Edgar Filing: VAN KAMPEN BOND FUND

Table of Contents

OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2

PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4

PORTFOLIO AT A GLANCE
CREDIT QUALITY 5
TWELVE-MONTH DIVIDEND HISTORY 5
TOP FIVE SECTORS 6
NET ASSET VALUE AND COMMON SHARE MARKET PRICE 6
Q&A WITH YOUR PORTFOLIO MANAGERS 7
GLOSSARY OF TERMS 10

BY THE NUMBERS
YOUR FUND'S INVESTMENTS 11
FINANCIAL STATEMENTS 19
NOTES TO FINANCIAL STATEMENTS 24
REPORT OF INDEPENDENT AUDITORS 30
DIVIDEND REINVESTMENT PLAN 31

BOARD OF TRUSTEES AND IMPORTANT ADDRESSES 32
RESULTS OF SHAREHOLDER VOTES 33
TRUSTEE AND OFFICER INFORMATION 34

You have a time-tested partner in Van Kampen.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE

OVERVIEW

LETTER TO SHAREHOLDERS
July 22, 2002

Dear Shareholder,

Due to events in the markets and the well-publicized controversies surrounding
certain companies, the recent months have been challenging for many investors.

Against this backdrop, you may be re-evaluating your investments. In this
regard, your financial advisor is a particularly valuable resource. Your advisor
can help you review your current asset allocation and determine whether it
remains appropriate for your goals, risk tolerance and time horizon.

You also have a time-tested partner in Van Kampen. With roots extending to 1927,
our legacy spans other market downturns and periods of uncertainty. While the
causes of turbulence have changed, our generations of experience have taught us
the enduring value of patience, discipline and long-term
focus.

Thank you for your continued trust in Van Kampen. We
appreciate the opportunity to help you and your loved ones enjoy life's true
wealth--family, friends and life's daily pleasures.

Sincerely,

[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Asset Management Inc.

ECONOMIC SNAPSHOT

THE ECONOMY
OVERALL ECONOMIC ACTIVITY INCREASED MODESTLY IN JUNE, CONTINUING THE TREND THAT
HAS BEEN EVIDENT THROUGHOUT 2002.

SIGNS OF GROWTH WERE EVIDENT IN MANY OF THE STATISTICAL MEASURES RELEASED
THROUGHOUT THE MONTH. FOR EXAMPLE, MANUFACTURING ACTIVITY, WHICH SLOWLY GAINED
MOMENTUM IN RECENT MONTHS, CLIMBED TO ITS HIGHEST LEVEL SINCE JUNE 1999.

AND, DESPITE LESS-THAN-ANTICIPATED EMPLOYMENT GROWTH AND INCREASING UNCERTAINTY
IN WORLD ECONOMICS AND POLITICS, U.S. CONSUMERS CONTINUED TO SUPPORT DOMESTIC
GROWTH THROUGH THE PURCHASE OF HOUSES, CARS AND EVERYDAY MERCHANDISE AND
SERVICES.

FINALLY, AS IF ACKNOWLEDGING HOW FAR THE ECONOMY HAS COME--AND HOW FAR IT STILL
HAS TO GO--THE FEDERAL RESERVE BOARD CHOSE TO LEAVE SHORT-TERM INTEREST RATES AT
THE REMARKABLY LOW LEVELS THAT PREVAILED THROUGHOUT THE FIRST HALF OF 2002.

U.S. GROSS DOMESTIC PRODUCT

SEASONALLY ADJUSTED ANNUALIZED RATES

(March 31, 2000--March 31, 2002)

[BAR GRAPH]

U.S. GROSS DOMESTIC PRODUCT
---------------------------

Mar 00 4.80
Jun 00 5.70
Sep 00 1.30
Dec 00 1.90
Mar 01 1.30
Jun 01 0.30
Sep 01 -1.30
Dec 01 1.70
Mar 02 6.10

Source: Bureau of Economic Analysis

INTEREST RATES AND INFLATION

(June 30, 2000--June 30, 2002)

[LINE GRAPH]

INTEREST RATES INFLATION
-------------- ---------

Jun 00 6.50 3.70
6.50 3.70
6.50 3.40
Sept 00 6.50 3.50
6.50 3.40
6.50 3.40
Dec 00 6.50 3.40
5.50 3.70
5.50 3.50
Mar 01 5.00 2.90
4.50 3.30
4.00 3.60
Jun 01 3.75 3.20
3.75 2.70
3.50 2.70
Sept 01 3.00 2.60
2.50 2.10
2.00 1.90
Dec 01 1.75 1.60
1.75 1.10
1.75 1.10
Mar 02 1.75 1.50
1.75 1.60
1.75 1.20
Jun 02 1.75 1.10

Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percentage
change of the Consumer Price Index for all urban consumers at the end of each
month.

Source: Bloomberg

PERFORMANCE SUMMARY

RETURN HIGHLIGHTS

(as of June 30, 2002)

------------------------------
NYSE Ticker Symbol - VBF
------------------------------

------------------------------------------------------------------------

One-year total return(1) 3.50%
------------------------------------------------------------------------
Five-year average annual total return(1) 6.87%
------------------------------------------------------------------------
Ten-year average annual total return(1) 7.34%
------------------------------------------------------------------------

Distribution rate as a % of closing common share market
price(2) 6.81%
------------------------------------------------------------------------
Net asset value $18.78
------------------------------------------------------------------------
Closing common share market price $18.50
------------------------------------------------------------------------
One-year high common share market price (07/03/01) $20.35
------------------------------------------------------------------------
One-year low common share market price (09/24/01) $17.85
------------------------------------------------------------------------

(1) Total return assumes an investment at the common share market price at the
beginning of the period indicated, reinvestment of all distributions for the
period in accordance with the Fund's dividend reinvestment plan, and sale of
all shares at the closing common share market price at the end of the period
indicated.

(2) Distribution rate represents the annualized distributions of the Fund at the
end of the period and not the earnings of the Fund.

Past performance is no guarantee of future results. Investment return,
common share market price and net asset value will fluctuate and Fund
shares, when sold, may be worth more or less than their original cost. An
investment in the Fund is subject to investment risks, and you could lose
money on your investment in the Fund. As a result of recent market activity,
current performance may vary from the figures shown. For more up-to-date
information, please visit vankampen.com or speak with your financial
advisor.

PORTFOLIO AT A GLANCE

CREDIT QUALITY

(as a percentage of long-term investments)

As of June 30, 2002

- AAA/Aaa............ 5.9% [PIE CHART]
- AA/Aa.............. 8.0%
- A/A................ 29.3%
- BBB/Baa............ 53.2%
- BB/Ba.............. 2.7%
- B/B................ 0.9%

As of June 30, 2001

- AAA/Aaa............ 0.5% [PIE CHART]
- AA/Aa.............. 8.4%
- A/A................ 31.4%
- BBB/Baa............ 49.1%
- BB/Ba.............. 9.9%
- B/B................ 0.7%

Based upon the credit quality ratings as issued by Standard & Poor's Credit
Market Services/Moody's Investor Services, respectively. Subject to change
daily.

TWELVE-MONTH DIVIDEND HISTORY

(for the year ended June 30, 2002)
[BAR GRAPH]

DIVIDENDS
---------

9/01 0.350
12/01 0.330
3/02 0.330
6/02 0.315

The dividend history represents dividends that were paid on the fund and is no
guarantee of the fund's future dividends.

TOP FIVE SECTORS

(as a percentage of long-term investments--June 30, 2002)

[BAR GRAPH]

Captive Finance 9.40%
Life Insurance 8.80%
Telecommunications 6.30%
Government & Government Agency 5.60%
Media-Cable 5.10%

Subject to change daily.

NET ASSET VALUE AND COMMON SHARE MARKET PRICE

(based upon quarter-end values--June 1992 through June 2002)

[LINE GRAPH]

NET ASSET VALUE COMMON SHARE MARKET PRICE
--------------- -------------------------

6/92 19.8500 19.7500
20.4100 21.2500
20.0500 20.2500
20.9400 20.7500
6/93 21.3300 20.7500
21.9500 20.8750
21.2900 20.3750
20.1200 18.0000
6/94 19.0700 18.1250
18.7900 17.1250
18.5900 16.7500
19.3000 18.2500
6/95 20.4100 19.1250
20.5700 19.0000
21.2700 19.6250
20.1800 19.3750
6/96 19.9700 18.1250
19.9500 18.7500
20.3400 18.7500
19.7800 18.7694
6/97 20.2800 19.2500
20.7700 19.7500
20.9100 20.8125
20.9200 20.3750
6/98 21.1600 19.6875
21.3500 19.8125
21.0900 20.0625
20.4000 19.2500
6/99 19.5900 17.8750
19.3100 16.3750
18.9800 15.6875
18.9800 16.0625
6/00 18.7000 16.7500
18.9200 17.0625
19.2900 17.4375
19.5700 18.5000
6/01 19.4100 19.1500
19.7000 19.6000
19.7100 19.2700
19.0800 18.0000
6/02 18.7800 18.5000

The solid line above represents the fund's net asset value (NAV), which
indicates overall changes in value among the fund's underlying securities. The
fund's common share market price is represented by the dashed line, which
indicates the price the market is willing to pay for shares of the fund at a
given time. Common share market price is influenced by a range of factors,
including supply and demand and market conditions.

Q&A WITH YOUR PORTFOLIO MANAGERS

WE RECENTLY SPOKE WITH THE PORTFOLIO MANAGEMENT TEAM FOR THE VAN KAMPEN BOND
FUND ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS AND
INFLUENCED THE FUND'S RETURN DURING THE 12-MONTH PERIOD ENDED JUNE 30, 2002. THE
FUND IS MANAGED BY THE ADVISER'S TAXABLE FIXED INCOME TEAM. CURRENT MEMBERS(1)
OF THE TEAM INCLUDE DAVID S. HOROWITZ, VICE PRESIDENT, AND GORDON W. LOERY,
EXECUTIVE DIRECTOR. THE FOLLOWING DISCUSSION REFLECTS THEIR VIEWS ON THE FUND'S
PERFORMANCE.

(1) Team members may change at any time without notice.

Q WHAT WAS THE MARKET
ENVIRONMENT OF THE PAST 12 MONTHS?

A The credit market entered the
period in a slump as concerns over the state of the U.S. economy and corporate
governance improprieties led many investors to trim their exposure to corporate
bonds. The situation was only worsened by the tragic events of September 11,
after which the corporate bond market suffered steep losses.

The market seemed to recover its footing toward the end of the year as
investors' expectations turned to imminent recovery for the U.S. economy and, as
a result, for corporate profits. The equity markets also appeared to stabilize
during that time and through the first months of 2002, which provided further
support to the credit market. Wide spreads relative to Treasuries were the final
ingredient that enticed many investors back into the credit markets.

The corporate market suffered another reversal in the spring, when a string
of high-profile accounting scandals began to seriously erode investor confidence
in public companies. Both the equity and the credit markets suffered greatly
from this loss of confidence.

In sector terms, market performance was widely varied. Company-specific
scandals in such areas as energy/utilities (Enron) and cable (Adelphia) seemed
to drag down entire industry sectors, regardless of individual company
fundamentals. The telecom area continued its string of underperformance,
suffering more defaults than any other industry sector. Two high-profile
companies--WorldCom and Qwest--were downgraded from investment grade to high
yield, which further undermined confidence in the sector.

Q HOW DID THE FUND PERFORM
IN THIS ENVIRONMENT?

A For the 12-month period ended
June 30, 2002, the fund generated a total return of 3.50 percent, based on
common share market price. The

fund's return reflects a decrease in common share market price from $19.15 per
share on June 30, 2001, to $18.50 per share on June 30, 2002. The fund's
quarterly dividend of $0.3150 per share translates to a distribution rate of
6.81 percent based on the fund's closing common share market price on June 30,
2002. Of course, past performance is no guarantee of future results. Investment
return, share price and net asset value will fluctuate and fund shares, when
sold, may be worth more or less than their original cost. As a result of recent
market activity, current performance may vary from the figures shown. For more
up-to-date information, please visit vankampen.com or speak with your financial
advisor.

By comparison, the Lehman Brothers BBB Corporate Bond Index posted a total
return of 5.18 percent for the same period. The Lehman Brothers BBB Corporate
Bond Index is a broad-based, unmanaged index, which reflects the performance of
corporate bonds. Its returns do not include any sales charges or fees that would
be paid by an investor purchasing the securities it represents. Such costs would
lower performance. It is not possible to invest directly in an index. For
additional performance results, please refer to the chart and footnotes on page
4.

Q WHAT WERE THE KEY DRIVERS OF
THE FUND'S RELATIVE PERFORMANCE?

A Our search for well-priced
companies led us in recent years to invest in the telecommunications sector. The
sector suffered significant losses during the period as several companies faced
deep financial crises. We trimmed the portfolio's exposure, but the fund still
suffered from what exposure it had.

On a more positive note, the fund benefited from its relatively high credit
quality. We grew increasingly cautious about the state of the economy over the
period and boosted the fund's quality as a buffer against further deterioration
in the economy. We did this through the purchase of higher-quality corporates as
well as a small position in Treasuries. This strategy proved beneficial as
investors gravitated to the higher-quality exposure.

Q WHAT STRATEGIES DID YOU USE
TO MANAGE THE FUND?

A While we kept the portfolio's
credit quality high in case the economy continued its slump, we also started to
position the fund to benefit from a potential turnaround. We added selectively
to the fund's holdings in the financial sector in the belief that these
companies would be among the first to gain if the economy turned the corner.

In a similar vein, we added some exposure to hotel and travel companies. As
with the financials, we believe that these companies are well positioned to
benefit from an economic recovery. They had the added attraction of being quite
cheap because of the travel industry's difficulties in the wake of September 11.

Our analysts were also able to identify what we believed were several
attractive bonds in the health-care sector. Many of these companies had suffered
from financing difficulties, leading the market to cast the entire sector in a
poor

light. Through careful research, we found what we believe to be solid companies
at very attractive prices.

As mentioned, we did trim the fund's holdings in telecommunications stocks
substantially. We had purchased these issues several years ago when the sector's
prospects appeared more constructive. As the bonds' prices began to fall, we
opted to sell holdings selectively in order to capture the best available prices
for shareholders. We made several such sales during the period, so that the
fund's holdings in telecommunications were reduced to below market weightings.

Q WHAT IS YOUR OUTLOOK FOR
THE FUND AND THE MARKETS IN THE COMING MONTHS?

A Broadly speaking, we remain
optimistic about the credit market. Spreads continue to be relatively wide, with
the market offering some compelling values. We anticipate that the economy is
likely to grow moderately over the next 18 months. This growth should aid
corporate balance sheets, which will in turn help lower defaults.

We also believe that the high-yield market will benefit from a structural
shift in its makeup that has occurred over the past year. One of the greatest
excesses of the late 1990s occurred when more and more lower-quality companies
were able to tap the high-yield market for financing. This wave of lower-quality
companies helped drag down the market's overall credit quality and was a major
contributor to the climbing default rates of the past two years. That trend has
reversed in the past year, as lower-quality companies have been all but shut out
of the market for new issuance. As a result, roughly 44 percent of last year's
issuance was rated BB, relative to a historical average of 29 percent. This
shift upward in quality should also help to reduce broader market default rates
back to their historical averages from recent elevated levels.

GLOSSARY OF TERMS

A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.

CREDIT RATING: An evaluation of a bond issuer's credit history and capability of
repaying debt obligations. Standard & Poor's Ratings Group and Moody's Investors
Service are two companies that assign credit ratings. Standard & Poor's ratings
range from a high of AAA to a low of D, while Moody's ratings range from a high
of Aaa to a low of C.

DEFAULT: The failure to make required debt payments on time.

INVESTMENT-GRADE BONDS: Generally, securities rated BBB and above by Standard &
Poor's Ratings Group or Baa and above by Moody's Investors Service. Bonds rated
below BBB or Baa are noninvestment grade.

YIELD: The annual rate of return on an investment, expressed as a percentage.

YIELD CURVE: The pattern that results from viewing the yields of U.S. Treasury
securities maturing in 1, 5, 10 and 30 years. When grouped together and graphed,
a pattern of increasing yield is often reflected as the time-to-maturity
extends. This pattern creates an upward sloping "curve." A "flat" yield curve
represents little difference between short- and long-term interest rates, while
a "negative" yield curve represents decreasing yields as the time-to-maturity
extends.

YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower credit ratings.
The spread is the difference in yield between bonds with short maturities and
long maturities or the difference in yield between high-quality bonds and
lower-quality bonds.

BY THE NUMBERS

YOUR FUND'S INVESTMENTS

June 30, 2002
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

CORPORATE BONDS 88.3%
AEROSPACE & DEFENSE 3.4%
$ 900 Lockheed Martin Corp. ...................... 7.750% 05/01/26 $ 999,478
1,000 Lockheed Martin Corp. ...................... 8.500 12/01/29 1,210,632
1,990 Raytheon Co. ............................... 6.150 11/01/08 2,045,238
1,900 Raytheon Co. ............................... 8.300 03/01/10 2,168,685
880 United Technologies Corp. .................. 6.100 05/15/12 913,146
------------
7,337,179
------------
AIRLINES 0.8%
382 Continental Airlines, Inc. ................. 6.545 08/02/20 370,182
104 Continental Airlines, Inc. ................. 6.648 03/15/19 101,808
1,191 Continental Airlines, Inc. ................. 6.900 01/02/18 1,178,593
------------
1,650,583
------------
AUTOMOTIVE 4.0%
385 ArvinMeritor, Inc........................... 6.625 06/15/07 384,854
755 ArvinMeritor, Inc........................... 8.750 03/01/12 810,585
2,000 DaimlerChrysler NA Holding.................. 7.375 09/15/06 2,155,770
2,355 Dana Corp................................... 9.000 08/15/11 2,331,450
3,000 Ford Motor Co. ............................. 7.450 07/16/31 2,800,440
------------
8,483,099
------------
BANKING 3.6%
1,135 Citigroup, Inc. ............................ 6.000 02/21/12 1,141,661
755 Golden State Holdings....................... 7.125 08/01/05 806,886
3,340 J.P. Morgan Chase & Co. .................... 6.750 02/01/11 3,467,568
2,250 MBNA American Bank NA (b)................... 6.500 06/20/06 2,331,729
------------
7,747,844
------------
BROKERAGE 3.7%
1,540 Credit Suisse First Boston USA, Inc. ....... 5.750 04/15/07 1,577,123
625 Credit Suisse First Boston USA, Inc. ....... 5.875 08/01/06 648,436
1,960 Goldman Sachs Group, Inc. .................. 6.875 01/15/11 2,035,288
1,000 Goldman Sachs Group, Inc. .................. 7.800 01/28/10 1,098,428
2,000 Lehman Brothers Holdings, Inc. ............. 8.500 05/01/07 2,272,392
250 World Financial Prop., 144A--Private
Placement (a)............................... 6.910 09/01/13 258,954
------------
7,890,621
------------

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

BUILDING MATERIALS 1.5%
$ 750 Centex Corp. ............................... 7.500% 01/15/12 $ 802,374
1,445 Centex Corp. ............................... 7.875 02/01/11 1,574,459
700 Mohawk Industries, Inc. .................... 7.200 04/15/12 744,577
------------
3,121,410
------------
CAPTIVE FINANCE 8.9%
180 Case Credit Corp. .......................... 6.125 02/15/03 176,721
660 CIT Group, Inc. ............................ 7.750 04/02/12 650,815
2,000 Ford Motor Credit Co. ...................... 6.875 02/01/06 2,047,740
2,335 Ford Motor Credit Co. ...................... 7.250 10/25/11 2,350,133
2,525 General Electric Capital Corp. ............. 6.750 03/15/32 2,488,087
580 General Motors Acceptance Corp. ............ 6.875 09/15/11 576,804
2,485 General Motors Acceptance Corp. ............ 8.000 11/01/31 2,548,807
2,000 Heller Financial, Inc. ..................... 6.375 03/15/06 2,136,086
2,080 Household Finance Corp. .................... 6.750 05/15/11 2,050,549
1,000 Household Finance Corp. .................... 7.875 03/01/07 1,067,611
150 Household Finance Corp. .................... 8.000 07/15/10 158,668
2,500 International Lease Finance Corp. .......... 8.375 12/15/04 2,737,965
------------
18,989,986
------------
CONGLOMERATES 1.7%
1,275 Cooper Industries, Inc., 144A--Private
Placement (a)............................... 5.250 07/01/07 1,276,225
2,350 Honeywell International, Inc. .............. 6.125 11/01/11 2,408,449
------------
3,684,674
------------
CONSTRUCTION MACHINERY 0.5%
300 Case Corp. ................................. 6.250 12/01/03 292,922
805 Kennametal, Inc. ........................... 7.200 06/15/12 805,823
------------
1,098,745
------------
ELECTRIC 4.9%
310 Alliant Energy Resources, Inc. ............. 7.000 12/01/11 299,944
1,025 American Electric Power, Inc. .............. 6.125 05/15/06 1,045,175
215 Calpine Corp. .............................. 8.500 02/15/11 145,125
1,000 Calpine Corp. .............................. 8.625 08/15/10 655,000
1,000 Cleveland Electric Illuminating Co. ........ 7.625 08/01/02 1,003,939
865 Detroit Edison Co. ......................... 6.125 10/01/10 863,794
960 Duquesne Light Co. ......................... 6.700 04/15/12 1,001,498
1,665 Mirant Americas Generation LLC.............. 7.200 10/01/08 1,317,205
1,323 Niagara Mohawk Power Corp. ................. 7.625 10/01/05 1,439,735
540 PG & E National Energy Group, Inc. ......... 10.375 05/16/11 551,754

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

ELECTRIC (CONTINUED)
$1,385 PSEG Energy Holdings, Inc................... 9.125% 02/10/04 $ 1,410,005
650 PSEG Energy Holdings, Inc., 144A--Private
Placement (a)............................... 8.625 02/15/08 624,666
------------
10,357,840
------------
ENTERTAINMENT 0.9%
2,000 Time Warner Entertainment Co. .............. 8.375 07/15/33 1,995,498
------------

ENVIRONMENTAL SERVICES 1.6%
830 Republic Services, Inc. .................... 6.750 08/15/11 856,399
1,500 Waste Management, Inc. ..................... 7.000 10/15/06 1,558,885
570 Waste Management, Inc. ..................... 7.000 07/15/28 535,406
550 Waste Management, Inc. ..................... 7.375 08/01/10 571,960
------------
3,522,650
------------
FOOD 1.3%
2,000 ConAgra Foods, Inc. (c)..................... 7.500 09/15/05 2,167,932
675 Smithfield Foods, Inc....................... 8.000 10/15/09 688,500
------------
2,856,432
------------
GAMING 1.5%
975 Harrahs Operating Co., Inc. ................ 8.000 02/01/11 1,056,274
180 Park Place Entertainment Corp. ............. 7.500 09/01/09 177,737
2,000 Park Place Entertainment Corp. ............. 7.950 08/01/03 2,045,164
------------
3,279,175
------------
HEALTHCARE 4.4%
3,205 Aetna, Inc. (c)............................. 7.375 03/01/06 3,362,558
640 Amerisourcebergen Corp. .................... 8.125 09/01/08 664,000
1,275 Columbia/HCA, Inc. ......................... 6.910 06/15/05 1,331,175
1,390 HealthSouth Corp., 144A--Private
Placement (a)............................... 7.625 06/01/12 1,379,322
1,440 Tenet Healthcare Corp....................... 6.875 11/15/31 1,421,947
1,130 UnitedHealth Group, Inc. ................... 5.200 01/17/07 1,149,366
------------
9,308,368
------------
HOME CONSTRUCTION 1.3%
2,575 Pulte Homes, Inc............................ 7.875 08/01/11 2,716,329
------------

INTEGRATED ENERGY 0.9%
325 Conoco, Inc. ............................... 6.950 04/15/29 333,160
1,500 Tosco Corp. ................................ 8.250 05/15/03 1,566,624
------------
1,899,784
------------

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

LIFE INSURANCE 8.3%
$2,300 Anthem Insurance Inc., 144A--Private
Placement (a)............................... 9.125% 04/01/10 $ 2,602,949
2,045 Cigna Corp. (c)............................. 6.375 10/15/11 2,114,058
1,805 Hartford Life, Inc. ........................ 7.375 03/01/31 1,928,962
2,005 Health Net, Inc. ........................... 8.375 04/15/11 2,232,684
2,210 John Hancock Co., 144A--Private
Placement (a)............................... 7.375 02/15/24 2,308,962
585 Nationwide Financial Services, Inc. ........ 6.250 11/15/11 596,916
635 Nationwide Mutual Insurance Co., 144A--
Private Placement (a)....................... 7.500 02/15/24 604,706
550 Nationwide Mutual Insurance Co., 144A--
Private Placement (a)....................... 8.250 12/01/31 575,377
500 New England Mutual, 144A--Private
Placement (a)............................... 7.875 02/15/24 525,914
1,070 Prudential Holdings, LLC, 144A--Private
Placement (a)............................... 7.245 12/18/23 1,128,217
2,840 Prudential Holdings, LLC, 144A--Private
Placement (a)............................... 8.695 12/18/23 3,090,837
------------
17,709,582
------------
LODGING 2.1%
1,215 Hyatt Equities LLC, 144A--Private
Placement (a)............................... 6.875 06/15/07 1,221,506
610 Marriott International, Inc. ............... 8.125 04/01/05 658,812
620 Marriott International, Inc. ............... 7.000 01/15/08 651,249
590 Starwood Hotels Resorts, 144A--Private
Placement (a)............................... 7.375 05/01/07 583,362
1,375 Starwood Hotels Resorts, 144A--Private
Placement (a)............................... 7.875 05/01/12 1,354,375
------------
4,469,304
------------
MEDIA-CABLE 4.8%
500 Charter Communication Holdings LLC.......... 8.250 04/01/07 337,500
1,095 Comcast Cable Communications................ 8.375 05/01/07 1,122,597
2,000 Comcast Cable Communications, Inc. (c)...... 8.125 05/01/04 2,071,338
7,000 TCI Communications, Inc. ................... 9.250 01/15/23 6,838,118
------------
10,369,553
------------
MEDIA-NONCABLE 4.3%
840 AOL Time Warner, Inc. ...................... 7.625 04/15/31 737,468
2,500 Clear Channel Commerce, Inc. ............... 7.250 10/15/27 2,291,155
1,000 Harcourt General, Inc. ..................... 7.200 08/01/27 974,480

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

MEDIA-NONCABLE (CONTINUED)
$1,750 Harcourt General, Inc. ..................... 8.875% 06/01/22 $ 2,052,192
2,880 News America Holdings, Inc. ................ 8.875 04/26/23 3,058,514
------------
9,113,809
------------
NATURAL GAS DISTRIBUTORS 0.3%
565 Consolidated Natural Gas Co. ............... 6.250 11/01/11 567,513
------------

NATURAL GAS PIPELINES 2.4%
1,455 Duke Capital Corp. ......................... 6.250 02/15/13 1,449,555
150 El Paso Corp. .............................. 7.000 05/15/11 143,832
1,240 El Paso Corp., 144A--Private
Placement (a)............................... 7.875 06/15/12 1,250,958
1,000 Transcontinental Gas Pipe Line Corp. ....... 7.250 12/01/26 776,470
850 Transcontinental Gas Pipe Line Corp......... 7.000 08/15/11 757,023
1,000 Williams Cos., Inc. ........................ 7.500 01/15/31 719,815
------------
5,097,653
------------
NONCAPTIVE-CONSUMER FINANCE 1.5%
3,075 American Express Co. (c).................... 5.500 09/12/06 3,184,393
------------

PAPER 0.5%
995 MeadWestvaco Corp. ......................... 6.850 04/01/12 1,046,479
------------

PROPERTY & CASUALTY 1.6%
2,000 Farmers Exchange Capital, 144A--Private
Placement (a)............................... 7.050 07/15/28 1,487,120
1,815 Farmers Insurance Exchange Surplus, 144A--
Private Placement (a)....................... 8.625 05/01/24 1,610,651
255 Florida Windstorm Underwriting, 144A--
Private Placement (a)....................... 7.125 02/25/19 270,900
------------
3,368,671
------------
RAILROADS 4.1%
1,000 CSX Corp. .................................. 6.750 03/15/11 1,050,488
7,000 Union Pacific Corp. ........................ 8.350 05/01/25 7,618,800
------------
8,669,288
------------
REAL ESTATE INVESTMENT TRUSTS 2.1%
1,310 EOP Operating LP............................ 7.500 04/19/29 1,292,665
495 Istar Financial, Inc. ...................... 8.750 08/15/08 491,470
2,125 Simon Property LP........................... 6.375 11/15/07 2,182,696
585 Vornado Realty.............................. 5.625 06/15/07 582,351
------------
4,549,182
------------
REFINING 0.1%
250 Vintage Petroleum, Inc. .................... 7.875 05/15/11 227,500
------------

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

RETAIL 3.4%
$1,440 CVS Corp.................................... 5.500% 02/15/04 $ 1,481,155
1,000 Federated Department Stores, Inc. .......... 6.300 04/01/09 1,018,022
1,500 Federated Department Stores, Inc. .......... 6.625 09/01/08 1,572,751
1,200 Lowe's Cos., Inc. .......................... 6.500 03/15/29 1,156,495
490 Lowe's Cos., Inc. .......................... 6.875 02/15/28 494,299
820 May Department Stores Co. .................. 5.950 11/01/08 840,215
700 May Department Stores Co. .................. 6.700 09/15/28 689,112
------------
7,252,049
------------
SUPERMARKETS 1.0%
2,035 Kroger Co. ................................. 7.375 03/01/05 2,184,271
------------

TECHNOLOGY 0.4%
905 Sun Microsystems, Inc. ..................... 7.650 08/15/09 956,745
------------

TELECOMMUNICATIONS 6.0%
825 Alltel Corp. ............................... 7.000 07/01/12 824,631
140 AT&T Corp., 144A--Private Placement (a)..... 7.300 11/15/11 116,417
2,220 AT&T Corp., 144A--Private Placement (a)..... 8.000 11/15/31 1,747,422
1,000 AT&T Wireless Services, Inc. ............... 7.875 03/01/11 809,151
1,110 AT&T Wireless Services, Inc. ............... 8.750 03/01/31 859,461
475 Global Crossing Holdings Ltd.
(Bermuda) (d) (e)........................... 8.700 08/01/07 7,125
1,435 Global Crossing Holdings Ltd.
(Bermuda) (d) (e)........................... 9.125 11/15/06 21,525
755 Nextel Communications, Inc. ................ 9.375 11/15/09 385,050
5,000 Sprint Corp. ............................... 9.500 04/01/03 5,234,015
985 Verizon Communications, Inc. ............... 6.940 04/15/28 882,366
1,250 Verizon Global Funding Corp. ............... 6.750 12/01/05 1,296,739
590 Verizon New England, Inc. .................. 6.500 09/15/11 578,160
------------
12,762,062
------------
TRANSPORTATION SERVICES 0.5%
120 Hertz Corp. ................................ 7.400 03/01/11 118,442
895 Hertz Corp. ................................ 7.625 06/01/12 883,911
------------
1,002,353
------------

TOTAL CORPORATE BONDS 88.3%.................................. 188,470,624
------------

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE

CONVERTIBLE CORPORATE OBLIGATIONS 0.8%
TECHNOLOGY 0.8%
$1,965 Corning, Inc. (Convertible into 16,369
common shares).............................. * 11/08/15 $ 992,325
1,430 Solectron Corp. (Convertible into 16,854
common shares), LYON........................ * 11/20/20 664,950
------------

TOTAL CONVERTIBLE CORPORATE OBLIGATIONS....................... 1,657,275
------------

GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS 5.3%
0 Government National Mortgage Association
Pool........................................ 10.000% 10/15/16 330
1,400 Ontario Province (Canada)................... 7.625 06/22/04 1,517,702
500 Republic of Italy (Italy)................... 5.250 04/05/06 515,752
3,000 Saskatchewan Province (Canada).............. 8.000 07/15/04 3,271,575
1,000 United States Treasury Bonds................ 8.125 08/15/21 1,290,761
2,400 United States Treasury Bonds................ 10.750 05/15/03 2,584,966
2,000 United States Treasury Bonds................ 11.625 11/15/02 2,074,588
------------

TOTAL GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS............ 11,255,674
------------

MARKET
DESCRIPTION SHARES VALUE

EQUITY 0.0%
TELECOMMUNICATIONS 0.0%
McLeodUSA, Inc. (f)......................................... 438 $ 1,642
McLeodUSA, Inc. (970 Preferred Stock Warrants) (f).......... 970 126
------------

TOTAL EQUITY........................................................ 1,768
------------

TOTAL LONG-TERM INVESTMENTS 94.4%
(Cost $201,029,225)............................................... 201,385,341
------------

SHORT-TERM INVESTMENTS 2.1%
REPURCHASE AGREEMENT 1.8%
Bank of America Securities ($3,866,000 par collateralized by U.S.
Government obligations in a pooled cash account, dated 06/28/02,
to be sold on 07/01/02 at $3,866,612)............................. 3,866,000
------------

See Notes to Financial Statements

YOUR FUND'S INVESTMENTS

June 30, 2002

MARKET
DESCRIPTION VALUE

U.S. GOVERNMENT AGENCY OBLIGATIONS 0.3%
United States Treasury Bill ($250,000 par, yielding 1.577%, 07/18/02
maturity)......................................................... $ 249,814
United States Treasury Bill ($500,000 par, yielding 1.891%, 10/17/02
maturity)......................................................... 497,180
------------

TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS............................ 746,994
------------

TOTAL SHORT-TERM INVESTMENTS 2.1%
(Cost $4,612,994)................................................. 4,612,994
------------

TOTAL INVESTMENTS 96.5%
(Cost $205,642,219)............................................... 205,998,335

OTHER ASSETS IN EXCESS OF LIABILITIES 3.5%......................... 7,380,441
------------

NET ASSETS 100.0%.................................................. $213,378,776
============

* Zero coupon bond

(a) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933, as amended. These securities may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.

(b) These securities are restricted and may be resold only in transactions
exempt from registration which are normally those transactions with
qualified institutional buyers.

(d) Non-income producing as security is in default.

(e) This company has filed for protection in federal bankruptcy court.

(f) Non-income producing security.

LYON--Liquid Yield Option Rate

See Notes to Financial Statements

FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2002

ASSETS:
Total Investments (Cost $205,642,219)....................... $205,998,335
Cash........................................................ 380,724
Receivables:
Investments Sold.......................................... 5,128,654
Interest.................................................. 3,905,920
Variation Margin on Futures............................... 12,814
Other....................................................... 49,098
------------
Total Assets............................................ 215,475,545
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,810,750
Investment Advisory Fee................................... 86,677
Affiliates................................................ 5,575
Trustees' Deferred Compensation and Retirement Plans........ 125,534
Accrued Expenses............................................ 68,233
------------
Total Liabilities....................................... 2,096,769
------------
NET ASSETS.................................................. $213,378,776
============
NET ASSET VALUE PER COMMON SHARE ($213,378,776 divided by
11,362,465 shares outstanding)............................ $ 18.78
============
NET ASSETS CONSIST OF:
Common Shares ($1.00 par value with 15,000,000 shares
authorized, 11,362,465 shares issued and outstanding)..... $ 11,362,465
Capital..................................................... 207,607,803
Net Unrealized Appreciation................................. 615,636
Accumulated Undistributed Net Investment Income............. (599,949)
Accumulated Net Realized Loss............................... (5,607,179)
------------
NET ASSETS.................................................. $213,378,776
============

See Notes to Financial Statements

Statement of Operations
For the Year Ended June 30, 2002

INVESTMENT INCOME:
Interest.................................................... $15,652,379
Other....................................................... 2,606
-----------
Total Income............................................ 15,654,985
-----------
EXPENSES:
Investment Advisory Fee..................................... 1,077,317
Shareholder Services........................................ 97,392
Trustees' Fees and Related Expenses......................... 43,008
Custody..................................................... 26,349
Legal....................................................... 11,569
Other....................................................... 182,029
-----------
Total Expenses.......................................... 1,437,664
Less Credits Earned on Cash Balances.................... 6,346
-----------
Net Expenses............................................ 1,431,318
-----------
NET INVESTMENT INCOME....................................... $14,223,667
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $(4,273,457)
Futures................................................... 1,680,469
-----------
Net Realized Loss........................................... (2,592,988)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 4,350,085
-----------
End of the Period:
Investments............................................. 356,116
Futures................................................. 259,520
-----------
615,636
-----------
Net Unrealized Depreciation During the Period............... (3,734,449)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(6,327,437)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 7,896,230
===========

See Notes to Financial Statements

Statements of Changes in Net Assets

YEAR ENDED YEAR ENDED
JUNE 30, 2002 JUNE 30, 2001
------------------------------

FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 14,223,667 $ 15,887,084
Net Realized Gain/Loss.................................. (2,592,988) 1,117,893
Net Unrealized Appreciation/Depreciation During the
Period................................................ (3,734,449) 6,663,849
------------ ------------
Change in Net Assets from Operations.................... 7,896,230 23,668,826

Distributions from Net Investment Income................ (15,054,433) (15,565,382)
------------ ------------

NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (7,158,203) 8,103,444

NET ASSETS:
Beginning of the Period................................. 220,536,979 212,433,535
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of ($599,949) and $802,655
respectively)......................................... $213,378,776 $220,536,979
============ ============

See Notes to Financial Statements

Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.

----------------------------
2002 (A) 2001 2000
----------------------------

NET ASSET VALUE, BEGINNING OF THE PERIOD............... $19.41 $18.70 $19.59
------ ------ ------
Net Investment Income................................ 1.26 1.40 1.43
Net Realized and Unrealized Gain/Loss................ (.56) .68 (.93)
------ ------ ------
Total from Investment Operations....................... .70 2.08 .50
Less Distributions from Net Investment Income.......... 1.33 1.37 1.39
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD..................... $18.78 $19.41 $18.70
====== ====== ======
Common Share Market Price at End of the Period......... $18.50 $19.15 $16.75
Total Return (b)....................................... 3.50% 23.10% 1.88%
Net Assets at End of the Period (In millions).......... $213.4 $220.5 $212.4
Ratio of Operating Expenses to Average Net Assets...... .65% .68% .64%
Ratio of Convertible Note Expenses to Average Net
Assets (c)........................................... -- -- --
Ratio of Net Investment Income to Average Net Assets... 6.39% 7.25% 7.48%
Portfolio Turnover..................................... 107% 88% 71%
Assuming full dilution of debt: (c)
Net Asset Value, End of the Period................... -- -- --
Number of Shares Outstanding, End of the Period
(000).............................................. -- -- --

(a) As required, effective July 1, 2001, the Fund has adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies and began
amortizing premium on fixed income securities. The effect of this change for
the year ended June 30, 2002 was to decrease net investment income per share
by $.04, increase net realized and unrealized gains and losses per share by
$.04 and decrease the ratio of net investment income to average net assets
by .24%. Per share, ratios and supplemental data for periods prior to June
30, 2002 have not been restated to reflect this change in presentation.

(b) Total return based on common share market price assumes an investment at the
common share market price at the beginning of the period indicated,
reinvestment of all distributions for the period in accordance with the
Fund's dividend reinvestment plan, and sale of all shares at the closing
common share market price at the end of the period indicated.

YEAR ENDED JUNE 30,
----------------------------------------------------------------------
1999 1998 1997 1996 1995 1994 1993
----------------------------------------------------------------------

$ 21.16 $ 20.26 $19.97 $ 20.41 $ 19.07 $ 21.33 $19.85
------- -------- ------ ------- ------- ------- ------
1.41 1.48 1.56 1.54 1.52 1.56 1.58
(1.56) .93 .27 (.44) 1.36 (2.28) 1.55
------- -------- ------ ------- ------- ------- ------
(.15) 2.41 1.83 1.10 2.88 (.72) 3.13
1.42 1.51 1.54 1.54 1.54 1.54 1.65
------- -------- ------ ------- ------- ------- ------
$ 19.59 $ 21.16 $20.26 $ 19.97 $ 20.41 $ 19.07 $21.33
======= ======== ====== ======= ======= ======= ======
$17.875 $19.6875 $19.25 $18.125 $19.125 $18.125 $20.75
-2.45% 10.08% 15.06% 2.61% 14.89% -5.59% 13.76%
$ 222.6 $ 240.4 $230.2 $ 226.9 $ 231.9 $ 216.6 $235.6
.66% .65% .68% .67% .68% .68% .71%
-- -- -- -- .39% .82% .98%
6.79% 7.04% 7.70% 7.47% 7.92% 7.29% 7.65%
10% 27% 8% 11% 8% 2% 19%
-- -- -- -- -- $ 19.07 $21.09
-- -- -- -- -- 12,411 12,411

See Notes to Financial Statements

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen Bond Fund (the "Fund") is registered as a diversified, closed-end
management investment company under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek interest income while
conserving capital through investing in a diversified portfolio consisting
primarily of high-quality debt securities.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

A. SECURITY VALUATION Fixed income investments are stated at value using market
quotations or indications of value obtained from an independent pricing service.
Investments in securities listed on a securities exchange are valued at their
sale price as of the close of such securities exchange. Listed securities and
unlisted securities for which the last sales price is not available are valued
at the mean of the bid and asked prices. For those securities where quotations
or prices are not available as noted above, valuations are determined in
accordance with procedures established in good faith by the Board of Trustees.
Futures contracts are valued at the settlement price established each day on the
exchange in which they are traded. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost, which approximates
market value.

B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Fund may 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
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when-issued or delayed delivery
purchase commitments until payment is made. At June 30, 2002, there were no
when-issued or delayed delivery purchase commitments.

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

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

balances into a pooled cash account along with other investment companies
advised by Van Kampen Asset Management Inc. (the "Adviser") or its affiliates,
the daily aggregate of which is invested in repurchase agreements. Repurchase
agreements are fully collateralized by the underlying debt security. The Fund
will make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian bank. The seller is required
to maintain the value of the underlying security at not less than the repurchase
proceeds due the Fund.

C. INVESTMENT INCOME Interest income is recorded on an accrual basis and
dividend income is recorded on the ex-dividend date. Premiums are amortized and
discounts are accreted over the expected life of each applicable security.

As required, effective July 1, 2001, the Fund has adopted the provisions of
the AICPA Audit and Accounting Guide for Investment Companies (the "Guide") and
began amortizing premium on fixed income securities. Prior to July 1, 2001, the
Fund did not amortize premiums on fixed income securities. The cumulative effect
of this accounting change had no impact on total net assets of the Fund, but
resulted in a $588,991 reduction in cost of securities and a corresponding
$588,991 increase in net unrealized appreciation based on securities held by the
Fund on July 1, 2001.

The effect of this change for the year ended June 30, 2002 was to decrease
net investment income by $545,535; decrease net unrealized depreciation by
$91,135, and decrease net realized losses by $454,400. The Statement of Changes
in Net Assets and Financial Highlights for prior periods have not been restated
to reflect this change in presentation.

The revised version of the Guide also requires that paydown gains and losses
on mortgage- and asset-backed securities be presented as interest income.
Previously, paydown gains and losses on mortgage- and asset-backed securities
were shown as a component of realized gain/loss. The effect of this change for
the year ended June 30, 2002 was to decrease net investment income and decrease
net realized loss by $534.

D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and to
distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.

The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset these losses against any future realized capital
gains. At June 30,

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

2002, the Fund had an accumulated capital loss carryforward for tax purposes of
$848,660, which will expire on June 30, 2009.

At June 30, 2002, the cost and related gross unrealized appreciation and
depreciation are as follows:

Cost of investments for tax purposes........................ $206,331,182
============
Gross tax unrealized appreciation........................... $ 5,519,841
Gross tax unrealized depreciation........................... (5,852,688)
------------
Net tax unrealized depreciation on investments.............. $ (332,847)
============

E. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays quarterly
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.

The tax character of distributions paid during 2002 and 2001 was as follows:

2002 2001

Distributions paid from:
Ordinary income......................................... $15,283,368 $15,336,914
Long-term capital gain.................................. -0- -0-
----------- -----------
$15,283,368 $15,336,914
=========== ===========

Due to inherent differences in the recognition of income, expenses and
realized gain/losses under accounting principles generally accepted in the
United States of America 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 relating to expenses which are not deductible for tax purposes
totaling $17,055 were reclassified from accumulated undistributed net investment
income to capital and $98 relating to the recognition of net realized gains on
paydowns of mortgage pool obligations was reclassified from accumulated net
realized loss to accumulated undistributed net investment income.

As of June 30, 2002, the components of distributable earnings on a tax basis
were as follows:

Undistributed ordinary income............................... $666,671
Undistributed long-term capital gain........................ -0-

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of the deferral of losses relating to wash sale
transactions, gains or losses recognized for tax purposes on open future
transactions on June 30, 2002 and post-October losses which may not be
recognized for tax purposes until the first day of the following fiscal year.

F. EXPENSE REDUCTIONS During the year ended June 30, 2002, the Fund's custody
fee was reduced by $6,346 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:

AVERAGE DAILY NET ASSETS % PER ANNUM

First $150 million.......................................... .50%
Next $100 million........................................... .45%
Next $100 million........................................... .40%
Over $350 million........................................... .35%

For the year ended June 30, 2002, the Fund recognized expenses of
approximately $11,600 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.

Under an Accounting Services agreement, the Adviser provides accounting
services to the Fund. The Adviser allocates cost of such services to each fund.
For the year ended June 30, 2002, the Fund recognized expenses of approximately
$18,200 representing Van Kampen Investments Inc.'s or its affiliates'
(collectively "Van Kampen") cost of providing accounting services to the Fund,
which are reported as part of "Other" expenses on the Statement of Operations.

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 to a
later date. 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.

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

3. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $223,751,723 and $229,056,174,
respectively.

4. DERIVATIVE FINANCIAL INSTRUMENTS

A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.

The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio or to generate potential gain. All of the Fund's portfolio holdings,
including derivative instruments, are marked to market each day with the change
in value reflected in the unrealized 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.

During the period, the Fund invested in futures contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Fund
generally invests in exchange traded futures on U.S. Treasury Bonds and Notes
and typically closes the contract prior to delivery date. 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 future
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 June 30, 2002, were as
follows:

CONTRACTS

Outstanding at June 30, 2001................................ 0
Futures Opened.............................................. 2,005
Futures Closed.............................................. (1,602)
------
Outstanding at June 30, 2002................................ 403
======

NOTES TO
FINANCIAL STATEMENTS

June 30, 2002

The futures contracts outstanding as of June 30, 2002 and the descriptions
and unrealized appreciation/depreciation are as follows:

UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION

LONG CONTRACTS:
5-Year U.S. Treasury Note Future, September 2002
(Current Notional Value of $107,422 per contract)....... 244 $522,484
2-Year U.S. Treasury Note Future, September 2002
(Current Notional Value of $209,953 per contract)....... 10 16,366
SHORT CONTRACTS:
U.S. Treasury Bond Future, September 2002
(Current Notional Value of $102,781 per contract)....... 110 (256,627)
10-Year U.S. Treasury Note Future, September 2002
(Current Notional Value of $107,234 per contract)....... 39 (22,703)
--- --------
403 $259,520
=== ========

REPORT OF INDEPENDENT AUDITORS

To the Board of Trustees and Shareholders of Van Kampen Bond Fund

We have audited the accompanying statement of assets and liabilities of Van
Kampen Bond Fund (the "Fund"), including the portfolio of investments, as of
June 30, 2002, 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 three 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. The Fund's financial highlights for the periods ended prior to June 30,
2000, were audited by other auditors whose report, dated July 23, 1999,
expressed an unqualified opinion on those financial highlights.

We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. Our procedures included confirmation of
securities owned as of June 30, 2002, by correspondence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. 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 Van
Kampen Bond Fund as of June 30, 2002, the results of its operations, the changes
in its net assets and the financial highlights for the respective stated
periods, in conformity with accounting principles generally accepted in the
United States of America.

DELOITTE & TOUCHE LLP
Chicago, Illinois
August 8, 2002

DIVIDEND REINVESTMENT PLAN

The Fund pays distributions in cash, but if you own more than 100 shares in
your own name, you may elect to participate in the Fund's dividend reinvestment
plan (the "Plan"). Under the Plan, shares will be issued by the Fund at net
asset value on a date determined by the Board of Trustees between the record and
payable dates on each distribution; however, if the market price including
brokerage commissions, is less than the net asset value, the amount of the
distribution will be paid to the Plan Agent, which will buy such shares as are
available at prices below the net asset value. (If the market price is not
significantly less than the net asset value, it is possible that open market
purchases of shares may increase the market price so that such price plus
brokerage commissions would equal or exceed the net asset value of such shares.)
If the Plan Agent cannot buy the necessary shares at less than net asset value
before the distribution date, the balance of the distribution will be made in
authorized but unissued shares of the Fund at net asset value. The cost per
share will be the average cost, including brokerage commissions, of all shares
purchased. Since all shares purchased from the Fund are at net asset value,
there will be no dilution, and no brokerage commissions are charged on such
shares.

You will receive tax information annually for your personal records and to
help you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gain distributions does not relieve you of any income tax
which may be payable (or required to be withheld) on dividends or distributions.

You may begin or discontinue participation in the Plan at any time by
written notice to the address below. If you withdraw from the Plan, you may
rejoin at any time if you own the required 100 shares. Elections and
terminations will be effective for distributions declared after receipt. If you
withdraw from the Plan, a certificate for the whole shares and a check for the
fractional shares, if any, credited to your Plan account will be sent as soon as
practicable after receipt of your election to withdraw. Except for brokerage
commissions, if any, which are borne by Plan participants, all costs of the Plan
are borne by the Fund. The Fund reserves the right to amend or terminate the
Plan on 30 days' written notice prior to the record date of the distribution for
which such amendment or termination is effective.

Record stockholders should address all notices, correspondence, questions or
other communications about the Plan to:

STATE STREET BANK AND TRUST COMPANY

C/O EQUISERVE LLP

P.O. BOX 8200

BOSTON, MA 02266-8200

1-800-821-1238

If your shares are not held directly in your name, you should contact your
brokerage firm, bank or other nominee for more information and to see if your
nominee will participate in the Plan on your behalf. If you participate through
your broker and choose to move your account to another broker, you will need to
re-enroll in the Plan through your new broker.

BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
VAN KAMPEN BOND FUND

BOARD OF TRUSTEES

DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
THEODORE A. MYERS
RICHARD F. POWERS, III* - Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*

INVESTMENT ADVISER

VAN KAMPEN ASSET MANAGEMENT INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555

CUSTODIAN AND SHAREHOLDER SERVICING AGENT

STATE STREET BANK
AND TRUST COMPANY
c/o EquiServe LLP
P.O. Box 43011
Providence, Rhode Island 02940-3011

LEGAL COUNSEL

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606

INDEPENDENT AUDITORS

DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601

Inquiries about an investor's account should be referred to the Fund's transfer
agent

State Street Bank and Trust Company
c/o EQUISERVE LLP
P.O. Box 43011
Providence, Rhode Island 02940-3011
Telephone: (800) 821-1238
Alaska and Hawaii
Call Collect: (781) 575-2000
Ask for Closed-End Fund Account Services

* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.

RESULTS OF
SHAREHOLDER VOTES

The Annual Meeting of Shareholders of the Fund was held on June 12, 2002, where
shareholders voted on the election of trustees.

1) With regards to the election of the following trustees by the common
shareholders of the Fund:

# OF SHARES
--------------------
IN FAVOR WITHHELD
----------------------------------------------------------------------------------

David C. Arch............................................... 9,870,821 161,284
Howard J Kerr............................................... 9,854,347 177,758

The other trustees of the Fund whose terms did not expire in 2002 are Hugo F.
Sonnenschein, Rod Dammeyer, Richard F. Powers, III, Theodore A. Myers, and Wayne
W. Whalen.

TRUSTEE AND OFFICER INFORMATION

The business and affairs of the Trust are managed under the direction of the
Trust's Board of Trustees and the Trust's officers appointed by the Board of
Trustees. The tables below list the trustees and officers of the Trust and their
principal occupations for the last five years, other directorships held by the
trustees and their affiliations, if any, with Van Kampen Investments Inc. ("Van
Kampen Investments"), Van Kampen Investment Advisory Corp. ("Advisory Corp."),
Van Kampen Asset Management Inc. ("Asset Management"), Van Kampen Funds Inc.
(the "Distributor"), Van Kampen Advisors Inc., Van Kampen Exchange Corp. and Van
Kampen Investor Services Inc. ("Investor Services"). Advisory Corp. and Asset
Management sometimes are referred to herein collectively as the "Advisers." For
purposes hereof, the term "Fund Complex" includes each of the investment
companies advised by the Advisers. Trustees serve three year terms or until
their successors are duly elected and qualified. Officers are annually elected
by the trustees.

INDEPENDENT TRUSTEES:

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
OF INDEPENDENT TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE

David C. Arch (57) Trustee Trustee Mr. Arch is Chairman and Chief Executive 37
Blistex Inc. since 1997 Officer of Blistex Inc., a consumer health
1800 Swift Drive care products manufacturer, and former
Oak Brook, IL 60523 Director of the World Presidents
Organization-Chicago Chapter. Mr. Arch is also
a Trustee or Managing General Partner of other
investment companies advised by the Advisers.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

David C. Arch (57) Mr. Arch is a member of
Blistex Inc. the Board of Directors of
1800 Swift Drive the Heartland Alliance, a
Oak Brook, IL 60523 non-profit organization
serving human needs based
in Chicago.

Rod Dammeyer (61) Trustee Trustee Mr. Dammeyer is President of CAC, llc., a 37
CAC, llc. since 1997 private company offering capital investment
676 North Michigan Avenue and management advisory services. Mr. Dammeyer
Suite 2800 is also a Trustee or Managing General Partner
Chicago, IL 60611 of other investment companies advised by the
Advisers. Prior to February 2001, Mr. Dammeyer
was Vice Chairman and Director of Anixter
International, Inc. and IMC Global Inc. Prior
to July 2000, Mr. Dammeyer was a Managing
Partner of Equity Group Corporate Investment
(EGI), a company that makes private
investments in other companies. Prior to 1997,
Mr. Dammeyer was President, Chief Executive
Officer and a Director of Great American
Management & Investment, Inc., a diversified
manufacturing company.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

Rod Dammeyer (61) Mr. Dammeyer is a member
CAC, llc. of the Board of Directors
676 North Michigan Avenue of TeleTech Holdings
Suite 2800 Inc., Stericycle, Inc.,
Chicago, IL 60611 GATX Corporation,
Therasense, Inc., and
Peregrine Systems Inc.
and a member of the Board
of Trustees of the
University of Chicago
Hospitals and Health
Systems. Prior to July
2000, Mr. Dammeyer was a
member of the Board of
Directors of Allied Riser
Communications Corp.,
Matria Healthcare Inc.,
Transmedia Networks,
Inc., CNA Surety, Corp.
and Grupo Azcarero Mexico
(GAM). Prior to April
1999, Mr. Dammeyer was a
Director of Metal
Management, Inc. Prior to
1998, Mr. Dammeyer was a
Director of Lukens, Inc.,
Capsure Holdings Corp.,
Revco D.S., Inc., the
Chase Manhattan
Corporation National
Advisory Board and Sealy,
Inc. Prior to 1997, Mr.
Dammeyer was a Director
of Flacon Building
Products, Inc.

Howard J Kerr (66) Trustee Trustee Mr. Kerr is a Trustee or Managing General 37
736 North Western Avenue since 1997 Partner of other investment companies advised
P.O. Box 317 by the Advisers. Prior to 1998, Mr. Kerr was
Lake Forest, IL 60045 the President and Chief Executive Officer of
Pocklington Corporation, Inc., an Investment
holding company.
Theodore A. Myers (72) Trustee Trustee Mr. Myers is a financial consultant. Mr. Myers 37
550 Washington Avenue since 1997 is also a Trustee or Managing General Partner
Glencoe, IL 60022 of other investment companies advised by the
Advisers. Prior to 1998, Mr. Myers was a
Senior Financial Advisor (and, prior to 1997,
an Executive Vice President, Chief Financial
Officer and Director) of Qualitech Steel
Corporation, a producer of high quality
engineered steels for automotive,
transportation and capital goods industries.
Prior to 1997, Mr. Myers was a member of the
Arthur Andersen Chief Financial Officers'
Committee.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

Howard J Kerr (66) Mr. Kerr is a Director of
736 North Western Avenue Canbra Foods, Ltd., a
P.O. Box 317 Canadian oilseed
Lake Forest, IL 60045 crushing, refining,
processing and packaging.
operation, and the Marrow
Foundation.
Theodore A. Myers (72) Mr. Myers is a Director
550 Washington Avenue of Met Life Investors
Glencoe, IL 60022 (formerly known as COVA
Financial Life
Insurance). Prior to
1997, Mr. Myers was a
Director of McLouth
Steel.

Hugo F. Sonnenschein (61) Trustee Trustee Mr. Sonnenschein is President Emeritus and 37
1126 E. 59th Street since 1997 Honorary Trustee of the University of Chicago
Chicago, IL 60637 and the Hutchinson Distinguished Service
Professor in the Department of Economics at
the University of Chicago. Prior to July 2000,
Mr. Sonnenschein was President of the
University of Chicago. Mr. Sonnenschein is a
member of the Board of Trustees of the
University of Rochester and a member of its
investment committee. Mr. Sonnenschein is a
member of the National Academy of Sciences,
the American Philosophical Society, and a
fellow of the American Academy of Arts and
Sciences. Mr. Sonnenschein is also a Trustee
or Managing General Partner of other
investment companies advised by the Advisers.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE HELD BY TRUSTEE

Hugo F. Sonnenschein (61)
1126 E. 59th Street
Chicago, IL 60637

INTERESTED TRUSTEES*:

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
OF INTERESTED TRUSTEE TRUST SERVED DURING PAST 5 YEARS BY TRUSTEE

Richard F. Powers, III* Chairman Trustee Mr. Powers is Chairman, Director, President, 98
(56) since 1999 Chief Executive Officer and Managing Director
1 Parkview Plaza of Van Kampen; Chairman, Director, Chief
Oakbrook Terrace, IL Executive Officer and Managing Director of the
60181 Advisers, Distributor, Van Kampen Advisors
Inc. and Van Kampen Management Inc.; Director
of other subsidiaries of Van Kampen; and Chief
Sales and Marketing Officer of Morgan Stanley
Asset Management Inc. Mr. Powers is also
Chairman of the Board, Trustee/Director and
President of funds in the Fund Complex. Prior
to May 1998, Mr. Powers was Executive Vice
President; and Director of Marketing of Morgan
Stanley and Director of Dean Witter Discover &
Co. and Dean Witter Realty. Prior to 1996, Mr.
Powers was Director of Dean Witter Reynolds
Inc.
Wayne W. Whalen* (62) Trustee Trustee Mr. Whalen is a Partner in the law firm of 98
333 West Wacker Drive since 1997 Skadden, Arps, Slate, Meagher & Flom
Chicago, IL 60606 (Illinois), legal counsel to certain funds
advised by the Advisers. Mr. Whalen is a
Trustee, Director or Managing General Partner
of other funds advised by the Advisers.

NAME, AGE AND ADDRESS OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE HELD BY TRUSTEE

Richard F. Powers, III*
(56)
1 Parkview Plaza
Oakbrook Terrace, IL
60181
Wayne W. Whalen* (62)
333 West Wacker Drive
Chicago, IL 60606

* Such trustee is an "interested person" (within the meaning of Section 2(a)(19)
of the 1940 Act). Mr. Whalen is an interested person to certain of the funds
in the Fund Complex by reason of his firm currently acting as legal counsel to
such funds in the Fund Complex. Mr. Powers is an interested person of such
funds in the Fund Complex and the Advisers by reason of their positions with
Morgan Stanley or its affiliates.

OFFICERS:

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

Stephen L. Boyd (61) Vice President Officer Managing Director and Chief Investment Officer of Van Kampen
2800 Post Oak Blvd. since 1998 Investments, and Managing Director and President of the
45th Floor Advisers and Van Kampen Advisors Inc. Executive Vice
Houston, TX 77056 President and Chief Investment Officer of funds in the Fund
Complex. Prior to December 2000, Executive Vice President
and Chief Investment Officer of Van Kampen Investments, and
President and Chief Operating Officer of the Advisers. Prior
to April 2000, Executive Vice President and Chief Investment
Officer for Equity Investments of the Advisers. Prior to
October 1998, Vice President and Senior Portfolio Manager
with AIM Capital Management, Inc. Prior to February 1998,
Senior Vice President and Portfolio Manager of Van Kampen
American Capital Asset Management, Inc., Van Kampen American
Capital Investment Advisory Corp. and Van Kampen American
Capital Management, Inc.
Joseph J. McAlinden (59) Chief Investment Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas Officer since 2002 Stanley Investment Advisors Inc. and Director of Morgan
New York, NY 10020 Stanley Trust for 5 years.

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

A. Thomas Smith III (45) Vice President and Officer Managing Director and Director of Van Kampen Investments,
1221 Avenue of Americas Secretary since 1999 Director of the Advisers, Van Kampen Advisors Inc., the
New York, NY 10020 Distributor, Investor Services and certain other
subsidiaries of Van Kampen Investments. Managing Director
and General Counsel-Mutual Funds of Morgan Stanley
Investment Advisors, Inc. Vice President or Principal Legal
Officer and Secretary of funds in the Fund Complex. Prior to
July 2001, Managing Director, General Counsel, Secretary and
Director of Van Kampen Investments, the Advisers, the
Distributor, Investor Services, and certain other
subsidiaries of Van Kampen Investments. Prior to December
2000, Executive Vice President, General Counsel, Secretary
and Director of Van Kampen Investments, the Advisers, Van
Kampen Advisors Inc., the Distributor, Investor Services and
certain other subsidiaries of Van Kampen Investments. Prior
to January 1999, Vice President and Associate General
Counsel to New York Life Insurance Company ("New York
Life"), and prior to March 1997, Associate General Counsel
of New York Life. Prior to December 1993, Assistant General
Counsel of The Dreyfus Corporation. Prior to August 1991,
Senior Associate, Willkie Farr & Gallagher. Prior to January
1989, Staff Attorney at the Securities and Exchange
Commission, Division of Investment Management, Office of
Chief Counsel.
John R. Reynoldson (49) Vice President Officer Executive Director of the Advisers and Van Kampen Advisors
1 Parkview Plaza since 2000 Inc. Vice President of funds in the Fund Complex. Prior to
Oakbrook Terrace, IL 60181 July 2001, Principal and Co- head of the Fixed Income
Department of the Advisers and Van Kampen Advisors Inc.
Prior to December 2000, Senior Vice President of the
Advisers and Van Kampen Advisors Inc. Prior to May 2000, he
managed the investment grade taxable group for the Advisers
since July 1999. From July 1988 to June 1999, he managed the
government securities bond group for Asset Management. Mr.
Reynoldson has been with Asset Management since April 1987.
John L. Sullivan (46) Vice President, Officer Executive Director of Van Kampen Investments, the Advisers
1 Parkview Plaza Chief Financial since 1996 and Van Kampen Advisors Inc. Vice President, Chief Financial
Oakbrook Terrace, IL 60181 Officer and Officer and Treasurer of funds in the Fund Complex. Head of
Treasurer Fund Accounting for Morgan Stanley Investment Management.

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

John H. Zimmermann, III (44) Vice President Officer Managing Director and Director of Van Kampen Investments,
Harborside Financial Center since 2000 and Managing Director, President and Director of the
Plaza 2 - 7th Floor Distributor. Vice President of funds in the Fund Complex.
Jersey City, NJ 07311 Prior to December 2000, President of Van Kampen Insurance
Agency of Illinois Inc., and Senior Vice President and
Director of Van Kampen Investments. From November 1992 to
December 1997, Mr. Zimmermann was Senior Vice President of
the Distributor.

Van Kampen
Privacy Notice

The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you make with us,
our affiliates, or third parties. We may also collect information you provide
when using our web site, and text files (a.k.a. "cookies") may be placed on your
computer to help us to recognize you and to facilitate transactions you
initiate. We do not disclose any nonpublic personal information about you or any
of our former customers to anyone, except as permitted by law. For instance, so
that we may continue to offer you Van Kampen investment products and services
that meet your investing needs, and to effect transactions that you request or
authorize, we may disclose the information we collect to companies that perform
services on our behalf, such as printers and mailers that assist us in the
distribution of investor materials. These companies will use this information
only for the services for which we hired them, and are not permitted to use or
share this information for any other purpose. To protect your nonpublic personal
information internally, we permit access to it only by authorized employees, and
maintain physical, electronic and procedural safeguards to guard your nonpublic
personal information.

* Includes Van Kampen Investments Inc., Van Kampen Investment Advisory Corp.,
Van Kampen Asset Management Inc., Van Kampen Advisors Inc., Van Kampen
Management Inc., Van Kampen Funds Inc., Van Kampen Investor Services Inc., Van
Kampen Trust Company, Van Kampen System Inc. and Van Kampen Exchange Corp., as
well as the many Van Kampen mutual funds and Van Kampen unit investment
trusts.

Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com