UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-02423
Van Kampen Corporate Bond Fund
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas, New York, New York 10020
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 8/31
Date of reporting period: 8/31/06
Item 1. Report to Shareholders.
The Fund's 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 annual period. The portfolio
management team will provide an overview of the market conditions and
discuss some of the factors that affected investment performance during
the reporting period. In addition, this report includes the fund's
financial statements and a list of fund investments as of August 31,
2006.
THIS PIECE MUST BE PRECEDED OR ACCOMPANIED BY THE FUND'S PROSPECTUS. THE
PROSPECTUS CONTAINS INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT
OBJECTIVES, RISKS, CHARGES AND EXPENSES. PLEASE READ THE PROSPECTUS
CAREFULLY BEFORE INVESTING.
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>
---------------------------------------------------------------------------------------
NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
---------------------------------------------------------------------------------------
</Table>
Performance Summary as of 8/31/06
PERFORMANCE OF A $10,000 INVESTMENT
This chart compares your fund's performance to that of the Lehman Brothers
Corporate Bond Index and the Lipper Corporate BBB-Rated Index from 8/31/96
through 8/31/06. Class A shares, adjusted for sales charges.
(LINE GRAPH)
<Table>
<Caption>
VAN KAMPEN CORPORATE LEHMAN BROTHERS CORPORATE LIPPER CORPORATE BBB-
BOND FUND BOND INDEX RATED INDEX
-------------------- ------------------------- ---------------------
8/96 9527 10000 10000
9713 10212 10200
9959 10491 10445
10177 10715 10678
10091 10567 10574
10135 10582 10608
10166 10627 10668
10018 10461 10504
10183 10620 10660
10319 10740 10782
10456 10892 10943
10882 11291 11321
8/97 10714 11124 11172
10900 11319 11369
11024 11462 11485
11087 11527 11541
11166 11649 11664
11324 11787 11814
11309 11784 11809
11374 11827 11869
11422 11902 11920
11552 12044 12022
11630 12133 12109
11628 12122 12100
8/98 11560 12179 12011
11755 12573 12259
11719 12380 12108
11966 12612 12332
11976 12649 12363
12037 12774 12470
11692 12471 12201
11804 12560 12336
11849 12596 12425
11619 12428 12257
11526 12363 12193
11484 12295 12132
8/99 11442 12266 12087
11555 12399 12191
11599 12456 12215
11624 12470 12244
11579 12404 12225
11551 12360 12189
11631 12475 12339
11712 12581 12453
11520 12471 12302
11418 12425 12209
11739 12736 12517
11877 12891 12571
8/00 12015 13052 12800
12099 13123 12836
12088 13126 12795
12210 13282 12914
12486 13529 13184
12726 13916 13503
12833 14035 13636
12901 14120 13628
12854 14074 13553
12942 14199 13675
13012 14270 13692
13339 14657 14002
8/01 13469 14847 14170
13458 14797 14050
13667 15161 14348
13696 15032 14255
13661 14924 14168
13687 15050 14246
13713 15150 14314
13451 14868 14126
13498 15055 14343
13649 15268 14456
13509 15269 14388
13368 15214 14316
8/02 13542 15617 14605
13696 15916 14737
13510 15702 14632
13794 15947 14843
14123 16434 15189
14193 16503 15289
14438 16841 15546
14422 16848 15572
14802 17185 15887
15138 17741 16303
15097 17701 16324
14654 16932 15767
8/03 14787 17073 15892
15236 17684 16381
15189 17499 16316
15302 17588 16429
15505 17788 16668
15618 17975 16820
15732 18200 16968
15846 18371 17085
15498 17794 16649
15357 17666 16523
15421 17744 16620
15580 17964 16795
8/04 15904 18391 17136
16016 18505 17242
16177 18686 17413
16051 18496 17355
16285 18749 17553
16399 18899 17646
16369 18786 17618
16120 18536 17421
16280 18777 17564
16489 19034 17746
16699 19190 17897
16614 19000 17815
8/05 16825 19291 18036
16591 18980 17855
16430 18760 17700
16519 18871 17772
16683 19062 17947
16672 19022 18011
16736 19107 18094
16547 18838 17897
16485 18772 17886
16473 18740 17843
16513 18764 17845
16734 19038 18091
8/06 16981 19392 18422
</Table>
<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 7.67% 7.52% 5.46% 5.46% 4.81% 4.81% 2.33%
10-year 5.95 5.44 5.30 5.30 5.16 5.16 --
5-year 4.74 3.72 3.96 3.71 3.96 3.96 --
1-year 0.93 -3.89 0.30 -3.55 0.16 -0.81 1.33
- -----------------------------------------------------------------------------------------------------
30-Day SEC Yield 4.63% 4.13% 4.20% 5.12%
</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 eight 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 Rule 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.
The Lehman Brothers Corporate 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 12-MONTH PERIOD ENDED AUGUST 31, 2006
MARKET CONDITIONS
Several events shaped trends in the fixed-income markets during the 12-month
review period. The series of natural disasters that struck the U.S. in mid-2005,
combined with sharply rising energy prices, generated concern regarding their
effect on economic growth. As the months progressed, however, it became apparent
that the impact on the economy would be less than anticipated. In fact, the
economy demonstrated considerable resilience and real gross domestic product
(GDP) growth averaged near 4 percent throughout 2005.
The first months of 2006 provided few surprises in the bond market. To virtually
no one's surprise, the Federal Open Market Committee (the "Fed") continued to
raise the target federal funds rate by 25 basis points at each of its meetings
during the first half of the year, bringing the rate to 5.25 percent at the end
of June.
Also as expected, comments made by Fed members after their May and June meetings
indicated that they will rely heavily on economic data in making future
decisions concerning the direction of interest rates. Based on these comments,
it appears that the Fed will be driven by the weight of the economic data more
so now than perhaps at anytime over the past few years.
During the last months of the period, in response to the expectation of a pause
in the Fed's tightening campaign, the U.S. bond market enjoyed the best
three-month run of positive returns since the Fed began its tightening cycle in
2004. In fact, despite negative returns in the first half of 2006, all
fixed-income asset classes ended August with positive year-to-date returns. As
anticipated, the Fed did finally pause at its August meeting, following a run of
17 consecutive increases in the target federal funds rate.
Due mainly to concerns over inflation and increased risk in the corporate
market, the credit sector had trouble keeping pace with other fixed-income
sectors. Within the investment-grade portion of the market, higher-rated issues
outperformed lower-rated issues. Improving economic conditions boosted the
financials sector, leading it to outpace both utilities and industrials.
2
PERFORMANCE ANALYSIS
The fund returned 0.93 percent for the 12 months ended August 31, 2006 (Class A
shares, unadjusted for sales charges). In comparison, the fund's benchmarks, the
Lehman Brothers Corporate Bond Index and the Lipper Corporate BBB-Rated Index,
returned 0.53 percent and 2.15 percent for the period, respectively.
TOTAL RETURN FOR THE 12-MONTH PERIOD ENDED AUGUST 31, 2006
<Table>
<Caption>
- --------------------------------------------------------------------------------------
LEHMAN BROTHERS LIPPER CORPORATE
CORPORATE BOND BBB-RATED
CLASS A CLASS B CLASS C CLASS I INDEX INDEX
0.93% 0.30% 0.16% 1.33% 0.53% 2.15%
- --------------------------------------------------------------------------------------
</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 duration (a measure of interest
rate sensitivity) well below that of the benchmark. This posture was beneficial
to performance as interest rates rose across the market, especially in the
short- and intermediate-portions of the yield curve.
Within the credit portion of the portfolio, we continued to employ a defensive
strategy with a focus on higher-quality securities, which benefited the fund's
relative performance. Additionally, strong security selection--particularly in
the paper and forest products, financial and automotive sectors--contributed
positively to performance.
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>
<Caption>
RATINGS ALLOCATIONS AS OF 08/31/06
AAA/Aaa 11.7%
AA/Aa 14.9
A/A 26.4
BBB/Baa 41.1
BB/Ba 3.3
B/B 2.6
<Caption>
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 08/31/06
Banking 10.9%
Electric 9.9
U.S. Government Agency Obligations 8.7
Wireline Communications 6.8
Noncaptive-Consumer Finance 5.5
Life Insurance 4.3
Food/Beverage 3.5
Noncaptive-Diversified Finance 3.4
Property & Casualty Insurance 3.2
Diversified Manufacturing 3.0
Automotive 2.5
Natural Gas Pipelines 2.4
Healthcare 2.1
Railroads 1.8
Construction Machinery 1.7
Media-Cable 1.7
Media-Noncable 1.6
Technology 1.5
Retail 1.3
Paper 1.3
Gaming 1.2
Transportation Services 1.0
Natural Gas Distributors 0.9
Supermarkets 0.9
Integrated Energy 0.9
Environmental & Facilities Services 0.8
Textiles 0.8
Wireless Communications 0.8
Consumer Products 0.6
</Table>
<Table>
(continued on next page)
</Table>
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 08/31/06
(continued from previous page)
Brokerage 0.6
Other Utilities 0.6
Oil Field Services 0.6
Aerospace & Defense 0.6
Entertainment 0.6
Lodging 0.5
Building Materials 0.4
Independent Energy 0.4
Chemicals 0.3
Real Estate Management & Development 0.3
Tobacco 0.2
-----
Total Long-Term Investments 90.1%
Short-Term Investments 10.8
Liabilities in Excess of Other Assets (0.9)
-----
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. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. 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 charges on redemptions of Class B and C Shares;
and redemption fees; 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 costs (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 3/1/06 - 8/31/06.
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 or redemption fees.
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*
----------------------------------------------
3/1/06 8/31/06 3/1/06-8/31/06
Class A
Actual...................................... $1,000.00 $1,014.62 $4.98
Hypothetical................................ 1,000.00 1,020.31 4.99
(5% annual return before expenses)
Class B
Actual...................................... 1,000.00 1,012.34 8.77
Hypothetical................................ 1,000.00 1,016.41 8.79
(5% annual return before expenses)
Class C
Actual...................................... 1,000.00 1,010.80 8.72
Hypothetical................................ 1,000.00 1,016.51 8.74
(5% annual return before expenses)
Class I
Actual...................................... 1,000.00 1,017.41 3.71
Hypothetical................................ 1,000.00 1,021.51 3.72
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.98%, 1.73%,
1.72% and 0.73% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 184/365 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
8
Investment Advisory Agreement Approval
Both the Investment Company Act of 1940 and the terms of the Fund's investment
advisory agreement require that the investment advisory agreement between the
Fund and its investment adviser be approved annually both by a majority of the
Board of Trustees and by a majority of the independent trustees voting
separately.
On May 22, 2006, the Board of Trustees, and the independent trustees voting
separately, determined that the terms of the investment advisory agreement are
fair and reasonable and approved the continuance of the investment advisory
contract as being in the best interests of the Fund and its shareholders. In
making its determination, the Board of Trustees considered materials that were
specifically prepared by the investment adviser at the request of the Board and
Fund counsel, and by an independent provider of investment company data
contracted to assist the Board, relating to the contract review process. The
Board also considered information received periodically about the portfolio,
performance, the investment strategy, portfolio management team and fees and
expenses of the Fund. The Board of Trustees considered the contract over a
period of several months and the non-management trustees held sessions both with
the investment adviser and separate from the investment adviser in reviewing and
considering the contract.
In approving the investment advisory agreement, the Board of Trustees
considered, among other things, the nature, extent and quality of the services
provided by the investment adviser, the performance, fees and expenses of the
Fund compared to other similar funds and other products, the investment
adviser's expenses in providing the services and the profitability of the
investment adviser and its affiliated companies. The Board of Trustees
considered the extent to which any economies of scale experienced by the
investment adviser are shared with the Fund's shareholders, and the propriety of
existing and alternative breakpoints in the Fund's investment advisory fee
schedule. The Board of Trustees considered comparative advisory fees of the Fund
and other investment companies and/or other products at different asset levels,
and considered the trends in the industry versus historical and projected assets
of the Fund. The Board of Trustees evaluated other benefits the investment
adviser and its affiliates derive from their relationship with the Fund. The
Board of Trustees reviewed information about the foregoing factors and
considered changes, if any, in such information since its previous approval. The
Board of Trustees discussed the financial strength of the investment adviser and
its affiliated companies and the capability of the personnel of the investment
adviser, and specifically the strength and background of its portfolio
management personnel. The Board of Trustees reviewed the statutory and
regulatory requirements for approval and disclosure of investment advisory
agreements. The Board of Trustees, including the independent trustees, evaluated
all of the foregoing and does not believe any single factor or group of factors
control or dominate the review process, and, after considering all factors
9
together, has determined, in the exercise of its business judgment, that
approval of the investment advisory agreement is in the best interests of the
Fund and its shareholders. The following summary provides more detail on certain
matters considered but does not detail all matters considered.
Nature, Extent and Quality of the Services Provided. On a regular basis, the
Board of Trustees considers the roles and responsibilities of the investment
adviser as a whole and for those specific portfolio management, support and
trading functions servicing the Fund. The trustees discuss with the investment
adviser the resources available and used in managing the Fund. The Fund
discloses information about its portfolio management team members and their
experience in its prospectus. The trustees also discuss certain other services
which are provided on a cost-reimbursement basis by the investment adviser or
its affiliates to the Van Kampen funds including certain accounting,
administrative and legal services. The Board has determined that the nature,
extent and quality of the services provided by the investment adviser support
its decision to approve the investment advisory contract.
Performance, Fees and Expenses of the Fund. On a regular basis, the Board of
Trustees reviews the performance, fees and expenses of the Fund compared to its
peers and to appropriate benchmarks. In addition, the Board spends more focused
time on the performance of the Fund and other funds in the Van Kampen complex,
paying specific attention to underperforming funds. The trustees discuss with
the investment adviser the performance goals and the actual results achieved in
managing the Fund. When considering a fund's performance, the trustees and the
investment adviser place emphasis on trends and longer-term returns (focusing on
one-year, three-year and five-year performance with special attention to
three-year performance) and, when a fund's weighted performance is under the
fund's benchmark, they discuss the causes and where necessary seek to make
specific changes to investment strategy or investment personnel. The Fund
discloses more information about its performance elsewhere in this report and in
the Fund's prospectus. The trustees discuss with the investment adviser the
level of advisory fees for this Fund relative to comparable funds and other
products advised by the adviser and others in the marketplace. The trustees
review not only the advisory fees but other fees and expenses (whether paid to
the adviser, its affiliates or others) and the Fund's overall expense ratio. The
Fund discloses more information about its fees and expenses in its prospectus.
The Board has determined that the performance, fees and expenses of the Fund
support its decision to approve the investment advisory contract.
Investment Adviser's Expenses in Providing the Service and Profitability. At
least annually, the trustees review the investment adviser's expenses in
providing services to the Fund and other funds advised by the investment adviser
and the profitability of the investment adviser. These profitability reports are
put together by the investment adviser with the oversight of the Board. The
trustees discuss with the investment adviser its revenues and expenses,
including among
10
other things, revenues for advisory services, portfolio management-related
expenses, revenue sharing arrangement costs and allocated expenses both on an
aggregate basis and per fund. The Board has determined that the analysis of the
investment adviser's expenses and profitability support its decision to approve
the investment advisory contract.
Economies of Scale. On a regular basis, the Board of Trustees considers the size
and growth prospects of the Fund and how that relates to the Fund's expense
ratio and particularly the Fund's advisory fee rate. In conjunction with its
review of the investment adviser's profitability, the trustees discuss with the
investment adviser how more (or less) assets can affect the efficiency or
effectiveness of managing the Fund's portfolio and whether the advisory fee
level is appropriate relative to current and projected asset levels and/or
whether the advisory fee structure reflects economies of scale as asset levels
change. The Board has determined that its review of the actual and potential
economies of scale of the Fund support its decision to approve the investment
advisory contract.
Other Benefits of the Relationship. On a regular basis, the Board of Trustees
considers other benefits to the investment adviser and its affiliates derived
from its relationship with the Fund and other funds advised by the investment
adviser. These benefits include, among other things, fees for transfer agency
services provided to the funds, in certain cases research received by the
adviser generated from commission dollars spent on funds' portfolio trading, and
in certain cases distribution or service related fees related to funds' sales.
The trustees review with the investment adviser each of these arrangements and
the reasonableness of its costs relative to the services performed. The Board
has determined that the other benefits received by the investment adviser or its
affiliates support its decision to approve the investment advisory contract.
11
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CORPORATE BONDS 81.0%
AEROSPACE & DEFENSE 0.6%
$ 992 Raytheon Co. ................................... 4.500% 11/15/07 $ 980,042
3,310 Raytheon Co. ................................... 6.150 11/01/08 3,367,971
------------
4,348,013
------------
AUTOMOTIVE 2.5%
2,915 DaimlerChrysler NA Holding Corp. ............... 8.500 01/18/31 3,510,427
6,205 General Motors Acceptance Corp. ................ 6.875 09/15/11 6,117,559
10,950 General Motors Corp. ........................... 8.375 07/15/33 9,225,375
------------
18,853,361
------------
BANKING 10.9%
5,120 Bank of America Corp. .......................... 3.375 02/17/09 4,913,690
6,000 Bank of Scotland (United Kingdom) (a)........... 3.500 11/30/07 5,875,344
160 Citigroup, Inc. ................................ 6.625 06/15/32 174,016
5,355 JPMorgan Chase & Co. ........................... 6.750 02/01/11 5,651,881
6,010 Marshall & Ilsley Bank.......................... 3.800 02/08/08 5,888,682
4,475 MBNA Corp. (Floating Rate Coupon)............... 5.910 05/05/08 4,509,440
6,160 National City Bank.............................. 3.375 10/15/07 6,015,437
2,695 Popular North America, Inc. .................... 5.650 04/15/09 2,701,403
5,855 SunTrust Banks, Inc. ........................... 5.050 07/01/07 5,840,878
6,000 U.S. Bancorp.................................... 3.950 08/23/07 5,900,286
3,650 USB Capital IX (Variable Rate Coupon)........... 6.189 03/29/49 3,668,896
3,100 Wachovia Corp. ................................. 3.625 02/17/09 2,988,282
2,890 Wachovia Corp. ................................. 4.950 11/01/06 2,887,061
15,155 Wachovia Capital Trust III (Variable Rate
Coupon)......................................... 5.800 08/29/49 15,102,382
1,690 Washington Mutual Bank FA....................... 5.500 01/15/13 1,680,708
2,960 Washington Mutual, Inc. ........................ 8.250 04/01/10 3,211,085
5,820 Wells Fargo & Co. .............................. 5.125 02/15/07 5,812,434
------------
82,821,905
------------
BROKERAGE 0.3%
2,000 Lehman Brothers Holdings, Inc. ................. 8.500 05/01/07 2,039,976
------------
BUILDING MATERIALS 0.4%
3,380 Masco Corp. .................................... 4.625 08/15/07 3,342,026
------------
CHEMICALS 0.3%
2,435 Sealed Air Corp. (a)............................ 5.625 07/15/13 2,381,072
------------
</Table>
12 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
CONSTRUCTION MACHINERY 1.7%
$ 5,460 Caterpillar Financial Services Corp., Ser F..... 3.625% 11/15/07 $ 5,349,146
7,350 John Deere Capital Corp. (Floating Rate
Coupon)......................................... 5.557 04/15/08 7,360,334
------------
12,709,480
------------
CONSUMER PRODUCTS 0.6%
4,725 Clorox Co. (Floating Rate Coupon)............... 5.444 12/14/07 4,734,252
------------
DIVERSIFIED MANUFACTURING 3.0%
3,935 Brascan Corp. (Canada).......................... 7.125 06/15/12 4,190,071
195 Brascan Corp. (Canada).......................... 8.125 12/15/08 205,521
2,260 Cooper Industries, Inc. ........................ 5.250 07/01/07 2,247,950
3,790 Cooper Industries, Inc. ........................ 5.250 11/15/12 3,750,455
1,450 Hutchison Whampoa International Ltd.
(Cayman Islands) (a)............................ 5.450 11/24/10 1,447,012
1,880 Hutchison Whampoa International Ltd.
(Cayman Islands) (a)............................ 6.500 02/13/13 1,957,840
3,000 Textron Financial Corp. ........................ 2.690 10/03/06 2,993,952
6,200 Tyco International Group SA (Luxembourg)........ 6.125 11/01/08 6,287,854
------------
23,080,655
------------
ELECTRIC 9.9%
5,660 Ameren Corp. ................................... 4.263 05/15/07 5,613,713
4,995 Arizona Public Service Co. ..................... 5.800 06/30/14 4,961,743
2,325 Arizona Public Service Co. ..................... 6.750 11/15/06 2,329,673
1,375 Baltimore Gas & Electric Co. ................... 6.625 03/15/08 1,398,831
2,155 Carolina Power & Light Co. ..................... 6.800 08/15/07 2,180,782
5,151 CC Funding Trust I.............................. 6.900 02/16/07 5,181,350
2,070 Cincinnati Gas & Electric Co. .................. 5.700 09/15/12 2,077,487
2,685 Detroit Edison Co. ............................. 6.125 10/01/10 2,754,354
2,690 Duquesne Light Co., Ser O....................... 6.700 04/15/12 2,829,745
320 Duquesne Light Co., Ser Q....................... 5.700 05/15/14 318,868
2,265 Entergy Gulf States, Inc. ...................... 3.600 06/01/08 2,188,645
4,395 Entergy Gulf States, Inc. (Floating Rate
Coupon)......................................... 5.631 12/01/09 4,392,064
1,965 Entergy Gulf States, Inc. (Floating Rate Coupon)
(a)............................................. 6.020 12/08/08 1,969,394
3,835 Exelon Corp. ................................... 6.750 05/01/11 4,011,813
560 Indianapolis Power & Light Co. (a).............. 6.300 07/01/13 575,656
3,585 MidAmerican Energy Holdings Co. ................ 4.625 10/01/07 3,555,492
1,930 Monongahela Power Co. .......................... 5.000 10/01/06 1,928,801
5,550 NiSource Finance Corp. (Floating Rate Coupon)... 5.968 11/23/09 5,557,753
4,500 Ohio Power Co., Ser K........................... 6.000 06/01/16 4,590,580
5,700 Oncor Electric Delivery Co. .................... 5.000 09/01/07 5,671,660
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
ELECTRIC (CONTINUED)
$ 1,400 PSEG Energy Holdings............................ 8.625% 02/15/08 $ 1,449,000
4,465 Texas-New Mexico Power Co. ..................... 6.125 06/01/08 4,484,021
5,000 Wisconsin Electric Power........................ 3.500 12/01/07 4,894,900
------------
74,916,325
------------
ENTERTAINMENT 0.6%
4,237 Time Warner, Inc. .............................. 6.150 05/01/07 4,254,211
------------
ENVIRONMENTAL & FACILITIES SERVICES 0.8%
3,223 Waste Management, Inc. ......................... 6.875 05/15/09 3,342,548
1,220 Waste Management, Inc. ......................... 7.000 10/15/06 1,221,814
1,745 Waste Management, Inc. ......................... 7.375 08/01/10 1,862,383
------------
6,426,745
------------
FOOD/BEVERAGE 3.5%
2,235 ConAgra, Inc. .................................. 7.000 10/01/28 2,396,351
1,870 ConAgra, Inc. .................................. 8.250 09/15/30 2,276,933
4,655 FBG Finance, Ltd. (Australia) (a)............... 5.125 06/15/15 4,411,422
4,000 General Mills, Inc. ............................ 3.875 11/30/07 3,915,508
3,145 Kraft Foods, Inc. .............................. 5.625 11/01/11 3,168,484
7,445 Miller Brewing Co. (a).......................... 4.250 08/15/08 7,284,583
655 Pilgrim's Pride Corp. .......................... 9.625 09/15/11 689,387
1,845 YUM! Brands, Inc. .............................. 8.875 04/15/11 2,081,291
------------
26,223,959
------------
GAMING 1.2%
7,040 Harrahs Operating Co., Inc. .................... 5.625 06/01/15 6,600,049
2,420 Harrahs Operating Co., Inc. .................... 6.500 06/01/16 2,405,122
------------
9,005,171
------------
HEALTHCARE 2.1%
4,420 Baxter Finance Co. (Netherlands)................ 4.750 10/15/10 4,323,105
1,840 UnitedHealth Group, Inc. ....................... 5.200 01/17/07 1,838,300
6,000 UnitedHealth Group, Inc. (Floating Rate
Coupon)......................................... 5.318 03/02/09 5,997,174
2,410 Wellpoint, Inc. ................................ 3.750 12/14/07 2,360,525
1,510 Wellpoint, Inc. ................................ 4.250 12/15/09 1,461,296
------------
15,980,400
------------
INDEPENDENT ENERGY 0.4%
1,550 Kerr-McGee Corp. ............................... 5.875 09/15/06 1,549,798
1,540 Kerr-McGee Corp. ............................... 6.625 10/15/07 1,563,394
------------
3,113,192
------------
INTEGRATED ENERGY 0.9%
1,000 Consumers Energy Co., Ser A..................... 6.375 02/01/08 1,011,269
1,880 Consumers Energy Co., Ser F..................... 4.000 05/15/10 1,785,126
2,035 Consumers Energy Co., Ser H..................... 4.800 02/17/09 2,003,508
1,905 Petro-Canada (Canada)........................... 5.350 07/15/33 1,666,768
------------
6,466,671
------------
</Table>
14 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
LIFE INSURANCE 4.3%
$ 2,085 AXA Financial, Inc. ............................ 6.500% 04/01/08 $ 2,119,663
5,155 Marsh & McLennan Cos., Inc. .................... 5.875 08/01/33 4,666,131
190 Metlife, Inc. .................................. 6.125 12/01/11 196,341
2,730 Monumental Global Funding II (a)................ 3.850 03/03/08 2,670,715
920 Nationwide Financial Services, Inc. ............ 6.250 11/15/11 952,040
3,495 Platinum Underwriters Finance Inc., Ser B....... 7.500 06/01/17 3,539,341
3,055 Platinum Underwriters Holdings Ltd. (Bermuda)... 6.371 11/16/07 3,035,124
6,400 Principal Life Global Funding I (a)............. 5.125 06/28/07 6,383,443
3,400 Prudential Funding LLC (a)...................... 6.600 05/15/08 3,469,748
6,095 Xlliac Global Funding (a)....................... 4.800 08/10/10 5,954,657
------------
32,987,203
------------
LODGING 0.5%
2,755 Hyatt Equities, LLC (a)......................... 6.875 06/15/07 2,774,202
1,005 Starwood Hotels & Resorts Worldwide, Inc. ...... 7.375 05/01/07 1,018,819
------------
3,793,021
------------
MEDIA-CABLE 1.7%
2,625 Comcast Cable Communications, Inc. ............. 6.750 01/30/11 2,747,548
1,570 Comcast Cable Communications, Inc. ............. 7.125 06/15/13 1,680,818
4,455 Comcast Cable Communications, Inc. ............. 8.375 05/01/07 4,538,834
2,495 Echostar DBS Corp. ............................. 6.375 10/01/11 2,435,744
1,205 Echostar DBS Corp. ............................. 6.625 10/01/14 1,161,319
------------
12,564,263
------------
MEDIA-NONCABLE 1.6%
2,415 Interpublic Group of Cos., Inc. ................ 5.400 11/15/09 2,227,837
2,600 News America Holdings, Inc. .................... 8.875 04/26/23 3,152,113
510 News America, Inc. ............................. 7.125 04/08/28 527,399
900 News America, Inc. ............................. 7.280 06/30/28 951,322
795 News America, Inc. ............................. 7.300 04/30/28 839,190
4,730 Viacom, Inc. (a)................................ 6.875 04/30/36 4,654,188
------------
12,352,049
------------
NATURAL GAS DISTRIBUTORS 0.9%
1,470 KeySpan Corp. .................................. 4.900 05/16/08 1,459,944
5,163 Sempra Energy................................... 4.621 05/17/07 5,133,008
------------
6,592,952
------------
NATURAL GAS PIPELINES 2.4%
2,230 Consolidated Natural Gas Co., Ser A............. 5.000 12/01/14 2,106,469
3,975 Consolidated Natural Gas Co., Ser C............. 6.250 11/01/11 4,083,903
1,575 Kinder Morgan Energy Partners................... 5.125 11/15/14 1,490,104
4,780 Kinder Morgan Finance Corp. (Canada)............ 5.700 01/05/16 4,357,094
3,325 Texas Eastern Transmission Corp. ............... 5.250 07/15/07 3,309,632
2,515 Texas Eastern Transmission Corp. ............... 7.000 07/15/32 2,770,592
------------
18,117,794
------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
NONCAPTIVE-CONSUMER FINANCE 5.4%
$ 4,660 American Express Co. ........................... 5.500% 09/12/06 $ 4,660,140
1,920 American General Finance Corp. ................. 4.625 05/15/09 1,886,108
4,500 American General Finance Corp. ................. 4.625 09/01/10 4,383,526
6,920 Countrywide Home Loans, Inc. ................... 3.250 05/21/08 6,691,135
800 HSBC Finance Corp. ............................. 4.125 12/15/08 780,673
1,175 HSBC Finance Corp. ............................. 4.125 11/16/09 1,134,696
1,790 HSBC Finance Corp. ............................. 6.375 10/15/11 1,864,595
4,700 HSBC Finance Corp. ............................. 6.750 05/15/11 4,966,814
1,000 HSBC Finance Corp. ............................. 7.875 03/01/07 1,011,674
8,785 Residential Capital Corp. ...................... 6.375 06/30/10 8,868,633
4,660 SLM Corp. ...................................... 4.000 01/15/10 4,475,245
1,000 SLM Corp. (Floating Rate Coupon)................ 5.665 07/26/10 1,000,947
------------
41,724,186
------------
NONCAPTIVE-DIVERSIFIED FINANCE 3.4%
940 CIT Group, Inc. ................................ 3.650 11/23/07 919,777
1,545 CIT Group, Inc. ................................ 4.750 08/15/08 1,530,094
1,165 CIT Group, Inc. ................................ 7.375 04/02/07 1,178,083
6,000 General Electric Capital Corp., Ser A........... 4.250 01/15/08 5,923,692
2,235 General Electric Capital Corp., Ser A........... 4.750 09/15/14 2,149,817
5,440 General Electric Capital Corp., Ser A........... 5.875 02/15/12 5,590,498
1,020 International Lease Finance Corp. .............. 3.750 08/01/07 1,003,964
7,785 Nationwide Building Society
(United Kingdom) (a)............................ 4.250 02/01/10 7,529,652
------------
25,825,577
------------
OIL FIELD SERVICES 0.6%
4,460 Panhandle Eastern Pipe Line Co., Ser B.......... 2.750 03/15/07 4,395,223
------------
OTHER UTILITIES 0.6%
4,555 Plains All American Pipeline (a)................ 6.700 05/15/36 4,701,065
------------
PAPER 1.3%
1,340 Abitibi-Consolidated, Inc. (Canada)............. 8.850 08/01/30 1,149,050
7,590 Bowater Canada Finance (Canada)................. 7.950 11/15/11 7,324,350
1,515 Sappi Papier Holding AG (Austria) (a)........... 6.750 06/15/12 1,448,263
------------
9,921,663
------------
PROPERTY & CASUALTY INSURANCE 3.2%
4,160 AIG Sunamerica Global Financial (a)............. 6.300 05/10/11 4,330,414
4,710 Farmers Exchange Capital (a).................... 7.050 07/15/28 4,744,270
2,721 Farmers Insurance Exchange Surplus (a).......... 8.625 05/01/24 3,124,552
4,610 Mantis Reef Ltd. (Australia) (a)................ 4.692 11/14/08 4,517,307
4,140 St. Paul Travelers Cos., Inc. .................. 5.010 08/16/07 4,106,520
3,315 Two-Rock Pass Through Trust (Floating Rate
Coupon) (Bermuda)............................... 6.344 02/11/49 3,265,839
------------
24,088,902
------------
</Table>
16 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
RAILROADS 1.8%
$ 3,240 Burlington Northern Santa Fe Corp. ............. 6.125% 03/15/09 $ 3,303,190
1,500 CSX Corp. ...................................... 6.750 03/15/11 1,580,002
1,649 Norfolk Southern Corp. ......................... 7.350 05/15/07 1,669,055
7,375 Union Pacific Corp. ............................ 6.625 02/01/08 7,491,282
------------
14,043,529
------------
REAL ESTATE MANAGEMENT & DEVELOPMENT 0.3%
1,945 Reckson Operating Partnership LP................ 5.150 01/15/11 1,909,307
------------
RETAIL 1.3%
800 CVS Corp. ...................................... 3.875 11/01/07 785,631
1,335 CVS Corp. ...................................... 5.750 08/15/11 1,348,357
1,500 Federated Department Stores, Inc. .............. 6.300 04/01/09 1,531,858
2,000 Federated Department Stores, Inc. .............. 6.625 09/01/08 2,044,612
1,315 Limited Brands, Inc. ........................... 6.950 03/01/33 1,306,321
2,970 May Department Stores Co. ...................... 5.950 11/01/08 2,998,064
------------
10,014,843
------------
SUPERMARKETS 0.9%
1,660 Delhaize America, Inc. ......................... 9.000 04/15/31 1,950,449
2,595 Fred Meyer, Inc. ............................... 7.450 03/01/08 2,665,683
1,800 Kroger Co. ..................................... 7.250 06/01/09 1,879,965
------------
6,496,097
------------
TECHNOLOGY 1.5%
4,870 Hewlett-Packard Co. (Floating Rate Coupon)...... 5.524 05/22/09 4,877,899
3,450 Hewlett-Packard Co. ............................ 5.750 12/15/06 3,452,812
2,995 LG Electronics, Inc. (South Korea) (a).......... 5.000 06/17/10 2,895,440
------------
11,226,151
------------
TEXTILES 0.8%
2,845 Mohawk Industries, Inc., Ser C.................. 6.500 04/15/07 2,859,714
3,245 Mohawk Industries, Inc., Ser D.................. 7.200 04/15/12 3,400,364
------------
6,260,078
------------
TOBACCO 0.2%
1,805 Reynolds American, Inc. (a)..................... 7.250 06/01/13 1,857,950
------------
TRANSPORTATION SERVICES 1.0%
2,300 FedEx Corp. .................................... 2.650 04/01/07 2,260,872
5,000 FedEx Corp. .................................... 5.500 08/15/09 5,029,050
------------
7,289,922
------------
WIRELESS COMMUNICATIONS 0.8%
6,000 Verizon Wireless Capital LLC.................... 5.375 12/15/06 5,998,134
------------
WIRELINE COMMUNICATIONS 6.8%
5,650 AT&T Corp. ..................................... 8.000 11/15/31 6,770,327
7,200 Bellsouth Corp. (Floating Rate Coupon).......... 5.530 11/15/07 7,210,699
4,865 France Telecom SA (France)...................... 8.500 03/01/31 6,226,037
6,000 SBC Communications, Inc. ....................... 4.125 09/15/09 5,795,022
</Table>
See Notes to Financial Statements 17
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------
WIRELINE COMMUNICATIONS (CONTINUED)
$ 3,155 SBC Communications, Inc. ....................... 6.150% 09/15/34 $ 3,016,066
6,650 Sprint Capital Corp. ........................... 6.125 11/15/08 6,741,737
2,080 Sprint Capital Corp. ........................... 8.750 03/15/32 2,529,340
1,900 Telecom Italia Capital (Luxembourg)............. 4.000 11/15/08 1,842,010
4,240 Telecom Italia Capital (Luxembourg)............. 4.000 01/15/10 4,031,812
5,210 Telefonica Europe BV (Netherlands).............. 8.250 09/15/30 6,158,553
1,000 Verizon Communications, Inc. ................... 7.510 04/01/09 1,048,641
265 Verizon New England, Inc. ...................... 6.500 09/15/11 270,577
------------
51,640,821
------------
TOTAL CORPORATE BONDS 81.0%................................................. 614,498,144
------------
MORTGAGE BACKED SECURITIES 0.3%
1,818 World Financial Property (a).................... 6.910 09/01/13 1,903,633
732 World Financial Property (a).................... 6.950 09/01/13 767,261
------------
TOTAL MORTGAGE BACKED SECURITIES............................................. 2,670,894
------------
GOVERNMENT OBLIGATIONS 8.8%
6,550 United States Treasury Bonds.................... 6.125 08/15/29 7,616,425
24,900 United States Treasury Bonds.................... 6.375 08/15/27 29,516,236
500 United States Treasury Bonds.................... 8.125 08/15/21 666,992
10,685 United States Treasury Notes (c)................ 4.250 08/15/13 10,392,840
8,500 United States Treasury Notes.................... 4.250 11/15/13 8,257,623
10,125 United States Treasury Notes.................... 4.500 02/28/11 10,049,073
------------
TOTAL GOVERNMENT OBLIGATIONS................................................. 66,499,189
------------
TOTAL LONG-TERM INVESTMENTS 90.1%
(Cost $686,584,732)........................................................ 683,668,227
============
SHORT-TERM INVESTMENTS 10.8%
REPURCHASE AGREEMENT 10.6%
State Street Bank & Trust Co. ($80,755,000 par collateralized by U.S.
Government obligations in a pooled cash account, interest rate of 5.10%,
dated 08/31/06, to be sold on 09/01/06 at $80,766,440)..................... 80,755,000
</Table>
18 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
<Table>
<Caption>
DESCRIPTION VALUE
- -----------------------------------------------------------------------------------------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 0.2%
United States Treasury Bills ($1,400,000 par, yielding 4.914%, 01/11/07
maturity) (b)................................................................. $ 1,375,242
------------
TOTAL SHORT-TERM INVESTMENTS 10.8%
(Cost $82,124,931)............................................................ 82,130,242
------------
TOTAL INVESTMENTS 100.9%
(Cost $768,709,663)........................................................... 765,798,469
LIABILITIES IN EXCESS OF OTHER ASSETS (0.9%)................................... (6,988,363)
------------
NET ASSETS 100.0%.............................................................. $758,810,106
============
</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) All or a portion of this security has been physically segregated in
connection with open futures contracts.
(c) Security purchased on a when-issued or delayed delivery basis.
FUTURES CONTRACTS OUTSTANDING AS OF AUGUST 31, 2006:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
LONG CONTRACTS:
U.S. Treasury Bonds Futures, December 2006
(Current Notional Value of $111,063 per contract)......... 828 $ 660,663
U.S. Treasury Notes 10-Year Futures, December 2006
(Current Notional Value of $107,375 per contract)......... 435 214,277
U.S. Treasury Notes 5-Year Futures, December 2006
(Current Notional Value of $105,109 per contract)......... 558 217,716
----- ---------
SHORT CONTRACTS:
U.S. Treasury Notes 2-Year Futures, December 2006
(Current Notional Value of $204,344 per contract)......... 445 (160,214)
----- ---------
2,266 $ 932,442
===== =========
</Table>
See Notes to Financial Statements 19
VAN KAMPEN CORPORATE BOND FUND
PORTFOLIO OF INVESTMENTS -- AUGUST 31, 2006 continued
SWAP AGREEMENTS OUTSTANDING AS OF AUGUST 31, 2006:
CREDIT DEFAULT SWAPS
<Table>
<Caption>
PAY/
RECEIVE NOTIONAL UNREALIZED
BUY/SELL FIXED EXPIRATION AMOUNT APPRECIATION/
COUNTERPARTY REFERENCE ENTITY PROTECTION RATE DATE (000) DEPRECIATION
JP Morgan Chase Bank,
N.A. .............. Tyco International., Ltd. Buy 0.65% 03/20/11 $3,500 $(26,296)
Goldman Sachs Capital
Markets............ Tyco International., Ltd. Buy 0.80 03/20/11 2,100 (29,052)
--------
$(55,348)
========
</Table>
20 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
August 31, 2006
<Table>
ASSETS:
Total Investments, including repurchase agreements of
$80,755,000 (Cost $768,709,663)............................ $765,798,469
Cash........................................................ 806
Receivables:
Interest................................................... 9,122,168
Investments Sold........................................... 4,014,209
Fund Shares Sold........................................... 1,325,589
Variation Margin on Futures................................ 385,881
Other....................................................... 134,168
------------
Total Assets............................................. 780,781,290
------------
LIABILITIES:
Payables:
Investments Purchased...................................... 18,828,309
Fund Shares Repurchased.................................... 1,745,702
Distributor and Affiliates................................. 407,395
Investment Advisory Fee.................................... 252,527
Income Distributions....................................... 223,185
Accrued Expenses............................................ 259,947
Trustees' Deferred Compensation and Retirement Plans........ 198,771
Swap Contracts.............................................. 55,348
------------
Total Liabilities........................................ 21,971,184
------------
NET ASSETS.................................................. $758,810,106
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized)............................... $773,732,133
Accumulated Undistributed Net Investment Income............. (4,258,122)
Net Unrealized Depreciation................................. (2,034,100)
Accumulated Net Realized Loss............................... (8,629,805)
------------
NET ASSETS.................................................. $758,810,106
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $591,178,884 and 90,488,187 shares of
beneficial interest issued and outstanding).............. $ 6.53
Maximum sales charge (4.75%* of offering price).......... .33
------------
Maximum offering price to public......................... $ 6.86
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $100,226,789 and 15,374,933 shares of
beneficial interest issued and outstanding).............. $ 6.52
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $28,567,775 and 4,379,764 shares of
beneficial interest issued and outstanding).............. $ 6.52
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $38,836,658 and 5,939,638 shares of
beneficial interest issued and outstanding).............. $ 6.54
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements 21
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Year Ended August 31, 2006
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 37,637,230
Other....................................................... 204,563
------------
Total Income............................................ 37,841,793
------------
EXPENSES:
Investment Advisory Fee..................................... 2,854,462
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B, and C $1,351,769, $1,122,872 and $284,042,
respectively)............................................. 2,758,683
Shareholder Services........................................ 1,599,009
Custody..................................................... 67,656
Trustees' Fees and Related Expenses......................... 46,789
Legal....................................................... 19,135
Other....................................................... 528,251
------------
Total Expenses.......................................... 7,873,985
Less Credits Earned on Cash Balances.................... 39,808
------------
Net Expenses............................................ 7,834,177
------------
NET INVESTMENT INCOME....................................... $ 30,007,616
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 24,964
Futures................................................... (620,721)
Swap Contracts............................................ (174,047)
------------
Net Realized Loss........................................... (769,804)
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 19,627,619
------------
End of the Period:
Investments............................................. (2,911,194)
Futures................................................. 932,442
Swap Contracts.......................................... (55,348)
------------
(2,034,100)
------------
Net Unrealized Depreciation During the Period............... (21,661,719)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(22,431,523)
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 7,576,093
============
</Table>
22 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2006 AUGUST 31, 2005
----------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 30,007,616 $ 24,710,301
Net Realized Gain/Loss................................... (769,804) 12,900,218
Net Unrealized Depreciation During the Period............ (21,661,719) (4,503,856)
------------- -------------
Change in Net Assets from Operations..................... 7,576,093 33,106,663
------------- -------------
Distributions from Net Investment Income:
Class A Shares......................................... (25,558,482) (21,278,452)
Class B Shares......................................... (4,399,602) (4,977,341)
Class C Shares......................................... (1,121,886) (1,142,953)
Class I Shares......................................... (1,435,264) (62,399)
------------- -------------
Total Distributions...................................... (32,515,234) (27,461,145)
------------- -------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES...... (24,939,141) 5,645,518
------------- -------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................................ 274,997,260 283,286,242
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................... 29,576,525 24,492,761
Cost of Shares Repurchased............................... (204,876,191) (179,215,837)
------------- -------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS....... 99,697,594 128,563,166
------------- -------------
TOTAL INCREASE IN NET ASSETS............................. 74,758,453 134,208,684
NET ASSETS:
Beginning of the Period.................................. 684,051,653 549,842,969
------------- -------------
End of the Period (Including accumulated undistributed
net investment income of ($4,258,122) and ($3,236,929),
respectively).......................................... $ 758,810,106 $ 684,051,653
============= =============
</Table>
See Notes to Financial Statements 23
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED AUGUST 31,
CLASS A SHARES ----------------------------------------------
2006 2005 2004 2003 2002
----------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.... $ 6.78 $ 6.72 $ 6.58 $ 6.39 $ 6.75
------ ------ ------ ------ ------
Net Investment Income..................... .28(a) .29 .33 .33(a) .37
Net Realized and Unrealized Gain/Loss..... (.22) .09 .16 .25 (.33)
------ ------ ------ ------ ------
Total from Investment Operations............ .06 .38 .49 .58 .04
------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.................................. .31 .32 .35 .39 .40
Return of Capital Distributions........... -0- -0- -0-(c) -0- -0-
------ ------ ------ ------ ------
Total Distributions......................... .31 .32 .35 .39 .40
------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.......... $ 6.53 $ 6.78 $ 6.72 $ 6.58 $ 6.39
====== ====== ====== ====== ======
Total Return (b)............................ .93% 5.79% 7.55% 9.20% .54%
Net Assets at End of the Period (In
millions)................................. $591.2 $502.6 $394.7 $318.4 $246.5
Ratio of Expenses to Average Net Assets..... .96% .99% .98% 1.01% 1.03%
Ratio of Net Investment Income to Average
Net Assets................................ 4.33% 4.29% 4.80% 4.98% 5.48%
Portfolio Turnover.......................... 45% 61% 38% 46% 82%
</Table>
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
(c) Amount is less than $.01.
24 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED AUGUST 31,
CLASS B SHARES ----------------------------------------------
2006 2005 2004 2003 2002
----------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.... $ 6.76 $ 6.70 $ 6.57 $ 6.38 $ 6.74
------ ------ ------ ------ ------
Net Investment Income..................... .23(a) .24 .26 .28(a) .32
Net Realized and Unrealized Gain/Loss..... (.21) .09 .16 .25 (.33)
------ ------ ------ ------ ------
Total from Investment Operations............ .02 .33 .42 .53 (.01)
------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.................................. .26 .27 .29 .34 .35
Return of Capital Distributions........... -0- -0- -0-(c) -0- -0-
------ ------ ------ ------ ------
Total Distributions......................... .26 .27 .29 .34 .35
------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.......... $ 6.52 $ 6.76 $ 6.70 $ 6.57 $ 6.38
====== ====== ====== ====== ======
Total Return (b)............................ .30% 5.01% 6.59% 8.38% -.22%
Net Assets at End of the Period (In
millions)................................. $100.2 $123.6 $126.5 $135.6 $112.3
Ratio of Expenses to Average Net Assets..... 1.72% 1.75% 1.75% 1.77% 1.78%
Ratio of Net Investment Income to Average
Net Assets................................ 3.57% 3.55% 4.06% 4.23% 4.73%
Portfolio Turnover.......................... 45% 61% 38% 46% 82%
</Table>
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within the first and second years of purchase and declining to 0% after
the fifth year. If the sales charge was included, total returns would be
lower. These returns include combined Rule 12b-1 fees and service fees of 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) Amount is less than $.01.
See Notes to Financial Statements 25
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED AUGUST 31,
CLASS C SHARES --------------------------------------------------
2006 2005 2004 2003 2002
--------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD... $6.76 $6.71 $6.57 $6.38 $ 6.74
----- ----- ----- ----- ------
Net Investment Income.................... .23(a) .24 .27 .28(a) .32
Net Realized and Unrealized Gain/Loss.... (.21) .08 .16 .25 (.33)
----- ----- ----- ----- ------
Total from Investment Operations........... .02 .32 .43 .53 (.01)
----- ----- ----- ----- ------
Less:
Distributions from Net Investment
Income................................. .26 .27 .29 .34 .35
Return of Capital Distributions.......... -0- -0- -0-(d) -0- -0-
----- ----- ----- ----- ------
Total Distributions........................ .26 .27 .29 .34 .35
----- ----- ----- ----- ------
NET ASSET VALUE, END OF THE PERIOD......... $6.52 $6.76 $6.71 $6.57 $ 6.38
===== ===== ===== ===== ======
Total Return (b)........................... .16%(c) 5.17%(c) 6.59%(c) 8.38% -.22%
Net Assets at End of the Period (In
millions)................................ $28.6 $29.2 $28.6 $29.6 $ 23.4
Ratio of Expenses to Average Net Assets.... 1.71%(c) 1.71%(c) 1.73%(c) 1.77% 1.78%
Ratio of Net Investment Income to Average
Net Assets............................... 3.58%(c) 3.59%(c) 4.07%(c) 4.22% 4.73%
Portfolio Turnover......................... 45% 61% 38% 46% 82%
</Table>
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of 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) 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).
(d) Amount is less than $.01.
26 See Notes to Financial Statements
VAN KAMPEN CORPORATE BOND FUND
FINANCIAL HIGHLIGHTS continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
AUGUST 12, 2005
(COMMENCEMENT OF
CLASS I SHARES YEAR ENDED OPERATIONS) TO
AUGUST 31, 2006 AUGUST 31, 2005
-----------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD................. $6.78 $6.72
----- -----
Net Investment Income.................................. .29(a) .03
Net Realized and Unrealized Gain/Loss.................. (.21) .06
----- -----
Total from Investment Operations......................... .08 .09
Less Distributions from Net Investment Income............ .32 .03
----- -----
NET ASSET VALUE, END OF THE PERIOD....................... $6.54 $6.78
===== =====
Total Return (b)......................................... 1.33% 1.11%*
Net Assets at End of the Period (In millions)............ $38.8 $28.7
Ratio of Expenses to Average Net Assets.................. .72% .86%
Ratio of Net Investment Income to Average Net Assets..... 4.59% 4.32%
Portfolio Turnover....................................... 45% 61%
</Table>
(a) Based on average shares outstanding.
(b) 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
See Notes to Financial Statements 27
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006
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. Credit default swaps are valued using market
quotations from brokers. 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. The Fund may purchase and sell securities
on a "when-issued" or "delayed delivery" basis, with settlement to occur at a
later date. The value of the security so purchased is subject to market
fluctuations during this period. The Fund will segregate assets with the
custodian having an aggregate value at least equal to the amount of the
when-issued or delayed delivery purchase
28
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
commitments until payment is made. At August 31, 2006, the Fund had $14,295,462
of when-issued or delayed delivery purchase commitments.
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 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. At August 31, 2006, the Fund had an accumulated capital loss carryforward
for tax purposes of $6,357,540, which will expire according to the following
schedule:
<Table>
<Caption>
AMOUNT EXPIRATION
$5,560,726.................................................. August 31, 2011
436,571................................................... August 31, 2012
360,243................................................... August 31, 2014
</Table>
At August 31, 2006, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $772,869,853
============
Gross tax unrealized appreciation........................... $ 6,070,061
Gross tax unrealized depreciation........................... (13,141,445)
------------
Net tax unrealized depreciation on investments.............. $ (7,071,384)
============
</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 futures transactions. All
short-term capital gains and a portion of futures gains are included in ordinary
income for tax purposes.
29
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
The tax character of distributions paid during the years ended August 31,
2006 and 2005 was follows:
<Table>
<Caption>
2006 2005
Distributions paid from:
Ordinary Income........................................... $32,525,490 $27,486,058
Long-term capital gain.................................... -0- -0-
----------- -----------
$32,525,490 $27,486,058
=========== ===========
</Table>
Due to inherent differences in the recognition of income, expenses and
realized gains/losses under U.S. generally accepted accounting principles and
federal income tax purposes, permanent differences between book and tax basis
reporting have been identified and appropriately reclassified on the Statement
of Assets and Liabilities. Permanent book and tax differences of $5,563 related
to the Fund's investments in other regulated investment companies and $198,750
related to consent fee income received from tender offers were reclassified from
accumulated undistributed net investment income to accumulated net realized
loss. A permanent book and tax difference of $23,682 related to the recognition
of net realized losses on paydowns of mortgage pool obligations and $1,847,024
related to book to tax amortization differences were reclassified from
accumulated undistributed net investment income to accumulated net realized
loss. Additionally, permanent book to tax differences of $179,968 and $1,925
relating to income from swap transactions were reclassified from accumulated net
realized loss to accumulated undistributed net investment income and capital,
respectively.
As of August 31, 2006 the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $294,973
</Table>
Net realized gains or losses may differ for financial reporting and tax
purposes as a result of gains or losses recognized for tax purposes on open
futures transactions at August 31, 2006 and post October losses of $1,347,670
which are not recognized for tax purposes until the first day of the following
fiscal year.
F. EXPENSE REDUCTIONS During the year ended August 31, 2006, the Fund's custody
fee was reduced by $39,808 as a result of credits earned on cash balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide 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.......................................... 0.42%
Next $750 million........................................... 0.35
Over $1.250 billion......................................... 0.22
</Table>
30
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
For the year ended August 31, 2006, the Fund recognized expenses of
approximately $19,000 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 year ended August 31, 2006, the Fund recognized
expenses of approximately $51,400 representing Van Kampen Investments 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 year ended
August 31, 2006, the Fund recognized expenses of approximately $1,395,400
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 $89,500 are
included in "Other" assets on the Statement of Assets and Liabilities at August
31, 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 year ended August 31, 2006, Van Kampen, as Distributor for the Fund,
received commissions on sales of the Fund's Class A Shares of approximately
$691,900 and contingent deferred sales charge (CDSC) on redeemed shares of
approximately $251,300. Sales charges do not represent expenses of the Fund.
31
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
3. CAPITAL TRANSACTIONS
For the years ended August 31, 2006 and 2005, transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
YEAR ENDED YEAR ENDED
AUGUST 31, 2006 AUGUST 31, 2005
---------------------------- ----------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A....................... 33,673,853 $ 220,273,129 32,548,636 $ 218,937,427
Class B....................... 4,260,898 27,860,021 4,094,787 27,489,442
Class C....................... 1,353,140 8,843,562 1,210,343 8,129,287
Class I....................... 2,782,444 18,020,548 4,275,162 28,730,086
----------- ------------- ----------- -------------
Total Sales..................... 42,070,335 $ 274,997,260 42,128,928 $ 283,286,242
=========== ============= =========== =============
Dividend Reinvestment:
Class A....................... 3,594,502 $ 23,444,306 2,871,301 $ 19,334,322
Class B....................... 589,962 3,840,743 631,406 4,241,852
Class C....................... 131,477 856,217 127,119 854,183
Class I....................... 219,719 1,435,259 9,204 62,404
----------- ------------- ----------- -------------
Total Dividend Reinvestment..... 4,535,660 $ 29,576,525 3,639,030 $ 24,492,761
=========== ============= =========== =============
Repurchases:
Class A....................... (20,947,743) $(136,661,300) (19,990,174) $(134,416,986)
Class B....................... (7,755,242) (50,546,695) (5,319,881) (35,708,060)
Class C....................... (1,419,885) (9,258,547) (1,294,715) (8,693,560)
Class I....................... (1,288,016) (8,409,649) (58,875) (397,231)
----------- ------------- ----------- -------------
Total Repurchases............... (31,410,886) $(204,876,191) (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
seven days of purchase. The redemption fee is paid directly to the Fund. For the
period ended August 31, 2006, the Fund received redemption fees of approximately
$2,800, which are reported as part of "Cost of Shares Repurchased" in the
Statement of Changes in Net Assets. The per share impact from redemption fees
paid to the Fund was less than $0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $375,011,406 and $304,164,116,
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 may use derivative instruments for a variety of reasons, 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
32
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
appreciation/depreciation. Upon 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. Risks may
arise as a result of the potential inability of the counterparties to meet the
terms of their contracts.
Summarized below are the specific types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS 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 Bonds or 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 year ended August 31, 2006, were
as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at August 31, 2005.............................. 2,335
Futures Opened.............................................. 14,355
Futures Closed.............................................. (14,424)
-------
Outstanding at August 31, 2006.............................. 2,266
=======
</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. Net unrealized gains are recorded as
an asset or net unrealized losses are reported as a liability on the Statement
of Assets and Liabilities. The change in value of the swap contracts is reported
as unrealized gains or losses in the Statement of Operations.
33
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
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.
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 sale, 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 $1,154,400 and $0 for
Class B and Class C Shares, respectively. These amounts may be recovered from
future payments under the distribution plan or CDSC. To the extent the
unreimbursed receivable has been fully recovered, the distribution fee is
reduced.
8. LEGAL MATTERS
The Adviser and certain affiliates of the Adviser are named as defendants in a
derivative action 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 Van Kampen 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
derivative action was coordinated with a direct action alleging related
violations of defendants' statutory disclosure obligations and fiduciary duties
with respect to the payments described above. In addition, this derivative
action was stayed by agreement of the parties pending rulings on the motion to
dismiss the direct action and the motion to dismiss another derivative action
brought by the same plaintiff that brought this derivative action, alleging
market timing and late trading in the Van Kampen funds. In April 2006, the court
granted defendants' motion to dismiss the direct action. In June 2006, the court
granted defendants' motion to dismiss the market timing action. Accordingly, the
stay on this action was lifted. Plaintiff and defendants have agreed that this
action should be dismissed in light of the rulings dismissing the two cases
discussed above. The Court has approved a notice to shareholders regarding the
dismissal, which is located at the back of this Report.
34
VAN KAMPEN CORPORATE BOND FUND
NOTES TO FINANCIAL STATEMENTS -- AUGUST 31, 2006 continued
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.
10. NEW ACCOUNTING PRONOUNCEMENT
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial statements. FIN 48 is effective for fiscal
years beginning after December 15, 2006. The impact to the Fund's financial
statements, if any, is currently being assessed.
35
VAN KAMPEN CORPORATE BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Shareholders and Board of Trustees of Van Kampen Corporate Bond Fund
We have audited the accompanying statement of assets and liabilities of Van
Kampen Corporate Bond Fund (the "Fund"), including the portfolio of investments,
as of August 31, 2006, and the related statement of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for each of the five years in
the period then ended. These financial statements and financial highlights are
the responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public
Company Accounting Oversight Board (United States). Those standards require that
we plan and perform the audit to obtain reasonable assurance about whether the
financial statements and financial highlights are free of material misstatement.
We were not engaged to perform an audit of the Fund's internal control over
financial reporting. Our audits included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Fund's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights, assessing the accounting
principles used and significant estimates made by management, and evaluating the
overall financial statement presentation. Our procedures included confirmation
of securities owned as of August 31, 2006, by correspondence with the custodian
and brokers or by other appropriate auditing procedures where replies from
brokers were not received. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of the
Van Kampen Corporate Bond Fund at August 31, 2006, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the five
years in the period then ended in conformity with U.S. generally accepted
accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
October 13, 2006
36
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
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
JAMES W. GARRETT
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.
37
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees and the Fund's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Fund
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments,
the Adviser, the Distributor, Van Kampen Advisors Inc., Van Kampen Exchange
Corp. and Investor Services. The term "Fund Complex" includes each of the
investment companies advised by the Adviser as of the date of this Annual
Report. Trustees serve until reaching their retirement age or until their
successors are duly elected and qualified. Officers are annually elected by the
trustees.
INDEPENDENT TRUSTEES:
<Table>
<Caption>
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
David C. Arch (61) Trustee Trustee Chairman and Chief 71 Trustee/Director/Managing
Blistex Inc. since 2003 Executive Officer of General Partner of funds
1800 Swift Drive Blistex Inc., a consumer in the Fund Complex.
Oak Brook, IL 60523 health care products
manufacturer. Director of
the Heartland Alliance, a
nonprofit organization
serving human needs based
in Chicago. Director of
St. Vincent de Paul
Center, a Chicago based
day care facility serving
the children of low
income families. Board
member of the Illinois
Manufacturers'
Association.
Jerry D. Choate (68) Trustee Trustee Prior to January 1999, 71 Trustee/Director/Managing
33971 Selva Road since 1999 Chairman and Chief General Partner of funds
Suite 130 Executive Officer of the in the Fund Complex.
Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a
("Allstate") and Allstate biotechnological company,
Insurance Company. Prior and Director of Valero
to January 1995, Energy Corporation, an
President and Chief independent refining
Executive Officer of company.
Allstate. Prior to August
1994, various management
positions at Allstate.
</Table>
38
<Table>
<Caption>
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Rod Dammeyer (65) Trustee Trustee President of CAC, L.L.C., 71 Trustee/Director/Managing
CAC, L.L.C. since 2003 a private company General Partner of funds
4350 LaJolla Village Drive offering capital in the Fund Complex.
Suite 980 investment and management Director of Quidel
San Diego, CA 92122-6223 advisory services. Prior Corporation, Stericycle,
to February 2001, Vice Inc., Ventana Medical
Chairman and Director of Systems, Inc., and GATX
Anixter International, Corporation, and Trustee
Inc., a global of The Scripps Research
distributor of wire, Institute. Prior to
cable and communications January 2005, Trustee of
connectivity products. the University of Chicago
Prior to July 2000, Hospitals and Health
Managing Partner of Systems. Prior to April
Equity Group Corporate 2004, Director of
Investment (EGI), a TheraSense, Inc. Prior to
company that makes January 2004, Director of
private investments in TeleTech Holdings Inc.
other companies. and Arris Group, Inc.
Prior to May 2002,
Director of Peregrine
Systems Inc. Prior to
February 2001, Director
of IMC Global Inc. Prior
to July 2000, Director of
Allied Riser
Communications Corp.,
Matria Healthcare Inc.,
Transmedia Networks,
Inc., CNA Surety, Corp.
and Grupo Azcarero Mexico
(GAM).
</Table>
39
<Table>
<Caption>
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Linda Hutton Heagy (58) Trustee Trustee Managing Partner of 71 Trustee/Director/Managing
Heidrick & Struggles since 1995 Heidrick & Struggles, an General Partner of funds
233 South Wacker Drive executive search firm. in the Fund Complex.
Suite 7000 Trustee on the University
Chicago, IL 60606 of Chicago Hospitals
Board, Vice Chair of the
Board of the YMCA of
Metropolitan Chicago and
a member of the Women's
Board of the University
of Chicago. Prior to
1997, Partner of Ray &
Berndtson, Inc., an
executive recruiting
firm. Prior to 1996,
Trustee of The
International House
Board, a fellowship and
housing organization for
international graduate
students. Prior to 1995,
Executive Vice President
of ABN AMRO, N.A., a bank
holding company. Prior to
1990, Executive Vice
President of The Exchange
National Bank.
R. Craig Kennedy (54) Trustee Trustee Director and President of 71 Trustee/Director/Managing
1744 R Street, NW since 1995 the German Marshall Fund General Partner of funds
Washington, DC 20009 of the United States, an in the Fund Complex.
independent U.S.
foundation created to
deepen understanding,
promote collaboration and
stimulate exchanges of
practical experience
between Americans and
Europeans. Formerly,
advisor to the Dennis
Trading Group Inc., a
managed futures and
option company that
invests money for
individuals and
institutions. Prior to
1992, President and Chief
Executive Officer,
Director and member of
the Investment Committee
of the Joyce Foundation,
a private foundation.
Howard J Kerr (70) Trustee Trustee Prior to 1998, President 71 Trustee/Director/Managing
14 Huron Trace since 2003 and Chief Executive General Partner of funds
Galena, IL 61036 Officer of Pocklington in the Fund Complex.
Corporation, Inc., an Director of the Lake
investment holding Forest Bank & Trust.
company. Director of the
Marrow Foundation.
</Table>
40
<Table>
<Caption>
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Jack E. Nelson (70) Trustee Trustee President of Nelson 71 Trustee/Director/Managing
423 Country Club Drive since 1995 Investment Planning General Partner of funds
Winter Park, FL 32789 Services, Inc., a in the Fund Complex.
financial planning
company and registered
investment adviser in the
State of Florida.
President of Nelson Ivest
Brokerage Services Inc.,
a member of the NASD,
Securities Investors
Protection Corp. and the
Municipal Securities
Rulemaking Board.
President of Nelson Sales
and Services Corporation,
a marketing and services
company to support
affiliated companies.
Hugo F. Sonnenschein (65) Trustee Trustee President Emeritus and 71 Trustee/Director/Managing
1126 E. 59th Street since 2003 Honorary Trustee of the General Partner of funds
Chicago, IL 60637 University of Chicago and in the Fund Complex.
the Adam Smith Director of Winston
Distinguished Service Laboratories, Inc.
Professor in the
Department of Economics
at the University of
Chicago. Prior to July
2000, President of the
University of Chicago.
Trustee of the University
of Rochester and a member
of its investment
committee. Member of the
National Academy of
Sciences, the American
Philosophical Society and
a fellow of the American
Academy of Arts and
Sciences.
Suzanne H. Woolsey, Ph.D. Trustee Trustee Chief Communications 71 Trustee/Director/Managing
(64) since 1999 Officer of the National General Partner of funds
815 Cumberstone Road Academy of in the Fund Complex.
Harwood, MD 20776 Sciences/National Director of Fluor Corp.,
Research Council, an an engineering,
independent, federally procurement and
chartered policy construction
institution, from 2001 to organization, since
November 2003 and Chief January 2004 and Director
Operating Officer from of Neurogen Corporation,
1993 to 2001. Director of a pharmaceutical company,
the Institute for Defense since January 1998.
Analyses, a federally
funded research and
development center,
Director of the German
Marshall Fund of the
United States, Director
of the Rocky Mountain
Institute and Trustee of
Colorado College. Prior
to 1993, Executive
Director of the
Commission on Behavioral
and Social Sciences and
Education at the National
Academy of
Sciences/National
Research Council. From
1980 through 1989,
Partner of Coopers &
Lybrand.
</Table>
41
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
INTERESTED TRUSTEE:*
<Table>
<Caption>
NUMBER OF
FUNDS IN
TERM OF FUND
OFFICE AND COMPLEX
POSITION(S) LENGTH OF OVERSEEN
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) BY
OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS TRUSTEE
Wayne W. Whalen* (67) Trustee Trustee Partner in the law firm of Skadden, Arps, Slate, Meagher & 71
333 West Wacker Drive since 1995 Flom LLP, legal counsel to funds in the Fund Complex.
Chicago, IL 60606
<Caption>
NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE HELD BY TRUSTEE
Wayne W. Whalen* (67) Trustee/Director/
333 West Wacker Drive Managing General
Chicago, IL 60606 Partner of funds in
the Fund Complex.
Director of the
Abraham Lincoln
Presidential Library
Foundation.
</Table>
* Mr. Whalen is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act) of certain funds in the Fund Complex by reason of he and
his firm currently providing legal services as legal counsel to such funds
in the Fund Complex.
42
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
OFFICERS:
<Table>
<Caption>
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS
Ronald E. Robison (67) President and Officer President of funds in the Fund Complex since September 2005
1221 Avenue of the Americas Principal Executive since 2003 and Principal Executive Officer of funds in the Fund Complex
New York, NY 10020 Officer since May 2003. Managing Director of Van Kampen Advisors
Inc. since June 2003. Director of Investor Services since
September 2002. Director of the Adviser, Van Kampen
Investments and Van Kampen Exchange Corp. since January
2005. Managing Director of Morgan Stanley and Morgan Stanley
& Co. Incorporated. Managing Director and Director of Morgan
Stanley Investment Management Inc. Chief Administrative
Officer, Managing Director and Director of Morgan Stanley
Investment Advisors Inc. and Morgan Stanley Services Company
Inc. Managing Director and Director of Morgan Stanley
Distributors Inc. and Morgan Stanley Distribution Inc. Chief
Executive Officer and Director of Morgan Stanley Trust.
Executive Vice President and Principal Executive Officer of
the Institutional and Retail Morgan Stanley Funds. Director
of Morgan Stanley SICAV. Previously, Chief Global Operations
Officer of Morgan Stanley Investment Management Inc. and
Executive Vice President of funds in the Fund Complex from
May 2003 to September 2005.
Dennis Shea (53) Vice President Officer Managing Director of Morgan Stanley Investment Advisors
1221 Avenue of the Americas since 2006 Inc., Morgan Stanley Investment Management Inc., the Adviser
New York, NY 10020 and Van Kampen Advisors Inc. Chief Investment Officer-Global
Equity of the same entities since February 2006. Vice
President of Morgan Stanley Institutional and Retail Funds
since February 2006. Vice President of funds in the Fund
Complex since March 2006. Previously, Managing Director and
Director of Global Equity Research at Morgan Stanley from
April 2000 to February 2006.
J. David Germany (52) Vice President Officer Managing Director of Morgan Stanley Investment Advisors
25 Cabot Square since 2006 Inc., Morgan Stanley Investment Management Inc., the Adviser
Canary Wharf and Van Kampen Advisors Inc. Chief Investment Officer -
London, GBR E14 4QA Global Fixed Income of the same entities since December
2005. Managing Director and Director of Morgan Stanley
Investment Management Ltd. Director of Morgan Stanley
Investment Management (ACD) Limited since December 2003.
Vice President of Morgan Stanley Institutional and Retail
Funds since February 2006. Vice President of funds in the
Fund Complex since March 2006.
</Table>
43
<Table>
<Caption>
VAN KAMPEN CORPORATE BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
TERM OF
OFFICE AND
POSITION(S) LENGTH OF
NAME, AGE AND HELD WITH TIME PRINCIPAL OCCUPATION(S)
ADDRESS OF OFFICER FUND SERVED DURING PAST 5 YEARS
Amy R. Doberman (44) Vice President Officer Managing Director and General Counsel - U.S. Investment
1221 Avenue of the Americas since 2004 Management; Managing Director of Morgan Stanley Investment
New York, NY 10020 Management Inc., Morgan Stanley Investment Advisors Inc. and
the Adviser. Vice President of the Morgan Stanley
Institutional and Retail Funds since July 2004 and Vice
President of funds in the Fund Complex since August 2004.
Previously, Managing Director and General Counsel of
Americas, UBS Global Asset Management from July 2000 to July
2004 and General Counsel of Aeltus Investment Management,
Inc. from January 1997 to July 2000.
Stefanie V. Chang (39) Vice President Officer Executive Director of Morgan Stanley Investment Management
1221 Avenue of the Americas and Secretary since 2003 Inc. Vice President and Secretary of funds in the Fund
New York, NY 10020 Complex.
John L. Sullivan (51) Chief Compliance Officer Chief Compliance Officer of funds in the Fund Complex since
1 Parkview Plaza Officer since 1996 August 2004. Prior to August 2004, Director and Managing
Oakbrook Terrace, IL 60181 Director of Van Kampen Investments, the Adviser, Van Kampen
Advisors Inc. and certain other subsidiaries of Van Kampen
Investments, Vice President, Chief Financial Officer and
Treasurer of funds in the Fund Complex and head of Fund
Accounting for Morgan Stanley Investment Management Inc.
Prior to December 2002, Executive Director of Van Kampen
Investments, the Adviser and Van Kampen Advisors Inc.
James W. Garrett (37) Chief Financial Officer Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas and Treasurer since 2006 Chief Financial Officer and Treasurer of Morgan Stanley
New York, NY 10020 Institutional Funds since 2002 and of Funds in the Fund
Complex from January 2005 to August 2005 and since September
2006.
</Table>
44
Notice to Fund Shareholders
As previously disclosed, a derivative action was filed on behalf of the Fund
against the Fund's investment adviser, broker-dealer, distributor, and Trustees.
The complaint alleges that defendants violated federal securities laws and state
laws in connection with certain economic incentive programs. The case is pending
before the Honorable Richard Owen, United States District Judge in the Southern
District of New York. Defendants have filed a motion to dismiss the complaint in
its entirety on numerous grounds, and that motion is still pending.
On April 18, 2006, Judge Owen dismissed a separate lawsuit against Morgan
Stanley and all of the same corporate defendants that are named in the
derivative action. The Morgan Stanley suit related to the same incentive
programs that are at issue in the derivative action, and asserted many of the
same legal claims. In his decision, Judge Owen found that the programs do not
violate federal law, and that defendants had made the appropriate disclosures
concerning the programs. The plaintiffs in the Morgan Stanley suit did not
appeal from the decision, and that decision is now final.
In light of this decision by Judge Owen -- as well as several other
decisions by other judges in the Southern District of New York and certain other
courts that have dismissed similar complaints against other investment funds --
plaintiff in the derivative action has determined that the suit would be
unsuccessful, if pursued further. Accordingly, plaintiff has asked Judge Owen to
dismiss the action. No attorneys' fees will be paid by defendants and no
consideration will be paid to the named plaintiff.
All investors in the Fund are hereby provided notice of this proposed
dismissal. If you object to the proposed dismissal, your objection must be
mailed no later than November 29, 2006, in writing, to the Honorable Richard
Owen, United States District Judge, United States Courthouse, Room 640, 500
Pearl Street, New York, NY 10007-1312. Copies of the objection must also be
mailed to Denise Davis Schwartzman, Esquire, Chimicles & Tikellis LLP, 361 West
Lancaster Avenue, Haverford, PA 19041; and Richard A. Rosen, Esquire, Paul,
Weiss, Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York,
NY 10019-6064.
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.
(continued on next page)
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
(continued on back)
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.
The Statement of Additional Information includes additional information
about Fund trustees and is available, without charge, upon request by
calling 1-800-847-2424.
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 ANR 10/06
(VAN KAMPEN INVESTMENTS SHINE LOGO) RN06-02888P-Y08/06
Item 2. Code of Ethics.
(a) The Fund has adopted a code of ethics (the "Code of Ethics") that
applies to its principal executive officer, principal financial officer,
principal accounting officer or controller, or persons performing similar
functions, regardless of whether these individuals are employed by the Fund or a
third party.
(b) No information need be disclosed pursuant to this paragraph.
(c) Not applicable.
(d) Not applicable.
(e) Not applicable.
(f)
(1) The Fund's Code of Ethics is attached hereto as Exhibit 12A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Fund's Board of Trustees has determined that it has three "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees : Rod Dammeyer, Jerry D. Choate and R. Craig Kennedy.
Under applicable securities laws, a person who is determined to be an audit
committee financial expert will not be deemed an "expert" for any purpose,
including without limitation for the purposes of Section 11 of the Securities
Act of 1933, as a result of being designated or identified as an audit committee
financial expert. The designation or identification of a person as an audit
committee financial expert does not impose on such person any duties,
obligations, or liabilities that are greater than the duties, obligations, and
liabilities imposed on such person as a member of the audit committee and Board
of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
2006
<Table>
<Caption>
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES...................... $26,100 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES.... $0 $706,000(2)
TAX FEES.............. $2,800(3) $75,537(4)
ALL OTHER FEES........ $0 $749,041(5)
TOTAL NON-AUDIT FEES............ $2,800 $1,530,578
TOTAL........................... $28,900 $1,530,578
</Table>
2005
<Table>
<Caption>
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES...................... $25,200 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES.... $0 $280,000(2)
TAX FEES.............. $2,500(3) $58,688(4)
ALL OTHER FEES........ $0 $655,125(5)
TOTAL NON-AUDIT FEES............ $2,500 $993,813
TOTAL........................... $27,700 $993,813
</Table>
N/A- Not applicable, as not required by Item 4.
(1) Covered Entities include the Adviser (excluding sub-advisors) and any
entity controlling, controlled by or under common control with the Adviser
that provides ongoing services to the Registrant.
(2) Audit-Related Fees represent assurance and related services provided that
are reasonably related to the performance of the audit of the financial
statements of the Covered Entities' and funds advised by the Adviser or its
affiliates, specifically attestation services provided in connection with a
SAS 70 Report.
(3) Tax Fees represent tax advice and compliance services provided in
connection with the review of the Registrant's tax.
(4) Tax Fees represent tax advice services provided to Covered Entities,
including research and identification of PFIC entities.
(5) All Other Fees represent attestation services provided in connection with
performance presentation standards and assistance with compliance policies
and procedures.
(e)(1) The audit committee's pre-approval policies and procedures are as
follows:
JOINT AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
VAN KAMPEN FUNDS
AS ADOPTED JULY 23, 2003 AND AMENDED MAY 26, 2004(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.(2)
The SEC has issued rules specifying the types of services that an
independent auditor may not provide to its audit client, as well as the audit
committee's administration of the engagement of the independent auditor. The
SEC's rules establish two different approaches to pre-approving services, which
the SEC considers to be equally valid. Proposed services either: may be
pre-approved without consideration of specific case-by-case services by the
Audit Committee ("general pre-approval"); or require the specific pre-approval
of the Audit Committee ("specific pre-approval"). The Audit Committee believes
that the combination of these two approaches in this Policy will result in an
effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee will consider
whether such services are consistent with the SEC's rules on auditor
independence. The Audit Committee will also consider whether the Independent
Auditors are best positioned to provide the most effective and efficient
services, for reasons such as its familiarity with the Fund's business, people,
culture, accounting systems, risk profile and other factors, and whether the
service might enhance the Fund's ability to manage or control risk or improve
audit quality. All such factors will be considered as a whole, and no one factor
should necessarily be determinative.
The Audit Committee is also mindful of the relationship between fees
for audit and non-audit services in deciding whether to pre-approve any such
services and may determine for each fiscal year, the appropriate ratio between
the total amount of fees for Audit, Audit-related and Tax services for the Fund
(including any Audit-related or Tax service fees for Covered Entities that were
subject to pre-approval), and the total amount of fees for certain permissible
non-audit services classified as All Other services for the Fund (including any
such services for Covered Entities subject to pre-approval).
The appendices to this Policy describe the Audit, Audit-related, Tax
and All Other services that have the general pre-approval of the Audit
Committee. The term of any general pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee considers and provides a different
period and states otherwise. The Audit Committee will annually review and
pre-approve the services that may be provided by the Independent Auditors
without obtaining specific pre-approval from the Audit Committee. The Audit
Committee will add to or subtract from the list of general pre-approved services
from time to time, based on subsequent determinations.
The purpose of this Policy is to set forth the policy and procedures by
which the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
- ------------------
(1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval
Policy and Procedures (the "Policy"), amended as of the date above,
supercedes and replaces all prior versions that may have been amended
from time to time.
(2) Terms used in this Policy and not otherwise defined herein shall have
the meanings as defined in the Joint Audit Committee Charter.
The Fund's Independent Auditors have reviewed this Policy and believes
that implementation of the Policy will not adversely affect the Independent
Auditors' independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may
delegate either type of pre-approval authority to one or more of its members.
The member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal control, and consultations relating to the audit. The Audit
Committee will monitor the Audit services engagement as necessary, but no less
than on a quarterly basis, and will also approve, if necessary, any changes in
terms, conditions and fees resulting from changes in audit scope, Fund structure
or other items.
In addition to the annual Audit services engagement approved by the
Audit Committee, the Audit Committee may grant general pre-approval to other
Audit services, which are those services that only the Independent Auditors
reasonably can provide. Other Audit services may include statutory audits and
services associated with SEC registration statements (on Forms N-1A, N-2, N-3,
N-4, etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the Audit services in Appendix
B.1. All other Audit services not listed in Appendix B.1 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated).
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements or, to the extent they are Covered Services, the Covered
Entities' financial statements, or that are traditionally performed by the
Independent Auditors. Because the Audit Committee believes that the provision of
Audit-related services does not impair the independence of the auditor and is
consistent with the SEC's rules on auditor independence, the Audit Committee may
grant general pre-approval to Audit-related services. Audit-related services
include, among others, accounting consultations related to accounting, financial
reporting or disclosure matters not classified as "Audit services"; assistance
with understanding and implementing new accounting and financial reporting
guidance from rulemaking authorities; agreed-upon or expanded audit procedures
related to accounting and/or billing records required to respond to or comply
with financial, accounting or regulatory reporting matters; and assistance with
internal control reporting requirements under Forms N-SAR and/or N-CSR.
The Audit Committee has pre-approved the Audit-related services in
Appendix B.2. All other Audit-related services not listed in Appendix B.2 must
be specifically pre-approved by the Audit Committee (or by any member of the
Audit Committee to which pre-approval has been delegated).
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide
Tax services to the Fund and, to the extent they are Covered Services, the
Covered Entities, such as tax compliance, tax planning and tax advice without
impairing the auditor's independence, and the SEC has stated that the
Independent Auditors may provide such services. Hence, the Audit Committee
believes it may grant general pre-approval to those Tax services that have
historically been provided by the Independent Auditors, that the Audit Committee
has reviewed and believes would not impair the independence of the Independent
Auditors, and that are consistent with the SEC's rules on auditor independence.
The Audit Committee will not permit the retention of the
Independent Auditors in connection with a transaction initially recommended by
the Independent Auditors, the sole business purpose of which may be tax
avoidance and the tax treatment of which may not be supported in the Internal
Revenue Code and related regulations. The Audit Committee will consult with
Director of Tax or outside counsel to determine that the tax planning and
reporting positions are consistent with this policy.
Pursuant to the preceding paragraph, the Audit Committee has
pre-approved the Tax Services in Appendix B.3. All Tax services involving large
and complex transactions not listed in Appendix B.3 must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated), including tax services proposed to be
provided by the Independent Auditors to any executive officer or
trustee/director/managing general partner of the Fund, in his or her individual
capacity, where such services are paid for by the Fund (generally applicable
only to internally managed investment companies).
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the All Other services in Appendix
B.4. Permissible All Other services not listed in Appendix B.4 must be
specifically pre-approved by the Audit Committee (or by any member of the Audit
Committee to which pre-approval has been delegated).
A list of the SEC's prohibited non-audit services is attached to this
policy as Appendix B.5. The SEC's rules and relevant guidance should be
consulted to determine the precise definitions of these services and the
applicability of exceptions to certain of the prohibitions.
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be
provided by the Independent Auditors will be established annually by the Audit
Committee. Any proposed services exceeding these levels or amounts will require
specific pre-approval by the Audit Committee. The Audit Committee is mindful of
the overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services. For each fiscal year, the Audit
Committee may determine the appropriate ratio between the total amount of fees
for Audit, Audit-related, and Tax services for the Fund (including any
Audit-related or Tax services fees for Covered Entities subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
8. PROCEDURES
All requests or applications for services to be provided by the
Independent Auditors that do not require specific approval by the Audit
Committee will be submitted to the Fund's Chief Financial Officer and must
include a detailed description of the services to be rendered. The Fund's Chief
Financial Officer will determine whether such services are included within the
list of services that have received the general pre-approval of the Audit
Committee. The Audit Committee will be informed on a timely basis of any such
services rendered by the Independent Auditors. Requests or applications to
provide services that require specific approval by the Audit Committee will be
submitted to the Audit Committee by both the Independent Auditors and the Fund's
Chief Financial Officer, and must include a joint statement as to whether, in
their view, the request or application is consistent with the SEC's rules on
auditor independence.
The Audit Committee has designated the Fund's Chief Financial Officer
to monitor the performance of all services provided by the Independent Auditors
and to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. A sample report is included as Appendix
B.7. Both the Fund's Chief Financial Officer and management will immediately
report to the chairman of the Audit Committee any breach of this Policy that
comes to the attention of the Fund's Chief Financial Officer or any member of
management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an
annual basis to meet its responsibility to oversee the work of the Independent
Auditors and to assure the auditor's independence from the Fund, such as
reviewing a formal written statement from the Independent Auditors delineating
all relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any
entity controlling, controlled by or under common control with the Fund's
investment adviser(s) that provides ongoing services to the Fund(s). Beginning
with non-audit service contracts entered into on or after May 6, 2003, the
Fund's audit committee must pre-approve non-audit services provided not only to
the Fund but also to the Covered Entities if the engagements relate directly to
the operations and financial reporting of the Fund. This list of Covered
Entities would include:
- Van Kampen Investments Inc.
- Van Kampen Asset Management
- Van Kampen Advisors Inc.
- Van Kampen Funds Inc.
- Van Kampen Investor Services Inc.
- Morgan Stanley Investment Management Inc.
- Morgan Stanley Trust Company
- Morgan Stanley Investment Management Ltd.
- Morgan Stanley Investment Management Company
- Morgan Stanley Asset & Investment Trust Management Company Ltd.
(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Registrant. 100% of such
services were pre-approved by the audit committee pursuant to the Audit
Committee's pre-approval policies and procedures (included herein).
(f) Not applicable.
(g) See table above.
(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.
Item 5. Audit Committee of Listed Registrants.
(a) The Fund has a separately-designated standing audit committee established in
accordance with Section 3(a)(58)(A) of the Exchange Act whose members are: R.
Craig Kennedy, Jerry D. Choate, Rod Dammeyer.
(b) Not applicable.
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-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the 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) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(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: October 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: October 19, 2006
By: /s/ James W. Garrett
--------------------
Name: James W. Garrett
Title: Principal Financial Officer
Date: October 19, 2006