<PAGE>
TABLE OF CONTENTS
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders................................ 1
Performance Results................................... 3
Portfolio Highlights.................................. 4
Performance in Perspective............................ 5
Portfolio Management Review........................... 6
Portfolio of Investments.............................. 9
Statement of Assets and Liabilities................... 21
Statement of Operations............................... 22
Statement of Changes in Net Assets.................... 23
Financial Highlights.................................. 24
Notes to Financial Statements......................... 27
Report of Independent Accountants..................... 31
</TABLE>
HYM ANR 1/97
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
DENNIS J. MCDONNELL AND DON G. POWELL
January 10, 1997
Dear Shareholder,
As you may already be aware, an agreement was reached in late June for VK/AC
Holding Inc., the parent company of Van Kampen American Capital, Inc., to be
acquired by Morgan Stanley Group Inc. This transaction was completed in Octo-
ber.
The combination of Morgan Stanley's global leadership in investment banking
and asset management and Van Kampen American Capital's reputation for competi-
tive long-term performance and superior investor services has created a world-
class company offering an extensive range of investment opportunities and
expertise.
More importantly, we expect the new ownership arrangement to strengthen our
commitment in 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. Similarly, the investment practices and policies of your Fund remain
unchanged.
ECONOMIC OVERVIEW
Throughout the year, municipal bond prices reacted to changes in the strength
of the nation's economic activity. On a number of occasions, reports of sur-
prisingly healthy economic growth led to concerns that inflation might rise
and spur the Federal Reserve Board to react by raising short-term interest
rates.
This was particularly true during the year's second quarter, when the economy
grew at an annualized rate of 4.7 percent. This strong growth was attributed
in part to a rebound from the aftermath of the General Motors strike earlier
in the year, an end to the budget stalemate between the White House and Con-
gress, and extreme weather conditions in many parts of the country. But data
released in late October indicated that real GDP (gross domestic product, ad-
justed for inflation) growth had slowed to a 2.0 percent annual rate in the
third quarter, sparking a rally in bond prices.
In general, inflation remains modest, with consumer prices rising at about a 3
percent annual rate during the past year. This rate is in line with the
closely watched "core" Consumer Price Index (which excludes the volatile food
and energy price components), which has risen year over year at annual rates
between 2.7 and 3.0 percent. Nevertheless, inflationary pressures exerted by
labor-related costs, which have crept upward in recent months, may yet come
into play in the near term.
ECONOMIC OUTLOOK
The third-quarter slowdown of the economy shifted the market's attention from
excessive growth--as was the case during the summer--to the possibility of
further slowing, or even recession. With the election results maintaining the
political status quo--a Democrat in the White House and Republicans control-
ling both houses of Congress-- investors may be taking comfort in the expecta-
tion that Fed policy will likely be on hold for the near term.
1
Continued on page two
<PAGE>
Nevertheless, we anticipate that reasonably strong economic growth will con-
tinue into 1997, and our analysis suggests that an acceleration in economic
growth is possible in the first half of 1997.
Bond market performance will hinge on several key factors, including GDP
growth, the rate of inflation, and the Federal Reserve Board's reaction to
these indicators. Still, we anticipate that bonds will remain within the trad-
ing range established over the past several months, perhaps with a slightly
bullish bias. 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
1997. This suggests that short-term interest rates could trend upward and
yields on long-term bonds could remain steady at around current levels.
As always, we appreciate your continued confidence in your Fund's portfolio
management team. We look forward to capitalizing on the combination of the tal-
ents and resources of Morgan Stanley and 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 NOVEMBER 30, 1996
VAN KAMPEN AMERICAN CAPITAL HIGH YIELD MUNICIPAL FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
One-year total return
based on NAV/1/..................................... 6.47% 5.67% 5.68%
One-year total return/2/............................ 1.39% 1.68% 4.68%
Five-year average
annual total return/2/.............................. 6.97% N/A N/A
Ten-year average
annual total return/2/.............................. 6.56% N/A N/A
Life-of-Fund average
annual total return/2/.............................. 6.90% 6.26% 5.74%
Commencement date................................... 01/02/86 07/20/92 12/10/93
DISTRIBUTION RATES AND YIELD
Distribution rate/3/................................ 6.28% 5.84% 5.85%
Taxable-equivalent distribution rate/4/............. 9.81% 9.13% 9.14%
SEC Yield/5/........................................ 5.59% 5.12% 5.10%
</TABLE>
N/A = Not Applicable
/1/Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (4.75% for A shares) or contingent
deferred sales charge for early withdrawal (4% 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 shares and C shares).
/3/Distribution rate represents the monthly annualized distributions of the Fund
at the end of the period and not the earnings of the Fund.
/4/Taxable-equivalent calculations reflect a federal income tax rate of 36%.
/5/SEC Yield is a standardized calculation prescribed by the Securities and
Exchange Commission for determining the amount of net income a portfolio
should theoretically generate for the 30-day period ending November 30, 1996.
A portion of the interest income may be subject to federal alternative minimum
tax (AMT).
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 HIGH YIELD MUNICIPAL FUND
TOP TEN STATES AS OF NOVEMBER 30, 1996
<TABLE>
<CAPTION>
PERCENTAGE OF FUND'S
LONG-TERM INVESTMENTS
<S> <C>
Pennsylvania.............................................. 12.3%
Massachusetts............................................. 9.1%
Illinois.................................................. 7.9%
Florida................................................... 7.2%
Ohio...................................................... 5.3%
California................................................ 5.3%
Texas..................................................... 5.2%
New Hampshire............................................. 4.9%
Colorado.................................................. 4.8%
New Jersey................................................ 4.1%
</TABLE>
CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM INVESTMENTS
LOGO
Based upon credit quality ratings issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.
TOP FIVE PORTFOLIO HOLDINGS BY SECTOR AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1996
<S> <C>
Industrial Revenue...... 21.6%
Other Care.............. 20.9%
Health Care............. 18.2%
Multi-Family Housing.... 12.0%
Tax District............ 6.8%
</TABLE>
<TABLE>
<CAPTION>
AS OF MAY 31, 1996
<S> <C>
Other Care.............. 19.7%
Health Care............. 19.3%
Industrial Revenue...... 17.7%
Multi-Family Housing.... 13.7%
Tax District............ 8.8%
</TABLE>
DURATION
<TABLE>
<CAPTION>
AS OF NOVEMBER 30, 1996 AS OF MAY 31, 1996
<S> <C> <C>
Duration 5.64 years 6.32 years
<CAPTION>
<S> <C> <C>
</TABLE>
4
<PAGE>
PUTTING YOUR FUND'S PERFORMANCE IN PERSPECTIVE
As you evaluate your progress toward achieving your financial goals, it is
important to track your investment portfolio's performance at regular inter-
vals. A good starting point is a comparison of your investment holdings to an
applicable benchmark, such as a broad-based market index. Such a comparison
can:
. Illustrate the general market environment in which your investments are
being managed
. Reflect the impact of favorable market trends or difficult market condi-
tions
. Help you evaluate the extent to which your Fund's management team has
responded to the opportunities and challenges presented to them over the
period measured
For these reasons, you may find it helpful to review the chart below, which
compares your Fund's performance to that of the Lehman Brothers Municipal Bond
Index over time. As a broad-based, unmanaged statistical composite, this index
does not reflect any commissions or fees which would be incurred by an in-
vestor purchasing the securities it represents. Similarly, its performance
does not reflect any sales charges or other costs which would be applicable to
an actively managed portfolio, such as that of the Fund.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Van Kampen American Capital High Yield Municipal Fund vs. Lehman
Brothers Municipal Bond Index
(November 30, 1986 through November 30, 1996)
[GRAPH APPEARS HERE]
Fund's Total Return
1 Year Avg. Annual = 1.39%
5 Year Avg. Annual = 6.97%
10 Year Avg. Annual = 6.56%
Inception Avg. Annual = 6.90%
VKAC High Yield Lehman Brothers
Municipal Fund Municipal Bond Index
--------------- --------------------
Nov 1986 9,527 10,000
Dec 1986 9,584 9,972
Dec 1987 9,422 10,121
Dec 1988 10,107 11,149
Dec 1989 11,152 12,351
Dec 1990 11,820 13,252
Dec 1991 13,078 14,861
Dec 1992 14,261 16,171
Dec 1993 15,710 18,156
Dec 1994 15,740 17,218
Dec 1995 17,929 20,224
Nov 1996 18,884 21,603
The above chart reflects the performance of Class A shares of the Fund. The
performance of Class A shares will differ from that of other share classes of
the Fund because of the difference in sales charges and/or expenses paid by
shareholders investing in the different share classes. The Fund's performance
assumes reinvestment of all distributions and includes payment of the maximum
sales charge (4.75% for A shares).
While past performance is not indicative of future performance, the above
information provides a broader vantage point from which to evaluate the
discussion of the Fund's performance found in the following pages.
5
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL HIGH YIELD MUNICIPAL FUND
We recently spoke with the management team of the Van Kampen American Capital
High Yield Municipal Fund about the key events and economic forces that shaped
the markets during the Fund's fiscal year. The team includes Wayne D. Godlin,
portfolio manager, and Peter W. Hegel, executive vice president for fixed-
income investments. The following excerpts reflect their views on the Fund's
performance during the 12-month period ended November 30, 1996.
Q HOW WOULD YOU DESCRIBE THE MARKET ENVIRONMENT IN WHICH THE FUND HAS
OPERATED OVER THE PAST FISCAL YEAR?
A Certainly, the Fund is more suited to the conditions we saw during 1996
than to the more volatile, more bullish market we had in 1995. To some ex-
tent, we benefited from the general trend of low interest rates, which have
been holding steady over the past year. Yields on municipal bonds also have re-
mained fairly consistent. In fact, yields are currently trading in the range of
5.6 to 5.7 percent (as measured by the Bond Buyer 40 Municipal Bond Index), the
same range they were trading in at the beginning of the reporting period. How-
ever, we did see some fluctuations in yields during the year--hitting their
highest mark of 6.22 percent on June 10, 1996 and their lowest of 5.47 percent
on February 13, 1996.
The market has been keeping close tabs on economic growth and inflation num-
bers, trying to anticipate how they might affect Federal Reserve Board policy.
High economic growth rates have tended to spur inflation, which can be bad news
for fixed income investors. The Fed appears to be committed to keeping infla-
tion under control, indicating that they may raise short-term interest rates if
the economy shows signs of increasing strength. And, when interest rates go up,
bond prices--and the net asset value of funds that purchase them--tend to go
down. Those are the basic equations driving the trading behavior of bond market
participants.
At this point, inflation seems to be holding fairly steady at around 3 per-
cent, and the market has reacted favorably to the Fed's decision to keep its
key short-term interest rates unchanged since January of 1996.
Q HAVE THESE CONDITIONS MADE IT MORE DIFFICULT TO MANAGE THE FUND?
A These factors will always play a key role in the performance of the Fund,
but our portfolio management team maintains a long-term perspective and
manages the Fund consistent with its specific objectives.
The Fund's objective is to seek to provide a high level of interest income
exempt from federal income tax. We strive for consistency and remain focused on
this strategy throughout various market conditions. In other words, we don't
spend a lot of time trying to outguess the market or the direction of interest
rates. Instead, we concentrate on the non-rated portion of the market, looking
for what we feel are suitable securities within the non-rated sector which we
feel would be similar in quality to municipal securities with a BB rating by
Standard & Poor's.
Q HAS THIS APPROACH BEEN SUCCESSFUL?
A We believe it has. Most shareholders selected this Fund because they're
seeking high current income, and we believe we've been able to provide
that consistently. At the same time, we hope to maintain a certain degree of
relative stability in the Fund's share price. We're not out to find distressed
securities in hopes of a huge turnaround. Instead, we emphasize securities that
exhibit characteristics that indicate long-term potential; we need valid rea-
sons to expect solid performance. Naturally, this implies that we rely heavily
on our research capabilities. We believe we have one of the strongest high
yield municipal research team in the industry.
6
<PAGE>
One of the keys to our successful management has been our regional focus.
With analysts located in Boston, Chicago, Houston, and Los Angeles, we've be-
come very attuned to local economies, politics, and regional trends that might
affect the municipal market or the securities of specific issuers. Because our
analysts aren't tied to one location, we can conduct site visits more readily
and establish relationships with the issuers.
Q AND YOU BELIEVE THIS RESEARCH EFFORT HAS PAID OFF?
A Definitely, because it allows us be highly selective. The level of re-
gional knowledge we've accumulated helps us find the "undiscovered value"
of securities with solid potential and recognize situations that might benefit
the Fund's performance. During the past fiscal year, the effects of profes-
sional research have been reflected in several instances where an improved
credit rating or advanced refunding have resulted in the appreciation of indi-
vidual securities in the portfolio.
Over the long term, I believe research has improved our consistency of per-
formance. In fact, the Fund continued to earn Morningstar's five-star rating,
the highest rating, among all the funds in the Municipal Bond Category, which
contains a total of 1,739 funds. This five-star composite rating, which is
evaluated monthly, is for the period beginning April 30, 1992 through November
30, 1996. Morningstar is an independent rating company that reviews and as-
signs ratings to mutual funds*.
Q YOU MENTIONED THE FUND'S PERFORMANCE. WHAT ARE THE NUMBERS FOR THE PAST
FISCAL YEAR?
A The Fund posted positive results for the fiscal year. Total return for
the 12 months ended November 30, 1996, was 6.47 percent/1/ (Class A
shares at net asset value), and the Fund's net asset value closed the report-
ing period at $11.14 per share, down slightly from $11.18 per share at the be-
ginning of the year. The Fund's tax-exempt distribution rate as of November
30, 1996, was 6.28 percent/3/, representing a taxable-equivalent distribution
rate of 9.81 percent/4/ for an investor in the 36-percent federal income tax
bracket.
The Fund's total return compared favorably to the Lehman Brothers Municipal
Bond Index, which returned 5.88 percent over the same time period. This index
is a broad-based, unmanaged index of municipal bonds and does not reflect any
commissions or fees that would be paid by an investor purchasing the securi-
ties it represents. Please refer to the chart on page three for additional
Fund performance results.
Q HAVE THERE BEEN SIGNIFICANT CHANGES IN THE FUND'S PORTFOLIO OVER THE PAST
YEAR?
A We've made a few adjustments, but not any significant changes. We con-
tinue to allocate the Fund's assets according to the stringent credit
standards we've established, looking at each individual security on its own
merits.
Currently, we have approximately 18 percent of net assets in the health
care sector, which includes acute care hospitals, nursing homes, and lifecare
projects, a significant weighting in industrial revenue bonds, and a portion
of assets in single- and multi-family housing bonds.
The duration of the Fund (a measure of its sensitivity to changes in inter-
est rates) is approximately 5.5 to 5.9 years, which is on the low end compared
to its peer group. This means that the Fund would appreciate to a lesser ex-
tent in an upward market, but potentially less volatile in a downward market.
For additional Fund portfolio highlights, please refer to page four.
*This five-star rating is a composite rating. For the one-year period, the
rating was four star, out of 1,739 funds. The ratings for the 1-, 3-, 5-, and
10-year periods are also five star out of 1,074, 569, and 239 funds,
respectively. Morningstar is an independent mutual fund performance monitor.
Its rating of one star (lowest) and five stars (highest) is based on a fund's
historic risk/reward ratio compared with similar funds for the 1-, 3-, 5-, and
10-year periods including all sales charges and fees. Ten percent of the funds
in an asset class receive a five star rating. Fund performance is relative to
the 3-month Treasury bill monthly return. Past performance does not guarantee
future results.
7
<PAGE>
Q SPEAKING OF UP MARKETS AND DOWN MARKETS, WHAT IS YOUR OUTLOOK FOR THE
MONTHS AHEAD?
A We expect interest rates at both the long and short end of the maturity
spectrum to remain fairly stable going into early 1997. Inflation appears
to be under control, but any sharp increases in economic growth could push
rates higher.
Still, we don't expect any significant change in interest rates in the near
term, so the return on municipal bonds will likely be coming from the income
side of the equation in 1997.
We believe the portfolio is well positioned for the conditions that we an-
ticipate in the coming year. With a relatively low duration, the Fund should be
relatively less susceptible to sharp moves in net asset value, should interest
rates change drastically. And, we are confident that the securities we've cho-
sen are consistent with the high standards we've set for inclusion in the port-
folio.
/s/ Peter W. Hegel /s/ Wayne D. Godlin
Peter W. Hegel Wayne D. Godlin
Executive Vice President Portfolio Manager
Fixed Income Investments
Please see footnotes on page three
8
<PAGE>
PORTFOLIO OF INVESTMENTS
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 0.3%
Gulf Shores, AL Rev Quality Inn
$ 1,540 Beachside Proj Ser 1986............... 11.000% 06/01/16 $ 1,583,243
400 Selma, AL Spl Care Fac Fin Auth Hosp
Rev Vaughan Regl Med Cent Proj Rfdg
(Prerefunded @ 06/01/97).............. 9.500 06/01/14 423,212
Vincent, AL Indl Dev Brd Shelby Motel
750 Group Inc Proj........................ 10.500 09/01/16 763,943
------------
2,770,398
------------
ALASKA 0.2%
2,250 Seward, AK Rev AK Sealife Cent Proj... 7.650 10/01/16 2,312,640
------------
ARIZONA 1.2%
500 Casa Grande, AZ Indl Dev Auth Rfdg.... 8.250 12/01/15 525,165
Chandler, AZ Indl Dev Auth Rev
Chandler Financial Cent Proj Ser 1986
2,915 (d)................................... 9.875 12/01/16 2,681,800
Peoria, AZ Indl Dev Auth Sierra Winds
985 Life Care Cmnty Proj (Var Rate Cpn)... 6.500 11/01/17 895,296
Pinal Cnty, AZ Indl Dev Auth Casa
1,025 Grande Reg Med Cent Proj Ser A........ 8.125 12/01/22 1,124,989
Pinal Cnty, AZ Indl Dev Auth Casa
475 Grande Reg Med Cent Proj Ser B........ 8.125 12/01/22 521,336
Scottsdale, AZ Indl Dev Auth Rev First
Mtg Westminster Village Proj
2,540 (Prerefunded @ 06/01/97).............. 10.000 06/01/17 2,691,892
Scottsdale, AZ Indl Dev Auth Rev First
1,035 Mtg Westminster Village Ser A Rfdg.... 8.000 06/01/11 1,096,707
Scottsdale, AZ Indl Dev Auth Rev First
2,000 Mtg Westminster Village Ser A Rfdg.... 8.250 06/01/15 2,132,880
------------
11,670,065
------------
ARKANSAS 0.0%
Fayetteville, AR Pub Fac Brd Rev
500 Butterfield Trail Village Proj B Rfdg. 9.500 09/01/14 542,125
------------
CALIFORNIA 5.2%
California Edl Fac Auth Rev Pacific
2,415 Graduate Sch of Psychology............ 8.000 11/01/21 2,456,127
California Hlth Fac Auth Rev Vly
3,000 Presbytern Hosp Proj Ser A Rfdg....... 9.000 05/01/12 3,090,000
5,440 California St Veterans Bonds Ser AY... 7.375 04/01/19 5,482,976
Colton, CA Pub Fin Auth Rev Elec Sys
1,500 Impts................................. 7.500 10/01/20 1,584,675
Corona, CA Ctfs Partn Vista Hosp Sys
2,500 Inc Ser C............................. 8.375 07/01/11 2,536,100
Emeryville, CA Impt Bond Act 1915
1,300 Assessment Dist 93-1 East Baybridge... 7.300 09/02/21 1,332,461
Folsom, CA Spl Tax Cmnty Fac Dist No 7
1,500 Rfdg.................................. 7.250 09/01/21 1,542,495
Fresno, CA Ctfs Partn Bldg Proj Fresno
2,855 Exec Plaza Inc........................ 8.500 05/01/16 3,028,498
Fresno, CA Jt Pwrs Fin Auth Local Agy
900 Ser B Rfdg............................ 7.350 09/02/12 969,003
Glendale, CA Hosp Rev Glendale Mem
Hosp & Hlth Ser A Rfdg (Prerefunded @
1,500 11/01/97)............................. 9.000 11/01/17 1,600,380
Huntington Park, CA Pub Fin Auth Loc
1,500 Agy Rev Sub Ser C..................... 7.600 09/01/18 1,615,890
Moreno Vly, CA Spl Tax Towngate Cmnty
1,000 Fac Dist 87-1......................... 7.125 10/01/23 1,044,310
1,530 Norco, CA Swr & Wtr Rev Rfdg.......... 7.200 10/01/19 1,643,006
Perris, CA Pub Fin Auth Loc Agy Rev
2,000 Ser D................................. 7.875 09/01/25 2,159,440
Rancho Cucamonga, CA Cmnty Fac Dist
1,500 Spl Tax No 88-2....................... 8.250 09/01/19 1,638,090
Rancho Cucamonga, CA Cmnty Fac Dist
100 Spl Tax No 88-2....................... 8.000 09/01/20 107,868
3,000 Reedley, CA Ctfs Partn................ 7.500 10/01/26 3,081,300
Richmond, CA Jt Pwrs Fin Auth Impt
1,250 Dists No 851 & 853 Ser A.............. 7.400 09/02/19 1,288,688
Richmond, CA Redev Agy Multi-Family
Rev Hsg Bridge Affordable Summit Ser
3,105 A..................................... 7.500 09/01/23 3,105,000
Riverside Cnty, CA Air Force Village
4,000 West Inc Ser A Rfdg................... 8.125 06/15/20 4,199,960
1,000 Riverside Cnty, CA Impt Bond Act 1915. 7.625 09/02/14 1,031,620
San Bernardino, CA Hosp Rev San
3,000 Bernardino Cmnty Hosp Rfdg............ 7.875 12/01/19 3,043,740
Santa Ana, CA Cmnty Redev Agy Tax Ser
3,000 B Rfdg................................ 7.500 09/01/16 3,079,170
Santa Rosa, CA Impt Bond Act 1915
1,000 Fountaingrove Prkwy Extension......... 7.625 09/02/19 1,031,350
------------
51,692,147
------------
COLORADO 4.7%
1,000 Arrowhead Metro Dist CO............... 8.125 12/01/11 1,071,840
1,060 Berry Creek Metro Dist CO Rfdg........ 7.300 12/01/12 1,151,669
2,400 Bowles Metro Dist CO.................. 7.750 12/01/15 2,385,864
Colorado Hlth Fac Auth Rev Christian
1,500 Living Campus Proj.................... 9.000 01/01/25 1,629,435
Colorado Hlth Fac Auth Rev Mile High
Transplant Bank Proj (Prerefunded @
400 06/01/97)............................. 8.500 06/01/07 429,152
</TABLE>
9
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COLORADO (CONTINUED)
Colorado Hlth Fac Auth Rev Shalom Park
$ 2,000 Proj Rfdg & Impt........................ 7.250% 12/15/25 $ 2,024,000
Colorado Hsg Fin Auth Single Family Pgm
2,000 Sr Ser C1............................... 7.550 11/01/27 2,212,120
1,250 Cordillera Metro Dist CO Eagle Cnty..... 8.250 12/01/13 1,393,838
Cottonwood Wtr & Santn Dist CO Ser A
3,000 Rfdg.................................... 7.750 12/01/20 3,050,340
Denver, CO City & Cnty Indl Dev Rev
1,055 Jewish Cmnty Cent Proj.................. 7.375 03/01/09 1,175,048
Denver, CO City & Cnty Indl Dev Rev
815 Jewish Cmnty Cent Proj.................. 7.875 03/01/19 903,892
Denver, CO City & Cnty Rev Indl Dev
1,130 Jewish Cmnty Cent Proj.................. 7.500 03/01/14 1,243,452
Denver, CO City & Cnty Single Family Mtg
2,860 Rev Ser A............................... 8.125 12/01/20 2,990,216
Denver, CO Urban Renewal Auth Tax
1,930 Increment Rev........................... 8.500 05/01/16 2,052,304
Eagle Cnty, CO Air Terminal Corp Rev
2,000 Arpt Proj............................... 7.500 05/01/21 2,050,060
Fairlake Metro Dist City & Cnty of
4,000 Denver, CO.............................. 9.625 12/01/10 4,493,160
Hyland Hills, CO Metro Park & Recreation
2,500 Dist CO Spl Rev Ser A................... 8.625 12/15/12 2,834,175
Landmark Metro Dist CO (Prerefunded @
1,000 06/01/00)............................... 8.750 12/01/05 1,059,930
Mountain Village Metro Dist San Miguel
Cnty, CO Rfdg (Prerefunded @ 12/01/98)
3,000 (c)..................................... 11.000 12/01/07 3,457,800
500 Panorama Metro Dist CO Ser B Rfdg....... 9.000 12/01/09 541,805
Skyland Metro Dist Gunnison Cnty CO Rfdg
147 (Var Rate Cpn).......................... 4.000 12/01/08 104,835
Snowmass Village, CO Multi-Family Hsg
750 Rev Ser A Rfdg.......................... 8.000 09/01/14 786,330
Southtech Metro Dist CO Rfdg
2,175 (Prerefunded @ 12/01/97)................ 9.500 12/01/11 2,316,593
660 Superior, CO Metro Dist No 2 Ser A Rfdg. 7.250 12/01/02 684,057
840 Superior, CO Metro Dist No 2 Ser A Rfdg. 7.750 12/01/13 892,979
1,500 Telluride, CO Hsg Auth Hsg Rev.......... 9.100 06/01/01 1,627,725
Telluride, CO Hsg Auth Hsg Rev Shandoka
2,000 Apts Proj Rfdg.......................... 7.875 06/01/17 2,096,560
------------
46,659,179
------------
CONNECTICUT 1.3%
Connecticut St Dev Auth 1st Mtg Gross
Rev Hlthcare Proj CT Baptist Homes Inc
2,391 Proj.................................... 8.750 09/01/12 2,565,041
Connecticut St Dev Auth 1st Mtg Gross
Rev Hlthcare Proj CT Baptist Homes Inc
1,500 Proj.................................... 9.000 09/01/22 1,637,295
Connecticut St Dev Auth Hlthcare Rev
1,225 Indpt Living Proj Ser B................. 8.000 07/01/17 1,274,772
Connecticut St Dev Auth Hlthcare Rev
1,920 Jerome Home Proj........................ 8.000 11/01/19 2,011,450
Connecticut St Hlth & Edl Fac Auth Rev
2,500 Tolland Cnty Hlthcare Inc Ser A......... 9.200 07/01/21 2,718,500
Manchester, CT Redev Agy Multi-Family
1,520 Mtg Rev Bennet Hsg Dev Rfdg............. 7.200 12/01/18 1,604,527
New Haven, CT Fac Rev Easter Seal
1,365 Goodwill Rehab Proj..................... 8.875 04/01/16 1,451,882
------------
13,263,467
------------
DELAWARE 0.8%
Delaware St Econ Dev Auth Indl Dev Rev
2,670 1st Mtg Dover Hlthcare Rfdg............. 7.875 04/01/08 2,785,878
Delaware St Econ Dev Auth Rev 1st Mtg
400 Gilpin Hall Proj........................ 7.375 07/01/15 410,688
Delaware St Econ Dev Auth Rev 1st Mtg
2,800 Gilpin Hall Proj........................ 7.625 07/01/25 2,873,920
Delaware St Econ Dev Auth Rev
Osteopathic Hosp Assn of DE Ser A
975 (Prerefunded @ 07/01/04)................ 9.500 01/01/22 1,207,292
300 Wilmington, DE Hosp Rev Osteopathic Hosp
Assn of DE/Riverside Hosp Ser A
(Prerefunded @ 10/01/98)................ 10.000 10/01/03 334,377
500 Wilmington, DE Hosp Rev Osteopathic Hosp
Assn of DE/Riverside Hosp Ser A
(Prerefunded @ 10/01/98)................ 10.200 10/01/18 561,235
------------
8,173,390
------------
DISTRICT OF COLUMBIA 0.6%
District of Columbia Hosp Rev Metlantic
2,090 WA Hosp Cent Ser A Rfdg................. 7.125 08/15/19 2,187,018
District of Columbia Rev Natl Pub Radio
3,500 Ser A................................... 7.700 01/01/23 3,735,515
------------
5,922,533
------------
FLORIDA 7.1%
Atlantic Beach, FL Rev Fleet Landing
2,085 Proj Ser A Rfdg & Impt.................. 7.875 10/01/08 2,323,899
Atlantic Beach, FL Rev Fleet Landing
1,160 Proj Ser A Rfdg & Impt.................. 7.500 10/01/02 1,236,885
Bay Cnty, FL Hosp Sys Rev Bay Med Cent
1,500 Proj Rfdg (Prerefunded @ 10/01/04)........ 8.000 10/01/12 1,797,705
Bay Cnty, FL Hosp Sys Rev Bay Med Cent
500 Proj Rfdg (Prerefunded @ 10/01/04)........ 8.000 10/01/19 616,095
</TABLE>
10
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
Brevard Cnty, FL Hlth Fac Auth Rev
$ 1,470 Courtenay Springs Village Rfdg........ 7.375% 11/15/04 $ 1,562,492
Brevard Cnty, FL Hlth Fac Auth Rev
2,200 Courtenay Springs Village Rfdg........ 7.750 11/15/17 2,352,966
Charlotte Cnty, FL Indl Dev Auth Rev
180 Beverly Enterprises Rfdg.............. 10.000 06/01/11 203,758
Collier Cnty, FL Indl Dev Auth
1,650 Retirement Rental Hsg Rev............. 10.750 03/01/03 1,870,044
Escambia Cnty, FL Pollutn Ctl Rev
4,000 Champion Intl Corp Proj............... 6.900 08/01/22 4,265,360
Fort Walton Beach, FL Indl Dev Rev 1st
850 Mtg Fort Walton Beach Venton Proj..... 10.500 12/01/16 906,780
Hernando Cnty, FL Indl Dev Rev Beverly
1,130 Enterprises Rfdg...................... 10.000 09/01/11 1,284,302
Hialeah Gardens, FL Indl Dev Rev
3,000 Waterford Convalescent Ser A Rfdg..... 8.250 12/01/14 3,209,550
Homestead, FL Indl Dev Rev Brookwood
1,500 Gardens Cent Proj Ser A Rfdg.......... 8.250 12/01/14 1,604,775
Lake Bernadette, FL Cmnty Dev Dist Spl
1,330 Assmt Rev Ser A....................... 8.000 05/01/17 1,340,866
Lake Saint Charles, FL Cmnty Dev Dist
2,500 Spl Assmt Rev......................... 7.875 05/01/17 2,500,475
Lee Cnty, FL Indl Dev Auth Econ Rev
750 Encore Nursing Cent Partner Rfdg...... 8.125 12/01/07 813,308
Marion Cnty, FL Indl Dev Auth Rev
1,300 Midland Ross Corp Proj................ 11.875 08/01/11 1,313,689
North Miami, FL Hlthcare Fac Rev
2,570 Imperial Club Proj Ser A.............. 10.000 01/01/13 2,828,619
Northern Palm Beach Cnty, FL Impt Dist
3,000 Wtr Ctl & Impt Unit Dev............... 7.200 08/01/16 3,113,580
Northern Palm Beach Cnty, FL Impt Dist
2,500 Wtr Ctl & Impt Unit Dev............... 7.300 08/01/27 2,598,450
Orange Cnty, FL Hlth Fac Auth Rev 1st
1,000 Mtg Orlando Lutheran Tower............ 8.750 07/01/26 1,006,610
Orange Cnty, FL Hlth Fac Auth Rev 1st
840 Mtg Orlando Lutheran Tower Rfdg....... 8.125 07/01/06 837,967
Orange Cnty, FL Hlth Fac Auth Rev 1st
2,035 Mtg Orlando Lutheran Tower Rfdg....... 8.400 07/01/14 2,051,728
Orange Cnty, FL Hlth Fac Auth Rev 1st
1,325 Mtg Orlando Lutheran Tower Rfdg....... 8.625 07/01/20 1,337,482
Orange Cnty, FL Hlth Fac Auth Rev Aces
Pooled Hosp Ln Ser A Rfdg (FGIC Insd)
2,870 (c)................................... 7.875 12/01/25 2,982,045
Orange Cnty, FL Hsg Fin Auth Multi-
2,645 Family Rev Mtg Hands Inc Proj Ser A... 7.875 10/01/15 2,683,987
Orange Cnty, FL Hsg Fin Auth Multi-
2,035 Family Rev Mtg Hands Inc Proj Ser A... 8.000 10/01/25 2,070,022
Orange Cnty, FL Indl Dev Auth Rev
450 Beverly Enterprises Proj Rfdg......... 9.250 08/01/10 497,529
Overoaks, FL Cmnty Dev Dist Cap Impt
3,000 Rev................................... 8.250 05/01/17 3,064,170
Palm Beach Cnty, FL Hlth Fac Auth Rev
3,400 Waterford Proj Rfdg................... 7.750 10/01/15 3,456,134
Plantation, FL Hlth Fac Auth Rev Hlth
Fac Auth Rev Covenant Retirement
750 Cmntys Inc............................ 7.750 12/01/22 804,668
Plantation, FL Hlth Fac Auth Rev Hlth
Fac Auth Rev Covenant Retirement
1,370 Cmntys Inc............................ 7.625 12/01/12 1,464,996
Santa Rosa Cnty, FL Indl Dev Auth Rev
250 1st Mtg Sandy Ridge Care Cent......... 10.500 04/01/16 252,068
Sarasota Cnty, FL Hlth Fac Auth Rev
2,000 Hlthcare Manatee Jewish Rfdg.......... 7.000 07/01/16 2,007,380
Tampa Palms, FL Open Space & Transn
Cmnty Dev Dist Rev Cap Impt Area 7
1,920 Proj.................................. 8.500 05/01/17 1,916,986
Volusia Cnty, FL Indl Dev Auth Bishops
710 Glen Proj Rfdg (b).................... 7.125 11/01/06 712,492
Volusia Cnty, FL Indl Dev Auth Bishops
2,000 Glen Proj Rfdg (b).................... 7.500 11/01/16 2,007,780
Volusia Cnty, FL Indl Dev Auth Bishops
2,000 Glen Proj Rfdg (b).................... 7.625 11/01/26 2,007,740
Westchase East Cmnty, FL Dev Dist Cap
1,775 Impt Rev.............................. 7.500 05/01/17 1,772,941
------------
70,678,323
------------
GEORGIA 1.0%
3,000 Class A Ctfs relating to Atlanta, GA
Urban Residential Fin Auth Multi-
Family Hsg Rev Renaissance on
Peachtree Apts Proj Ser 85............ 8.500 04/01/26 2,850,000
Coweta Cnty, GA Residential Care Fac
For The Elderly Auth Rev 1st Lien
375 Wesley Woods Ser A.................... 7.625 10/01/06 379,879
Coweta Cnty, GA Residential Care Fac
For The Elderly Auth Rev 1st Lien
1,500 Wesley Woods Ser A.................... 8.200 10/01/16 1,521,390
Coweta Cnty, GA Residential Care Fac
For The Elderly Auth Rev 1st Lien
1,500 Wesley Woods Ser A.................... 8.250 10/01/26 1,521,330
Richmond Cnty, GA Dev Auth Nursing
Home Rev Beverly Enterprises GA Proj
300 Rfdg.................................. 8.750 06/01/11 326,898
Rockdale Cnty, GA Dev Auth Solid Waste
3,000 Disposal Rev.......................... 7.500 01/01/26 3,123,660
------------
9,723,157
------------
HAWAII 0.1%
Hawaii Cnty, HI Impt Dist No 17 Spl
900 Assessment Kaloko Subdivision......... 9.500 08/01/11 951,993
------------
ILLINOIS 7.8%
Bedford Park, IL Tax Increment Rev
1,500 Mark IV Proj.......................... 9.750 03/01/12 1,731,420
Bedford Park, IL Tax Increment Rev Sr
1,000 Lien Bedford City Proj................ 9.250 02/01/12 1,129,230
Broadview, IL Tax Increment Rev Sr
3,000 Lien.................................. 8.250 07/01/13 3,272,100
Chicago, IL O'Hare Intl Arpt Spl Fac
1,000 Rev American Airls Inc Proj Rfdg...... 8.200 12/01/24 1,185,910
</TABLE>
11
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
Chicago, IL O'Hare Intl
Arpt Spl Fac Rev American
$ 540 Airls Inc Proj Ser A...... 7.875% 11/01/25 $ 587,439
Chicago, IL O'Hare Intl
Arpt Spl Fac Rev United
3,500 Airls Inc................. 8.500 05/01/18 3,880,240
Chicago, IL Tax Increment
1,500 (b)......................... 7.250 01/01/14 1,500,000
Crestwood, IL Tax
3,000 Increment Rev Rfdg........ 7.250 12/01/08 3,052,710
Hanover Park, IL Rev 1st
Mtg Windsor Park Manor
1,350 Proj...................... 9.500 12/01/14 1,444,919
Hodgkins, IL Tax
500 Increment................. 9.500 12/01/09 584,385
Hodgkins, IL Tax Increment
4,000 Rev Ser A Rfdg............ 7.625 12/01/13 4,118,480
Huntley, IL Increment
Alloc Rev Huntley Redev
3,500 Proj Ser A................ 8.500 12/01/15 3,563,105
Illinois Dev Fin Auth Hlth
Fac Rev Cmnty Living
2,470 Options................... 7.125 03/01/10 2,587,646
Illinois Dev Fin Auth
Pollutn Ctl Rev IL Pwr Co
1,500 Proj Ser A Rfdg........... 8.300 04/01/17 1,584,315
Illinois Dev Fin Auth Rev
Cmnty Fac Clinic Altgeld
650 Proj...................... 8.000 11/15/06 652,529
Illinois Dev Fin Auth Rev
Cmnty Fac Clinic Altgeld
1,405 Proj...................... 8.000 11/15/16 1,410,662
Illinois Dev Fin Auth Rev
Debt Restructure East
2,000 Saint Louis............... 7.375 11/15/11 2,215,100
Illinois Edl Fac Auth Rev
4,000 Peace Mem Ministries Proj. 7.500 08/15/26 4,090,840
Illinois Hlth Fac Auth Rev
Covenant Retirement Cmntys
1,475 Ser A..................... 7.600 12/01/12 1,595,360
Illinois Hlth Fac Auth Rev
Fairview Oblig Group Ser A
3,000 Rfdg...................... 7.400 08/15/23 3,048,360
Illinois Hlth Fac Auth Rev
510 Hinsdale Ser C............ 9.500 11/15/19 582,833
Illinois Hlth Fac Auth Rev
Lifelink Corp Oblig Group
1,700 Ser B..................... 8.000 02/15/25 1,792,939
Illinois Hlth Fac Auth Rev
Lutheran Home & Svcs Proj
4,000 Ser A..................... 7.500 08/15/26 4,035,000
Illinois Hlth Fac Auth Rev
Saint Elizabeth's Hosp
1,250 Chicago Rfdg.............. 7.625 07/01/10 1,373,763
Illinois Hlth Fac Auth Rev
Saint Elizabeth's Hosp
1,500 Chicago Rfdg.............. 7.750 07/01/16 1,659,735
Jackson Park Hosp Fndtn
Chicago, IL Jackson Park
1,500 Hosp (d).................. 9.000 03/01/05 1,365,000
Loves Park, IL 1st Mtg Rev
3,270 Hoosier Care Proj Ser A... 9.750 08/01/19 3,496,186
Mill Creek Wtr Reclamation
2,500 Dist IL Swr Rev........... 8.000 03/01/10 2,571,775
Mill Creek Wtr Reclamation
1,500 Dist IL Wtrwks Rev........ 8.000 03/01/10 1,543,065
Robbins, IL Res Recovery
3,100 Rev....................... 8.375 10/15/16 3,193,000
Round Lake Beach, IL Tax
1,695 Increment Rev Rfdg........ 7.200 12/01/04 1,761,834
Round Lake Beach, IL Tax
2,500 Increment Rev Rfdg........ 7.500 12/01/13 2,589,200
Saint Charles, IL Indl Dev
3,035 Rev Tri-City Proj......... 7.500 11/01/13 3,112,969
Saint Charles, IL Multi-
Family Hsg Rev Bonds
3,965 Wessel Court Proj......... 7.600 04/01/24 4,078,597
Sherman, IL Rev 1st Mtg
500 Villa Hlthcare Ser A...... 8.250 10/01/14 516,865
Sherman, IL Rev 1st Mtg
500 Villa Hlthcare Ser A...... 8.500 10/01/24 523,160
------------
77,430,671
------------
INDIANA 2.6%
Carmel, IN Retirement
Rental Hsg Rev Beverly
500 Enterprises Proj Rfdg..... 8.750 12/01/08 554,000
Indiana Hlth Fac Fin Auth
Rev Saint Anthony Home
1,500 Oblig Group............... 7.000 05/15/17 1,500,930
Indiana Hlth Fac Fin Auth
Rev Saint Anthony Home
1,000 Oblig Group............... 7.250 05/15/24 1,005,880
Indiana St Dev Fin Auth
Envir USX Corp Proj Rfdg &
1,000 Impt (b).................. 6.250 07/15/30 1,017,700
Indiana St Dev Fin Auth
Indl Dev Rev UNR Rohn Inc
3,000 Proj...................... 7.500 03/01/11 3,061,980
Indiana St Dev Fin Auth
Pollutn Ctl Rev Inland
5,000 Steel Co Proj No 13 Rfdg.. 7.250 11/01/11 5,175,200
Valparaiso, IN Econ Dev
Rev 1st Mtg Whispering
560 Pines Cent................ 7.300 01/01/02 534,626
Valparaiso, IN Econ Dev
Rev 1st Mtg Whispering
980 Pines Cent................ 7.500 01/01/07 938,262
Valparaiso, IN Econ Dev
Rev 1st Mtg Whispering
1,405 Pines Cent................ 7.750 01/01/12 1,347,634
Valparaiso, IN Econ Dev
Rev 1st Mtg Whispering
2,045 Pines Cent................ 8.000 01/01/17 1,963,732
Valparaiso, IN Econ Dev
Rev 1st Mtg Whispering
Pines Cent Rfdg
3,675 (Prerefunded @ 01/01/00).. 9.500 01/01/07 4,281,779
Wells Cnty, IN Hosp Auth
Rev Caylor Nickel Med Cent
400 Inc Rfdg.................. 8.500 04/15/03 450,684
Wells Cnty, IN Hosp Auth
Rev Caylor Nickel Med Cent
3,600 Inc Rfdg.................. 8.750 04/15/12 4,115,304
------------
25,947,711
------------
IOWA 0.3%
Iowa Fin Auth Multi-Family
Rev Hsg Park West Proj
2,770 Rfdg...................... 8.000 10/01/23 2,853,045
------------
KANSAS 0.3%
Newton, KS Hosp Rev Newton
1,500 Hlthcare Corp Ser A....... 7.375 11/15/14 1,587,750
Newton, KS Hosp Rev Newton
1,000 Hlthcare Corp Ser A....... 7.750 11/15/24 1,084,160
------------
2,671,910
------------
</TABLE>
12
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
KENTUCKY 0.3%
Erlanger, KY Assessment Rev Pub Impt
$ 1,250 Proj.................................... 7.500% 08/01/18 $ 1,324,400
Kenton Cnty, KY Arpt Brd Arpt Rev Spl
1,195 Fac Delta Airls Proj Ser A.............. 8.100 12/01/15 1,289,943
------------
2,614,343
------------
LOUISIANA 3.2%
East Baton Rouge, LA Mtg Fin Auth Single
Family Mtg Ser A (GNMA Collateralized)
3,510 (c)..................................... 7.600 02/01/20 3,637,694
4,700 Hodge, LA Util Rev...................... 9.000 03/01/10 5,101,615
Iberia Parish, LA Hosp Svc Dist No 1
1,400 Hosp Rev................................ 7.500 05/26/06 1,417,962
Iberia Parish, LA Hosp Svc Dist No 1
2,000 Hosp Rev................................ 8.000 05/26/16 2,024,840
Lake Charles, LA Harbor & Terminal Dist
4,000 Port Fac Rev Trunkline Lng Rfdg......... 7.750 08/15/22 4,574,600
Louisiana Pub Fac Auth Rev Indl Dev
665 Beverly Enterprises Rfdg................ 8.250 09/01/08 722,363
Port New Orleans, LA Indl Dev Rev
2,000 Avondale Inds Inc Proj Rfdg............. 8.250 06/01/04 2,171,940
Port New Orleans, LA Indl Dev Rev
2,000 Continental Grain Co Proj............... 14.500 01/01/02 2,014,580
Port New Orleans, LA Indl Dev Rev
3,000 Continental Grain Co Proj Rfdg.......... 7.500 07/01/13 3,239,760
Port New Orleans, LA Indl Dev Rev
2,500 Continental Grain Co Proj Ser A......... 14.500 02/01/02 2,535,925
Saint James Parish, LA Solid Waste
2,500 Disposal Rev Kaiser Aluminum Proj....... 7.750 08/01/22 2,660,050
West Feliciana Parish, LA Pollutn Ctl
500 Rev Gulf States Util Co Proj Ser A...... 7.500 05/01/15 537,565
West Feliciana Parish, LA Pollutn Ctl
1,000 Rev Gulf States Util Co Proj Ser B...... 9.000 05/01/15 1,118,810
------------
31,757,704
------------
MAINE 0.6%
Maine Fin Auth Solid Waste Disposal Rev
3,200 Boise Cascade Corp Proj................. 7.900 06/01/15 3,493,696
450 Maine Hlth & Higher Edl Fac Auth Rev
Waterville Osteopathic Hosp Ser A
(Prerefunded @ 07/01/97)................ 9.875 07/01/13 479,309
1,500 Maine Vets Homes Rev.................... 7.750 10/01/20 1,587,765
------------
5,560,770
------------
MARYLAND 1.1%
Baltimore Cnty, MD Pollutn Ctl Rev
2,000 Bethlehem Steel Corp Proj Ser A Rfdg.... 7.550 06/01/17 2,133,020
Baltimore Cnty, MD Pollutn Ctl Rev
2,500 Bethlehem Steel Corp Proj Ser B Rfdg.... 7.500 06/01/15 2,657,550
Calvert Cnty, MD Econ Dev Rev Asbury
2,000 Solomons Island Fac Proj................ 8.375 01/01/15 2,190,400
Maryland St Energy Fin Admin Ltd Oblig
4,000 Rev Cogeneration AES Warrior Run........ 7.400 09/01/19 4,239,920
------------
11,220,890
------------
MASSACHUSETTS 9.0%
Massachusetts St Hlth & Edl Fac Auth Rev
1,490 Indpt Living Ser A...................... 8.100 07/01/18 1,544,564
Massachusetts St Hlth & Edl Fac Auth Rev
3,000 Milford-Whitinsville Regl Hosp Ser B.... 7.750 07/15/17 3,167,100
Massachusetts St Hlth & Edl Fac Auth Rev
1,000 Norwood Hosp Ser E...................... 8.000 07/01/12 1,015,750
Massachusetts St Hlth & Edl Fac Auth Rev
745 Saint Annes Hosp Ser A.................. 9.250 07/01/05 753,627
Massachusetts St Hlth & Edl Fac Auth Rev
2,000 Saint Annes Hosp Ser A.................. 9.375 07/01/14 2,023,380
Massachusetts St Indl Fin Agy Hillcrest
2,750 Edl Cent Inc Proj....................... 8.450 07/01/18 2,820,758
Massachusetts St Indl Fin Agy Indl Rev
1,000 1st Hlthcare Corp Proj Ser A Rfdg....... 7.625 04/01/13 1,023,570
Massachusetts St Indl Fin Agy Indl Rev
800 Beverly Enterprises Rfdg................ 8.375 05/01/09 871,376
Massachusetts St Indl Fin Agy Indl Rev
Beverly Enterprises/Gloucester &
1,075 Lexington Projs Rfdg.................... 8.000 05/01/02 1,133,491
Massachusetts St Indl Fin Agy Rev 1st
Mtg Brookhaven Cmnty (Prerefunded @
500 01/01/98)................................. 10.250 01/01/18 546,585
Massachusetts St Indl Fin Agy Rev 1st
1,005 Mtg Evanswood Bethzatha Ser A Rfdg...... 7.400 01/15/09 1,031,351
Massachusetts St Indl Fin Agy Rev 1st
2,000 Mtg Evanswood Bethzatha Ser A Rfdg...... 7.625 01/15/14 2,051,900
Massachusetts St Indl Fin Agy Rev 1st
2,000 Mtg Evanswood Bethzatha Ser A Rfdg...... 7.875 01/15/20 2,080,320
Massachusetts St Indl Fin Agy Rev 1st
690 Mtg Loomis House & Village Proj......... 7.250 07/01/07 724,155
Massachusetts St Indl Fin Agy Rev 1st
1,410 Mtg Loomis House & Village Proj......... 7.400 07/01/12 1,474,945
Massachusetts St Indl Fin Agy Rev 1st
1,530 Mtg Loomis House & Village Proj......... 7.500 07/01/17 1,610,723
Massachusetts St Indl Fin Agy Rev 1st
30 Mtg Pioneer Vly......................... 7.000 10/01/01 28,044
Massachusetts St Indl Fin Agy Rev 1st
500 Mtg Pioneer Vly Amended................. 7.000 10/01/20 417,350
Massachusetts St Indl Fin Agy Rev 1st
1,000 Mtg Reeds Landing Proj.................. 7.750 10/01/00 1,024,870
Massachusetts St Indl Fin Agy Rev 1st
4,300 Mtg Reeds Landing Proj.................. 8.625 10/01/23 4,631,057
</TABLE>
13
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MASSACHUSETTS (CONTINUED)
Massachusetts St Indl Fin Agy Rev 1st
$ 1,700 Mtg Stone Institute & Newton.......... 7.700% 01/01/14 $ 1,778,285
Massachusetts St Indl Fin Agy Rev
500 Atlantic Med Cent Ser B............... 10.125 11/01/14 504,550
Massachusetts St Indl Fin Agy Rev
3,545 Boston Architectural Cent Proj........ 8.500 09/01/19 3,842,284
Massachusetts St Indl Fin Agy Rev
500 Dimmock Cmnty Hlth Cent............... 8.000 12/01/06 530,665
Massachusetts St Indl Fin Agy Rev
1,000 Dimmock Cmnty Hlth Cent............... 8.375 12/01/13 1,078,880
Massachusetts St Indl Fin Agy Rev
3,000 Dimmock Cmnty Hlth Cent............... 8.500 12/01/20 3,249,210
Massachusetts St Indl Fin Agy Rev East
2,555 Boston Neighborhood Proj.............. 7.500 07/01/16 2,587,091
Massachusetts St Indl Fin Agy Rev East
2,560 Boston Neighborhood Proj.............. 7.625 07/01/26 2,575,360
Massachusetts St Indl Fin Agy Rev
785 Evergreen Cent Inc.................... 8.000 11/01/06 829,941
Massachusetts St Indl Fin Agy Rev
1,230 Evergreen Cent Inc.................... 8.375 11/01/13 1,359,470
Massachusetts St Indl Fin Agy Rev
2,165 Evergreen Cent Inc.................... 8.500 11/01/20 2,411,031
Massachusetts St Indl Fin Agy Rev
1,760 Glenmeadow Retirement Cmnty Ser C..... 8.250 02/15/08 1,804,000
Massachusetts St Indl Fin Agy Rev
500 Glenmeadow Retirement Cmnty Ser C..... 8.625 02/15/26 510,070
Massachusetts St Indl Fin Agy Rev Gtr
3,745 Lynn Mental Hlth Assn Proj............ 8.800 06/01/14 4,132,832
Massachusetts St Indl Fin Agy Rev
420 Hillcrest Edl Cent Inc Proj........... 7.500 07/01/00 428,093
Massachusetts St Indl Fin Agy Rev
740 Hillcrest Edl Cent Inc Proj........... 8.000 07/01/05 766,255
Massachusetts St Indl Fin Agy Rev JRC
3,380 Assisted Living....................... 7.500 07/01/26 3,456,320
Massachusetts St Indl Fin Agy Rev N E
2,555 Cent For Autism....................... 9.000 11/01/05 2,766,401
Massachusetts St Indl Fin Agy Rev N E
4,910 Cent For Autism....................... 9.500 11/01/17 5,395,648
Massachusetts St Indl Fin Agy Rev N E
1,100 Cent For Autism....................... 7.000 11/01/19 1,060,840
Massachusetts St Indl Fin Agy Rev
5,000 Orchard Cove Issue.................... 9.000 05/01/22 5,463,950
Massachusetts St Indl Fin Agy Rev Rev
7,000 Emerson College Issue Ser A........... 8.900 01/01/18 7,792,610
Massachusetts St Indl Fin Agy Rev
1,190 Vinfen Corp Issue..................... 7.100 11/15/18 1,170,125
Massachusetts St Indl Fin Agy Rev
1,020 Waarc Inc Proj........................ 7.300 09/01/10 1,033,087
Massachusetts St Indl Fin Agy Rev
915 Waarc Inc Proj........................ 7.600 09/01/17 923,866
Massachusetts St Indl Fin Agy Rev
1,820 Waarc Inc Proj........................ 7.750 09/01/25 1,838,819
------------
89,264,599
------------
MICHIGAN 2.8%
Detroit, MI Local Dev Fin Auth Tax
440 Increment Ser A....................... 9.500 05/01/21 519,046
Dickinson Cnty, MI Mem Hosp Sys Hosp
1,000 Rev................................... 8.000 11/01/14 1,069,110
Meridian, MI Econ Dev Corp 1st Mtg
2,390 Burcham Hills Ser A Rfdg.............. 7.500 07/01/13 2,439,449
Meridian, MI Econ Dev Corp 1st Mtg
3,430 Burcham Hills Ser A Rfdg.............. 7.750 07/01/19 3,502,202
Michigan St Hosp Fin Auth Rev Detroit
4,020 Macomb Hosp Corp Ser A Rfdg........... 7.300 06/01/01 4,059,356
Michigan St Hosp Fin Auth Rev Gratiot
Cmnty Hosp Ser A Rfdg (Prerefunded @
2,400 10/01/98)............................. 8.750 10/01/07 2,590,464
Michigan St Hosp Fin Auth Rev Hosp
500 Genesys Hlth Sys Ser A Rfdg........... 7.500 10/01/07 545,375
Michigan St Hosp Fin Auth Rev Hosp
1,500 Genesys Hlth Sys Ser A Rfdg........... 8.100 10/01/13 1,690,365
Michigan St Hosp Fin Auth Rev Saratoga
5,790 Cmnty Hosp Rfdg....................... 8.750 06/01/10 6,526,546
Michigan St Strategic Fd Ltd Oblig Rev
1,500 Great Lakes Pulp & Fibre Proj (e)..... 10.250 12/01/16 901,830
Michigan St Strategic Fd Solid Waste
3,500 Disp Rev Genesee Pwr.................. 7.500 01/01/21 3,521,595
Oakland Cnty, MI Econ Dev Corp Ltd
Oblig Rev Pontiac Osteopathic Hosp
500 Proj.................................. 9.625 01/01/20 584,280
------------
27,949,618
------------
MINNESOTA 2.8%
Austin, MN Multi-Family Rev Hsg Cedars
1,020 of Austin Proj Rfdg................... 7.500 04/01/17 1,054,394
Austin, MN Multi-Family Rev Hsg Cedars
2,000 of Austin Proj Rfdg................... 7.500 04/01/18 2,067,440
Brooklyn Cent MN Multi-Family Hsg Rev
1,955 Four Courts Apts Proj Ser A Rfdg...... 7.400 12/01/15 1,982,878
Brooklyn Cent MN Multi-Family Hsg Rev
1,220 Four Courts Apts Proj Ser A Rfdg...... 7.500 06/01/25 1,237,312
Chisago City, MN Hlth Fac Rev Part
750 Pleasant Heights Proj Ser A Rfdg...... 7.300 07/01/25 760,853
Maplewood, MN Hlthcare Fac Rev VOA
1,200 Care Cent Proj........................ 7.450 10/01/16 1,271,736
Minneapolis, MN Cmnty Dev Agy
Commercial Dev Rev Std Mill Hotel Proj
650 (e)................................... 8.000 04/01/10 260,000
Minneapolis, MN Commercial Dev Rev
800 Holiday Inn Metrodome Proj Rfdg....... 10.500 06/01/03 815,584
</TABLE>
14
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MINNESOTA (CONTINUED)
Minneapolis, MN Hlthcare Fac Rev
$ 1,950 Ebenezer Society Proj Ser A........... 7.200% 07/01/23 $ 1,994,616
Minneapolis, MN Hlthcare Fac Rev Saint
1,000 Olaf Residence Inc Proj............... 7.100 10/01/23 1,014,790
Minneapolis, MN Multi-Family Rev Hsg
350 Belmont Apts Proj..................... 7.250 11/01/16 351,911
Minneapolis, MN Multi-Family Rev Hsg
1,320 Belmont Apts Proj..................... 7.625 11/01/27 1,327,062
New Brighton, MN Rental Hsg Rev
Polynesian Village Apts Proj Ser A
3,040 Rfdg.................................. 7.500 10/01/17 3,080,949
New Hope Minnesota Multi-Family Rev
865 Hsg Broadway Lanel Proj............... 7.750 09/01/07 895,362
New Hope Minnesota Multi-Family Rev
2,320 Hsg Broadway Lanel Proj Rfdg.......... 7.750 09/01/07 2,391,572
North Saint Paul, MN Multi-Family Rev
920 Hsg Cottages North Saint Paul Rfdg.... 9.000 02/01/09 988,430
North Saint Paul, MN Multi-Family Rev
2,220 Hsg Cottages North Saint Paul Rfdg.... 9.250 02/01/22 2,383,570
Saint Paul, MN Hsg & Redev Auth
Commercial Dev Rev Beverly Enterprises
1,695 Rfdg.................................. 7.750 11/01/02 1,739,731
Shoreview, MN Sr Hsg Rev Shoreview Sr
500 Residence Proj........................ 7.250 02/01/26 499,325
Spring Lake Park, MN Multi-Family Hsg
2,000 Cottages Spring Lake Rfdg............. 8.375 01/01/22 2,037,860
------------
28,155,375
------------
MISSISSIPPI 1.9%
Claiborne Cnty, MS Pollutn Ctl Rev
5,500 Middle South Energy Inc Ser B......... 8.250 06/01/14 5,949,680
Claiborne Cnty, MS Pollutn Ctl Rev
7,575 Middle South Energy Inc Ser C......... 9.875 12/01/14 8,434,687
Lowndes Cnty, MS Hosp Rev Golden
1,000 Triangle Med Cent Rfdg................ 8.500 02/01/10 1,114,890
Ridgeland, MS Urban Renewal Rev the
3,000 Orchard Ltd Proj Ser A Rfdg........... 7.750 12/01/15 3,133,170
------------
18,632,427
------------
MISSOURI 1.8%
Chesterfield, MO Indl Dev Auth Rev
Saint Andrews Episcopal-Presbyterian
1,500 Ser A................................. 8.500 12/01/19 1,596,285
Good Shepherd Nursing Home Dist MO
1,000 Nursing Home Fac Rev.................. 7.625 08/15/15 1,027,660
Good Shepherd Nursing Home Dist MO
3,000 Nursing Home Fac Rev.................. 7.750 08/15/25 3,093,690
Jefferson Cnty, MO Indl Dev Auth Indl
Rev Cedars Hlthcare Cent Proj Ser A
2,840 Rfdg.................................. 8.250 12/01/15 2,845,652
1,115 Madison Cnty, MO Hosp Rev Ser A....... 7.700 10/01/18 1,124,299
1,490 Madison Cnty, MO Hosp Rev Ser A....... 7.900 10/01/26 1,504,572
Missouri St Hlth & Edl Fac Bethesda
1,075 Hlth Group Inc Proj A Rfdg............ 7.500 08/15/12 1,105,240
785 Perry Cnty, MO Nursing Home Rev Ser A. 7.650 03/01/16 799,562
1,745 Perry Cnty, MO Nursing Home Rev Ser A. 7.750 03/01/26 1,777,195
Saint Louis Cnty, MO Indl Dev Auth Rev
500 1st Mtg Deaconess Manor Assn.......... 7.500 06/01/16 508,810
Saint Louis Cnty, MO Indl Dev Auth Rev
500 1st Mtg Deaconess Manor Assn.......... 7.500 06/01/23 503,920
Saint Louis, MO Tax Increment Rev
1,830 Scullin Redev Area Ser A.............. 10.000 08/01/10 2,205,406
------------
18,092,291
------------
MONTANA 0.2%
Montana St Hlth Fac Auth Rev Mission
2,000 Ridge Proj Ser A...................... 7.000 08/15/26 2,006,060
------------
NEVADA 0.9%
Clark Cnty, NV Indl Dev Rev Southwest
2,000 Gas Corp Ser A........................ 6.500 12/01/33 2,019,780
1,500 Henderson, NV Local Impt Dist No T-10. 7.500 08/01/15 1,545,075
Henderson, NV Local Impt Dist No T-4
1,425 Ser B................................. 7.300 11/01/12 1,469,489
Las Vegas, NV Local Impt Bonds Spl
945 Impt Dist No 404...................... 7.300 11/01/09 972,074
Las Vegas, NV Spl Impt Dist No 505
985 Elkhorn Springs....................... 8.000 09/15/13 1,021,268
Nevada St Dept Commerce Hlth Fac Rev
1,975 Washoe Convalescent Cent Proj Rfdg.... 8.125 06/01/03 2,029,648
------------
9,057,334
------------
NEW HAMPSHIRE 4.9%
New Hampshire Higher Edl & Hlth Fac
Auth Rev 1st Mtg Odd Fellows Home
1,490 Rfdg.................................. 8.000 06/01/04 1,574,781
New Hampshire Higher Edl & Hlth Fac
Auth Rev 1st Mtg Odd Fellows Home
2,000 Rfdg.................................. 9.000 06/01/14 2,253,500
New Hampshire Higher Edl & Hlth Fac
435 Auth Rev Colby-Sawyer College Issue... 7.200 06/01/12 439,385
New Hampshire Higher Edl & Hlth Fac
2,565 Auth Rev Colby-Sawyer College Issue... 7.500 06/01/26 2,640,744
New Hampshire Higher Edl & Hlth Fac
5,000 Auth Rev Daniel Webster College Issue. 7.625 07/01/16 5,346,600
New Hampshire Higher Edl & Hlth Fac
1,000 Auth Rev Havenwood-Heritage Heights... 7.350 01/01/18 1,016,420
New Hampshire Higher Edl & Hlth Fac
4,825 Auth Rev Havenwood-Heritage Heights... 7.450 01/01/25 4,900,125
</TABLE>
15
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW HAMPSHIRE (CONTINUED)
New Hampshire Higher Edl & Hlth Fac
$ 2,425 Auth Rev Hlthcare Visiting Nurse....... 7.250% 09/01/23 $ 2,362,678
New Hampshire Higher Edl & Hlth Fac
1,425 Auth Rev Monadock Cmnty Hosp Issue..... 9.125 10/01/20 1,554,846
New Hampshire Higher Edl & Hlth Fac
2,000 Auth Rev New London Hosp Assn Proj..... 7.500 06/01/05 2,204,580
New Hampshire Higher Edl & Hlth Fac
3,500 Auth Rev Vly Regl Hosp................. 7.350 04/01/23 3,361,365
New Hampshire St Bus Fin Auth Elec Fac
4,110 Rev Plymouth Cogeneration.............. 7.750 06/01/14 4,247,438
New Hampshire St Bus Fin Auth Swr &
Solid Waste Disp Rev Crown Paper Co
1,500 Proj................................... 7.875 07/01/26 1,550,640
New Hampshire St Hsg Fin Auth Single
4,435 Family Residential..................... 8.500 07/01/14 4,669,390
New Hampshire St Indl Dev Auth Rev
Pollutn Ctl Pub Svcs Co of NH Proj Ser
3,420 A...................................... 7.650 05/01/21 3,537,648
New Hampshire St Indl Dev Auth Rev
Pollutn Ctl Pub Svcs Co of NH Proj Ser
2,300 C...................................... 7.650 05/01/21 2,379,120
New Hampshire St Indl Dev Auth Rev
4,000 Pollutn Ctl Ser B...................... 10.750 10/01/12 4,281,840
------------
48,321,100
------------
NEW JERSEY 4.0%
Camden Cnty, NJ Impt Auth Lease Rev
1,000 Dockside Refrigerated.................. 8.400 04/01/24 1,020,980
New Jersey Econ Dev Auth 1st Mtg
Delaire Nursing Ser A Rfdg (Prerefunded
750 @ 11/01/99).............................. 8.750 11/01/10 868,028
New Jersey Econ Dev Auth 1st Mtg Gross
Rev Burnt Tavrn Convalescent Ser A
500 Rfdg................................... 9.000 11/15/13 537,895
New Jersey Econ Dev Auth 1st Mtg Gross
1,240 Rev Dover Residential Hlthcare Fac (e)... 13.375 11/01/14 682,000
New Jersey Econ Dev Auth 1st Mtg Gross
2,250 Rev Franciscan Oaks Proj Ser A......... 8.500 10/01/23 2,401,110
New Jersey Econ Dev Auth 1st Mtg Gross
840 Rev Stone Arch Nursing Home Proj Rfdg.. 8.750 12/01/10 896,876
New Jersey Econ Dev Auth 1st Mtg Gross
1,000 Rev The Evergreens..................... 9.250 10/01/22 1,092,770
New Jersey Econ Dev Auth Econ Dev Rev
1,000 Borg Warner Corp....................... 11.200 08/01/04 1,039,920
New Jersey Econ Dev Auth Econ Dev Rev
500 Green Acres Manor Inc Ser A Rfdg....... 8.000 01/01/09 515,870
New Jersey Econ Dev Auth Econ Dev Rev
1,000 Green Acres Manor Inc Ser A Rfdg....... 8.250 01/01/17 1,032,480
New Jersey Econ Dev Auth Econ Dev Rev
4,000 Sr Mtg Holt Hauling Ser D.............. 10.250 09/15/14 4,158,440
New Jersey Econ Dev Auth Econ Dev Rev
4,365 United Methodist Homes................. 7.500 07/01/20 4,437,197
New Jersey Econ Dev Auth Econ Dev Rev
420 United Methodist Homes................. 7.500 07/01/24 426,489
New Jersey Econ Dev Auth Econ Dev Rev
500 Zirbser Greenbriar Inc Ser A Rfdg...... 7.375 07/15/03 525,395
New Jersey Econ Dev Auth Econ Dev Rev
915 Zirbser Greenbriar Inc Ser A Rfdg...... 7.750 07/15/08 959,679
New Jersey Econ Dev Auth Holt Hauling &
1,000 Warehsg Rev Ser G Rfdg................. 8.400 12/15/15 1,050,590
New Jersey Econ Dev Auth Rev 1st Mtg
500 Fellowship Village Proj Ser A.......... 8.500 01/01/10 532,270
New Jersey Econ Dev Auth Rev 1st Mtg
1,000 Fellowship Village Proj Ser A.......... 9.250 01/01/25 1,138,530
New Jersey Econ Dev Auth Rev 1st Mtg
975 Millhouse Proj Ser A................... 8.250 04/01/10 1,000,438
New Jersey Econ Dev Auth Rev 1st Mtg
2,060 Millhouse Proj Ser A................... 8.500 04/01/16 2,123,716
New Jersey Econ Dev Auth Rev 1st Mtg
1,860 Winchester Gardens Ser A............... 7.500 11/01/05 1,861,990
New Jersey Econ Dev Auth Rev 1st Mtg
1,000 Winchester Gardens Ser A............... 8.500 11/01/16 1,021,520
New Jersey Econ Dev Auth Rev 1st Mtg
1,500 Winchester Gardens Ser A............... 8.625 11/01/25 1,544,985
New Jersey Econ Dev Auth Rev Sr Mtg
855 Arbor Glen Proj Ser A.................. 8.000 05/15/02 875,358
New Jersey Econ Dev Auth Rev Sr Mtg
750 Arbor Glen Proj Ser A.................. 8.000 05/15/04 768,518
New Jersey Econ Dev Auth Rev Sr Mtg
2,000 Arbor Glen Proj Ser A.................. 8.000 05/15/12 2,038,640
New Jersey Econ Dev Auth Rev Sr Mtg
2,000 Arbor Glen Proj Ser A.................. 8.750 05/15/26 2,078,200
New Jersey Hlth Care Fac Fin Auth Rev
2,500 Raritan Bay Med Cent Issue Rfdg........ 7.250 07/01/14 2,639,350
New Jersey St Edl Fac Auth Rev Caldwell
1,000 College Ser A.......................... 7.250 07/01/25 1,057,860
------------
40,327,094
------------
NEW MEXICO 0.8%
Albuquerque, NM Nursing Home Rev
695 Albuquerque Hlthcare Rfdg.............. 9.750 12/01/14 744,849
Albuquerque, NM Retirement Fac Rev LA
4,555 Vida Llena Proj Ser A Rfdg............. 8.850 02/01/23 4,908,605
Farmington, NM Pollutn Ctl Rev San Juan
1,500 Proj Ser A Rfdg........................ 6.400 08/15/23 1,516,860
Santa Fe, NM Indl Rev Casa Real Nursing
715 Home Rfdg.............................. 9.750 01/01/13 753,052
Truth or Consequences, NM Nursing Home
455 Rev Sierra Hlthcare Rfdg & Impt........ 9.750 12/01/14 487,432
------------
8,410,798
------------
</TABLE>
16
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK 2.6%
Clifton Springs, NY Hosp & Clinic Ser
$ 1,210 A Rfdg & Impt......................... 7.650% 01/01/12 $ 1,238,435
Islip, NY Cmnty Dev Agy Cmnty Dev Rev
4,800 NY Institute of Technology Rfdg....... 7.500 03/01/26 4,985,952
New York City Indl Dev Agy Civic Fac
2,500 Rev................................... 7.500 08/01/26 2,515,625
New York City Indl Dev Agy Civic Fac
Rev Our Lady of Mercy Med Cent Pkg
4,170 Corp Proj............................. 8.500 12/30/22 4,477,579
New York City Indl Dev Agy Rev Solid
2,500 Waste Disposal Visy Paper Proj........ 7.800 01/01/16 2,656,600
New York St Energy Resh & Dev Auth
5,000 Elec Fac Rev Long Island Ltg Ser A.... 7.150 12/01/20 5,168,650
2,905 Newark Wayne Cmnty Hosp NY Rev Ser A.. 7.600 09/01/15 2,790,921
North Syracuse, NY Hsg Auth Rev Janus
2,000 Park Proj............................. 8.000 06/01/14 2,041,800
------------
25,875,562
------------
OHIO 5.2%
Athens Cnty, OH Hosp Fac Rev O'Bleness
1,500 Mem Hosp Proj......................... 7.100 11/15/23 1,487,130
Cleveland, OH Pkg Fac Rev (Prerefunded
3,000 @ 09/15/02)........................... 8.000 09/15/12 3,582,360
Cuyahoga Cnty, OH Hlthcare Fac Rev
1,000 Jennings Hall......................... 7.200 11/15/14 1,034,270
Cuyahoga Cnty, OH Hlthcare Fac Rev
1,500 Jennings Hall......................... 7.300 11/15/23 1,542,990
Cuyahoga Cnty, OH Hlthcare Fac Rev
2,500 Judson Retirement Cmnty Ser A Rfdg.... 7.250 11/15/13 2,536,825
Cuyahoga Cnty, OH Hlthcare Fac Rev
3,000 Judson Retirement Cmnty............... 7.250 11/15/18 3,025,860
Cuyahoga Cnty, OH Hlthcare Fac Rev
Judson Retirement Cmnty (Prerefunded @
2,555 11/15/99)............................. 8.875 11/15/19 2,946,273
Dayton, OH Spl Fac Rev Emery Air
7,625 Freight Corp Ser A Rfdg............... 12.500 10/01/09 8,522,005
Fairfield, OH Econ Dev Rev Beverly
500 Enterprises Proj Rfdg................. 8.500 01/01/03 539,515
Harrison, OH Harrison Ave Kmart Proj
1,945 Ser A................................. 8.125 12/01/02 2,024,278
Lorain Cnty, OH Hosp Rev Mtg Elyria
2,000 United Methodist Rfdg................. 6.875 06/01/22 2,015,640
Mount Vernon, OH Hosp Rev Knox Cmnty
2,500 Hosp Rfdg............................. 7.875 06/01/12 2,577,675
North Canton, OH Hlthcare Fac Rev
1,000 Waterford at Saint Luke Proj.......... 8.625 11/15/21 1,075,010
Ohio St Air Quality Dev Auth Rev
4,930 Pollutn Ctl Toledo Edison Ser B....... 9.875 11/01/22 5,119,164
Ohio St Indl Dev Rev 1st Mtg Swifton
1,036 Commons Proj Rfdg (e)................. 8.125 12/01/15 909,431
Ohio St Solid Waste Rev Rep Engineered
2,000 Steels Proj........................... 8.250 10/01/14 2,062,760
Ohio St Solid Waste Rev Rep Engineered
4,000 Steels Proj........................... 9.000 06/01/21 4,298,120
Ohio St Wtr Dev Auth Pollutn Ctl Fac
Rev Collateral Toledo Edison Ser A
2,000 Rfdg.................................. 8.000 10/01/23 2,173,740
Ohio St Wtr Dev Auth Pollutn Ctl Fac
Rev Collateral Cleveland Elec Ser A
2,000 Rfdg.................................. 8.000 10/01/23 2,173,740
Sandusky Cnty, OH Hosp Fac Rev Mem
2,250 Hosp Proj Rfdg........................ 7.750 12/01/09 2,266,155
------------
51,912,941
------------
OKLAHOMA 0.3%
Jackson Cnty, OK Mem Hosp Auth Rev
1,000 Jackson Mem (Prerefunded @ 08/01/97).. 9.000 08/01/15 1,054,780
500 Leflore Cnty, OK Hosp Auth Impt Rev... 9.400 05/01/06 538,410
Oklahoma Hsg Fin Agy Single Family
555 Class A (GNMA Collateralized)......... 7.997 08/01/18 592,923
500 Woodward, OK Muni Auth Hosp Rev....... 8.250 11/01/09 543,525
Woodward, OK Muni Auth Hosp Rev
500 (Prerefunded @ 11/01/00).............. 9.250 11/01/14 595,650
------------
3,325,288
------------
OREGON 0.2%
Salem, OR Hosp Fac Auth Rev Capital
1,500 Manor Inc............................. 7.500 12/01/24 1,568,445
------------
PENNSYLVANIA 12.1%
Allegheny Cnty, PA Hosp Dev Auth Rev
1,945 Hlth Fac Allegheny Vly Sch............ 7.500 02/01/10 1,988,821
Allegheny Cnty, PA Hosp Dev Auth Rev
3,120 Hlth Fac Allegheny Vly Sch............ 7.875 02/01/20 3,230,448
Beaver Cnty, PA Indl Dev Auth Pollutn
Ctl Collateral Cleveland Elec Proj
1,800 Rfdg.................................. 7.625 05/01/25 1,955,520
Beaver Cnty, PA Indl Dev Auth Pollutn
Ctl Rev Collateral Toledo Edison Co
7,550 Proj Rfdg............................. 7.625 05/01/20 8,202,320
Beaver Cnty, PA Indl Dev Auth Pollutn
Ctl Rev Collateral Toledo Edison Ser A
4,000 Rfdg.................................. 7.750 05/01/20 4,390,840
Beaver Cnty, PA Indl Dev Auth Pollutn
1,100 Ctl Rev OH Edison Proj Ser A Rfdg..... 7.750 09/01/24 1,162,161
Berks Cnty, PA Muni Auth Rev Phoebe
1,860 Berks Village Inc Proj Rfdg........... 7.500 05/15/13 1,911,280
Berks Cnty, PA Muni Auth Rev Phoebe
1,860 Berks Village Inc Proj Rfdg........... 7.700 05/15/22 1,880,776
Berks Cnty, PA Muni Auth Rev Phoebe
2,500 Berks Village Inc Proj Rfdg........... 8.250 05/15/22 2,655,900
Chartiers Vly, PA Indl & Commercial
1,000 Dev Auth 1st Mtg Rev.................. 7.250 12/01/11 1,023,400
</TABLE>
17
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
Chartiers Vly, PA Indl & Commercial
$ 2,000 Dev Auth 1st Mtg Rev.................. 7.400% 12/01/15 $ 2,058,020
Chartiers Vly, PA Indl & Commercial
Dev Auth 1st Mtg Rev (Prerefunded @
1,000 12/01/98)............................. 9.500 12/01/15 1,123,540
Clarion Cnty, PA Hosp Auth Hosp Rev
4,480 Clarion Hosp Proj..................... 8.100 07/01/12 4,762,822
Clarion Cnty, PA Hosp Auth Hosp Rev
1,000 Clarion Hosp Proj..................... 8.500 07/01/21 1,106,510
Columbia Cnty, PA Indl Dev Auth 1st
825 Mtg Rev 1st Str Assoc Proj Rfdg....... 9.000 05/01/14 881,323
Delaware Cnty, PA Auth Rev 1st Mtg
Riddle Village Proj (Prerefunded @
870 06/01/02)............................. 8.750 06/01/10 1,056,302
Delaware Cnty, PA Auth Rev 1st Mtg
Riddle Village Proj (Prerefunded @
2,800 06/01/02)............................. 9.250 06/01/22 3,465,420
Delaware Cnty, PA Auth Rev 1st Mtg
3,645 Riddle Village Proj Rfdg.............. 7.000 06/01/26 3,631,441
Delaware Cnty, PA Auth Rev White Horse
2,100 Village Ser A Rfdg.................... 7.500 07/01/18 2,166,234
Doylestown, PA Hosp Auth Hosp Rev Pine
1,350 Run Ser A............................. 7.200 07/01/23 1,389,434
Lebanon Cnty, PA Hlth Fac Auth Hlth
Cent Rev United Church of Christ Homes
1,250 Rfdg.................................. 7.250 10/01/19 1,256,100
Lehigh Cnty, PA Genl Purp Auth Rev 1st
250 Mtg Bible Fellowship Proj............. 7.150 12/15/08 258,073
Lehigh Cnty, PA Genl Purp Auth Rev 1st
2,315 Mtg Bible Fellowship Proj............. 8.000 12/15/23 2,388,756
Lehigh Cnty, PA Indl Dev Auth Rev
4,785 Rfdg.................................. 8.000 08/01/12 5,009,991
Luzerne Cnty, PA Indl Dev Auth 1st Mtg
2,000 Gross Rev Rfdg........................ 7.875 12/01/13 2,102,920
Luzerne Cnty, PA Indl Dev Auth Exmpt
Fac Rev PA Gas & Wtr Co Proj Ser A
3,000 Rfdg.................................. 7.200 10/01/17 3,226,500
Montgomery Cnty, PA Higher Ed & Hlth
500 Auth Rev Retirement Cmnty GDL Farms A. 9.500 01/01/20 582,240
Montgomery Cnty, PA Indl Dev Auth Rev
1,550 1st Mtg The Meadowood Corp Proj Ser A. 9.250 12/01/00 1,815,128
2,025 Montgomery Cnty, PA Indl Dev Auth Rev
1st Mtg The Meadowood Corp Proj Ser A
(Prerefunded @ 12/01/00).............. 10.000 12/01/19 2,458,370
Montgomery Cnty, PA Indl Dev Auth Rev
1st Mtg The Meadowood Corp Proj Ser A
2,500 Rfdg.................................. 10.250 12/01/20 2,769,325
Montgomery Cnty, PA Indl Dev Auth Rev
500 1st Mtg The Meadowood Corp Rfdg....... 7.000 12/01/10 508,740
Montgomery Cnty, PA Indl Dev Auth Rev
1,500 1st Mtg The Meadowood Corp Rfdg....... 7.250 12/01/15 1,505,400
Montgomery Cnty, PA Indl Dev Auth Rev
4,000 1st Mtg The Meadowood Corp Rfdg....... 7.400 12/01/20 3,999,080
Montgomery Cnty, PA Indl Dev Auth Rev
3,780 Assisted Living Ser A................. 8.250 05/01/23 3,978,601
Montgomery Cnty, PA Indl Dev Auth Rev
3,595 Hlthcare Adv Geriatric Ser A.......... 8.375 07/01/23 3,803,977
Montgomery Cnty, PA Indl Dev Auth Rev
805 Pennsburg Nursing & Rehab Cent........ 7.625 07/01/18 835,654
Montgomery Cnty, PA Indl Dev Auth Rev
2,660 Wordsworth Academy.................... 7.750 09/01/14 2,761,772
Northampton Cnty, PA Indl Dev Auth Rev
750 1st Mtg Kirkland Village Proj......... 7.375 12/15/18 751,125
Northampton Cnty, PA Indl Dev Auth Rev
750 1st Mtg Kirkland Village Proj......... 7.500 12/15/23 751,470
Pennsylvania Econ Dev Fin Auth Exempt
Fac Rev MacMillan Ltd Partnership
1,000 Proj.................................. 7.600 12/01/20 1,123,460
Pennsylvania Econ Dev Fin Auth
Recycling Rev Ponderosa Fibres Proj
1,500 Ser A................................. 9.250 01/01/22 1,412,610
Philadelphia, PA Auth for Indl Dev
2,000 Coml Philadelphia Arpt Rev Rfdg....... 7.750 12/01/17 2,158,940
Philadelphia, PA Auth for Indl Dev Rev
1,170 1st Mtg RHA/Care Pavilion Proj........ 10.250 02/01/18 1,208,598
Philadelphia, PA Auth for Indl Dev Rev
1,500 Cathedral Village..................... 7.250 04/01/15 1,513,305
Philadelphia, PA Auth for Indl Dev Rev
5,835 Long-Term Care Maplewood.............. 8.000 01/01/24 6,048,444
Philadelphia, PA Auth for Indl Dev Rev
2,000 Long-Term Care Maplewood.............. 8.000 01/01/14 2,076,120
Philadelphia, PA Auth for Indl Dev Rev
1,000 Lutheran Retire Ser B (Var Rate Cpn).. 5.000 01/01/17 730,060
Philadelphia, PA Hosps & Higher Ed Fac
1,875 Auth Hosp Rev......................... 7.250 03/01/24 1,836,563
Philadelphia, PA Pkg Auth Rev East
500 Market................................ 8.750 03/01/05 503,010
Philadelphia, PA Pkg Auth Rev East
1,785 Market................................ 8.875 03/01/10 1,795,371
Scranton-Lackawanna, PA Hlth & Welfare
Allied Auth Rev Svcs Rehab Hosp Proj
3,000 Ser A................................. 7.375 07/15/08 3,132,570
Somerset Cnty, PA Hosp Auth Rev
3,000 Somerset Cmnty Hosp Proj.............. 7.500 03/01/17 3,173,610
Warren Cnty, PA Indl Dev Auth Beverly
250 Enterprises Rfdg...................... 9.000 11/01/12 274,718
Washington Cnty, PA Hosp Auth Rev
2,300 Canonsburg Genl Hosp Rfdg............. 7.350 06/01/13 2,242,615
------------
120,035,728
------------
SOUTH CAROLINA 1.0%
Charleston Cnty, SC Hlth Fac Rev 1st
Mtg Episcopal Proj Rfdg (Prerefunded @
750 04/01/01)............................. 9.750 04/01/16 919,028
1,500 Charleston Cnty, SC Hlth Fac Rev 1st
Mtg Roper Geriatric Cent Inc Proj Rfdg
(Prerefunded @ 05/01/99).............. 7.750 05/01/17 1,646,220
McCormick Cnty, SC Hosp Fac Rev
390 McCormick Hlthcare Cent Proj.......... 10.500 03/01/18 399,984
</TABLE>
18
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
SOUTH CAROLINA (CONTINUED)
Piedmont Muni Pwr Agy South Carolina
$ 3,000 Elec Rev Rfdg......................... 6.550% 01/01/16 $ 3,021,750
Piedmont Muni Pwr Agy South Carolina
3,000 Elec Rev Rfdg......................... 6.600 01/01/21 3,016,650
South Carolina Jobs Econ Dev Auth Hlth
Fac Rev 1st Mtg Lutheran Homes SC
750 Proj.................................. 8.000 10/01/22 778,598
South Carolina Jobs Econ Dev Auth Hlth
Fac Rev 1st Mtg Lutheran Homes SC
250 Proj.................................. 7.750 10/01/12 259,303
------------
10,041,533
------------
SOUTH DAKOTA 0.1%
South Dakota St Hlth & Edl Fac Auth
1,000 Rev Huron Regl Med Cent............... 7.250 04/01/20 1,058,940
------------
TENNESSEE 0.4%
Smith Cnty, TN Hlth & Edl Fac 1st
500 Hlthcare Corp Proj Rfdg............... 7.400 04/01/13 508,945
Springfield, TN Hlth & Edl Fac Brd
3,000 Hosp Rev Jesse Holman Jones Hosp Proj. 8.250 04/01/12 3,228,300
------------
3,737,245
------------
TEXAS 5.1%
Alliance Arpt Auth Inc TX Spl Fac Rev
4,850 American Airls Inc Proj............... 7.500 12/01/29 5,218,988
Alliance Arpt Auth Inc TX Spl Fac Rev
11,150 Fed Express Corp Proj................. 6.375 04/01/21 11,316,024
Amarillo, TX Hlth Fac Corp Rev
1,380 Panhandle Retirement Ser B............ 7.000 08/15/15 1,382,650
Amarillo, TX Hlth Fac Corp Rev
3,000 Panhandle Retirement Ser B............ 7.750 08/15/18 3,037,400
Bell Cnty, TX Hlth Fac Dev Corp Rev
1,035 Hosp Proj............................. 9.250 07/01/08 1,139,732
Dallas-Fort Worth, TX Intl Arpt Fac
500 Impt Corp Rev American Airls Inc...... 7.500 11/01/25 537,945
Dallas-Fort Worth, TX Intl Arpt Fac
1,500 Impt Corp Rev American Airls Inc...... 7.250 11/01/30 1,625,220
Dallas-Fort Worth, TX Intl Arpt Fac
1,250 Impt Corp Rev Delta Airls Inc......... 7.625 11/01/21 1,365,263
De Soto, TX Hlth Fac Dev Corp Rev Park
2,665 Manor Sr Care......................... 7.750 12/01/16 2,622,760
Harris Cnty, TX Hsg Fin Corp Single
210 Family Hsg Rev........................ 9.875 03/15/14 210,714
Harris Cnty, TX Hsg Fin Corp Single
245 Family Hsg Rev Ser 1983 Ser A......... 10.125 07/15/03 245,245
Harris Cnty, TX Hsg Fin Corp Single
1,455 Family Hsg Rev Ser 1983 Ser A......... 10.375 07/15/14 1,450,638
Houston, TX Hsg Fin Corp Single Family
3,075 Mtg Rev Ser B......................... 10.375 12/15/13 3,083,795
Montgomery Cnty, TX Hlth Fac Dev Corp
Hosp Mtg Rev Woodlands Med Cent Proj
790 Rfdg.................................. 8.850 08/15/14 853,089
Northeast Hosp Auth TX Rev Northeast
1,250 Med Cent Hosp Ser B................... 7.250 07/01/22 1,333,225
Port Corpus Christi, TX Indl Dev Corp
4,505 Rev Valero Refining & Mktg Co Ser A... 10.250 06/01/17 4,760,704
Port Corpus Christi, TX Indl Dev Corp
500 Rev Valero Refining & Mktg Co Ser B... 10.625 06/01/08 530,565
Rusk Cnty, TX Hlth Fac Corp Hosp Rev
3,255 Henderson Mem Hosp Proj............... 7.750 04/01/13 3,424,618
San Antonio, TX Hlth Fac Dev Corp Rev
500 Encore Nursing Cent Partner........... 8.250 12/01/19 539,320
San Antonio, TX Hsg Fin Corp Multi-
Family Hsg Rev Marbach Manor Apts Proj
2,000 Ser A................................. 8.125 06/01/27 2,046,480
Tarrant Cnty, TX Hlth Fac Dev Corp Rev
1,500 Mtg Cumberland Rest Ser A Rfdg........ 7.000 08/15/19 1,501,500
Texas Genl Svcs Comm Partn Interests
1,401 Office Bldg & Land Aquisition Proj.... 7.000 08/01/24 1,442,991
790 Weslaco, TX Hlth Fac Dev Corp Hosp Rev
Welasco Hlth Fac Proj Ser B
(Prerefunded @ 06/01/98).............. 10.375 06/01/16 870,209
------------
50,539,075
------------
UTAH 0.4%
Hildale, UT Elec Rev Gas Turbine Elec
500 Fac Proj.............................. 7.600 09/01/06 509,035
Hildale, UT Elec Rev Gas Turbine Elec
1,000 Fac Proj.............................. 7.800 09/01/15 1,000,520
Utah St Hsg Fin Agy Single Family Mtg
2,345 Ser C2 (FHA Gtd)...................... 7.950 07/01/20 2,413,755
------------
3,923,310
------------
VERMONT 0.1%
Vermont Edl & Hlth Bldgs Fin Agy Rev
Northwestern Med Cent Ser A
700 (Prerefunded @ 09/01/98).............. 9.750 09/01/18 780,451
------------
VIRGINIA 1.6%
Alexandria, VA Indl Dev Auth Rev Saint
2,955 Coletta Sch Proj...................... 7.750 10/15/26 2,979,674
Covington-Alleghany Cnty, VA Indl Dev
870 Beverly Enterprises Proj Rfdg......... 9.375 09/01/01 966,118
Fairfax Cnty, VA Redev & Hsg Auth
3,000 Multi-Family Hsg Rev.................. 7.600 10/01/36 3,000,000
Hopewell, VA Indl Dev Auth Res
Recovery Rev Stone Container Corp Proj
1,500 Rfdg.................................. 8.250 06/01/16 1,635,075
Pittsylvania Cnty, VA Indl Dev Auth
1,000 Rev Exempt Fac Ser A.................. 7.450 01/01/09 1,051,800
Richmond, VA Redev & Hsg Auth Multi-
6,000 Family Rev Ser A Rfdg (Var Rate Cpn).. 8.000 12/15/21 5,977,440
------------
15,610,107
------------
</TABLE>
19
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
WASHINGTON 0.1%
Port Walla Walla, WA Pub Corp Solid
Waste Recycling Rev Ponderosa Fibres
$ 1,500 Proj.................................. 9.125% 01/01/26 $ 1,392,060
------------
WEST VIRGINIA 0.2%
Randolph Cnty, WV Bldg Commission
500 Davis Mem Hosp Proj Ser A Rfdg & Impt. 7.650 11/01/21 537,235
Weirton, WV Pollutn Ctl Rev Weirton
1,040 Steel Proj Rfdg....................... 8.625 11/01/14 1,091,605
------------
1,628,840
------------
WISCONSIN 0.8%
Wisconsin St Hlth & Edl Fac Auth Rev
795 Hess Mem Hosp Assn.................... 7.200 11/01/05 794,833
Wisconsin St Hlth & Edl Fac Auth Rev
2,000 Hess Mem Hosp Assn.................... 7.875 11/01/22 2,013,320
Wisconsin St Hlth & Edl Fac Auth Rev
2,500 Natl Regency of New Berlin Proj....... 8.000 08/15/25 2,548,600
Wisconsin St Hlth & Edl Milwaukee
3,000 Catholic Home Proj.................... 7.500 07/01/26 3,076,890
------------
8,433,643
------------
U. S. VIRGIN ISLANDS 0.3%
University of Virgin Islands Pub Fin
1,210 Auth Ser A............................ 7.500 10/01/09 1,337,667
University of Virgin Islands Pub Fin
1,965 Auth Ser A............................ 7.650 10/01/14 2,181,405
------------
3,519,072
------------
TOTAL LONG-TERM INVESTMENTS 98.3%
(Cost $945,075,401)........................................... 978,015,397
SHORT-TERM INVESTMENTS AT AMORTIZED COST 0.1%.................. 700,000
OTHER ASSETS IN EXCESS OF LIABILITIES 1.6%..................... 16,017,108
------------
NET ASSETS 100.0%.............................................. $994,732,505
------------
</TABLE>
(a) At November 30, 1996, for federal income tax purposes, cost is
$945,080,571; the aggregate gross unrealized appreciation is $39,681,346 and
the aggregate gross unrealized depreciation is $6,746,520, resulting in net
unrealized appreciation of $32,934,826.
(b) Securities purchased on a when-issued or delayed-delivery basis.
(c) Assets segregated as collateral for when-issued or delayed-delivery
purchase commitments.
(d) Interest is accruing for this security at less than the stated coupon.
(e) Non-Income producing security.
20
See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $945,075,401)
(Note 1)....................................................... $ 978,015,397
Short-Term Investments (Note 1)................................ 700,000
Cash........................................................... 82,152
Receivables:
Interest...................................................... 23,057,606
Securities Sold............................................... 4,515,866
Fund Shares Sold.............................................. 1,451,676
Other.......................................................... 4,131
--------------
Total Assets.................................................. 1,007,826,828
--------------
LIABILITIES:
Payables:
Securities Purchased.......................................... 7,248,217
Income Distributions.......................................... 3,031,741
Fund Shares Repurchased....................................... 1,571,081
Distributor and Affiliates (Note 2)........................... 609,253
Investment Advisory Fee (Note 2).............................. 452,766
Accrued Expenses............................................... 142,607
Deferred Compensation and Retirement Plans (Note 2)............ 38,658
--------------
Total Liabilities............................................. 13,094,323
--------------
NET ASSETS..................................................... $ 994,732,505
--------------
NET ASSETS CONSIST OF:
Capital (Note 3)............................................... $ 986,396,208
Net Unrealized Appreciation on Securities...................... 32,939,996
Accumulated Undistributed Net Investment Income................ 113,411
Accumulated Net Realized Loss on Securities.................... (24,717,110)
--------------
NET ASSETS..................................................... $ 994,732,505
--------------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net
assets of $620,960,577 and 55,746,099 shares of beneficial
interest issued and outstanding).............................. $ 11.14
Maximum sales charge (4.75%* of offering price)............... .56
--------------
Maximum offering price to public.............................. $ 11.70
--------------
Class B Shares:
Net asset value and offering price per share (Based on net
assets of $323,811,217 and 29,077,037 shares of beneficial
interest issued and outstanding).............................. $ 11.14
--------------
Class C Shares:
Net asset value and offering price per share (Based on net
assets of $49,960,711 and 4,490,533 shares of beneficial
interest issued and outstanding).............................. $ 11.13
--------------
</TABLE>
*On sales of $100,000 or more, the sales charge will be reduced.
21
See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
For the Year Ended November 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest........................................................... $65,971,253
-----------
EXPENSES:
Investment Advisory Fee (Note 2)................................... 4,757,392
Distribution (12b-1) and Service Fees (Attributed to Classes A, B
and C of
$1,380,920, $2,708,233 and $389,676, respectively) (Note 5)....... 4,478,829
Shareholder Services (Note 2)...................................... 888,765
Accounting Services (Note 2)....................................... 208,513
Legal (Note 2)..................................................... 46,103
Trustees Fees and Expenses (Note 2)................................ 41,035
Other.............................................................. 670,060
-----------
Total Expenses.................................................... 11,090,697
Less Expenses Reimbursed (Note 2)................................. 17,000
-----------
Net Expenses...................................................... 11,073,697
-----------
NET INVESTMENT INCOME.............................................. $54,897,556
-----------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Net Realized Gain on Investments................................... $ 2,092,011
-----------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period........................................... 36,755,483
End of the Period:
Investments..................................................... 32,939,996
-----------
Net Unrealized Depreciation on Securities During the Period........ (3,815,487)
-----------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES..................... $(1,723,476)
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS......................... $53,174,080
-----------
</TABLE>
22
See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended November 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
November 30, 1996 November 30, 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................... $ 54,897,556 $ 45,949,732
Net Realized Gain/Loss on Securities..... 2,092,011 (11,171,506)
Net Unrealized Appreciation/Depreciation
on Securities............................ (3,815,487) 56,699,702
------------ ------------
Change in Net Assets from Operations..... 53,174,080 91,477,928
------------ ------------
Distributions from Net Investment Income:
Class A Shares.......................... (36,684,070) (32,309,178)
Class B Shares.......................... (15,919,679) (12,327,837)
Class C Shares.......................... (2,289,094) (1,507,847)
------------ ------------
Total Distributions..................... (54,892,843) (46,144,862)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES............................... (1,718,763) 45,333,066
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold................ 301,612,850 222,380,164
Net Asset Value of Shares Issued Through
Dividend Reinvestment.................... 23,613,873 19,652,888
Cost of Shares Repurchased............... (110,086,181) (91,773,703)
------------ ------------
CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS............................. 215,140,542 150,259,349
------------ ------------
TOTAL INCREASE IN NET ASSETS............. 213,421,779 195,592,415
NET ASSETS:
Beginning of the Period.................. 781,310,726 585,718,311
------------ ------------
End of the Period (Including
undistributed net investment income of
$113,411 and $26,781, respectively)..... $994,732,505 $781,310,726
------------ ------------
</TABLE>
See Notes to Financial Statements
23
<PAGE>
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the
Fundoutstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended November 30,
-------------------------------------
Class A Shares 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period. $11.18 $10.44 $11.19 $10.95 $10.78
------- ------ ------ ------ ------
Net Investment Income................... .735 .74 .76 .8132 .815
Net Realized and Unrealized Gain/Loss on
Securities............................. (.041) .7475 (.744) .2303 .195
------- ------ ------ ------ ------
Total from Investment Operations......... .694 1.4875 .016 1.0435 1.01
Less Distributions from Net Investment
Income................................... .735 .7475 .766 .8035 .84
------- ------ ------ ------ ------
Net Asset Value, End of the Period ...... $11.139 $11.18 $10.44 $11.19 $10.95
------- ------ ------ ------ ------
Total Return (a)......................... 6.47% 14.65% .10% 9.65% 9.77%
Net Assets at End of the Period (In
millions)................................ $621.0 $516.3 $411.1 $408.0 $309.5
Ratio of Expenses to Average Net Assets
(b)...................................... 1.01% .98% 1.02% 1.03% 1.07%
Ratio of Net Investment Income to Average
Net Assets (b)........................... 6.64% 6.81% 6.98% 7.13% 7.45%
Portfolio Turnover....................... 23% 26% 33% 27% 24%
</TABLE>
(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) The impact on the Ratios of Expenses and Net Investment Income to Average
Net Assets due to VKAC reimbursement of expenses was less than 0.01%.
24
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
July 20, 1992
Year Ended November 30, (Commencement
-------------------------------- of Distribution) to
Class B Shares 1996 1995 1994 1993(a) November 30, 1992(a)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period. $ 11.18 $ 10.43 $11.18 $10.96 $11.08
------- ------- ------ ------ ------
Net Investment Income.. .653 .66 .68 .6919 .27
Net Realized and
Unrealized Gain/Loss
on Securities......... (.046) .7535 (.748) .2476 (.1122)
------- ------- ------ ------ ------
Total from Investment
Operations.............. .607 1.4135 (.068) .9395 .1578
Less Distributions from
Net Investment Income.. .651 .6635 .682 .7195 .2778
------- ------- ------ ------ ------
Net Asset Value, End of
the Period.............. $11.136 $11.18 $10.43 $11.18 $10.96
------- ------- ------ ------ ------
Total Return (b) ....... 5.67% 13.89% (.76%) 8.84% 1.45%*
Net Assets at End of the
Period (In millions)... $323.8 $233.9 $159.3 $104.8 $21.0
Ratio of Expenses to
Average Net Assets (c).. 1.77% 1.73% 1.77% 1.77% 1.71%
Ratio of Net Investment
Income to Average Net
Assets (c)............. 5.88% 6.03% 6.19% 6.15% 5.88%
Portfolio Turnover...... 23% 26% 33% 27% 24%
</TABLE>
*Non-Annualized
(a) Based on average month-end shares outstanding.
(b) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(c) The impact on the Ratios of Expenses and Net Investment Income to Average
Net Assets due to VKAC reimbursement of expenses was less than 0.01%.
25
See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the
Fundoutstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
December 10, 1993
(Commencement
Year Ended Year Ended of Distribution) to
Class C Shares November 30, 1996 November 30, 1995 November 30, 1994(a)
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value,
Beginning of the Period. $ 11.17 $ 10.42 $ 11.29
------- ------- -------
Net Investment Income.. .652 .66 .63
Net Realized and
Unrealized Gain/Loss
on Investments........ (.045) .7535 (.8363)
------- ------- -------
Total from Investment
Operations.............. .607 1.4135 (.2063)
Less Distributions from
Net Investment Income... .651 .6635 .6637
------- ------- -------
Net Asset Value, End of
the Period.............. $11.126 $ 11.17 $ 10.42
------- ------- -------
Total Return (b) ....... 5.68% 13.79% (1.80%)*
Net Assets at End of the
Period (In millions).... $50.0 $31.1 $15.3
Ratio of Expenses to
Average Net Assets (c).. 1.77% 1.72% 1.75%
Ratio of Net Investment
Income to Average Net
Assets (c)............. 5.86% 5.98% 6.07%
Portfolio Turnover...... 23% 26% 33%
</TABLE>
*Non-Annualized
(a) Based on average month-end shares outstanding.
(b) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(c) The impact on the Ratios of Expenses and Net Investment Income to Average
Net Assets due to VKAC reimbursement of expenses was less than 0.01%.
26
See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
November 30, 1996
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital High Yield Municipal Fund (the "Fund") is organized
as a series of the Van Kampen American Capital Tax-Exempt Trust, a Delaware
business trust, and is registered as a diversified open-end management invest-
ment company under the Investment Company Act of 1940, as amended. The Fund's
investment objective is to provide as high a level of interest income exempt
from federal income tax as is consistent with investing in medium- to lower-
rated high yielding municipal securities. The Fund commenced investment opera-
tions on January 2, 1986. The distribution of the Fund's Class B and Class C
shares commenced on July 20, 1992 and December 10, 1993, respectively.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent 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 VALUATIONS-Municipal bonds are valued at the most recently quoted
bid prices furnished by an independent pricing service or dealers. Securities
for which market quotations are not readily available are valued at fair value
as determined in good faith by the Board of Trustees of the Fund. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
The Fund's investments include lower-rated and unrated debt securities which
may be more susceptible to adverse economic conditions than 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. Securities rated below investment grade and
comparable unrated securities represented approximately 86% of the Fund's
investment portfolio at the end of the period.
B. SECURITY TRANSACTIONS-Security transactions are recorded on a trade date ba-
sis. Realized gains and losses are determined on an identified cost basis. The
Fund may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Fund will
maintain, in a segregated account with its custodian, assets having an aggre-
gate value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
The Fund invests in repurchase agreements, which are short-term investments
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 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") or its
affiliates, the daily aggregate of which is invested in repurchase agreements.
Repurchase agreements are collateralized by the underlying debt securities. The
Fund will make payment for such securities only upon physical delivery or evi-
dence 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-Interest income is recorded on an accrual basis. Bond pre-
mium and original issue discount are amortized over the life of each applicable
security. 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 requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
The Fund intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset these losses against any future realized capital
gains. At
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
November 30, 1996, the Fund had an accumulated capital loss carryforward for
tax purposes of $24,474,967 which expires between November 30, 1997 and Novem-
ber 30, 2003. Of this amount, $2,674,127 will expire in 1997. Net realized loss
differs for financial reporting and tax purposes primarily as a result of the
deferral of post October 31 losses which are not recognized for tax purposes
until the first day of the following fiscal year.
E. DISTRIBUTION OF INCOME AND GAINS-The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are distrib-
uted annually. Permanent book and tax basis differences relating to the expira-
tion of a portion of the capital loss carryforward totaling $4,412,954 were
reclassified from net realized gain/loss on securities to capital. Permanent
differences relating to the recognition of expenses associated with the consol-
idation of the VKAC open-end fund complex totaling $76,482 were reclassified
from accumulated undistributed net investment income to capital. Additionally,
permanent differences relating to the recognition of market discount on bonds
totaling $5,435 were reclassified from net realized gain/loss on securities to
accumulated undistributed net investment income.
For the year ended November 30, 1996, 99.96% of the income distributions made
by the Fund were exempt from federal income taxes. In January, 1997, the Fund
will provide tax information to shareholders for the 1996 calendar year.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- --------------------------------------------------------------------------------
<S> <C>
First $300 million.................................................. .60 of 1%
Next $300 million................................................... .55 of 1%
Over $600 million................................................... .50 of 1%
</TABLE>
The Adviser has agreed to reimburse the Fund for certain trustees' compensa-
tion in connection with the July, 1995 increase in the number of trustees of
the Fund. This reimbursement is expected to continue through December 31, 1996.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.
For the year ended November 30, 1996, the Fund recognized expenses of approx-
imately $208,500 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., an affiliate of the Adviser, serves as the
shareholder servicing agent for the Fund. For the year ended November 30, 1996,
the Fund recognized expenses of approximately $728,600, representing ACCESS'
cost of providing transfer agency and shareholder services plus a profit.
Additionally, for the year ended November 30, 1996, the Fund reimbursed VKAC
approximately $76,500 related to the direct cost of consolidating the VKAC
open-end fund complex. Payment was contingent upon the realization by the Fund
of cost efficiencies in shareholder services resulting from 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.
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of shares of beneficial interest, Clas-
ses A, B and C each with a par value of $.01 per share. There are an unlimited
number of shares of each class authorized.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
November 30, 1996, the Fund had an accumulated capital loss carryforward for
tax purposes of $24,474,967 which expires between November 30, 1997 and Novem-
ber 30, 2003. Of this amount, $2,674,127 will expire in 1997. Net realized loss
differs for financial reporting and tax purposes primarily as a result of the
deferral of post October 31 losses which are not recognized for tax purposes
until the first day of the following fiscal year.
E. DISTRIBUTION OF INCOME AND GAINS-The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are distrib-
uted annually. Permanent book and tax basis differences relating to the expira-
tion of a portion of the capital loss carryforward totaling $4,412,954 were
reclassified from net realized gain/loss on securities to capital. Permanent
differences relating to the recognition of expenses associated with the consol-
idation of the VKAC open-end fund complex totaling $76,482 were reclassified
from accumulated undistributed net investment income to capital. Additionally,
permanent differences relating to the recognition of market discount on bonds
totaling $5,435 were reclassified from net realized gain/loss on securities to
accumulated undistributed net investment income.
For the year ended November 30, 1996, 99.96% of the income distributions made
by the Fund were exempt from federal income taxes. In January, 1997, the Fund
will provide tax information to shareholders for the 1996 calendar year.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- --------------------------------------------------------------------------------
<S> <C>
First $300 million.................................................. .60 of 1%
Next $300 million................................................... .55 of 1%
Over $600 million................................................... .50 of 1%
</TABLE>
The Adviser has agreed to reimburse the Fund for certain trustees' compensa-
tion in connection with the July, 1995 increase in the number of trustees of
the Fund. This reimbursement is expected to continue through December 31, 1996.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.
For the year ended November 30, 1996, the Fund recognized expenses of approx-
imately $208,500 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., an affiliate of the Adviser, serves as the
shareholder servicing agent for the Fund. For the year ended November 30, 1996,
the Fund recognized expenses of approximately $728,600, representing ACCESS'
cost of providing transfer agency and shareholder services plus a profit.
Additionally, for the year ended November 30, 1996, the Fund reimbursed VKAC
approximately $76,500 related to the direct cost of consolidating the VKAC
open-end fund complex. Payment was contingent upon the realization by the Fund
of cost efficiencies in shareholder services resulting from 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.
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of shares of beneficial interest, Clas-
ses A, B and C each with a par value of $.01 per share. There are an unlimited
number of shares of each class authorized.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
November 30, 1996
- --------------------------------------------------------------------------------
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 will be imposed
on most redemptions made within six years of the purchase 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 respective deferred sales ar-
rangements, including higher distribution and service fees and incremental
transfer agency costs.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C>
First....................................................... 4.00% 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 year ended November 30, 1996, VKAC, as distributor for the Fund, re-
ceived net commissions on sales of the Fund's Class A shares of approximately
$588,200 and CDSC on the redeemed shares of Classes B and C of approximately
$558,400. 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 and reorganization and restructuring
costs, were $420,555,572 and $198,036,929, respectively.
5. 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 (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.
Annual fees under the Plans of up to .25% for Class A net assets and 1.00%
each for Class B and Class C net assets are accrued daily. Included in these
fees for the year ended November 30, 1996, are payments to VKAC of approxi-
mately $2,430,000.
30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
VAN KAMPEN AMERICAN CAPITAL HIGH YIELD MUNICIPAL FUND
In our opinion, the accompanying statement of assets and liabilities, including
the portfolio of investments, and the related statements of operations and of
changes in net assets and the financial highlights present fairly, in all mate-
rial respects, the financial position of Van Kampen American Capital High Yield
Municipal Fund (the "Fund"), a series of the Van Kampen American Capital Tax-
Exempt Trust, at November 30, 1996, and the results of its operations, the
changes in its net assets and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles. These
financial statements and financial highlights (hereafter referred to as "finan-
cial statements") are the responsibility of the Fund's management; our respon-
sibility is to express an opinion on these financial statements based on our
audits. We conducted our audits of these financial statements in accordance
with generally accepted auditing standards which require that we plan and per-
form the audit to obtain reasonable assurance about whether the financial
statements 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
November 30, 1996 by correspondence with the custodian and brokers and the ap-
plication of alternative auditing procedures where confirmations from brokers
were not received, provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
January 15, 1997
31
<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
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.
32
<PAGE>
VAN KAMPEN AMERICAN CAPITAL HIGH YIELD MUNICIPAL FUND
BOARD OF TRUSTEES INVESTMENT ADVISER
J. MILES BRANAGAN VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
LINDA HUTTON HEAGY One Parkview Plaza
Oakbrook Terrace, Illinois 60181
ROGER HILSMAN
DISTRIBUTOR
R. CRAIG KENNEDY
VAN KAMPEN AMERICAN CAPITAL
DENNIS J. MCDONNELL* DISTRIBUTORS, INC.
One Parkview Plaza
DONALD C. MILLER - Co-Chairman Oakbrook Terrace, Illinois 60181
JACK E. NELSON SHAREHOLDER SERVICING AGENT
JEROME L. ROBINSON ACCESS INVESTOR
SERVICES, INC.
FERNANDO SISTO - Co-Chairman P.O. Box 418256
Kansas City, Missouri 64141-9256
WAYNE W. WHALEN*
CUSTODIAN
WILLIAM S. WOODSIDE
STATE STREET BANK
AND TRUST COMPANY
OFFICERS 225 Franklin Street
P.O. Box 1713
DENNIS J. MCDONNELL* Boston, Massachusetts 02105
President
LEGAL COUNSEL
RONALD A. NYBERG*
Vice President and Secretary SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
EDWARD C. WOOD, III* 333 West Wacker Drive
Vice President and Chief Financial Officer Chicago, Illinois 60606
CURTIS W. MORELL* INDEPENDENT ACCOUNTANTS
Vice President and Chief Accounting Officer
PRICE WATERHOUSE LLP
JOHN L. SULLIVAN* 1201 Louisiana
Treasurer Houston, Texas 77002
TANYA M. LODEN*
Controller
PETER W. HEGEL*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents
*"Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C)Van Kampen American Capital Distributors, Inc., 1997 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
unless 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.
RESULTS OF SHAREHOLDER VOTES
A Special Meeting of Shareholders of the Fund was held on October 25, 1996
where shareholders voted on a new investment advisory agreement, a new
investment subadvisory agreement, changes to investment policies and the
ratification of Price Waterhouse LLP as independent public accountants. With
regard to the approval of a new investment advisory agreement between Van
Kampen American Capital Asset Management, Inc. and the Fund, 59,188,203 shares
voted for the proposal, 1,306,880 shares voted against and 3,063,414 shares
abstained. With regard to the approval of an investment subadvisory agreement
between the Fund and Van Kampen American Capital Advisors Inc., 59,567,538
shares voted for the proposal, 1,183,296 shares voted against and 2,807,664
shares abstained. With regard to the approval of certain changes to the Fund's
fundamental investment policies with respect to investment in other investment
companies, 37,501,325 shares voted for the proposal, 1,192,872 shares voted
against and 3,270,840 shares abstained. With regard to the ratification of
Price Waterhouse LLP as independent public accountants for the Fund,
60,596,934 shares voted for the proposal, 517,531 shares voted against and
2,444,031 shares abstained.
33
