UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
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: 2/28/06
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 semi annual period. The
portfolio management team will provide an overview of the market
conditions and discuss some of the factors that affected investment
performance during the reporting period. In addition, this report
includes the fund's financial statements and a list of fund investments
as of February 28, 2006.
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
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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</Table>
Performance Summary February 28, 2006
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
since 9/23/71 since 9/28/92 since 8/30/93 since 8/12/05
- ----------------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALES SALES W/O SALES SALES W/O SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 7.74% 7.59% 5.69% 5.69% 4.88% 4.88% 0.70%
10-year 5.74 5.22 5.25 5.25 4.95 4.95 n/a
5-year 5.46 4.44 4.64 4.39 4.67 4.67 n/a
1-year 2.24 -2.66 1.46 -2.44 1.61 0.64 n/a
6-month -0.53 -5.28 -0.92 -4.81 -0.91 -1.89 -0.40
- ----------------------------------------------------------------------------------------------------
30-Day SEC Yield 4.40% 3.87% 3.87% 4.87%
</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
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. 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 up to 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. Class I shares are
available for purchase exclusively by investors through (i) tax-exempt
retirement plans with assets of at least $1 million (including 401(k) plans, 457
plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans,
defined benefit plans and non-qualified deferred compensation plans), (ii)
fee-based investment programs with assets of at least $1 million and (iii)
institutional clients with assets of at least $1 million. Class I shares are
offered without any sales charges on purchases or sales and do not include
combined 12b-1 fees and service fees. 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 are unmanaged and do not include any sales
charges or fees. Such costs would lower performance. It is not possible to
invest directly in an index. Source: Lipper Inc.
1
Fund Report
FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2006
MARKET CONDITIONS
Despite high energy prices and the devastation of the Gulf Coast hurricanes, the
U.S. economy demonstrated resilience during the reporting period. While some
observers initially expected that Hurricane Katrina would deliver a significant
blow to the U.S. economy, it became apparent as the weeks progressed that the
impact on the economy would be much smaller and more temporary than many had
anticipated. Moreover, sharply higher energy prices failed to interrupt the
positive economic momentum.
The first two months of 2006 proved somewhat uneventful. As many expected, the
Federal Open Market Committee (the Fed) once again raised the federal funds
target rate by a quarter-point to 4.50 percent in January. Also as expected,
Alan Greenspan retired in January after more than 18 years as chairman of the
Federal Reserve Board of Governors. Ben S. Bernanke replaced him, and in his
first Congressional testimony as chairman, Bernanke acknowledged some risks to
the Fed's relatively contained inflation forecast and recognized the potential
for upward pressure on inflation if certain conditions persisted unchecked. The
chairman also indicated that he concurred with the Fed's January policy
statement which noted the potential for further tightening of monetary policy.
U.S. Treasury yields rose for the period overall. Short- and intermediate-term
Treasury yields were more responsive to stronger-than-expected economic data and
rose more rapidly than longer-term Treasury yields. Accordingly, the yield curve
(which measures the difference between short- and long-term bond yields)
flattened during the six-month period.
U.S. investment-grade corporate bonds underperformed other major bond market
sectors. Sector returns were unevenly distributed, with a few key names driving
performance within each sector. Overall, Aa-rated issues posted the highest
returns while medium quality, Baa-rated issues lagged. Among the
investment-grade corporate sub-sectors, the best performers were energy,
utilities and banking issues. Within the high yield sector, lower-rated issues
posted the best performance with forest products, telecom and consumer products
leading the way.
2
PERFORMANCE ANALYSIS
The fund returned -0.53 percent for the six months ended February 28, 2006
(Class A shares, unadjusted for sales charges). In comparison, the fund's
benchmarks, the Lehman Brothers Credit Bond Index and the Lipper Corporate
BBB-Rated Index, returned -0.78 percent and 0.34 percent for the period,
respectively.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED FEBRUARY 28, 2006
<Table>
<Caption>
- --------------------------------------------------------------------------------------
LEHMAN BROTHERS LIPPER CORPORATE
CREDIT BOND BBB-RATED
CLASS A CLASS B CLASS C CLASS I INDEX INDEX
-0.53% -0.92% -0.91% -0.40% -0.78% 0.34%
- --------------------------------------------------------------------------------------
</Table>
The performance for the four 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.
During the period, we kept the fund's overall interest-rate exposure well below
that of the Lehman benchmark. This posture was beneficial as interest rates rose
across the yield curve, especially in the short-term and intermediate-term
portions of the curve.
Favorable sector and security selection decisions, most notably an underweight
in the automotive sector, benefited relative performance versus the Lehman
benchmark. Within the investment-grade portion of the fund, a focus on
higher-rated issues contributed positively to both absolute and relative
performance.
While the fund emphasizes investment-grade credits, it also includes a smaller
allocation to higher yielding securities. Within the high yield portion, a
conservative approach detracted from performance as higher-rated issues
underperformed the riskiest segment of the high yield market (issues rated CCC
and below).
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
3
<Table>
RATINGS ALLOCATIONS AS OF 02/28/06
AAA/Aaa 13.8%
AA/Aa 15.0
A/A 28.4
BBB/Baa 35.7
BB/Ba 3.7
B/B 3.4
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 02/28/06
U.S. Government Agency Obligations 10.0%
Banking 9.6
Electric 8.7
Wireline Communications 7.3
Noncaptive-Consumer Finance 5.3
Life Insurance 4.6
Healthcare 4.5
Noncaptive-Diversified Finance 4.0
Diversified Manufacturing 3.9
Property & Casualty Insurance 3.4
Food/Beverage 3.3
Automotive 2.4
Paper 2.2
Railroads 2.1
Media-Noncable 1.6
Media-Cable 1.5
Retail 1.5
Natural Gas Pipelines 1.2
Consumer Products 1.2
Aerospace & Defense 0.9
Environmental & Facilities Services 0.9
Brokerage 0.9
Supermarkets 0.9
Textile 0.9
Wireless Communications 0.8
Chemicals 0.8
Gaming 0.8
Integrated Energy 0.8
Technology 0.7
Construction Machinery 0.7
Natural Gas Distributors 0.7
Entertainment 0.6
Lodging 0.5
Building Materials 0.5
Real Estate Investment Trusts 0.4
Independent Energy 0.4
Transportation Services 0.3
Pharmaceuticals 0.3
Oil Field Services 0.1
Refining 0.0
-----
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 02/28/06
(continued from previous page)
Total Long-Term Investments 91.2%
Short-Term Investments 6.5
Other Assets in Excess of Liabilities 2.3
-----
Total Net Assets 100.0%
</Table>
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the industries shown above. Ratings allocations are as a
percentage of long-term investments. Industry allocations are as a percentage of
net assets. 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 and Moody's, respectively.
5
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters by filing the schedule
electronically with the Securities and Exchange Commission (SEC). The
semiannual reports are filed on Form N-CSRS and the annual reports are
filed on Form N-CSR. Van Kampen also delivers the semiannual and annual
reports to fund shareholders, and makes these reports available on its
public Web site, www.vankampen.com. In addition to the semiannual and
annual reports that Van Kampen delivers to shareholders and makes
available through the Van Kampen public Web site, each fund files a
complete schedule of portfolio holdings with the SEC for the fund's first
and third fiscal quarters on Form N-Q. Van Kampen does not deliver the
reports for the first and third fiscal quarters to shareholders, nor are
the reports posted to the Van Kampen public Web site. You may, however,
obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS
filings) by accessing the SEC's Web site, http://www.sec.gov. You may
also review and copy them at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the SEC's Public
Reference Room may be obtained by calling the SEC at (800) SEC-0330. You
can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
You may obtain copies of a fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
6
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 POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge by visiting our Web site at www.vankampen.com.
This information is also available on the Securities and Exchange
Commission's Web site at http://www.sec.gov.
7
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charge on redemptions of Class B and C Shares; and
(2) ongoing costs, including management fees; distribution and service (12b-1)
fees; and other Fund expenses. This example is intended to help you understand
your ongoing cost (in dollars) of investing in the Fund and to compare these
costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 9/1/05 - 2/28/06.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges. Therefore, the second line
of the table is useful in comparing ongoing costs only, and will not help you
determine the relative total costs of owning different funds. In addition, if
these transactional costs were included, your costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
------------------------------------------------
9/1/05 2/28/06 9/1/05-2/28/06
Class A
Actual...................................... $1,000.00 $ 994.72 $4.65
Hypothetical................................ 1,000.00 1,020.09 4.71
(5% annual return before expenses)
Class B
Actual...................................... 1,000.00 990.81 8.39
Hypothetical................................ 1,000.00 1,016.39 8.50
(5% annual return before expenses)
Class C
Actual...................................... 1,000.00 990.85 8.39
Hypothetical................................ 1,000.00 1,016.39 8.50
(5% annual return before expenses)
Class I
Actual...................................... 1,000.00 995.97 3.46
Hypothetical................................ 1,000.00 1,021.29 3.51
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.94%, 1.70%,
1.70% and 0.70% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 181/365 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
8
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CORPORATE BONDS 80.8%
AEROSPACE & DEFENSE 0.9%
$ 992 Raytheon Co. ................................... 4.500% 11/15/07 $ 980,671
3,310 Raytheon Co. ................................... 6.150 11/01/08 3,394,673
1,960 Raytheon Co. ................................... 8.300 03/01/10 2,171,776
------------
6,547,120
------------
AUTOMOTIVE 2.4%
2,915 DaimlerChrysler NA Holding Corp. ............... 8.500 01/18/31 3,564,182
3,725 General Motors Acceptance Corp. ................ 6.875 09/15/11 3,338,963
11,945 General Motors Corp. ........................... 8.375 07/15/33 8,480,950
2,920 Lear Corp. ..................................... 8.110 05/15/09 2,578,635
------------
17,962,730
------------
BANKING 9.6%
5,120 Bank of America Corp. .......................... 3.375 02/17/09 4,878,234
6,000 Bank of Scotland, 144A-Private Placement (United
Kingdom) (a).................................... 3.500 11/30/07 5,848,890
160 Citigroup, Inc. ................................ 6.625 06/15/32 180,851
5,355 JPMorgan Chase & Co. ........................... 6.750 02/01/11 5,694,528
5,920 KeyCorp. ....................................... 6.750 03/15/06 5,923,451
6,010 Marshall & Ilsley Bank.......................... 3.800 02/08/08 5,870,466
4,475 MBNA Corp. (Variable Rate Coupon)............... 5.140 05/05/08 4,511,632
6,160 National City Bank.............................. 3.375 10/15/07 5,998,996
3,400 PNC Funding Corp. .............................. 5.750 08/01/06 3,409,112
5,855 SunTrust Banks, Inc. ........................... 5.050 07/01/07 5,832,435
6,000 U.S. Bancorp.................................... 3.950 08/23/07 5,905,698
2,890 Wachovia Corp. ................................. 4.950 11/01/06 2,885,951
3,100 Wachovia Corp. ................................. 3.625 02/17/09 2,972,984
1,690 Washington Mutual Bank FA....................... 5.500 01/15/13 1,695,989
2,960 Washington Mutual, Inc. ........................ 8.250 04/01/10 3,256,269
5,820 Wells Fargo & Co. .............................. 5.125 02/15/07 5,812,003
------------
70,677,489
------------
BROKERAGE 0.5%
1,560 Goldman Sachs Group, Inc. ...................... 5.250 10/15/13 1,547,999
2,000 Lehman Brothers Holdings, Inc. ................. 8.500 05/01/07 2,072,288
------------
3,620,287
------------
BUILDING MATERIALS 0.5%
3,380 Masco Corp. .................................... 4.625 08/15/07 3,342,306
------------
CHEMICALS 0.8%
5,890 Sealed Air Corp., 144A-Private Placement (a).... 5.625 07/15/13 5,834,546
------------
CONSTRUCTION MACHINERY 0.7%
5,460 Caterpillar Financial Services Corp., Ser F..... 3.625 11/15/07 5,330,467
------------
</Table>
See Notes to Financial Statements 9
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CONSUMER PRODUCTS 1.2%
$3,950 Cendant Corp. .................................. 6.250% 01/15/08 $ 4,001,054
4,725 Clorox Co. (Variable Rate Coupon)............... 4.614 12/14/07 4,737,035
------------
8,738,089
------------
DIVERSIFIED MANUFACTURING 3.9%
195 Brascan Corp. (Canada).......................... 8.125 12/15/08 208,641
3,935 Brascan Corp. (Canada).......................... 7.125 06/15/12 4,248,301
2,260 Cooper Industries, Inc. ........................ 5.250 07/01/07 2,256,409
3,790 Cooper Industries, Inc., 144A-Private Placement
(a)............................................. 5.250 11/15/12 3,773,199
1,450 Hutchison Whampoa International Ltd.,
144A-Private Placement (Cayman Islands) (a)..... 5.450 11/24/10 1,451,003
1,880 Hutchison Whampoa International Ltd.,
144A-Private Placement (Cayman Islands) (a)..... 6.500 02/13/13 1,976,499
3,000 Textron Financial Corp. ........................ 2.690 10/03/06 2,960,613
475 Tyco International Group SA (Luxembourg)........ 5.800 08/01/06 476,041
6,200 Tyco International Group SA (Luxembourg)........ 6.125 11/01/08 6,307,874
5,050 United Technologies Corp. ...................... 4.375 05/01/10 4,927,815
------------
28,586,395
------------
ELECTRIC 8.7%
5,470 Ameren Corp. ................................... 4.263 05/15/07 5,401,964
2,325 Arizona Public Service Co. ..................... 6.750 11/15/06 2,346,843
4,880 Arizona Public Service Co. ..................... 5.800 06/30/14 4,926,990
2,155 Carolina Power & Light Co. ..................... 6.800 08/15/07 2,201,305
5,151 CC Funding Trust I.............................. 6.900 02/16/07 5,227,523
2,860 Cincinnati Gas & Electric Co. .................. 5.700 09/15/12 2,911,051
2,685 Detroit Edison Co. ............................. 6.125 10/01/10 2,774,300
2,690 Duquesne Light Co., Ser O....................... 6.700 04/15/12 2,889,875
320 Duquesne Light Co., Ser Q....................... 5.700 05/15/14 325,162
2,265 Entergy Gulf States, Inc. ...................... 3.600 06/01/08 2,171,967
4,395 Entergy Gulf States, Inc. (Variable Rate
Coupon)......................................... 4.810 12/01/09 4,348,048
1,965 Entergy Gulf States, Inc., 144A-Private
Placement (Variable Rate Coupon) (a)............ 5.207 12/08/08 1,967,238
3,835 Exelon Corp. ................................... 6.750 05/01/11 4,055,244
3,415 FPL Group Capital, Inc. ........................ 3.250 04/11/06 3,408,716
560 Indianapolis Power & Light Co., 144A-Private
Placement (a)................................... 6.300 07/01/13 582,834
1,930 Monongahela Power Co. .......................... 5.000 10/01/06 1,926,785
5,550 NiSource Finance Corp. (Variable Rate Coupon)... 5.344 11/23/09 5,574,326
4,195 Pacific Gas & Electric Co. ..................... 6.050 03/01/34 4,355,945
1,400 PSEG Energy Holdings............................ 8.625 02/15/08 1,480,500
590 TXU Corp., Ser J................................ 6.375 06/15/06 594,426
5,000 Wisconsin Electric Power........................ 3.500 12/01/07 4,860,590
------------
64,331,632
------------
ENTERTAINMENT 0.6%
4,237 Time Warner, Inc. .............................. 6.150 05/01/07 4,281,950
------------
</Table>
10 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
ENVIRONMENTAL & FACILITIES SERVICES 0.9%
$1,220 Waste Management, Inc. ......................... 7.000% 10/15/06 $ 1,233,391
3,223 Waste Management, Inc. ......................... 6.875 05/15/09 3,374,935
1,745 Waste Management, Inc. ......................... 7.375 08/01/10 1,881,747
------------
6,490,073
------------
FOOD/BEVERAGE 3.3%
2,750 Coca-Cola Enterprises, Inc. .................... 5.375 08/15/06 2,754,301
1,835 ConAgra, Inc. .................................. 7.000 10/01/28 1,980,376
1,745 ConAgra, Inc. .................................. 8.250 09/15/30 2,148,092
4,465 FBG Finance, Ltd., 144A-Private Placement
(Australia) (a)................................. 5.125 06/15/15 4,283,989
4,000 General Mills, Inc. ............................ 3.875 11/30/07 3,910,648
3,145 Kraft Foods, Inc. .............................. 5.625 11/01/11 3,188,278
6,015 Miller Brewing Co., 144A-Private Placement
(a)............................................. 4.250 08/15/08 5,884,306
------------
24,149,990
------------
GAMING 0.8%
5,760 Harrahs Operating Co., Inc. .................... 5.625 06/01/15 5,637,756
------------
HEALTHCARE 4.5%
4,835 Aetna, Inc. .................................... 7.375 03/01/06 4,835,000
1,135 Aetna, Inc. .................................... 7.875 03/01/11 1,261,506
1,815 Amerisourcebergen Corp., 144A-Private Placement
(a)............................................. 5.625 09/15/12 1,814,608
4,420 Baxter Finance Co., 144A-Private Placement
(Netherlands) (a)............................... 4.750 10/15/10 4,322,053
6,085 Health Net, Inc. ............................... 9.875 04/15/11 7,024,682
1,840 UnitedHealth Group, Inc. ....................... 5.200 01/17/07 1,841,634
6,000 UnitedHealth Group, Inc. (Variable Rate
Coupon)......................................... 4.920 03/02/09 6,003,282
2,000 Wellpoint, Inc. ................................ 6.375 06/15/06 2,008,288
2,410 Wellpoint, Inc. ................................ 3.750 12/14/07 2,351,317
1,510 Wellpoint, Inc. ................................ 4.250 12/15/09 1,457,204
------------
32,919,574
------------
INDEPENDENT ENERGY 0.4%
1,550 Kerr-McGee Corp. ............................... 5.875 09/15/06 1,560,879
1,540 Kerr-McGee Corp. ............................... 6.625 10/15/07 1,572,531
------------
3,133,410
------------
INTEGRATED ENERGY 0.8%
1,880 Consumers Energy Co., Ser F..................... 4.000 05/15/10 1,780,386
2,035 Consumers Energy Co., Ser H..................... 4.800 02/17/09 2,008,156
1,905 Petro-Canada (Canada)........................... 5.350 07/15/33 1,777,605
------------
5,566,147
------------
LIFE INSURANCE 4.6%
830 AXA Financial, Inc. ............................ 6.500 04/01/08 854,707
7,605 Marsh & McLennan Cos., Inc. .................... 5.875 08/01/33 7,275,802
190 Metlife, Inc. .................................. 6.125 12/01/11 198,263
</Table>
See Notes to Financial Statements 11
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
LIFE INSURANCE (CONTINUED)
$2,730 Monumental Global Funding II, 144A-Private
Placement (a)................................... 3.850% 03/03/08 $ 2,665,015
920 Nationwide Financial Services, Inc. ............ 6.250 11/15/11 957,641
3,495 Platinum Underwriters Finance Inc. Ser B........ 7.500 06/01/17 3,575,661
3,055 Platinum Underwriters Hldgs, Ltd. (Bermuda)..... 6.371 11/16/07 3,051,105
6,400 Principal Life Global Funding I, 144A-Private
Placement (a)................................... 5.125 06/28/07 6,367,494
3,400 Prudential Funding LLC., 144A-Private Placement
(a)............................................. 6.600 05/15/08 3,499,375
5,595 Xlliac Global Funding, 144A-Private Placement
(a)............................................. 4.800 08/10/10 5,477,706
------------
33,922,769
------------
LODGING 0.5%
2,755 Hyatt Equities, LLC, 144A-Private Placement
(a)............................................. 6.875 06/15/07 2,790,950
1,005 Starwood Hotels & Resorts Worldwide, Inc. ...... 7.375 05/01/07 1,030,125
------------
3,821,075
------------
MEDIA-CABLE 1.5%
4,455 Comcast Cable Communications, Inc. ............. 8.375 05/01/07 4,613,455
2,625 Comcast Cable Communications, Inc. ............. 6.750 01/30/11 2,757,864
240 Comcast Cable Communications, Inc. ............. 7.125 06/15/13 259,206
2,495 Echostar DBS Corp. ............................. 6.375 10/01/11 2,451,338
1,205 Echostar DBS Corp. ............................. 6.625 10/01/14 1,177,888
------------
11,259,751
------------
MEDIA-NONCABLE 1.6%
2,415 Interpublic Group of Cos., Inc. ................ 5.400 11/15/09 2,233,875
2,600 News America Holdings, Inc. .................... 8.875 04/26/23 3,230,139
510 News America, Inc. ............................. 7.125 04/08/28 544,645
795 News America, Inc. ............................. 7.300 04/30/28 865,110
900 News America, Inc. ............................. 7.280 06/30/28 978,100
3,580 WPP Finance Corp. (United Kingdom).............. 5.875 06/15/14 3,598,262
------------
11,450,131
------------
NATURAL GAS DISTRIBUTORS 0.7%
5,163 Sempra Energy................................... 4.621 05/17/07 5,124,706
------------
NATURAL GAS PIPELINES 1.2%
2,230 Consolidated Natural Gas Co., Ser A............. 5.000 12/01/14 2,145,443
3,530 Consolidated Natural Gas Co., Ser C............. 6.250 11/01/11 3,661,143
2,515 Texas Eastern Transmission Corp. ............... 7.000 07/15/32 2,944,587
------------
8,751,173
------------
NONCAPTIVE-CONSUMER FINANCE 5.3%
4,660 American Express Co. ........................... 5.500 09/12/06 4,672,270
1,520 American General Finance Corp. ................. 4.625 05/15/09 1,499,469
4,500 American General Finance Corp. ................. 4.625 09/01/10 4,361,823
6,920 Countrywide Home Loans, Inc. ................... 3.250 05/21/08 6,638,439
1,000 HSBC Finance Corp. ............................. 7.875 03/01/07 1,024,967
800 HSBC Finance Corp. ............................. 4.125 12/15/08 777,626
1,175 HSBC Finance Corp. ............................. 4.125 11/16/09 1,132,635
</Table>
12 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NONCAPTIVE-CONSUMER FINANCE (CONTINUED)
$4,700 HSBC Finance Corp. ............................. 6.750% 05/15/11 $ 5,000,302
1,115 HSBC Finance Corp. ............................. 6.375 10/15/11 1,168,343
8,335 Residential Capital Corp. ...................... 6.375 06/30/10 8,423,768
4,660 SLM Corp. ...................................... 4.000 01/15/10 4,418,831
------------
39,118,473
------------
NONCAPTIVE-DIVERSIFIED FINANCE 4.0%
1,165 CIT Group, Inc. ................................ 7.375 04/02/07 1,190,772
940 CIT Group, Inc. ................................ 3.650 11/23/07 917,508
1,545 CIT Group, Inc. ................................ 4.750 08/15/08 1,531,158
6,000 General Electric Capital Corp., Ser A........... 4.250 01/15/08 5,911,278
5,440 General Electric Capital Corp., Ser A........... 5.875 02/15/12 5,628,229
2,235 General Electric Capital Corp., Ser A........... 4.750 09/15/14 2,172,290
3,845 General Electric Capital Corp., Ser A........... 6.750 03/15/32 4,514,880
1,020 International Lease Finance Corp. .............. 3.750 08/01/07 999,537
7,115 Nationwide Building Society, 144A-Private
Placement (United Kingdom) (a).................. 4.250 02/01/10 6,880,483
------------
29,746,135
------------
OIL FIELD SERVICES 0.1%
960 Panhandle Eastern Pipe Line Co., Ser B.......... 2.750 03/15/07 934,854
------------
PAPER 2.2%
2,175 Abitibi-Consolidated, Inc. (Canada)............. 8.550 08/01/10 2,158,688
4,610 Abitibi-Consolidated, Inc. (Canada)............. 8.850 08/01/30 4,074,088
7,945 Bowater Canada Finance (Canada)................. 7.950 11/15/11 7,825,825
1,915 Sappi Papier Hldg AG, 144A-Private Placement
(Austria) (a)................................... 6.750 06/15/12 1,837,140
------------
15,895,741
------------
PHARMACEUTICALS 0.3%
2,000 Abbott Laboratories............................. 5.625 07/01/06 2,004,978
------------
PROPERTY & CASUALTY INSURANCE 3.4%
3,910 AIG Sunamerica Global Financial, 144A-Private
Placement (a)................................... 6.300 05/10/11 4,106,783
4,710 Farmers Exchange Capital, 144A-Private Placement
(a)............................................. 7.050 07/15/28 4,961,929
2,721 Farmers Insurance Exchange Surplus, 144A-Private
Placement (a)................................... 8.625 05/01/24 3,288,247
575 Hartford Financial Services Group, Inc. ........ 2.375 06/01/06 571,411
4,610 Mantis Reef Ltd., 144A-Private Placement
(Australia) (a)................................. 4.692 11/14/08 4,508,889
4,140 St. Paul Travelers Cos., Inc. .................. 5.010 08/16/07 4,117,064
3,315 Two-Rock Pass Through Trust (Variable Rate
Coupon) (Bermuda)............................... 5.680 02/11/49 3,297,828
------------
24,852,151
------------
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
RAILROADS 2.1%
$3,240 Burlington Northern Santa Fe Corp. ............. 6.125% 03/15/09 $ 3,327,749
1,572 Burlington Northern Santa Fe Railway Co. ....... 4.575 01/15/21 1,505,731
1,500 CSX Corp. ...................................... 6.750 03/15/11 1,595,919
1,649 Norfolk Southern Corp. ......................... 7.350 05/15/07 1,692,004
7,375 Union Pacific Corp. ............................ 6.625 02/01/08 7,559,169
------------
15,680,572
------------
REAL ESTATE INVESTMENT TRUSTS 0.4%
525 EOP Operating LP................................ 4.750 03/15/14 495,397
765 EOP Operating LP................................ 7.875 07/15/31 909,362
1,945 Reckson Operating Partnership LP................ 5.150 01/15/11 1,904,118
------------
3,308,877
------------
REFINING 0.0%
250 Vintage Petroleum, Inc. ........................ 7.875 05/15/11 260,883
------------
RETAIL 1.5%
465 CVS Corp. ...................................... 5.625 03/15/06 465,071
800 CVS Corp. ...................................... 3.875 11/01/07 782,702
2,000 Federated Department Stores, Inc. .............. 6.625 09/01/08 2,058,622
1,500 Federated Department Stores, Inc. .............. 6.300 04/01/09 1,538,496
2,910 Limited Brands, Inc. ........................... 6.950 03/01/33 2,987,339
2,970 May Department Stores Co. ...................... 5.950 11/01/08 3,015,572
------------
10,847,802
------------
SUPERMARKETS 0.9%
4,600 Albertson's, Inc. .............................. 8.000 05/01/31 4,414,703
1,800 Kroger Co. ..................................... 7.250 06/01/09 1,890,293
------------
6,304,996
------------
TECHNOLOGY 0.7%
3,450 Hewlett-Packard Co. ............................ 5.750 12/15/06 3,466,153
1,960 LG Electronics, Inc., 144A-Private Placement
(South Korea) (a)............................... 5.000 06/17/10 1,915,471
------------
5,381,624
------------
TEXTILE 0.9%
2,845 Mohawk Industries, Inc., Ser C.................. 6.500 04/15/07 2,872,662
3,245 Mohawk Industries, Inc., Ser D.................. 7.200 04/15/12 3,430,802
------------
6,303,464
------------
TRANSPORTATION SERVICES 0.3%
2,300 FedEx Corp. .................................... 2.650 04/01/07 2,235,653
------------
WIRELESS COMMUNICATIONS 0.8%
6,000 Verizon Wireless Capital LLC.................... 5.375 12/15/06 6,012,516
------------
WIRELINE COMMUNICATIONS 7.3%
5,650 AT&T Corp. ..................................... 9.750 11/15/31 7,091,117
6,000 AT&T Inc. ...................................... 4.125 09/15/09 5,783,652
3,155 AT&T Inc. ...................................... 6.150 09/15/34 3,154,066
</Table>
14 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
WIRELINE COMMUNICATIONS (CONTINUED)
$7,200 Bellsouth Corp. (Variable Rate Coupon).......... 4.874% 11/15/07 $ 7,212,067
2,745 Cox Communications, Inc. ....................... 4.625 01/15/10 2,646,518
4,465 Deutsche Telekom International Finance BV
(Netherlands)................................... 8.250 06/15/30 5,630,718
4,325 France Telecom SA (France)...................... 8.500 03/01/31 5,693,884
6,650 Sprint Capital Corp. ........................... 6.125 11/15/08 6,801,301
2,080 Sprint Capital Corp. ........................... 8.750 03/15/32 2,740,348
1,900 Telecom Italia Capital, (Luxembourg)............ 4.000 11/15/08 1,835,860
4,105 Telecom Italia Capital, (Luxembourg)............ 4.000 01/15/10 3,886,618
265 Verizon New England, Inc. ...................... 6.500 09/15/11 272,960
1,000 Verizon Wireless Capital, Inc. ................. 5.375 12/15/06 1,057,962
------------
53,807,071
------------
TOTAL CORPORATE BONDS 80.8%................................................ 594,175,356
------------
MORTGAGE BACKED SECURITIES 0.4%
1,916 World Financial Property, 144A-Private Placement
(a)............................................. 6.910 09/01/13 2,003,862
771 World Financial Property, 144A-Private Placement
(a)............................................. 6.950 09/01/13 806,607
------------
TOTAL MORTGAGE BACKED SECURITIES............................................ 2,810,469
------------
GOVERNMENT OBLIGATIONS 10.0%
6,550 United States Treasury Bonds.................... 6.125 08/15/29 7,909,898
24,900 United States Treasury Bonds.................... 6.375 08/15/27 30,566,717
500 United States Treasury Bonds.................... 8.125 08/15/21 686,114
9,495 United States Treasury Bonds (STRIPS) (b)....... 0.000 02/15/25 3,935,981
8,775 United States Treasury Bonds (STRIPS) (b)....... 0.000 02/15/27 3,342,038
10,685 United States Treasury Notes.................... 4.250 08/15/13 10,443,754
7,000 United States Treasury Notes.................... 4.250 11/15/13 6,836,214
10,125 United States Treasury Notes.................... 5.000 02/15/11 10,306,936
------------
TOTAL GOVERNMENT OBLIGATIONS................................................ 74,027,652
------------
TOTAL LONG-TERM INVESTMENTS 91.2%
(Cost $673,130,618)....................................................... 671,013,477
------------
SHORT-TERM INVESTMENTS 6.5%
REPURCHASE AGREEMENT 6.4%
State Street Bank & Trust Co. ($46,788,000 par collateralized by
U.S. Government obligations in a pooled cash account, interest
rate of 4.49%, dated 02/28/06, to be sold on 03/01/06 at
$46,793,836)...................................................... 46,788,000
</Table>
See Notes to Financial Statements 15
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
<Table>
<Caption>
DESCRIPTION VALUE
- -----------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 0.1%
United States Treasury Bills ($900,000 par, yielding 4.927%,
07/13/06 maturity) (c)............................................ $ 885,502
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $47,673,502)............................................................ 47,673,502
------------
TOTAL INVESTMENTS 97.7%
(Cost $720,804,120)........................................................... 718,686,979
OTHER ASSETS IN EXCESS OF LIABILITIES 2.3%..................................... 16,968,940
------------
NET ASSETS 100.0%.............................................................. $735,655,919
============
</Table>
Percentages are calculated as a percentage of net assets.
(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) Interest only strip.
(c) All or a portion of these securities have been physically segregated in
connection with open futures contracts.
16 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
FUTURES CONTRACTS OUTSTANDING AS OF FEBRUARY 28, 2006:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
LONG CONTRACTS:
U.S. Treasury Bonds Futures, June 2006
(Current Notional Value of $113,094 per contract)....... 603 $ 81,145
U.S. Treasury Notes 10-Year Futures, June 2006
(Current Notional Value of $107,906 per contract)....... 721 (51,475)
U.S. Treasury Notes 5-Year Futures, June 2006
(Current Notional Value of $105,188 per contract)....... 40 9,327
----- --------
1,364 38,997
----- --------
SHORT CONTRACTS:
U.S. Treasury Notes 2-Year Futures, June 2006
(Current Notional Value of $204,375 per contract)....... 685 75,484
U.S. Treasury Notes 2-Year Futures, March 2006
(Current Notional Value of $204,359 per contract)....... 168 116,899
----- --------
853 192,383
----- --------
2,217 $231,380
===== ========
</Table>
SWAP AGREEMENTS OUTSTANDING AS OF FEBRUARY 28, 2006:
CREDIT DEFAULT SWAPS
<Table>
<Caption>
PAY/
RECEIVE NOTIONAL UNREALIZED
BUY/SELL FIXED EXPIRATION AMOUNT APPRECIATION/
COUNTERPARTY REFERENCE ENTITY PROTECTION RATE DATE (000) DEPRECIATION
- ------------ ---------------- ---------- ------- ---------- -------- -------------
Goldman Sachs Capital
Markets............... Country Wide Home Loans, Inc. Sell 0.63% 09/20/10 $2,000 $ 19,045
Goldman Sachs Capital
Markets............... Eastman Kodak Co. Sell 2.87 11/15/13 2,100 52,897
JPMorgan Chase Bank.... Tyco International., Ltd. Buy 0.65 03/20/11 3,500 7,274
Goldman Sachs Capital
Markets............... Tyco International., Ltd. Buy 0.80 03/20/11 2,100 (10,259)
--------
$ 68,957
========
</Table>
See Notes to Financial Statements 17
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
February 28, 2006 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $720,804,120)....................... $718,686,979
Cash........................................................ 122
Receivables:
Investments Sold.......................................... 13,601,080
Interest.................................................. 8,720,494
Fund Shares Sold.......................................... 2,643,714
Variation Margin on Futures............................... 472,391
Swap Contracts.............................................. 68,957
Other....................................................... 122,157
------------
Total Assets............................................ 744,315,894
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 6,000,000
Fund Shares Repurchased................................... 1,334,621
Distributor and Affiliates................................ 498,763
Income Distributions...................................... 241,917
Investment Advisory Fee................................... 222,399
Trustees' Deferred Compensation and Retirement Plans........ 183,532
Accrued Expenses............................................ 178,743
------------
Total Liabilities....................................... 8,659,975
------------
NET ASSETS.................................................. $735,655,919
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $744,860,393
Net Unrealized Depreciation................................. (1,816,804)
Accumulated Net Realized Loss............................... (2,894,988)
Accumulated Undistributed Net Investment Income............. (4,492,682)
------------
NET ASSETS.................................................. $735,655,919
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $559,132,243 and 84,858,165 shares of
beneficial interest issued and outstanding)............. $ 6.59
Maximum sales charge (4.75%* of offering price)......... .33
------------
Maximum offering price to public........................ $ 6.92
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $118,432,171 and 18,012,879 shares of
beneficial interest issued and outstanding)............. $ 6.57
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $29,325,662 and 4,457,820 shares of
beneficial interest issued and outstanding)............. $ 6.58
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $28,765,843 and 4,362,553 shares of
beneficial interest issued and outstanding)............. $ 6.59
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
18 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended February 28, 2006 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 18,192,510
Other....................................................... 86,063
------------
Total Income................................................ 18,278,573
------------
EXPENSES:
Investment Advisory Fee..................................... 1,394,731
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $642,982, $594,347 and $142,750
respectively)............................................. 1,380,079
Shareholder Services........................................ 746,435
Custody..................................................... 38,574
Trustees' Fees and Related Expenses......................... 18,449
Legal....................................................... 17,965
Other....................................................... 219,251
------------
Total Expenses.......................................... 3,815,484
Less Credits Earned on Cash Balances.................... 21,415
------------
Net Expenses............................................ 3,794,069
------------
NET INVESTMENT INCOME....................................... $ 14,484,504
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 3,279,389
Futures................................................... 195,279
Swap Contracts............................................ 5,845
------------
Net Realized Gain........................................... 3,480,513
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 19,627,619
------------
End of the Period:
Investments............................................. (2,117,141)
Futures................................................. 231,380
Swap Contracts.......................................... 68,957
------------
(1,816,804)
------------
Net Unrealized Depreciation During the Period............... (21,444,423)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(17,963,910)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $ (3,479,406)
============
</Table>
See Notes to Financial Statements 19
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2006 AUGUST 31, 2005
------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 14,484,504 $ 24,710,301
Net Realized Gain....................................... 3,480,513 12,900,218
Net Unrealized Depreciation During the Period........... (21,444,423) (4,503,856)
------------ ------------
Change in Net Assets from Operations.................... (3,479,406) 33,106,663
------------ ------------
Distributions from Net Investment Income:
Class A Shares........................................ (12,177,090) (21,278,452)
Class B Shares........................................ (2,310,422) (4,977,341)
Class C Shares........................................ (555,148) (1,142,953)
Class I Shares........................................ (697,597) (62,399)
------------ ------------
Total Distributions..................................... (15,740,257) (27,461,145)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (19,219,663) 5,645,518
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................... 145,899,494 283,286,242
Net Asset Value of Shares Issued Through Dividend
Reinvestment.......................................... 14,261,095 24,492,761
Cost of Shares Repurchased.............................. (89,336,660) (179,215,837)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS...... 70,823,929 128,563,166
------------ ------------
TOTAL INCREASE IN NET ASSETS............................ 51,604,266 134,208,684
NET ASSETS:
Beginning of the Period................................. 684,051,653 549,842,969
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of ($4,492,682) and
($3,236,929), respectively)........................... $735,655,919 $684,051,653
============ ============
</Table>
20 See Notes to Financial Statements
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 28, ----------------------------------------------
2006 2005 2004 2003 2002 (C) 2001
-------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $ 6.78 $ 6.72 $ 6.58 $ 6.39 $ 6.75 $ 6.43
------ ------ ------ ------ ------ ------
Net Investment Income............. .14 .29 .33 .33(a) .37 .41
Net Realized and Unrealized
Gain/Loss....................... (.18) .09 .16 .25 (.33) .33
------ ------ ------ ------ ------ ------
Total from investment Operations.... (.04) .38 .49 .58 .04 .74
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.......................... .15 .32 .35 .39 .40 .42
Return of Capital Distributions... -0- -0- -0-(d) -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions................. .15 .32 .35 .39 .40 .42
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $ 6.59 $ 6.78 $ 6.72 $ 6.58 $ 6.39 $ 6.75
====== ====== ====== ====== ====== ======
Total Return (b).................... -0.53%* 5.79% 7.55% 9.20% 0.54% 12.10%
Net Assets at End of the Period (In
millions)......................... $559.1 $502.6 $394.7 $318.4 $246.5 $221.4
Ratio of Expenses to Average
Net Assets........................ .94% .99% .98% 1.01% 1.03% 1.07%
Ratio of Net Investment Income to
Average Net Assets................ 4.30% 4.29% 4.80% 4.98% 5.48% 6.56%
Portfolio Turnover.................. 22%* 61% 38% 46% 82% 112%
</Table>
* Non-Annualized
(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 1% may be
imposed on certain redemptions made within eighteen months of purchases. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(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 by .52%. Per share, ratios and supplemental data for
periods prior to August 31, 2002, have not been restated to reflect this
change in presentation.
(d) Amount is less than $.01.
See Notes to Financial Statements 21
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 28, ----------------------------------------------
2006 2005 2004 2003 2002 (C) 2001
-------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $ 6.76 $ 6.70 $ 6.57 $ 6.38 $ 6.74 $ 6.42
------ ------ ------ ------ ------ ------
Net Investment Income............. .12 .24 .26 .28(a) .32 .37
Net Realized and Unrealized
Gain/Loss....................... (.18) .09 .16 .25 (.33) .32
------ ------ ------ ------ ------ ------
Total from Investment Operations.... (.06) .33 .42 .53 (.01) .69
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.......................... .13 .27 .29 .34 .35 .37
Return of Capital Distributions... -0- -0- -0-(d) -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions................. .13 .27 .29 .34 .35 .37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $ 6.57 $ 6.76 $ 6.70 $ 6.57 $ 6.38 $ 6.74
====== ====== ====== ====== ====== ======
Total Return (b).................... -0.92%* 5.01% 6.59% 8.38% -0.22% 11.28%
Net Assets at End of the Period (In
millions)......................... $118.4 $123.6 $126.5 $135.6 $112.3 $ 93.8
Ratio of Expenses to Average
Net Assets........................ 1.70% 1.75% 1.75% 1.77% 1.78% 1.82%
Ratio of Net Investment Income to
Average Net Assets................ 3.54% 3.55% 4.06% 4.23% 4.73% 5.81%
Portfolio Turnover.................. 22%* 61% 38% 46% 82% 112%
</Table>
* Non-Annualized
(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 up
to 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 by .52%. Per share, ratios and supplemental data for
periods prior to August 31, 2002, have not been restated to reflect this
change in presentation.
(d) Amount is less than $.01.
22 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 C SHARES FEBRUARY 28, -----------------------------------------------
2006 2005 2004 2003 2002 (C) 2001
--------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $ 6.76 $ 6.71 $ 6.57 $ 6.38 $ 6.74 $ 6.42
------ ------ ------ ------ ------ ------
Net Investment Income........... .12 .24 .27 .28(a) .32 .37
Net Realized and Unrealized
Gain/Loss..................... (.17) .08 .16 .25 (.33) .32
------ ------ ------ ------ ------ ------
Total from Investment
Operations...................... (.05) .32 .43 .53 (.01) .69
------ ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income............. .13 .27 .29 .34 .35 .37
Return of Capital
Distributions................. -0- -0- -0-(e) -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions............... .13 .27 .29 .34 .35 .37
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.......................... $ 6.58 $ 6.76 $ 6.71 $ 6.57 $ 6.38 $ 6.74
====== ====== ====== ====== ====== ======
Total Return (b).................. -0.91%* 5.17%(d) 6.59%(d) 8.38% -0.22% 11.28%
Net Assets at End of the Period
(In millions)................... $ 29.3 $ 29.2 $ 28.6 $ 29.6 $ 23.4 $ 18.9
Ratio of Expenses to Average
Net Assets...................... 1.70% 1.71%(d) 1.73%(d) 1.77% 1.78% 1.84%
Ratio of Net Investment Income to
Average Net Assets.............. 3.54% 3.59%(d) 4.07%(d) 4.22% 4.73% 5.79%
Portfolio Turnover................ 22%* 61% 38% 46% 82% 112%
</Table>
* Non-Annualized
(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 up to 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 by .52%. Per share, ratios and supplemental data for
periods prior to August 31, 2002, have not been restated to reflect this
change in presentation.
(d) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See Footnote 7).
(e) Amount is less than $.01.
See Notes to Financial Statements 23
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>
CLASS I SHARES
SIX MONTHS AUGUST 12, 2005
ENDED (COMMENCEMENT
FEBRUARY 28, OF OPERATIONS)
2006 TO AUGUST 31, 2005
----------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD................... $ 6.78 $ 6.72
------ ------
Net Investment Income.................................... .15 .03
Net Realized and Unrealized Gain/Loss.................... (.18) .06
------ ------
Total from Investment Operations........................... (.03) .09
Less Distributions from Net Investment Income.............. .16 .03
------ ------
NET ASSET VALUE, END OF THE PERIOD......................... $ 6.59 $ 6.78
====== ======
Total Return (a)........................................... -0.40%* 1.11%*
Net Assets at End of the Period (In millions).............. $ 28.8 $ 28.7
Ratio of Expenses to Average Net Assets.................... .70% .86%
Ratio of Net Investment Income to Average Net Assets....... 4.55% 4.32%
Portfolio Turnover......................................... 22%* 61%*
</Table>
(a) Assumes reinvestment of all distributions for the period. These returns do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund Shares.
* Non-Annualized
24 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (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 Fund offers Class A Shares, Class B Shares, Class C Shares and
Class I Shares. Each class of shares differs by its initial sales load,
contingent deferred sales charges, the allocation of class specific expenses and
voting rights on matters affecting a single class.
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 U.S. generally accepted
accounting principles 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. 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 may invest 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. Other income is comprised
primarily of consent fees. Consent fees are earned as compensation for agreeing
to changes in the terms of debt instruments. Income and expenses of the Fund are
allocated on a pro rata basis to each class of shares, except for
25
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
distribution and service fees and incremental transfer agency costs which are
unique to each class of shares.
D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of Subchapter M 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. During the prior fiscal year, the Fund utilized capital losses carried
forward of $12,985,784. At August 31, 2005, the Fund had an accumulated capital
loss carryforward for tax purposes of $5,997,297 which will expire according to
the following schedule:
<Table>
<Caption>
AMOUNT EXPIRATION
- ------ ----------
$5,560,726.................................................. August 31, 2011
436,571................................................... August 31, 2012
</Table>
At February 28, 2006, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $724,459,649
============
Gross tax unrealized appreciation........................... $ 14,560,071
Gross tax unrealized depreciation........................... (20,332,741)
------------
Net tax unrealized depreciation on investments.............. $ (5,772,670)
============
</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 the year ended August 31,
2005 was as follows:
<Table>
Distributions paid from:
Ordinary Income........................................... $27,486,058
Return of Capital......................................... --
-----------
$27,486,058
===========
</Table>
As of August 31, 2005 there were no distributable earnings on a tax basis.
Net realized gains or losses may differ for financial and tax reporting
purposes as a result of the deferral of losses relating to wash sales
transactions.
F. EXPENSE REDUCTIONS During the six months ended February 28, 2006, the Fund's
custody fee was reduced by $21,415 as a result of credits earned on cash
balances.
26
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (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 $500 million.......................................... .42%
Next $750 million........................................... .35%
Over $1.250 billion......................................... .22%
</Table>
For the six months ended February 28, 2006, the Fund recognized expenses of
approximately $17,900 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a Trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
Under separate Accounting Services and Chief Compliance Officer ("CCO")
Employment agreements, the Adviser provides accounting services and the CCO
provides compliance services to the Fund. The costs of these services are
allocated to each fund. For the six months ended February 28, 2006, the Fund
recognized expenses of approximately $21,200, representing Van Kampen Investment
Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing
accounting services to the Fund, as well as, the salary, benefits and related
costs of the CCO and related support staff paid by Van Kampen. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Other" expenses on 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 28, 2006, the Fund recognized expenses of approximately $653,500
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 $85,200 are
included in "Other" assets on the Statement of Assets and Liabilities at
February 28, 2006. Appreciation/depreciation and distributions received from
these investments are recorded with an offsetting increase/decrease in the
deferred compensation obligation and do not affect the net asset value of the
Fund. Benefits under the retirement plan are payable upon retirement for a
ten-year period and are based upon each trustee's years of service to the Fund.
The maximum annual benefit per trustee under the plan is $2,500.
For the six months ended February 28, 2006, Van Kampen, as Distributor for
the Fund, received commissions on sales of the Fund's Class A Shares of
approximately $405,632 and CDSC on redeemed shares of approximately $118,000.
Sales charges do not represent expenses of the Fund.
27
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended February 28, 2006, and the year ended August 31, 2005,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 2006 AUGUST 31, 2005
--------------------------- ----------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A........................ 18,145,867 $120,002,711 32,548,636 $ 218,937,427
Class B........................ 2,568,912 16,958,806 4,094,787 27,489,442
Class C........................ 712,277 4,708,611 1,210,343 8,129,287
Class I........................ 641,404 4,229,366 4,275,162 28,730,086
----------- ------------ ----------- -------------
Total Sales...................... 22,068,460 $145,899,494 42,128,928 $ 283,286,242
=========== ============ =========== =============
Dividend Reinvestment:
Class A........................ 1,685,375 $ 11,125,159 2,871,301 $ 19,334,322
Class B........................ 306,423 2,018,257 631,406 4,241,852
Class C........................ 63,766 420,087 127,119 854,183
Class I........................ 105,590 697,592 9,204 62,404
----------- ------------ ----------- -------------
Total Dividend Reinvestment...... 2,161,154 $ 14,261,095 3,639,030 $ 24,492,761
=========== ============ =========== =============
Repurchases:
Class A........................ (9,140,652) $(60,403,218) (19,990,174) $(134,416,986)
Class B........................ (3,141,771) (20,718,185) (5,319,881) (35,708,060)
Class C........................ (633,255) (4,184,992) (1,294,715) (8,693,560)
Class I........................ (609,932) (4,030,265) (58,875) (397,231)
----------- ------------ ----------- -------------
Total Repurchases................ (13,525,610) $(89,336,660) (26,663,645) $(179,215,837)
=========== ============ =========== =============
</Table>
4. REDEMPTION FEE
Effective September 26, 2005, the Fund assesses a 2% redemption fee on the
proceeds of Fund shares that are redeemed (either by sale or exchange) within
the seven days of purchase. The redemption fee is paid directly to the Fund. For
the period ended February 28, 2006, the Fund received redemption fees of
approximately $1,000, which are reported as part of "Cost of Shares Repurchased"
on the Statement of Changes in Net Assets.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $196,125,256 and $143,701,945,
respectively.
6. 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 to 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 appreciation/depreciation. Upon
28
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
disposition, a realized gain or loss is recognized accordingly, except when
taking delivery of a security underlying a futures contract. In this instance,
the recognition of gain or loss is postponed until the disposal of the security
underlying the futures contract. Risk may arise as a result of the potential
inability of the counterparties to meet the terms of their contracts.
A. FUTURES 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 28,
2006, were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at August 31, 2005.............................. 2,335
Futures Opened.............................................. 6,749
Futures Closed.............................................. (6,867)
------
Outstanding at February 28, 2006............................ 2,217
======
</Table>
B. CREDIT DEFAULT SWAPS The Fund may enter into credit default swap contracts
for hedging purposes or to gain exposure to a credit in which the Fund may
otherwise invest. A credit default swap is an agreement between two parties to
exchange the credit risk of an issuer. A buyer of a credit default swap is said
to buy protection by paying periodic fees in return for a contingent payment
from the seller if the issuer has a credit event such as bankruptcy, a failure
to pay outstanding obligations or deteriorating credit while the swap is
outstanding. A seller of a credit default swap, is said to sell protection and
thus collects the periodic fees and profits if the credit of the issuer remains
stable or improves while the swap is outstanding but the seller in a credit
default swap contract would be required to pay an agreed-upon amount, which
approximates the notional amount of the swap, as disclosed in the table
following the Portfolio of Investments, to the buyer in the event of an adverse
credit event of the issuer. The Fund accrues for the periodic fees on swap
contracts on a daily basis with the net amount accrued recorded within
unrealized appreciation/depreciation of swap contracts. Upon cash settlement of
the periodic fees, the net amount is recorded as realized gain/loss on swap
contracts on the Statements of Operations.
Credit default swaps may involve greater risks than if a Fund had invested
in the issuer directly. Credit default swaps are subject to general market risk,
counterparty risk and credit risk. If there is a default by the counterparty,
the Fund will have contractual remedies pursuant to the agreements related to
the transaction.
29
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the distribution, shareholder servicing and maintenance of
shareholder accounts for these shares. Under the Plans, the Fund will incur
annual fees of up to .25% of Class A average daily net assets and up to 1.00%
each of Class B and Class C average daily net assets. These fees are accrued
daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $1,464,900 and $2,600
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, the distribution fee is
reduced.
8. 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 similar class action complaints which were
consolidated. The consolidated action also names as defendants certain
individual Trustees and Directors of certain investment companies advised by
affiliates of the Adviser; the complaint does not, however, name the individual
Trustees of any Van Kampen funds. The consolidated amended complaint generally
alleges that defendants 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 to investors 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 complaint seeks, among other
things, unspecified compensatory damages, rescissionary damages, fees and costs.
Plantiffs have filed a Motion for Leave to file a Supplemental Pleading that
would, among other things, expand the allegations and alleged class.
The defendants have moved to dismiss this action and otherwise intend to
defend it vigorously.
The Adviser and certain affiliates of the Adviser are also named as
defendants in a derivative suit which additionally names as defendants certain
individual Trustees of certain Van Kampen funds; the named investment companies,
including the Fund, are listed as nominal defendants. The complaint alleges that
defendants caused the Van Kampen funds to pay economic incentives to a
proprietary sales force to promote the sale of proprietary mutual funds. The
complaint also alleges that the Van Kampen funds paid excessive commissions to
Morgan Stanley and its affiliates in connection with the sales of the funds. The
complaint seeks, among other things, the removal of the current Trustees of the
funds, rescission of the management contracts for the funds, disgorgement of
profits by Morgan Stanley and its affiliates and monetary damages. This
complaint has been coordinated with the consolidated complaint described in the
preceding paragraph. Defendants moved to dismiss the complaint and intend
otherwise to vigorously defend it. Plaintiff sought leave to
30
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- FEBRUARY 28, 2006 (UNAUDITED) continued
file a second amended derivative complaint that alleges that the Adviser
permitted or recklessly disregarded market timing and late trading in its
proprietary mutual funds in order to increase assets under management and fees.
However, pursuant to an agreement between the parties, the plaintiff's proposed
second amended derivative complaint was withdrawn and the allegations regarding
market timing and late trading asserted therein were filed in a separate
complaint and coordinated with other cases related to market timing that have
been centralized in a federal court. The defendants moved to dismiss this
matter, which motion was granted in part and denied in part. Defendants moved
for reconsideration of those claims that were denied. Plaintiff subsequently
dismissed the trustee defendants from the action, in exchange for the execution
of a tolling agreement by the trustees permitting plaintiff to bring the same
claims against the trustees at a later date should plaintiff deem necessary.
While the defendants believe that they have meritorious defenses, the
ultimate outcome of these matters is not presently determinable, and no
provision has been made in the Fund's financial statements for the effect, if
any, of these matters.
9. 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.
31
VAN KAMPEN CORPORATE BOND FUND
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
J. DAVID GERMANY
Vice President
DENNIS SHEA
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
PHILLIP G. GOFF
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 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
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
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.
32
Van Kampen Corporate Bond Fund
An Important Notice Concerning Our U.S. Privacy Policy
We are required by federal law to provide you with a copy of our Privacy
Policy annually.
The following Policy applies to current and former individual clients of Van
Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors
Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van
Kampen Exchange Corp., as well as current and former individual investors in
Van Kampen mutual funds, unit investment trusts, and related companies.
This Policy is not applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy applicable to
individuals who are either beneficiaries of a trust for which we serve as
trustee or participants in an employee benefit plan administered or advised
by us. This Policy is, however, applicable to individuals who select us to
be a custodian of securities or assets in individual retirement accounts,
401(k) accounts, 529 Educational Savings Accounts, accounts subject to the
Uniform Gifts to Minors Act, or similar accounts.
Please note that we may amend this Policy at any time, and will inform you
of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we
help you achieve your financial objectives. This Policy describes what
non-public personal information we collect about you, why we collect it, and
when we may share it with others.
We hope this Policy will help you understand how we collect and share
non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies
you or your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect
and maintain accurate information about you. We may obtain this information
from applications and other forms you submit to us, from your dealings with
us, from consumer reporting agencies, from our Web sites and from third
parties and other sources.
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Van Kampen Corporate Bond Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
For example:
-- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
-- We may obtain information about account balances, your use of
account(s) and the types of products and services you prefer to receive
from us through your dealings and transactions with us and other
sources.
-- We may obtain information about your creditworthiness and credit
history from consumer reporting agencies.
-- We may collect background information from and through third-party
vendors to verify representations you have made and to comply with
various regulatory requirements.
-- If you interact with us through our public and private Web sites, we
may collect information that you provide directly through online
communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name,
your computer's operating system and Web browser, your use of our Web
sites and your product and service preferences, through the use of
"cookies." "Cookies" recognize your computer each time you return to
one of our sites, and help to improve our sites' content and
personalize your experience on our sites by, for example, suggesting
offerings that may interest you. Please consult the Terms of Use of
these sites for more details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you
better and to manage our business, we may disclose personal information we
collect about you to our affiliated companies and to non-affiliated third
parties as required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise
required or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except
to enable them to provide services on our behalf, to perform joint marketing
agreements with
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Van Kampen Corporate Bond Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
other financial institutions, or as otherwise required or permitted by law.
For example, some instances where we may disclose information about you to
non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against
fraud, for institutional risk control, to respond to judicial process or to
perform services on our behalf. When we share personal information with
these companies, they are required to limit their use of personal
information to the particular purpose for which it was shared and they are
not allowed to share personal information with others except to fulfill that
limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL
INFORMATION WE COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties
that provide support or marketing services on our behalf may also receive
personal information, and we require them to adhere to confidentiality
standards with respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2006 Van Kampen Funds Inc. All rights reserved.
Member NASD/SIPC.
17, 117, 217
CORP SAR 4/06
(VAN KAMPEN INVESTMENTS SHINE LOGO) RN06-00946P-Y02/06
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. Schedule of Investments.
Please refer to Item #1.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11. 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-CSRS
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 second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics -- Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) 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 19, 2006
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 19, 2006
By: /s/ Phillip G. Goff
----------------------
Name: Phillip G. Goff
Title: Principal Financial Officer
Date: April 19, 2006