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 811-02423
Van Kampen Corporate Bond 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: 2/29/04
Item 1. Report to Shareholders.
The Fund's semi-annual report transmitted to shareholders pursuant to
Rule 30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Corporate Bond Fund performed during the semiannual 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 February 29,
2004.
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.
<Table>
<Caption>
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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</Table>
Performance Summary
<Table>
<Caption>
A SHARES B SHARES C SHARES
since 09/23/71 since 09/28/92 since 08/30/93
- ----------------------------------------------------------------------------------------------
AVERAGE ANNUAL W/O SALES W/SALES W/O SALES W/SALES W/O SALES W/SALES
TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 8.03% 7.87% 6.15% 6.15% 5.22% 5.22%
10-year 6.39 5.88 5.89 5.89 5.58 5.58
5-year 6.12 5.10 5.34 5.10 5.34 5.34
1-year 8.96 3.78 8.32 4.32 8.32 7.32
6-month 6.39 1.31 6.00 2.00 6.00 5.00
- ----------------------------------------------------------------------------------------------
30-Day SEC Yield 3.79% 3.23% 3.23%
</Table>
Past performance is no guarantee of future results and current performance may
be lower or higher than the figures shown. For more up-to-date information,
including month-end performance figures, please visit vankampen.com or speak
with your financial advisor. Investment returns 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. Average annual total return with sales charges includes payment
of the maximum sales charge of 4.75 percent for Class A shares, a contingent
deferred sales charge of 4.00 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. The
since inception returns for Class C shares reflect the conversion of Class C
shares into Class A shares ten years after purchase. See footnote 3 in the Notes
to Financial Statements for additional information. Figures shown above assume
reinvestment of all dividends and capital gains. SEC yield is a calculation for
determining the amount of portfolio income, excluding non-income items as
prescribed by the SEC. Yields are subject to change.
Lehman Brothers Credit Bond Index is a market-weighted index of investment-grade
corporate fixed-rate debt issues with maturities of one year or more. Lipper
Corporate BBB-Rated Index is an index of funds with similar investment
objectives as this fund. Indexes do not include any expenses, fees or sales
charges, which would lower performance. Indexes are unmanaged and should not be
considered an investment.
1
Fund Report
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 29, 2004
Van Kampen Corporate Bond Fund is managed by the adviser's Taxable Fixed Income
team. Current members of the team include Sheila Finnerty, Managing Director,
and David S. Horowitz and Gordon W. Loery, Executive Directors.(1)
MARKET CONDITIONS
Over the six-month reporting period, the overall environment for investment-
grade corporate bonds remained generally positive. Weaker economic reports in
September caused some investors to retreat to Treasuries, but this move was
short-lived. In the fourth quarter of 2003, data once again indicated a strong
revival of economic activity. This boosted investor confidence in further
economic growth and improvement in corporate earnings, spurring demand for
corporate bonds over lower-yielding Treasuries.
Virtually all areas of the corporate market benefited, though the impact was
greatest among lower-rated corporate securities. Non-investment grade high-yield
bonds outperformed their higher-rated counterparts. Within the investment-grade
realm, BBB rated bonds offered the strongest performance. Investors came to
favor these lower-rated bonds not only for their higher yields--which are
particularly attractive in a low-rate environment--but also for their capital
appreciation potential in the face of a strengthening economic environment.
Continuing a trend seen earlier in 2003, the sectors and individual bonds that
had been among the most beaten down in 2002 offered some of the strongest
performance over the period. These included bonds in the technology,
telecommunications, and cable sectors, all of which benefited from investors'
perceptions of their reasonable valuations, improving corporate governance, and
recovering earnings prospects. Weaker-performing bonds, however, came from more
stable, steady-growth areas of the economy, such as food producers and drug
makers.
Yield spreads--the difference in yield between corporate bonds and similar-
maturity Treasuries--have contracted significantly as corporate bonds have
rebounded from their previously depressed levels. As a result, individual bond
selection--rather than exposure to broader market sectors--has become a crucial
factor in performance. It appears that the "easy money" that could be made in
the earlier days of the corporate bond recovery is now past.
The Federal Reserve kept short-term interest rates low throughout the period.
Market interest rates generally declined over the six months after their run-up
during the summer of 2003.
(1)Team members may change without notice at any time.
2
PERFORMANCE ANALYSIS
The fund returned 6.39 percent for the reporting period, yet slightly
underperformed its benchmark indexes, the Lehman Brothers Credit Bond Index and
the Lipper Corporate BBB-Rated Index. (Performance is for Class A shares,
unadjusted for sales charge. See table below.)
The fund was generally positioned to benefit from a recovering economy, an
approach that for the most part contributed positively to performance. Our
significant allocation to BBB rated bonds--those in the lowest tier of
investment-grade debt--helped to boost the fund's returns as this sector of the
market outperformed higher-rated bonds.
In keeping with our expectation of an improving economic environment, we favored
bonds from those sectors we believed were positioned to benefit significantly
from that turnaround. Among the areas we overweighted relative to the benchmarks
over the past six months were financials, transportation, utilities, and energy.
We also continued to keep the fund's duration (its sensitivity to interest-rate
changes) shorter than that of its benchmarks. We believe this positioning was
prudent, given the signs of strength in the economy. As the economy continues to
improve, in time the Federal Reserve is likely to act to increase rates--and in
that case, a shorter duration would be beneficial to performance. However, the
Federal Reserve did not take such action during the period, and in fact market
interest rates fell slightly for the six months. As a result, our duration
positioning hindered the fund's performance somewhat.
In keeping with our strategy during the last reporting period, we maintained our
underweighted position in bonds in the five- to 20-year maturity range. In our
opinion, many bonds in this part of the yield curve were simply too expensive.
This strategy helped to keep price risk at bay and to keep the fund's duration
shorter than that of the benchmarks. Given that the Federal Reserve may become
more active later in the year--perhaps after the Presidential
election--maintaining our shorter duration stance seems appropriate at this
point.
After such a strong period for corporate bonds, returns going forward are likely
to be driven primarily by bond coupons, with little contribution from capital
appreciation. As a result, returns are likely to be more moderate going forward.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDING FEBRUARY 29, 2004
<Table>
<Caption>
- ------------------------------------------------------------------------------
LEHMAN BROTHERS LIPPER CORPORATE
CLASS A CLASS B CLASS C CREDIT BOND INDEX BBB-RATED INDEX
6.39% 6.00% 6.00% 6.59% 6.77%
- ------------------------------------------------------------------------------
</Table>
The performance for the three share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definitions.
3
That said, we believe that the emerging economic recovery makes this a
reasonable time to hold corporate debt. Among the bond sectors we believe may
present opportunities in this environment are transportation, health care,
utilities, forest products, and energy. We will continue to maintain a well-
diversified portfolio, with exposure to a wide variety of sectors and individual
issues. In a market in which individual bond selection may play a driving role
in returns, we will continue to combine top-down macroeconomic considerations
with bottom-up security research.
There is no guarantee the securities mentioned will continue to perform well or
be held by the fund in the future.
<Table>
TOP 5 INDUSTRIES AS OF 2/29/04 RATINGS ALLOCATIONS AS OF 2/29/04
Captive Finance 7.5% AAA 1.7%
Electric 6.6 AA 6.1
Integrated Energy 6.1 A 27.8
Banking 5.7 BBB 52.4
Telecommunications 5.5 BB 8.8
B 2.1
Non-Rated 1.1
</Table>
Subject to change daily. All percentages are as a percentage of long-term
investments. Provided for informational purposes only and should not be deemed
as a recommendation to buy securities in the industries shown above. Van Kampen
is a wholly owned subsidiary of a global securities firm which is engaged in a
wide range of financial services including, for example, securities trading and
brokerage activities, investment banking, research and analysis, financing and
financial advisory services. Ratings allocations based upon ratings as issued by
Standard and Poor's.
4
ANNUAL HOUSEHOLDING NOTICE
To reduce fund 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 prospectuses
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 trust's policies and procedures with respect to the
voting of proxies relating to the trust'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.
5
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CORPORATE BONDS 87.3%
AEROSPACE & DEFENSE 0.8%
$1,000 Lockheed Martin Corp. ....................... 8.200% 12/01/09 $ 1,233,043
535 Lockheed Martin Corp. ....................... 8.500 12/01/29 717,473
1,960 Raytheon Co. ................................ 8.300 03/01/10 2,384,554
145 Raytheon Co. ................................ 4.850 01/15/11 149,599
------------
4,484,669
------------
AUTOMOTIVE 3.2%
4,290 DaimlerChrysler NA Holding Corp. ............ 7.300 01/15/12 4,890,845
2,915 DaimlerChrysler NA Holding Corp. ............ 8.500 01/18/31 3,549,735
900 Delphi Corp. ................................ 6.125 05/01/04 905,937
5,830 Ford Motor Co. .............................. 7.450 07/16/31 5,873,503
1,380 General Motors Acceptance Corp. ............. 4.500 07/15/06 1,426,044
305 Hertz Corp. ................................. 7.625 08/15/07 335,581
------------
16,981,645
------------
BANKING 5.2%
5,120 Bank of America Corp. ....................... 3.375 02/17/09 5,109,873
1,145 Citigroup, Inc. ............................. 6.000 02/21/12 1,273,337
3,820 Citigroup, Inc. ............................. 5.625 08/27/12 4,138,515
160 Citigroup, Inc. ............................. 6.625 06/15/32 179,067
5,355 JP Morgan Chase & Co. ....................... 6.750 02/01/11 6,125,815
700 MBNA America Bank NA......................... 7.125 11/15/12 823,017
3,890 MBNA Corp. .................................. 6.125 03/01/13 4,282,310
3,100 Wachovia Corp. .............................. 3.625 02/17/09 3,125,129
1,690 Washington Mutual Bank FA.................... 5.500 01/15/13 1,781,373
490 Washington Mutual, Inc. ..................... 8.250 04/01/10 598,049
------------
27,436,485
------------
BROKERAGE 1.6%
2,715 Goldman Sachs Group, Inc. ................... 6.875 01/15/11 3,136,751
380 Goldman Sachs Group, Inc. ................... 6.600 01/15/12 431,931
1,115 Goldman Sachs Group, Inc. ................... 5.250 10/15/13 1,145,687
2,000 Lehman Brothers Holdings, Inc. .............. 8.500 05/01/07 2,350,068
1,355 Lehman Brothers Holdings, Inc. .............. 6.625 01/18/12 1,556,554
------------
8,620,991
------------
BUILDING MATERIALS 0.6%
1,335 Centex Corp. ................................ 7.500 01/15/12 1,576,060
1,160 Mohawk Industries, Inc., Ser D............... 7.200 04/15/12 1,339,765
------------
2,915,825
------------
CAPTIVE FINANCE 6.8%
5,220 Countrywide Home Loans, Inc. ................ 3.250 05/21/08 5,207,415
555 Ford Motor Credit Co. ....................... 7.375 10/28/09 611,265
8,740 Ford Motor Credit Co. ....................... 7.250 10/25/11 9,482,577
3,600 General Electric Capital Corp. .............. 6.750 03/15/32 4,139,780
3,445 General Motors Acceptance Corp. ............. 6.875 09/15/11 3,720,962
7,450 General Motors Acceptance Corp. ............. 8.000 11/01/31 8,231,840
</Table>
6 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CAPTIVE FINANCE (CONTINUED)
$2,000 Heller Financial, Inc. ...................... 6.375% 03/15/06 $ 2,187,830
2,500 International Lease Finance Corp. ........... 8.375 12/15/04 2,638,085
------------
36,219,754
------------
CHEMICALS 0.3%
120 FMC Corp. ................................... 10.250 11/01/09 141,600
1,420 ICI Wilmington, Inc. ........................ 4.375 12/01/08 1,445,483
------------
1,587,083
------------
CONSTRUCTION MACHINERY 0.6%
2,915 Kennametal, Inc. ............................ 7.200 06/15/12 3,219,600
------------
CONSUMER PRODUCTS 0.5%
2,380 Xerox Corp. ................................. 7.125 06/15/10 2,534,700
------------
DIVERSIFIED MANUFACTURING 2.6%
2,260 Cooper Industries, Inc. ..................... 5.250 07/01/07 2,436,422
540 Honeywell International, Inc. ............... 7.500 03/01/10 644,397
4,370 Honeywell International, Inc. ............... 6.125 11/01/11 4,895,562
1,450 Hutchison Whampoa International Ltd., 144A-
Private Placement (Cayman Islands) (a)....... 5.450 11/24/10 1,493,098
1,890 Hutchison Whampoa International Ltd., 144A-
Private Placement (Cayman Islands) (a)....... 6.500 02/13/13 2,002,326
475 Tyco International Group SA (Luxembourg)..... 5.800 08/01/06 504,419
140 Tyco International Group SA (Luxembourg)..... 6.750 02/15/11 154,865
1,275 Tyco International Group SA (Luxembourg)..... 6.375 10/15/11 1,379,564
------------
13,510,653
------------
ELECTRIC 6.0%
1,595 Appalachian Power Co., Ser H................. 5.950 05/15/33 1,592,172
1,140 Cincinnati Gas & Electric Co. ............... 5.700 09/15/12 1,222,046
910 Cincinnati Gas & Electric Co., Ser A......... 5.400 06/15/33 859,996
1,030 Cincinnati Gas & Electric Co., Ser B......... 5.375 06/15/33 969,792
1,705 Columbus Southern Power Co., Ser D........... 6.600 03/01/33 1,886,323
1,495 Detroit Edison Co. .......................... 6.125 10/01/10 1,667,211
1,640 Duquesne Light Co., Ser O.................... 6.700 04/15/12 1,877,403
1,205 Entergy Gulf States, Inc. 144A-Private
Placement (a)................................ 3.600 06/01/08 1,176,115
2,235 Exelon Corp. ................................ 6.750 05/01/11 2,549,458
1,930 FirstEnergy Corp., Ser B..................... 6.450 11/15/11 2,098,636
925 FirstEnergy Corp., Ser C..................... 7.375 11/15/31 1,026,167
560 Indianapolis Power & Light Co., 144A-Private
Placement (a)................................ 6.300 07/01/13 608,416
1,245 Monongahela Power Co. ....................... 5.000 10/01/06 1,271,456
2,457 Niagara Mohawk Power Corp., Ser F............ 7.625 10/01/05 2,657,948
1,450 Nisource Finance Corp. ...................... 7.625 11/15/05 1,583,127
2,775 Ohio Edison Co., 144A-Private Placement
(a).......................................... 5.450 05/01/15 2,818,956
250 Ohio Power Co., Ser G........................ 6.600 02/15/33 276,565
</Table>
See Notes to Financial Statements 7
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
ELECTRIC (CONTINUED)
$1,400 PSEG Energy Holdings......................... 8.625% 02/15/08 $ 1,515,500
440 Southern CA Edison Co. ...................... 5.000 01/15/14 448,421
590 TXU Corp., Ser J............................. 6.375 06/15/06 637,200
1,790 TXU Energy Co. .............................. 7.000 03/15/13 2,038,697
140 Wisconsin Electric Power..................... 5.625 05/15/33 140,167
645 Wisconsin Energy Corp. ...................... 6.200 04/01/33 669,326
------------
31,591,098
------------
ENVIRONMENTAL SERVICES 1.8%
535 Allied Waste North America, Inc., 144A-
Private Placement (a)........................ 6.500 11/15/10 545,700
810 Allied Waste North America, Inc., Ser B...... 8.500 12/01/08 907,200
1,185 Republic Services, Inc. ..................... 6.750 08/15/11 1,323,868
1,220 Waste Management, Inc. ...................... 7.000 10/15/06 1,354,294
1,745 Waste Management, Inc. ...................... 7.375 08/01/10 2,045,388
2,600 Waste Management, Inc. ...................... 7.000 07/15/28 2,889,302
315 Waste Management, Inc. ...................... 7.375 05/15/29 364,739
------------
9,430,491
------------
FOOD/BEVERAGE 1.8%
2,000 ConAgra Foods, Inc. ......................... 7.500 09/15/05 2,167,372
2,200 Miller Brewing Co., 144A- Private Placement
(a).......................................... 4.250 08/15/08 2,269,703
2,970 Smithfield Foods, Inc., Ser B................ 8.000 10/15/09 3,255,862
295 Smithfield Foods, Inc., Ser B................ 7.750 05/15/13 318,600
1,035 YUM! Brands, Inc. ........................... 8.875 04/15/11 1,283,400
------------
9,294,937
------------
GAMING 1.7%
3,310 Harrahs Operating Co., Inc. ................. 8.000 02/01/11 3,946,576
2,555 MGM Mirage, Inc. ............................ 8.500 09/15/10 2,995,737
1,385 Park Place Entertainment Corp. .............. 7.500 09/01/09 1,551,200
620 Station Casinos, Inc. ....................... 8.375 02/15/08 668,825
------------
9,162,338
------------
HEALTHCARE 3.7%
4,835 Aetna, Inc. ................................. 7.375 03/01/06 5,325,433
430 Aetna, Inc. ................................. 7.875 03/01/11 518,603
1,085 AmerisourceBergen Corp. ..................... 8.125 09/01/08 1,212,487
2,000 HCA, Inc. ................................... 6.910 06/15/05 2,104,062
2,055 HCA, Inc. ................................... 6.300 10/01/12 2,182,706
365 HCA, Inc. ................................... 9.000 12/15/14 455,108
1,010 HCA, Inc. ................................... 7.190 11/15/15 1,129,306
1,590 Tenet Healthcare Corp. ...................... 7.375 02/01/13 1,478,700
3,565 Tenet Healthcare Corp. ...................... 6.875 11/15/31 2,958,950
1,840 Unitedhealth Group, Inc. .................... 5.200 01/17/07 1,971,915
------------
19,337,270
------------
</Table>
8 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
HOME CONSTRUCTION 0.6%
$1,260 D.R. Horton, Inc. ........................... 6.875% 05/01/13 $ 1,363,950
485 Pulte Homes, Inc. ........................... 7.875 08/01/11 579,009
1,465 Pulte Homes, Inc. ........................... 6.375 05/15/33 1,453,312
------------
3,396,271
------------
INTEGRATED ENERGY 5.5%
5,345 Conoco, Inc. ................................ 6.950 04/15/29 6,234,953
1,630 Constellation Energy Group................... 7.600 04/01/32 1,962,567
475 Consumers Energy Co., Ser D.................. 5.375 04/15/13 486,698
1,880 Consumers Energy Co., Ser F.................. 4.000 05/15/10 1,857,346
510 Consumers Energy Co., Ser H.................. 4.800 02/17/09 528,887
540 Kerr-McGee Corp. ............................ 5.875 09/15/06 582,497
945 Kerr-McGee Corp. ............................ 6.875 09/15/11 1,070,902
2,050 Kerr-McGee Corp. ............................ 7.875 09/15/31 2,480,352
2,325 Marathon Oil Corp. .......................... 6.800 03/15/32 2,591,159
3,410 Pemex Project Funding Master Trust........... 8.000 11/15/11 3,930,025
2,860 Pemex Project Funding Master Trust........... 7.375 12/15/14 3,143,140
1,035 Pemex Project Funding Master Trust........... 8.625 02/01/22 1,181,194
995 Pemex Project, Inc. ......................... 9.125 10/13/10 1,213,900
150 Petro-Canada (Canada)........................ 4.000 07/15/13 141,523
1,905 Petro-Canada (Canada)........................ 5.350 07/15/33 1,765,457
------------
29,170,600
------------
LIFE INSURANCE 4.3%
4,420 Anthem Insurance Cos. Inc., 144A-Private
Placement (a)................................ 9.125 04/01/10 5,654,219
575 Hartford Financial Services Group............ 2.375 06/01/06 576,201
4,120 Health Net, Inc. ............................ 8.375 04/15/11 5,025,914
190 Metlife, Inc. ............................... 6.125 12/01/11 212,236
920 Nationwide Financial Services, Inc. ......... 6.250 11/15/11 1,018,060
1,600 Nationwide Mutual Insurance Co., 144A-
Private Placement (a)........................ 7.500 02/15/24 1,655,845
845 Nationwide Mutual Insurance Co., 144A-
Private Placement (a)........................ 8.250 12/01/31 1,060,281
1,740 Prudential Hldgs, LLC, Ser B, 144A-Private
Placement (a)................................ 7.245 12/18/23 2,042,586
4,160 Prudential Hldgs, LLC, Ser C, 144A-Private
Placement (a)................................ 8.695 12/18/23 5,293,787
------------
22,539,129
------------
LODGING 2.2%
2,595 Hilton Hotels Corp. ......................... 7.625 12/01/12 2,951,812
2,360 Hyatt Equities LLC, 144A-Private Placement
(a).......................................... 6.875 06/15/07 2,554,091
1,080 Marriott International, Ser D................ 8.125 04/01/05 1,152,085
1,085 Marriott International, Ser E................ 7.000 01/15/08 1,233,200
1,005 Starwood Hotels & Resorts Worldwide, Inc. ... 7.375 05/01/07 1,092,937
2,610 Starwood Hotels & Resorts Worldwide, Inc. ... 7.875 05/01/12 2,923,200
------------
11,907,325
------------
</Table>
See Notes to Financial Statements 9
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
MEDIA-CABLE 2.1%
$1,540 AOL Time Warner, Inc. ....................... 7.700% 05/01/32 $ 1,818,678
1,000 Comcast Cable Communications, Inc. .......... 8.125 05/01/04 1,009,883
1,805 Comcast Cable Communications, Inc. .......... 8.375 05/01/07 2,096,881
1,725 Comcast Cable Communications, Inc. .......... 6.750 01/30/11 1,958,215
240 Comcast Cable Communications, Inc. .......... 7.125 06/15/13 277,021
1,755 Comcast Corp. ............................... 6.500 01/15/15 1,944,912
1,940 Echostar DBS Corp., 144A- Private Placement
(a).......................................... 6.375 10/01/11 2,058,825
------------
11,164,415
------------
MEDIA-NONCABLE 2.9%
400 AOL Time Warner, Inc. ....................... 6.875 05/01/12 453,907
2,650 AOL Time Warner, Inc. ....................... 7.625 04/15/31 3,093,350
2,500 Clear Channel Communications, Inc. .......... 7.250 10/15/27 2,921,227
3,000 News America Hldg, Inc. ..................... 8.875 04/26/23 3,921,405
2,135 News America, Inc. .......................... 7.300 04/30/28 2,451,924
1,650 News America, Inc. .......................... 7.280 06/30/28 1,891,519
650 Time Warner, Inc. ........................... 6.625 05/15/29 677,605
------------
15,410,937
------------
METALS 1.0%
1,525 Inco Ltd. (Canada)........................... 7.750 05/15/12 1,838,908
2,880 Inco Ltd. (Canada)........................... 7.200 09/15/32 3,333,943
------------
5,172,851
------------
NATURAL GAS PIPELINES 1.4%
735 Consolidated Natural Gas Co., Ser A.......... 5.000 03/01/14 746,808
2,050 Consolidated Natural Gas Co., Ser C.......... 6.250 11/01/11 2,293,380
1,160 Gulfterra Energy Partners LP, Ser B.......... 8.500 06/01/10 1,316,600
1,485 Gulfterra Energy Partners LP, Ser B.......... 6.250 06/01/10 1,570,388
1,470 Texas Eastern Transmission Corp. ............ 7.000 07/15/32 1,654,857
------------
7,582,033
------------
NONCAPTIVE-CONSUMER FINANCE 3.5%
4,660 American Express Co. ........................ 5.500 09/12/06 5,025,386
4,500 American General Finance Corp. .............. 4.625 09/01/10 4,641,354
1,000 Household Finance Corp. ..................... 7.875 03/01/07 1,148,882
800 Household Finance Corp. ..................... 4.125 12/15/08 819,437
4,040 Household Finance Corp. ..................... 6.750 05/15/11 4,607,507
1,980 Newcourt Credit Group, Ser B (Canada)........ 6.875 02/16/05 2,077,669
------------
18,320,235
------------
OIL FIELD SERVICES 0.6%
995 Key Energy Services, Inc. ................... 6.375 05/01/13 1,034,800
2,020 Nexen, Inc. (Canada)......................... 5.050 11/20/13 2,043,981
------------
3,078,781
------------
PACKAGING 0.6%
1,285 Packaging Corp. of America................... 5.750 08/01/13 1,341,381
1,985 Sealed Air Corp., 144A-Private Placement
(a).......................................... 5.625 07/15/13 2,071,475
------------
3,412,856
------------
</Table>
10 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
PAPER 4.6%
$3,240 Abitibi-Consolidated, Inc. (Canada).......... 8.550% 08/01/10 $ 3,608,900
2,490 Abitibi-Consolidated, Inc. (Canada).......... 8.850 08/01/30 2,642,092
5,825 Bowater Canada Finance (Canada).............. 7.950 11/15/11 6,219,079
2,025 International Paper Co. ..................... 4.250 01/15/09 2,065,417
1,115 Owens-Brockway Glass Containers, Inc. ....... 7.750 05/15/11 1,187,475
925 Owens-Brockway Glass Containers, Inc. ....... 8.750 11/15/12 1,019,813
1,310 Sappi Papier Hldg AG, 144A-Private Placement
(Austria) (a)................................ 6.750 06/15/12 1,470,031
1,100 Weyerhaeuser Co. ............................ 6.000 08/01/06 1,188,090
4,430 Weyerhaeuser Co. ............................ 6.750 03/15/12 4,979,568
------------
24,380,465
------------
PHARMACEUTICALS 1.0%
2,000 Abbott Laboratories.......................... 5.625 07/01/06 2,159,518
2,000 Eli Lilly & Co. ............................. 5.500 07/15/06 2,156,770
1,115 Schering-Plough Corp. ....................... 5.300 12/01/13 1,161,955
------------
5,478,243
------------
PROPERTY & CASUALTY 2.1%
4,480 Farmers Exchange Capital, 144A-Private
Placement (a)................................ 7.050 07/15/28 4,523,891
2,471 Farmers Insurance Exchange Surplus, 144A-
Private Placement (a)........................ 8.625 05/01/24 2,825,532
3,500 Mantis Reef Ltd., 144A-Private Placement
(Australia) (a).............................. 4.692 11/14/08 3,562,206
------------
10,911,629
------------
RAILROADS 1.2%
1,500 CSX Corp. ................................... 6.750 03/15/11 1,706,546
4,000 Union Pacific Corp. ......................... 8.350 05/01/25 4,416,044
------------
6,122,590
------------
REAL ESTATE INVESTMENT TRUSTS 1.9%
4,490 EOP Operating LP............................. 7.500 04/19/29 5,180,468
420 Istar Financial, Inc. ....................... 7.000 03/15/08 451,500
600 Istar Financial, Inc. ....................... 8.750 08/15/08 669,000
1,945 Reckson Operating Partnership................ 5.150 01/15/11 1,927,654
545 Rouse Co. ................................... 5.375 11/26/13 556,453
755 Simon Property Group LP...................... 6.375 11/15/07 843,282
160 Simon Property Group LP...................... 6.350 08/28/12 177,940
------------
9,806,297
------------
REFINING 1.2%
4,520 Amerada Hess Corp. .......................... 7.875 10/01/29 5,211,433
895 Ashland, Inc. ............................... 7.830 08/15/05 963,727
250 Vintage Petroleum, Inc. ..................... 7.875 05/15/11 267,500
------------
6,442,660
------------
RETAIL 2.9%
465 CVS Corp. ................................... 5.625 03/15/06 498,276
800 CVS Corp. ................................... 3.875 11/01/07 825,022
</Table>
See Notes to Financial Statements 11
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
RETAIL (CONTINUED)
$2,000 Federated Department Stores, Inc. ........... 6.625% 09/01/08 $ 2,255,624
1,500 Federated Department Stores, Inc. ........... 6.300 04/01/09 1,679,057
165 Federated Department Stores, Inc. ........... 6.900 04/01/29 183,774
870 Lowe's Companies, Inc. ...................... 6.875 02/15/28 1,014,763
1,710 Lowe's Companies, Inc. ...................... 6.500 03/15/29 1,907,024
2,970 May Department Stores Co. ................... 5.950 11/01/08 3,250,148
620 May Department Stores Co. ................... 6.700 09/15/28 675,310
929 May Department Stores Co. ................... 7.875 03/01/30 1,151,840
1,950 Toys R US, Inc. ............................. 7.375 10/15/18 1,986,426
------------
15,427,264
------------
SERVICES 1.2%
2,045 Cendant Corp. ............................... 7.375 01/15/13 2,383,685
1,960 Cendant Corp. ............................... 7.125 03/15/15 2,258,553
1,157 Iron Mountain, Inc. ......................... 7.750 01/15/15 1,226,420
685 Iron Mountain, Inc. ......................... 6.625 01/01/16 667,875
------------
6,536,533
------------
SUPERMARKETS 1.0%
1,845 Albertson's, Inc. ........................... 7.500 02/15/11 2,159,347
2,810 Kroger Co. .................................. 7.500 04/01/31 3,355,570
------------
5,514,917
------------
TECHNOLOGY 1.3%
2,085 Arrow Electronics, Inc. ..................... 6.875 07/01/13 2,239,065
465 Arrow Electronics, Inc. ..................... 6.875 06/01/18 489,166
536 Avaya, Inc. ................................. 11.125 04/01/09 633,820
415 Avnet, Inc. ................................. 9.750 02/15/08 483,475
1,240 Electronic Data Systems Corp. ............... 7.125 10/15/09 1,314,712
1,675 Electronic Data Systems Corp., Ser B......... 6.000 08/01/13 1,618,434
------------
6,778,672
------------
TELECOMMUNICATIONS 5.0%
425 AT&T Corp. .................................. 8.050 11/15/11 495,893
3,900 AT&T Corp. .................................. 8.750 11/15/31 4,611,988
1,690 AT&T Wireless Services, Inc. ................ 7.875 03/01/11 1,991,939
3,225 Deutsche Telekom International Finance BV
(Netherlands)................................ 8.250 06/15/30 4,169,557
1,500 Sprint Capital Corp. ........................ 7.125 01/30/06 1,631,886
1,000 Sprint Capital Corp. ........................ 6.125 11/15/08 1,089,756
1,000 Verizon Communications, Inc. ................ 7.510 04/01/09 1,164,852
5,570 Verizon Communications, Inc. ................ 6.940 04/15/28 6,004,176
4,085 Verizon Global Funding Corp. ................ 7.750 12/01/30 4,914,713
165 Verizon New England, Inc. ................... 6.500 09/15/11 185,168
------------
26,259,928
------------
TOBACCO 1.2%
1,730 Altria Group, Inc. .......................... 7.000 11/04/13 1,901,228
1,970 Altria Group, Inc. .......................... 7.750 01/15/27 2,194,517
</Table>
12 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
TOBACCO (CONTINUED)
$1,225 Kraft Foods, Inc. ........................... 5.625% 11/01/11 $ 1,316,098
1,015 Kraft Foods, Inc. ........................... 6.250 06/01/12 1,127,645
------------
6,539,488
------------
WIRELESS COMMUNICATIONS 0.8%
1,595 France Telecom SA (France) (b)............... 9.750/9.500 03/01/31 2,116,471
290 Sprint Capital Corp. ........................ 8.750 03/15/32 360,993
1,900 Telecom Italia Capital, 144A-Private
Placement (Luxembourg) (a)................... 4.000 11/15/08 1,922,745
------------
4,400,209
------------
TOTAL CORPORATE BONDS 87.3%.................................................. 462,081,867
------------
CONVERTIBLE CORPORATE OBLIGATION 0.1%
TECHNOLOGY 0.1%
600 Solectron Corp. (Convertible into 7,072
common shares) LYON.......................... * 11/20/20 352,500
------------
MORTGAGE BACKED SECURITIES 0.7%
2,275 World Financial Property, 144A-Private
Placement (a)................................ 6.910 09/01/13 2,558,183
915 World Financial Property, 144A-Private
Placement (a)................................ 6.950 09/01/13 1,031,414
------------
TOTAL MORTGAGE BACKED SECURITIES.............................................. 3,589,597
------------
GOVERNMENT OBLIGATIONS 2.1%
635 Republic of Columbia (Columbia).............. 10.750 01/15/13 731,837
2,000 United Mexican States (Mexico)............... 10.375 02/17/09 2,557,000
2,665 United Mexican States (Mexico)............... 8.375 01/14/11 3,204,663
560 United Mexican States (Mexico)............... 8.000 09/24/22 636,160
3,405 United Mexican States (Mexico)............... 8.300 08/15/31 3,966,825
------------
TOTAL GOVERNMENT OBLIGATIONS.................................................. 11,096,485
------------
ASSET BACKED SECURITIES 0.7%
599 Continental Airlines, Inc. .................. 6.545 08/02/20 605,299
173 Continental Airlines, Inc. .................. 6.648 03/15/19 173,406
2,007 Continental Airlines, Inc. .................. 6.900 01/02/18 2,018,627
755 Ras Laffan Liquefied Natural Gas Co. Ltd.,
144A-Private Placement (Qatar) (a)........... 8.294 03/15/14 894,675
------------
TOTAL ASSET BACKED SECURITIES................................................. 3,692,007
------------
TOTAL LONG-TERM INVESTMENTS 90.9%
(Cost $445,759,971)......................................................... 480,812,456
------------
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
<Table>
<Caption>
DESCRIPTION VALUE
- ---------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS 7.4%
REPURCHASE AGREEMENT 7.0%
Bank of America Securities LLC ($37,112,000 par collateralized by
U.S. Government obligations in a pooled cash account, dated 02/27/04,
to be sold on 03/01/04 at $37,115,124)...................................... $ 37,112,000
------------
U.S. TREASURY OBLIGATIONS 0.4%
United States Treasury Bill ($900,000 par, yielding 0.911%,
03/25/04 maturity) (c)...................................................... 899,454
United States Treasury Bill ($1,500,000 par, yielding 0.927%,
07/15/04 maturity) (c)...................................................... 1,494,763
------------
TOTAL U.S. TREASURY OBLIGATIONS............................................... 2,394,217
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $39,506,046).......................................................... 39,506,217
------------
TOTAL INVESTMENTS 98.3%
(Cost $485,266,017)......................................................... 520,318,673
OTHER ASSETS IN EXCESS OF LIABILITIES 1.7%................................... 9,201,105
------------
NET ASSETS 100.0%............................................................ $529,519,778
============
</Table>
* Zero coupon bond
(a) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933, as amended. These securities may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(b) Security is a "step-up" bond where the coupon increases/decreases or steps
up/down at a predetermined date.
(c) All or a portion of these securities have been physically segregated in
connection with open futures contracts.
LYON--Liquid Yield Option Note
14 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
February 29, 2004 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $485,266,017)....................... $520,318,673
Receivables:
Interest.................................................. 8,547,129
Investments Sold.......................................... 2,726,041
Fund Shares Sold.......................................... 2,640,910
Other....................................................... 111,668
------------
Total Assets............................................ 534,344,421
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 2,026,911
Fund Shares Repurchased................................... 1,063,163
Variation Margin on Futures............................... 630,844
Income Distributions...................................... 307,057
Distributor and Affiliates................................ 277,891
Investment Advisory Fee................................... 174,579
Custodian Bank............................................ 4,828
Accrued Expenses............................................ 179,652
Trustees' Deferred Compensation and Retirement Plans........ 159,718
------------
Total Liabilities....................................... 4,824,643
------------
NET ASSETS.................................................. $529,519,778
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $517,878,690
Net Unrealized Appreciation................................. 33,990,072
Accumulated Undistributed Net Investment Income............. (2,092,540)
Accumulated Net Realized Loss............................... (20,256,444)
------------
NET ASSETS.................................................. $529,519,778
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $360,494,682 and 52,839,738 shares of
beneficial interest issued and outstanding)............. $ 6.82
Maximum sales charge (4.75%* of offering price)......... .34
------------
Maximum offering price to public........................ $ 7.16
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $138,458,602 and 20,339,667 shares of
beneficial interest issued and outstanding)............. $ 6.81
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $30,566,494 and 4,490,478 shares of
beneficial interest issued and outstanding)............. $ 6.81
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements 15
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended February 29, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $14,870,839
Other....................................................... 775
-----------
Total Income............................................ 14,871,614
-----------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $407,775, $689,570 and $148,154,
respectively)............................................. 1,245,499
Investment Advisory Fee..................................... 1,062,409
Shareholder Services........................................ 513,050
Custody..................................................... 25,782
Trustees' Fees and Related Expenses......................... 14,378
Legal....................................................... 7,404
Other....................................................... 186,152
-----------
Total Expenses.......................................... 3,054,674
Less Credits Earned on Cash Balances.................... 1,362
-----------
Net Expenses............................................ 3,053,312
-----------
NET INVESTMENT INCOME....................................... $11,818,302
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 5,110,647
Futures................................................... (767,149)
-----------
Net Realized Gain........................................... 4,343,498
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 19,889,383
-----------
End of the Period:
Investments............................................. 35,052,656
Futures................................................. (1,062,584)
-----------
33,990,072
-----------
Net Unrealized Appreciation During the Period............... 14,100,689
-----------
NET REALIZED AND UNREALIZED GAIN............................ $18,444,187
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $30,262,489
===========
</Table>
16 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE SIX FOR THE YEAR
MONTHS ENDED ENDED
FEBRUARY 29, 2004 AUGUST 31, 2003
-----------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 11,818,302 $ 20,558,844
Net Realized Gain/Loss................................... 4,343,498 (470,540)
Net Unrealized Appreciation During the Period............ 14,100,689 15,474,182
------------ -------------
Change in Net Assets from Operations..................... 30,262,489 35,562,486
------------ -------------
Distributions from Net Investment Income:
Class A Shares......................................... (8,780,194) (16,543,987)
Class B Shares......................................... (3,120,058) (6,542,723)
Class C Shares......................................... (672,970) (1,386,369)
------------ -------------
Total Distributions...................................... (12,573,222) (24,473,079)
------------ -------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES...... 17,689,267 11,089,407
------------ -------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................................ 112,994,743 295,935,507
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................... 10,640,596 20,028,626
Cost of Shares Repurchased............................... (95,341,710) (225,767,690)
------------ -------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS....... 28,293,629 90,196,443
------------ -------------
TOTAL INCREASE IN NET ASSETS............................. 45,982,896 101,285,850
NET ASSETS:
Beginning of the Period.................................. 483,536,882 382,251,032
------------ -------------
End of the Period (Including accumulated undistributed
net investment income of ($2,092,540) and ($1,337,620)
respectively).......................................... $529,519,778 $ 483,536,882
============ =============
</Table>
See Notes to Financial Statements 17
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31,
CLASS A SHARES FEBRUARY 29, ------------------------------------------------
2004 2003 (a) 2002 (c) 2001 2000 (a) 1999
---------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $ 6.58 $ 6.39 $ 6.75 $ 6.43 $ 6.53 $ 7.03
------ ------ ------ ------ ------ ------
Net Investment Income........... .17 .33 .37 .41 .43 .43
Net Realized and Unrealized
Gain/Loss..................... .25 .25 (.33) .33 (.12) (.49)
------ ------ ------ ------ ------ ------
Total from Investment
Operations...................... .42 .58 .04 .74 .31 (.06)
Less Distributions from Net
Investment Income............... .18 .39 .40 .42 .41 .44
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.......................... $ 6.82 $ 6.58 $ 6.39 $ 6.75 $ 6.43 $ 6.53
====== ====== ====== ====== ====== ======
Total Return (b).................. 6.39%* 9.20% 0.54% 12.10% 5.01% -1.02%
Net Assets at End of the Period
(In millions)................... $360.5 $318.4 $246.5 $221.4 $167.7 $172.9
Ratio of Expenses to Average Net
Assets (c)...................... .97% 1.01% 1.03% 1.07% 1.15% 1.08%
Ratio of Net Investment Income to
Average Net Assets (c).......... 4.98% 4.98% 5.48% 6.56% 6.80% 6.26%
Portfolio Turnover................ 22%* 46% 82% 112% 94% 43%
* Non-annualized
</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 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 4% 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 Rules 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.
(c) As required, effective September 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing premium on fixed income securities. The effect of this
change for the year ended August 31, 2002, was to decrease net investment
income per share by $.03, increase net realized and unrealized gains and
losses per share by $.03 and decrease the Ratio of Net Investment Income to
Average Net Assets from 6.00% to 5.48%. Per share, ratios and supplemental
data for periods prior to August 31, 2002, have not been restated to reflect
this change in presentation.
18 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31,
CLASS B SHARES FEBRUARY 29, ------------------------------------------------
2004 2003 (a) 2002 (c) 2001 2000 (a) 1999
---------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD......................... $ 6.57 $ 6.38 $ 6.74 $ 6.42 $6.51 $ 7.01
------ ------ ------ ------ ----- ------
Net Investment Income.......... .14 .28 .32 .37 .39 .38
Net Realized and Unrealized
Gain/Loss.................... .25 .25 (.33) .32 (.12) (.49)
------ ------ ------ ------ ----- ------
Total from Investment
Operations..................... .39 .53 (.01) .69 .27 (.11)
Less Distributions from Net
Investment Income.............. .15 .34 .35 .37 .36 .39
------ ------ ------ ------ ----- ------
NET ASSET VALUE, END OF THE
PERIOD......................... $ 6.81 $ 6.57 $ 6.38 $ 6.74 $6.42 $ 6.51
====== ====== ====== ====== ===== ======
Total Return (b)................. 6.00%* 8.38% -0.22% 11.28% 4.34% -1.78%
Net Assets at End of the Period
(In millions).................. $138.5 $135.6 $112.3 $ 93.8 $54.5 $ 54.0
Ratio of Expenses to Average Net
Assets (c)..................... 1.72% 1.77% 1.78% 1.82% 1.92% 1.86%
Ratio of Net Investment Income to
Average Net Assets (c)......... 4.23% 4.23% 4.73% 5.81% 6.03% 5.47%
Portfolio Turnover............... 22%* 46% 82% 112% 94% 43%
* Non-annualized
</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 4%, charged on certain redemptions
made within the first and second years 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 redemption of Fund shares.
(c) As required, effective September 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing premium on fixed income securities. The effect of this
change for the year ended August 31, 2002, was to decrease net investment
income per share by $.03, increase net realized and unrealized gains and
losses per share by $.03 and decrease the Ratio of Net Investment Income to
Average Net Assets from 5.25% to 4.73%. Per share, ratios and supplemental
data for periods prior to August 31, 2002, have not been restated to reflect
this change in presentation.
See Notes to Financial Statements 19
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED AUGUST 31,
CLASS C SHARES FEBRUARY 29, ------------------------------------------------
2004 2003 (a) 2002 (c) 2001 2000 (a) 1999
---------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD......................... $6.57 $6.38 $ 6.74 $ 6.42 $6.51 $ 7.01
----- ----- ------ ------ ----- ------
Net Investment Income.......... .14 .28 .32 .37 .39 .39
Net Realized and Unrealized
Gain/Loss.................... .25 .25 (.33) .32 (.12) (.50)
----- ----- ------ ------ ----- ------
Total from Investment
Operations..................... .39 .53 (.01) .69 .27 (.11)
Less Distributions from Net
Investment Income.............. .15 .34 .35 .37 .36 .39
----- ----- ------ ------ ----- ------
NET ASSET VALUE, END OF THE
PERIOD......................... $6.81 $6.57 $ 6.38 $ 6.74 $6.42 $ 6.51
===== ===== ====== ====== ===== ======
Total Return (b)................. 6.00%* 8.38% -0.22% 11.28% 4.34% -1.78%
Net Assets at End of the Period
(In millions).................. $30.6 $29.6 $ 23.4 $ 18.9 $12.0 $ 14.3
Ratio of Expenses to Average Net
Assets (c)..................... 1.72% 1.77% 1.78% 1.84% 1.92% 1.86%
Ratio of Net Investment Income to
Average Net Assets (c)......... 4.23% 4.22% 4.73% 5.79% 6.03% 5.47%
Portfolio Turnover............... 22%* 46% 82% 112% 94% 43%
* Non-annualized
</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) As required, effective September 1, 2001, the Fund has adopted the
provisions of the AICPA Audit and Accounting Guide for Investment Companies
and began amortizing premium on fixed income securities. The effect of this
change for the year ended August 31, 2002, was to decrease net investment
income per share by $.03, increase net realized and unrealized gains and
losses per share by $.03 and decrease the Ratio of Net Investment Income to
Average Net Assets from 5.25% to 4.73%. Per share, ratios and supplemental
data for periods prior to August 31, 2002, have not been restated to reflect
this change in presentation.
20 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Corporate Bond Fund (the "Fund") is organized as a Delaware statutory
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 primary investment objective is to seek to provide current income with
preservation of capital. The Fund commenced investment operations on September
23, 1971. The distribution of the Fund's Class B and Class C Shares commenced on
September 28, 1992 and August 30, 1993, 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 Fixed income investments are stated at value using market
quotations or indications of value obtained from an independent pricing service.
Investments in securities listed on a securities exchange are valued at their
last 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 sales 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 as noted above, valuations are determined in
accordance with procedures established in good faith by the Board of Trustees.
Futures contracts are valued at the settlement price established each day on the
exchange in which they are traded. 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 invests in repurchase agreements, which are short-term investments
in which the Fund acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The Fund may
invest independently in repurchase agreements, or transfer uninvested cash
balances into a pooled cash account along with other investment companies
advised by Van Kampen Asset Management (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 Interest income is recorded on an accrual basis.
Discounts on debt securities purchased are accreted and premiums are amortized
over the expected life of each applicable security. 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
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
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 the loss and offset these losses against any future realized capital
gains. At August 31, 2003, the Fund had an accumulated capital loss carryforward
for tax purposes of $18,503,503 which will expire between August 31, 2008 and
2011.
At February 29, 2004, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $486,770,678
============
Gross tax unrealized appreciation........................... $ 34,266,443
Gross tax unrealized depreciation........................... (718,448)
------------
Net tax unrealized appreciation on investments.............. $ 33,547,995
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed annually. Distributions from net realized gains for book purposes
may include short-term capital gains and gains on future transactions. All
short-term capital gains and a portion of future gains are included in ordinary
income for tax purposes.
The tax character of distributions paid during 2003 was as follows:
<Table>
<Caption>
2003
Distribution paid from:
Ordinary Income........................................... $24,512,386
Long-term capital gain.................................... --
-----------
$24,512,386
===========
</Table>
As of August 31, 2003, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $288,566
</Table>
Net realized gains or losses may differ for financial and tax reporting
purposes as a result of the deferral of losses relating to wash sale
transactions.
F. EXPENSE REDUCTIONS During the six months ended February 29, 2004, the Fund's
custody fee was reduced by $1,362 as a result of credits earned on cash
balances.
22
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
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 $150 million.......................................... .50%
Next $100 million........................................... .45%
Next $100 million........................................... .40%
Over $350 million........................................... .35%
</Table>
For the six months ended February 29, 2004, the Fund recognized expenses of
approximately $7,400 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, 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 six months ended February 29, 2004, the Fund recognized expenses
of approximately $19,400 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. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
February 29, 2004, the Fund recognized expenses of approximately $423,300
representing transfer agency fees paid to VKIS. 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 approximately $73,500 are
included in "Other" assets on the Statement of Assets and Liabilities at
February 29, 2004. 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.
23
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
At February 29, 2004, capital aggregated $355,282,898, $132,992,594 and
$29,603,198 for Classes A, B and C, respectively. For the six months ended
February 29, 2004, transactions were as follows:
<Table>
<Caption>
SHARES VALUE
Sales:
Class A................................................... 13,326,451 $ 89,895,292
Class B................................................... 2,560,935 17,223,843
Class C................................................... 872,861 5,875,608
----------- ------------
Total Sales................................................. 16,760,247 $112,994,743
=========== ============
Dividend Reinvestment:
Class A................................................... 1,132,965 $ 7,661,830
Class B................................................... 368,498 2,486,693
Class C................................................... 72,914 492,073
----------- ------------
Total Dividend Reinvestment................................. 1,574,377 $ 10,640,596
=========== ============
Repurchases:
Class A................................................... (9,983,102) $(67,138,673)
Class B................................................... (3,232,667) (21,759,855)
Class C................................................... (957,755) (6,443,182)
----------- ------------
Total Repurchases........................................... (14,173,524) $(95,341,710)
=========== ============
</Table>
At August 31, 2003, capital aggregated $324,864,449, $135,041,913 and
$29,678,699 for Classes A, B and C, respectively. For the year ended August 31,
2003, transactions were as follows:
<Table>
<Caption>
SHARES VALUE
Sales:
Class A................................................... 33,860,873 $ 223,054,574
Class B................................................... 8,733,393 57,165,431
Class C................................................... 2,395,255 15,715,502
----------- -------------
Total Sales................................................. 44,989,521 $ 295,935,507
=========== =============
Dividend Reinvestment:
Class A................................................... 2,118,750 $ 13,930,487
Class B................................................... 775,621 5,088,552
Class C................................................... 153,893 1,009,587
----------- -------------
Total Dividend Reinvestment................................. 3,048,264 $ 20,028,626
=========== =============
Repurchases:
Class A................................................... (26,177,791) $(172,148,255)
Class B................................................... (6,476,025) (42,378,021)
Class C................................................... (1,716,574) (11,241,414)
----------- -------------
Total Repurchases........................................... (34,370,390) $(225,767,690)
=========== =============
</Table>
24
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
Class B Shares purchased on or after June 1, 1996, and any dividend
reinvestment Class B Shares received on such shares, automatically convert to
Class A Shares eight years after the end of the calendar month in which the
shares were purchased. Class B Shares purchased before June 1, 1996, and any
dividend reinvestment plan Class B Shares received on such shares, automatically
convert to Class A Shares six years after the end of the calendar month in which
the shares were purchased. For the six months ended February 29, 2004 and year
ended August 31, 2003, 221,361 and 492,903 Class B Shares automatically
converted to Class A Shares, respectively, and are shown in the above tables as
sales of Class A Shares and repurchases of Class B Shares. Class C Shares
purchased before January 1, 1997, and any dividend reinvestment plan Class C
Shares received on such shares, automatically convert to Class A Shares ten
years after the end of the calendar month in which the shares were purchased.
Class C Shares purchased on or after January 1, 1997 do not possess a conversion
feature. For the six months ended February 29, 2004 and year ended August 31,
2003, no Class C Shares converted to Class A Shares. 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 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....................................................... 4.00% 1.00%
Second...................................................... 4.00% None
Third....................................................... 3.00% None
Fourth...................................................... 2.50% None
Fifth....................................................... 1.50% None
Sixth and Thereafter........................................ None None
</Table>
For the six months ended February 29, 2004, Van Kampen, as Distributor for
the Fund, received commissions on sales of the Fund's Class A Shares of
approximately $192,400 and CDSC on redeemed shares of approximately $157,900.
Sales charges do not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $105,734,310 and $105,603,564,
respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in unrealized
25
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
appreciation/depreciation. Upon disposition, a realized gain or loss is
recognized accordingly, except when taking delivery of a security underlying a
future contract. In this instance, the recognition of gain or loss is postponed
until the disposal of the security underlying the future contract. Risk may
arise as a result of the potential inability of the counterparties to meet the
terms of their contracts.
During the period, the Fund invested in futures contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Fund
generally invests in futures on U.S. Treasury Notes. Upon entering into futures
contracts, the Fund maintains an amount of cash or liquid securities with a
value equal to a percentage of the contract amount with either a futures
commission merchant pursuant to rules and regulations promulgated under the 1940
Act, as amended, or with its custodian in an account in the broker's name. This
amount is known as initial margin. During the period the futures contract is
open, payments are received from or made to the broker based upon changes in the
value of the contract (the variation margin). The risk of loss associated with a
futures contract is in excess of the variation margin reflected on the statement
of Assets and Liabilities.
Transactions in futures contracts for the six months ended February 29,
2004, were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at August 31, 2003.............................. 1,173
Futures Opened.............................................. 3,285
Futures Closed.............................................. (3,447)
------
Outstanding at February 29, 2004............................ 1,011
======
</Table>
The futures contracts outstanding as of February 29, 2004, and the
descriptions and unrealized appreciation/depreciation are as follows:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
LONG CONTRACTS:
U.S. Treasury Notes 2-Year Futures June 2004 (Current
Notional Value of $214,531 per contract)................ 30 $ 23,665
SHORT CONTRACTS:
U.S. Treasury Bonds, June 2004 (Current Notional Value of
$112,438 per contract).................................. 417 (513,186)
U.S. Treasury Notes 10-Year Futures June 2004 (Current
Notional Value of $113,875 per contract)................ 342 (337,103)
U.S. Treasury Notes 5-Year Futures June 2004 (Current
Notional Value of $112,406 per contract)................ 193 (159,412)
U.S. Treasury Notes 5-Year Futures March 2004 (Current
Notional Value of $113,766 per contract)................ 29 (76,548)
----- -----------
1,011 $(1,062,584)
===== ===========
</Table>
26
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 29, 2004 (UNAUDITED) continued
6. DISTRIBUTION AND SERVICE PLANS
With respect to its Class A Shares, Class B Shares and Class C 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 and Class C Shares; the provision of ongoing shareholder services
with respect to such classes of shares; and the maintenance of shareholder
accounts with respect to such classes of shares.
Annual fees under the Plans of up to 0.25% of Class A average daily net
assets and 1.00% each for Class B and Class C average daily net assets are
accrued daily. The amount of distribution expenses incurred by Van Kampen and
not yet reimbursed ("unreimbursed receivable") was approximately $2,816,600 and
$0 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 six months ended February 29, 2004, are
payments retained by Van Kampen of approximately $579,300 and payments made to
Morgan Stanley DW Inc., an affiliate of the Adviser, of approximately $91,800.
7. LEGAL MATTERS
The Adviser, certain affiliates of the Adviser and certain investment companies
advised by the Adviser or its affiliates, including the Fund, are named as
defendants in a number of recently filed, similar class action complaints. One
of the actions also names the individual Trustees of the Van Kampen funds as
defendants. These complaints generally allege that defendants, including the
Fund, violated their statutory disclosure obligations and fiduciary duties by
failing properly to disclose (i) that the Adviser and certain affiliates of the
Adviser allegedly offered economic incentives to brokers and others to steer
investors to the funds advised by the Adviser or its affiliates rather than
funds managed by other companies, and (ii) that the funds advised by the Adviser
or its affiliates, including the Fund, allegedly paid excessive commissions to
brokers in return for their alleged efforts to steer investors to these funds.
The complaints seek, among other things, unspecified compensatory damages,
rescissionary damages, fees and costs. The defendants intend to move to dismiss
these actions and otherwise vigorously to defend them. While the Fund believes
that it has meritorious defenses, the ultimate outcome of these matters is not
presently determinable at this early stage of the litigation, and no provision
has been made in the Fund's financial statements for the effect, if any, of
these matters.
27
VAN KAMPEN CORPORATE BOND FUND
BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
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
1221 Avenue of the Americas
New York, NY 10020
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, NY 10020
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 LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
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
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 Asset Management, Van
Kampen Advisors 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.
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)2004 Van Kampen
Funds Inc. All rights reserved.
Member NASD/SIPC. 17, 117, 217
CORP SAR 4/04 14078C04-AP-4/04
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
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.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 10. Exhibits.
(a) Code of Ethics -- Not applicable for semi-annual reports.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
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 Corporate Bond Fund
By: /s/ Ronald E. Robison
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: April 20, 2004
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: April 20, 2004
By: /s/ John L. Sullivan
Name: John L. Sullivan
Title: Principal Financial Officer
Date: April 20, 2004