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AMERICAN CAPITAL TAX-EXEMPT TRUST
SUPPLEMENT DATED MAY 12, 1995 TO PROSPECTUS DATED APRIL 3, 1995
On May 11, 1995, the Trustees of American Capital Tax-Exempt Trust (the
"Trust") approved an Agreement and Plan of Reorganization between the Insured
Municipal Portfolio of the Trust (the "American Capital Portfolio") and the Van
Kampen Merritt Insured Tax Free Income Fund, a sub-trust of the Van Kampen
Merritt Tax Free Fund (the "Van Kampen Fund"), a fund advised by Van Kampen
American Capital Investment Advisory Corp., providing for the transfer of assets
and liabilities of the American Capital Portfolio to the Van Kampen Fund in
exchange for shares of beneficial interest of the Van Kampen Fund at its net
asset value per share (the "Reorganization").
Van Kampen American Capital Investment Advisory Corp. and Van Kampen American
Capital Asset Management, Inc., the investment adviser to the American Capital
Portfolio, are wholly owned subsidiaries of Van Kampen American Capital, Inc.,
which is a wholly owned subsidiary of VK/AC Holding, Inc.
The Reorganization is subject to approval by the holders of a majority of the
outstanding shares of the American Capital Portfolio. Further details of the
proposed Reorganization will be contained in the proxy statement/prospectus
expected to be mailed to shareholders in July, 1995.
The Van Kampen Fund had assets of $1,222.3 million on March 31, 1995. Its
objective is to seek to provide high current income exempt from federal income
taxes consistent with liquidity and safety of principal primarily through
investment in a diversified portfolio of insured municipal securities. The
American Capital Portfolio and the Van Kampen Fund have similar investment
objectives and follow generally similar investment policies.
The American Capital Portfolio will continue its normal operations prior to
the Reorganization.
