<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Highlights........................ 4
Portfolio Management Review................. 5
Portfolio of Investments.................... 7
Statement of Assets and Liabilities......... 13
Statement of Operations..................... 14
Statement of Changes in Net Assets.......... 15
Financial Highlights........................ 16
Notes to Financial Statements............... 19
</TABLE>
COM SAR 8/96
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
January 30, 1996
Dear Shareholder,
As you may be aware, an agreement was reached in late June for VK/AC Hold-
ing, Inc., the parent company of Van Kampen American Capital Inc., to be ac-
quired by the Morgan Stanley Group Inc. While this announcement may appear
commonplace in an ever-changing financial industry, we believe it represents
an exciting opportunity for shareholders of our investment products.
With Morgan Stanley's global leadership in investment banking and asset man-
agement and Van Kampen American Capital's reputation for competitive long-term
performance and superior investor services, together we will offer a broader
range of investment opportunities and expertise.
The new ownership will not affect our commitment to pursuing excellence in
all aspects of our business. And, we expect very little change in the way your
mutual fund account is maintained and serviced.
A proxy will be mailed to you shortly explaining the acquisition and asking
for your vote of approval. Please read it carefully and return your response
for inclusion in the shareholder vote. We value our relationship with you and
look forward to communicating more details of this transaction, which is an-
ticipated to be completed in November.
ECONOMIC REVIEW
The economy demonstrated an acceleration in growth during the six-month re-
porting period. After a nominal 0.3 percent growth rate in the last quarter of
1995, GDP (the nation's gross domestic product) rose by 2.0 percent in this
year's first quarter. And, as anticipated, the economy grew 4.2 percent in the
second quarter, partly reflecting a recovery from the effects of labor strikes
earlier in the year and extreme weather conditions across the country. Upward
momentum has been assisted by consumer spending, as indicated by a 5.6 percent
rise in retail sales in the first five months of this year versus the compara-
ble 1995 period.
In the manufacturing sector, economic reports, such as the National Associa-
tion of Purchasing Managers Index, suggested a continued rebound in production
from last winter's lower levels. In June, this index reached its highest level
since early 1995. Strong levels of exports and a replenishing of inventories
have helped support this momentum.
Surprisingly healthy economic activity led to concerns that inflation may
rise and the Federal Reserve Board might tighten monetary policy. Inflation
remains modest, however, with consumer prices rising at about a 3 percent an-
nual rate over the past year. Meanwhile, the closely watched "core" Consumer
Price Index, which excludes volatile food and energy components, has risen
year over year at rates between 2.7 and 3.0 percent per year, with mid-1996
readings at a moderate 2.7 percent. In general, recent reports have suggested
an upward creep in labor-related costs, while indicating that prices of many
commodities have begun to decline.
1
<PAGE>
EQUITY MARKET REVIEW
The stock market averages posted attractive gains for the six-month period
ended June 30, 1996, with most major averages posting all-time highs. The Dow
Jones Industrial Average rose 10.9 percent from 5095 to 5654, and the NASDAQ
Composite Index rose 12.6 percent from 1052 to 1185.
Corporate earnings, which were an important contributor to last year's
strong stock market, continued to move ahead during the reporting period. Un-
expectedly strong economic activity helped lift reported profits above expec-
tations for the period. Through the rest of 1996, we expect earnings will be
supportive, but perhaps not the primary factor in the movement of the major
stock market averages.
OUTLOOK
We anticipate that reasonably strong economic growth will continue during
the balance of 1996, albeit at more moderate rates than the second quarter's
swift pace. While we expect rates of inflation to remain near current levels,
the Fed may begin to lean toward greater restraint in its monetary policy in
the coming months. That suggests an upward bias for short-term interest rates
and for yields on long-term bonds to remain steady at current levels.
Additional details about your Fund, including a question and answer section
with your portfolio management team, is provided in this report. We appreciate
your continued confidence in your investment with Van Kampen American Capital.
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, 1996
VAN KAMPEN AMERICAN CAPITAL COMSTOCK FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 10.14% 9.70% 9.70%
Six-month total return/2/............................ 3.79% 4.70% 8.70%
One-year total return/2/............................. 17.80% 19.01% 23.10%
Five-year average annual total return/2/............. 13.27% N/A N/A
Ten-year average annual total return/2/.............. 11.56% N/A N/A
Life-of-Fund average annual total return/2/.......... 11.90% 13.44% 14.35%
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
include 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 (A shares) or
contingent deferred sales charge for early withdrawal (B and 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 HIGHLIGHTS
VAN KAMPEN AMERICAN CAPITAL COMSTOCK FUND
TOP TEN HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
% AS OF
AS OF JUNE 30, 1996 SIX MONTHS AGO
<S> <C> <C>
U.S. Treasury Notes .......................... 5.2%................. N/A
Bristol-Myers Squibb Co. ..................... 2.8%................. 0.7%
WMX Technologies, Inc......................... 2.6%................. 3.1%
Unilever NV New York.......................... 2.2%................. N/A
DTE Energy Co................................. 1.8%................. N/A
Sonat, Inc.................................... 1.6%................. 0.9%
Panhandle Eastern Corp. ...................... 1.6%................. 1.0%
Boise Cascade Corp............................ 1.6%................. 0.7%
Browning-Ferris Industries, Inc. ............. 1.5%................. N/A
Mallinckrodt Group, Inc. ..................... 1.5%................. 1.3%
</TABLE>
N/A = Not Applicable
TOP FIVE PORTFOLIO HOLDINGS BY SECTOR
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
<S> <C>
Energy................ 16%
Utilities............. 14%
Finance............... 12%
Health Care........... 9%
Producer
Manufacturing........ 9%
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
<S> <C>
Energy............... 16%
Raw
Materials/Processing
Industries.......... 13%
Utilities............ 13%
Finance.............. 12%
Producer
Manufacturing....... 10%
</TABLE>
4
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL COMSTOCK FUND
We recently spoke with the management team of the Van Kampen American Capital
Comstock Fund about the key events and economic forces that shaped the markets
during the first half of the Fund's fiscal year. The team is led by B. Robert
Baker, Jr., portfolio manager, and Alan T. Sachtleben, executive vice president
for equity investments. The following excerpts reflect their views on the
Fund's performance during the six-month period ended June 30, 1996.
Q WHAT MARKET FACTORS HAD THE GREATEST INFLUENCE ON THE FUND'S PERFORMANCE
DURING THE SIX MONTHS ENDED JUNE 30, 1996?
A Two market factors broadly contributed to the Fund's performance. First,
expectations at the beginning of the year for a sluggish economy led to
significant undervaluation in cyclical stocks--securities of companies that are
very sensitive to economic activity. However, economic strength in the first
and second quarters caused cyclical stocks to outperform the market early in
the year. Second, relatively low oil and gas prices created undervaluations in
the energy sector, more specifically gas transmission, exploration and produc-
tion companies.
Q WHAT ADJUSTMENTS DID YOU MAKE TO THE PORTFOLIO IN ACCORDANCE WITH THESE
MARKET CONDITIONS?
A In January, the portfolio contained stocks of companies in industries
whose prospects were highly dependent on economic activity. Among the
Fund's greatest exposures were paper and forest products, chemicals, autos and
retail. Throughout March and April, stocks in these industries generally per-
formed very well. As valuations rose to more accurately reflect each company's
prospects, several holdings were either reduced or eliminated in order to real-
ize some attractive gains.
In the energy sector, the portfolio had broad exposure to each industry
grouping, including large international companies, producers, pipelines and oil
service companies. Unlike cyclical stocks, which were reduced in the first half
of the year, energy stocks were generally retained because they did not yet
fully reflect strengthening industry conditions. Please refer to page four for
Fund portfolio highlights.
Q HOW DID THE FUND PERFORM DURING THE SIX-MONTH PERIOD ENDED JUNE 30,
1996?
A Class A shares of the Fund achieved a total return at net asset value of
10.14 percent/1/ for the six-month period ended June 30, 1996. By compar-
ison, the Standard & Poor's 500-Stock Index generated a total return of 10.08
percent and the Lipper Growth and Income Fund Index returned 8.67 percent for
the same period. Keep in mind that the S&P 500 Index is a broad-based, unman-
aged index that reflects the general performance of the stock market and does
not reflect any commissions or fees that would be paid by an investor purchas-
ing the securities it represents. The Lipper Growth and Income Fund Index re-
flects the average performance of the largest equity income funds and does not
reflect any sales charges that would be paid by an investor purchasing the
funds it represents. Please refer to the chart on page three for additional
Fund performance results.
5
<PAGE>
Please see footnotes on page three
Q CAN YOU GIVE A FEW EXAMPLES OF SPECIFIC STOCKS THAT AIDED THE
PORTFOLIO'S PERFORMANCE DURING THE PAST SIX MONTHS?
A Retail stocks were extremely undervalued at the end of 1995. As retail
sales improved, stock prices rose sharply. Comstock shareholders bene-
fited from holdings during the period in Gap Stores, Dayton Hudson, Toys 'R'
Us, and Sears.
Top performers within the energy sector were related to natural gas, includ-
ing pipeline companies such as Sonat and Panenergy; production companies such
as Pogo Producing and Louisiana Land and Exploration, and the oil service com-
pany, Schlumberger.
Additionally, two other significant contributors to the portfolio's perfor-
mance were take- over targets. Caremark, one of the Fund's top ten holdings at
the beginning of the year, accepted a buyout offer at a substantial premium to
its existing stock price. Also, Varity--a smaller holding in the portfolio--was
sold at a large profit.
Q WHAT IS THE OUTLOOK FOR THE STOCK MARKET AND, MORE SPECIFICALLY, FOR THE
FUND THROUGHOUT THE NEXT SIX MONTHS?
A The stock market is overvalued based on historical measures of valuation
(such as price/earnings ratio). However, stock prices may continue to
climb if corporate profit growth continues without a meaningful acceleration in
inflation or interest rates. After the market's extended run-up, we expect some
volatility going forward. For this reason, we will continue to monitor key eco-
nomic indicators during this uncertain environment.
Q GIVEN THAT SOME MARKET VOLATILITY CAN BE EXPECTED, HOW DOES YOUR
INVESTMENT PHILOSOPHY SEEK TO MANAGE THE PORTFOLIO'S RISK?
A Our investment philosophy is reflected in the Fund's investment objec-
tive--to seek capital growth and income. We believe the key to consistent
performance centers on seeking to manage risk, thereby minimizing volatility.
There are several ways we seek to manage the portfolio's risk. First, the
Fund will normally be fully invested with 95 percent of its assets invested in
common stocks, on average, over the long-term. Staying in the market over the
long-term is expected to help to reduce the impact of short-term volatility and
increase return opportunities over time. Secondly, we maintain a broadly diver-
sified portfolio by investing in a variety of market sectors. Allocations in
each sector will vary according to relative valuations and opportunities.
Finally, in addition to maintaining a fully invested and broadly diversified
portfolio, we seek to manage risk by carefully monitoring specific company
characteristics such as average growth rates, price/earnings ratios and divi-
dend yields. Again, by looking at each stock for its long-term potential, we
tend to avoid the kind of knee jerk reaction to short-term market volatility
that can result in loss. We are confident our management style will serve us
well in the current environment.
/s/ Alan T. Sachtleben /s/ B. Robert Baker, Jr.
Alan T. Sachtleben B. Robert Baker, Jr.
Executive Vice President Portfolio Manager
Equity Investments
6
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description Shares (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 88.9%
CONSUMER DISTRIBUTION 3.8%
Alco Standard Corp........................................ 120,000 $ 5,430
Dayton Hudson Corp........................................ 40,000 4,125
Dillard Department Stores, Inc., Class A.................. 280,000 10,220
Federated Department Stores, Inc. (b)..................... 160,000 5,460
Kroger Co. (b)............................................ 200,000 7,900
Sears, Roebuck & Co....................................... 170,000 8,266
Toys R Us, Inc. (b)....................................... 130,000 3,705
Wal-Mart Stores, Inc...................................... 100,000 2,538
------------
47,644
------------
CONSUMER DURABLES 3.8%
Chrysler Corp............................................. 130,000 8,060
Cooper Tire & Rubber Co................................... 220,000 4,895
Daimler-Benz AG, --ADR (Germany).......................... 100,000 5,388
Fiat SpA,--ADR (Italy).................................... 300,000 5,100
General Motors Corp....................................... 90,000 4,714
Masco Corp................................................ 120,000 3,630
Maytag Co................................................. 240,000 5,010
Newell Co................................................. 210,000 6,431
Sunbeam-Oster, Inc........................................ 300,000 4,425
------------
47,653
------------
CONSUMER NON-DURABLES 7.2%
Anheuser-Busch Cos., Inc.................................. 80,000 6,000
Colgate-Palmolive Co...................................... 90,000 7,627
CPC International, Inc.................................... 36,000 2,592
Dial Corp................................................. 200,000 5,725
Heinz (H. J.) Co.......................................... 240,000 7,290
Kimberly Clark Corp....................................... 50,000 3,863
Philip Morris Cos., Inc................................... 100,000 10,400
Quaker Oats Co............................................ 70,000 2,389
RJR Nabisco Holdings Corp................................. 110,000 3,410
Sara Lee Corp............................................. 100,000 3,238
Tambrands, Inc............................................ 260,000 10,627
Unilever NV New York...................................... 180,000 26,122
------------
89,283
------------
CONSUMER SERVICES 4.6%
Cox Communications, Inc. (b).............................. 540,000 11,677
Gannett, Inc.............................................. 44,000 3,113
Harcourt General, Inc..................................... 200,000 10,000
International Game Technology............................. 220,000 3,713
New York Times Co., Class A............................... 110,000 3,589
Tele Communications, Class A (b).......................... 660,000 11,962
Time Warner, Inc.......................................... 240,000 9,420
Trump Hotels & Casino Resorts (b)......................... 140,000 3,990
------------
57,464
------------
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description Shares (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
ENERGY 14.7%
Amoco Corp................................................ 80,000 $ 5,790
Atlantic Richfield Co..................................... 32,000 3,792
British Petroleum PLC, --ADR (United Kingdom)............. 24,000 2,565
Burlington Resources, Inc................................. 100,000 4,300
Chevron Corp.............................................. 80,000 4,720
Coastal Corp.............................................. 290,000 12,107
El Paso Natural Gas Co.................................... 100,000 3,850
Enron Oil & Gas Co........................................ 100,000 2,788
Exxon Corp................................................ 72,000 6,255
J. Ray McDermott SA (b)................................... 260,000 6,565
Louisiana Land & Exploration.............................. 52,000 2,997
Mobil Corp................................................ 50,000 5,606
Noble Affiliates, Inc..................................... 110,000 4,153
Norsk Hydro, AS, --ADR (Norway)........................... 120,000 5,865
Occidental Petroleum Corp................................. 240,000 5,940
Pacific Enterprises....................................... 226,000 6,695
Panhandle Eastern Corp.................................... 560,000 18,410
Phillips Petroleum Co..................................... 88,000 3,685
Pogo Producing Co......................................... 150,000 5,719
Repsol SA, --ADR (Spain).................................. 250,000 8,687
Royal Dutch Petroleum, --ADR (Netherlands)................ 40,000 6,150
Schlumberger Ltd.......................................... 44,000 3,707
Seagull Energy Corp. (b).................................. 220,000 5,500
Shell Transport & Trading, --ADR (United Kingdom)......... 60,000 5,280
Sonat, Inc................................................ 420,000 18,900
Texaco, Inc............................................... 100,000 8,387
Total SA, --ADR (France).................................. 170,000 6,311
USX Marathon Group........................................ 220,000 4,428
YPF Sociedad Anonima, --ADR (Argentina)................... 160,000 3,600
------------
182,752
------------
FINANCE 11.7%
Aetna Life & Casualty Co.................................. 160,000 11,440
AFLAC, Inc................................................ 169,000 5,049
Allmerica Financial Corp.................................. 81,600 2,428
Allstate Corp............................................. 120,029 5,476
AMBAC, Inc................................................ 90,400 4,712
American Bankers Insurance Group.......................... 229,600 10,016
American General Corp..................................... 100,000 3,638
Argentaria SA, (Bancaria Espana)--ADR (Spain)............. 500,000 11,000
BankAmerica Corp.......................................... 80,000 6,060
Bankers Trust New York Corp............................... 54,000 3,989
</TABLE>
See Notes to Financial Statements
8
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description Shares (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
FINANCE (CONTINUED)
Bear Stearns Cos., Inc.................................... 388,500 $ 9,178
Chase Manhattan Corp...................................... 180,000 12,712
CIGNA Corp................................................ 29,000 3,418
Fleet Financial Group, Inc................................ 120,000 5,220
Franklin Resources, Inc................................... 120,000 7,320
Great Western Financial Corp.............................. 160,000 3,820
MBIA, Inc................................................. 108,000 8,411
Morgan (J.P.) & Co., Inc.................................. 140,000 11,848
PNC Financial Corp........................................ 120,000 3,570
Providian Corp............................................ 80,000 3,430
St. Paul Cos., Inc........................................ 100,000 5,350
SunAmerica, Inc........................................... 130,000 7,345
------------
145,430
------------
HEALTH CARE 8.5%
Abbott Laboratories....................................... 140,000 6,090
American Home Products Corp............................... 180,000 10,822
Astra AB Ser A,--ADR (Sweden)............................. 88,500 3,872
Bausch & Lomb, Inc........................................ 54,000 2,295
Bristol-Myers Squibb Co................................... 360,000 32,400
Johnson & Johnson......................................... 124,000 6,138
Mallinckrodt Group, Inc................................... 440,000 17,105
Merck & Co., Inc.......................................... 90,000 5,816
Schering-Plough Corp...................................... 82,000 5,146
Smithkline Beecham PLC,--ADR (United Kingdom)............. 68,000 3,698
Warner Lambert Co......................................... 220,000 12,100
------------
105,482
------------
PRODUCER MANUFACTURING 8.4%
Browning-Ferris Industries Inc............................ 620,000 17,980
Caterpillar, Inc.......................................... 54,000 3,659
Cooper Industries, Inc.................................... 100,000 4,150
Dover Corp................................................ 52,000 2,398
Fluor Corp................................................ 72,000 4,707
Foster Wheeler Corp....................................... 110,000 4,936
General Electric Co....................................... 120,000 10,380
Honeywell, Inc............................................ 70,000 3,815
Ingersoll-Rand Co......................................... 143,000 6,256
ITT Industries............................................ 50,000 1,256
Johnson Controls, Inc..................................... 34,000 2,363
Rockwell International Corp............................... 120,000 6,870
TRW, Inc.................................................. 50,000 4,494
WMX Technologies, Inc..................................... 920,000 30,130
------------
103,394
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description Shares (000)
- -------------------------------------------------------------------------------
<S> <C> <C>
RAW MATERIALS/PROCESSING INDUSTRIES 7.2%
Bethlehem Steel Corp. (b)................................. 560,000 $ 6,650
Betz Laboratories, Inc.................................... 140,000 6,143
Boise Cascade Corp........................................ 500,000 18,312
Champion International Corp............................... 86,000 3,591
Consolidated Papers Inc................................... 40,000 2,080
Crown Cork & Seal Co., Inc................................ 100,000 4,500
Dow Chemical Co........................................... 120,000 9,120
Du Pont (E.I.) de Nemours & Co., Inc...................... 40,000 3,165
Georgia Pacific Corp...................................... 64,000 4,544
International Paper Co.................................... 200,000 7,375
Lyondell Petrochemical Co................................. 380,000 9,167
Mead Corp................................................. 70,000 3,631
Temple Inland, Inc........................................ 72,000 3,366
Willamette Industries, Inc ............................... 120,000 7,140
------------
88,784
------------
TECHNOLOGY 5.4%
3Com Corp. (b)............................................ 50,000 2,287
Avnet, Inc................................................ 110,000 4,634
BMC Software, Inc. (b).................................... 50,000 2,987
Cadence Design Systems, Inc. (b).......................... 72,000 2,430
Cisco Systems, Inc. (b)................................... 70,000 3,964
Computer Associates International, Inc.................... 64,000 4,560
Ericsson (LM),--ADR (Sweden).............................. 120,000 2,580
Gateway 2000, Inc. (b).................................... 170,000 5,780
General Dynamics Corp..................................... 120,000 7,440
Intel Corp................................................ 54,000 3,966
International Rectifier Corp. (b)......................... 160,000 2,580
Lucent Technologies, Inc.................................. 90,385 3,423
Microsoft Corp. (b)....................................... 30,000 3,604
Motorola, Inc............................................. 78,000 4,904
Newbridge Networks Corp. (b).............................. 20,000 1,310
SCI Systems, Inc. (b)..................................... 72,000 2,925
Sunguard Data Systems, Inc. (b)........................... 183,000 7,343
------------
66,717
------------
TRANSPORTATION 0.4%
Illinois Central Corp..................................... 180,000 5,108
------------
UTILITIES 13.2%
360 Communications Co. (b)................................ 53,333 1,280
American Electric Power, Inc.............................. 56,000 2,387
Ameritech Corp............................................ 130,000 7,719
BellSouth Corp............................................ 130,000 5,509
</TABLE>
See Notes to Financial Statements
10
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description Shares (000)
- --------------------------------------------------------------------------------
<S> <C> <C>
UTILITIES (CONTINUED)
Carolina Power & Light Co.................................. 72,000 $ 2,736
Central & South West Corp.................................. 220,000 6,380
Cilcorp, Inc............................................... 56,000 2,394
DTE Energy Co.............................................. 680,000 20,995
Florida Progress Corp...................................... 100,000 3,475
FPL Group Inc.............................................. 160,000 7,360
Houston Industries, Inc.................................... 420,000 10,342
Idaho Power Co............................................. 250,000 7,781
Illinova Corp.............................................. 460,000 13,225
Minnesota Power & Light Co................................. 130,000 3,770
Northern States Power Co................................... 47,000 2,321
NYNEX Corp................................................. 240,000 11,400
Ohio Edison Co............................................. 48,000 1,050
Oklahoma Gas & Electric Co................................. 54,000 2,140
PacifiCorp................................................. 180,000 4,005
Peco Energy Co............................................. 140,000 3,640
Portland General Corp...................................... 320,000 9,880
Southwestern Public Service Co............................. 180,000 5,872
Sprint Corp................................................ 160,000 6,720
Tele Denmark A/S,--ADR (Denmark) (b)....................... 202,000 5,126
Telefonica de Espana, SA,--ADR (Spain)..................... 64,000 3,528
Texas Utilities Co......................................... 180,000 7,695
Unicom Corp................................................ 200,000 5,575
----------
164,305
----------
TOTAL COMMON STOCKS........................................ 1,104,016
----------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
Security Description (000)
- -------------------------------------------------------------------------------
<S> <C>
U.S. GOVERNMENT SECURITIES 4.8%
U.S. Treasury Note ($60,000,000 par, 6.50% coupon, 05/31/2001
maturity)......................................................... $ 60,019
----------
TOTAL LONG-TERM INVESTMENTS 93.7%
(Cost $1,050,000) (a)............................................. 1,164,035
----------
SHORT-TERM INVESTMENTS 6.1%
COMMERCIAL PAPER 1.2%
General Electric Capital Corp. ($15,000,000 par, yielding 5.56%,
07/01/96 maturity)............................................... 14,993
----------
U.S. GOVERNMENT AND GOVERNMENT AGENCY OBLIGATIONS 3.7%
Federal National Mortgage Association ($25,000,000 par, yielding
5.26%, 07/09/96 maturity)........................................ 24,967
Federal National Mortgage Association ($20,000,000 par, yielding
5.30%, 08/09/96 maturity)........................................ 19,883
U.S. Treasury Bills ($1,320,000 par, yielding 5.09%, 08/15/96
maturity)........................................................ 1,312
----------
46,162
----------
REPURCHASE AGREEMENT 1.2%
Bank of America Securities ($15,155,000 par collateralized by
U.S. Government obligations in a pooled cash account, dated
06/28/96, to be sold on 07/01/96 at $15,161,883)................. 15,155
----------
TOTAL SHORT-TERM INVESTMENTS 6.1%................................. 76,310
----------
OTHER ASSETS IN EXCESS OF LIABILITIES 0.2%........................ 2,122
----------
NET ASSETS 100.0%................................................. $1,242,467
----------
</TABLE>
(a) At June 30, 1996, cost for federal income tax purposes is $1,050,758,121,
the aggregate gross unrealized appreciation is $129,715,180 and the aggre-
gate gross unrealized depreciation is $16,438,086, resulting in net
unrealized appreciation of $113,277,094.
(b) Non-income producing security as this stock currently does not declare div-
idends.
See Notes to Financial Statements
12
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
All amounts, except for Maximum Offering Price information, reported in
thousands
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $1,050,681) (Note 1)............. $1,164,035
Short-Term Investments (Note 1)..................................... 76,310
Cash................................................................ 12
Receivables:
Securities Sold.................................................... 71,009
Fund Shares Sold................................................... 10,317
Dividends.......................................................... 2,441
Interest........................................................... 330
Other............................................................... 61
----------
Total Assets....................................................... 1,324,515
----------
LIABILITIES:
Payables:
Securities Purchased............................................... 78,080
Fund Shares Repurchased............................................ 2,580
Investment Advisory Fee (Note 2)................................... 499
Distributor and Affiliates (Notes 2 and 6)......................... 467
Income Distributions............................................... 212
Deferred Compensation and Retirement Plans (Note 2)................. 107
Accrued Expenses.................................................... 103
----------
Total Liabilities.................................................. 82,048
----------
NET ASSETS.......................................................... $1,242,467
----------
NET ASSETS CONSIST OF:
Capital (Note 3).................................................... $1,003,465
Accumulated Net Realized Gain on Securities......................... 124,982
Net Unrealized Appreciation on Securities........................... 113,354
Accumulated Undistributed Net Investment Income..................... 666
----------
NET ASSETS.......................................................... $1,242,467
----------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net assets
of $1,180,217,850 and 76,620,194 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 15.40
Maximum sales charge (5.75%* of offering price).................... .94
----------
Maximum offering price to public................................... $ 16.34
----------
Class B Shares:
Net asset value and offering price per share (Based on net assets
of $57,275,388 and 3,713,904 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 15.42
----------
Class C Shares:
Net asset value and offering price per share (Based on net assets
of $4,974,185 and 322,517 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 15.42
----------
</TABLE>
*On sales of $50,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
13
<PAGE>
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
All amounts reported in thousands
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Dividends............................................................. $ 13,891
Interest.............................................................. 2,200
--------
Total Income......................................................... 16,091
--------
EXPENSES:
Investment Advisory Fee (Note 2)...................................... 2,930
Distribution (12b-1) and Service Fees (Allocated to Classes A, B and C
of $1,134, $263 and $22, respectively) (Note 6)...................... 1,419
Shareholder Services (Note 2)......................................... 1,212
Custody (Note 1)...................................................... 39
Trustees Fees and Expenses (Note 2)................................... 33
Other ................................................................ 353
--------
Total Expenses....................................................... 5,986
Less: Earnings Credits on Cash Balances (Note 1)..................... 19
Expenses Reimbursed................................................ 7
--------
Net Expenses......................................................... 5,960
--------
NET INVESTMENT INCOME................................................. $ 10,131
--------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments.......................................................... $125,673
Futures.............................................................. 1,207
--------
Net Realized Gain on Securities....................................... 126,880
--------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period.............................................. 136,779
End of the Period:
Investments.......................................................... 113,354
--------
Net Unrealized Depreciation on Securities During the Period........... (23,425)
--------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES........................ $103,455
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS............................ $113,586
--------
</TABLE>
See Notes to Financial Statements
14
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1996 and the Year Ended December 31, 1995
(Unaudited)
All amounts reported in thousands
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
- ---------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income...................... $ 10,131 $ 18,223
Net Realized Gain on Securities............ 126,880 151,825
Net Unrealized Appreciation/Depreciation
on Securities During the Period........... (23,425) 140,846
---------- ----------
Change in Net Assets from Operations....... 113,586 310,894
---------- ----------
Distributions from Net Investment Income:
Class A Shares............................ (9,668) (18,342)
Class B Shares............................ (246) (354)
Class C Shares............................ (19) (31)
---------- ----------
(9,933) (18,727)
---------- ----------
Distributions from Net Realized Gain on
Securities:
Class A Shares............................ (34,411) (131,445)
Class B Shares............................ (1,586) (5,144)
Class C Shares............................ (110) (463)
---------- ----------
(36,107) (137,052)
---------- ----------
Total Distributions....................... (46,040) (155,779)
---------- ----------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................. 67,546 155,115
---------- ----------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold.................. 398,922 391,197
Net Asset Value of Shares Issued Through
Dividend Reinvestment...................... 42,448 143,243
Cost of Shares Repurchased................. (387,151) (464,773)
---------- ----------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS............................... 54,219 69,667
---------- ----------
TOTAL INCREASE IN NET ASSETS............... 121,765 224,782
NET ASSETS:
Beginning of the Period.................... 1,120,702 895,920
---------- ----------
End of the Period (Including undistributed
net investment income of $666 and $468,
respectively)............................. $1,242,467 $1,120,702
---------- ----------
</TABLE>
See Notes to Financial Statements
15
<PAGE>
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended December 31
Ended -------------------------------
Class A Shares June 30, 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period...................... $14.54 $12.40 $16.38 $17.30 $17.52
-------- -------- ------- ------ ------
Net Investment Income.......... .132 .26 .31 .32 .33
Net Realized and Unrealized
Gain/Loss on Securities....... 1.326 4.1125 (.92) 1.18 .795
-------- -------- ------- ------ ------
Total from Investment
Operations...................... 1.458 4.3725 (.61) 1.50 1.125
-------- -------- ------- ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income........................ .130 .27 .3225 .2975 .3275
Distributions from Net Realized
Gain on Securities............ .465 1.9625 3.0475 2.1225 1.0175
-------- -------- ------- ------ ------
Total Distributions............. .595 2.2325 3.37 2.42 1.345
-------- -------- ------- ------ ------
Net Asset Value, End of the
Period.......................... $15.403 $14.54 $12.40 $16.38 $17.30
-------- -------- ------- ------ ------
Total Return (a)................ 10.14%* 36.16% (3.67%) 9.09% 6.53%
Net Assets at End of the Period
(In millions)................... $1,180.2 $1,071.4 $871.6 $980.4 $959.0
Ratio of Expenses to Average Net
Assets (b) (c).................. .96% .96% 1.01% .96% .87%
Ratio of Net Investment Income
to Average Net
Assets (c)..................... 1.74% 1.82% 1.93% 1.82% 1.84%
Portfolio Turnover.............. 97%* 151% 136% 50% 36%
</TABLE>
*Non-Annualized
(a) Total Return is based upon Net Asset Value which does not include payment
of maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratios of Expenses
are based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
(c) The Ratios of Expenses and Net Investment Income to Average Net Assets
were not affected by the assumption of certain expenses by VKAC.
See Notes to Financial Statements
16
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 19, 1992
Six Months December 31 (Commencement
Ended --------------------- of Distribution) to
Class B Shares June 30, 1996 1995 1994 1993 December 31, 1992
- -----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $14.56 $12.42 $16.40 $17.30 $17.62
------- ------ ------ ------ ------
Net Investment Income.. .073 .14 .16 .18 .03
Net Realized and
Unrealized
Gain/Loss on
Securities............ 1.324 4.1125 (.905) 1.192 .9225
------- ------ ------ ------ ------
Total from Investment
Operations.............. 1.397 4.2525 (.745) 1.372 .9525
------- ------ ------ ------ ------
Less:
Distributions from and
in Excess of Net
Investment Income..... .070 .15 .1875 .1495 .29
Distributions from Net
Realized
Gain on Securities.... .465 1.9625 3.0475 2.1225 .9825
------- ------ ------ ------ ------
Total Distributions..... .535 2.1125 3.235 2.272 1.2725
------- ------ ------ ------ ------
Net Asset Value, End of
the Period.............. $15.422 $14.56 $12.42 $16.40 $17.30
------- ------ ------ ------ ------
Total Return (a)........ 9.70%* 34.99% (4.41%) 8.25% 4.66%*
Net Assets at End of the
Period (In millions).... $57.3 $45.2 $22.0 $13.9 $0.8
Ratio of Expenses to
Average Net Assets (b)
(c).................... 1.78% 1.79% 1.84% 1.76% 1.88%
Ratio of Net Investment
Income to Average Net
Assets (c)............. .94% .96% 1.12% 1.04% .74%
Portfolio Turnover...... 97%* 151% 136% 50% 36%
</TABLE>
*Non-Annualized
(a) Total Return is based upon Net Asset Value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratios of Expenses
are based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
(c) The Ratios of Expenses and Net Investment Income to Average Net Assets
were not affected by the assumption of certain expenses by VKAC.
See Notes to Financial Statements
17
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended October 26, 1993
Six Months December 31 (Commencement
Ended ------------- of Distribution) to
Class C Shares June 30, 1996 1995 1994 December 31, 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period............... $14.56 $12.41 $16.39 $18.16
------- ------ ------ ------
Net Investment Income...... .078 .15 .18 .02
Net Realized and Unrealized
Gain/Loss on Securities... 1.320 4.1125 (.925) .1425
------- ------ ------ ------
Total from Investment
Operations.................. 1.398 4.2625 (.745) .1625
------- ------ ------ ------
Less:
Distributions from and in
Excess of
Net Investment Income..... .070 .15 .1875 .065
Distributions from Net
Realized
Gain on Securities........ .465 1.9625 3.0475 1.8675
------- ------ ------ ------
Total Distributions......... .535 2.1125 3.235 1.9325
------- ------ ------ ------
Net Asset Value, End of the
Period...................... $15.423 $14.56 $12.41 $16.39
------- ------ ------ ------
Total Return (a)............ 9.70%* 35.11% (4.43%) 1.11%*
Net Assets at End of the
Period (In millions)........ $5.0 $4.1 $2.3 $0.5
Ratio of Expenses to Average
Net Assets (b) (c).......... 1.78% 1.79% 1.85% 1.93%
Ratio of Net Investment
Income to
Average Net Assets (c)..... .94% .97% 1.15% .78%
Portfolio Turnover.......... 97%* 151% 136% 50%
</TABLE>
*Non-Annualized
(a) Total Return is based upon Net Asset Value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) Beginning with the year ended December 31, 1995, the Ratios of Expenses
are based upon Total Expenses which does not reflect credits earned on
overnight cash balances. (Note 1)
(c) The Ratios of Expenses to Average Net Assets and Net Investment Income to
Average Net Assets were not affected by the assumption of certain expenses
by VKAC.
See Notes to Financial Statements
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Comstock Fund (the "Fund") is organized as a Dela-
ware business trust and is registered as a diversified open-end investment
management company under the Investment Company Act of 1940, as amended. The
Fund's investment objective is capital growth and income through investments
in common and preferred stock, and debt securities convertible into common and
preferred stock. The Fund commenced investment operations on October 7, 1968.
The distribution of the Fund's Class B and Class C shares commenced on October
19, 1992 and October 26, 1993, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The prep-
aration of financial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of con-
tingent assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
A. SECURITY VALUATION-Investments in securities listed on a securities ex-
change are valued at their sale price as of the close of such securities ex-
change. Investments in securities not listed on a securities exchange are
valued at the mean between the last reported bid and asked price or, if not
available, their fair value as determined by the Board of Trustees. Fixed in-
come investments are stated at values using market quotations or, if such val-
uations are not available, estimates obtained from yield data relating to
instruments or securities with similar characteristics in accordance with pro-
cedures established in good faith by the Board of Trustees. Short-term securi-
ties with remaining maturities of less than 60 days are valued at amortized
cost.
B. SECURITY TRANSACTIONS-Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Fund may purchase and sell securities on a "when issued" or "delayed de-
livery" basis, with settlement to occur at a later date. The value of the se-
curity so purchased is subject to market fluctuations during this period. The
Fund will maintain, in a segregated account with its custodian, assets having
an aggregate value at least equal to the amount of the when issued or delayed
delivery purchase commitments until payment is made. At June 30, 1996, there
were no when issued or delay delivery purchase commitments.
A repurchase agreement is a short-term investment in which the Fund acquires
ownership of a debt security and the seller agrees to repurchase the security
at a future time and specified price. The Fund may invest independently in re-
purchase agreements, or transfer
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
uninvested cash balances into a pooled cash account along with other invest-
ment companies advised by Van Kampen American Capital Asset Management, Inc.
(the "Adviser"), the daily aggregate of which is invested in repurchase agree-
ments. Repurchase agreements are collateralized by the underlying debt securi-
ty. The Fund will make payment 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 maintain the value of the underlying security at not
less than the repurchase proceeds due the Fund.
C. INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis.
The Fund accounts for discounts and premiums on the same basis as is used
for federal income tax reporting. Accordingly, original issue discounts on
debt securities purchased are amortized over the life of the security. Premi-
ums on debt securities are not amortized. Market discounts are recognized at
the time of sale as realized gains for book purposes and ordinary income for
tax purposes.
D. FEDERAL INCOME TAXES-It is the Fund's policy to comply with the require-
ments of the Internal Revenue Code applicable to regulated investment compa-
nies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
Net realized gains or losses may differ for financial and tax reporting pur-
poses primarily as a result of the deferral of losses for tax purposes result-
ing from wash sales.
E. DISTRIBUTION OF INCOME AND GAINS-The Fund declares and pays dividends quar-
terly from net investment income. Net realized gains, if any, are distributed
annually. Distributions from net realized gains for book purposes may include
short-term capital gains and gains on option and futures transactions. All
short-term capital gains and a portion of option and futures gains are in-
cluded in ordinary income for tax purposes.
F. EXPENSE REDUCTIONS-During the six months ended June 30, 1996, the Fund's
custody fee was reduced by approximately $19,000 as a result of credits earned
on overnight cash balances.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide facilities and investment advice to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- --------------------------------------------------------------------------------
<S> <C>
First $1 billion.................................................... .50 of 1%
Next $1 billion..................................................... .45 of 1%
Next $1 billion..................................................... .40 of 1%
Over $3 billion..................................................... .35 of 1%
</TABLE>
For the six months ended June 30, 1996, the Fund recognized expenses of ap-
proximately $124,300 representing Van Kampen American Capital Distributors,
Inc.'s or its affiliates' (collectively "VKAC") cost of providing accounting
services to the Fund. These services are provided by VKAC at cost.
ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months
ended June 30, 1996, the Fund recognized expenses of approximately $1,034,600,
representing ACCESS' cost of providing transfer agency and shareholder serv-
ices plus a profit.
Additionally, for the six months ended June 30, 1996, the Fund reimbursed
VKAC approximately $50,600 related to the cost of consolidating the VKAC open-
end fund complex. The reimbursement represents savings realized by the Fund as
a result of the consolidation.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers
of VKAC.
The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer
all or a portion of their compensation to a later date. The retirement plan
covers those trustees who are not officers of VKAC.
At June 30, 1996, VKAC owned 42,299 Class A shares, 53 Class B shares and 46
Class C shares.
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of common shares, Classes A, B and C
each with a par value of $.01 per share. There are an unlimited number of
shares of each class authorized.
At June 30, 1996, capital aggregated $942,725,966, $55,788,493 and
$4,950,385 for Classes A, B, and C, respectively. For the six months ended
June 30, 1996, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A........................................... 25,262,791 $ 382,944,499
Class B........................................... 937,347 14,221,228
Class C........................................... 115,882 1,756,786
----------- -------------
Total Sales........................................ 26,316,020 $ 398,922,513
----------- -------------
Dividend Reinvestment:
Class A........................................... 2,717,506 $ 40,629,082
Class B........................................... 113,596 1,698,246
Class C........................................... 8,080 120,961
----------- -------------
Total Dividend Reinvestment........................ 2,839,182 $ 42,448,289
----------- -------------
Repurchases:
Class A........................................... (25,037,490) $(379,269,602)
Class B........................................... (438,283) (6,630,813)
Class C........................................... (81,971) (1,250,501)
----------- -------------
Total Repurchases.................................. (25,557,744) $(387,150,916)
----------- -------------
</TABLE>
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
At December 31, 1995, capital aggregated $898,421,987, $46,499,832 and
$4,323,139 for Classes A, B and C, respectively. For the year ended December
31, 1995, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A........................................... 24,488,433 $368,647,727
Class B........................................... 1,425,692 20,613,898
Class C........................................... 133,213 1,934,822
----------- -------------
Total Sales........................................ 26,047,338 $ 391,196,447
----------- -------------
Dividend Reinvestment:
Class A........................................... 9,655,233 $ 137,771,277
Class B........................................... 352,915 5,064,571
Class C........................................... 28,402 407,205
----------- -------------
Total Dividend Reinvestment........................ 10,036,550 $ 143,243,053
----------- -------------
Repurchases:
Class A........................................... (30,776,686) $(457,375,508)
Class B........................................... (446,399) (6,474,496)
Class C........................................... (67,640) (922,733)
----------- -------------
Total Repurchases.................................. (31,290,725) $(464,772,737)
----------- -------------
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). The CDSC for Class B and
C shares will be imposed on most redemptions made within six years of the pur-
chase for Class B and one year of the purchase for Class C as detailed in the
following schedule. The Class B and C shares bear the expense of their respec-
tive deferred sales arrangements, including higher distribution and service
fees and incremental transfer agency costs.
23
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C>
First........................................................... 5.00% 1.00%
Second.......................................................... 4.00% None
Third........................................................... 3.00% None
Fourth.......................................................... 2.50% None
Fifth........................................................... 1.50% None
Sixth and Thereafter............................................ None None
</TABLE>
For the six months ended June 30, 1996, VKAC, as Distributor for the Fund,
received commissions on sales of the Fund's Class A shares of approximately
$97,600 and CDSC on redeemed shares of approximately $57,400. Sales charges do
not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $1,092,377,001 and
$1,112,323,773, respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of
its portfolio or generate potential gain. All of the Fund's portfolio hold-
ings, including derivative instruments, are marked to market each day with the
change in value reflected in the unrealized appreciation/depreciation on secu-
rities. Upon disposition, a realized gain or loss isrecognized accordingly.
During the period, the Fund invested in futures contracts, a type of deriva-
tive. A futures contract is an agreement involving the delivery of a particu-
lar asset on a specified future date at an agreed upon price. The Fund
generally invests in stock index futures. These contracts are generally used
to provide the return of an index without purchasing all of the securities un-
derlying the index or as a substitute for purchasing specific securities.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
Upon entering into futures contracts, the Fund maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the
value of the contract (the variation margin). The cost of securities acquired
through delivery under a contract is adjusted by the unrealized gain or loss
on the contract.
Transactions in futures contracts for the six months ended June 30, 1996,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- --------------------------------------------------------------------------------
<S> <C>
Outstanding at December 31, 1995..................................... -0-
Futures Opened....................................................... 240
Futures Closed....................................................... (240)
----
Outstanding at June 30, 1996......................................... -0-
----
</TABLE>
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 and a service plan (col-
lectively the "Plans"). The Plans govern payments for the distribution of the
Fund's shares, ongoing shareholder services and maintenance of shareholder ac-
counts.
Annual fees under the Plans of up to .25% of Class A shares and 1.00% each
of Class B and Class C shares are accrued daily. Included in these fees for
the six months ended June 30, 1996, are payments to VKAC of approximately
$218,600.
25
<PAGE>
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
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
Intermediate 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 1-800-341-2911 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
26
<PAGE>
VAN KAMPEN AMERICAN CAPITAL COMSTOCK FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
DONALD C. MILLER - Co-Chairman
JACK E. NELSON
DON G. POWELL*
JEROME L. ROBINSON
FERNANDO SISTO - Co-Chairman
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE
OFFICERS
DON G. POWELL*
President and Chief Executive Officer
DENNIS J. MCDONNELL*
Executive Vice President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TONYA M. LODEN*
Controller
WILLIAM N. BROWN*
PETER W. HEGEL*
ROBERT C. PECK, JR.*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents
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 SERVICING AGENT
ACCESS INVESTORSERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANKAND TRUST CO.
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
*"Interested" persons of the Fund, as de-
fined in the
Investment Company Act of 1940.
(C)Van Kampen American Capital Distribu-
tors, Inc., 1996
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
sales charge, and other pertinent data.
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