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VAN KAMPEN AMERICAN CAPITAL
GLOBAL MANAGED ASSETS FUND
SUPPLEMENT DATED APRIL 30, 1997, TO THE PROSPECTUS DATED APRIL 30, 1997.
The section of the Prospectus entitled "INVESTMENT OBJECTIVE AND POLICIES"
is hereby amended with the following:
The Subadviser utilizes a "top-down" approach in selecting investments for
the Fund that emphasizes country selection and weighting rather than individual
stock selection. This approach reflects the Subadviser's philosophy that a
diversified selection of securities representing exposure to world markets based
upon the economic outlook and current valuation levels for each country is an
effective way to maximize the return and minimize the risk associated with
global investment.
The Subadviser determines country allocations for the Fund on an ongoing
basis within policy ranges dictated by each country's market capitalization and
liquidity. The Fund will invest in the United States and other industrialized
countries throughout the world that comprise the Morgan Stanley Capital
International World Index. These countries currently are Australia, Austria,
Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Italy, Japan, the
Netherlands, New Zealand, Norway, Singapore/Malaysia, Spain, Sweden,
Switzerland, the United Kingdom and the United States. In addition, the Fund may
invest a portion of its assets in emerging country equity securities. The Fund
currently intends to invest in some or all of the following countries:
Argentina, Indonesia, Portugal, South Africa, Brazil, Malaysia, Philippines,
Thailand, India, Mexico, South Korea and Turkey.
By analyzing a variety of macroeconomic and political factors, the
Subadviser develops fundamental projections on interest rates, currencies,
corporate profits and economic growth for each country. These country
projections are then used to determine what the Subadviser believes to be a fair
value for the stock market of each country. Discrepancies between actual value
and fair value, as determined by the Subadviser, provide an expected return for
each stock market. The expected return is adjusted by currency return
expectations derived from the Subadviser's purchasing-power parity exchange rate
model to arrive at an expected total return in U.S. Dollars. The final country
allocation decision is then reached by considering the expected total return in
light of various country specific considerations such as market size,
volatility, liquidity and country risk.
Within a particular country, investments are made through the purchase of
common stocks which, in the aggregate, replicate a broad market index, which in
most cases will be the Morgan Stanley Capital International ("MSCI") Index for
the particular country. The MSCI Indices measure the performance of stock
markets worldwide. The various MSCI Indices are based on the share prices of
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companies listed on the local stock exchange of the specified country or
countries within a specified region. The combined market capitalization of
companies in these indices represent approximately 60 percent of the aggregate
market value of the covered stock exchanges. Companies included in the MSCI
country index replicate the industry composition of the local market and are a
representative sampling of large, medium and small companies, subject to
liquidity. Non-domiciled companies traded on the local exchange and companies
with restricted float due to dominant shareholders or cross-ownership are
avoided. The Subadviser may overweight or underweight an industry segment of a
particular index if it concludes this would be advantageous to the Fund.
