<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Management Review................. 4
Portfolio of Investments.................... 6
Statement of Assets and Liabilities......... 11
Statement of Operations..................... 12
Statement of Changes in Net Assets.......... 13
Financial Highlights........................ 14
Notes to Financial Statements............... 17
</TABLE>
COM SAR 8/95
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
August 3, 1995
Dear Shareholder:
The first half of 1995 has been a very positive one for most investors. Both
the fixed-income and stock markets have made considerable gains for the period
ended June 30, 1995. This year has been particularly rewarding for investors
after weathering the difficult markets of 1994.
The first six months of 1995 serve as a reminder of just how quickly markets
can move, and how difficult it can be to predict the timing of those movements.
Moreover, this year reinforces the importance of maintaining a long-term per-
spective, and reaffirms the principle that it is time--not timing--that leads
to investment success.
ECONOMIC OVERVIEW
Due in large part to the Federal Reserve Board's efforts to tighten monetary
supply in 1994, the economy has slowed significantly this year. Evidence of
this guided slowdown was reflected in gross domestic product for the second
quarter, which grew at an annual rate of 0.5 percent, substantially lower than
its first quarter rate of 2.7 percent and fourth quarter 1994 rate of 5.1 per-
cent. While other key economic data, including unemployment rates and housing
starts, have shown mixed signs during recent weeks, the general trend for the
first half of the year suggested a "soft landing" scenario. Subsequently, con-
cern over inflation has subsided, as its annualized rate has run at a modest
pace of 3.2 percent year-to-date.
Financial markets, perceiving the Fed's monetary initiatives had taken hold
without driving the economy into a recession, rallied through the first six
months of the year. With slowing growth, interest rates declined and the value
of fixed-income investments rose. For example, the yield on 30-year Treasury
securities fell from 7.88 percent at the end of December to 6.62 percent at the
end of June, while prices on the "long bond" rose 18 percent. Likewise, the
yield on the Bond Buyer's Municipal Bond Index fell from 7.28 percent to 6.37
percent during the same period.
Corporate earnings remained quite strong during the first half of the year,
helping push stocks to new highs. The Dow Jones Industrial Average and the S&P
500 Index gained nearly 19 percent during the period. The strongest performance
has been in the science & technology sector of the market--and in big "capital-
ization" stocks. As the U.S. dollar plunged against several international cur-
rencies, companies--typically large ones--which had diversified overseas were
able to capture additional earnings, while technology stocks benefited from
booming growth in computers and telecommunications throughout the world.
(Continued on page two)
1
<PAGE>
ECONOMIC OUTLOOK
Comfortable with the economy's rate of growth and level of inflation, the Fed
reversed course and lowered short-term interest rates on July 6. We believe the
Fed will move cautiously before easing again, waiting for further signs that
the economy has settled into a slow growth pattern. We anticipate that the
economy will grow at an annual rate between 2 and 3 percent in the second half
of the year and that inflation will run at an annualized rate between 3.3 and
3.5 percent. Based upon a generally slow growth and low inflation outlook, we
believe fixed-income markets will continue to make positive gains as interest
rates fall. We look for stocks to perform well, but perhaps not as strongly as
in the first half of the year, as some companies may find it difficult to main-
tain their strong earnings momentum.
During recent months, debate over tax reform has dominated the agenda in
Washington. There has been varied speculation about the impact of reform, which
may have caused you to wonder how it might affect your investment goals. At
this point, no one knows for sure what will happen or when it might actually
take place. As various proposals come to the forefront, there may be short-term
market fluctuations, just as we saw during the debate over the U.S. health care
system. We will continue to keep a close watch over any new developments and
evaluate the potential impact that they may have on your investments.
Once again, it is important to remember that financial markets will inevita-
bly experience highs and lows, but by maintaining a long-term investment per-
spective, it may allow you to ride the ups and downs of the markets more easily
as you pursue your investment goals.
On the following pages, you can read about your Fund's performance for the
period, as well as portfolio management's outlook for the Fund in the coming
months. We hope that you will find the information contained in the question-
and-answer section helpful.
CORPORATE NEWS
Along with your Fund's shareholder report, we are pleased to introduce a new
shareholder publication called Your Portfolio. The purpose of this publication
is to provide you with additional information about your mutual fund invest-
ment, as well as offer helpful insights regarding long-term investment strate-
gies and trends in the marketplace. The publication will be mailed twice a year
with your June and December shareholder reports. This premier issue focuses on
our various shareholder services and privileges designed to make mutual fund
investing easier for you.
We appreciate your continued confidence in your investment with Van Kampen
American Capital, and we look forward to communicating with you again regarding
the performance of your Fund.
Sincerely,
/s/ Don G. Powell /s/ Dennis J. McDonnell
- --------------------------- ---------------------------
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Asset Management Inc. Asset Management Inc.
2
<PAGE>
PERFORMANCE RESULTS FOR THE PERIOD ENDED JUNE 30, 1995
AMERICAN CAPITAL COMSTOCK FUND, INC.
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 19.98% 19.42% 19.44%
Six-month total return/2/............................ 13.05% 14.42% 18.44%
One-year total return/2/............................. 14.58% 15.85% 19.61%
Five-year average annual total return/2/............. 9.20% N/A N/A
Ten-year average annual total return/2/.............. 11.15% N/A N/A
Life-of-Fund average annual total return/2/.......... 11.44% 9.54% 8.91%
Commencement Date.................................... 10/07/68 10/19/92 10/26/93
</TABLE>
N/A = Not Applicable
/1/Assumes reinvestment of all distributions for the period and does not in-
clude payment of the maximum sales charge (5.75% for A shares) or contingent
deferred sales charge for early withdrawal (5% for B shares and 1% for C
shares).
/2/Standardized total return. Assumes reinvestment of all distributions for
the period and includes payment of the maximum sales charge (5.75% for A
shares) or contingent deferred sales charge for early withdrawal (5% for B
shares and 1% for C shares).
See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth
more or less than their original cost.
3
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
AMERICAN CAPITAL COMSTOCK FUND, INC.
The following is an interview with the management team of American Capital
Comstock Fund. The team is led by Robert Baker, portfolio manager, and Alan T.
Sachtleben, executive vice president, equity investments.
Q. WHAT FACTORS HAD THE MOST IMPACT ON THE FUND'S PERFORMANCE DURING THE
FIRST HALF OF 1995?
A. During the first six months of this year interest rates fell after rising
during the previous six-month period. As rates declined, the trend gener-
ated renewed enthusiasm among investors. Stock prices rallied in a broad-based
recovery that was led by the technology sector. In addition to our technology
holdings, the Fund also benefited from its "bottom-up" stock-picking philoso-
phy. Last fall we purchased stocks in several companies that we believed were
undervalued and they performed very well during the past six months.
Q. WHAT INDUSTRIES PERFORMED WELL DURING THE PAST YEAR?
A. The technology sector continued to lead the market. Whether we look at
the performance for a three-month, six-month or one-year period, technol-
ogy stocks continue to generate strong returns. As a broadly diversified Fund,
we limit the percentage of our assets invested in any one sector, but we still
had a sizeable portion of the Fund's assets invested in technology. However,
as technology stocks soared in value, it became harder to find good values in
the sector, so we focused on other sectors.
Finance and consumer non-durables companies also did well in recent months.
The stock of Philip Morris, for example, increased in value 29 percent during
the first half of the year. The Fund also had significant holdings in Disney
and AMR, the parent company of American Airlines, which increased in value 21
percent and 40 percent, respectively, during the reporting period. Of course,
not all stocks in the portfolio performed this well, and past performance is
no guarantee of future results..
The Fund's largest stock holding at the end of the period was WMX, formerly
Waste Management, which is one of the country's largest trash collection and
recycling companies. The chart below shows the diversification of the portfo-
lio as of June 30, 1995.
[PIE CHART OF HOLDINGS BY INDUSTRY AS A PERCENTAGE OF NET ASSETS AS OF
JUNE 30, 1995]
U.S. Treasury Notes 7%
Health Care 9%
Utilities 10%
Finance 7%
Customer Service 9%
Energy 10%
Raw Materials/Processing Industries 10%
Producer Manufacturing 10%
Technology 7%
Consumer Non-Durables 7%
Consumer Distribution 7%
Other 7%
4
<PAGE>
Q. WERE THERE OTHER FACTORS THAT HELPED THE FUND'S PERFORMANCE?
A. Yes. We owned several special situation stocks that performed very well.
These are stocks of companies that may have hired new senior management
or that may be undergoing a reorganization. W.R. Grace, for example, put in a
new management team, which then sold the company's medical subsidiary. ITT
split into three companies to enhance its value to shareholders.
Q. HOW DID THE FUND PERFORM DURING THE SIX MONTHS ENDED JUNE 30, 1995?
A. Class A shares of the Fund achieved a total return at net asset value of
19.98 percent/1/, including reinvestment of dividends totalling $0.135
per share and a capital gains distribution of $0.3025 per share. By compari-
son, the Standard & Poor's 500-Stock Index, a broad-based, unmanaged index
that reflects general stock market performance, achieved a total return of
20.15 percent. The S&P 500 does not reflect any commissions or fees that would
be paid by an investor purchasing the securities it represents. (Please refer
to the chart on page three for additional Fund performance.)
Q. WHAT'S THE OUTLOOK FOR THE FUND IN THE NEXT SIX MONTHS?
A. The performance of the stock market during the remainder of the year will
depend, in large part, on what action the Fed takes with regard to short-
term interest rates. The stock market also will be dependent on the degree to
which the slowdown in economic activity that seems to be under way impacts
corporate earnings. The recent cut in rates should increase economic growth
and cause the stock market to continue to perform well. However, if economic
growth accelerates rapidly to the point of causing inflation, then stocks
would not perform as well.
Since our investment style is to normally remain fully invested and broadly
diversified, we will continue to focus on stock selection and pick stocks that
should do well regardless of changes in interest and economic growth rates. We
focus on undervalued stocks and as valuations in certain industries increase,
it is important to remain flexible and look for values whereever we can find
them. Recently, we have found good values in retail and cable television, so
we increased the Fund's holdings in those industries.
/s/ Alan T. Sachtleben /s/ B. Robert Baker, Jr.
- ------------------------ ------------------------
Alan T. Sachtleben B. Robert Baker, Jr.
Executive Vice President Portfolio Manager
Equity Investments
Please see footnotes on page three.
5
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK 87.3%
CONSUMER DISTRIBUTION 6.9%
*150 Best Buy, Inc....................................... $ 3,993,750
120 Dayton Hudson Corp.................................. 8,610,000
110 Dillard Dept Stores, Inc............................ 3,231,250
120 Gap, Inc............................................ 4,185,000
150 Limited, Inc........................................ 3,300,000
120 May Department Stores Co............................ 4,995,000
70 Nordstrom, Inc...................................... 2,896,250
260 Sears, Roebuck & Co................................. 15,567,500
*126 Sports & Recreation, Inc............................ 1,653,750
110 Sysco Corp.......................................... 3,245,000
*130 Toys R Us, Inc...................................... 3,802,500
540 Wal-Mart Stores, Inc................................ 14,445,000
--------------
TOTAL CONSUMER DISTRIBUTION......................... 69,925,000
--------------
CONSUMER DURABLES 1.3%
130 Eastman Kodak Co.................................... 7,881,250
110 General Motors Corp................................. 5,156,250
--------------
TOTAL CONSUMER DURABLES............................. 13,037,500
--------------
CONSUMER NON-DURABLES 7.4%
260 Clorox Co........................................... 16,965,000
120 ConAgra, Inc........................................ 4,185,000
50 CPC International, Inc.............................. 3,087,500
*180 Fruit Of The Loom................................... 3,802,500
100 Maybelline, Inc..................................... 2,050,000
222 Nabisco Holdings Corp, Class A...................... 5,991,300
323 PepsiCo, Inc........................................ 14,736,875
220 Philip Morris Companies, Inc........................ 16,362,500
40 Procter & Gamble Co................................. 2,875,000
175 Sara Lee Corp....................................... 4,987,500
--------------
TOTAL CONSUMER NON-DURABLES......................... 75,043,175
--------------
CONSUMER SERVICES 8.7%
140 CBS, Inc............................................ 9,380,000
280 Comcast Corp., Class A.............................. 5,197,500
650 Cox Communications, Inc............................. 12,586,000
180 Disney (Walt) Co.................................... 10,012,500
150 Marriott International, Inc......................... 5,381,250
120 McDonald's Corp..................................... 4,695,000
26 McGraw-Hill, Inc.................................... 1,972,750
160 New York Times Co., Class A......................... 3,760,000
220 News Corp., Ltd., ADR............................... 4,977,500
</TABLE>
See Notes to Financial Statements
6
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
*560 Tele-Communications, Inc., Class A.................. $ 13,125,000
380 Time Warner, Inc.................................... 15,627,500
114 Wendy's International, Inc.......................... 2,037,750
--------------
TOTAL CONSUMER SERVICES............................. 88,752,750
--------------
ENERGY 10.4%
76 Amoco Corp.......................................... 5,063,500
140 Ashland, Inc........................................ 4,917,500
45 Atlantic Richfield Co............................... 4,938,750
140 Baker Hughes, Inc................................... 2,870,000
135 Burlington Resources, Inc........................... 4,978,125
500 Coastal Corp........................................ 15,187,500
100 Consolidated Natural Gas Co......................... 3,775,000
130 Dresser Industries, Inc............................. 2,892,500
280 Exxon Corp.......................................... 19,775,000
140 Halliburton Co...................................... 5,005,000
240 Pacific Enterprises................................. 5,880,000
440 Panhandle Eastern Corp.............................. 10,725,000
150 Repsol S.A., ADR.................................... 4,743,750
100 Schlumberger, Ltd................................... 6,212,500
*140 Smith International, Inc............................ 2,345,000
160 Sonat, Inc.......................................... 4,880,000
100 Valero Energy Corp.................................. 2,025,000
--------------
TOTAL ENERGY........................................ 106,214,125
--------------
FINANCE 6.6%
36 American International Group, Inc................... 4,104,000
180 Chase Manhattan Corp................................ 8,460,000
130 Chemical Banking Corp............................... 6,142,500
68 Comerica, Inc....................................... 2,184,500
80 Federal National Mortgage Association............... 7,550,000
120 First Chicago Corp.................................. 7,185,000
68 Franklin Resources, Inc............................. 3,026,000
150 Morgan (J P) & Co., Inc............................. 10,518,750
150 NationsBank Corp.................................... 8,043,750
100 Providian Corp...................................... 3,625,000
60 St. Paul Companies, Inc............................. 2,955,000
65 Transamerica Corp................................... 3,786,250
--------------
TOTAL FINANCE....................................... 67,580,750
--------------
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
HEALTH CARE 8.6%
68 American Home Products Corp.......................... $ 5,261,500
190 Baxter International, Inc............................ 6,911,250
60 Bristol-Myers Squibb Co.............................. 4,087,500
606 Caremark International, Inc.......................... 12,110,000
72 Columbia/HCA Healthcare Corp......................... 3,114,000
500 Community Psychiatric Centers........................ 5,625,000
*200 Lincare Holdings, Inc................................ 5,312,500
220 Mallinckrodt Group, Inc.............................. 7,810,000
170 Merck & Co., Inc..................................... 8,330,000
*640 National Medical Enterprises, Inc.................... 9,200,000
*75 Nellcor, Inc......................................... 3,375,000
140 Schering Plough Corp................................. 6,177,500
120 Upjohn Co............................................ 4,545,000
72 Warner Lambert Co.................................... 6,219,000
-------------
TOTAL HEALTH CARE.................................... 88,078,250
-------------
PRODUCER MANUFACTURING 9.9%
90 Browning-Ferris Industries, Inc...................... 3,251,250
44 Emerson Electric Co.................................. 3,146,000
100 Fluor Corp........................................... 5,200,000
220 General Electric Co.................................. 12,402,500
126 Honeywell, Inc....................................... 5,433,750
126 ITT Corp............................................. 14,805,000
150 Philip N.V., ADR..................................... 6,412,500
180 Rockwell International Corp.......................... 8,235,000
120 Tenneco, Inc......................................... 5,520,000
50 United Technologies Corp............................. 3,906,250
*74 Varity Corp.......................................... 3,256,000
1,040 WMX Technologies, Inc................................ 29,510,000
-------------
TOTAL PRODUCER MANUFACTURING......................... 101,078,250
-------------
RAW MATERIALS/PROCESSING INDUSTRIES 10.1%
663 Asia Pacific Resources International................. 6,047,137
180 Barrick Gold Corp.................................... 4,545,000
80 Consolidated Papers, Inc............................. 4,610,000
200 Du Pont (E.I.) de Nemours & Co., Inc................. 13,750,000
70 Engelhard Corp....................................... 3,001,250
*800 Fort Howard Corp..................................... 11,300,000
900 Freeport-McMoran, Inc................................ 15,862,500
200 Grace (W. R.) & Co................................... 12,275,000
</TABLE>
See Notes to Financial Statements
8
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
300 James River Corp..................................... $ 8,287,500
120 Lubrizol Corp........................................ 4,245,000
56 Mead Corp............................................ 3,325,000
40 Monsanto Co.......................................... 3,605,000
92 Newmont Mining Corp.................................. 3,852,500
70 Sherwin Williams Co.................................. 2,493,750
36 Sigma-Aldrich Corp................................... 1,807,800
76 Willamette Industries, Inc........................... 4,218,000
-------------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES............ 103,225,437
-------------
TECHNOLOGY 7.0%
92 Avnet, Inc........................................... 4,450,500
*50 BMC Software, Inc.................................... 3,862,500
*240 Compaq Computer Corp................................. 10,890,000
*120 Gateway 2000, Inc.................................... 2,730,000
77 General Dynamics Corp................................ 3,434,625
40 Hewlett-Packard Co................................... 2,980,000
120 International Business Machines Corp................. 11,520,000
120 Lockheed Martin Corp................................. 7,575,000
80 Loral Corp........................................... 4,140,000
80 Northern Telecom, Ltd................................ 2,920,000
*240 Novell, Inc.......................................... 4,785,000
160 Varian Associates, Inc............................... 8,840,000
*100 VLSI Technology, Inc................................. 3,012,500
-------------
TOTAL TECHNOLOGY..................................... 71,140,125
-------------
TRANSPORTATION 0.8%
*60 AMR Corp............................................. 4,477,500
120 Illinois Central Corp................................ 4,140,000
-------------
TOTAL TRANSPORTATION................................. 8,617,500
-------------
UTILITIES 9.6%
56 American Electric Power, Inc......................... 1,967,000
90 Ameritech Corp....................................... 3,960,000
220 AT&T Corp............................................ 11,687,500
76 Baltimore Gas & Electric Co.......................... 1,900,000
100 Carolina Power & Light Co............................ 3,025,000
40 Central & South West Corp............................ 1,050,000
32 Florida Progress Corp................................ 1,000,000
100 FPL Group, Inc....................................... 3,862,500
150 Frontier Corp........................................ 3,600,000
33 General Public Utilities Corp........................ 981,750
110 GTE Corp............................................. 3,753,750
110 Illinova Corp........................................ 2,791,250
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares/
Par Amount
(000) Description Market Value
- -------------------------------------------------------------------------------
<C> <S> <C>
380 MCI Communications Corp........................... $ 8,360,000
45 Nevada Power Co................................... 928,125
30 NIPSCO Industries, Inc............................ 1,020,000
200 PECO Energy Co.................................... 5,525,000
20 Pinnacle West Capital Corp........................ 490,000
30 Public Service Co. of Colorado.................... 975,000
*140 Public Service Co. of New Mexico.................. 1,995,000
160 Public Service Enterprise Group................... 4,440,000
45 San Diego Gas & Electric Co....................... 933,750
100 SBC Communications, Inc........................... 4,762,500
240 Southern Co....................................... 5,370,000
34 Southwestern Public Service Co.................... 1,003,000
480 Sprint Corp....................................... 16,140,000
100 U. S. West, Inc................................... 4,162,500
*100 Worldcom, Inc..................................... 2,700,000
--------------
TOTAL UTILITIES................................... 98,383,625
--------------
TOTAL COMMON STOCK (Cost $780,747,806)............ 891,076,487
--------------
UNITED STATES GOVERNMENT OBLIGATIONS 6.5%
$18,000 United States Treasury Notes, 6.250%, 8/31/96..... 18,081,540
47,700 United States Treasury Notes, 6.875%, 2/28/97..... 48,467,493
--------------
TOTAL UNITED STATES GOVERNMENT OBLIGATIONS (Cost
$65,578,289)...................................... 66,549,033
--------------
COMMERCIAL PAPER 3.2%
Associates Corp. of North America, 6.150%, 7/03/95
32,840 (Cost $32,823,170)................................ 32,823,170
--------------
TOTAL INVESTMENTS (Cost $879,149,265) 97.0%................... 990,448,690
OTHER ASSETS AND LIABILITIES NET 3.0%......................... 30,345,625
--------------
NET ASSETS 100%............................................... $1,020,794,315
--------------
</TABLE>
*Non-income producing security
See Notes to Financial Statements
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $879,149,265)................ $ 990,448,690
Cash............................................................ 15,711
Receivable for investments sold................................. 43,445,762
Dividends and interest receivable............................... 3,616,622
Receivable for Fund shares sold................................. 494,437
Other assets.................................................... 11,505
--------------
Total Assets................................................... 1,038,032,727
--------------
LIABILITIES
Payable for investments purchased............................... 12,873,646
Payable for Fund shares redeemed................................ 2,870,511
Dividends payable............................................... 214,128
Due to Distributor.............................................. 453,972
Due to Adviser.................................................. 422,820
Due to shareholder service agent................................ 223,700
Deferred Directors' compensation................................ 84,775
Accrued expenses................................................ 94,860
--------------
Total Liabilities.............................................. 17,238,412
--------------
NET ASSETS, equivalent to $14.40 per share for Class A, $14.42
per share for Class B, and $14.41 per share for Class C shares. $1,020,794,315
--------------
NET ASSETS WERE COMPRISED OF:
Capital stock, at par; 68,403,105 Class A, 2,301,582 Class B,
and 199,148 Class C shares outstanding......................... 709,038
Capital surplus................................................. 861,091,655
Undistributed net realized gain on securities................... 46,662,306
Net unrealized appreciation of securities....................... 111,299,425
Undistributed net investment income............................. 1,031,891
--------------
NET ASSETS...................................................... $1,020,794,315
--------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends......................................................... $ 11,942,011
Interest.......................................................... 2,424,200
------------
Investment income................................................ 14,366,211
------------
EXPENSES
Management fees................................................... 2,396,992
Shareholder service agent's fees and expenses..................... 1,316,425
Accounting services............................................... 78,642
Service fees--Class A............................................. 789,707
Distribution and service fees--Class B............................ 137,499
Distribution and service fees--Class C............................ 12,512
Directors' fees and expenses...................................... 14,863
Audit fees........................................................ 18,865
Custodian fees.................................................... 4,318
Legal fees........................................................ 6,892
Reports to shareholders........................................... 63,394
Registration and filing fees...................................... 60,723
Miscellaneous..................................................... 16,634
------------
Total expenses................................................... 4,917,466
------------
NET INVESTMENT INCOME............................................. 9,448,745
------------
REALIZED AND UNREALIZED GAIN ON SECURITIES
Net realized gain on securities................................... 48,512,796
Net unrealized appreciation of securities during the period....... 115,366,044
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.................... 163,878,840
------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS.................. $173,327,585
------------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year
Ended Ended
June 30, December 31,
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period.................. $ 895,919,571 $994,910,318
-------------- ------------
Operations
Net investment income........................... 9,448,745 18,001,692
Net realized gain on securities................. 48,512,796 189,796,739
Net unrealized appreciation (depreciation) of
securities during the period.................... 115,366,044 (242,739,776)
-------------- ------------
Increase (decrease) in net assets resulting from
operations...................................... 173,327,585 (34,941,345)
-------------- ------------
Distributions to shareholders from
Net investment income
Class A......................................... (9,215,767) (18,545,606)
Class B......................................... (158,910) (238,732)
Class C......................................... (13,921) (23,465)
-------------- ------------
(9,388,598) (18,807,803)
-------------- ------------
Net realized gain on securities
Class A......................................... (20,638,248) (174,099,107)
Class B......................................... (594,819) (4,195,711)
Class C......................................... (53,674) (441,419)
-------------- ------------
(21,286,741) (178,736,237)
-------------- ------------
Total distributions............................. (30,675,339) (197,544,040)
-------------- ------------
Capital transactions
Proceeds from shares sold
Class A......................................... 40,451,137 97,825,457
Class B......................................... 8,975,219 12,817,155
Class C......................................... 780,918 2,206,502
-------------- ------------
50,207,274 112,849,114
-------------- ------------
Proceeds from shares issued for distributions
reinvested
Class A......................................... 27,548,690 176,744,344
Class B......................................... 707,432 4,113,202
Class C......................................... 60,957 443,048
-------------- ------------
28,317,079 181,300,594
-------------- ------------
Cost of shares redeemed
Class A......................................... (93,144,578) (156,755,958)
Class B......................................... (2,497,880) (3,588,713)
Class C......................................... (659,397) (310,399)
-------------- ------------
(96,301,855) (160,655,070)
-------------- ------------
Increase (decrease) in net assets from capital
transactions..................................... (17,777,502) 133,494,638
-------------- ------------
INCREASE (DECREASE) IN NET ASSETS................ 124,874,744 (98,990,747)
-------------- ------------
NET ASSETS, end of period........................ $1,020,794,315 $895,919,571
-------------- ------------
</TABLE>
See Notes to Financial Statements
13
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each of the
periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------------------------------
Six Months
Ended Year Ended December 31
June 30, ----------------------------------------------
1995 1994 1993 1992 1991 1990
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value,
beginning of period..... $12.40 $ 16.38 $ 17.30 $ 17.52 $14.29 $15.29
------ ------- ------- ------- ------ ------
Income from investment
operations
Investment income...... .21 .47 .49 .48 .535 .59
Expenses............... (.07) (.16) (.17) (.15) (.14) (.12)
------ ------- ------- ------- ------ ------
Net investment income... .14 .31 .32 .33 .395 .47
Net realized and
unrealized gains or
losses on securities... 2.2975 (.92) 1.18 .795 4.065 (.9875)
------ ------- ------- ------- ------ ------
Total from investment
operations.............. 2.4375 (.61) 1.50 1.125 4.46 (.5175)
------ ------- ------- ------- ------ ------
Less distributions from
Net investment income.. (.1350) (.3225) (.2975) (.3275) (.395) (.475)
Net realized gains on
securities............. (.3025) (3.0475) (2.1225) (1.0175) (.835) (.0075)
------ ------- ------- ------- ------ ------
Total distributions..... (.4375) (3.37) (2.42) (1.345) (1.23) (.4825)
------ ------- ------- ------- ------ ------
Net asset value, end of
period.................. $14.40 $ 12.40 $ 16.38 $ 17.30 $17.52 $14.29
------ ------- ------- ------- ------ ------
TOTAL RETURN (/1/)...... 19.98% (3.67%) 9.09% 6.53% 31.96% (3.36%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (millions)....... $984.7 $871.6 $980.4 $959.0 $986.2 $812.1
Average net assets
(millions).............. $929.1 $920.9 $967.7 $931.8 $897.9 $866.9
Ratios to average net
assets (annualized)
Expenses............... 1.00% 1.01% .96% .87% .82% .79%
Net investment income.. 2.00% 1.93% 1.82% 1.84% 2.32% 2.99%
Portfolio turnover rate. 69% 136% 50% 36% 38% 30%
</TABLE>
(1) Total return for a period of less than one full year is not annualized.
Total return does not consider the effect of sales charges.
See Notes to Financial Statements
14
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding throughout each of the
periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
---------------------------------------------
Six Months Year Ended October 19,
Ended December 31 1992(/1/) to
June 30, ------------------- December 31,
1995 1994 1993(/2/) 1992(/2/)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of
period......................... $12.42 $ 16.40 $ 17.30 $ 17.62
------ ------- ------- -------
Income from investment
operations
Investment income.............. .20 .43 .49 .105
Expenses....................... (.12) (.27) (.31) (.075)
------ ------- ------- -------
Net investment income........... .08 .16 .18 .03
Net realized and unrealized
gains or losses on securities.. 2.2975 (.905) 1.192 .9225
------ ------- ------- -------
Total from investment
operations..................... 2.3775 (.745) 1.372 .9525
------ ------- ------- -------
Less distributions from
Net investment income.......... (.0750) (.1875) (.1495) (.29)
Net realized gains on
securities.................... (.3025) (3.0475) (2.1225) (.9825)
------ ------- ------- -------
Total distributions............. (.3775) (3.235) (2.272) (1.2725)
------ ------- ------- -------
Net asset value, end of period.. $14.42 $ 12.42 $ 16.40 $ 17.30
------ ------- ------- -------
TOTAL RETURN (/3/).............. 19.42% (4.41%) 8.25% 4.66%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions)..................... $33.2 $22.0 $13.9 $0.8
Average net assets (millions)... $27.5 $18.8 $7.0 $0.4
Ratios to average net assets
(annualized)
Expenses....................... 1.84% 1.84% 1.76% 1.88%
Net investment income.......... 1.15% 1.12% 1.04% .74%
Portfolio turnover rate......... 69% 136% 50% 36%
</TABLE>
(1) Commencement of offering of sales.
(2) Based on average month-end shares outstanding.
(3) Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.
See Notes to Financial Statements
15
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding throughout each of the
periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
---------------------------------------
Six Months October 26,
Ended Year Ended 1993(/1/) to
June 30, December 31, December 31,
1995 1994(/2/) 1993(/2/)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period.. $12.41 $ 16.39 $ 18.16
------ ------- -------
Income from investment operations
Investment income.................... .21 .47 .07
Expenses............................. (.13) (.29) (.05)
------ ------- -------
Net investment income................. .08 .18 .02
Net realized and unrealized gains or
losses on securities................. 2.2975 (.925) .1425
------ ------- -------
Total from investment operations...... 2.3775 (.745) .1625
------ ------- -------
Less distributions from
Net investment income................ (.0750) (.1875) (.065)
Net realized gains on securities..... (.3025) (3.0475) (1.8675)
------ ------- -------
Total distributions................... (.3775) (3.235) (1.9325)
------ ------- -------
Net asset value, end of period........ $14.41 $ 12.41 $ 16.39
------ ------- -------
TOTAL RETURN (/3/).................... 19.44% (4.43%) 1.11%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions).. $2.9 $2.3 $0.5
Average net assets (millions)......... $2.5 $1.7 $0.2
Ratios to average net assets
(annualized)
Expenses............................. 1.84% 1.85% 1.93%
Net investment income................ 1.15% 1.15% .78%
Portfolio turnover rate............... 69% 136% 50%
</TABLE>
(1) Commencement of offering of sales.
(2) Based on average month-end shares outstanding.
(3) Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.
See Notes to Financial Statements
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
- --------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
American Capital Comstock Fund, Inc. (the "Fund") is registered under the In-
vestment Company Act of 1940, as amended, as a diversified, open-end management
investment company. The following is a summary of significant accounting poli-
cies consistently followed by the Fund in the preparation of its financial
statements.
A. INVESTMENT VALUATIONS-Investments listed or traded on a national securities
exchange are valued at the last sale price. Unlisted securities and listed se-
curities for which the last sale price is not available are valued at the mean
between the last reported bid and asked price.
Short-term investments with a maturity of 60 days or less when purchased are
valued at amortized cost, which approximates market value. Short-term invest-
ments with a maturity of more than 60 days when purchased are valued based on
market quotations until the remaining days to maturity becomes less than 61
days. From such time, until maturity, the investments are valued at amortized
cost.
B. FUTURES CONTRACTS-Transactions in futures contracts are utilized in strate-
gies to manage the market risk of the Fund's investments. The purchase of a
futures contract increases the impact on net asset value of changes in the mar-
ket price of investments. There is a risk that the market movement of such in-
struments may not be in the direction forecasted.
Upon entering into futures contracts, the Fund maintains, in a segregated ac-
count with its custodian, securities with a value equal to its obligation under
the futures contracts. A portion of these funds is held as collateral in an ac-
count in the name of the broker, the Fund's agent in acquiring the futures po-
sition. During the period the futures contract is open, changes in the value of
the contract ("variation margin") are recognized by marking the contract to
market on a daily basis. As unrealized gains or losses are incurred, variation
margin payments are received from or made to the broker. Upon the closing or
cash settlement of a contract, gains and losses are realized. The cost of secu-
rities acquired through delivery under a contract is adjusted by the unrealized
gain or loss on the contract.
C. REPURCHASE AGREEMENTS-A repurchase agreement is a short-term investment in
which a Fund acquires ownership of a debt security and the seller agrees to re-
purchase the security at a future time and specified price. The Fund may invest
independently in repurchase agreements, or transfer uninvested cash balances
into a pooled cash account along with other investment companies advised by Van
Kampen American Capital Asset Management, Inc. (the "Adviser"), the daily ag-
gregate of which is invested in repurchase agreements. Repurchase agreements
are collateralized by the underlying debt securities. The Fund will make pay-
ment
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
for such securities only upon physical delivery or evidence of book entry
transfer to the account of the custodian bank. The seller is required to main-
tain the value of the underlying security at not less than the repurchase pro-
ceeds due the Fund.
D. FEDERAL INCOME TAXES-No provision for federal income taxes is required be-
cause the Fund has elected to be taxed as a "regulated investment company" un-
der the Internal Revenue Code and intends to maintain this qualification by
annually distributing all of its taxable net investment income and taxable net
realized gains to its shareholders.
E. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME-Investment transac-
tions are accounted for on the trade date. Realized gains and losses on in-
vestments are determined on the basis of identified cost. Dividend income is
recorded on the ex-dividend date. Interest income is accrued daily.
F. DIVIDENDS AND DISTRIBUTIONS-Dividends and distributions to shareholders are
recorded on the record date. The Fund distributes tax basis earnings in accor-
dance with the minimum distribution requirements of the Internal Revenue Code,
which may differ from generally accepted accounting principles. Such dividends
or distributions may exceed financial statement earnings.
G. DEBT DISCOUNT AND PREMIUM-The Fund accounts for discounts and premiums on
the same basis as is used for federal income tax reporting. Accordingly, orig-
inal issue discounts on debt securities purchased are amortized over the life
of the security. Premiums on debt securities are not amortized. Market dis-
counts are recognized at the time of sale as realized gains for book purposes
and as ordinary income for tax purposes.
NOTE 2--MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager of the Fund. Management fees are paid
monthly, based on the average daily net assets of the Fund at an annual rate
of .50% of the first $1 billion, .45% of the next $1 billion, .40% of the next
$1 billion, and .35% of the amount in excess of $3 billion.
Accounting services include the salaries and overhead expenses of the Fund's
Treasurer and the personnel operating under his direction. Charges are allo-
cated among investment companies advised by the Adviser. For the period, these
charges included $13,062 as the Fund's share of the employee costs attribut-
able to the Fund's accounting officers. A portion of the accounting services
expense was paid to the Adviser in reimbursement of personnel,
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
facilities and equipment costs attributable to the provision of accounting
services to the Fund. The services provided by the Adviser are at cost.
ACCESS Investor Services, Inc., an affiliate of the Adviser, serves as the
Fund's shareholder service agent. These services are provided at cost plus a
profit. For the end of the period, such fees aggregated $1,168,723.
The Fund has been advised that Van Kampen American Capital Distributors,
Inc. (the "Distributor") and Advantage Capital Corporation (the "Retail Deal-
er"), both affiliates of the Adviser, received $19,811 and $31,944, respec-
tively, as their portion of the commissions charged on sales of Fund shares
during the period.
Under the Distribution Plans, the Fund pays up to .25% per annum of its av-
erage daily net assets reimburse to the Distributor for expenses and service
fees incurred. Class B and Class C shares pay an additional fee of up to .75%
per annum of their average net assets to reimburse the Distributor for its
distribution expenses. Actual distribution expenses incurred by the Distribu-
tor for Class B and Class C shares may exceed the amounts reimbursed to the
Distributor by the Fund. At the end of the period, the unreimbursed expenses
incurred by the Distributor under the Class B and Class C plans aggregated ap-
proximately $1.1 million and $33,000, respectively, and may be carried forward
and reimbursed through either the collection of the contingent deferred sales
charges from share redemptions or, subject to the annual renewal of the plans,
future Fund reimbursements of distribution fees.
Legal fees of $6,866 were for services rendered by O'Melveny & Myers, coun-
sel for the Fund. Lawrence J. Sheehan, of counsel to that firm, is a director
of the Fund.
Certain officers and directors of the Fund are officers and directors of the
Adviser, the Distributor, the Retail Dealer and the shareholder service agent.
NOTE 3--INVESTMENT ACTIVITY
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $630,130,047 and $691,939,674,
respectively.
For federal income tax purposes, the identified cost of investments owned at
the end of the period was $879,875,587. Net unrealized appreciation of invest-
ments aggregated $110,573,103, gross unrealized appreciation of investment ag-
gregate $117,222,897 and gross unrealized depreciation of investments
aggregated $6,649,794.
NOTE 4--DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $2,170 plus a fee of $45 per day for Board and Com-
mittee meetings attended. The Chairman receives additional fees from the Fund
at the annual rate of $820. During the period, such fees aggregated $13,313.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
The directors may participate in a voluntary Deferred Compensation Plan (the
"Plan"). The Plan is not funded, and obligations under the Plan will be paid
solely out of the Fund's general accounts. The Fund will not reserve or set
aside funds for the payment of its obligations under the Plan by any form of
trust or escrow. Each director covered under the Plan elects to be credited
with an earnings component on amounts deferred equal to the income earned by
the Fund on its short-term investments or equal to the total return of the
Fund.
NOTE 5--CAPITAL
The Fund offers three classes of shares at their respective net asset values
per share, plus a sales charge which is imposed either at the time of purchase
(the Class A shares) or at the time of redemption on a contingent deferred ba-
sis (the Class B and Class C shares). All classes of shares have the same
rights, except that Class B and Class C shares bear the cost of distribution
fees and certain other class specific expenses. Realized and unrealized gains
or losses, investment income and expenses (other than class specific expenses)
are allocated daily to each class of shares based upon the relative proportion
of net assets of each class. Class B and Class C shares automatically convert
to Class A shares six years and ten years after purchase, respectively, sub-
ject to certain conditions.
The Fund has 200 million shares of each class of $.01 par value of capital
stock authorized. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1995 December 31, 1994
- --------------------------------------------------------------
<S> <C> <C>
Shares sold
Class A................. 3,040,580 6,288,477
Class B................. 663,944 816,632
Class C................. 58,309 138,497
---------- -----------
3,762,833 7,243,606
---------- -----------
Shares issued for
distributions
reinvested
Class A................. 2,077,505 14,045,849
Class B................. 53,416 330,049
Class C................. 4,583 35,656
---------- -----------
2,135,504 14,411,554
---------- -----------
Shares redeemed
Class A................. (7,025,387) (9,862,202)
Class B................. (184,814) (227,469)
Class C................. (50,295) (20,152)
---------- -----------
(7,260,496) (10,109,823)
---------- -----------
Increase (decrease) in
shares outstanding..... (1,362,159) 11,545,337
---------- -----------
</TABLE>
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
NOTE 6--FUND REORGANIZATION
On July 21, 1995, the shareholders approved the reorganization of the Fund to
a Delaware Business Trust and the election of fourteen trustees.
21
<PAGE>
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND INTERNATIONAL
Global Equity Fund
Global Government Securities
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Limited Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund
THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
22
<PAGE>
AMERICAN CAPITAL COMSTOCK FUND, INC.
BOARD OF DIRECTORS
J. MILES BRANAGAN
RICHARD E. CARUSO
ROGER HILSMAN
DON G. POWELL
DAVID REES
LAWRENCE J. SHEEHAN
FERNANDO SISTO*
WILLIAM S. WOODSIDE
*Chairman of the Board
OFFICERS
DON G. POWELL
President
CURTIS W. MORELL
Vice President and Treasurer
B. ROBERT BAKER
DENNIS J. MCDONNELL
RONALD A. NYBERG
ALAN T. SACHTLEBEN
PAUL R. WOLKENBERG
Vice Presidents
TANYA M. LODEN
Vice President and Controller
NORI L. GABERT
Vice President and Secretary
J. DAVID WISE
Vice President and Assistant Secretary
PERRY F. FARRELL
M. ROBERT SULLIVAN
Assistant Treasurers
HUEY P. FALGOUT, JR.
Assistant Secretary
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL ASSET MANAGEMENT, INC.
2800 Post Oak Blvd. Houston, Texas 77056
DISTRIBUTOR
VAN KAMPEN AMERICAN CAPITAL DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
SHAREHOLDER SERVICE AGENT
ACCESS INVESTOR SERVICES, INC.
P.O. Box 418256 Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK AND TRUST COMPANY
225 Franklin Street Boston, Massachusetts 02110
COUNSEL
O'MELVENY & MYERS
400 South Hope Street Los Angeles, California 90071
(C) Van Kampen American Capital Distributors, Inc., 1995 All rights reserved.
/SM/ denotes a service mark of Van Kampen American Capital Distributors, Inc.
This report is submitted for the general information of the shareholders of
the Fund. It is not authorized for distribution to prospective investors un-
less it has been preceded or is accompanied by an effective prospectus of the
Fund which contains additional information on how to purchase shares, the se-
lect charge, and other pertinent data.
23
<PAGE>
AMERICAN CAPITAL COMSTOCK FUND, INC.
THIS PAGE INTENTIONALLY LEFT BLANK
24
