<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Portfolio Management Review...................... 4
Glossary of Terms................................ 7
Portfolio Highlights............................. 8
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 13
Statement of Operations.......................... 14
Statement of Changes in Net Assets............... 15
Financial Highlights............................. 16
Notes to Financial Statements.................... 19
</TABLE>
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.
<PAGE> 2
LETTER TO SHAREHOLDERS
December 20, 1999
Dear Shareholder,
As we approach the end of the century--and the millennium--it seems
appropriate to take a look back at the progress that's been made over the last
100 years and how the world of investing has changed over the generations.
Although rapid advances in technology and science have dramatically altered the
world that we live in today, one of the greatest shifts we've seen this century
is the increasing importance of investing for many Americans.
Once considered primarily for the wealthy, investing in the stock market is
now available to most people. In fact, almost 79 million individuals--who
represent almost half of all U.S. households--own stocks either directly or
through mutual funds. This is even more impressive when considering that just 16
years earlier, only 19 percent of households owned stocks. Another important
shift has been the need for retirement planning beyond a pension plan or Social
Security. The Investment Company Institute, the leading mutual fund industry
association, reports that 77 percent of all mutual fund shareholders earmarked
retirement as their primary financial goal in 1998.
Through all the changes in the investment environment over the past century,
the general principles that have made generations of investors successful remain
the same. Those that have stood the test of time include:
- Investing for the long-term
- Basing investment decisions on sound research
- Building a diversified portfolio
- Believing in the value of professional investment advice
While no one can predict the future, at Van Kampen, we believe that these
ideas will remain important tenets for investors well into the next century. As
we continue to focus on these principles, we hope that our decades of investment
experience can help bring you closer to your financial goals as we enter the new
millennium.
Sincerely,
[SIG.]
Richard F. Powers III
Chairman
Van Kampen Asset Management Inc.
[SIG.]
Dennis J. McDonnell
President
Van Kampen Asset Management Inc. 1
Source: Investment Company Institute
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
Americans continued their spending spree, keeping the economy growing at a
brisk pace. High levels of consumer confidence fueled this heavy retail
activity, which pushed the personal savings rate to a record low in September as
spending rates outpaced income growth. Although the U.S. economy experienced a
slowdown during the second quarter of 1999, growth rebounded in the third
quarter with gross domestic product increasing an annualized 5.7 percent.
EMPLOYMENT
The strong job market helped support the strength of the economy. During the
reporting period, the unemployment rate reached its lowest level in almost 30
years, and wages continued to climb. Wage pressures pushed the cost of labor
higher in the second quarter, as the employment cost index (ECI) recorded its
biggest gain in eight years. However, productivity gains offset rising wages in
the third quarter, bringing the ECI back to a more moderate level.
INFLATION AND INTEREST RATES
Although the Consumer Price Index continued to reflect historically low
inflation, concerns about future increases in inflation were prevalent
throughout the reporting period. The Federal Reserve Board remained active in
guarding against inflation and tempering economic growth. The Fed reversed its
three interest-rate cuts from the fall of 1998 by raising rates in June, August,
and November 1999 in an attempt to keep the economy from overheating.
U.S. GROSS DOMESTIC PRODUCT
Seasonally Adjusted Annualized Rates
Third Quarter 1997 through Third Quarter 1999
[GRAPH]
<TABLE>
<CAPTION>
<S> <C>
97Q3 4.00
97Q4 3.10
98Q1 6.70
98Q2 2.10
98Q3 3.80
98Q4 5.90
99Q1 3.70
99Q2 1.90
99Q3 5.70
</TABLE>
Source: Bureau of Economic Analysis
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED NOVEMBER 30, 1999
VAN KAMPEN GLOBAL GOVERNMENT SECURITIES FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
Six-month total return based on NAV(1)... (1.33%) (1.58%) (1.73%)
Six-month total return(2)................ (5.98%) (5.41%) (2.69%)
One-year total return(2)................. (10.30%) (9.99%) (7.52%)
Five-year average annual total
return(2)................................ 3.00% 3.00% 3.23%
Life-of-Fund average annual total
return(2)................................ 3.23% 3.12% 2.74%
Commencement Date........................ 11/15/91 11/15/91 04/12/93
DISTRIBUTION RATE AND YIELD
Distribution rate(3)..................... 5.57% 5.04% 5.09%
SEC Yield(4)............................. 3.86% 3.29% 3.29%
</TABLE>
(1) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge (4.75% for A shares) or contingent
deferred sales charge for early withdrawal (4% for B shares and 1%
for C shares). If the sales charges were included, total return would be lower.
(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or contingent
deferred sales charge for early withdrawal (B and C shares).
(3) Distribution rate represents the monthly annualized distributions of the
Fund at the end of the period and not the earnings of the Fund.
(4) SEC Yield is a standardized calculation prescribed by the Securities and
Exchange Commission for determining the amount of net income a portfolio should
theoretically generate for the 30-day period ending November 30, 1999.
See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth more
or less than their original cost.
Investing in securities issued by foreign governments and corporations involves
risks not typically associated with investing in U.S. government securities such
as fluctuations in currency rates, changes in exchange control regulations,
application of foreign tax laws, changes in foreign economic or monetary policy.
Market forecasts provided in this report may not necessarily come to pass.
3
<PAGE> 5
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN GLOBAL GOVERNMENT SECURITIES FUND
We recently spoke with representatives of the advisor of the Van Kampen Global
Government Securities Fund about the key events and economic forces that shaped
the markets during the past six months. The portfolio managers include J. David
Germany, Michael B. Kushma, Paul F. O'Brien, Christian G. Roth and Ram Willner
of Morgan Stanley Dean Witter Investment Management.
The following excerpts reflect their views on the Fund's performance during
the six-month period ended November 30, 1999.
Q HOW WOULD YOU CHARACTERIZE THE MARKET CONDITIONS IN WHICH THE FUND
OPERATED DURING THE PAST SIX MONTHS?
A The past six months were terrible for global bond markets as long-term
interest rates rose in Europe, Japan, and the United States-- the Fund's
primary investment regions. When long-term interest rates rise, bond
prices go down, making this a difficult environment for the Fund to achieve
favorable returns. The most disappointing bond market was Europe, where
long-term interest rates rose by more than 1 percent during the period in
anticipation of sharp interest-rate hikes by the European Central Bank (ECB)
over the next 12 months.
Global economic growth was more robust than expected, particularly in
regions of the world that had struggled earlier in the year. Commodity prices,
led by oil, continued to march higher, while investor confidence finally started
to rebound from the shocks of the third quarter of 1998. Compared to the U.S.
dollar, the Japanese yen rose approximately 16 percent, and the European euro
fell approximately 3.5 percent.
Q WHAT STRATEGIES DID YOU PURSUE IN THESE CONDITIONS?
A Entering the period, we significantly decreased the Fund's exposure to
Japan compared to the United States and Europe. We didn't expect Japan to
show strong signs of recovery, and we believed that the Bank of Japan
would keep interest rates near zero. We felt this combination of low interest
rates and a weak economy would keep the yen neutral and offer minimal bond
market opportunity.
We made a good decision to decrease exposure to Japanese bonds due to the
rise in interest rates, but we missed out on potential currency appreciation
from the increase in the Japanese yen, which hurt the Fund. We did increase our
exposure to the yen later in the period, which eventually helped returns, but we
also maintained our exposure to Europe because we believed that the European
economy would outperform Japan.
Our significant exposure to Europe--approximately one-half of the Fund's
assets--hurt Fund performance more than any other factor. We were greatly
surprised by the market's reaction to stronger growth in Europe. At the
beginning of the period, the market expected the ECB to remain neutral in its
short-term monetary policy. However, accelerating economic growth, rising
commodity prices, and a weak euro led the market to
4
<PAGE> 6
expect sharp interest-rate increases over the next 12 months. We held our
exposure in Europe because we felt the economic fundamentals were attractive.
Unfortunately, the Fund's performance was hurt by the market's expectations of
rate increases, not by a deterioration of economic fundamentals. Going into the
period, we did not anticipate the European economy would recover as fast as it
did, and we did not expect the weakness in the euro. Compared to the euro, the
yen appreciated nearly 20 percent during the period. The Fund benefited from its
exposure to other European currencies such as the Swedish krona, which
appreciated 5 percent versus the euro. For additional Fund portfolio highlights,
please refer to page 8.
Q HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD?
A The price declines in global bond markets and the Fund's exposure to the
euro hurt its return during the period. For Class A shares at net asset
value, the Fund generated a total return of -1.33 percent(1) for the six
months ended November 30, 1999. By comparison, the J.P. Morgan Global Traded
Government Index generated a total return of 1.72 percent for the same period.
This broad-based index is composed of major foreign and U.S. government bonds,
weighted by the total market value of each country's securities. It reflects
variations in currency values with all results measured in U.S. dollar terms.
This index does not reflect any commissions or sales charges that would be paid
by an investor purchasing the securities it represents. Please refer to the
chart and footnotes on page 3 for additional Fund performance results. Past
performance does not guarantee future results.
Q WHAT DO YOU SEE HAPPENING DURING THE NEXT SIX MONTHS?
A Today, we remain confident in the global bond markets. In October we began
decreasing our exposure to the United Kingdom in favor of German bonds
because the price differential between U.K. and German bonds was greater
than we've seen in approximately 20 years. During the period, the U.K. bond
market performed well, but we don't expect that to continue in the near future
at elevated price levels. In the short-term, we do not see signs of inflation in
the United States or Europe, and we don't expect the ECB or the Federal Reserve
Board to raise interest rates as much as the market has anticipated.
With regard to commodities, we expect oil and other energy prices to
continue to rise. We've seen a pattern among commodity-based economies in which
economic recovery generally leads to currency strength. As a result, we have
currency exposure to Canada and Australia, which are commodity-based economies.
5
<PAGE> 7
Among the currencies of Europe, Japan and the United States, we expect the
euro to rebound versus the yen. Compared to the yen, it is significantly
undervalued, and the strong economic recovery in Europe should provide good
fundamental support. In addition, we feel a recovery in the global bond markets
cannot happen unless inflation and interest-rate fears subside.
<TABLE>
<S> <C> <C>
J. David Germany Paul E. O'Brien Ram Willner
Portfolio Manager Portfolio Manager Portfolio Manager
Michael B. Kushma Christian G. Roth
Portfolio Manager Portfolio Manager
</TABLE>
6
<PAGE> 8
GLOSSARY OF TERMS
BOND: A debt security issued by a government or corporation that generally pays
a bondholder a stated rate of interest and repays the principal at the
maturity date.
CLASS A SHARES: When Class A shares of a fund are purchased, the share price
includes the net asset value plus a one-time sales charge (or "load"). In
most cases, there is no redemption fee (contingent deferred sales charge).
FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank system of the United States. Its
policy-making committee, called the Federal Open Market Committee, meets
eight times a year to establish monetary policy and monitor the economic
pulse of the United States.
FUNDAMENTALS: Characteristics of a company, such as revenue growth, earnings
growth, financial strength, market share, and quality of management.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic
indicator that measures the change in the cost of purchased goods and
services.
YIELD: The annual rate of return on an investment, expressed as a percentage.
For bonds and notes, the current yield is the annual interest divided by the
market price.
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN GLOBAL GOVERNMENT SECURITIES FUND
TOP FIVE PORTFOLIO HOLDINGS AS OF NOVEMBER 30, 1999*
<TABLE>
<CAPTION>
PERCENTAGE OF FUND'S
LONG-TERM INVESTMENTS
<S> <C>
United States Treasury Bonds, 8.125% Coupon, 07/15/19
Maturity ............................................. 11.1%
Government of Japan, 0.900% Coupon, 12/22/08
Maturity ........................................... 7.1%
Government of France, 4.500% Coupon, 07/12/03
Maturity ........................................... 6.5%
Government of France, December Forward 5.250% Coupon,
04/25/08 Maturity .................................. 6.2%
United States Treasury Bonds, 12.000% Coupon, 05/15/05
Maturity ........................................... 6.0%
</TABLE>
TOP FIVE COUNTRIES AS A PERCENTAGE OF LONG-TERM INVESTMENTS*
[GRAPH]
<TABLE>
<CAPTION>
NOVEMBER 30, 1999 MAY 31, 1999
----------------- ------------
<S> <C> <C>
United States 31.50 43.40
Germany 14.00 14.00
France 12.70 10.70
Japan 7.10 10.10
Spain 6.40 2.70
</TABLE>
* Includes Forward Purchase Commitments. For additional information, refer to
Note 5 in the Notes to Financial Statements section.
8
<PAGE> 10
PORTFOLIO HIGHLIGHTS (CONTINUED)
VAN KAMPEN GLOBAL GOVERNMENT SECURITIES FUND
DIVIDEND HISTORY (CLASS A SHARES)
FOR THE PERIOD ENDED NOVEMBER 30, 1999
[BAR GRAPH]
<TABLE>
<CAPTION>
MONTHLY DIVIDEND
----------------
<S> <C>
Jun 1999 0.0375
Jul 1999 0.0375
Aug 1999 0.0375
Sep 1999 0.0340
Oct 1999 0.0340
Nov 1999 0.0340
</TABLE>
The dividend history represents past performance of the Fund and does not
predict the Fund's future distributions.
ASSET ALLOCATION AS A PERCENTAGE OF TOTAL INVESTMENTS
[BAR GRAPH]
<TABLE>
<CAPTION>
NOVEMBER 30, 1999 MAY 31, 1999
----------------- ------------
<S> <C> <C>
Foreign Government and Government Agency Obligations 52.60 0.00
U.S. Government and Government Agency Obligations 27.90 30.50
Forward Purchase Commitments 14.80 39.80
Short-Term Investments 4.70 29.70
</TABLE>
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
In Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS 56.3%
CANADA 3.8%
$ 1,000 Canada Government -- CA$.... 8.750% 12/01/05 $ 767,174
1,000 Canada Government -- CA$.... 5.250 09/01/03 660,427
-----------
1,427,601
-----------
DENMARK 4.8%
12,000 Kingdom of Denmark -- DKK... 7.000 11/15/07 1,788,216
-----------
EUROPE 2.1%
70,000 European Investment
Bank -- JPY................. 4.625 02/26/03 776,923
-----------
FRANCE 6.7%
2,450 Government of
France -- EUR............... 4.500 07/12/03 2,469,357
-----------
GERMANY 14.3%
1,700 Bundesrepublik
Deut -- EUR................. 6.500 07/04/27 1,851,770
1,300 Germany Federal
Unity -- EUR................ 8.500 02/20/01 1,381,277
1,200 Federal Republic of
Germany -- EUR.............. 6.000 07/04/27 1,273,392
80,000 KFW Intl Finance -- JPY..... 1.000 12/20/04 783,196
-----------
5,289,635
-----------
ITALY 3.6%
1,200 Republic of Italy -- EUR.... 6.750 02/01/07 1,319,769
-----------
JAPAN 7.2%
300,000 Government of
Japan -- JPY................ 0.900 12/22/08 2,674,788
-----------
NETHERLANDS 3.4%
1,300 Kingdom of
Netherlands -- EUR.......... 3.000 02/15/02 1,276,668
-----------
SPAIN 3.9%
130,000 Kingdom of Spain -- JPY..... 5.750 03/23/02 1,433,939
-----------
UNITED KINGDOM 6.5%
950 United Kingdom
Treasury -- GBP............. 8.500 07/16/07 1,761,091
400 United Kingdom
Treasury -- GBP............. 8.000 12/07/00 649,533
-----------
2,410,624
-----------
TOTAL FOREIGN GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS............... 20,867,520
-----------
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
In Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UNITED STATES GOVERNMENT & GOVERNMENT AGENCY
OBLIGATIONS 29.8%
$ 550 Federal National Mortgage
Association -- AUD.......... 6.500% 07/10/02 $ 350,398
500 Federal National Mortgage
Association -- AUD.......... 6.375 08/15/07 304,949
50,000 Federal National Mortgage
Association -- JPY.......... 2.125 10/09/07 508,396
338 Government National Mortgage
Association
Pools -- US$ (a)............ 8.000 11/15/00 to 12/15/25 343,665
1,800 United States Treasury
Bonds -- US$ (a)............ 12.000 05/15/05 2,265,462
3,600 United States Treasury
Bonds -- US$ (a)............ 8.125 07/15/19 4,191,192
1,000 United States Treasury
Notes -- US$ (a)............ 6.250 10/31/01 1,004,220
2,100 United States Treasury
Notes -- US$ (a)............ 6.250 10/31/01 2,095,401
-----------
TOTAL UNITED STATES GOVERNMENT & GOVERNMENT AGENCY OBLIGATIONS......... 11,063,683
-----------
FORWARD PURCHASE COMMITMENTS 15.8%
1,000 Kingdom of Spain, December
Forward -- EUR.............. 5.150 07/30/09 993,641
2,300 Government of France,
December Forward -- EUR..... 5.250 04/25/08 2,337,526
10,000 Kingdom of Sweeden, December
Forward -- SEK.............. 13.000 07/15/01 1,317,877
3,000 Kingdom of Sweeden, December
Forward -- SEK.............. 6.000 02/09/05 361,671
300 United States Treasury
Bonds, December
Forward -- US$.............. 8.125 08/15/19 349,266
500 United States Treasury
Notes, December
Forward -- US$.............. 6.250 02/15/07 498,905
-----------
TOTAL FORWARD PURCHASE COMMITMENTS..................................... 5,858,886
-----------
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
In Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TOTAL LONG-TERM INVESTMENTS 101.9%
(Cost $38,575,224)................................................... $37,790,089
-----------
SHORT-TERM INVESTMENTS 5.1%
COMMERCIAL PAPER 3.0%
$ 1,100 KFW Intl Fin, Inc. (yielding 5.31%, 12/01/99
maturity) (a)............................................... 1,100,000
REPURCHASE AGREEMENT 2.1%
State Street Bank & Trust Co. (Collateralized by U.S.
Government Obligations, $778,000 par, 8.50% coupon, dated
05/31/99, to be sold on 06/01/99 at $778,097) (a)........... 778,000
-----------
TOTAL SHORT-TERM INVESTMENTS
(Cost $1,878,000).................................................... 1,878,000
-----------
TOTAL INVESTMENTS 107.0%
(Cost $40,453,224)................................................... 39,668,089
FOREIGN CURRENCY (JAPANESE YEN) 0.0%
(Cost $177).......................................................... 184
LIABILITIES IN EXCESS OF OTHER ASSETS (7.0%).......................... (2,578,756)
-----------
NET ASSETS 100.0%..................................................... $37,089,517
===========
</TABLE>
(a) Assets segregated as collateral for forward purchase commitments.
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $40,453,224)........................ $ 39,668,089
Foreign Currency (Cost $177)................................ 184
Cash........................................................ 922
Receivables:
Investments Sold.......................................... 3,734,401
Interest.................................................. 818,164
Fund Shares Sold.......................................... 4,895
Other....................................................... 30,745
------------
Total Assets.......................................... 44,257,400
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 6,054,302
Fund Shares Repurchased................................... 113,997
Income Distributions...................................... 73,845
Investment Advisory Fee................................... 50,237
Distributor and Affiliates................................ 6,417
Forward Currency Contracts and Forward Commitments.......... 703,931
Trustees' Deferred Compensation and Retirement Plans........ 79,396
Accrued Expenses............................................ 85,758
------------
Total Liabilities..................................... 7,167,883
------------
NET ASSETS.................................................. $ 37,089,517
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $ 78,637,245
Accumulated Distributions in Excess of Net Investment
Income.................................................... (348,945)
Net Unrealized Depreciation................................. (1,234,948)
Accumulated Net Realized Loss............................... (39,963,835)
------------
NET ASSETS.................................................. $ 37,089,517
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $24,502,892 and 3,504,597 shares of
beneficial interest issued and outstanding)........... $ 6.99
Maximum sales charge (4.75%* of offering price)......... .35
------------
Maximum offering price to public........................ $ 7.34
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $10,567,146 and 1,503,780 shares of
beneficial interest issued and outstanding)........... $ 7.03
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $2,019,479 and 290,701 shares of
beneficial interest issued and outstanding)........... $ 6.95
============
</TABLE>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
13
<PAGE> 15
STATEMENT OF OPERATIONS
For the Six Months Ended November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $1,139)....... $ 1,383,632
-----------
EXPENSES:
Investment Advisory Fee..................................... 172,196
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $29,997, $98,571 and $11,034,
respectively)............................................. 139,602
Shareholder Services........................................ 56,212
Custody..................................................... 37,269
Reports to Shareholders..................................... 27,600
Trustees' Fees and Related Expenses......................... 6,895
Legal....................................................... 1,830
Other....................................................... 58,993
-----------
Total Expenses.......................................... 500,597
-----------
NET INVESTMENT INCOME....................................... $ 883,035
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ (554,932)
Forward Commitments....................................... (1,834,752)
Foreign Currency Transactions............................. 823,445
-----------
Net Realized Loss........................................... (1,566,239)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... (1,190,372)
-----------
End of the Period:
Investments............................................. (785,135)
Forward Currency Contracts and Forward Commitments...... (449,820)
Foreign Currency Translation............................ 7
-----------
(1,234,948)
-----------
Net Unrealized Depreciation During the Period............... (44,576)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(1,610,815)
===========
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $ (727,780)
===========
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended November 30, 1999 and the
Year Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
November 30, 1999 May 31, 1999
- ------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................. $ 883,035 $ 2,587,654
Net Realized Gain/Loss............................ (1,566,239) 637,577
Net Unrealized Depreciation During the Period..... (44,576) (1,628,806)
----------- ------------
Change in Net Assets from Operations.............. (727,780) 1,596,425
----------- ------------
Distributions from Net Investment Income.......... (943,421) (3,365,273)
Distributions in Excess of Net Investment
Income.......................................... (348,945) -0-
----------- ------------
Distributions from and in Excess of Net Investment
Income*......................................... (1,292,366) (3,365,273)
----------- ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES...................................... (2,020,146) (1,768,848)
----------- ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold......................... 7,339,991 25,387,352
Net Asset Value of Shares Issued Through Dividend
Reinvestment.................................... 854,227 2,141,165
Cost of Shares Repurchased........................ (23,111,053) (36,621,754)
----------- ------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS.................................... (14,916,835) (9,093,237)
----------- ------------
TOTAL DECREASE IN NET ASSETS...................... (16,936,981) (10,862,085)
NET ASSETS:
Beginning of the Period........................... 54,026,498 64,888,583
----------- ------------
End of the Period
(Including accumulated undistributed net
investment income of ($348,945) and $60,386,
respectively)................................... $37,089,517 $ 54,026,498
=========== ============
*DISTRIBUTIONS BY CLASS:
- ------------------------------------------------------------------------------------
Distributions from and in Excess of Net Investment
Income:
Class A Shares.................................. $ (720,920) $ (1,391,139)
Class B Shares.................................. (513,702) (1,810,060)
Class C Shares.................................. (57,744) (164,074)
----------- ------------
$(1,292,366) $ (3,365,273)
=========== ============
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31,
Six Months Ended ------------------------------------
Class A Shares November 30, 1999(a) 1999(a) 1998(a) 1997(a) 1996
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $7.298 $7.553 $7.604 $ 7.92 $ 8.24
------ ------ ------ ------ ------
Net Investment Income...... .149 .369 .352 .526 .56
Net Realized and Unrealized
Gain/Loss................ (.240) (.144) .088 (.310) (.328)
------ ------ ------ ------ ------
Total from Investment
Operations................. (.091) .225 .440 .216 .232
Less Distributions from and
in Excess of Net Investment
Income..................... .215 .480 .491 .532 .552
------ ------ ------ ------ ------
Net Asset Value, End of the
Period..................... $6.992 $7.298 $7.553 $7.604 $ 7.92
====== ====== ====== ====== ======
Total Return (b)............. (1.33%)* 2.75% 5.98% 2.65% 2.81%
Net Assets at End of the
Period (In millions)....... $ 24.5 $ 23.9 $ 21.9 $ 25.7 $ 36.4
Ratio of Expenses to Average
Net Assets (c)............. 1.84% 1.56% 1.95% 1.57% 1.51%
Ratio of Net Investment
Income to Average Net
Assets (c)................. 4.18% 4.88% 4.69% 6.58% 6.66%
Portfolio Turnover........... 12%* 183% 276% 161% 239%
</TABLE>
(a) Based on average month-end shares outstanding.
(b) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(c) For the years ended through May 31, 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
*Non-Annualized
See Notes to Financial Statements
16
<PAGE> 18
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31,
Six Months Ended ------------------------------------
Class B Shares November 30, 1999(a) 1999(a) 1998(a) 1997(a) 1996
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $7.344 $7.596 $7.645 $ 7.96 $ 8.28
------ ------ ------ ------ ------
Net Investment Income...... .126 .320 .299 .477 .49
Net Realized and Unrealized
Gain/Loss................ (.257) (.152) .083 (.320) (.318)
------ ------ ------ ------ ------
Total from Investment
Operations................. (.131) .168 .382 .157 .172
Less Distributions from and
in Excess of Net Investment
Income..................... .186 .420 .431 .472 .492
------ ------ ------ ------ ------
Net Asset Value, End of the
Period..................... $7.027 $7.344 $7.596 $7.645 $ 7.96
====== ====== ====== ====== ======
Total Return (b)............. (1.58%)* 1.94% 4.98% 2.00% 2.06%
Net Assets at End of the
Period (In millions)....... $ 10.6 $ 27.7 $ 39.5 $ 56.9 $ 97.7
Ratio of Expenses to Average
Net Assets (c)............. 2.53% 2.29% 2.72% 2.33% 2.27%
Ratio of Net Investment
Income to Average Net
Asset (c).................. 3.47% 4.06% 3.91% 5.86% 5.91%
Portfolio Turnover........... 12%* 183% 276% 161% 239%
</TABLE>
(a) Based on average month-end shares outstanding.
(b) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(c) For the years ended through May 31, 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
*Non-Annualized
See Notes to Financial Statements
17
<PAGE> 19
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31,
Six Months Ended ------------------------------------
Class C Shares November 30, 1999(a) 1999(a) 1998(a) 1997(a) 1996
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $7.280 $7.534 $7.585 $ 7.91 $ 8.22
------ ------ ------ ------ ------
Net Investment Income...... .122 .316 .293 .471 .46
Net Realized and Unrealized
Gain/Loss................ (.269) (.150) .087 (.324) (.278)
------ ------ ------ ------ ------
Total from Investment
Operations................. (.147) .166 .380 .147 .182
Less Distributions from and
in Excess of Net Investment
Income..................... .186 .420 .431 .472 .492
------ ------ ------ ------ ------
Net Asset Value, End of the
Period..................... $6.947 $7.280 $7.534 $7.585 $ 7.91
====== ====== ====== ====== ======
Total Return (b)............. (1.73%)* 1.96% 5.02% 1.88% 2.20%
Net Assets at End of the
Period (In millions)....... $ 2.0 $ 2.4 $ 3.5 $ 5.6 $ 9.5
Ratio of Expenses to Average
Net Assets (c)............. 2.60% 2.29% 2.72% 2.33% 2.27%
Ratio of Net Investment
Income to Average Net
Assets (c)................. 3.42% 4.05% 3.90% 5.84% 5.91%
Portfolio Turnover........... 12%* 183% 276% 161% 239%
</TABLE>
(a) Based on average month-end shares outstanding.
(b) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.
(c) For the years ended through May 31, 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
*Non-Annualized
See Notes to Financial Statements
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Global Government Securities Fund (the "Fund") is organized as a
series of Van Kampen World Portfolio Series Trust, a Delaware business trust,
and is registered as a non-diversified open-end management investment company
under the Investment Company Act of 1940, as amended. The Fund's investment
objective is to seek to provide a high level of current income. Investments in
foreign securities involve certain risks not ordinarily associated with
investments in securities of domestic issuers, including fluctuations in foreign
exchange rates, future political and economic developments, and the possible
imposition of exchange controls or other foreign governmental laws or
restrictions. The Fund commenced investment operations on November 15, 1991. The
distribution of the Fund's Class C shares commenced on April 12, 1993.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at the mean of the quoted bid or
asked prices as obtained from an independent pricing service. If such valuations
are not available, estimates obtained from yield data relating to instruments or
securities with similar characteristics in accordance with procedures
established in good faith by the Board of Trustees. Short-term securities with
remaining maturities of 60 days or less are valued at amortized cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Fund may invest in repurchase agreements which are short-term
investments in which the Fund acquires ownership of a debt security and the
seller agrees to repurchase the security at a future time and specified price.
The Fund may invest independently in repurchase agreements or transfer
uninvested cash balances into a pooled cash account along with other investment
companies advised by Van Kampen Asset Management Inc. (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
agreements. Repurchase agreements are collateralized by the underlying debt
security. The Fund will make payment for such securities only upon physical
delivery or evidence of book entry transfer to the account of the custodian
bank. The seller is required to maintain the value of the underlying security at
not less than the repurchase proceeds due the Fund.
C. INCOME AND EXPENSES--Interest income is recorded on an accrual basis. The
Fund accounts for discounts and premiums on the same basis as is used for
federal income tax reporting. Accordingly, original issue discounts on debt
securities purchased are amortized over the life of the security. Premiums on
debt securities are not amortized. Market discounts are recognized at the time
of sale as realized gains for book purposes and ordinary income for tax
purposes.
Income and expenses of the Fund are allocated on a pro rata basis to each
class of shares, except for distribution and service fees and transfer agency
costs which are unique to each class of shares.
D. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars based on quoted exchange rates as of noon Eastern Time. Purchases
and sales of portfolio securities are translated at the rate of exchange
prevailing when such securities were acquired or sold. Income and expenses are
translated at rates prevailing when accrued. Gains and losses on the sale of
securities are not segregated for financial reporting purposes between amounts
arising from changes in exchange rates and amounts arising from changes in the
market prices of securities. Realized gain and loss on foreign currency includes
the net realized amount from the sale of currency and the amount realized
between trade date and settlement date on security transactions.
E. FEDERAL INCOME TAXES--It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
At November 30, 1999, for federal income tax purposes the cost of long- and
short-term investments is $40,453,224, the aggregate gross unrealized
appreciation is $277,935 and the aggregate gross unrealized depreciation is
$1,063,070, resulting in net unrealized depreciation on long- and short-term
investments of $785,135.
20
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At May 31, 1999, the Fund had an accumulated capital loss carryforward
for tax purposes of $37,203,444, which expires between May 31, 2003 and May 31,
2006. Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of post October 31 losses which are not
recognized for tax purposes until the first day of the following fiscal year,
wash sales, and the mark to market of open forward currency contracts at May 31,
1999.
F. DISTRIBUTION OF INCOME AND GAINS--The Fund declares daily and pays monthly
dividends from net investment income. Net investment income for federal income
tax purposes includes gains and losses realized on transactions in foreign
currencies. These realized gains and losses are included as net realized gains
or losses for financial reporting purposes. Net realized gains, if any, are
distributed annually.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly. Investment advisory fees are calculated monthly, based on the average
daily net assets of the Fund at the annual rate of .75%. The Adviser has entered
into a subadvisory agreement with Morgan Stanley Dean Witter Investment
Management Inc. (the "Subadviser"), who provides advisory services to the Fund
and the Adviser with respect to the Fund's investments. The Adviser pays 50% of
its investment advisory fee to the Subadviser.
For the six months ended November 30, 1999, the Fund recognized expenses of
approximately $1,800, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.
For the six months ended November 30, 1999, the Fund recognized expenses of
approximately $24,700 representing Van Kampen Investments Inc.'s or its
affiliates' (collectively "Van Kampen") cost of providing accounting services to
the Fund.
Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the six months ended November
30, 1999, the Fund recognized expenses of approximately $34,900. Transfer agency
fees are determined through negotiations with the Fund's Board of Trustees and
are based on competitive market benchmarks.
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Fund. The maximum
annual benefit per trustee under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At November 30, 1999, capital aggregated $37,359,059, $35,550,657 and
$5,727,529 for Classes A, B and C, respectively. For the six months ended
November 30, 1999, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A...................................... 975,746 $ 6,946,832
Class B...................................... 47,559 341,979
Class C...................................... 7,208 51,180
---------- ------------
Total Sales.................................... 1,030,513 $ 7,339,991
========== ============
Dividend Reinvestment:
Class A...................................... 65,346 $ 465,693
Class B...................................... 49,914 358,672
Class C...................................... 4,200 29,862
---------- ------------
Total Dividend Reinvestment.................... 119,460 $ 854,227
========== ============
Repurchases:
Class A...................................... (809,175) $ (5,758,079)
Class B...................................... (2,374,905) (17,022,518)
Class C...................................... (46,459) (330,456)
---------- ------------
Total Repurchases.............................. (3,230,539) $(23,111,053)
========== ============
</TABLE>
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
At May 31, 1999, capital aggregated $35,704,613, $51,872,524 and $5,976,943
for Classes A, B and C, respectively. For the year ended May 31, 1999,
transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A...................................... 1,506,855 $ 11,587,495
Class B...................................... 1,726,839 13,643,494
Class C...................................... 20,077 156,363
---------- ------------
Total Sales.................................... 3,253,771 $ 25,387,352
========== ============
Dividend Reinvestment:
Class A...................................... 113,067 $ 869,477
Class B...................................... 153,357 1,186,337
Class C...................................... 11,101 85,351
---------- ------------
Total Dividend Reinvestment.................... 277,525 $ 2,141,165
========== ============
Repurchases:
Class A...................................... (1,246,677) $ (9,616,649)
Class B...................................... (3,295,845) (25,669,869)
Class C...................................... (171,957) (1,335,236)
---------- ------------
Total Repurchases.............................. (4,714,479) $(36,621,754)
========== ============
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares purchased
on or after June 1, 1996, and any dividend reinvestment plan Class B shares
received on such shares, automatically convert to Class A shares eight years
after the end of the calendar month in which the shares were purchased. Class B
shares purchased before June 1, 1996, and any dividend reinvestment plan Class B
shares received on such shares, automatically convert to Class A shares six
years after the end of the calendar month in which the shares were purchased.
For the six months ended November 30, 1999, 862,980 Class B shares automatically
converted to Class A shares and are shown in the above table as sales of Class A
shares and repurchases of Class B shares. Class C shares purchased before
January 1, 1997, and any dividend reinvestment plan Class C shares received on
such shares, automatically convert to Class A shares ten years after the end of
the calendar month in which such shares were purchased. Class C shares purchased
on or after January 1, 1997 do not possess a conversion feature. For the six
months ended November 30, 1999, no Class C shares converted to Class A shares.
The CDSC will be
23
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
imposed on most redemptions made within five years of the purchase for Class B
and one year of the purchase for Class C as detailed in the following schedule.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
--------------------------
YEAR OF REDEMPTION CLASS B CLASS C
- ---------------------------------------------------------------------------
<S> <C> <C>
First........................................ 4.00% 1.00%
Second....................................... 4.00% None
Third........................................ 3.00% None
Fourth....................................... 2.50% None
Fifth........................................ 1.50% None
Sixth and Thereafter......................... None None
</TABLE>
For the six months ended November 30, 1999, Van Kampen, as Distributor for
the Fund, received commissions on sales of the Fund's Class A shares of
approximately $900 and CDSC on the redeemed shares of approximately $10,100.
Sales charges do not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments and forward commitments, were $4,710,957 and
$3,513,339, respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio, manage the portfolio's effective yield, foreign currency exposure, or
generate potential gain. All of the Fund's portfolio holdings, including
derivative instruments, are marked to market each day with the change in value
reflected in unrealized appreciation/depreciation. Upon disposition, a realized
gain or loss is recognized accordingly, except when taking delivery of a
security underlying a forward commitment. In this instance, the recognition of
gain or loss is postponed until the disposal of the security underlying the
forward commitment.
Purchasing securities on a forward commitment involves a risk that the
market value at the time of delivery may be lower than the agreed upon purchase
price resulting in an unrealized loss. Selling securities on a forward
commitment involves different risks and can
24
<PAGE> 26
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
result in losses more significant than those arising from the purchase of such
securities. Risks may arise as a result of the potential inability of the
counterparties to meet the terms of their contracts.
A. FORWARD PURCHASE COMMITMENTS--The Fund trades certain securities under the
terms of forward purchase commitments, whereby the settlement occurs at a
specific future date. Forward purchase commitments are privately negotiated
transactions between the Fund and dealers. While forward purchase commitments
are outstanding, the Fund maintains sufficient collateral of cash or securities
in a segregated account with its custodian. The forward purchase commitments are
marked to market on a daily basis with changes in value reflected as a component
of unrealized appreciation/depreciation. There were no forward purchase
commitments outstanding at November 30, 1999.
B. CLOSED BUT UNSETTLED FORWARD COMMITMENTS--In certain situations, the Fund has
entered into offsetting transactions for outstanding forward commitments prior
to settlement of the obligation. In doing so, the Fund realizes a gain or loss
on the transaction at the time the forward commitment is closed. However,
settlement of both the purchase and sale is still scheduled to occur in the
denominated foreign currency at a future date. The net difference in the amount
of foreign currency on the trade is marked to market daily with any fluctuation
included as a component of unrealized gain/loss on forwards.
The following closed but unsettled forward transactions were outstanding at
November 30, 1999:
<TABLE>
<CAPTION>
UNREALIZED
LOCAL CURRENCY GAIN ON NET US$ NET
------------------------- CURRENCY RECEIVABLE
DESCRIPTION/CURRENCY RECEIVABLE PAYABLE DIFFERENCE (PAYABLE)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AUSTRALIA (COMMONWEALTH OF) -- DOLLAR
(1,000,000 par, 7.50%,
07/15/05) 1,079,570 1,068,083 $ 7,931 $ 7,312
SPAIN (KINGDOM OF) -- ECU
(600,000 par, 5.15%,
07/30/09) 606,528 589,833 23,190 16,824
JAPAN -- YEN
(80,000,000 par, 3.40%,
03/22/04) 89,076,548 89,117,348 (3,766) (401)
JAPAN -- YEN
(160,000,000 par, 3.40%,
03/22/04) 178,602,696 178,234,696 (7,241) 3,615
------- -------
$20,114 $27,350
======= =======
</TABLE>
25
<PAGE> 27
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
C. FORWARD CURRENCY CONTRACTS--A forward currency contract is a commitment to
purchase or sell a foreign currency at a future date at a negotiated forward
rate. Upon the settlement of the contract, a realized gain or loss is recognized
and is included as a component of realized gain/loss on forwards. Risks may
arise as a result of the potential inability of the counterparties to meet the
terms of their contracts.
The following forward currency contracts were outstanding as of November 30,
1999:
<TABLE>
<CAPTION>
UNREALIZED
CURRENT APPRECIATION/
VALUE DEPRECIATION
- -------------------------------------------------------------------------
<S> <C> <C>
LONG CONTRACTS
Australian Dollar,
1,100,000 expiring 12/13/99.............. $ 700,489 $ (26,886)
Danish Krone,
13,100,000 expiring 12/01/99............. 1,774,501 (132,340)
Japanese Yen,
50,000,000 expiring 12/01/99............. 491,270 13,103
620,000,000 expiring 12/01/99............ 6,091,752 186,990
Swedish Krona,
18,800,000 expiring 12/01/99............. 2,209,855 (102,568)
Euro Currency,
12,500,000 expiring 12/06/99............. 12,603,271 (1,052,479)
500,000 expiring 12/13/99................ 504,430 (34,695)
----------- -----------
TOTAL LONG CONTRACTS..................... 24,375,568 (1,148,875)
----------- -----------
SHORT CONTRACTS
British Pound Sterling,
1,800,000 expiring 12/02/99.............. 2,870,475 103,485
Japanese Yen,
325,000,000 expiring 12/01/99............ 3,193,257 (92,112)
93,000,000 expiring 12/01/99............. 913,762 (21,163)
Euro Currency,
6,680,000 expiring 12/06/99.............. 6,735,188 294,565
500,000 expiring 12/13/99................ 504,430 35,510
2,000,000 expiring 02/02/00.............. 2,017,720 5,821
Australian Dollar,
1,100,000 expiring 12/13/99.............. 700,489 7,581
</TABLE>
26
<PAGE> 28
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
UNREALIZED
CURRENT APPRECIATION/
VALUE DEPRECIATION
- -------------------------------------------------------------------------
<S> <C> <C>
Danish Krone,
13,100,000 expiring 12/01/99............. 1,774,501 62,806
Swedish Krona,
3,900,000 expiring 12/01/99.............. 458,427 21,101
----------- -----------
TOTAL SHORT CONTRACTS.................... $19,168,249 417,594
=========== -----------
$ (731,281)
===========
</TABLE>
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.
Annual fees under the Plans of up to .25% for Class A and 1.00% each for
Class B and Class C shares are accrued daily. Included in these fees for the six
months ended November 30, 1999, are payments retained by Van Kampen of
approximately $87,900.
7. BORROWINGS
In accordance with its investment policies, the Fund may borrow from banks for
temporary purposes and is subject to certain other customary restrictions.
Effective November 30, 1999, the Fund, in conjunction with certain other funds
of Van Kampen, has entered in to a $650 million committed line of credit
facility with a group of banks which expires on November 28, 2000, but is
renewable with the consent of the participating banks. Each Fund is permitted to
utilize the facility in accordance with the restrictions of its prospectus. In
the event the demand for the credit facility meets or exceeds $650 million on a
complex-wide basis, each Fund will be limited to its pro-rata percentage based
on the net assets of each participating Fund. Interest on borrowings is charged
under the agreement at a rate of 0.50% above the federal funds rate per annum.
An annual commitment fee of 0.09% per annum is charged on the unused portion of
the credit facility, which each Fund incurs based on its pro-rata percentage of
quarterly net assets. The Fund has not borrowed against the credit facility
during the period.
27
<PAGE> 29
VAN KAMPEN GLOBAL GOVERNMENT SECURITIES FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
JERRY D. CHOATE
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY, PH.D.
PAUL G. YOVOVICH
OFFICERS
RICHARD F. POWERS, III*
President
DENNIS J. MCDONNELL*
Executive Vice President and
Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
CURTIS W. MORELL*
Vice President and
Chief Accounting Officer
TANYA M. LODEN*
Controller
STEPHEN L. BOYD*
PETER W. HEGEL*
MICHAEL H. SANTO*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
ASSET MANAGEMENT INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
INVESTMENT SUBADVISER
MORGAN STANLEY DEAN WITTER
INVESTMENT MANAGEMENT INC.
1221 Avenue of the Americas
New York, New York 10020
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICEWATERHOUSECOOPERS LLP
200 E. Randolph
Chicago, Illinois 60601
* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C) Van Kampen Funds Inc., 2000 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data. After April 30, 2000, the report, if used with prospective
investors, must be accompanied by a monthly performance update.
28
<PAGE> 30
YEAR 2000 UPDATE
As we enter the new century, it's "business as usual" for Van Kampen. Thank you
for the confidence you showed in us during the changeover on January 1, 2000,
and for entrusting us with your investment portfolio. We look forward to
continuing to serve your investment needs.
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000869760
<NAME> VK GLOBAL GOVERNMENT SECURITIES
<SERIES>
<NUMBER> 11
<NAME> GLOBAL GOV A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 40,453,224<F1>
<INVESTMENTS-AT-VALUE> 39,668,089<F1>
<RECEIVABLES> 4,557,460<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 31,851<F1>
<TOTAL-ASSETS> 44,257,400<F1>
<PAYABLE-FOR-SECURITIES> 6,054,302<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 1,113,581<F1>
<TOTAL-LIABILITIES> 7,167,883<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 37,359,059
<SHARES-COMMON-STOCK> 3,504,597
<SHARES-COMMON-PRIOR> 3,272,680
<ACCUMULATED-NII-CURRENT> (348,945)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (39,963,835)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> (1,234,948)<F1>
<NET-ASSETS> 24,502,892
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 1,383,632<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (500,597)<F1>
<NET-INVESTMENT-INCOME> 883,035<F1>
<REALIZED-GAINS-CURRENT> (1,566,239)<F1>
<APPREC-INCREASE-CURRENT> (44,576)<F1>
<NET-CHANGE-FROM-OPS> (727,780)<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (720,920)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 975,746
<NUMBER-OF-SHARES-REDEEMED> (809,175)
<SHARES-REINVESTED> 65,346
<NET-CHANGE-IN-ASSETS> 617,717
<ACCUMULATED-NII-PRIOR> 60,386<F1>
<ACCUMULATED-GAINS-PRIOR> (38,397,596)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 172,196<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 500,597<F1>
<AVERAGE-NET-ASSETS> 23,995,609
<PER-SHARE-NAV-BEGIN> 7.298
<PER-SHARE-NII> 0.149
<PER-SHARE-GAIN-APPREC> (0.240)
<PER-SHARE-DIVIDEND> (0.215)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 6.992
<EXPENSE-RATIO> 1.84
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000869760
<NAME> VK GLOBAL GOVERNMENT SECURITIES
<SERIES>
<NUMBER> 12
<NAME> GLOBAL GOV B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 40,453,224<F1>
<INVESTMENTS-AT-VALUE> 39,668,089<F1>
<RECEIVABLES> 4,557,460<F1>
<ASSETS-OTHER> 0<F1>
<OTHER-ITEMS-ASSETS> 31,851<F1>
<TOTAL-ASSETS> 44,257,400<F1>
<PAYABLE-FOR-SECURITIES> 6,054,302<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 1,113,581<F1>
<TOTAL-LIABILITIES> 7,167,883<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 35,550,657
<SHARES-COMMON-STOCK> 1,503,780
<SHARES-COMMON-PRIOR> 3,781,212
<ACCUMULATED-NII-CURRENT> (348,945)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (39,963,835)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> (1,234,948)<F1>
<NET-ASSETS> 10,567,146
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 1,383,632<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (500,597)<F1>
<NET-INVESTMENT-INCOME> 883,035<F1>
<REALIZED-GAINS-CURRENT> (1,566,239)<F1>
<APPREC-INCREASE-CURRENT> (44,576)<F1>
<NET-CHANGE-FROM-OPS> (727,780)<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (513,702)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 47,559
<NUMBER-OF-SHARES-REDEEMED> (2,374,905)
<SHARES-REINVESTED> 49,914
<NET-CHANGE-IN-ASSETS> (17,202,798)
<ACCUMULATED-NII-PRIOR> 60,386<F1>
<ACCUMULATED-GAINS-PRIOR> (38,397,596)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 172,196<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 500,597<F1>
<AVERAGE-NET-ASSETS> 19,700,628
<PER-SHARE-NAV-BEGIN> 7.344
<PER-SHARE-NII> 0.126
<PER-SHARE-GAIN-APPREC> (0.257)
<PER-SHARE-DIVIDEND> (0.186)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 7.027
<EXPENSE-RATIO> 2.53
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000869760
<NAME> VK GLOBAL GOVERNMENT SECURITIES
<SERIES>
<NUMBER> 13
<NAME> GLOBAL GOV C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> MAY-31-2000
<PERIOD-START> JUN-01-1999
<PERIOD-END> NOV-30-1999
<INVESTMENTS-AT-COST> 40,453,224<F1>
<INVESTMENTS-AT-VALUE> 39,668,089<F1>
<RECEIVABLES> 4,557,460<F1>
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<SENIOR-LONG-TERM-DEBT> 0<F1>
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<TOTAL-LIABILITIES> 7,167,883<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 5,727,529
<SHARES-COMMON-STOCK> 290,701
<SHARES-COMMON-PRIOR> 325,752
<ACCUMULATED-NII-CURRENT> (348,945)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (39,963,835)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> (1,234,948)<F1>
<NET-ASSETS> 2,019,479
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 1,383,632<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (500,597)<F1>
<NET-INVESTMENT-INCOME> 883,035<F1>
<REALIZED-GAINS-CURRENT> (1,566,239)<F1>
<APPREC-INCREASE-CURRENT> (44,576)<F1>
<NET-CHANGE-FROM-OPS> (727,780)<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (57,744)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,208
<NUMBER-OF-SHARES-REDEEMED> (46,459)
<SHARES-REINVESTED> 4,200
<NET-CHANGE-IN-ASSETS> (351,900)
<ACCUMULATED-NII-PRIOR> 60,386<F1>
<ACCUMULATED-GAINS-PRIOR> (38,397,596)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 172,196<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 500,597<F1>
<AVERAGE-NET-ASSETS> 2,206,436
<PER-SHARE-NAV-BEGIN> 7.280
<PER-SHARE-NII> 0.122
<PER-SHARE-GAIN-APPREC> (0.269)
<PER-SHARE-DIVIDEND> (0.186)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 6.947
<EXPENSE-RATIO> 2.60
<FN>
<F1>This item relates to the Fund on a composite basis and not on a class basis
</FN>
</TABLE>
