<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>
HAR 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 HARBOR FUND, INC.
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 12.00% 11.56% 11.50%
Six-month total return/2/............................ 5.54% 6.56% 10.50%
One-year total return/2/............................. 5.79% 6.37% 10.32%
Five-year average annual total return/2/............. 7.78% N/A N/A
Ten-year average annual total return/2/.............. 9.54% N/A N/A
Life-of-Fund average annual total return/2/.......... 9.48% 7.59% 2.66%
Commencement Date.................................... 11/15/56 12/20/91 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 HARBOR FUND, INC.
The following is an interview with the management team of American Capital
Harbor Fund. The team is led by James Behrmann, 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 ris-
ing during the previous six-month period. As rates declined, the trend
generated renewed enthusiasm among investors. The stock and bond markets ral-
lied, in a broad-based recovery that was led by the technology sector. Both
the decline in rates and the rally in stocks helped the Fund's performance.
The Fund also benefited from its "bottom-up" stock-picking philosophy, which
emphasizes picking securities that should do well because of the underlying
fundamentals of the issuer rather than specific economic conditions.
Q. WHAT INDUSTRIES PERFORMED WELL DURING THE PAST YEAR?
A. Our bottom-up approach led us to buy many stocks in the technology, paper
and the airline industries, with the technology sector leading the mar-
ket. Whether we look at the performance for a three-month, six-month or one-
year period, technology stocks continued 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 sizable portion of the Fund's assets in-
vested in technology. Technology names include Texas Instruments, LSI Logic
and Motorola, all semiconductor companies. These companies benefited from the
explosion in personal computers and cellular communications. Technology cer-
tainly was the place to be in the first half of the year.
In the paper industry, Champion International benefited from the significant
price increases in newsprint and uncoated freesheet. Because these prices were
at a 50-year low just three years ago, we think prices could increase further
from this point. Utilization rates are very high in the industry, while little
capacity is being added.
[PIE CHART OF PORTFOLIO HOLDINGS BY INDUSTRY AS OF JUNE 30, 1995 APPEARS HERE.]
Energy - 13%
Raw Materials/Processing Industries - 7%
Producer Manufacturing - 5%
Technology - 11%
Consumer Durables - 3%
Consumer Non-Durables - 7%
Consumer Distribution - 4%
Consumer Services - 13%
Finance - 17%
Utilities - 9%
Health Care - 4%
Other - 7%
4
<PAGE>
Similarly, capacity growth has slowed significantly in the airline industry.
Fare wars have diminished. Traffic is up. Until this changes, we will have ex-
posure to the airline industry. The chart on page four shows the diversifica-
tion of the portfolio as of June 30, 1995.
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
12.00 percent/1/, including reinvestment of dividends totaling $0.300 per
share and a capital gains distribution of $0.015 per share. By comparison, 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 in-
vestor purchasing the securities it represents. In addition, the S&P 500 is
comprised solely of equity securities, while your Fund invests in both equity
and fixed-income securities. (Please refer to the chart on page three for addi-
tional Fund performance.)
Q. WHAT'S THE OUTLOOK FOR THE FUND IN THE NEXT SIX MONTHS?
A. The performance of the stock market during the balance 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 cor-
porate 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 securities
that should do well regardless of changes in interest and economic growth
rates. We will continue to focus on companies in the technology, airlines, pa-
per and financial services industries, as part of our continuing strategy to be
defensive and income oriented.
/s/ Alan T. Sachtleben /s/ James Behrmann
- ------------------------ ------------------------
Alan T. Sachtleben James Behrmann
Executive Vice President Portfolio Manager
Equity Investments
Please see footnotes on page three.
5
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CONVERTIBLE CORPORATE
OBLIGATIONS 57.9%
CONSUMER DISTRIBUTION 4.1%
$ 2,200 Danka Business Systems............ 6.750% 04/01/02 $ 2,304,500
3,900 Federated Department Stores, Inc.. ** 02/15/04 3,929,250
2,300 Pier 1 Imports, Inc............... 6.875 04/01/02 2,300,000
12,500 Rite Aid Corp., LYON.............. ** 07/24/06 6,015,625
4,700 Waban, Inc........................ 6.500 07/01/02 4,277,000
--------------
TOTAL CONSUMER DISTRIBUTION....... 18,826,375
--------------
CONSUMER DURABLES 2.7%
2,600 American Group.................... 6.250 06/15/03 2,392,000
2,550 Gencorp, Inc...................... 8.000 08/01/02 2,454,375
4,250 Mascotech, Inc.................... 4.500 12/15/03 3,107,813
4,675 Pacific Dunlop.................... 6.750 07/02/97 4,663,312
--------------
TOTAL DURABLES.................... 12,617,500
--------------
CONSUMER NON-DURABLES 4.2%
1,900 Alberto Culver Co................. 5.500 06/30/05 1,895,250
3,400 American Brands, Inc.............. 7.625 03/05/01 3,519,000
2,850 Far East Textiles................. 4.000 10/07/06 3,206,250
5,100 Grand Metropolitian, PLC.......... 6.500 01/31/00 5,444,250
5,350 S. A. B. Finance.................. 7.500 08/02/98 5,376,750
--------------
TOTAL NON-DURABLES................ 19,441,500
--------------
CONSUMER SERVICES 10.9%
7,800 ADT Operations, Inc., LYON........ ** 07/06/10 3,051,750
8,500 Discovery Zone, Inc., LYON........ ** 10/14/13 2,847,500
4,465 Enquirer Star, Inc................ ** 05/15/97 3,661,300
9,600 News American Holdings, LYON...... ** 03/11/13 4,560,000
4,038 Prime Hospitality Corp............ 7.000 04/15/02 4,199,520
5,950 Rogers Communications, LYON....... ** 05/20/13 2,023,000
11,503 Time Warner, Inc.................. 8.750 01/10/15 12,035,379
21,700 Time Warner, Inc., LYON........... ** 12/17/12 7,242,375
12,550 Turner Broadcasting, LYON......... ** 02/13/07 5,396,500
3,470 Wendy's International, Inc........ 7.000 04/01/06 5,291,750
--------------
TOTAL CONSUMER SERVICES........... 50,309,074
--------------
ENERGY 7.8%
1,725 Amoco Petroleum Co., Canada....... 7.375 09/01/13 2,182,125
4,750 Ashland, Inc...................... 6.750 07/01/14 4,678,750
4,650 Consolidated Natural Gas Co....... 7.250 12/15/15 4,859,250
15,300 Halliburton Co., LYON............. ** 03/13/06 8,089,875
5,000 Noble Affiliates, Inc............. 4.250 11/01/03 4,737,500
6,500 SFP Pipeline Holdings............. 11.163 08/15/10 8,229,302
7,705 USX-Marathon Group, LYON.......... ** 08/09/05 3,544,300
--------------
TOTAL ENERGY...................... 36,321,102
--------------
</TABLE>
See Notes to Financial Statements
6
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FINANCE 9.4%
$ 2,740 Aegon, N V........................ 4.750% 11/01/04 $ 3,411,300
Alexander & Alexander Services,
9,637 Inc............................... 11.000 04/15/07 9,805,647
132 Allstate Corp..................... 6.760 04/15/98 5,391,498
2,000 Central International............. 10.000 08/07/96 1,140,000
4,250 Fifth Third Bancorp............... 4.250 01/15/98 4,281,875
3,000 HD Finance........................ 6.750 06/01/00 2,985,000
6,420 Henderson Capital International... 4.500 10/27/96 6,420,000
3,200 Statesman Group, Inc.............. 6.250 05/01/03 3,248,000
3,400 Swiss Re Insurance................ 2.000 07/06/00 3,068,500
1,460 Trenwick Group, Inc............... 6.000 12/15/99 1,474,600
United Companies Financial,
55 PRIDES............................ 6.750 07/01/00 2,472,293
--------------
TOTAL FINANCE..................... 43,698,713
--------------
HEALTH CARE 3.7%
11,750 Alza Corp., LYON.................. ** 07/14/14 4,472,344
4,750 Ivax Corp......................... 6.500 11/15/01 4,631,250
8,500 Roche Holdings, Inc., LYON ....... ** 04/20/10 3,368,125
4,500 United Technologies............... ** 09/08/97 4,680,000
--------------
TOTAL HEALTHCARE.................. 17,151,719
--------------
PRODUCER MANUFACTURING 2.5%
3,938 Cooper Industries, Inc............ 7.050 01/01/15 4,110,287
1,500 Samsung Electrics................. 5.000 12/31/09 1,552,500
5,900 Valhi, Inc., LYON................. ** 10/20/07 2,050,250
4,617 WMX Technologies.................. 2.000 01/24/05 3,884,051
--------------
TOTAL PRODUCER MANUFACTURING...... 11,597,088
--------------
RAW MATERIALS/PROCESSING
INDUSTRIES 1.3%
4,900 Freeport McMoran, Inc............. 6.550 01/15/01 4,557,000
1,390 Repap Enterprises, Inc............ 8.500 08/01/97 1,598,500
--------------
TOTAL RAW MATERIALS/PROCESSING
INDUSTRIES........................ 6,155,500
--------------
TECHNOLOGY 7.6%
3,000 Altera Corp....................... 5.750 06/15/02 3,153,750
1,645 Arrow Electronics, Inc............ 5.750 10/15/02 2,385,250
13,850 AST Research, Inc., LYON.......... ** 12/14/13 4,570,500
1,250 First Financial Management........ 5.000 12/15/99 1,650,000
3,300 Integrated Devices Technology..... 5.500 06/01/02 3,465,000
734 LSI Logic Corp.................... 5.500 03/15/01 2,319,440
5,950 Motorola, Inc., LYON ............. ** 09/27/13 4,819,500
51 Salomon Inc., ELKS................ 5.000 11/01/96 5,124,167
5,100 Silicon Graphics, Inc. ........... ** 11/02/13 3,340,500
1,600 Texas Instruments, Inc............ 2.750 09/29/02 2,584,537
1,500 3 Com Corp........................ 10.250 11/01/01 1,916,250
--------------
TOTAL TECHNOLOGY.................. 35,328,894
--------------
</TABLE>
See Notes to Financial Statements
7
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Principal
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TRANSPORTATION 0.6%
$ 2,550 AMR Corp.......................... 6.125% 11/01/24 $ 2,652,000
--------------
UTILITIES 3.1%
3,435 LDDS Communications............... 5.000 08/15/03 3,314,775
7,375 Potomac Electric Power, Co........ 5.000 09/01/02 6,379,375
43 Sprint Corp....................... 8.250 03/30/00 1,476,875
10,500 U S Cellular Corp., LYON.......... ** 06/15/15 3,307,500
--------------
TOTAL UTILITIES................... 14,478,525
--------------
TOTAL CONVERTIBLE CORPORATE
OBLIGATIONS
(Cost $256,557,226).............. 268,577,990
--------------
<CAPTION>
Number
of Shares
(000)
- ---------
<C> <S> <C> <C> <C>
COMMON STOCK 17.1%
CONSUMER NON-DURABLES 2.3%
47 Nabisco Holdings Corp, Class A..................... 1,255,500
75 Philip Morris Companies, Inc....................... 5,578,125
33 Procter & Gamble Co................................ 2,371,875
30 Ralston-Ralston Purina Group....................... 1,530,000
--------------
TOTAL CONSUMER NON-DURABLES........................ 10,735,500
--------------
CONSUMER SERVICES 0.8%
40 Disney (Walt) Co................................... 2,225,000
38 Time Warner, Inc................................... 1,562,750
--------------
TOTAL CONSUMER SERVICES............................ 3,787,750
--------------
ENERGY 2.7%
70 Exxon Corp......................................... 4,943,750
32 Royal Dutch Petroleum.............................. 3,900,000
55 Texaco, Inc........................................ 3,609,375
--------------
TOTAL ENERGY....................................... 12,453,125
--------------
FINANCE 0.5%
53 Chase Manhattan Corp............................... 2,491,000
--------------
PRODUCER MANUFACTURING 1.5%
93 Rockwell International Corp........................ 4,254,750
57 Tenneco, Inc....................................... 2,607,096
--------------
TOTAL PRODUCER MANUFACTURING....................... 6,861,846
--------------
RAW MATERIALS/PROCESSING INDUSTRIES 2.0%
89 Champion International Corp........................ 4,639,125
30 Grace (W R) & Co................................... 1,841,250
55 Imperial Chemical Industries....................... 2,681,250
--------------
TOTAL RAW MATERIALS/PROCESSING INDUSTRIES.......... 9,161,625
--------------
</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> <C> <C>
TECHNOLOGY 1.9%
Compaq Computer
*62 Corp................ $ 2,813,250
International
Business Machines
34 Corp................ 3,264,000
Lockheed Martin
40 Corp................ 2,525,000
--------------
TOTAL TECHNOLOGY.... 8,602,250
--------------
UTILITIES 5.4%
50 Ameritech Corp...... 2,200,000
35 Bellsouth Corp...... 2,222,500
158 CMS Energy Group.... 3,890,750
70 GTE Corp............ 2,388,750
223 Illinova Corp....... 5,658,625
MCI Communications
115 Corp................ 2,530,000
National Power,
133 ADR................. 1,639,688
131 Powergen, PLC, ADR.. 1,592,013
67 Southern Co......... 1,499,125
*60 Worldcom, Inc....... 1,620,000
--------------
TOTAL UTILITIES..... 25,241,451
--------------
TOTAL COMMON STOCK
(Cost $72,286,964).. 79,334,547
--------------
CONVERTIBLE
PREFERRED
STOCK 17.5%
CONSUMER NON-
DURABLES 0.6%
75 ConAgra, Inc........ 2,653,125
--------------
CONSUMER
SERVICES 1.6%
SCI Finance Llc,
120 6.25%............... 7,314,300
--------------
ENERGY 2.1%.........
Occidental
87 Petroleum........... 4,959,000
Snyder Oil Corp,
60 $1.50............... 1,192,900
Williams Companies,
62 $3.50............... 3,780,700
--------------
TOTAL ENERGY........ 9,932,600
--------------
FINANCE 7.1%
American General
128 Corp. MIPS, 6.00%... 6,614,063
35 Citicorp, $5.375.... 5,502,750
Conseco, Inc.,
96 $3.25............... 4,188,000
Great Western,
57 $4.375.............. 3,343,550
92 Kemper Co, $2.875... 4,522,700
Roosevelt Financial
39 Group, $3.25........ 2,515,500
Sovereign Bancorp,
*85 $3.125.............. 4,579,375
St Paul Companies,
35 MIPS, 6.00%......... 1,802,625
--------------
TOTAL FINANCE....... 33,068,563
--------------
</TABLE>
See Notes to Financial Statements
9
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares
(000) Description Market Value
- ------------------------------------------------------------
<C> <S> <C>
PRODUCER
MANUFACTURING 0.8%
Browning-Ferris
Industries, Inc., $7.25,
52 ACES...................... $ 1,887,050
Jardine Strategic
1,700 Holdings, 7.50%........... 1,836,000
--------------
TOTAL PRODUCER
MANUFACTURING............. 3,723,050
--------------
RAW MATERIALS/PROCESSING
INDUSTRIES 3.6%
Boise Cascade Corp.,
120 $1.58..................... 4,005,000
Bowater, Inc., PRIDES,
130 7.00%..................... 4,907,500
Freeport McMoran C&G,
215 $1.25..................... 4,649,375
63 Owens Corning, $3.25...... 3,213,000
--------------
TOTAL RAW
MATERIALS/PROCESSING
INDUSTRIES................ 16,774,875
--------------
TECHNOLOGY 1.7%
General Motors Corp.,
121 $3.25..................... 7,623,000
--------------
TOTAL CONVERTIBLE
PREFERRED STOCK (Cost
$74,700,805).............. 81,089,513
--------------
<CAPTION>
Principal
Amount
(000)
---------
<C> <S> <C>
COMMERCIAL PAPER 4.1%
Associates Corp. of North
America, 6.15%, 07/03/95
$18,755 (Cost $18,745,388)........ 18,745,388
--------------
TOTAL INVESTMENTS (Cost
$422,290,383) 96.6%................. 447,747,438
OTHER ASSETS AND LIABILITIES,
NET 3.4%............................ 15,880,080
--------------
NET ASSETS 100%..................... $ 463,627,518
--------------
</TABLE>
*Non income producing security
**zero coupon bond
ACES--automatically convertible equity securities
ELKS--equity linked securities, traded in shares
LYON--liquid yield option note
MIPS--monthly income paying security
PRIDES--preferred redeemable increased dividend equity security
See Notes to Financial Statements
10
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
ASSETS
<TABLE>
<S> <C>
Investments, at market value (Cost $422,290,383).............. $ 447,747,438
Cash.......................................................... 2,958,309
Receivable for investments sold............................... 26,050,718
Dividends and interest receivable............................. 4,372,835
Receivable for Fund shares sold............................... 181,573
Other assets.................................................. 5,088
----------------
Total Assets................................................. 481,315,961
----------------
LIABILITIES
Payable for investments purchased............................. 15,374,071
Payable for Fund shares redeemed.............................. 919,977
Dividends payable............................................. 582,214
Due to Distributor............................................ 304,538
Due to Adviser................................................ 207,980
Due to shareholder service agent.............................. 103,000
Deferred Directors' compensation.............................. 51,994
Accrued expenses and liabilities.............................. 144,669
----------------
Total Liabilities............................................ 17,688,443
----------------
Net assets, equivalent to $14.50 per share for Class A ,
$14.46 per share for Class B and $14.52 per share for Class C
shares....................................................... $ 463,627,518
----------------
NET ASSETS WERE COMPRISED OF:
Capital stock, at par; 26,522,998 Class A, 5,232,391 Class B
and 229,546
Class C shares outstanding................................... $ 31,984,935
Capital surplus............................................... 401,592,408
Undistributed net realized gain on securities................. 1,941,916
Net unrealized appreciation of securities..................... 25,457,055
Undistributed net investment income........................... 2,651,204
----------------
NET ASSETS.................................................... $ 463,627,518
----------------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENT OF OPERATIONS
Six Months Ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest...................................................... $ 10,114,495
Dividends..................................................... 3,654,092
----------------
Investment income............................................ 13,768,587
----------------
EXPENSES
Management fees............................................... 1,223,726
Shareholder service agent's fees and expenses................. 423,050
Accounting services........................................... 54,588
Service fees--Class A......................................... 377,749
Distribution and service fees--Class B........................ 367,065
Distribution and service fees--Class C........................ 16,640
Directors' fees and expenses.................................. 10,097
Audit fees.................................................... 22,100
Custodian fees................................................ 230
Legal fees.................................................... 6,295
Reports to shareholders....................................... 109,720
Registration and filing fees.................................. 48,479
Miscellaneous................................................. 23,580
----------------
Total expenses............................................... 2,683,319
----------------
NET INVESTMENT INCOME........................................ 11,085,268
----------------
REALIZED AND UNREALIZED GAIN ON SECURITIES
Net realized gain on securities............................... 3,840,846
Net unrealized appreciation of securities during the period... 36,276,614
----------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES............... 40,117,460
----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............. $ 51,202,728
----------------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Year Ended
Ended December 31,
June 30, 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period................... $444,133,746 $493,332,696
------------ ------------
Operations
Net investment income............................ 11,085,268 20,268,466
Net realized gain on securities.................. 3,840,846 3,548,005
Net unrealized appreciation (depreciation) of se-
curities during the period...................... 36,276,614 (55,725,504)
------------ ------------
Increase (decrease) in net assets resulting from
operations...................................... 51,202,728 (31,909,033)
------------ ------------
Distributions to shareholders from
Net investment income
Class A.......................................... (8,063,003) (17,430,212)
Class B.......................................... (1,263,555) (2,534,008)
Class C.......................................... (55,174) (108,062)
------------ ------------
(9,381,732) (20,072,282)
------------ ------------
Net realized gain on securities
Class A.......................................... (409,604) (3,000,509)
Class B.......................................... (78,159) (527,033)
Class C.......................................... (3,498) (20,463)
------------ ------------
(491,261) (3,548,005)
------------ ------------
Excess of book-basis net realized gain on securi-
ties (see Note 1F)
Class A.......................................... -- (6,103,576)
Class B.......................................... -- (1,072,081)
Class C.......................................... -- (41,626)
------------ ------------
-- (7,217,283)
------------ ------------
Total distributions.............................. (9,872,993) (30,837,570)
------------ ------------
Capital transactions
Proceeds from shares sold
Class A.......................................... 7,376,191 74,987,593
Class B.......................................... 3,915,404 30,149,379
Class C.......................................... 288,333 3,699,355
------------ ------------
11,579,928 108,836,327
------------ ------------
Proceeds from shares issued for distributions re-
invested
Class A.......................................... 6,595,931 21,238,092
Class B.......................................... 1,079,402 3,463,734
Class C.......................................... 38,825 114,241
------------ ------------
7,714,158 24,816,067
------------ ------------
Cost of shares redeemed
Class A.......................................... (33,373,770) (105,939,736)
Class B.......................................... (7,191,717) (12,924,220)
Class C.......................................... (564,562) (1,240,785)
------------ ------------
(41,130,049) (120,104,741)
------------ ------------
Increase (decrease) in net assets resulting from
capital transactions............................. (21,835,963) 13,547,653
------------ ------------
INCREASE (DECREASE) IN NET ASSETS................. 19,493,772 (49,198,950)
------------ ------------
NET ASSETS, end of period......................... $463,627,518 $444,133,746
------------ ------------
</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 Year Ended December 31
Ended ------------------------------------------
June 30, 1995 1994 1993 1992 1991 1990
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PER SHARE OPERATING PER-
FORMANCE
Net asset value, begin-
ning of period......... $13.24 $15.12 $14.95 $14.92 $12.93 $14.05
------ ------- ------ ------- ------ -------
Income from operations
Investment income...... .43 .78 .85 .90 .955 1.115
Expenses............... (.07) (.15) (.16) (.15) (.13) (.12)
------ ------- ------ ------- ------ -------
Net investment income... .36 .63 .69 .75 .825 .995
Net realized and
unrealized gains or
losses on securities... 1.215 (1.5625) 1.365 .6275 2.085 (1.1525)
------ ------- ------ ------- ------ -------
Total from investment
operations............. 1.575 (.9325) 2.055 1.3775 2.91 (.1575)
------ ------- ------ ------- ------ -------
Less distributions from
Net investment income.. (.30) (.62) (.66) (.84) (.92) (.87)
Net realized gains on
securities............ (.015) (.108) (1.225) (.5075) -- (.0925)
Excess of book-basis
net realized gain on
securities (see Note
1F)................... -- (.2195) -- -- -- --
------ ------- ------ ------- ------ -------
Total distributions..... (.315) (.9475) (1.885) (1.3475) (.92) (.9625)
------ ------- ------ ------- ------ -------
Net asset value, end of
period................. $14.50 $ 13.24 $15.12 $ 14.95 $14.92 $ 12.93
------ ------- ------ ------- ------ -------
TOTAL RETURN (/1/)...... 12.00% (6.43%) 13.56% 9.63% 23.08% (1.23%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of pe-
riod (millions)........ $384.7 $369.7 $432.3 $394.1 $385.5 $336.9
Average net assets (mil-
lions)................. $377.7 $402.1 $419.1 $381.6 $356.4 $359.6
Ratios to average net
assets (annualized)
Expenses............... 1.03% 1.04% 1.02% .99% .91% .89%
Net investment income.. 5.03% 4.39% 4.37% 5.00% 5.86% 7.29%
Portfolio turnover rate. 78% 105% 134% 85% 91% 71%
</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(/1/)
----------------------------------------------
Six Months Year Ended December 31
Ended -------------------------------
June 30, 1995 1994 1993(/2/) 1992(/2/)
- --------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C> <C>
Net asset value, beginning of
period........................ $13.20 $15.07 $14.90 $14.91
------ -------- ------- -------
Income from operations
Investment income............. .43 .77 .83 .87
Expenses...................... (.13) (.26) (.27) (.275)
------ -------- ------- -------
Net investment income.......... .30 .51 .56 .595
Net realized and unrealized
gains or losses on securities. 1.215 (1.5505) 1.375 .63
------ -------- ------- -------
Total from investment
operations.................... 1.515 (1.0405) 1.935 1.225
------ -------- ------- -------
Less distributions from
Net investment income......... (.24) (.502) (.54) (.7275)
Net realized gains on securi-
ties......................... (.015) (.108) (1.225) (.5075)
Excess of book-basis net real-
ized gain on securities (see
Note 1F)..................... -- (.2195) -- --
------ -------- ------- -------
Total distributions............ (.255) (.8295) (1.765) (1.235)
------ -------- ------- -------
Net asset value, end of period. $14.46 $ 13.20 $ 15.07 $ 14.90
------ -------- ------- -------
TOTAL RETURN (/3/)............. 11.56% (7.11%) 12.68% 8.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions).................... $75.6 $71.1 $60.1 $20.0
Average net assets (millions).. $73.4 $69.7 $40.1 $7.9
Ratios to average net assets
(annualized)
Expenses...................... 1.83% 1.84% 1.73% 1.88%
Net investment income......... 4.23% 3.63% 3.62% 4.08%
Portfolio turnover rate........ 78% 105% 134% 85%
</TABLE>
(1) Sales of Class B shares commenced on December 20, 1991 at a net asset value
of $14.32 per share. At December 31, 1991, there were 15,738 Class B shares
outstanding with a per share net asset value of $14.91. The increase in net
asset value was due principally to unrealized appreciation; there were no
dividends or distributions paid during the period. Other financial
highlights for the Class B shares for this short period are not presented
as they are not meaningful.
(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
------------------------------------------
October 26,
Six Months 1993(/1/)
Ended Year Ended through
June 30, December 31, December 31,
1995 1994 1993(/2/)
- -------------------------------------------------------------------------------
PER SHARE OPERATING PERFORMANCE
<S> <C> <C> <C>
Net asset value, beginning of
period............................ $13.25 $ 15.13 $ 16.14
------ -------- --------
Income from operations
Investment income................. .44 .78 .22
Expenses.......................... (.13) (.26) (.07)
------ -------- --------
Net investment income.............. .31 .52 .15
Net realized and unrealized gains
or losses on securities........... 1.215 (1.5705) (.0325)
------ -------- --------
Total from investment operations... 1.525 (1.0505) .1175
------ -------- --------
Less distributions from
Net investment income............. (.24) (.502) (.125)
Net realized gains on securities.. (.015) (.108) (1.0025)
Excess of book-basis net realized
gain on securities (see Note 1F). -- (.2195) --
------ -------- --------
Total distributions................ (.255) (.8295) (1.1275)
------ -------- --------
Net asset value, end of period..... $14.52 $ 13.25 $ 15.13
------ -------- --------
TOTAL RETURN (/3/)................. 11.50% (7.14%) .93%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions)........................ $3.3 $3.3 $1.1
Average net assets (millions)...... $3.3 $2.8 $0.7
Ratios to average net assets
(annualized)
Expenses.......................... 1.83% 1.84% 1.90%
Net investment income............. 4.22% 3.72% 3.88%
Portfolio turnover rate............ 78% 105% 134%
</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
The American Capital Harbor Fund, Inc. (the "Fund") is registered under the
Investment Company Act of 1940, as amended, as a diversified open-end manage-
ment investment company. The following is a summary of significant accounting
policies consistently followed by the Fund in the preparation of its financial
statements.
A. INVESTMENT VALUATIONS-Securities 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 most
recent bid price, except unlisted convertible securities, which are valued at
the higher of their bid price or the value of the securities issuable on con-
version.
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.
Fund investments include lower rated debt securities which may be more sus-
ceptible to adverse economic conditions than other investment grade holdings.
These securities are often subordinated to the prior claims of other senior
lenders and uncertainties exist as to an issuer's ability to meet principal
and interest payments. Debt securities rated below investment grade and compa-
rable unrated securities represented approximately 27% of the investment port-
folio at the end of the period.
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
market price of investments. There is also a risk that the market movement of
such instruments may not be in the direction forecasted.
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. A portion of these funds are held as collateral
in an account in the name of the broker, the Fund's agent in acquiring the
futures position. 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 in-
curred, variation margin payments are received from or made to the broker.
Upon the closing or cash settlement of a contract, gains or losses are real-
ized. The cost of securities acquired through delivery under a contract is ad-
justed by the unrealized gain or loss on the contract.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
C. REPURCHASE AGREEMENTS-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 in-
vest independently in repurchase agreements, or transfer uninvested cash bal-
ances into a pooled cash account along with other investment companies advised
by Van Kampen American Capital Asset Management, Inc. (the "Adviser"), the
daily aggregate of which is invested in repurchase agreements. Repurchase
agreements are collateralized by the underlying debt security. 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 re-
quired to maintain the value of the underlying security at not less than the
repurchase proceeds 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. It is anticipated that no distribution of
capital gains will be made until tax basis capital loss carryforwards, if any,
expire or are offset by net realized capital gains to its shareholders.
Additionally, approximately $1.8 million of post October losses are deferred
for federal income tax purposes to the 1995 fiscal year.
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 OR PREMIUM-The Fund accounts for discounts and premiums on
the same basis as is used for federal income tax reporting. Accordingly, orig-
inal issue debt discounts 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.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
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 .55% of the first $350 million, .50% of the next $350 million, .45% of the
next $350 million, and .40% of the amount in excess of $1.05 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 $8,251 as the Fund's share of the employee costs attributable
to the Fund's accounting officers. A portion of the accounting services ex-
pense was paid to the Adviser in reimbursement of personnel, 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 period, the fees for these services aggregated $352,302.
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, each class of shares pays up to .25% per annum
of their average net assets to reimburse the Distributor for expenses and
service fees incurred. The Class B and Class C shares pay an additional fee of
up to .75% per annum of their average daily net assets to reimburse the Dis-
tributor for its distribution expenses. Actual distribution expenses incurred
by the Distributor for Class B and Class C shares may exceed the amounts reim-
bursed 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 approximately $2.7 million and $48,000, 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 $6,269 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 $324,109,972 and $316,485,765,
respectively.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
For federal income tax purposes, the identified cost of investments owned at
the end of the period was the same as for financial reporting purposes. Gross
unrealized appreciation of investments aggregated $28,768,168 and gross
unrealized depreciation of investments aggregated $3,311,113.
NOTE 4--DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $1,420 plus a fee of $35 per day for Board and Com-
mittee meetings attended. The Chairman receives additional fees from the Fund
at the annual rate of $530. During the period, such fees aggregated $8,857.
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 a time of redemption on a contingent deferred basis
(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. Class B and Class C shares automati-
cally convert to Class A shares six years and ten years after purchase, re-
spectively, subject to certain conditions. 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.
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
(Unaudited)
- -------------------------------------------------------------------------------
The Fund has 200 million of each class of shares of $1.00 par value 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................. 533,879 5,205,597
Class B................. 284,367 2,088,330
Class C................. 19,992 256,253
---------- ----------
838,238 7,550,180
---------- ----------
Shares issued for
distributions reinvested
Class A................. 471,368 1,510,729
Class B................. 77,363 248,107
Class C................. 2,771 8,217
---------- ----------
551,502 1,767,053
---------- ----------
Shares redeemed
Class A................. (2,403,300) (7,381,835)
Class B................. (520,706) (919,838)
Class C................. (39,645) (89,612)
---------- ----------
(2,963,651) (8,391,285)
---------- ----------
Increase (decrease) in
shares outstanding....... (1,573,911) 925,948
---------- ----------
</TABLE>
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 Fund
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 HARBOR 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
JAMES H. BEHRMANN
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, IL 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
sales charge, and other pertinent data.
23
<PAGE>
AMERICAN CAPITAL HARBOR FUND, INC.
THIS PAGE INTENTIONALLY LEFT BLANK
24
