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 811-0261
Van Kampen Exchange 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: 12/31
Date of reporting period: 6/30/04
Item 1. Reports 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
Exchange Fund performed during the semiannual period. This report
includes the fund's financial statements and a list of fund investments
as of June 30, 2004.
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
that the value of the fund shares may be therefore less than what you
paid for them. Accordingly, you can lose money investing in this fund.
<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 as of 6/30/04
<Table>
<Caption>
- -----------------------------------------------
W/O SALES
AVERAGE ANNUAL CHARGES
TOTAL RETURNS since 12/16/76
Since Inception 12.38%
10-year 12.70
5-year 0.76
1-year 19.69
6-month 2.86
- -----------------------------------------------
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT 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
partner would pay on fund distributions or the redemption of fund units. Figures
shown above assume reinvestment of all dividends and capital gains.
1
VAN KAMPEN EXCHANGE FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 (UNAUDITED)
<Table>
<Caption>
NUMBER OF
DESCRIPTION SHARES VALUE
- -------------------------------------------------------------------------------------
COMMON STOCKS 98.8%
AEROSPACE & DEFENSE 0.7%
Honeywell International, Inc. .............................. 12,528 $ 458,901
-----------
ALUMINUM 0.7%
Alcan, Inc. (Canada)........................................ 10,774 446,044
-----------
AUTO PARTS & EQUIPMENT 0.4%
Dana Corp. ................................................. 13,677 268,069
-----------
COMPUTER HARDWARE 2.1%
International Business Machines Corp. ...................... 15,016 1,323,660
-----------
CONSTRUCTION & ENGINEERING 1.0%
Fluor Corp. ................................................ 12,831 611,654
-----------
DIVERSIFIED BANKS 1.4%
HSBC Holdings Plc--ADR (United Kingdom)..................... 11,434 856,521
-----------
DIVERSIFIED METALS & MINING 0.6%
Massey Energy Corp. ........................................ 12,831 361,963
-----------
FOREST PRODUCTS 1.0%
Louisiana-Pacific Corp. .................................... 25,970 614,191
-----------
HEALTH CARE DISTRIBUTORS 0.2%
Cardinal Health, Inc. ...................................... 1,867 130,783
-----------
HEALTH CARE EQUIPMENT 0.6%
Baxter International, Inc. ................................. 10,000 345,100
Edwards Lifesciences Corp. (a).............................. 1,000 34,850
-----------
379,950
-----------
HEALTH CARE SERVICES 0.4%
Medco Health Solutions, Inc. (a)............................ 6,075 227,813
-----------
INDUSTRIAL GASES 7.4%
Air Products & Chemicals, Inc. ............................. 89,021 4,669,151
-----------
INDUSTRIAL MACHINERY 1.0%
SPX Corp. .................................................. 13,648 633,813
-----------
INTEGRATED OIL & GAS 11.7%
Amerada Hess Corp. ......................................... 21,200 1,678,828
BP Plc--ADR (United Kingdom)................................ 33,876 1,814,737
Exxon Mobil Corp. .......................................... 86,639 3,847,638
-----------
7,341,203
-----------
</Table>
2 See Notes to Financial Statements
VAN KAMPEN EXCHANGE FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
NUMBER OF
DESCRIPTION SHARES VALUE
- -------------------------------------------------------------------------------------
MULTI-LINE INSURANCE 4.7%
American International Group, Inc. ......................... 41,688 $ 2,971,521
-----------
OFFICE SERVICES & SUPPLIES 1.6%
IKON Office Solutions, Inc. ................................ 86,993 997,810
-----------
OIL & GAS DRILLING 0.1%
Transocean, Inc. (Cayman Islands) (a)....................... 3,113 90,090
-----------
OIL & GAS EQUIPMENT & SERVICES 4.6%
Baker Hughes, Inc. ......................................... 25,634 965,120
Halliburton Co. ............................................ 30,320 917,483
Schlumberger Ltd. (Netherlands)............................. 16,080 1,021,241
-----------
2,903,844
-----------
OIL & GAS EXPLORATION & PRODUCTION 2.8%
Apache Corp. ............................................... 26,346 1,147,368
Kerr-McGee Corp. ........................................... 10,900 586,093
-----------
1,733,461
-----------
PACKAGED FOODS 5.2%
McCormick & Co., Inc. ...................................... 96,518 3,281,612
-----------
PAPER PRODUCTS 2.2%
Georgia-Pacific Corp. ...................................... 37,376 1,382,164
-----------
PHARMACEUTICALS 28.9%
Johnson & Johnson........................................... 78,636 4,380,025
Merck & Co., Inc. .......................................... 50,376 2,392,860
Pfizer, Inc. ............................................... 189,577 6,498,700
Schering-Plough Corp. ...................................... 156,022 2,883,287
Wyeth, Inc. ................................................ 56,000 2,024,960
-----------
18,179,832
-----------
REAL ESTATE INVESTMENT TRUSTS 1.3%
Plum Creek Timber Co., Inc. ................................ 25,602 834,113
-----------
RESTAURANTS 0.2%
Luby's Cafeterias, Inc. (a)................................. 13,367 92,366
-----------
SEMICONDUCTORS 12.8%
Intel Corp. ................................................ 291,662 8,049,871
-----------
SPECIALTY CHEMICALS 5.2%
International Flavors & Fragrances, Inc. ................... 49,712 1,859,229
Lubrizol Corp. ............................................. 37,620 1,377,644
-----------
3,236,873
-----------
</Table>
See Notes to Financial Statements 3
VAN KAMPEN EXCHANGE FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 (UNAUDITED) continued
<Table>
<Caption>
DESCRIPTION VALUE
- -------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 98.8%
(Cost $6,838,402)...................................................... $62,077,273
REPURCHASE AGREEMENT 1.2%
State Street Bank & Trust Co. ($776,000 par collateralized by U.S.
Government obligations in a pooled cash account, interest rate of
1.35%, dated 06/30/04, to be sold on 07/01/04 at $776,029)
(Cost $776,000)...................................................... 776,000
-----------
TOTAL INVESTMENTS 100.0%
(Cost $7,614,402).................................................... 62,853,273
LIABILITIES IN EXCESS OF OTHER ASSETS 0.0%............................ (3,690)
-----------
NET ASSETS 100.0%..................................................... $62,849,583
===========
</Table>
Percentages are calculated as a percentage of net assets.
(a) Non-income producing security as this stock currently does not declare
dividends.
ADR--American Depositary Receipt
4 See Notes to Financial Statements
VAN KAMPEN EXCHANGE FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2004 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $7,614,402)......................... $62,853,273
Cash........................................................ 31,775
Receivables:
Dividends................................................. 88,054
Interest.................................................. 29
Other....................................................... 22,685
-----------
Total Assets............................................ 62,995,816
-----------
LIABILITIES:
Payables:
Investment Advisory Fee................................... 25,492
Other Affiliates.......................................... 9,463
Managing General Partners' Retirement Plan.................. 72,573
Accrued Expenses............................................ 38,705
-----------
Total Liabilities....................................... 146,233
-----------
NET ASSETS.................................................. $62,849,583
===========
NET ASSETS ARE COMPRISED OF:
182,249 units of limited partnership interest............... $61,640,443
3,340 units of non-managing general partnership interest.... 1,129,658
235 units of managing general partnership interest.......... 79,482
-----------
NET ASSETS.................................................. $62,849,583
===========
NET ASSET VALUE PER UNIT ($62,849,583 divided by 185,824
units of partnership interest outstanding)................ $ 338.22
===========
</Table>
See Notes to Financial Statements 5
VAN KAMPEN EXCHANGE FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended June 30, 2004 (Unaudited)
<Table>
INVESTMENT INCOME:
Dividends (Net of foreign withholding taxes of $5,058)...... $ 528,586
Interest.................................................... 3,584
-----------
Total Income............................................ 532,170
-----------
EXPENSES:
Investment Advisory Fee..................................... 155,095
Managing General Partners' Fees and Related Expenses........ 18,521
Shareholder Reports......................................... 14,060
Audit....................................................... 12,308
Legal....................................................... 5,844
Custody..................................................... 5,753
Other....................................................... 21,291
-----------
Total Expenses.......................................... 232,872
Less Credits Earned on Cash Balances.................... 259
-----------
Net Expenses............................................ 232,613
-----------
NET INVESTMENT INCOME....................................... $ 299,557
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain on Investments as a result of
partner-in-kind redemptions............................... $ 5,022,439
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 58,760,543
End of the Period......................................... 55,238,871
-----------
Net Unrealized Depreciation During the Period............... (3,521,672)
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 1,500,767
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 1,800,324
===========
</Table>
6 See Notes to Financial Statements
VAN KAMPEN EXCHANGE FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
JUNE 30, 2004 DECEMBER 31, 2003
-------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................. $ 299,557 $ 620,402
Net Realized Gain on Investments as a result of
partner-in-kind redemptions......................... 5,022,439 3,543,670
Net Unrealized Appreciation/Depreciation During the
Period.............................................. (3,521,672) 9,926,325
----------- -----------
Change in Net Assets from Operations.................. 1,800,324 14,090,397
----------- -----------
Distributions from Net Investment Income.............. (119,170) (266,042)
Distributions from Net Realized Gain.................. (17,030) -0-
----------- -----------
Total Distributions................................... (136,200) (266,042)
----------- -----------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... 1,664,124 13,824,355
----------- -----------
FROM PARTNERSHIP UNIT TRANSACTIONS:
Proceeds From Units Issued Through Dividend
Reinvestment........................................ 25,756 52,133
Cost of Units Repurchased............................. (5,266,428) (3,908,192)
----------- -----------
NET CHANGE IN NET ASSETS FROM PARTNERSHIP UNIT
TRANSACTIONS........................................ (5,240,672) (3,856,059)
----------- -----------
TOTAL INCREASE/DECREASE IN NET ASSETS................. (3,576,548) 9,968,296
NET ASSETS:
Beginning of the Period............................... 66,426,131 56,457,835
----------- -----------
End of the Period..................................... $62,849,583 $66,426,131
=========== ===========
CHANGE IN PARTNERSHIP UNITS OUTSTANDING:
Units Issued Through Dividend Reinvestment............ 77 185
Units Repurchased..................................... (15,831) (14,244)
----------- -----------
Decrease in Partnership Units Outstanding........... (15,754) (14,059)
=========== ===========
</Table>
See Notes to Financial Statements 7
VAN KAMPEN EXCHANGE 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 DECEMBER 31,
JUNE 30, -------------------------------------------------------------
2004 2003 2002 2001 2000 1999
---------------------------------------------------------------------------
NET ASSET VALUE, BEGINNING
OF THE PERIOD............. $329.53 $261.82 $352.77 $376.51 $348.41 $313.59
------- ------- ------- ------- ------- -------
Net Investment Income..... 1.59(a) 2.99(a) 2.60(a) 2.40(a) 1.85(a) 1.77(a)
Net Realized and
Unrealized Gain/Loss.... 7.83 66.00 (92.27) (24.86) 28.06 34.82
------- ------- ------- ------- ------- -------
Total from Investment
Operations................ 9.42 68.99 (89.67) (22.46) 29.91 36.59
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income....... .64 1.28 1.28 1.28 1.28 1.28
Distributions from Net
Realized Gain........... .09 -0- -0- -0- .53 .49
------- ------- ------- ------- ------- -------
Total Distributions......... .73 1.28 1.28 1.28 1.81 1.77
------- ------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD.................... $338.22 $329.53 $261.82 $352.77 $376.51 $348.41
======= ======= ======= ======= ======= =======
Total Return (b)............ 2.86%* 26.44% -25.47% -5.97% 8.56% 11.48%
Net Assets at End of the
Period (In millions)...... $ 62.8 $ 66.4 $ 56.5 $ 84.7 $ 94.8 $ 94.2
Ratio of Expenses to Average
Net Assets................ .75% .78% .71% .64% .65% .75%
Ratio of Net Investment
Income to Average Net
Assets.................... .97% 1.05% .85% .68% .45% .53%
Portfolio Turnover.......... 0%* 0% 0% 0% 0% 0%
* Non-Annualized
</Table>
(a) Based on average units outstanding.
(b) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all units at the end of the period, all at NAV. These
returns do not reflect the deduction of taxes that a partner would pay on
Fund distributions or the redemption of Fund units.
8 See Notes to Financial Statements
VAN KAMPEN EXCHANGE FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Exchange Fund (the "Fund"), a California limited partnership, is a
partnership registered under the Investment Company Act of 1940, as amended, as
a diversified, open-end investment management company. The Fund seeks long-term
growth of capital. The production of current income is a secondary objective.
The Fund commenced investment operations on December 16, 1976.
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 sales price is not
available are valued at the mean between the last reported bid and ask price.
For those securities where quotations or prices are not available, valuations
are determined in accordance with procedures established in good faith by the
Managing General Partners. 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 (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. INVESTMENT INCOME Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis.
D. FEDERAL INCOME TAXES The Fund has met the qualifications to be classified as
a partnership for federal income tax purposes and intends to maintain this
qualification in the future. A partnership is not subject to federal income tax.
9
VAN KAMPEN EXCHANGE FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 (UNAUDITED) continued
At June 30, 2004, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $ 3,700,502
-----------
Gross tax unrealized appreciation........................... $59,152,771
Gross tax unrealized depreciation........................... -0-
-----------
Net tax unrealized appreciation on investments.............. $59,152,771
===========
</Table>
E. DISTRIBUTION OF INCOME AND GAINS Quarterly distributions to partners are
recorded on the record date. Net investment income is allocated daily to each
partner, relative to the total number of units held. Capital gains or losses
will be allocated equally among units outstanding on the day recognized.
F. EXPENSE REDUCTIONS During the six months ended June 30, 2004, the Fund's
custody fee was reduced by $259 as a result of credits earned on cash balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide facilities and investment advice to the Fund for an annual fee payable
monthly of .50% based on the average daily net assets of the Fund.
For the six months ended June 30, 2004, the Fund recognized expenses of
approximately $5,800 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 June 30, 2004, the Fund recognized expenses of
approximately $4,500 representing Van Kampen Investments Inc.'s or its
affiliates' (collectively "Van Kampen") cost of providing accounting services to
the Fund, which is reported as part of "Other" expense 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
June 30, 2004, the Fund recognized expenses of approximately $7,500 representing
transfer agency fees paid to VKIS. Transfer agency fees are determined through
negotiations with the Fund's Managing General Partners.
Managing general partners of the Fund who are not affiliated with the
Adviser are compensated by the Fund at the annual rate of approximately $500
plus a fee of $250 per Board meeting attended.
The Managing General Partners of the Fund instituted a Retirement Plan
effective April 1, 1996. The Plan is not funded, and obligations under the Plan
will be paid solely out of the Fund's general accounts. The Fund will not
reserve or set aside funds for the payment of its obligations under the Plan by
any form of trust or escrow. For the current Managing General Partners not
affiliated with the Adviser, the annual retirement benefit payable per year for
a ten year period is based upon the highest total annual compensation received
in any of the three calendar years preceding retirement. Managing General
Partners with more than five but less than ten years service at retirement will
receive a prorated reduced benefit. Under the Plan, for the Managing General
Partners retiring with the effectiveness of the Plan,
10
VAN KAMPEN EXCHANGE FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 (UNAUDITED) continued
the annual retirement benefit payable per year for a ten year period is equal to
75% of the total compensation received from the Fund during the 1995 calendar
year.
At June 30, 2004, Van Kampen Funds Inc. and Van Kampen Exchange Corp., as
nonmanaging general partners of the Fund, owned 223 and 3,116 units of
partnership interest, respectively.
3. PARTNERSHIP UNIT TRANSACTIONS
Partners of the Fund may redeem units at any time. The net asset value of units
redeemed, other than redemptions under a systematic withdrawal plan, may be paid
in cash or securities, at the option of the Fund, and will ordinarily be paid in
whole or in part in securities. The Fund's valuation will determine the quantity
of securities tendered. The Fund will select securities for tender in
redemptions based on tax or investment considerations.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $-0- and $5,099,769, respectively.
5. NET ASSETS
At June 30, 2004, net assets include the following:
<Table>
Net paid in capital on units of beneficial interest......... $ 7,610,712
Net unrealized appreciation on investments.................. 55,238,871
-----------
Total net assets............................................ $62,849,583
===========
</Table>
6. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
11
VAN KAMPEN EXCHANGE FUND (A CALIFORNIA LIMITED PARTNERSHIP)
MANAGING GENERAL PARTNERS AND IMPORTANT ADDRESSES
MANAGING GENERAL PARTNERS
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
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
NON-MANAGING GENERAL PARTNERS
VAN KAMPEN EXCHANGE CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, NY 10020
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
12
VAN KAMPEN EXCHANGE FUND
RESULTS OF PARTNER VOTES
The Annual Meeting of the Partners of the Fund was held on June 23, 2004, where
partners voted on the election of Managing General Partners. With regard to the
election of the following Managing General Partners of the Fund:
<Table>
<Caption>
# OF SHARES
----------------------------
IN FAVOR WITHHELD
- ------------------------------------------------------------------------------------------
David C. Arch............................................... 98,687 3,686
J. Miles Branagan........................................... 98,687 3,686
Jerry D. Choate............................................. 98,687 3,686
Rod Dammeyer................................................ 98,687 3,686
Linda Hutton Heagy.......................................... 98,687 3,686
R. Craig Kennedy............................................ 98,687 3,686
Howard J Kerr............................................... 98,687 3,686
Mitchell M. Merin........................................... 98,687 3,686
Jack E. Nelson.............................................. 98,687 3,686
Richard F. Powers, III...................................... 98,687 3,686
Hugo F. Sonnenschein........................................ 98,687 3,686
Wayne W. Whalen............................................. 98,687 3,686
Suzanne H. Woolsey.......................................... 98,687 3,686
</Table>
13
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.
EXCH SAR 8/04 RN04-01787P-Y06/04
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. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 10. 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 11. 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 Exchange Fund
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 19, 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: August 19, 2004
By: /s/ James M. Dykas
----------------------
Name: James M. Dykas
Title: Principal Financial Officer
Date: August 19, 2004