File No: 333-
CIK #1025209
Securities and Exchange Commission
Washington, D.C. 20549-1004
Form S-6
For Registration under the Securities Act of 1933 of Securities of Unit
Investment Trusts Registered on Form N-8B-2.
A. Exact name of Trust: Van Kampen American Capital Equity
Opportunity Trust, Series 63
B. Name of Depositor: Van Kampen American Capital Distributors, Inc.
C. Complete address of Depositor's principal executive offices:
One Parkview Plaza
Oakbrook Terrace Illinois 60181
D. Name and complete address of agents for service:
Chapman And Cutler Van Kampen American Capital Distributors, Inc.
Attention: Mark J. Kneedy Attention: Don G. Powell, Chairman
111 West Monroe Street One Parkview Plaza
Chicago, Illinois 60603 Oakbrook Terrace, Illinois 60181
E. Title and amount of securities being registered: An indefinite number
of Units of undivided fractional beneficial interests pursuant to Rule
24f-2 under the Investment Company Act of 1940
F. Proposed maximum offering price to the public of the securities being
registered: Indefinite
G. Amount of registration fee: Not Applicable
H. Approximate date of proposed sale to the public:
As Soon As Practicable After The Effective Date Of The Registration
Statement
______________________________________________________________________
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as the
Commission, acting pursuant to said Section 8(a) may determine.
Van Kampen American Capital Equity Opportunity Trust
Series 63
Cross Reference Sheet
Pursuant to Rule 404(c) of Regulation C
under the Securities Act of 1933
(Form N-8B-2 Items Required by Instruction
1 as to Prospectus on Form S-6)
Form N-8B-2 Form S-6
Item Number Heading in Prospectus
I. Organization and General Information
1. (a) Name of trust ) Prospectus Front Cover Page
(b) Title of securities issued ) Prospectus Front Cover Page
2. Name and address of Depositor ) Summary of Essential Financial
) Information
) Trust Administration
3. Name and address of Trustee ) Summary of Essential Financial
) Information
) Trust Administration
4. Name and address of principal ) Trust Administration
underwriter
5. Organization of trust ) The Trust
6. Execution and termination of ) The Trust
Trust Indenture and Agreement ) Trust Administration
7. Changes of Name ) *
8. Fiscal year ) *
9. Material Litigation ) *
II. General Description of the Trust and
Securities of the Trust
10. General information regarding ) The Trust
Trust's securities and ) Taxation
rights of security holders ) Public Offering
) Rights of Unitholders
) Trust Administration
) Risk Factors
11. Type of securities comprising ) Prospectus Front Cover Page
units ) The Trust
) Trust Portfolio
) Risk Factors
12. Certain information regarding ) *
periodic payment certificates )
13. (a) Loan, fees, charges and expenses ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Portfolio
)
) Trust Operating Expenses
) Public Offering
) Rights of Unitholders
(b) Certain information regarding )
periodic payment plan ) *
certificates )
(c) Certain percentages ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
)
) Public Offering
) Rights of Unitholders
(d) Certain other fees, expenses or ) Trust Operating Expenses
charges payable by holders ) Rights of Unitholders
(e) Certain profits to be received ) Public Offering
by depositor, principal ) Trust Portfolio
underwriter, trustee or any )
affiliated persons )
(f) Ratio of annual charges ) *
to income )
14. Issuance of Trust's securities ) Rights of Unitholders
15. Receipt and handling of payments ) *
from purchasers )
16. Acquisition and disposition of ) The Trust
underlying securities ) Rights of Unitholders
) Trust Administration
17. Withdrawal or redemption ) Rights of Unitholders
) Trust Administration
18. (a) Receipt and disposition ) Prospectus Front Cover Page
of income ) Rights of Unitholders
(b) Reinvestment of distributions ) *
(c) Reserves or special funds ) Trust Operating Expenses
) Rights of Unitholders
(d) Schedule of distributions ) *
19. Records, accounts and reports ) Rights of Unitholders
) Trust Administration
20. Certain miscellaneous provisions ) Trust Administration
of Trust Agreement )
21. Loans to security holders ) *
22. Limitations on liability ) Trust Portfolio
) Trust Administration
23. Bonding arrangements ) *
24. Other material provisions of ) *
Trust Indenture Agreement )
III. Organization, Personnel and Affiliated
Persons of Depositor
25. Organization of Depositor ) Trust Administration
26. Fees received by Depositor ) *
27. Business of Depositor ) Trust Administration
28. Certain information as to ) *
officials and affiliated )
persons of Depositor )
29. Companies owning securities ) *
of Depositor )
30. Controlling persons of Depositor ) *
31. Compensation of Officers of ) *
Depositor )
32. Compensation of Directors ) *
33. Compensation to Employees ) *
34. Compensation to other persons ) *
IV. Distribution and Redemption of Securities
35. Distribution of trust's securities ) Public Offering
by states )
36. Suspension of sales of trust's ) *
securities )
37. Revocation of authority to ) *
distribute )
38. (a) Method of distribution )
)
(b) Underwriting agreements ) Public Offering
)
(c) Selling agreements )
39. (a) Organization of principal ) *
underwriter )
(b) N.A.S.D. membership by ) *
principal underwriter )
40. Certain fees received by ) *
principal underwriter )
41. (a) Business of principal ) Trust Administration
underwriter )
(b) Branch offices or principal ) *
underwriter )
(c) Salesmen or principal ) *
underwriter )
42. Ownership of securities of ) *
the trust )
43. Certain brokerage commissions ) *
received by principal underwriter )
44. (a) Method of valuation ) Prospectus Front Cover Page
) Summary of Essential Financial
) Information
) Trust Operating Expenses
) Public Offering
(b) Schedule as to offering ) *
price )
(c) Variation in offering price ) *
to certain persons )
46. (a) Redemption valuation ) Rights of Unitholders
) Trust Administration
(b) Schedule as to redemption ) *
price )
47. Purchase and sale of interests ) Public Offering
in underlying securities ) Trust Administration
V. Information Concerning the Trustee or Custodian
48. Organization and regulation of ) Trust Administration
trustee )
49. Fees and expenses of trustee ) Summary of Essential Financial
) Information
) Trust Operating Expenses
50. Trustee's lien ) Trust Operating Expenses
VI. Information Concerning Insurance of Holders of Securities
51. Insurance of holders of trust's )
securities ) *
52. (a) Provisions of trust agreement )
with respect to replacement ) Trust Administration
or elimination portfolio )
securities )
(b) Transactions involving )
elimination of underlying ) *
securities )
(c) Policy regarding substitution )
or elimination of underlying ) Trust Administration
securities )
(d) Fundamental policy not ) *
otherwise covered )
53. Tax Status of trust ) Taxation
VII. Financial and Statistical Information
54. Trust's securities during ) *
last ten years )
55. )
56. Certain information regarding ) *
57. periodic payment certificates )
58. )
59. Financial statements (Instructions ) Report of Independent
Certified
1(c) to Form S-6) ) Public Accountants
) Statement of Condition
______________________________________________
* Inapplicable, omitted, answer negative or not required
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This Prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any State.
Preliminary Prospectus Dated May 20, 1997
Subject To Completion
June 24, 1997
China Consumer Opportunity Trust, Series 1
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 63 (the
"Fund" ) is comprised of one underlying unit investment trust
designated as the China Consumer Opportunity (the "Trust" ). The Trust
offers investors the opportunity to purchase Units representing proportionate
interests in a fixed, diversified portfolio of common stocks issued by
companies which International Assets Advisory Corp. (the "Managing
Underwriter" ) believes have substantial present or future potential
opportunities in the China region consumer products and services sector (the
"Equity Securities" or "Securities" ). See "Trust
Portfolio." The Securities are common stocks of foreign issuers, certain
of which are held in American Depositary Receipt form ("ADRs" ). The
foreign common stocks which are traded on a foreign securities exchange are
referred to herein as the "Foreign Securities." Unless terminated
earlier, the Trust will terminate on June 24, 2004 (the "Mandatory
Termination Date" ) and any Securities then held will, within a reasonable
time thereafter, be liquidated or distributed by the Trustee. Any Securities
liquidated at termination will be sold at the then current market value for
such Securities; therefore, the amount distributable in cash to a Unitholder
upon termination may be more or less than the amount such Unitholder paid for
his Units. Unless otherwise indicated, all amounts herein are stated in U.S.
dollars computed on the basis of the exchange rate for the relevant currency
on the Initial Date of Deposit.
Objective of the Trust. The objective of the Trust is to provide the potential
for above-average total return primarily through potential capital
appreciation with dividend income playing a lesser role. See "Objectives
and Securities Selection." There is, of course, no guarantee that the
objective of the Trust will be achieved.
Public Offering Price. The Public Offering Price of the Units of the Trust
includes the aggregate underlying value of the Securities in the Trust's
portfolio, the initial sales charge described below, and cash, if any, in the
Income and Capital Accounts held or owned by the Trust. The initial sales
charge is equal to the difference between the maximum total sales charge of
5.5% of the Public Offering Price and the maximum deferred sales charge ($0.30
per Unit). The monthly deferred sales charge ($0.05 per Unit) will begin
accruing on a daily basis on December 24, 1997 and will continue to accrue
through June 23, 1998. The monthly deferred sales charge will be charged to
the Trust, in arrears, commencing January 24, 1998 and will be charged on the
24th day of each month thereafter through June 24, 1998. Unitholders will be
assessed only that portion of the deferred sales charge payments not yet
collected. This deferred sales charge will be paid from funds in the Capital
Account, if sufficient, or from the periodic sale of Securities. The total
maximum sales charge assessed to Unitholders on a per Unit basis will be 5.5%
of the Public Offering Price (5.820% of the aggregate value of the Securities
less the deferred sales charge), subject to reduction as set forth in "
Public Offering--General." The Public Offering Price per Unit is based on
the aggregate value of the Foreign Securities computed on the basis of the
offering side value of the currency exchange rate for the relevant currency
expressed in U.S. dollars during the initial offering period and on the bid
side value for secondary market transactions. The sales charge is reduced on a
graduated scale for sales involving at least 10,000 Units. If Units were
available for purchase at the close of business on the day before on the
Initial Date of Deposit, the Public Offering Price per Unit would have been
that amount set forth under "Summary of Essential Financial
Information." The minimum purchase is 500 Units (100 Units for a
tax-sheltered retirement plan). See "Public Offering."
Additional Deposits. The Sponsor may, from time to time during a period of up
to approximately six months after the Initial Date of Deposit, deposit
additional Securities in the Trust as provided under "The Trust."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable Distribution
Date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information." The initial estimated
distribution will be approximately $_____ per Unit and will be made on
December 25, 1997 to Unitholders of record on December 10, 1997. Any
distribution of income and/or capital will be net of the expenses of the
Trust. See "Taxation." Additionally, upon surrender of Units for
redemption or termination of the Trust, the Trustee will distribute to each
Unitholder his pro rata share of the Trust's assets, less expenses, in the
manner set forth under "Rights of Unitholders--Distributions of Income and
Capital."
Secondary Market for Units. Although not obligated to do so, International
Assets Advisory Corp. (the "Managing Underwriter" ) currently intends
to maintain a market for Units of the Trust and offer to repurchase Units at
prices which are based on the aggregate underlying value of Equity Securities
in the Trust (generally determined by the closing sale prices of the
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is not maintained, a Unitholder may redeem
Units at prices based upon the aggregate underlying value of the Equity
Securities in the Trust plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date, Securities will
begin to be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the Securities.
Written notice of any termination of the Trust shall be given by the Trustee
to each Unitholder at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after the Trust is terminated.
See "Trust Administration--Amendment or Termination."
Portfolio Supervision. Van Kampen American Capital Investment Advisory Corp.,
the Supervisor for the Trust, has retained Global Assets Advisors, Inc. ("
Global Assets Advisors" ) as the Sub-Supervisor to provide research to the
Supervisor and perform portfolio supervisory services for the Trust. The
Sponsor believes that this arrangement is desirable in the present
circumstances due to the complexity of the foreign equity security markets and
Global Assets Advisors' expertise in providing equity research on individual
foreign equity securities, emerging markets and the foreign equity security
markets in general. The Supervisor will pay Global Assets Advisors the entire
supervisory fee for providing these services. See "Summary of Essential
Financial Information."
Reinvestment Option. Unitholders may have the opportunity to have their
distributions reinvested into additional Units of the Trust, if Units are
available at the time of reinvestment. See "Rights of
Unitholders--Reinvestment Option."
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer, exchange control restrictions impacting
foreign issuers and risks related to an investment in companies that do
business or are traded in China or its territorial possessions. For certain
risk considerations related to the Trust, see "Risk Factors." Units of
the Trust are not deposits or obligations of, and are not guaranteed or
endorsed by, any bank and are not federally insured or otherwise protected by
the Federal Deposit Insurance Corporation, the Federal Reserve Board or any
other agency and involve investment risk, including the possible loss of the
principal amount invested.
<TABLE>
SUMMARY OF ESSENTIAL FINANCIAL INFORMATION
At the Close of the Relevant Stock Market on: June 23, 1997
Managing Underwriter: International Assets Advisory Corp.
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor (1): Van Kampen American Capital Investment Advisory Corp.
Sub-Supervisor (1): Global Assets Advisors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<CAPTION>
GENERAL INFORMATION
<S> <C>
Number of Units <F2>......................................................
Fractional Undivided Interest in the Trust per Unit <F2>..................
Public Offering Price: ...................................................
Aggregate Value of Securities in Portfolio <F3>.......................... $
Aggregate Value of Securities per Unit................................... $
Maximum Sales Charge <F4>................................................ $
Less Deferred Sales Charge............................................... $
Public Offering Price per Unit <F4><F5><F6>.............................. $
Redemption Price per Unit <F7>............................................ $
Initial Secondary Market Repurchase Price per Unit <F7>................... $
Excess of Public Offering Price per Unit over Redemption Price per Unit... $
Calculation of Estimated Net Annual Dividends per Unit <F8>:..............
Estimated Gross Annual Dividends per Unit................................ $
Less: Estimated Annual Expense per Unit.................................. $
Estimated Net Annual Dividends per Unit.................................. $
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee <F1>...Maximum of $.007 per Unit
Evaluator's Annual Evaluation Fee..........Maximum of $.0025 per Unit
Mandatory Termination Date.................June 24, 2004
The Trust may be terminated if the net asset value of the Trust is less than $500,000
unless the net asset value of the Trust's deposits has exceeded $15,000,000, then the
Minimum Termination Value..................Trust may be terminated if the net asset value of the Trust is less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee <F9>......................$.008 per Unit
Income and Capital Account Record Date.........Tenth day of December
Income and Capital Account Distribution Date...Twenty-fifth day of December
Evaluation Time................................Generally 4 a.m. New York time
- ----------
<FN>
<F1>Pursuant to a contractual arrangement with the Supervisor, Global Assets
Advisors, Inc. will provide to the Supervisor on an agency basis supervisory
services in return for the entire supervisory fee.
<F2>As of the close of business on any day on which the Sponsor is the sole
Unitholder of the Trust, the number of Units may be adjusted so that the
Public Offering Price per Unit will equal approximately $10. Therefore, to the
extent of any such adjustment the fractional undivided interest per Unit will
increase or decrease accordingly from the amounts indicated above.
<F3>Each Equity Security listed on a national or foreign securities exchange is
valued at the closing sale price, or if an Equity Security is not so listed,
at the closing ask price thereof. The aggregate value of Securities in the
Trust is based on the U.S. dollar value of the Foreign Securities based on the
offering side value of the related currency exchange rate at the Evaluation
Time on the date of this "Summary of Essential Financial Information" .
<F4>The Maximum Sales Charge consists of an initial sales charge and a deferred
sales charge. The initial sales charge is applicable to all Units and
represents an amount equal to the difference between the Maximum Sales Charge
of 5.5% of the Public Offering Price and the amount of the maximum deferred
sales charge of $0.30 per Unit. Subsequent to the Initial Date of Deposit, the
amount of the initial sales charge will vary with changes in the aggregate
value of the Securities in the Trust. In addition to the initial sales charge,
Unitholders will pay a deferred sales charge of $0.05 per Unit per month which
will begin accruing on a daily basis on December 24, 1997 and will continue to
accrue through June 23, 1998. The monthly deferred sales charge will be
charged to the Trust, in arrears, commencing January 24, 1998 and will be
charged on the 24th day of each month thereafter through June 24, 1998. Units
purchased subsequent to the initial deferred sales charge payment will be
subject only to the portion of the deferred sales charge payments not yet
collected. These deferred sales charge payments will be paid from funds in the
Capital Account, if sufficient, or from the periodic sale of Securities. The
total maximum sales charge will be 5.5% of the Public Offering Price (5.820%
of the aggregate value of the Securities in the Trust less the deferred sales
charge). See the "Fee Table" below and "Public Offering--Offering
Price" .
<F5>On the Initial Date of Deposit there will be no cash in the Income or Capital
Accounts. Anyone ordering Units after such date will have included in the
Public Offering Price a pro rata share of any cash in such Accounts.
<F6>Commencing on June 24, 1998, the secondary market sales charge will not
include deferred payments but will instead include only a one-time initial
sales charge of 5.0% of the Public Offering Price and will be reduced by .5 of
1% on each subsequent June 24 to a minimum sales charge of 3.0%. See "
Public Offering."
<F7>The Redemption Price per Unit and the Secondary Market Repurchase Price per
Unit are reduced by the unpaid portion of the deferred sales charge. The
Redemption Price per Unit is based on the aggregate value of the Foreign
Securities computed on the basis of the bid side value of the related currency
exchange rate expressed in U.S. dollars.
<F8>Estimated annual dividends are based on annualizing the last dividends
declared, taking into consideration any applicable foreign withholding tax.
Estimated Annual Dividends per Unit are based on the number of Units, the
fractional undivided interest in the Securities per Unit and the aggregate
value of the Securities per Unit as of the Initial Date of Deposit. Investors
should note that the actual annual dividends received per Unit will vary from
the estimated amount due to changes in the factors described in the preceding
sentence and actual dividends declared and paid by the issuers of the
Securities.
<F9>The Trustee will receive additional annual compensation, payable in monthly
installments, of $_____ per $1,000 of market value of the Equity Securities
traded on _____ securities exchanges and held in a sub-custodian account at
month end.
</TABLE>
FEE TABLE
- --------------------------------------------------------------------------
This Fee Table is intended to assist investors in understanding the costs and
expenses that an investor in the Trust will bear directly or indirectly. See
"Public Offering--Offering Price" and "Trust Operating
Expenses" . Although the Trust is a unit investment trust rather than a
mutual fund, this information is presented to permit a comparison of fees.
Investors should note that while this example is based on the public offering
price and the estimated fees for the Trust, the actual public offering price
and fees could vary from the estimated amounts below.
<TABLE>
<CAPTION>
<S> <C> <C>
Amount Per
Unitholder Transaction Expenses (as of the Initial Date of Deposit) (as a percentage of offering price) 100 Units
--------------
Initial Sales Charge Imposed on Purchase <F1>............................................................. 2.50% $ 25.00
Deferred Sales Charge <F2>................................................................................ 3.00% 30.00
-----------------------
Maximum Sales Charge...................................................................................... 5.50% $ 55.00
=======================
Maximum Sales Charge Imposed on Reinvested Dividends <F3>................................................. 3.00% $ 30.00
======== ==============
Estimated Annual Trust Operating Expenses (as of the Initial Date of Deposit) (as a percentage of
aggregate value)
Trustee's Fee ............................................................................................ $
Portfolio Supervision and Evaluation Fees ................................................................
Organizational Costs......................................................................................
Other Operating Expenses .................................................................................
-------- --------------
Total..................................................................................................... $
======== ==============
</TABLE>
Example
<TABLE>
<CAPTION>
Cumulative Expenses Paid for Period of:
------------------------------------------------
1 Year 3 Years 5 Years 10 Years
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
An investor would pay the following expenses on a $1,000 investment, assuming a
5% annual return and redemption at the end of each time period $ $ $ $
</TABLE>
The example assumes reinvestment of all dividends and distributions and
utilizes a 5% annual rate of return as mandated by Securities and Exchange
Commission regulations applicable to mutual funds. For purposes of the
example, the deferred sales charge imposed on reinvestment of dividends is not
reflected until the year following payment of the dividend; the cumulative
expenses would be higher if sales charges on reinvested dividends were
reflected in the year of reinvestment. The example should not be considered as
a representation of past or future expenses or annual rate of return; the
actual expenses and annual rate of return may be more or less than those
assumed for purposes of the example.
- ----------
The Initial Sales Charge is actually the difference between the Maximum Sales
Charge (5.50% of the Public Offering Price) and the maximum deferred sales
charge ($0.30 per Unit) and would exceed 2.50% if the Public Offering Price
exceeds $10 per Unit.
The actual fee is $0.05 per Unit per month, irrespective of purchase or
redemption price, deducted over the six months commencing January 24, 1998. If
a holder sells or redeems Units before all of these deductions have been made,
the balance of the deferred sales charge payments remaining will be deducted
from the sales or redemption proceeds. If Unit price exceeds $10 per Unit, the
deferred portion of the sales charge will be less than 3.00%; if Unit price is
less than $10 per Unit, the deferred portion of the sales charge will exceed
3.00%. Units purchased subsequent to the initial deferred sales charge payment
will be subject to only that portion of the deferred sales charge payments not
yet collected.
Reinvested dividends will be subject only to the deferred sales charge
remaining at the time of reinvestment. See "Rights of
Unitholders--Reinvestment Option" .
THE TRUST
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 63, which is
comprised of one unit investment trust, China Consumer Opportunity Trust,
Series 1, was created under the laws of the State of New York pursuant to a
Trust Indenture and Trust Agreement (the "Trust Agreement" ), dated the
date of this Prospectus (the "Initial Date of Deposit" ), among Van
Kampen American Capital Distributors, Inc., as Sponsor, Van Kampen American
Capital Investment Advisory Corp., as Supervisor, The Bank of New York, as
Trustee, and American Portfolio Evaluation Services, a division of Van Kampen
American Capital Investment Advisory Corp., as Evaluator.
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of equity securities issued by
companies which International Assets Advisory Corp. believes have substantial
present or future potential opportunities in the China region consumer
products and services sector.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities indicated under "Portfolio" herein, including delivery
statements relating to contracts for the purchase of certain such Securities
and an irrevocable letter of credit issued by a financial institution in the
amount required for such purchases. Thereafter, the Trustee, in exchange for
such Securities (and contracts) so deposited, delivered to the Sponsor
documentation evidencing the ownership of that number of Units of the Trust
indicated in "Summary of Essential Financial Information." Unless
terminated earlier, the Trust will terminate on the Mandatory Termination Date
set forth under "Summary of Essential Financial Information" and any
Securities then held will, within a reasonable time thereafter, be liquidated
or distributed by the Trustee. Any Securities liquidated at termination will
be sold at the then current market value for such Securities; therefore, the
amount distributable in cash to a Unitholder upon termination may be more or
less than the amount such Unitholder paid for his Units.
Additional Units of the Trust may be issued at any time by depositing in the
Trust (i) additional Securities, (ii) contracts to purchase securities
together with cash or irrevocable letters of credit or (iii) cash (including a
letter of credit) with instructions to purchase additional Securities. As
additional Units are issued by the Trust as a result of the deposit of
additional Securities, the aggregate value of the Securities in the Trust will
be increased and the fractional undivided interest in the Trust represented by
each Unit will be decreased. The Sponsor may continue to make additional
deposits of Securities or cash with instructions to purchase Securities into
the Trust following the Initial Date of Deposit, provided that such additional
deposits will be in amounts which will maintain, as nearly as practicable, the
same percentage relationship among the number of shares of each Equity
Security in the Trust's portfolio that existed immediately prior to any such
subsequent deposit. Any deposit of additional Equity Securities will
duplicate, as nearly as is practicable, this actual proportionate relationship
and not the original proportionate relationship on the Initial Date of
Deposit, since the actual proportionate relationship may be different than the
original proportionate relationship. Any such difference may be due to the
sale, redemption or liquidation of any of the Equity Securities deposited in
the Trust on the Initial, or any subsequent, Date of Deposit. If the Sponsor
deposits cash, however, existing and new investors may experience a dilution
of their investments and a reduction in their anticipated income because of
fluctuations in the prices of the Securities between the time of the cash
deposit and the purchase of the Securities and because the Trust will pay the
associated brokerage fees.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee or
additional Units are issued as a result of additional Securities being
deposited by the Sponsor, the fractional undivided interest in the Trust
represented by each unredeemed Unit will increase or decrease accordingly,
although the actual interest in the Trust represented by such fraction will
remain unchanged. Units will remain outstanding until redeemed upon tender to
the Trustee by Unitholders, which may include the Sponsor or the Managing
Underwriter, or until the termination of the Trust Agreement.
OBJECTIVE AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of the Trust is to provide the potential for above-average total
return primarily through potential capital appreciation with dividend income
playing a lesser role. There is, of course, no assurance that the Trust (which
includes expenses and sales charges) will achieve its objective. The Equity
Securities selected for deposit in the Trust were chosen by International
Assets Advisory Corporation ("IAAC" ), the Managing Underwriter.
"In many ways China is a consumer marketer's dream. A combination of
pentup demand for consumer goods, rising incomes and a revival of traditional
Chinese mores, which place high value on the accumulation and expression of
wealth, is precipitating a consumer boom in the world's most populated nation.
Thirty-five years of a production-driven communist economic system (from
roughly 1950-1985) in which the party line deemed consumer products frivolous
has created tremendous pent-up desire for consumer goods. At the same time,
China's stellar economic growth--averaging 10.2% annually in the decade
1984-1994--is augmenting household incomes, giving consumers the money they
need to purchase the plethora of a new products that are arriving on the
shelves." Source: Statistics Bureau, Economist Intelligence Unit\xa9
Consumer Marketing in China, 1996. Reproduced by permission of the Economist
Intelligence Unit, 111 West 57th Street, New York, New York 10019.
Total area in China is 9.6 million square miles, slightly larger than the
U.S., but with a population of 1.2 billion people, or almost five times that
of the United States. China borders 15 countries, with 14,000 miles of land
boundaries and 8,200 miles of coastland.
<TABLE>
<CAPTION>
Population Economic Growth GDP $ U.S. Trillion
(million) 1980-1995* 1995
-------------- ------------------ ----------------------
<S> <C> <C> <C>
China 1221 325% 0.693
U.S. 283 42% 7.25
Japan 125 60% 5.11
Germany 82 50% 2.41
*Chg. GDP 1990 local prices (source: IMF)
</TABLE>
China is now the most populous nation on earth and, if current growth rates
continue, it will within little more than two decades become its largest
economy.
<TABLE>
<CAPTION>
1990 1995 (Estimated) 2000
-------- -------- -------------------
<S> <C> <C> <C>
Total Population (billion) 1.14 1.23 1.3
Population Growth Rate 1.50% 1.30% 1.20%
Age Profile (% of population)
0-14 27.6 27 26.5
15-64 66.4 66.8 67.1
65 and Over 6 6.2 6.4
Life Expectancy (yrs)
Male 66 67 68
Female 69 70 71
Literacy Rate (% of population) 73.5 75 77
Labor Force (millions) 562 609 651
Source: Statistics Bureau, Economist Intelligence Unit\xa9 Consumer
Marketing in China, 1996. Reproduced by permission of the Economist
Intelligence Unit, 111 West 57th Street, New York, New York 10019.
</TABLE>
Since 1978, China's leaders have been moving the economy from a centrally
planned to market oriented economy, albeit at their own pace and of their own
definition: "Socialism with Chinese Characteristics" , which has meant
more market-oriented characteristics. Thus the late Deng Xiaoping's statement
in May of 1988: "Socialism is not about being poor, but being rich
together." Of course, while the Chinese government has begun to accept
economic reforms, investors should be aware of that there can be no assurance
that these reforms will continue or that additional reforms will occur in the
future.
China's private (non-state) sector has grown rapidly in recent years. By the
end of 1995, the number of privately operated enterprises exceeded 600,000
(over six times the 1990 figure) employing 55.7 million workers. In 1996,
about 72% of China's retail consumer goods and 57% of China's industrial
output were produced by non-state enterprises (including collective and
private owned enterprises). In rural agriculture areas, where 70% of the
population still works and lives, more responsibility has been given to the
individual household, helping to liberate this sector from government
intervention. The above move, is a major market move from a developing
economy. For example, in 1980 there were 15 cities with a population over one
million. In 1995, there were 32. The Ministry of Construction announced that
it expects to establish 432 new cities over the next 15 years and anticipates
that the number of towns will surge to 48,000 to 68,000. Of course, there can
be no assurance that these trends will continue or occur during the life of
the Trust.
Now the urban population represents about 360 million, some 30% of the
country's total, up from 20% in 1985, and that percentage continues to grow.
The state statistical bureau estimates that the urban population will rise to
36% of the population by the year 2000, while the United Nations Development
Program predicts the figure will be close to 50%. Additionally, there is a
fringe or suburban population bordering on urban areas with a population
estimated at about 380 million, and whose average per capita income is only
slightly lagging behind that of the urban population.
Urbanization has been especially significant to the consumer products
industry. China's urban population has a much higher income level than the
rural population, at about $570 per annum, and the urban consumer is much
easier to access geographically, particularly considering the current
inefficiency of China's transportation/distribution infrastructure,
particularly in rural areas.
<TABLE>
<CAPTION>
Urban Rural
----------- -----------
<S> <C> <C>
Average people per household 3.28 4.54
Average employees per household 1.88 2.59
Persons supported per wage earner 1.74 1.57
Annual income per capita 3502 Rmb 1789 Rmb
Annual per-capita income available for living expenses 3179 Rmb 1221 Rmb
Annual living expenditure per capita 2851 Rmb 1017 Rmb
Source: Statistics Bureau, Economist Intelligence Unit\xa9 Consumer Marketing
in China, 1996. Reproduced by permission of the Economist Intelligence Unit, 111
West 57th Street, New York, New York 10019.
</TABLE>
Thirty five years under communism during which the Communist party deemed
consumer products a frivolous luxury created desire among the populace for
consumer goods. With economic reform, China's GDP grew an average of 10.2%
annually from 1984 to 1994, helping to provide Chinese families with the
economic wherewithal to begin purchasing newly available consumer products.
Chinese households have typically saved a large percentage of their income,
estimated at about 18%, and significantly higher among the urban population.
This savings, among other things, is often targeted to funding future "
big-ticket" purchases. Additionally, multi-generational households are the
norm, with 20% of all national households including three generations. Such
households may have four workers and one or no dependents. With four incomes,
spending cash for a refrigerator or a TV may come within their reach.
The urban, consumer population appears to be growing much more sophisticated
in their shopping habits. For example, in 1985, only 4.4% of Chinese
households owned TVs, while over 42% of Chinese households now own TVs,
including 95% of urban households. Now that most urban households have access
to television, they are increasingly exposed to a new consumer-oriented
mentality. Obviously, many urban households are now for the first time in
their lives viewing television commercials advertising new consumer products.
Annual Chinese television advertising expenditures are reaching one billion
dollars annually, up from $24 million in 1985. One example: A five-second
daily advertisement following the national 7 o'clock news running through 1997
was bought for $39 million by a Chinese liquor company, hoping to reach
China's mass consumer audience.
<TABLE>
<CAPTION>
Nationwide Ownership of Goods (%) Nationwide Ownership of Goods (%)
- -------------------------------- ------ -------------------------------- ------
<S> <C> <C> <C>
Bicycle 81 Gas Stove 23
Electric Fan 63 Camera 14
Radio 58 Stereo 23
B&W TV 54 Walkman 12
Color TV 40 VCR 12
Rice Cooker 39 Telephone 15
Washing Machine 36 Motorcycle 6
Refrigerator 25 Vacuum 6
Source: Gallup, 1995 as reproduced in State Statistics Bureau, Economist
Intelligence Unit\xa9 Consumer Marketing in China, 1996. Reproduced by
permission of the Economist Intelligence Unit, 111 West 57th Street, New York,
New York 10019.
</TABLE>
According to the U.S. State Department, the size of the Chinese cosmetics and
toiletries market grew from 1.3 billion U.S. dollars in 1994 to 2.6 billion in
1996. The pharmaceuticals market grew from 9.7 billion U.S. dollars in 1994 to
14 billion in 1996. Sales of computer software grew, from 560 million U.S.
dollars in 1994 to 1.2 billion in 1996. Sales of computers grew from 3.6
billion U.S. dollars in 1994 to 6 billion in 1996. Cosmetics may be a $6
billion industry by the year 2000 according to estimates made by the official
Xinhua news agency.
<TABLE>
<CAPTION>
Women's Cosmetic Use Nationally Urban
- ----------------------- ------------- --------
<S> <C> <C>
Shampoo 66 78
Perfumes 33 46
Hand creams 31 39
Lipstick 16 30
Nail polish 9 18
Source: Statistics Bureau, Economist
Intelligence Unit\xa9 Consumer Marketing in
China, 1996. Reproduced by permission of the
Economist Intelligence Unit, 111 West 57th
Street, New York, New York 10019.
</TABLE>
According to a Gallup poll in 1995, most people in China embrace a "work
hard, get rich" ethic that they expect to help them buy consumer goods.
Also, just 4% said they subscribed to the collectivist belief in putting one's
society first. The same poll of 3,400 Chinese people resulted in a list of
things the Chinese planned to buy soon, which included color TVs, VCRs,
washing machines, refrigerators, and tape recorders.
China's total retail sales of consumer goods reached almost 300 billion U.S.
dollars in 1996 (2460 billion yuan), an increase of over 20% over the prior
year (see chart). Sales in urban areas reached $180 billion, and $117 billion
in rural areas.
INSERT GRAPH HERE - INSERT DATA TABLE FOR ASCII
Rising incomes and living standards may be creating the same effect on the
diet and food purchases patterns of China's consumers as has been seen in many
other countries around the world. Per capita consumption of meat, fruits,
vegetables, processed, and convenience foods is increasing. In major urban
markets consumers are rapidly adapting to fast foods, convenience foods, and
packaged food products.
Generally, the government has less of a hand in the consumer products market
than it does in much of China's industrial sector. For example, the government
substantially controls electricity, telecommunications, mining, and much of
heavy industry. In the consumer sector, 72% of production is coming from
non-governmental companies who are freer to produce and advertise the best
product possible, while the consumer is allowed to purchase the product he or
she wants. As the consumer market is one of the freest sectors in China's
economy, the Managing Underwriter believes this is one of the best areas to
look for investments.
An investment in the Trust must be made with an understanding of the risks of
investing companies within the China region. These risks are substantially
different than those associated with an investment in companies within the
United States. See "Risk Factors" for a more detailed discussion of
these risks. Risks that are unique to the China region and must be considered
include:
Political Considerations. An investment in companies within the China region
involves substantial uncertainty with respect to political considerations
which include, but are not limited to, changes in policies regarding laws or
regulations, or the interpretation thereof, taxation, restrictions on currency
conversion, the imposition of exchange controls or price controls, or the
expropriation of private or foreign business or property interests. While the
Chinese government has slowly accepted economic and social reforms in recent
years, no assurance can be made that any current trends will continue or that
the Chinese government will not revert to more restrictive economic and social
policies characteristic of a centrally planned communist government.
Economic Considerations. In the past, the allocation of resources and
productivity growth was set forth in plans created by central authorities.
Only in recent years has the Chinese government encouraged substantial private
economic activity, and there can be no assurance that the government's pursuit
of economic reforms will be consistent or effective.
Trade Relations. An increasingly large portion of China's economic activity is
export driven and therefore, affected by developments in the economies and
trade laws of its principal trading partners.
Tax. In order to encourage foreign investment in China, certain Sino-foreign
joint ventures have enjoyed preferential tax treatment in past years. No
assurance be given that the current policy with respect to such preferential
treatment will continue.
Currency Conversion and Exchange Rate Risks. As of January 1, 1994, a floating
exchange rate system based on market forces was put into place and the
Renminbi-U.S. dollar exchange rate became susceptible to movements based on
the market. Since that time the exchange rate has remained relatively stable.
There is, however, no assurance that the Renminbi will not be subject to
devaluation or depreciation or that shortages in the availability of foreign
currency will not develop.
Legal System. The legal system of China is a civil law system which is based
on written statutes and in which decided legal cases have little precedent in
value. The Chinese government is still in the process of developing a
comprehensive system of laws and its legal system may be considered to be
underdeveloped in comparison with the legal system of western countries.
Do the potential rewards from investing in companies that should capitalize on
the growth of consumerism in China outweigh the potential risks?
For investors with a tolerance for volatility and uncertainty, and an
appropriate long-term investment time horizon, International Assets believes
that the Trust may potentially offer an above-average total return through a
long-term foreign sector investment opportunity. Even though the impending
transfer of Hong Kong to China introduces a new element of uncertainty to the
Asian political scene and the short-term prospects for Asian stocks, it is the
Managing Underwriter's view that any temporary weakness in stocks of companies
within the China region, whether traded in Hong Kong, Shanghai or New York,
may offer a significant investment opportunity. Specifically, based on current
market conditions, International Assets Advisory Corp. anticipates that:
- -Hong Kong's takeover by China, while not without uncertainties, is ultimately
liberating politically and economically for China.
- -Chinese entrepreneurialism is alive and well. It will be invigorated by the
incorporation of Hong Kong.
- -Chinese savings rates will remain high.
- -Yet, the appetite of the rapidly expanding middle class in China for a vast
array of goods and services will grow faster than the overall growth of the
Chinese economy.
- -Barring some unanticipated surprise, overseas capital will continue to pour
into China, effectively lowering local interest rates and driving up the value
of local (including Hong Kong) financial assets.
Of course, the realization of these factors depends heavily upon continuation
of current trends and the future actions of the Chinese government and there
can be no guarantee that these factors will be realized. The Securities, and
therefore Units, may be materially adversely affected if any of the above
estimates, projects or assumptions are not realized or if the current trends
described above do not continue in the future.
Although the portfolio contains securities of companies doing business or
traded in the China region, when added to a portfolio of global stocks, the
Trust may help to reduce overall portfolio volatility. The Trust is intended
to supplement an investment portfolio by helping investors achieve prudent
exposure to the growing Chinese consumer sector through an investment in a
portfolio of quality growth stocks. The Trust should not be considered as a
complete equity investment program and diversification of Trust assets will
not eliminate the risk of loss always inherent in an investment in securities.
See "Risk Factors." The above information has been provided solely by
International Assets Advisory Corp. and has not been independently verified or
approved by the Sponsor. The Sponsor makes no representation as to the
suitability of an investment in Units.
General. Investors will be subject to taxation on the dividend income received
by the Trust and on gains from the sale or liquidation of Securities.
Investors should be aware that there is not any guarantee that the objective
of the Trust will be achieved because it is subject to the continuing ability
of the respective issuers to declare and pay dividends and because the market
value of the Securities can be affected by a variety of factors. Common stocks
may be especially susceptible to general stock market movements and to
volatile increases and decreases of value as market confidence in and
perceptions of the issuers change. Investors should be aware that there can be
no assurance that the value of the underlying Securities will increase or that
the issuers of the Securities will pay dividends on outstanding common shares.
Any distribution of income will generally depend upon the declaration of
dividends by the issuers of the Securities and the declaration of any
dividends depends upon several factors including the financial condition of
the issuers and general economic conditions. In addition, a decrease in the
value of the foreign currencies relative to the U.S. dollar will adversely
affect the value of the Trust's assets and income and the value of the Units
of the Trust. See "Risk Factors."
Investors should note that the above criteria was applied to the Securities
for inclusion in the Trust as of the Initial Date of Deposit. Subsequent to
the Initial Date of Deposit, the Securities may no longer meet the above
criteria. Should a Security no longer meet the criteria originally established
for inclusion in the Trust, such Security will not as a result thereof be
removed from the Trust portfolio.
Investors should be aware that the Trust is not a "managed" fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. The Trust may
continue to hold Securities even though the evaluation of the attractiveness
of the Securities may have changed and, if the evaluation were performed again
at that time, the Securities would not be selected for the Trust.
TRUST PORTFOLIO
- --------------------------------------------------------------------------
The Trust consists of _____ common stocks of companies that International
Assets Advisory Corp. believes have substantial present or future potential
opportunities in the China region consumer products and services sector
(certain of which are held in ADR form). All of the Equity Securities are
listed on a national or foreign securities exchange, the NASDAQ National
Market or are traded in the over-the-counter market. Each of the Securities
was selected by the Managing Underwriter based upon those factors referred to
under "Objectives and Securities Selection" above. The following is a
general description of each of the companies currently anticipated to be
included in the Trust. The actual portfolio is subject to change at the
Initial Date of Deposit.
INSERT DESCRIPTIONS HERE
The Trust consists of (a) the Equity Securities (including contracts for the
purchase thereof) listed under "Portfolio" as may continue to be held
from time to time in the Trust, (b) any additional Equity Securities acquired
and held by the Trust pursuant to the provisions of the Trust Agreement and
(c) any cash held in the Income and Capital Accounts. Neither the Sponsor nor
the Trustee shall be liable in any way for any failure in any of the Equity
Securities. However, should any contract for the purchase of any of the Equity
Securities initially deposited hereunder fail, the Sponsor will, unless
substantially all of the moneys held in the Trust to cover such purchase are
reinvested in substitute Equity Securities in accordance with the Trust
Agreement, refund the cash and sales charge attributable to such failed
contract to all Unitholders on or before the next scheduled distribution date.
Investors should note that the above criteria was applied to the Equity
Securities selected by the Managing Underwriter for inclusion in the Trust
portfolio as of the date indicated above. Since the Sponsor may deposit
additional Equity Securities which were originally selected through this
process, the Sponsor and Managing Underwriter may continue to sell Units of
the Trust even though the Equity Securities would no longer be chosen for
deposit into the Trust if the selection process were to be made again at a
later time.
RISK FACTORS
- --------------------------------------------------------------------------
General. An investment in Units of the Trust should be made with an
understanding of the risks which an investment in common stocks of foreign
issuers entails, including the risk that the financial condition of the
issuers of the Equity Securities or the general condition of the common stock
market may worsen and the value of the Equity Securities and therefore the
value of the Units may decline. Common stocks are especially susceptible to
general stock market movements and to volatile increases and decreases of
value as market confidence in and perceptions of the issuers change. These
perceptions are based on unpredictable factors including expectations
regarding government, economic, monetary and fiscal policies, inflation and
interest rates, economic expansion or contraction, and global or regional
political, economic or banking crises. Shareholders of common stocks have
rights to receive payments from the issuers of those common stocks that are
generally subordinate to those of creditors of, or holders of debt obligations
or preferred stocks of, such issuers. Shareholders of common stocks of the
type held by the Trust have a right to receive dividends only when and if, and
in the amounts, declared by each issuer's board of directors and have a right
to participate in amounts available for distribution by such issuer only after
all other claims on such issuer have been paid or provided for. Common stocks
do not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Equity Securities in the portfolio may be expected to fluctuate over the life
of the Trust to values higher or lower than those prevailing on the Initial
Date of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national or foreign
securities exchange, the principal trading market for the Equity Securities
may be in the over-the-counter market. As a result, the existence of a liquid
trading market for the Equity Securities may depend on whether dealers will
make a market in the Equity Securities. There can be no assurance that a
market will be made for any of the Equity Securities, that any market for the
Equity Securities will be maintained or of the liquidity of the Equity
Securities in any markets made. In addition, the Trust may be restricted under
the Investment Company Act of 1940 from selling Equity Securities to the
Sponsor or the Managing Underwriter. The price at which the Equity Securities
may be sold to meet redemption, and the value of the Trust, will be adversely
affected if trading markets for the Equity Securities are limited or absent.
Unitholders will be unable to dispose of any of the Equity Securities in the
Trust, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor (who may rely on the Supervisor). In the
absence of any such instructions, the Trustee will vote such Securities so as
to insure that the Securities are voted as closely as possible in the same
manner and the same general proportion as are shares held by owners other than
the Trust.
Foreign Equity Risks. Since the Equity Securities consist of securities of
foreign issuers, an investment in the Trust involves certain investment risks
that are different in some respects from an investment in a trust which
invests entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant Equity
Securities, the possibility that the financial condition of the issuers of the
Equity Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute directly to a
decrease in the value of the Equity Securities and thus in the value of the
Units), the limited liquidity and relatively small market capitalization of
the relevant securities market, expropriation or confiscatory taxation,
economic uncertainties and foreign currency devaluations and fluctuations. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer. Also,
foreign issuers are not necessarily subject to uniform accounting, auditing
and financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of comparable
domestic issuers. In addition, fixed brokerage commissions and other
transaction costs on foreign securities exchanges are generally higher than in
the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there
is in the United States. However, due to the nature of the issuers of the
Equity Securities, the Sponsor believes that adequate information will be
available to allow the Supervisor to provide portfolio surveillance for the
Trust.
Equity securities issued by non-U.S. issuers generally pay dividends in
foreign currencies and are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the U.S. dollar foreign exchange
rates for the various Equity Securities. See "Exchange Rate" below.
Investors should also realize that, although certain Equity Securities are
ADRs, all foreign issuers which operate internationally are subject to
currency risks.
The securities of certain foreign issuers in the Trust are in ADR form
(including Global Depositary Receipts). See "Portfolio" . ADRs evidence
American Depositary Receipts which represent common stock deposited with a
custodian in a depositary. American Depositary Shares, and receipts therefor
(ADRs), are issued by an American bank or trust company to evidence ownership
of underlying securities issued by a foreign corporation. These instruments
may not necessarily be denominated in the same currency as the securities into
which they may be converted. For purposes of the discussion herein, the term
ADR generally includes American Depositary Shares. ADRs may be sponsored or
unsponsored. In an unsponsored facility, the depositary initiates and arranges
the facility at the request of market makers and acts as agent for the ADR
holder, while the company itself is not involved in the transaction. In a
sponsored facility, the issuing company initiates the facility and agrees to
pay certain administrative and shareholder-related expenses. Sponsored
facilities use a single depositary and entail a contractual relationship
between the issuer, the shareholder and the depositary; unsponsored facilities
involve several depositaries with no contractual relationship to the company.
The depositary bank that issues an ADR generally charges a fee, based on the
price of the ADR, upon issuance and cancellation of the ADR. This fee would be
in addition to the brokerage commissions paid upon the acquisition or
surrender of the security. In addition, the depositary bank incurs expenses in
connection with the conversion of dividends or other cash distributions paid
in local currency into U.S. dollars and such expenses are deducted from the
amount of the dividend or distribution paid to holders, resulting in a lower
payout per underlying shares represented by the ADR than would be the case if
the underlying share were held directly. The Trustee for this Trust acts as a
depositary for ADRs, certain of which may be included in the Trust's
portfolio. Certain tax considerations, including tax rate differentials and
withholding requirements, arising from applications of the tax laws of one
nation to nationals of another and from certain practices in the ADR market
may also exist with respect to certain ADRs. In varying degrees, any or all of
these factors may affect the value of the ADR compared with the value of the
underlying shares in the local market. In addition, the rights of holders of
ADRs may be different than those of holders of the underlying shares, and the
market for ADRs may be less liquid than that for the underlying shares. ADRs
are registered securities pursuant to the Securities Act of 1933 and may be
subject to the reporting requirements of the Securities Exchange Act of 1934.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trust of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trust. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trust and on the ability of
the Trust to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
Investors should be aware that it may not be possible to buy all of the Equity
Securities at the same time because of the unavailability of any Equity
Security, and restrictions applicable to the Trust relating to the purchase of
an Equity Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities Act
of 1933 and may not be exempt from the registration requirements of such Act.
Sales of non-exempt Equity Securities by the Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Equity Securities by the Trust will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that the Trust will encounter obstacles in disposing of the
Equity Securities, investors should realize that the Equity Securities may be
traded in foreign countries where the securities markets are not as developed
or efficient and may not be as liquid as those in the United States. The value
of the Equity Securities will be adversely affected if trading markets for the
Equity Securities are limited or absent.
China. Investment in securities issued by companies organized, doing business
or traded in China or its territorial possessions involves risks not typically
associated with investments in securities of U.S. companies. See "Foreign
Equity Risks" above. INSERT 10 HERE
Exchange Rates. The Trust is concentrated in Equity Securities that are
principally traded in foreign currencies and as such involves investment risks
that are substantially different from an investment in a fund which invests in
securities that are traded only in United States dollars. The United States
dollar value of the portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the United
States dollar foreign exchange rates for the related foreign currencies. Most
foreign currencies have fluctuated widely in value against the United States
dollar for many reasons, including supply and demand of the respective
currency, the rate of inflation in the respective economies compared to the
United States, the impact of interest rate differentials between different
currencies on the movement of foreign currency rates, the balance of imports
and exports of goods and services, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries.
The post-World War II international monetary system was, until 1973, dominated
by the Bretton Woods Treaty, which established a system of fixed exchange
rates and the convertibility of the United States dollar into gold through
foreign central banks. Starting in 1971, growing volatility in the foreign
exchange markets caused the United States to abandon gold convertibility and
to effect a small devaluation of the United States dollar. In 1973, the system
of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily
currency valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have continued to
"peg" their currencies to the United States dollar although there has
been some interest in recent years in "pegging" currencies to "
baskets" of other currencies or to a Special Drawing Right administered by
the International Monetary Fund. Currencies are generally traded by leading
international commercial banks and institutional investors (including
corporate treasurers, money managers, pension funds and insurance companies).
From time to time, central banks in a number of countries also are major
buyers and sellers of foreign currencies, mostly for the purpose of preventing
or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual
and proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling
large amounts of the same currency or currencies. However, over the long term,
the currency of a country with a low rate of inflation and a favorable balance
of trade should increase in value relative to the currency of a country with a
high rate of inflation and deficits in the balance of trade.
The Evaluator will estimate the current exchange rate for the appropriate
foreign currencies based on activity in the related currency exchange market.
However, since this market may be volatile and is constantly changing,
depending on the activity at any particular time of the large international
commercial banks, various central banks, large multi-national corporations,
speculators and other buyers and sellers of foreign currencies, and since
actual foreign currency transactions may not be instantly reported, the
exchange rates estimated by the Evaluator may not be indicative of the amount
in United States dollars the Trust would receive had the Trustee sold any
particular currency in the market. The foreign exchange transactions of the
Trust will be concluded by the Trustee with foreign exchange dealers acting as
principals on a spot (i.e., cash) buying basis. Although foreign exchange
dealers trade on a net basis, they do realize a profit based upon the
difference between the price at which they are willing to buy a particular
currency (bid price) and the price at which they are willing to sell the
currency (offer price).
TAXATION
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General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code" ). Unitholders
should consult their tax advisers in determining the federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust.
In the opinion of Chapman and Cutler, special counsel for the Sponsor, under
existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Security when such income is received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, taxable exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder. The
price a Unitholder pays for his Units is allocated among his pro rata portion
of each Security held by the Trust (in proportion to the fair market values
thereof on the valuation date nearest the date the Unitholder purchases his
Units) in order to determine his initial tax basis for his pro rata portion of
each Security held by the Trust. For federal income tax purposes, a
Unitholder's pro rata portion of dividends as defined by Section 316 of the
Code paid with respect to a Security held by the Trust is taxable as ordinary
income to the extent of such corporation's current and accumulated "
earnings and profits." A Unitholder's pro rata portion of dividends paid
on such Security which exceeds such current and accumulated earnings and
profits will first reduce a Unitholder's tax basis in such Security, and to
the extent that such dividends exceed a Unitholder's tax basis in such
Security shall generally be treated as capital gain. In general, any such
capital gain will be short-term unless a Unitholder has held his Units for
more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain except in the case of a dealer or a financial
institution and, will be long-term if the Unitholder has held his Units for
more than one year (the date on which the Units are acquired (i.e., the "
trade date" ) is excluded for purposes of determining whether the Units
have been held for more than one year). A Unitholder's portion of loss, if
any, upon the sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital loss (except in the
case of a dealer or a financial institution) and, in general, will be
long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
gains and losses for federal income tax purposes.
Dividends Received Deduction. To the extent dividends received by the Trust
are attributable to foreign corporations, a corporation that owns Units will
not be entitled to the dividends received deduction with respect to its pro
rata portion of such dividends, since the dividends received deduction is
generally available only with respect to dividends paid by domestic
corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. For taxpayers other than corporations, net
capital gains are subject to a maximum marginal stated tax rate of 28%.
However, it should be noted that legislative proposals are introduced from
time to time that affect tax rates and could affect relative differences at
which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act" )
raised tax rates on ordinary income while capital gains remain subject to a
28% maximum stated rate for taxpayers other than corporations. Because some or
all capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are "
conversion transactions" effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust involved including his
pro rata portion of all the Securities represented by a Unit.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of
each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary
income as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. To the extent they are not
treated as United States source income, distributions by the Trust will
generally not be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons. However, distributions, by the Trust that
are treated as United States source income, if any, would generally be subject
to such taxation and withholding. Investors should consult their tax advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade and business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign county. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Equity
Securities that are attributable to foreign corporations may be subject to
foreign withholding taxes and Unitholders should consult their tax advisers
regarding the potential tax consequences relating to the payment of any such
withholding taxes by the Trust. Any dividends withheld as a result thereof
will nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of Kroll & Tract LLP, special counsel to the Fund for New York
tax matters, the Trust is not an association taxable as a corporation and the
income of the Trust will be treated as the income of the Unitholders under the
existing income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit of the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
The tax discussion set forth above is a summary included for general
informational purposes only. In view of the individual nature of tax
consequences, each Unitholder is advised to consult his own tax adviser with
respect to the specific tax consequences of being a Unitholder of the Trust
and the exercise or expiration of the rights, including the effect and
applicability of state, local, foreign, and other tax laws and the possible
effects of changes in federal, foreign or other tax laws.
TRUST OPERATING EXPENSES
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Initial Costs. All costs and expenses incurred in creating and establishing
the Trust, including the cost of the initial preparation, printing and
execution of the Trust Agreement and the certificates, legal and accounting
expenses, advertising and selling expenses, expenses of the Trustee, initial
fees of an evaluator and other out-of-pocket expenses have been borne by the
Sponsor at no cost to the Fund.
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee, payable in monthly
installments, which is not to exceed the amount set forth under "Summary
of Essential Financial Information" , for providing portfolio supervisory
services for the Trust. Such fee (which is based on the number of Units
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which case the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) may exceed the actual costs of providing such supervisory
services for this Trust, but at no time will the total amount received for
portfolio supervisory services rendered to series of Van Kampen American
Capital Equity Opportunity Trust and to any other unit investment trusts
sponsored by the Sponsor for which the Supervisor provides portfolio
supervisory services in any calendar year exceed the aggregate cost to the
Supervisor of supplying such services in such year. Pursuant to a contract
with the Supervisor, Global Assets Advisors, Inc., a non-affiliated firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities, provides, for both the initial offering period and
secondary market transactions, portfolio supervisory services for the Trust
and receives for such services the entire supervisory fee paid to the
Supervisor. In addition, American Portfolio Evaluation Services, which is a
division of Van Kampen American Capital Investment Advisory Corp., shall
receive for regularly providing evaluation services to the Trust the annual
per Unit evaluation fee, payable in monthly installments, set forth under "
Summary of Essential Financial Information" (which is based on the number
of Units of the Trust outstanding on January 1 of each year for which such
compensation relates except during the initial offering period in which event
the calculation is based on the number of Units of the Trust outstanding at
the end of the month of such calculation) for regularly evaluating the Trust
portfolio. The foregoing fees are payable as described under "General"
below. Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor and the Managing
Underwriter will receive sales commissions and the Managing Underwriter may
realize other profits (or losses) in connection with the sale of Units and the
deposit of the Securities as described under "Public Offering--Sponsor and
Managing Underwriter Compensation" .
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" (which is based on the number of Units of the Trust
outstanding on January 1 of each year for which such compensation relates
except during the initial offering period in which case the calculation is
based on the number of Units outstanding at the end of the month of such
calculation) and, in connection with certain Equity Securities held in
sub-custodian accounts, the additional amounts set forth in footnote (9) in
the "Summary of Essential Financial Information" . The Trustee's fees
are payable as described under "General" below. The Trustee benefits
to the extent there are funds for future distributions, payment of expenses
and redemptions in the Capital and Income Accounts since these Accounts are
non-interest bearing to the Trust and the amounts earned by the Trustee are
retained by the Trustee. Part of the Trustee's compensation for its services
to the Trust is expected to result from the use of these funds. Such fees may
be increased without approval of the Unitholders by amounts not exceeding
proportionate increases under the category "All Services Less Rent of
Shelter" in the Consumer Price Index published by the United States
Department of Labor or, if such category is no longer published, in a
comparable category. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration."
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of the
Trust, (b) fees of the Trustee for extraordinary services, (c) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect the Trust and the rights and interests
of Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) accrual of costs associated with liquidating securities and (i)
expenditures incurred in contacting Unitholders upon termination of the Trust.
The expenses set forth herein are payable as described under "General"
below.
General. All of the fees and expenses of the Trust will accrue on a daily
basis and will be charged to the Trust, in arrears, on a monthly basis as of
the tenth day of each month. When such fees and expenses are paid by or owing
to the Trustee, they are secured by a lien on the Trust's portfolio. Since the
Equity Securities are all common stocks, and the income stream produced by
dividend payments is unpredictable, the Sponsor cannot provide any assurance
that dividends will be sufficient to meet any or all expenses of the Trust. If
the balances in the Income and Capital Accounts are insufficient to provide
for amounts payable by the Trust, the Trustee has the power to sell Equity
Securities to pay such amounts. These sales may result in capital gains or
losses to Unitholders. See "Taxation."
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price. The Public Offering
Price is based on the aggregate underlying value of the Securities in the
Trust's portfolio, the initial sales charge described below, and cash, if any,
in the Income and Capital Accounts held or owned by the Trust. The initial
sales charge is equal to the difference between the maximum total sales charge
for the Trust of 5.5% of the Public Offering Price and the maximum deferred
sales charge for the Trust ($0.30 per Unit). The monthly deferred sales charge
($0.05 per Unit) will begin accruing on a daily basis on December 24, 1997 and
will continue to accrue through June 23, 1998. The monthly deferred sales
charge will be charged to the Trust, in arrears, commencing January 24, 1998
and will be charged on the 24th day of each month thereafter through June 24,
1998. If any deferred sales charge payment date is not a business day, the
payment will be charged to the Trust on the next business day. Unitholders
will be assessed only that portion of the deferred sales charge accrued from
the time they became Unitholders of record. Units purchased subsequent to the
initial deferred sales charge payment will be subject to only that portion of
the deferred sales charge payments not yet collected. This deferred sales
charge will be paid from funds in the Capital Account, if sufficient, or from
the periodic sale of Securities. The total maximum sales charge assessed to
Unitholders on a per Unit basis will be 5.5% of the Public Offering Price
(5.820% of the aggregate value of the Securities in the Trust less the
deferred sales charge). The sales charge for secondary market transactions is
described under "Offering Price" below. The aggregate underlying value
of the Securities is based on the U.S. dollar value of the Foreign Securities
computed on the basis of the offering side value of the related currency
exchange rate expressed in U.S. dollars as of the Evaluation Time during the
initial offering period and on the bid side value for secondary market
transactions. The sales charge applicable to quantity purchases is, during the
initial offering period and secondary market, reduced on a graduated basis to
any person acquiring 10,000 or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number of Units
Purchased Percentage Sales Charge Reduction Per Unit
- -------------------------------- ------------------------------------------------
<S> <C>
10,000-24,999 .60%
25,000-49,999 .90
50,000-99,999 1.30
100,000 or more 2.10
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent. A Unitholder who purchases
additional Units of the Trust may obtain a reduced sales charge through a
right of accumulation on current purchases of Units. The applicable sales
charge on such additional purchases will be determined based on the total of
(a) the number of Units currently purchased plus (b) the total number of Units
previously purchased. The following purchases may be aggregated for purposes
of determining the total number of Units purchased: (i) individual purchases
on behalf of a single purchaser, the purchaser's spouse and the purchaser's
children under the age of 21 years; (ii) purchases made by clients of same
registered investment advisor; (iii) purchases in connection with an employee
benefits plan exclusively for the benefit of such individuals, such as an IRA,
individual plan under Internal Revenue Code section 403(b) or a
single-participant Keogh-type plan; (iv) purchases made by a company
controlled by such individuals.
Registered representatives of the Managing Underwriter may purchase Units of
the Trust at the current Public Offering Price less the underwriting
commission during the initial offering period, and less the dealer's
concession for secondary market transactions. Registered representatives of
selling brokers, dealers, or agents may purchase Units of the Trust at the
current Public Offering Price less the dealer's concession during the initial
offering period and for secondary market transactions.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
accordance with fluctuations in the prices of the underlying Securities in the
Trust. The aggregate underlying value of the Securities is based on the U.S.
dollar value of the Foreign Securities computed on the basis of the offering
side or bid side value of the related currency exchange rate expressed in U.S.
dollars during the initial offering period or secondary market, respectively.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities in the Trust
an amount equal to the difference between the maximum total sales charge of
5.5% of the Public Offering Price and the maximum deferred sales charge ($0.30
per Unit) and dividing the sum so obtained by the number of Units in the Trust
outstanding. The Public Offering Price shall include the proportionate share
of any cash held in the Income and Capital Accounts in the Trust. This
computation produced a gross underwriting profit equal to 5.5% of the Public
Offering Price. Such price determination as of the close of the relevant stock
market on the date set forth under "Summary of Essential Financial
Information" was made on the basis of an evaluation of the Securities in
the Trust prepared by Interactive Data Corporation, a firm regularly engaged
in the business of evaluating, quoting or appraising comparable securities.
Thereafter, the Evaluator on each business day (except as stated below) will
appraise or cause to be appraised the value of the underlying Securities in
the Trust as of the Evaluation Time and will adjust the Public Offering Price
of the Units commensurate with such valuation. Such Public Offering Price will
be effective for all orders received prior to 4:00 a.m. New York time on each
such day. Orders received by the Trustee or Managing Underwriter for
purchases, sales or redemptions after 4:00 a.m. New York time, or on a day
which is not a business day for the Trust, will be held until the next
determination of price. No such evaluation shall be made on any date on which
Securities representing greater than 33% of the aggregate value of the Trust
are not traded on the principal trading exchange for such Securities due to a
customary business holiday on such exchange. Accordingly, purchases or
redemptions of Units on such a day will be based on the next determination of
price of the Securities (and the price of such Units would be the next
computed price). Unitholders who purchase Units subsequent to the Initial Date
of Deposit will pay an initial sales charge equal to the difference between
the maximum total sales charge for the Trust of 5.5% of the Public Offering
Price and the maximum deferred sales charge for the Trust ($0.30 per Unit) and
will be assessed a deferred sales charge of $0.05 per Unit on each of the
remaining deferred sales charge payment dates as set forth in "Public
Offering--general" . The Managing Underwriter currently does not intend to
maintain a secondary market after December 23, 2003. Commencing on June 24,
1998 the secondary market sales charge will not include deferred payments but
will instead include only a one-time initial sales charge of 5.0% of the
Public Offering Price and will be reduced by .5 of 1% on each subsequent June
24, to a minimum sales charge of 3.0%.
The value of the Equity Securities during the initial offering period is
determined on each business day by the Evaluator in the following manner: if
the Equity Securities are listed on a national or foreign securities exchange,
this evaluation is generally based on the closing sale prices on that exchange
(unless it is determined that these prices are inappropriate as a basis for
valuation) or, if there is no closing sale price on that exchange, at the
closing ask prices. If the Equity Securities are not so listed or, if so
listed and the principal market therefore is other than on the exchange, the
evaluation shall generally be based on the current ask price on the
over-the-counter market (unless it is determined that these prices are
inappropriate as a basis for evaluation). If current ask prices are
unavailable, the evaluation is generally determined (a) on the basis of
current ask prices for comparable securities, (b) by appraising the value of
the Equity Securities on the ask side of the market or (c) by any combination
of the above. The value of the Equity Securities during the initial offering
period is based on the U.S. dollar value of the Foreign Securities computed on
the basis of the offering side value of the currency exchange rate as of the
Evaluation Time.
In offering the Units to the public, neither, the Managing Underwriter nor any
broker-dealers are recommending any of the individual Securities in the Trust
but rather the entire pool of Securities, taken as a whole, which are
represented by the Units.
Unit Distribution. During the initial offering period, Units will be
distributed to the public by the Managing Underwriter, broker-dealers and
others at the Public Offering Price. Upon the completion of the initial
offering period, Units repurchased in the secondary market, if any, may be
offered by this Prospectus at the secondary market Public Offering Price in
the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for sale in a
number of states. Sales initially will be made to any broker, dealer or bank
at prices which represent a concession or agency commission in connection with
the distribution of Units during the initial offering period of 3.30% of the
Public Offering Price. Volume concessions or agency commissions of an
additional .40% of the Public Offering Price will be given to any broker,
dealer or bank who purchases from the Managing Underwriter at least $100,000
on the Initial Date of Deposit. Resale of Units of the Trust by such Managing
Underwriter, dealers and others to the public will be made at the Public
Offering Price described in the then current prospectus.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 500 Units (100 Units for a
tax-sheltered retirement plan). The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive the gross sales commission equal to 5.5% of the Public Offering Price
of the Units, less any reduced sales charge for quantity purchases as
described under "General" above. Any such quantity discount provided
to investors will be borne by the Managing Underwriter or the selling dealer
or agent. The Sponsor will receive from the Managing Underwriter the excess of
such gross sales commission over the Managing Underwriter's discount. The
Managing Underwriter will be allowed a discount in connection with the
distribution of Units of (a) 4.0% per Unit for sales up to $10,000,000 and (b)
4.2% per Unit for sales in excess of $10,000,000.
In addition, the Managing Underwriter will realize a profit or will sustain a
loss, as the case may be, as a result of the difference between the price paid
for the Securities by the Managing Underwriter and the cost of such Securities
to the Trust on the Initial Date of Deposit as well as on subsequent deposits.
See "Notes to Portfolio." The Sponsor and Managing Underwriter have
not participated as sole underwriter or as manager or as a member of the
underwriting syndicates or as an agent in a private placement for any of the
Securities in the Trust portfolio. The Managing Underwriter may further
realize additional profit or loss during the initial offering period as a
result of the possible fluctuations in the market value of the Securities in
the Trust after a date of deposit, since all proceeds received from purchasers
of Units (excluding dealer concessions and agency commissions allowed, if any)
will be retained by the Managing Underwriter.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor or
Managing Underwriter prior to the date of settlement for the purchase of Units
may be used in the Sponsor's or the Managing Underwriter's business and may be
deemed to be a benefit to the Sponsor or Managing Underwriter, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Managing Underwriter
currently intends to maintain a secondary market for Units of the Trust. In so
maintaining a market, the Managing Underwriter will also realize profits or
sustain losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge). In addition, the Managing Underwriter
or Sponsor will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Managing Underwriter
currently intends to maintain a market for the Units offered hereby and offer
continuously to purchase Units at prices, subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in the Trust
(computed as indicated under "Offering Price" above and "Rights of
Unitholders--Redemption of Units" ). The aggregate underlying value of the
Foreign Securities is computed on the basis of the bid side value of the
related currency exchange rate (offer side during the initial offering period)
expressed in U.S. dollars. If the supply of Units exceeds demand or if some
other business reason warrants it, the Managing Underwriter may either
discontinue all purchases of Units or discontinue purchases of Units at such
prices. In the event that a market is not maintained for the Units and the
Unitholder cannot find another purchaser, a Unitholder desiring to dispose of
his Units will be able to dispose of such Units by tendering them to the
Trustee for redemption at the Redemption Price. See "Rights of
Unitholders--Redemption of Units." A Unitholder who wishes to dispose of
his Units should inquire of his broker as to current market prices in order to
determine whether there is in existence any price in excess of the Redemption
Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is 100 Units.
RIGHTS OF UNITHOLDERS
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Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by book entry unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be evidenced by certificates. Units are
transferable by making a written request to the Trustee and, in the case of
Units evidenced by a certificate, by presentation and surrender of such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign such written
request, and such certificate or transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate
representing the Units to be transferred with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP" ) or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account of the Trust. Other receipts (e.g., capital gains, proceeds
from the sale of Securities, etc.) are credited to the Capital Account of the
Trust. Dividends with respect to the Foreign Securities to be credited to such
accounts are first converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Distribution Dates to
Unitholders of record on the preceding Income Record Dates. See "Summary
of Essential Financial Information." Proceeds received on the sale of any
Securities in the Trust, to the extent not used to meet redemptions of Units
or pay expenses, will be distributed annually on the Capital Account
Distribution Date to Unitholders of record on the preceding Capital Account
Record Date. Proceeds received from the disposition of any of the Securities
after a record date and prior to the following distribution date will be held
in the Capital Account of the Trust and not distributed until the next
distribution date applicable to the Capital Account. The Trustee is not
required to pay interest on funds held in the Capital or Income Accounts (but
may itself earn interest thereon and therefore benefits from the use of such
funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
As of the tenth day of each month, the Trustee will deduct from the Income
Account and, to the extent funds are not sufficient therein, from the Capital
Account of the Trust amounts necessary to pay the expenses of the Trust (as
determined on the basis set forth under "Trust Operating Expenses" ).
The Trustee also may withdraw from said accounts such amounts, if any, as it
deems necessary to establish a reserve for any governmental charges payable
out of the Trust. Amounts so withdrawn shall not be considered a part of the
Trust's assets until such time as the Trustee shall return all or any part of
such amounts to the appropriate accounts. In addition, the Trustee may
withdraw from the Income and Capital Accounts of the Trust such amounts as may
be necessary to cover redemptions of Units.
It is anticipated that the deferred sales charge will be collected from the
Capital Account. To the extent that amounts in the Capital Account are
insufficient to satisfy the then current deferred sales charge obligation,
Equity Securities will be sold to meet such shortfall. Distributions of
amounts necessary to pay the deferred portion of the sales charge will be made
to an account maintained by the Trustee for purposes of satisfying
Unitholders' deferred sales charge obligations.
Reinvestment Option. Unitholders of the Trust may elect to have each
distribution of income, capital gains and/or capital on their Units
automatically reinvested in additional Units of the Trust subject to the
remaining deferred sales charge payments due on Units, if any, pursuant to the
"Automatic Reinvestment Option" (to the extent Units may be lawfully
offered for sale in the state in which the Unitholder resides). Brokers and
dealers who distribute Units to Unitholders pursuant to the Automatic
Reinvestment Option may do so through two options. Brokers and dealers can use
the Dividend Reinvestment Service through Depository Trust Company or purchase
the available Automatic Reinvestment Option CUSIP. If a broker or dealer
decides to continue to utilize the Dividend Reinvestment Service through the
Depository Trust Company, the broker or dealer must have access to a PTS
terminal equipped with the Elective Dividend System function (EDS) prior to
the first Record Date set forth under "Summary of Essential Financial
Information" . The second option available is to purchase the appropriate
CUSIP for automatic reinvestment. To participate in the reinvestment plan, a
Unitholder may either contact his or her broker or agent or file with the
Trustee a written notice of election at least five days prior to the Record
Date for which the first distribution is to apply. A Unitholder's election to
participate in the reinvestment plan will apply to all Units of the Trust
owned by such Unitholder and such election will remain in effect until changed
by the Unitholder.
Reinvestment plan distributions may be reinvested in Units already held in
inventory by the Managing Underwriter only (see "Public Offering--Public
Market" ). If Units are unavailable in the secondary market, distributions
which would otherwise have been reinvested shall be paid in cash to the
Unitholder on the applicable Distribution Date.
Purchases of additional Units made pursuant to the reinvestment plan will be
made subject to any remaining deferred sales charge based on the net asset
value for Units of the Trust as of the Evaluation Time on the related
Distribution Dates. Under the reinvestment plan, the Trust will pay the
Unitholder's distributions to the Trustee which in turn will purchase for such
Unitholder full and fractional Units of the Trust and will send such
Unitholder a statement reflecting the reinvestment.
A participant may at any time prior to five days preceding the next succeeding
distribution date, by so notifying the Trustee in writing, elect to terminate
his or her reinvestment plan and receive future distributions on his or her
Units in cash. There will be no charge or other penalty for such termination.
The Managing Underwriter and Sponsor shall have the right to suspend or
terminate the reinvestment plan at any time.
Reports Provided. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of income and the
amount of other receipts (received since the preceding distribution), if any,
being distributed, expressed in each case as a dollar amount representing the
pro rata share of each Unit of the Trust outstanding. Within a reasonable
period of time after the end of each calendar year, the Trustee shall furnish
to each person who at any time during the calendar year was a registered
Unitholder of the Trust a statement (i) as to the Income Account: income
received, deductions for applicable taxes and for fees and expenses of the
Trust, for redemptions of Units, if any, and the balance remaining after such
distributions and deductions, expressed in each case both as a total dollar
amount and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (ii) as to the
Capital Account: the dates of disposition of any Securities and the net
proceeds received therefrom, deductions for payment of applicable taxes, fees
and expenses of the Trust held for distribution to Unitholders of record as of
a date prior to the determination and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
by such Trust and the number of Units of the Trust outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit of the
Trust based upon the last computation thereof made during such calendar year;
and (v) amounts actually distributed during such calendar year from the Income
and Capital Accounts of the Trust, separately stated, expressed as total
dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as described above (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender the Unitholder will be entitled
to receive in cash an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units and
converted into U.S. dollars as of the Evaluation Time set forth under "
Summary of Essential Financial Information" . The "date of tender"
is deemed to be the date of the next computation of the net asset value per
Unit after Units are received by the Trustee for redemption. No such
computation shall be made on any day on which Securities representing greater
than 33% of the aggregate value of the Trust are not traded on the principal
trading exchange for such Securities due to a customary business holiday on
such exchange. Accordingly, purchases or redemptions of Units on such a day
will be based on the next determination of price of the Securities (and the
price of such Units would be the next computed price). Foreign securities
exchanges are open for trading on certain days which are U.S. holidays on
which the Trust will not transact business. The Foreign Securities will
continue to trade on those days and thus the value of the Trust may be
significantly affected on days when a Unitholder cannot sell or redeem his
Units.
The Trustee is empowered to sell Securities of the Trust in order to make
funds available for redemption if funds are not otherwise available in the
Capital and Income Accounts of the Trust to meet redemptions. The Securities
to be sold will be selected by the Trustee from those designated on a current
list provided by the Supervisor for this purpose. Units so redeemed shall be
cancelled.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust (net of applicable commissions, exchange
fees and stamp taxes). On the Initial Date of Deposit, the Public Offering
Price per Unit (which includes the sales charge) exceeded the values at which
Units could have been redeemed by the amounts shown under "Summary of
Essential Financial Information." The Redemption Price per Unit is the pro
rata share of each Unit in the Trust determined on the basis of (i) the cash
on hand in the Trust, (ii) the value of the Securities in the Trust and (iii)
dividends receivable on the Equity Securities of the Trust trading ex-dividend
as of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued expenses of
the Trust. The Evaluator may determine the value of the Equity Securities in
the Trust in the following manner: if the Equity Securities are listed on a
national or foreign securities exchange, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange, at the closing bid prices. If the Equity
Securities are not so listed or, if so listed and the principal market
therefore is other than on the exchange, the evaluation shall generally be
based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities of such Trust on the bid side of the market or (c) by
any combination of the above. The value of the Equity Securities in the
secondary market is based on the aggregate value of the Foreign Securities
computed on the basis of the bid side value of the applicable currency
exchange rate expressed in U.S. dollars as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
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Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase such Units by notifying the Trustee
before the close of business on the next succeeding business day and by making
payment therefor to the Unitholder not later than the day on which the Units
would otherwise have been redeemed by the Trustee. Units held by the Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter will be
in accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit resulting from the
resale of such Units will belong to the Managing Underwriter which likewise
will bear any loss resulting from a lower offering or redemption price
subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. While the Trust will not be managed, the Trust Agreement does
provide that the Sponsor may (but need not) direct the Trustee to dispose of
an Equity Security in certain events such as the issuer having defaulted on
the payment on any of its outstanding obligations or the price of an Equity
Security has declined to such an extent or other such credit factors exist so
that in the opinion of the Sponsor the retention of such Securities would be
detrimental to the Trust. Pursuant to the Trust Agreement and with limited
exceptions, the Trustee may sell any securities or other properties acquired
in exchange for Equity Securities such as those acquired in connection with a
merger or other transaction. If offered such new or exchanged securities or
property, the Trustee shall reject the offer. However, in the event such
securities or property are nonetheless acquired by the Trust, they may be
accepted for deposit in the Trust and either sold by the Trustee or held in
the Trust pursuant to the direction of the Sponsor (who may rely on the advice
of the Supervisor). Proceeds from the sale of Securities (or any securities or
other property received by the Trust in exchange for Equity Securities) are
credited to the Capital Account for distribution to Unitholders or to meet
redemptions. Except as stated under "Trust Portfolio" for failed
securities and as provided in this paragraph, the acquisition by the Trust of
any securities other than the Securities is prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in the
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units of the Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in the Trust of any Unitholder without the consent of such Unitholder
or reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of the Trust then outstanding, or by the Trustee when the
value of the Equity Securities owned by the Trust, as shown by any evaluation,
is less than that amount set forth under Minimum Termination Value in "
Summary of Essential Financial Information." The Trust will be liquidated
by the Trustee in the event that a sufficient number of Units of the Trust not
yet sold are tendered for redemption by the Managing Underwriter or the
Sponsor so that the net worth of the Trust would be reduced to less than 40%
of the value of the Securities at the time they were deposited in the Trust.
If the Trust is liquidated because of the redemption of unsold Units by the
Sponsor and/or the Managing Underwriter, the Sponsor will refund to each
purchaser of Units the entire sales charge paid by such purchaser. The Trust
Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information."
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. At least 30 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination to all Unitholders of
the Trust. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. The Trustee will deduct from the funds of the Trust any
accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of
liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of Securities in
the Trust upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. The Trustee will then
distribute to each Unitholder of the Trust his pro rata share of the balance
of the Income and Capital Accounts of the Trust.
Within 60 days after the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement. The Trustee shall not be liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or
upon the interest thereon or upon it as Trustee under the Trust Agreement or
upon or in respect of the Trust which the Trustee may be required to pay under
any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Managing Underwriter and Sub-Supervisor. International Assets Advisory
Corporation ("IAAC" ), the Managing Underwriter for the Trust, is a
full-service securities brokerage firm specializing in global investing. IAAC
was formed as a Florida corporation in 1981 and registered as a broker/dealer
in 1982. The firm has focused on the sale of global debt and equity securities
to its clients. IAAC has developed an experienced team specializing in the
selection, research, trading, currency exchange and execution of individual
equity and fixed-income products on a global basis. Members of this team are
also affiliated with Global Assets Advisors, Inc. and have many years of
experience in the global marketplace. Global Assets Advisors, Inc., is the
Sub-Supervisor and provides research and portfolio supervisory services for
the Trust pursuant to a contract with the Supervisor. Global Assets Advisors
is a wholly-owned subsidiary of International Assets Holding Corporation and a
related corporation of IAAC. The principal offices of IAAC and Global Assets
Advisors are located at 250 Park Avenue South, Suite 200, Winter Park, Florida
32789. The telephone number is (800) 432-0000.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ).
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser ("MSAM" ), Morgan Stanley
& Co. Incorporated, a registered broker-dealer and investment adviser, and
Morgan Stanley International, are engaged in a wide range of financial
services. Their principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring and other
corporate finance advisory activities; merchant banking; stock brokerage and
research services; asset management; trading of futures, options, foreign
exchange commodities and swaps (involving foreign exchange, commodities,
indices and interest rates); real estate advice, financing and investing; and
global custody, securities clearance services and securities lending. As of
December 31, 1996, MSAM, together with its affiliated investment advisory
companies, had approximately $113 billion of assets under management and
fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996 the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
As of December 31, 1996, the Sponsor and its Van Kampen American Capital
affiliates managed or supervised approximately $59 billion of investment
products, of which over $11.88 billion is invested in municipal securities.
The Sponsor and its Van Kampen American Capital affiliates managed $48 billion
of assets, consisting of $29.9 billion for 59 open-end mutual funds (of which
46 are distributed by Van Kampen American Capital Distributors, Inc.) $13.1
billion for 38 closed-end funds and $4.99 billion for 106 institutional
accounts. The Sponsor has also deposited approximately $26 billion of unit
investment trusts. All of Van Kampen American Capital's open-end funds,
closed-ended funds and unit investment trusts are professionally distributed
by leading financial firms nationwide. Based on cumulative assets deposited,
the Sponsor believes that it is the largest sponsor of insured municipal unit
investment trusts, primarily through the success of its Insured Municipals
Income Trust(R)or the IM-IT(R)trust. The Sponsor also provides
surveillance and evaluation services at cost for approximately $13 billion of
unit investment trust assets outstanding. Since 1976, the Sponsor has serviced
over two million investor accounts, opened through retail distribution firms.
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286, (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided" ).
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
- --------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Kroll & Tract LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Van Kampen American Capital Equity Opportunity Trust,
Series 63 (China Consumer Opportunity Trust, Series 1):
We have audited the accompanying statement of condition and the related
portfolio of Van Kampen American Capital Equity Opportunity Trust, Series 63
(China Consumer Opportunity Trust, Series 1) as of June 24, 1997. The
statement of condition and portfolio are the responsibility of the Sponsor.
Our responsibility is to express an opinion on such financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of an irrevocable letter of credit deposited
to purchase securities by correspondence with the Trustee. An audit also
includes assessing the accounting principles used and significant estimates
made by the Sponsor, as well as evaluating the overall financial statement
presentation.
We believe our audit provides a reasonable basis for our opinion. In our
opinion, the financial statements referred to above present fairly, in all
material respects, the financial position of Van Kampen American Capital
Equity Opportunity Trust, Series 63 (China Consumer Opportunity Trust, Series
1) as of June 24, 1997, in conformity with generally accepted accounting
principles.
GRANT THORNTON LLP
Chicago, Illinois
June 24, 1997
<TABLE>
CHINA CONSUMER OPPORTUNITY TRUST, SERIES 1
STATEMENT OF CONDITION
As of June 24, 1997
<CAPTION>
<S> <C>
Investment in Securities:
Contracts to purchase securities <F1>.......... $
-----------
............................................... $
===========
Liabilities and Interest of Unitholders:
Liabilities--..................................
Deferred sales charge liability <F2>........... $
Interest of Unitholders-- .....................
Cost to investors <F3>.........................
Less: Gross underwriting commission <F3><F4>...
-----------
Net interest to Unitholders <F3>...............
-----------
Total.......................................... $
===========
- ----------
<FN>
<F1>The aggregate value of the Securities listed under "Portfolio" and
their cost to the Trust are the same. The value of the Securities is
determined by Interactive Data Corporation on the bases set forth under "
Public Offering--Offering Price" . The contracts to purchase Securities are
collateralized by an irrevocable letter of credit of $_____ which has been
deposited with the Trustee.
<F2>Represents the amount of mandatory distributions from the Trust on the bases
set forth under "Public Offering" .
<F3>The aggregate public offering price and the aggregate sales charge of 5.5% are
computed on the bases set forth under "Public Offering--Offering Price"
and "Public Offering--Sponsor and Managing Underwriter Compensation"
and assume all single transactions involve less than 10,000 Units. For single
transactions involving 10,000 or more Units, the sales charge is reduced (see
"Public Offering--General" ) resulting in an equal reduction in both
the Cost to investors and the Gross underwriting commission while the Net
interest to Unitholders remains unchanged.
<F4>Assumes the maximum sales charge.
</TABLE>
<TABLE>
CHINA CONSUMER OPPORTUNITY TRUST, SERIES 1
PORTFOLIO (VAN KAMPEN AMERICAN CAPITAL EQUITY OPPORTUNITY TRUST, SERIES 63)
as of the Initial Date of Deposit: _____, 1997
<CAPTION>
Estimated
Annual
Number Market Dividends Cost of
of Value per per Share Securities to
Shares Name of Issuer<F1>* Share <F2> <F2> Trust <F2>
---------- ------------------------------------ ---------- --------- -------------
<S> <C> <C> <C> <C>
Amway Asia Pacific Ltd. $ $ $
Founder Hong Kong Limited
Goldlion Holdings
Guangdong Invest
Guangdong Kelon Electric Holdings
Guangnan Holdings
Shandong Xinhua Pharma
Sinocan Holdings
Swire Paciic Holdings B
Television Broadcasts
Tingyi Holdings Co
Vitasoy International Holdings
Want Want Holdings
Wuxi Little Swan Co. B
$
========== ============
*NOTE: The securities listed above are currently anticipated to be included
in the Trust portfolio. The actual portfolio is subject to change at the
Initial Date of Deposit.
NOTES TO PORTFOLIO
- --------------------------------------------------------------------------
<FN>
<F1>All of the Securities are represented by "regular way" contracts for
the performance of which an irrevocable letter of credit has been deposited
with the Trustee. At the Initial Date of Deposit, the Sponsor has assigned to
the Trustee all of its right, title and interest in and to such Securities.
Contracts to acquire Securities were entered into on _____, 1997 are expected
to settle on _____, 1997. (see "The Trust" ).
<F2>The market value of each of the Equity Securities is based on the closing sale
price of each Security (in the case of the Foreign Securities, converted into
U.S. dollars at the offer side of the applicable currency exchange rate at the
Evaluation Time and includes the costs associated with acquiring the Foreign
Securities) on the day prior to the Initial Date of Deposit. Estimated annual
dividends are based on the most recently declared dividends taking into
consideration any applicable foreign withholding tax (in the case of the
Foreign Securities, converted into U.S. dollars at the offer side of the
applicable currency exchange rate at the Evaluation Time). The aggregate value
of the Securities on the day prior to the Initial Date of Deposit (based on
the closing sale or bid price of each Security and, for the Foreign
Securities, converted into U.S. dollars at the bid side of the related
currency exchange rate at the Evaluation Time reduced by the costs of
liquidating such Securities) was $_____. This is the basis on which the
Redemption Price per Unit will be determined. The ask price of the applicable
Securities and the offer side exchange rates of the Foreign Securities (the
basis on which the Public Offering Price per Unit will be determined during
the initial offering period) is greater than the related bid side values.
Other information regarding the Securities in the Trust, as of the Initial
Date of Deposit (in the case of the Foreign Securities, converted into U.S.
dollars at the offer side of the applicable currency exchange rate at the
Evaluation Time on the day prior to the Initial Date of Deposit), is as
follows:
</TABLE>
<TABLE>
<CAPTION>
Cost To Profit (Loss) To Aggregate
Managing Managing Estimated Annual
Underwriter Underwriter Dividends
----------- ----------- ----------------
<S> <C> <C>
$ $ $
</TABLE>
A Security marked by "+" indicates an American or Global Depositary
Receipt.
"**" Indicates that the dividends shown reflect the net amounts after
giving effect to foreign withholding taxes.
A Security marked by "3" indicates an equity security listed on a
foreign securities exchange.
A Security marked by "#" indicates a U.S. dollar denominated foreign
common stock listed on the New York
Stock Exchange.
An affiliate of the Sponsor may have participated as issuer, sole underwriter,
managing underwriter or member of an underwriting syndicate in a public
offering of one or more of the stocks in the Trust. An affiliate of the
Sponsor may serve as a specialist in the stocks in the Trust on one or more
stock exchanges and may have a long or short position in any of these stocks
or in options on any of these stocks, and may be on the opposite side of
public orders executed on the floor of an exchange where such stocks are
listed. An officer, director or employee of the Sponsor or an affiliate may be
an officer or director of one or more of the issuers of the stocks in the
Trust. An affiliate of the Sponsor may trade for its own account as an odd-lot
dealer, market maker, block positioner and/or arbitrageur in any stocks or
options relating thereto. The Sponsor, its affiliates, directors, elected
officers and employee benefit programs may have either a long or short
position in any stock or option of the issuers.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
<S> <C>
Summary of Essential Financial
Information
Fee Table
The Trust
Trust Portfolio
Risk Factors
Taxation
Trust Operating Expenses
Public Offering
Rights of Unitholders
Trust Administration
Other Matters
Report of Independent Certified Public
Accountants
Statement of Condition
Portfolio
Notes to Portfolio
</TABLE>
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
June 24, 1997
CHINA CONSUMER OPPORTUNITY TRUST, SERIES 1
Van Kampen American Capital
Equity Opportunity Trust, Series 63
International Assets Advisory Corp.
250 Park Avenue South, Suite 200
Winter Park, Florida 32789
Please retain this Prospectus for future reference.
Contents Of Registration Statement
This Registration Statement comprises the following papers and documents:
The facing sheet
The Cross-Reference Sheet
The Prospectus
The signatures
The consents of independent public accountants
and legal counsel
The following exhibits:
1.1 Proposed form of Trust Agreement (to be supplied by amendment).
3.1 Opinion and consent of counsel as to legality of securities being
registered (to be supplied by amendment).
3.2 Opinion and consent of counsel as to New York tax status of
securities being registered (to be supplied by amendment).
4.1 Consent of Interactive Data Corporation (to be supplied by
amendment).
4.2 Consent of Grant Thornton LLP (to be supplied by amendment).
EX-27 Financial Data Schedule (to be supplied by amendment).
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
63 has duly caused this Registration Statement to be signed on its behalf
by the undersigned, thereunto duly authorized in the City of Chicago and
State of Illinois on the 20th day of May, 1997.
Van Kampen American Capital Equity
Opportunity Trust, Series 63
(Registrant)
By Van Kampen American Capital
Distributors, Inc.
(Depositor)
Sandra A. Waterworth
Vice President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below on May 20, 1997 by the
following persons who constitute a majority of the Board of Directors of
Van Kampen American Capital Distributors, Inc.
Signature Title
Don G. Powell Chairman and Chief Executive )
Officer )
William R. Molinari President and Chief Operating)
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel
William R. Rybak Executive Vice President and )
Chief Financial Officer )
Sandra A. Waterworth ) (Attorney-in-fact*)
*An executed copy of each of the related powers of attorney was
filed with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income Trust and
Investors' Quality Tax-Exempt Trust, Multi-Series 203 (File No. 33-65744)
and with the Registration Statement on Form S-6 of Insured Municipals
Income Trust, 170th Insured Multi-Series (File No. 33-55891) and the same
are hereby incorporated herein by this reference.
