Dynamic Credit Opportunities (VTA) April Dividend Reduction
The dividend reduction in the Van Kampen Dynamic Credit Opportunities Fund (VTA) reflects
the recent decline in short term interest rates. This Fund invests primarily in floating rate
senior secured loans that typically pay a fixed spread over LIBOR that re-sets to the current
level of LIBOR every 30-90 days. As a result, the income generated by the portfolio is impacted
by changes in short-term interest rates (LIBOR). Since the beginning of the year, the Federal
Reserve has been aggressively reducing the Federal Funds rate target, which in turn has
cause the level of LIBOR to decline. The level of LIBOR has declined approximately 2.00% this
year, which has reduced the level of income generated by the portfolio. A dividend reduction
was necessary to ensure that the distribution rate of the Fund reflects the earnings of the
underlying portfolio.
Investing in closed-end funds involves risk and it is possible to lose money on any
closed-end fund investment.
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