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VAN KAMPEN AMERICAN CAPITAL
REAL ESTATE SECURITIES FUND
SUPPLEMENT DATED JANUARY 2, 1997, TO THE PROSPECTUS DATED APRIL 29, 1996,
AS PREVIOUSLY SUPPLEMENTED ON JUNE 1, 1996, JULY 1, 1996 AND NOVEMBER 1, 1996.
Effective December 31, 1996, the sub-advisory agreement with Hines Interests
Realty Advisors Limited Partnership was terminated. Following such termination,
Van Kampen American Capital Asset Management, Inc. continues to provide the Fund
with investment advisory services under its current investment advisory
agreement, without involvement by any sub-adviser. In addition, Russell C. Platt
and Theodore R. Bigman have assumed responsibility for the day-to-day management
of the Fund's investment portfolio effective January 1, 1997. Mr. Platt became
Executive Vice President of the Adviser on December 31, 1996. Since 1994, Mr.
Platt has also been a Principal, and as of December 1, 1996, a Managing Director
of Morgan Stanley Asset Management Inc. ("MSAM") where he has primary
responsibility for managing the real estate securities investment business for
MSAM and serves as a member of the Investment Committee of The Morgan Stanley
Real Estate Fund ("MSREF"). From 1991 to 1993, Mr. Platt was head of Morgan
Stanley Realty's Transaction Development Group. From 1990 to 1991, Mr. Platt was
based in Morgan Stanley Realty's London Office. Prior to this he had extensive
transaction responsibilities involving portfolio, retail, office, hotel and
apartment sales and financings. Mr. Bigman became Senior Vice President of the
Adviser on December 31, 1996. Since 1995, Mr. Bigman has also been a Vice
President, and as of December 1, 1996, a Principal of MSAM where, together with
Mr. Platt, he is responsible for MSAM's real estate securities research. Prior
to joining MSAM, he was a Director at CS First Boston, where he worked for eight
years in the Real Estate Group. Prior to this Mr. Bigman had extensive real
estate experience in a wide variety of transactions involving the financing and
sale of both individual assets and portfolios of real estate assets as well as
the acquisition and sale of several real estate companies.
References in the Prospectus that Class C shares automatically convert to
Class A shares are hereby deleted and the following sentence is added to the
section of the Prospectus captioned "ALTERNATIVE SALES
ARRANGEMENTS -- CONVERSION FEATURE."
Class C shares purchased before January 1, 1997, and any dividend
reinvestment plan shares received thereon, automatically convert to Class A
shares ten years after the end of the calendar month in which such shares were
purchased. Such conversion will be on the basis of the relative net asset values
per share, without the imposition of any sales load, fee or other charge.
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The section of the Prospectus captioned "PURCHASE OF SHARES" hereby is
supplemented by adding the following:
The Distributor is sponsoring a sales incentive program for A.G. Edwards &
Sons, Inc. ("A.G. Edwards"). The Distributor will reallow its portion of the
Fund's sales concession to A.G. Edwards on sales of Class A Shares of the Fund
relating to the "rollover" of any savings into an Individual Retirement Account
("IRA"), the transfer of assets into an IRA and contributions to an IRA,
commencing on January 1, 1997 and terminating on April 15, 1997.
Paragraph (5) of the section of the Prospectus captioned "PURCHASE OF
SHARES -- NAV PURCHASE OPTIONS" is hereby amended and restated with the
following:
(5) Trustees and other fiduciaries purchasing shares for retirement plans of
organizations with retirement plan assets of $3 million or more and
which invest in multiple fund families through national wirehouse
alliance programs.
Paragraphs (8) and (9) of the section of the Prospectus captioned "PURCHASE
OF SHARES -- NAV PURCHASE OPTIONS" are hereby amended and restated with the
following:
(8) Trusts created under pension, profit sharing or other employee benefit
plans qualified under Section 401(a) of the Code, or custodial accounts
held by a bank created pursuant to Section 403(b) of the Code and
sponsored by non-profit organizations defined under Section 501(c)(3) of
the Code and assets held by an employer or trustee in connection with an
eligible deferred compensation plan under Section 457 of the Code. Such
plans will qualify for purchases at net asset value provided, for plans
initially establishing accounts with the Distributor in the
Participating Funds after February 1, 1997, that (1) the initial amount
invested in the Participating Funds is at least $500,000 or (2) such
shares are purchased by an employer sponsored plan with more than 100
eligible employees. Such plans that have been established with a
Participating Fund or have received proposals from the Distributor prior
to February 1, 1997 based on net asset value purchase privileges
previously in effect will be qualified to purchase shares of the
Participating Funds at net asset value for accounts established on or
before May 1, 1997. Section 403(b) and similar accounts for which Van
Kampen American Capital Trust Company serves as custodian will not be
eligible for net asset value purchases based on the aggregate investment
made by the plan or the number of eligible employees, except under
certain uniform criteria established by the Distributor from time to
time. Prior to February 1, 1997, a commission
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will be paid to authorized dealers who initiate and are responsible for
such purchases within a rolling twelve-month period as follows: 1.00% on
sales to $5 million, plus 0.50% on the next $5 million, plus 0.25% on
the excess over $10 million. For purchases on February 1, 1997 and
thereafter, a commission will be paid as follows: 1.00% on sales to $2
million, plus 0.80% on the next $1 million, plus 0.50% on the next $47
million, plus 0.25% on the excess over $50 million.
