Closed-End Strategy: Master Income Portfolio, Series 28...

Closed-End Strategy: Master Income Portfolio, Series 28

Closed-End Strategy: Master Municipal Income Portfolio – National Series 24

Closed-End Strategy: Value Equity and Income Portfolio 2011-3

Closed-End Strategy: Covered Call Income Portfolio 2011-3

The unit investment trusts named above (the “Portfolios”), included in Van Kampen Unit Trusts, Series 1120,each invest in a portfolio of closed-end investment companies (known as “closed-end funds”). Of course, wecannot guarantee that a Portfolio will achieve its objective.

An investment can be made in the underlying funds directly rather than through a Portfolio. These directinvestments can be made without paying the Portfolio sales charge, operating expenses and organization costs.

July 5, 2011

You should read this prospectus and retain it for future reference.

The Securities and Exchange Commission has not approved or disapproved of the Unitsor passed upon the adequacy or accuracy of this prospectus.

Any contrary representation is a criminal offense.

INVESCO

Investment Objective. The Portfolio seeks highcurrent income.

Principal Investment Strategy. The Portfolioseeks to achieve its objective by investing in aportfolio consisting of common stock of closed-endinvestment companies (known as “closed-endfunds”) selected by Cohen & Steers Capita lManagement, Inc. Van Kampen Funds Inc. is theSponsor of the Portfolio. These closed-end fundsgeneral ly seek to invest in income-producingsecurities or strategies, such as preferred securities,convertible bonds, real estate investment trusts(REITs), high yield securities, emerging marketsbonds, corporate bonds, covered cal l opt ionstrategies and other income-oriented strategies.

In selecting funds for the Portfolio, Cohen & Steerssought to select funds with strong fundamentals,well-known advisors with experience managing theasset class and diversification of sector and assetclass. In addition, in selecting funds for the Portfolio,Cohen & Steers sought to select funds with dailytrading volumes generally greater than $750,000 perday and funds with market capitalization generallygreater than $200 million. There can be no guaranteethat a particular fund in the Portfolio will satisfy thecriteria set forth above.

Cohen & Steers believes that there is a compellinginvestment opportunity in the secondary market forclosed-end funds. Cohen & Steers believes that fiveprimary factors support this investment case,including:

• Rising Demand for Dividend Income – Cohen &Steers believes that the potential for risingdemand for dividend income exists due to theaging of America, lower tax rates, the inflationprotection that may be offered by r isingdividends, and the low return environment. Ofcourse, there can be no assurance that thePortfolio or the underlying funds will provideincome in the future.

• Growth in the Number and Types of Closed-EndFund New Issues – Since 2001, the closed-endfund market has grown by over $140 billion, to atotal size in excess of $200 billion. There arenow over 600 l isted closed-end funds.Underlying asset classes have expanded toinclude significant volumes of funds focused oncategories such as equity dividends, coveredcall option writing, REITs, utilities, energy, seniorloan securities, convertible securities and limitedduration bonds.

• Lack of Research and Institutional Capital –Historically, activity in the closed-end fundmarket has been dominated by individualinvestors, with only a handful of professionalinvestors and institutional sources of capital.Due to a variety of historical factors,institutional participation in the closed-end fundmarket currently remains low.

• Need for Professional Selection – Manyinvestors and financial advisors do not have thetime or resources to assess dividend quality,leverage, net asset value risk, and historicalmarket valuation to net asset value of closedend funds.

• Discounts to Net Asset Value – Currentdiscounts to net asset value in many funds andsectors may offer a timely opportunity toacquire attractive funds with income potentialat a discount to their intrinsic value.

Approximately 40% of the closed-end funds in thePortfolio are funds classified as “non-diversified” underthe Investment Company Act of 1940. These fundshave the ability to invest a greater portion of theirassets in obligations of a single issuer. As a result,these funds may be more susceptible to volatility thana more diversified fund.

Of course, we cannot guarantee that your Portfoliowill achieve its objective. The value of your Units mayfall below the price you paid for the Units. You shouldread the “Risk Factors” section before you invest.

2

Closed-End Strategy: Master Income Portfolio

3

The Portfolio Consultant. Founded in 1986,Cohen & Steers Capital Management Inc. is amanager of portfolios specializing in U.S. REITs,international real estate securities, large cap valuestocks, listed infrastructure and utilities, and preferredsecurities. As of March 31, 2011, Cohen & SteersCapital Management Inc. had $38.0 billion in assetsunder management. Cohen & Steers managesseparate account portfolios for institutional investors,including some of the world’s largest pension fundsand endowments. In addition, the firm manages open-and closed-end funds for both retail and institutionalinvestors. Cohen & Steers is among the largest REITmanagers in the U.S. and employs a significantresearch and trading staff. Many investors have cometo view Cohen & Steers as an important source forincome-oriented investment products. Cohen & Steersalso acts as Supervisor of the Portfolio. As describedabove, Cohen & Steers advises other clients such asinvestment companies and other accounts. Many ofthese client accounts are “managed” accounts. ThePortfolio is not a managed fund and will generally notsell or replace Securities. Please refer to “Objectivesand Securities Selection” for a discussion of Cohen &Steers’ activities regarding the advisory accounts of itsother clients and the effect these activities may haveon the Securities in the Portfolio.

Principal Risks. As with all investments, you canlose money by investing in this Portfolio. The Portfolioalso might not perform as well as you expect. This canhappen for reasons such as these:

• Security prices will fluctuate. The value ofyour investment may fall over time.

• The value of the securities in theclosed-end funds will generally fall ifinterest rates, in general, rise. No onecan predict whether interest rates will rise or fallin the future.

• A security issuer may be unable to makeinterest and/or principal payments in thefuture. This may reduce the level of dividendsa closed-end fund pays which would reduce

your income and cause the value of your Unitsto fall.

• The financial condition of a securityissuer may worsen or its credit ratingsmay drop, resulting in a reduction in thevalue of your Units. This may occur at anypoint in time, including during the primaryoffering period.

• The Portfolio invests in shares ofclosed-end funds. You should understandthe section titled “Closed-End Funds” beforeyou invest. In particular, shares of these fundstend to trade at a discount from their netasset value and are subject to risks related tofactors such as management’s abil i ty toachieve a fund’s objective, market conditionsaffecting a fund’s investments and use ofleverage. The Portfolio and the underlyingfunds have management and operat ingexpenses. You will bear not only your share ofthe Port fo l io’s expenses, but a lso theexpenses of the under ly ing funds. Byinvesting in other funds, the Portfolio incursgreater expenses than you would incur if youinvested directly in the funds.

• Certain of the closed-end funds mayinvest in securities of foreign issuers,presenting risks beyond those of U.S.issuers. These risks may include market andpolitical factors related to an issuer’s foreignmarket, international trade conditions, lessregulation, smaller or less liquid markets,increased volatility, differing accounting and taxpractices and changes in the value of foreigncurrencies which may have both economic andtax consequences.

• The closed-end funds may invest insecurities rated below investment gradeand are considered to be “junk”securities. These securities are considered tobe speculative and are subject to greatermarket and credit risks. Accordingly, the risk of

default is higher than investment gradesecurities. In addition, these securities may bemore sensitive to interest rate changes andmay be more likely to make early returns ofprincipal.

• We do not actively manage the Portfolio.While the closed-end funds have managedportfolios, except in limited circumstances, thePortfolio will hold, and continue to buy, sharesof the same funds even if their market valuedeclines.

4

Fee Table

The amounts below are estimates of the direct and indirectexpenses that you may incur based on a $10 Public Offering Price perUnit. Actual expenses may vary.

As a % ofPublic Amount

Offering Per 100Sales Charge Price Units_________ _________

Initial sales charge 1.000% $10.000Deferred sales charge 1.450 14.500Creation and development fee 0.500 5.000______ ______Maximum sales charge 2.950% $29.500______ ____________ ______

As a % Amountof Net Per 100Assets Units_________ _________

Estimated Organization Costs 0.426% $ 4.120______ _____________ _______

Estimated Annual Expenses Trustee’s fee and operating expenses 0.277% $ 2.683Supervisory fee 0.025 0.242Bookkeeping and administrative fees 0.016 0.150Estimated underlying funds’ expenses 1.470 14.207______ _______

Total 1.788% $17.282*______ _____________ _______

Example

This example helps you compare the cost of the Portfolio with otherunit trusts and mutual funds. In the example we assume that the expensesdo not change and that the Portfolio’s annual return is 5%. Your actualreturns and expenses will vary. This example also assumes that youcontinue to follow the Portfolio strategy and roll your investment, includingall distributions, into a new trust each year subject to a reduced rolloversales charge of 1.95%. Based on these assumptions, you would pay thefollowing expenses for every $10,000 you invest in the Portfolio:

1 year $ 5093 years 1,3275 years 2,15610 years 4,281

* The estimated annual expenses are based upon the estimated trust sizefor the Portfolio determined as of the initial date of deposit. Becausecertain of the operating expenses are fixed amounts, if the Portfolio doesnot reach the estimated size, or if the value of the Portfolio or number ofoutstanding units decline over the life of the trust, or if the actual amountof the operating expenses exceeds the estimated amounts, the actualamount of the operating expenses per 100 units would exceed theestimated amounts. In some cases, the actual amount of operatingexpenses may substantially differ from the amounts reflected above.

The maximum sales charge is 2.95% of the Public Offering Price perUnit. The initial sales charge is the difference between the total sales charge(maximum of 2.95% of the Public Offering Price) and the sum of theremaining deferred sales charge and the total creation and developmentfee. The deferred sales charge is fixed at $0.145 per Unit and accrues dailyfrom November 10, 2011 through April 9, 2012. Your Portfolio pays aproportionate amount of this charge on the 10th day of each monthbeginning in the accrual period until paid in full. The combination of the initialand deferred sales charges comprises the “transactional sales charge”. Thecreation and development fee is fixed at $0.05 per Unit and is paid at theearlier of the end of the initial offering period (anticipated to be three months)or six months following the Initial Date of Deposit. The Portfolio assesses theSupervisory Fee as a percentage of the daily net asset value (0.025%).Other annual expenses are assessed as dollar amounts per Unit.

Although not an actual operating expense, the Portfolio, andtherefore the Unitholders, will indirectly bear the operating expenses ofthe funds held by the Portfolio in the estimated amount provided above.Estimated fund expenses are based upon the net asset value of thenumber of fund shares held by the Portfolio per Unit multiplied by theannual operating expenses of the funds for the most recent fiscal year.

Essential Information

Unit Price at Initial Date of Deposit $10.0000Initial Date of Deposit July 5, 2011Mandatory Termination Date October 4, 2012Estimated Net Annual Income1,2 $0.71267 per UnitRecord Dates2 10th day of each monthDistribution Dates2 25th day of each monthCUSIP Numbers Cash – 92121P345

Reinvest – 92121P352Wrap Fee Cash – 92121P360

Wrap Fee Reinvest – 92121P378

1 As of close of business day prior to Initial Date of Deposit. The actualdistributions you receive will vary from the estimated amount due tochanges in the Portfolio’s fees and expenses, in actual income receivedby the Portfolio, currency fluctuations and with changes in the Portfoliosuch as the acquisition or liquidation of securities. See “Rights ofUnitholders--Estimated Distributions.”

2 The Trustee will make distributions of income and capital on eachmonthly Distribution Date to Unitholders of record on the precedingRecord Date, provided that the total cash held for distribution equals atleast $0.01 per Unit. Undistributed income and capital will be distributedin the next month in which the total cash held for distribution equals atleast $0.01 per Unit. Based on the foregoing, it is currently estimated thatthe initial distribution will occur in August 2011.

5

6


Portfolio____________________________________________________________________________________________________________Current Cost of

Number Market Value Dividend Securities toof Shares Name of Issuer (1) per Share (2) Yield (3) Portfolio (2) __________ ___________________________________ _______________ ___________ _____________

Covered Call and Income - 13.32%338 BlackRock Enhanced Capital and

Income Fund, Inc. $ 14.60 9.86% $ 4,934.80388 Eaton Vance Tax-Managed Buy-Write

Opportunities Fund 12.85 10.34 4,985.80408 Eaton Vance Tax-Managed Global

Buy-Write Opportunities Fund 12.15 9.96 4,957.20471 Eaton Vance Tax-Managed Global

Diversified Equity Income Fund 10.56 10.77 4,973.76Emerging Markets Debt - 3.33%

324 AllianceBernstein Global High Income Fund, Inc. 15.30 7.84 4,957.20

Energy - 3.32%170 BlackRock Energy and Resources Trust 29.13 5.56 4,952.10

General Mortgage - 3.35%232 Western Asset Mortgage Defined

Opportunity Fund, Inc. 21.50 7.81 4,988.00Global Equity - 6.68%

334 Clough Global Equity Fund 14.95 7.76 4,993.30237 ING Infrastructure, Industrials and

Materials Fund 20.96 8.59 4,967.52Global Equity Dividend - 3.33%

809 Alpine Total Dynamic Dividend Fund 6.14 10.75 4,967.26Global Income - 9.99%

285 First Trust/Aberdeen Global Opportunity Income Fund 17.39 8.97 4,956.15

717 MFS Multimarket Income Trust 6.92 7.63 4,961.64379 Western Asset Global High Income

Fund, Inc. 13.10 8.82 4,964.90Government - 3.31%

625 AllianceBernstein Income Fund, Inc. 7.89 6.08 4,931.25High Yield/High Income - 9.98%

676 BlackRock Corporate High Yield Fund III, Inc. 7.31 8.21 4,941.56405 BlackRock Corporate High Yield Fund V, Inc. 12.24 8.33 4,957.20254 Western Asset High Yield Defined

Opportunity Fund, Inc. 19.56 9.02 4,968.24Investment Grade - 3.34%

262 Western Asset Global Corporate Defined Opportunity Fund, Inc. 18.97 8.22 4,970.14

7


Portfolio (continued)____________________________________________________________________________________________________________Current Cost of


Limited Duration - 6.66%297 Eaton Vance Limited Duration Income

Fund $ 16.73 7.47% $ 4,968.81321 Wells Fargo Advantage Multi-Sector

Income Fund 15.42 7.78 4,949.82Master Limited Partnerships - 3.32%

197 Kayne Anderson Midstream/Energy Fund, Inc. 25.15 0.00 4,954.55

Multi-Sector - 3.33%540 Nuveen Multi-Strategy Income and

Growth Fund 2 9.20 8.26 4,968.00Preferred and Income - 3.33%

394 John Hancock Premium Dividend Fund 12.60 7.19 4,964.40Real Estate - 3.35%

687 Alpine Global Premier Properties Fund 7.27 5.45 4,994.49Senior Loan - 6.67%

354 BlackRock Floating Rate Income Strategies Fund II, Inc. 14.08 6.22 4,984.32

682 Eaton Vance Senior Income Trust 7.27 5.45 4,958.14Tax-Advantaged Dividend/Tax-Managed Dividend - 13.39%

285 Eaton Vance Tax-Advantaged Dividend Income Fund 17.49 7.38 4,984.65

323 Eaton Vance Tax-Advantaged Global Dividend Income Fund 15.39 7.99 4,970.97

296 Gabelli Dividend & Income Trust 16.89 5.68 4,999.44372 Nuveen Tax-Advantaged Dividend Growth

Fund 13.40 7.76 4,984.80__________ ____________

12,062 $ 149,010.41__________ ______________________ ____________

See “Notes to Portfolios”.

Investment Objective. The Portfolio seeks toprovide income exempt from federal income tax.

Principal Investment Strategy. The Portfolioseeks to achieve its objective by investing in a portfolioconsisting of common stock of closed-end investmentcompanies (known as “closed-end funds”) selected byCohen & Steers Capital Management, Inc. (the“Portfolio Consultant”). Van Kampen Funds Inc. is theSponsor of the Portfolio. These closed-end fundsgenerally seek to invest in tax-exempt municipalbonds. Income may be subject to the alternativeminimum tax and state and local taxes.

The Portfolio Consultant sought to construct awell-diversified portfolio of leveraged closed-end fundsthat have strong fundamentals and are advised bywell-regarded managers in this asset class. Cohen &Steers believes that the large number of national andsingle state municipal closed-end funds – there arenearly 250 funds at this time – contribute to secondarymarket inefficiencies in this sector. In selecting fundsfor the Portfolio, the Portfolio Consultant generallyconsidered only funds with a ten-day average dailytrading volume greater than $300,000 and a marketcapitalization greater than $200,000,000 at the time ofselection. In general, after screening out funds that didnot meet the above criteria, Cohen & Steers thenapplied a proprietary selection methodology forincluding funds in the Portfolio. The Cohen & Steersproprietary methodology evaluates a series of factors,including, but not limited to, the following factors:

• Current dividend yield;

• Share price premium/discount to net assetvalue;

• Amount and type of leverage in the capitalstructure;

• Estimate of fund earnings power;

• Embedded dividend payment cushion;

• Expense ratios;

• Historical track record; and

• History with regard to dividend changes.

After evaluating each of the screened funds, thePortfolio Consultant uses its proprietary valuationmodel to score each fund. Funds advised by theSponsor, the Portfolio Consultant and their affiliateswere excluded from consideration for the Portfolio inan effort to maintain independence in the portfolioselection process.

Approximately 37% of the closed-end funds in thePortfolio are funds classified as “non-diversified” underthe Investment Company Act of 1940. These fundshave the ability to invest a greater portion of theirassets in obligations of a single issue. As a result,these funds may be more susceptible to volatility thana more diversified fund.

The Portfolio Consultant. Founded in 1986, Cohen& Steers Capital Management Inc. is a manager ofportfolios specializing in U.S. REITs, international realestate securities, large cap value stocks, l istedinfrastructure and utilities, and preferred securities. Asof March 31, 2011, Cohen & Steers CapitalManagement Inc. had $38.0 billion in assets undermanagement. Cohen & Steers manages separateaccount portfolios for institutional investors, includingsome of the world’s largest pension funds andendowments. In addition, the firm manages open-and closed-end funds for both retail and institutionalinvestors. Cohen & Steers is among the largest REITmanagers in the U.S. and employs a significantresearch and trading staff. Many investors have cometo view Cohen & Steers as an important source forincome-oriented investment products. Cohen &Steers also acts as Supervisor of the Portfolio. Asdescribed above, Cohen & Steers advises otherclients such as investment companies and otheraccounts. Many of these cl ient accounts are“managed” accounts. The Portfolio is not a managedfund and will generally not sell or replace Securities.Please refer to “Objectives and Securities Selection”for a discussion of Cohen & Steers’ act iv i t iesregarding the advisory accounts of its other clientsand the effect these activities may have on theSecurities in the Portfolio.

8

Closed-End Strategy: Master Municipal Income Portfolio – National Series

9



• The value of the securities in theclosed-end funds will generally fall ifinterest rates, in general, rise. No onecan predict whether interest rates will rise or fallin the future.

• A security issuer may be unable to makeinterest and/or principal payments in thefuture. This may reduce the level of dividends aclosed-end fund pays which would reduce yourincome and cause the value of your Units to fall.


• The Portfolio invests in shares ofclosed-end funds. You should understandthe section titled “Closed-End Funds” beforeyou invest. In particular, shares of these fundstend to trade at a discount from their net assetvalue and are subject to risks related to factorssuch as management’s ability to achieve afund’s objective, market conditions affecting afund’s investments and use of leverage. ThePortfol io and the underlying funds havemanagement and operating expenses. You willbear not only your share of the Portfolio’sexpenses, but also the expenses of theunderlying funds. By investing in other funds,the Portfolio incurs greater expenses than youwould incur if you invested directly in the funds.

• The closed-end funds may invest insecurities rated below investment gradeand are considered to be “junk”securities. These securities are considered to

be speculative and are subject to greatermarket and credit risks. Accordingly, the risk ofdefault is higher than investment gradesecurities. In addition, these securities may bemore sensitive to interest rate changes andmay be more likely to make early returns ofprincipal.

• We do not actively manage the Portfolio.While the closed-end funds have managedportfolios, except in limited circumstances, thePortfolio will hold, and continue to buy, sharesof the same funds even if their market valuedeclines.

10

Fee Table






Estimated Organization Costs 0.438% $ 4.233______ _____________ _______

Estimated Annual Expenses Trustee’s fee and operating expenses 0.239% $ 2.305Supervisory fee 0.025 0.242Bookkeeping and administrative fees 0.015 0.150Estimated underlying funds’ expenses 1.259 12.163______ _______

Total 1.538% $14.860*______ _____________ _______

Example







Unit Price at Initial Date of Deposit $10.0000Initial Date of Deposit July 5, 2011Mandatory Termination Date October 4, 2012Estimated Net Annual Income1,2 $0.63581 per UnitRecord Dates2 10th day of each monthDistribution Dates2 25th day of each monthCUSIP Numbers Cash – 92121P386




2 The Trustee will make distributions of income and capital on eachmonthly Distribution Date to Unitholders of record on the precedingRecord Date, provided that the total cash held for distribution equals atleast 0.1% of the Portfolio’s net asset value. Undistributed income andcapital will be distributed in the next month in which the total cash heldfor distribution equals at least 0.1% of the Portfolio’s net asset value.Based on the foregoing, it is currently estimated that the initialdistribution set forth above will occur in August 2011.

11


Portfolio____________________________________________________________________________________________________________Current Cost of


National Municipal - 100.00%581 AllianceBernstein National Municipal

Income Fund, Inc. $ 13.500 6.89% $ 7,843.50744 BlackRock Long-Term Municipal

Advantage Trust 10.550 7.11 7,849.20581 BlackRock Municipal Income Investment

Trust 13.330 6.79 7,744.73573 BlackRock Municipal Income Trust II 13.700 7.31 7,850.10620 BlackRock MuniHoldings Quality Fund, Inc. 12.670 7.01 7,855.40611 BlackRock MuniYield Investment Quality

Fund 12.820 6.65 7,833.02575 BlackRock MuniYield Quality Fund, Inc. 13.680 6.75 7,866.00624 BlackRock Strategic Municipal Trust 12.590 7.05 7,856.16879 Dreyfus Municipal Income, Inc. 8.920 7.06 7,840.68654 DWS Municipal Income Trust 12.000 7.00 7,848.00590 Nuveen Dividend Advantage Municipal

Fund 13.360 6.83 7,882.40565 Nuveen Dividend Advantage Municipal

Fund 3 13.840 7.11 7,819.60586 Nuveen Enhanced Municipal Value Fund 13.360 6.89 7,828.96577 Nuveen Insured Municipal Opportunity

Fund, Inc. 13.530 6.39 7,806.81549 Nuveen Investment Quality Municipal

Fund, Inc. 14.230 6.68 7,812.27561 Nuveen Performance Plus Municipal

Fund, Inc. 13.930 6.76 7,814.73582 Nuveen Premier Municipal Income

Fund, Inc. 13.420 6.54 7,810.44573 Nuveen Premium Income Municipal

Fund 2, Inc. 13.650 6.56 7,821.45696 Putnam Municipal Opportunities Trust 11.300 7.04 7,864.80__________ ____________

11,721 $ 148,848.25__________ ______________________ ____________


Investment Objective. The Portfolio seeks totalreturn, consisting of high current income and potentialcapital appreciation.

Principal Investment Strategy. The Portfolioseeks to achieve its objective by investing in a portfolioconsisting of common stock of closed-end investmentcompanies (known as “closed-end funds”). Cohen &Steers Capital Management, Inc. (the “PortfolioConsultant”) uses a value oriented methodology toselect funds that invest significantly in equity orincome-producing securities. Van Kampen Funds Inc.is the Sponsor of the Portfolio. These closed-endfunds may focus on total return securities, sectors orstrategies, such as convertible securities, covered calloption strategies, energy, equity dividend securities,high-yield strategies, preferred securities, real estate,senior loans, tax-advantaged dividend securities andother total return strategies. Cohen & Steers believesthat the principal determinants of total investmentopportunity or ‘value’ in closed-end funds include:Market price relative to net asset value, annualizeddividend yield, dividend coverage ratio and themomentum of fund returns on its market price relativeto the momentum of returns on its net asset value.

In addition, Cohen & Steers sought to identifyfunds that exhibited the following characteristics,among others:

1. Daily trading volumes generally greater than$750,000 per day.

2. Closed-end funds with market capitalizationgenerally greater than $200 million.

3. High current income.

4. Share prices at a discount to net asset value.

5. Undervalued funds where recent total return onmarket price trails recent total return on netasset value.

6. Strong fundamentals, including liquidity, incomecoverage and quality, leverage/risk management.Cohen & Steers believes that a conservativeapproach to leverage helps mitigate the effectsof changes in interest rates.

7. Well-known advisors with experience managingthe asset class.

8. Diversification of sector and asset class.

There can be no guarantee that a particular fund inthe Portfolio will satisfy the criteria set forth above.

Cohen & Steers believes that capital appreciationfrom equity and income focused closed-end fundscould come from three potential sources:

• A narrowing of fund share price discounts tonet asset value, assuming no change in fundnet asset value;

• Growth in fund share prices which mirrorsgrowth in underlying portfolio net asset value,with no change in the discount to net assetvalue; and

• Increased dividend/distr ibution rates byclosed-end funds which attract investors andcause rising share prices.



• Growth in the Number and Types of Closed-EndFund New Issues – Since 2001, the closed-endfund market has grown by over $140 billion, to atotal size in excess of $200 billion. There arenow over 600 l isted closed-end funds.Underlying asset classes have expanded toinclude significant volumes of funds focused oncategories such as equity dividends, covered

12

Closed-End Strategy: Value Equity and Income Portfolio

call option writing, REITs, utilities, energy, seniorloan securities, convertible securities and limitedduration bonds.






The Portfolio Consultant. Founded in 1986, Cohen& Steers Capital Management Inc. is a manager ofportfolios specializing in U.S. REITs, international realestate securit ies, large cap value stocks, listedinfrastructure and utilities, and preferred securities. Asof March 31, 2011, Cohen & Steers CapitalManagement Inc. had $38.0 billion in assets undermanagement. Cohen & Steers manages separate

account portfolios for institutional investors, includingsome of the world’s largest pension funds andendowments. In addition, the firm manages open-and closed-end funds for both retail and institutionalinvestors. Cohen & Steers is among the largest REITmanagers in the U.S. and employs a significantresearch and trading staff. Many investors have cometo view Cohen & Steers as an important source forincome-oriented investment products. Cohen &Steers also acts as Supervisor of the Portfolio. Asdescribed above, Cohen & Steers advises otherclients such as investment companies and otheraccounts. Many of these cl ient accounts are“managed” accounts. The Portfolio is not a managedfund and will generally not sell or replace Securities.Please refer to “Objectives and Securities Selection”for a discussion of Cohen & Steers’ act iv i t iesregarding the advisory accounts of its other clientsand the effect these activities may have on theSecurities in the Portfolio.



• The value of the securities in certain ofthe closed-end funds will generally fallif interest rates, in general, rise. No onecan predict whether interest rates will rise or fallin the future.

• A security issuer may be unwilling orunable to declare dividends in thefuture, or may reduce the level ofdividends declared. This may reduce thelevel of dividends a closed-end fund payswhich would reduce your income and maycause the value of your Units to fall.

• The financial condition of a securityissuer may worsen or its credit ratingsmay drop, resulting in a reduction in thevalue of your Units. This may occur at any

13

point in time, including during the primaryoffering period.

• The Portfolio invests in shares ofclosed-end funds. You should understandthe section titled “Closed-End Funds” beforeyou invest. In particular, shares of these fundstend to trade at a discount from their net assetvalue and are subject to risks related to factorssuch as management’s ability to achieve afund’s objective, market conditions affecting afund’s investments and use of leverage. ThePortfol io and the underlying funds havemanagement and operating expenses. You willbear not only your share of the Portfolio’sexpenses, but also the expenses of theunderlying funds. By investing in other funds,the Portfolio incurs greater expenses than youwould incur if you invested directly in the funds.

• Certain of the closed-end funds mayinvest in securities of foreign issuers,presenting risks beyond those of U.S.issuers. These risks may include marketand political factors related to an issuer’sforeign market, international trade conditions,less regulation, smaller or less liquid markets,increased volatility, differing accounting andtax practices and changes in the value offoreign currencies which may have botheconomic and tax consequences.

• Certain of the closed-end funds mayinvest in securities rated belowinvestment grade and are considered tobe “junk” securities. These securities areconsidered to be speculative and are subject togreater market and credit risks. Accordingly, therisk of default is higher than investment gradesecurities. In addition, these securities may bemore sensitive to interest rate changes and maybe more likely to make early returns of principal.

• We do not actively manage the Portfolio.While the closed-end funds have managedportfolios, except in limited circumstances, the

Portfolio will hold, and continue to buy, shares ofthe same funds even if their market valuedeclines.

14

Fee Table






Estimated Organization Costs 0.185% $ 1.792______ ____________ ______

Estimated Annual Expenses Trustee’s fee and operating expenses 0.230% $ 2.229Supervisory fee 0.025 0.242Bookkeeping and administrative fees 0.015 0.150Estimated underlying funds’ expenses 1.476 14.295______ ______

Total 1.746% $16.916*______ ____________ ______

Example




The maximum sales charge is 2.95% of the Public Offering Price perUnit. The initial sales charge is the difference between the total sales charge(maximum of 2.95% of the Public Offering Price) and the sum of theremaining deferred sales charge and the total creation and developmentfee. The deferred sales charge is fixed at $0.145 per Unit and accrues dailyfrom November 10, 2011, through April 9, 2012. Your Portfolio pays aproportionate amount of this charge on the 10th day of each monthbeginning in the accrual period until paid in full. The combination of the initialand deferred sales charges comprises the “transactional sales charge”. Thecreation and development fee is fixed at $0.05 per Unit and is paid at theearlier of the end of the initial offering period (anticipated to be three months)or six months following the Initial Date of Deposit. The Portfolio assesses theSupervisory Fee as a percentage of the daily net asset value (0.025%).Other annual expenses are assessed as dollar amounts per Unit.



Unit Price at Initial Date of Deposit $10.0000Initial Date of Deposit July 5, 2011Mandatory Termination Date October 4, 2012Estimated Net Annual Income1 $0.70197 per UnitRecord Dates2 10th day of each monthDistribution Dates2 25th day of each monthCUSIP Numbers Cash – 92121P261




2 The Trustee will make distributions of income and capital on eachmonthly Distribution Date to Unitholders of record on the precedingRecord Date, provided that the total cash held for distribution equals atleast $0.01 per Unit. Undistributed income and capital will be distributedin the next month in which the total cash held for distribution equals atleast $0.01 per Unit. Based on the foregoing, it is currently estimatedthat the initial distribution will occur in August 2011.

15

16


Portfolio______________________________________________________________________________________________________________

Current Cost ofNumber Market Value Dividend Securities toof Shares Name of Issuer (1) per Share (2) Yield (3) Portfolio (2) __________ ___________________________________ _______________ ___________ _____________

Covered Call and Income - 8.11%292 Eaton Vance Tax-Managed Buy-Write

Income Fund $ 13.78 9.40% $ 4,023.76315 Eaton Vance Tax-Managed Buy-Write

Opportunities Fund 12.85 10.34 4,047.75331 Eaton Vance Tax-Managed Global

Buy-Write Opportunities Fund 12.15 9.96 4,021.65Emerging Markets Debt - 2.70%

263 AllianceBernstein Global High Income Fund, Inc. 15.30 7.84 4,023.90

Energy - 5.40%138 BlackRock Energy and Resources Trust 29.13 5.56 4,019.94217 Gabelli Natural Resources, Gold & Income

Trust 18.55 9.06 4,025.35Tax-Advantaged Dividend/Tax-Managed - 13.55%

231 Eaton Vance Tax-Advantaged Dividend Income Fund 17.49 7.38 4,040.19

262 Eaton Vance Tax-Advantaged Global Dividend Income Fund 15.39 7.99 4,032.18

184 Eaton Vance Tax-Advantaged Global Dividend Opportunities Fund 22.00 6.37 4,048.00

240 Gabelli Dividend & Income Trust 16.89 5.68 4,053.60242 John Hancock Tax-Advantaged Dividend

Income Fund 16.63 6.57 4,024.46Global Equity - 5.39%

270 Clough Global Equity Fund 14.95 7.76 4,036.50191 ING Infrastructure, Industrials and Materials

Fund 20.96 8.59 4,003.36Global Equity Dividend - 2.70%

656 Alpine Total Dynamic Dividend Fund 6.14 10.75 4,027.84Global Hybrid - 8.14%

459 Calamos Global Dynamic Income Fund 8.82 6.80 4,048.38258 Clough Global Allocation Fund 15.56 7.71 4,014.48351 Nuveen Diversified Dividend and Income

Fund 11.59 8.63 4,068.09Global Income - 8.10%

231 First Trust/Aberdeen Global Opportunity Income Fund 17.39 8.97 4,017.09

582 MFS Multimarket Income Trust 6.92 7.63 4,027.44308 Western Asset Global High Income

Fund, Inc. 13.10 8.82 4,034.80

17


Portfolio (continued)______________________________________________________________________________________________________________


Government - 2.69%508 AllianceBernstein Income Fund, Inc. $ 7.89 6.08% $ 4,008.12

High Yield/High Income - 8.10%548 BlackRock Corporate High Yield Fund III, Inc. 7.31 8.21 4,005.88328 BlackRock Corporate High Yield Fund V, Inc. 12.24 8.33 4,014.72207 Western Asset High Yield Defined

Opportunity Fund, Inc. 19.56 9.02 4,048.92Investment Grade - 2.71%

213 Western Asset Global Corporate Defined Opportunity Fund, Inc. 18.97 8.22 4,040.61

Limited Duration - 5.39%241 Eaton Vance Limited Duration Income Fund 16.73 7.47 4,031.93260 Wells Fargo Advantage Multi-Sector

Income Fund 15.42 7.78 4,009.20Master Limited Partnerships - 5.39%

160 Kayne Anderson Midstream/Energy Fund, Inc. 25.15 0.00 4,024.00

154 Tortoise MLP Fund, Inc. 26.01 6.27 4,005.54Multi-Sector - 2.70%

437 Nuveen Multi-Strategy Income and Growth Fund 2 9.20 8.70 4,020.40

Preferred and Income - 5.40%192 John Hancock Preferred Income Fund II 20.90 8.04 4,012.80320 John Hancock Premium Dividend Fund 12.60 7.19 4,032.00

Real Estate - 2.72%557 Alpine Global Premier Properties Fund 7.27 5.45 4,049.39

General Equity - 5.40%772 Liberty All-Star Equity Fund 5.22 6.90 4,029.84266 Royce Value Trust, Inc. 15.11 5.03 4,019.26

U.S. Hybrid Growth & Income - 2.71%416 Calamos Strategic Total Return Fund 9.70 6.49 4,035.20

Utility - 2.70%341 Wells Fargo Advantage Utilities and High

Income Fund 11.82 7.61 4,030.62__________ ____________11,941 $ 149,057.19__________ ______________________ ____________


Investment Objective. The Portfolio seeks totalreturn, consisting of high current income and potentialcapital appreciation.

Principal Investment Strategy. The Portfolioseeks to achieve its objective by investing in aportfolio consisting of common stock of closed-endinvestment companies (known as “closed-endfunds”). Cohen & Steers Capital Management, Inc.(the “Portfolio Consultant”) uses a value orientedmethodology to select funds that invest significantlyin equity or income-producing securit ies. VanKampen Funds Inc. is the Sponsor of the Portfolio.These closed-end funds wil l primarily focus oncovered call option strategies or other income-oriented investment strategies. Cohen & Steersbelieves that the principal determinants of totalinvestment opportunity or ‘value’ in closed-endfunds include: market price relative to net assetvalue, annualized dividend yield, dividend coverageratio and the momentum of fund returns on itsmarket price relative to the momentum of returns onits net asset value.

In addition, Cohen & Steers sought to identifyfunds that exhibited the following characteristics,among others:

1. Daily trading volumes generally greater than$500,000 per day.

2. Closed-end funds with market capitalizationgenerally greater than $200 million.

3. High current income.

4. Share prices at a discount to net asset value.

5. Undervalued funds where recent total return onmarket price trails recent total return on netasset value.

6. Strong fundamentals, including liquidity, incomecoverage and quality, leverage/risk management.Cohen & Steers believes that a conservativeapproach to leverage helps mitigate the effectsof changes in interest rates.

7. Well-known advisors with experience managingthe asset class.

8. Diversification of sector and asset class.

There can be no guarantee that a particular fund inthe Portfolio will satisfy the criteria set forth above.

Cohen & Steers believes that capital appreciationfrom covered call income focused closed-end fundscould come from three potential sources:

• A narrowing of fund share price discounts tonet asset value, assuming no change in fundnet asset value;

• Growth in fund share prices which mirrorsgrowth in underlying portfolio net asset value,with no change in the discount to net assetvalue; and

• Increased dividend/distr ibution rates byclosed-end funds which attract investors andcause rising share prices.



• Growth in the Number and Types of Closed-EndFund New Issues – Since 2001, the closed-endfund market has grown by over $140 billion, to atotal size in excess of $200 billion. There arenow over 600 l isted closed-end funds.Underlying asset classes have expanded toinclude significant volumes of funds focused oncategories such as equity dividends, covered

18

Closed-End Strategy: Covered Call Income Portfolio

19

call option writing, REITs, utilities, energy, seniorloan securities, convertible securities and limitedduration bonds.






The Portfolio Consultant. Founded in 1986, Cohen &Steers Capital Management Inc. is a manager ofportfolios specializing in U.S. REITs, international realestate securities, large cap value stocks, l istedinfrastructure and utilities, and preferred securities. Asof March 31, 2011, Cohen & Steers CapitalManagement Inc. had $38.0 billion in assets undermanagement. Cohen & Steers manages separate

account portfolios for institutional investors, includingsome of the world’s largest pension funds andendowments. In addition, the firm manages open- andclosed-end funds for both retail and institutionalinvestors. Cohen & Steers is among the largest REITmanagers in the U.S. and employs a significantresearch and trading staff. Many investors have cometo view Cohen & Steers as an important source forincome-oriented investment products. Cohen & Steersalso acts as Supervisor of the Portfolio. As describedabove, Cohen & Steers advises other clients such asinvestment companies and other accounts. Many ofthese client accounts are “managed” accounts. ThePortfolio is not a managed fund and will generally notsell or replace Securities. Please refer to “Objectivesand Securities Selection” for a discussion of Cohen &Steers’ activities regarding the advisory accounts of itsother clients and the effect these activities may have onthe Securities in the Portfolio.



• A security issuer may be unwilling orunable to declare dividends in thefuture, or may reduce the level ofdividends declared. This may reduce thelevel of dividends a closed-end fund payswhich would reduce your income and maycause the value of your Units to fall.


• The Portfolio invests in shares ofclosed-end funds. You should understandthe section titled “Closed-End Funds” beforeyou invest. In particular, shares of these funds

20

tend to trade at a discount from their net assetvalue and are subject to risks related to factorssuch as management’s ability to achieve afund’s objective, market conditions affecting afund’s investments and use of leverage. ThePortfol io and the underlying funds havemanagement and operating expenses. You willbear not only your share of the Portfolio’sexpenses, but also the expenses of theunderlying funds. By investing in other funds,the Portfolio incurs greater expenses than youwould incur if you invested directly in the funds.

• The Portfolio is concentrated in fundsthat write call options on their assets.The use of options may require an underlyingfund to sell portfolio securities at inopportunetimes or at prices other than current marketvalues, may limit the amount of appreciation afund can realize on an investment, or maycause a fund to hold a security i t mightotherwise sell. To the extent an underlying fundpurchases options pursuant to a hedgingstrategy, the fund could lose its entireinvestment in the option.

• Certain of the closed-end funds mayinvest in securities of foreign issuers,presenting risks beyond those of U.S.issuers. These risks may include marketand political factors related to an issuer’sforeign market, international trade conditions,less regulation, smaller or less liquid markets,increased volatility, differing accounting andtax practices and changes in the value offoreign currencies which may have botheconomic and tax consequences.

• We do not actively manage the Portfolio.While the closed-end funds have managedportfolios, except in limited circumstances, thePortfolio will hold, and continue to buy, shares ofthe same funds even if their market valuedeclines.

21

Fee Table






Estimated Organization Costs 0.242% $ 2.346______ ____________ ______

Estimated Annual Expenses Trustee’s fee and operating expenses 0.249% $ 2.407Supervisory fee 0.025 0.242Bookkeeping and administrative fees 0.015 0.150Estimated underlying funds’ expenses 1.083 10.485______ ______

Total 1.372% $13.284*______ ____________ ______

Example







Unit Price at Initial Date of Deposit $10.0000Initial Date of Deposit July 5, 2011Mandatory Termination Date October 4, 2012Estimated Net Annual Income1 $0.88233 per UnitRecord Dates 10th day of November 2011,

February 2012 and May 2012

Distribution Dates 25th day of November 2011,February 2012 and May 2012

CUSIP Numbers Cash – 92121P303Reinvest – 92121P311

Wrap Fee Cash – 92121P329Wrap Fee Reinvest – 92121P337


22


Portfolio______________________________________________________________________________________________________________


Covered Call and Income - 100%824 BlackRock Enhanced Capital and

Income Fund, Inc. $ 14.60 9.86% $ 12,030.40307 BlackRock Energy and Resources Trust 29.13 5.56 8,942.91680 Calamos Global Dynamic Income Fund 8.82 6.80 5,997.60292 Columbia Seligman Premium Technology

Growth Fund, Inc. 19.05 9.71 5,562.60562 Eaton Vance Tax-Managed Buy-Write

Income Fund 13.78 9.40 7,744.361,100 Eaton Vance Tax-Managed Buy-Write

Opportunities Fund 12.85 10.34 14,135.001,160 Eaton Vance Tax-Managed Global

Buy-Write Opportunities Fund 12.15 9.96 14,094.001,340 Eaton Vance Tax-Managed Global

Diversified Equity Income Fund 10.56 10.77 14,150.40356 ING Global Advantage and Premium

Opportunity Fund 13.67 9.80 4,866.52392 ING Infrastructure, Industrials and Materials

Fund 20.96 8.59 8,216.32350 NASDAQ Premium Income & Growth

Fund, Inc. 14.54 8.69 5,089.00742 NFJ Dividend, Interest & Premium Strategy

Fund 19.05 9.45 14,135.10503 Nuveen Equity Premium Advantage Fund 12.63 10.04 6,352.89316 Nuveen Equity Premium and Growth Fund 13.36 8.38 4,221.76752 Nuveen Equity Premium Income Fund 12.55 9.66 9,437.60

1,128 Nuveen Equity Premium Opportunity Fund 12.56 10.03 14,167.68__________ ____________10,804 $ 149,144.14__________ ______________________ ____________


23

Notes to Portfolios

(1) The Securities are initially represented by “regular way” contracts for the performance of which an irrevocable letter ofcredit has been deposited with the Trustee. Contracts to acquire Securities were entered into on July 1, 2011 and havea settlement date of July 7, 2011 (see “The Portfolios”).

(2) The value of each Security is determined on the bases set forth under “Public Offering--Unit Price” as of the close of theNew York Stock Exchange on the business day before the Initial Date of Deposit. In accordance with FASB AccountingStandards Codification (“ASC”), ASC 820, Fair Value Measurements and Disclosures, the Portfolio’s investments areclassified as Level 1, which refers to security prices determined using quoted prices in active markets for identicalsecurities. Other information regarding the Securities, as of the Initial Date of Deposit, is as follows:

ProfitCost to (Loss) ToSponsor Sponsor______________ _____________

Closed-End Strategy: Master Income Portfolio . . . . . . . . . . . . $ 149,372 $ (362)Closed-End Strategy: Master Municipal Income

Portfolio – National Series . . . . . . . . . . . . . . . . . . . . . . . . $ 149,200 $ (352)Closed-End Strategy: Value Equity and Income Portfolio . . . . . $ 149,415 $ (358)Closed-End Strategy: Covered Call Income Portfolio . . . . . . . . $ 149,468 $ (324)

(3) Current Dividend Yield for each Security is based on the estimated annual dividends per share and the Security’s valueas of the most recent close of trading on the New York Stock Exchange on the business day before the Initial Date ofDeposit. Generally, estimated annual dividends per share are calculated by annualizing the most recently declaredregular dividends or by adding the most recent regular interim and final dividends declared and reflect any foreignwithholding taxes. In certain cases, this calculation may consider several recently declared dividends in order for theCurrent Dividend Yield to be more reflective of recent historical dividend rates.

24

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Unitholders of Van Kampen Unit Trusts, Series 1120:

We have audited the accompanying statements of condition including the related portfolios of Closed-EndStrategy: Master Income Portfolio, Series 28, Closed-End Strategy: Master Municipal Income Portfolio –National Series 24, Closed-End Strategy: Value Equity and Income Portfolio 2011-3 and Closed-EndStrategy: Covered Call Income Portfolio 2011-3 (included in Van Kampen Unit Trusts, Series 1120) as of July5, 2011. The statements of condition are the responsibility of the Sponsor. Our responsibility is to express anopinion on such statements of condition based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting OversightBoard (United States). Those standards require that we plan and perform the audits to obtain reasonableassurance about whether the statements of condition are free of material misstatement. The trusts are notrequired to have, nor were we engaged to perform an audit of their internal control over financial reporting.Our audits included consideration of internal control over financial reporting as a basis for designing auditprocedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion onthe effectiveness of the trusts’ internal control over financial reporting. Accordingly, we express no suchopinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosuresin the statements of condition, assessing the accounting principles used and significant estimates made bythe Sponsor, as well as evaluating the overall statements of condition presentation. Our procedures includedconfirmation with The Bank of New York Mellon, Trustee, of cash or an irrevocable letter of credit depositedfor the purchase of Securities as shown in the statements of condition as of July 5, 2011. We believe that ouraudits of the statements of condition provide a reasonable basis for our opinion.

In our opinion, the statements of condition referred to above present fairly, in all material respects, thefinancial position of Closed-End Strategy: Master Income Portfolio, Series 28, Closed-End Strategy: MasterMunicipal Income Portfolio – National Series 24, Closed-End Strategy: Value Equity and Income Portfolio2011-3 and Closed-End Strategy: Covered Call Income Portfolio 2011-3 (included in Van Kampen UnitTrusts, Series 1120) as of July 5, 2011, in conformity with accounting principles generally accepted in theUnited States of America.

/s/ GRANT THORNTON LLP

New York, New YorkJuly 5, 2011

25

STATEMENTS OF CONDITIONAs of July 5, 2011

Closed-End Closed-End Closed-EndClosed-End Strategy: Strategy: Strategy:

Strategy: Master Value CoveredMaster Municipal Equity and CallIncome Income Income Income

INVESTMENT IN SECURITIES Portfolio Portfolio Portfolio Portfolio_____________ _____________ _____________ _____________Contracts to purchase Securities (1) . . . . . . . . . . . . . . $ 149,010 $ 148,848 $ 149,057 $ 149,144_____________ _____________ _____________ _____________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 149,010 $ 148,848 $ 149,057 $ 149,144_____________ _____________ _____________ __________________________ _____________ _____________ _____________

LIABILITIES AND INTEREST OF UNITHOLDERSLiabilities--

Organization costs (2) . . . . . . . . . . . . . . . . . . . . . . $ 620 $ 636 $ 270 $ 353Deferred sales charge liability (3) . . . . . . . . . . . . . . 2,183 2,180 2,183 2,185Creation and development fee liability (4) . . . . . . . 753 752 753 753

Interest of Unitholders--Cost to investors (5) . . . . . . . . . . . . . . . . . . . . . . . 150,520 150,360 150,570 150,660Less: initial sales charge (5)(6) . . . . . . . . . . . . . . . . 1,510 1,512 1,513 1,516Less: deferred sales charge, creation and

development fee and organization costs (2)(4)(5)(6) . . . . . . . . . . . . . . . . . . . . . . . 3,556 3,568 3,206 3,291_____________ _____________ _____________ _____________Net interest to Unitholders (5) . . . . . . . . . . . . 145,454 145,280 145,851 145,853_____________ _____________ _____________ _____________

Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 149,010 $ 148,848 $ 149,057 $ 149,144_____________ _____________ _____________ __________________________ _____________ _____________ _____________Units outstanding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,052 15,036 15,057 15,066_____________ _____________ _____________ __________________________ _____________ _____________ _____________Net asset value per Unit . . . . . . . . . . . . . . . . . . . . . . . . $ 9.664 $ 9.663 $ 9.687 $ 9.682_____________ _____________ _____________ __________________________ _____________ _____________ _____________

(1) The value of the Securities is determined by the Trustee on the bases set forth under “Public Offering--Unit Price”. The contracts to purchaseSecurities are collateralized by separate irrevocable letters of credit which have been deposited with the Trustee.

(2) A portion of the Public Offering Price represents an amount sufficient to pay for all or a portion of the costs incurred in establishing aPortfolio. The amount of these costs are set forth in the “Fee Table”. A distribution will be made as of the earlier of the close of the initialoffering period (approximately three months) or six months following the Initial Date of Deposit to an account maintained by the Trustee fromwhich the organization expense obligation of the investors will be satisfied. To the extent that actual organization costs of a Portfolio aregreater than the estimated amount, only the estimated organization costs added to the Public Offering Price will be reimbursed to theSponsor and deducted from the assets of the Portfolio.

(3) Represents the amount of mandatory distributions from a Portfolio on the bases set forth under “Public Offering”.(4) The creation and development fee is payable by a Portfolio on behalf of Unitholders out of the assets of the Portfolio as of the close of the

initial offering period. If Units are redeemed prior to the close of the initial public offering period, the fee will not be deducted from theproceeds.

(5) The aggregate public offering price and the aggregate sales charge are computed on the bases set forth under “Public Offering”.(6) Assumes the maximum sales charge.

A-1

THE PORTFOLIOS

The Portfolios were created under the laws of theState of New York pursuant to a Trust Indenture andTrust Agreement (the “Trust Agreement”), dated thedate of this prospectus (the “Initial Date of Deposit”),among Van Kampen Funds Inc., as Sponsor, Cohen &Steers Capital Management, Inc., as Supervisor andThe Bank of New York Mellon, as Trustee.

Each Portfolio offers investors the opportunity topurchase Units representing proportionate interests in aportfolio of shares of closed-end funds. A Portfolio maybe an appropriate medium for investors who desire toparticipate in a portfolio of securities with greaterdiversification than they might be able to acquireindividually.

On the Initial Date of Deposit, the Sponsor depositeddelivery statements relating to contracts for the purchaseof the Securities and an irrevocable letter of credit in theamount required for these purchases with the Trustee. Inexchange for these contracts the Trustee delivered to theSponsor documentation evidencing the ownership ofUnits of the Portfolios. Unless otherwise terminated asprovided in the Trust Agreement, a Portfolio will terminateon the Mandatory Termination Date and any remainingSecurities will be liquidated or distributed by the Trusteewithin a reasonable time. As used in this prospectus theterm “Securities” means the securities (including contractsto purchase these securities) listed in each “Portfolio” andany additional securities deposited into a Portfolio.

Additional Units of a Portfolio may be issued at anytime by depositing in the Portfolio (i) additional Securities,(ii) contracts to purchase Securities together with cash orirrevocable letters of credit or (iii) cash (or a letter of creditor the equivalent) with instructions to purchase additionalSecurities. As additional Units are issued by a Portfolio,the aggregate value of the Securities will be increasedand the fractional undivided interest represented by eachUnit may be decreased. The Sponsor may continue tomake additional deposits into a Portfolio following theInitial Date of Deposit provided that the additionaldeposits will be in amounts which will maintain, as nearlyas practicable, the same percentage relationship amongthe number of shares of each Security in the Portfolio that

existed immediately prior to the subsequent deposit.Investors may experience a dilution of their investmentsand a reduction in their anticipated income because offluctuations in the prices of the Securities between thetime of the deposit and the purchase of the Securitiesand because a Portfolio wil l pay the associatedbrokerage or acquisition fees. In addition, during the initialoffering of Units it may not be possible to buy a particularSecurity due to trading restrictions or corporate actions.While such limitations are in effect, additional Units wouldbe created by purchasing each of the Securities in yourPortfolio that are not subject to those limitations. Thiswould also result in the dilution of the investment in anysuch Security not purchased and potential variances inanticipated income. Purchases and sales of Securities byyour Portfolio may impact the value of the Securities. Thismay especially be the case during the initial offering ofUnits, upon Portfolio termination and in the course ofsatisfying large Unit redemptions.

Each Unit of your Portfolio initially offered representsan undivided interest in the Portfolio. At the close of theNew York Stock Exchange on the Initial Date of Deposit,the number of Units may be adjusted so that the PublicOffering Price per Unit equals $10. The number of Units,fractional interest of each Unit in your Portfolio and theestimated distr ibutions per Unit wil l increase ordecrease to the extent of any adjustment. To the extentthat any Units are redeemed by the Trustee or additionalUnits are issued as a result of additional Securitiesbeing deposited by the Sponsor, the fractionalundivided interest in your Portfolio represented by eachunredeemed Unit will increase or decrease accordingly,although the actual interest in your Portfolio will remainunchanged. Units wi l l remain outstanding unti lredeemed upon tender to the Trustee by Unitholders,which may include the Sponsor, or until the terminationof the Trust Agreement.

Each Portfolio consists of (a) the Securities (includingcontracts for the purchase thereof) listed under theapplicable “Portfolio” as may continue to be held fromtime to time in the Portfolio, (b) any additional Securitiesacquired and held by the Portfolio pursuant to theprovisions of the Trust Agreement and (c) any cash heldin the related Income and Capital Accounts. Neither the

A-2

Sponsor nor the Trustee shall be liable in any way forany contract failure in any of the Securities.

OBJECTIVES AND SECURITIES SELECTION

The objective of each Portfolio is described in theindividual Portfolio sections. There is no assurance thata Portfolio will achieve its objective.

The Portfolio Consultant is not an affiliate of theSponsor. The Sponsor did not select the Securities forthe Portfolios. The Portfolio Consultant may use the listof Securit ies in i ts independent capacity as aninvestment adviser and distributes this information tovar ious indiv iduals and ent i t ies. The Portfol ioConsultant may recommend or effect transactions inthe Securities. This may have an adverse effect on theprices of the Securities. This also may have an impacton the price a Portfolio pays for the Securities and theprice received upon Unit redemptions or Portfoliotermination. The Portfolio Consultant may act as agentor principal in connection with the purchase and sale ofsecurities, including the Securities. The PortfolioConsultant also issues reports and makesrecommendations on the Securities. The PortfolioConsultant’s research department may receivecompensation based on commissions generated byresearch and/or sales of Units.

Neither the Portfolio Consultant nor the Sponsormanage the Portfolios. You should note that thePortfolio Consultant applied the selection criteria to theSecurities for inclusion in the Portfolios prior to the InitialDate of Deposit. After the initial selection, the Securitiesmay no longer meet the selection criteria. Should aSecurity no longer meet the selection criteria, we willgenerally not remove the Security from a Portfolio. Inoffering the Units to the public, neither the Sponsor norany broker-dealers are recommending any of theindividual Securities but rather the entire pool ofSecurities in a Portfolio, taken as a whole, which arerepresented by the Units.

RISK FACTORS

All investments involve risk. This section describesthe main risks that can impact the value of the securities

in your Portfolio or in the underlying funds. You shouldunderstand these risks before you invest. If the value ofthe securities falls, the value of your Units will also fall.We cannot guarantee that your Portfolio will achieve itsobjective or that your investment return will be positiveover any period.

Market Risk. Market risk is the risk that the value ofthe securities in your Portfolio or in the underlying fundswill fluctuate. This could cause the value of your Units tofall below your original purchase price. Market valuefluctuates in response to various factors. These caninclude changes in interest rates, inflation, the financialcondition of a security’s issuer, perceptions of the issuer,or ratings on a security. Even though your Portfolio issupervised, you should remember that we do notmanage your Portfolio. Your Portfolio will not sell asecurity solely because the market value falls as ispossible in a managed fund.

Dividend Payment Risk. Dividend payment risk isthe risk that an issuer of a security, a fund or anunderlying security in a fund is unwilling or unable to paydividends on a security. Stocks represent ownershipinterests in the issuers and are not obligations of theissuers. Common stockholders have a right to receivedividends only after the company has provided forpayment of its creditors, bondholders and preferredstockholders. Common stocks do not assure dividendpayments. Dividends are paid only when declared by anissuer’s board of directors and the amount of anydividend may vary over time. If dividends received by aPortfolio are insufficient to cover expenses, redemptionsor other Portfolio costs, it may be necessary for thePortfolio to sell Securities to cover such expenses,redemptions or other costs. Any such sales may result incapital gains or losses to you. See “Taxation”.

Interest Rate Risk. Interest rate risk is the risk thatthe value of securities held by a closed-end fund will fallif interest rates increase. The securities held by certainclosed-end funds typically fall in value when interestrates rise and rise in value when interest rates fall. Thesecurities held by the closed-end funds with longerperiods before maturity are often more sensitive tointerest rate changes.

A-3

Credit Risk. Credit risk is the risk that a borrower isunable to meet its obligation to pay principal or intereston a security held by a closed-end fund. This mayreduce the level of dividends a closed-end fund payswhich would reduce your income and could cause thevalue of your Units to fall.

Closed-End Funds. Each Portfolio invests in sharesof closed-end funds. You should understand the sectiontitled “Closed-End Funds” before you invest. Shares ofclosed-end funds frequently trade at a discount fromtheir net asset value in the secondary market. This risk isseparate and distinct from the risk that the net assetvalue of fund shares may decrease. The amount of suchdiscount from net asset value is subject to change fromtime to time in response to various factors. Closed-endfunds are subject to various risks, includingmanagement’s ability to meet the fund’s investmentobjective, and to manage the fund portfolio when theunderlying securities are redeemed or sold, duringperiods of market turmoil and as investors’ perceptionsregarding closed-end funds or their underlyinginvestments change. The Portfolios and the underlyingfunds have operating expenses. You will bear not onlyyour share of your Portfolio’s expenses, but also theexpenses of the underlying funds. By investing in otherfunds, your Portfolio incurs greater expenses than youwould incur if you invested directly in the funds.

Municipal Bond Risks. Each of the closed-endfunds held by the Master Municipal Income Portfolio –National Series invests in tax-exempt municipal bonds.Municipal bonds are debt obligations issued by statesor by political sub-divisions or authorities of states.Municipal bonds are typically designated as generalobligation bonds, which are general obligations of agovernmental entity that are backed by the taxingpower of such entity, or revenue bonds, which arepayable from the income of a specific project orauthority and are not supported by the issuer’s power tolevy taxes. Municipal bonds are long-term fixed ratedebt obligations that generally decline in value withincreases in interest rates, when an issuer’s financialcondition worsens or when the rating on a bond isdecreased. Many municipal bonds may be called orredeemed prior to their stated maturity, an event which

is more likely to occur when interest rates fall. In suchan occurrence, a closed-end fund may not be able toreinvest the money it receives in other bonds that haveas high a yield or as long a maturity.

Many municipal bonds are subject to continuingrequirements as to the actual use of the bond proceedsor manner of operation of the project financed frombond proceeds that may affect the exemption ofinterest on such bonds from federal income taxation.The market for municipal bonds is generally less liquidthan for other securities and therefore the price ofmunicipal bonds may be more volatile and subject togreater price fluctuations than securities with greaterliquidity. In addition, an issuer’s ability to make incomedistributions generally depends on several factorsincluding the financial condition of the issuer andgeneral economic conditions. Any of these factors maynegatively impact the price of municipal bonds held bya closed-end fund and would therefore impact the priceof both the fund shares and the Units.

The funds invest primarily in municipal bonds that payinterest that is exempt from regular federal income taxand, for state-specific funds, from regular income tax ofthe applicable state. Notwithstanding the foregoing,certain income from a fund may not qualify as tax-exemptincome and could be subject to federal, state or local tax.In addition, income from the funds may be subject to thealternative minimum tax and may have other taxconsequences (e.g., they may affect the amount of socialsecurity benefits that are taxed). Capital gains and capitalgain dividends, if any, will be subject to tax.

High-Yield Securities Risk. Certain of theclosed-end funds held by the Portfolios may invest inhigh-yield securities or unrated securities. High-yield,high risk securities are subject to greater marketfluctuations and risk of loss than securities with higherinvestment ratings. The value of these securities willdecline significantly with increases in interest rates, notonly because increases in rates generally decreasevalues, but also because increased rates may indicatean economic slowdown. An economic slowdown, or areduction in an issuer’s creditworthiness, may result inthe issuer being unable to maintain earnings at a levelsufficient to maintain interest and principal payments.

A-4

High-yield or “junk” securities, the generic names forsecurities rated below “BBB” by Standard & Poor’sRatings Services (“Standard & Poor’s”) or “Baa” byMoody’s Investors Service, Inc. (“Moody’s”), arefrequently issued by corporations in the growth stage oftheir development or by established companies who arehighly leveraged or whose operations or industries aredepressed. Securities rated below BBB or Baa areconsidered speculative as these ratings indicate a qualityof less than investment grade. Because high-yieldsecurities are generally subordinated obligations and areperceived by investors to be riskier than higher ratedsecurities, their prices tend to fluctuate more than higherrated securities and are affected by short-term creditdevelopments to a greater degree.

The market for high-yield securities is smaller andless liquid than that for investment grade securities.High-yield securities are generally not listed on anational securit ies exchange but trade in theover-the-counter markets. Due to the smaller, less liquidmarket for high-yield securities, the bid-offer spread onsuch securities is generally greater than it is forinvestment grade securities and the purchase or sale ofsuch securities may take longer to complete.

Convertible Securities Risk. Certain closed-endfunds held by the Master Income Portfolio, the CoveredCall Income Portfolio and the Value Equity and IncomePortfolio may invest in convertible securities. Convertiblesecurities generally offer lower interest or dividend yieldsthan non-convertible fixed-income securities of similarcredit quality because of the potential for capitalappreciation. The market values of convertible securitiestend to decline as interest rates increase and, conversely,to increase as interest rates decline. However, aconvertible security’s market value also tends to reflectthe market price of the common stock of the issuingcompany, particularly when the stock price is greaterthan the convertible security’s conversion price. Theconversion price is defined as the predetermined price orexchange ratio at which the convertible security can beconverted or exchanged for the underlying commonstock. As the market price of the underlying commonstock declines below the conversion price, the price ofthe convertible security tends to be increasingly

influenced more by the yield of the convertible securitythan by the market price of the underlying commonstock. Thus, it may not decline in price to the sameextent as the underlying common stock, and convertiblesecurities generally have less potential for gain or lossthan common stocks. However, mandatory convertiblesecurities (as discussed below) generally do not limit thepotential for loss to the same extent as securitiesconvertible at the option of the holder. In the event of aliquidation of the issuing company, holders of convertiblesecurities would be paid before that company’s commonstockholders. Consequently, an issuer’s convertiblesecurities generally entail less risk than its common stock.However, convertible securities fall below debt obligationsof the same issuer in order of preference or priority in theevent of a liquidation and are typically unrated or ratedlower than such debt obligations.

Mandatory convertible securities are distinguished asa subset of convert ible securit ies because theconversion is not optional and the conversion price atmaturity is based solely upon the market price of theunderlying common stock, which may be significantlyless than par or the price (above or below par) paid. Forthese reasons, the risks associated with investing inmandatory convertible securities most closely resemblethe risks inherent in common stocks. Mandatoryconvertible securities customarily pay a higher couponyield to compensate for the potential risk of additionalprice volatility and loss upon conversion. Because themarket price of a mandatory convertible securityincreasingly corresponds to the market price of itsunderlying common stock as the convertible securityapproaches its conversion date, there can be noassurance that the higher coupon will compensate forthe potential loss.

Option Risk. The closed-end funds held by theCovered Call Income Portfolio and certain closed-endfunds held in the Master Income Portfolio and the ValueEquity and Income Portfolio may invest using a coveredcal l option strategy or similar income-orientedinvestment strategies. You should understand the risksof these strategies before you invest. In employing acovered call strategy, a closed-end fund will generallywrite (sell) call options on a significant portion of the

A-5

fund’s managed assets. These call options will give theoption holder the right, but not the obligation, topurchase a security from the fund at the strike price onor prior to the option’s expiration date. The ability tosuccessfully implement the fund’s investment strategydepends on the fund adviser’s ability to predict pertinentmarket movements, which cannot be assured. Thus,the use of options may require a fund to sell portfoliosecurities at inopportune times or for prices other thancurrent market values, may l imit the amount ofappreciation the fund can realize on an investment, ormay cause the fund to hold a security that it mightotherwise sell. The writer (seller) of an option has nocontrol over the time when it may be required to fulfill itsobligation as a writer (seller) of the option. Once anoption writer (seller) has received an exercise notice, itcannot effect a closing purchase transaction in order toterminate its obligation under the option and mustdeliver the underlying security at the exercise price. Asthe writer (seller) of a covered call option, a fundforgoes, during the option’s life, the opportunity to profitfrom increases in the market value of the securityunderlying the call option above the sum of thepremium and the strike price of the call option, but hasretained the risk of loss should the price of theunderlying security decline. The value of the optionswritten (sold) by a fund, which will be marked-to-marketon a daily basis, will be affected by changes in the valueand dividend rates of the underlying securities, anincrease in interest rates, changes in the actual orperceived volatil ity of securities markets and theunderlying securities and the remaining time to theoptions’ expiration. The value of the options may alsobe adversely affected if the market for the optionsbecomes less liquid or smaller. An option is generallyconsidered “covered” if a closed-end fund owns thesecurity underlying the call option or has an absoluteand immediate right to acquire that security withoutadditional cash consideration (or, if required, liquid cashor other assets are segregated by the fund) uponconversion or exchange of other securities held by thefund. In certain cases, a call option may also beconsidered covered if a fund holds a call option on thesame security as the call option written (sold) providedthat certain conditions are met. By writing (selling)

covered call options, a fund generally seeks to generateincome, in the form of the premiums received for writing(selling) the call options. Investment income paid by afund to its shareholders (such as the Portfolio) may bederived primarily from the premiums it receives fromwriting (selling) call options and, to a lesser extent, fromthe dividends and interest it receives from the equitysecurities or other investments held in the fund’sportfolio and short-term gains thereon. Premiums fromwriting (selling) call options and dividends and interestpayments made by the securities in a fund’s portfoliocan vary widely over time.

To the extent that a fund purchases options pursuantto a hedging strategy, the fund will be subject to thefol lowing additional r isks. If a put or call optionpurchased by a fund is not sold when it has remainingvalue, and if the market price of the underlying securityremains equal to or greater that the exercise price (inthe case of a put), or remains less than or equal to theexercise price (in the case of a call), the fund will lose itsentire investment in the option. Also, where a put or calloption on a particular security is purchased to hedgeagainst price movements in a related security, the priceof the put or call option may move more or less than theprice of the related security. If restrictions on exercisewere imposed, the fund might be unable to exercise anoption it had purchased. If the fund were unable toclose out and option that it had purchased on asecurity, it would have to exercise the option in order torealize any profit or the option may expire worthless.

Preferred Securities Risk. Certain closed-endfunds held by the Master Income Portfolio and the ValueEquity and Income Portfolio may invest in preferredsecurities including preferred stocks, trust preferredsecurities or other similar securities.

Preferred stocks are unique securities that combinesome of the characteristics of both common stocks andbonds. Preferred stocks generally pay a fixed rate ofreturn and are sold on the basis of current yield, likebonds. However, because they are equity securities,preferred stocks provide equity ownership of a companyand the income is paid in the form of dividends.Preferred stocks typically have a yield advantage overcommon stocks as well as comparably-rated fixed

A-6

income investments. Preferred stocks are typicallysubordinated to bonds and other debt instruments in acompany’s capital structure, in terms of priority tocorporate income, and therefore will be subject togreater credit risk than those debt instruments.

Trust preferred securities are securities typically issuedby corporations, generally in the form of interest-bearingnotes or preferred securities, or by an affiliated businesstrust of a corporation, generally in the form of beneficialinterests in subordinated debentures or similarlystructured securities. Distribution payments of thePortfolio preferred securities generally coincide withinterest payments on the underlying obligations. Trustpreferred securities generally have a yield advantage overtraditional preferred stocks, but unlike preferred stocks, insome cases distributions are treated as interest ratherthan dividends for federal income tax purposes andtherefore, are not eligible for the dividends-receiveddeduction. Trust preferred securities prices fluctuate forseveral reasons including changes in investors’perception of the financial condition of an issuer or thegeneral condition of the market for trust preferredsecurities, or when political or economic events affectingthe issuers occur. Trust preferred securities are alsosensitive to interest rate fluctuations, as the cost ofcapital rises and borrowing costs increase in a risinginterest rate environment and the risk that a trustpreferred security may be called for redemption in afalling interest rate environment. Certain trust preferredsecurities are also subject to unique risks which includethe fact that dividend payments will only be paid if interestpayments on the underlying obligations are made, whichinterest payments are dependent on the financialcondition of the issuer and may be deferred for up to 20consecutive quarters. During any deferral period,investors are generally taxed as if they had receivedcurrent income. In such a case, an investor may haveincome taxes due prior to receiving cash distributions topay such taxes. In addition, the underlying obligations,and thus the trust preferred securities, may be pre-paidafter a stated call date or as a result of certain tax orregulatory events. Preferred securities are typicallysubordinated to bonds and other debt instruments in acompany’s capital structure, in terms of priority to

corporate income, and therefore will be subject to greatercredit risk than those debt instruments.

Master Limited Partnership Risk. Certain of theclosed-end funds in the Value Equity and IncomePortfolio and the Master Income Portfolio invest in masterl imited partnerships (“MLPs”). MLPs are l imitedpartnerships or limited liability companies that are taxedas partnerships and whose interests (limited partnershipunits or limited liability company units) are traded onsecurities exchanges like shares of common stock. AMLP generally consists of a general partner and limitedpartners. The general partner manages the partnership,has an ownership stake in the partnership and may beeligible to receive an incentive distribution. The limitedpartners provide capital to the partnership, have a limited(if any) role in the operation and management of thepartnership and receive cash distributions. YourPortfolio’s investment in funds that hold securities ofMLPs, which generally distribute substantially all of theirincome to investors in order to not be subject to entitylevel taxation, often offer a yield advantage over othertypes of securities. Currently, most MLPs operate in theenergy, natural resources or real estate sectors.Investments in MLP interests are subject to the risksgenerally applicable to companies in the energy andnatural resources sectors, including commodity pricingrisk, supply and demand risk, depletion risk andexploration risk. There are certain tax risks associatedwith MLPs in which your Portfolio may be exposed,including the risk that U.S. taxing authorities couldchallenge your Portfolio’s treatment for federal income taxpurposes of the MLPs in which your Portfolio may beexposed. These tax risks, and any adverse determinationwith respect thereto, could have a negative impact on theafter-tax income available for distribution by the MLPsand/or the value of your Portfolio’s investments.

Real Estate Companies. The Value Equity andIncome Portfolio and the Master Income Portfolio areexposed to real estate investment trusts (“REITs”) andother real estate companies (collectively “real estatecompanies”) through investment in the underlyingsecurities in the closed-end funds. You shouldunderstand the risks of real estate companies before youinvest. Many factors can have an adverse impact on the

A-7

performance of a particular real estate company,including its cash available for distribution, the creditquality of a particular company or the real estate industrygenerally. The success of real estate companies dependson various factors, including the occupancy and rentlevels, appreciation of the underlying property and theability to raise rents on those properties. Economicrecession, over-building, tax law changes, higher interestrates or excessive speculation can all negatively impactthese companies, their future earnings and share prices.

Risks associated with the direct ownership of realestate include, among other factors,

• general U.S. and global as well as localeconomic conditions,

• decline in real estate values,

• the financial health of tenants,

• over-building and increased competition fortenants,

• over-supply of properties for sale,

• changing demographics,

• changes in interest rates, tax rates and otheroperating expenses,

• changes in government regulations,

• faulty construction and the ongoing need forcapital improvements,

• regulatory and judicial requirements,including relating to liability for environmentalhazards,

• changes in neighborhood values and buyerdemand, and

• the unavailability of construction financing ormortgage loans at rates acceptable todevelopers.

Variations in rental income and space availability andvacancy rates in terms of supply and demand areadditional factors affecting real estate generally and realestate companies in particular. Properties owned by acompany may not be adequately insured against certainlosses and may be subject to significant environmentalliabilities, including remediation costs.

You should also be aware that real estate companiesmay not be diversified and are subject to the risks offinancing projects. The real estate industry may becyclical, and, if your Portfolio acquires securities at ornear the top of the cycle, there is increased risk of adecline in value of the securities during the life of yourPortfolio. Real estate companies are also subject todefaults by borrowers and the market’s perception of thereal estate industry generally.

Because of the structure of certain real estatecompanies, and legal requirements in many countriesthat these companies distribute a certain minimumamount of their taxable income to shareholdersannually, real estate companies often require frequentamounts of new funding, through both borrowingmoney and issuing stock. Thus, many real estatecompanies historical ly have frequently issuedsubstantial amounts of new equity shares (orequivalents) to purchase or build new properties. Thismay have adversely affected security market prices.Both existing and new share issuances may have anadverse effect on these prices in the future, especiallywhen companies continue to issue stock when realestate prices are relatively high and stock prices arerelatively low.

Foreign Issuer Risk. Some of the underlyingsecurities held by certain of the closed-end funds inyour Portfolio may be issued by foreign issuers. Thissubjects your Portfolio to more risks than if it onlyinvested in closed-end funds which invest solely insecurities of domestic issuers. Risks of foreign issuersinclude restr ict ions on foreign investments andexchange of securit ies and inadequate financialinformation. Foreign securities may also be affected bymarket and political factors specific to the issuer’scountry as well as fluctuations in foreign currencyexchange rates. Risks associated with investing inforeign secur i t ies may be more pronounced inemerging markets where the securities markets aresubstantially smaller, less developed, less liquid, lessregulated, and more volati le than the securit iesmarkets of the U.S. and developed foreign markets.Investments in debt securities of foreign governmentspresent special risks, including the fact that issuers

A-8

may be unable or unwilling to repay principal and/orinterest when due in accordance with the terms ofsuch debt, or may be unable to make suchrepayments when due in the currency required underthe terms of the debt. Political, economic and socialevents also may have a greater impact on the price ofdebt securities issued by foreign governments than onthe price of U.S. securities. In addition, brokerage andother transact ion costs on foreign secur i t iesexchanges are often higher than in the United Statesand there is generally less government supervision andregulation of exchanges, brokers and issuers in foreigncountries.

Senior Loans. Certain of the closed-end funds heldby the Master Income Portfolio may invest in seniorloans. Senior loans are issued by banks, other financialinst itut ions and other issuers to corporations,partnerships, limited liability companies and otherentities to finance leveraged buyouts, recapitalizations,mergers, acquisit ions, stock repurchases, debtrefinancings and, to a lesser extent, for generaloperating and other purposes.

An investment by the funds in senior loans involvesrisk that the borrowers under senior loans may defaulton their obligations to pay principal or interest whendue. Although senior loans may be secured by specificcollateral, there can be no assurance that liquidation ofcollateral would satisfy the borrower’s obligation in theevent of non-payment or that such collateral could bereadily liquidated. Senior loans are typically structuredas floating rate instruments in which the interest ratepayable on the obligation fluctuates with interest ratechanges. As a result, the yield on funds investing insenior loans will generally decline in a falling interestrate environment and increase in a rising interest rateenvironment. Senior loans are general ly belowinvestment grade quality and may be unrated at thetime of investment; are generally not registered withthe Securities and Exchange Commission (“SEC”) orstate securities commissions; and are generally notlisted on any securities exchange. In addition, theamount of public information available on senior loansis generally less extensive than that available for othertypes of securities.

Liquidity Risk. Liquidity risk is the risk that thevalue of a security will fall if trading in the security islimited or absent. No one can guarantee that a liquidtrading market will exist for any security.

Legislation/Litigation. From time to time, variouslegislative initiatives are proposed in the United Statesand abroad which may have a negative impact oncertain of the companies represented in your Portfolioor on the tax treatment of your Portfolio or of yourinvestment in the Portfolio. In addition, l it igationregarding any of the issuers of the Securities or of theindustries represented by these issuers may negativelyimpact the share prices of these Securities. No one canpredict what impact any pending or threatened litigationwill have on the share prices of the Securities.

No FDIC Guarantee. An investment in yourPortfolio is not a deposit of any bank and is not insuredor guaranteed by the Federal Deposit InsuranceCorporation or any other government agency.

CLOSED-END FUNDS

Closed-end funds are a type of investment companythat hold an actively managed portfolio of securities.Closed-end funds issue shares in “closed-end” offeringswhich generally trade on a stock exchange (althoughsome closed-end fund shares are not listed on asecurities exchange). The funds in the Portfolios all arecurrently l isted on a securit ies exchange. Sinceclosed-end funds maintain a relatively fixed pool ofinvestment capital, portfolio managers may be betterable to adhere to their investment philosophies throughgreater flexibility and control. In addition, closed-endfunds don’t have to manage fund liquidity to meetpotentially large redemptions.

Closed-end funds are subject to various risks,including management’s ability to meet the closed-endfund’s investment objective, and to manage theclosed-end fund portfolio when the underlying securitiesare redeemed or sold, during periods of market turmoiland as investors’ perceptions regarding closed-endfunds or their underlying investments change.

Shares of closed-end funds frequently trade at adiscount from their net asset value in the secondary

A-9

market. This risk is separate and distinct from the riskthat the net asset value of closed-end fund shares maydecrease. The amount of such discount from net assetvalue is subject to change from time to time in responseto various factors.

The closed-end funds included in the Portfolios mayemploy the use of leverage in their portfolios throughthe issuance of preferred stock or other methods. Whileleverage often serves to increase the yield of aclosed-end fund, this leverage also subjects theclosed-end fund to increased risks. These risks mayinclude the likelihood of increased volatility and thepossibility that the closed-end fund’s common shareincome will fall if the dividend rate on the preferredshares or the interest rate on any borrowings rises.

Certain of the funds in the Portfol ios may beclassified as “non-diversified” under the InvestmentCompany Act of 1940. These funds have the ability toinvest a greater portion of their assets in securities of asingle issuer which could reduce diversification.

Only the Trustee may vote the shares of theclosed-end funds held in the Portfolios. The Trustee willvote the shares in the same general proportion asshares held by other shareholders of each fund. YourPortfolio is generally required, however, to reject anyoffer for securities or other property in exchange forportfolio securities as described under “PortfolioAdministration--Portfolio Administration.”

PUBLIC OFFERING

General. Units are offered at the Public OfferingPrice which consists of the net asset value per Unit plusorganization costs plus the sales charge. The net assetvalue per Unit is the value of the securities, cash andother assets in your Portfolio reduced by the liabilities ofthe Portfolio divided by the total Units outstanding. Themaximum sales charge equals 2.95% of the PublicOffering Price per Unit (3.04% of the aggregate offeringprice of the Securities) at the time of purchase.

You pay the initial sales charge at the time you buyUnits. The initial sales charge is the difference betweenthe total sales charge percentage (maximum of 2.95%of the Public Offering Price per Unit) and the sum of the

remaining fixed dollar deferred sales charge and thetotal fixed dollar creation and development fee. Theinitial sales charge will be approximately 1.00% of thePublic Offering Price per Unit depending on the PublicOffering Price per Unit. The deferred sales charge isfixed at $0.145 per Unit. Your Portfolio pays thedeferred sales charge in installments as described in the“Fee Table.” If any deferred sales charge payment dateis not a business day, we will charge the payment onthe next business day. If you purchase Units after theinitial deferred sales charge payment, you will only paythat portion of the payments not yet collected. If youredeem or sell your Units prior to collection of the totaldeferred sales charge, you will pay any remainingdeferred sales charge upon redemption or sale of yourUnits. The initial and deferred sales charges are referredto as the “transactional sales charge.” The transactionalsales charge does not include the creation anddevelopment fee which compensates the Sponsor forcreating and developing your Portfolio and is describedunder “Expenses.” The creation and development fee isfixed at $0.05 per Unit. Your Portfolio pays the creationand development fee as of the close of the initialoffering period as described in the “Fee Table.” If youredeem or sell your Units prior to collection of thecreation and development fee, you will not pay thecreation and development fee upon redemption or saleof your Units. Because the deferred sales charge andcreation and development fee are fixed dollar amountsper Unit, the actual charges will exceed the percentagesshown in the “Fee Table” if the Public Offering Price perUnit fal ls below $10 and wil l be less than thepercentages shown in the “Fee Table” if the PublicOffering Price per Unit exceeds $10. In no event will themaximum total sales charge exceed 2.95% of thePublic Offering Price per Unit.

Since the deferred sales charge and creation anddevelopment fee are fixed dollar amounts per Unit, yourPortfolio must charge these amounts per Unit regardlessof any decrease in net asset value. However, if the PublicOffering Price per Unit falls to the extent that themaximum sales charge percentage results in a dollaramount that is less than the combined fixed dollaramounts of the deferred sales charge and creation and

A-10

development fee, your initial sales charge will be a creditequal to the amount by which these fixed dollar chargesexceed your sales charge at the time you buy Units. Insuch a situation, the value of securities per Unit wouldexceed the Public Offering Price per Unit by the amountof the initial sales charge credit and the value of thosesecurities will fluctuate, which could result in a benefit ordetriment to Unitholders that purchase Units at that price.The initial sales charge credit is paid by the Sponsor andis not paid by the Portfolio. The “Fee Table” shows thesales charge calculation at a $10 Public Offering Priceper Unit and the following examples illustrate the salescharge at prices below and above $10. If the PublicOffering Price per Unit fell to $6, the maximum salescharge would be $0.1770 (2.95% of the Public OfferingPrice per Unit), which consists of an initial sales chargeof -$0.0180, a deferred sales charge of $0.145 and acreation and development fee of $0.05. If the PublicOffering Price per Unit rose to $14, the maximum salescharge would be $0.4130 (2.95% of the Public OfferingPrice per Unit), consisting of an initial sales charge of$0.2180, a deferred sales charge of $0.145 and thecreation and development fee of $0.05.

The actual sales charge that may be paid by aninvestor may differ slightly from the sales chargesshown herein due to rounding that occurs in thecalculation of the Public Offering Price and in thenumber of Units purchased.

The minimum purchase is 100 Units (25 Units forretirement accounts) but may vary by selling firm.Certain broker-dealers or selling firms may charge anorder handling fee for processing Unit purchases.

Reducing Your Sales Charge. The Sponsoroffers a variety of ways for you to reduce the salescharge that you pay. It is your financial professional’sresponsibility to alert the Sponsor of any discount whenyou purchase Units. Before you purchase Units youmust also inform your financial professional of yourqualification for any discount or of any combinedpurchases to be eligible for a reduced sales charge. Youmay not combine discounts. Since the deferred salescharge and creation and development fee are fixeddollar amounts per Unit, your Portfolio must chargethese amounts per Unit regardless of any discounts.

However, if you are eligible to receive a discount suchthat your total sales charge is less than the fixed dollaramounts of the deferred sales charge and creation anddevelopment fee, you will receive a credit equal to thedifference between your total sales charge and thesefixed dollar charges at the time you buy Units.

Large Quantity Purchases. You can reduce yoursales charge by increasing the size of your investment.If you purchase the amount of Units shown in the tablebelow during the initial offering period, the sales chargewill be as follows:

Transaction Amount Sales Charge ______________ ______________Less than $50,000 . . . . . . . . . . . . . . . . . . . . 2.95%$50,000 - $99,999 . . . . . . . . . . . . . . . . . . 2.70$100,000 - $249,999 . . . . . . . . . . . . . . . . . 2.45$250,000 - $499,999 . . . . . . . . . . . . . . . . 2.10$500,000 - $999,999 . . . . . . . . . . . . . . . . 1.85$1,000,000 or more . . . . . . . . . . . . . . . . . 1.20

Except as described below, these quantity discountlevels apply only to purchases of a single Portfolio madeby the same person on a single day from a singlebroker-dealer. We apply these sales charges as apercent of the Public Offering Price per Unit at the timeof purchase. The breakpoints will be adjusted to takeinto consideration purchase orders stated in dollarswhich cannot be completely fulf i l led due to therequirement that only whole Units will be issued.

For purposes of achieving these levels you maycombine purchases of Units of a Portfolio offered in thisprospectus with purchases of units of any other VanKampen-sponsored unit investment trust in the initialoffering period which are not already subject to areduced sales charge (including other Portfolios offeredin this prospectus). In addition, Units purchased in thename of your spouse or children under 21 living in thesame household as you will be deemed to be additionalpurchases by you for the purposes of calculating theapplicable quantity discount level. The reduced salescharge levels will also be applicable to a trustee or otherfiduciary purchasing Units for a single trust, estate(including multiple trusts created under a single estate)or fiduciary account. To be eligible for aggregation as

A-11

described in this paragraph, all purchases must bemade on the same day through a single broker-dealeror selling agent. You must inform your broker-dealer ofany combined purchases before your purchase to beeligible for a reduced sales charge.

Fee Accounts. Investors may purchase Units throughregistered investment advisers, certified financialplanners and registered broker-dealers who in eachcase either charge periodic fees for brokerage services,f inancial planning, investment advisory or assetmanagement services, or provide such services inconnection with the establishment of an investmentaccount for which a comprehensive “wrap fee” charge(“Wrap Fee”) is imposed (“Fee Accounts”). If Units of aPortfolio are purchased for a Fee Account and thePortfolio is subject to a Wrap Fee (i.e., the Portfolio is“Wrap Fee Eligible”), then the purchase will not besubject to the transactional sales charge but will besubject to the creation and development fee that isretained by the Sponsor. Please refer to the sectioncalled “Fee Accounts” for additional information onthese purchases. The Sponsor reserves the right to limitor deny purchases of Units described in this paragraphby investors or selling firms whose frequent tradingactivity is determined to be detrimental to a Portfolio.

Rollovers and Exchanges. During the initial offeringperiod of a Portfolio offered in this prospectus,unitholders of any Van Kampen-sponsored unitinvestment trusts and unitholders of unaffiliated unitinvestment trusts may util ize their redemption ortermination proceeds from such a trust to purchase Unitsof a Portfolio at the Public Offering Price per Unit less1.00%. In order to be eligible for the sales chargediscounts applicable to Unit purchases made withredemption or termination proceeds from other unitinvestment trusts, the termination or redemptionproceeds used to purchase Units of a Portfolio must bederived from a transaction that occurred within 30 daysof your Unit purchase. In addition, the discounts will onlybe available for investors that uti l ize the samebroker-dealer (or a different broker-dealer withappropriate notification) for both the Unit purchase andthe transaction resulting in the receipt of the terminationor redemption proceeds used for the Unit purchase. You

may be required to provide appropriate documentation orother information to your broker-dealer to evidence youreligibility for these reduced sales charge discounts. Anexchange does not avoid a taxable event on theredemption or termination of an interest in a trust.

Employees. Employees, officers and directors(including their spouses and children under 21 living inthe same household, and trustees, custodians orfiduciaries for the benefit of such persons) of VanKampen Funds Inc. and its affiliates, and dealers andtheir affiliates may purchase Units at the Public OfferingPrice less the applicable dealer concession. All employeediscounts are subject to the policies of the related sellingfirm. Only employees, officers and directors of companiesthat allow their employees to participate in this employeediscount program are eligible for the discounts.

Distribution Reinvestments. We do not charge anysales charge when you reinvest distributions from yourPortfolio into additional Units of your Portfolio. Since thedeferred sales charge and creation and development feeare fixed dollar amounts per Unit, your Portfolio mustcharge these amounts per Unit regardless of thisdiscount. If you elect to reinvest distributions, the Sponsorwill credit you with additional Units with a dollar valuesufficient to cover the amount of any remaining deferredsales charge and creation and development fee that willbe collected on such Units at the time of reinvestment.The dollar value of these Units will fluctuate over time.

Unit Price. The Public Offering Price of Units willvary from the amounts stated under “EssentialInformation” in accordance with fluctuations in the pricesof the underlying Securities in your Portfolio. The initialprice of the Securities upon deposit by the Sponsor wasdetermined by the Trustee. The Trustee will generallydetermine the value of the Securities as of the EvaluationTime on each business day and will adjust the PublicOffering Price of Units accordingly. The Evaluation Timeis the close of the New York Stock Exchange on eachbusiness day. The term “business day”, as used hereinand under “Rights of Unitholders--Redemption of Units”,means any day on which the New York Stock Exchangeis open for regular trading. The Public Offering Price perUnit will be effective for all orders received prior to theEvaluation Time on each business day. Orders received

A-12

by the Sponsor prior to the Evaluation Time and ordersreceived by authorized financial professionals prior to theEvaluation Time that are properly transmitted to theSponsor by the time designated by the Sponsor, arepriced based on the date of receipt. Orders received bythe Sponsor after the Evaluation Time, and ordersreceived by authorized financial professionals after theEvaluation Time or orders received by such persons thatare not transmitted to the Sponsor until after the timedesignated by the Sponsor, are priced based on thedate of the next determined Public Offering Price perUnit provided they are received timely by the Sponsor onsuch date. It is the responsibility of authorized financialprofessionals to transmit orders received by them to theSponsor so they will be received in a timely manner.

The value of portfolio securities is based on thesecurities’ market price when available. When amarket pr ice is not readi ly avai lable, includingcircumstances under which the Trustee determinesthat a security’s market price is not accurate, aport fo l io secur i ty is valued at i ts fa i r value, asdetermined under procedures established by theTrustee or an independent pricing service used by theTrustee. In these cases, a Portfolio’s net asset valuewill reflect certain portfolio securities’ fair value ratherthan their market price. With respect to securities thatare primarily listed on foreign exchanges, the value ofthe portfolio securities may change on days when youwill not be able to purchase or sell Units. The value ofany foreign securities is based on the applicablecurrency exchange rate as of the Evaluation Time.The Sponsor will provide price dissemination andoversight services to your Portfolio.

During the initial offering period, part of the PublicOffering Price represents an amount that will pay thecosts incurred in establishing your Portfolio. These costsinclude the costs of preparing documents relating to thePortfolio (such as the registration statement, prospectus,trust agreement and legal documents), fees paid to thePortfolio Consultant for assisting the Sponsor in theselection of securities, federal and state registration fees,the initial fees and expenses of the Trustee and the initialaudit. Your Portfolio will sell securities to reimburse us forthese costs at the end of the initial offering period or after

six months, if earlier. The value of your Units will declinewhen your Portfolio pays these costs.

Unit Distribution. Units will be distributed to thepublic by the Sponsor, broker-dealers and others at thePublic Offering Price. Units repurchased in thesecondary market, if any, may be offered by thisprospectus at the secondary market Public OfferingPrice in the manner described above.

The Sponsor intends to qualify Units for sale in anumber of states. Brokers, dealers and others will beallowed a regular concession or agency commission inconnection with the distribution of Units during the initialoffering period as described in the following table:

Concession Transaction or Agency Amount* Commission ______________ ____________Less than $50,000 . . . . . . . . . . . . . . . . . . . 2.25%$50,000 - $99,999 . . . . . . . . . . . . . . . . . . 2.00$100,000 - $249,999 . . . . . . . . . . . . . . . . . 1.75$250,000 - $499,999 . . . . . . . . . . . . . . . . 1.45$500,000 - $999,999 . . . . . . . . . . . . . . . . 1.20$1,000,000 or more . . . . . . . . . . . . . . . . . 0.65_______________

* The breakpoints will be adjusted to take into considerationpurchase orders stated in dollars which cannot be completelyfulfilled due to the requirement that only whole Units will be issued.

For transactions involving unitholders of other unitinvestment trusts who use their redemption ortermination proceeds to purchase Units of the Portfolios,the regular concession or agency commission willamount to 1.20% per Unit.

In addition to the regular concession or agencycommission set forth above, all broker-dealers andother selling firms will be eligible to receive additionalcompensation based on total initial offering period salesof all eligible Van Kampen unit investment trusts duringa Quarterly Period as set forth in the following table:

Initial Offering Period VolumeSales During Quarterly Period Concession______________________________ ____________$2 million but less than $5 million . . . . . . . . 0.025%$5 million but less than $10 million . . . . . . . 0.050$10 million but less than $50 million . . . . . . 0.075$50 million or more . . . . . . . . . . . . . . . . . . 0.100

A-13

“Quarterly Period” means the following periods:January – March; April – June; July – September; andOctober – December. Broker-dealers and other sellingf irms wil l not receive these addit ional volumeconcessions on the sale of units which are not subjectto the transactional sales charge, however, such saleswill be included in determining whether a firm has metthe sales level breakpoints set forth in the table above.Secondary market sales of all unit investment trusts areexcluded for purposes of these volume concessions.Notwithstanding the foregoing, Wells Fargo Advisors willreceive the maximum volume concession set forth inthe table above for all eligible unit sales. The Sponsorwill pay these amounts out of the transactional salescharge received on units within a reasonable timefollowing each Quarterly Period. For a trust to be eligiblefor this additional compensation for Quarterly Periodsales, the trust’s prospectus must include disclosurerelated to this additional compensation; a trust is notel igible for this addit ional compensation i f theprospectus for such trust does not include disclosurerelated to this additional compensation.

In addition to the regular concession and additionalvolume concessions set forth in the tables above,Preferred Distributors will receive a reallowance of 0.10%of the Public Offering Price per Unit of all Units of aPortfolio sold during a Quarterly Period. This additionalcompensation will be paid to Preferred Distributors as anadditional broker-dealer concession at the time Units arepurchased unless the Preferred Distributor notifies theSponsor that it elects to receive a separate paymentfol lowing each applicable Quarterly Period. The“Preferred Distributors” include (1) the following firms andtheir affiliates: Edward D. Jones & Co., L.P., MerrillLynch, Pierce, Fenner & Smith Incorporated, MorganStanley Smith Barney LLC, UBS Financial Services Inc.and Wells Fargo Advisors and (2) any selling firm thathas achieved aggregate sales of Van Kampen unitinvestment trusts of either $30 million in the three-monthperiod preceding the related Quarterly Period or $100million in the twelve-month period preceding the relatedQuarterly Period. Preferred Distributors will not receivethis additional compensation on the sale of Units whichare not subject to the transactional sales charge,

however, such sales will be included in determiningwhether a firm has met the sales levels described in thepreceding sentence for purposes of qualifying as aPreferred Distributor. Secondary market sales of Unitsare excluded for purposes of this Preferred Distributorcompensation.

Except as provided in this section, any sales chargediscount provided to investors will be borne by theselling broker-dealer or agent. For all secondary markettransactions the total concession or agencycommission will amount to 80% of the sales charge.Notwithstanding anything to the contrary herein, in nocase shall the total of any concessions, agencycommissions and any additional compensation allowedor paid to any broker, dealer or other distributor of Unitswith respect to any individual transaction exceed thetotal sales charge applicable to such transaction. TheSponsor reserves the right to reject, in whole or in part,any order for the purchase of Units and to change theamount of the concession or agency commission todealers and others from time to time.

We may provide, at our own expense and out of ourown profits, additional compensation and benefits tobroker-dealers who sell Units of these Portfolios and ourother products. This compensation is intended to resultin additional sales of our products and/or compensatebroker-dealers and financial advisors for past sales. Wemay make these payments for marketing, promotionalor related expenses, including, but not limited to,expenses of entertaining retail customers and financialadvisors, advert ising, sponsorship of events orseminars, obtaining shelf space in broker-dealer firmsand similar activities designed to promote the sale ofthe Portfolios and our other products. Fees may includepayment for travel expenses, including lodging, incurredin connection with trips taken by invited registeredrepresentatives for meetings or seminars of a businessnature. These arrangements will not change the priceyou pay for your Units.

Sponsor Compensation. The Sponsor will receivethe total sales charge applicable to each transaction.Except as provided under “Unit Distribution” above, anysales charge discount provided to investors will be borneby the selling dealer or agent. In addition, the Sponsor

A-14

will realize a profit or loss as a result of the differencebetween the price paid for the Securities by the Sponsorand the cost of the Securities to a Portfolio on the InitialDate of Deposit as well as on subsequent deposits. See“Notes to Portfolios”. The Sponsor has not participatedas sole underwriter or as manager or as a member ofthe underwriting syndicates or as an agent in a privateplacement for any of the Securities. The Sponsor mayrealize profit or loss as a result of fluctuations in themarket value of Units held by the Sponsor for sale to thepublic. In maintaining a secondary market, the Sponsorwill realize profits or losses in the amount of anydifference between the price at which Units arepurchased and the price at which Units are resold (whichprice includes the applicable sales charge) or from aredemption of repurchased Units at a price above orbelow the purchase price. Cash, if any, made availableto the Sponsor prior to the date of settlement for thepurchase of Units may be used in the Sponsor’sbusiness and may be deemed to be a benefit to theSponsor, subject to the limitations of the SecuritiesExchange Act of 1934.

The Sponsor or an affiliate may have participated in apublic offering of one or more of the Securities. TheSponsor, an affiliate or their employees may have a longor short position in these Securities or related securities.An affiliate may act as a specialist or market maker forthese Securities. An officer, director or employee of theSponsor or an affiliate may be an officer or director forissuers of the Securities.

Market for Units. Although it is not obligated todo so, the Sponsor may maintain a market for Unitsand to purchase Units at the secondary marketrepurchase price (which is described under “Right ofUnitholders--Redemption of Units”). The Sponsor maydiscont inue purchases of Units or d iscont inuepurchases at this price at any time. In the event that asecondary market is not maintained, a Unitholder willbe able to dispose of Units by tendering them to theTrustee for redemption at the Redemption Price. See“Rights of Uni tholders--Redempt ion of Uni ts”.Unitholders should contact their broker to determinethe best price for Units in the secondary market. Unitssold prior to the time the entire deferred sales charge

has been collected will be assessed the amount ofany remaining deferred sales charge at the time ofsale. The Trustee will notify the Sponsor of any Unitstendered for redemption. If the Sponsor’s bid in thesecondary market equals or exceeds the RedemptionPrice per Unit, it may purchase the Units not laterthan the day on which Units would have beenredeemed by the Trustee. The Sponsor may sellrepurchased Units at the secondary market PublicOffering Price per Unit.

RETIREMENT ACCOUNTS

Units are available for purchase in connection withcertain types of tax-sheltered retirement plans, includingIndividual Retirement Accounts for individuals, SimplifiedEmployee Pension Plans for employees, qualified plansfor self-employed individuals, and qualified corporatepension and profit sharing plans for employees. Theminimum purchase for these accounts is reduced to 25Units but may vary by selling firm. The purchase of Unitsmay be limited by the plans’ provisions and does notitself establish such plans.

FEE ACCOUNTS

As described above, Units may be available forpurchase by investors in Fee Accounts where the Portfoliois Wrap Fee Eligible. You should consult your financialprofessional to determine whether you can benefit fromthese accounts. This table illustrates the sales charge youwill pay a Portfolio is Wrap Fee Eligible as a percentage ofthe initial Public Offering Price per Unit on the Initial Date ofDeposit (the percentage will vary thereafter).

Initial sales charge 0.00%Deferred sales charge 0.00 ______ Transactional sales charge 0.00% ______ ______Creation and development fee 0.50% ______ Total sales charge 0.50% ______ ______

You should consult the “Public Offering--ReducingYour Sales Charge” section for specific information onthis and other sales charge discounts. That sectiongoverns the calculation of all sales charge discounts.

A-15

The Sponsor reserves the r ight to l imit or denypurchases of Units in Fee Accounts by investors orsel l ing f irms whose frequent trading activity isdetermined to be detrimental to a Portfolio. To purchaseUnits in these Fee Accounts, your financial professionalmust purchase Units designated with one of the WrapFee CUSIP numbers set forth under “EssentialInformation,” either Wrap Fee Cash for cashdistributions or Wrap Fee Reinvest for the reinvestmentof distributions in additional Units, if available. See“Rights of Unitholders--Reinvestment Option.”

RIGHTS OF UNITHOLDERS

Distributions. With respect to the Master IncomePortfolio, Value Equity and Income Portfolio and CoveredCall Income Portfolio, dividends and interest, net ofexpenses, and any net proceeds from the sale ofSecurities received by your Portfolio will generally bedistributed to Unitholders on each Distribution Date toUnitholders of record on the preceding Record Date.With respect to the Master Municipal Income Portfolio--National Series, the Trustee will generally distribute thecash held in the Income and Capital Accounts of yourPortfolio, net of expenses, on each Distribution Date toUnitholders of record on the preceding Record Date,provided that the total cash held for distribution equals atleast 0.1% of your Portfolio's net asset value. Thesedates appear under “Essential Information”. In addition, aPortfolio will generally make required distributions at theend of each year if it is structured as a “regulatedinvestment company” for federal tax purposes.Unitholders will also receive a final distribution ofdividends when their Portfolio terminates. A personbecomes a Unitholder of record on the date of settlement(generally three business days after Units are ordered).Unitholders may elect to receive distributions in cash orto have distributions reinvested into additional Units. See“Rights of Unitholders--Reinvestment Option”.

Dividends and interest received by a Portfolio arecredited to the Income Account of the Portfolio. Otherreceipts (e.g., capital gains, proceeds from the sale ofSecurities, etc.) are credited to the Capital Account.Proceeds received on the sale of any Securities, to theextent not used to meet redemptions of Units or pay

deferred sales charges, fees or expenses, will bedistributed to Unitholders. Proceeds received from thedisposition of any Securities after a Record Date andprior to the following Distribution Date will be held in theCapital Account and not distributed until the nextDistribution Date. Any distribution to Unitholdersconsists of each Unitholder’s pro rata share of theavailable cash in the Income and Capital Accounts as ofthe related Record Date.

Estimated Distributions. The estimated initialdistribution and estimated net annual income per Unitmay be shown under “Essential Information.” Generally,the estimate of the income a Portfolio may receive isbased on the most recent ordinary dividends declaredby a closed-end fund. In certain cases, estimated netannual income may also be based upon several recentlydeclared dividends of a closed-end fund. However, theissuers of any securities in the underlying funds in yourPortfolio, as well as the issuers of the closed-end funds inyour Portfolio, do not assure dividend payments andtherefore the amount of future dividend income to yourPortfolio is uncertain. The actual net annual distributionsmay decrease over time because a portion of theSecurities included in a Portfolio will be sold to pay forthe organization costs, deferred sales charge andcreation and development fee. Securities may also besold to pay regular fees and expenses during aPortfol io’s l i fe. The actual net annual incomedistributions you receive will vary from the estimatedamount due to changes in a Portfolio’s fees andexpenses, in actual income received by a Portfolio,currency fluctuations and with changes in a Portfoliosuch as the acquisition, call, maturity or sale ofSecurities. Due to these and various other factors,actual income received by a Portfolio will most likelydiffer from the most recent dividends or scheduledincome payments.

Reinvestment Option. Unitholders may havedistributions automatically reinvested in additionalUnits without a sales charge (to the extent Units maybe lawfully offered for sale in the state in which theUnitholder resides). The CUSIP numbers for either“Cash” distributions or “Reinvest” for the reinvestmentof distr ibut ions are set forth under “Essent ia l

A-16

Informat ion”. Brokers and dealers can use theDividend Reinvestment Service through DepositoryTrust Company (“DTC”) or purchase a Reinvest (orWrap Fee Reinvest in the case of Wrap Fee EligibleUnits held in Fee Accounts) CUSIP, if available. Toparticipate in this reinvestment option, a Unitholdermust file with the Trustee a written notice of election,together with any other documentation that theTrustee may then require, at least five days prior to therelated Record Date. A Unitholder’s election will applyto all Units owned by the Unitholder and will remain ineffect unt i l changed by the Unitholder. Thereinvestment option is not offered during the 30 daysprior to termination. If Units are unavai lable forreinvestment or this reinvestment option is no longeravai lable, distr ibut ions wi l l be paid in cash.Distributions will be taxable to Unitholders if paid incash or automatically reinvested in additional Units.See “Taxation”.

A participant may elect to terminate his or herreinvestment plan and receive future distributions incash by notifying the Trustee in writing no later than fivedays before a Distribution Date. The Sponsor shall havethe right to suspend or terminate the reinvestment planat any time. The reinvestment plan is subject toavailability or limitation by each broker-dealer or sellingfirm. Broker-dealers may suspend or terminate theoffering of a reinvestment plan at any time. Pleasecontact your financial professional for additionalinformation.

Redemption of Units. All or a portion of your Unitsmay be tendered to The Bank of New York Mellon, theTrustee, for redemption at Unit Investment Trust Division,111 Sanders Creek Parkway, East Syracuse, New York13057, on any day the New York Stock Exchange isopen. No redemption fee will be charged by the Sponsoror the Trustee, but you are responsible for applicablegovernmental charges, if any. Units redeemed by theTrustee will be canceled. You may redeem all or a portionof your Units by sending a request for redemption to yourbank or broker-dealer through which you hold your Units.No later than three business days following satisfactorytender, the Unitholder will be entitled to receive in cash anamount for each Unit equal to the Redemption Price per

Unit next computed on the date of tender. The “date oftender” is deemed to be the date on which Units arereceived by the Trustee, except that with respect to Unitsreceived by the Trustee after the Evaluation Time or on aday which is not a Portfolio business day, the date oftender is deemed to be the next business day.Redemption requests received by the Trustee after theEvaluation Time, and redemption requests received byauthorized financial professionals after the EvaluationTime or redemption requests received by such personsthat are not transmitted to the Trustee until after the timedesignated by the Trustee, are priced based on the dateof the next determined redemption price provided theyare received timely by the Trustee on such date. It is theresponsibility of authorized financial professionals totransmit redemption requests received by them to theTrustee so they will be received in a timely manner.Certain broker-dealers or selling firms may charge anorder handling fee for processing redemption requests.Units redeemed directly through the Trustee are notsubject to such fees.

Unitholders tendering 1,000 or more Units of thePortfolios (or such higher amount as may be requiredby your broker-dealer or selling agent) for redemptionmay request an in kind distribution of Securities equalto the Redemption Price per Unit on the date of tender.Unitholders may not request an in kind distributionwithin thirty days of a Portfolio’s termination. ThePortfolios generally will not offer in kind distributions ofportfolio securities that are held in foreign markets. Anin kind distribution will be made by the Trustee throughthe distribution of each of the Securities in book-entryform to the account of the Unitholder’s broker-dealer atDTC. Amounts representing fractional shares will bedistributed in cash. The Trustee may adjust the numberof shares of any Security included in a Unitholder’s inkind distribution to facilitate the distribution of wholeshares. The in kind distribution option may be modifiedor discontinued at any t ime without not ice.Notwithstanding the foregoing, if the Unitholderrequesting an in kind distribution is the Sponsor or anaffiliated person of the Portfolio, the Trustee may makean in kind distribution to such Unitholder provided thatno one with a pecuniary incentive to influence the in

A-17

kind distr ibution may inf luence selection of thedistributed securities, the distribution must consist of apro rata distribution of all portfolio securities (withlimited exceptions) and the in kind distribution may notfavor such affiliated person to the detriment of anyother Unitholder.

The Trustee may sell Securities to satisfy Unitredemptions. To the extent that Securit ies areredeemed in kind or sold, the size of a Portfolio will be,and the diversity of the Portfolio may be, reduced. Salesmay be required at a time when Securities would nototherwise be sold and may result in lower prices thanmight otherwise be realized. The price received uponredemption may be more or less than the amount paidby the Unitholder depending on the value of theSecurities at the time of redemption. Special federalincome tax consequences will result if a Unitholderrequests an in kind distribution. See “Taxation”.

The Redemption Price per Unit and the secondarymarket repurchase price per Unit are equal to the prorata share of each Unit in your Portfolio determined onthe basis of (i) the cash on hand in the Portfolio, (ii) thevalue of the Securities in the Portfolio and (iii) dividendsor other income distr ibutions receivable on theSecurities in the Portfolio trading ex-dividend as of thedate of computation, less (a) amounts representingtaxes or other governmental charges payable out ofthe Portfolio, (b) the accrued expenses of the Portfolio(including costs associated with liquidating securitiesafter the end of the initial offering period) and (c) anyunpaid deferred sales charge payments. During theinitial offering period, the redemption price and thesecondary market repurchase pr ice wi l l not bereduced by estimated organization costs or thecreation and development fee. For these purposes,the Trustee will determine the value of the Securitiesas described under “Public Offering--Unit Price.”

The right of redemption may be suspended andpayment postponed for any period during which theNew York Stock Exchange is closed, other than forcustomary weekend and holiday closings, or any periodduring which the SEC determines that trading on thatExchange is restricted or an emergency exists, as aresult of which disposal or evaluation of the Securities is

not reasonably practicable, or for other periods as theSEC may permit.

Exchange Option. When you redeem Units of yourPortfolio or when your Portfolio terminates, you may beable to exchange your Units for units of other VanKampen unit trusts at a reduced sales charge. Youshould contact your financial professional for moreinformation about trusts currently avai lable forexchanges. Before you exchange Units, you shouldread the prospectus of the new trust carefully andunderstand the risks and fees. You should then discussthis option with your financial professional to determinewhether your investment goals have changed, whethercurrent trusts suit you and to discuss taxconsequences. An exchange is a taxable event to you.We may discontinue this option at any time.

Rollover. We may offer a subsequent series of eachPortfolio for a Rollover when the Portfolios terminate.

On the Mandatory Termination Date you will have theoption to (1) participate in a Rollover and have yourUnits reinvested into a subsequent trust series or (2) receive a cash distribution.

If you elect to participate in a cash Rollover, yourUnits will be redeemed on the Mandatory TerminationDate. As the redemption proceeds become available,the proceeds (including dividends) will be invested in anew trust series at the public offering price for the newtrust. The Trustee will attempt to sell Securities to satisfythe redemption as quickly as practicable on theMandatory Termination Date. We do not anticipate thatthe sale period will be longer than one day, however,certain factors could affect the ability to sell theSecurities and could impact the length of the saleperiod. The liquidity of any Security depends on thedaily trading volume of the Security and the amountavailable for redemption and reinvestment on any day.

We may make subsequent trust series available forsale at various times during the year. Of course, wecannot guarantee that a subsequent trust or sufficientunits will be available or that any subsequent trustswill offer the same investment strategies or objectivesas the current Portfolios. We cannot guarantee that aRol lover wi l l avoid any negat ive market pr ice

A-18

consequences resulting from trading large volumes ofsecur i t ies. Market pr ice t rends may make i tadvantageous to sell or buy securities more quickly ormore s lowly than permit ted by the Port fo l ioprocedures. We may, in our sole discretion, modify aRollover or stop creating units of a trust at any timeregardless of whether all proceeds of Unitholdershave been reinvested in a Rollover. If we decide not tooffer a subsequent series, Unitholders will be notifiedprior to the Mandatory Termination Date. Cash whichhas not been re invested in a Rol lover wi l l bedistributed to Unitholders shortly after the MandatoryTermination Date. Rollover participants may receivetaxable dividends or realize taxable capital gainswhich are reinvested in connection with a Rollover butmay not be entitled to a deduction for capital lossesdue to the “wash sale” tax ru les. Due to thereinvestment in a subsequent trust, no cash will bedistributed to pay any taxes. See “Taxation”.

Units. Ownership of Units is evidenced in book-entryform only and will not be evidenced by certificates. Unitspurchased or held through your bank or broker-dealer willbe recorded in book-entry form and credited to theaccount of your bank or broker-dealer at DTC. Units aretransferable by contacting your bank or broker-dealerthrough which you hold your Units. Transfer, and therequirements therefore, will be governed by the applicableprocedures of DTC and your agreement with the DTCparticipant in whose name your Units are registered onthe transfer records of DTC.

Reports Provided. Unitholders will receive astatement of dividends and other amounts received bya Portfolio for each distribution. Within a reasonabletime after the end of each year, each person who was aUnitholder during that year will receive a statementdescribing dividends and capital received, actualPortfolio distributions, Portfolio expenses, a list of theSecurities and other Portfolio information. Unitholdersmay obtain evaluations of the Securities upon request tothe Trustee. If you have questions regarding youraccount or your Portfolio, please contact your financialadvisor or the Trustee. The Sponsor does not haveaccess to individual account information.

PORTFOLIO ADMINISTRATION

Portfolio Administration. Your Portfolio is not amanaged fund and, except as provided in the TrustAgreement, Securities generally will not be sold orreplaced. The Sponsor may, however, direct thatSecurities be sold in certain limited circumstances toprotect a Portfolio based on advice from the Supervisor.These situations may include events such as the issuerhaving defaulted on payment of any of its outstandingobligations or the price of a Security has declined tosuch an extent or other credit factors exist so that in theopinion of the Supervisor retention of the Security wouldbe detrimental to a Portfolio. If a public tender offer hasbeen made for a Security or a merger or acquisition hasbeen announced affecting a Security, the Trustee mayeither sel l the Security or accept an offer i f theSupervisor determines that the sale or exchange is inthe best interest of Unitholders (only offers for cash if aPortfolio has not elected to be treated as a regulatedinvestment company for tax purposes). The Trustee willdistribute any cash proceeds to Unitholders. In addition,the Trustee may sell Securities to redeem Units or payPortfolio expenses or deferred sales charges. Withrespect to the Master Municipal Income Portfolio--National Series, the Trustee must reject any offer forsecurities or property other than cash in exchange forthe Securities. If securities or property are nonethelessacquired by a Portfolio, the Sponsor may direct theTrustee to sell the securities or property and distributethe proceeds to Unitholders or to accept the securitiesor property for deposit in the Portfolio. Should anycontract for the purchase of any of the Securities fail,the Sponsor will (unless substantially all of the moneysheld in a Portfolio to cover the purchase are reinvestedin substitute Securities in accordance with the TrustAgreement) refund the cash and sales chargeattributable to the failed contract to all Unitholders on orbefore the next Distribution Date.

With respect to the Master Income Portfolio, theValue Equity and Income Portfolio and the CoveredCall Income Portfolio, the Sponsor may direct thereinvestment of proceeds of the sale of Securities if thesale is the direct result of serious adverse creditfactors which, in the opinion of the Sponsor, would

A-19

make retention of the Securities detrimental to aPortfolio. In such a case, the Sponsor may, but is notobligated to, direct the reinvestment of sale proceedsin any other securit ies that meet the criteria forinclusion in a Portfolio on the Initial Date of Deposit.The Sponsor may also instruct the Trustee to takeaction necessary to ensure that the Master IncomePortfolio, the Value Equity and Income Portfolio andthe Covered Call Income Portfolio continue to satisfythe qualifications of a regulated investment companyand to avoid imposition of tax on undistributed incomeof the Portfolio.

The Trust Agreement requires the Trustee to vote allshares of the funds held in a Portfolio in the samemanner and ratio on all proposals as the owners of suchshares not held by the Portfolio.

When your Portfolio sells Securities, the compositionand diversity of the Securities in the Portfolio may bealtered. However, if the Trustee sells fund shares toredeem Units or to pay Portfolio expenses or salescharges, the Trustee will do so, as nearly as practicable,on a pro rata basis. In order to obtain the best price fora Portfolio, it may be necessary for the Supervisor tospecify minimum amounts in which blocks of Securitiesare to be sold. In effecting purchases and sales ofportfolio securities, the Sponsor may direct that ordersbe placed with and brokerage commissions be paid tobrokers, including brokers which may be affiliated with aPortfolio, the Sponsor or dealers participating in theoffering of Units.

Pursuant to an exemptive order, a Portfolio may bepermitted to sell Securities to a new trust when itterminates if those Securities are included in the newtrust. The exemption may enable a Portfolio to eliminatecommission costs on these transactions. The price forthose securities will be the closing sale price on the saledate on the exchange where the Securit ies areprincipally traded, as certified by the Sponsor.

Amendment of the Trust Agreement. The Trusteeand the Sponsor may amend the Trust Agreement withoutthe consent of Unitholders to correct any provision whichmay be defective or to make other provisions that will notmaterially adversely affect Unitholders (as determined in

good faith by the Sponsor and the Trustee). The TrustAgreement may not be amended to increase the numberof Units or permit acquisition of securities in addition to orsubstitution for the Securities (except as provided in theTrust Agreement). The Trustee will notify Unitholders of anyamendment.

Termination. Your Portfolio will terminate on theMandatory Termination Date or upon the sale or otherdisposition of the last Security held in the Portfolio. YourPortfolio may be terminated at any time with consent ofUnitholders representing two-thirds of the outstandingUnits or by the Trustee when the value of the Portfolio isless than $500,000 ($3,000,000 if the value of thePortfolio has exceeded $15,000,000) (the “MinimumTermination Value”). Your Portfolio will be liquidated bythe Trustee in the event that a sufficient number of Unitsof the Portfolio not yet sold are tendered for redemptionby the Sponsor, so that the net worth of the Portfoliowould be reduced to less than 40% of the value of theSecurities at the time they were deposited in thePortfolio. If your Portfolio is liquidated because of theredemption of unsold Units by the Sponsor, theSponsor will refund to each purchaser of Units the entiresales charge paid by such purchaser. Unitholders will benotified of any termination. The Trustee may begin to sellSecurities in connection with a Portfolio termination ninebusiness days before, and no later than, the MandatoryTermination Date. Approximately forty-five days beforethis date, the Trustee will notify Unitholders of thetermination and provide a form enabling qualifiedUnitholders to elect an in kind distribution of Securities,provided that Unitholders may not request an in kinddistribution of Securities within thirty days of a Portfolio’stermination. Any in kind distribution of Securities will bemade in the manner and subject to the restrictionsdescribed under “Rights of Unitholders--Redemption ofUnits”, provided that, in connection with an in kinddistr ibution election more than 30 days prior totermination, Unitholders tendering 1,000 or more Unitsof a Portfolio (or such higher amount as may be requiredby your broker-dealer or selling agent) may request an inkind distribution of Securities equal to the RedemptionPrice per Unit on the date of tender. Unitholders willreceive a final cash distribution within a reasonable time

A-20

after the Mandatory Termination Date. All distributionswill be net of Portfolio expenses and costs. Unitholderswill receive a final distribution statement followingtermination. The Information Supplement containsfurther information regarding termination of yourPortfolio. See “Additional Information”.

Limitations on Liabilities. The Sponsor, Supervisorand Trustee are under no liability for taking any action orfor refraining from taking any action in good faith pursuantto the Trust Agreement, or for errors in judgment, butshall be liable only for their own willful misfeasance, badfaith or gross negligence (negligence in the case of theTrustee) in the performance of their duties or by reason oftheir reckless disregard of their obligations and dutieshereunder. The Trustee is not liable for depreciation orloss incurred by reason of the sale by the Trustee of anyof the Securities. In the event of the failure of the Sponsorto act under the Trust Agreement, the Trustee may actthereunder and is not liable for any action taken by it ingood faith under the Trust Agreement. The Trustee is notliable for any taxes or other governmental chargesimposed on the Securities, on it as Trustee under theTrust Agreement or on a Portfolio which the Trustee maybe required to pay under any present or future law of theUnited States of America or of any other taxing authorityhaving jurisdiction. In addition, the Trust Agreementcontains other customary provisions limiting the liability ofthe Trustee. The Sponsor and Supervisor may rely on anyevaluation furnished by the Trustee and have noresponsibility for the accuracy thereof. Determinations bythe Trustee shall be made in good faith upon the basis ofthe best information available to it.

Sponsor. Van Kampen Funds Inc. is the Sponsor ofyour Portfolio. The Sponsor is a wholly owned subsidiaryof Van Kampen Investments Inc. (“Van KampenInvestments”). Van Kampen Investments is a diversifiedasset management company that administers more thanthree million retail investor accounts and has extensivecapabilities for managing institutional portfolios. VanKampen Investments is an indirect wholly ownedsubsidiary of Invesco Ltd. (“Invesco”), a leadingindependent global investment manager that provides awide range of investment strategies and vehicles to itsretail, institutional and high net worth clients around the

globe. On June 1, 2010, Invesco completed thepreviously announced acquisition of the retail assetmanagement business, including Van KampenInvestments, from Morgan Stanley & Co. Incorporated.The Sponsor’s principal office is located at 11 GreenwayPlaza, Houston, Texas 77046-1173. As of June 30,2010, the total stockholders’ equity of Van KampenFunds Inc. was $62,918,885 (unaudited). The currentassets under management and supervision by Invescoand its affiliates were valued at approximately $641.9billion as of March 31, 2011.

The Sponsor and your Portfolio have adopted a codeof ethics requiring Invesco’s employees who haveaccess to information on Portfolio transactions to reportpersonal securities transactions. The purpose of thecode is to avoid potential conflicts of interest and toprevent fraud, deception or misconduct with respect toyour Portfolio. The Information Supplement containsadditional information about the Sponsor.

If the Sponsor shall fail to perform any of its dutiesunder the Trust Agreement or become incapable ofacting or shall become bankrupt or its affairs are takenover by public authorities, then the Trustee may ( i ) appoint a successor Sponsor at rates ofcompensation deemed by the Trustee to be reasonableand not exceeding amounts prescribed by the SEC, (ii) terminate the Trust Agreement and liquidate yourPortfolio as provided therein or (iii) continue to act asTrustee without terminating the Trust Agreement.

Trustee. The Trustee is The Bank of New York Mellon,a trust company organized under the laws of New York.The Bank of New York Mellon has its principal unitinvestment trust division offices at 2 Hanson Place, 12thFloor, Brooklyn, New York 11217, (800) 856-8487. If youhave questions regarding your account or your Portfolio,please contact the Trustee at its principal unit investmenttrust division offices or your financial adviser. The Sponsordoes not have access to individual account information.The Bank of New York Mellon is subject to supervisionand examination by the Superintendent of Banks of theState of New York and the Board of Governors of theFederal Reserve System, and its deposits are insured bythe Federal Deposit Insurance Corporation to the extentpermitted by law. Additional information regarding the

A-21

Trustee is set forth in the Information Supplement,including the Trustee’s qualifications and duties, its abilityto resign, the effect of a merger involving the Trustee andthe Sponsor’s ability to remove and replace the Trustee.See “Additional Information”.

TAXATION – MASTER MUNICIPAL INCOMEPORTFOLIO – NATIONAL SERIES

This section summarizes some of the principal U.S.federal income tax consequences of owning Units ofyour Portfolio as of the date of this prospectus. Tax lawsand interpretations change frequently, and thesesummaries do not describe all of the tax consequencesto al l taxpayers. For example, these summariesgenerally do not describe your situation if you are acorporation, a non-U.S. person, a broker/dealer, atax-exempt entity, or other investor with specialcircumstances. In addition, this section does notdescribe your state, local or foreign tax consequences.

This federal income tax summary is based in part onthe advice of counsel to the Sponsor. The InternalRevenue Service could disagree with any conclusionsset forth in this section. In addition, our counsel was notasked to review the federal income tax treatment of theassets to be deposited in your Portfolio.

As with any investment, you should seek advicebased on your individual circumstances from your owntax advisor.

Assets of the Portfolio. Your Portfolio is expectedto hold shares (the “RIC Shares”) in funds that aretreated as interests in regulated investment companies(“RICs”) for federal income tax purposes.

It is possible that your Portfolio will also hold otherassets, including assets that are treated differently forfederal income tax purposes from those describedabove, in which case you will have federal income taxconsequences different from or in addition to thosedescribed in this section. We refer to the assets held byyour Portfolio as “Portfolio Assets”.

Portfolio Status. If your Portfolio is at all timesoperated in accordance with the documentsestablishing the Portfolio and certain requirements offederal income tax law are met, the Portfolio will not be

taxed as a corporation for federal income tax purposes.As a Unit owner, you will be treated as the owner of apro rata portion of each of the Portfolio Assets, and assuch you will be considered to have received a pro ratashare of income (e.g. dividends and capital gains), if anyfrom each Portfolio Asset when such income would beconsidered to be received by you if you directly ownedthe Portfolio Assets. This tax treatment applies even ifyou elect to have your distributions reinvested intoadditional Units. In addition, the income from PortfolioAssets that you must take into account for federalincome tax purposes is not reduced by amounts usedto pay sales charges or Portfolio expenses.

Your Tax Basis and Income or Loss uponDisposition. If you dispose of your Units or redeem yourUnits for cash, you will generally recognize gain or loss. Todetermine the amount of this gain or loss, you mustsubtract your adjusted tax basis in your Units disposed offrom your proceeds received in the transaction. You alsogenerally will recognize taxable gain or loss if your Portfoliodisposes of Portfolio Assets. Your initial tax basis in eachPortfolio Asset is determined by apportioning the cost ofyour Units, including sales charges, among the PortfolioAssets ratably according to their values on the date youacquire your Units. In certain circumstances, however,your tax basis in certain Portfolio Assets must be adjustedafter you acquire your Units.

If you are an individual, the maximum marginalfederal tax rate for net capital gain currently is generally15% (zero for certain taxpayers in the 10% and 15% taxbrackets). These capital gains rates are generallyeffective for taxable years beginning before January 1,2013. For later periods, as of the date of this prospectus,the maximum marginal federal tax rate for net capitalgains for individuals is scheduled to be 20% (10% forcertain taxpayers in the 10% and 15% tax brackets). Ifthe gain is earned on property with a holding period ofmore than five years the long-term capital gain rate of20% currently is scheduled to be reduced to 18% andthe 10% rate reduced to 8%.

Net capital gain equals net long-term capital gain minusnet short-term capital loss for the taxable year. Capitalgain or loss is long-term if the holding period for the assetis more than one year and is short-term if the holding

A-22

period for the asset is one year or less. You must excludethe date you purchase your Units to determine yourholding period. The tax rates for capital gains realized fromassets held for one year or less are generally the same asfor ordinary income. The Internal Revenue Code of 1986,as amended (the “Code”), however, treats certain capitalgains as ordinary income in special situations. Thedeductibility of capital losses is subject to limitations underthe Code, including generally a maximum deductionagainst ordinary income of $3,000 per year.

Dividends from RIC Shares. Unitholders of yourPortfolio are treated as directly receiving dividends anddistributions paid to the Portfolio by the Portfolio Assets.Some dividends on the RIC Shares may be designatedas “capital gain dividends,” generally taxable to you aslong-term capital gains. Some dividends on the RICShares may qualify as “exempt interest dividends,” whichare derived from tax-exempt obligations held by the RICand which generally are excluded from your grossincome for federal income tax purposes. Some or all ofthe exempt-interest dividends, however may be takeninto account in determining your alternative minimumtax, and may have other tax consequences (e.g., theymay affect the amount of your social security benefitsthat are taxed). Other dividends on the RIC Shares willgenerally be taxable to you as ordinary income. Certainordinary income dividends from a RIC may qualify to betaxed at the same rates that apply to net capital gain (asdiscussed above), provided certain holding periodrequirements are satisfied and provided the dividendsare attributable to qualifying dividends received by theRIC itself. These special rules relating to the taxation ofordinary income dividends from regulated investmentcompanies generally apply to taxable years beginningbefore January 1, 2013. Regulated investmentcompanies are required to provide notice to theirshareholders of the amount of any distribution that maybe taken into account as a dividend that is eligible for thecapital gains tax rates. If you hold a Unit for six monthsor less or if your Portfolio holds a RIC Share for sixmonths or less, any loss incurred by you related to thedisposition of such RIC Share will be disallowed to theextent of the exempt-interest dividends you received. Tothe extent, if any, it is not disallowed, it will be treated as

a long-term capital loss to the extent of any long-termcapital gain distributions received (or deemed to havebeen received) with respect to such RIC Share.Distributions of income or capital gains declared on theRIC Shares in October, November or December but paidin January will be deemed to have been paid to you onDecember 31 of the year they are declared.

Dividends Received Deduction. A corporationthat owns Units generally will not be entitled to thedividends received deduction with respect to manydividends received by your Portfolio, because thedividends received deduction is generally not availablefor dividends from RICs.

In Kind Distributions. Under certain circumstancesas described in this prospectus, you may request an inkind distribution of Portfolio Assets when you redeemyour Units. By electing to receive an in kind distribution,you will receive Portfolio Assets plus, possibly, cash. Yougenerally will not recognize gain or loss if you only receivewhole Portfolio Assets in exchange for the identicalamount of your pro rata portion of the same PortfolioAssets held by your Portfolio. However, if you also receivecash in exchange for a Portfolio Asset or a fractionalportion of a Portfolio Asset, you will generally recognizegain or loss based on the difference between the amountof cash you receive and your tax basis in such PortfolioAsset or fractional portion.

Cash Distributions, Rollovers and Exchanges. Ifyou receive cash when you redeem your Units or at yourPortfolio’s termination or if you elect to direct that the cashproceeds you are deemed to receive when you redeemyour Units or at your Portfolio’s termination be rolled into afuture trust, it is considered a sale for federal income taxpurposes, and any gain on the sale will be treated as acapital gain, and, in general, any loss will be treated as acapital loss. However, any loss you incur in connectionwith the receipt or deemed receipt of cash, or inconnection with the exchange of your Units of the Portfoliofor units of another trust (deemed sale and subsequentdeemed repurchase), will generally be disallowed, to theextent you acquire units of a subsequent trust and suchsubsequent trust has substantially identical assets underthe wash sale provisions of the Code.

A-23

Limitations on the Deductibility of PortfolioExpenses. Generally, for federal income tax purposes,you must take into account your full pro rata share ofyour Portfolio’s income, even if some of that income isused to pay Portfolio expenses. You may deduct yourpro rata share of each expense paid by your Portfolio tothe same extent as if you directly paid the expense. Youmay be required to treat some or all of the expenses ofyour Portfolio as miscellaneous itemized deductions.Individuals may only deduct certain miscellaneousitemized deductions to the extent they exceed 2% ofadjusted gross income.

Because some of the RICs pay exempt-interestdividends, which are treated as tax-exempt interest forfederal income tax purposes, you will not be able todeduct some of your share of the Portfolio expenses. Inaddition, you will not be able to deduct some of yourinterest expense for debt that you incur or continue topurchase or carry your Units.

Foreign Investors. If you are a foreign investor (i.e.,an investor other than a U.S. citizen or resident or a U.S.corporation, partnership, estate or trust), you may not besubject to U.S. federal income taxes, including withholdingtaxes, on some or all of the income from your Portfolio orgain from the sale or redemption of your Units, providedthat certain conditions are met. You should consult yourtax advisor with respect to the conditions you must meetin order to be exempt for U.S. tax purposes. You shouldalso consult your tax advisor with respect to other U.S. taxwithholding and reporting requirements.

Under certain circumstances, a RIC may elect topass through to its shareholders certain foreign taxespaid by the RIC. If the RIC makes this election withrespect to RIC Shares, you must include in your incomefor federal income tax purposes your portion of suchtaxes and you may be entitled to a credit or deductionfor such taxes.

New York Tax Status. Under the existing incometax laws of the State and City of New York, yourPortfolio will not be taxed as a corporation, subject tothe New York State franchise tax of the New York Citygeneral corporation tax. You should consult your taxadvisor regarding potential federal, foreign, state or local

taxation with respect to your Units based on yourindividual circumstances.

TAXATION – ALL OTHER PORTFOLIOS

This section summarizes some of the principal U.S.federal income tax consequences of owning Units ofyour Portfolio as of the date of this prospectus. Tax lawsand interpretations change frequently, and thesesummaries do not describe all of the tax consequencesto al l taxpayers. For example, these summariesgenerally do not describe your situation if you are acorporation, a non-U.S. person, a broker/dealer, atax-exempt entity, or other investor with specialcircumstances. In addition, this section does notdescribe your state, local or foreign tax consequences.


As with any investment, you should seek advicebased on your individual circumstances from your owntax advisor.

Portfolio Status. Your Portfolio intends to elect andto qualify annually as a “regulated investment company”under the federal tax laws. If your Portfolio qualifies as aregulated investment company and distributes itsincome as required by the tax law, the Portfol iogenerally will not pay federal income taxes.

Distributions. Portfolio distributions are generallytaxable. After the end of each year, you will receive atax statement that separates your Port fo l io’sdistributions into two categories, ordinary incomedistributions and capital gains dividends. Ordinaryincome distributions are generally taxed at yourordinary tax rate, however, as further discussed below,certain ordinary income distributions received fromyour Portfolio may be taxed at the capital gains taxrates for taxable years beginning before January 1,2013. Certain ordinary income dividends on Units thatare attributable to qualifying dividends received by yourPortfolio from certain corporations may be reported by

A-24

the Portfol io as being el igible for the dividendsreceived deduction for corporate Unitholders providedcertain holding period requirements are met. Generally,you will treat all capital gains dividends as long-termcapital gains regardless of how long you have ownedyour Units. In addition, your Portfolio may makedistributions that represent a return of capital for taxpurposes and thus will generally not be taxable to you.The tax status of your distributions from your Portfoliois not affected by whether you re invest yourdistributions in additional Units or receive them incash. The income from your Portfolio that you musttake into account for federal income tax purposes isnot reduced by amounts used to pay a deferred salescharge, if any. The tax laws may require you to treatdistributions made to you in January as if you hadreceived them on December 31 of the previous year.

Sale or Redemption of Units. If you sell orredeem your Units, you will generally recognize ataxable gain or loss. To determine the amount of thisgain or loss, you must subtract your adjusted tax basisin your Units from the amount you receive in thetransaction. Your initial tax basis in your Units isgenerally equal to the cost of your Units, generallyincluding sales charges. In some cases, however, youmay have to adjust your tax basis after you purchaseyour Units.

Capital Gains and Losses and Certain OrdinaryIncome Dividends. If you are an individual, themaximum marginal federal tax rate for net capital gainunder current law is generally 15% (zero for certaintaxpayers in the 10% and 15% tax brackets). Thesecapital gains rates are generally effective for taxable yearsbeginning before January 1, 2013. For later periods, as ofthe date of this prospectus, the maximum marginalfederal tax rate for net capital gains for individuals isscheduled to be 20% (10% for certain taxpayers in the10% and 15% tax brackets). If the gain is earned onproperty with a holding period of more than five years thelong-term capital gain rate of 20% currently is scheduledto be reduced to 18% and the 10% rate reduced to 8%.

Net capital gain equals net long-term capital gainminus net short-term capital loss for the taxable year.Capital gain or loss is long-term if the holding period for

the asset is more than one year and is short-term if theholding period for the asset is one year or less. Youmust exclude the date you purchase your Units todetermine your holding period. However, if you receive acapital gain dividend from your Portfolio and sell yourUnits at a loss after holding it for six months or less, theloss will be recharacterized as long-term capital loss tothe extent of the capital gain dividend received. The taxrates for capital gains realized from assets held for oneyear or less are generally the same as for ordinaryincome. The Code treats certain capital gains asordinary income in special situations.

In certain circumstances, ordinary income dividendsreceived by an individual Unitholder from a regulatedinvestment company such as your Portfolio may betaxed at the same rates that apply to net capital gain (asdiscussed above), provided certain holding periodrequirements are satisfied and provided the dividendsare attributable to qualified dividend income received bythe Portfolio itself. These special rules relating to thetaxation of qualified dividend income from regulatedinvestment companies generally apply to taxable yearsbeginning before January 1, 2013. Your Portfolio willprovide notice to its Unitholders of the amount of anydistribution which may be taken into account asqualified dividend income which is eligible for the newcapital gains tax rates.

In Kind Distributions. Under certain circumstances,as described in this prospectus, you may receive an inkind distribution of Portfolio securities when you redeemyour Units. In general, this distribution will be treated as asale for federal income tax purposes and you willrecognize gain or loss, based on the value at that time ofthe securities and the amount of cash received. TheInternal Revenue Service could however assert that a losscould not be currently deducted.

Rollovers and Exchanges. If you elect to haveyour proceeds from your Portfolio rolled over into afuture trust, it is considered a sale for federal income taxpurposes and any gain on the sale will be treated as acapital gain, and, in general, any loss will be treated as acapital loss. However, any loss realized on a sale orexchange will be disallowed to the extent that Unitsdisposed of are replaced ( including through

A-25

reinvestment of dividends) within a period of 61 daysbeginning 30 days before and ending 30 days afterdisposition of Units or to the extent that the Unitholder,during such period, acquires or enters into an option orcontract to acquire, substantially identical stock orsecurities. In such a case, the basis of the Unitsacquired will be adjusted to reflect the disallowed loss.

Deductibility of Portfolio Expenses. Generally,expenses incurred by your Portfolio will be deducted fromthe gross income received by your Portfolio and only yourshare of the Portfolio’s net income will be paid to you andreported as taxable income to you. However, if the Unitsof your Portfolio are held by fewer than 500 Unitholders atany time during a taxable year, your Portfolio will generallynot be able to deduct certain expenses from income,thus resulting in your reported share of the Portfolio’staxable income being increased by your share of thoseexpenses, even though you do not receive acorresponding cash distribution. In this case you may beable to take a deduction for these expenses; however,certain miscellaneous itemized deductions, such asinvestment expenses, may be deducted by individualsonly to the extent that all of these deductions exceed 2%of the individual’s adjusted gross income.

Foreign Investors. If you are a foreign investor (i.e.,an investor other than a U.S. citizen or resident or a U.S.corporation, partnership, estate or trust), you should beaware that, generally, subject to applicable tax treaties,distributions from your Portfolio will be characterized asdividends for federal income tax purposes (other thandividends which your Portfolio reports as capital gaindividends) and will be subject to U.S. income taxes,including withholding taxes, subject to certain exceptionsdescribed below. However distributions received by aforeign investor from your Portfolio that are properlyreported by the trust as capital gain dividends may not besubject to U.S. federal income taxes, includingwithholding taxes, provided that your Portfolio makescertain elections and certain other conditions are met.

Foreign Tax Credit. If your Portfolio invests in anyforeign securities, the tax statement that you receivemay include an item showing foreign taxes yourPortfolio paid to other countries. In this case, dividendstaxed to you will include your share of the taxes your

Portfolio paid to other countries. You may be able todeduct or receive a tax credit for your share of thesetaxes if your Portfolio meets certain requirements forpassing through such deductions or credits to you.

Investors should consult their advisors concerningthe federal, state, local and foreign tax consequences ofinvesting in your Portfolio.

PORTFOLIO OPERATING EXPENSES

General. The fees and expenses of your Portfoliowill generally accrue on a daily basis. Portfolio operatingfees and expenses are generally paid out of the IncomeAccount to the extent funds are available, and then fromthe Capital Account. The deferred sales charge,creation and development fee and organization costsare generally paid out of the Capital Account of yourPortfolio. It is expected that Securities will be sold topay these amounts which will result in capital gains orlosses to Unitholders. See “Taxation”. These sales willreduce future income distributions. The Sponsor’s,Supervisor’s and Trustee’s fees may be increasedwithout approval of the Unitholders by amounts notexceeding proportionate increases under the category“Services Less Rent of Shelter” in the Consumer PriceIndex for All Urban Consumers or, if this category is notpublished, in a comparable category.

Organization Costs. You and the otherUnitholders will bear all or a portion of the organizationcosts and charges incurred in connection with theestablishment of your Portfolio. These costs andcharges will include the cost of the preparation, printingand execution of the trust agreement, registrationstatement and other documents relating to yourPortfolio, federal and state registration fees and costs,fees paid to the Portfolio Consultant for assisting theSponsor in the selection of securities, the initial feesand expenses of the Trustee, and legal and auditingexpenses. The Public Offering Price of Units includesthe estimated amount of these costs. The Trustee willdeduct these expenses from your Portfolio’s assets atthe end of the initial offering period.

Creation and Development Fee. The Sponsor willreceive a fee from your Portfolio for creating and

A-26

developing the Portfolio, including determining thePortfolio’s objectives, policies, composition and size,selecting service providers and information services andfor providing other similar administrative and ministerialfunctions. The creation and development fee is a chargeof $0.05 per Unit. The Trustee will deduct this amountfrom your Portfolio’s assets as of the close of the initialoffering period. No portion of this fee is applied to thepayment of distribution expenses or as compensation forsales efforts. This fee will not be deducted from proceedsreceived upon a repurchase, redemption or exchange ofUnits before the close of the initial public offering period.

Trustee’s Fee. For its services the Trustee willreceive the fee from your Portfolio set forth in the “FeeTable” (which includes the estimated amount ofmiscellaneous Portfolio expenses). The Trustee benefitsto the extent there are funds in the Capital and IncomeAccounts since these Accounts are non-interest bearingto Unitholders and the amounts earned by the Trusteeare retained by the Trustee. Part of the Trustee’scompensation for its services to your Portfolio isexpected to result from the use of these funds.

Compensation of Sponsor and Supervisor. TheSponsor and the Supervisor will receive the annual feesfor providing bookkeeping and administrative servicesand portfolio supervisory services set forth in the “FeeTable”. These fees may exceed the actual costs ofproviding these services to your Portfolio but at no timewill the total amount received for these servicesrendered to all Van Kampen unit investment trusts in anycalendar year exceed the aggregate cost of providingthese services in that year. The Supervisor’s fee ischarged as a percentage of average daily net assetvalue and accrues daily and is paid quarterly.

Miscellaneous Expenses. The following additionalcharges are or may be incurred by your Portfolio: (a) normal expenses (including the cost of mailing reportsto Unitholders) incurred in connection with the operationof the Portfolio, (b) fees of the Trustee for extraordinaryservices, (c) expenses of the Trustee (including legal andauditing expenses) and of counsel designated by theSponsor, (d) various governmental charges, (e) expensesand costs of any action taken by the Trustee to protectthe Portfolio and the rights and interests of Unitholders,

(f) indemnification of the Trustee for any loss, liability orexpenses incurred in the administration of the Portfoliowithout negligence, bad faith or wilful misconduct on itspart, (g) foreign custodial and transaction fees (whichmay include compensation paid to the Trustee or itssubsidiaries or affiliates), (h) costs associated withliquidating the securities held in the Portfolio, (i) anyoffering costs incurred after the end of the initial offeringperiod and (j) expenditures incurred in contactingUnitholders upon termination of the Portfolio. YourPortfol io may pay the expenses of updating itsregistration statement each year. The Portfolios will eachpay a l icense fee to Cohen & Steers CapitalManagement, Inc. for the use of certain service marks.

Fund Expenses. Each Portfolio will also indirectlybear the expenses of the underlying funds. While thePortfolios will not pay these expenses directly out of itsassets, these expenses are shown in the Portfolios’annual operating expenses in the “Fee Tables” toillustrate the impact of these expenses.

OTHER MATTERS

Legal Opinions. The legality of the Units offeredhereby has been passed upon by Paul, Hastings,Janofsky & Walker LLP. Dorsey & Whitney LLP hasacted as counsel to the Trustee.

Independent Registered Public AccountingFirm. The statements of condition and the relatedportfolios included in this prospectus have beenaudited by Grant Thornton LLP, independentregistered public accounting firm, as set forth in theirreport in this prospectus, and are included herein inreliance upon the authority of said firm as experts inaccounting and auditing.

ADDITIONAL INFORMATION

This prospectus does not contain all the informationset forth in the registration statements filed by yourPortfolio with the SEC under the Securities Act of1933 and the Investment Company Act of 1940 (fileno. 811-2754). The Information Supplement, whichhas been filed with the SEC and is incorporated hereinby reference, includes more detailed information

A-27

concerning the Securit ies, investment risks andgeneral information about the Portfolios. Informationabout your Port fo l io ( including the Informat ionSupplement) can be reviewed and copied at the SEC’sPublic Reference Room in Washington, DC. You mayobtain information about the Public Reference Roomby cal l ing 1-202-551-8090. Reports and otherinformation about your Portfolio are available on theEDGAR Database on the SEC’s Internet site athttp://www.sec.gov. Copies of this information may beobtained, after paying a duplication fee, by electronicrequest at the fo l lowing e-mai l address:[email protected] or by writing the SEC’s PublicReference Section, Washington, DC 20549-0102.

THIS PAGE INTENTIONALLY LEFT BLANK.

TABLE OF CONTENTS

Title Page

Closed-End Strategy: Master Income Portfolio ......................................................... 2

Closed-End Strategy: Master Municipal Income Portfolio – National Series .................. 8

Closed-End Strategy: Value Equity and Income Portfolio ............................................. 12

Closed-End Strategy: Covered Call Income Portfolio ......................................................... 18

Notes to Portfolios ............................................. 23Report of Independent Registered

Public Accounting Firm .................................. 24Statements of Condition ................................... 25The Portfolios..................................................... A-1Objectives and Securities Selection.................... A-2Risk Factors....................................................... A-2Closed-End Funds ............................................. A-8Public Offering ................................................... A-9Retirement Accounts ......................................... A-14Fee Accounts..................................................... A-14Rights of Unitholders.......................................... A-15Portfolio Administration ...................................... A-18Taxation – Master Municipal Income

Portfolio – National Series .............................. A-21Taxation – All Other Portfolios............................. A-23Portfolio Operating Expenses............................. A-25Other Matters .................................................... A-26Additional Information ........................................ A-26

______________When Units of the Portfolios are no longer available thisprospectus may be used as a preliminary prospectus for afuture Portfolio. If this prospectus is used for future Portfoliosyou should note the following:

The information in this prospectus is not complete with respectto future Portfolio series and may be changed. No person maysell Units of future Portfolios until a registration statement is filedwith the Securities and Exchange Commission and is effective.This prospectus is not an offer to sell Units and is not solicitingan offer to buy Units in any state where the offer or sale is notpermitted.

U-EMSPRO1120

PROSPECTUS

July 5, 2011

Closed-End Strategy:Master Income Portfolio, Series 28

Closed-End Strategy:Master Municipal Income Portfolio –

National Series 24



Please retain this prospectus for future reference.

INVESCO

Information Supplement





This Information Supplement provides additional information concerning the risks and operations of thePortfolios which are not described in the prospectus. You should read this Information Supplement in conjunctionwith the prospectus. This Information Supplement is not a prospectus (but is incorporated into the prospectus byreference). It does not include all of the information that you should consider before investing in the Portfolios. ThisInformation Supplement may not be used to offer or sell Units without the prospectus. You can obtain copies of theprospectus by contacting the Sponsor’s unit investment trust division at 1 Parkview Plaza, P.O. Box 5555,Oakbrook Terrace, Illinois 60181-5555, or by contacting your broker. This Information Supplement is dated as ofthe date of the prospectus. All capitalized terms have been defined in the prospectus.

Table of ContentsPage

Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . 2The Portfolios . . . . . . . . . . . . . . . . . . . . . . . . . . 13Sponsor Information . . . . . . . . . . . . . . . . . . . . . 13Trustee Information . . . . . . . . . . . . . . . . . . . . . . 13Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14Portfolio Termination . . . . . . . . . . . . . . . . . . . . . 16

INVESCO

2

RISK FACTORSClosed-End Funds. Closed-end funds’ portfolios

are managed and their shares are generally listed on asecurities exchange. The net asset value of closed-endfund shares will fluctuate with changes in the value ofthe underlying securities that the closed-end fundowns. In addition, for various reasons closed-end fundshares frequently trade at a discount from their netasset value in the secondary market. The amount ofsuch discount from net asset value is subject tochange from time to time in response to variousfactors. Closed-end funds’ articles of incorporationmay contain certain anti-takeover provisions that mayhave the effect of inhibit ing a fund’s possibleconversion to open-end status and limiting the ability ofother persons to acquire control of a fund. In certaincircumstances, these provisions might also inhibit theability of stockholders (including the Portfolios) to selltheir shares at a premium over prevailing market prices.This characteristic is a risk separate and distinct fromthe risk that a fund’s net asset value will decrease. Inparticular, this characteristic would increase the loss orreduce the return on the sale of those closed-end fundshares that were purchased by a Portfol io at apremium. In the unlikely event that a closed-end fundconverts to open-end status at a time when its sharesare trading at a premium there would be an immediateloss in value to a Portfolio since shares of open-endfunds trade at net asset value. Certain closed-endfunds may have in place or may put in place in thefuture plans pursuant to which the fund mayrepurchase its own shares in the marketplace. Typically,these plans are put in place in an attempt by a fund’sboard of directors to reduce a discount on its shareprice. To the extent that such a plan is implementedand shares owned by a Portfolio are repurchased by afund, the Portfolios’ position in that fund will bereduced and the cash will be distributed.

The Portfolios are prohibited from subscribing to arights offering for shares of any of the closed-end fundsin which it invests. In the event of a rights offering foradditional shares of a fund, Unitholders should expectthat a Portfolio will, at the completion of the offer, own asmaller proportional interest in such fund that would

otherwise be the case. It is not possible to determinethe extent of this dilution in share ownership withoutknowing what proportion of the shares in a rightsoffering will be subscribed. This may be particularlyserious when the subscription price per share for theoffer is less than the fund’s net asset value per share.Assuming that all rights are exercised and there is nochange in the net asset value per share, the aggregatenet asset value of each shareholder’s shares ofcommon stock should decrease as a result of the offer.If a fund’s subscription price per share is below thatfund’s net asset value per share at the expiration of theoffer, shareholders would experience an immediatedilution of the aggregate net asset value of their sharesof common stock as a result of the offer, which couldbe substantial.

Closed-end funds may use leveraging in theirportfolios. Leveraging can be expected to causeincreased price volatility for those fund’s shares, and asa result, increased volatility for the price of the Units of aPortfolio. There can be no assurance that a leveragingstrategy will be successful during any period in which itis employed.

Option Risk. The closed-end funds held in certainPortfolios may invest using a covered call optionstrategy or similar income-oriented investmentstrategies. You should understand the risks of thesestrategies before you invest. In employing a covered callstrategy, a closed-end fund will generally write (sell) calloptions on a significant portion of the fund’s managedassets. These call options will give the option holder theright, but not the obligation, to purchase a security fromthe fund at the strike price on or prior to the option’sexpiration date. The ability to successfully implementthe fund’s investment strategy depends on the fundadviser’s ability to predict pertinent market movements,which cannot be assured. Thus, the use of options mayrequire a fund to sell portfolio securities at inopportunetimes or for prices other than current market values,may limit the amount of appreciation the fund canrealize on an investment, or may cause the fund to holda security that it might otherwise sell. The writer (seller)of an option has no control over the time when it maybe required to fulfill its obligation as a writer (seller) of

the option. Once an option writer (seller) has receivedan exercise notice, it cannot effect a closing purchasetransaction in order to terminate its obligation under theoption and must deliver the underlying security at theexercise price. As the writer (seller) of a covered calloption, a fund forgoes, during the option’s life, theopportunity to profit from increases in the market valueof the security underlying the call option above the sumof the premium and the strike price of the call option,but has retained the risk of loss should the price of theunderlying security decline. The value of the optionswritten (sold) by a fund, which will be marked-to-marketon a daily basis, will be affected by changes in the valueand dividend rates of the underlying securities, anincrease in interest rates, changes in the actual orperceived volatil ity of securities markets and theunderlying securities and the remaining time to theoptions’ expiration. The value of the options may alsobe adversely affected if the market for the optionsbecomes less liquid or smaller. An option is generallyconsidered “covered” if a closed-end fund owns thesecurity underlying the call option or has an absoluteand immediate right to acquire that security withoutadditional cash consideration (or, if required, liquid cashor other assets are segregated by the fund) uponconversion or exchange of other securities held by thefund. In certain cases, a call option may also beconsidered covered if a fund holds a call option on thesame security as the call option written (sold) providedthat certain conditions are met. By writing (selling)covered call options, a fund generally seeks to generateincome, in the form of the premiums received for writing(selling) the call options. Investment income paid by afund to its shareholders (such as a Portfolio) may bederived primarily from the premiums it receives fromwriting (selling) call options and, to a lesser extent, fromthe dividends and interest it receives from the equitysecurities or other investments held in the fund’sportfolio and short-term gains thereon. Premiums fromwriting (selling) call options and dividends and interestpayments made by the securities in a fund’s portfoliocan vary widely over time.

To the extent that a fund purchases options pursuantto a hedging strategy, the fund will be subject to the

fol lowing additional r isks. If a put or call optionpurchased by a fund is not sold when it has remainingvalue, and if the market price of the underlying securityremains equal to or greater that the exercise price (inthe case of a put), or remains less than or equal to theexercise price (in the case of a call), the fund will lose itsentire investment in the option. Also, where a put or calloption on a particular security is purchased to hedgeagainst price movements in a related security, the priceof the put or call option may move more or less than theprice of the related security. If restrictions on exercisewere imposed, the fund might be unable to exercise anoption it had purchased. If the fund were unable toclose out and option that it had purchased on asecurity, it would have to exercise the option in order torealize any profit or the option may expire worthless.

Municipal Bonds. The closed-end funds held incertain Portfolios invest in the types of bonds describedbelow. Accordingly, an investment in the Portfolioshould be made with an understanding of thecharacteristics of and risks associated with such bonds.

Certain of the bonds in a closed-end fund may begeneral obligations of a governmental entity that arebacked by the taxing power of such entity. Other bondsare revenue bonds payable from the income of aspecific project or authority and are not supported bythe issuer’s power to levy taxes. General obligationbonds are secured by the issuer’s pledge of its faith,credit and taxing power for the payment of principal andinterest. Revenue bonds, on the other hand, arepayable only from the revenues derived from a particularfacility or class of facilities or, in some cases, from theproceeds of a special excise tax or other specificrevenue source. There are, of course, variations in thesecurity of the different bonds in a closed-end fund,both within a particular classification and betweenclassifications, depending on numerous factors.

Certain of the bonds in a closed-end fund may beobligations which derive their payments from mortgageloans. Certain of such housing bonds may be FHAinsured or may be single family mortgage revenuebonds issued for the purpose of acquiring fromoriginating financial institutions notes secured bymortgages on residences located within the issuer’s

3

boundaries and owned by persons of low or moderateincome. Mortgage loans are generally partially orcompletely pre-paid prior to their final maturities as aresult of events such as sale of the mortgagedpremises, default, condemnation or casualty loss.Because these bonds are subject to extraordinarymandatory redemption in whole or in part from suchprepayments of mortgage loans, a substantial portion ofsuch bonds will probably be redeemed prior to theirscheduled maturities or even prior to their ordinary calldates. Extraordinary mandatory redemption withoutpremium could also result from the failure of theoriginating financial institutions to make mortgage loansin sufficient amounts within a specified time period.Additionally, unusually high rates of default on theunderlying mortgage loans may reduce revenuesavailable for the payment of principal of or interest onsuch mortgage revenue bonds. In each case the issuerof the bonds has covenanted to comply with applicablerequirements and bond counsel to such issuer hasissued an opinion that the interest on the bonds isexempt from Federal income tax under existing lawsand regulations. Certain issuers of housing bonds haveconsidered various ways to redeem bonds they haveissued prior to the stated first redemption dates forsuch bonds.

Certain of the bonds in a closed-end fund may behealth care revenue bonds. Ratings of bonds issued forhealth care facilities are often based on feasibilitystudies that contain projections of occupancy levels,revenues and expenses. A facility’s gross receipts andnet income available for debt service may be affectedby future events and conditions including, among otherthings, demand for services and the ability of the facilityto provide the services required, physicians’ confidencein the facility, management capabilities, competition withother health care facilities, efforts by insurers andgovernmental agencies to l imit rates, legislationestablishing state rate-setting agencies, expenses, thecost and possible unavai labi l i ty of malpracticeinsurance, the funding of Medicare, Medicaid and othersimilar third party pay or programs, governmentregulat ion and the termination or restr ict ion ofgovernmental financial assistance, including that

associated with Medicare, Medicaid and other similarthird party pay or programs.

Certain of the bonds in a closed-end fund may beobligations of public utility issuers, including thoseselling wholesale and retail electric power and gas.General problems of such issuers would include thedifficulty in financing large construction programs in aninflationary period, the limitations on operations andincreased costs and delays attr ibutable toenvironmental considerations, the difficulty of thecapital market in absorbing utility debt, the difficulty inobtaining fuel at reasonable prices and the effect ofenergy conservation. In addition, Federal, state andmunicipal governmental authorities may from time totime review existing, and impose additional, regulationsgoverning the licensing, construction and operation ofnuclear power plants, which may adversely affect theability of the issuers of certain of the bonds in aclosed-end fund to make payments of principal and/orinterest on such bonds.

Certain of the bonds in a closed-end fund may beobligations of issuers whose revenues are derived fromthe sale of water and/or sewerage services. Suchbonds are generally payable from user fees. Theproblems of such issuers include the ability to obtaintimely and adequate rate increases, population declineresulting in decreased user fees, the difficulty offinancing large construction programs, the limitations onoperations and increased costs and delays attributableto environmental considerations, the increasing difficultyof obtaining or discovering new supplies of fresh water,the effect of conservation programs and the impact of“no-growth” zoning ordinances.

Certain of the bonds in a closed-end fund may beindustrial revenue bonds (“IRBs”). IRBs have generallybeen issued under bond resolutions pursuant to whichthe revenues and receipts payable under thearrangements with the operator of a particular projecthave been assigned and pledged to purchasers. Insome cases, a mortgage on the underlying project mayhave been granted as security for the IRBs. Regardlessof the structure, payment of IRBs is solely dependentupon the creditworthiness of the corporate operator ofthe project or corporate guarantor. Corporate

4

operators or guarantors may be affected by manyfactors which may have an adverse impact on thecredit quality of the particular company or industry.These include cyclicality of revenues and earnings,regulatory and environmental restrictions, litigationresulting from accidents or environmentally-causedi l lnesses, extensive competit ion and f inancialdeterioration resulting from a corporate restructuringpursuant to a leveraged buy-out, takeover orotherwise. Such a restructuring may result in theoperator of a project becoming highly leveraged whichmay impact on such operator’s creditworthiness whichin turn would have an adverse impact on the ratingand/or market value of such bonds. Further, thepossibility of such a restructuring may have an adverseimpact on the market for and consequently the value ofsuch bonds, even though no actual takeover or otheraction is ever contemplated or effected.

Certain of the bonds in a closed-end fund may beobligations that are secured by lease payments of agovernmental entity (hereinafter called “leaseobligations”). Lease obligations are often in the form ofcertificates of participation. Although the lease obligationsdo not constitute general obligations of the municipalityfor which the municipality’s taxing power is pledged, alease obligation is ordinarily backed by the municipality’scovenant to appropriate for and make the payments dueunder the lease obligation. However, certain leaseobligations contain “non-appropriation” clauses whichprovide that the municipality has no obligation to makelease payments in future years unless money isappropriated for such purpose on a yearly basis. Agovernmental entity that enters into such a leaseagreement cannot obligate future governments toappropriate for and make lease payments but covenantsto take such action as is necessary to include any leasepayments due in its budgets and to make theappropriations therefor. A governmental entity’s failure toappropriate for and to make payments under its leaseobligation could result in insufficient funds available forpayment of the obligations secured thereby. Although“non-appropriation” lease obligations are secured by theleased property, disposition of the property in the event offoreclosure might prove difficult.

Certain of the bonds in a closed-end fund may beobligations of issuers which are, or which govern theoperation of, schools, colleges and universities andwhose revenues are derived mainly from ad valoremtaxes or for higher education systems, from tuition,dormitory revenues, grants and endowments. Generalproblems relating to school bonds include litigationcontesting the state constitutionality of financing publiceducation in part from ad valorem taxes, therebycreating a disparity in educational funds available toschools in wealthy areas and schools in poor areas.Litigation or legislation on this issue may affect thesources of funds available for the payment of schoolbonds. General problems relating to college anduniversity obligations include the prospect of a decliningpercentage of the population consisting of “college” ageindividuals, possible inability to raise tuitions and feessufficiently to cover increased operating costs, theuncertainty of continued receipt of Federal grants andstate funding, and government legislation or regulationswhich may adversely affect the revenues or costs ofsuch issuers.

Certain of the bonds in a closed-end fund may beobligations which are payable from and secured byrevenues derived from the ownership and operation offacilities such as airports, bridges, turnpikes, portauthorities, convention centers and arenas. The majorportion of an airport’s gross operating income isgenerally derived from fees received from signatoryairlines pursuant to use agreements which consist ofannual payments for leases, occupancy of certainterminal space and service fees. Airport operatingincome may therefore be affected by the ability of theair l ines to meet their obl igations under the useagreements. From time to time the air transport industryhas experienced significant variations in earnings andtraffic, due to increased competition, excess capacity,increased costs, deregulation, traffic constraints andother factors, and several airlines have experiencedsevere financial difficulties. Similarly, payment on bondsrelated to other facilities is dependent on revenues fromthe projects, such as user fees from ports, tolls onturnpikes and bridges and rents from buildings.Therefore, payment may be adversely affected by

5

reduction in revenues due to such factors as increasedcost of maintenance, decreased use of a facility, lowercost of alternative modes of transportation, scarcity offuel and reduction or loss of rents.

Certain of the bonds in a closed-end fund may beobligations which are payable from and secured byrevenues derived from the operation of resourcerecovery facilities. Resource recovery facilities aredesigned to process solid waste, generate steam andconvert steam to electricity. Resource recovery bondsmay be subject to extraordinary optional redemption atpar upon the occurrence of certain circumstances,including but not l imited to: destruction orcondemnation of a project; contracts relating to aproject becoming void, unenforceable or impossible toperform; changes in the economic availability of rawmaterials, operating supplies or facilities necessary forthe operation of a project or technological or otherunavoidable changes adversely affecting the operationof a project; and administrative or judicial actions whichrender contracts relat ing to the projects void,unenforceable or impossible to perform or imposeunreasonable burdens or excessive liabilities. TheSponsor cannot predict the causes or likelihood of theredemption of resource recovery bonds prior to thestated maturity of the bonds.

Certain of the bonds in a closed-end fund may besubject to redemption prior to their stated maturity datepursuant to sinking fund provisions, call provisions orextraordinary optional or mandatory redemptionprovisions or otherwise. A sinking fund is a reserve fundaccumulated over a period of time for retirement ofdebt. A callable debt obligation is one which is subjectto redemption or refunding prior to maturity at theoption of the issuer. A refunding is a method by which adebt obligation is redeemed, at or before maturity, bythe proceeds of a new debt obligation. In general, callprovisions are more likely to be exercised when theoffering side valuation is at a premium over par thanwhen it is at a discount from par. The exercise ofredemption or cal l provisions wil l result in thedistribution of principal and may result in a reduction inthe amount of subsequent interest distributions.Extraordinary optional redemptions and mandatory

redemptions result from the happening of certainevents. General ly, events that may permit theextraordinary optional redemption of bonds or mayrequire the mandatory redemption of bonds include,among others: a final determination that the interest onthe bonds is taxable; the substantial damage ordestruction by fire or other casualty of the project forwhich the proceeds of the bonds were used; anexercise by a local, state or Federal governmental unitof i ts power of eminent domain to take al l orsubstantially all of the project for which the proceeds ofthe bonds were used; changes in the economicavailability of raw materials, operating supplies orfacilities or technological or other changes which renderthe operation of the project for which the proceeds ofthe bonds were used uneconomic; changes in law oran administrative or judicial decree which renders theperformance of the agreement under which theproceeds of the bonds were made available to financethe project impossible or which creates unreasonableburdens or which imposes excessive liabilities, such astaxes, not imposed on the date the bonds are issuedon the issuer of the bonds or the user of the proceedsof the bonds; an administrative or judicial decree whichrequires the cessation of a substantial part of theoperations of the project financed with the proceeds ofthe bonds; an overestimate of the costs of the projectto be financed with the proceeds of the bonds resultingin excess proceeds of the bonds which may be appliedto redeem bonds; or an underestimate of a source offunds securing the bonds resulting in excess fundswhich may be applied to redeem bonds. The issuer ofcertain bonds in a closed-end fund may have sold orreserved the right to sell, upon the satisfaction of certainconditions, to third parties all or any portion of its rightsto call bonds in accordance with the stated redemptionprovisions of such bonds. In such a case the issuer nolonger has the right to call the bonds for redemptionunless it reacquires the rights from such third party. Athird party pursuant to these rights may exercise theredemption provisions with respect to a bond at a timewhen the issuer of the bond might not have called abond for redemption had it not sold such rights. No onecan predict all of the circumstances which may result insuch redemption of an issue of bonds. See also the

6

7

discussion of single family mortgage and multi-familyrevenue bonds above for more information on the callprovisions of such bonds.

High-Yield Securities. An investment in Units ofthe Portfolios should be made with an understanding ofthe risks that an investment in “high-yield, high-risk” debtobligations or “junk” obligations may entail, includingincreased credit risks and the risk that the value of theUnits will decline, and may decline precipitously, withincreases in interest rates. In recent years there havebeen wide fluctuations in interest rates and thus in thevalue of debt obligations generally. Certain of thesecurities included in the funds in the Portfolios may besubject to greater market fluctuations and risk of loss ofincome and principal than are investments inlower-yielding, higher-rated securities, and their valuemay decline precipitously because of increases ininterest rates, not only because the increases in ratesgenerally decrease values, but also because increasedrates may indicate a slowdown in the economy and adecrease in the value of assets generally that mayadversely affect the credit of issuers of high-yield, high-risk securities resulting in a higher incidence of defaultsamong high-yield, high-risk securities. A slowdown in theeconomy, or a development adversely affecting anissuer’s creditworthiness, may result in the issuer beingunable to maintain earnings or sell assets at the rate andat the prices, respectively, that are required to producesufficient cash flow to meet its interest and principalrequirements. For an issuer that has outstanding bothsenior commercial bank debt and subordinatedhigh-yield, high-risk securities, an increase in interestrates will increase that issuer’s interest expense insofaras the interest rate on the bank debt is fluctuating.However, many leveraged issuers enter into interest rateprotection agreements to fix or cap the interest rate on alarge portion of their bank debt. This reduces exposureto increasing rates, but reduces the benefit to the issuerof declining rates. The Sponsor cannot predict futureeconomic policies or their consequences or, therefore,the course or extent of any similar market fluctuations inthe future.

“High-yield” or “junk” securities, the generic namesfor securities rated below BBB by Standard & Poor’s, or

below Baa by Moody’s, are frequently issued bycorporations in the growth stage of their development,by establ ished companies whose operations orindustries are depressed or by highly leveragedcompanies purchased in leveraged buyout transactions.The market for high-yield securities is very specializedand investors in it have been predominantly financialinstitutions. High-yield securities are generally not listedon a national securities exchange. Trading of high- yieldsecurit ies, therefore, takes place primari ly inover-the-counter markets that consist of groups ofdealer firms that are typically major securities firms.Because the high-yield security market is a dealermarket, rather than an auction market, no singleobtainable price for a given security prevails at anygiven time. Prices are determined by negotiationbetween traders. The existence of a liquid tradingmarket for the securities may depend on whetherdealers will make a market in the securities. There canbe no assurance that a market will be made for any ofthe securities, that any market for the securities will bemaintained or of the liquidity of the securities in anymarkets made. Not all dealers maintain markets in allhigh-yield securities. Therefore, since there are fewertraders in these securities than there are in “investmentgrade” securities, the bid-offer spread is usually greaterfor high-yield securities than it is for investment gradesecurities. The price at which the securities may be soldand the value of a Portfolio will be adversely affected iftrading markets for the securities are limited or absent.If the rate of redemptions is great, the value of aPortfolio may decline to a level that requires liquidation.

Lower-rated securities tend to offer higher yieldsthan higher-rated securities with the same maturitiesbecause the creditworthiness of the issuers oflower-rated securities may not be as strong as that ofother issuers. Moreover, if a security is recharacterizedas equity by the Internal Revenue Service for federalincome tax purposes, the issuer’s interest deductionwith respect to the security will be disallowed and thisdisallowance may adversely affect the issuer’s creditrating. Because investors generally perceive that thereare greater risks associated with the lower-ratedsecurities in the funds in the Portfolios, the yields and

prices of these securities tend to fluctuate more thanhigher- rated securities with changes in the perceivedquality of the credit of their issuers. In addition, themarket value of high-yield, high-risk securities mayfluctuate more than the market value of higher-ratedsecurit ies since these securit ies tend to ref lectshort-term credit development to a greater extent thanhigher-rated securities. Lower-rated securities generallyinvolve greater risks of loss of income and principalthan higher-rated securities. Issuers of lower-ratedsecurit ies may possess fewer creditworthinesscharacteristics than issuers of higher-rated securitiesand, especially in the case of issuers whose obligationsor credit standing have recently been downgraded,may be subject to claims by debtholders, owners ofproperty leased to the issuer or others which, ifsustained, would make it more difficult for the issuersto meet their payment obligations. High-yield, high-risksecurities are also affected by variables such asinterest rates, inflation rates and real growth in theeconomy. Therefore, investors should consider carefullythe relat ive r isks associated with investment insecurities that carry lower ratings.

The value of the shares of the closed-end fundsreflects the value of the portfolio securities, including thevalue (if any) of securities in default. Should the issuer ofany security default in the payment of principal orinterest, the closed-end funds in the Portfolios mayincur additional expenses seeking payment on thedefaulted security. Because amounts (if any) recoveredby the funds in payment under the defaulted securitymay not be reflected in the value of the fund shares untilactually received by the funds, and depending uponwhen a Unitholder purchases or sells his or her Units, itis possible that a Unitholder would bear a portion of thecost of recovery without receiving any portion of thepayment recovered.

High-yield, high-risk securit ies are general lysubordinated obligations. The payment of principal (andpremium, if any), interest and sinking fund requirementswith respect to subordinated obligations of an issuer issubordinated in right of payment to the payment ofsenior obligations of the issuer. Senior obligationsgenerally include most, if not all, significant debt

obligations of an issuer, whether existing at the time ofissuance of subordinated debt or created thereafter.Upon any distribution of the assets of an issuer withsubordinated obligations upon dissolution, total orpartial l iquidation or reorganization of or similarproceeding relating to the issuer, the holders of seniorindebtedness will be entitled to receive payment in fullbefore holders of subordinated indebtedness will beentitled to receive any payment. Moreover, generally nopayment with respect to subordinated indebtednessmay be made while there exists a default with respectto any senior indebtedness. Thus, in the event ofinsolvency, holders of senior indebtedness of an issuergenerally will recover more, ratably, than holders ofsubordinated indebtedness of that issuer.

Obligations that are rated lower than “BBB” byStandard & Poor’s, or “Baa” by Moody’s, respectively,should be considered speculative as such ratingsindicate a quality of less than investment grade.Investors should carefully review the objective of aPortfolio and consider their ability to assume the risksinvolved before making an investment in the Portfolio.

Convertible Securities Risks. The closed-endfunds held in certain Portfolios may invest in convertiblesecurities. Convertible securities generally offer lowerinterest or dividend yields than non-convertiblefixed-income securities of similar credit quality because ofthe potential for capital appreciation. The market valuesof convertible securities tend to decline as interest ratesincrease and, conversely, to increase as interest ratesdecline. However, a convertible security’s market valuealso tends to reflect the market price of the commonstock of the issuing company, particularly when the stockprice is greater than the convertible security’s conversionprice. The conversion price is defined as thepredetermined price or exchange ratio at which theconvertible security can be converted or exchanged forthe underlying common stock. As the market price of theunderlying common stock declines below the conversionprice, the price of the convertible security tends to beincreasingly influenced more by the yield of theconvertible security than by the market price of theunderlying common stock. Thus, it may not decline inprice to the same extent as the underlying common

8

stock, and convertible securities generally have lesspotential for gain or loss than common stocks. However,mandatory convertible securities (as discussed below)generally do not limit the potential for loss to the sameextent as securities convertible at the option of theholder. In the event of a liquidation of the issuingcompany, holders of convertible securities would be paidbefore that company’s common stockholders.Consequently, an issuer’s convertible securities generallyentail less risk than its common stock. However,convertible securities fall below debt obligations of thesame issuer in order of preference or priority in the eventof a liquidation and are typically unrated or rated lowerthan such debt obligations. In addition, contingentpayment, convertible securities allow the issuer to claimdeductions based on its nonconvertible cost of debt,which generally will result in deduction in excess of theactual cash payments made on the securities (andaccordingly, holders will recognize income in amounts inexcess of the cash payments received).

Mandatory convertible securities are distinguished asa subset of convert ible securit ies because theconversion is not optional and the conversion price atmaturity is based solely upon the market price of theunderlying common stock, which may be significantlyless than par or the price (above or below par) paid. Forthese reasons, the risks associated with investing inmandatory convertible securities most closely resemblethe risks inherent in common stocks. Mandatoryconvertible securities customarily pay a higher couponyield to compensate for the potential risk of additionalprice volatility and loss upon conversion. Because themarket price of a mandatory convertible securityincreasingly corresponds to the market price of itsunderlying common stock as the convertible securityapproaches its conversion date, there can be noassurance that the higher coupon will compensate forthe potential loss.

Preferred Stock Risks. The closed-end funds heldin certain Portfolios may invest in preferred stocks.Preferred stocks may be susceptible to general stockmarket movements and to volatile increases anddecreases of value as market confidence in andperceptions of the issuers change. These perceptions are

based on unpredictable factors, including expectationsregarding government, economic, monetary and fiscalpolicies, inflation and interest rates, economic expansionor contraction, market liquidity, and global or regionalpolitical, economic or banking crises. Preferred stocksare also vulnerable to Congressional reductions in thedividends-received deduction which would adverselyaffect the after-tax return to the investors who can takeadvantage of the deduction. Such a reduction mightadversely affect the value of preferred stocks in general.Holders of preferred stocks, as owners of the entity, haverights to receive payments from the issuers of thosepreferred stocks that are generally subordinate to thoseof creditors of, or holders of debt obligations or, in somecases, other senior preferred stocks of, such issuers.Preferred stocks do not represent an obligation of theissuer and, therefore, do not offer any assurance ofincome or provide the same degree of protection ofcapital as do debt securities. The issuance of additionaldebt securities or senior preferred stocks will create priorclaims for payment of principal and interest and seniordividends which could adversely affect the ability andinclination of the issuer to declare or pay dividends on itspreferred stock or the rights of holders of preferred stockwith respect to assets of the issuer upon liquidation orbankruptcy. The value of preferred stocks is subject tomarket fluctuations for as long as the preferred stocksremain outstanding, and thus the value of the securitiesmay be expected to fluctuate over the life of yourPortfolio to values higher or lower than those prevailingon a Portfolio’s inception date.

Trust Preferred Securities Risks. The closed-endfunds held in certain Portfolios may invest in variouspreferred securities, including trust preferred securities.Holders of trust preferred securities incur risks in additionto or slightly different than the typical risks of holdingpreferred stocks. Trust preferred securities are securitiesthat are typically issued by corporations, generally in theform of interest-bearing notes or preferred securitiesissued by corporations, or by an affiliated business trustof a corporation, generally in the form of beneficialinterests in subordinated debentures issued by thecorporation, or similarly structured securities. Thematurity and coupon rate of the trust preferred securities

9

are structured to match the maturity and coupon interestrate of the interest-bearing notes, preferred securities orsubordinated debentures. Trust preferred securitiesusually mature on the stated maturity date of theinterest-bearing notes, preferred securities orsubordinated debentures and may be redeemed orliquidated prior to the stated maturity date of suchinstruments for any reason on or after their stated calldate or upon the occurrence of certain circumstances atany time. Trust preferred securities generally have a yieldadvantage over traditional preferred stocks, but unlikepreferred stocks, distributions on the trust preferredsecurities are generally treated as interest rather thandividends for federal income tax purposes. Unlike mostpreferred stocks, distributions received from certain trustpreferred securities may not be eligible for the dividendsreceived deduction. Certain of the risks unique to trustpreferred securities include: (i) distributions on trustpreferred securities will be made only if distributionpayments on the interest-bearing notes, preferredsecurities or subordinated debentures are made; (ii) acorporation issuing the interest-bearing notes, preferredsecurities or subordinated debentures may defer interestpayments on these instruments for up to 20 consecutivequarters and if such election is made, distributions willnot be made on the trust preferred securities during thedeferral period; (iii) certain tax or regulatory events maytrigger the redemption of the interest-bearing notes,preferred securities or subordinated debentures by theissuing corporation and result in prepayment of the trustpreferred securities prior to their stated maturity date; (iv) future legislation may be proposed or enacted thatmay prohibit the corporation from deducting its interestpayments on the interest-bearing notes, preferredsecurities or subordinated debentures for tax purposes,making redemption of these instruments likely; (v) acorporation may redeem the interest-bearing notes,preferred securities or subordinated debentures in wholeat any time or in part from time to time on or after astated call date; (vi) trust preferred securities holders havevery limited voting rights; and (vii) payment of interest onthe interest-bearing notes, preferred securities orsubordinated debentures, and therefore distributions onthe trust preferred securities, is dependent on thefinancial condition of the issuing corporation.

Foreign Issuers. Since certain of the underlyingsecurities held by certain of the closed-end funds areissued by foreign issuers, an investment in certain of thePortfolios involves certain investment risks that aredifferent in some respects from an investment in aportfolio which invests entirely in the securities ofdomestic issuers. These investment risks include futurepolitical or governmental restrictions which mightadversely affect the payment or receipt of payment ofdividends on the relevant securities, the possibility thatthe financial condition of the issuers of the securitiesmay become impaired or that the general condition ofthe relevant stock market may worsen (both of whichwould contribute directly to a decrease in the value ofthe securities and thus in the value of the Units), thelimited liquidity and relatively small market capitalizationof the relevant securities market, expropriation orconfiscatory taxation, economic uncertainties andforeign currency devaluations and fluctuations. Inaddition, for foreign issuers that are not subject to thereporting requirements of the Securities Exchange Actof 1934, there may be less publicly available informationthan is available from a domestic issuer. In addition,foreign issuers are not necessarily subject to uniformaccounting, auditing and financial reporting standards,practices and requirements comparable to thoseapplicable to domestic issuers. The securities of manyforeign issuers are less liquid and their prices morevolatile than securities of comparable domestic issuers.In addition, fixed brokerage commissions and othertransaction costs in foreign securities markets aregenerally higher than in the United States and there isgenerally less government supervision and regulation ofexchanges, brokers and issuers in foreign countriesthan there is in the United States.

Securities issued by non-U.S. issuers generally payincome in foreign currencies and principally trade inforeign currencies. Therefore, there is a risk that theU.S. dollar value of these securities will vary withfluctuations in the U.S. dollar foreign exchange rates forthe various securities.

There can be no assurance that exchange controlregulations might not be adopted in the future whichmight adversely affect payment to the closed-end funds

10

or the Portfolios. The adoption of exchange controlregulations and other legal restrictions could have anadverse impact on the marketability of internationalsecurities in a Portfolio. In addition, restrictions on thesettlement of transactions on either the purchase orsale side, or both, could cause delays or increase thecosts associated with the purchase and sale of theforeign Securities and correspondingly could affect theprice of the Units.

Investors should be aware that it may not bepossible to buy all securities at the same time becauseof the unavailability of any security, and restrictionsrelating to the purchase of a security by reason of thefederal securities laws or otherwise.

Foreign securities generally have not been registeredunder the Securities Act of 1933 and may not be exemptfrom the registration requirements of such Act. Sales ofnon-exempt securities by a closed-end fund in the UnitedStates securities markets are subject to severerestrictions and may not be practicable. Accordingly,sales of these securities by a closed-end fund willgenerally be effected only in foreign securities markets.Investors should realize that the securities in the closed-end funds might be traded in foreign countries where thesecurities markets are not as developed or efficient andmay not be as liquid as those in the United States. Thevalue of the securities will be adversely affected if tradingmarkets for the securities are limited or absent.

Senior Loans. Certain of the securities held by theclosed-end funds in the Portfolios may invest in seniorloans issued by banks, other financial institutions, andother issuers to corporations, partnerships, limitedliabil ity companies and other entit ies to f inanceleveraged buyouts, recapita l izat ions, mergers,acquisitions, stock repurchases, debt refinancingsand, to a lesser extent, for general operating and otherpurposes. Senior loans in which the funds invest:

• generally are of below investment grade creditquality;

• may be unrated at the time of investment;

• generally are not registered with the Securitiesand Exchange Commission or any statesecurities commission; and

• general ly are not l isted on any securit iesexchange.

An investment by funds in senior loans involves riskthat the borrowers under senior loans may default ontheir obligations to pay principal or interest when due.Although senior loans may be secured by specificcollateral, there can be no assurance that liquidation ofcollateral would satisfy the borrower’s obligation in theevent of non-payment or that such collateral could bereadily liquidated. Senior loans are typically structuredas floating rate instruments in which the interest ratepayable on the obligation fluctuates with interest ratechanges. As a result, the yield on funds investing insenior loans will generally decline in a falling interest rateenvironment and increase in a rising interest rateenvironment.

The amount of public information available on seniorloans generally will be less extensive than that availablefor other types of assets. No reliable, active tradingmarket currently exists for many senior loans, althougha secondary market for certain senior loans hasdeveloped over the past several years. Senior loans arethus relatively illiquid. Liquidity relates to the ability of afund to sell an investment in a timely manner at a priceapproximately equal to its value on the fund’s books.The illiquidity of senior loans may impair a fund’s abilityto realize the full value of its assets in the event of avoluntary or involuntary liquidation of such assets.Because of the lack of an active trading market, illiquidsecurities are also difficult to value and prices providedby external pricing services may not reflect the truevalue of the securities. However, many senior loans areof a large principal amount and are held by a largenumber of financial institutions. To the extent that asecondary market does exist for certain senior loans,the market may be subject to irregular trading activity,wide bid/ask spreads and extended trade settlementperiods. The market for senior loans could be disruptedin the event of an economic downturn or a substantialincrease or decrease in interest rates. This could resultin increased volatility in the market and in a Portfolio’snet asset value.

If legislation or state or federal regulators imposeadditional requirements or restrictions on the ability of

11

financial institutions to make loans that are consideredhighly leveraged transactions, the availability of seniorloans for investment by the funds may be adverselyaffected. In addition, such requirements or restrictionscould reduce or eliminate sources of financing forcertain borrowers. This would increase the risk ofdefault. If legislation or federal or state regulatorsrequire financial institutions to dispose of senior loansthat are considered highly leveraged transactions orsubject such senior loans to increased regulatoryscrutiny, financial institutions may determine to sellsuch senior loans. Such sales could result indepressed prices. If a fund attempts to sell a seniorloan at a time when a financial institution is engaging insuch a sale, the price a fund could get for the seniorloan may be adversely affected.

Some senior loans are subject to the risk that acourt, pursuant to fraudulent conveyance or othersimilar laws, could subordinate the senior loans topresently existing or future indebtedness of theborrower or take other action detrimental to lenders.Such court action could under certain circumstancesinclude invalidation of senior loans. Any lender, whichcould include a fund, is subject to the risk that a courtcould find the lender liable for damages in a claim by aborrower arising under the common laws of tort orcontracts or anti-fraud provisions of certain securitieslaws for actions taken or omitted to be taken by thelenders under the relevant terms of a loan agreement orin connection with actions with respect to the collateralunderlying the senior loan.

Discount Securities. Certain of the securities heldby the closed-end funds in the Portfolios may havebeen acquired at a market discount from par value atmaturity. The coupon interest rates on the discountsecurit ies at the t ime they were purchased anddeposited in the funds were lower than the currentmarket interest rates for newly issued securities ofcomparable rating and type. If such interest rates fornewly issued comparable securities increase, themarket discount of previously issued securities willbecome greater, and if such interest rates for newlyissued comparable securities decline, the marketdiscount of previously issued securities will be reduced,

other things being equal. Investors should also note thatthe value of securities purchased at a market discountwill increase in value faster than securities purchased ata market premium if interest rates decrease. Conversely,if interest rates increase, the value of securit iespurchased at a market discount will decrease fasterthan securities purchased at a market premium. Inaddition, if interest rates rise, the prepayment risk ofhigher yielding, premium securities and the prepaymentbenefit for lower yielding, discount securities will bereduced. Market discount attributable to interestchanges does not indicate a lack of market confidencein the issue.

Premium Securities. Certain of the securities heldby the closed-end funds in the Portfolios may have beenacquired at a market premium from par value at maturity.The coupon interest rates on the premium securities atthe time they were purchased by the fund were higherthan the current market interest rates for newly issuedsecurities of comparable rating and type. If such interestrates for newly issued and otherwise comparablesecurities decrease, the market premium of previouslyissued securities will be increased, and if such interestrates for newly issued comparable securities increase,the market premium of previously issued securities willbe reduced, other things being equal. The currentreturns of securities trading at a market premium areinitially higher than the current returns of comparablesecurities of a similar type issued at currently prevailinginterest rates because premium securities tend todecrease in market value as they approach maturitywhen the face amount becomes payable. Because partof the purchase price is thus returned not at maturity butthrough current income payments, early redemption of apremium security at par or early prepayments ofprincipal will result in a reduction in yield. Redemptionpursuant to call provisions generally will, and redemptionpursuant to sinking fund provisions may, occur at timeswhen the redeemed securities have an offering sidevaluation which represents a premium over par or fororiginal issue discount securities a premium over theaccreted value.

Liquidity. Whether or not the securities in thePortfolios are listed on an exchange, the securities may

12

delist from the exchange or principally trade in an over-the-counter market. As a result, the existence of a liquidtrading market could depend on whether dealers willmake a market in the securities. We cannot guaranteethat dealers will maintain a market or that any marketwill be liquid. The value of the securities could fall iftrading markets are limited or absent.

Additional Units. The Sponsor may createadditional Units of the Portfolios by depositing into aPortfolio additional securities or cash with instructionsto purchase additional securities. A deposit could resultin a dilution of your investment and anticipated incomebecause of fluctuations in the price of the securitiesbetween the time of the deposit and the purchase ofthe securities and because the Portfolios will paybrokerage or acquisition fees.

Voting. Only the Trustee may sell or vote thesecurities in the Portfolios. While you may sell orredeem your Units, you may not sell or vote thesecurities in your Portfolio. The Trustee will vote theunderlying funds in the same general proportion asshares held by other shareholders.

THE PORTFOLIOSInvestors should note that the selection criteria were

applied to the Securities for inclusion in the Portfoliosprior to the Initial Date of Deposit. Should a Security nolonger meet the criteria used for selection for a Portfolio,such Security will not as a result thereof be removedfrom the Portfolio.

SPONSOR INFORMATIONVan Kampen Funds Inc. is the Sponsor of your

Portfolio. The Sponsor is a wholly owned subsidiary ofVan Kampen Investments Inc. (“Van KampenInvestments”). Van Kampen Investments is a diversifiedasset management company that administers morethan three million retail investor accounts and hasextensive capabil i t ies for managing institutionalportfolios. Van Kampen Investments is an indirectwholly owned subsidiary of Invesco Ltd. (“Invesco”), aleading independent global investment manager thatprovides a wide range of investment strategies andvehicles to its retail, institutional and high net worth

clients around the globe. On June 1, 2010, Invescocompleted the previously announced acquisition of theretail asset management business, including VanKampen Investments, from Morgan Stanley & Co.Incorporated. The Sponsor’s principal office is locatedat 11 Greenway Plaza, Houston, Texas 77046-1173. Asof June 30, 2010, the total stockholders’ equity of VanKampen Funds Inc. was $62,918,855 (unaudited). Thecurrent assets under management and supervision byInvesco and its affiliates were valued at approximately$641.9 billion as of March 31, 2011. (This paragraphrelates only to the Sponsor and not to the Portfolios orto any other Series thereof. The information is includedherein only for the purpose of informing investors as tothe financial responsibility of the Sponsor and its abilityto carry out its contractual obligations. More detailedfinancial information will be made available by theSponsor upon request).

The Sponsor and your Portfolio have adopted a codeof ethics requiring Invesco’s employees who haveaccess to information on Portfolio transactions to reportpersonal securities transactions. The purpose of thecode is to avoid potential conflicts of interest and toprevent fraud, deception or misconduct with respect toyour Portfolio.

If the Sponsor shall fail to perform any of its dutiesunder the Trust Agreement or become incapable ofacting or shall become bankrupt or its affairs are takenover by public authorities, then the Trustee may ( i ) appoint a successor Sponsor at rates ofcompensation deemed by the Trustee to be reasonableand not exceeding amounts prescribed by theSecurities and Exchange Commission, (ii) terminate theTrust Agreement and liquidate a Portfolio as providedtherein or (i i i ) continue to act as Trustee withoutterminating the Trust Agreement.

TRUSTEE INFORMATIONThe Trustee is The Bank of New York Mellon, a trust

company organized under the laws of New York. TheBank of New York Mellon has its principal unitinvestment trust division offices at 2 Hanson Place, 12thFloor, Brooklyn, New York 11217, (800) 856-8487. TheBank of New York Mellon is subject to supervision and

13

examination by the Superintendent of Banks of theState of New York and the Board of Governors of theFederal Reserve System, and its deposits are insuredby the Federal Deposit Insurance Corporation to theextent permitted by law.

The duties of the Trustee are primarily ministerial innature. It did not part icipate in the selection ofSecurities for the Portfolios.

In accordance with the Trust Agreement, the Trusteeshall keep proper books of record and account of alltransactions at its office for the Portfolios. Such recordsshall include the name and address of, and the numberof Units of the Portfolios held by, every Unitholder. Suchbooks and records shall be open to inspection by anyUnitholder at all reasonable times during the usualbusiness hours. The Trustee shall make such annual orother reports as may from time to time be requiredunder any applicable state or federal statute, rule orregulation. The Trustee is required to keep a certifiedcopy or duplicate original of the Trust Agreement on filein its office available for inspection at all reasonablet imes during the usual business hours by anyUnitholder, together with a current list of the Securitiesheld in the Portfolios.

Under the Trust Agreement, the Trustee or anysuccessor trustee may resign and be discharged ofits responsibilities created by the Trust Agreement byexecuting an instrument in writing and filing the samewith the Sponsor. The Trustee or successor trusteemust mail a copy of the notice of resignation to allUnitholders then of record, not less than 60 daysbefore the date specified in such notice when suchresignation is to take effect. The Sponsor uponreceiving notice of such resignation is obligated toappoint a successor trustee promptly. If, upon suchresignation, no successor trustee has been appointedand has accepted the appointment within 30 daysafter notification, the retiring Trustee may apply to acourt of competent jurisdiction for the appointment ofa successor. The Sponsor may remove the Trusteeand appoint a successor trustee as provided in theTrust Agreement at any time with or without cause.Notice of such removal and appointment shall bemailed to each Unitholder by the Sponsor. Upon

execut ion of a wr i t ten acceptance of suchappointment by such successor trustee, all the rights,powers, duties and obligations of the original trusteeshall vest in the successor. The resignation or removalof a Trustee becomes effect ive only when thesuccessor trustee accepts its appointment as such orwhen a court of competent jurisdiction appoints asuccessor trustee.

Any corporation into which a Trustee may be mergedor with which it may be consol idated, or anycorporation resulting from any merger or consolidationto which a Trustee shall be a party, shall be thesuccessor trustee. The Trustee must be a bankingcorporation organized under the laws of the UnitedStates or any state and having at all times an aggregatecapital, surplus and undivided profits of not less than$5,000,000.

TAXATION

Regulated Investment Companies

The prospectus contains a discussion of certain U.S.federal income tax issues concerning the MasterIncome Portfolio, the Value Equity and Income Portfolioand the Covered Cal l Income Portfol io and thepurchase, ownership and disposition of a Portfolio’sUnits. The discussion below supplements theprospectus discussion and is qualified in its entirety bythe prospectus discussion. Prospective investorsshould consult their own tax advisors with regard to thefederal tax consequences of the purchase, ownership,or disposition of Portfolio Units, as well as the taxconsequences arising under the laws of any state,locality, non-U.S. country, or other taxing jurisdiction.


The Master Income Portfolio, the Value Equity andIncome Portfolio and the Covered Call Income Portfolioeach intend to elect and to qualify annually as aregulated investment company under the Internal

14

Revenue Code of 1986, as amended (the “Code”) andto comply with applicable distribution requirements sothat it will not pay federal income tax on income andcapital gains distributed to its Unitholders.

To qualify for the favorable U.S. federal income taxtreatment generally accorded to regulated investmentcompanies, a Portfolio must, among other things, (a) derive in each taxable year at least 90% of its grossincome from dividends, interest, payments with respectto securities loans and gains from the sale or otherdisposition of stock, securities or foreign currencies orother income derived with respect to its business ofinvesting in such stock, securities or currencies, and netincome from qualified publicly traded partnerships; (b) diversify its holdings so that, at the end of eachquarter of the taxable year, (i) at least 50% of the marketvalue of the Portfolio’s assets is represented by cashand cash items (including receivables), U.S. governmentsecurities, the securities of other regulated investmentcompanies and other securities, with such othersecurities of any one issuer generally limited for thepurposes of this calculation to an amount not greaterthan 5% of the value of the Portfolio’s total assets andnot greater than 10% of the outstanding votingsecurities of such issuer, and (ii) not more than 25% ofthe value of its total assets is invested in the securities(other than U.S. government securities or the securitiesof other regulated investment companies) of any oneissuer, or two or more issuers which the Portfoliocontrols (by owning 20% or more of the issuer’soutstanding voting securities) and which are engaged inthe same, similar or related trades or businesses, or thesecurities of qualified publicly traded partnerships; and(c) distribute at least 90% of its investment companytaxable income (which includes, among other items,dividends, interest and net short-term capital gains inexcess of net long-term capital losses but excludes netcapital gain, i f any) and at least 90% of its nettax-exempt interest income, if any, each taxable year.

As a regulated investment company, a Portfoliogenerally will not be subject to U.S. federal income taxon its investment company taxable income (as that termis defined in the Code, but without regard to thededuction for dividends paid) and net capital gain (the

excess of net long-term capital gain over net short-termcapital loss), if any, that it distributes to Unitholders. YourPortfolio intends to distribute to its Unitholders, at leastannually, substantially all of its investment companytaxable income and net capital gain. If a Portfolio retainsany net capital gain or investment company taxableincome, it will generally be subject to federal income taxat regular corporate rates on the amount retained. Inaddition, amounts not distributed on a timely basis inaccordance with a calendar year distribution requirementare subject to a nondeductible 4% excise tax unless,generally, a Portfolio distributes during each calendaryear an amount equal to the sum of (1) at least 98% ofits ordinary income (not taking into account any capitalgains or losses) for the calendar year, (2) at least 98.2%of its capital gains in excess of its capital losses(adjusted for certain ordinary losses) for the one-yearperiod ending October 31 of the calendar year, and (3)any ordinary income and capital gains for previous yearsthat were not distributed or taxed during those years. Toprevent application of the excise tax, your Portfoliointends to make its distributions in accordance with thecalendar year distribution requirement. Further, if yourPortfolio retains any net capital gain, the Portfolio maydesignate the retained amount as undistributed capitalgains in a notice to Unitholders who, if subject to federalincome tax on long-term capital gains (i) will be requiredto include in income for federal income tax purposes, aslong-term capital gain, their share of such undistributedamount, and ( i i ) wil l be entit led to credit theirproportionate share of the tax paid by the Portfolioagainst their federal income tax liabilities, if any, and toclaim refunds to the extent the credit exceeds suchliabilities. A distribution will be treated as paid onDecember 31 of the current calendar year if it is declaredby a Portfolio in October, November or December with arecord date in such a month and paid by the Portfolioduring January of the following calendar year. Thesedistributions will be taxable to Unitholders in the calendaryear in which the distributions are declared, rather thanthe calendar year in which the distributions are received.

If a Portfol io fai led to qual i fy as a regulatedinvestment company or failed to satisfy the 90%distribution requirement in any taxable year, the Portfolio

15

would be taxed as an ordinary corporation on itstaxable income (even if such income were distributed toits Unitholders) and all distributions out of earnings andprofits would be taxed to Unitholders as ordinarydividend income.

If a Portfolio is treated as holding directly or indirectly10 percent or more of the combined voting power of thestock of a foreign corporation, and all U.S. shareholderscollectively own more than 50 percent of the vote or valueof the stock of such corporation, the foreign corporationmay be treated as a “controlled foreign corporation” (a “CFC”) for U.S. federal income tax purposes. In suchcircumstances, a Portfolio will be required to includecertain types of passive income and certain other types ofincome relating to insurance, sales and services withrelated parties and oil related income in the Portfolio’staxable income whether or not such income is distributed.

If a Portfolio holds an equity interest in any “passiveforeign investment companies” (“PFICs”), which aregenerally certain foreign corporations that receive at least75% of their annual gross income from passive sources(such as interest, dividends, certain rents and royalties orcapital gains) or that hold at least 50% of their assets ininvestments producing such passive income, thePortfolio could be subject to U.S. federal income tax andadditional interest charges on gains and certaindistributions with respect to those equity interests, even ifall the income or gain is timely distributed to itsUnitholders. A Portfolio will not be able to pass throughto its Unitholders any credit or deduction for such taxes.A Portfolio may be able to make an election that couldameliorate these adverse tax consequences. In this case,a Portfolio would recognize as ordinary income anyincrease in the value of such PFIC shares, and asordinary loss any decrease in such value to the extent itdid not exceed prior increases included in income. Underthis election, a Portfolio might be required to recognize ina year income in excess of its distributions from PFICsand its proceeds from dispositions of PFIC stock duringthat year, and such income would nevertheless besubject to the distribution requirement and would betaken into account for purposes of the 4% excise tax(described above). Dividends paid by PFICs will not betreated as qualified dividend income.

PORTFOLIO TERMINATIONA Portfolio may be liquidated at any time by consent

of Unitholders representing 66 2/3% of the Units of thePortfolio then outstanding or by the Trustee when thevalue of the Securities owned by the Portfolio, as shownby any evaluation, is less than $500,000 ($3,000,000 ifthe value of the Portfolio has exceeded $15,000,000). APortfolio will be liquidated by the Trustee in the eventthat a sufficient number of Units of the Portfolio not yetsold are tendered for redemption by the Sponsor, sothat the net worth of the Portfolio would be reduced toless than 40% of the value of the Securities at the timethey were deposited in the Portfolio. If a Portfolio isliquidated because of the redemption of unsold Units bythe Sponsor, the Sponsor will refund to each purchaserof Units the entire sales charge paid by such purchaser.The Trust Agreement will terminate upon the sale orother disposition of the last Security held thereunder,but in no event will it continue beyond the MandatoryTermination Date.

Commencing during the period beginning ninebusiness days pr ior to, and no later than, theMandatory Termination Date, Securities will begin to besold in connection with the termination of a Portfolio.The Sponsor will determine the manner, timing andexecution of the sales of the Securities. The Sponsorshall direct the liquidation of the Securities in suchmanner as to effectuate orderly sales and a minimalmarket impact. In the event the Sponsor does not sodirect, the Securities shall be sold within a reasonableperiod and in such manner as the Trustee, in its solediscretion, shall determine. At least 45 days before theMandatory Termination Date the Trustee will providewritten notice of any termination to all Unitholders ofthe Portfol ios. Unitholders wi l l receive a cashdistribution from the sale of the remaining Securitieswithin a reasonable time following the MandatoryTermination Date. The Trustee will deduct from thefunds of a Portfolio any accrued costs, expenses,advances or indemnit ies provided by the TrustAgreement, including estimated compensation of theTrustee, costs of liquidation and any amounts requiredas a reserve to provide for payment of any applicabletaxes or other governmental charges. Any sale of

16

Securities in a Portfolio upon termination may result ina lower amount than might otherwise be realized ifsuch sale were not required at such time. The Trusteewill then distribute to each Unitholder of a Portfolio hispro rata share of the balance of the Income and CapitalAccounts of the Portfolio.

The Sponsor may, but is not obligated to, offer forsale units of a subsequent series of the Portfolios. Thereis, however, no assurance that units of any new seriesof a Portfolio will be offered for sale at that time, or ifoffered, that there will be sufficient units available forsale to meet the requests of any or all Unitholders.

Within 60 days of the final distribution Unitholders willbe furnished a final distribution statement of the amountdistributable. At such time as the Trustee in its solediscretion will determine that any amounts held inreserve are no longer necessary, it will make distributionthereof to Unitholders in the same manner.

17

Closed-End Strategy: Master Income Portfolio, Series 28...

Documents

Transcript of Closed-End Strategy: Master Income Portfolio, Series 28...