Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, Illinois 60606
May 28, 2008
Mr. Larry Greene
Securities and Exchange Commission
Office of Investment Management
100 F Street, N.E.
Washington, D.C. 20549
Re: Van Kampen Trust -
Post-Effective Amendment No. 60 to the
Registration Statement on Form N-1A
(the "Registration Statement")
(File Nos. 033-4410 and 811-4629)
Dear Mr. Greene:
Thank you for your telephonic comments regarding
Post-Effective Amendment No. 60 to the Registration Statement on Form N-1A for
Van Kampen Trust (the "Registrant"), on behalf of its series, Van Kampen
Inflation-Linked Fixed Income Fund (the "Fund"), filed with the Securities and
Exchange Commission (the "Commission") on March 14, 2008 pursuant to Rule 485(a)
of the of the General Rules and Regulations of the Commission promulgated under
the Securities Act of 1933, as amended, and the Investment Company Act of 1940,
as amended (the "1940 Act") (the "General Rules and Regulations"). On behalf of
the Fund, we have summarized your comments to the best of our understanding,
below which we have provided our response to those comments. Where changes were
necessary in response to your comments, they are reflected in Post-Effective
Amendment No. 61 to the Fund's Registration Statement on Form N-1A, which will
be filed pursuant to Rule 485(b) of the General Rules and Regulations via EDGAR
on or about May 28, 2008.
COMMENTS TO THE PROSPECTUS:
COMMENT 1 PLEASE CONFIRM THAT THE REGISTRANT FILED REPORTS WITH RESPECT
TO THE FIDELITY BOND COVERAGE REQUIRED BY RULE 17G-1 UNDER THE
1940 ACT FOR 2005.
Response 1 According to the Registrant's records, the Registrant filed
with the Commission a paper version of its fidelity bond for
2005.
COMMENT 2 IN THE SECOND PARAGRAPH ON THE OUTSIDE FRONT COVER OF THE
PROSPECTUS, THE REFERENCE TO "ANY STATE REGULATOR" IN THE RULE
481 STATEMENT MAY BE DELETED IF THE FUND SO DESIRES.
Response 2 The Fund acknowledges the comment and opts to include the
reference.
COMMENT 3 IN THE LAST SENTENCE OF THE FIRST PARAGRAPH IN THE
"RISK/RETURN SUMMARY -- PRINCIPAL INVESTMENT STRATEGIES"
SECTION, IT STATES "[T]HE FUND SEEKS TO MAINTAIN AN AVERAGE
PORTFOLIO DURATION THAT IS WITHIN THREE YEARS (PLUS OR MINUS)
OF THE EFFECTIVE DURATION OF THE LEHMAN BROTHERS U.S. TIPS
INDEX....". PLEASE DEFINE THE TERM "DURATION" AT AN
APPROPRIATE LOCATION.
Response 3 The Fund notes that the term "duration" is currently described
in the "Investment Objective, Principal Investment Strategies
and Risks -- Principal Investment Strategies and Risks"
section in a specially grayed out box with the title
"Understanding Duration" in bold face type. Therefore, the
Fund does not believe that additional disclosure is necessary.
COMMENT 4 IN THE THIRD SENTENCE OF THE FIRST PARAGRAPH IN THE
"RISK/RETURN SUMMARY -- PRINCIPAL INVESTMENT STRATEGIES"
SECTION, IT STATES "[T]HE PRINCIPAL OR INTEREST COMPONENTS OF
AN INFLATION-LINKED SECURITY ARE ADJUSTED PERIODICALLY
ACCORDING TO THE GENERAL MOVEMENTS OF INFLATION IN THE COUNTRY
OF ISSUE AS MEASURED BY A DESIGNATED INFLATION INDEX." AS THE
DISCLOSURE STATES THAT THERE IS AN ADJUSTMENT FEATURE TO THESE
SECURITIES, PLEASE SUPPLEMENTALLY EXPLAIN WHETHER THE FUND
CONSIDERS INFLATION-LINKED SECURITIES TO BE DERIVATIVE
INSTRUMENTS.
Response 4 The Fund does not consider inflation-linked fixed income
securities to be derivative instruments.
COMMENT 5 IF APPLICABLE, IN THE "INVESTMENT OBJECTIVES, PRINCIPAL
INVESTMENT STRATEGIES AND RISKS - RISKS OF INVESTING IN
SECURITIES OF FOREIGN ISSUERS" SECTION, PLEASE ADD DISCLOSURE
REGARDING THE RISKS OF INVESTING IN EMERGING MARKET COUNTRIES.
Response 5 The Fund notes that such disclosure is currently in the fifth
paragraph of the section referenced and thus, the Fund does
not believe that additional disclosure is necessary.
COMMENT 6 IF THE FUND INTENDS TO INVEST IN ANY SECURITIES THAT MAY GIVE
THE FUND EXPOSURE TO SUBPRIME MORTGAGES, PLEASE ADD RELEVANT
RISK DISCLOSURE.
Response 6 The Fund notes that such disclosure is currently in the sixth
paragraph of the "Investment Objective, Principal Investment
Strategies and Risks -- Other Types of Fixed Income Securities
-- Mortgage-Related or Mortgage-Backed Securities" section and
thus, the Fund does not believe that additional disclosure is
necessary.
COMMENT 7 IN THE "RISK/RETURN SUMMARY -- PRINCIPAL INVESTMENT RISKS --
INFLATION-LINKED FIXED INCOME SECURITIES" SECTION, THE FIRST
SENTENCE IS MORE OF A DESCRIPTION OF INFLATION-LINKED FIXED
INCOME SECURITIES, RATHER THAN A RISK AND SHOULD BE MOVED TO
AN APPROPRIATE LOCATION IN THE PROSPECTUS.
Response 7 The Fund believes that, while the sentence referenced may be
more descriptive than risk related, it provides the necessary
lead in for the risk disclosure which
follows it. The Fund notes that the descriptive disclosure is
similarly disclosed elsewhere in the prospectus as well, and
thus, prefers to retain such disclosure in the current
location.
COMMENT 8 PLEASE REVISE THE SECTION ENTITLED "FEES AND EXPENSES OF THE
FUND" SO THAT THE FOOTNOTES APPEAR AFTER THE "EXAMPLE."
Response 8 The Fund respectfully submits that its disclosure under "Fees
and Expenses of the Fund," as currently presented, complies
with the requirements of Item 3 of Form N-1A. Specifically,
the Fund believes that moving the footnotes to the Fee and
Expense table to after the Example and accompanying text would
hinder shareholders' ability to comprehend the information
presented in the Fee and Expense table.
COMMENT 9 IN THE "FEES AND EXPENSES OF THE FUND" SECTION, PLEASE
SUPPLEMENTALLY VERIFY THAT THE "TOTAL ANNUAL FUND OPERATING
EXPENSES" LINE ITEM IN THE "ANNUAL FUND OPERATING EXPENSES"
TABLE SHOWS GROSS FEES.
Response 9 The Fund verifies that the fees shown in the "Total annual
fund operating expenses" line item in the "Annual Fund
Operating Expenses" table are gross fees.
COMMENT 10 IN THE FIRST PARAGRAPH IN THE "INVESTMENT OBJECTIVE, PRINCIPAL
INVESTMENT STRATEGIES AND RISKS - PRINCIPAL INVESTMENT
STRATEGIES AND RISKS" SECTION, IT STATES "[T]HE PRINCIPAL OR
INTEREST COMPONENTS OF AN INFLATION-LINKED SECURITY ARE
ADJUSTED PERIODICALLY ACCORDING TO GENERAL MOVEMENTS OF
INFLATION IN THE COUNTRY OF ISSUE." PLEASE SUPPLEMENTALLY
EXPLAIN THE MECHANICS OF HOW THIS WORKS.
Response 10 The Fund believes that the following disclosure currently in
the second paragraph in the "Investment Objective, Investment
Strategies and Risks -- Inflation-Linked Fixed Income
Securities" section of the Statement of Additional Information
explains the mechanics of how an inflation-lined fixed income
security works:
Inflation-linked fixed income securities issued by
the U.S. Treasury have maturities of five, ten or
thirty years, although it is possible that securities
with other maturities will be issued in the future.
The U.S. Treasury securities pay interest on a
semi-annual basis, equal to a fixed percentage of the
inflation-adjusted principal amount. For example, if
the Fund purchased an inflation-indexed bond with a
par value of $1,000 and a 3% real rate of return
coupon (payable 1.5% semi-annually), and inflation
over the first six months were 1%, the mid-year par
value of the bond would be $1,010 and the first
semi-annual interest payment would be $15.15 ($1,010
times 1.5%). If inflation during the second half of
the year resulted in the whole years' inflation
equaling 3%, the end-of-year par value of the bond
would be $1,030 and the second semi-annual interest
payment would be $15.45 ($1,030 times 1.5%).
COMMENT 11 IN THE FOURTH PARAGRAPH IN THE "INVESTMENT OBJECTIVE,
PRINCIPAL INVESTMENT STRATEGIES AND RISKS - PRINCIPAL
INVESTMENT STRATEGIES AND RISKS" SECTION, IT STATES "[T]O THE
EXTENT THAT THE FUND USES STRUCTURED PRODUCTS OR OTHER
DERIVATIVE INSTRUMENTS (COLLECTIVELY REFERRED TO IN THIS
PROSPECTUS AS STRATEGIC TRANSACTIONS) THAT PROVIDE
INFLATION-LINKED FIXED INCOME INVESTMENT EXPOSURE OR TIPS
INVESTMENT EXPOSURE, SUCH INVESTMENTS ARE COUNTED FOR PURPOSES
OF THE RESPECTIVE 80% AND 65% POLICIES DESCRIBED ABOVE."
PLEASE SUPPLEMENTALLY EXPLAIN WHETHER THE FUND COULD BE
INVESTED 100% IN THE DERIVATIVE INSTRUMENTS REFERENCED.
Response 11 The Fund could be invested 100% in structured products or
other derivative instruments that provide inflation-linked
fixed income investment exposure or TIPS investment exposure,
although the Fund does not currently expect that all of its
exposure to inflation-linked fixed income securities and TIPS
will be through such instruments.
COMMENT 12 IN THE "INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES
AND RISKS -- WHEN-ISSUED AND DELAYED DELIVERY TRANSACTIONS"
SECTION, PLEASE ADD DISCLOSURE REGARDING THE FUND'S
SEGREGATION OF CASH AND/OR LIQUID SECURITIES.
Response 12 The Fund notes that the requested disclosure is currently in
the second paragraph in the "Investment Objective, Investment
Strategies and Risks -- Forward Commitments" section of the
Statement of Additional Information. The Fund believes that
this is the appropriate location for such disclosure and does
not believe that additional disclosure is necessary.
COMMENT 13 IN THE THIRD SENTENCE OF THE SECTION ENTITLED "INVESTMENT
OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS -- OTHER
INVESTMENTS AND RISK FACTORS -- TEMPORARY DEFENSIVE STRATEGY,"
PLEASE REVISE THE DISCLOSURE TO STATE THAT SUCH DEFENSIVE
POSITIONS ARE INCONSISTENT WITH THE FUND'S PRINCIPAL
INVESTMENT STRATEGIES, AS REQUIRED BY INSTRUCTION 6 OF ITEM
4(b) OF FORM N-1A.
Response 13 The Fund respectfully submits that the last sentence of this
section addresses Instruction 6 as it states, "In taking such
a defensive position, the Fund would temporarily not be
pursuing and may not achieve its investment objective." In
addition, the Fund believes that adding the disclosure as
requested would make the statements therein untrue. The Fund's
investment objective is to "maximize real return," which means
"total return adjusted to reflect the estimated costs of
inflation." "Total return" includes both income and capital
gains. Therefore, since one component of the Fund's investment
objective is to seek income, making a statement that
temporarily investing in securities issued by the U.S.
government, its agencies or instrumentalities, prime
commercial paper, certificates of deposit, bankers'
acceptances and other obligations of domestic banks and
repurchase agreements (i.e., investments that primarily
produce income) is inconsistent with the Fund's investment
objective is just untrue. In fact, the Fund believes that
making such investments would be consistent with at least one
component of the
Fund's investment objective of maximizing real return (i.e.,
seeking income). Therefore, the Fund does not believe that
additional disclosure is necessary.
COMMENT 14 IN THE SECTION ENTITLED "INVESTMENT ADVISORY SERVICES -
PORTFOLIO MANAGEMENT," PLEASE DELETE THE WORDS "WITHOUT
NOTICE" FROM THE FOLLOWING SENTENCE: "THE COMPOSITION OF THE
TEAM MAY CHANGE WITHOUT NOTICE FROM TIME TO TIME."
Response 14 The Fund respectfully submits that the disclosure is
consistent with the requirements of Form N-1A and opts to
retain the disclosure. Item 5(a)(2) of Form N-1A requires
disclosure of the persons "primarily responsible for the
day-to-day management of the Fund's portfolio ('Portfolio
Manager')" and Item 15(a) of Form N-1A requires certain
disclosure regarding such persons' management of other
accounts. The Fund is managed by a team of investment
professionals. The team may be comprised both of persons
"primarily responsible for the day-to-day management of the
Fund's portfolio" (any such persons are disclosed under Item
5(a)(2) and Item 15(a)) and persons who are not. The
referenced disclosure states that the composition of each team
may change without notice from time to time. We note
supplementally that, notwithstanding the Fund's disclosure
that team members may change without notice, to the extent
that a team member with primary responsibility for the
day-to-day management of the Fund's portfolio changes, the
Fund intends to supplement its Prospectus and its Statement of
Additional Information with the information required by Item
5(a)(2) and Item 15(a) for such team member.
COMMENTS TO THE STATEMENT OF ADDITIONAL INFORMATION
COMMENT 15 IN THE "INVESTMENT OBJECTIVE, INVESTMENT STRATEGIES AND RISKS
-- PREFERRED STOCK" SECTION OF THE STATEMENT OF ADDITIONAL
INFORMATION, IF THE FUND INTENDS TO INVEST IN AUCTION RATE
PREFERRED STOCK, PLEASE ADD RELEVANT RISK DISCLOSURE OF SUCH
INVESTMENTS.
Response 15 The Fund does not currently intend to invest in such
securities, thus the Fund does not believe that additional
disclosure is necessary.
COMMENT 16 PLEASE ADD THE SUBSTANCE OF THE INFORMATION LOCATED IN THE
SECTION OF THE STATEMENT OF ADDITIONAL INFORMATION ENTITLED
"STRATEGIC TRANSACTIONS -- COMBINED TRANSACTIONS" TO THE
PROSPECTUS.
Response 16 As entering into combined derivative transactions is not a
principal investment strategy of the Fund, the Fund
respectfully submits that no additional disclosure related to
such transactions is necessary in the prospectus.
COMMENT 17 RESTRICTION 3 INDICATES THAT THE FUND WILL NOT CONCENTRATE ITS
INVESTMENTS: "EXCEPT (a) EXCLUDING SECURITIES ISSUED OR
GUARANTEED BY THE U.S. GOVERNMENT AND ITS AGENCIES AND
INSTRUMENTALITIES OR SECURITIES OF STATE AND MUNICIPAL
GOVERNMENTS OR THEIR POLITICAL SUBDIVISIONS." PLEASE DELETE
THE WORD "EXCLUDING."
Response 17 The Fund has deleted the word "excluding" as requested.
* * *
In connection with the effectiveness of the Registration Statement, the
Registrant acknowledges that the disclosure included in the Registration
Statement is the responsibility of the Registrant. The Registrant further
acknowledges that the action of the Commission or the staff acting pursuant to
delegated authority in reviewing the Registration Statement does not relieve the
Registrant from its full responsibility for the adequacy and accuracy of the
disclosures in the Registration Statement, and that the Registrant will not
assert this action as a defense in any proceeding initiated by the Commission or
any person under the federal securities laws of the United States.
Should you have any questions concerning our responses to your
comments, please direct them to Debra Rubano at (212) 296-6993 or the
undersigned at (312) 407-0863.
Sincerely,
/s/ Charles B. Taylor