Craig Kennedy....................... -0- 92,625
Donald C. Miller....................... -0- 94,625
Jack E. Nelson......................... -0- 93,625
David Rees............................. -0- 83,250
Jerome L. Robinson..................... -0- 89,375
Lawrence J. Sheehan.................... -0- 91,250
Dr. Fernando Sisto..................... -0- 98,750
Wayne W. Whalen........................ -0- 93,375
William S. Woodside.................... -0- 79,125
</TABLE>

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

(1) Mr. McDonnell, a trustee of the Trust, is an affiliated person of the VK
Adviser and AC Adviser and is not eligible for compensation or retirement
benefits from the Registrant. Messrs. Gaughan, Kennedy, Miller, Nelson,
Robinson and Whalen were elected by shareholders to the Board of Trustees on
July 21, 1995. Ms. Heagy was appointed to the Board of Trustees on September
7, 1995. Mr. McDonnell was appointed to the Board of Trustees on January 30,
1996. Mr. Don G. Powell resigned from the Board of Trustees on August 15,
1996, and did not receive any compensation or benefits from the Fund while a
trustee because he was an affiliated person of the VK Adviser and AC
Adviser. Messrs. Gaughan and Rees retired from the Board of Trustees on
January 26, 1996 and January 29, 1996, respectively. Messrs. Caruso and
Sheehan were removed from the Board of Trustees effective September 7, 1995
and January 29, 1996, respectively.

(2) The amounts shown in this column are aggregated from the compensation paid
by each series in operation during the Registrant's fiscal year ended August
31, 1996 before deferral by the trustees under the deferred compensation
plan. The following trustees deferred all or a portion of their compensation
from the Registrant during the fiscal year ended August 31, 1996: Dr.
Caruso, $ ; Mr. Gaughan, $ ; Ms. Heagy, $ ; Mr. Kennedy,
$ ; Mr. Miller, $ ; Mr. Nelson, $ ; Mr. Rees, $ ;

9
<PAGE> 19

Mr. Robinson, $ ; Dr. Sisto, $ ; and Mr. Whalen, $ . The
cumulative deferred compensation (including interest) accrued with respect
to each trustee from the Registrant as of August 31, 1996 is as follows: Dr.
Caruso, $ ; Mr. Gaughan, $ ; Ms. Heagy, $ ; Mr. Kennedy,
$ ; Mr. Miller, $ ; Mr. Nelson, $ ; Mr. Rees, $ ; Mr.
Robinson, $ ; Dr. Sisto, $ ; and Mr. Whalen, $ . The deferred
compensation plan is described above the Compensation Table. Amounts
deferred are retained by the Fund and earn a rate of return determined by
reference to either the return on the common shares of the Fund or other
funds in the Fund Complex as selected by the respective Non-Affiliated
Trustee. To the extent permitted by the 1940 Act, the Fund may invest in
securities of those funds selected by the Non-Affiliated Trustees in order
to match the deferred compensation obligation.

(3) The amounts shown in this column are zero in the Fund's fiscal year ended
August 31, 1996 because the Adviser has agreed to reimburse the Fund for
expenses related to the retirement plan through December 31, 1996. Absent
such reimbursement, the aggregate expenses of the Fund for all trustees
would have been approximately $ in its fiscal year ended August 31,
1996. The Retirement Plan is described above the Compensation Table.

(4) The amounts shown in this column are the estimated annual benefits payable
by the Registrant in each year of the 10-year period commencing in the year
of such trustee's retirement from the Registrant (based on $2,500 per series
for each series of the Registrant in operation) assuming: the trustee has 10
or more years of service on the Board of the respective series and retires
at or after attaining the age of 60. The actual annual benefit may be less
if the trustee is subject to the Fund Complex retirement benefit cap or if
the trustee is not fully vested at the time of retirement.

(5) The amounts shown in this column represent the aggregate compensation paid
by all of the funds in the Fund Complex as of December 31, 1995, before
deferral by the trustees under the deferred compensation plan. The following
trustees deferred compensation paid by the Registrant and the Fund Complex
during the calendar year ended December 31, 1995; Dr. Caruso, $41,750; Mr.
Gaughan, $57,750; Ms. Heagy, $8,750; Mr. Kennedy, $65,875; Mr. Miller,
$65,875; Mr. Nelson, $65,875; Mr. Rees, $8,375; Mr. Robinson, $62,375; Dr.
Sisto, $30,260; and Mr. Whalen, $65,625. The deferred compensation earns a
rate of return determined by reference to the return on the common shares of
the Fund or other funds in the Fund Complex as selected by the respective
Non-Affiliated Trustee. To the extent permitted by the 1940 Act, the Fund
may invest in securities of those funds selected by the Non-Affiliated
Trustees in order to match the deferred compensation obligation. The
trustees' Fund Complex compensation cap commenced on July 22, 1995 and
covered the period between July 22, 1995 and December 31, 1995. Compensation
received prior to July 22, 1995 was not subject to the cap. For the calendar
year ended December 31, 1995, while certain trustees received compensation
over $84,000 in the aggregate, no trustee received compensation in excess of
the pro rata amount of the Fund Complex cap for the period July 22, 1995
through December 31, 1995. In addition to the amounts set forth above,
certain trustees received lump sum retirement benefit distributions not
subject to the cap in 1995 related to three mutual funds that ceased
investment operations during 1995 as follows: Mr. Gaughan, $22,136; Mr.
Miller, $33,205; Mr. Nelson, $30,851; Mr. Robinson, $11,068; and Mr. Whalen,
$27,332. The VK Adviser, AC Adviser and their affiliates also serve as
investment adviser for other investment companies; however, with the
exception of Messrs. McDonnell and Whalen, the trustees were not trustees of
such investment companies. Combining the Fund Complex with other investment
companies advised by the VK Adviser, AC Adviser and their affiliates, Mr.
Whalen received Total Compensation of $268,857 during the calendar year
ended December 31, 1995.

As of December , 1996, the trustees and officers of the Fund as a group
owned less than 1% of the shares of the Fund. As of December , 1996, no
trustee or officer of the Fund owns or would be able to acquire 5% or more of
the common stock of VK/AC Holding, Inc. Mr. McDonnell owns, or has the
opportunity to purchase, an equity interest in VK/AC Holding, Inc., the parent
company of Van Kampen American Capital, and has entered into an employment
contract (for a term until February 17, 1998) with Van Kampen American Capital.

LEGAL COUNSEL

Skadden, Arps, Slate, Meagher & Flom (Illinois).

ITEM 15. CONTROL PERSONS AND PRINCIPAL HOLDERS OF SECURITIES.

[As of December 6, 1995, Amivest Corporation, a Delaware corporation, 767
5th Avenue, 50th Floor, New York, New York 10153, serves as investment adviser
to a number of pension and trust funds that hold

10
<PAGE> 20

shares of the Fund, including those for which Amalgamated Bank serves as
custodian. As a result of such relationship, Amivest may be deemed to control
the Fund.

In addition, Van Kampen American Capital Trust Company, acts as custodian
for certain employee benefit plans and individual retirement accounts.

<TABLE>
<CAPTION>
PERCENT
NAME AND ADDRESS OF
OF BENEFICIAL OWNER OWNERSHIP
--------------------------------------------------------- ---------
<S> <C>
Amalgamated Bank of New York Cust. 27.58%
TWU-NYC Private Bus Lines Pension Fund
Amivest Corp. Discretionary Investment Manager
P.O. Box 0370 Cooper Station
New York, New York 10276-0370
Van Kampen American Capital Trust Company 13.72%
2800 Post Oak Boulevard
Houston, Texas 77056
Amalgamated Bank of New York Cust. 8.51%
Marble Industry Trust Fund
P.O. Box 0370 Cooper Station
New York, NY 10276-0370
Amalgamated Bank of New York Cust. 6.27%
Elevator Div. Retirement Benefit Plan
Amivest Corp. Discretionary Investment Manager
P.O. Box 0370
New York, New York 10276-0370
Amalgamated Bank of New York Cust. 6.19%
NY City Hotel Trades Council & Hotel Association
Pension Fund
Amivest Corp. Discretionary Investment Manager
P.O. Box 0370
New York, New York 10276-0370
</TABLE>

(c) As of December , 1996, the Trustees and Officers of the Fund as a
group owned less than one percent of the outstanding shares of the
Fund.

No Officer or Trustee of the Fund owns or would be able to acquire five
percent or more of the common stock of VK/AC Holding, Inc.]

ITEM 16. INVESTMENT ADVISORY AND OTHER SERVICES.

(a) (i) The Adviser, the Distributor and ACCESS are wholly owned
subsidiaries of Van Kampen American Capital, Inc. ("VKAC"), which
is a wholly owned subsidiary of VK/AC Holding, Inc. VK/AC Holding,
Inc. is a wholly-owned subsidiary of MSAM Holdings II, Inc. which,
in turn, is a wholly-owned subsidiary of Morgan Stanley Group Inc.
The Adviser's principal office is located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181.

Morgan Stanley Group Inc. and various of its directly or
indirectly owned subsidiaries, including Morgan Stanley & Co.
Incorporated, a registered broker-dealer and investment manager
adviser, and Morgan Stanley International, are engaged in a wide
range of financial services. Their principal businesses include
securities underwriting, distribution and trading; merger,
acquisition, restructuring and other corporate finance advisory
activities; merchant banking; stock brokerage and research
services; asset management; trading of futures, options, foreign
exchange, commodities and swaps (involving foreign exchange,
commodities, indices

11
<PAGE> 21

and interest rates); real estate advice, financing and investing;
and global custody, securities clearance services and securities
lending.

(ii) See Item 14(a).

(iii) The Fund and the Adviser are parties to an investment advisory
agreement (the "Advisory Agreement"). Under the Advisory
Agreement, the Fund pays to the Adviser as compensation for the
services rendered, facilities furnished, and expenses paid by it
a fee payable monthly computed on average daily net assets of the
Fund at an annual rate of 0.50% on the Fund's average daily net
assets. During the fiscal years ended August 31, 1994, 1995 and
1996 the Adviser received $89,343, $78,242 and $ (with
expense waiver) in advisory fees from the Fund, respectively.

The Fund's average net assets are determined by taking the
average of all of the determinations of the net assets during a
given calendar month. Such fee is payable for each calendar month
as soon as practicable after the end of that month. The fee
payable to the Adviser is reduced by any commissions, tender
solicitation and other fees, brokerage or similar payments
received by the Adviser or any other direct or indirect majority
owned subsidiary of VK/AC Holding, Inc. in connection with the
purchase and sale of portfolio investments of the Fund, less any
direct expenses incurred by such subsidiary of VK/AC Holding,
Inc. in connection with obtaining such commissions, fees,
brokerage or similar payments. The Adviser agrees to use its best
efforts to recapture tender solicitation fees and exchange offer
fees for the Fund's benefit and to advise the Trustees of the
Fund of any other commissions, fees, brokerage or similar
payments which may be possible for the Adviser or any other
direct or indirect majority owned subsidiary of VK/AC Holding,
Inc. to receive in connection with the Fund's portfolio
transactions or other arrangements which may benefit the Fund.

The Advisory Agreement also provides that, in the event the
ordinary business expenses of the Fund for any fiscal year exceed
the most restrictive expense limitation applicable in the states
where the Fund's shares are qualified for sale, the Adviser's
monthly compensation will be reduced by the amount of such excess
and that, if the amount of such excess exceeds the Adviser's
monthly compensation, the Adviser will pay the Fund an amount
sufficient to make up the deficiency, subject to readjustment
during the Fund's fiscal year. Ordinary business expenses include
the investment advisory fee and other operating costs paid by the
Fund except (1) interest and taxes, (2) brokerage commissions,
(3) certain litigation and indemnification expenses as described
in the Advisory Agreement and (4) payments made by the Fund
pursuant to the Distribution Plan. The Advisory Agreement also
provides that the Adviser shall not be liable to the Fund for any
actions or omissions if it acted in good faith without negligence
or misconduct.

The most restrictive applicable limitation will be 2 1/2% of the
first $30 million, 2% of the next $70 million, and 1 1/2% of the
remaining average net assets.

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

(b) Under the Advisory Agreement, the Fund retains the Adviser to manage
the investment of its assets including the placing of orders for the
purchase and sale of portfolio securities. The Adviser obtains and
evaluates economic, statistical and financial information to formulate
and implement the Fund's investment programs. The Adviser also
furnishes the services of the Fund's President and such other executive
and clerical personnel as are necessary to prepare the various reports
and statements and

12
<PAGE> 22

conduct the Fund's day-to-day operations. Under the Advisory Agreement,
the Fund bears the cost of its accounting services, which include
maintaining its financial books and records and calculating its net
asset value. The costs of such accounting services include the salaries
and overhead expenses of the Fund's Treasurer and the personnel
operating under his direction. For the fiscal years ended August 31,
1994, 1995 and 1996, the Fund paid $52,629, $49,880 and $ ,
respectively, for accounting services. A portion of these amounts were
paid to the Adviser or its parent in reimbursement of personnel,
facilities and equipment costs attributable to the provision of
accounting services to the Fund. The services provided by the Adviser
are at cost, which is allocated among the investment companies advised
or sub-advised by the Adviser. The Fund also pays shareholder service
agency fees, custodian fees, legal and auditing fees, the costs of
reports to shareholders, and all other ordinary business expenses not
specifically assumed by the Adviser. The Advisory Agreement also
provides that the Adviser shall not be liable to the Fund for any
actions or omissions if it acted without bad faith, negligence or
reckless disregard of its obligations.

(d) INAPPLICABLE

(e) INAPPLICABLE

(f) The Fund has adopted a distribution plan (the "Plan") under which it
may pay up to 0.25% per annum of its average daily net assets to the
Distributor for the purpose of financing any activity which is
primarily intended to result in the sale of the Fund's shares.
Activities which could be financed under the Plan include, but are not
limited to, organizing and conducting sales seminars, printing
prospectuses and reports for other than existing shareholders,
preparation and distribution of advertising material and sales
literature, supplemental payments to dealers under a dealer incentive
program established by the Distributor and the costs of administering
such a program.

The Trustees have authorized payments by the Fund under the Plan to
reimburse the Distributor for its payments to certain financial
institutions (which may include banks), securities dealers and other
industry professionals (collectively, "Service Organizations") for
administration, for servicing Fund shareholders who are also their
clients and/or for distribution. Such payments are based on an annual
percentage of the value of Fund shares held in shareholder accounts for
which such Service Organizations are responsible.

Banks are currently prohibited under the Glass-Steagall Act from
providing certain underwriting or distribution services. If banking
firms were prohibited from acting in any capacity or providing any of
the described services, the Distributor would consider what action, if
any, would be appropriate. The Distributor does not believe that
termination of a relationship with a bank would result in any material
adverse consequences to the Fund. In addition, state securities laws on
this issue may differ from the interpretations of federal law expressed
herein and banks and financial institutions may be required to register
as dealers pursuant to state law.

As required by Rule 12b-1 under the 1940 Act, the Plan and the forms of
servicing agreement were approved by the Trustees, including a majority
of the Trustees who are not interested persons (as defined in the 1940
Act) of the Fund and who have no direct or indirect financial interest
in the operation of the Plan or in any agreements related to the Plan
("Independent Trustees"). In approving the Plan in accordance with the
requirements of Rule 12b-1, the Trustees determined that there is a
reasonable likelihood that the Plan will benefit the Fund and its
shareholders.

The Plan requires the Distributor to provide the Fund's Trustees at
least quarterly with a written report of the amounts expended pursuant
to the Plan and the purposes for which such expenditures were made.
Unless sooner terminated in accordance with its terms, the Plan will
continue in effect so long as such continuance is specifically approved
at least annually by the Trustees, including a majority of Independent
Trustees.

13
<PAGE> 23

The Plan may be terminated by vote of a majority of the Independent
Trustees, or by vote of a majority of the outstanding voting securities
of the Fund. Any change in the Plan that would materially increase the
distribution expenses borne by the Fund requires shareholder approval;
otherwise, it may be amended by a majority of the Trustees, including a
majority of the Independent Trustees, by vote cast in person at a
meeting called for the purpose of voting upon such amendment. So long
as the Plan is in effect, the selection or nomination of the
Independent Trustees is committed to the discretion of the Independent
Trustees.

For each fiscal year, the Distributor may be reimbursed by the Fund for
payments to Service Organizations. To the extent that payments are not
reimbursed for any fiscal year, the excess will not be carried over to
future years. The Fund will not reimburse the Distributor for any
interest or carrying charges or for any general overhead expenses.

For the fiscal year ended August 31, 1996, the Fund had aggregate
expenses under the Plan of $ or % of the Fund's average net
assets.

(g) INAPPLICABLE

(h) The Custodian of all the Fund's assets is State Street Bank and Trust
Company located at 225 Franklin Street, Boston, Massachusetts 02110.

Price Waterhouse LLP, 1201 Louisiana, Houston, Texas 77002, are the
independent accountants for the Fund.

(i) During the fiscal years ended August 31, 1995 and 1996, ACCESS,
shareholder service agent for the Fund, received fees aggregating
$22,750 and $ , respectively. These services are provided at cost
plus a profit.

ITEM 17. BROKERAGE ALLOCATION AND OTHER PRACTICES.

(a) The Adviser is responsible for the placement of orders for the purchase
and sale of portfolio securities for the Fund. U.S. Government
securities and other debt securities in which the Fund invests are
traded in the over-the-counter market. Such securities are generally
traded on a net basis with dealers acting as principal for their own
accounts without a stated commission, although the prices of the
securities usually include a profit to the dealers. It is the policy of
the Fund to seek to obtain the best net results taking into account
such factors as price (including the applicable dealer spread), the
size, type and difficulty of the transaction involved, the firm's
general execution and operational facilities, the firm's risk in
positioning the securities involved and the provision of supplemental
investment research by the firm. The information received may be used
by the Adviser in managing the assets of other advisory accounts as
well as in the management of the assets of the Fund. While the Fund
seeks reasonably competitive dealer spreads, the Fund will not
necessarily be paying the lowest spread available. The Adviser is
authorized to place portfolio transactions with brokerage firms
participating in the distribution of shares of the Fund and other Van
Kampen American Capital mutual funds if it reasonably believes that the
quality of the execution and the commissions are comparable to that
available from other qualified brokerage firms.

No brokerage commissions were paid by the Fund on portfolio
transactions for the fiscal years ending August 31, 1994, 1995 and
1996.

(b) INAPPLICABLE.

(c) In selecting dealers, the Adviser considers the firm's reliability, the
quality of its execution services on a continuing basis and its
financial condition. When more than one firm is believed to meet these
criteria, preference may be given to firms which also provide research
services to the Fund or the Adviser.

The Adviser seeks to allocate portfolio transactions equitably whenever
concurrent decisions are made to purchase or sell securities by the
Fund and another advisory account. In some cases, this procedure could
have an adverse effect on the price or the amount of securities
available to the Fund.

14
<PAGE> 24

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

The Adviser's brokerage practices are monitored on a quarterly basis by
the Brokerage Review Committee comprised of Fund Trustees who are not
affiliated persons (as defined in the 1940 Act) of the Adviser.

(d) INAPPLICABLE

(e) INAPPLICABLE

ITEM 18. CAPITAL STOCK AND OTHER SECURITIES.

See Item 6.

ITEM 19. PURCHASE, REDEMPTION AND PRICING OF SECURITIES BEING OFFERED.

(a) Shares of the Fund are not currently being offered to the public. See
Item 7.

(b) See Item 8.

ITEM 20. TAX STATUS.

See Item 6(g).

ITEM 21. UNDERWRITERS.

(a) The Distributor acts as the principal underwriter of the Fund's shares
pursuant to a written agreement (the "Underwriting Agreement"). Shares
of the Fund are not currently being offered to the public. No shares of
the Fund were sold during the fiscal year ended August 31, 1994, 1995
and 1996.

(b) See Item 21(a).

ITEM 22. CALCULATION OF PERFORMANCE DATA.

The average annual total return for the Fund for the period ended August
31, 1996 was %. The average annual total return for the Fund for the period
since its operations commenced was %. These results are based on historical
earnings and asset value fluctuations and are not intended to indicate future
performance. Such information should be considered in light of the Fund's
investment objective and policies as well as the risks incurred in the Fund's
investment practices.

Certain additional performance information regarding the Fund is contained
in the Fund's Annual Report for the fiscal year ended August 31, 1996.

From time to time, in reports or other communications, or in advertising or
sales materials, the Adviser may announce the results of actual tests performed
by DALBAR Financial Securities, Inc., an independent research firm, as they
relate to the level of services for mutual fund investors, and may refer to the
Missouri Quality Award received by ACCESS, the Fund's transfer agent, in 1993.
In addition, the Adviser may also refer to the Houston Awards for Quality
received by Van Kampen American Capital in 1994.

The Fund may, from time to time: (1) illustrate the benefits of
tax-deferral by comparing taxable investments to investments made through
tax-deferred retirement plans; (2) illustrate in graph or chart form,

15
<PAGE> 25

or otherwise, the benefits of dollar cost averaging by comparing investments
made pursuant to a systematic investment plan to investments made in a rising
market; and (3) in reports or other communications to shareholders or in
advertising material, illustrate the benefits of compounding at various assumed
rates of return. Such illustrations may be in the form of charts or graphs and
will not be based on historical returns experienced by the Fund.

ITEM 23. FINANCIAL STATEMENTS.

The attached financial statements in the form in which they appear in the
Annual Report to Shareholders including the related report of Independent
Accountants on the August 31, 1996 financial statements, are included in the
Statement of Additional Information.

16
<PAGE> 26

PART C

OTHER INFORMATION

ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS.

(a) Financial Statements (to be included by further amendment)

Included in the Prospectus:

Financial Highlights

Included in the Statement of Additional Information:

Report of Independent Accountants

Financial Statements

Notes to Financial Statements

The Statement of Sources of Net Assets and Schedules II and III are omitted
because the required information is included in the financial statements filed
herewith, or because the conditions requiring their filing do not exist.

(b) Exhibits

<TABLE>
<C> <S>
1.1 -- First Amended and Restated Agreement and Declaration of Trust
incorporated herein by reference (to Form N-1A of Registrant's
Amendment No. 10, filed on December 21, 1995).
1.2 -- Certificate of Amendment incorporated herein by reference (to Form
N-1A of Registrant's Amendment No. 10, filed on December 21, 1995).
2 -- Amended and Restated Bylaws incorporated herein by reference (to Form
N-1A of Registrant's Amendment No. 10, filed on December 21, 1995).
3 -- INAPPLICABLE
4 -- Specimen Share Certificate incorporated herein by reference (to Form
N-1A of Registrant's Amendment No. 10, filed on December 21, 1995).
5 -- Investment Advisory Agreement.+
6 -- Distribution and Service Agreement.+
7 -- INAPPLICABLE
8.1 -- Custodian Contract.+
8.2 -- Transfer Agency and Servicing Agreement.+
9 -- Data Access Services Agreement dated December 2, 1993 incorporated
herein by reference (Exhibit 9.2 to Form N-1A of Van Kampen American
Capital Utilities Income Fund, Registration No. 33-68452,
Post-Effective Amendment No. 1, filed on May 19, 1994).
10 -- Opinion of Counsel.+
11 -- Consent of Independent Accountants.+
12 -- INAPPLICABLE
13 -- Investment Letter incorporated herein by reference (Exhibit 13 to
Form N-1A of Registrant, Registration No. 33-35610, Post-Effective
Amendment No. 2, filed on December 21, 1990).
14.1 -- Individual Retirement Account Brochure with Application incorporated
herein by reference (Exhibit 14.2 to Form N-1A of Van Kampen American
Capital Reserve Fund, Registration No. 2-50870, Post-Effective
Amendment No. 31, filed on September 24, 1993).
</TABLE>

C-1
<PAGE> 27

<TABLE>
<C> <S>
14.2 -- 403(b)(7) Custodial Account incorporated herein by reference (Exhibit
14.2 to Form N-1A of Van Kampen American Capital Reserve Fund,
Registration No. 2-50870, Post-Effective Amendment No. 30, filed on
September 24, 1992).
14.3 -- ORP 403(b)(7) Custodial Account incorporated herein by reference
(Exhibit 14.3 to Form N-1A of Van Kampen American Capital Reserve
Fund, Registration No. 2-50870, Post-Effective Amendment No. 30,
filed on September 24, 1992).
14.4 -- Retirement Plans for the Small Business-Forms Package and Plan
Documents incorporated herein by reference (Exhibit 14.9 to Form N-1A
of Van Kampen American Capital Emerging Growth Fund, Post-Effective
Amendment No. 44, Registration No. 2-33214, filed on December 21,
1990).
14.5 -- Prototype Profit Sharing/Money Purchase Plan and Trust incorporated
herein by reference (Exhibit 14.5 to Form N-1A of Van Kampen American
Capital Growth and Income Fund, Registration No. 2-21657,
Post-Effective Amendment No. 61, filed on March 26, 1991).
14.6 -- Prototype 401(k) Plan and Trust incorporated herein by reference
(Exhibit 14.6 to Form N-1A of Van Kampen American Capital Growth and
Income Fund, Registration No. 2-21657, Post-Effective Amendment No.
61, filed on March 26, 1991).
14.7 -- Salary Reduction Simplified Employee Pension Plan incorporated herein
by reference (Exhibit 14.7 to Form N-1A of Van Kampen American
Capital World Portfolio Series Trust, Registration No. 33-37879,
Post-Effective Amendment No. 9, filed on September 24, 1993).
15.1 -- Plan of Distribution Pursuant to Rule 12b-1.
15.2 -- Service Plan.
15.3 -- Form of Shareholder Assistance Agreement.
15.4 -- Form of Administrative Services Agreement.
16 -- Computation for Performance Information.+
17.1 -- List of Certain Investment Companies in Response to Item 29(a).+
17.2 -- List of Officers and Directors of Van Kampen American Capital
Distributors, Inc. in Response to Item 29(b).+
19.1 -- Powers-of-Attorney for J. Miles Branagan, Roger Hilsman, Don G.
Powell, David Rees, Lawrence J. Sheehan, Fernando Sisto and William
S. Woodside incorporated herein by reference (Exhibit 19.1 to Form
N-1A of Registrant, Registration No. 811-6127, Amendment No. 9, filed
on August 25, 1995).
19.2 -- Powers-of-Attorney for Philip P. Gaughan, R. Craig Kennedy, Donald C.
Miller, Jack E. Nelson, Jerome L. Robinson and Wayne W. Whalen
incorporated herein by reference (Exhibit 19.2 to Form N-1A of
Registrant, Registration No. 811-6127, Amendment No. 9, filed on
August 25, 1995).
27 -- Financial Data Schedule.
</TABLE>

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

+ To be filed by further amendment.

C-2
<PAGE> 28

ITEM 25. PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT.

None.

ITEM 26. NUMBER OF HOLDERS OF SECURITIES.

AS OF DECEMBER , 1996

<TABLE>
<CAPTION>
(1) (2)
NUMBER OF RECORD
TITLE OF CLASS HOLDERS
----------------------------------------------------- ----------------
<S> <C>
Shares of Beneficial Interest, $0.01 par value
</TABLE>

ITEM 27. INDEMNIFICATION.

Reference is made to Article 8, Section 8.4 of the Registrant's Agreement
and Declaration of Trust.

Article 8; Section 8.4 of the Agreement and Declaration of Trust provides
that each officer and trustee of the Registrant shall be indemnified by the
Registrant against all liabilities incurred in connection with the defense or
disposition of any action, suit or other proceeding, whether civil or criminal,
in which the officer or trustee may be or may have been involved by reason of
being or having been an officer or trustee, except that such indemnity shall not
protect any such person against a liability to the Registrant or any shareholder
thereof to which such person would otherwise be subject by reason of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office. Absent a court determination that
an officer or trustee seeking indemnification was not liable on the merits or
guilty of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of his or her office, the decision by the
Registrant to indemnify such person must be based upon the reasonable
determination of independent counsel or non-party independent trustees, after
review of the facts, that such officer or trustee is not guilty of willful
misfeasance, bad faith, gross negligence or reckless disregard of the duties
involved in the conduct of his or her office.

The Registrant has purchased insurance on behalf of its officers and
trustees protecting such persons from liability arising from their activities as
officers or trustees of the Registrant. The insurance does not protect or
purport to protect such persons from liability to the Registrant or to its
shareholders to which such officer or trustee would otherwise be subject by
reason of willful misfeasance, bad faith, gross negligence or reckless disregard
of the duties involved in the conduct of their office.

Conditional advancing of indemnification monies may be made if the trustee
or officer undertakes to repay the advance unless it is ultimately determined
that he or she is entitled to the indemnification and only if the following
conditions are met: (1) the trustee or officer provides a security for the
undertaking; (2) the Registrant is insured against losses arising from lawful
advances; or (3) a majority of a quorum of the Registrant's disinterested,
non-party trustees, or an independent legal counsel in a written opinion, shall
determine, based upon a review of readily available facts, that a recipient of
the advance ultimately will be found entitled to indemnification.

Insofar as indemnification for liabilities arising under the Securities Act
of 1933 (the "Act") may be permitted to trustees, officers and controlling
persons of the Registrant pursuant to the foregoing provisions or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by the trustee, officer, or controlling person of the
Registrant in the successful defense of any action, suit or proceeding) is
asserted by such trustee, officer or controlling person in connection with the
shares being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.

C-3
<PAGE> 29

ITEM 28. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER.

See "Investment Advisory Services" in Part A and "Trustees and Officers" in
the Statement of Additional Information for information regarding the business
of the Adviser. For information as to the business, profession, vocation and
employment of a substantial nature of directors and officers of the Adviser,
reference is made to the Adviser's current Form ADV (File No. 801-1669) filed
under the Investment Advisers Act of 1940, as amended, incorporated herein by
reference.

ITEM 29. PRINCIPAL UNDERWRITERS.

(a) The sole principal underwriter is Van Kampen American Capital
Distributors, Inc., which acts as principal underwriter for certain investment
companies and unit investment trusts set forth in Exhibit 17.1 incorporated by
reference herein.

(b) Van Kampen American Capital Distributors, Inc. is an affiliated person
of an affiliated person of Registrant and is the only principal underwriter for
Registrant. The name, principal business address and positions and offices with
Van Kampen American Capital Distributors, Inc. of each of the directors and
officers thereof are set forth in Exhibit 17.2. Except as disclosed under the
heading, "Trustees and Officers" in Part B of this Registration Statement, none
of such persons has any position or office with Registrant.

ITEM 30. LOCATION OF ACCOUNTS AND RECORDS.

All accounts, books and other documents required by Section 31(a) of the
Investment Company Act of 1940 and the Rules thereunder to be maintained (i) by
Registrant will be maintained at its offices, located at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, ACCESS Investor Services, Inc., 7501 Tiffany
Springs Parkway, Kansas City, Missouri 64153, or at the State Street Bank and
Trust Company, 1776 Heritage Drive, North Quincy, MA; (ii) by the Adviser, will
be maintained at its offices, located at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181; and (iii) by the Distributor, the principal underwriter, will be
maintained at its offices located at One Parkview Plaza, Oakbrook Terrace,
Illinois 60181.

ITEM 31. MANAGEMENT SERVICES.

There are no management related services contracts not discussed in Part A.

ITEM 32. UNDERTAKINGS.

Registrant hereby undertakes to furnish to each person to whom a prospectus
is delivered a copy of the Registrant's latest annual report to shareholders,
upon request and without charge.

C-4
<PAGE> 30

SIGNATURES

Pursuant to the requirements of the Investment Company Act of 1940, the
Registrant, Van Kampen American Capital Government Target Fund, has duly caused
this Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereto duly authorized in the City of Oakbrook Terrace, and State
of Illinois, on the 29th day of October, 1996.

VAN KAMPEN AMERICAN CAPITAL
GOVERNMENT TARGET FUND

By: /s/ RONALD A. NYBERG

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

(Ronald A. Nyberg, Vice President
and Secretary)

<PAGE> 31

VAN KAMPEN AMERICAN CAPITAL GOVERNMENT TARGET FUND

INDEX TO EXHIBITS TO AMENDMENT NO. 11 TO FORM N-1A

AS SUBMITTED TO THE SECURITIES AND EXCHANGE COMMISSION

ON OCTOBER 30, 1996

<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION OF EXHIBIT
- -------------------- --------------------------------------------------------------
<C> <S> <C>
27 Financial Data Schedule
</TABLE>

<ARTICLE> 6
<CIK> 0000865441
<NAME> VKAC GOVERNMENT TARGET FUND
<MULTIPLIER> 1

<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> AUG-31-1996
<INVESTMENTS-AT-COST> 15677603
<INVESTMENTS-AT-VALUE> 15953165
<RECEIVABLES> 51122
<ASSETS-OTHER> 19511
<OTHER-ITEMS-ASSETS> 4187
<TOTAL-ASSETS> 16027985
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 134218
<TOTAL-LIABILITIES> 134218
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 16949501
<SHARES-COMMON-STOCK> 1101770
<SHARES-COMMON-PRIOR> 1221264
<ACCUMULATED-NII-CURRENT> 687239
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (2018535)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 275562
<NET-ASSETS> 15893767
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1125425
<OTHER-INCOME> 0
<EXPENSES-NET> 277279
<NET-INVESTMENT-INCOME> 848146
<REALIZED-GAINS-CURRENT> (168441)
<APPREC-INCREASE-CURRENT> (186417)
<NET-CHANGE-FROM-OPS> 493288
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (887820)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> (184036)
<SHARES-REINVESTED> 64542
<NET-CHANGE-IN-ASSETS> (1215639)
<ACCUMULATED-NII-PRIOR> 685988
<ACCUMULATED-GAINS-PRIOR> (1809169)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 84429
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 285722
<AVERAGE-NET-ASSETS> 16885788
<PER-SHARE-NAV-BEGIN> 14.78
<PER-SHARE-NII> .765
<PER-SHARE-GAIN-APPREC> (.379)
<PER-SHARE-DIVIDEND> (.740)
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 14.426
<EXPENSE-RATIO> 1.64
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>