SUPPLEMENTED DATED MARCH 7, 2005
TO THE
STATEMENT OF ADDITIONAL INFORMATION
DATED DECEMBER 30, 2004
VAN KAMPEN HIGH YIELD FUND,
AS PREVIOUSLY SUPPLEMENTED ON FEBRUARY 2, 2005
The Statement of Additional Information is hereby supplemented as follows:
The following is added after the first paragraph in the section entitled
"INVESTMENT OBJECTIVE, PRINCIPAL INVESTMENT STRATEGIES AND RISKS -- SECURITIES
OF FOREIGN ISSUERS:"
FOREIGN CURRENCY EXCHANGE RISKS. To the extent the Fund invests in
securities denominated or quoted in currencies other than the U.S. dollar,
the Fund will be affected by changes in foreign currency exchange rates
(and exchange control regulations) which affect the value of investments in
the Fund and the income and appreciation or depreciation of the
investments. Changes in foreign currency exchange ratios relative to the
U.S. dollar will affect the U.S. dollar value of the Fund's assets
denominated in that currency and the Fund's yield on such assets. In
addition, the Fund will incur costs in connection with conversions between
various currencies.
The Fund's foreign currency exchange transactions may be conducted on
a spot basis (that is, cash basis) at the spot rate for purchasing or
selling currency prevailing in the foreign currency exchange market. The
Fund also may enter into contracts with banks, brokers or dealers to
purchase or sell securities or foreign currencies at a future date
("forward contracts"). A foreign currency forward contract is a negotiated
agreement between the contracting parties to exchange a specified amount of
currency at a specified future time at a specified rate. The rate can be
higher or lower than the spot rate between the currencies that are the
subject of the contract.
The Fund may attempt to protect against adverse changes in the value
of the U.S. dollar in relation to a foreign currency by entering into a
forward contract for the purchase or sale of the amount of foreign currency
invested or to be invested or by buying or selling a foreign currency
option or futures contract for such amount. Such strategies may be employed
before the Fund purchases a foreign security traded in the currency which
the Fund anticipates acquiring or between the date the foreign security is
purchased or sold and the date on which payment therefor is made or
received. Seeking to protect against a change in the value of a foreign
currency in the foregoing manner does not eliminate Fluctuations in the
prices of portfolio securities or prevent losses if the prices of such
securities decline. Furthermore, such transactions reduce or preclude the
opportunity for gain if the value of the currency should move in the
direction opposite to the position taken. Unanticipated changes in currency
prices may result in poorer overall performance for the Fund than if it had
not entered into such contracts. The Fund is not required to enter into
such transactions with regard to its foreign currency-denominated
securities. It also should be realized that this method of protecting the
value of portfolio securities against a decline in the value of a currency
does not eliminate fluctuations in the underlying prices of the securities.
It simply establishes a rate of exchange which one can achieve at some
future point in time. In addition, although such contracts tend to minimize
the risk of loss due to a decline in the value of the hedged currency, at
the same time, they tend to limit any potential gain which might result
should the value of such currency increase.
The Fund may cross-hedge currencies by entering into a transaction to
purchase or sell one or more currencies that are expected to decline in
value relative to other currencies to which a portfolio has or expects to
have portfolio exposure. The Fund may also engage in proxy hedging, which
is defined as entering into positions in one currency to hedge investments
denominated in another currency, where two currencies are economically
linked. The Fund's entry into forward contracts, as well as any use of
proxy or cross hedging techniques, will generally require the Fund to
segregate cash and/or liquid securities at least equal to the Fund's
obligations throughout the duration of the contract. The Fund may combine
forward contracts with investments in securities denominated in other
currencies to achieve desired security and currency exposures. Such
combinations are generally referred to as synthetic securities. For
example, in lieu of purchasing a foreign bond, the Fund may purchase a U.S.
dollar-denominated security and at the same time enter into a forward
contract to exchange U.S. dollars for the contract's underlying currency at
a future date. By matching the amount of U.S. dollars to be exchanged with
the anticipated value of the U.S. dollar-denominated security, the Fund may
be able to lock in the foreign currency value of the security and adopt a
synthetic position reflecting the credit quality of the U.S. dollar-
denominated security.
To the extent required by the rules and regulations of the SEC, the
Fund will segregate cash and/or liquid securities in an amount at least
equal to the value of the Fund's total assets committed to the consummation
of forward foreign currency exchange contracts. If the value of the
segregated assets declines, additional cash and/or liquid securities will
be segregated on a daily basis so that the value of the segregated assets
will be at least equal to the amount of the Fund's commitments with respect
to such contracts.
PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE
HYFSPT305