<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................................................... 1
Portfolio of Investments.................................................... 3
Statement of Assets and Liabilities......................................... 4
Statement of Operations..................................................... 5
Statement of Changes in Net Assets.......................................... 6
Financial Highlights........................................................ 7
Notes to Financial Statements............................................... 9
</TABLE>
RES AR 7/95
<PAGE>
LETTER TO SHAREHOLDERS
DON G. POWELL
July 3, 1995
Dear Shareholder:
During the twelve-month period
covered by this report, June 1, 1994
through May 31, 1995, the Fund con-
tinued to benefit from rising short-
term interest rates, and was able to
provide shareholders with attractive
returns and investment stability.
MARKET OVERVIEW
In an effort to moderate economic growth and
keep inflation under control, the Federal Reserve Board raised the federal
funds rate (the rate banks charge each other for overnight loans) seven times
from February 1994 through February 1995. As a result, the fed funds rate dou-
bled from 3 percent to 6 percent, its highest level in three years. Likewise,
the yield on 3-month U.S. Treasury bills rose to 5.94 percent by the end of
February 1995. While this rising rate environment helped push yields on money
market securities higher, rising rates had a negative impact on bond and stock
investments. This was reflected in the increased flow of money into money mar-
ket funds, as many investors fled from more volatile domestic and foreign mar-
kets to short-term securities.
PERFORMANCE SUMMARY
We are pleased to report the Fund achieved a one-year total return of 4.43
percent, based on net asset value for the period ended May 31, 1995. We believe
this performance is competitive compared to the money market fund category av-
erage of 4.75 percent for the same period (as calculated by Lipper Analytical
Services). Moreover, during the past twelve months, the Fund provided share-
holders with returns that exceeded the rate of inflation, while at the same
time providing capital preservation.
In keeping with the Fund's disciplined investment approach, we continued to
focus on only the highest quality securities (those securities rated A-1 and P-
1 by Standard & Poor's Ratings Group and Moody's Investors Service). Since our
last report, we have significantly increased the Fund's holdings in commercial
paper from 13 percent of the portfolio on November 30, 1994, to 50 percent, as
of May 31, 1995. This portfolio shift has helped the Fund maintain an attrac-
tive yield level. The Fund's portfolio composition for the period is further
illustrated by the chart on the following page.
Fund shares are not guaranteed or insured by the U.S. Government, and there is
no assurance that the Fund will be able to maintain a stable net asset value of
$1.
(Continued on page two)
1
<PAGE>
LOGO
OUTLOOK
To date, inflation remains under control and recent economic data continues
to suggest a slowdown in the economy. Many analysts now expect gross domestic
product to grow at an annual rate between 1 and 2 percent in the second half of
this year. Should this scenario play out, we believe the Fed is more likely to
lower than raise short-term interest rates. As a result, the Fund has empha-
sized securities with longer maturities in order to take advantage of the cur-
rent interest rate environment and lock into higher yields. Going forward, the
Fund may increase its holdings in U.S. Government obligations, which typically
have provided additional yield potential and increased liquidity over other
short-term securities.
CORPORATE NEWS
As you may have already noticed, we have adopted a new design for our share-
holder reports that reflects our new identity as Van Kampen American Capital.
Going forward, we will continue to look for new ways to improve upon the pre-
sentation of information in your Fund's report.
In addition, we have developed a new corporate advertising campaign introduc-
ing Van Kampen American Capital and our wide range of investment opportunities
designed to help you build and preserve wealth. Full page ads appeared in The
Wall Street Journal in the first quarter of 1995--watch for more advertising
throughout the year.
We look forward to communicating with you on a regular basis, providing in-
formation about your Fund's performance, new investment opportunities, and our
newly created company. We appreciate your continued confidence in your invest-
ment with Van Kampen American Capital.
Sincerely,
/s/ Don G. Powell
Don G. Powell
Chairman
Van Kampen American Capital
Asset Management, Inc.
2
<PAGE>
See Notes to Financial Statements
PORTFOLIO OF INVESTMENTS
May 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COMMERCIAL PAPER 60.7%
$16,000 Associates Corp. of North America..... 6.230% 07/12/95 $ 15,886,133
15,000 Chevron Oil Finance Co................ 5.930% 06/26/95 14,936,083
10,000 Du Pont (E.I.) de Nemours............. 6.060% 06/27/95 9,955,150
18,000 General Electric Capital Corp......... 6.190% 07/24/95 17,837,190
19,000 General Electric Co................... 6.230% 09/05/95 18,689,250
6,300 Lilly (Eli) & Co...................... 6.000% 06/30/95 6,268,815
10,000 MetLife Funding, Inc.................. 5.960% 06/22/95 9,963,761
10,000 MetLife Funding, Inc.................. 6.000% 07/11/95 9,932,350
18,000 Pitney Bowes Credit Corp.............. 6.100% 06/12/95 17,963,880
9,000 Pitney Bowes, Inc..................... 5.960% 06/14/95 8,979,210
8,000 Prudential Funding Corp............... 6.230% 07/24/95 7,927,160
9,000 Prudential Funding Corp............... 6.230% 07/27/95 8,913,503
18,000 Raytheon Co........................... 5.970% 06/09/95 17,973,180
5,000 State Bank of New South Wales......... 6.250% 08/29/95 4,923,750
10,000 State Bank of New South Wales......... 6.260% 09/06/95 9,833,944
17,000 Toronto Dominion Holdings............. 5.990% 07/10/95 16,887,989
------------
TOTAL COMMERCIAL PAPER (Cost
$196,871,348)......................... 196,871,348
------------
REPURCHASE AGREEMENTS* 37.2%
SBC Capital Markets, Inc., dated
5/31/95, repurchase proceeds
65,000 $65,011,104.......................... 6.150% 06/01/95 65,000,000
State Street Bank & Trust Co., dated
5/31/95, repurchase proceeds
55,905 $55,914,512.......................... 6.125% 06/01/95 55,905,000
------------
TOTAL REPURCHASE AGREEMENTS
(Cost $120,905,000)................ 120,905,000
------------
UNITED STATES GOVERNMENT
OBLIGATIONS 24.6%
30,000 Federal Home Loan Banks............... 6.100% 06/01/95 29,994,917
25,000 Federal National Mortgage Association. 5.900% 06/02/95 24,991,819
25,000 Federal National Mortgage Association. 5.940% 08/09/95 24,715,625
------------
TOTAL UNITED STATES GOVERNMENT
OBLIGATIONS
(Cost $79,702,361)................ 79,702,361
------------
TOTAL INVESTMENTS (Cost $397,478,709) 122.5%................... 397,478,709
OTHER ASSETS AND LIABILITIES, NET (22.5%)...................... (73,020,170)
------------
NET ASSETS 100%................................................ $324,458,539
------------
</TABLE>
*Collateralized by U.S. Government obligations in a pooled cash account
3
<PAGE>
See Notes to Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at amortized cost................................... $397,478,709
Cash............................................................. 127,602
Receivable for Fund shares sold.................................. 786,579
Other assets..................................................... 43,829
------------
Total Assets.................................................... 398,436,719
------------
LIABILITIES
Payable for Fund shares redeemed................................. 73,417,480
Due to shareholder service agent................................. 162,280
Due to Adviser................................................... 138,975
Due to Distributor............................................... 87,995
Dividends payable................................................ 62,989
Deferred Directors' compensation................................. 60,138
Accrued expenses................................................. 48,323
------------
Total Liabilities............................................... 73,978,180
------------
NET ASSETS, equivalent to $1.00 per share for Class A, B and C
shares........................................................... $324,458,539
------------
NET ASSETS WERE COMPRISED OF:
Capital stock at par; 319,694,843 Class A, 4,189,806 Class B and
588,487 Class C shares outstanding.............................. $ 3,244,731
Capital surplus.................................................. 321,161,934
Undistributed net investment income.............................. 51,874
------------
NET ASSETS at May 31, 1995....................................... $324,458,539
------------
</TABLE>
4
<PAGE>
See Notes to Financial Statements
STATEMENT OF OPERATIONS
Year Ended May 31, 1995
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest........................................................... $22,971,502
-----------
EXPENSES
Management fees.................................................... 1,896,937
Shareholder service agent's fees and expenses...................... 1,495,213
Accounting services................................................ 100,666
Service fees--Class A.............................................. 611,646
Distribution and service fees--Class B............................. 3,845
Distribution and service fees--Class C............................. 526
Directors' fees and expenses....................................... 22,739
Audit fees......................................................... 21,525
Legal fees......................................................... 20,066
Reports to shareholders............................................ 58,845
Registration and filing fees....................................... 111,820
Miscellaneous...................................................... 13,559
-----------
Total expenses.................................................... 4,357,387
-----------
NET INVESTMENT INCOME.............................................. 18,614,115
-----------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................... $18,614,115
-----------
</TABLE>
5
<PAGE>
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31
--------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period.............. $ 463,827,313 $ 279,344,078
--------------- ---------------
Operations
Increase from net investment income.......... 18,614,115 7,722,464
--------------- ---------------
Distributions to shareholders from net
investment income
Class A..................................... (18,623,009) (7,713,417)
Class B..................................... (15,317) --
Class C..................................... (2,167) --
--------------- ---------------
(18,640,493) (7,713,417)
--------------- ---------------
Capital transactions
Proceeds from shares sold
Class A..................................... 3,148,142,161 2,733,962,738
Class B..................................... 21,754,203 --
Class C..................................... 3,049,049 --
--------------- ---------------
3,172,945,413 2,733,962,738
--------------- ---------------
Proceeds from shares issued for distributions
reinvested
Class A..................................... 18,623,009 7,713,418
Class B..................................... 15,317 --
Class C..................................... 2,167 --
--------------- ---------------
18,640,493 7,713,418
--------------- ---------------
Cost of shares redeemed
Class A..................................... (3,310,885,859) (2,557,201,968)
Class B..................................... (17,579,714) --
Class C..................................... (2,462,729) --
--------------- ---------------
(3,330,928,302) (2,557,201,968)
--------------- ---------------
Increase (decrease) in net assets resulting
from capital transactions................... (139,342,396) 184,474,188
--------------- ---------------
INCREASE (DECREASE) IN NET ASSETS............ (139,368,774) 184,483,235
--------------- ---------------
NET ASSETS, end of period.................... $ 324,458,539 $ 463,827,313
--------------- ---------------
</TABLE>
6
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each of the
periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
--------------------------------------
Year Ended May 31
--------------------------------------
1995 1994 1993 1992 1991
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
Income from operations
Investment income..................... .0535 .0329 .0353 .052 .0758
Expenses.............................. (.0101) (.0100) (.0109) (.0105) (.0094)
------ ------ ------ ------ ------
Net investment income.................. .0434 .0229 .0244 .0415 .0664
------ ------ ------ ------ ------
Distributions from net investment
income................................. (.0434) (.0229) (.0244) (.0415) (.0664)
------ ------ ------ ------ ------
Net asset value, end of period......... $ 1.00 $ 1.00 $ 1.00 $ 1.00 $ 1.00
------ ------ ------ ------ ------
TOTAL RETURN........................... 4.43% 2.32% 2.44% 4.20% 6.80%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions)... $319.7 $463.8 $279.3 $329.2 $402.3
Average net assets (millions).......... $434.4 $326.8 $306.7 $377.5 $482.6
Ratios to average net assets
Expenses.............................. 1.00% 1.03% 1.09% 1.05% .94%
Net investment income................. 4.28% 2.36% 2.44% 4.19% 6.68%
</TABLE>
7
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding throughout each of the
periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B Class C
------------------- -------------------
April 18, 1995(/1/) April 18, 1995(/1/)
through through
May 31, 1995 May 31, 1995
- ------------------------------------------------------------------------------
<S> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period.. $ 1.00 $ 1.00
------ ------
Income from investment operations
Investment income.................... .0073 .0076
Expenses............................. (.0026) (.0027)
------ ------
Net investment income................. .0047 .0049
------ ------
Distributions from net investment
income................................ (.0047) (.0049)
------ ------
Net asset value, end of period........ $ 1.00 $ 1.00
------ ------
TOTAL RETURN(/2/)..................... .47% .49%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions).. $4.2 $0.6
Average net assets (millions)......... $2.3 $0.3
Ratios to average net assets
(annualized)(/3/)
Expenses............................. 1.76% 1.76%
Net investment income................ 3.52% 3.52%
</TABLE>
(1) Commencement of operations
(2) Total return has not been annualized and does not consider the effect of
sales charges.
(3) Ratios based on the class of shares being in effect for the entire fiscal
year.
8
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
American Capital Reserve Fund, Inc. (the "Fund") is registered under the In-
vestment Company Act of 1940, as amended, as a diversified open-end management
investment company. The following is a summary of significant accounting poli-
cies consistently followed by the Fund in the preparation of its financial
statements.
A. INVESTMENT VALUATIONS-Investments are valued at amortized cost, which ap-
proximates market value. The cost of investments for federal income tax pur-
poses is substantially the same as for financial reporting purposes.
B. 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.
C. 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. Additionally, approximately $18,000 of fi-
nancial statement losses are deferred for federal income tax purposes to the
1996 fiscal year.
D. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME-Investment transac-
tions are accounted for on the trade date. Realized gains and losses on invest-
ments are determined on the basis of amortized cost. Interest income is accrued
daily.
E. DIVIDENDS-The Fund records daily dividends from net investment income. These
dividends are automatically reinvested in additional shares of the Fund at net
asset value. Shares purchased by daily reinvestments are liquidated at net as-
set value on the last business day of the month and the proceeds of such re-
demptions paid to the shareholders electing to receive dividends in cash. The
Fund distributes tax basis earnings in accordance with the minimum
9
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
distribution requirements of the Internal Revenue Code, which may differ from
generally accepted accounting principles. Such distributions may result in
dividends in excess of financial statement net investment income.
F. DEBT DISCOUNT AND PREMIUM-For financial and tax reporting purposes, all
discounts and premiums are amortized over the life of the security.
NOTE 2--MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager of the Fund. Management fees are cal-
culated monthly, based on the average daily net assets of the Fund at an an-
nual rate of .50% of the first $150 million; .45% of the next $100 million;
.40% of the next $100 million; and .35% of the amount in excess of $350 mil-
lion.
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. During the period,
these charges included $12,498 as the Fund's share of the employee costs at-
tributable to the Fund's accounting officers. A portion of the accounting
services expense was paid to the Adviser in reimbursement of personnel, facil-
ities and equipment costs attributable to the provision of accounting services
to the Fund. The services provided by the Adviser are at cost.
ACCESS Investors Services, Inc., an affiliate of the Adviser, serves as the
Fund's shareholder service agent. These services are provided at cost plus a
profit. During the period, such fees aggregated $1,266,690.
Under the Distribution Plans, each class of shares pays up to .15% per annum
of its average daily net assets to reimburse the Distributor for expenses and
service fees incurred. Class B and Class C shares pay an additional fee of up
to .75% per annum of their average daily net assets to reimburse Van Kampen
American Capital Distributors, Inc. (the "Distributor") for its distribution
expenses. Actual distribution expenses incurred by the Distributor for Class B
and Class C shares may exceed the amounts reimbursed to the Distributor by the
Fund. At the end of the period, the unreimbursed expenses incurred by the Dis-
tributor under the Class B and Class C plans aggregated approximately $9,000
and $3,000, respectively, and may be carried forward and reimbursed through
either the collection of the contingent deferred sales charges from share re-
demptions or, subject to the annual renewal of the plans, future Fund reim-
bursements of distribution fees.
Legal fees were for services rendered by O'Melveny & Myers, counsel 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 and the shareholder service agent.
10
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
NOTE 3-DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $1,440 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 $540. During the period, such fees aggregated $19,263.
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 by 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 4-CAPITAL
The Fund offers three classes of shares at their respective net asset values
per share. Class B and Class C shares are subject to a sales charge imposed at
the time of redemption on a contingent deferred basis. All classes of shares
have the same rights, except that Class B and Class C shares bear the cost of
distribution fees and certain other class specific expenses. Realized and
unrealized gains or losses, investment income and expenses (other than class
specific expenses) are allocated daily to each class of shares based upon the
relative proportion of net assets of each class. Class B and Class C shares
automatically convert to Class A shares six years and ten years after pur-
chase, respectively, subject to certain conditions. The offering of Class B
and Class C shares commenced April 18, 1995, at which time all previously out-
standing shares became Class A shares.
11
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
The Fund has 1 billion of Class A shares, and 500 million each of Class B
and Class C shares of $.01 par value capital stock authorized. Transactions in
shares of capital stock were as follows:
<TABLE>
<CAPTION>
Year Ended May 31
------------------------------
1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Shares sold
Class A........................................ 3,148,142,161 2,733,962,738
Class B........................................ 21,754,203 --
Class C........................................ 3,049,049 --
-------------- --------------
3,172,945,413 2,733,962,738
-------------- --------------
Shares issued for distributions reinvested
Class A........................................ 18,623,009 7,713,418
Class B........................................ 15,317 --
Class C........................................ 2,167 --
-------------- --------------
18,640,493 7,713,418
-------------- --------------
Shares redeemed
Class A........................................ (3,310,885,862) (2,557,202,100)
Class B........................................ (17,579,714) --
Class C........................................ (2,462,729) --
-------------- --------------
(3,330,928,305) (2,557,202,100)
-------------- --------------
Increase (decrease) in shares outstanding...... (139,342,399) 184,474,056
-------------- --------------
</TABLE>
12
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF DIRECTORS OF
AMERICAN CAPITAL RESERVE FUND, INC.
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the investment portfolio, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all ma-
terial respects, the financial position of American Capital Reserve Fund, Inc.
at May 31, 1995, and the results of its operations, the changes in its net as-
sets and the financial highlights for each of the fiscal periods presented, in
conformity with generally accepted accounting principles. These financial
statements and financial highlights (hereafter referred to as "financial
statements") are the responsibility of the Fund's management; our responsibil-
ity is to express an opinion on these financial statements based on our au-
dits. We conducted our audits of these financial statements in accordance with
generally accepted auditing standards which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial state-
ments are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement presenta-
tion. We believe that our audits, which included confirmation of securities at
May 31, 1995 by correspondence with the custodian, provide a reasonable basis
for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
June 30, 1995
13
<PAGE>
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND INTERNATIONAL
Govett Emerging Markets Fund
AC Global Equity Fund
Govett Global Government Income Fund
AC Global Government Securities
AC Global Managed Assets Fund
Govett International Equity Fund
Govett Latin America Fund
Govett Pacific Strategy Fund
VKM Short-Term Global Income Fund
VKM Strategic Income Fund
EQUITY
Growth
AC Emerging Growth Fund
AC Enterprise Fund
AC Pace Fund
Govett Smaller Companies Fund
Growth & Income
VKM Balanced Fund
AC Comstock Fund
AC Equity Income Fund
AC Growth and Income Fund
VKM Growth and Income Fund
AC Harbor Fund
AC Real Estate Securities Fund
VKM Utility Fund
AC Utilities Income Fund
FIXED INCOME
VKM Adjustable Rate U.S. Government Fund
AC Corporate Bond Fund
AC Federal Mortgage Trust
AC Government Securities
VKM High Yield Fund
AC High Yield Investments
VKM Money Market Fund
VKM Prime Rate Income Trust
AC Reserve Fund
VKM U.S. Government Fund
AC U.S. Government Trust for Income
TAX-FREE
VKM California Insured Tax Free Fund
VKM Florida Insured Tax Free Income Fund
VKM Insured Tax Free Income Fund
VKM Limited Term Municipal Income Fund
AC Municipal Bond Fund
VKM Municipal Income Fund
VKM New Jersey Tax Free Income Fund
VKM New York Tax Free Income Fund
VKM Pennsylvania Tax Free Income Fund
AC Tax-Exempt Trust
--High Yield Municipal Portfolio
--Insured Municipal Portfolio
VKM Tax Free High Income Fund
VKM Tax Free Money Fund
AC Texas Municipal Securities
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.
14
<PAGE>
AMERICAN CAPITAL RESERVE 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
DENNIS J. MCDONNELL
RONALD A. NYBERG
ROBERT C. PECK, JR.
DAVID R. TROTH
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.
2800 Post Oak Blvd.
Houston, Texas 77056
SHAREHOLDER SERVICE AGENT
ACCESS INVESTORS SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIANS
STATE STREET BANK AND TRUST CO.
225 Franklin Street
Boston, Massachusetts 02110
CITY NATIONAL BANK
Los Angeles, California
FIRST INTERSTATE BANK
Los Angeles, California
COUNSEL
O'MELVENY & MYERS
400 South Hope Street
Los Angeles, California 90071
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
(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. If used for distributions to prospec-
tive investors after 8/31/95, this annual report must be accompanied by an
American Capital Reserve Fund performance data update for the most recent
quarter.
15
<PAGE>
AMERICAN CAPITAL RESERVE FUND, INC.
THIS PAGE INTENTIONALLY LEFT BLANK
16
