<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
DISTRIBUTED BY VAN KAMPEN FUNDS INC.
SEMI-ANNUAL REPORT
DECEMBER 31, 1998
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Letter to Shareholders................................................ 1
Investment Overview................................................... 3
Portfolio of Investments.............................................. 5
Statement of Assets and Liabilities................................... 23
Statement of Operations............................................... 24
Statement of Changes in Net Assets.................................... 25
Financial Highlights ................................................. 26
Notes to Financial Statements......................................... 27
</TABLE>
MSGE SAR 2/99
<PAGE>
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
January 20, 1999
Dear Shareholder,
The past decade has been a remarkable time for investors. Together, we've
witnessed one of the greatest bull markets in investment history, unprecedented
growth in mutual fund investing, and a surge in personal retirement planning.
The coming millennium promises to hold even more opportunities.
To lead us into this new era of investing, Richard F. Powers III has joined Van
Kampen as Chairman and Chief Executive Officer. He comes to us from our parent
company, Morgan Stanley Dean Witter & Co., where he served as Executive Vice
President and Director of Marketing. He brings 27 years of experience in the
financial services industry, including an extensive background in product
management, strategic planning and brand development.
Although former Chairman Don G. Powell retired on January 1, he will remain
active in the industry and the community. Mr. Powell plans to continue his
service as a member of the board of directors of the Investment Company
Institute, the leading mutual fund industry association, and he will remain a
trustee of your fund.
ECONOMIC OVERVIEW
Despite a stormy year in the global economy, the United States ended 1998 with
only a moderate slowdown in growth. The nation's gross domestic product, a
measure of economic health, grew 3.9 percent during the year, matching 1997's
growth rate and indicating that our nation's economy remains strong. A
continuation of low inflation--only a 1.6 percent increase in the consumer price
index over the last 12 months--also helped sustain the domestic economy and kept
inflation-adjusted interest rates attractive.
Although the year ended on a positive note, the economic environment was quite
unsettled in the third quarter, with the Asian financial crisis contributing to
slowing corporate profits in the United States. Given the uncertainty
surrounding emerging market nations and the near-collapse of a major U.S. hedge
fund, the stock and bond markets experienced significant volatility during this
period. With instability as a backdrop, American and foreign investors alike
pursued a flight to quality--seeking the relative safety of large-company stocks
and government bonds.
In the last few months of the year the global financial situation improved in
conjunction with the Federal Reserve's interest rate decreases. In response to
declining corporate profits and mounting international concerns, the Fed lowered
interest rates three times, with 0.25 percent cuts in September, October, and
November. These rate cuts, coupled with a wave of corporate mergers and
cost-cutting measures, lent the support needed to keep the economy growing.
Dozens of foreign central banks also reduced interest rates in an effort to
stimulate their economies. These actions gave a boost to investor confidence and
encouraged a return to a more diversified range of investments in the last few
months of the year.
MARKET REVIEW
The performance of international stocks varied widely based on regional
conditions, with most markets experiencing significant volatility as a result of
the economic turmoil in many emerging market nations. Stock indexes in most
European countries turned in solid gains for the year, with Belgium, Greece, and
Finland each posting gains of more than 50 percent. In anticipation of the
economic benefits of European Monetary Union and the introduction of the euro,
the European Dow Jones Stoxx Index climbed 18.4 percent in 1998. However, many
Latin American, Asian, and eastern European stock indexes registered significant
losses.
As a result of interest rate cuts by a number of foreign central banks,
international government bonds generally performed well. In addition to
benefiting from lower interest rates, demand for these bonds increased during
the global flight to quality, as investors pulled assets from riskier
investments and diverted them to government bonds.
OUTLOOK
Our outlook for the domestic economy is positive, and we anticipate continued
low inflation and healthy economic growth. However, the aftereffects of the
global economic slowdown may continue to put pressure on corporate earnings in
the first half of the year. Internationally, we anticipate that low interest
rates and declining inflation will lead to improvements in troubled areas such
as Asia and Latin America. With the successful launch of the euro, the new
European transnational currency, we believe that many foreign markets will
become increasingly attractive in 1999.
In the long term, we are optimistic that the stock market will continue its
record growth, although we could experience additional volatility in the months
ahead if concerns about high stock valuations and increasing earnings pressure
become more pronounced. Combined with growing questions about corporate and
government reactions to the Year 2000 computer problem, we could see an
increasingly cautious market by mid-year.
------------------
1
<PAGE>
LETTER TO SHAREHOLDERS
- --------------------------------------------------------------------------------
Additional details about your fund, including an investment overview section
with your portfolio management team, are provided in this report. As always, we
are pleased to have the opportunity to share with you the progress of your
investment.
Sincerely,
<TABLE>
<S> <C>
[/S/ RICHARD F. POWERS] [/S/ DENNIS J. MCDONNELL]
Richard F. Powers III Dennis J. McDonnell
Chairman President
Van Kampen Investment Advisory Corp. Van Kampen Investment Advisory Corp.
</TABLE>
- --------------
2
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
INVESTMENT OVERVIEW
(UNAUDITED)
COMPOSITION OF NET ASSETS (AT DECEMBER 31, 1998)
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<S> <C>
France 4.0%
Germany 4.1%
Hong Kong 2.5%
Italy 3.2%
Japan 9.1%
Netherlands 2.9%
Spain 3.4%
Switzerland 2.7%
United Kingdom 11.4%
United States 38.0%
Short-Term Investment 9.5%
Other 9.2%
</TABLE>
<TABLE>
<CAPTION>
TOTAL RETURNS**
-----------------------------------------------------------------------------------
AVERAGE ANNUAL
---------------------------------------
SIX MONTHS ONE YEAR FIVE YEAR SINCE INCEPTION
----------------- ----------------- ----------------- -----------------
WITH WITHOUT WITH WITHOUT WITH WITHOUT WITH WITHOUT
SALES SALES SALES SALES SALES SALES SALES SALES
CHARGE* CHARGE CHARGE* CHARGE CHARGE* CHARGE CHARGE* CHARGE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares -3.23% 2.69% 12.55% 19.38% 12.18% 13.51% 13.90% 15.03%
- -------------------------------------------------------------------------------------------------------------
Class B+ Shares -2.51% 2.28% 13.58% 18.58% N/A N/A 15.63% 16.15%
- -------------------------------------------------------------------------------------------------------------
Class C Shares 1.35% 2.31% 17.53% 18.53% 12.68% 12.68% 14.19% 14.19%
- -------------------------------------------------------------------------------------------------------------
MSCI World Net
Dividends Index: N/A 5.91% N/A 24.34% N/A 15.68% N/A 16.92%
- -------------------------------------------------------------------------------------------------------------
</TABLE>
* The returns above are calculated using the applicable sales charge for Class
A shares and the applicable deferred sales charge for Class B and Class C
shares.
** Total returns for the Fund reflect expenses waived and reimbursed, if
applicable, by the Adviser. Without such waivers and reimbursements, total
returns would be lower.
+ Class B shares have been offered since August 1, 1995.
THE MORGAN STANLEY CAPITAL INTERNATIONAL (MSCI) WORLD NET DIVIDENDS INDEX IS AN
UNMANAGED INDEX THAT INCLUDES SECURITIES LISTED ON THE STOCK EXCHANGES OF THE
U.S., EUROPE, CANADA, AUSTRALIA, NEW ZEALAND, AND THE FAR EAST AND ASSUMES
DIVIDENDS ARE REINVESTED NET OF WITHHOLDING TAX.
<TABLE>
<CAPTION>
TOP FIVE HOLDINGS TOP FIVE SECTORS
PERCENT OF VALUE PERCENT OF NET
ISSUER COUNTRY NET ASSETS SECTOR (000) ASSETS
- -------------------------- ------------- -------------- -------------------------- --------- --------------
<S> <C> <C> <C> <C> <C>
General Electric Co. United States 0.8% Finance $ 122,787 21.6%
Microsoft Corp. United States 0.8% Consumer Products 113,934 20.1%
Glaxo Welcome plc United Services 87,492 15.4%
Kingdom 0.7%
Nippon Telegraph & Capital Goods & Equipment 76,407 13.5%
Telephone Japan 0.6%
Corp. Energy 45,401 8.0%
Royal Dutch Petroleum Co. Netherlands 0.6%
</TABLE>
The Van Kampen Global Equity Allocation Fund seeks long-term capital
appreciation by investing primarily in equity securities of U.S. and non-U.S.
issuers in accordance with country weightings determined by the subadviser and
with stock selection within each country designed to replicate a broad market
index. As such, emphasis is placed upon country rather than stock selection.
This approach reflects our investment philosophy that a diversified selection of
securities representing exposure to each country that we find attractive is an
effective way to help maximize the return and reduce the risks associated with
global investing.
For the six months ended December 31, 1998, the Van Kampen Global Equity
Allocation Fund generated a total return of 2.69 percent for the Class A shares
at net asset value, as compared to a total return of 5.91 percent for the Morgan
Stanley Capital International (MSCI) World Net Dividends Index.
During the third quarter, continued economic weakness in Asia and in the
Japanese banking system spread to Russia and Latin America, and there were
warning signs that Asia's problems were beginning to affect Europe and the
United States. With turmoil in the emerging markets and a crisis of confidence
in U.S. and European markets, many investors moved out of stocks into
high-quality, government bonds, primarily those issued by the United States and
Germany.
PAST PERFORMANCE IS NOT PREDICTIVE OF FUTURE PERFORMANCE.
THE COUNTRY SPECIFIC PERFORMANCE RESULTS PROVIDED IN THIS OVERVIEW ARE AS
MEASURED BY THE MSCI WORLD INDEX AND ARE FOR INFORMATIONAL PURPOSES ONLY AND
SHOULD NOT BE CONSTRUED AS A GUARANTEE OF THE FUND'S FUTURE PERFORMANCE.
INVESTMENT RETURN AND PRINCIPAL VALUE WILL FLUCTUATE SO THAT AN INVESTOR'S
SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
PLEASE SEE THE PROSPECTUS FOR A DESCRIPTION OF CERTAIN RISK CONSIDERATIONS
ASSOCIATED WITH INTERNATIONAL INVESTING.
------------------
3
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
INVESTMENT OVERVIEW (CONT.)
(UNAUDITED)
Paced by the Federal Reserve Board and the approaching European economic and
monetary union (EMU), banks worldwide lowered interest rates during the fourth
quarter. The interest rate cuts renewed investor confidence and helped revive
stock markets in Europe and the United States, and some Asian markets began to
rebound.
In July, we saw signs of economic slowdown in Europe, particularly in Germany,
and we significantly reduced our positions in favor of cash. We held a
substantial cash position throughout the summer, which benefited the Portfolio
as global markets stumbled due to troubles in Asia and Russia.
Our positions in Italy, Spain, and Portugal helped the Fund's performance as
stock market liquidity improved when short-term interest rates in those
countries fell from more than five percent to three percent.
In the United States, we remained underweight relative to our MSCI benchmark
because of concerns about overpriced stock valuations and potential deceleration
in corporate profit growth. Despite a mid-year slump, however, the U.S. market
rallied strongly in the fourth quarter to a record high.
Through September, the Portfolio was significantly underweight in Asia and Japan
because of the economic malaise of that region. In October, we felt that Asia's
economic, stock market, and sentiment cycles had reached the opposite end of the
spectrum compared to the euphoria and strength of the United States. As a
result, we increased our exposure to Japan, Hong Kong, and Singapore.
Going forward, we are apprehensive about the current valuation levels of global
equity markets, particularly in the United States and Europe. We believe
consensus double-digit earnings expectations for 1999 in these regions are too
optimistic, and we are concerned that actual earnings will be unable to support
such lofty valuations.
Although the European market fell off sharply during the period, we are not
convinced there is value in Europe especially with optimistic double-digit
earnings forecasts. We do, however, believe in the long-term positive effects of
corporate restructuring and focus on shareholder value. We continue to monitor
economic data, such as unemployment, manufacturing production, and export
figures.
In Asia, we will look for signs that the economic crisis has ended. We have
begun to see currencies strengthen, interest rates fall, and corporate
cost-cutting accelerate. If this is the case, we expect the stock market and
corporate earnings to lead this recovery.
Finally, we don't expect EMU to affect the Fund's positioning. We believe that
since the May announcement of the 11 participant nations most of the financial
implications from EMU have already been reflected in the market.
<TABLE>
<S> <C>
Barton M. Biggs Ann D. Thivierge
PORTFOLIO MANAGER PORTFOLIO MANAGER
</TABLE>
- --------------
4
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
COMMON STOCKS (88.7%)
AUSTRALIA (1.3%)
28,707 Amcor Ltd........................................ $ 123
37,449 Amp Ltd.......................................... 474
14,546 Australian Gas Light Co., Ltd.................... 105
47,243 Boral Ltd........................................ 67
9,179 Brambles Industries Ltd.......................... 224
84,273 Broken Hill Proprietary Ltd...................... 621
32,515 Coca-Cola Amatil Ltd............................. 121
46,720 Coles Myer Ltd................................... 245
11,466 CRA Ltd.......................................... 136
63,319 Crown Ltd........................................ 24
46,287 CSR Ltd.......................................... 113
14,982 Email Ltd........................................ 21
5,552 Faulding (F.H.) & Co. Ltd........................ 26
74,410 Fosters Brewing Group Ltd........................ 202
55,168 General Property Trust........................... 103
26,920 GIO Australia Holdings Ltd....................... 88
54,558 Goodman Fielder Ltd.............................. 55
12,273 ICI Australia Ltd................................ 64
13,266 Leighton Holdings Ltd............................ 57
23,254 Lend Lease Corp., Ltd............................ 313
91,602 MIM Holdings Ltd................................. 40
59,130 National Australia Bank Ltd...................... 891
79,020 News Corp., Ltd.................................. 522
99,713 Normandy Mining Ltd.............................. 92
42,881 North Broken Hill Peko Ltd....................... 70
44,695 Pacific Dunlop Ltd............................... 73
37,752 Pioneer International Ltd........................ 80
16,920 QBE Insurance Group Ltd.......................... 70
25,502 Santos Ltd....................................... 68
23,665 Schroders Property Fund.......................... 39
7,938 Smith (Howard) Ltd............................... 53
26,025 Southcorp Holdings Ltd........................... 83
(a)12,844 Stockland Trust Group............................ 32
14,385 TABCORP Holdings Ltd............................. 88
216,349 Telstra Corp., Ltd............................... 1,011
16 Westfield Trust (New)............................ --
80,633 Westpac Banking Corp., Ltd....................... 540
58,061 WMC Ltd.......................................... 175
--------
7,109
--------
(D)AUSTRIA (0.7%)
503 Austria Mikro Systems International AG........... 19
4,142 Austrian Airlines Osterreichische Luftverkehrs
AG............................................. 149
3,719 Austria Tabakwerke AG............................ 285
19,144 Bank Austria AG.................................. 974
800 Bau Holdings AG.................................. 37
1,866 Boehler-Udderholm AG............................. 87
285 BWT AG........................................... 63
3,589 Flughafen Wein AG................................ 176
1,197 Generali AG...................................... 294
(a)625 Lenzing AG....................................... 39
2,026 Mayr-Melnhof Karton AG........................... 95
1,548 Oesterreichische Brau-Beteiligungs AG............ 88
5,159 Oesterreichish Elektrizitaets, 'A'............... 788
4,517 OMV AG........................................... 426
2,366 Radex-Heraklith Industriebet AG.................. 62
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
2,535 VA Technologies AG............................... $ 220
1,460 Wienerberger Baustoffindustrie AG................ 290
--------
4,092
--------
CANADA (1.0%)
4,200 Abitibi-Consolidated, Inc........................ 39
3,100 Agrium, Inc...................................... 27
(a)2,400 Alberta Energy Co., Ltd.......................... 52
4,900 Alcan Aluminum Ltd............................... 132
(a)2,800 Anderson Exploration Ltd......................... 25
5,600 Bank of Montreal................................. 225
10,100 Bank of Nova Scotia.............................. 222
7,700 Barrick Gold Corp................................ 150
9,400 Barrick Gold Corp................................ 182
13,500 BCE, Inc......................................... 508
13,800 Bombardier, Inc., 'A'............................ 198
1,200 Cameco Corp...................................... 21
1,350 Canadian Hunter Exploration Ltd.................. 9
8,400 Canadian Imperial Bank of Commerce............... 208
2,100 Canadian Natural Resources Ltd................... 31
3,000 Canadian Occidental Petroleum Ltd................ 31
7,300 Canadian Pacific Ltd............................. 136
2,000 Canadian Tire Corp., 'A'......................... 52
1,900 Cominco Ltd...................................... 21
2,200 Dofasco, Inc..................................... 28
3,600 Edperbarascan Corp. 'A'.......................... 50
(a)200 Fairfax Financial Holdings Ltd................... 70
2,900 George Weston Ltd................................ 111
(a)19,900 Gulf Canada Resources Ltd........................ 58
9,000 Imasco Ltd....................................... 191
10,000 Imperial Oil Ltd................................. 160
3,600 Inco Ltd......................................... 38
7,100 Laidlaw, Inc. 'B'................................ 71
1,600 Loewen Group, Inc................................ 13
3,000 Macmillan Bloedel Ltd............................ 30
1,600 Magna International, Inc., 'A'................... 99
(a)1,300 MDS Inc., 'B'.................................... 25
3,800 National Bank of Canada.......................... 61
(a)3,600 Newbridge Networks Corp.......................... 109
(a)2,354 Nexfor, Inc...................................... 9
5,400 Noranda, Inc..................................... 54
13,600 Northern Telecom Ltd............................. 678
90 Nova Corp........................................ 1
6,200 Petro............................................ 66
5,900 Placer Dome, Inc................................. 67
(a)3,200 Poco Petroleums Ltd.............................. 27
1,200 Potash Corp. of Saskatchewan, Inc................ 77
3,600 Power Corp. of Canada............................ 78
1,700 Quebecor, Inc. 'B'............................... 37
(a)3,200 Renaissance Energy Ltd........................... 36
(a)3,700 Rogers Communication, Inc., 'B'.................. 33
6,500 Royal Bank of Canada............................. 324
7,400 Seagram Co., Ltd................................. 280
2,000 Southam, Inc..................................... 30
2,400 Suncor, Inc...................................... 72
(a)2,300 Talisman Energy, Inc............................. 40
3,200 TELUS Corp....................................... 68
12,600 Thomson Corp..................................... 294
1,800 Transalta Corp................................... 27
</TABLE>
-----------------------
5
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
CANADA (CONT.)
<TABLE>
<C> <S> <C>
10,344 Transcanada Pipelines Ltd........................ $ 151
2,600 Westcoast Energy, Inc............................ 52
--------
5,884
--------
(D)FRANCE (4.0%)
3,811 Accor S.A........................................ 825
4,513 Alcatel Alsthom.................................. 552
8,096 AXA S.A.......................................... 1,173
5,683 Banque Nationale de Paris........................ 468
1,846 BIC Corp......................................... 102
645 Bouygues......................................... 133
1,026 Canal Plus....................................... 280
103 Cap Gemini S.A................................... 17
1,093 Carrefour S.A.................................... 825
2,408 Cie de Saint-Gobain.............................. 340
4,437 Cie Generale des Eaux............................ 1,151
7,843 Elf Aquitaine.................................... 906
3,276 Elf Sanofi S.A................................... 539
925 Eridania Beghin-Say S.A.......................... 160
207 Essilor International............................ 81
2,636 Etablissements Economiques du Casino
Guichard-Perrachon............................. 274
20,912 France Telecom S.A............................... 1,661
2,104 Groupe Danone RFD................................ 602
543 Imetal S.A....................................... 54
(a)11,420 Klepierre........................................ 1,164
2,613 Lafarge S.A...................................... 248
3,668 Lagardere S.C.A.................................. 156
2,293 L'air Liquide.................................... 420
767 Legrand S.A...................................... 203
1,909 L'Oreal.......................................... 1,380
2,635 LVMH Moet Hennessy Louis Vuitton................. 521
3,819 Lyonnaise des Eaux S.A........................... 784
4,032 Michelin (C.G.D.E.) 'B'.......................... 161
4,058 Paribas.......................................... 352
323 Pathe S.A........................................ 90
2,037 Pernod-Ricard.................................... 132
(a)2,604 Pinault-Printemps-Redoute........................ 498
539 Promodes......................................... 392
1,435 PSA Peugeot Citroen S.A.......................... 222
10,691 Rhone-Poulenc S.A. 'A'........................... 550
188 Sagem............................................ 124
4,071 Schneider S.A.................................... 247
3,417 Silic............................................ 635
9,638 Simco S.A. (Registered).......................... 874
152 Societe Eurafrance S.A........................... 110
2,755 Societe Generale................................. 446
820 Sodexho S.A...................................... 183
14,035 Sophia S.A....................................... 596
3,543 Thomson CSF S.A.................................. 152
6,999 Total S.A. 'B'................................... 709
8,030 Unibail.......................................... 1,171
6,607 Usinor Sacilor................................... 73
2,580 Valeo S.A........................................ 203
--------
22,939
--------
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
(D)GERMANY (4.0%)
1,483 Adidas AG........................................ $ 163
1,450 Agiv AG.......................................... 37
7,292 Allianz AG....................................... 2,713
600 AMB Aachener & Muenchener Beteiligungs AG........ 87
18,500 BASF AG.......................................... 705
21,300 Bayer AG......................................... 894
12,025 Bayer Vereinsbank AG............................. 951
1,950 Bilfinger & Berger Bau AG........................ 43
33 Brau und Brunnen AG.............................. 3
717 CKAG Colonia Konzern AG.......................... 81
3,533 Continental AG................................... 98
(a)5,387 Daimler-Chrysler AG.............................. 518
29,730 Daimler-Chrysler AG.............................. 2,953
2,183 Degussa AG....................................... 121
15,100 Deutsche Bank AG................................. 891
63,987 Deutsche Telekom AG.............................. 2,102
14,617 Dresdner Bank AG................................. 612
4,500 FAG Kugelfischer Georg Schaefer AG............... 38
603 Heidelberger Zement AG........................... 48
3,183 Hochtief AG...................................... 125
350 Karstadt AG...................................... 183
2,067 Kloeckner-Humboldt-Deutz AG...................... 19
233 Linde AG......................................... 141
10,700 Lufthansa AG..................................... 237
350 MAN AG........................................... 104
(a)10,720 Mannesmann AG.................................... 1,240
6,440 Merck KGAA AG.................................... 290
7,057 Metro AG......................................... 555
2,447 Muenchener Rueckversicherungs-Gesellschaft AG
(Registered)................................... 1,197
500 Preussag AG...................................... 227
12,704 RWE AG........................................... 701
1,827 SAP AG........................................... 789
2,300 Schering AG...................................... 289
16,783 Siemens AG....................................... 1,103
1,217 Thyssen AG....................................... 230
14,733 VEBA AG.......................................... 873
845 Viag AG.......................................... 499
8,730 Volkswagen AG.................................... 706
--------
22,566
--------
HONG KONG (2.5%)
140,200 Bank of East Asia................................ 245
288,000 Cathay Pacific Airways Ltd....................... 286
207,000 Cheung Kong Holdings Ltd......................... 1,490
284,000 Chinese Estate Holdings Ltd...................... 41
232,500 CLP Holdings Ltd................................. 1,158
142,000 Hang Lung Development Corp....................... 152
170,600 Hang Seng Bank Ltd............................... 1,525
437,000 Hong Kong & China Gas Co., Ltd................... 556
12,643 Hong Kong Land Holdings Ltd...................... 15
90,000 Hong Kong Shanghai Hotels........................ 64
1,137,800 Hong Kong Telecommunications Ltd................. 1,990
122,200 Hopewell Holdings Ltd............................ 67
364,000 Hutchison Whampoa Ltd............................ 2,572
104,000 Hysan Development Co............................. 155
60,000 Johnson Electric Holdings Ltd.................... 154
</TABLE>
- --------------
6
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
HONG KONG (CONT.)
<TABLE>
<C> <S> <C>
201,000 New World Development Co., Ltd................... $ 506
574,000 Regal Hotel International........................ 62
361,000 Sino Land Co..................................... 193
222,000 South China Morning Post......................... 114
221,000 Sun Hung Kai Properties Ltd...................... 1,612
149,000 Swire Pacific Ltd. 'A'........................... 667
43,000 Television Broadcasting Ltd...................... 111
233,000 Wharf Holdings Ltd............................... 340
--------
14,075
--------
ISRAEL (0.0%)
(a)1,200 Comverse Technology, Inc......................... 85
--------
(D)ITALY (3.2%)
(a)62,254 Alitalia......................................... 230
44,676 Assicurazioni Generali S.p.A..................... 1,864
81,300 Banca Commerciale Italiana....................... 561
85,900 Banco Ambrosiano Veneto.......................... 515
11,000 Banco Popolare Milano............................ 100
(a)76,300 Benetton Group S.p.A............................. 154
3,700 Burgo Cartiere S.p.A............................. 24
(a)640,520 Ciga S.p.A....................................... 523
(a)700 CIR-Compagnie Industriali Riunite S.p.A.......... 1
196,215 Credito Italiano S.p.A........................... 1,163
31,000 Edison S.p.A..................................... 365
360,000 Ente Nazionale Idrocarburi S.p.A................. 2,352
2,000 Falck Acciaierie & Ferriere Lombarde............. 16
261,630 Fiat S.p.A....................................... 908
44,970 Fiat S.p.A. di Risp NCS.......................... 90
100,900 Immobiliare Metanopoli S.p.A..................... 124
21,000 Impreglio S.p.A.................................. 19
176,500 Istituto Nazionale delle Assicurazioni (INA)..... 466
7,300 Italcementi S.p.A................................ 80
10,150 Italcementi S.p.A................................ 52
20,400 Italgas.......................................... 110
9,878 La Rinascente S.p.A.............................. 102
14,000 Magneti Marelli S.p.A............................ 24
49,000 Mediaset S.p.A................................... 397
29,260 Mediobanca S.p.A................................. 406
178,108 Montedison S.p.A................................. 236
58,900 Montedison S.p.A. Di Risp NCS.................... 59
(a)122,880 Olivetti Group................................... 427
79,640 Parmalat Finanziaria S.p.A....................... 152
100,000 Pirelli S.p.A.................................... 320
21,769 R.A.S............................................ 315
462 R.A.S. di Risp................................... 5
250 S.A.I............................................ 2
6,100 S.A.I............................................ 73
(a)62,176 San Paolo-Imi S.p.A.............................. 1,098
8,000 Sirti S.p.A...................................... 48
41,000 Snia BPD S.p.A................................... 64
287,800 Telecom Italia Mobile S.p.A...................... 2,123
70,000 Telecom Italia Mobile S.p.A. RNC................. 329
48,663 Telecom Italia S.p.A............................. 306
155,388 Telecom Italia S.p.A............................. 1,325
(a)792,927 Unione Immobiliare S.p.A......................... 413
--------
17,941
--------
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
JAPAN (9.1%)
4,500 Acom Co., Ltd.................................... $ 289
45,800 Ajinomoto Co., Inc............................... 487
(a)47,800 Aoki Corp........................................ 23
64,500 Asahi Bank Ltd................................... 237
29,000 Asahi Breweries Ltd.............................. 428
85,400 Asahi Chemical Industry Co., Ltd................. 408
80,600 Asahi Glass Co................................... 501
23,500 Bank of Yokohama................................. 56
32,000 Bridgestone Corp................................. 727
34,800 Canon, Inc....................................... 745
17,000 Casio Computer Co., Ltd.......................... 126
22,800 Chiba Bank Ltd................................... 91
29,800 Chugai Pharmaceutical Ltd........................ 298
5,100 Credit Saison Co., Ltd........................... 126
32,800 Dai Nippon Printing Co., Ltd..................... 524
29,800 Daiei, Inc....................................... 81
28,800 Daikin Industries Ltd............................ 286
29,800 Daiwa House Industry............................. 318
108,000 Daiwa Securities Co., Ltd........................ 369
170 East Japan Railway Co............................ 951
19,800 Ebara Corp....................................... 171
12,200 Fanuc Co......................................... 418
171,000 Fuji Bank........................................ 630
17,000 Fuji Photo Film Co............................... 633
70,600 Fujitsu Ltd...................................... 942
20,800 Furukawa Electric................................ 71
11,000 Gunma Bank Ltd................................... 87
37,000 Hankyu Corp...................................... 163
(a)28,000 Hazama-Gumi...................................... 18
143,000 Hitachi Ltd...................................... 887
34,000 Honda Motor Co................................... 1,118
79,000 Industrial Bank of Japan......................... 365
14,000 Ito-Yokado Co., Ltd.............................. 980
(a)90,000 Japan Airlines Co., Ltd.......................... 238
67,600 Japan Energy Corp................................ 64
11,800 Joyo Bank........................................ 46
14,800 Jusco Co......................................... 300
55,600 Kajima Corp...................................... 145
36,600 Kansai Electric Power Co......................... 803
37,800 KAO Corp......................................... 854
45,600 Kawasaki Steel Corp.............................. 68
65,600 Kinki Nippon Railway Co., Ltd.................... 352
57,600 Kirin Brewery Co., Ltd........................... 735
52,600 Komatsu Ltd...................................... 276
81,400 Kubota Corp...................................... 243
(a)88,600 Kumagai Gumi Co., Ltd............................ 68
8,500 Kyocera Corp..................................... 450
26,800 Kyowa Hakko Kogyo Co., Ltd....................... 133
77,200 Marubeni Corp.................................... 133
6,800 Marui Co., Ltd................................... 131
72,400 Matsushita Electric Industrial Co., Ltd.......... 1,282
86,000 Mitsubishi Chemical Corp......................... 181
76,000 Mitsubishi Corp.................................. 438
101,400 Mitsubishi Electric Corp......................... 319
24,000 Mitsubishi Estate Co., Ltd....................... 215
155,000 Mitsubishi Heavy Industries Ltd.................. 604
54,600 Mitsubishi Materials Corp........................ 92
38,000 Mitsubishi Trust and Banking Corp................ 245
</TABLE>
-----------------------
7
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
JAPAN (CONT.)
<TABLE>
<C> <S> <C>
78,200 Mitsui & Co...................................... $ 437
56,600 Mitsui Engineering & Shipbuilding Co., Ltd....... 56
18,000 Mitsui Fudosan Co., Ltd.......................... 136
1,400 Mitsui Trust & Banking Co., Ltd.................. 2
29,800 Mitsukoshi Ltd................................... 79
12,000 Murata Manufacturing Co., Inc.................... 499
18,800 Mycal Corp....................................... 112
50,600 NEC Corp......................................... 466
57,600 New OJI Paper Co., Ltd........................... 300
29,800 NGK Insulators Ltd............................... 385
10,600 Nippon Denko Co., Ltd............................ 196
22,000 Nippon Express Co., Ltd.......................... 124
26,800 Nippon Fire & Marine Insurance Co................ 99
26,800 Nippon Light Metal Co............................ 28
26,800 Nippon Meat Packers, Inc......................... 432
82,600 Nippon Oil Co.................................... 288
320,000 Nippon Steel Corp................................ 581
433 Nippon Telegraph & Telephone Corp. ADR........... 3,346
80,400 Nippon Yusen Kabushiki Kaisha.................... 254
350 Nissan Fire & Marine Insurance Co., Ltd.......... 1
102,400 Nissan Motor Co., Ltd............................ 314
168,000 NKK Corp......................................... 115
55,000 Nomura Securities Co., Ltd....................... 480
31,800 Odakyu Electric Railway Co....................... 111
1,300 Orix Corp........................................ 97
114,200 Osaka Gas Co..................................... 394
26,800 Penta-Ocean Construction......................... 54
8,000 Pioneer Electronic Corp.......................... 134
3,000 Rohm Co.......................................... 274
108,200 Sakura Bank Ltd.................................. 248
21,800 Sankyo Co., Ltd.................................. 477
80,000 Sanwa Bank Ltd................................... 617
73,400 Sanyo Electric Co., Ltd.......................... 228
6,800 Secom Co......................................... 564
5,800 Sega Enterprises Ltd............................. 129
28,800 Sekisui House Ltd................................ 305
48,600 Sharp Corp....................................... 439
8,000 Shimano Inc...................................... 207
40,800 Shimizu Corp..................................... 137
12,000 Shin-Etsu Chemical Co............................ 289
13,000 Shiseido Co., Ltd................................ 167
15,800 Shizuoka Bank.................................... 195
54,600 Showa Denko K.K.................................. 48
2,100 SMC Corp......................................... 168
900 Softbank Corp.................................... 54
12,000 Sony Corp........................................ 875
69,000 Sumitomo Bank.................................... 709
108,200 Sumitomo Chemical Co............................. 422
55,400 Sumitomo Corp.................................... 270
38,800 Sumitomo Electric Industries..................... 437
17,000 Sumitomo Forestry................................ 122
103,400 Sumitomo Metal Industries........................ 118
28,000 Sumitomo Metal Mining Co......................... 91
27,800 Sumitomo Osaka Cement Co., Ltd................... 52
57,600 Taisei Corp., Ltd................................ 111
17,000 Taisho Pharmaceutical Co......................... 468
33,000 Taiyo Yuden Co., Ltd............................. 391
32,800 Takeda Chemical Industries....................... 1,264
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
57,600 Teijin Ltd....................................... $ 212
180,600 The Bank of Tokyo-Mitsubishi Ltd................. 1,872
12,000 The 77 Bank Ltd.................................. 120
36,800 Tobu Railway Co.................................. 108
19,500 Tohoku Electric Power............................ 346
53,600 Tokai Bank....................................... 254
79,400 Tokio Marine & Fire Insurance Co................. 950
47,300 Tokyo Electric Power Co.......................... 1,169
4,000 Tokyo Electron Ltd............................... 152
108,200 Tokyo Gas Co..................................... 285
45,800 Tokyu Corp....................................... 121
37,800 Toppan Printing Co., Ltd......................... 462
84,500 Toray Industries, Inc............................ 442
29,800 Toto Ltd......................................... 240
58,600 Toyobo Ltd....................................... 76
118,000 Toyota Motor Corp................................ 3,210
54,600 Ube Industries Ltd............................... 83
300 Yamaichi Securities.............................. --
30,000 Yokogawa Electric Corp........................... 149
--------
51,616
--------
(D)NETHERLANDS (2.9%)
41,315 ABN Amro Holding N.V............................. 869
16,800 Aegon N.V........................................ 2,063
10,100 Akzo Nobel N.V................................... 460
(a)2,640 Buhrmann N V..................................... 47
18,300 Elsevier N.V..................................... 256
2,606 Getronics........................................ 129
2,500 Hagemeyer N.V.................................... 91
9,413 Heineken N.V..................................... 566
27,199 ING Groep N.V.................................... 1,659
2,439 KLM Royal Dutch Airlines N.V..................... 74
15,617 Koninklijke Ahold N.V............................ 577
13,047 Koninklijke KNP BT N.V........................... 653
700 Nedlloyd Groep N.V............................... 10
2,656 Oce N.V.......................................... 95
10,800 Phillips Electronics N.V......................... 725
23,974 Rodamco N.V...................................... 609
65,400 Royal Dutch Petroleum............................ 3,256
27,000 Royal Dutch Petroleum Co., New York Shares....... 1,293
1,418 Stork N.V........................................ 33
14,247 TNT Post Group N.V............................... 459
33,560 Uni-Invest N.V................................... 527
19,800 Unilever N.V..................................... 1,692
2,200 Vedior N.V....................................... 43
2,177 Wolters Kluwer N.V............................... 466
--------
16,652
--------
NORWAY (0.1%)
(a)142,200 Choice Hotels Scandinavia S.A.................... 200
(a)79,840 Linstow ASA...................................... 378
--------
578
--------
(D)PORTUGAL (1.2%)
26,942 Banco Comercial (Registered)..................... 829
17,920 Banco Espirito Santo............................. 556
(a)20 Banco Pinto & Sotto Mayor........................ --
800 Banco Totta & Acores 'B' (Registered)............ 19
</TABLE>
- --------------
8
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
(D)PORTUGAL (CONT.)
<TABLE>
<C> <S> <C>
10,900 BPI-SGPS S.A. (Registered)....................... $ 370
(a)8,200 Brisa Auto-Estradas.............................. 483
12,300 Cimpor-Cimentos de Portugal S.A.................. 393
800 CIN S.A.......................................... 32
2,300 Companhia de Seguros Tranguilidade
(Registered)................................... 73
82,600 EDP-Electricidade de Portugal S.A................ 1,820
1,500 INAPA S.A........................................ 16
(a)9,450 Jeronimo Martins, SGPS S.A....................... 517
14,700 Portucel Industrial-Empresa Produtora de Celulose
S.A............................................ 96
27,400 Portugal Telecom S.A............................. 1,257
1,080 Sociedade de Construcoes Soares da Costa S.A..... 4
2,203 Somague SGPS..................................... 13
6,200 Sonae Investimentos S.A.......................... 302
2,400 UNICER-Uniao Cervejeira S.A...................... 57
--------
6,837
--------
SINGAPORE (1.6%)
125,000 City Developments Ltd............................ 542
13,450 Creative Technology Ltd.......................... 190
36,000 Cycle & Carriage Ltd............................. 123
176,000 DBS Land Ltd..................................... 259
101,000 Development Bank Of Singapore Ltd. (Foreign)..... 912
42,000 Fraser & Neave Ltd............................... 123
(a)145,000 Hotel Properties Ltd............................. 62
130,000 Keppel Corp...................................... 348
95,000 NatSteel Ltd..................................... 104
(a)171,000 Neptune Orient Lines Ltd......................... 55
152,000 Overseas-Chinese Banking Corp., Ltd. (Foreign)... 1,032
(a)226 Overseas Union Enterprise Ltd.................... --
57,000 Parkway Holdings Ltd............................. 102
174,244 Sembcorp Industries Ltd.......................... 199
3,000 Shangri-La Hotel Ltd............................. 5
172,000 Singapore Airlines Ltd. (Foreign)................ 1,261
50,000 Singapore Press Holdings......................... 542
487,000 Singapore Technology Engineering Ltd............. 455
928,000 Singapore Telecommunications Ltd................. 1,417
101,000 Straits Trading Co., Ltd......................... 65
239,000 United Industrial Corp., Ltd..................... 96
139,000 United Overseas Bank Ltd. (Foreign).............. 893
(a)68,000 United Overseas Land Ltd......................... 46
34,000 Venture Manufacturing Ltd........................ 130
--------
8,961
--------
(D)SPAIN (3.4%)
5,500 Acerinox S.A..................................... 128
4,094 ACS S.A.......................................... 161
(a)41 Aguas de Barcelona S.A........................... 3
38,380 Argentaria S.A................................... 992
18,896 Autopistas Concesionaria Espanola S.A............ 314
5,500 Azucarere Ebro Agricolas S.A..................... 121
153,100 Banco Bilbao Vizcaya S.A. (Reistered)............ 2,397
71,100 Banco Central Hispanoamer S.A.................... 843
90,531 Banco Santander S.A.............................. 1,796
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
1,100 Corporacion Financiera Alba S.A.................. $ 183
5,398 Corporacion Mapfre S.A........................... 146
4,350 Dragados y Construcciones S.A.................... 160
50 Empresa Nacional de Cellulosas S.A............... 1
72,300 Endesa S.A....................................... 1,913
17 Energia y Industrias Aragonesas S.A.............. --
5,500 Fomento de Construcciones y Contratas S.A........ 408
11,000 Gas Natural SDG S.A. 'E'......................... 1,196
3,435 General de Aguas de Barcelona S.A................ 230
66,000 Iberdrola S.A.................................... 1,233
(a)3,302 Immobiliaria Metropolitana Vasco Central S.A..... 99
23,800 Repsol S.A....................................... 1,268
2,400 Sol Melia S.A.................................... 84
(a)13,100 Tabacalera S.A. 'A'.............................. 330
73,354 Telefonica S.A................................... 3,257
3,145 Telefonica S.A. (New)............................ 140
(a)15,991 TelePizza S.A.................................... 152
21,900 Union Electrica Fenosa S.A....................... 378
(a)90,758 Vallehermoso S.A................................. 1,296
50 Viscofan Industria Navarra de Envolturas
Celulosicas S.A................................ 2
1,840 Zardoya-Otis S.A................................. 57
--------
19,288
--------
SWEDEN (1.6%)
21,300 ABB AB 'A'....................................... 228
8,900 ABB AB 'B'....................................... 95
5,100 AGA AG 'A'....................................... 68
(a)67,540 Asticus AB....................................... 663
42,366 Astra AB 'A'..................................... 866
10,300 Astra AB 'B'..................................... 210
4,250 Atlas Copco AB 'A'............................... 93
2,100 Atlas Copco AB 'B'............................... 46
110,740 Castellum AB..................................... 1,204
(a)81,590 Diligentia AB.................................... 574
(a)4,000 Drott AB 'B'..................................... 37
(a)12,500 Electrolux AB 'B'................................ 215
600 Esselte AB 'B'................................... 10
36,710 Fastighets AB Tornet............................. 537
100 Granges AB....................................... 1
6,700 Hennes & Mauritz AB 'B'.......................... 548
(a)3,500 NetCom Systems AB 'B'............................ 143
26,100 Piren AB......................................... 166
6,000 Sandvik AB 'A'................................... 104
2,500 Sandvik AB 'B'................................... 43
8,100 SCA AB 'B'....................................... 177
11,600 Securitas AB 'B'................................. 181
(a)17,000 Skandia Forsakrings AB........................... 260
19,200 Skandinaviska Enskilda Banken AB 'A'............. 203
4,000 Skanska AB 'B'................................... 111
3,000 SKF AB 'B'....................................... 35
10,500 Sparbanken Sverige AB 'A'........................ 272
7,200 Svenska Handelsbanken AB 'A'..................... 304
3,400 Svenskt Stal AB 'A'.............................. 33
60,400 Telefonaktiebolaget LM Ericsson.................. 1,440
4,500 Trelleborg AB 'B'................................ 37
500 Volvo AB 'A'..................................... 11
</TABLE>
-----------------------
9
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
SWEDEN (CONT.)
<TABLE>
<C> <S> <C>
14,000 Volvo AB 'B'..................................... $ 322
2,400 Wm-Data AB 'B'................................... 103
--------
9,340
--------
SWITZERLAND (2.7%)
245 ABB AG (Bearer).................................. 288
470 Adia S.A. (Bearer)............................... 214
160 Alusuisse-Lonza Holding AG (Registered).......... 187
6,850 CS Holding AG (Registered)....................... 1,074
85 Georg Fischer AG (Registered).................... 29
175 Holderbank Financiere Glarus AG (Bearer)......... 207
165 Merkur Holding AG (Registered)................... 45
1,005 Nestle S.A. (Registered)......................... 2,191
1,636 Novartis AG (Registered)......................... 3,221
42 Roche Holding AG (Bearer)........................ 762
177 Roche Holding AG-Genusshein...................... 2,163
(a)405 Sairgroup (Registered)........................... 101
375 Schweizerische Rueckver (Registered)............. 979
50 SGS Societe Generale de Surveillance Holding S.A.
(Bearer)....................................... 49
135 SMH AG (Bearer).................................. 83
110 Sulzer AG (Registered)........................... 67
(a)2,050 Swisscom AG (Registered)......................... 859
(a)5,181 UBS AG (Registered).............................. 1,594
(a)1,205 Zurich Allied AG................................. 894
--------
15,007
--------
UNITED KINGDOM (11.4%)
52,400 Abbey National plc............................... 1,122
58,227 Albert Fisher Group plc.......................... 6
(a)3,096 Alldays plc...................................... 9
(a)4,039 Allders plc...................................... 9
(a)57,946 Allied Zurich plc................................ 864
11,811 Amec plc......................................... 35
(a)31,573 Anglian Water plc................................ 436
33,640 Argyll Group plc................................. 169
26,150 Arjo Wiggins Appleton plc........................ 49
18,725 Associated British Foods plc..................... 177
(a)83,014 Associated British Ports Holdings plc............ 387
(a)18,004 Astec plc........................................ 26
64,089 Barclays plc..................................... 1,382
16,890 Barratt Developments plc......................... 65
36,717 Bass plc......................................... 535
2,022 BBA Group plc.................................... 13
38,215 Beazer Group plc................................. 97
26,471 Berisford plc.................................... 79
10,202 Berkeley Group (The) plc......................... 75
145,190 BG plc........................................... 916
38,169 BICC plc......................................... 44
49,913 Blue Circle Industries plc....................... 257
26,105 BOC Group plc.................................... 373
41,125 Boots Co. plc.................................... 700
(a)8,271 BP Amoco plc Spons ADR........................... --
79,479 BPB Industries plc............................... 301
74,772 British Aerospace plc............................ 634
44,903 British Airways plc.............................. 303
57,946 British American Tobacco plc..................... 510
107,980 British Land Co. plc............................. 803
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
218,658 British Petroleum Co. plc........................ $ 3,265
59,825 British Sky Broadcasting Group plc............... 454
74,800 British Steel plc................................ 111
216,950 British Telecommunications plc................... 3,269
269,745 BTR plc, 'B'..................................... 557
280,100 Burford Holdings plc............................. 457
44,339 Burmah Castrol plc............................... 634
93,487 Cable & Wireless plc............................. 1,149
41,160 Cadbury Schweppes plc............................ 702
7,728 Capital Corp. plc................................ 8
187,410 Capital Shopping Centers plc..................... 1,051
97,514 Caradon plc...................................... 167
16,769 Carpetright plc.................................. 63
164,550 Centrica plc..................................... 331
33,646 Coats Viyella plc................................ 15
19,249 Cobham plc....................................... 223
26,106 Commercial Union plc............................. 409
3,722 De La Rue plc.................................... 13
3,953 Delta plc........................................ 7
126,724 Diageo plc....................................... 1,442
(a)7,331 Dialog Corporation plc........................... 7
29,175 Elementis plc.................................... 40
9,770 Emap plc......................................... 187
83,638 EMI Group plc.................................... 559
40,199 Enterprise Oil plc............................... 197
38,972 Firstgroup plc................................... 258
31,227 FKI plc.......................................... 70
108,475 General Electric plc............................. 979
44,734 GKN plc.......................................... 594
119,675 Glaxo Welcome plc................................ 4,118
26,140 Granada Group plc................................ 462
402,620 Grantchester Holdings plc........................ 938
44,875 Great Universal Stores plc....................... 473
(a)8,968 Greycoat plc..................................... 25
28,470 Guardian Royal Exchange plc...................... 159
78,320 Hammerson plc.................................... 449
61,081 Hanson plc....................................... 485
22,703 House of Fraser plc.............................. 20
82,270 HSBC Holdings plc................................ 2,081
39,193 Hyder plc........................................ 492
37,585 IMI plc.......................................... 148
33,675 Imperial Chemical Industries plc................. 292
21,676 Jarvis plc....................................... 241
(a)2,387 JBA Holdings plc................................. 8
44,295 Johnson Matthey plc.............................. 299
4,129 Kwik-Fit Holdings plc............................ 33
45,473 Ladbroke Group plc............................... 183
(a)10,539 Laird Group plc.................................. 29
29,925 Land Securities plc.............................. 385
136,247 Lasmo plc........................................ 227
44,875 Legal & General Group plc........................ 583
(a)21,762 Lex Service plc.................................. 139
87,179 LIMIT plc........................................ 238
205,675 Lloyds TSB Group plc............................. 2,926
(a)31,795 London Clubs International plc................... 87
(a)11,737 London Forfaiting Co., plc....................... 22
35,683 Lonrho Africa plc................................ 195
7,485 Lonrho Africa plc................................ 7
(a)3,132 Low & Bonar plc.................................. 8
</TABLE>
- --------------
10
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED KINGDOM (CONT.)
<TABLE>
<C> <S> <C>
115,823 LucasVarity plc.................................. $ 386
(a)3,027 Manchester United plc............................ 11
130,875 Marks & Spencer plc.............................. 898
(a)60,642 Marley plc....................................... 123
(a)396 Mayflower Corporation plc........................ 1
3,630 McKechnie plc.................................... 22
(a)9,288 Meggitt plc...................................... 19
18,557 MEPC plc......................................... 124
32,562 Mirror Group News Ord plc........................ 81
(a)56,088 Misys plc........................................ 409
52,400 National Power plc............................... 452
24,343 Next plc......................................... 200
(a)64,004 NFC plc.......................................... 127
26,148 North West Water plc............................. 362
(a)1,490 Ocean Group plc.................................. 19
(a)14,245 Parity plc....................................... 136
30,693 Peninsular & Oriental Steam Navigation Co........ 363
17,517 Pennon Group plc................................. 339
219,471 Pilkington plc................................... 219
3,303 Powerscreen International plc.................... 6
74,809 Prudential Corp. plc............................. 1,130
15,431 Racal Electronic plc............................. 89
76,911 Rank Group plc................................... 296
51,925 Reed International plc........................... 406
55,120 Reuters Holdings plc............................. 579
17,481 Rexam plc........................................ 49
(a)3,727 Rexam plc........................................ 10
(a)11,200 RMC Group plc.................................... 153
56,619 Rolls-Royce plc.................................. 235
52,412 Royal & Sun Alliance Insurance Group plc......... 428
18,679 Royal Bank of Scotland Group plc................. 298
45,035 Rtz Corp. plc (Registered)....................... 524
20,156 Rugby Group plc.................................. 31
59,797 Sainsbury (J) plc................................ 479
11,175 Schroders plc.................................... 204
(a)8,881 Scotia Holdings plc.............................. 9
37,418 Scottish Power plc............................... 384
(a)57,421 Sears plc........................................ 246
7,480 Selfridges plc................................... 27
(a)2,700 Skillsgroup plc.................................. 8
18,725 Slough Estates plc............................... 85
192,871 SmithKline Beecham plc........................... 2,696
8,351 Smiths Industries plc............................ 119
53,535 Southern Electric plc............................ 605
(a)68,508 Stagecoach Holdings plc.......................... 273
52,385 Tarmac plc....................................... 98
29,879 Taylor Woodrow plc............................... 75
213,201 Tesco plc........................................ 608
24,011 Thames Water plc................................. 459
18,691 TI Group plc..................................... 101
(a)2,634 Torotrac plc..................................... 4
7,900 Unilever N.V. - New York Shares.................. 655
107,150 Unilever plc..................................... 1,202
(a)4,410 Vickers plc...................................... 13
123,417 Vodafone Group plc............................... 2,004
553,100 Wates City of London Properties plc.............. 653
1,852 Wickes plc....................................... 8
25,635 William Baird plc................................ 44
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
45,398 WPP Group plc.................................... $ 276
(a)29,111 Yorkshire Water plc.............................. 266
33,675 Zeneca Group plc................................. 1,466
--------
64,938
--------
UNITED STATES (38.0%)
6,800 AAR Corp......................................... 162
19,400 Abbott Laboratories.............................. 951
(a)1,500 Abercrombie & Fitch Co. 'A'...................... 106
4,700 ABM Industries, Inc.............................. 163
(a)2,000 Acnielsen Corp................................... 57
(a)14,800 Acxiom Corp...................................... 459
(a)4,400 Adac Laboratories, Inc........................... 88
(a)3,800 ADC Telecom, Inc................................. 132
(a)4,700 Advo Inc......................................... 124
(a)3,400 AES Corp......................................... 161
2,200 AETNA, Inc....................................... 173
7,100 AFLAC, Inc....................................... 312
2,300 A.G. Edwards, Inc................................ 86
1,900 AGL Resources, Inc............................... 44
3,800 A.H. Belo Corp., 'A'............................. 76
8,300 Air Express International Corp................... 181
5,200 Air Products & Chemicals, Inc.................... 208
2,300 Airborne Freight Corp............................ 83
(a)7,900 Airtouch Communications, Inc..................... 570
2,600 AK Steel Holding Corp............................ 61
3,300 Albertson's, Inc................................. 210
3,100 Allegheny Energy, Inc............................ 107
1,700 Allegiance Corp.................................. 79
(a)2,900 Alliant Techsystems, Inc......................... 239
7,400 Allied Signal, Inc............................... 328
4,900 Allied Waste Industries, Inc..................... 116
10,700 Allstate Corp.................................... 413
3,600 Alltel Corp...................................... 215
6,000 Alpharma, Inc.................................... 212
(a)2,800 Altera Corp...................................... 170
3,301 Aluminum Co. of America.......................... 246
2,100 AMBAC Finacial Group, Inc........................ 126
2,200 Amerada Hess Corp................................ 109
1,700 Ameren Corp...................................... 73
(c)11,800 America Online, Inc.............................. 1,708
9,100 American Bankers Insurance Group, Inc............ 440
2,500 American Electric Power Co., Inc................. 118
5,600 American Express Co.............................. 573
2,000 American Financial Group, Inc.................... 88
3,900 American General Corp............................ 304
16,600 American Home Products Corp...................... 935
13,000 American International Group, Inc................ 1,255
(a)8,700 American Management Systems, Inc................. 348
(a)7,200 American Oncology Resources, Inc................. 105
(a)2,800 American Power Conversion Corp................... 136
(a)2,100 American Standard Companies, Inc................. 75
4,000 American Stores Co............................... 148
23,100 American Telephone & Telegraph Co................ 1,737
2,400 American Water Works, Inc........................ 81
(a)13,800 Americredit Corp................................. 191
14,200 Ameritech Corp................................... 900
(a)3,500 Amgen, Inc....................................... 366
7,000 A.O. Smith Corp.................................. 172
</TABLE>
-----------------------
11
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
12,500 Amoco Corp....................................... $ 755
4,500 AMP, Inc......................................... 234
(a)2,200 AMR Corp......................................... 131
(a)4,900 Analog Devices................................... 154
3,100 Analogic Corp.................................... 117
5,300 Analysts International Corp...................... 102
3,600 Anchor Bancorp Wisconsin, Inc.................... 86
6,500 Anheuser-Busch Cos., Inc., 'A'................... 427
(a)11,100 Anixter International, Inc....................... 225
(a)4,900 AnnTaylor Stores Corp............................ 193
2,800 Aon Corp......................................... 155
9,600 Apogee Enterprises, Inc.......................... 108
6,600 Applebee's International, Inc.................... 136
7,500 Applied Industrial Technologies, Inc............. 104
(a)5,700 Applied Material, Inc............................ 243
8,500 Applied Power, Inc., 'A'......................... 321
8,700 Aptar Group, Inc................................. 244
8,900 Archer Daniels Midland Co........................ 153
(a)3,100 Arrow Electronics, Inc........................... 83
1,400 Arvin Industries, Inc............................ 58
(a)3,200 Ascend Communications, Inc....................... 210
(a)11,500 Aspect Telecommunications Corp................... 198
2,000 Associated Banc-Corp............................. 68
9,003 Associates First Capital Corp., 'A'.............. 382
(a)2,100 Astec Industries, Inc............................ 117
12,000 Astoria Financial Corp........................... 549
4,700 Atlantic Richfield Co............................ 307
5,800 Atmos Energy Corp................................ 187
3,700 Automatic Data Processing, Inc................... 297
2,800 Avery Dennison Corp.............................. 126
(a)5,600 Avid Technology, Inc............................. 131
1,500 Avnet, Inc....................................... 91
4,000 Avon Products, Inc............................... 177
5,300 Baker Hughes, Inc................................ 94
9,700 Baldor Electric Co............................... 196
7,500 Ballard Medical Products......................... 182
8,700 Bank of New York Co., Inc........................ 350
14,900 Banc One Corp.................................... 761
21,700 BankAmerica Corp................................. 1,304
4,200 BankBoston Corp.................................. 164
1,800 Bankers Trust New York Corp...................... 154
3,300 Banknorth Group, Inc............................. 124
(a)2,200 Barnes & Noble, Inc.............................. 94
5,100 Barnes Group, Inc................................ 149
(a)4,800 Barr Laboratories, Inc........................... 230
(a)5,900 Barrett Resources Corp........................... 142
4,100 Baxter International, Inc........................ 264
4,600 BB&T Corp........................................ 185
(a)5,300 BE Aerospace, Inc................................ 111
1,100 Beckman Coulter, Inc............................. 60
4,300 Becton & Dickinson & Co.......................... 184
(a)3,700 Bed Bath & Beyond, Inc........................... 126
9,100 Belden, Inc...................................... 193
19,800 Bell Atlantic Corp............................... 1,048
24,800 BellSouth Corp................................... 1,236
2,700 Bergen Brunswig Corp., 'A'....................... 94
(a)2,900 Best Buy Co., Inc................................ 178
4,100 Bestfoods........................................ 218
<CAPTION>
VALUE
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<C> <S> <C>
- --------------------------------------------------------------------------
(a)7,500 Billing Concepts Corp............................ $ 83
5,100 Bindley Western Industries, Inc.................. 251
(a)2,000 Biogen, Inc...................................... 166
(a)6,300 BISYS Group, Inc................................. 325
(a)2,400 BJ Services Co................................... 38
1,400 BJ's Wholesale Club, Inc......................... 65
2,200 Black & Decker Corp.............................. 123
9,100 Blount International, Inc.,'A'................... 227
(a)2,800 BMC Software, Inc................................ 125
13,000 Boeing Co........................................ 424
(a)6,300 Boole & Babbage, Inc............................. 185
(a)2,100 Borders Group, Inc............................... 52
1,000 Borg-Warner Automotive, Inc...................... 56
(a)6,500 Boston Scientific Corp........................... 174
1,700 Bowater, Inc..................................... 70
8,700 Bowne & Co....................................... 156
5,000 Brady Corp., 'A'................................. 135
(a)13,600 BREED Technologies, Inc.......................... 111
(a)12,100 Brightpoint, Inc................................. 166
(a)2,300 Brinker Intertional, Inc......................... 66
12,700 Bristol-Myers Squibb Co.......................... 1,698
3,000 Browning-Ferris Industries, Inc.................. 85
6,200 Brush Wellman, Inc............................... 108
(a)8,700 Buckeye Technologies, Inc........................ 130
5,400 Burlington Northern Railroad Co.................. 182
3,000 Burlington Resources, Inc........................ 107
(a)8,200 Burr-Brown Corp.................................. 192
7,100 Cable Design Technologies Corp................... 131
2,500 Cabot Corp....................................... 70
7,000 Cabot Oil & Gas Corp., 'A'....................... 105
6,100 Cadence Design Systems, Inc...................... 181
2,100 California Energy Co., Inc....................... 73
6,400 Cambrex Corp..................................... 154
5,100 Campbell Soup Co................................. 281
3,900 Canandaigua Brands, Inc., 'A'.................... 225
1,000 Capital One Financial Corp....................... 115
(a)7,900 Capital Re Corp.................................. 158
6,100 Caraustar Industries, Inc........................ 174
3,100 Cardinal Health, Inc............................. 235
1,300 Carlisle Cos., Inc............................... 67
1,800 Carolina Power & Light Co........................ 85
9,400 Case Corp........................................ 205
12,300 Caseys General Stores, Inc....................... 160
3,900 Catalina Marketing Corp.......................... 267
5,700 Caterpillar, Inc................................. 262
7,200 Cato Corp., 'A'.................................. 71
10,300 CBS, Inc......................................... 337
1,300 CCB Financial Corp............................... 74
(a)8,600 C-Cube Microsystems, Inc......................... 233
(a)5,000 CDI Corp......................................... 101
(a)3,700 CEC Entertainment, Inc........................... 103
(a)12,300 Cendant Corp..................................... 234
(a)2,000 Centocor, Inc.................................... 90
2,400 Central & South West Corp........................ 66
3,900 Central Hudson Gas & Electric Corp............... 175
6,100 Central Parking Corp............................. 198
5,000 Centura Banks, Inc............................... 372
2,900 Century Telephone Enterprises, Inc............... 196
(a)1,200 Ceridian Corp.................................... 84
</TABLE>
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12
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
(a)6,600 Cerner Corp...................................... $ 177
(a)10,200 Champion Enterprises, Inc........................ 279
2,600 Charter One Financial, Inc....................... 72
11,300 Chase Manhattan Corp............................. 769
(a)4,700 Cheesecake Factory, Inc. (The)................... 139
4,100 Chemed Corp...................................... 137
4,700 ChemFirst , Inc.................................. 93
8,300 Chevron Corp..................................... 688
14,200 Chiquita Brands International, Inc............... 136
(a)5,000 Chiron Corp...................................... 131
(a)1,400 Chris-Craft Industries, Inc...................... 67
2,200 Chubb Corp....................................... 143
(a)11,400 Ciber, Inc....................................... 318
3,000 Cigna Corp....................................... 232
3,200 CILCORP, Inc..................................... 196
4,300 Cincinatti Bell, Inc............................. 163
2,700 Cincinnati Financial Corp........................ 99
2,000 Cinergy Corp..................................... 69
2,800 Cintas Corp...................................... 197
(a)20,000 Cisco Systems, Inc............................... 1,855
29,000 Citigroup, Inc................................... 1,435
(a)1,200 Citrix Systems, Inc.............................. 116
1,400 City National Corp............................... 58
10,450 Cke Restaurants, Inc............................. 308
6,100 CLARCOR, Inc..................................... 122
5,025 Clayton Homes, Inc............................... 69
(a)3,600 Clear Channel Communications, Inc................ 196
1,400 Clorox Co........................................ 164
2,900 CMS Energy Corp.................................. 140
1,800 CNF Transportation, Inc.......................... 68
4,400 Coastal Corp..................................... 154
2,100 Coca-Cola Bottling Co............................ 121
30,700 Coca-Cola Co..................................... 2,052
5,600 Coca-Cola Enterprises, Inc....................... 200
(a)8,200 Cognex Corp...................................... 164
3,900 Colgate Palmolive Co............................. 362
9,800 Columbia HCA/Healthcare Corp..................... 243
12,900 Comair Holdings, Inc............................. 435
4,900 Comcast Corp..................................... 288
4,200 Comdisco, Inc.................................... 71
2,300 Comerica, Inc.................................... 157
4,600 Commerce Bancorp, Inc............................ 242
13,000 Commercial Federal Corp.......................... 301
5,100 Commercial Metals Co............................. 142
4,300 Commonwealth Energy Systems...................... 174
(a)9,000 CommScope, Inc................................... 151
22,200 Compaq Computer Corp............................. 931
7,300 Computer Associates International, Inc........... 311
2,200 Computer Sciences Corp........................... 142
4,800 Computer Task Group, Inc......................... 130
(a)4,900 Compuware Corp................................... 383
900 Comsat Corp...................................... 32
6,900 Conagra, Inc..................................... 217
2,600 Conectiv, Inc.................................... 64
4,200 Conseco, Inc..................................... 128
3,600 Consolidated Edison Co. of New York, Inc......... 99
3,300 Consolidated Edison, Inc......................... 174
(a)3,400 Consolidated Graphics, Inc....................... 230
<CAPTION>
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<C> <S> <C>
- --------------------------------------------------------------------------
(a)2,200 Consolidated Stores Corp......................... $ 44
(a)4,500 Cooper Companies, Inc............................ 93
2,800 Cooper Industries, Inc........................... 134
7,300 Corn Products International, Inc................. 222
3,700 Corning, Inc..................................... 167
(a)2,200 Corrections Corp. of America..................... 39
(a)3,100 Costco Cos., Inc................................. 224
2,000 Countrywide Credit Industries, Inc............... 100
(a)2,000 Covance, Inc..................................... 58
(a)12,300 Coventry Health Care, Inc........................ 108
1,800 Cracker Barrel Old Country Store, Inc............ 42
2,500 Crestar Financial Corp........................... 180
10,800 Cross Timbers Oil Co............................. 81
3,300 CSX Corp......................................... 137
4,200 CTS Corp......................................... 183
5,400 Cullen/Frost Bankers, Inc........................ 296
300 Cummins Engine................................... 11
6,900 Dallas Semiconductor Corp........................ 281
3,800 Dana Corp........................................ 155
4,100 Danaher Corp..................................... 223
6,300 Dayton Hudson Corp............................... 342
1,100 Dean Foods Co.................................... 45
3,500 Deere & Co....................................... 116
(a)16,500 Dell Computer Corp............................... 1,208
(a)4,692 Delphi Financial Group, Inc., 'A'................ 246
8,200 Delta & Pine Land Co............................. 303
1,800 Delta Airlines, Inc.............................. 94
1,900 DENTSPLY International, Inc...................... 49
7,200 Devon Energy Corp................................ 221
(a)14,100 DeVry, Inc....................................... 432
5,100 Diagnostic Products Corp......................... 159
2,900 Dial Corp........................................ 84
2,000 Diebold, Inc..................................... 71
2,400 Dime Bancorp, Inc................................ 63
9,300 Dimon, Inc....................................... 69
(a)5,100 Dionex Corp...................................... 187
(a)4,700 Discount Auto Parts, Inc......................... 103
2,000 Dole Food Co., Inc............................... 60
(a)1,600 Dollar Tree Stores, Inc.......................... 70
3,400 Dominion Resources, Inc.......................... 159
4,100 Dover Corp....................................... 150
4,000 Dow Chemical Co.................................. 364
6,000 Downey Financial Corp............................ 153
12,300 D.R. Horton, Inc................................. 283
(a)7,300 Dress Barn, Inc.................................. 111
1,700 DTE Energy Co.................................... 73
15,000 Du Pont (EI) de Nemours Co....................... 796
4,300 Duke Power Co.................................... 275
3,800 Dun & Bradstreet Corp............................ 120
11,200 E*TRADE Group, Inc............................... 524
(a)6,100 Eagle Hardware & Garden, Inc..................... 198
8,500 Earthgrains Co................................... 263
5,700 Eastern Utilities Association.................... 161
4,500 Eastman Kodak Co................................. 324
6,200 Eaton Vance Corp................................. 129
4,800 Edison International Corp........................ 134
3,000 El Paso Energy Corp.............................. 104
6,500 Electronic Data Systems Corp..................... 327
1,800 Electronics For Imaging, Inc..................... 101
</TABLE>
-----------------------
13
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
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<TABLE>
<C> <S> <C>
14,000 Eli Lilly & Co................................... $ 1,244
(a)6,600 EMC Corp......................................... 561
5,500 Emerson Electric Co.............................. 333
6,600 Energen Corp..................................... 129
2,100 Energy East Corp................................. 119
8,300 Enhance Financial Services Group, Inc............ 249
4,600 Enron Corp....................................... 262
4,100 Ensco International, Inc......................... 44
3,500 Entergy Corp..................................... 109
(a)4,900 Envoy Corp....................................... 285
(a)10,000 Enzo Biochem, Inc................................ 103
2,100 Equifax, Inc..................................... 72
(a)5,100 Etec Systems, Inc................................ 204
6,600 Ethan Allen Interiors, Inc....................... 271
3,100 Executive Risk, Inc.............................. 170
5,100 Expeditors International of Washington, Inc...... 214
(a)6,900 Express Scripts, Inc., 'A'....................... 463
30,300 Exxon Corp....................................... 2,215
3,700 Fair, Issac & Co., Inc........................... 171
5,300 Family Dollar Stores, Inc........................ 117
(a)5,900 Family Golf Centers, Inc......................... 117
12,800 Fannie Mae Corp.................................. 947
(a)1,400 Fastenal Co...................................... 62
(a)2,300 FDX Corp......................................... 205
8,200 Federal Home Loan Mortgage Corp.................. 528
2,100 Federal Signal Corp.............................. 57
1,600 Federal-Mogul Corp............................... 95
(a)3,700 Federated Department Stores...................... 161
2,000 Ferro Corp....................................... 52
6,270 Fidelity National Financial, Inc................. 191
3,800 Fifth Third Bancorp.............................. 271
1,700 Finova Group, Inc................................ 92
(a)11,100 First American Financial Corp.................... 357
6,100 Firstbancorp/Puerto Rico......................... 184
1,100 First Brands Corp................................ 43
1,100 First Chicago Nbd Corp........................... 56
6,300 First Data Corp.................................. 200
(a)1,900 First Health Group Corp.......................... 31
6,000 First Midwest Bancorp, Inc....................... 228
5,200 First Security Corp.............................. 122
3,100 First Tennessee National Corp.................... 118
12,100 First Union Corp. (N.C.)......................... 736
1,600 First Virginia Banks, Inc........................ 75
2,712 Firstar Corp..................................... 253
3,300 Firstenergy Corp................................. 107
13,300 Firstmerit Corp.................................. 357
(a)2,200 Fiserv, Inc...................................... 113
6,800 Fleet Financial Group, Inc....................... 304
10,300 Fleming Cos., Inc................................ 107
2,700 Florida Progress Corp............................ 121
4,400 Florida Rock Industries, Inc..................... 136
2,600 Flowers Industries, Inc.......................... 62
(a)8,800 Foodmaker, Inc................................... 194
(a)5,600 Footstar, Inc.................................... 140
16,100 Ford Motor Co.................................... 945
(a)3,000 Fore Systems, Inc................................ 55
(a)2,400 Forest Laboratories, Inc. 'A'.................... 128
3,900 Fort James Corp.................................. 156
<CAPTION>
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<C> <S> <C>
- --------------------------------------------------------------------------
3,200 Fortune Brands, Inc.............................. $ 101
(a)5,200 Foundation Health Systems 'A'.................... 62
1,900 FPL Group, Inc................................... 117
6,900 Franklin Covey Co................................ 116
(a)3,700 Franklin Resources, Inc.......................... 118
(a)2,200 Fred Meyer, Inc.................................. 133
14,000 Fremont General Corp............................. 347
3,000 Frontier Corp.................................... 102
9,600 Frontier Insurance Group, Inc.................... 124
4,600 G & K Services Inc. 'A'.......................... 245
3,300 Gallagher (Arthur J.) & Co....................... 146
3,700 Gannett Co., Inc................................. 239
7,850 Gap, Inc......................................... 442
(a)2,400 Gateway 2000, Inc................................ 123
3,300 Gatx Corp........................................ 125
2,000 General Dynamics Corp............................ 117
43,284 General Electric Co.............................. 4,417
2,500 General Mills, Inc............................... 194
9,100 General Motors Corp.............................. 651
1,000 General RE Corp.................................. 248
(a)9,000 Genesis Health Ventures, Inc..................... 79
(a)14,100 Gentex Corp...................................... 282
(a)2,300 Genzyme Corp..................................... 114
259 Genzyme-Molecular Oncology....................... 1
5,300 Geon Co.......................................... 122
3,200 Georgia-Pacific Corp............................. 187
3,000 Georgia-Pacific Corp. (Timber Group)............. 71
6,000 Gerber Scientific, Inc........................... 143
(a)7,000 Getchell Gold Corp............................... 191
14,400 Gillette Co...................................... 696
(a)5,000 Global Marine, Inc............................... 46
1,000 Golden West Financial Corp....................... 92
4,000 Goodyear Tire & Rubber Co........................ 202
1,900 GPU, Inc......................................... 84
3,800 Graco, Inc....................................... 112
(a)11,800 Grand Casinos, Inc............................... 95
2,100 Greenpoint Financial Corp........................ 74
12,300 GTE Corp......................................... 800
2,100 Guidant Corp..................................... 232
9,700 Guilford Mills, Inc.............................. 162
(a)3,100 Hadco Corp....................................... 109
5,900 Halliburton Co................................... 175
(a)6,000 Ha-Lo Industries, Inc............................ 226
1,600 Hannaford Brothers Co............................ 85
4,500 Harley-Davidson, Inc............................. 213
4,500 Harman International Industries, Inc............. 172
2,200 Harsco Corp...................................... 67
2,800 Hartford Financial Services Group................ 154
1,400 Hawaiian Electric Industries, Inc................ 56
13,005 HBO & Co......................................... 373
(a)7,200 Health Management Associates, Inc. 'A'........... 156
(a)8,400 HEALTHSOUTH Corp................................. 130
(a)7,200 Heartland Express, Inc........................... 126
4,200 Henry (Jack) & Associates........................ 209
2,500 Herman Miller, Inc............................... 67
1,900 Hershey Foods Corp............................... 118
13,600 Hewlett-Packard Co............................... 929
4,000 Hibernia Corp., 'A'.............................. 70
2,200 Hillenbrand Industries, Inc...................... 125
</TABLE>
- --------------
14
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
4,300 Hilton Hotels Corp............................... $ 82
4,800 H.J. Heinz Co.................................... 272
(a)5,300 HNC Software, Inc................................ 214
18,500 Home Depot, Inc.................................. 1,132
1,900 Honeywell, Inc................................... 143
2,200 Hormel Foods Corp................................ 72
1,300 Houghton Mifflin Co.............................. 61
6,400 Household Internaional, Inc,..................... 254
3,600 Houston Industries, Inc.......................... 116
1,600 HSB Group, Inc................................... 66
2,500 Hubbell Inc.'B'.................................. 95
8,200 Hubco, Inc....................................... 247
6,300 Hughes Supply, Inc............................... 184
3,500 Huntington Bancshares, Inc....................... 105
(a)5,800 Hutchinson Technology, Inc....................... 207
(a)6,100 Hyperion Solutions Corp.......................... 110
2,600 IBP, Inc......................................... 76
2,400 ICN Pharmaceuticals, Inc......................... 54
(a)8,300 IDEXX Laboratories, Inc.......................... 223
(a)2,700 IHOP Corp........................................ 108
3,800 Illinois Tool Works, Inc......................... 220
1,600 Illinova Corp.................................... 40
3,500 IMC Global, Inc.................................. 75
2,600 IMS Health, Inc.................................. 196
(a)6,400 Incyte Pharmaceuticals, Inc...................... 239
2,600 Ingersoll-Rand Co................................ 122
10,500 Input/Output, Inc................................ 77
(a)8,400 Insituform Technologies, Inc. 'A'................ 122
(a)12,700 Integrated Health Services, Inc.................. 179
21,500 Intel Corp....................................... 2,549
13,300 Interface, Inc................................... 123
(a)10,800 Interim Services, Inc............................ 252
6,100 Intermet Corp.................................... 80
12,000 International Business Machines Corp............. 2,217
3,700 International Game Technology.................... 90
6,000 International Paper Co........................... 269
(a)14,500 International Rectifier Corp..................... 141
2,600 Interpublic Group of Cos., Inc................... 207
2,100 Interstate Bakeries Corp......................... 56
2,500 Interstate Energy Corp........................... 81
6,200 Inter-Tel, Inc................................... 145
(a)1,600 Intuit, Inc...................................... 116
(a)4,500 Ionics, Inc...................................... 135
1,400 IPALCO Enterprises, Inc.......................... 78
2,200 ITT Industries, Inc.............................. 87
7,000 Ivacare Corp..................................... 168
3,700 J.C. Penney Co., Inc............................. 173
1,400 Jefferson-Pilot Corp............................. 105
9,700 JLG Industries, Inc.............................. 152
7,300 John H. Harland Co............................... 115
16,800 Johnson & Johnson................................ 1,409
(a)3,400 Jones Apparel Group, Inc......................... 75
6,300 Jones Pharma., Inc............................... 230
1,800 JSB Financial.................................... 98
(a)7,500 Just For Feet, Inc............................... 130
7,500 Justin Industries................................ 98
7,800 Kaman Corp., 'A'................................. 125
1,100 Kansas City Power & Light Co..................... 33
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
3,700 Kansas City Southern Industries, Inc............. $ 182
1,500 Kaydon Corp...................................... 60
(a)1,800 Keane, Inc....................................... 72
4,800 Kellogg Co....................................... 164
5,700 Kellwood Co...................................... 143
1,400 Kelly Services Inc. 'A'.......................... 44
(a)8,800 Kemet Corp....................................... 99
(a)8,500 Kent Electronics Corp............................ 108
6,100 Keycorp.......................................... 195
(a)4,300 Keyspan Energy Corp.............................. 133
10,300 Keystone Financial, Inc.......................... 381
7,000 Kimberly-Clark Corp.............................. 382
(a)3,700 Kirby Corp....................................... 74
(a)9,200 Kmart Corp....................................... 141
1,600 KN Energy, Inc................................... 58
(a)2,400 Kohls Corp....................................... 147
(a)4,000 Kroger Co........................................ 242
4,600 Kuhlman Corp..................................... 174
(a)6,000 Kulicke & Soffa Industries....................... 107
(a)2,200 Landstar System, Inc............................. 90
(a)5,100 Lattice Semiconductor Corp....................... 234
11,200 La-Z-Boy, Inc.................................... 200
(a)2,100 Lear Corp........................................ 81
2,100 Lee Enterprises.................................. 66
12,600 Legg Mason, Inc.................................. 398
5,400 Leggett & Platt, Inc............................. 119
3,300 Lehman Brothers Holdings, Inc.................... 145
(a)2,000 Lexmark International Group, Inc................. 201
2,600 LG&E Energy Corp................................. 74
3,800 Libbey, Inc...................................... 110
5,300 Lilly Industries, Inc. 'A'....................... 106
(a)1,800 Lincare Holdings, Inc............................ 73
1,500 Lincoln National Corp............................ 123
2,200 Linear Technology Corp........................... 197
(a)8,000 Linens 'n Things, Inc............................ 317
(a)1,000 Litton Industries, Inc........................... 65
2,800 Lockheed Martin Corp............................. 237
1,700 Loews Corp....................................... 167
5,400 Lone Star Industries, Inc........................ 199
4,700 Lowe's Cos., Inc................................. 241
2,200 Lubrizol Corp.................................... 57
9,000 Luby's Cafeterias, Inc........................... 139
16,800 Lucent Technologies, Inc......................... 1,848
5,500 LVS Corp......................................... 303
2,900 Lyondell Petrochemical Co........................ 52
5,500 Macdermid, Inc................................... 215
(a)8,500 Macromedia, Inc.................................. 286
2,900 Maf Bancorp, Inc................................. 77
3,800 Manitowoc Co., Inc............................... 169
2,400 Manpower, Inc.................................... 60
8,100 Marcus Corp...................................... 132
3,500 Mark IV Industries, Inc.......................... 46
4,500 Marriott International 'A'....................... 131
3,400 Marsh & Mclennan Cos., Inc....................... 199
2,900 Marshall & Ilsley Corp........................... 169
(a)6,900 Marshall Industries.............................. 169
1,500 Martin Marietta Corp............................. 93
5,000 Masco Corp....................................... 144
4,000 Mattel, Inc...................................... 91
</TABLE>
-----------------------
15
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
(a)3,800 Maxim Integrated Products........................ $ 166
3,800 May Department Stores Co......................... 229
2,200 Maytag Corp...................................... 137
2,100 MBIA, Inc........................................ 138
9,700 MBNA Corp........................................ 242
2,100 McCormick & Co., Inc............................. 71
8,600 McDonald's Corp.................................. 659
1,700 McGraw-Hill Cos., Inc............................ 173
10,113 MCI WorldCom, Inc................................ 726
2,400 Mckesson Corp.................................... 190
1,200 Media General, Inc. 'A'.......................... 64
(a)7,900 MediaOne Group, Inc.............................. 371
(a)5,500 Medimmune, Inc................................... 547
(a)5,000 Medquist, Inc.................................... 198
6,300 Medtronic, Inc................................... 468
3,400 Mellon Bank Corp................................. 234
(a)7,000 Men's Wearhouse, Inc............................. 222
2,400 Mercantile Bancorp............................... 111
1,800 Mercantile Bankshares Corp....................... 69
14,900 Merck & Co., Inc................................. 2,201
(a)3,900 Mercury Interactive.............................. 247
2,366 Meritor Automotive, Inc.......................... 50
4,600 Merrill Lynch & Co., Inc......................... 307
8,800 Methode Electronics 'A'.......................... 138
(a)3,600 Metro Networks, Inc.............................. 153
2,300 MGIC Investment Corp............................. 92
(a)6,600 Michaels Stores, Inc............................. 119
3,600 Micron Technology, Inc........................... 182
(a)3,600 Micros Systems, Inc.............................. 118
(a)31,200 Microsoft Corp................................... 4,327
2,900 Midamerican Energy Holdings Co................... 78
1 Midas, Inc....................................... --
(a)9,000 Midway Games, Inc................................ 99
5,500 Minnesota Mining & Manufacturing Co.............. 391
1,300 Minnesota Power & Light Co....................... 57
7,500 Mississippi Chemical Corp........................ 105
9,900 Mobil Corp....................................... 863
(a)2,800 Modis Professional Services, Inc................. 41
(a)10,800 Mohawk Industries, Inc........................... 454
4,800 Molex, Inc....................................... 183
8,300 Monsanto......................................... 394
1,800 Montana Power Co................................. 102
2,500 Morgan (J.P.) & Co., Inc......................... 263
(a)13,900 Morrison Knudsen Corp............................ 136
8,500 Motorola, Inc.................................... 519
(a)4,800 MS Carriers...................................... 158
(a)9,000 Mueller Industries, Inc.......................... 183
1,400 Murphy Oil Corp.................................. 58
7,900 Mutual Risk Management Ltd....................... 309
5,100 Myers Industries, Inc............................ 146
3,600 Mylan Laboratories, Inc.......................... 113
(a)3,200 Nabors Industries, Inc........................... 43
3,800 Nac Re Corp...................................... 178
3,700 National City Corp............................... 268
6,700 National Computer Systems, Inc................... 248
8,500 National Data Corp............................... 414
1,400 National Fuel Gas Co............................. 63
(a)6,800 National Instruments Corp........................ 232
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
(a)8,700 Nautica Enterprises, Inc......................... $ 131
(a)14,200 NBTY, Inc........................................ 101
(a)3,200 NCR Corp......................................... 134
(a)5,400 NCS Healthcare, Inc.............................. 128
(a)3,600 Networks Associates, Inc......................... 239
1,600 Nevada Power Co.................................. 42
2,600 New Century Energies, Inc........................ 127
3,600 New England Business Services, Inc............... 141
1,500 New England Electric System...................... 72
4,200 New Jersey Resources Corp........................ 166
3,000 New York Times Co., 'A'.......................... 104
2,700 Newell Co........................................ 111
(a)7,800 Newfield Exploration Co.......................... 163
(a)5,300 Nextel Communications Inc., 'A'.................. 125
12,900 NFO Worldwide, Inc............................... 148
4,300 Nike, Inc. 'B'................................... 174
2,600 Nipsco Industries, Inc........................... 79
1,400 Noble Affiliates, Inc............................ 34
(a)3,500 Noble Drilling Corp.............................. 45
1,000 Nordson Corp..................................... 51
4,900 Norfolk Southern Corp............................ 155
7,900 Norrell Corp..................................... 117
(a)6,600 North American Vaccine, Inc...................... 59
3,200 North Fork Bancorp, Inc.......................... 77
(a)3,400 Northeast Utilities.............................. 54
8,300 Northern Telecom Ltd............................. 416
1,900 Northern Trust Corp.............................. 166
5,600 Northwest Natural Gas Co......................... 145
(a)2,100 Nova Corp/Georgia................................ 73
(a)5,600 Novell, Inc...................................... 102
(a)7,900 Novellus Systems, Inc............................ 391
(a)4,400 Oak Industries, Inc.............................. 154
10,300 Oakwood Homes Corp............................... 156
5,000 Occidental Petroleum Corp........................ 84
(a)7,300 Office Depot, Inc................................ 270
(a)4,500 OfficeMax, Inc................................... 55
3,100 OGE Energy Corp.................................. 90
3,100 Old Kent Financial Corp.......................... 144
4,100 Old Republic International Corp.................. 92
2,200 Olin Corp........................................ 62
5,700 Om Group, Inc.................................... 208
2,600 Omnicare, Inc.................................... 90
3,100 Omnicon Group, Inc............................... 180
(a)12,600 Oracle System Corp............................... 543
2,300 Orange & Rockland Utilities, Inc................. 131
(a)7,900 Orbital Sciences Corp............................ 350
(a)4,900 O'Reilly Automotive, Inc......................... 232
6,900 Orion Capital Corp............................... 275
(a)11,800 Orthodontic Centers of America................... 229
(a)1,800 Outback Steakhouse, Inc.......................... 72
(a)9,000 Owens & Minor, Inc............................... 142
3,200 Owens-Illinois, Inc.............................. 98
2,200 Pacific Century Financial Corp................... 54
(a)4,100 Pacific Sunwear of California.................... 67
(a)1,400 Pacificare Health Systems........................ 111
4,400 PacifiCorp....................................... 93
3,700 Paine Webber Group, Inc.......................... 143
(a)4,800 Parexel International Corp....................... 120
268 Patriot American Hospitality, Inc. REIT.......... 2
</TABLE>
- --------------
16
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
(a)7,800 Patterson Dental Co.............................. $ 339
(a)11,400 Paxar............................................ 102
2,300 Paychex, Inc..................................... 118
(a)1,000 Payless Shoesource, Inc.......................... 47
3,000 Peco Energy Co................................... 125
(a)3,500 Pediatrix Medical Group, Inc..................... 210
4,100 Pennsylvania Enterprises, Inc.................... 105
1,400 Pentair, Inc..................................... 56
18,900 Pepsico, Inc..................................... 774
16,600 Pfizer, Inc...................................... 2,082
5,400 PG&E Corp........................................ 170
(a)5,000 Pharmaceutical Product Development............... 150
6,900 Pharmacia & Upjohn, Inc.......................... 391
6,400 Philadelphia Suburban Corp....................... 189
30,700 Philip Morris Cos., Inc.......................... 1,642
3,900 Phillips Petroleum Co............................ 166
10,000 Phillips-Van Heusen Corp......................... 72
6,000 Photronics, Inc.................................. 144
(a)16,900 Phycor, Inc...................................... 115
4,900 Piedmont Natural Gas Co.......................... 177
22,300 Pier 1 Imports, Inc.............................. 216
4,000 Pillowtex Corp................................... 107
2,700 Pinnacle West Capital Corp....................... 114
6,600 Pioneer Group, Inc............................... 130
3,500 Pioneer Hi-Bred International, Inc............... 95
3,000 Pioneer Natural Resources Co..................... 26
4,200 Pitney Bowes, Inc................................ 277
1,700 Pittston Brinks Group............................ 54
(a)6,000 Plains Resources, Inc............................ 84
(a)2,300 Platinum Technology, Inc......................... 44
3,900 PNC Bank Corp.................................... 211
11,100 Pogo Producing Co................................ 144
5,400 Polaris Industries, Inc.......................... 212
(a)1,200 Policy Management Systems Corp................... 61
2,900 Potomac Electric Power Co........................ 76
4,400 PPG Industries, Inc.............................. 256
3,300 Praxair, Inc..................................... 116
1,200 Precision Castparts Corp......................... 53
2,000 Premark International, Inc....................... 69
(a)5,500 Prepaid Legal Services, Inc...................... 182
(a)11,200 Pride International, Inc......................... 79
5,700 Primark Corp..................................... 155
14,500 Prime Hospitality Corp........................... 153
16,600 Procter & Gamble Co.............................. 1,516
(a)3,800 Progress Software Corp........................... 128
1,100 Progressive Corp................................. 186
(a)2,590 Promus Company, Inc.............................. 84
1,600 Protective Life Corp............................. 64
(a)3,900 Protein Design Labs, Inc......................... 90
1,700 Provident Financial Group........................ 64
2,550 Providian Financial Corp......................... 191
(a)2,100 PSS World Medical, Inc........................... 48
2,800 Public Service Enterprise Group, Inc............. 112
1,700 Puget Sound Energy, Inc.......................... 47
2,400 Quaker Oats, Co.................................. 143
(a)2,000 Qualcomm, Inc.................................... 104
(a)5,100 Quantum Corp..................................... 108
4,500 Queens County Bancorp, Inc....................... 134
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
2,500 Questar Corp..................................... $ 48
(a)2,500 Quintiles Transnational Corp..................... 133
(a)2,800 Quorum Health Group, Inc......................... 36
(a)7,200 Ralcorp Holdings, Inc............................ 131
4,500 Ralston-Ralston Purina Group..................... 146
10,300 Raymond James Financial, Inc..................... 218
1,200 Rayonier, Inc.................................... 55
5,200 Raytheon Co., 'B'................................ 277
(a)11,100 Read-Rite Corp................................... 164
5,000 Regal Beloit..................................... 115
3,500 Regions Financial Corp........................... 141
5,200 Regis Corp....................................... 208
4,100 Reliance Steel & Aluminum........................ 113
2,300 Reliastar Financial Corp......................... 106
(a)9,400 Renal Care Group, Inc............................ 271
1,700 Republic New York Corp........................... 77
(a)7,200 Respironics, Inc................................. 144
2,700 Reynolds & Reynolds Co. 'A'...................... 62
10,100 Richfood Holdings, Inc........................... 210
5,900 Riggs National Corp. of Washington D.C........... 120
3,600 Rite Aid Corp.................................... 178
4,500 RJR Nabisco Holdings Corp........................ 134
(a)2,700 Robert Half International, Inc................... 121
(a)7,600 Roberts Pharmaceutical Corp...................... 165
3,600 Rockwell International Corp...................... 175
4,800 Rohm & Haas Co................................... 145
12,900 Rollins Truck Leasing Corp....................... 190
8,200 Roper Industries, Inc............................ 167
1,500 Ross Stores, Inc................................. 59
4,100 RPM, Inc......................................... 66
3,200 Rubbermaid, Inc.................................. 101
7,500 Ruby Tuesday, Inc................................ 159
5,700 Russ Berrie & Co., Inc........................... 134
(a)11,700 Ryan's Family Steak Houses, Inc.................. 145
(a)11,300 Safe Skin Corp................................... 273
2,000 Safeco Corp...................................... 86
(a)4,000 Saks, Inc........................................ 126
(a)8,700 Samina Corp...................................... 544
(a)22,400 Santa fe Energy Resources........................ 165
12,000 Sara Lee Corp.................................... 338
24,298 SBC Communications, Inc.......................... 1,303
2,200 Scana Corp....................................... 71
18,700 Schering-Plough Corp............................. 1,033
7,400 Schlumberger Ltd................................. 341
5,600 Schwab (Charles) Corp............................ 315
(a)1,900 SCI Systems, Inc................................. 110
(a)3,700 Seagate Technology, Inc.......................... 112
5,100 Seagram Co., Ltd................................. 194
5,500 Sears, Roebuck & Co.............................. 234
3,800 SEI Corp......................................... 378
7,400 Selective Insurance Group, Inc................... 149
4,200 Sempra Energy.................................... 107
(a)7,700 Sequus Pharmaceuticals, Inc...................... 156
3,700 Service Corp. International...................... 141
(a)4,400 Service Experts, Inc............................. 129
(a)3,500 Shaw Industries, Inc............................. 85
4,100 Sherwin-Williams Co.............................. 120
(a)6,000 Shopko Stores, Inc............................... 200
(a)6,300 Shorewood Packaging.............................. 129
</TABLE>
-----------------------
17
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
(a)2,200 Siebel Systems, Inc.............................. $ 75
(a)6,900 Sierra Health Services, Inc...................... 145
(a)4,800 Sierra Pac Res Com............................... 182
(a)5,000 Silicon Valley Bancshares........................ 85
5,000 Skywest, Inc..................................... 163
2,300 SLM Holding Corp................................. 110
1,600 Smith International, Inc......................... 40
(a)7,900 Smithfield Foods, Inc............................ 268
7,300 Snyder Oil Corp.................................. 97
6,600 Sola International, Inc.......................... 114
(a)3,300 Solectron Corp................................... 307
2,900 Solutia, Inc..................................... 65
2,300 Sonat, Inc....................................... 62
3,500 Sonoco Products Co............................... 104
1,100 Southdown, Inc................................... 65
10,100 Southern Co...................................... 294
4,400 Southtrust Corp.................................. 163
4,000 Southwest Airlines Co............................ 90
6,600 Southwest Gas Corp............................... 177
8,700 Southwestern Energy Co........................... 65
4,600 Sovereign Bancorp, Inc........................... 66
(a)5,600 Sprint Corp...................................... 471
2,850 Sprint Corp...................................... 66
(a)3,000 SPS Technologies, Inc............................ 170
(a)1,100 SPX Corp......................................... 74
4,500 St. John Knits, Inc.............................. 117
7,800 St. Paul Bancorp, Inc............................ 212
4,603 St. Paul Cos., Inc............................... 160
3,800 Standard Motor Products.......................... 92
6,500 Standard Products Co............................. 132
(a)4,600 Staples, Inc..................................... 201
(a)2,500 Starbucks Corp................................... 140
2,800 Statestreet Corp................................. 195
(a)2,000 Steris Corp...................................... 57
(a)2,400 Sterling Commerce, Inc........................... 108
(a)2,400 Sterling Software, Inc........................... 65
2,900 Stewart Enterprises, Inc. 'A'.................... 65
(a)4,900 Stillwater Mining Co............................. 201
3,800 Stone & Webster, Inc............................. 126
(a)2,900 Storage Technology Corp.......................... 103
9,900 Stride Rite Corp................................. 87
2,600 Stryker Corp..................................... 143
6,900 Sturm Ruger & Co., Inc........................... 82
3,100 Summit Bancorp................................... 135
(a)5,100 Sun Microsystems, Inc............................ 437
6,000 Sunamerica, Inc.................................. 487
1,900 Sundstrand Corp.................................. 99
(a)2,600 Sunguard Data Systems, Inc....................... 103
(a)8,100 Sunrise Medical, Inc............................. 101
2,900 Suntrust Banks, Inc.............................. 222
(a)6,000 Superior Services, Inc........................... 120
6,200 Susquehanna Bancshares, Inc...................... 127
(a)2,700 Sybron International Corp........................ 73
2,100 Symbol Technologies, Inc......................... 134
(a)2,000 Synopsys, Inc.................................... 109
4,200 Synovus Financial Corp........................... 102
5,300 Sysco Corp....................................... 145
3,400 T. Rowe Price Associates, Inc.................... 116
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
1,700 TCA Cable TV, Inc................................ $ 61
1,800 TCF Financial Corp............................... 44
1,500 Tech Data Corp................................... 60
4,400 Technitrol, Inc.................................. 140
(a)9,900 Technology Solutions Co.......................... 106
3,200 Teco Energy, Inc................................. 90
(a)6,800 Tele-Communications, Inc., 'A'................... 376
11,132 Tele-Communications-TCI Ventures Group 'A'....... 262
1,300 Teleflex, Inc.................................... 59
3,100 Telephone & Data Systems, Inc.................... 139
(a)3,800 Tellabs, Inc..................................... 261
(a)15,400 Tel-Save Com., Inc............................... 258
(a)4,900 Tenet Healthcare Corp............................ 129
(a)2,500 Teradyne, Inc.................................... 106
6,800 Texaco, Inc...................................... 360
4,700 Texas Industries, Inc............................ 127
5,300 Texas Instruments, Inc........................... 453
3,700 Texas Utilities Co............................... 173
2,800 Textron, Inc..................................... 213
3,900 The Limited, Inc................................. 114
(a)4,600 Scott Co. (The).................................. 177
5,400 Thomas Industries, Inc........................... 106
4,900 3Com Corp........................................ 220
1,600 Tidewater, Inc................................... 37
(a)3,100 Timberland Co. ,'A'.............................. 141
15,500 Time Warner, Inc................................. 962
1,200 Times Mirror Co.,'A'............................. 67
4,700 TJX Companies, Inc............................... 136
3,400 TNP Enterprises, Inc............................. 129
(a)8,000 Toll Brothers, Inc............................... 181
2,100 Torchmark Corp................................... 74
4,200 Tosco Corp....................................... 109
(a)2,400 Total Renal Care Holdings, Inc................... 71
800 Transamerica Corp................................ 92
2,900 Transocean Offshore, Inc......................... 78
7,300 Tredegar Industries, Inc......................... 164
3,100 Trenwick Group, Inc.............................. 101
(a)7,000 Triarc Companies................................. 112
2,000 Tribune Co....................................... 132
(a)2,200 Tricon Global Restaurants, Inc................... 110
(a)1,600 Trigon Healthcare, Inc........................... 60
1,500 Trinity Industries, Inc.......................... 58
9,700 True North Communications, Inc................... 261
5,280 Trustco Bank Corp................................ 158
2,300 TRW, Inc......................................... 129
(a)11,200 Tuboscope, Inc................................... 91
8,299 Tyco International Ltd........................... 626
6,300 Tyson Foods, Inc................................. 134
2,800 Ultramar Diamond Shamrock Corp................... 68
(a)5,300 Ultratech Stepper, Inc........................... 85
3,500 Unicom Corp...................................... 135
3,400 Union Carbide Corp............................... 145
3,400 Union Pacific Corp............................... 153
2,400 Union Planters Corp.............................. 109
3,800 Unisys Corp...................................... 131
7,600 United Bankshares, Inc........................... 201
3,300 United Healthcare Corp........................... 142
3,500 United Illuminating Co........................... 180
3,300 United Technologies Corp......................... 359
</TABLE>
- --------------
18
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
VALUE
SHARES (000)
- --------------------------------------------------------------------------
<C> <S> <C>
</TABLE>
UNITED STATES (CONT.)
<TABLE>
<C> <S> <C>
8,800 United Water Resources, Inc...................... $ 211
(a)8,700 Unitrode Corp.................................... 152
1,500 Universal Corp................................... 53
2,100 Universal Foods Corp............................. 58
(a)7,200 Universal Health Services, Inc................... 374
4,300 Unocal Corp...................................... 126
2,100 UNUM Corp........................................ 123
(a)1,500 U.S. Airways Group, Inc.......................... 78
9,800 U.S. Bancorp..................................... 348
(a)5,100 U.S. Filter Corp................................. 117
(a)1,300 U.S. Foodservice, Inc............................ 64
5,600 U.S. Freightways Corp............................ 163
(a)3,800 U.S. Home Corp................................... 126
3,600 U.S. Trust Corp.................................. 274
6,349 U.S. West, Inc................................... 410
2,900 UST, Inc......................................... 101
4,700 USX-Marathon Group............................... 142
1,500 UtiliCorp. United, Inc........................... 55
(a)7,500 Valassis Communications, Inc..................... 387
2,000 Valero Energy Corp............................... 43
5,800 Valmont Industries............................... 80
(a)10,000 Vanstar Corp..................................... 93
1,100 Varian Associates, Inc........................... 42
(a)5,600 Vertex Pharmaceuticals, Inc...................... 167
(a)4,800 Viacom, Inc., 'B'................................ 355
2,700 Viad Corp........................................ 82
(a)12,100 Vicor Corp....................................... 109
13,300 Vintage Petroleum, Inc........................... 115
(a)3,200 Visx, Inc........................................ 280
14,800 Vitesse Semiconductor............................ 675
(a)12,700 VLSI Technologic, Inc............................ 139
1,100 Vulcan Materials Co.............................. 145
6,500 Wabash National Corp............................. 132
2,400 Wachovia Corp.................................... 210
125 Waddell & Reed Financial, Inc., 'A'.............. 3
(a)538 Waddell & Reed Financial, Inc., 'B'.............. 13
6,100 Walgreen Co...................................... 357
28,300 Wal-Mart Stores, Inc............................. 2,305
26,300 Walt Disney Co................................... 789
2,100 Warnaco Group.................................... 53
10,600 Warner-Lambert Co................................ 797
2,000 Washington Gas Light Co.......................... 54
7,600 Washington Mutual, Inc........................... 290
400 Washington Post Co. 'B'.......................... 231
7,700 Waste Management, Inc............................ 359
5,300 Watsco, Inc...................................... 89
(a)2,500 Watson Pharmaceuticals, Inc...................... 157
2,900 Wausau-Mosinee Paper Corp........................ 51
6,100 WD-40 Co......................................... 175
(a)2,500 Weatherford International, Inc................... 48
(a)20,100 Wells Fargo Co................................... 803
10,100 Werner Enterprises, Inc.......................... 179
(a)2,200 Westpoint Stevens, Inc........................... 69
(a)7,300 Westwood One Inc................................. 223
4,300 Weyerhaeuser Co.................................. 218
3,100 Whitman Corp..................................... 79
4,200 Whitney Holding Corp............................. 158
<CAPTION>
VALUE
SHARES (000)
<C> <S> <C>
- --------------------------------------------------------------------------
(a)10,000 Whittman-Hart, Inc............................... $ 276
(a)5,400 Whole Foods Market, Inc.......................... 261
10,000 Wicor, Inc....................................... 218
6,100 Williams Cos., Inc............................... 190
(a)11,500 Williams-Sonoma, Inc............................. 464
800 Wilmington Trust Corp............................ 49
2,000 Winn-Dixie Stores, Inc........................... 90
2,700 Wisconsin Energy................................. 85
2,500 Witco Corp....................................... 40
1,800 WM. Wrigley Jr. Co............................... 161
12,100 Wolverine World Wide, Inc........................ 160
(a)12,687 WordCom, Inc..................................... 910
(a)8,200 World Color Press, Inc........................... 250
5,400 Wynn's International Inc......................... 119
4,500 Xerox Corp....................................... 531
(a)2,200 Xilinx, Inc...................................... 143
(a)4,800 Xircom, Inc...................................... 163
(a)9,800 Xylan Corp....................................... 172
(a)6,600 Yellow Corp...................................... 126
1,800 York International Corp.......................... 73
(a)8,000 Zale Corp........................................ 258
(a)6,900 Zebra Technologies Corp., 'A'.................... 198
(a)4,100 Zenith National Insurance........................ 95
1,900 Zions Bancorp.................................... 119
--------
215,478
--------
TOTAL COMMON STOCKS (COST $431,069)............................. 503,386
--------
PREFERRED STOCKS (0.2%)
AUSTRALIA (0.1%)
71,354 News Corp., Ltd.................................. 434
--------
(D)GERMANY (0.1%)
1,226 SAP AG-Vorzug.................................... 588
(a)2,800 Volkswagen AG.................................... 139
--------
727
--------
(D)ITALY (0.0%)
57,550 Fiat S.p.A. (Privilegiate)....................... 111
--------
TOTAL PREFERRED STOCKS (COST $932).............................. 1,272
--------
INVESTMENT COMPANIES (0.7%)
UNITED STATES (0.7%)
(b)381,900 Latin American Discovery Fund, Inc............... 2,363
(b)70,000 Morgan Stanley Africa Investment Fund, Inc....... 586
(b)124,800 Morgan Stanley Asia-Pacific Fund, Inc............ 874
--------
TOTAL INVESTMENT COMPANIES (COST $8,048)........................ 3,823
--------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
RIGHTS
<C> <S> <C>
- ------------
RIGHTS (0.0%)
(D)SPAIN (0.0%)
(a)73,354 Telefonica S.A. (COST $0)........................ 65
--------
</TABLE>
<TABLE>
<CAPTION>
NO. OF
UNITS
<C> <S> <C>
- ------------
UNITS (0.0%)
AUSTRALIA (0.0%)
(a)45,798 Westfield Trust (COST $86)....................... 101
--------
</TABLE>
-----------------------
19
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
NO. OF VALUE
WARRANTS (000)
<C> <S> <C>
- --------------------------------------------------------------------------
WARRANTS (0.0%)
HONG KONG (0.0%)
(a)8,950 Hong Kong & China Gas Co., Ltd., expiring
9/30/99........................................ $ 1
(a)8,400 Hysan Development Co., Ltd.,
expiring 4/30/99............................... --
--------
TOTAL WARRANTS (COST $0)........................................ 1
--------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT
(000)
<C> <S> <C>
- ------------
CONVERTIBLE DEBENTURES (0.0%)
(D)FRANCE (0.0%)
FRF 5 Casino Guichard Perrachon 4.50%, 7/12/01......... 33
8 Simco S.A. 3.25%, 1/1/06......................... 56
1 Sodexho S.A., 6.00%, 6/7/04...................... 5
--------
94
--------
(D)ITALY (0.0%)
ITL 18,504 Mediobanca S.p.A. 4.50%, 1/1/00.................. 11
--------
(D)PORTUGAL (0.0%)
$ 34,030 Jeromimo Martins................................. 24
--------
TOTAL CONVERTIBLE DEBENTURES (COST $55)......................... 129
--------
TOTAL FOREIGN & U.S. SECURITIES (89.6%) (COST $440,190)......... 508,777
--------
SHORT-TERM INVESTMENT (9.5%)
REPURCHASE AGREEMENT (9.5%)
53,829 Chase Securities, Inc., 4.45%, dated 12/31/98,
due 1/4/99, to be repurchased at $53,856,
collateralized by $54,500 Federal National
Mortgage Association, 4.75%, due 11/14/03,
valued at $54,286 (COST $53,829)............... 53,829
--------
TOTAL INVESTMENT IN SECURITIES (99.1%) (COST $494,019).......... 562,606
--------
</TABLE>
<TABLE>
<CAPTION>
FACE
AMOUNT VALUE
(000) (000)
<C> <S> <C>
- --------------------------------------------------------------------------
FOREIGN CURRENCY (0.1%)
AUD 22 Australian Dollar................................ $ 14
ATS 84 Austrian Schilling............................... 7
GBP 82 British Pound.................................... 136
CAD 3 Canadian Dollar.................................. 2
ESP 60,463 Spanish Peseta................................... 426
--------
TOTAL FOREIGN CURRENCY (COST $587).............................. 585
--------
TOTAL INVESTMENTS (99.2%) (COST $494,606)....................... 563,191
OTHER ASSETS IN EXCESS OF LIABILITIES (0.8%).................... 4,563
--------
NET ASSETS (100%)............................................... $567,754
--------
--------
</TABLE>
- ---------------
(a) -- Non-Income Producing Security
(b) -- The Fund is advised by an affiliate which earns a management fee as
advisor to the Fund.
(c) -- Security valued at fair value--see note A-1 to financial statements.
(d) -- European assets as of December 31, 1998, reflect country-specific
markets. On January 1, 1999, the currencies of countries participating
in the European economic and monetary union convert to the euro.
ADR -- American Depositary Receipt
NCS -- Non Convertible Shares
REIT -- Real Estate Investment Trust
RFD -- Ranked for Dividend
RNC -- Non-Convertible Savings Shares
- --------------
20
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
- --------------------------------------------------------------------------------
FOREIGN CURRENCY EXCHANGE INFORMATION:
Under the terms of foreign currency contracts open at December 31, 1998, the
Portfolio is obligated to deliver or is to receive foreign currency in exchange
for U.S. dollars as indicated below:
<TABLE>
<CAPTION>
CURRENCY IN EXCHANGE
TO DELIVER VALUE SETTLEMENT FOR VALUE NET UNREALIZED
(000) (000) DATE (000) (000) GAIN (LOSS) (000)
- ------------- --------- ----------- --------------- --------- -----------------
<S> <C> <C> <C> <C> <C>
$ 3,441 $ 3,441 1/11/99 JPY 394,922 $ 3,505 $ 64
JPY 394,922 3,505 1/11/99 $ 3,300 3,300 (205)
$ 855 855 1/19/99 DEM 1,410 847 (8)
$ 603 603 1/19/99 JPY 69,087 614 11
DEM 16,406 10,455 1/19/99 $ 10,339 10,339 (116)
JPY 69,087 614 1/19/99 $ 597 597 (17)
$ 1,226 1,226 1/29/99 JPY 140,412 1,249 23
$ 606 606 1/29/99 JPY 70,206 625 19
JPY 70,206 624 1/29/99 $ 600 600 (24)
$ 7,249 7,249 2/4/99 FRF 41,365 7,413 164
$ 990 990 2/4/99 FRF 5,644 1,011 21
$ 3,814 3,814 2/4/99 JPY 436,805 3,871 57
$ 2,953 2,953 2/4/99 JPY 341,785 3,043 90
JPY 778,590 6,931 2/4/99 $ 6,630 6,630 (301)
$ 846 846 2/8/99 JPY 96,751 862 16
$ 1,758 1,758 2/8/99 JPY 203,325 1,811 53
JPY 300,076 2,673 2/8/99 $ 2,608 2,608 (65)
JPY 302,502 2,694 2/8/99 $ 2,608 2,608 (86)
$ 1,544 1,544 2/12/99 ITL 2,571,240 1,558 14
$ 6,213 6,213 2/12/99 GBP 3,751 6,232 19
ESP 852,075 6,009 2/12/99 $ 6,027 6,027 18
ITL 1,207,276 732 2/12/99 $ 734 734 2
$ 2,571 2,571 3/3/99 SGD 4,208 2,564 (7)
SGD 4,208 2,564 3/3/99 $ 2,576 2,576 12
$ 765 765 3/8/99 SGD 1,252 763 (2)
$ 389 389 3/8/99 SGD 636 388 (1)
SGD 1,252 763 3/8/99 $ 767 767 4
SGD 636 388 3/8/99 $ 390 390 2
$ 2,068 2,068 3/10/99 JPY 238,306 2,131 63
$ 7,384 7,384 3/10/99 JPY 847,020 7,594 210
JPY 1,230,518 11,005 3/10/99 $ 10,428 10,428 (577)
$ 766 766 4/7/99 SGD 1,252 764 (2)
SGD 1,252 764 4/7/99 $ 768 768 4
--------- --------- -----
$ 95,762 $ 95,217 $ (545)
--------- --------- -----
--------- --------- -----
</TABLE>
- --------------------------------------------------------------------------------
-----------------------
21
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN
GLOBAL EQUITY ALLOCATION FUND
- --------------------------------------------------------------------------------
PORTFOLIO OF INVESTMENTS (CONT.)
DECEMBER 31, 1998
(UNAUDITED)
FUTURES CONTRACTS: At December 31, 1998, the Portfolio had the following futures
contracts open:
<TABLE>
<CAPTION>
UNREALIZED
AGGREGATE APPRECIATION
NUMBER OF FACE VALUE EXPIRATION (DEPRECIATION)
CONTRACTS (000) DATE (000)
------------- ------------- ---------- ---------------
<S> <C> <C> <C> <C>
PURCHASES:
CAC 40 Index 269 FRF 53,040 Mar-99 $ 519
FTSE 100 Index 80 GBP 4,694 Mar-99 375
MIB 30 Index 7 ITL 2,478,630 Mar-99 161
Nikkei 225 Index 39 JPY 534,300 Mar-99 (382)
S&P 500 Index 61 $ 18,948 Mar-99 683
SALES:
DAX Index 31 DEM 15,698 Mar-99 (874)
Hang Seng Index 129 HKD 65,597 Jan-99 81
IBEX Plus Index 83 ESP 773,370 Jan-99 (356)
TOPIX Index 96 JPY 225,960 Mar-99 402
-----
$ 609
-----
-----
</TABLE>
- ---------------
GBP -- British Pound
FRF -- French Franc
DEM -- German Mark
HKD -- Hong Kong Dollar
ITL -- Italian Lira
JPY -- Japanese Yen
SGD -- Singapore Dollar
ESP -- Spanish Peseta
- --------------------------------------------------------------------------------
SUMMARY OF FOREIGN & U.S. SECURITIES BY INDUSTRY CLASSIFICATION
<TABLE>
<CAPTION>
VALUE PERCENT OF
INDUSTRY (000) NET ASSETS
- --------------------------------------------------------------------------------- --------- -------------
<S> <C> <C>
Finance.......................................................................... $ 122,787 21.6%
Consumer Products................................................................ 113,934 20.1
Services......................................................................... 87,492 15.4
Capital Goods & Equipment........................................................ 76,407 13.5
Energy........................................................................... 45,401 8.0
Materials........................................................................ 28,594 5.0
Technology....................................................................... 17,573 3.1
Multi-Industry................................................................... 11,573 2.0
Investment Companies............................................................. 3,823 0.7
Gold Mines....................................................................... 1,193 0.2
--------- ---
$ 508,777 89.6%
--------- ---
--------- ---
</TABLE>
- --------------
22
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
STATEMENT OF ASSETS AND LIABILITIES
- --------------------------------------------------------------------------------
DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(000)
<S> <C>
- --------------------------------------------------------
ASSETS:
Investments in Securities, at Value
(Investments at Cost $494,019) $ 562,606
Foreign Currency (Cost $587) 585
Margin Deposit on Futures 6,401
Receivable for:
Dividends 1,007
Variation of Futures Contracts 695
Investments Sold 690
Fund Shares Sold 334
Foreign Withholding Tax Reclaim 313
Security Lending Income 14
Interest 8
Securities, at Value, Held as
Collateral for Securities Loaned 20,036
Other 111
--------
Total Assets 592,800
--------
LIABILITIES:
Payable for:
Collateral on Securities Loaned 20,036
Bank Overdraft 1,510
Distribution Fees 675
Investments Purchased 565
Investment Advisory Fees 492
Custody Fees 331
Fund Shares Redeemed 299
Shareholder Reporting Expenses 162
Administrative Fees 123
Dividends Declared 51
Directors' Fees and Expenses 38
Professional Fees 27
Securities Lending Expense 17
Filing and Registration Fees 2
Net Unrealized Loss on Foreign
Currency Exchange Contracts 545
Other 173
--------
Total Liabilities 25,046
--------
NET ASSETS $ 567,754
--------
--------
NET ASSETS CONSIST OF:
Capital Stock at Par $ 233
Paid in Capital in Excess of Par 496,709
Undistributed Net Investment Income 1,388
Accumulated Net Realized Gain 435
Unrealized Appreciation on
Investments, Foreign Currency
Translations and Futures 68,989
--------
NET ASSETS $ 567,754
--------
--------
CLASS A SHARES:
Net Assets $ 241,568
Shares Issued and Outstanding
($.001 par value) (Authorized
2,625,000,000) 15,130
Net Asset Value and Redemption
Price Per Share (Based on Net
Assets of $241,567,994 and
15,129,925 Shares Outstanding) $ 15.97
--------
--------
Maximum Sales Charge 5.75%
Maximum Offering Price Per Share
(Net Asset Value Per Share X 100
/ (100 - maximum sales charge)) $ 16.94
--------
--------
CLASS B SHARES:
Net Assets $ 224,673
Shares Issued and Outstanding
($.001 par value) (Authorized
2,625,000,000) 14,510
Net Asset Value and Offering Price
Per Share (Based on Net Assets of
$224,672,432 and 14,510,008
Shares Outstanding)* $ 15.48
--------
--------
CLASS C SHARES:
Net Assets $ 101,513
Shares Issued and Outstanding
($.001 par value) (Authorized
2,625,000,000) 6,488
Net Asset Value and Offering Price
Per Share (Based on Net Assets of
$101,513,151 and 6,487,829 Shares
Outstanding)* $ 15.65
--------
--------
</TABLE>
- ---------------
* Redemption price may be subject to a contingent deferred sales charge.
-----------------------
23
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
STATEMENT OF OPERATIONS
- --------------------------------------------------------------------------------
SIX MONTHS ENDED DECEMBER 31, 1998
(UNAUDITED)
<TABLE>
<CAPTION>
(000)
<S> <C>
- ------------------------------------------------------
INVESTMENT INCOME:
Dividends $ 2,934
Interest 2,418
Security Lending 93
Less Foreign Taxes Withheld (187)
-------
Total Income 5,258
-------
EXPENSES:
Investment Advisory 2,833
Less: Fees Waived (27)
-------
Net Investment Advisory Fees 2,806
Distribution Fees
Class A 307
Class B 1,118
Class C 505
Administrative Fees 746
Custodian Fees 206
Shareholder Reports 151
Transfer Agent Fees 72
Filing and Registration Fees 42
Professional Fees 33
Other 6
-------
Net Expenses 5,992
-------
Net Investment Loss (734)
-------
NET REALIZED GAIN (LOSS) ON:
Investments 21,048
Foreign Currency Transactions (1,541)
Futures 1,921
Written Option Contracts 1
-------
Net Realized Gain 21,429
-------
CHANGE IN UNREALIZED
APPRECIATION/DEPRECIATION ON:
Investments (10,595)
Foreign Currency Translations 313
Futures (114)
-------
Change in Unrealized
Appreciation/Depreciation (10,396)
-------
Net Realized Gain and Change in
Unrealized
Appreciation/Depreciation 11,033
-------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 10,299
-------
-------
</TABLE>
- --------------
24
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
SIX MONTHS ENDED
DECEMBER 31, 1998 YEAR ENDED
(UNAUDITED) JUNE 30, 1998
(000) (000)
<S> <C> <C>
- ------------------------------------------------------------------------------------------
INCREASE (DECREASE) IN NET ASSETS
OPERATIONS:
Net Investment Income (Loss) $ (734) $ 1,993
Net Realized Gain 21,429 33,576
Change in Unrealized Appreciation/Depreciation (10,396) 47,298
---------- ----------
Net Increase in Net Assets Resulting from
Operations 10,299 82,867
---------- ----------
DISTRIBUTIONS:
Net Investment Income:
Class A (3,158) (1,628)
Class B (1,483) (1,028)
Class C (661) (1,187)
---------- ----------
(5,302) (3,843)
---------- ----------
Net Realized Gain:
Class A (12,370) (8,369)
Class B (11,988) (6,610)
Class C (5,393) (9,026)
---------- ----------
(29,751) (24,005)
---------- ----------
Net Decrease in Net Assets Resulting from
Distributions (35,053) (27,848)
---------- ----------
CAPITAL SHARE TRANSACTIONS (1):
Subscribed 88,634 399,475
Distributions Reinvested 31,543 26,341
Redeemed (123,749) (74,620)
---------- ----------
Net Increase (Decrease) in Net Assets Resulting
from Capital Share Transactions (3,572) 351,196
---------- ----------
Total Increase (Decrease) in Net Assets (28,326) 406,215
NET ASSETS--Beginning of Period 596,080 189,865
---------- ----------
NET ASSETS--End of Period (Including undistributed
net investment income of $1,388 and $4,082,
respectively) $ 567,754 $ 596,080
---------- ----------
---------- ----------
- ------------------------------------------------------------------------------------------
Capital Share Transactions:
(1) Class A:
---------------------
Shares:
Subscribed 3,331 13,220
Distributions Reinvested 953 658
Redeemed (4,849) (2,571)
---------- ----------
Net Increase (Decrease) in Class A Shares
Outstanding (565) 11,307
---------- ----------
---------- ----------
Dollars:
Subscribed $ 52,777 $ 193,752
Distributions Reinvested 14,537 9,235
Redeemed (75,798) (41,983)
---------- ----------
Net Increase (Decrease) $ (8,484) $ 161,004
---------- ----------
---------- ----------
Ending Paid in Capital $ 206,794 $ 215,278
---------- ----------
---------- ----------
Class B:
---------------------
Shares:
Subscribed 1,907 11,944
Distributions Reinvested 790 533
Redeemed (2,174) (902)
---------- ----------
Net Increase in Class B Shares Outstanding 523 11,575
---------- ----------
---------- ----------
Dollars:
Subscribed $ 29,165 $ 170,660
Distributions Reinvested 11,694 7,277
Redeemed (33,279) (14,280)
---------- ----------
Net Increase $ 7,580 $ 163,657
---------- ----------
---------- ----------
Ending Paid in Capital $ 206,488 $ 198,908
---------- ----------
---------- ----------
Class C:
---------------------
Shares:
Subscribed 427 2,310
Distributions Reinvested 355 713
Redeemed (960) (1,171)
---------- ----------
Net Increase (Decrease) in Class C Shares
Outstanding (178) 1,852
---------- ----------
---------- ----------
Dollars:
Subscribed $ 6,692 $ 35,063
Distributions Reinvested 5,312 9,829
Redeemed (14,672) (18,357)
---------- ----------
Net Increase (Decrease) $ (2,668) $ 26,535
---------- ----------
---------- ----------
Ending Paid in Capital $ 83,700 $ 86,368
---------- ----------
---------- ----------
- ------------------------------------------------------------------------------------------
</TABLE>
-----------------------
25
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CLASS A
--------------------------------------------------------------------------------
SIX MONTHS
ENDED
DECEMBER 31, YEAR ENDED JUNE 30,
SELECTED PER SHARE DATA 1998 ----------------------------------------------------------------
AND RATIOS (UNAUDITED) 1998# 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 16.67 $ 16.57 $ 14.75 $ 12.60 $ 11.99 $ 11.09
------------ --------- --------- --------- --------- ------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) 0.03 0.21 0.10 0.19 0.12 0.10
Net Realized and
Unrealized Gain 0.36 2.07 2.76 2.82 0.67 0.90
------------ --------- --------- --------- --------- ------------
Total From Investment
Operations 0.39 2.28 2.86 3.01 0.79 1.00
------------ --------- --------- --------- --------- ------------
DISTRIBUTIONS
Net Investment Income (0.22) (0.35) (0.55) (0.39) -- (0.03)
In Excess of Net
Investment Income -- -- -- -- (0.05) --
Net Realized Gain (0.87) (1.83) (0.49) (0.47) (0.13) (0.07)
------------ --------- --------- --------- --------- ------------
Total Distributions (1.09) (2.18) (1.04) (0.86) (0.18) (0.10)
------------ --------- --------- --------- --------- ------------
NET ASSET VALUE, END OF
PERIOD $ 15.97 $ 16.67 $ 16.57 $ 14.75 $ 12.60 $ 11.99
------------ --------- --------- --------- --------- ------------
------------ --------- --------- --------- --------- ------------
TOTAL RETURN (1) 2.69% 16.17% 20.61% 24.62% 6.69% 9.02%
------------ --------- --------- --------- --------- ------------
------------ --------- --------- --------- --------- ------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(000's) $ 241,568 $ 261,633 $ 72,704 $ 63,706 $ 42,586 $ 33,425
Ratio of Expenses to
Average Net Assets 1.70%** 1.61% 1.70% 1.70% 1.70% 1.70%
Ratio of Net Investment
Income to Average Net
Assets 0.17%** 1.30% 0.59% 0.71% 1.01% 0.98%
Portfolio Turnover Rate 65% 108% 45% 44% 39% 30%
- -------------------------------------------------------------------------------------------------------------
Effect of Voluntary
Expense Limitation
During the Period
Per Share Benefit to Net
Investment Income $ 0.01 $ 0.02 $ 0.03 $ 0.10 $ 0.04 $ 0.09
Ratios Before Expense
Limitation:
Expenses to Average Net
Assets 1.71%** 1.62% 1.90% 2.06% 2.03% 2.58%
Net Investment Income
(Loss) to Average Net
Assets 0.17%** 1.30% 0.40% 0.35% 0.68% 0.10%
- -------------------------------------------------------------------------------------------------------------
<CAPTION>
-------------------------------------------------------
SIX MONTHS
ENDED YEAR ENDED JUNE 30, AUGUST 1,
DECEMBER 31, 1995+
SELECTED PER SHARE DATA 1998 ---------------------- TO JUNE 30,
AND RATIOS (UNAUDITED) 1998# 1997 1996
<S> <C> <C> <C> <C>
- -------------------------
NET ASSET VALUE,
BEGINNING OF PERIOD $ 16.14 $ 16.15 $ 14.46 $ 13.01
------------- --------- --------- ------------
INCOME FROM INVESTMENT
OPERATIONS
Net Investment Income
(Loss) (0.05) 0.09 (0.05) 0.30
Net Realized and
Unrealized Gain 0.37 2.01 2.73 1.98
------------- --------- --------- ------------
Total From Investment
Operations 0.32 2.10 2.68 2.28
------------- --------- --------- ------------
DISTRIBUTIONS
Net Investment Income (0.11) (0.28) (0.50) (0.35)
In Excess of Net
Investment Income -- -- -- --
Net Realized Gain (0.87) (1.83) (0.49) (0.48)
------------- --------- --------- ------------
Total Distributions (0.98) (2.11) (0.99) (0.83)
------------- --------- --------- ------------
NET ASSET VALUE, END OF
PERIOD $ 15.48 $ 16.14 $ 16.15 $ 14.46
------------- --------- --------- ------------
------------- --------- --------- ------------
TOTAL RETURN (1) 2.28% 15.33% 19.64% 18.08%
------------- --------- --------- ------------
------------- --------- --------- ------------
RATIOS AND SUPPLEMENTAL
DATA
Net Assets, End of Period
(000's) $ 224,673 $ 225,797 $ 38,962 $ 14,786
Ratio of Expenses to
Average Net Assets 2.45%** 2.35% 2.45% 2.45%**
Ratio of Net Investment
Income to Average Net
Assets (0.58)%** 0.60% (0.11)% 0.45%**
Portfolio Turnover Rate 65% 108% 45% 44%
- -----------------------------------------------------------------------------------------------------
Effect of Voluntary
Expense Limitation
During the Period
Per Share Benefit to Net
Investment Income $ 0.01 $ 0.02 $ 0.09 $ 0.22
Ratios Before Expense
Limitation:
Expenses to Average Net
Assets 2.46%** 2.36% 2.65% 2.81%**
Net Investment Income
(Loss) to Average Net
Assets (0.58)%** 0.60% (0.30)% 0.09%**
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
CLASS C
---------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED JUNE 30,
DECEMBER 31, 1998 --------------------------------------------------------
SELECTED PER SHARE DATA AND RATIOS (UNAUDITED) 1998# 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF PERIOD $ 16.30 $ 16.24 $ 14.49 $ 12.43 $ 11.90 $ 11.05
---------- -------- ------- ------- ------- -------
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) (0.04) 0.08 (0.03) 0.12 0.04 0.06
Net Realized and Unrealized Gain 0.37 2.05 2.73 2.75 0.65 0.86
---------- -------- ------- ------- ------- -------
Total From Investment Operations 0.33 2.13 2.70 2.87 0.69 0.92
---------- -------- ------- ------- ------- -------
DISTRIBUTIONS
Net Investment Income (0.11) (0.24) (0.46) (0.33) -- --
In Excess of Net Investment Income -- -- -- -- (0.03) --
Net Realized Gain (0.87) (1.83) (0.49) (0.48) (0.13) (0.07)
---------- -------- ------- ------- ------- -------
Total Distributions (0.98) (2.07) (0.95) (0.81) (0.16) (0.07)
---------- -------- ------- ------- ------- -------
NET ASSET VALUE, END OF PERIOD $ 15.65 $ 16.30 $ 16.24 $ 14.49 $ 12.43 $ 11.90
---------- -------- ------- ------- ------- -------
---------- -------- ------- ------- ------- -------
TOTAL RETURN (1) 2.31% 15.37% 19.69% 23.65% 5.84% 8.34%
---------- -------- ------- ------- ------- -------
---------- -------- ------- ------- ------- -------
RATIOS AND SUPPLEMENTAL DATA
Net Assets, End of Period (000's) $ 101,513 $108,650 $78,199 $63,025 $40,460 $29,892
Ratio of Expenses to Average Net
Assets 2.45%** 2.55% 2.45% 2.45% 2.45% 2.45%
Ratio of Net Investment Income to
Average Net Assets (0.58)%** 0.52% (0.16)% (0.04)% 0.25% 0.23%
Portfolio Turnover Rate 65% 108% 45% 44% 39% 30%
- ---------------------------------------------------------------------------------------------------------------------------
Effect of Voluntary Expense
Limitation During the Period
Per Share Benefit to Net Investment
Income $ 0.01 $ 0.02 $ 0.03 $ 1.16 $ 0.05 $ 0.12
Ratios Before Expense Limitation:
Expenses to Average Net Assets 2.46%** 2.56% 2.65% 2.81% 2.78% 3.34%
Net Investment Income (Loss) to
Average Net Assets (0.58)%** 0.52% (0.34)% (0.40)% (0.08)% (0.66)%
</TABLE>
- --------------------------------------------------------------------------------
** Annualized
+ The Fund began offering Class B shares on August 1, 1995.
(1) Total return is calculated exclusive sale charges or deferred sales
charges. Total return for periods of less than one year are not
annualized.
# Net investment income and capital changes per share are based upon
monthly average shares outstanding.
- --------------
26
The accompanying notes are an integral part of the financial statements.
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
The Van Kampen Global Equity Allocation Fund (the "Fund") is organized as a
Maryland Corporation and is registered under the Investment Company Act of 1940,
as amended. The Fund is a portfolio of the Van Kampen Series Fund, Inc. The Fund
commenced operations on January 4, 1993.
The Fund currently offers three classes of shares, Class A, Class B, and Class C
Shares. Class A shares are sold with a front-end sales charge of up to 5.75%.
For certain purchases of Class A shares, the front-end sales charge may be
waived and a contingent deferred sales charge of 1.00% imposed in the event of
certain redemptions within one year of the purchase. Class B shares are sold
with a contingent deferred sales charge on redemptions made within 5 years of
purchase which declines annually from 5% for redemptions made in year one, down
to 1.50% in year five. The contingent deferred sales charge is based on the
lesser of the current market value of the shares redeemed or the total cost of
such shares. Class B shares will automatically convert to Class A shares after
the eighth year following purchase. Class C shares are sold with a contingent
deferred sales charge of 1% for shares that are redeemed within one year of
purchase, based on the lesser of the current market value of the shares redeemed
or the total cost of such shares. All three classes of shares have identical
voting, dividend, liquidation and other rights. The Fund began offering the
current Class B shares on August 1, 1995. Class B shares held prior to May 1,
1995 were renamed Class C shares.
A. ACCOUNTING POLICIES: The following significant accounting policies are in
conformity with generally accepted accounting principles for investment
companies. Such policies are consistently followed by the Fund in the
preparation of the financial statements. Generally accepted accounting
principles require management to make estimates and assumptions that affect the
reported amounts and disclosures in the financial statements. Actual results may
differ from those estimates.
1. SECURITY VALUATION: Equity securities listed on a U.S. exchange and equity
securities traded on NASDAQ are valued at the latest quoted sales price on the
valuation date. Securities listed on a foreign exchange are valued at their
closing price. Unlisted securities and listed securities not traded on the
valuation date for which market quotations are readily available are valued at
the average between the current bid and asked prices obtained from reputable
brokers. Bonds and other fixed income securities may be valued according to the
broadest and most representative market. In addition, bonds and other fixed
income securities may be valued on the basis of prices provided by a pricing
service which takes into account institutional size trading in similar groups of
securities. Debt securities purchased with remaining maturities of 60 days or
less are valued at amortized cost, if it approximates market value. All other
securities and assets for which market values are not readily available are
valued at fair value as determined in good faith by the Board of Directors,
although the actual calculations may be done by others.
2. TAXES: It is the Fund's intention to qualify as a regulated investment
company and distribute all of its taxable income. Accordingly, no provision for
Federal income taxes is required in the financial statements. A portfolio may be
subject to taxes imposed by countries in which it invests. Such taxes are
generally based on income earned or gains realized or repatriated. Taxes are
accrued and applied to net investment income, net realized capital gains and net
unrealized appreciation, as applicable, as the income is earned or capital gains
are recorded.
To the extent that capital loss carryforwards are used to offset any future net
capital gains realized during the carryforward period as provided by U.S.
Federal income tax regulations, no capital gains tax liability will be incurred
by the Fund for gains realized and not distributed. To the extent that capital
gains are so offset, such gains will not be distributed to shareholders.
Net capital and net currency losses incurred after October 31 and within the
taxable year are deemed to arise on the first business day of the Fund's next
taxable year.
3. REPURCHASE AGREEMENTS: In connection with transactions in repurchase
agreements, a bank as custodian for the Fund takes possession of the underlying
securities, with a market value at least equal to the amount of the repurchase
transaction, including principal and accrued interest. To the extent that any
repurchase transaction exceeds one business day, the value of the collateral is
marked-to-market on a daily basis to determine the adequacy of the collateral.
In the event of default on the obligation to repurchase, the Fund has the right
to liquidate the collateral and apply the proceeds in satisfaction of the
obligation. In the event of default or bankruptcy by the counterparty to the
agreement, realization and/or retention of the collateral or proceeds may be
subject to legal proceedings.
4. FOREIGN CURRENCY TRANSLATION AND FOREIGN INVESTMENTS: The books and records
of the Fund are maintained in U.S. dollars. Foreign currency amounts are
translated into U.S. dollars at the mean of the bid and asked prices of such
currencies against U.S. dollars last quoted by a major bank as follows:
- investments, other assets and liabilities at the prevailing rates of
exchange on the valuation date;
- investment transactions and investment income at the prevailing rates of
exchange on the dates of such transactions.
Although the net assets of the Fund are presented at the foreign exchange rates
and market values at the close of the period, the Fund does not isolate that
portion of the results of operations arising as a result of changes in the
foreign
------------------
27
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (CONT.)
DECEMBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
exchange rates from the fluctuations arising from changes in the market prices
of the securities held at period end. Similarly, the Fund does not isolate the
effect of changes in foreign exchange rates from the fluctuations arising from
changes in the market prices of securities sold during the period. Accordingly,
realized and unrealized foreign currency gains (losses) on investments are
included in the reported net realized and unrealized gains (losses) on
investments. However, pursuant to U.S. Federal income tax regulations, the
foreign currency portion of gains and losses realized on sales and maturities of
foreign denominated debt securities is treated as ordinary income for U.S.
Federal income tax purposes.
Net realized gains (losses) on foreign currency transactions represent net
foreign exchange gains (losses) from forward foreign currency exchange
contracts, disposition of foreign currencies, currency gains or losses realized
between the trade and settlement dates on securities transactions, and the
difference between the amount of investment income and foreign withholding taxes
recorded on the Fund's books and the U.S. dollar equivalent amounts actually
received or paid. Net unrealized currency gains (losses) from valuing foreign
currency denominated assets and liabilities at period end exchange rates are
reflected as a component of unrealized appreciation (depreciation) on
investments and foreign currency translations in the Statement of Assets and
Liabilities. The change in net unrealized currency gains (losses) for the period
is reflected on the Statement of Operations.
5. FOREIGN CURRENCY EXCHANGE CONTRACTS: The Fund may enter into foreign currency
exchange contracts to attempt to protect securities and related receivables and
payables against changes in future foreign currency exchange rates. A currency
exchange contract is an agreement between two parties to buy or sell currency at
a set price on a future date. The market value of the contract will fluctuate
with changes in currency exchange rates. The contract is marked-to-market daily
and the change in market value is recorded by the Fund as unrealized gain or
loss on foreign currency translation. The Fund records realized gains or losses
on foreign translation when the contract is closed, equal to the difference
between the value of the contract at the time it was opened and the value of the
contract at the time it was closed. Risks may arise upon entering into these
contracts from the potential inability of counterparties to meet the terms of
their contracts but is generally limited to the amount of unrealized gain on the
contracts, if any, at the date of default. Risks may also arise from the
unanticipated movements in the value of a foreign currency relative to the U.S.
dollar.
The net assets of the Fund may include issuers located in emerging markets.
There will be certain considerations and risks of these investments not
typically associated with investments in the United States. Changes in currency
exchange rates will affect the value of and investment income from such
securities. The smaller size of the markets themselves, lesser liquidity and
greater volatility contribute to risks in valuation as compared with the U.S.
securities markets. Also there is often substantially less publicly available
information about these issuers. Emerging markets may be subject to a greater
degree of governmental involvement in the economy and greater economic and
political uncertainty. Accordingly the price which the Fund realizes upon the
sale of securities in such markets may not be equal to its value as presented in
the financial statements.
Prior governmental approval for foreign investments may be required under
certain circumstances in some countries, and the extent of foreign investment in
domestic companies may be subject to limitations in other countries. Foreign
ownership limitations also may be imposed by the charters of individual
companies to prevent, among other concerns, violation of foreign investment
limitations. As a result, an additional class of shares (identified as "Foreign"
in the Portfolio of Investments) may be created and offered for investment. The
"local" and "foreign" shares' market values may vary.
6. PURCHASED OPTIONS: The Fund may purchase call or put options on its portfolio
securities. The Fund may purchase call options to protect against an increase in
the price of a security it anticipates purchasing. The Fund may purchase put
options on securities which it holds to protect against a decline in the value
of the security. Risks may arise from an imperfect correlation between the
change in market value of the securities held by the Fund and the prices of
options relating to the securities purchased or sold by the Fund and from the
possible lack of a liquid secondary market for an option. The maximum exposure
to loss for any purchased option is limited to the premium initially paid for
the option.
7. SECURITY LENDING: The Fund may lend investment securities to qualified
institutional investors who borrow securities in order to complete certain
transactions. By lending its investment securities, the Fund attempts to
increase its net investment income through the receipt of interest on the loan.
Any gain or loss in the market price of the securities loaned that might occur
and any interest earned or dividends declared during the term of the loan would
accrue to the account of the Fund. Risks of delay in recovery of the securities
or even loss of rights in the collateral may occur should the borrower of the
securities fail financially. Risks may also arise to the extent that the value
of the collateral decreases below the value of the securities loaned.
Funds that lend securities receive cash, securities issued or guaranteed by the
U.S. Government or letters of credit as collateral in an amount equal to or
exceeding 100% of the current market value of the loaned securities. Any cash
received as collateral is invested in interest bearing repurchase agreements
with approved counterparties. A portion of the interest received on the
repurchase
- -----------------------
28
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (CONT.)
DECEMBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
agreements is retained by the Fund and the remainder is rebated to the borrower
of the securities. The net amount of interest earned and interest rebated is
included in the Statement of Operations as interest income. The value of loaned
securities and related collateral outstanding at December 31, 1998 is as
follows:
<TABLE>
<CAPTION>
VALUE OF LOANED VALUE OF
SECURITIES COLLATERAL
(000) (000)
- ----------------------- -----------
<S> <C>
$19,162................. $ 20,036
</TABLE>
At December 31, 1998, the Fund had invested the cash collateral in a repurchase
agreement with Goldman Sachs. Such repurchase agreement was collateralized by
U.S. Treasury obligations.
Morgan Stanley Trust Company, a former affiliate of the Investment Sub-Adviser,
administers the security lending program and for its services the Fund incurred
fees in the amount of $13,800 for the six months ended December 31, 1998.
8. FUTURES CONTRACTS: The Fund may purchase and sell futures contracts. Future
contracts provide for the sale by one party and purchase by another party of a
specified amount of a specified security, instrument or basket of instruments.
Futures contracts (secured by cash and securities deposited with brokers as
"initial margin") are valued based upon their quoted daily settlement prices;
changes in initial settlement value (represented by cash paid to or received
from brokers as "variation margin") are accounted for as unrealized appreciation
(depreciation). When futures contracts are closed, the difference between the
opening value at the date of purchase and the value at closing is recorded as
realized gains or losses in the Statement of Operations.
The Fund may use futures contracts in order to hedge against unfavorable changes
in the value of securities or to remain fully invested and to reduce transaction
costs. Futures contracts involve market risk in excess of the amounts recognized
in the Statement of Assets and Liabilities. Risks arise from the possible
movements in security values underlying these instruments applied to the
notional value of the contract. The change in value of futures contracts
primarily corresponds with the value of their underlying instruments, which may
not correlate with the change in value of the hedged investments. In addition,
there is the risk that the Fund may not be able to enter into a closing
transaction because of an illiquid secondary market.
9. OTHER: Security transactions are accounted for on the date the securities are
purchased or sold. Realized gains and losses on the sale of investment
securities are determined on the specific identified cost basis. Dividend income
is recorded on the ex-dividend date (except for certain foreign dividends which
may be recorded as soon as the Fund is informed of such dividends), net of
applicable withholding taxes where recovery of such taxes is not reasonably
assured. Interest income is recognized on the accrual basis except where
collection is in doubt. Discounts and premiums on securities purchased are
amortized according to the effective yield method over their respective lives.
Income, expenses (other than class specific expenses) and realized and
unrealized gains or losses are allocated to each class of shares based upon
their relative net assets. Distributions from the Portfolio are recorded on the
ex-distribution date.
The amount and the character of income and capital gain distributions to be paid
by the Fund are determined in accordance with Federal income tax regulations
which may differ from generally accepted accounting principles. These
differences are primarily due to differing book and tax treatment for foreign
currency transactions, net operating losses, foreign taxes on net realized
gains, deductibility of interest expense on short sales and gains on certain
securities of corporations designated as "passive foreign investment companies."
Permanent book and tax basis differences relating to shareholder distributions
may result in reclassification among undistributed net investment income (loss),
accumulated net realized gain (loss) and paid in capital.
Permanent book and tax basis differences, if any, are not included in ending
undistributed (distributions in excess of) net investment income for the purpose
of presenting net investment income (loss) per share in the Financial
Highlights.
B. ADVISER: Van Kampen Investment Advisory Corp., (the "Adviser") a wholly owned
subsidiary of Van Kampen Investments Inc. (an indirect wholly owned subsidiary
of Morgan Stanley Dean Witter & Co.) and Morgan Stanley Dean Witter Investment
Management Inc. ("MSDWIM" or a "Sub-Adviser"), a wholly owned subsidiary of
Morgan Stanley Dean Witter & Co., provide the Fund with investment advisory
services at a fee paid monthly and calculated at the annual rates based on
average daily net assets as indicated below. The Adviser has agreed to reduce
advisory fees payable to it and to reimburse the Fund, if necessary, if the
annual operating expenses, as defined, expressed as a percentage of average
daily net assets, exceed the maximum ratios indicated as follows:
<TABLE>
<CAPTION>
CLASS B
CLASS A AND CLASS C
MAX. OPERATING MAX. OPERATING
ADVISORY FEE EXPENSE RATIO EXPENSE RATIO
- -------------------- ---------------------- ----------------------
<S> <C> <C>
1.00%............... 1.70% 2.45%
</TABLE>
C. ADMINISTRATOR: Van Kampen Investment Advisory Corp. (the "Administrator")
also provides the Fund with administrative services pursuant to an
administrative agreement for a monthly fee which on an annual basis equals 0.25%
of the average daily net assets of the portfolio, plus reimbursement of
out-of-pocket expenses. Under an agreement between the Adviser and The Chase
Manhattan Bank ("Chase"), through its corporate affiliate Chase Global Funds
Services Company ("CGFSC"), Chase provides
------------------
29
<PAGE>
VAN KAMPEN GLOBAL EQUITY ALLOCATION FUND
NOTES TO FINANCIAL STATEMENTS (CONT.)
DECEMBER 31, 1998 (UNAUDITED)
- --------------------------------------------------------------------------------
certain administrative services to the Fund. Chase is compensated for such
services by the Adviser from the fee it receives from the Fund. Transfer Agency
services are provided to the Fund by Van Kampen Investor Services Inc., an
affiliate of the Adviser.
D. DISTRIBUTOR: Van Kampen Funds Inc. the ("Distributor") a wholly owned
subsidiary of Van Kampen Investments Inc., an indirect wholly owned subsidiary
of Morgan Stanley Dean Witter & Co., serves as the Distributor of the Fund's
shares. The Distributor is entitled to receive from the Fund a distribution fee,
which is accrued daily and paid quarterly, of an amount of up to 0.25% of the
Class A shares and up to 1.00%, on an annualized basis, of the average daily net
assets attributable to the Class B and Class C shares of the Fund.
The Distributor may receive a front end sales charge for purchases of Class A
shares. In addition, the Distributor may receive a contingent deferred sales
charge for certain redemptions of Class B and Class C shares of the Fund
redeemed within one to five years following such purchase. For the six months
ended December 31, 1998, the Distributor has advised the Fund that it earned
initial sales charges of $71,958 for Class A shares and deferred sales charges
of $530, $235,364 and $5,932 for Class A shares, Class B shares and Class C
shares, respectively.
E. CUSTODIAN: The Chase Manhattan Bank and its affiliates serve as custodian for
the Fund. Prior to October 1, 1998, the Fund's assets held outside the United
States were held by Morgan Stanley Trust Company ("MSTC"), a former affiliate of
the Sub-Advisers. Custody fees are payable monthly based on assets held in
custody, investment purchase and sales activity, an account maintenance fee,
plus reimbursement for certain out-of-pocket expenses. Through September 30,
1998, the Fund incurred MSTC fees of approximately $96,000. On October 1, 1998,
the Chase Manhatten Bank purchased MSTC.
F. DIRECTORS' FEES: The Fund provides deferred compensation and retirement plans
for its Directors who are not officers of Van Kampen. Under the deferred
compensation plan, Directors 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 Director's years of service to the
Fund.
G. PURCHASES AND SALES: For the six months ended December 31, 1998, the Fund
made purchases of approximately $312,193,000 and sales of approximately
$298,188,000 of investment securities other than long-term U.S. Government
securities and short-term investments. There were no purchases or sales of
long-term U.S. Government securities.
H. OTHER: At December 31, 1998, cost and unrealized appreciation (depreciation)
for U.S. Federal income tax purposes of the investments of the Fund was:
<TABLE>
<CAPTION>
NET
COST APPREC. (DEPREC.) APPRECIATION
(000) (000) (000) (000)
- -------- ------- ---------- ---------------
<S> <C> <C> <C>
$494,019.. $ 92,657 $(24,070) $ 68,587
</TABLE>
At December 31, 1998, the Global Equity Allocation Fund owned shares of
affiliated funds for which the Funds earned dividend income of approximately
$9,000 during the period.
I. PLAN OF REORGANIZATION: On June 12, 1998, the Global Equity Allocation Fund
acquired all of the assets and liabilities of the Van Kampen American Capital
Global Equity Fund (the "VK Fund"), through a tax-free reorganization approved
by the VK Fund shareholders on June 12, 1998. Included in these net assets were
cumulative book and tax differences resulting in re-classifications of
undistributed capital gains of $(3,301,076), undistributed net investment income
of $3,342,357 and paid in capital of $(41,281).
- -----------------------
30
<PAGE>
VAN KAMPEN FUNDS
- --------------------------------------------------------------------------------
EQUITY FUNDS
DOMESTIC
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
Utility
Value
INTERNATIONAL/GLOBAL
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
INCOME
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
TAX EXEMPT INCOME
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
CAPITAL PRESERVATION
Reserve
Tax Free Money
SENIOR LOAN FUNDS
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these funds, ask
your financial advisor for a prospectus, which
contains more complete information, including
sales charges, risks, and expenses. Please read
it carefully before you invest or send money.
To view a current Van Kampen fund
prospectus or to receive additional fund
information, choose from one of the following:
- - visit our Web site at WWW.VANKAMPEN.COM --
to view a prospectus, select
DOWNLOAD A PROSPECTUS
- - call us at 1-800-341-2911 weekdays
from 7:00 a.m. to 7:00 p.m. Central time
(Telecommunications Device for the Deaf
users, call 1-800-421-2833)
- - e-mail us by visiting WWW.VANKAMPEN.COM
and selecting CONTACT US
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by the Fund's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Fund's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Fund's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Fund. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Fund may invest that, in turn, may adversely affect
the net asset value of the Fund. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Fund's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act which may limit the legal rights regarding the use of such
statements in the case of dispute.
<PAGE>
VAN KAMPEN FUNDS
- --------------------------------------------------------------------------------
DIRECTORS
Wayne W. Whalen
CHAIRMAN OF THE BOARD
Partner, Skadden, Arps, Slate, Meagher & Flom
(Illinois)
J. Miles Branagan
Private Investor; Formerly Chairman, Chief Executive Officer
and President, MDT Corporation
Richard M. DeMartini
President and Chief Operating Officer, Individual Asset
Management Group, a division of Morgan Stanley Dean Witter & Co.
Linda Hutton Heagy
Co-Managing Partner of Heldrick & Struggles
R. Craig Kennedy
President and Director, German Marshall Fund
of the United States
Jack E. Nelson
President, Nelson Investment Planning Services, Inc.
Don G. Powell
Chairman and Director,
Van Kampen Investments Inc.
Phillip B. Rooney
Vice Chairman and Director of The Servicemaster Company
Fernando Sisto
Professor Emeritus Stevens Institute of Technology;
Director, Dynalysis of Princeton
Paul G. Yovovich
Private Investor
INVESTMENT ADVISER AND ADMINISTRATOR
Van Kampen Investment Advisory Corp.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181
INVESTMENT SUB ADVISER
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, Illinois 60181
CUSTODIANS
The Chase Manhattan Bank
One Pierrepont Plaza
Brooklyn, New York 11210
The Chase Manhattan Bank
3 MetroTech Center
Brooklyn, New York 11245
OFFICERS
Dennis J. McDonnell
PRESIDENT
John L. Sullivan
VICE PRESIDENT, CHIEF FINANCIAL OFFICER AND TREASURER
Curtis W. Morell
VICE PRESIDENT AND CHIEF ACCOUNTING OFFICER
Peter W. Hegel
VICE PRESIDENT
Joseph P. Stadler
VICE PRESIDENT
Paul R. Wolkenberg
VICE PRESIDENT
Edward C. Wood III
VICE PRESIDENT
Tanya M. Loden
CONTROLLER
DIVIDEND DISBURSING AND TRANSFER AGENT
Van Kampen Investor Services Inc.
P.O. Box 418256
Kansas City, Missouri 64141
LEGAL COUNSEL
Skadden, Arps, Slate, Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP
200 E. Randolph St.
Chicago, Illinois 60601
- --------------------------------------------------------------------------------
FOR INFORMATION ON HOW TO INVEST, PLEASE CONTACT YOUR ACCOUNT REPRESENTATIVE OR
THE FUND AT (800) 341-2911.
THIS REPORT IS AUTHORIZED FOR DISTRIBUTION ONLY WHEN PRECEDED OR ACCOMPANIED BY
PROSPECTUSES OF THE VAN KAMPEN FUNDS INC. WHICH DESCRIBES IN DETAIL EACH OF THE
INVESTMENT FUNDS' INVESTMENT POLICIES, FEES, AND EXPENSES. PLEASE READ THE
PROSPECTUSES CAREFULLY BEFORE YOU INVEST OR SEND MONEY.
<PAGE>
- --------------------------------------------------------------------------------
NOTES:
<PAGE>
VANKAMPEN FUNDS
1 Parkview Plaza/ /P.O. Box 5555/ /Oakbrook Terrace, IL 60181-5555/
/www.vankampen.com
-C- Van Kampen Funds Inc. 1999
