UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-02424 Van Kampen Emerging Growth Fund - -------------------------------------------------------------------------------- (Exact name of registrant as specified in charter) 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Ronald Robison 1221 Avenue of the Americas, New York, New York 10020 - -------------------------------------------------------------------------------- (Name and address of agent for service) Registrant's telephone number, including area code: 212-762-4000 Date of fiscal year end: 8/31 Date of reporting period: 8/31/03 Item 1. Report to Shareholders Welcome, Shareholder In this report, you'll learn about how your investment in Van Kampen Emerging Growth Fund performed during the annual period. The portfolio management team will provide an overview of the market conditions and discuss some of the factors that affected investment performance during the reporting period. In addition, this report includes the fund's financial statements and a list of fund investments as of August 31, 2003. This material must be preceded or accompanied by a prospectus for the fund being offered. Market forecasts provided in this report may not necessarily come to pass. There is no assurance that the fund will achieve its investment objective. The fund is subject to market risk, which is the possibility that the market values of securities owned by the fund will decline and, therefore, the value of the fund shares may be less than what you paid for them. Accordingly, you can lose money investing in this fund. Please see the prospectus for more complete information on investment risks. NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE Performance Summary PERFORMANCE OF A $10,000 INVESTMENT This chart compares your fund's performance to that of the Russell 1000(R) Growth Index from 8/31/1993 through 8/31/2003. Class A shares, adjusted for sales charges. (LINE GRAPH) <Table> <Caption> VAN KAMPEN EMERGING GROWTH FUND RUSSELL 1000(R) GROWTH -------------------------- ---------------------- 8/93 9427 10000 9850 9926 12/93 9828 10308 9337 9853 8645 9751 9220 10502 12/94 9128 10578 9878 11586 11108 12724 12772 13879 12/95 13201 14511 14102 15290 15530 16263 16214 16848 12/96 15566 17866 14270 17962 16984 21359 20047 22964 12/97 18887 23313 21893 26846 23030 28064 20074 25515 12/98 25446 32337 29185 34393 30822 35716 32132 34408 12/99 51839 43060 65206 46128 57641 44882 61546 42469 12/00 45948 33404 35197 26422 35797 28647 28258 23086 12/01 30974 26582 29305 25894 25155 21059 21291 17890 12/02 20683 19170 20800 18965 23523 21678 8/03 24943 22771 </Table> Source: Confluence Technologies Inc. and Bloomberg. <Table> <Caption> A SHARES B SHARES C SHARES D SHARES R SHARES since 10/2/70 since 4/20/92 since 7/6/93 since 10/17/00 since 10/1/02 - ------------------------------------------------------------------------------------------------------------------------------ AVERAGE ANNUAL W/O SALES W/SALES W/O SALES W/SALES W/O SALES W/SALES W/O SALES W/SALES W/O SALES TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES Since Inception 15.26% 15.05% 11.87% 11.87% 9.81% 9.81% -25.10% -25.10% 13.69% 10-year 10.22 9.57 9.70 9.70 9.38 9.38 -- -- -- 5-year 6.62 5.37 5.81 5.60 5.83 5.83 -- -- -- 1-year 10.08 3.74 9.24 4.24 9.33 8.33 10.39 10.39 -- - ------------------------------------------------------------------------------------------------------------------------------ </Table> Past performance is no guarantee of future results. Investment return and principal value will fluctuate, and fund shares, when redeemed, may be worth more or less than their original cost. The returns shown in this report do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. Performance of share classes will vary due to differences in sales charges and expenses. As a result of recent market activity, current performance may vary from the figures shown. For more up-to-date information, please visit vankampen.com or speak with your financial advisor. Average annual total return with sales charges includes payment of the maximum sales charge of 5.75 percent for Class A shares, a contingent deferred sales charge of 5.00 percent for Class B shares (in year one and declining to zero after year five), a contingent deferred sales charge of 1.00 percent for Class C shares in year one, and combined Rule 12b-1 fees and service fees of up to 0.25 percent for Class A shares and 1.00 percent for Class B and C shares. The since inception and 10-year returns for Class B shares reflect the conversion of Class B shares into Class A shares six years after purchase. See footnote 3 in the Notes to Financial Statements for additional information. Certain non-recurring payments were made to Class C 1 shares, resulting in an increase to the one-year return of 0.03%. Class D and R Shares are available for purchase exclusively by investors of tax-exempt retirement plans. Class D shares include Profit Sharing, 401(k), money purchase pension and defined benefit plans of Morgan Stanley DW Inc. (Morgan Stanley) or any of its subsidiaries for the benefit of certain employees of Morgan Stanley and its subsidiaries and are offered without any sales charges on purchases or sales and does not include combined 12b-1 fees and service fees. Class R shares include 401(k) plans, 457 plans, defined benefit plans, profit sharing and money purchase pension plans, non-qualified deferred compensation plans, and employer-sponsored 403(b) plans. Class R shares are offered without any sales charges on purchases or sales. The combined Rule 12b-1 fees and service fees for Class R shares are up to 0.50%. Figures shown above assume reinvestment of all dividends and capital gains. The Russell 1000(R) Growth Index is generally representative of the U.S. market for large-capitalization stocks. It contains securities that growth managers typically select from the Russell 1000(R) Index. Indexes are unmanaged and do not include any sales charges or fees. Such costs would lower performance. It is not possible to invest directly into an index. 2 Fund Report FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2003 Van Kampen Emerging Growth Fund is managed by the adviser's Multi-Cap Growth team. Current members include(1) Gary Lewis, Managing Director; Dudley Brickhouse, Executive Director; Janet Luby, Executive Director; David Walker, Executive Director; Matthew Hart, Vice President; and Scott Miller, Associate. The following discussion reflects their views on the fund's performance. Q. BEFORE YOU DISCUSS HOW THE FUND PERFORMED, PLEASE DESCRIBE THE OVERALL MARKET ENVIRONMENT. A. Early in the period, mixed economic signals and the threat of war with Iraq kept investors subdued about the market's prospects. In fact, in October 2002, major stock indexes slumped to 12-month lows, and several failed rallies were led by low-quality stocks with no growth prospects. However, by late spring, stock markets began to turn upward. A steepening yield curve provided an unfavorable backdrop for investors who owned bonds, leading to a rotation into stocks. Because fixed-income securities are interest-rate sensitive--generally speaking, as rates go up, bond prices fall--stock investments became more attractive to investors. Furthermore, many investors believed the Federal Reserve Board would allow rates to creep up as the economy improved, maintaining the appearance that stocks could be more favorable than bonds over the longer term. This backdrop, coupled with two consecutive quarters of stronger- than-expected earnings reports, a swift conclusion to major combat in Iraq, and an improving macroeconomic scenario, gave investors renewed optimism for stocks. By August 2003, stock indexes were propelled to new 12-month highs. Q. HOW DID THE FUND PERFORM DURING THE REPORTING PERIOD? A. Although the fund underperformed its benchmark index, the fund performed better in this period than it had in some time. -- Van Kampen Emerging Growth Fund returned 10.08 percent for the 12 months ended August 31, 2003. Performance figures are for Class A shares, and assume the reinvestment of all distributions but do not reflect the deduction of any applicable sales charges. If sales charges were included, performance would be lower. Past performance is no guarantee of future results. (1)Team members may change at any time without notice. 3 -- The fund's benchmark index, the Russell 1000(R) Growth Index, returned 14.08 percent for the same period. See Performance Summary for additional information and index definitions. Q. WHAT FACTORS HINDERED PERFORMANCE? A. Many of the fund's holdings we discussed in the six-month report dated February 28, 2002--Tenet Healthcare, Kohl's, Lockheed Martin, and Northrop Grumman (all were sold during the period)--were also among the largest detractors for the entire 12-month period. In addition to these names, Kraft also fell short of our expectations. -- TENET HEALTHCARE AND KOHL'S suffered from negative surprises. Shares of Tenet, a hospital-chain operator, fell sharply when rumors of fraudulent billing practices and a consequent government investigation were announced. Discount department store Kohl's reported lower-than-expected same-store sales. We sold both positions because we viewed these negative changes as signs of fundamental deterioration, but unfortunately, not before the stock prices slipped. -- NORTHROP GRUMMAN AND LOCKHEED MARTIN entered the reporting period with investors' lofty expectations that these aerospace-and-defense contractors would be the beneficiaries of increased U.S. military activity. However, Northrop reported earnings in mid-October 2002 that reflected weakness in its ship-building business and increased pension costs. The stock was no longer attractive based on our criteria, and we sold the holding over the <Table> TOP 10 HOLDINGS AS OF 8/31/03 TOP 10 INDUSTRIES AS OF 8/31/03 eBay 4.0% Semiconductors 10.1% Intel 3.5 Internet Retail 8.1 Amazon.com 2.7 Biotechnology 8.0 Gilead Sciences 2.4 Systems Software 5.7 Best Buy 2.3 Communications Equipment 4.7 Boston Scientific 2.2 Health Care Equipment 4.6 Wal-Mart Stores 2.1 Pharmaceuticals 4.3 Cisco Systems 2.1 Semiconductor Equipment 3.5 Veritas Software 2.0 Construction & Farm Machinery 3.3 Electronic Arts 2.0 Oil & Gas Equipment & Services 3.0 </Table> Subject to change daily. All percentages are as of a percentage of long-term investments. All information is provided for informational purposes only and should not be deemed as a recommendation to buy the securities mentioned or securities in the industries shown above. Morgan Stanley is a full-service securities firm engaged in securities trading and brokerage activities, investment banking, research and analysis, financing and financial advisory services. 4 next two days. We maintained a position in Lockheed but, following major combat in Iraq, we did not see the earnings momentum we had expected, and we still viewed escalating pension costs as an ongoing challenge for the industry. Lockheed's stock price had fallen during the period, which took a toll on the fund's performance when we sold the position. -- KRAFT missed its earnings guidance in January because of higher-than-expected pension expenses, a weak business environment, and sluggish sales in Latin America. We did not expect the negative news but viewed it as significant. We sold the entire position within the next two days. Although the stock later rallied, Kraft's stock underperformed the market during the reporting period. Q. WHAT HELPED PERFORMANCE DURING THE REPORTING PERIOD? A. We attribute the fund's improved performance to several factors: -- AN IMPROVED ECONOMIC ENVIRONMENT. The fund's style was able to gain traction, which is exactly what we expected. Historically, the fund's style of investing, which seeks stocks with rising earnings expectations and/or rising valuations, has performed better in a strengthening economy than in a weakening economy. This period was no exception. -- MORE SUSTAINABLE TRENDS. With this economic tailwind, we were able to find more companies that met our rising-earnings-expectations, rising-valuations investment criteria. Although we remained as selective as ever about which stocks belonged in the fund's portfolio, the improving economy meant that companies were more easily maintaining their earnings growth. On the valuations side, we did see more stocks with rising valuations as the market conditions improved. In the first half of the period, stocks with weak outlooks that were losing money tended to be favored by investors. However, as market conditions recovered, we began to see the higher-quality stocks we favor--those stocks with good earnings prospects--rewarded with higher valuations. -- STRONG CONSUMER SPENDING DROVE GAINS IN SELECTED FUND HOLDINGS.(2) Fueled by tax refunds, consumers shopped at eBay, Amazon.com, and Best Buy, signed on for enhanced user services from Yahoo!, bought personal computers that housed Intel's processing chips, and registered for post-secondary education with Apollo Group, which owns online-education site University of Phoenix. -- INTERNET RETAIL AND BIOTECHNOLOGY HOLDINGS.(2) In addition to benefiting from consumer dollars, online auctioneer eBay and Internet retailer Amazon.com were also rewarded by investors for (2)There is no guarantee that these stocks will continue to perform well or be held by the fund in the future. 5 taking market share in their respective spaces. The companies survived the dot-com bubble and have finally generated the revenue and margin growth we believed their business models were capable of producing. Internet portal Yahoo! was another strong holding in this group. Strong products and a favorable regulatory environment helped biotechnology companies show remarkable results during the period. Portfolio holdings Amgen and Gilead Sciences gained market share with successful new drugs, which sent their stock prices upward. Amgen develops drugs for cancer, anemia, and inflammatory disorders such as arthritis, and Gilead specializes in therapeutics for life-threatening diseases. Q. PLEASE HIGHLIGHT SIGNIFICANT POSITIONS IN THE FUND'S PORTFOLIO. A. Among the fund's largest industry positions at the close of the period were semiconductors, systems software, Internet retail, and biotechnology. -- SEMICONDUCTORS. The performance of semiconductor companies has historically been strongly tied to economic recoveries, and once again investors anticipating this event bid semiconductor stocks higher. However, we were more attracted to a spur in demand for the chips, driven by increases in corporate spending. -- SYSTEMS SOFTWARE. The fund's systems software names included Veritas Software, Microsoft, and Symantec. We liked Veritas' prospects because of growing storage demand--not only the need for increased capacity, but also for more efficient storage--in today's digital society. A new PC cycle bodes well for Microsoft and Symantec, whose software products are installed on many new PCs. In addition, virus-protection software designer Symantec benefited from the recent, high-profile computer-virus outbreaks, and its products are sold on an annual subscription basis, providing for a relatively steady revenue stream to the company. -- INTERNET RETAIL AND BIOTECHNOLOGY. As discussed earlier, we found selected stocks very attractive--including eBay, Amazon.com, and Yahoo! in Internet retail, and Gilead and Amgen in biotechnology-- lending to sizable industry weights in the fund's portfolio. Q. NOW THAT YOU'VE PROVIDED AN OVERVIEW OF THE FUND, DO YOU HAVE ANY CLOSING THOUGHTS FOR SHAREHOLDERS? A. Our goal remains to seek out the companies that have what we believe to be the best growth prospects. The fund's strategy has been in place for decades, and despite difficult market conditions in the past, our commitment to the fund's strategy has not been deterred. 6 ANNUAL HOUSEHOLDING NOTICE To reduce expenses, the fund attempts to eliminate duplicate mailings to the same address. The fund delivers a single copy of certain shareholder documents to investors who share an address, even if the accounts are registered under different names. The fund's prospectus and shareholder reports (including annual privacy notices) will be delivered to you in this manner indefinitely unless you instruct us otherwise. You can request multiple copies of these documents by either calling (800) 341-2911 or writing to Van Kampen Investor Services at 1 Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor Services has received your instructions, we will begin sending individual copies for each account within 30 days. PROXY VOTING POLICIES AND PROCEDURES A description of the fund's policies and procedures with respect to the voting of proxies relating to the Fund's portfolio securities is available without charge, upon request, by calling 1-800-847-2424. This information is also available on the Securities and Exchange Commission's website at http://www.sec.gov. 7 BY THE NUMBERS YOUR FUND'S INVESTMENTS August 31, 2003 THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF THE REPORTING PERIOD. <Table> <Caption> MARKET DESCRIPTION SHARES VALUE COMMON STOCKS 96.0% ADVERTISING 0.3% Univision Communications, Inc., Class A (a)................. 500,000 $ 18,745,000 -------------- AIR FREIGHT & COURIERS 0.5% FedEx Corp. ................................................ 500,000 33,550,000 -------------- AIRLINES 0.3% JetBlue Airways Corp. (a)................................... 350,000 18,767,000 -------------- ALUMINUM 0.5% Alcoa, Inc. ................................................ 1,250,000 35,700,000 -------------- APPAREL & ACCESSORIES 0.8% Coach, Inc. (a)............................................. 1,000,000 58,040,000 -------------- APPAREL RETAIL 1.5% Gap, Inc. .................................................. 5,000,000 104,450,000 -------------- APPLICATION SOFTWARE 2.1% Mercury Interactive Corp. (a)............................... 1,000,000 43,890,000 SAP AG--ADR (Germany)....................................... 1,250,000 37,425,000 Synopsys, Inc. (a).......................................... 1,000,000 68,210,000 -------------- 149,525,000 -------------- ASSET MANAGEMENT & CUSTODY BANKS 0.4% Mellon Financial Corp. ..................................... 1,000,000 31,350,000 -------------- AUTO PARTS & EQUIPMENT 0.3% Advanced Auto Parts, Inc. (a)............................... 250,000 18,662,500 -------------- BIOTECHNOLOGY 7.6% Amgen, Inc. (a)............................................. 2,000,000 131,800,000 Celgene Corp. (a)........................................... 500,000 19,245,000 Genentech, Inc. (a)......................................... 1,500,000 119,100,000 Genzyme Corp. (a)........................................... 1,250,000 58,937,500 Gilead Sciences, Inc. (a)................................... 2,500,000 166,750,000 Invitrogen Corp. (a)........................................ 300,000 17,301,000 Medimmune, Inc. (a)......................................... 1,000,000 34,870,000 -------------- 548,003,500 -------------- </Table> 8 See Notes to Financial Statements YOUR FUND'S INVESTMENTS August 31, 2003 <Table> <Caption> MARKET DESCRIPTION SHARES VALUE BROADCASTING & CABLE TV 1.5% EchoStar Communications Corp., Class A (a).................. 3,000,000 $ 110,700,000 -------------- CASINOS & GAMING 1.4% International Game Technology............................... 4,000,000 103,360,000 -------------- COMMUNICATIONS EQUIPMENT 4.5% Cisco Systems, Inc. (a)..................................... 7,500,000 143,625,000 Corning, Inc. (a)........................................... 7,500,000 61,875,000 Foundry Networks, Inc. (a).................................. 1,250,000 24,312,500 Juniper Networks, Inc. (a).................................. 4,000,000 68,880,000 QLogic Corp. (a)............................................ 500,000 24,510,000 -------------- 323,202,500 -------------- COMPUTER & ELECTRONICS RETAIL 2.2% Best Buy Co., Inc. (a)...................................... 3,000,000 156,030,000 -------------- COMPUTER HARDWARE 1.8% Dell Computer Corp. (a)..................................... 4,000,000 130,520,000 -------------- COMPUTER STORAGE & PERIPHERALS 2.7% EMC Corp. (a)............................................... 7,000,000 89,250,000 Network Appliance, Inc. (a)................................. 2,000,000 44,820,000 SanDisk Corp. (a)........................................... 1,000,000 60,460,000 -------------- 194,530,000 -------------- CONSTRUCTION & FARM MACHINERY 3.2% Caterpillar, Inc. .......................................... 1,000,000 71,830,000 Deere & Co. ................................................ 1,250,000 70,637,500 Paccar, Inc. ............................................... 1,000,000 85,200,000 -------------- 227,667,500 -------------- CONSUMER ELECTRONICS 0.3% Harman International Industries, Inc. ...................... 200,000 19,930,000 -------------- CONSUMER FINANCE 1.9% American Express Co. ....................................... 2,500,000 112,625,000 SLM Corp. .................................................. 600,000 24,108,000 -------------- 136,733,000 -------------- DEPARTMENT STORES 1.1% Federated Department Stores, Inc. .......................... 1,750,000 76,475,000 -------------- DIVERSIFIED BANKS 1.1% Bank of America Corp. ...................................... 500,000 39,625,000 Wachovia Corp. ............................................. 1,000,000 42,150,000 -------------- 81,775,000 -------------- DIVERSIFIED CAPITAL MARKETS 0.5% JP Morgan Chase & Co. ...................................... 1,000,000 34,220,000 -------------- </Table> See Notes to Financial Statements 9 YOUR FUND'S INVESTMENTS August 31, 2003 <Table> <Caption> MARKET DESCRIPTION SHARES VALUE DIVERSIFIED COMMERCIAL SERVICES 2.1% Apollo Group, Inc., Class A (a)............................. 1,525,000 $ 97,706,750 Career Education Corp. (a).................................. 500,000 22,565,000 Cendant Corp. (a)........................................... 1,750,000 31,465,000 -------------- 151,736,750 -------------- DRUG RETAIL 0.5% CVS Corp. .................................................. 1,000,000 32,600,000 -------------- HEALTH CARE EQUIPMENT 4.4% Boston Scientific Corp. (a)................................. 2,500,000 150,250,000 Guidant Corp. .............................................. 1,250,000 62,750,000 St. Jude Medical, Inc. (a).................................. 500,000 26,035,000 Stryker Corp. .............................................. 500,000 37,900,000 Zimmer Holdings, Inc. (a)................................... 750,000 38,805,000 -------------- 315,740,000 -------------- HOME ENTERTAINMENT SOFTWARE 1.9% Electronic Arts, Inc. (a)................................... 1,500,000 134,625,000 -------------- HOME IMPROVEMENT RETAIL 2.3% Home Depot, Inc. ........................................... 2,250,000 72,360,000 Lowe's Co., Inc. ........................................... 1,750,000 96,005,000 -------------- 168,365,000 -------------- HYPERMARKETS & SUPER CENTERS 2.1% Wal-Mart Stores, Inc. ...................................... 2,500,000 147,925,000 -------------- INDUSTRIAL CONGLOMERATES 0.8% 3M Co. ..................................................... 400,000 56,988,000 -------------- INTERNET RETAIL 7.7% Amazon.com, Inc. (a)........................................ 4,000,000 185,760,000 eBay, Inc. (a).............................................. 5,000,000 276,900,000 InterActiveCorp (a)......................................... 2,500,000 92,525,000 -------------- 555,185,000 -------------- INTERNET SOFTWARE & SERVICES 1.4% Yahoo!, Inc. (a)............................................ 3,000,000 100,200,000 -------------- INVESTMENT BANKING & BROKERAGE 2.0% Ameritrade Holding Corp. (a)................................ 1,000,000 10,870,000 Goldman Sachs Group, Inc. .................................. 750,000 66,367,500 Merrill Lynch & Co., Inc. .................................. 1,250,000 67,225,000 -------------- 144,462,500 -------------- MANAGED HEALTH CARE 1.6% Aetna, Inc. ................................................ 750,000 42,750,000 UnitedHealth Group, Inc. ................................... 1,500,000 74,145,000 -------------- 116,895,000 -------------- </Table> 10 See Notes to Financial Statements YOUR FUND'S INVESTMENTS August 31, 2003 <Table> <Caption> MARKET DESCRIPTION SHARES VALUE MOVIES & ENTERTAINMENT 1.0% News Corp., LTD.--ADR (Australia)........................... 750,000 $ 25,762,500 Viacom, Inc., Class B (a)................................... 1,100,000 49,500,000 -------------- 75,262,500 -------------- OIL & GAS EQUIPMENT & SERVICES 2.9% BJ Services Co. (a)......................................... 1,500,000 56,055,000 Schlumberger Ltd. .......................................... 1,500,000 74,265,000 Smith International, Inc. (a)............................... 2,000,000 78,180,000 -------------- 208,500,000 -------------- PERSONAL PRODUCTS 0.5% Avon Products, Inc. ........................................ 600,000 38,460,000 -------------- PHARMACEUTICALS 4.1% Biovail Corp. (Canada) (a).................................. 1,150,000 47,759,500 Eli Lilly & Co. ............................................ 750,000 49,897,500 Pfizer, Inc. ............................................... 1,250,000 37,400,000 Teva Pharmaceutical Industries, Ltd.--ADR (Israel).......... 2,000,000 117,424,000 Wyeth....................................................... 1,000,000 42,850,000 -------------- 295,331,000 -------------- PROPERTY & CASUALTY 0.7% Chubb Corp. ................................................ 750,000 50,955,000 -------------- RESTAURANTS 1.3% McDonald's Corp. ........................................... 4,000,000 89,680,000 -------------- SEMICONDUCTOR EQUIPMENT 3.4% Applied Materials, Inc. (a)................................. 5,000,000 108,000,000 KLA-Tencor Corp. (a)........................................ 2,250,000 133,560,000 -------------- 241,560,000 -------------- SEMICONDUCTORS 9.7% Altera Corp. (a)............................................ 3,500,000 78,540,000 Analog Devices, Inc. (a).................................... 2,500,000 102,500,000 Broadcom Corp., Class A (a)................................. 3,000,000 81,960,000 Intel Corp. ................................................ 8,500,000 243,270,000 International Rectifier Corp. (a)........................... 500,000 20,795,000 Intersil Corp., Class A (a)................................. 1,500,000 43,695,000 Linear Technology Corp. .................................... 1,750,000 72,135,000 Marvell Technology Group Ltd. (Bermuda) (a)................. 1,250,000 52,712,500 -------------- 695,607,500 -------------- SPECIALTY STORES 1.4% Bed Bath & Beyond, Inc. (a)................................. 1,250,000 53,787,500 Staples, Inc. (a)........................................... 2,000,000 49,260,000 -------------- 103,047,500 -------------- </Table> See Notes to Financial Statements 11 YOUR FUND'S INVESTMENTS August 31, 2003 <Table> <Caption> MARKET DESCRIPTION SHARES VALUE SYSTEMS SOFTWARE 5.5% Computer Associates International, Inc. .................... 2,500,000 $ 64,075,000 Microsoft Corp. ............................................ 3,000,000 79,560,000 Oracle Corp. (a)............................................ 3,000,000 38,340,000 Symantec Corp. (a).......................................... 1,250,000 71,787,500 VERITAS Software Corp. (a).................................. 4,000,000 137,920,000 -------------- 391,682,500 -------------- THRIFTS & MORTGAGE FINANCE 0.5% Countrywide Financial Corp. ................................ 500,000 33,925,000 -------------- WIRELESS TELECOMMUNICATION SERVICES 1.7% Nextel Communications, Inc., Class A (a).................... 6,500,000 125,320,000 -------------- TOTAL LONG-TERM INVESTMENTS 96.0% (Cost $5,365,673,670)................................................ 6,885,989,250 -------------- REPURCHASE AGREEMENTS 4.3% BankAmerica ($160,805,000 par collateralized by U.S. Government obligations in a pooled cash account, dated 08/29/03, to be sold on 09/02/03 at $160,822,689)............................................ 160,805,000 State Street Bank & Trust Co. ($48,307,000 par collateralized by U.S. Government obligations in a pooled cash account, dated 08/29/03, to be sold on 09/02/03 at $48,311,831).................................. 48,307,000 UBS Securities LLC ($103,439,000 par collateralized by U.S. Government obligations in a pooled cash account, dated 08/29/03, to be sold on 09/02/03 at $103,450,263)............................................ 103,439,000 -------------- TOTAL REPURCHASE AGREEMENTS (Cost $312,551,000).................................................. 312,551,000 -------------- TOTAL INVESTMENTS 100.3% (Cost $5,678,224,670)................................................ 7,198,540,250 LIABILITIES IN EXCESS OF OTHER ASSETS (0.3%).......................... (24,977,857) -------------- NET ASSETS 100.0%..................................................... $7,173,562,393 ============== </Table> (a) Non-income producing security as this stock currently does not declare dividends. ADR--American Depositary Receipt 12 See Notes to Financial Statements FINANCIAL STATEMENTS Statement of Assets and Liabilities August 31, 2003 <Table> ASSETS: Total Investments (Cost $5,678,224,670)..................... $ 7,198,540,250 Receivables: Investments Sold.......................................... 127,517,974 Fund Shares Sold.......................................... 6,851,925 Dividends................................................. 2,884,150 Interest.................................................. 25,337 Other....................................................... 1,024,432 --------------- Total Assets............................................ 7,336,844,068 --------------- LIABILITIES: Payables: Investments Purchased..................................... 137,859,595 Fund Shares Repurchased................................... 9,824,251 Distributor and Affiliates................................ 9,047,582 Investment Advisory Fee................................... 2,592,211 Custodian Bank............................................ 819,335 Accrued Expenses............................................ 2,613,733 Trustees' Deferred Compensation and Retirement Plans........ 524,968 --------------- Total Liabilities....................................... 163,281,675 --------------- NET ASSETS.................................................. $ 7,173,562,393 =============== NET ASSETS CONSIST OF: Capital (Par value of $.01 per share with an unlimited number of shares authorized).............................. $13,222,525,517 Net Unrealized Appreciation................................. 1,520,315,580 Accumulated Net Investment Loss............................. (592,789) Accumulated Net Realized Loss............................... (7,568,685,915) --------------- NET ASSETS.................................................. $ 7,173,562,393 =============== MAXIMUM OFFERING PRICE PER SHARE: Class A Shares: Net asset value and redemption price per share (Based on net assets of $4,222,805,339 and 123,904,361 shares of beneficial interest issued and outstanding)............. $ 34.08 Maximum sales charge (5.75%* of offering price)......... 2.08 --------------- Maximum offering price to public........................ $ 36.16 =============== Class B Shares: Net asset value and offering price per share (Based on net assets of $2,346,262,759 and 79,335,784 shares of beneficial interest issued and outstanding)............. $ 29.57 =============== Class C Shares: Net asset value and offering price per share (Based on net assets of $570,092,636 and 18,792,845 shares of beneficial interest issued and outstanding)............. $ 30.34 =============== Class D Shares: Net asset value and offering price per share (Based on net assets of $33,936,554 and 988,606 shares of beneficial interest issued and outstanding)............. $ 34.33 =============== Class R Shares: Net asset value and offering price per share (Based on net assets of $465,105 and 13,663 shares of beneficial interest issued and outstanding)........................ $ 34.04 =============== </Table> * On sales of $50,000 or more, the sales charge will be reduced. See Notes to Financial Statements 13 Statement of Operations For the Year Ended August 31, 2003 <Table> INVESTMENT INCOME: Dividends (Net of foreign withholding taxes of $127,923).... $ 31,740,805 Interest.................................................... 5,084,960 -------------- Total Income............................................ 36,825,765 -------------- EXPENSES: Distribution (12b-1) and Service Fees (Attributed to Classes A, B, C, D and R of $9,716,380, $21,890,132, $5,515,960, $0 and $337, respectively)................................ 37,122,809 Investment Advisory Fee..................................... 29,638,485 Shareholder Services........................................ 28,061,917 Custody..................................................... 500,243 Legal....................................................... 338,292 Trustees' Fees and Related Expenses......................... 95,495 Other....................................................... 2,673,379 -------------- Total Expenses.......................................... 98,430,620 Less Credits Earned on Cash Balances.................... 63,774 -------------- Net Expenses............................................ 98,366,846 -------------- NET INVESTMENT LOSS......................................... $ (61,541,081) ============== REALIZED AND UNREALIZED GAIN/LOSS: Net Realized Loss........................................... $ (907,033,099) -------------- Unrealized Appreciation/Depreciation: Beginning of the Period................................... (44,490,730) End of the Period......................................... 1,520,315,580 -------------- Net Unrealized Appreciation During the Period............... 1,564,806,310 -------------- NET REALIZED AND UNREALIZED GAIN............................ $ 657,773,211 ============== NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 596,232,130 ============== </Table> 14 See Notes to Financial Statements Statements of Changes in Net Assets <Table> <Caption> YEAR ENDED YEAR ENDED AUGUST 31, 2003 AUGUST 31, 2002 --------------------------------- FROM INVESTMENT ACTIVITIES: Operations: Net Investment Loss.................................... $ (61,541,081) $ (74,208,094) Net Realized Loss...................................... (907,033,099) (3,062,734,160) Net Unrealized Appreciation During the Period.......... 1,564,806,310 4,917,164 --------------- --------------- NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.... 596,232,130 (3,132,025,090) --------------- --------------- FROM CAPITAL TRANSACTIONS: Proceeds from Shares Sold.............................. 1,058,461,118 2,234,137,357 Cost of Shares Repurchased............................. (1,845,414,527) (2,974,005,607) --------------- --------------- NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS..... (786,953,409) (739,868,250) --------------- --------------- TOTAL DECREASE IN NET ASSETS........................... (190,721,279) (3,871,893,340) NET ASSETS: Beginning of the Period................................ 7,364,283,672 11,236,177,012 --------------- --------------- End of the Period (Including accumulated net investment loss of $592,789 and $479,608, respectively)......... $ 7,173,562,393 $ 7,364,283,672 =============== =============== </Table> See Notes to Financial Statements 15 Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. <Table> <Caption> YEAR ENDED AUGUST 31, CLASS A SHARES -------------------------------------------------------- 2003 (a) 2002 (a) 2001 (a) 2000 (a) 1999 (a) -------------------------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD........................... $ 30.96 $ 43.18 $ 109.19 $ 60.00 $ 36.13 -------- -------- -------- --------- -------- Net Investment Income/Loss....... (.18) (.17) .03 (.32) (.23) Net Realized and Unrealized Gain/Loss...................... 3.30 (12.05) (51.18) 58.81 26.41 -------- -------- -------- --------- -------- Total from Investment Operations... 3.12 (12.22) (51.15) 58.49 26.18 Less Distributions from Net Realized Gain.................... -0- -0- 14.86 9.30 2.31 -------- -------- -------- --------- -------- NET ASSET VALUE, END OF THE PERIOD........................... $ 34.08 $ 30.96 $ 43.18 $ 109.19 $ 60.00 ======== ======== ======== ========= ======== Total Return (b)................... 10.08% -28.30% -51.22% 104.41% 75.10% Net Assets at End of the Period (In millions)........................ $4,222.8 $4,310.2 $6,251.4 $11,527.6 $4,156.4 Ratio of Expenses to Average Net Assets........................... 1.15% 1.06% .93% .87% .97% Ratio of Net Investment Income/Loss to Average Net Assets............ (.61%) (.44%) .04% (.35%) (.45%) Portfolio Turnover................. 180% 230% 148% 110% 124% </Table> (a) Based on average shares outstanding. (b) Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 5.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within one year of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to .25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 16 See Notes to Financial Statements Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. <Table> <Caption> YEAR ENDED AUGUST 31, CLASS B SHARES ------------------------------------------------------- 2003 (a) 2002 (a) 2001 (a) 2000 (a) 1999 (a) ------------------------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD............................ $ 27.07 $ 38.04 $ 99.32 $ 55.56 $ 33.84 -------- -------- -------- -------- -------- Net Investment Loss............... (.36) (.41) (.41) (.93) (.57) Net Realized and Unrealized Gain/Loss....................... 2.86 (10.56) (46.01) 53.99 24.60 -------- -------- -------- -------- -------- Total from Investment Operations.... 2.50 (10.97) (46.42) 53.06 24.03 Less Distributions from Net Realized Gain.............................. -0- -0- 14.86 9.30 2.31 -------- -------- -------- -------- -------- NET ASSET VALUE, END OF THE PERIOD............................ $ 29.57 $ 27.07 $ 38.04 $ 99.32 $ 55.56 ======== ======== ======== ======== ======== Total Return (b).................... 9.24% -28.84% -51.60% 102.85% 73.78% Net Assets at End of the Period (In millions)......................... $2,346.3 $2,395.2 $3,904.7 $7,648.0 $2,850.2 Ratio of Expenses to Average Net Assets............................ 1.91% 1.82% 1.71% 1.63% 1.74% Ratio of Net Investment Loss to Average Net Assets................ (1.37%) (1.20%) (.74%) (1.12%) (1.22%) Portfolio Turnover.................. 180% 230% 148% 110% 124% </Table> (a) Based on average shares outstanding. (b) Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 5%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. See Notes to Financial Statements 17 Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. <Table> <Caption> YEAR ENDED AUGUST 31, CLASS C SHARES ------------------------------------------------------- 2003 (a) 2002 (a) 2001 (a) 2000 (a) 1999 (a) ------------------------------------------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD.............................. $27.75 $ 39.00 $ 101.30 $ 56.52 $34.39 ------ ------- -------- -------- ------ Net Investment Loss................. (.36) (.42) (.41) (.95) (.58) Net Realized and Unrealized Gain/Loss......................... 2.95 (10.83) (47.03) 55.03 25.02 ------ ------- -------- -------- ------ Total from Investment Operations...... 2.59 (11.25) (47.44) 54.08 24.44 Less Distributions from Net Realized Gain................................ -0- -0- 14.86 9.30 2.31 ------ ------- -------- -------- ------ NET ASSET VALUE, END OF THE PERIOD.... $30.34 $ 27.75 $ 39.00 $ 101.30 $56.52 ====== ======= ======== ======== ====== Total Return (b)...................... 9.33%(c) -28.85% -51.60% 102.91% 73.79% Net Assets at End of the Period (In millions)........................... $570.1 $ 629.0 $1,038.5 $1,944.0 $454.5 Ratio of Expenses to Average Net Assets.............................. 1.91% 1.82% 1.70% 1.64% 1.74% Ratio of Net Investment Loss to Average Net Assets.................. (1.34%)(c) (1.20%) (.73%) (1.11%) (1.21%) Portfolio Turnover.................... 180% 230% 148% 110% 124% </Table> (a) Based on average shares outstanding. (b) Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. (c) Certain non-recurring payments were made to Class C Shares, resulting in an increase to the Total Return and Ratio of Net Investment Income to Average Net Assets of .03%. 18 See Notes to Financial Statements Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. <Table> <Caption> OCTOBER 17, 2000 YEAR ENDED (COMMENCEMENT AUGUST 31, OF INVESTMENT CLASS D SHARES -------------------- OPERATIONS) TO 2003 (a) 2002 (a) AUGUST 31, 2001 (a) ------------------------------------------ NET ASSET VALUE, BEGINNING OF THE PERIOD........... $31.10 $ 43.27 $ 97.10 ------ ------- ------- Net Investment Income/Loss....................... (.11) (.07) .17 Net Realized and Unrealized Gain/Loss............ 3.34 (12.10) (39.14) ------ ------- ------- Total from Investment Operations................... 3.23 (12.17) (38.97) Less Distributions from Net Realized Gain.......... -0- -0- 14.86 ------ ------- ------- NET ASSET VALUE, END OF THE PERIOD................. $34.33 $ 31.10 $ 43.27 ====== ======= ======= Total Return (b)................................... 10.39% -28.13% -45.03%* Net Assets at End of the Period (In millions)...... $ 33.9 $ 29.8 $ 41.6 Ratio of Expenses to Average Net Assets............ .90% .81% .72% Ratio of Net Investment Income/Loss to Average Net Assets........................................... (.36%) (.19%) .33% Portfolio Turnover................................. 180% 230% 148% </Table> * Non-Annualized (a) Based on average shares outstanding. (b) Assumes reinvestment of all distributions for the period. See Notes to Financial Statements 19 Financial Highlights THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. <Table> <Caption> OCTOBER 1, 2002 (COMMENCEMENT OF OPERATIONS) TO AUGUST 31, 2003 (a) CLASS R SHARES ------------------- NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $29.94 ------ Net Investment Loss....................................... (.24) Net Realized and Unrealized Gain.......................... 4.34 ------ Total from Investment Operations............................ 4.10 ------ NET ASSET VALUE, END OF THE PERIOD.......................... $34.04 ====== Total Return (b)............................................ 13.69%* Net Assets at End of the Period (In millions)............... $ .5 Ratio of Expenses to Average Net Assets..................... 1.41% Ratio of Net Investment Loss to Average Net Assets.......... (.85%) Portfolio Turnover.......................................... 180% </Table> * Non-Annualized (a) Based on average shares outstanding. (b) Assumes reinvestment of all distributions for the period. The return includes combined Rule 12b-1 fees and service fees of .50% and does not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares. 20 See Notes to Financial Statements NOTES TO FINANCIAL STATEMENTS August 31, 2003 1. SIGNIFICANT ACCOUNTING POLICIES Van Kampen Emerging Growth Fund (the "Fund") is organized as a Delaware business trust, and is registered as a diversified open-end management investment company under the Investment Company Act of 1940 (the "1940 Act"), as amended. The Fund's investment objective is capital appreciation. The Fund commenced investment operations on October 2, 1970. The distribution of the Fund's Class B, Class C, Class D, and Class R Shares commenced on April 20, 1992, July 6, 1993, October 17, 2000 and October 1, 2002, respectively. The following is a summary of significant accounting policies consistently followed by the Fund in the preparation of its financial statements. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. A. SECURITY VALUATION Investments in securities listed on a securities exchange are valued at their sale price as of the close of such securities exchange. Equity securities traded on NASDAQ are valued at the NASDAQ Official Closing Price. Listed and unlisted securities for which the last sale price is not available are valued at the mean of the bid and asked prices. For those securities where quotations or prices are not available, valuations are determined in accordance with procedures established in good faith by the Board of Trustees. Short-term securities with remaining maturities of 60 days or less are valued at amortized cost, which approximates market value. B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date basis. Realized gains and losses are determined on an identified cost basis. The Fund may invest in repurchase agreements, which are short-term investments whereby the Fund acquires ownership of a debt security and the seller agrees to repurchase the security at a future time and specified price. The Fund may invest independently in repurchase agreements, or transfer uninvested cash balances into a pooled cash account along with other investment companies advised by Van Kampen Asset Management Inc. (the "Adviser") or its affiliates, the daily aggregate of which is invested in repurchase agreements. Repurchase agreements are fully collateralized by the underlying debt security. The Fund will make payment for such securities only upon physical delivery or evidence of book entry transfer to the account of the custodian bank. The seller is required to maintain the value of the underlying security at not less than the repurchase proceeds due the Fund. C. INCOME AND EXPENSES Dividend income is recorded on the ex-dividend date and interest income is recorded on an accrual basis. Income and expenses of the Fund are allocated on a pro rata basis to each class of shares, except for distribution and service fees and transfer agency costs which are unique to each class of shares. 21 NOTES TO FINANCIAL STATEMENTS August 31, 2003 D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute substantially all of its taxable income to its shareholders. Therefore, no provision for federal income taxes is required. The Fund intends to utilize provisions of the federal income tax laws which allow it to carry a realized capital loss forward for eight years following the year of loss and offset such losses against any future realized capital gains. At August 31, 2003, the Fund had an accumulated capital loss carryforward for tax purposes of $7,139,466,841, which will expire between August 31, 2010 and August 31, 2011. At August 31, 2003, the cost and related gross unrealized appreciation and depreciation were as follows: <Table> Cost of investments for tax purposes........................ $5,747,020,222 ============== Gross tax unrealized appreciation........................... $1,472,053,042 Gross tax unrealized depreciation........................... (20,533,014) -------------- Net tax unrealized appreciation on investments.............. $1,451,520,028 ============== </Table> E. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays dividends annually from net investment income and from net realized gains, if any. Distributions from net realized gains for book purposes may include short-term capital gains, which are included in ordinary income for tax purposes. Due to inherent differences in the recognition of income, expenses and realized gain/losses under accounting principles generally accepted in the United States of America and federal income tax purposes, permanent differences between book and tax basis reporting have been identified and appropriately reclassified on the Statement of Assets and Liabilities. Permanent book and tax differences relating to a net operating loss in the amount of $61,407,042 was reclassified from accumulated net investment loss to capital. Additionally, a permanent book and tax difference relating to the Fund's investment in other regulated investment companies totaling $20,858 was reclassified from accumulated net realized loss to accumulated net investment loss. Net realized gains and losses may differ for financial reporting purposes primarily as a result of the deferral of losses relating to wash sale transactions and post October losses which are not realized for tax purposes until the first day of the following fiscal year. F. EXPENSE REDUCTIONS During the year ended August 31, 2003, the Fund's custody fee was reduced by $63,774 as a result of credits earned on cash balances. 22 NOTES TO FINANCIAL STATEMENTS August 31, 2003 2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES Under the terms of the Fund's Investment Advisory Agreement, the Adviser will provide investment advice and facilities to the Fund for an annual fee payable monthly as follows: <Table> <Caption> AVERAGE DAILY NET ASSETS % PER ANNUM First $350 million.......................................... .575% Next $350 million........................................... .525% Next $350 million........................................... .475% Over $1.05 billion.......................................... .425% </Table> For the year ended August 31, 2003, the Fund recognized expenses of approximately $338,300 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the Fund is an affiliated person. Under an Accounting Services agreement, the Adviser provides accounting services to the Fund. The Adviser allocates the cost of such services to each fund. For the year ended August 31, 2003, the Fund recognized expenses of approximately $370,100 representing Van Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing accounting services to the Fund, which are reported as part of "Other" expenses in the Statement of Operations. Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as the shareholder servicing agent for the Fund. For the year ended August 31, 2003, the Fund recognized expenses of approximately $23,239,000. Transfer agency fees are determined through negotiations with the Fund's Board of Trustees. Certain officers and trustees of the Fund are also officers and directors of Van Kampen. The Fund does not compensate its officers or trustees who are officers of Van Kampen. The Fund provides deferred compensation and retirement plans for its trustees who are not officers of Van Kampen. Under the deferred compensation plan, trustees may elect to defer all or a portion of their compensation. Amounts deferred are retained by the Fund and to the extent permitted by the 1940 Act, as amended, may be invested in the common shares of those funds selected by the trustees. Investments in such funds of $386,111 are included in "Other" assets on the Statement of Assets and Liabilities at August 31, 2003. Appreciation/depreciation and distributions received from these investments are recorded with an offsetting increase/decrease in the deferred compensation obligation and do not affect the net asset value of the Fund. Benefits under the retirement plan are payable upon retirement for a ten-year period and are based upon each trustee's years of service to the Fund. The maximum annual benefit per trustee under the plan is $2,500. For the year ended August 31, 2003, the Fund paid brokerage commissions to Morgan Stanley DW Inc., (Morgan Stanley) an affiliate of Van Kampen, totaling $573,267. At August 31, 2003, Van Kampen owned 33 shares of Class R. 23 NOTES TO FINANCIAL STATEMENTS August 31, 2003 3. CAPITAL TRANSACTIONS At August 31, 2003, capital aggregated $7,032,595,024, $4,586,075,058, $1,514,704,846, $88,714,658 and $435,931 for Classes A, B, C, D, and R, respectively. For the year ended August 31, 2003, transactions were as follows: <Table> <Caption> SHARES VALUE Sales: Class A.................................................. 25,608,189 $ 774,042,461 Class B.................................................. 8,204,476 216,522,629 Class C.................................................. 1,972,739 53,563,237 Class D.................................................. 451,964 13,823,860 Class R.................................................. 15,715 508,931 ----------- --------------- Total Sales................................................ 36,253,083 $ 1,058,461,118 =========== =============== Repurchases: Class A.................................................. (40,942,557) $(1,225,272,921) Class B.................................................. (17,357,272) (450,924,839) Class C.................................................. (5,845,694) (156,203,721) Class D.................................................. (422,920) (12,944,028) Class R.................................................. (2,052) (69,018) ----------- --------------- Total Repurchases.......................................... (64,570,495) $(1,845,414,527) =========== =============== </Table> At August 31, 2002, capital aggregated $7,519,973,491, $4,840,561,718, $1,622,225,430 and $88,125,329 for Classes A, B, C, and D, respectively. For the year ended August 31, 2002, transactions were as follows: <Table> <Caption> SHARES VALUE Sales: Class A.................................................. 40,681,272 $ 1,574,726,544 Class B.................................................. 14,483,524 494,638,638 Class C.................................................. 4,287,292 151,190,754 Class D.................................................. 344,185 13,581,421 ----------- --------------- Total Sales................................................ 59,796,273 $ 2,234,137,357 =========== =============== Repurchases: Class A.................................................. (46,231,542) $(1,736,987,366) Class B.................................................. (28,641,546) (945,570,350) Class C.................................................. (8,249,546) (278,234,931) Class D.................................................. (345,611) (13,212,960) ----------- --------------- Total Repurchases.......................................... (83,468,245) $(2,974,005,607) =========== =============== </Table> 24 NOTES TO FINANCIAL STATEMENTS August 31, 2003 Class B Shares purchased on or after June 1, 1996, and any dividend reinvestment plan Class B Shares received on such shares, automatically convert to Class A Shares eight years after the end of the calendar month in which the Shares were purchased. Class B Shares purchased before June 1, 1996, and any dividend reinvestment plan Class B Shares received on such shares, automatically convert to Class A Shares six years after the end of the calendar month in which the shares were purchased. For the years ended August 31, 2003 and 2002, 195,817 and 4,015,842 Class B Shares converted to Class A Shares, respectively, and are shown in the above table as sales of Class A Shares and repurchases of Class B Shares. Class C Shares purchased before January 1, 1997, and any dividend reinvestment plan C Shares received on such shares, automatically convert to Class A Shares ten years after the end of the calendar month in which such shares were purchased. Class C Shares purchased on or after January 1, 1997 do not possess a conversion feature. For the years ended August 31, 2003 and 2002, no Class C Shares converted to Class A Shares. Class D and Class R Shares do not possess a conversion feature. Class B and C Shares are offered without a front end sales charge, but are subject to a contingent deferred sales charge (CDSC). The CDSC for Class B and C Shares will be imposed on most redemptions made within five years of the purchase for Class B and one year of the purchase for Class C as detailed in the following schedule. <Table> <Caption> CONTINGENT DEFERRED SALES CHARGE AS A PERCENTAGE OF DOLLAR AMOUNT SUBJECT TO CHARGE -------------------------- YEAR OF REDEMPTION CLASS B CLASS C First....................................................... 5.00% 1.00% Second...................................................... 4.00% None Third....................................................... 3.00% None Fourth...................................................... 2.50% None Fifth....................................................... 1.50% None Sixth and Thereafter........................................ None None </Table> For the year ended August 31, 2003, Van Kampen, as Distributor for the Fund, received net commissions on sales of the Fund's Class A Shares of approximately $1,079,800 and CDSC on redeemed shares of approximately $5,477,700. Sales charges do not represent expenses to the Fund. 4. INVESTMENT TRANSACTIONS During the period, the cost of purchases and proceeds from sales of investments, excluding short-term investments, were $11,438,705,190 and $12,103,787,746, respectively. 25 NOTES TO FINANCIAL STATEMENTS August 31, 2003 5. DISTRIBUTION AND SERVICE PLANS With respect to its Class A Shares, Class B Shares, Class C Shares and Class R Shares, the Fund and its shareholders have adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively the "Plans"). The Plans govern payments for: the distribution of the Fund's Class A Shares, Class B Shares, Class C Shares and Class R Shares; the provision of ongoing shareholder services with respect to such classes of shares; and maintenance of shareholder accounts with respect to such classes of shares. Annual fees under the Plan of up to 0.25% of Class A average daily net assets, 1.00% each for Class B and Class C average daily net assets and .50% of Class R Shares average daily net assets are accrued daily. The amount of distribution expenses incurred by Van Kampen and not yet reimbursed ("unreimbursed receivable") was approximately $59,688,300 and $1,579,300 for Class B and Class C Shares, respectively. These amounts may be recovered from future payments under the distribution plan or CDSC. To the extent the unreimbursed receivable has been fully recovered, any excess 12b-1 fees will be refunded to the Fund on a quarterly basis. Included in the fees for the year ended August 31, 2003 are payments retained by Van Kampen of approximately $16,693,700 and payments made to Morgan Stanley, an affiliate of the Adviser, of approximately $1,166,800. 26 REPORT OF INDEPENDENT AUDITORS To the Shareholders and Board of Trustees of Van Kampen Emerging Growth Fund: We have audited the accompanying statement of assets and liabilities of Van Kampen Emerging Growth Fund (the "Fund"), including the portfolio of investments, as of August 31, 2003, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund's management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. The financial highlights of the Fund for the year ended August 31, 1999 were audited by other auditors whose report dated October 6, 1999 expressed an unqualified opinion on those financial highlights. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of August 31, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the Van Kampen Emerging Growth Fund at August 31, 2003, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and the financial highlights for each of the four years in the period then ended in conformity with accounting principles generally accepted in the United States. -s- Ernst & Young LLP Chicago, Illinois October 1, 2003 27 BOARD OF DIRECTORS AND IMPORTANT ADDRESSES VAN KAMPEN EMERGING GROWTH FUND BOARD OF DIRECTORS DAVID C. ARCH J. MILES BRANAGAN JERRY D. CHOATE ROD DAMMEYER LINDA HUTTON HEAGY R. CRAIG KENNEDY HOWARD J KERR MITCHELL M. MERIN* JACK E. NELSON RICHARD F. POWERS, III* HUGO F. SONNENSCHEIN WAYNE W. WHALEN* - Chairman SUZANNE H. WOOLSEY INVESTMENT ADVISER VAN KAMPEN ASSET MANAGEMENT INC. 1 Parkview Plaza P.O. Box 5555 Oakbrook Terrace, Illinois 60181-5555 DISTRIBUTOR VAN KAMPEN FUNDS INC. 1 Parkview Plaza P.O. Box 5555 Oakbrook Terrace, Illinois 60181-5555 SHAREHOLDER SERVICING AGENT VAN KAMPEN INVESTOR SERVICES INC. P.O. Box 947 Jersey City, New Jersey 07303-0947 CUSTODIAN STATE STREET BANK AND TRUST COMPANY 225 Franklin Street P.O. Box 1713 Boston, Massachusetts 02110 LEGAL COUNSEL SKADDEN, ARPS, SLATE MEAGHER & FLOM (ILLINOIS) 333 West Wacker Drive Chicago, Illinois 60606 INDEPENDENT AUDITORS ERNST & YOUNG LLP 233 South Wacker Drive Chicago, Illinois 60606 * "Interested persons" of the Fund, as defined in the Investment Company Act of 1940, as amended. 28 TRUSTEES AND OFFICERS The business and affairs of the Fund are managed under the direction of the Fund's Board of Trustees and the Fund's officers appointed by the Board of Trustees. The tables below list the trustees and executive officers of the Fund and their principal occupations during the last five years, other directorships held by trustees and their affiliations, if any, with Van Kampen Investments Inc. ("Van Kampen Investments"), Van Kampen Investment Advisory Corp. ("Advisory Corp."), Van Kampen Asset Management Inc. ("Asset Management"), Van Kampen Funds Inc. (the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van Kampen Investor Services Inc. ("Investor Services"). Advisory Corp. and Asset Management sometimes are referred to herein collectively as the "Advisers." The term "Fund Complex" includes each of the investment companies advised by the Advisers or their affiliates as of the date of this Statement of Additional Information. Trustees serve until reaching their retirement age or until their successors are duly elected and qualified. Officers are annually elected by the trustees. INDEPENDENT TRUSTEES <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE David C. Arch (58) Trustee Trustee Chairman and Chief 90 Trustee/Director/Managing Blistex Inc. since 2003 Executive Officer of General Partner of funds 1800 Swift Drive Blistex Inc., a consumer in the Fund Complex. Oak Brook, IL 60523 health care products manufacturer. Former Director of the World Presidents Organization-Chicago Chapter. Director of the Heartland Alliance, a nonprofit organization serving human needs based in Chicago. J. Miles Branagan (71) Trustee Trustee Private investor. 88 Trustee/Director/Managing 1632 Morning Mountain Road since 1991 Co-founder, and prior to General Partner of funds Raleigh, NC 27614 August 1996, Chairman, in the Fund Complex. Chief Executive Officer and President, MDT Corporation (now known as Getinge/Castle, Inc., a subsidiary of Getinge Industrier AB), a company which develops, manufactures, markets and services medical and scientific equipment. </Table> 29 <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Jerry D. Choate (65) Trustee Trustee Prior to January 1999, 88 Trustee/Director/Managing 33971 Selva Road since 1999 Chairman and Chief General Partner of funds Suite 130 Executive Officer of the in the Fund Complex. Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a ("Allstate") and Allstate biotechnological company, Insurance Company. Prior and Director of Valero to January 1995, Energy Corporation, an President and Chief independent refining Executive Officer of company. Allstate. Prior to August 1994, various management positions at Allstate. Rod Dammeyer (62) Trustee Trustee President of CAC, llc., a 90 Trustee/Director/Managing CAC, llc. since 2003 private company offering General Partner of funds 4350 LaJolla Village Drive capital investment and in the Fund Complex. Suite 980 management advisory Director of TeleTech San Diego, CA 92122-6223 services. Prior to July Holdings Inc., 2000, Managing Partner of Stericycle, Inc., Equity Group Corporate TheraSense, Inc., GATX Investment (EGI), a Corporation, Arris Group, company that makes Inc. and Trustee of the private investments in University of Chicago other companies. Hospitals and Health Systems. Prior to May 2002, Director of Peregrine Systems Inc. Prior to February 2001, Vice Chairman and Director of Anixter International, Inc. and IMC Global Inc. Prior to July 2000, Director of Allied Riser Communications Corp., Matria Healthcare Inc., Transmedia Networks, Inc., CNA Surety, Corp. and Grupo Azcarero Mexico (GAM). Prior to April 1999, Director of Metal Management, Inc. </Table> 30 <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Linda Hutton Heagy (55) Trustee Trustee Managing Partner of 88 Trustee/Director/Managing Heidrick & Struggles since 1995 Heidrick & Struggles, an General Partner of funds 233 South Wacker Drive executive search firm. in the Fund Complex. Suite 7000 Trustee on the University Chicago, IL 60606 of Chicago Hospitals Board, Vice Chair of the Board of the YMCA of Metropolitan Chicago and a member of the Women's Board of the University of Chicago. Prior to 1997, Partner of Ray & Berndtson, Inc., an executive recruiting firm. Prior to 1996, Trustee of The International House Board, a fellowship and housing organization for international graduate students. Prior to 1995, Executive Vice President of ABN AMRO, N.A., a bank holding company. Prior to 1992, Executive Vice President of La Salle National Bank. R. Craig Kennedy (51) Trustee Trustee Director and President of 88 Trustee/Director/Managing 11 DuPont Circle, N.W. since 1995 the German Marshall Fund General Partner of funds Washington, D.C. 20016 of the United States, an in the Fund Complex. independent U.S. foundation created to deepen understanding, promote collaboration and stimulate exchanges of practical experience between Americans and Europeans. Formerly, advisor to the Dennis Trading Group Inc., a managed futures and option company that invests money for individuals and institutions. Prior to 1992, President and Chief Executive Officer, Director and member of the Investment Committee of the Joyce Foundation, a private foundation. Howard J Kerr (67) Trustee Trustee Prior to 1998, President 90 Trustee/Director/Managing 736 North Western Avenue since 2003 and Chief Executive General Partner of funds P.O. Box 317 Officer of Pocklington in the Fund Complex. Lake Forest, IL 60045 Corporation, Inc., an Director of the Lake investment holding Forest Bank & Trust. company. Director of the Marrow Foundation </Table> 31 <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Jack E. Nelson (67) Trustee Trustee President of Nelson 88 Trustee/Director/Managing 423 Country Club Drive since 1995 Investment Planning General Partner of funds Winter Park, FL 32789 Services, Inc., a in the Fund Complex. financial planning company and registered investment adviser in the State of Florida. President of Nelson Ivest Brokerage Services Inc., a member of the NASD, Securities Investors Protection Corp. and the Municipal Securities Rulemaking Board. President of Nelson Sales and Services Corporation, a marketing and services company to support affiliated companies. Hugo F. Sonnenschein (62) Trustee Trustee President Emeritus and 90 Trustee/Director/Managing 1126 E. 59th Street since 2003 Honorary Trustee of the General Partner of funds Chicago, IL 60637 University of Chicago and in the Fund Complex. the Adam Smith Director of Winston Distinguished Service Laboratories, Inc. Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago. Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences. Suzanne H. Woolsey (61) Trustee Trustee Chief Communications 88 Trustee/Director/Managing 2101 Constitution Ave., N.W. since 1999 Officer of the National General Partner of funds Room 285 Academy of in the Fund Complex. Washington, D.C. 20418 Sciences/National Director of Neurogen Research Council, an Corporation, a independent, federally pharmaceutical company, chartered policy since January 1998. institution, since 2001 and previously Chief Operating Officer from 1993 to 2001. Director of the Institute for Defense Analyses, a federally funded research and development center, Director of the German Marshall Fund of the United States, and Trustee of Colorado College. Prior to 1993, Executive Director of the Commission on Behavioral and Social Sciences and Education at the National Academy of Sciences/National Research Council. From 1980 through 1989, Partner of Coopers & Lybrand. </Table> 32 INTERESTED TRUSTEES* <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Mitchell M. Merin* (50) Trustee, Trustee President and Chief 88 Trustee/Director/Managing 1221 Avenue of the Americas President since 1999 Executive Officer of General Partner of funds New York, NY 10020 and Chief funds in the Fund in the Fund Complex. Executive Complex. Chairman, Officer President, Chief Executive Officer and Director of the Advisers and VK Advisors Inc. since December 2002. Chairman, President and Chief Executive Officer of Van Kampen Investments since December 2002. Director of Van Kampen Investments since December 1999. Chairman and Director of Van Kampen Funds Inc. since December 2002. President, Director and Chief Operating Officer of Morgan Stanley Investment Management since December 1998. President and Director since April 1997 and Chief Executive Officer since June 1998 of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Chairman, Chief Executive Officer and Director of Morgan Stanley Distributors Inc. since June 1998. Chairman since June 1998, and Director since January 1998 of Morgan Stanley Trust. Director of various Morgan Stanley subsidiaries. President of the Morgan Stanley Funds since May 1999. Previously Chief Executive Officer of Van Kampen Funds Inc. from December 2002 to July 2003, Chief Strategic Officer of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. and Executive Vice President of Morgan Stanley Distributors Inc. from April 1997 to June 1998. Chief Executive Officer from September 2002 to April 2003 and Vice President from May 1997 to April 1999 of the Morgan Stanley Funds. </Table> 33 <Table> <Caption> NUMBER OF TERM OF FUNDS IN OFFICE AND FUND POSITION(S) LENGTH OF COMPLEX NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE Richard F. Powers, III* (57) Trustee Trustee Advisory Director of 90 Trustee/Director/Managing 1 Parkview Plaza since 1999 Morgan Stanley. Prior to General Partner of funds P.O. Box 5555 December 2002, Chairman, in the Fund Complex. Oakbrook Terrace, IL 60181 Director, President, Chief Executive Officer and Managing Director of Van Kampen Investments and its investment advisory, distribution and other subsidiaries. Prior to December 2002, President and Chief Executive Officer of funds in the Fund Complex. Prior to May 1998, Executive Vice President and Director of Marketing at Morgan Stanley and Director of Dean Witter, Discover & Co. and Dean Witter Realty. Prior to 1996, Director of Dean Witter Reynolds Inc. Wayne W. Whalen* (64) Trustee Trustee Partner in the law firm 90 Trustee/Director/Managing 333 West Wacker Drive since 1995 of Skadden, Arps, Slate, General Partner of funds Chicago, IL 60606 Meagher & Flom in the Fund Complex. (Illinois), legal counsel to funds in the Fund Complex. </Table> * Such trustee is an "interested person" (within the meaning of Section 2(a)(19) of the 1940 Act). Mr. Whalen is an interested person of certain funds in the Fund Complex by reason of his firm currently acting as legal counsel to such funds in the Fund Complex. Messrs. Merin and Powers are interested persons of funds in the Fund Complex and the Advisers by reason of their current or former positions with Morgan Stanley or its affiliates. 34 OFFICERS <Table> <Caption> TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS Stephen L. Boyd (62) Vice President Officer Managing Director of Global Research Investment Management. 2800 Post Oak Blvd. since 1998 Vice President of funds in the Fund Complex. Prior to 45th Floor December 2002, Chief Investment Officer of Van Kampen Houston, TX 77056 Investments and President and Chief Operations Officer of the Advisers and Van Kampen Advisors Inc. Prior to May 2002, Executive Vice President and Chief Investment Officer of funds in the Fund Complex. Prior to May 2001, Managing Director and Chief Investment Officer of Van Kampen Investments, and Managing Director and President of the Advisers and Van Kampen Advisors Inc. Prior to December 2000, Executive Vice President and Chief Investment Officer of Van Kampen Investments, and President and Chief Operating Officer of the Advisers. Prior to April 2000, Executive Vice President and Chief Investment Officer for Equity Investments of the Advisers. Prior to October 1998, Vice President and Senior Portfolio Manager with AIM Capital Management, Inc. Prior to February 1998, Senior Vice President and Portfolio Manager of Van Kampen American Capital Asset Management, Inc., Van Kampen American Capital Investment Advisory Corp. and Van Kampen American Capital Management, Inc. Stefanie V. Chang (36) Vice President Officer Executive Director of Morgan Stanley Investment Management. 1221 Avenue of the Americas since 2003 Vice President of funds in the Fund Complex. New York, NY 10020 Joseph J. McAlinden (60) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan 1221 Avenue of the Americas President and Chief since 2002 Stanley Investment Advisors Inc., Morgan Stanley Investment New York, NY 10020 Investment Officer Management Inc. and Morgan Stanley Investments LP and Director of Morgan Stanley Trust for over 5 years. Executive Vice President and Chief Investment Officer of funds in the Fund Complex. Managing Director and Chief Investment Officer of Van Kampen Investments, the Advisers and Van Kampen Advisors Inc. since December 2002. </Table> 35 <Table> <Caption> TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS John R. Reynoldson (50) Vice President Officer Executive Director and Portfolio Specialist of the Advisers 1 Parkview Plaza since 2000 and Van Kampen Advisors Inc. Vice President of funds in the P.O. Box 5555 Fund Complex. Prior to July 2001, Principal and Co-head of Oakbrook Terrace, IL 60181 the Fixed Income Department of the Advisers and Van Kampen Advisors Inc. Prior to December 2000, Senior Vice President of the Advisers and Van Kampen Advisors Inc. Prior to May 2000, Senior Vice President of the investment grade taxable group for the Advisers. Prior to June 1999, Senior Vice President of the government securities bond group for Asset Management. Ronald E. Robison (64) Executive Vice Officer Chief Executive Officer and Chairman of Investor Services. 1221 Avenue of the Americas President and since 2003 Executive Vice President and Principal Executive Officer of New York, NY 10020 Principal Executive funds in the Fund Complex. Chief Global Operations Officer Officer and Managing Director of Morgan Stanley Investment Management Inc. Managing Director of Morgan Stanley. Managing Director and Director of Morgan Stanley Investment Advisors Inc. and Morgan Stanley Services Company Inc. Chief Executive Officer and Director of Morgan Stanley Trust. Vice President of the Morgan Stanley Funds. A. Thomas Smith III (46) Vice President and Officer Managing Director of Morgan Stanley, Managing Director and 1221 Avenue of the Americas Secretary since 1999 Director of Van Kampen Investments, Director of the New York, NY 10020 Advisers, Van Kampen Advisors Inc., the Distributor, Investor Services and certain other subsidiaries of Van Kampen Investments. Managing Director and General Counsel-Mutual Funds of Morgan Stanley Investment Advisors, Inc. Vice President and Secretary of funds in the Fund Complex. Prior to July 2001, Managing Director, General Counsel, Secretary and Director of Van Kampen Investments, the Advisers, the Distributor, Investor Services, and certain other subsidiaries of Van Kampen Investments. Prior to December 2000, Executive Vice President, General Counsel, Secretary and Director of Van Kampen Investments, the Advisers, Van Kampen Advisors Inc., the Distributor, Investor Services and certain other subsidiaries of Van Kampen Investments. Prior to January 1999, Vice President and Associate General Counsel to New York Life Insurance Company ("New York Life"), and prior to March 1997, Associate General Counsel of New York Life. Prior to December 1993, Assistant General Counsel of The Dreyfus Corporation. Prior to August 1991, Senior Associate, Willkie Farr & Gallagher. Prior to January 1989, Staff Attorney at the Securities and Exchange Commission, Division of Investment Management, Office of Chief Counsel. </Table> 36 <Table> <Caption> TERM OF OFFICE AND POSITION(S) LENGTH OF NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S) ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS John L. Sullivan (48) Vice President, Chief Officer Director and Managing Director of Van Kampen Investments, 1 Parkview Plaza Financial Officer and since 1996 the Advisers, Van Kampen Advisors Inc. and certain other P.O. Box 5555 Treasurer subsidiaries of Van Kampen Investments. Vice President, Oakbrook Terrace, IL 60181 Chief Financial Officer and Treasurer of funds in the Fund Complex. Head of Fund Accounting for Morgan Stanley Investment Management. Prior to December 2002, Executive Director of Van Kampen Investments, the Advisers and Van Kampen Advisors Inc. </Table> 37 Van Kampen Privacy Notice The Van Kampen companies and investment products* respect your right to privacy. We also know that you expect us to conduct and process your business in an accurate and efficient manner. To do so, we must collect and maintain certain nonpublic personal information about you. This is information we collect from you on applications or other forms, and from the transactions you conduct with us, our affiliates, or third parties. We may also collect information you provide when using our Web site, and text files (also known as "cookies") may be placed on your computer to help us to recognize you and to facilitate transactions you initiate. We do not disclose any nonpublic personal information about you or any of our former customers to anyone, except as permitted by law. For instance, so that we may continue to offer you Van Kampen investment products and services that meet your investing needs, and to effect transactions that you request or authorize, we may disclose the information we collect to companies that perform services on our behalf, such as printers and mailers that assist us in the distribution of investor materials. These companies will use this information only for the services for which we hired them, and are not permitted to use or share this information for any other purpose. To protect your nonpublic personal information internally, we permit access to it only by authorized employees, and maintain physical, electronic and procedural safeguards to guard your nonpublic personal information. * Includes Van Kampen Investments Inc., Van Kampen Investment Advisory Corp., Van Kampen Asset Management Inc., Van Kampen Advisors Inc., Van Kampen Management Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van Kampen System Inc. and Van Kampen Exchange Corp., as well as the many Van Kampen mutual funds and Van Kampen unit investment trusts. The Statement of Additional Information includes additional information about Fund trustees and is available, without charge, upon request by calling (800) 847-2424. Van Kampen Funds Inc. 1 Parkview Plaza, P.O. Box 5555 Oakbrook Terrace, IL 60181-5555 www.vankampen.com (VAN KAMPEN INVESTMENTS LOGO) Copyright (C)2003 Van Kampen Funds Inc. All rights reserved. Member NASD/SIPC. 16, 116, 216, 516, 316 EMG ANR 10/03 12029J03-AP-10/03 Item 2. Code of Ethics. (a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies to its principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the Fund or a third party. (b) No information need be disclosed pursuant to this paragraph. (c) Not applicable. (d) Not applicable. (e) Not applicable. (f) (1) The Fund's Code of Ethics is attached hereto as Exhibit 10A. (2) Not applicable. (3) Not applicable. Item 3. Audit Committee Financial Expert. The Fund's Board of Trustees has determined that it has three "audit committee financial experts" serving on its audit committee, each of whom are "independent" Trustees: J. Miles Branagan, Jerry Choate and R. Craig Kennedy. Under applicable securities laws, a person who is determined to be an audit committee financial expert will not be deemed an "expert" for any purpose, including without limitation for the purposes of Section 11 of the Securities Act of 1933, as a result of being designated or identified as an audit committee financial expert. The designation or identification of a person as an audit committee financial expert does not impose on such person any duties, obligations, or liabilities that are greater than the duties, obligations, and liabilities imposed on such person as a member of the audit committee and Board of Trustees in the absence of such designation or identification. Item 4. Principal Accountant Fees and Services. Applicable only for reports covering fiscal years ending on or after December 15, 2003. Item 5. Audit Committee of Listed Registrants. Applicable only for reports covering periods ending on or after the earlier of (i) the first annual shareholder meeting after January 15, 2004 or (ii) October 31, 2004. Item 6. [Reserved.] Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies. Applicable only to annual reports filed by closed-end funds. Item 8. [Reserved.] Item 9. Controls and Procedures (a) The Fund's principal executive officer and principal financial officer have concluded that the Fund's disclosure controls and procedures are sufficient to ensure that information required to be disclosed by the Fund in this Form N-CSR was recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, based upon such officers' evaluation of these controls and procedures as of a date within 90 days of the filing date of the report. There were no significant changes or corrective actions with regard to significant deficiencies or material weaknesses in the Fund's internal controls or in other factors that could significantly affect the Fund's internal controls subsequent to the date of their evaluation. (b) There were no changes in the registrant's internal control over financial reporting that occurred during the registrant's second fiscal half-year that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. Item 10. Exhibits. (a) The Code of Ethics for Principal Executive and Senior Financial Officers is attached hereto. (b) A separate certification for each Principal Executive Officer and Principal Financial Officer of the registrant are attached hereto as part of EX-99.CERT. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Van Kampen Emerging Growth Fund ------------------------------------------- By: /s/ Ronald E. Robison --------------------------------------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: October 20, 2003 Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By: /s/ Ronald E. Robison --------------------------------------------------- Name: Ronald E. Robison Title: Principal Executive Officer Date: October 20, 2003 By: /s/ John L. Sullivan --------------------------------------------------- Name: John L. Sullivan Title: Principal Financial Officer Date: October 20, 2003