UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT
COMPANIES
Investment Company Act file number 811-02090
Van Kampen Bond Fund
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(Exact name of registrant as specified in charter)
1221 Avenue of the Americas New York, New York 10020
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(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas New York, New York 10020
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(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 6/30
Date of reporting period: 6/30/04
Item 1. Reports to Shareholders.
The Fund's annual report transmitted to shareholders pursuant to Rule 30e-1
under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen Bond
Fund performed during the annual period. The portfolio management team
will provide an overview of the market conditions and discuss some of the
factors that affected investment performance during the reporting period.
In addition, this report includes the fund's financial statements and a
list of fund investments as of June 30, 2004.
Market forecasts provided in this report may not necessarily come to
pass. There is no assurance that the fund will achieve its investment
objective. Funds are subject to market risk, which is the possibility
that the market values of securities owned by the fund will decline and
that the value of the fund shares may therefore be less than what you
paid for them. Accordingly, you can lose money investing in this fund.
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
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NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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Performance Summary as of 6/30/04
BOND FUND
SYMBOL: VBF
-----------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
10-year 7.75% 7.03%
5-year 6.80 6.24
1-year 3.04 -7.44
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PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET
ASSET VALUE (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND FUND SHARES,
WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
The NAV per share is determined by dividing the value of the fund's portfolio
securities, cash and other assets, less all liabilities, by the total number of
common shares outstanding. The common share market price is 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. Total return assumes an investment at the beginning of the
period, reinvestment of all distributions for the period in accordance with the
fund's dividend reinvestment plan, and sale of all shares at the end of the
period.
The Lehman Brothers BBB Corporate Bond Index is generally representative of
corporate bonds. The index does not include any expenses, fees or sales charges,
which would lower performance. The index is unmanaged and should not be
considered an investment. It is not possible to invest directly in an index.
1
Fund Report
FOR THE 12-MONTH PERIOD ENDED JUNE 30, 2004
Van Kampen Bond Fund is managed by the Adviser's Taxable Fixed-Income team.
Current team members include Sheila Finnerty, Managing Director of the Adviser;
and David S. Horowitz and Gordon W. Loery, Executive Directors of the
Adviser.(1)
MARKET CONDITIONS
Much has changed in both the bond market and economy since the 12-month period
began. Last summer, concerns about deflation and the sluggish economy permeated
the market. In an effort to facilitate economic growth, the Federal Reserve
Bank's Federal Open Market Committee (the Fed) lowered the federal funds rate to
1.0 percent, its lowest level in 46 years. Shortly thereafter, however, the
economic outlook began to brighten and the furor over corporate-governance
scandals began to subside, leading investors to believe that the Fed might soon
change direction and begin to raise interest rates. As a result, Treasury bond
prices fell and yields rose.
By the fall of 2003, it appeared that the Fed was going to bide its time and
wait until a stronger economic recovery was ensured before raising interest
rates. This change in market perception led to a market correction and a decline
in yields. During the second quarter of 2004, investor sentiment shifted once
again, leading to a period of rising yields, as one development after another
pointed toward a strong economy and eventual interest-rate hike by the Fed.
Gross Domestic Product (GDP) showed a healthy 3.9 percent increase, consumer
spending remained strong, and manufacturing continued to show a rebound in
activity. Finally, on June 30, the Fed raised its target rate to 1.25 percent,
the first increase since 2000.
Corporate bonds were in demand at the start of the reporting year, as investors
were attracted to their higher yields relative to Treasuries. Going into
January, however, corporate bonds' yield advantage had narrowed considerably.
The supply of high-grade corporate bonds declined during the reporting year, as
improved corporate earnings diminished companies' need to borrow money. Overall,
lower quality/high-yield bonds--especially those in the lowest credit-rating
tier--outperformed investment-grade debt.
(1)Team members may change without notice at any time.
2
PERFORMANCE ANALYSIS
Closed-end fund returns can be calculated upon either the market price or the
net asset value (NAV) of its shares. NAV per share is determined by dividing the
value of the fund's portfolio securities, cash and other assets, minus all
liabilities, by the total number of common shares outstanding, whereas market
price reflects the supply and demand for shares. As a result, the two returns
may differ significantly, as they did during the reporting period when the fund
showed a 3.04 percent gain on an NAV basis, but a 7.44 percent decline on a
market-price basis. The fund's return at NAV outperformed its benchmark, the
Lehman Brothers BBB Corporate Bond Index. (See table below.)
We implemented various strategies during the reporting period that helped boost
the fund's performance. At the beginning of the period, believing that yield
spreads over Treasuries were modestly wide, we maintained a large weighting in
the BBB-rated credit area. As the reporting period progressed, spreads tightened
and we moderately increased the credit quality of the portfolio, which allowed
us to capture some price appreciation. In addition, the fund had a below-average
duration (or sensitivity to interest rates) throughout the period, which helped
buoy performance when interest rates did finally rise.
The fund's positions in the energy, insurance and utilities sectors also added
to performance. Energy companies benefited from a stronger economy and firmer
pricing, while insurance and utilities appeared undervalued at the start of the
reporting period. Fund holdings in Niagara Mohawk Power, Ohio Edison and Pacific
Gas & Electric were positive performers, as were Amerada Hess, Conoco and
Kerr-McGee.
The fund's holdings in higher-quality debt did detract from performance somewhat
because they kept the fund from more fully participating in the relative
outperformance of lower-quality bonds. In addition, below-average weightings in
telecommunications, wireless communications and information technology modestly
hindered performance, especially early in the reporting period.
Looking forward, we believe it's likely that the Fed will continue to
incrementally raise interest rates. We also anticipate that, after a couple of
banner years for the corporate-bond market, finding solid value may prove
tougher. However, we believe that given the fund's below-average duration
TOTAL RETURN FOR THE 12-MONTH PERIOD ENDING JUNE 30, 2004
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BASED ON BASED ON LEHMAN BROTHERS BBB
NAV MARKET PRICE CORPORATE BOND INDEX
3.04% -7.44% 1.23%
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Past performance is no guarantee of future results. Investment return, net asset
value and common share market price will fluctuate and fund shares, when sold,
may be worth more or less than their original cost. See Performance Summary for
additional performance information and index definition.
3
positioning and broad diversification across the corporate-bond spectrum, the
portfolio should be well positioned to the weather the months ahead.
TOP 5 SECTORS AS OF 6/30/04 RATING ALLOCATIONS AS OF 6/30/04
Electric 8.9% AAA/Aaa 4.8%
Automotive 7.5 AA/Aa 6.4
Banking 6.7 A/A 31.3
Healthcare 5.5 BBB/Baa 48.4
Railroads 4.3 BB/Ba 7.0
B/B 2.1
Subject to change daily. All percentages are as a percentage of long-term
investments. Provided for informational purposes only and should not be deemed
as a recommendation to buy or sell securities in the sectors shown above.
Securities are classified by sectors that represent broad groupings of related
industries. Ratings allocation based upon ratings as issued by Standard and
Poor's and Moody's, respectively. Van Kampen is a wholly owned subsidiary of a
global securities firm which is engaged in a wide range of financial services
including, for example, securities trading and brokerage activities, investment
banking, research and analysis, financing and financial advisory services.
4
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters by filing the schedule
electronically with the Securities and Exchange Commission (SEC). The
semiannual reports are filed on Form N-CSRS and the annual reports are
filed on Form N-CSR. Van Kampen also delivers the semiannual and annual
reports to fund shareholders, and makes these reports available on its
public web site, www.vankampen.com. In addition to the semiannual and
annual reports that Van Kampen delivers to shareholders and makes
available through the Van Kampen public web site, each fund files a
complete schedule of portfolio holdings with the SEC for the fund's first
and third fiscal quarters on Form N-Q. Van Kampen does not deliver the
reports for the first and third fiscal quarters to shareholders, nor are
the reports posted to the Van Kampen public web site. You may, however,
obtain the Form N-Q filings (as well as the Form N-CSR and N-CSRS
filings) by accessing the SEC's web site, http://www.sec.gov. You may
also review and copy them at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the SEC's Public
Reference Room may be obtained by calling the SEC at 1-202-942-8090. You
can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
In addition to filing a complete schedule of portfolio holdings with the
SEC each fiscal quarter, each Van Kampen fund makes portfolio holdings
information available by periodically providing the information on its
public web site, www.vankampen.com. Each Van Kampen fund provides a
complete schedule of portfolio holdings on the public web site on a
calendar-quarter basis approximately 30 days after the close of the
calendar quarter. Furthermore, each Van Kampen fund provides partial
lists of its portfolio holdings (such as top 10 or top 15 fund holdings)
to the public web site each with a delay of approximately 15 days.
You may obtain copies of a fund's fiscal quarter filings, or its monthly
or calendar-quarter web site postings, by contacting Van Kampen Client
Relations at 1-800-847-2424.
5
PROXY VOTING POLICIES AND PROCEDURES AND PROXY VOTING RECORD
The fund's policies and procedures with respect to the voting of proxies
relating to the fund's portfolio securities and information on how the
fund voted proxies relating to portfolio securities during the most
recent twelve-month period ended June 30 is available without charge,
upon request, by calling 1-800-847-2424 or by visiting our web site at
www.vankampen.com. This information is also available on the Securities
and Exchange Commission's web site at http://www.sec.gov.
6
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
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CORPORATE BONDS 90.8%
AEROSPACE & DEFENSE 1.7%
$ 330 Lockheed Martin Corp. .......................... 7.700% 06/15/08 $ 372,579
635 Lockheed Martin Corp. .......................... 8.500 12/01/29 798,873
410 Northrop Grumman Corp. ......................... 7.125 02/15/11 461,360
850 Raytheon Co. ................................... 4.500 11/15/07 864,056
875 Raytheon Co. ................................... 8.300 03/01/10 1,027,561
65 Raytheon Co. ................................... 4.850 01/15/11 64,602
------------
3,589,031
------------
AIRLINES 0.8%
98 Continental Airlines, Inc. ..................... 6.648 09/15/17 91,482
1,129 Continental Airlines, Inc. ..................... 6.900 01/02/18 1,061,273
528 Continental Airlines, Inc. ..................... 6.545 02/02/19 494,041
------------
1,646,796
------------
AUTOMOTIVE 7.0%
330 AutoNation, Inc. ............................... 9.000 08/01/08 374,550
1,445 DaimlerChrysler North America Holding Corp. .... 7.300 01/15/12 1,579,457
1,280 DaimlerChrysler North America Holding Corp. .... 8.500 01/18/31 1,474,830
420 Ford Motor Co. ................................. 7.450 07/16/31 401,479
3,795 Ford Motor Credit Co. .......................... 7.250 10/25/11 3,968,690
640 General Motors Acceptance Corp. ................ 4.500 07/15/06 647,137
3,770 General Motors Acceptance Corp. ................ 6.875 09/15/11 3,870,817
2,865 General Motors Acceptance Corp. ................ 8.000 11/01/31 2,943,687
------------
15,260,647
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BANKING 6.3%
2,230 Bank of America Corp. .......................... 3.375 02/17/09 2,144,069
545 Citigroup, Inc. ................................ 6.000 02/21/12 578,728
2,110 Citigroup, Inc. ................................ 5.625 08/27/12 2,172,418
75 Citigroup, Inc. ................................ 6.625 06/15/32 77,929
3,340 J.P. Morgan Chase & Co. ........................ 6.750 02/01/11 3,645,142
400 MBNA America Bank NA............................ 7.125 11/15/12 441,781
1,720 MBNA Corp. ..................................... 6.125 03/01/13 1,779,319
1,350 Wachovia Corp. ................................. 3.625 02/17/09 1,310,801
925 Washington Mutual Bank FA....................... 5.500 01/15/13 925,919
525 Washington Mutual, Inc. ........................ 8.250 04/01/10 612,023
------------
13,688,129
------------
BROKERAGE 2.7%
1,670 Goldman Sachs Group, Inc. ...................... 6.875 01/15/11 1,835,706
185 Goldman Sachs Group, Inc. ...................... 5.250 10/15/13 179,957
2,000 Lehman Brothers Holdings, Inc. ................. 8.500 05/01/07 2,259,662
982 World Financial Prop., 144A-Private Placement
(a)............................................. 6.910 09/01/13 1,068,084
446 World Financial Prop., 144A-Private Placement
(a)............................................. 6.950 09/01/13 486,562
------------
5,829,971
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See Notes to Financial Statements 7
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
CHEMICALS 0.3%
$ 60 FMC Corp. ...................................... 10.250% 11/01/09 $ 69,300
640 ICI Wilmington, Inc. ........................... 4.375 12/01/08 628,424
------------
697,724
------------
CONSTRUCTION MACHINERY 0.6%
1,320 Kennametal, Inc. ............................... 7.200 06/15/12 1,398,172
------------
CONSUMER PRODUCTS 0.6%
1,305 Xerox Corp. .................................... 7.125 06/15/10 1,337,625
------------
DIVERSIFIED MANUFACTURING 2.5%
1,275 Cooper Industries, Inc. ........................ 5.250 07/01/07 1,330,552
2,445 Honeywell International, Inc. .................. 6.125 11/01/11 2,627,145
705 Hutchison Whampoa International Ltd.,
144A-Private Placement (Cayman Islands) (a)..... 5.450 11/24/10 693,083
850 Hutchison Whampoa International Ltd.,
144A-Private Placement (Cayman Islands) (a)..... 6.500 02/13/13 852,312
------------
5,503,092
------------
ELECTRIC 7.8%
725 Appalachian Power Co., Ser H.................... 5.950 05/15/33 670,704
790 Arizona Public Service Co. ..................... 5.800 06/30/14 792,244
370 CenterPoint Energy.............................. 7.750 02/15/11 411,636
625 Cincinnati Gas & Electric Co. .................. 5.700 09/15/12 640,050
425 Cincinnati Gas & Electric Co., Ser A............ 5.400 06/15/33 368,850
375 Cincinnati Gas & Electric Co., Ser B............ 5.375 06/15/33 324,229
820 Columbus Southern Power Co., Ser B.............. 6.600 03/01/33 838,161
865 Detroit Edison Co. ............................. 6.125 10/01/10 923,040
960 Duquesne Light Co. ............................. 6.700 04/15/12 1,049,621
540 Entergy Gulf States, Inc. ...................... 3.600 06/01/08 521,492
1,660 Exelon Corp. ................................... 6.750 05/01/11 1,807,772
885 FirstEnergy Corp., Ser B........................ 6.450 11/15/11 918,871
255 Indianapolis Power & Light Co., 144A-Private
Placement (a)................................... 6.300 07/01/13 262,176
545 Monongahela Power Co. .......................... 5.000 10/01/06 559,180
1,323 Niagara Mohawk Power Corp., Ser F............... 7.625 10/01/05 1,389,471
685 NiSource Finance Corp. ......................... 7.625 11/15/05 726,884
180 Ohio Power Co., Ser E........................... 6.600 02/15/33 184,466
1,215 Pacific Gas & Electric Co. ..................... 6.050 03/01/34 1,146,570
180 PSEG Energy Holdings, Inc. ..................... 7.750 04/16/07 189,450
650 PSEG Energy Holdings, Inc. ..................... 8.625 02/15/08 702,000
195 Southern CA Edison.............................. 5.000 01/15/14 190,069
365 Texas-New Mexico Power Co. ..................... 6.250 01/15/09 366,629
255 TXU Corp., Ser J................................ 6.375 06/15/06 269,826
805 TXU Energy Co. ................................. 7.000 03/15/13 878,046
8 See Notes to Financial Statements
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
ELECTRIC (CONTINUED)
$ 770 Westar Energy, Inc. ............................ 6.000% 07/01/14 $ 783,761
65 Wisconsin Electric Power........................ 5.625 05/15/33 60,919
------------
16,976,117
------------
ENTERTAINMENT 1.3%
930 AOL Time Warner, Inc. .......................... 6.875 05/01/12 1,006,481
590 AOL Time Warner, Inc. .......................... 7.700 05/01/32 646,471
180 Park Place Entertainment Corp. ................. 7.500 09/01/09 190,350
270 Time Warner, Inc. .............................. 6.625 05/15/29 262,795
660 Time Warner, Inc. .............................. 7.625 04/15/31 716,341
------------
2,822,438
------------
ENVIRONMENTAL SERVICES 2.1%
245 Allied Waste North America, Inc., 144A-Private
Placement (a)................................... 6.500 11/15/10 243,775
365 Allied Waste North America, Inc., Ser B......... 8.500 12/01/08 401,044
830 Republic Services, Inc. ........................ 6.750 08/15/11 909,281
1,500 Waste Management, Inc. ......................... 7.000 10/15/06 1,612,605
550 Waste Management, Inc. ......................... 7.375 08/01/10 618,707
790 Waste Management, Inc. ......................... 7.000 07/15/28 822,437
------------
4,607,849
------------
FOOD/BEVERAGE 3.3%
2,000 ConAgra Foods, Inc. ............................ 7.500 09/15/05 2,104,562
2,025 Kraft Foods, Inc. .............................. 5.625 11/01/11 2,063,088
500 Kraft Foods, Inc. .............................. 6.250 06/01/12 527,316
1,420 Smithfield Foods, Inc. ......................... 8.000 10/15/09 1,537,150
105 Smithfield Foods, Inc. ......................... 7.750 05/15/13 110,775
710 YUM! Brands, Inc. .............................. 8.875 04/15/11 857,903
------------
7,200,794
------------
GAMING 2.0%
680 Harrahs Operating Co., Inc., 144A-Private
Placement (a)................................... 5.500 07/01/10 684,268
1,495 Harrahs Operating Co., Inc. .................... 8.000 02/01/11 1,689,807
1,175 MGM Mirage, Inc. ............................... 8.500 09/15/10 1,274,875
645 Station Casinos, Inc. .......................... 6.000 04/01/12 627,262
------------
4,276,212
------------
HEALTHCARE 5.1%
3,205 Aetna, Inc. .................................... 7.375 03/01/06 3,417,363
640 AmerisourceBergen Corp. ........................ 8.125 09/01/08 692,800
1,275 HCA, Inc. ...................................... 6.910 06/15/05 1,313,094
800 HCA, Inc. ...................................... 6.300 10/01/12 801,683
285 HCA, Inc. ...................................... 7.190 11/15/15 296,524
1,835 Health Net, Inc. ............................... 8.375 04/15/11 2,148,271
620 Tenet Healthcare Corp. ......................... 7.375 02/01/13 564,200
915 Tenet Healthcare Corp. ......................... 6.875 11/15/31 722,850
1,130 UnitedHealth Group, Inc. ....................... 5.200 01/17/07 1,176,327
------------
11,133,112
------------
See Notes to Financial Statements 9
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
HOME CONSTRUCTION 0.3%
$ 605 D.R. Horton, Inc. .............................. 6.875% 05/01/13 $ 620,125
------------
INDEPENDENT ENERGY 1.0%
285 Kerr-McGee Corp. ............................... 5.875 09/15/06 298,118
470 Kerr-McGee Corp. ............................... 6.625 10/15/07 505,158
490 Kerr-McGee Corp. ............................... 6.875 09/15/11 527,873
825 Kerr-McGee Corp. ............................... 7.875 09/15/31 912,653
------------
2,243,802
------------
INTEGRATED ENERGY 4.0%
1,625 Amerada Hess Corp. ............................. 7.875 10/01/29 1,760,502
720 Conoco Funding Co. (Canada)..................... 6.350 10/15/11 784,552
2,290 Conoco, Inc. ................................... 6.950 04/15/29 2,528,962
625 Constellation Energy Group...................... 7.600 04/01/32 692,051
230 Consumers Energy Co., Ser D..................... 5.375 04/15/13 225,619
790 Consumers Energy Co., Ser F..................... 4.000 05/15/10 748,882
190 Consumers Energy Co., Ser H..................... 4.800 02/17/09 190,349
670 Marathon Oil Corp. ............................. 5.375 06/01/07 700,287
685 Marathon Oil Corp. ............................. 6.800 03/15/32 712,501
270 Transcontinental Gas Pipe Line Corp. ........... 8.875 07/15/12 306,450
------------
8,650,155
------------
LIFE INSURANCE 2.8%
2,195 Anthem Insurance Cos., Inc., 144A-Private
Placement (a)................................... 9.125 04/01/10 2,695,383
475 John Hancock Financial Services, Inc. .......... 5.625 12/01/08 499,880
105 Metlife, Inc. .................................. 6.125 12/01/11 112,887
585 Nationwide Financial Services, Inc. ............ 6.250 11/15/11 624,957
1,070 Prudential Holdings, LLC, 144A-Private Placement
(a)............................................. 7.245 12/18/23 1,216,153
820 Prudential Holdings, LLC, 144A-Private Placement
(a)............................................. 8.695 12/18/23 986,904
------------
6,136,164
------------
LODGING 2.8%
1,555 Hilton Hotels Corp. ............................ 7.625 12/01/12 1,679,400
1,325 Hyatt Equities LLC, 144A-Private Placement
(a)............................................. 6.875 06/15/07 1,409,648
610 Marriott International.......................... 8.125 04/01/05 634,110
375 Marriott International.......................... 7.000 01/15/08 408,772
400 Starwood Hotels & Resorts Worldwide, Inc. ...... 7.375 05/01/07 423,000
1,375 Starwood Hotels & Resorts Worldwide, Inc. ...... 7.875 05/01/12 1,478,125
------------
6,033,055
------------
MEDIA-CABLE 1.6%
490 Comcast Cable Communications, Inc. ............. 8.375 05/01/07 547,980
1,785 Comcast Cable Communications, Inc. ............. 6.750 01/30/11 1,928,728
90 Comcast Cable Communications, Inc. ............. 7.125 06/15/13 98,540
845 Echostar DBS Corp. ............................. 6.375 10/01/11 836,550
------------
3,411,798
------------
10 See Notes to Financial Statements
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
MEDIA-NONCABLE 3.0%
$2,500 Clear Channel Communications, Inc. ............. 7.250% 10/15/27 $ 2,676,303
390 Nevada Power Co. ............................... 9.000 08/15/13 426,075
2,800 News America Holdings, Inc. .................... 8.875 04/26/23 3,506,838
------------
6,609,216
------------
NATURAL GAS PIPELINES 1.6%
285 Consolidated Natural Gas Co., Ser A............. 5.000 03/01/14 273,551
960 Consolidated Natural Gas Co., Ser C............. 6.250 11/01/11 1,022,913
464 Gulfterra Energy Partners LP, Ser B............. 8.500 06/01/10 506,920
670 Gulfterra Energy Partners LP, Ser B............. 6.250 06/01/10 680,050
210 Northwest Pipeline Corp. ....................... 8.125 03/01/10 227,325
675 Texas Eastern Transmission Corp. ............... 7.000 07/15/32 707,927
------------
3,418,686
------------
NONCAPTIVE-CONSUMER FINANCE 3.7%
2,000 American General Finance Corp. ................. 4.625 09/01/10 1,977,592
2,245 Countrywide Home Loans, Inc. ................... 3.250 05/21/08 2,161,515
1,000 Household Finance Corp. ........................ 7.875 03/01/07 1,105,520
150 Household Finance Corp. ........................ 8.000 07/15/10 174,271
1,555 Household Finance Corp. ........................ 6.750 05/15/11 1,701,657
1,060 SLM Corp. ...................................... 5.000 10/01/13 1,025,458
------------
8,146,013
------------
NONCAPTIVE-DIVERSIFIED FINANCE 3.0%
415 CIT Group, Inc. ................................ 7.375 04/02/07 454,309
415 General Electric Capital Corp. ................. 6.750 03/15/32 447,581
2,000 Heller Financial, Inc. ......................... 6.375 03/15/06 2,116,162
2,500 International Lease Finance Corp. .............. 8.375 12/15/04 2,571,620
935 Newcourt Credit Group, Inc., Ser B (Canada)..... 6.875 02/16/05 961,336
------------
6,551,008
------------
OIL FIELD SERVICES 0.1%
280 Panhandle Eastern Pipe Line Co., Ser B.......... 2.750 03/15/07 268,885
------------
PACKAGING 0.7%
630 Packaging Corp. of America...................... 5.750 08/01/13 625,802
960 Sealed Air Corp., 144A-Private Placement (a).... 5.625 07/15/13 949,963
------------
1,575,765
------------
PAPER 2.1%
905 International Paper Co. ........................ 4.250 01/15/09 890,547
505 Owens-Brockway Glass Containers, Inc. .......... 7.750 05/15/11 527,725
405 Owens-Brockway Glass Containers, Inc. .......... 8.750 11/15/12 441,450
455 Weyerhaeuser Co. ............................... 6.000 08/01/06 478,944
1,980 Weyerhaeuser Co. ............................... 6.750 03/15/12 2,147,484
------------
4,486,150
------------
PHARMACEUTICALS 0.3%
550 Schering-Plough Corp. .......................... 5.300 12/01/13 541,106
------------
See Notes to Financial Statements 11
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
PROPERTY & CASUALTY 2.9%
$ 570 AIG Sunamerica Global Financial, 144A-Private
Placement (a)................................... 6.300% 05/10/11 $ 613,102
1,545 Farmers Exchange Capital, 144A-Private Placement
(a)............................................. 7.050 07/15/28 1,487,001
1,565 Farmers Insurance Exchange Surplus, 144A-Private
Placement (a)................................... 8.625 05/01/24 1,757,312
125 Hartford Financial Services Group............... 2.375 06/01/06 123,029
1,800 Mantis Reef Ltd., 144A-Private Placement
(Australia) (a)................................. 4.692 11/14/08 1,779,541
440 Nationwide Mutual Insurance Co., 144A-Private
Placement (a)................................... 8.250 12/01/31 520,315
------------
6,280,300
------------
RAILROADS 4.0%
1,000 CSX Corp. ...................................... 6.750 03/15/11 1,086,137
7,000 Union Pacific Corp. ............................ 8.350 05/01/25 7,601,244
------------
8,687,381
------------
REAL ESTATE INVESTMENT TRUSTS 1.0%
250 EOP Operating LP................................ 4.750 03/15/14 230,766
278 Istar Financial, Inc. .......................... 8.750 08/15/08 308,865
850 Reckson Operating Partnership LP................ 5.150 01/15/11 824,495
570 Rouse Co. ...................................... 3.625 03/15/09 542,097
245 Rouse Co. ...................................... 5.375 11/26/13 237,096
------------
2,143,319
------------
REFINING 0.3%
430 Ashland, Inc. .................................. 7.830 08/15/05 450,441
250 Vintage Petroleum, Inc. ........................ 7.875 05/15/11 257,500
------------
707,941
------------
RETAIL 3.5%
250 CVS Corp. ...................................... 5.625 03/15/06 260,731
270 CVS Corp. ...................................... 3.875 11/01/07 270,420
1,500 Federated Department Stores, Inc. .............. 6.625 09/01/08 1,624,419
500 Federated Department Stores, Inc. .............. 6.300 04/01/09 535,872
490 Lowe's Cos., Inc. .............................. 6.875 02/15/28 537,544
700 Lowe's Cos., Inc. .............................. 6.500 03/15/29 736,793
1,275 May Department Stores Co. ...................... 5.950 11/01/08 1,338,319
700 May Department Stores Co. ...................... 6.700 09/15/28 697,656
430 May Department Stores Co. ...................... 7.875 03/01/30 490,767
75 May Department Stores Co. ...................... 6.900 01/15/32 77,155
175 Toys "R" Us, Inc. .............................. 7.875 04/15/13 176,531
895 Toys "R" Us, Inc. .............................. 7.375 10/15/18 831,231
------------
7,577,438
------------
SERVICES 0.4%
562 Iron Mountain, Inc. ............................ 7.750 01/15/15 560,595
295 Iron Mountain, Inc. ............................ 6.625 01/01/16 269,925
------------
830,520
------------
12 See Notes to Financial Statements
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
-------------------------------------------------------------------------------------------
SUPERMARKETS 1.1%
$ 770 Albertson's, Inc. .............................. 7.500% 02/15/11 $ 868,857
1,285 Kroger Co. ..................................... 7.500 04/01/31 1,426,545
------------
2,295,402
------------
TECHNOLOGY 0.7%
195 Avnet, Inc. .................................... 9.750 02/15/08 222,300
465 Electronic Data Systems Corp. .................. 7.125 10/15/09 487,144
780 Electronic Data Systems Corp., Ser B............ 6.000 08/01/13 746,245
------------
1,455,689
------------
TEXTILE 0.4%
810 Mohawk Industries, Inc. ........................ 7.200 04/15/12 900,098
------------
TOBACCO 0.8%
850 Altria Group, Inc. ............................. 7.000 11/04/13 867,048
890 Altria Group, Inc. ............................. 7.750 01/15/27 912,433
------------
1,779,481
------------
TRANSPORTATION SERVICES 0.4%
1,000 FedEx Corp., 144A-Private Placement (a)......... 2.650 04/01/07 971,725
------------
WIRELESS COMMUNICATIONS 0.4%
745 AT&T Wireless Services, Inc. ................... 7.875 03/01/11 848,525
------------
WIRELINE COMMUNICATIONS 3.8%
140 AT&T Corp. ..................................... 8.050 11/15/11 143,940
1,765 AT&T Corp. ..................................... 8.750 11/15/31 1,727,227
1,105 Sprint Capital Corp. ........................... 8.750 03/15/32 1,291,326
2,935 Verizon Communications, Inc. ................... 6.940 04/15/28 3,004,017
1,360 Verizon Global Funding Corp. ................... 7.750 12/01/30 1,532,098
590 Verizon New England, Inc. ...................... 6.500 09/15/11 629,572
------------
8,328,180
------------
TOTAL CORPORATE BONDS 90.8%...................................... 197,465,636
------------
CONVERTIBLE CORPORATE OBLIGATION 0.6%
ELECTRIC 0.6%
1,240 Ohio Edison Co. ................................ 5.450 05/01/15 1,182,194
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 2.5%
8,750 United States Treasury Bonds (STRIP
PRINCIPAL)...................................... * 02/15/25 2,751,184
9,000 United States Treasury Notes (STRIPS)........... * 05/15/25 2,773,440
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS.......................... 5,524,624
------------
See Notes to Financial Statements 13
VAN KAMPEN BOND FUND
PORTFOLIO OF INVESTMENTS -- JUNE 30, 2004 continued
DESCRIPTION VALUE
-------------------------------------------------------------------------------------------
TOTAL LONG-TERM INVESTMENTS 93.9%
(Cost $198,130,162)....................................................... $204,172,454
------------
SHORT-TERM INVESTMENTS 5.5%
REPURCHASE AGREEMENT 5.1%
UBS Securities ($11,202,000 par collateralized by U.S. Government
obligations in a pooled cash account, interest rate of 1.25%, dated
06/30/04, to be sold on 07/01/04 at $11,202,389)............................ 11,202,000
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 0.4%
United States Treasury Bills ($250,000 par, yielding 1.163%, 07/15/04
maturity) (b)............................................................... 249,887
United States Treasury Bills ($600,000 par, yielding 1.285%, 09/23/04
maturity) (b)............................................................... 598,206
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS 0.4%.............................. 848,093
------------
TOTAL SHORT-TERM INVESTMENTS
(Cost $12,050,536)........................................................ 12,050,093
------------
TOTAL INVESTMENTS 99.4%
(Cost $210,180,698)....................................................... 216,222,547
OTHER ASSETS IN EXCESS OF LIABILITIES 0.6%................................. 1,330,415
------------
NET ASSETS 100.0%.......................................................... $217,552,962
============
Percentages are calculated as a percentage of net assets.
* 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) Assets segregated as collateral for open futures transactions.
STRIPS--Separate Trading of Registered Interest and Principal of Securities
14 See Notes to Financial Statements
VAN KAMPEN BOND FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
June 30, 2004
ASSETS:
Total Investments (Cost $210,180,698)....................... $216,222,547
Cash........................................................ 489
Receivables:
Interest.................................................. 3,125,327
Investments Sold.......................................... 112,253
Other....................................................... 41,412
------------
Total Assets............................................ 219,502,028
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,219,723
Variation Margin on Futures............................... 207,781
Income Distributions...................................... 158,448
Investment Advisory Fee................................... 86,393
Other Affiliates.......................................... 5,589
Trustees' Deferred Compensation and Retirement Plans........ 169,033
Accrued Expenses............................................ 102,099
------------
Total Liabilities....................................... 1,949,066
------------
NET ASSETS.................................................. $217,552,962
============
NET ASSET VALUE PER COMMON SHARE ($217,552,962 divided by
11,362,465 shares outstanding)............................ $ 19.15
============
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
Paid in Surplus............................................. 207,602,030
Net Unrealized Appreciation................................. 5,653,917
Accumulated Undistributed Net Investment Income............. (1,097,551)
Accumulated Net Realized Loss............................... (5,967,899)
------------
NET ASSETS.................................................. $217,552,962
============
See Notes to Financial Statements 15
VAN KAMPEN BOND FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Year Ended June 30, 2004
INVESTMENT INCOME:
Interest.................................................... $ 13,114,149
Other....................................................... 3,375
------------
Total Income.......................................... 13,117,524
------------
EXPENSES:
Investment Advisory Fee..................................... 1,077,464
Shareholder Services........................................ 75,776
Shareholder Reports......................................... 74,948
Trustees' Fees and Related Expenses......................... 70,311
Custody..................................................... 26,890
Legal....................................................... 13,138
Other....................................................... 108,154
------------
Total Expenses........................................ 1,446,681
Less Credits Earned on Cash Balances.................. 76
------------
Net Expenses.......................................... 1,446,605
------------
NET INVESTMENT INCOME....................................... $ 11,670,919
============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 4,584,194
Futures................................................... 3,128,809
------------
Net Realized Gain........................................... 7,713,003
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 19,458,599
------------
End of the Period:
Investments............................................. 6,041,849
Futures................................................. (387,932)
------------
5,653,917
------------
Net Unrealized Depreciation During the Period............... (13,804,682)
------------
NET REALIZED AND UNREALIZED LOSS............................ $ (6,091,679)
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 5,579,240
============
16 See Notes to Financial Statements
VAN KAMPEN BOND FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets
FOR THE FOR THE
YEAR ENDED YEAR ENDED
JUNE 30, 2004 JUNE 30, 2003
------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income...................................... $ 11,670,919 $ 12,525,760
Net Realized Gain/Loss..................................... 7,713,003 (6,299,069)
Net Unrealized Appreciation/Depreciation During the
Period................................................... (13,804,682) 18,842,963
------------ ------------
Change in Net Assets from Operations....................... 5,579,240 25,069,654
Distributions from Net Investment Income................... (12,726,925) (13,747,783)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES........ (7,147,685) 11,321,871
NET ASSETS:
Beginning of the Period.................................... 224,700,647 213,378,776
------------ ------------
End of the Period (Including accumulated undistributed net
investment income of $(1,097,551) and $(276,131),
respectively)............................................ $217,552,962 $224,700,647
============ ============
See Notes to Financial Statements 17
VAN KAMPEN BOND FUND
FINANCIAL HIGHLIGHTS
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
----------------------------
2004 2003 2002 (a)
----------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $19.78 $18.78 $19.41
------ ------ ------
Net Investment Income..................................... 1.03 1.10 1.26
Net Realized and Unrealized Gain/Loss..................... (.54) 1.11 (.56)
------ ------ ------
Total from Investment Operations............................ .49 2.21 .70
Less Distributions from Net Investment Income............... 1.12 1.21 1.33
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.......................... $19.15 $19.78 $18.78
====== ====== ======
Common Share Market Price at End of the Period.............. $17.02 $19.57 $18.50
Total Return (b)............................................ -7.44% 12.67% 3.50%
Net Assets at End of the Period (In millions)............... $217.6 $224.7 $213.4
Ratio of Operating Expenses to Average Net Assets........... .65% .65% .65%
Ratio of Convertible Note Expenses to Average Net Assets
(c)....................................................... -- -- --
Ratio of Net Investment Income to Average Net Assets........ 5.24% 5.79% 6.39%
Portfolio Turnover.......................................... 41% 57% 107%
(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.
(c) On January 3, 1995, the Fund paid off its outstanding convertible extendible
note.
18
YEAR ENDED JUNE 30,
----------------------------------------------------------------------
2001 2000 1999 1998 1997 1996 1995
----------------------------------------------------------------------
$18.70 $19.59 $ 21.16 $ 20.26 $19.97 $ 20.41 $ 19.07
------ ------ ------- -------- ------ ------- -------
1.40 1.43 1.41 1.48 1.56 1.54 1.52
.68 (.93) (1.56) .93 .27 (.44) 1.36
------ ------ ------- -------- ------ ------- -------
2.08 .50 (.15) 2.41 1.83 1.10 2.88
1.37 1.39 1.42 1.51 1.54 1.54 1.54
------ ------ ------- -------- ------ ------- -------
$19.41 $18.70 $ 19.59 $ 21.16 $20.26 $ 19.97 $ 20.41
====== ====== ======= ======== ====== ======= =======
$19.15 $16.75 $17.875 $19.6875 $19.25 $18.125 $19.125
23.10% 1.88% -2.45% 10.08% 15.06% 2.61% 14.89%
$220.5 $212.4 $ 222.6 $ 240.4 $230.2 $ 226.9 $ 231.9
.68% .64% .66% .65% .68% .67% .68%
-- -- -- -- -- -- .39%
7.25% 7.48% 6.79% 7.04% 7.70% 7.47% 7.92%
88% 71% 10% 27% 8% 11% 8%
See Notes to Financial Statements 19
VAN KAMPEN BOND FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004
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 (the
"1940 Act"), 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
sales 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 on 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
segregate assets with its custodian 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, 2004, 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 balances into a pooled cash account along with other investment
companies advised by Van Kampen Asset Management (the "Adviser") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are fully collateralized by the underlying debt security.
The Fund will make payment for such securities only upon physical delivery or
evidence of book entry transfer to the account of the custodian bank. The seller
is required to maintain the value of the underlying security at not less than
the repurchase proceeds due the Fund.
C. INVESTMENT INCOME 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.
20
VAN KAMPEN BOND FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 continued
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, 2004, the Fund had an accumulated capital loss carryforward
for tax purposes of $6,354,808, which will expire on June 30, 2011.
At June 30, 2004, the cost and related gross unrealized appreciation and
depreciation are as follows:
Cost of investments for tax purposes........................ $211,091,322
============
Gross tax unrealized appreciation........................... $ 7,467,385
Gross tax unrealized depreciation........................... (2,336,160)
------------
Net tax unrealized appreciation on investments.............. $ 5,131,225
============
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 the years ended June 30, 2004
and 2003 was as follows:
2004 2003
Distributions paid from:
Ordinary income........................................... $12,568,477 $13,747,783
Long-term capital gain.................................... -0- -0-
----------- -----------
$12,568,477 $13,747,783
=========== ===========
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. A permanent book and
tax difference relating to consent fee income totaling $3,000 was reclassified
to accumulated net realized loss from accumulated undistributed net investment
income and $6,079 relating to the recognition of net realized losses on paydowns
of mortgage pool obligations was reclassified from accumulated undistributed net
investment income to accumulated net realized loss. Additionally, a permanent
difference relating to book to tax amortization differences totaling $231,507
has been reclassified from accumulated net realized loss to accumulated
undistributed net investment income.
21
VAN KAMPEN BOND FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 continued
As of June 30, 2004, the component of distributable earnings on a tax basis
were as follows:
Undistributed ordinary income............................... $104,707
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 and gains or losses recognized for tax purposes on open future
transactions on June 30, 2004.
F. EXPENSE REDUCTIONS During the year ended June 30, 2004, the Fund's custody
fee was reduced by $76 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, 2004, the Fund recognized expenses of
approximately $13,100 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, counsel to the Fund, of which a trustee of the Fund
is an affiliated person.
Under an Accounting Services agreement, the Adviser provides accounting
services to the Fund. The Adviser allocates cost of such services to each fund.
For the year ended June 30, 2004, the Fund recognized expenses of approximately
$15,200 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.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $84,852,361 and $87,989,568,
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.
22
VAN KAMPEN BOND FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 continued
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 futures
commission merchant pursuant to rules and regulations promulgated under the 1940
Act, as amended, or with its custodian in an account in the broker's name. This
amount is known as initial margin. During the period the futures contract is
open, payments are received from or made to the broker based upon changes in the
value of the contract (the variation margin). The risk of loss associated with a
futures contract is in excess of the variation margin reflected on the Statement
of Assets and Liabilities.
Transactions in futures contracts for the year ended June 30, 2004, were as
follows:
CONTRACTS
Outstanding at June 30, 2003................................ 556
Futures Opened.............................................. 1,805
Futures Closed.............................................. (2,036)
------
Outstanding at June 30, 2004................................ 325
======
The futures contracts outstanding as of June 30, 2004 and the descriptions
and unrealized appreciation/depreciation are as follows:
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Bond Future, September 2004
(Current Notional Value of $106,375 per contract)....... 35 $ (97,098)
5-Year U.S. Treasury Note Future, September 2004 (Current
Notional Value of $108,688 per contract)................ 153 (119,897)
10-Year U.S. Treasury Note Future, September 2004 (Current
Notional Value of $109,328 per contract)................ 137 (170,937)
--- ---------
325 $(387,932)
=== =========
23
VAN KAMPEN BOND FUND
NOTES TO FINANCIAL STATEMENTS -- JUNE 30, 2004 continued
5. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
24
VAN KAMPEN BOND FUND
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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, 2004, the related statement of operations for the year then ended, the
statements of changes in net assets for each of the two years in the period then
ended, and the financial highlights for each of the five years in the period
then ended. These financial statements and financial highlights are the
responsibility of the Fund's management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits. 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 standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. 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, 2004, by correspondence with the Fund's
custodian and brokers; where replies were not received from brokers, we
performed other auditing procedures. 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, 2004, the results of its operations for the year
then ended, 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 9, 2004
25
VAN KAMPEN BOND FUND
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.
26
VAN KAMPEN BOND FUND
BOARD OF TRUSTEES AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
J. MILES BRANAGAN
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUSAN H. WOOLSEY
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020
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 LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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.
27
VAN KAMPEN BOND FUND
RESULTS OF SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Fund was held on June 23, 2004, where
shareholders voted on the election of trustees.
With regards to the election of the following trustees by the common
shareholders of the Fund:
# OF SHARES
------------------------------
IN FAVOR WITHHELD
------------------------------------------------------------------------------------------
R. Craig Kennedy.......................................... 10,038,019 260,505
Jack E. Nelson............................................ 10,035,098 263,426
Richard F. Powers, III.................................... 10,045,040 253,484
Hugo F. Sonnenschein...................................... 10,037,048 261,476
The other trustees of the Fund whose terms did not expire in 2004 are David C.
Arch, J. Miles Branagan, Jerry D. Choate, Rod Dammeyer, Linda Hutton Heagy,
Howard J Kerr, Mitchell M. Merin, Wayne W. Whalen and Susan H. Woolsey.
28
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION
The business and affairs of the Fund are managed under the direction of the
Fund's Board of Trustees and the Fund's officers appointed by the Board of
Trustees. The tables below list the trustees and executive officers of the Fund
and their principal occupations during the last five years, other directorships
held by trustees and their affiliations, if any, with Van Kampen Investments
Inc. ("Van Kampen Investments"), Van Kampen Asset Management ("Asset Management"
or the "Adviser"), Van Kampen Funds Inc. (the "Distributor"), Van Kampen
Advisors Inc., Van Kampen Exchange Corp. and Van Kampen Investor Services Inc.
("Investor Services"). The term "Fund Complex" includes each of the investment
companies advised by the Adviser or its affiliates as of the date of this
Statement of Additional Information. Trustees serve until reaching their
retirement age or until their successors are duly elected and qualified.
Officers are annually elected by the trustees.
INDEPENDENT TRUSTEES
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
David C. Arch (59) Trustee Trustee Chairman and Chief 88 Trustee/Director/Managing
Blistex Inc. since 1997 Executive Officer of General Partner of funds
1800 Swift Drive Blistex Inc., a consumer in the Fund Complex.
Oak Brook, IL 60523 health care products
manufacturer. Director of
the Heartland Alliance, a
nonprofit organization
serving human needs based
in Chicago. Director of
St. Vincent de Paul
Center, a Chicago based
day care facility serving
the children of low
income families. Board
member of the Illinois
Manufacturers'
Association.
J. Miles Branagan (72) Trustee Trustee Private investor. 86 Trustee/Director/Managing
1632 Morning Mountain Road since 2003 Co-founder, and prior to General Partner of funds
Raleigh, NC 27614 August 1996, Chairman, in the Fund Complex.
Chief Executive Officer
and President, MDT
Corporation (now known as
Getinge/Castle, Inc., a
subsidiary of Getinge
Industrier AB), a company
which develops,
manufactures, markets and
services medical and
scientific equipment.
29
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Jerry D. Choate (65) Trustee Trustee Prior to January 1999, 86 Trustee/Director/Managing
33971 Selva Road since 2003 Chairman and Chief General Partner of funds
Suite 130 Executive Officer of the in the Fund Complex.
Dana Point, CA 92629 Allstate Corporation Director of Amgen Inc., a
("Allstate") and Allstate biotechnological company,
Insurance Company. Prior and Director of Valero
to January 1995, Energy Corporation, an
President and Chief independent refining
Executive Officer of company.
Allstate. Prior to August
1994, various management
positions at Allstate.
30
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Rod Dammeyer (63) Trustee Trustee President of CAC, L.L.C., 88 Trustee/Director/Managing
CAC, L.L.C. since 1997 a private company General Partner of funds
4350 LaJolla Village Drive offering capital in the Fund Complex.
Suite 980 investment and management Director of Stericycle,
San Diego, CA 92122-6223 advisory services. Prior Inc., Ventana Medical
to February 2001, Vice Systems, Inc., GATX
Chairman and Director of Corporation and Trustee
Anixter International, of The Scripps Research
Inc., a global Institute and the
distributor of wire, University of Chicago
cable and communications Hospitals and Health
connectivity products, Systems. Prior to April
and IMC Global Inc., an 2004, Director of
international company TheraSense, Inc. Prior to
that mines, manufactures January 2004, Director of
and sells essential crop TeleTech Holdings Inc.
nutrients and feed and Arris Group, Inc.
ingredients to farmers. Prior to May 2002,
Prior to July 2000, Director of Peregrine
Managing Partner of Systems Inc. Prior to
Equity Group Corporate February 2001, Vice
Investment (EGI), a Chairman and Director of
company that makes Anixter International,
private investments in Inc. and IMC Global Inc.
other companies. Prior to July 2000,
Director of Allied Riser
Communications Corp.,
Matria Healthcare Inc.,
Transmedia Networks,
Inc., CNA Surety, Corp.
and Grupo Azcarero Mexico
(GAM).
31
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Linda Hutton Heagy (56) Trustee Trustee Managing Partner of 86 Trustee/Director/Managing
Heidrick & Struggles since 2003 Heidrick & Struggles, an General Partner of funds
233 South Wacker Drive executive search firm. in the Fund Complex.
Suite 7000 Trustee on the University
Chicago, IL 60606 of Chicago Hospitals
Board, Vice Chair of the
Board of the YMCA of
Metropolitan Chicago and
a member of the Women's
Board of the University
of Chicago. Prior to
1997, Partner of Ray &
Berndtson, Inc., an
executive recruiting
firm. Prior to 1996,
Trustee of The
International House
Board, a fellowship and
housing organization for
international graduate
students. Prior to 1995,
Executive Vice President
of ABN AMRO, N.A., a bank
holding company. Prior to
1992, Executive Vice
President of La Salle
National Bank.
R. Craig Kennedy (52) Trustee Trustee Director and President of 86 Trustee/Director/Managing
1744 R Street, NW since 2003 the German Marshall Fund General Partner of funds
Washington, D.C. 20009 of the United States, an in the Fund Complex.
independent U.S.
foundation created to
deepen understanding,
promote collaboration and
stimulate exchanges of
practical experience
between Americans and
Europeans. Formerly,
advisor to the Dennis
Trading Group Inc., a
managed futures and
option company that
invests money for
individuals and
institutions. Prior to
1992, President and Chief
Executive Officer,
Director and member of
the Investment Committee
of the Joyce Foundation,
a private foundation.
Howard J Kerr (68) Trustee Trustee Prior to 1998, President 88 Trustee/Director/Managing
736 North Western Avenue since 1997 and Chief Executive General Partner of funds
P.O. Box 317 Officer of Pocklington in the Fund Complex.
Lake Forest, IL 60045 Corporation, Inc., an Director of the Lake
investment holding Forest Bank & Trust.
company. Director of the Marrow
Foundation.
32
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INDEPENDENT TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Jack E. Nelson (68) Trustee Trustee President of Nelson 86 Trustee/Director/Managing
423 Country Club Drive since 2003 Investment Planning General Partner of funds
Winter Park, FL 32789 Services, Inc., a in the Fund Complex.
financial planning
company and registered
investment adviser in the
State of Florida.
President of Nelson Ivest
Brokerage Services Inc.,
a member of the NASD,
Securities Investors
Protection Corp. and the
Municipal Securities
Rulemaking Board.
President of Nelson Sales
and Services Corporation,
a marketing and services
company to support
affiliated companies.
Hugo F. Sonnenschein (63) Trustee Trustee President Emeritus and 88 Trustee/Director/Managing
1126 E. 59th Street since 1997 Honorary Trustee of the General Partner of funds
Chicago, IL 60637 University of Chicago and in the Fund Complex.
the Adam Smith Director of Winston
Distinguished Service Laboratories, Inc.
Professor in the
Department of Economics
at the University of
Chicago. Prior to July
2000, President of the
University of Chicago.
Trustee of the University
of Rochester and a member
of its investment
committee. Member of the
National Academy of
Sciences, the American
Philosophical Society and
a fellow of the American
Academy of Arts and
Sciences.
Suzanne H. Woolsey, P.h.D. (62) Trustee Trustee Previously Chief 86 Trustee/Director/Managing
815 Cumberstone Road since 2003 Communications Officer of General Partner of funds
Harwood, MD 20776 the National Academy of in the Fund Complex.
Sciences/National Director of Fluor Corp.,
Research Council, an an engineering,
independent, federally procurement and
chartered policy construction
institution, from 2001 to organization, since
November 2003 and Chief January 2004 and Director
Operating Officer from of Neurogen Corporation,
1993 to 2001. Director of a pharmaceutical company,
the Institute for Defense since January 1998.
Analyses, a federally
funded research and
development center,
Director of the German
Marshall Fund of the
United States, Director
of the Rocky Mountain
Institute and Trustee of
Colorado College. Prior
to 1993, Executive
Director of the
Commission on Behavioral
and Social Sciences and
Education at the National
Academy of
Sciences/National
Research Council. From
1980 through 1989,
Partner of Coopers &
Lybrand.
33
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
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 OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Mitchell M. Merin* (50) Trustee, Trustee President and Chief 86 Trustee/Director/Managing
1221 Avenue of the Americas President since Executive Officer of General Partner of funds
New York, NY 10020 and Chief 2003; funds in the Fund in the Fund Complex.
Executive President Complex. Chairman,
Officer and Chief President, Chief
Executive Executive Officer and
Officer Director of the Adviser
since 2002 and Van Kampen Advisors
Inc. since December 2002.
Chairman, President and
Chief Executive Officer
of Van Kampen Investments
since December 2002.
Director of Van Kampen
Investments since
December 1999. Chairman
and Director of Van
Kampen Funds Inc. since
December 2002. President,
Director and Chief
Operating Officer of
Morgan Stanley Investment
Management since December
1998. President and
Director since April 1997
and Chief Executive
Officer since June 1998
of Morgan Stanley
Investment Advisors Inc.
and Morgan Stanley
Services Company Inc.
Chairman, Chief Executive
Officer and Director of
Morgan Stanley
Distributors Inc. since
June 1998. Chairman since
June 1998, and Director
since January 1998 of
Morgan Stanley Trust.
Director of various
Morgan Stanley
subsidiaries. President
of the Morgan Stanley
Funds since May 1999.
Previously Chief
Executive Officer of Van
Kampen Funds Inc. from
December 2002 to July
2003, Chief Strategic
Officer of Morgan Stanley
Investment Advisors Inc.
and Morgan Stanley
Services Company Inc. and
Executive Vice President
of Morgan Stanley
Distributors Inc. from
April 1997 to June 1998.
Chief Executive Officer
from September 2002 to
April 2003 and Vice
President from May 1997
to April 1999 of the
Morgan Stanley Funds.
34
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
NUMBER OF
TERM OF FUNDS IN
OFFICE AND FUND
POSITION(S) LENGTH OF COMPLEX
NAME, AGE AND ADDRESS HELD WITH TIME PRINCIPAL OCCUPATION(S) OVERSEEN OTHER DIRECTORSHIPS
OF INTERESTED TRUSTEE FUND SERVED DURING PAST 5 YEARS BY TRUSTEE HELD BY TRUSTEE
Richard F. Powers, III* (58) Trustee Trustee Advisory Director of 88 Trustee/Director/Managing
1 Parkview Plaza since 1999 Morgan Stanley. Prior to General Partner of funds
P.O. Box 5555 December 2002, Chairman, in the Fund Complex.
Oakbrook Terrace, IL 60181 Director, President,
Chief Executive Officer
and Managing Director of
Van Kampen Investments
and its investment
advisory, distribution
and other subsidiaries.
Prior to December 2002,
President and Chief
Executive Officer of
funds in the Fund
Complex. Prior to May
1998, Executive Vice
President and Director of
Marketing at Morgan
Stanley and Director of
Dean Witter, Discover &
Co. and Dean Witter
Realty. Prior to 1996,
Director of Dean Witter
Reynolds Inc.
Wayne W. Whalen* (64) Trustee Trustee Partner in the law firm 88 Trustee/Director/Managing
333 West Wacker Drive since 1997 of Skadden, Arps, Slate, General Partner of funds
Chicago, IL 60606 Meagher & Flom LLP, legal in the Fund Complex.
counsel to funds in the
Fund Complex.
* Such trustee is an "interested person" (within the meaning of Section
2(a)(19) of the 1940 Act). Mr. Whalen is an interested person of certain
funds in the Fund Complex by reason of his firm currently acting as legal
counsel to such funds in the Fund Complex. Messrs. Merin and Powers are
interested persons of funds in the Fund Complex and the Adviser by reason of
their current or former positions with Morgan Stanley or its affiliates.
35
VAN KAMPEN BOND FUND
TRUSTEE AND OFFICER INFORMATION continued
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
Stefanie V. Chang (37) Vice President and Officer Executive Director of Morgan Stanley Investment Management.
1221 Avenue of the Americas Secretary since 2003 Vice President of funds in the Fund Complex.
New York, NY 10020
Joseph J. McAlinden (61) Executive Vice Officer Managing Director and Chief Investment Officer of Morgan
1221 Avenue of the Americas President and since 2002 Stanley Investment Advisors Inc., Morgan Stanley Investment
New York, NY 10020 Chief Investment Management Inc. and Morgan Stanley Investments LP and
Officer Director of Morgan Stanley Trust for over 5 years. Executive
Vice President and Chief Investment Officer of funds in the
Fund Complex. Managing Director and Chief Investment Officer
of Van Kampen Investments, the Adviser and Van Kampen
Advisors Inc. since December 2002.
Ronald E. Robison (65) Executive Vice Officer Chief Executive Officer and Chairman of Investor Services.
1221 Avenue of the Americas President and since 2003 Executive Vice President and Principal Executive Officer of
New York, NY 10020 Principal funds in the Fund Complex. Chief Administrative Officer and
Executive Officer Managing Director of Morgan Stanley. Managing Director and
Director of Morgan Stanley Investment Advisors Inc. and
Morgan Stanley Services Company Inc. Chief Executive Officer
and Director of Morgan Stanley Trust. Executive Vice
President and Principal Executive Officer of the Morgan
Stanley Funds. Director of Morgan Stanley SICAV. Previously,
Chief Global Operations Officer and Managing Director of
Morgan Stanley Investment Management Inc.
John L. Sullivan (48) Vice President, Officer Director and Managing Director of Van Kampen Investments,
1 Parkview Plaza Chief Financial since 1998 the Adviser, Van Kampen Advisors Inc. and certain other
P.O. Box 5555 Officer and subsidiaries of Van Kampen Investments. Vice President,
Oakbrook Terrace, IL 60181 Treasurer Chief Financial Officer and Treasurer of funds in the Fund
Complex. Head of Fund Accounting for Morgan Stanley
Investment Management. Prior to December 2002, Executive
Director of Van Kampen Investments, the Adviser and Van
Kampen Advisors Inc.
36
Van Kampen
Privacy Notice
The Van Kampen companies and investment products* respect your right to privacy.
We also know that you expect us to conduct and process your business in an
accurate and efficient manner. To do so, we must collect and maintain certain
nonpublic personal information about you. This is information we collect from
you on applications or other forms, and from the transactions you conduct with
us, our affiliates, or third parties. We may also collect information you
provide when using our web site, and text files (also known as "cookies") may be
placed on your computer to help us to recognize you and to facilitate
transactions you initiate. We do not disclose any nonpublic personal information
about you or any of our former customers to anyone, except as permitted by law.
For instance, so that we may continue to offer you Van Kampen investment
products and services that meet your investing needs, and to effect transactions
that you request or authorize, we may disclose the information we collect to
companies that perform services on our behalf, such as printers and mailers that
assist us in the distribution of investor materials. These companies will use
this information only for the services for which we hired them, and are not
permitted to use or share this information for any other purpose. To protect
your nonpublic personal information internally, we permit access to it only by
authorized employees, and maintain physical, electronic and procedural
safeguards to guard your nonpublic personal information.
* Includes Van Kampen Investments Inc., Van Kampen Asset Management, Van
Kampen Advisors Inc., Van Kampen Management Inc., Van Kampen Funds Inc., Van
Kampen Investor Services Inc., Van Kampen System Inc. and Van Kampen
Exchange Corp., as well as the many Van Kampen mutual funds and Van Kampen
unit investment trusts.
Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
(VAN KAMPEN INVESTMENTS LOGO)
Copyright (C)2004 Van Kampen
Funds Inc. All rights reserved.
Member NASD/SIPC.
VBF ANR 8/04 RN04-01592P-Y06/04
Item 2. Code of Ethics.
(a) The Fund has adopted a code of ethics (the "Code of Ethics") that applies
to its principal executive officer, principal financial officer, principal
accounting officer or controller, or persons performing similar functions,
regardless of whether these individuals are employed by the Trust or a third
party.
(b) No information need be disclosed pursuant to this paragraph.
(c) The Fund has amended its Code of Ethics during the period covered by the
shareholder report presented in Item 1 hereto.
(d) The Fund has not granted a waiver or an implicit waiver from a provision of
its Code of Ethics.
(e) Not applicable.
(f)
(1) The Fund's Code of Ethics is attached hereto as Exhibit 11A.
(2) Not applicable.
(3) Not applicable.
Item 3. Audit Committee Financial Expert.
The Fund's Board of Trustees has determined that it has three "audit committee
financial experts" serving on its audit committee, each of whom are
"independent" Trustees: J. Miles Branagan, Jerry Choate and R. Craig Kennedy.
Under applicable securities laws, a person who is determined to be an audit
committee financial expert will not be deemed an "expert" for any purpose,
including without limitation for the purposes of Section 11 of the Securities
Act of 1933, as a result of being designated or identified as an audit committee
financial expert. The designation or identification of a person as an audit
committee financial expert does not impose on such person any duties,
obligations, or liabilities that are greater than the duties, obligations, and
liabilities imposed on such person as a member of the audit committee and Board
of Trustees in the absence of such designation or identification.
Item 4. Principal Accountant Fees and Services.
(a)(b)(c)(d) and (g). Based on fees billed for the periods shown:
2004
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES........................... $28,080 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES......... $0 $230,000(2)
TAX FEES................... $1,550(3) $0(4)
ALL OTHER FEES............. $0 $0(5)
TOTAL NON-AUDIT FEES................. $1,550 $230,000
TOTAL................................ $29,630 $230,000
2003
REGISTRANT COVERED ENTITIES(1)
AUDIT FEES............................ $26,376 N/A
NON-AUDIT FEES
AUDIT-RELATED FEES.......... $0 $95,000(2)
TAX FEES.................... $1,500(3) $0(4)
ALL OTHER FEES.............. $0 $0(6)
TOTAL NON-AUDIT FEES.................. $1,500 $95,000
TOTAL................................. $27,876 $95,000
N/A- Not applicable, as not required by Item 4.
(1) Covered Entities include the Adviser (excluding sub-advisors) and
any entity controlling, controlled by or under common control
with the Adviser that provides ongoing services to the
Registrant.
(2) Audit-Related Fees represent assurance and related services
provided that are reasonably related to the performance of the
audit of the financial statements of the Covered Entities' and
funds advised by the Adviser or its affiliates, specifically
attestation services provided in connection with a SAS 70 Report.
(3) Tax Fees represent tax advice and compliance services provided in
connection with the review of the Registrant's tax.
(4) Tax Fees represent tax advice services provided to Covered
Entities, including research and identification of PFIC entities.
(5) All Other Fees represent attestation services provided in
connection with performance presentation standards.
(6) All Other Fees represent attestation services provided in
connection with performance presentation standards, general
industry education seminars provided, and a regulatory review
project performed.
(e)(1) The audit committee's pre-approval policies and procedures are as
follows:
JOINT AUDIT COMMITTEE
AUDIT AND NON-AUDIT SERVICES
PRE-APPROVAL POLICY AND PROCEDURES
OF THE
VAN KAMPEN FUNDS
AS ADOPTED JULY 23, 2003(1)
1. STATEMENT OF PRINCIPLES
The Audit Committee of the Board is required to review and, in its sole
discretion, pre-approve all Covered Services to be provided by the Independent
Auditors to the Fund and Covered Entities in order to assure that services
performed by the Independent Auditors do not impair the auditor's independence
from the Fund.(2)
The SEC has issued rules specifying the types of services that an
independent auditor may not provide to its audit client, as well as the audit
committee's administration of the engagement of the independent auditor. The
SEC's rules establish two different approaches to pre-approving services, which
the SEC considers to be equally valid. Proposed services either: may be
pre-approved without consideration of specific case-by-case services by the
Audit Committee ("general pre-approval"); or require the specific pre-approval
of the Audit Committee ("specific pre-approval"). The Audit Committee believes
that the combination of these two approaches in this Policy will result in an
effective and efficient procedure to pre-approve services performed by the
Independent Auditors. As set forth in this Policy, unless a type of service has
received general pre-approval, it will require specific pre-approval by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
authority has been delegated) if it is to be provided by the Independent
Auditors. Any proposed services exceeding pre-approved cost levels or budgeted
amounts will also require specific pre-approval by the Audit Committee.
For both types of pre-approval, the Audit Committee will consider
whether such services are consistent with the SEC's rules on auditor
independence. The Audit Committee will also consider whether the Independent
Auditors are best positioned to provide the most effective and efficient
services, for reasons such as its familiarity with the Fund's business, people,
culture, accounting systems, risk profile and other factors, and whether the
service might enhance the Fund's ability to manage or control risk or improve
audit quality. All such factors will be considered as a whole, and no one factor
should necessarily be determinative.
The Audit Committee is also mindful of the relationship between fees
for audit and non-audit services in deciding whether to pre-approve any such
services and may determine for each fiscal year, the appropriate ratio between
the total amount of fees for Audit, Audit-related and Tax services for the Fund
(including any Audit-related or Tax service fees for Covered Entities that were
subject to pre-approval), and the total amount of fees for certain permissible
non-audit services classified as All Other services for the Fund (including any
such services for Covered Entities subject to pre-approval).
The appendices to this Policy describe the Audit, Audit-related, Tax
and All Other services that have the general pre-approval of the Audit
Committee. The term of any general pre-approval is 12 months from the date of
pre-approval, unless the Audit Committee considers and provides a different
period and states otherwise. The Audit Committee will annually review and
pre-approve the services that may be provided by the Independent Auditors
without obtaining specific pre-approval
------------------------
(1) This Joint Audit Committee Audit and Non-Audit Services Pre-Approval
Policy and Procedures (the "Policy"), adopted as of the date above, supercedes
and replaces all prior versions that may have been adopted from time to time.
(2) Terms used in this Policy and not otherwise defined herein shall have the
meanings as defined in the Joint Audit Committee Charter.
from the Audit Committee. The Audit Committee will add to or subtract from the
list of general pre-approved services from time to time, based on subsequent
determinations.
The purpose of this Policy is to set forth the policy and procedures by
which the Audit Committee intends to fulfill its responsibilities. It does not
delegate the Audit Committee's responsibilities to pre-approve services
performed by the Independent Auditors to management.
The Fund's Independent Auditors have reviewed this Policy and believes
that implementation of the Policy will not adversely affect the Independent
Auditors' independence.
2. DELEGATION
As provided in the Act and the SEC's rules, the Audit Committee may
delegate either type of pre-approval authority to one or more of its members.
The member to whom such authority is delegated must report, for informational
purposes only, any pre-approval decisions to the Audit Committee at its next
scheduled meeting.
3. AUDIT SERVICES
The annual Audit services engagement terms and fees are subject to the
specific pre-approval of the Audit Committee. Audit services include the annual
financial statement audit and other procedures required to be performed by the
Independent Auditors to be able to form an opinion on the Fund's financial
statements. These other procedures include information systems and procedural
reviews and testing performed in order to understand and place reliance on the
systems of internal control, and consultations relating to the audit. The Audit
Committee will monitor the Audit services engagement as necessary, but no less
than on a quarterly basis, and will also approve, if necessary, any changes in
terms, conditions and fees resulting from changes in audit scope, Fund structure
or other items.
In addition to the annual Audit services engagement approved by the
Audit Committee, the Audit Committee may grant general pre-approval to other
Audit services, which are those services that only the Independent Auditors
reasonably can provide. Other Audit services may include statutory audits and
services associated with SEC registration statements (on Forms N-1A, N-2, N-3,
N-4, etc.), periodic reports and other documents filed with the SEC or other
documents issued in connection with securities offerings.
The Audit Committee has pre-approved the following Audit services. All
other Audit services not listed below must be specifically pre-approved by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
has been delegated):
- Statutory audits or financial audits for the Fund
- Services associated with SEC registration statements (including new
funds), periodic reports and other documents filed with the SEC or
other documents issued in connection with securities offerings (e.g.,
comfort letters for closed-end fund offerings, consents), and
assistance in responding to SEC comment letters
- Consultations by the Fund's management as to the accounting or
disclosure treatment of transactions or events and/or the actual or
potential impact of final or proposed rules, standards or
interpretations by the SEC, FASB, or other regulatory or standard
setting bodies (Note: Under SEC rules, some consultations may be
"audit related" services rather than "audit" services)
4. AUDIT-RELATED SERVICES
Audit-related services are assurance and related services that are
reasonably related to the performance of the audit or review of the Fund's
financial statements or, to the extent they are Covered Services, the Covered
Entities' financial statements, or that are traditionally performed by
the Independent Auditors. Because the Audit Committee believes that the
provision of Audit-related services does not impair the independence of the
auditor and is consistent with the SEC's rules on auditor independence, the
Audit Committee may grant general pre-approval to Audit-related services.
Audit-related services include, among others, accounting consultations related
to accounting, financial reporting or disclosure matters not classified as
"Audit services"; assistance with understanding and implementing new accounting
and financial reporting guidance from rulemaking authorities; agreed-upon or
expanded audit procedures related to accounting and/or billing records required
to respond to or comply with financial, accounting or regulatory reporting
matters; and assistance with internal control reporting requirements under Forms
N-SAR and/or N-CSR.
The Audit Committee has pre-approved the following Audit-related
services. All other Audit-related services not listed below must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated):
- Attest procedures not required by statute or regulation (including
agreed upon procedures related to the Closed-End Fund asset coverage
tests required by the rating agencies and/or lenders)
- Due diligence services pertaining to potential fund mergers
- Issuance of SAS-70 reports on internal controls of Morgan Stanley
Trust Co. and MSIM Trade Operations
- Consultations by the Fund's management as to the accounting or
disclosure treatment of transactions or events and/or the actual or
potential impact of final or proposed rules, standards or
interpretations by the SEC, FASB, or other regulatory or
standard-setting bodies (Note: Under SEC rules, some consultations may
be "audit" services rather than "audit-related" services)
- Information systems reviews not performed in connection with the audit
(e.g., application data center and technical reviews)
- General assistance with implementation of the requirements of SEC
rules or listing standards promulgated pursuant to the Sarbanes-Oxley
Act
- Audit of record keeping services performed by Morgan Stanley Trust
Fund related to the New Jersey State Retirement Plan
5. TAX SERVICES
The Audit Committee believes that the Independent Auditors can provide
Tax services to the Fund and, to the extent they are Covered Services, the
Covered Entities, such as tax compliance, tax planning and tax advice without
impairing the auditor's independence, and the SEC has stated that the
Independent Auditors may provide such services. Hence, the Audit Committee
believes it may grant general pre-approval to those Tax services that have
historically been provided by the Independent Auditors, that the Audit Committee
has reviewed and believes would not impair the independence of the Independent
Auditors, and that are consistent with the SEC's rules on auditor independence.
The Audit Committee will not permit the retention of the Independent Auditors in
connection with a transaction initially recommended by the Independent Auditors,
the sole business purpose of which may be tax avoidance and the tax treatment of
which may not be supported in the Internal Revenue Code and related regulations.
The Audit Committee will consult with Director of Tax or outside counsel to
determine that the tax planning and reporting positions are consistent with this
policy.
Pursuant to the preceding paragraph, the Audit Committee has
pre-approved the following Tax Services. All Tax services involving large and
complex transactions not listed below must be specifically pre-approved by the
Audit Committee (or by any member of the Audit Committee to which pre-approval
has been delegated), including tax services proposed to be provided by the
Independent Auditors to any executive officer or trustee/director/managing
general partner of the Fund, in his or her individual capacity, where such
services are paid for by the Fund (generally applicable only to internally
managed investment companies):
- U.S. federal, state and local tax planning and advice
- U.S. federal, state and local tax compliance
- International tax planning and advice
- International tax compliance
- Review of federal, state, local and international income, franchise,
and other tax returns
- Identification of Passive Foreign Investment Companies
- Review of closed-end funds pro rata allocation of taxable income and
capital gains to common and preferred shares
- Domestic and foreign tax planning, compliance, and advice
- Assistance with tax audits and appeals before the IRS and similar
state, local and foreign agencies
- Tax advice and assistance regarding statutory, regulatory or
administrative developments (e.g., excise tax reviews, evaluation of
Fund's tax compliance function)
- Review the calculations of taxable income from corporate actions
including reorganizations related to bankruptcy filings and provide
guidance related to the foregoing
6. ALL OTHER SERVICES
The Audit Committee believes, based on the SEC's rules prohibiting the
Independent Auditors from providing specific non-audit services, that other
types of non-audit services are permitted. Accordingly, the Audit Committee
believes it may grant general pre-approval to those permissible non-audit
services classified as All Other services that it believes are routine and
recurring services, would not impair the independence of the auditor and are
consistent with the SEC's rules on auditor independence.
The Audit Committee has pre-approved the following All Other services.
Permissible All Other services not listed below must be specifically
pre-approved by the Audit Committee (or by any member of the Audit Committee to
which pre-approval has been delegated):
- Risk management advisory services, e.g., assessment and testing of
security infrastructure controls
The following is a list of the SEC's prohibited non-audit services. The
SEC's rules and relevant guidance should be consulted to determine the precise
definitions of these services and the applicability of exceptions to certain of
the prohibitions:
- Bookkeeping or other services related to the accounting records or
financial statements of the audit client
- Financial information systems design and implementation
- Appraisal or valuation services, fairness opinions or
contribution-in-kind reports
- Actuarial services
- Internal audit outsourcing services
- Management functions
- Human resources
- Broker-dealer, investment adviser or investment banking services
- Legal services
- Expert services unrelated to the audit
7. PRE-APPROVAL FEE LEVELS OR BUDGETED AMOUNTS
Pre-approval fee levels or budgeted amounts for all services to be
provided by the Independent Auditors will be established annually by the Audit
Committee. Any proposed services exceeding these levels or amounts will require
specific pre-approval by the Audit Committee. The Audit Committee is mindful of
the overall relationship of fees for audit and non-audit services in determining
whether to pre-approve any such services. For each fiscal year, the Audit
Committee may determine the appropriate ratio between the total amount of fees
for Audit, Audit-related, and Tax services for the Fund (including any
Audit-related or Tax services fees for Covered Entities subject to
pre-approval), and the total amount of fees for certain permissible non-audit
services classified as All Other services for the Fund (including any such
services for Covered Entities subject to pre-approval).
8. PROCEDURES
All requests or applications for services to be provided by the
Independent Auditors that do not require specific approval by the Audit
Committee will be submitted to the Fund's Chief Financial Officer and must
include a detailed description of the services to be rendered. The Fund's Chief
Financial Officer will determine whether such services are included within the
list of services that have received the general pre-approval of the Audit
Committee. The Audit Committee will be informed on a timely basis of any such
services rendered by the Independent Auditors. Requests or applications to
provide services that require specific approval by the Audit Committee will be
submitted to the Audit Committee by both the Independent Auditors and the Fund's
Chief Financial Officer, and must include a joint statement as to whether, in
their view, the request or application is consistent with the SEC's rules on
auditor independence.
The Audit Committee has designated the Fund's Chief Financial Officer
to monitor the performance of all services provided by the Independent Auditors
and to determine whether such services are in compliance with this Policy. The
Fund's Chief Financial Officer will report to the Audit Committee on a periodic
basis on the results of its monitoring. Both the Fund's Chief Financial Officer
and management will immediately report to the chairman of the Audit Committee
any breach of this Policy that comes to the attention of the Fund's Chief
Financial Officer or any member of management.
9. ADDITIONAL REQUIREMENTS
The Audit Committee has determined to take additional measures on an
annual basis to meet its responsibility to oversee the work of the Independent
Auditors and to assure the auditor's independence from the Fund, such as
reviewing a formal written statement from the Independent Auditors delineating
all relationships between the Independent Auditors and the Fund, consistent with
Independence Standards Board No. 1, and discussing with the Independent Auditors
its methods and procedures for ensuring independence.
10. COVERED ENTITIES
Covered Entities include the Fund's investment adviser(s) and any
entity controlling, controlled by or under common control with the Fund's
investment adviser(s) that provides ongoing services to the Fund(s). Beginning
with non-audit service contracts entered into on or after May 6, 2003, the
Fund's audit committee must pre-approve non-audit services provided not only to
the Fund but also to the Covered Entities if the engagements relate directly to
the operations and financial reporting of the Fund. This list of Covered
Entities would include:
- Van Kampen Investments, Inc.
- Van Kampen Investment Advisory Corporation
- Van Kampen Asset Management Inc.
- Van Kampen Advisors Inc.
- Van Kampen Funds Inc.
- Van Kampen Trust Company
- Van Kampen Investor Services Inc.
- Van Kampen Management Inc.
- Morgan Stanley Investment Management Inc.
- Morgan Stanley Investments LP
- Morgan Stanley Trust Company
(e)(2) Beginning with non-audit service contracts entered into on or after May
6, 2003, the audit committee also is required to pre-approve services to Covered
Entities to the extent that the services are determined to have a direct impact
on the operations or financial reporting of the Registrant. 100% of such
services were pre-approved by the audit committee pursuant to the Audit
Committee's pre-approval policies and procedures (attached hereto).
(f) Not applicable.
(g) See table above.
(h) The audit committee of the Board of Trustees has considered whether the
provision of services other than audit services performed by the auditors to the
Registrant and Covered Entities is compatible with maintaining the auditors'
independence in performing audit services.
Item 5. Audit Committee of Listed Registrants.
Not applicable.
Item 6. [Reserved.]
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End
Management Investment Companies.
The Fund invests in exclusively non-voting securities and therefore this item is
not applicable to the Fund.
Item 8. Purchase of Equity Securities by Closed-End Management Investment
Company and Affiliated Purchasers.
Not Applicable.
Item 9. Submission of Matters to a Vote of Security Holders.
Not Applicable.
Item 10. Controls and Procedures
(a) The Fund's principal executive officer and principal financial officer have
concluded that the Fund's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case of an annual report) that
has materially affected, or is reasonably likely to materially affect, the
registrant's internal control over financial reporting.
Item 11. Exhibits.
(a) The Code of Ethics for Principal Executive and Senior Financial Officers is
attached hereto.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Van Kampen Bond Fund
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 19, 2004
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: August 19, 2004
By: /s/ James M. Dykas
---------------------
Name: James M. Dykas
Title: Principal Financial Officer
Date: August 19, 2004