<PAGE>
Van Kampen American Capital
HIGH YIELD
MUNICIPAL FUND
Semi-Annual Report
May 31, 1998
[ARTWORK APPEARS HERE]
----A Wealth of Knowledge . A Knowledge of Wealth./sm/----
VAN KAMPEN AMERICAN CAPITAL
<PAGE>
Table of Contents
Letter to Shareholders..................................................... 1
Performance Results........................................................ 3
Glossary of Terms.......................................................... 4
Portfolio Management Review................................................ 6
Portfolio Highlights....................................................... 9
Portfolio of Investments................................................... 10
Statement of Assets and Liabilities........................................ 48
Statement of Operations.................................................... 49
Statement of Changes in Net Assets......................................... 50
Financial Highlights....................................................... 51
Notes to Financial Statements.............................................. 54
HYM SAR 7/98
<PAGE>
Letter to Shareholders
[PHOTO APPEARS HERE]
Dennis J. McDonnell and Don G. Powell
June 19, 1998
Dear Shareholder,
The recent announcement that the federal government will generate a budget
surplus this year for the first time since 1969 gives us pause to reflect on how
far the nation's finances have come during the past 15 years. Many Americans
can remember the 1970s, when a painful outbreak of inflation undermined
investment returns and lowered living standards. Just a few years ago, the
federal budget was still nearly $300 billion in the red and the U.S. dollar was
weak.
Today, economic growth is robust, inflation is virtually nonexistent, the
job market is healthy, and the dollar is rising around the world. Against this
backdrop, stock and bond prices have appreciated considerably since the nation's
inflationary fever began to subside more than a decade ago. From a long-term
perspective, however, history tells us that the good times will not last
forever.
At Van Kampen American Capital, we are pleased to provide investors with
products and tools for all economic climates. As always, we remain vigilant in
identifying changes in the investment environment that might affect our fund
shareholders. In the meantime, we encourage you to talk to your adviser about
how diversification can help your portfolio's long-term performance.
Economic Overview
The United States economy continued to grow briskly during the reporting
period with no evidence of inflation. The nation's output of goods and services
(gross domestic product) increased at an annualized rate of 4.2 percent in the
first quarter of 1998, while unemployment fell to the lowest level since 1970.
Meanwhile, consumer confidence soared to a 28-year high in February.
At the consumer level, inflation fell to approximately 1.37 percent during
the six months ended in May, while producer prices actually declined over the
same period. Several factors contributed to keeping inflation in check despite
strong overall growth. The extreme economic weakness in Asia reduced demand for
U.S. goods in the region. Also, the strong dollar helped to contain price
increases for many imported goods. Finally, the Asian recession contributed to a
sharp decline in world energy and commodity prices.
There are indications, however, that mild price pressures are building. The
low unemployment rate has caused a modest acceleration in wages. Also, the
nation's money supply has been growing at an above-average rate for most of the
last year.
Despite these warning signs of potential inflation, Federal Reserve policy
makers kept short-term interest rates unchanged during the reporting period.
Inflation-adjusted interest rates remain relatively high by historical
standards, and with no sign of rising inflation, the Fed has been reluctant to
risk damaging the frail Asian economies further by tightening monetary policy.
Continued on page two
1
<PAGE>
PAGE>
Market Review
Interest rates bounced within an extremely tight range as investors
struggled to assess the ultimate impact of the Asian recession on U.S.
inflation. After beginning the reporting period at about 6.05 percent, the yield
on the Treasury's 30-year benchmark bond fell to 5.72 percent in early January
amid signs that the Asian crisis was deepening. Then, as tentative signs of
recovery appeared in the region, long-term yields climbed back above 6.00
percent. Finally, intense political and social unrest in Asia convinced
investors that the region's troubles would dampen price pressures building in
the United States.
Tax-exempt municipal bonds were aided by the general decline in long-term
interest rates. During the six months through May, the Lehman Brothers
Municipal Bond Index returned 3.78 percent, while 30-year, A-rated municipal
revenue bonds closed the reporting period with a yield of 5.39 percent,
equivalent to an 8.42 percent taxable yield for an investor in the 36 percent
federal income tax bracket.
Outlook
Economic growth is likely to slow in the coming months as the impact of the
Asian crisis becomes more evident. A return to the Goldilocks economy--not too
hot, not too cold--should allow long-term interest rates to fall modestly from
current levels. If fallout from Asia does not brake economic activity enough to
counteract the inflationary pressures building in the economy, we would expect
the Federal Reserve to raise short-term interest rates by the end of the year.
Additional details about your Fund, including a question-and-answer section
with your portfolio management team, are provided in this report. As always, we
are pleased to have the opportunity to serve you and your family through our
diverse selection of quality investments.
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
Investment Advisory Corp. Investment Advisory Corp.
2
<PAGE>
Performance Results for the Period Ended May 31, 1998
Van Kampen American Capital High Yield Municipal Fund
<TABLE>
<CAPTION>
A Shares B Shares C Shares
<S> <C> <C> <C>
Total Returns
Six-month total return based on NAV/1/........ 4.74% 4.28% 4.28%
Six-month total return/2/..................... (0.22%) 0.28% 3.28%
Five-year average annual total return/2/...... 6.68% 6.67% N/A
Ten-year average annual total return/2/....... 7.95% N/A N/A
Life-of-Fund average annual total return/2/... 7.24% 7.13% 6.79%
Commencement date............................. 01/02/86 07/20/92 12/10/93
Distribution Rates and Yield
Distribution rate/3/.......................... 5.70% 5.26% 5.27%
Taxable-equivalent distribution rate/4/....... 8.91% 8.22% 8.23%
SEC Yield/5/.................................. 5.08% 4.56% 4.57%
</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 May 31, 1998.
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>
Glossary of Terms
Basis point:
A measure used in quoting yields on bonds. One hundred basis points is
equal to one percent. For example, if a bond's yield changes from 7.00 to
6.65 percent, it would be considered a 35 basis point move.
Call feature:
Allows the issuer to buy back the bond before the date of maturity. When
the bond is called, the issuer repurchases it at or above its face value,
and stops paying interest on that loan.
Class A shares:
When Class A shares of a fund are purchased, the share price includes the
net asset value plus a one-time sales charge (or "load"). There is no
redemption fee (Contingent Deferred Sales Charge).
Coupon rate:
The stated rate of interest the bond pays until maturity, expressed as a
percentage of the face value.
Credit spread:
Also called quality spread, the difference in yield between higher-quality
issues (such as AAA-rated municipal securities) and lower-quality issues
(such as BBB- and non-rated municipal bonds). Under normal circumstances,
lower-quality issues provide higher yields in order to compensate investors
for the additional credit risk.
Duration:
A measure of a bond's sensitivity to changes in interest rates, expressed
in years. The longer a fund's duration, the greater the effect of interest
rate movements on net asset value. Typically, funds with shorter durations
have performed better in rising rate environments, while funds with longer
durations have performed better when rates decline.
Federal funds rate:
The interest rate charged by one institution lending federal funds to
another. This overnight rate is used to meet banks' daily reserve
requirements. The Federal Reserve Board uses the federal funds rate to
affect the direction of interest rates.
Federal Reserve Board (The Fed):
A seven-member group that directs the operations of the Federal Reserve
System, the central bank system of the United States. Currently led by
Chairman Alan Greenspan, the Fed meets eight times a year to establish
monetary policy and monitor the country's economic pulse.
General obligation bonds:
Bonds backed by the full faith and credit (taxing authority) of the issuer
for timely payment of interest and principal. General obligation bonds are
issued to finance essential government projects, such as highways and
schools.
4
<PAGE>
Inflation:
An economic state in which the amount of money supply and business activity
dramatically increases, accompanied by sharply rising prices. Inflation is
widely measured by the Consumer Price Index, a leading economic indicator
that measures the change in the cost of purchased goods and services.
Municipal bond:
A debt security issued by a state, municipality, or other governmental
entity to finance capital expenditures. Such expenditures might include
the construction of highways, public works, or school buildings.
Municipal revenue bonds:
Bonds that are payable only from the revenues the project will generate and
are not backed by any taxing authority of the issuer. Revenue bonds are
issued to finance the building of hospitals, toll bridges, electric dams,
airports, and college dormitories.
Municipal yield curve:
A representation of the actual or projected yields of municipal bond
securities in relationship to their maturities.
Net asset value (NAV):
The value of a mutual fund share, calculated by deducting a fund's
liabilities from its total assets and dividing this amount by the number of
shares outstanding. The NAV does not include any initial or contingent
deferred sales charges.
Put bond:
A long-term bond that the bondholder can "put" back to the issuer for
redemption at a specified price on a specified future date prior to
maturity.
Refunding:
A process whereby new bonds are issued to refinance an outstanding bond
issue. This typically occurs when interest rates decline and an issuer
wishes to replace higher-yielding bonds with current lower-yielding issues.
Yield curve:
A result of viewing the yields of U.S. Treasury securities maturing in 1,
5, 10, and 30 years, grouped together, will often reflect a pattern of
increasing yield as maturity extends. This pattern creates an upward
sloping "curve." A "flat" yield curve represents little difference between
short-and long-term interest rates. An "inverted" yield curve indicates
that short-term rates are rising as long-term rates move lower.
Zero coupon bonds:
A corporate or municipal debt security traded at a deep discount from face
value that pays no interest and it may be redeemed at maturity for full
face value.
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 past six months. The team includes Wayne D. Godlin,
portfolio manager, and Peter W. Hegel, chief investment officer for fixed-income
investments. The following excerpts reflect their views on the Fund's
performance during the six-month period ended May 31, 1998.
Q How would you describe the market environment in which the Fund has
operated during the past six months?
A The municipal bond market was in a steady, tight trading range during the
past six months, which created limited opportunities in the secondary
market. The primary market, however, continued to produce a moderate supply of
new high-yield issues. As a result, we focused on the primary market and
acquired many issues that we believed would benefit the portfolio.
By the middle of the period, bond prices and yields began to fluctuate amid
speculation that the Federal Reserve Board intended to drop its neutral
monetary policy stance and was leaning toward raising interest rates in order to
tighten the money supply. Despite its concerns, the Fed chose not to act during
its May 19 meeting regarding an interest rate change.
Q What changes have you made to the Fund's portfolio during the reporting
period?
A Because we evaluate bonds on an individual basis, we continued to make
purchases based on high-yield opportunities that we feel offered our
shareholders the greatest value. As a result, we increased our exposure to non-
rated bonds. The portfolio as of May 31, 1998, consisted of 81.6 percent non-
rated bonds, compared to 73.2 percent at the beginning of the period.
With this focus, we continue to maintain a highly diversified fund, which
is an important feature of our investment approach in high-yield, high-risk
municipal bonds. We seek to find value in small- and mid-size new issues in the
$5 to $15 million range, and have an average exposure to the Fund of 0.2 percent
per issue.
Although our focus is on individual bonds, there are municipal bond sectors
that offer particular value. Recently, we have added to the portfolio's multi-
family housing sector exposure because we have found value in areas that have
limited supply and lack new construction. We recently purchased new issues in
Arizona, Florida, and Missouri in the multi-family housing sector. For
additional Fund portfolio highlights, please refer to page nine.
Q How do you feel about the Fund's performance during the past six months?
A The Fund has performed relatively well. The total return for the six months
ended May 31, 1998, was 4.74 percent/1/ (Class A shares at net asset
value), and the Fund's net asset value closed the reporting period at $11.64 per
Class A share, up from $11.45 at the beginning of the period. The Fund's tax-
exempt distribution rate as of May 31, 1998, was 5.70 percent/3/, representing a
taxable equivalent distribution rate of 8.91 percent/4/ for an investor in the
36 percent federal income tax bracket.
6
<PAGE>
Our total return record continues to outpace the Lehman Brothers Municipal
Bond Index, which returned 3.78 percent during the same six-month period. This
index is a broad-based index of municipal bonds and does not reflect any
commissions or sales charges that would be paid by an investor purchasing the
securities or investments it represents. Please refer to the chart on page three
for additional Fund performance results.
The Fund's Class A share performance also earned an overall rating of five
stars from Morningstar among 1,823 funds in the Municipal Bond Fund Category.
Morningstar is an independent rating company and the five-star composite rating
is the highest rating it assigns in its monthly mutual fund reviews.* While past
performance is no guarantee of future results, Morningstar ratings provide a
means to measure a fund's ability to achieve its investment goals. The Fund's
Class A shares received five stars in each of the three-, five-, and ten-year
periods, which were calculated among 1,548; 819; and 348 funds, respectively.
Ten percent of the funds receive five stars, 22.5 percent receive four stars,
35 percent receive three stars, 22.5 percent receive two stars, and 10 percent
receive one star.
Q What prevailing market trends have had the greatest effect on the Fund's
performance during the reporting period and did anything surprise you?
A The municipal bond market continued to experience significant tightening in
credit spreads, which increased the value of the portfolio's lower- and
non-rated bonds. In addition, because we are in a period of lower yields, there
is growing national interest in opportunities within the high-yield, high-risk
municipal bond market. Continued strong demand in the high-yield market forces
us to maintain a selective, disciplined process.
We continue to benefit from high-yield bonds with strong credit performance
and price appreciation, especially from issues that we've purchased over the
last several years. Overall, we are very pleased with the Fund's performance
under these conditions.
The biggest surprise to us was the market's strength, especially from a
supply and demand standpoint. Strong supply provided a greater selection of
bonds and allowed us to pick and choose our opportunities. With low interest
rates and controlled inflation, municipalities financed debt at attractive
levels and created a positive environment for bonds and their borrowers.
Q Much has been said and written about a potential rise in interest rates.
How do you feel about the Fund's positioning for the months ahead?
A We believe the Fund is in excellent shape. The municipal bond market has
strong supply and demand fundamentals, which we feel should continue. Our
disciplined approach--one that does not change quarter-to-quarter or year-to-
year--we feel has been the key to the Fund's success. With the Fund's favorable
credit quality allocation and sector diversification, we continue to maintain
our focus on long-term performance.
*The five-star rating is a composite rating. Morningstar is an independent
mutual fund performance monitor. Morningstar proprietary ratings reflect
historical risk-adjusted performance as of May 31, 1998. The ratings are subject
to change every month. Past performance is no guarantee of future results.
Morningstar ratings are calculated from the funds three-, five-, and ten-year
average annual returns (if applicable) in excess of 90-day Treasury bill
returns with appropriate fee adjustments, and a risk factor that reflects fund
performance below 90-day T-bill returns.
7
<PAGE>
We believe the Fed will tighten interest rates once this year, for a short-
term total increase of 25 to 50 basis points. One wild card is whether an
increase in short-term interest rates will cause long-term interest rates to
rise. High-yield, high-risk issues tend to be more sensitive to interest rate
fluctuations than higher-rated investments. On a relative total return basis,
however, we believe that a backup in interest rates is not threatening for this
Fund because we have positioned the Fund's duration to provide low sensitivity
to interest rate fluctuations.
Specifically, the Fund is positioned with a short duration of 6.4 years as
of May 31, 1998, compared to the Lehman Brothers Municipal Bond Index duration
of 7.60 years, to reduce volatility. As a result, we believe it is positioned
well should we have a rising interest rate environment. We believe that a short
duration and a highly selective process for choosing high-yield municipal bonds
will help us achieve our investment objective of providing shareholders a high
level of income exempt from federal income tax.
/s/ Peter W. Hegel /s/ Wayne D. Godlin
Peter W. Hegel Wayne D. Godlin
Chief Investment Officer Portfolio Manager
Fixed Income Investments
8 Please see footnotes on page three
<PAGE>
Portfolio Highlights
Van Kampen American Capital High Yield Municipal Fund
Top Ten States as of May 31, 1998
<TABLE>
<CAPTION>
Percentage of Fund's
Long-Term Investments
<S> <C>
Pennsylvania............................................. 10.5%
Massachusetts............................................ 8.6%
Florida.................................................. 8.4%
Illinois................................................. 7.7%
California............................................... 6.3%
New Jersey............................................... 4.7%
Colorado................................................. 4.4%
Ohio..................................................... 4.1%
New Hampshire............................................ 3.1%
Texas.................................................... 2.8%
</TABLE>
Credit Quality as a Percentage of Long-Term Investments
[PIE CHARTS APPEAR HERE]
<TABLE>
<CAPTION>
As of May 31, 1998 As of November 30, 1997
<S> <C> <C> <C>
[_] AAA.......... 2.3% [_] AAA............... 3.6%
[_] AA........... 1.6% [_] AA................ 4.3%
[_] A............ 1.5% [_] A................. 2.3%
[_] BBB.......... 6.3% [_] BBB............... 9.6%
[_] BB........... 5.9% [_] BB................ 6.1%
[_] B............ 0.8% [_] B................. 0.9%
[_] Non-Rated.... 81.6% [_] Non-Rated......... 73.2%
</TABLE>
Based upon the highest credit quality ratings as determined by Standard & Poor's
or Moody's.
Top Five Portfolio Sectors as a Percentage of Long-Term Investments
<TABLE>
<CAPTION>
As of May 31, 1998 As of November 30, 1997
<S> <C> <C> <C>
Other Care................... 20.9% Industrial Revenue........... 21.6%
Industrial Revenue........... 18.8% Other Care................... 20.0%
Health Care.................. 16.9% Health Care.................. 16.3%
Multi-Family Housing......... 15.4% Multi-Family Housing......... 11.9%
Tax District................. 8.0% Tax District................. 7.1%
</TABLE>
Duration
<TABLE>
<CAPTION>
As of May 31, 1998 As of November 30, 1997
<S> <C> <C>
Duration 6.40 years 5.94 years
</TABLE>
9
<PAGE>
Portfolio of Investments
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==========================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Municipal Bonds 98.8%
Alabama 0.3%
$ 750 Vincent, AL Indl Dev Brd Shelby Motel
Group Inc Proj................................. 10.500% 09/01/16 $ 735,000
3,255 West Jefferson Cnty, AL Amusement & Pub
Pk Auth First Mtg Visionland Proj.............. 8.000 12/01/26 3,482,525
----------
4,217,525
----------
Alaska 0.2%
2,250 Seward, AK Rev AK Sealife Cent Proj............ 7.650 10/01/16 2,416,005
----------
Arizona 2.6%
1,220 Casa Grande, AZ Indl Dev Auth Rfdg............. 8.250 12/01/15 1,326,103
2,880 Chandler, AZ Indl Dev Auth Rev Chandler
Finl Cent Proj Ser 1986 (c).................... 9.875 12/01/16 2,448,291
5,500 Maricopa Cnty, AZ Indl Dev Auth Multi-
Family Hsg Rev................................. 6.625 07/01/33 5,495,820
3,000 Maricopa Cnty, AZ Indl Dev Auth Sr Living
Fac Rev........................................ 7.750 04/01/15 3,221,610
1,300 McDowell, AZ Mountain Ranch Cmnty Fac Dist..... 6.500 07/15/22 1,337,258
1,112 Peoria, AZ Indl Dev Auth Sierra Winds Life Care
Cmnty Proj (Var Rate Cpn)...................... 6.500 11/01/17 1,115,581
2,750 Pima Cnty, AZ Indl Dev Auth Indl Rev Tucson
Elec Pwr Co Ser A.............................. 6.100 09/01/25 2,836,047
4,500 Pima Cnty, AZ Indl Dev Auth Indl Rev Tucson
Elec Pwr Co Proj Ser B......................... 6.000 09/01/29 4,641,300
3,000 Pima Cnty, AZ Indl Dev Auth Multi-Family Rev... 6.625 10/01/28 3,014,700
2,000 Pima Cnty, AZ Indl Dev Auth Rev La Posada at
Park Cent Ser A................................ 7.000 05/15/27 2,138,980
1,025 Pinal Cnty, AZ Indl Dev Auth Casa Grande
Regl Med Cent Proj Ser A....................... 8.125 12/01/22 1,137,565
475 Pinal Cnty, AZ Indl Dev Auth Casa Grande
Regl Med Cent Proj Ser B....................... 8.125 12/01/22 527,165
1,500 Red Hawk Canyon Cmnty Facs Dist No 2 AZ
Dist Assmt Rev................................. 6.000 12/01/02 1,488,645
1,500 Red Hawk Canyon Cmnty Facs Dist No 2 AZ
Dist Assmt Rev................................. 6.500 12/01/12 1,485,435
</TABLE>
See Notes to Financial Statements
10
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Arizona (Continued)
$ 1,035 Scottsdale, AZ Indl Dev Auth Rev First Mtg
Westminster Vlg Ser A Rfdg.......................... 8.000% 06/01/11 $ 1,173,628
2,000 Scottsdale, AZ Indl Dev Auth Rev First Mtg
Westminster Vlg Ser A Rfdg.......................... 8.250 06/01/15 2,284,460
-----------
35,672,588
-----------
Arkansas 0.4%
500 Fayetteville, AR Pub Fac Brd Rev Butterfield Trail
Vlg Proj B (Prerefunded @ 09/01/99)................. 9.500 09/01/14 543,715
4,420 Jackson Cnty, AR Hlthcare Fac Brd First Mtg
Hosp Rev Newport Hosp & Clinic Inc.................. 7.375 11/01/11 4,613,066
-----------
5,156,781
-----------
California 6.2%
1,000 Brentwood, CA Impt Bond Act 1915.................... 6.000 09/02/27 1,030,890
1,210 California Edl Fac Auth Rev Pacific Graduate
Sch of Psych........................................ 7.600 11/01/21 1,294,373
2,385 California Edl Fac Auth Rev Pacific Graduate
Sch of Psych........................................ 8.000 11/01/21 2,609,118
10,000 California Statewide Cmntys Dev Auth Spl Fac
United Airls Ser A.................................. 5.700 10/01/33 10,178,900
1,000 Capistrano, CA Uni Sch Dist Cmnty Fac Dist Spl Tax.. 7.100 09/01/21 1,106,040
1,200 Colton, CA Pub Fin Auth Rev Sub Tax
Alloc Redev Proj Ser B.............................. 5.875 08/01/27 1,206,312
2,000 Corona, CA Ctfs Partn Vista Hosp Sys Inc Ser B...... 9.500 07/01/20 2,454,780
2,500 Corona, CA Ctfs Partn Vista Hosp Sys Inc Ser C...... 8.375 07/01/11 2,818,175
1,500 Davis, CA Pub Fac Fin Auth Local Agy Rev............ 6.600 09/01/25 1,592,010
1,300 Emeryville, CA Impt Bond Act 1915 Assmt
Dist 93-1 East Baybridge............................ 7.300 09/02/21 1,362,231
1,000 Folsom, CA Pub Fin Auth Ser A....................... 6.875 09/02/19 1,031,280
1,500 Folsom, CA Spl Tax Cmnty Fac Dist No 7 Rfdg......... 7.250 09/01/21 1,630,245
2,730 Fresno, CA Ctfs Partn............................... 8.500 05/01/16 2,911,272
1,000 Indio, CA Pub Fin Auth Rev Tax Increment............ 6.500 08/15/27 1,037,730
1,200 Irvine, CA Mobile Home Pk Rev Sub Meadows
Mobile Home Pk Ser B................................ 6.050 03/01/28 1,194,936
3,000 Irwindale, CA Pub Fin Auth Spl Cmnty Facs
Dist No 1 Rfdg...................................... 6.000 11/01/20 3,019,410
See Notes to Financial Statements
</TABLE>
11
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (Continued)
$ 4,550 Lake Elsinore, CA Pub Fin Auth Local Agy Rev .......... 7.100% 09/01/20 $ 4,903,626
1,500 Los Angeles, CA Cmnty Fac Dist Spl Tax No. 3 Cascades
Business Pk ........................................... 6.400 09/01/22 1,547,175
4,500 Millbrae, CA Residential Fac Rev Magnolia of Millbrae
Proj Ser A ............................................ 7.375 09/01/27 4,662,855
1,000 Moreno Vly, CA Spl Tax Towngate Cmnty Fac Dist 87-1 ... 7.125 10/01/23 1,057,640
1,530 Norco, CA Swr & Wtr Rev Rfdg .......................... 7.200 10/01/19 1,699,601
1,000 Oceanside, CA Mobile Home Pk Fin Auth Rev ............. 5.800 03/01/28 1,003,190
2,000 Perris, CA Pub Fin Auth Loc Agy Rev Ser D ............. 7.875 09/01/25 2,255,120
1,500 Rancho Cucamonga, CA Cmnty Fac Dist Spl Tax No 88-2 ... 8.250 09/01/19 1,689,360
100 Rancho Cucamonga, CA Cmnty Fac Dist Spl Tax No 88-2 ... 8.000 09/01/20 111,023
3,000 Reedley, CA Ctfs Partn ................................ 7.500 10/01/26 3,265,140
3,105 Richmond, CA Redev Agy Multi-Family Rev Ser A ......... 7.500 09/01/23 3,157,847
7,500 Riverside Cnty, CA Air Force Vlg West Inc Ser A Rfdg .. 8.125 06/15/20 8,218,050
2,000 Sacramento, CA Spl Tax Cmnty Fac Dist No 97-1 Ser A ... 6.700 09/01/17 2,095,340
2,000 Sacramento, CA Spl Tax Cmnty Fac Dist No 97-1 Ser A ... 6.750 09/01/27 2,087,780
3,000 San Bernardino, CA Hosp Rev San Bernardino Cmnty
Hosp Rfdg ............................................. 7.875 12/01/19 3,150,000
1,900 San Luis Obispo, CA Ctfs Partn Vista Hosp Sys Inc ..... 8.375 07/01/29 2,097,030
3,000 Santa Ana, CA Cmnty Redev Agy Tax Alloc Ser B Rfdg .... 7.500 09/01/16 3,129,930
1,000 Santa Rosa, CA Impt Bond Act 1915 Fountaingrove Pkwy
Extension Assmt ....................................... 7.625 09/02/19 1,034,310
1,835 Stockton, CA Cmnty Facs Dist Spl Tax(a) ............... 6.000 09/01/24 1,845,258
800 Vista, CA Mobile Home Pk Rev Estrella De Oro Mobile
Home Ser A ............................................ 5.875 02/01/28 799,696
------------
86,287,673
------------
</TABLE>
12 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
============================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado 4.3%
$ 1,000 Arrowhead Metro Dist CO (Prerefunded @ 12/01/02)....... 8.125% 12/01/11 $ 1,181,850
1,060 Berry Creek Metro Dist CO Rfdg......................... 7.300 12/01/12 1,145,966
2,400 Bowles Metro Dist CO................................... 7.750 12/01/15 2,549,592
2,250 Colorado Hlth Fac Auth Rev Baptist Home
Assn Ser A............................................. 6.375 08/15/24 2,360,047
1,300 Colorado Hlth Fac Auth Rev Sr Living Fac Eaton
Terrace Ser A.......................................... 6.800 07/01/09 1,359,137
3,250 Colorado Hlth Fac Auth Rev Sr Living Fac Eaton
Terrace Ser A.......................................... 7.250 07/01/22 3,376,425
1,500 Colorado Hlth Fac Auth Rev Christian Living
Campus Proj............................................ 9.000 01/01/25 1,771,155
2,000 Colorado Hlth Fac Auth Rev Shalom Pk
Proj Rfdg & Impt....................................... 7.250 12/15/25 2,093,960
1,250 Cordillera Metro Dist CO Eagle Cnty.................... 8.250 12/01/13 1,422,987
3,000 Cottonwood Wtr & Sanitation Dist CO Ser A Rfdg......... 7.750 12/01/20 3,228,540
1,055 Denver, CO City & Cnty Indl Dev Rev Jewish
Cmnty Cent Proj........................................ 7.375 03/01/09 1,189,091
1,130 Denver, CO City & Cnty Indl Dev Rev Jewish
Cmnty Cent Proj........................................ 7.500 03/01/14 1,260,764
815 Denver, CO City & Cnty Indl Dev Rev Jewish
Cmnty Cent Proj........................................ 7.875 03/01/19 915,628
1,885 Denver, CO City & Cnty Single Family Mtg Rev
Ser A (GNMA Collateralized)............................ 8.125 12/01/20 1,937,950
1,855 Denver, CO Urban Renewal Auth Tax Increment Rev
South Bdwy/Montgomery Ward............................. 8.500 05/01/16 2,076,283
2,000 Eagle Cnty, CO Air Term Corp Rev Arpt Term Proj........ 7.500 05/01/21 2,187,460
1,000 Eaglebend, CO Affordable Hsg Corp Multi-Family
Rev Hsg Proj........................................... 6.200 07/01/12 1,031,490
1,735 Eaglebend, CO Affordable Hsg Corp Multi-Family
Rev Hsg Proj........................................... 6.400 07/01/17 1,796,176
1,500 Eaglebend, CO Affordable Hsg Corp Multi-Family
Rev Hsg Proj........................................... 6.450 07/01/21 1,558,920
4,000 Fairlake Metro Dist City & Cnty of Denver, CO.......... 9.625 12/01/10 4,563,040
2,500 Hyland Hills, CO Metro Pk & Rec Dist Spl
Rev Ser A (Prerefunded @ 12/15/02)..................... 8.625 12/15/12 3,001,000
</TABLE>
13 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
=================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado (Continued)
$ 4,000 Lafayette, CO Indl Dev Rev Rocky Medium Term Nt
Instr Proj A........................................ 7.000% 10/01/18 $ 4,013,880
1,000 Landmark Metro Dist CO (Prerefunded @ 06/01/00)..... 8.750 12/01/05 1,065,110
3,000 Mountain Vlg Metro Dist CO San Miguel Cnty
Rfdg (Prerefunded @ 12/01/98)....................... 11.000 12/01/07 3,167,880
4,300 Northern Metro Dist CO Adams Cnty Rfdg.............. 6.500 12/01/16 4,544,584
500 Panorama Metro Dist CO Ser B Rfdg
(Prerefunded @ 12/01/99)............................ 9.000 12/01/09 542,385
147 Skyland Metro Dist CO Gunnison Cnty Rfdg
(Var Rate Cpn)...................................... 4.000 12/01/08 104,835
750 Snowmass Vlg, CO Multi-Family Hsg
Rev Ser A Rfdg...................................... 8.000 09/01/14 786,038
660 Superior, CO Metro Dist No 2 Ser A Rfdg............. 7.250 12/01/02 695,495
840 Superior, CO Metro Dist No 2 Ser A Rfdg............. 7.750 12/01/13 918,943
2,000 Telluride, CO Hsg Auth Hsg Rev Shandoka
Apts Proj Rfdg...................................... 7.875 06/01/17 2,128,500
------------
59,975,111
------------
Connecticut 2.5%
1,000 Connecticut St Dev Auth Mystic Marinelife Aquar
Proj A.............................................. 7.000 12/01/27 1,072,950
2,275 Connecticut St Dev Auth First Mtg Gross Rev
Hlthcare Proj CT Baptist Homes Inc Proj............. 8.750 09/01/12 2,551,799
1,500 Connecticut St Dev Auth First Mtg Gross Rev
Hlthcare Proj CT Baptist Homes Inc Proj............. 9.000 09/01/22 1,696,425
1,325 Connecticut St Dev Auth Hlthcare Rev Indpt
Living Proj Ser B................................... 8.000 07/01/17 1,454,956
1,885 Connecticut St Dev Auth Hlthcare Rev Jerome
Home Proj (Prerefunded @ 11/01/99).................. 8.000 11/01/19 2,026,375
2,000 Connecticut St Hlth & Edl Fac Auth Rev.............. 6.875 07/01/27 2,154,960
2,500 Connecticut St Hlth & Edl Fac Auth Rev Tolland
Cnty Hlthcare Inc Ser A............................. 9.200 07/01/21 2,808,075
300 Connecticut St Hlth & Edl Facs Auth Rev............. 6.875 07/01/17 323,244
2,760 Connecticut St Hsg Fin Auth......................... 5.850 11/15/28 2,872,222
5,000 Greenwich, CT Hsg Auth Multi-Family Rev Hsg
Greenwich Close Ser A............................... 6.350 09/01/27 5,102,450
</TABLE>
14 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Connecticut (Continued)
$ 1,720 Greenwich, CT Hsg Auth Multi-Family Rev Hsg
Greenwich Close Ser B................................... 7.500% 09/01/27 $ 1,728,531
1,465 Manchester, CT Redev Agy Multi-Family Mtg Rev
Bennet Hsg Dev Rfdg..................................... 7.200 12/01/18 1,575,417
5,000 Mashantucket Western Pequot Tribe CT Spl Rev
Ser B, 144-A(e)......................................... 5.750 09/01/27 5,078,200
1,365 New Haven, CT Fac Rev Easter Seal Goodwill
Rehab Proj.............................................. 8.875 04/01/16 1,291,372
2,335 New Haven, CT Indl Fac Rev Adj Govt Cent
Thermal Energies........................................ 7.250 07/01/09 2,351,859
------------
34,088,835
------------
Delaware 0.6%
2,380 Delaware St Econ Dev Auth Indl Dev Rev First Mtg
Dover Hlthcare Rfdg..................................... 7.875 04/01/08 2,601,530
400 Delaware St Econ Dev Auth Rev First Mtg Gilpin
Hall Proj............................................... 7.375 07/01/15 433,712
2,800 Delaware St Econ Dev Auth Rev First Mtg Gilpin
Hall Proj............................................... 7.625 07/01/25 3,053,764
955 Delaware St Econ Dev Auth Rev Osteopathic Hosp
Assn of DE Ser A (Prerefunded @ 07/01/04)............... 9.500 01/01/22 1,213,490
300 Wilmington, DE Hosp Rev Osteopathic Hosp Assn of
DE/Riverside Hosp Ser A (Prerefunded @ 10/01/98)........ 10.000 10/01/03 312,225
500 Wilmington, DE Hosp Rev Osteopathic Hosp Assn of
DE/Riverside Hosp Ser A (Prerefunded @ 10/01/98)........ 10.200 10/01/18 520,640
------------
8,135,361
------------
District of Columbia 0.3%
3,500 District of Columbia Rev Natl Pub Radio Ser A........... 7.700 01/01/23 3,840,445
------------
Florida 8.3%
1,000 Atlantic Beach, FL Rev Fleet Landing Proj Ser
A Rfdg & Impt........................................... 7.500 10/01/02 1,047,520
2,085 Atlantic Beach, FL Rev Fleet Landing Proj Ser
A Rfdg & Impt........................................... 7.875 10/01/08 2,367,726
1,500 Bay Cnty, FL Hosp Sys Rev Bay Med Cent
Proj Rfdg (Prerefunded @ 10/01/04)...................... 8.000 10/01/12 1,787,220
</TABLE>
15 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (Continued)
$ 500 Bay Cnty, FL Hosp Sys Rev Bay Med Cent
Proj Rfdg (Prerefunded @ 10/01/04).................. 8.000% 10/01/19 $ 611,950
1,980 Bayside Impt Cmnty Dev Dist FL Ser A................ 6.300 05/01/18 1,985,643
585 Bayside Impt Cmnty Dev Dist FL Ser B................ 6.375 05/01/18 586,656
1,170 Bobcat Trail Cmnty, FL Dev Dist Cap Impt Rev........ 6.750 05/01/04 1,183,244
1,300 Bobcat Trail Cmnty, FL Dev Dist Cap Impt Rev........ 7.500 05/01/19 1,335,737
3,335 Boca Raton, FL Hsg Auth Mtg Hsg Rev First Lien
Banyan Place Sr Living A............................ 7.150 04/01/31 3,432,449
910 Boca Raton, FL Hsg Auth Mtg Hsg Rev Second Lien
Banyan Place Sr Living B............................ 8.700 10/01/32 944,371
1,330 Brevard Cnty, FL Hlth Fac Auth Rev Courtenay
Springs Vlg Rfdg.................................... 7.375 11/15/04 1,445,298
2,200 Brevard Cnty, FL Hlth Fac Auth Rev Courtenay
Springs Vlg Rfdg.................................... 7.750 11/15/17 2,433,662
160 Charlotte Cnty, FL Indl Dev Auth Rev Beverly
Enterprises Rfdg.................................... 10.000 06/01/11 181,928
1,410 Collier Cnty, FL Indl Dev Auth Retirement
Rental Hsg Rev...................................... 10.750 03/01/03 1,616,170
1,000 Dade Cnty, FL Hsg Fin Auth Multi-Family
Mtg Rev............................................. 6.000 11/01/32 1,027,420
4,350 Fishhawk Cmnty, FL Dev Dist Spl Assmt Rev........... 7.625 05/01/18 4,687,603
835 Fort Walton Beach, FL Indl Dev Rev First Mtg
Fort Walton Beach Venture Proj...................... 10.500 12/01/16 870,980
1,000 Heritage Harbor Cmnty Dev Dist FL Rev Rec........... 7.750 05/01/19 995,810
1,000 Heritage Harbor Cmnty Dev Dist FL Rev Spl
Assmt Ser A......................................... 6.700 05/01/19 998,250
1,000 Heritage Harbor Cmnty Dev Dist FL Rev Spl
Assmt Ser B......................................... 6.000 05/01/03 994,200
1,070 Hernando Cnty, FL Indl Dev Rev Beverly
Enterprises Rfdg.................................... 10.000 09/01/11 1,226,156
3,000 Hialeah Gardens, FL Indl Dev Rev Waterford
Convalescent Ser A Rfdg............................. 8.250 12/01/14 3,320,700
1,500 Homestead, FL Indl Dev Rev Brookwood Gardens
Cent Proj Ser A Rfdg................................ 8.250 12/01/14 1,660,350
1,300 Lake Bernadette, FL Cmnty Dev Dist Spl
Assmt Rev Ser A..................................... 8.000 05/01/17 1,388,985
See Notes to Financial Statements
</TABLE>
16
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (Continued)
$ 2,445 Lake Saint Charles, FL Cmnty Dev Dist Spl Assmt Rev ... 7.875% 05/01/17 $ 2,616,101
2,000 Largo, FL Sun Coast Hlth Sys Hosp ..................... 6.200 03/01/13 2,026,760
730 Lee Cnty, FL Indl Dev Auth Econ Rev Encore Nursing
Cent Partner Rfdg ..................................... 8.125 12/01/07 810,848
2,000 Lee Cnty, FL Indl Dev Auth Hlthcare Fac Rev ........... 6.250 10/01/17 2,086,500
1,500 Lee Cnty, FL Indl Dev Auth Hlthcare Fac Rev ........... 6.375 10/01/25 1,579,080
5,000 Leon Cnty, FL Edl Facs Auth Rev Southgate Residence
Hall Ser A Rfdg ....................................... 6.750 09/01/28 5,037,600
1,300 Marion Cnty, FL Indl Dev Auth Rev Midland Ross Corp
Proj .................................................. 11.875 08/01/11 1,313,260
4,055 Mount Dora, FL Hlth Fac Auth Hlth Rev ................. 7.125 08/15/21 4,220,241
2,515 North Miami, FL Hlthcare Fac Rev Imperial Club Proj
Ser A ................................................. 9.250 01/01/13 2,879,524
2,000 North Springs, FL Impt Dist Spl Assmt Rev ............. 6.250 05/01/05 2,039,080
1,000 North Springs, FL Impt Dist Spl Assmt Rev ............. 7.000 05/01/19 1,046,570
3,000 Northern Palm Beach Cnty, FL Impt Dist Wtr Ctl & Impt
Unit Dev .............................................. 7.200 08/01/16 3,274,080
2,500 Northern Palm Beach Cnty, FL Impt Dist Wtr Ctl & Impt
Unit Dev .............................................. 7.300 08/01/27 2,742,325
440 Orange Cnty, FL Hlth Fac Auth Rev First Mtg Orlando
Lutheran Twr Rfdg ..................................... 8.125 07/01/06 489,804
2,035 Orange Cnty, FL Hlth Fac Auth Rev First Mtg Orlando
Lutheran Twr Rfdg ..................................... 8.400 07/01/14 2,364,873
1,325 Orange Cnty, FL Hlth Fac Auth Rev First Mtg Orlando
Lutheran Twr Rfdg ..................................... 8.625 07/01/20 1,561,393
1,250 Orange Cnty, FL Hlth Fac Auth Rev First Mtg Orlando
Lutheran Twr Rfdg ..................................... 8.750 07/01/26 1,480,212
2,550 Orange Cnty, FL Hsg Fin Auth Multi-Family Rev Mtg
Hands Inc Proj Ser A .................................. 7.875 10/01/15 2,813,542
2,035 Orange Cnty, FL Hsg Fin Auth Multi-Family Rev Mtg
Hands Inc Proj Ser A .................................. 8.000 10/01/25 2,260,071
2,385 Orange Cnty, FL Hsg Fin Auth Hsg Alhambra Trace Apts
Proj C ................................................ 7.375 04/01/28 2,393,991
435 Orange Cnty, FL Indl Dev Auth Rev Beverly Enterprises
Proj Rfdg ............................................. 9.250 08/01/10 487,996
</TABLE>
17 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
============================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Florida (Continued)
$ 3,000 Overoaks, FL Cmnty Dev Dist Cap Impt Rev........... 8.250% 05/01/17 $ 3,110,610
3,000 Pinellas Cnty, FL Edl Fac Auth Rev College
Harbor Proj Ser A.................................. 8.250 12/01/21 3,230,280
1,000 Piney Z Cmnty Dev Dist FL Cap Impt Rev Ser A....... 7.250 05/01/19 1,027,310
1,295 Piney Z Cmnty Dev Dist FL Cap Impt Rev Ser B....... 6.500 05/01/02 1,294,249
1,370 Plantation, FL Hlth Fac Auth Rev Covenant
Retirement Cmnty Inc (Prerefunded @ 12/01/02)...... 7.625 12/01/12 1,581,980
750 Plantation, FL Hlth Fac Auth Rev Covenant
Retirement Cmnty Inc Rfdg
(Prerefunded @ 12/01/02)........................... 7.750 12/01/22 869,858
1,000 Saint John's Cnty, FL Indl Dev Auth Hlthcare
Rev Bayview Proj Ser A............................. 7.100 10/01/16 1,085,520
2,000 Saint John's Cnty, FL Indl Dev Auth Hlthcare
Rev Bayview Proj Ser A............................. 7.100 10/01/26 2,175,180
250 Santa Rosa Cnty, FL Indl Dev Auth Rev First Mtg
Sandy Ridge Care Cent.............................. 10.500 04/01/16 253,708
1,000 Sarasota Cnty, FL Hlth Fac Auth Rev Hlthcare
Manatee Jewish Rfdg................................ 7.000 07/01/16 1,078,720
2,300 Tamarac, FL Indl Dev Rev Sun Belt
Precision Prods Inc................................ 6.500 08/01/17 2,366,907
1,735 Tampa Palms, FL Open Space & Transn Cmnty
Dev Dist Rev Cap Impt Area 7 Proj.................. 8.500 05/01/17 1,919,083
2,200 Tampa Palms, FL Open Space & Transn Cmnty
Dev Dist Rev Cap Impt Area 7 Proj.................. 7.500 05/01/18 2,327,798
710 Volusia Cnty, FL Indl Dev Auth Bishops Glen
Proj Rfdg.......................................... 7.125 11/01/06 762,647
1,835 Volusia Cnty, FL Indl Dev Auth Bishops Glen
Proj Rfdg.......................................... 7.500 11/01/16 2,012,775
2,000 Volusia Cnty, FL Indl Dev Auth Bishops Glen
Proj Rfdg.......................................... 7.625 11/01/26 2,223,940
1,735 Westchase East Cmnty, FL Dev Dist Cap Impt Rev..... 7.500 05/01/17 1,840,870
1,965 Westchase East Cmnty, FL Dev Dist Cap Impt Rev..... 7.300 05/01/18 2,084,217
------------
114,899,531
------------
</TABLE>
18 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
===========================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Georgia 1.4%
$ 1,640 Athens Clarke Cnty, GA Residential Care Fac For
The Elderly Auth Rev..................................... 6.350% 10/01/17 $ 1,684,526
1,720 Athens Clarke Cnty, GA Residential Care Fac For
The Elderly Auth Rev..................................... 6.375 10/01/27 1,761,813
3,000 Atlanta, GA Urban Residential Fin Auth Multi-Family
Hsg Renaissance on Peachtree Apts Proj Ser 85............ 8.500 04/01/26 3,159,420
375 Coweta Cnty, GA Residential Care Fac For The Elderly
Auth Rev First Lien Wesley Woods Ser A................... 7.625 10/01/06 422,741
1,500 Coweta Cnty, GA Residential Care Fac For The Elderly
Auth Rev First Lien Wesley Woods Ser A................... 8.200 10/01/16 1,744,035
1,500 Coweta Cnty, GA Residential Care Fac For The Elderly
Auth Rev First Lien Wesley Woods Ser A................... 8.250 10/01/26 1,748,925
1,000 Fulton Cnty, GA Hsg Auth Multi-Family Hsg Rev............ 6.375 02/01/08 1,002,030
4,000 Fulton Cnty, GA Hsg Auth Multi-Family Hsg Rev............ 6.500 02/01/28 4,012,520
300 Richmond Cnty, GA Dev Auth Nursing Home Rev
Beverly Enterprises GA Proj Rfdg......................... 8.750 06/01/11 337,755
3,000 Rockdale Cnty, GA Dev Auth Solid Waste Disp
Visy Paper Inc Proj...................................... 7.500 01/01/26 3,264,660
-----------
19,138,425
-----------
Hawaii 0.1%
870 Hawaii Cnty, HI Impt Dist No 17 Spl Assmt
Kaloko Subdivision....................................... 9.500 08/01/11 941,862
-----------
Illinois 7.6%
1,475 Bedford Park, IL Tax Increment Rev 71st &
Cicero Proj Rfdg......................................... 7.375 01/01/12 1,602,528
1,475 Bedford Park, IL Tax Increment Rev Mark IV
Proj (Prerefunded @ 03/01/02)............................ 9.750 03/01/12 1,762,359
960 Bedford Park, IL Tax Increment Rev Sr Lien
Bedford City Sq Proj..................................... 9.250 02/01/12 1,107,408
2,910 Broadview, IL Tax Increment Rev Sr Lien.................. 8.250 07/01/13 3,316,090
250 Carol Stream, IL First Mtg Rev Windsor Park
Manor Proj............................................... 7.000 12/01/13 270,778
2,000 Carol Stream, IL First Mtg Rev Windsor Park
Manor Proj............................................... 7.200 12/01/14 2,181,040
</TABLE>
19 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (Continued)
$ 1,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev American
Airls Inc Proj Rfdg................................. 8.200% 12/01/24 $ 1,196,230
540 Chicago, IL O'Hare Intl Arpt Spl Fac Rev American
Airls Inc Proj Ser A................................ 7.875 11/01/25 587,077
3,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc.................................... 8.500 05/01/18 3,800,475
1,500 Chicago, IL Tax Increment........................... 7.250 01/01/14 1,624,110
3,000 Crestwood, IL Tax Increment Rev Rfdg................ 7.250 12/01/08 3,232,500
500 Hodgkins, IL Tax Increment.......................... 9.500 12/01/09 592,690
4,000 Hodgkins, IL Tax Increment Ser A Rfdg............... 7.625 12/01/13 4,446,720
3,500 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A.................................... 8.500 12/01/15 4,097,905
2,450 Huntley, IL Spl Svc Area Number 6................... 6.750 02/01/25 2,473,324
2,470 Illinois Dev Fin Auth Hlth Fac Rev Cmnty
Living Options...................................... 7.125 03/01/10 2,718,828
605 Illinois Dev Fin Auth Rev Cmnty Fac Clinic
Altgeld Proj........................................ 8.000 11/15/06 683,493
1,405 Illinois Dev Fin Auth Rev Cmnty Fac
Clinic Altgeld Proj................................. 8.000 11/15/16 1,566,561
2,000 Illinois Dev Fin Auth Rev Debt Restructure-
East Saint Louis.................................... 7.375 11/15/11 2,270,700
4,000 Illinois Edl Fac Auth Rev Peace Mem
Ministries Proj..................................... 7.500 08/15/26 4,296,120
1,500 Illinois Edl Facs Auth Rev Lifelink Corp
Oblig Group Rfdg.................................... 5.850 02/15/20 1,504,740
4,295 Illinois Edl Facs Auth Rev Lifelink Corp
Oblig Group Rfdg.................................... 5.700 02/15/24 4,198,277
1,700 Illinois Hlth Facs Auth Rev Bohemian
Tabor Hills Ser B Rfdg.............................. 5.900 11/15/24 1,710,132
240 Illinois Hlth Fac Auth Rev Fairview Oblig
Group Ser A......................................... 7.125 08/15/17 267,946
4,000 Illinois Hlth Fac Auth Rev Victory Hlth
Svcs Ser A.......................................... 5.750 08/15/27 4,110,000
1,475 Illinois Hlth Fac Auth Rev Covenant
Retirement Cmntys Ser A............................. 7.600 12/01/12 1,663,092
</TABLE>
20 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
========================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (Continued)
$ 3,000 Illinois Hlth Fac Auth Rev Fairview Oblig Group
Ser A Rfdg.......................................... 7.400% 08/15/23 $ 3,392,520
490 Illinois Hlth Fac Auth Rev Hinsdale Ser C........... 9.500 11/15/19 574,064
1,700 Illinois Hlth Fac Auth Rev Lifelink Corp
Oblig Group Ser B (Prerefunded @ 02/15/05).......... 8.000 02/15/25 2,057,085
4,000 Illinois Hlth Fac Auth Rev Lutheran Home &
Svcs Proj Ser A..................................... 7.500 08/15/26 4,386,720
1,250 Illinois Hlth Fac Auth Rev Saint Elizabeth's
Hosp Rfdg (Prerefunded @ 07/01/04).................. 7.625 07/01/10 1,489,438
1,500 Illinois Hlth Fac Auth Rev Saint Elizabeth's
Hosp Rfdg (Prerefunded @ 07/01/04).................. 7.750 07/01/16 1,797,270
1,265 Jackson Park Hosp Fndtn Chicago, IL
Jackson Park Hosp................................... 9.000 03/01/05 1,239,700
3,215 Loves Park, IL First Mtg Rev Hoosier Care
Proj Ser A.......................................... 9.750 08/01/19 3,413,623
2,275 Mill Creek Wtr Reclamation Dist IL Sewage Rev....... 8.000 03/01/10 2,600,825
1,375 Mill Creek Wtr Reclamation Dist IL Wtrwks Rev....... 8.000 03/01/10 1,571,927
2,480 Palatine, IL Tax Increment Rev Rand/Dundee
Cent Proj........................................... 7.750 01/01/17 2,630,958
765 Peoria, IL Spl Tax Weaverridge Spl Svc Area......... 7.625 02/01/08 833,261
2,050 Peoria, IL Spl Tax Weaverridge Spl Svc Area......... 8.050 02/01/17 2,265,680
6,600 Robbins, IL Res Recov Rev........................... 8.375 10/15/16 6,895,218
1,610 Round Lake Beach, IL Tax Increment Rev Rfdg......... 7.200 12/01/04 1,767,571
2,500 Round Lake Beach, IL Tax Increment Rev Rfdg......... 7.500 12/01/13 2,736,225
2,950 Saint Charles, IL Indl Dev Rev Tri-City Cent Proj... 7.500 11/01/13 3,128,062
3,965 Saint Charles, IL Multi-Family Hsg Rev Bonds
Wessel Court Proj................................... 7.600 04/01/24 4,119,080
500 Sherman, IL Rev First Mtg Villa Hlthcare Ser A...... 8.250 10/01/14 529,095
500 Sherman, IL Rev First Mtg Villa Hlthcare Ser A...... 8.500 10/01/24 530,680
------------
105,240,125
------------
</TABLE>
21 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana 1.8%
$ 485 Carmel, IN Retirement Rental Hsg Rev Beverly
Enterprises Inc Proj Rfdg.......................... 8.750% 12/01/08 $ 550,562
1,100 Crawfordsville, IN Redev Comm Dist Tax
Increment Rev...................................... 7.350 02/01/17 1,133,033
1,465 Delaware Cnty, IN Redev Dist Tax Increment Rev..... 6.875 02/01/18 1,498,929
3,000 Indiana Dev Fin Auth Indl Dev Rev Unr-Rohn
Inc Proj........................................... 7.500 03/01/11 3,136,684
1,000 Indiana Hlth Fac Auth Cmnty Hartsfield
Vlg Proj Ser A..................................... 6.250 08/15/14 1,024,910
2,000 Indiana Hlth Fac Auth Cmnty Hartsfield
Vlg Proj Ser A..................................... 6.375 08/15/27 2,054,960
1,500 Indiana Hlth Fac Auth Saint Anthony Home........... 7.000 05/15/17 1,565,445
1,000 Indiana Hlth Fac Auth Saint Anthony Home........... 7.250 05/15/24 1,051,040
175 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/10 68,423
135 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/11 49,122
130 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/12 43,616
130 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/13 40,440
125 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/14 36,021
125 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/15 33,399
125 Saint Joseph Cnty, IN Redev Dist Tax Increment Rev. * 12/30/16 30,939
560 Valparaiso, IN Econ Dev Rev First Mtg Whispering
Pines Cent......................................... 7.300 01/01/02 561,221
980 Valparaiso, IN Econ Dev Rev First Mtg Whispering
Pines Cent......................................... 7.500 01/01/07 984,322
1,405 Valparaiso, IN Econ Dev Rev First Mtg Whispering
Pines Cent......................................... 7.750 01/01/12 1,411,042
2,045 Valparaiso, IN Econ Dev Rev First Mtg Whispering
Pines Cent......................................... 8.000 01/01/17 2,053,691
3,250 Valparaiso, IN Econ Dev Rev First Mtg Whispering
Pines Cent Rfdg (Prerefunded @ 01/01/00)........... 9.500 01/01/07 3,580,168
400 Wells Cnty, IN Hosp Auth Rev Caylor Nickel Med
Cent Inc Rfdg...................................... 8.500 04/15/03 451,312
3,600 Wells Cnty, IN Hosp Auth Rev Caylor Nickel Med
Cent Inc Rfdg...................................... 8.750 04/15/12 4,183,056
-----------
25,542,335
-----------
</TABLE>
22 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Iowa 0.2%
$ 2,770 Iowa Fin Auth Multi-Family Rev Hsg Park
West Proj Rfdg................................. 8.000% 10/01/23 $ 2,865,150
------------
Kansas 0.9%
1,000 Lawrence, KS Coml Dev Rev Holiday Inn Sr Ser A. 8.000 07/01/16 1,096,640
2,000 Lenexa, KS Hlthcare Fac Rev Lakeview Vlg Ser B. 6.250 05/15/26 2,116,280
3,000 Manhattan, KS Coml Dev Rev Holiday Inn
Sr Ser A Rfdg.................................. 8.000 07/01/16 3,229,110
1,500 Newton, KS Hosp Rev Newton Hlthcare Corp
Ser A (Prerefunded @ 11/15/04)................. 7.375 11/15/14 1,778,220
1,000 Newton, KS Hosp Rev Newton Hlthcare Corp
Ser A (Prerefunded @ 11/15/04)................. 7.750 11/15/24 1,206,420
3,125 Shawnee Cnty, KS Rev Rfdg United Methodist
Homes Inc A.................................... 6.125 11/15/19 3,244,875
------------
12,671,545
------------
Kentucky 0.3%
1,195 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac Delta
Airls Proj Ser A............................... 8.100 12/01/15 1,276,129
1,000 Kentucky Econ Dev Fin Auth Hosp Sys Rev........ 5.800 10/01/12 1,045,080
1,500 Kentucky Econ Dev Fin Auth Hosp Sys Rev........ 5.850 10/01/17 1,538,535
------------
3,859,744
------------
Louisiana 2.0%
4,700 Hodge, LA Util Rev............................ 9.000 03/01/10 5,053,205
1,335 Iberia Parish, LA Hosp Svc Dist No 1 Hosp Rev. 7.500 05/26/06 1,436,540
2,000 Iberia Parish, LA Hosp Svc Dist No 1 Hosp Rev. 8.000 05/26/16 2,210,140
4,000 Lake Charles, LA Harbor & Terminal Dist Port
Fac Rev Trunkline Lng Co Rfdg................. 7.750 08/15/22 4,584,400
200 Louisiana Hsg Fin Agy Rev Multi-Family Hsg
Plantation Ser A.............................. 7.200 01/01/06 199,360
4,675 Louisiana Hsg Fin Agy Rev Multi-Family Hsg
Plantation Ser A.............................. 7.125 01/01/28 4,637,553
635 Louisiana Pub Fac Auth Rev Indl Dev Beverly
Enterprises Inc Rfdg.......................... 8.250 09/01/08 705,682
</TABLE>
23 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Louisiana (Continued)
$ 1,650 Port New Orleans, LA Indl Dev Rev Avondale Inds Inc
Proj Rfdg ............................................. 8.250% 06/01/04 $ 1,822,937
3,000 Port New Orleans, LA Indl Dev Rev Continental Grain Co
Proj Rfdg ............................................. 7.500 07/01/13 3,386,310
2,500 Saint James Parish, LA Solid Waste Disp Rev Kaiser
Alum Proj ............................................. 7.750 08/01/22 2,784,125
500 West Feliciana Parish, LA Pollutn Ctl Rev Gulf States
Util Co Proj Ser A .................................... 7.500 05/01/15 559,500
1,000 West Feliciana Parish, LA Pollutn Ctl Rev Gulf States
Util Co Proj Ser B .................................... 9.000 05/01/15 1,104,640
------------
28,484,392
------------
Maine 0.4%
3,200 Maine Fin Auth Solid Waste Disposal Rev Boise Cascade
Corp Proj ............................................. 7.900 06/01/15 3,438,880
1,500 Maine Vets Homes ME Rev ............................... 7.750 10/01/20 1,702,980
------------
5,141,860
------------
Maryland 1.1%
1,750 Baltimore Cnty, MD Nursing Fac Eastpoint Rehab &
Nursing Cent Ser A .................................... 6.750 04/01/28 1,740,882
2,000 Baltimore Cnty, MD Pollutn Ctl Rev Bethlehem Steel
Corp Proj Ser A Rfdg .................................. 7.550 06/01/17 2,220,740
2,500 Baltimore Cnty, MD Pollutn Ctl Rev Bethlehem Steel
Corp Proj Ser B Rfdg .................................. 7.500 06/01/15 2,803,225
2,000 Calvert Cnty, MD Econ Dev Rev Asbury-Solomons Island
Fac Proj (Prerefunded @ 01/01/05) ..................... 8.375 01/01/15 2,482,320
750 Frederick Cnty, MD Retirement Cmnty Rev ............... 6.000 01/01/24 762,293
2,000 Maryland St Energy Fin Admin Ltd Oblig Rev
Cogeneration AES Warrior Run .......................... 7.400 09/01/19 2,219,400
3,000 Prince Georges Cnty, MD Spl Oblig Spl Assmt Woodview
Ser A ................................................. 8.000 07/01/26 3,219,570
------------
15,448,430
------------
</TABLE>
24 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts 8.4%
$ 1,480 Massachusetts St Hlth & Edl Fac Auth Rev Indpt Living
Ser A ................................................. 8.100% 07/01/18 $ 1,650,866
3,000 Massachusetts St Hlth & Edl Fac Auth Rev Milford-
Whitinsville Regl Hosp Ser B (Prerefunded @ 07/15/02) . 7.750 07/15/17 3,450,720
1,000 Massachusetts St Hlth & Edl Fac Auth Rev Norwood Hosp
Ser E ................................................. 8.000 07/01/12 1,021,340
745 Massachusetts St Hlth & Edl Fac Auth Rev Saint Anne's
Hosp Ser A ............................................ 9.250 07/01/05 747,563
2,000 Massachusetts St Hlth & Edl Fac Auth Rev Saint Anne's
Hosp Ser A ............................................ 9.375 07/01/14 2,007,080
500 Massachusetts St Hlth & Edl Facs Auth Rev ............. 5.375 07/15/28 490,600
2,000 Massachusetts St Indl Fin Agy Assisted Living Fac Rev . 8.000 09/01/27 2,088,680
2,000 Massachusetts St Indl Fin Agy Assisted Living Fac Rev . 7.500 12/01/27 2,035,700
2,750 Massachusetts St Indl Fin Agy Hillcrest Edl Cent Inc
Proj .................................................. 8.450 07/01/18 3,184,198
4,000 Massachusetts St Indl Fin Agy Hlthcare Fac Rev Metro
Hlth Fndtn Inc Proj A ................................. 6.750 12/01/27 4,254,360
875 Massachusetts St Indl Fin Agy Indl Rev Beverly
Enterprises Inc/Gloucester & Lexington Proj Rfdg ...... 8.000 05/01/02 918,103
800 Massachusetts St Indl Fin Agy Indl Rev Beverly
Enterprises Rfdg ...................................... 8.375 05/01/09 888,016
1,000 Massachusetts St Indl Fin Agy Indl Rev First Hlthcare
Corp Proj Ser A Rfdg .................................. 7.625 04/01/13 1,037,230
1,175 Massachusetts St Indl Fin Agy Rev HMEA Issue .......... 7.000 09/01/12 1,207,994
2,600 Massachusetts St Indl Fin Agy Rev Montserrat College
Art Issue Ser A ....................................... 7.000 12/01/27 2,618,512
920 Massachusetts St Indl Fin Agy Rev Seven Hills Fndtn
Issue ................................................. 7.000 09/01/12 946,864
595 Massachusetts St Indl Fin Agy Rev Seven Hills Fndtn
Issue ................................................. 7.150 09/01/17 611,440
2,020 Massachusetts St Indl Fin Agy Rev Seven Hills Fndtn
Issue ................................................. 7.250 09/01/27 2,077,105
</TABLE>
25 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (Continued)
$ 2,000 Massachusetts St Indl Fin Agy Rev Sr
Living Fac Forge Hill Proj.......................... 6.750% 04/01/30 $ 1,924,020
500 Massachusetts St Indl Fin Agy Rev Atlantic Med
Cent Ser B.......................................... 10.125 11/01/14 538,255
3,490 Massachusetts St Indl Fin Agy Rev Boston
Architectural Cent Proj............................. 8.500 08/01/19 3,690,570
500 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent..................................... 8.000 12/01/06 568,715
1,000 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent..................................... 8.375 12/01/13 1,177,710
3,000 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent..................................... 8.500 12/01/20 3,548,580
2,555 Massachusetts St Indl Fin Agy Rev East Boston
Neighborhood Proj................................... 7.500 07/01/16 2,698,514
2,560 Massachusetts St Indl Fin Agy Rev East Boston
Neighborhood Proj................................... 7.625 07/01/26 2,687,002
7,000 Massachusetts St Indl Fin Agy Rev Emerson
College Issue Ser A................................. 8.900 01/01/18 7,693,980
785 Massachusetts St Indl Fin Agy Rev Evergreen
Cent Inc............................................ 8.000 11/01/06 893,126
4,300 Massachusetts St Indl Fin Agy Rev Evergreen
Cent Inc............................................ 9.250 11/01/11 4,800,735
1,230 Massachusetts St Indl Fin Agy Rev Evergreen
Cent Inc............................................ 8.375 11/01/13 1,472,987
2,165 Massachusetts St Indl Fin Agy Rev Evergreen
Cent Inc............................................ 8.500 11/01/20 2,617,528
1,005 Massachusetts St Indl Fin Agy Rev First Mtg
Evanswood Bethzatha Ser A Rfdg...................... 7.400 01/15/09 1,081,380
2,000 Massachusetts St Indl Fin Agy Rev First Mtg
Evanswood Bethzatha Ser A Rfdg...................... 7.625 01/15/14 2,140,460
2,000 Massachusetts St Indl Fin Agy Rev First Mtg
Evanswood Bethzatha Ser A Rfdg...................... 7.875 01/15/20 2,154,100
690 Massachusetts St Indl Fin Agy Rev First Mtg
Loomis House & Vlg Proj............................. 7.250 07/01/07 770,523
1,410 Massachusetts St Indl Fin Agy Rev First Mtg
Loomis House & Vlg Proj............................. 7.400 07/01/12 1,585,503
26 See Notes to Financial Statements
</TABLE>
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (Continued)
$ 1,530 Massachusetts St Indl Fin Agy Rev First Mtg
Loomis House & Vlg Proj............................. 7.500% 07/01/17 $ 1,729,328
30 Massachusetts St Indl Fin Agy Rev First Mtg
Pioneer Vly......................................... 7.000 10/01/01 28,954
500 Massachusetts St Indl Fin Agy Rev First Mtg
Pioneer Vly Amended................................. 7.000 10/01/20 479,525
1,000 Massachusetts St Indl Fin Agy Rev First Mtg
Reeds Landing Proj.................................. 7.750 10/01/00 1,021,330
8,300 Massachusetts St Indl Fin Agy Rev First Mtg
Reeds Landing Proj.................................. 8.625 10/01/23 9,453,036
1,700 Massachusetts St Indl Fin Agy Rev First Mtg
Stone Institute & Newton............................ 7.700 01/01/14 1,879,265
1,760 Massachusetts St Indl Fin Agy Rev
Glenmeadow Retirement Cmnty Ser C
(Prerefunded @ 02/15/06)............................ 8.250 02/15/08 2,220,451
1,000 Massachusetts St Indl Fin Agy Rev
Glenmeadow Retirement Cmnty Ser C
(Prerefunded @ 02/15/06)............................ 8.625 02/15/26 1,284,290
3,675 Massachusetts St Indl Fin Agy Rev Gtr Lynn
Mental Hlth Assn Proj............................... 8.800 06/01/14 4,423,891
325 Massachusetts St Indl Fin Agy Rev Hillcrest Edl
Cent Inc Proj....................................... 7.500 07/01/00 333,613
740 Massachusetts St Indl Fin Agy Rev Hillcrest Edl
Cent Inc Proj....................................... 8.000 07/01/05 815,635
3,380 Massachusetts St Indl Fin Agy Rev JRC
Assisted Living..................................... 7.500 07/01/26 3,610,212
2,360 Massachusetts St Indl Fin Agy Rev NE
Cent for Autism..................................... 9.000 11/01/05 2,544,812
4,910 Massachusetts St Indl Fin Agy Rev NE
Cent for Autism..................................... 9.500 11/01/17 5,343,111
1,100 Massachusetts St Indl Fin Agy Rev NE
Cent for Autism..................................... 7.000 11/01/19 1,140,381
2,000 Massachusetts St Indl Fin Agy Rev Orchard
Cove Issue (Prerefunded @ 05/01/02)................. 9.000 05/01/22 2,391,060
1,135 Massachusetts St Indl Fin Agy Rev
Vinten Corp Issue................................... 7.100 11/15/18 1,258,658
27 See Notes to Financial Statements
</TABLE>
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
===============================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (Continued)
$ 980 Massachusetts St Indl Fin Agy Rev
Waarc Inc Proj........................................ 7.300% 09/01/10 $ 1,049,364
915 Massachusetts St Indl Fin Agy Rev
Waarc Inc Proj........................................ 7.600 09/01/17 978,922
1,820 Massachusetts St Indl Fin Agy Rev
Waarc Inc Proj........................................ 7.750 09/01/25 1,952,805
------------
117,218,702
------------
Michigan 2.5%
1,000 Detroit, MI Local Dev Fin Auth Tax Increment
Sr Ser B.............................................. 6.700 05/01/21 1,030,300
3,500 Detroit, MI Local Dev Fin Auth Ser C.................. 6.850 05/01/21 3,616,340
430 Detroit, MI Local Dev Fin Auth Tax Increment
Ser A (Prerefunded @ 05/01/03)........................ 9.500 05/01/21 531,183
1,315 Dickinson Cnty, MI Mem Hosp Sys Hosp Rev.............. 7.625 11/01/05 1,483,715
1,000 Dickinson Cnty, MI Mem Hosp Sys Hosp Rev.............. 8.000 11/01/14 1,148,370
2,390 Meridian, MI Econ Dev Corp First Mtg Burcham
Hills Ser A Rfdg...................................... 7.500 07/01/13 2,608,685
3,430 Meridian, MI Econ Dev Corp First Mtg Burcham
Hills Ser A Rfdg...................................... 7.750 07/01/19 3,786,137
2,400 Michigan St Hosp Fin Auth Rev Gratiot Cmnty
Hosp Ser A Rfdg (Prerefunded @ 10/01/98).............. 8.750 10/01/07 2,440,488
500 Michigan St Hosp Fin Auth Rev Hosp Genesys
Hlth Sys Ser A Rfdg (Prerefunded @ 10/01/05).......... 7.500 10/01/07 607,595
1,500 Michigan St Hosp Fin Auth Rev Hosp Genesys
Hlth Sys Ser A Rfdg (Prerefunded @ 10/01/05).......... 8.100 10/01/13 1,878,945
5,343 Michigan St Hosp Fin Auth Rev Saratoga
Cmnty Hosp Rfdg (Prerefunded 06/01/02)................ 8.750 06/01/10 6,196,384
2,200 Michigan St Strategic Fd Ltd Oblig Rev
Environmental Impt Ser A.............................. 6.500 08/01/21 2,297,504
922 Michigan St Strategic Fd Ltd Oblig Rev Great
Lakes Pulp & Fiber Proj............................... 8.000 12/01/27 873,699
2,000 Michigan St Strategic Fd Res Recovery Ltd Oblig
Rev Central Wayne Energy Rec Ser A.................... 7.000 07/01/27 2,006,460
4,000 Michigan St Strategic Fd Solid Waste Disp
Rev Genesee Pwr Station Proj.......................... 7.500 01/01/21 4,351,880
</TABLE>
28 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Michigan (Continued)
$ 500 Oakland Cnty, MI Econ Dev Corp Ltd Oblig Rev Pontiac
Osteopathic Hosp Proj (Prerefunded @ 01/01/00) ......... 9.625% 01/01/20 $ 551,715
------------
35,409,400
------------
Minnesota 2.6%
1,020 Austin, MN Multi-Family Rev Hsg Cedars of Austin Proj
Rfdg ................................................... 7.500 04/01/17 1,065,839
2,000 Austin, MN Multi-Family Rev Hsg Cedars of Austin Proj
Rfdg ................................................... 7.500 04/01/18 2,089,880
3,400 Bloomington, MN Hsg & Redev Auth Sr Summerhouse
Bloomington Proj ....................................... 6.125 05/01/35 3,415,606
1,955 Brooklyn Cent MN Multi-Family Hsg Rev Four Courts Apts
Proj Ser A Rfdg ........................................ 7.400 12/01/15 2,015,449
1,220 Brooklyn Cent MN Multi-Family Hsg Rev Four Courts Apts
Proj Ser A Rfdg ........................................ 7.500 06/01/25 1,256,710
750 Chisago City, MN Hlth Fac Rev Part Pleasant Heights
Proj Ser A Rfdg ........................................ 7.300 07/01/25 820,447
3,000 Columbia Heights, MN Multi-Family Crest View Corp Proj . 6.000 03/01/33 3,015,060
850 Little Canada, MN Fac Rev Hsg Alt Dev Co Proj Ser A .... 6.100 12/01/17 855,474
1,450 Little Canada, MN Fac Rev Hsg Alt Dev Co Proj Ser A .... 6.250 12/01/27 1,459,280
1,200 Maplewood, MN Hlthcare Fac Rev VOA Care Cent Proj ...... 7.450 10/01/16 1,313,652
682 Minneapolis, MN Cmnty Dev Agy Coml Dev Rev Std Mill
Hotel Proj(d) .......................................... 8.000 04/01/10 354,650
1,950 Minneapolis, MN Hlthcare Fac Rev Ebenezer Society Proj
Ser A .................................................. 7.200 07/01/23 2,052,355
1,000 Minneapolis, MN Hlthcare Fac Rev Saint Olaf Residence
Inc Proj ............................................... 7.100 10/01/23 1,054,110
350 Minneapolis, MN Multi-Family Rev Hsg Belmont Apts Proj . 7.250 11/01/16 363,983
1,320 Minneapolis, MN Multi-Family Rev Hsg Belmont Apts Proj . 7.625 11/01/27 1,374,265
</TABLE>
29 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minnesota (Continued)
$ 3,040 New Brighton, MN Rental Hsg Rev Polynesian Vlg Apts
Proj Ser A Rfdg ....................................... 7.500% 10/01/17 $ 3,183,336
815 New Hope, MN Multi-Family Rev Hsg Broadway Lanel Proj . 7.750 09/01/07 850,591
2,320 New Hope, MN Multi-Family Rev Hsg Broadway Lanel Proj
Rfdg .................................................. 8.000 09/01/18 2,411,130
835 North Saint Paul, MN Multi-Family Rev Hsg Cottages
North Saint Paul Rfdg ................................. 9.000 02/01/09 897,441
2,220 North Saint Paul, MN Multi-Family Rev Hsg Cottages
North Saint Paul Rfdg ................................. 9.250 02/01/22 2,383,858
500 Shoreview, MN Sr Hsg Rev Shoreview Sr Residence Proj .. 7.250 02/01/26 508,960
2,000 Spring Lake Park, MN Multi-Family Hsg Cottages Spring
Lake Rfdg ............................................. 8.375 01/01/22 2,055,040
1,500 Winona, MN Hsg Rev Saint Anne Hospice Inc ............. 6.750 07/01/27 1,546,995
------------
36,344,111
------------
Mississippi 1.5%
5,500 Claiborne Cnty, MS Pollutn Ctl Rev Middle South Energy
Inc Ser B ............................................. 8.250 06/01/14 5,841,110
7,575 Claiborne Cnty, MS Pollutn Ctl Rev Middle South Energy
Inc Ser C (b) ......................................... 9.875 12/01/14 7,987,383
1,000 Lowndes Cnty, MS Hosp Rev Golden Triangle Med Cent
Rfdg .................................................. 8.500 02/01/10 1,082,220
2,300 Mississippi Dev Bank Spl Oblig Diamond Lakes Utils
Ser A Rfdg ............................................ 6.250 12/01/17 2,362,675
2,945 Ridgeland, MS Urban Renewal Rev the Orchard Ltd Proj
Ser A Rfdg ............................................ 7.750 12/01/15 3,219,032
------------
20,492,420
------------
Missouri 2.5%
1,500 Chesterfield, MO Indl Dev Auth Rev Saint Andrews
Episcopal-Presbyterian Ser A (Prerefunded @ 12/01/00) . 8.500 12/01/19 1,711,320
1,000 Ferguson, MO Tax Increment Rev Crossings At Halls
Ferry Proj ............................................ 7.250 04/01/07 1,011,410
2,000 Ferguson, MO Tax Increment Rev Crossings At Halls
Ferry Proj ............................................ 7.625 04/01/17 2,036,580
</TABLE>
30 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Missouri (Continued)
$ 1,000 Ferguson, MO Tax Increment Rev Crossings
At Halls Ferry Proj................................. 7.625% 04/01/18 $ 1,018,290
3,610 Good Shepard Nursing Home Dist MO Nursing
Home Fac Rev Rfdg................................... 5.900 08/15/23 3,633,068
1,000 Good Shepherd Nursing Home Dist MO
Nursing Home Fac Rev (Prerefunded @ 08/15/05)....... 7.625 08/15/15 1,210,220
3,000 Good Shepherd Nursing Home Dist MO Nursing
Home Fac Rev (Prerefunded @ 08/15/05)............... 7.750 08/15/25 3,653,580
2,775 Jefferson Cnty, MO Indl Dev Auth Indl Rev Cedars
Hlthcare Cent Proj Ser A Rfdg....................... 8.250 12/01/15 3,113,550
3,000 Kansas City, MO Multi-Family Hsg Rev Vlg
Green Apts Proj..................................... 6.250 04/01/30 3,009,630
1,115 Madison Cnty, MO Hosp Rev Ser A..................... 7.700 10/01/18 1,246,358
1,490 Madison Cnty, MO Hosp Rev Ser A..................... 7.900 10/01/26 1,684,818
1,075 Missouri St Hlth & Edl Fac Bethesda Hlth Group
Inc Proj A Rfdg..................................... 7.500 08/15/12 1,208,709
1,240 Perry Cnty, MO Nursing Home Rev Ser A............... 7.450 03/01/27 1,305,918
785 Perry Cnty, MO Nursing Home Rev Ser A............... 7.650 03/01/16 869,552
1,060 Perry Cnty, MO Nursing Home Rev Ser A............... 7.300 03/01/18 1,158,442
1,745 Perry Cnty, MO Nursing Home Rev Ser A............... 7.750 03/01/26 1,932,169
1,765 Saint Louis, MO Tax Increment Rev Scullin
Redev Area Ser A.................................... 10.000 08/01/10 2,236,890
2,250 Springfield, MO Indl Dev Auth Rev Bethesda
Living Centrs Ser A Rfdg............................ 5.700 08/15/28 2,236,928
------------
34,277,432
------------
Montana 0.3%
3,825 Montana St Brd Invt Res Recovery Rev Yellowstone
Energy L P Proj..................................... 7.000 12/31/19 3,865,430
------------
Nevada 1.3%
3,075 Clark Cnty, NV Assisted Living Homestead Boulder
City Proj........................................... 6.500 12/01/27 3,128,566
6,000 Clark Cnty, NV Indl Dev Rev Nevada Pwr Co Proj Ser A 5.900 11/01/32 6,132,000
1,500 Henderson, NV Local Impt Dist No T-10............... 7.500 08/01/15 1,552,005
1,370 Henderson, NV Local Impt Dist No T-4 Ser B.......... 7.300 11/01/12 1,422,115
31 See Notes to Financial Statements
</TABLE>
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nevada (Continued)
$ 985 Las Vegas, NV Spl Impt Dist No 505
Elkhorn Springs.................................. 8.000% 09/15/13 $ 1,022,253
1,470 Nevada St Dept Commerce Hlth Fac Rev Washoe
Convalescent Cent Proj Rfdg...................... 8.125 06/01/03 1,557,318
3,000 Washoe Cnty, NV Impt Bonds Spl Assmt
Dist No 23....................................... 6.500 11/01/17 3,072,330
------------
17,886,587
------------
New Hampshire 3.1%
500 New Hampshire Higher Edl & Hlth Fac Auth Rev..... 5.800 11/01/27 524,255
435 New Hampshire Higher Edl & Hlth Fac Auth Rev
Colby-Sawyer College Issue....................... 7.200 06/01/12 473,567
2,565 New Hampshire Higher Edl & Hlth Fac Auth Rev
Colby-Sawyer College Issue....................... 7.500 06/01/26 2,824,937
5,000 New Hampshire Higher Edl & Hlth Fac Auth Rev
Daniel Webster College Issue Rfdg................ 7.625 07/01/16 5,516,450
1,200 New Hampshire Higher Edl & Hlth Fac Auth Rev
First Mtg Odd Fellows Home Rfdg.................. 8.000 06/01/04 1,296,036
2,000 New Hampshire Higher Edl & Hlth Fac Auth Rev
First Mtg Odd Fellows Home Rfdg.................. 9.000 06/01/14 2,438,140
1,000 New Hampshire Higher Edl & Hlth Fac Auth Rev
Havenwood-Heritage Heights....................... 7.350 01/01/18 1,094,670
4,825 New Hampshire Higher Edl & Hlth Fac Auth Rev
Havenwood-Heritage Heights....................... 7.450 01/01/25 5,310,878
2,365 New Hampshire Higher Edl & Hlth Fac Auth Rev
Hlthcare Visiting Nurse.......................... 7.250 09/01/23 2,512,221
1,410 New Hampshire Higher Edl & Hlth Fac Auth Rev
Monadock Cmnty Hosp Issue
(Prerefunded @ 10/01/00)......................... 9.125 10/01/20 1,593,046
2,000 New Hampshire Higher Edl & Hlth Fac Auth Rev
New London Hosp Assn Proj........................ 7.500 06/01/05 2,272,220
3,405 New Hampshire Higher Edl & Hlth Fac Auth Rev
Vly Regl Hosp.................................... 7.350 04/01/23 3,433,772
280 New Hampshire Higher Edl & Hlth Facs Auth Rev
Franklin Pierce.................................. 6.000 10/01/18 283,550
525 New Hampshire Higher Edl & Hlth Facs Auth Rev
Franklin Pierce (Prerefunded @ 04/01/04)......... 6.000 10/01/18 579,238
</TABLE>
32 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Hampshire (Continued)
$ 1,000 New Hampshire Higher Edl & Hlth Facs Auth Rev
Littleton Hosp Assn................................. 6.000% 05/01/28 $ 1,009,700
3,960 New Hampshire St Business Fin Auth Elec Fac Rev
Plymouth Cogeneration............................... 7.750 06/01/14 4,268,009
1,500 New Hampshire St Business Fin Auth Swr & Solid
Waste Disp Rev Crown Paper Co Proj.................. 7.875 07/01/26 1,727,475
2,000 New Hampshire St Hsg Fin Auth Single Family Rev..... 5.900 07/01/28 2,086,960
3,440 New Hampshire St Hsg Fin Auth Single
Family Residential.................................. 8.500 07/01/14 3,550,665
------------
42,795,789
------------
New Jersey 4.7%
4,990 Camden Cnty, NJ Impt Auth Lease Rev
Dockside Refrigerated............................... 8.400 04/01/24 5,638,251
4,500 Camden Cnty, NJ Impt Auth Lease Rev Kaighn
PT Marine Term A.................................... 8.000 06/01/27 4,869,765
500 New Jersey Econ Dev Auth Econ Dev Rev Green
Acres Manor Inc Ser A Rfdg.......................... 8.000 01/01/09 533,740
1,000 New Jersey Econ Dev Auth Econ Dev Rev Green
Acres Manor Inc Ser A Rfdg........................... 8.250 01/01/17 1,073,410
4,365 New Jersey Econ Dev Auth Econ Dev Rev Utd
Methodist Homes...................................... 7.500 07/01/20 4,869,463
420 New Jersey Econ Dev Auth Econ Dev Rev Utd
Methodist Homes...................................... 7.500 07/01/24 463,798
500 New Jersey Econ Dev Auth Econ Dev Rev
Zirbser Greenbriar Inc Ser A Rfdg.................... 7.375 07/15/03 534,750
915 New Jersey Econ Dev Auth Econ Dev Rev
Zirbser Greenbriar Inc Ser A Rfdg.................... 7.750 07/15/08 983,835
250 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A........................................... 7.000 02/01/10 270,205
1,500 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A........................................... 7.375 02/01/17 1,663,755
3,500 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A........................................... 7.500 02/01/27 3,886,155
750 New Jersey Econ Dev Auth First Mtg Delaire
Nursing Ser A Rfdg (Prerefunded @ 11/01/99).......... 8.750 11/01/10 828,037
33 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
================================================================================
Par
Amount Market
(000) Description Coupon Maturity Value
________________________________________________________________________________
<S> <C> <C> <C> <C>
New Jersey (Continued)
$ 500 New Jersey Econ Dev Auth First Mtg Gross
Rev Burnt Tavern Convalescent Ser A Rfdg... 9.000% 11/15/13 $ 556,460
2,250 New Jersey Econ Dev Auth First Mtg Gross
Rev Franciscan Oaks Proj Ser A
(Prerefunded @ 10/01/02)................... 8.500 10/01/23 2,673,922
840 New Jersey Econ Dev Auth First Mtg Gross
Rev Stone Arch Nursing Home Proj Rfdg...... 8.750 12/01/10 936,079
1,000 New Jersey Econ Dev Auth First Mtg Gross
Rev The Evergreens (Prerefunded
@ 10/01/02)................................ 9.250 10/01/22 1,210,140
1,000 New Jersey Econ Dev Auth Holt Hauling &
Warehsg Rev Ser G Rfdg..................... 8.400 12/15/15 1,102,520
650 New Jersey Econ Dev Auth Rev............... 6.000 10/01/17 672,380
700 New Jersey Econ Dev Auth Rev............... 6.000 10/01/22 724,101
1,000 New Jersey Econ Dev Auth Rev First Mtg
The Evergreens Rfdg........................ 5.875 12/01/27 1,020,540
500 New Jersey Econ Dev Auth Rev First Mtg
Franciscan Oaks Proj....................... 5.750 10/01/23 508,335
1,000 New Jersey Econ Dev Auth Rev First Mtg
Keswick Pines Rfdg......................... 5.600 01/01/12 1,001,410
500 New Jersey Econ Dev Auth Rev First Mtg
Fellowship Vlg Proj Ser A (Prerefunded
@ 01/01/05)................................ 8.500 01/01/10 626,415
1,000 New Jersey Econ Dev Auth Rev First Mtg
Fellowship Vlg Proj Ser A (Prerefunded
@ 01/01/05)................................ 9.250 01/01/25 1,294,770
975 New Jersey Econ Dev Auth Rev First Mtg
Millhouse Proj Ser A....................... 8.250 04/01/10 1,115,390
2,060 New Jersey Econ Dev Auth Rev First Mtg
Millhouse Proj Ser A....................... 8.500 04/01/16 2,372,667
1,860 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................... 7.500 11/01/05 1,942,454
1,000 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................... 8.500 11/01/16 1,107,040
1,500 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................... 8.625 11/01/25 1,667,265
855 New Jersey Econ Dev Auth Rev Sr Mtg
Arbor Glen Proj Ser A...................... 8.000 05/15/02 908,138
750 New Jersey Econ Dev Auth Rev Sr Mtg
Arbor Glen Proj Ser A...................... 8.000 05/15/04 817,373
</TABLE>
34 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
======================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Jersey (Continued)
$2,000 New Jersey Econ Dev Auth Rev Sr Mtg
Arbor Glen Proj Ser A...................... 8.000% 05/15/12 $ 2,265,620
2,560 New Jersey Econ Dev Auth Rev Sr Mtg
Arbor Glen Proj Ser A...................... 8.750 05/15/26 2,990,541
2,500 New Jersey Hlthcare Fac Fin Auth Rev
Care Institute Inc Cherry Hill Proj........ 7.750 07/01/10 2,731,550
2,500 New Jersey Hlthcare Fac Fin Auth Rev
Raritan Bay Med Cent Issue Rfdg............ 7.250 07/01/14 2,711,600
1,000 New Jersey Hlthcare Facs Auth Rev
Rahway Hosp Oblig (a)...................... 5.125 07/01/14 970,680
4,000 New Jersey St Edl Fac Auth Rev
Felician College of Lodi Ser D............. 7.375 11/01/22 4,152,320
1,000 New Jersey St Edl Fac Auth Rev
Caldwell College Ser A..................... 7.250 07/01/25 1,089,850
----------
64,784,724
----------
New Mexico 1.0%
680 Albuquerque, NM Nursing Home Rev
Albuquerque Hlthcare Rfdg.................. 9.750 12/01/14 714,789
4,505 Albuquerque, NM Retirement Fac Rev
La Vida Liena Proj Ser A Rfdg.............. 8.850 02/01/23 4,949,418
3,000 Bernalillo Cnty, NM Multi-Family Rev
Hsg Topke Commons/Arbors Proj Ser D........ 7.700 04/01/27 3,088,350
1,610 Bernalillo Cnty, NM Multi-Family Rev
Hsg Sr Solar Villas Apts Ser F............. 7.250 10/15/22 1,633,699
2,920 RHA Hsg Dev Corp New Mexico Multi-Family
Rev Mtg Woodleaf Apts Proj A Rfdg.......... 7.125 12/15/27 2,933,519
685 Santa Fe, NM Indl Rev Casa Real Nursing
Home Rfdg.................................. 9.750 01/01/13 744,472
445 Truth or Consequences, NM Nursing Home
Rev Sierra Hlthcare Rfdg & Impt............ 9.750 12/01/14 464,153
----------
14,528,400
----------
New York 2.6%
2,000 Castle Rest Residential Hlthcare Fac NY
Rev Hlthcare Fac Ser B..................... 8.000 08/01/10 2,085,200
1,210 Clifton Springs, NY Hosp & Clinic Ser A
Rfdg & Impt................................ 7.650 01/01/12 1,343,560
</TABLE>
35 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
=========================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (Continued)
$ 3,000 Erie Cnty, New York Indl Dev Agy Life Care
Cmnty Rev.......................................... 6.000% 02/01/28 $ 3,023,250
4,800 Islip, NY Cmnty Dev Agy Cmnty Dev Rev NY
Institute of Technology Rfdg....................... 7.500 03/01/26 5,329,824
1,000 Monroe Cnty, NY Indl Dev Agy Indl Dev Depaul
Cmnty Facs A....................................... 5.875 02/01/28 1,000,660
1,500 Monroe Cnty, NY Indl Dev Agy Rev Indl Dev
Empire Sports Proj A............................... 6.250 03/01/28 1,503,165
2,500 New York City Indl Dev Agy Civic Fac Rev Cmnty
Res Developmentally Disabled....................... 7.500 08/01/26 2,664,450
4,075 New York City Indl Dev Agy Civic Fac Rev Our
Lady of Mercy Med Cent Pkg Corp Proj............... 8.500 12/30/22 4,642,036
2,500 New York City Indl Dev Agy Rev Solid Waste
Disposal Visy Paper Proj........................... 7.800 01/01/16 2,901,025
2,000 New York St Energy Resh & Dev Auth Elec Fac
Rev Long Island Ser A.............................. 7.150 12/01/20 2,200,000
2,830 Newark-Wayne Cmnty Hosp Inc NY Hosp Rev Ser A...... 7.600 09/01/15 3,073,975
2,000 North Syracuse, NY Hsg Auth Rev Janus Park Proj.... 8.000 06/01/14 2,127,820
675 Oswego Cnty, NY Indl Dev Agy Civic Fac Rev......... 7.000 02/01/12 680,798
3,100 Suffolk Cnty, NY Indl Dev Agy Indl Dev Rev......... 6.375 12/01/17 3,124,862
400 Syracuse, NY Hsg Auth Rev Sub Proj Loretto
Rest Ser B......................................... 7.500 08/01/10 412,016
-----------
36,112,641
-----------
North Carolina 0.3%
425 North Carolina Med Care Comm Hlth Care Fac Rev..... 6.000 11/01/19 432,897
2,075 North Carolina Med Care Comm Hlth Care Fac Rev..... 6.000 11/01/27 2,098,987
1,440 North Carolina Med Care Comm Hlth Care Facs Rev.... 6.125 01/01/28 1,445,832
-----------
3,977,716
-----------
North Dakota 0.4%
3,000 Grand Forks, ND Sr Hsg Rev 4000 Vly Square Proj.... 6.250 12/01/34 3,023,490
2,000 Grand Forks, ND Sr Hsg Rev Spl Term 4000
Vly Square Proj.................................... 6.375 12/01/34 2,068,360
-----------
5,091,850
-----------
</TABLE>
36 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio 4.0%
$ 1,500 Athens Cnty, OH Hosp Fac Rev O'Bleness
Mem Hosp Proj.................................. 7.100% 11/15/23 $ 1,592,940
3,000 Cleveland, OH Arpt Spl Rev Ref Continental
Airls Inc(a)................................... 5.700 12/01/19 2,959,140
1,000 Cuyahoga Cnty, OH Hlthcare Fac Rev
Jennings Hall.................................. 7.200 11/15/14 1,086,050
1,500 Cuyahoga Cnty, OH Hlthcare Fac Rev
Jennings Hall.................................. 7.300 11/15/23 1,638,000
2,500 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty Ser A Rfdg.................... 7.250 11/15/13 2,736,975
3,000 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty Ser A Rfdg.................... 7.250 11/15/18 3,284,370
2,500 Cuyahoga Cnty, OH Multi-Family Rev Hsg Park
Lane Apts Proj Ser A........................... 8.250 07/01/28 2,575,000
1,195 Cuyahoga Cnty, Ohio Multi-Family Rev Hsg Mtg
Colonnade Apts Ser A Rfdg...................... 7.500 12/01/17 1,206,568
2,305 Cuyahoga Cnty, Ohio Multi-Family Rev Hsg Mtg
Colonnade Apts Ser A Rfdg...................... 7.750 12/01/28 2,327,013
7,625 Dayton, OH Spl Fac Rev Emery Air Freight Corp
Ser A Rfdg (Prerefunded @ 10/01/98) (b)........ 12.500 10/01/09 7,998,244
370 Fairfield, OH Econ Dev Rev Beverly Enterprises
Inc Proj Rfdg.................................. 8.500 01/01/03 402,804
1,910 Hamilton Cnty, Ohio Multi-Family Rev Hsg
Garden Hill Washington Park Apts............... 7.750 10/01/21 1,960,195
1,680 Harrison, OH Harrison Ave Kmart Proj Ser A..... 8.125 12/01/02 1,770,669
2,000 Montgomery Cnty, OH Hlthcare Fac Rev........... 6.250 02/01/22 2,070,200
2,330 Mount Vernon, OH Hosp Rev Knox Cmnty Hosp Rfdg. 7.875 06/01/12 2,382,355
1,000 North Canton, OH Hlthcare Fac Rev Waterford
at Saint Luke Proj............................. 8.625 11/15/21 1,122,800
2,000 Ohio St Indl Dev Rev First Mtg Swifton Commons
Proj Rfdg (d).................................. 8.125 12/01/15 776,778
2,500 Ohio St Solid Waste Rev CSC Ltd Proj........... 8.500 08/01/22 2,657,250
2,000 Ohio St Solid Waste Rev Republic Engineered
Steels Proj.................................... 8.250 10/01/14 2,073,280
4,000 Ohio St Solid Waste Rev Republic Engineered
Steels Proj.................................... 9.000 06/01/21 4,314,000
</TABLE>
37 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
===============================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Ohio (Continued)
$ 2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev Coll
Cleveland Elec Ser A Rfdg...................... 8.000% 10/01/23 $ 2,305,480
2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev Coll
Toledo Edison Ser A Rfdg....................... 8.000 10/01/23 2,305,480
2,000 Ohio St Wtr Dev Auth Solid Waste Disposal Rev.. 5.875 09/01/20 2,025,440
2,000 Toledo Lucas Cnty, OH Port Auth Arpt Rev....... 5.500 05/15/20 1,930,780
------------
55,501,811
------------
Oklahoma 0.3%
500 Leflore Cnty, OK Hosp Auth Impt Rev
(Prerefunded @ 05/01/99)....................... 9.400 05/01/06 534,650
2,830 Oklahoma Cnty, OK Fin Auth Epworth
Villa Proj Ser A Rfdg.......................... 7.000 04/01/25 2,950,813
500 Woodward, OK Muni Auth Hosp Rev................ 8.250 11/01/09 568,330
500 Woodward, OK Muni Auth Hosp Rev
(Prerefunded @ 11/01/00)....................... 9.250 11/01/14 568,135
-----------
4,621,928
-----------
Oregon 0.2%
1,745 Douglas Cnty, OR Hosp Fac Auth Rev Elderly
Hsg Forest Glen Ser A.......................... 7.500 09/01/27 1,821,588
1,500 Salem, OR Hosp Fac Auth Rev Cap Manor Inc...... 7.500 12/01/24 1,638,435
-----------
3,460,023
-----------
Pennsylvania 10.3%
1,945 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Fac Allegheny Vly Sch.......................... 7.500 02/01/10 2,134,540
3,120 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Fac Allegheny Vly Sch.......................... 7.875 02/01/20 3,487,692
7,000 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl Rev
Collateral Toledo Edison Co Proj Rfdg (b)...... 7.625 05/01/20 8,012,340
4,000 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl Rev
Collateral Toledo Edison Co Proj Ser A Rfdg.... 7.750 05/01/20 4,651,640
1,100 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl Rev
Collateral Toledo Edison Co Proj Ser A Rfdg.... 7.750 09/01/24 1,160,456
1,795 Berks Cnty, PA Muni Auth Rev Phoebe Berks
Vlg Inc Proj Rfdg.............................. 7.500 05/15/13 1,995,484
</TABLE>
38 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
===============================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (Continued)
$ 1,860 Berks Cnty, PA Muni Auth Rev Phoebe Berks
Vlg Inc Proj Rfdg.............................. 7.700% 05/15/22 $ 2,082,884
2,500 Berks Cnty, PA Muni Auth Rev Phoebe Berks
Vlg Inc Proj Rfdg.............................. 8.250 05/15/22 2,740,750
1,000 Chartiers Vly, PA Indl & Coml Dev
Auth First Mtg Rev............................. 7.250 12/01/11 1,036,840
2,000 Chartiers Vly, PA Indl & Coml Dev
Auth First Mtg Rev............................. 7.400 12/01/15 2,179,600
1,000 Chartiers Vly, PA Indl & Coml Dev
Auth First Mtg Rev (Prerefunded @ 12/01/98).... 9.500 12/01/15 1,048,450
900 Clarion Cnty, PA Hosp Auth Hosp Rev
Clarion Hosp Proj Rfdg......................... 5.625 07/01/21 898,218
4,480 Clarion Cnty, PA Hosp Auth Hosp Rev
Clarion Hosp Proj (Prerefunded @ 07/01/99)..... 8.100 07/01/12 4,767,616
1,000 Clarion Cnty, PA Hosp Auth Hosp Rev
Clarion Hosp Proj (Prerefunded @ 07/01/01)..... 8.500 07/01/21 1,141,980
790 Columbia Cnty, PA Indl Dev Auth First
Mtg Rev First St Assn Proj Rfdg................ 9.000 05/01/14 887,454
870 Delaware Cnty, PA Auth Rev First Mtg
Riddle Vlg Proj (Prerefunded @ 06/01/02)....... 8.750 06/01/10 1,027,688
2,800 Delaware Cnty, PA Auth Rev First Mtg Riddle
Vlg Proj (Prerefunded @ 06/01/02).............. 9.250 06/01/22 3,357,760
2,500 Delaware Cnty, PA Auth Rev First Mtg Riddle
Vlg Proj Rfdg.................................. 7.000 06/01/26 2,627,125
2,100 Delaware Cnty, PA Auth Rev White Horse
Vlg Ser A Rfdg................................. 7.500 07/01/18 2,305,527
1,350 Doylestown, PA Hosp Auth Hosp Rev Pine Run
Ser A (Prerefunded @ 07/01/03)................. 7.200 07/01/23 1,549,246
1,250 Lebanon Cnty, PA Hlth Fac Auth Hlth Cent Rev
United Church of Christ Homes Rfdg............. 7.250 10/01/19 1,272,162
250 Lehigh Cnty, PA Genl Purp Auth Rev First Mtg
Bible Fellowship Proj.......................... 7.150 12/15/08 266,308
2,315 Lehigh Cnty, PA Genl Purp Auth Rev First Mtg
Bible Fellowship Proj.......................... 8.000 12/15/23 2,456,909
4,665 Lehigh Cnty, PA Indl Dev Auth Rev Rfdg......... 8.000 08/01/12 5,015,481
3,000 Luzerne Cnty, PA Indl Dev Auth Exmpt Fac Rev
PA Gas & Wtr Co Proj Ser A Rfdg................ 7.200 10/01/17 3,322,350
</TABLE>
39 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
======================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (Continued)
$1,935 Luzerne Cnty, PA Indl Dev Auth First Mtg
Gross Rev Rfdg................................. 7.875% 12/01/13 $2,131,886
500 Montgomery Cnty, PA Higher Edl & Hlth Auth
Rev Retirement Cmnty GDL Farms A
(Prerefunded @ 01/01/00)....................... 9.500 01/01/20 550,795
2,000 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowwood Ser A Rfdg............ 6.000 12/01/10 2,067,300
3,695 Montgomery Cnty, PA Indl Dev Auth Rev
Assisted Living Ser A.......................... 8.250 05/01/23 4,075,068
989 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A........ 9.250 12/01/00 1,067,428
2,025 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A
(Prerefunded @ 12/01/00).......................10.000 12/01/19 2,343,229
2,500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser
A Rfdg (Prerefunded @ 12/01/00)................10.250 12/01/20 2,907,275
500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Rfdg.............. 7.000 12/01/10 536,945
1,500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Rfdg.............. 7.250 12/01/15 1,624,590
4,000 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Rfdg.............. 7.400 12/01/20 4,310,160
3,595 Montgomery Cnty, PA Indl Dev Auth Rev
Hlthcare Adv Geriatric Ser A................... 8.375 07/01/23 3,896,153
790 Montgomery Cnty, PA Indl Dev Auth Rev
Pennsburg Nursing & Rehab Cent
(Prerefunded @ 03/31/04)....................... 7.625 07/01/18 936,000
2,660 Montgomery Cnty, PA Indl Dev Auth Rev
Wordsworth Academy............................. 7.750 09/01/14 2,947,972
2,000 Montgomery Cnty, PA Indl Dev Auth Rev
Wordsworth Academy............................. 7.750 09/01/24 2,225,540
1,500 Montgomery Cnty, PA Indl Dev Rev First
Mtg Meadowood Ser A Rfdg....................... 6.250 12/01/17 1,569,435
2,200 Montgomery Cnty, PA Indl Rev GDL Farms
Corp Proj Rfdg................................. 6.500 01/01/20 2,245,320
</TABLE>
40 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
==================================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (Continued)
$ 750 Northampton Cnty, PA Indl Dev Auth Rev First
Mtg Kirkland Vlg Proj............................... 7.375% 12/15/18 $ 756,030
750 Northampton Cnty, PA Indl Dev Auth Rev First
Mtg Kirkland Vlg Proj............................... 7.500 12/15/23 756,525
1,000 Pennsylvania Econ Dev Fin Auth Exempt Fac
Rev MacMillan Ltd Partnership Proj.................. 7.600 12/01/20 1,121,690
1,665 Philadelphia, PA Auth For Indl Dev Hlthcare
Fac Rev............................................. 5.850 05/15/13 1,689,276
400 Philadelphia, PA Auth For Indl Dev Hlthcare
Fac Rev............................................. 5.750 05/15/18 398,576
1,650 Philadelphia, PA Auth For Indl Dev Hlthcare
Fac Rev............................................. 5.875 05/15/28 1,659,108
1,495 Philadelphia, PA Auth For Indl Dev Rev
Lutheran Retirement................................. 6.500 01/01/17 1,495,553
1,500 Philadelphia, PA Auth for Indl Dev Rev Cathedral
Vlg (Prerefunded @ 04/01/03)........................ 7.250 04/01/15 1,716,120
4,000 Philadelphia, PA Auth for Indl Dev Rev Coml
RMK Rfdg............................................ 7.750 12/01/17 4,519,360
2,000 Philadelphia, PA Auth for Indl Dev Rev Long-Term
Care Maplewood...................................... 8.000 01/01/14 2,226,880
5,835 Philadelphia, PA Auth for Indl Dev Rev Long-Term
Care Maplewood...................................... 8.000 01/01/24 6,481,168
1,000 Philadelphia, PA Auth for Indl Dev Rev Lutheran
Retire Ser B (Var Rate Cpn)......................... 5.000 01/01/17 1,000,370
1,180 Philadelphia, PA Hosps & Higher Edl Facs Auth
Hosp Rev............................................ 6.500 07/01/27 1,231,708
900 Philadelphia, PA Hosps & Higher Edl Facs
Auth Hosp Rev....................................... 6.500 07/01/23 915,876
1,500 Philadelphia, PA Hosps & Higher Edl Facs
Auth Hosp Rev....................................... 7.000 07/01/05 1,580,535
1,000 Philadelphia, PA Hosps & Higher Edl Facs
Auth Hosp Rev....................................... 7.250 07/01/18 1,062,800
1,830 Philadelphia, PA Hosps & Higher Edl Facs
Auth Hosp Rev....................................... 7.250 03/01/24 1,933,981
500 Philadelphia, PA Pkg Auth Rev East Market........... 8.750 03/01/05 505,535
1,785 Philadelphia, PA Pkg Auth Rev East Market........... 8.875 03/01/10 1,804,849
41 See Notes to Financial Statements
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
========================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Pennsylvania (Continued)
$ 1,465 Scranton Lackawanna, PA Hlth & Welfare
Auth Rev Rfdg................................ 7.250% 01/15/17 $ 1,575,607
3,100 Scranton Lackawanna, PA Hlth & Welfare
Auth Rev Rfdg................................ 7.350 01/15/22 3,357,641
3,000 Somerset Cnty, PA Hosp Auth Rev Somerset
Cmnty Hosp Proj (Prerefunded @ 03/01/02)..... 7.500 03/01/17 3,345,000
2,400 Southern Chester Cnty, PA Hlth & Higher Ed
Auth Mtg Rev................................. 6.300 06/01/10 2,464,560
250 Warren Cnty, PA Indl Dev Auth Beverly
Enterprises Rfdg............................. 9.000 11/01/12 280,200
2,300 Washington Cnty, PA Hosp Auth Rev
Canonsburg Genl Hosp Rfdg.................... 7.350 06/01/13 2,445,705
------------
143,186,249
------------
South Carolina 0.5%
725 Charleston Cnty, SC Hlth Fac Rev First Mtg
Episcopal Proj Rfdg (Prerefunded @ 04/01/01). 9.750 04/01/16 840,137
250 South Carolina Jobs Econ Dev Auth Hlth Fac
Rev First Mtg Lutheran Homes SC Proj
(Prerefunded @ 10/01/02)..................... 7.750 10/01/12 290,838
750 South Carolina Jobs Econ Dev Auth Hlth Fac
Rev First Mtg Lutheran Homes SC Proj
(Prerefunded @ 10/01/02)..................... 8.000 10/01/22 879,877
5,095 South Carolina St Hsg Fin & Dev Auth Multi-
Family Rev................................... 6.750 05/01/28 5,152,828
------------
7,163,680
------------
South Dakota 0.6%
2,500 Mobridge, SD Hlthcare Facs Rev Mobridge
Regl Hosp Proj............................... 6.500 12/01/22 2,526,650
4,000 South Dakota Hsg Dev Auth Homeownership
Mtg Ser F.................................... 5.800 05/01/28 4,127,200
1,000 South Dakota St Hlth & Edl Fac Auth Rev Huron
Regl Med Cent................................ 7.250 04/01/20 1,121,020
------------
7,774,870
------------
</TABLE>
42 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tennessee 1.3%
$ 2,000 Shelby Cnty, TN Hlth Edl & Hsg Fac Brd Rev.............. 6.000% 07/01/28 $ 2,099,020
2,000 Shelby Cnty, TN Hlth Edl & Hsg Fac Brd Rev
Hlthcare Fac Kirby Pines Ser A.......................... 6.250 11/15/16 2,042,600
4,000 Shelby Cnty, TN Hlth Edl & Hsg Fac Brd Rev
Hlthcare Fac Kirby Pines Ser A.......................... 6.375 11/15/25 4,092,920
500 Smith Cnty, TN Hlth & Edl Fac First Hlthcare
Corp Proj Rfdg (Prerefunded @ 04/01/99)................. 7.400 04/01/13 524,395
3,250 Springfield, TN Hlth & Edl Fac Brd Hosp Rev
Jesse Holman Jones Hosp Proj............................ 8.250 04/01/12 3,760,185
2,155 Sweetwater, TN Indl Dev Brd Mtg Rev Wood
Presbyterian Home Proj.................................. 7.500 01/01/18 2,173,080
2,845 Sweetwater, TN Indl Dev Brd Mtg Rev Wood
Presbyterian Home Proj.................................. 7.750 01/01/29 2,868,585
------------
17,560,785
------------
Texas 2.7%
1,380 Amarillo, TX Hlth Fac Corp Rev Panhandle
Retirement Ser B........................................ 7.000 08/15/15 1,444,888
3,000 Amarillo, TX Hlth Fac Corp Rev Panhandle
Retirement Ser B........................................ 7.750 08/15/18 3,375,090
985 Bell Cnty, TX Hlth Fac Dev Corp Rev Hosp Proj........... 9.250 07/01/08 1,052,423
4,000 Bell Cnty, TX Indl Dev Corp Solid Waste Disposal Rev.... 7.600 12/01/17 4,033,800
500 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
American Airls Inc...................................... 7.500 11/01/25 539,350
1,500 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
American Airls Inc...................................... 7.250 11/01/30 1,662,450
1,250 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
Delta Airls Inc......................................... 7.625 11/01/21 1,376,200
2,665 De Soto, TX Hlth Fac Dev Park Manor Sr Care............. 7.750 12/01/16 2,798,810
200 Harris Cnty, TX Hsg Fin Corp Single Family Hsg Rev...... 9.875 03/15/14 190,800
200 Harris Cnty, TX Hsg Fin Corp Single Family Hsg Rev
1983 Ser A.............................................. 10.125 07/15/03 200,264
1,210 Harris Cnty, TX Hsg Fin Corp Single Family Hsg Rev
1983 Ser A.............................................. 10.375 07/15/14 1,175,881
5,000 Houston, TX Arpt Sys Rev Spl Fac Continental Airls
Term Impt Ser B......................................... 6.125 07/15/27 5,234,300
</TABLE>
43 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (Continued)
$ 770 Montgomery Cnty, TX Hlth Fac Dev Corp Hosp
Mtg Rev Woodlands Med Cent Proj Rfdg
(Prerefunded @ 08/15/99)................................ 8.850% 08/15/14 $ 829,090
2,985 Orange, TX Hsg Dev Corp Multi-Family
Rev Hsg Vlgs At Pine Hallow............................. 8.000 03/01/28 3,003,029
3,255 Rusk Cnty, TX Hlth Fac Corp Hosp Rev
Henderson Mem Hosp Proj Rfdg............................ 7.750 04/01/13 3,559,082
500 San Antonio, TX Hlth Fac Dev Corp Rev
Encore Nursing Cent Partn............................... 8.250 12/01/19 558,390
2,000 San Antonio, TX Hsg Fin Corp Multi-Family
Hsg Rev Beverly Oaks Apts Proj Ser A.................... 7.750 02/01/27 2,052,200
1,985 San Antonio, TX Hsg Fin Corp Multi-Family
Hsg Rev Marbach Manor Apts Proj Ser A................... 8.125 06/01/27 2,057,790
1,500 Tarrant Cnty, TX Hlth Fac Dev Corp Rev Mtg
Cumberland Rest Ser A Rfdg.............................. 7.000 08/15/19 1,544,355
1,401 Texas Genl Svcs Cmty Partn Interests Office
Bldg & Land Acquisition Proj............................ 7.000 08/01/24 1,438,355
------------
38,126,547
------------
Utah 0.9%
1,500 Carbon Cnty, UT Solid Waste Disposal Rev Rfdg
Laidlaw Environmentl Ser A.............................. 7.450 07/01/17 1,656,060
4,000 Clearfield City, UT Hsg Mtg FHA Oakstone Apts
Ser A (FHA Insd)........................................ 5.850 05/01/39 4,090,120
500 Hildale, UT Elec Rev Gas Turbine Elec Fac Proj.......... 7.600 09/01/06 528,365
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac Proj.......... 7.800 09/01/15 1,057,580
1,000 Tooele Cnty, UT Pollutn Ctl Rev Rfdg Laidlaw
Environmentl Ser A...................................... 7.550 07/01/27 1,109,820
2,000 Utah St Hsg Fin Agy Rev RHA Cmnty Svcs
Proj Ser A.............................................. 6.875 07/01/27 2,056,140
1,445 Utah St Hsg Fin Agy Single Family Mtg Ser C2............ 7.950 07/01/20 1,483,885
------------
11,981,970
------------
Vermont 0.0%
700 Vermont Edl & Hlth Bldgs Fin Agy Rev Northwestern Med
Cent Ser A (Prerefunded @ 09/01/98)..................... 9.750 09/01/18 724,458
------------
</TABLE>
44 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
============================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Virginia 1.9%
$ 2,955 Alexandria, VA Indl Dev Auth Rev Saint Coletta Sch
Proj................................................. 7.750% 10/15/26 $ 3,116,875
235 Alexandria, VA Indl Dev Auth Rev Saint Coletta Sch
Proj................................................. 7.750 10/15/26 245,740
725 Covington-Alleghany Cnty, VA Indl Dev Auth Beverly
Enterprises Inc Proj Rfdg............................ 9.375 09/01/01 784,841
2,000 Dulles Town Cent Cmnty Dev Auth Dulles Town Cent
Proj................................................. 6.250 03/01/26 2,019,660
3,000 Fairfax Cnty, VA Redev & Hsg Auth Multi-Family Hsg
Rev.................................................. 7.600 10/01/36 3,231,180
2,500 Henry Cnty, VA Indl Dev Auth Indl Dev Rev 5Bs Inc
Proj Ser A........................................... 7.400 09/01/17 2,564,075
1,500 Hopewell, VA Indl Dev Auth Res Recovery Rev Stone
Container Corp Proj Rfdg............................. 8.250 06/01/16 1,680,390
1,000 Pittsylvania Cnty, VA Indl Dev Auth Rev Exempt Fac
Ser A................................................ 7.450 01/01/09 1,107,120
6,000 Richmond, VA Redev & Hsg Auth Multi-Family Rev
Ser A Rfdg (Var Rate Cpn)............................ 8.000 12/15/21 6,069,300
3,400 Rockingham Cnty, VA Indl Dev Auth Residential Care
Fac Rev.............................................. 5.750 04/01/28 3,374,738
1,750 Winchester, VA Indl Dev Auth Residential Care Fac Rev 5.750 01/01/27 1,745,030
----------
25,938,949
----------
Washington 0.5%
2,650 Seattle, WA Hsg Auth Rev Holly Pk Proj............... 5.900 01/01/30 2,666,430
2,500 Spokane Cnty, WA Indl Dev Corp Solid Waste Disp
Rev.................................................. 7.600 03/01/27 2,829,975
1,000 Vancouver, WA Hsg Auth Rev Hsg Maple Knoll Apts
Proj................................................. 6.000 10/01/17 1,015,610
1,000 Vancouver, WA Hsg Auth Rev Hsg Maple Knoll Apts
Proj................................................. 6.200 10/01/27 1,019,050
----------
7,531,065
----------
</TABLE>
45 See Notes to Financial Statements
<PAGE>
<TABLE>
<CAPTION>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
=========================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------------
West Virginia 0.4%
<S> <C> <C> <C> <C>
$ 2,000 Randolph Cnty, WV Bldg Comm Rev Crossover Elkins
Regl Proj Rfdg..................................... 6.125% 07/01/23 $ 2,006,980
500 Randolph Cnty, WV Bldg Commission Davis Mem
Hosp Proj Ser A Rfdg & Impt (Prerefunded
@ 11/01/01)........................................ 7.650 11/01/21 563,705
2,540 Weirton, WV Pollutn Ctl Rev Weirton Steel Proj Rfdg 8.625 11/01/14 2,687,472
------------
5,258,157
------------
Wisconsin 1.3%
805 Baldwin, WI Hosp Rev Mtg Ser A (a)................. 6.125 12/01/18 810,756
2,590 Baldwin, WI Hosp Rev Mtg Ser A (a)................. 6.375 12/01/28 2,608,311
3,000 Oconto Falls, WI Cmnty Dev Oconto Falls Tissue
Inc Proj........................................... 7.750 12/01/22 3,147,930
1,560 Wisconsin Hsg & Econ Dev Auth Home Ownership
Rev................................................ 7.550 07/01/26 1,684,644
795 Wisconsin St Hlth & Edl Fac Auth Rev Hess Mem
Hosp Assn.......................................... 7.200 11/01/05 846,770
2,000 Wisconsin St Hlth & Edl Fac Auth Rev Hess Mem
Hosp Assn.......................................... 7.875 11/01/22 2,257,920
2,500 Wisconsin St Hlth & Edl Fac Auth Rev Natl Regency
of New Berlin Proj................................. 8.000 08/15/25 2,847,250
3,000 Wisconsin St Hlth & Edl Milwaukee Catholic Home
Proj............................................... 7.500 07/01/26 3,305,310
500 Wisconsin St Hlth and Edl Rev Mem Hosp At
Oconomowoc Inc Proj................................ 6.350 07/01/17 513,575
------------
18,022,466
------------
Wyoming 0.9%
1,500 Teton Cnty, WY Hosp Dist Hosp Rev Impt Rfdg........ 5.800 12/01/17 1,516,305
5,000 Wyoming Cmnty Dev Auth Hsg Rev..................... 6.250 06/01/27 5,274,700
4,975 Wyoming Cmnty Dev Auth Hsg Rev..................... 5.850 06/01/28 5,122,658
------------
11,913,663
------------
</TABLE>
46 See Notes to Financial Statements
<PAGE>
Portfolio of Investments (Continued)
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
====================================================================================================
Par
Amount
(000) Description Coupon Maturity Market Value
- ----------------------------------------------------------------------------------------------------
U. S. Virgin Islands 0.3%
<S> <C> <C> <C> <C>
$ 1,210 University of Virgin Islands Pub Fin Auth Ser A... 7.500% 10/01/09 $ 1,378,831
1,965 University of Virgin Islands Pub Fin Auth Ser A... 7.650 10/01/14 2,254,936
--------------
3,633,767
--------------
Total Long-Term Investments 98.8%
(Cost $1,283,656,258)................................................................ 1,369,209,313
Other Assets in Excess of Liabilities 1.2%........................................... 17,090,474
--------------
Net Assets 100.0%.................................................................... $1,386,299,787
==============
</TABLE>
*Zero coupon bond
(a) Securities purchased on a when issued or delayed delivery basis.
(b) Assets segregated as collateral for when issued or delayed delivery
purchase commitments.
(c) Interest is accruing at less than the stated coupon.
(d) Non-Income producing security.
(e) 144A securities are those which are exempt from registration under Rule
144A of the Securities Act of 1933. These securities may only be resold in
transactions exempt from registration which are normally transactions with
qualified institutional buyers.
47 See Notes to Financial Statements
<PAGE>
Statement of Assets and Liabilities
May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
================================================================================
Assets:
<S> <C>
Total Investments (Cost $1,283,656,258)...........................$1,369,209,313
Receivables:
Interest........................................................ 29,328,692
Investments Sold................................................ 8,138,160
Fund Shares Sold................................................ 1,757,189
Other............................................................. 63,042
--------------
Total Assets................................................. 1,408,496,396
--------------
Liabilities:
Payables:
Investments Purchased........................................... 9,157,734
Custodian Bank.................................................. 5,957,480
Income Distributions............................................ 3,843,633
Fund Shares Repurchased......................................... 1,544,580
Distributor and Affiliates...................................... 819,671
Investment Advisory Fee......................................... 623,409
Accrued Expenses.................................................. 139,659
Trustees' Deferred Compensation and Retirement Plans.............. 110,443
--------------
Total Liabilities............................................ 22,196,609
--------------
Net Assets........................................................$1,386,299,787
==============
Net Assets Consist of:
Capital...........................................................$1,324,003,452
Net Unrealized Appreciation....................................... 85,553,055
Accumulated Distributions in Excess of Net Investment Income...... (453,421)
Accumulated Net Realized Loss..................................... (22,803,299)
--------------
Net Assets........................................................$1,386,299,787
==============
Maximum Offering Price Per Share:
Class A Shares:
Net asset value and redemption price per share
(Based on net assets of $831,459,399 and 71,434,754 shares of
beneficial interest issued and outstanding)..................$ 11.64
Maximum sales charge (4.75%* of offering price).............. .58
--------------
Maximum offering price to public.............................$ 12.22
==============
Class B Shares:
Net asset value and offering price per share
(Based on net assets of $452,266,680 and 38,871,288 shares of
beneficial interest issued and outstanding)..................$ 11.63
==============
Class C Shares:
Net asset value and offering price per share
(Based on net assets of $102,573,708 and 8,825,083 shares of
beneficial interest issued and outstanding)..................$ 11.62
==============
</TABLE>
*On sales of $100,000 or more, the sales charge will be reduced.
48 See Notes to Financial Statements
<PAGE>
Statement of Operations
For the Six Months Ended May 31, 1998 (Unaudited)
<TABLE>
<CAPTION>
============================================================================================
<S> <C>
Investment Income:
Interest.................................................................... $46,979,940
-----------
Expenses:
Investment Advisory Fee..................................................... 3,596,870
Distribution (12b-1) and Service Fees (Attributed to Classes A, B and C of
$1,012,621, $2,203,286 and $485,185, respectively)........................ 3,701,092
Shareholder Services........................................................ 416,979
Custody..................................................................... 33,306
Trustees' Fees and Expenses................................................. 15,017
Legal....................................................................... 13,426
Other....................................................................... 343,787
-----------
Total Expenses............................................................ 8,120,477
-----------
Net Investment Income....................................................... $38,859,463
===========
Realized and Unrealized Gain/Loss:
Net Realized Gain/Loss:
Investments............................................................... $ 863,653
Futures................................................................... 24,768
-----------
Net Realized Gain........................................................... 888,421
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................................... 64,464,321
End of the Period:
Investments............................................................ 85,553,055
-----------
Net Unrealized Appreciation During the Period............................... 21,088,734
-----------
Net Realized and Unrealized Gain............................................ $21,977,155
===========
Net Increase in Net Assets from Operations.................................. $60,836,618
===========
</TABLE>
49
See Notes to Financial Statements
<PAGE>
Statement of Changes in Net Assets
For the Six Months Ended May 31, 1998 and
the Year Ended November 30, 1997 (Unaudited)
<TABLE>
<CAPTION>
=========================================================================================================
Six Months Ended Year Ended
May 31, 1998 November 30, 1997
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income............................................... $ 38,859,463 $ 65,562,592
Net Realized Gain/Loss.............................................. 888,421 (1,648,737)
Net Unrealized Appreciation......................................... 21,088,734 31,524,325
-------------- --------------
Change in Net Assets from Operations................................ 60,836,618 95,438,180
-------------- --------------
Distributions from Net Investment Income*........................... (39,346,948) (65,202,550)
Distributions in Excess of Net Investment Income*................... (453,421) -0-
-------------- --------------
Total Distributions............................................... (39,800,369) (65,202,550)
-------------- --------------
Net Change in Net Assets from Investment Activities................. 21,036,249 30,235,630
-------------- --------------
From Capital Transactions:
Proceeds from Shares Sold........................................... 126,211,932 369,938,578
Net Asset Value of Shares Issued Through
Dividend Reinvestment............................................. 17,724,505 28,519,681
Cost of Shares Repurchased.......................................... (75,425,494) (126,673,799)
-------------- --------------
Change in Net Assets from
Capital Transactions.............................................. 68,510,943 271,784,460
-------------- --------------
Total Increase in Net Assets........................................ 89,547,192 302,020,090
Net Assets:
Beginning of the Period............................................. 1,296,752,595 994,732,505
-------------- --------------
End of the Period
(Including accumulated undistributed net investment
income of ($453,421) and $487,485, respectively).................. $1,386,299,787 $1,296,752,595
============== ==============
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class: May 31, 1998 November 30, 1997
- ---------------------------------------------------------------------------------------------------------
Distributions from and in Excess of Net Investment Income:
<S> <C> <C>
Class A Shares.................................................... $ (25,094,598) $ (41,904,414)
Class B Shares.................................................... (12,050,200) (19,909,861)
Class C Shares.................................................... (2,655,571) (3,388,275)
-------------- --------------
$ (39,800,369) $ (65,202,550)
============== ==============
</TABLE>
50 See Notes to Financial Statements
<PAGE>
Financial Highlights
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Year Ended November 30,
Six Months Ended -------------------------------------
Class A Shares May 31,1998 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period................................. $11.454 $11.139 $ 11.18 $10.44 $11.19
------- ------- ------- ------ ------
Net Investment Income......................... .350 .729 .735 .74 .76
Net Realized and
Unrealized Gain/Loss........................ .193 .312 (.041) .7475 (.744)
------- ------- ------- ------ ------
Total from Investment
Operations.................................... .543 1.041 .694 1.4875 .016
Less Distributions from and in Excess of
Net Investment Income......................... .358 .726 .735 .7475 .766
------- ------- ------- ------ ------
Net Asset Value,
End of the Period............................. $11.639 $11.454 $11.139 $11.18 $10.44
======= ======= ======= ====== ======
Total Return (a)................................ 4.74%* 9.63% 6.47% 14.65% .10%
Net Assets at End of the
Period (In millions).......................... $ 831.5 $ 779.9 $ 621.0 $516.3 $411.1
Ratio of Expenses to
Average Net Assets (b)........................ .90% .95% 1.01% .98% 1.02%
Ratio of Net Investment
Income to Average
Net Assets (b)................................ 6.06% 6.50% 6.64% 6.81% 6.98%
Portfolio Turnover.............................. 13%* 29% 23% 26% 33%
</TABLE>
* Non-Annualized
(a) Total Return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) For the years ended November 30, 1995 through 1997, the impact on the
Ratios of Expenses and Net Investment Income to Average Net Assets due to
VKAC reimbursement of certain expenses was less than 0.01%.
51 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. (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Year Ended November 30,
Six Months Ended ---------------------------------------
Class B Shares May 31, 1998 1997 1996 1995 1994
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period........ $11.452 $11.136 $ 11.18 $ 10.43 $11.18
------- ------- ------- ------- ------
Net Investment Income............ .307 .645 .653 .66 .68
Net Realized and
Unrealized Gain/Loss........... .191 .313 (.046) .7535 (.748)
------- ------- ------- ------- ------
Total from Investment
Operations..................... .498 .958 .607 1.4135 (.068)
Less Distributions from and
in Excess of Net
Investment Income.............. .316 .642 .651 .6635 .682
------- ------- ------- ------- ------
Net Asset Value,
End of the Period.............. $11.634 $11.452 $11.136 $ 11.18 $10.43
======= ======= ======= ======= ======
Total Return (a)................. 4.28%* 8.82% 5.67% 13.89% (.76%)
Net Assets at End of the
Period (In millions)........... $ 452.3 $ 425.6 $ 323.8 $ 233.9 $159.3
Ratio of Expenses to Average
Net Assets (b)................. 1.65% 1.71% 1.77% 1.73% 1.77%
Ratio of Net Investment
Income to Average
Net Assets (b)................. 5.31% 5.74% 5.88% 6.03% 6.19%
Portfolio Turnover............... 13%* 29% 23% 26% 33%
</TABLE>
* Non-Annualized
(a) Total Return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(b) For the years ended November 30, 1995 through 1997, the impact on the
Ratios of Expenses and Net Investment Income to Average Net Assets due to
VKAC reimbursement of certain expenses was less than 0.01%.
52 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. (Unaudited)
<TABLE>
<CAPTION>
===================================================================================================================
December 10, 1993
Six Months Year Ended November 30, (Commencement
Ended May 31, -------------------------------- of Distribution) to
Class C Shares 1998 1997 1996 1995 November 30, 1994 (a)
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------
Net Asset Value, Beginning
of the Period............................$11.440 $11.126 $ 11.17 $ 10.42 $ 11.29
------- ------- ------- ------- ---------
Net Investment Income.................... .307 .644 .652 .66 .63
Net Realized and
Unrealized Gain/Loss................... .192 .312 (.045) .7535 (.8363)
------- ------- ------- ------- ---------
Total from Investment
Operations............................... .499 .956 .607 1.4135 (.2063)
Less Distributions from and
in Excess of Net
Investment Income........................ .316 .642 .651 .6635 .6637
------- ------- ------- ------- ---------
Net Asset Value,
End of the Period........................$11.623 $11.440 $11.126 $ 11.17 $ 10.42
======= ======= ======= ======= =========
Total Return (b)........................... 4.28%* 8.82% 5.68% 13.79% (1.80%)*
Net Assets at End of the
Period (In millions).....................$102.6 $ 91.3 $ 50.0 $ 31.1 $ 15.3
Ratio of Expenses to
Average Net Assets (c)................... 1.65% 1.70% 1.77% 1.72% 1.75%
Ratio of Net Investment
Income to Average
Net Assets (c)........................... 5.30% 5.69% 5.86% 5.98% 6.07%
Portfolio Turnover......................... 13%* 29% 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) For the years ended November 30, 1995 through 1997, the impact on the
Ratios of Expenses and Net Investment Income to Average Net Assets due to
VKAC certain reimbursement of expenses was less than 0.01%.
53 See Notes to Financial Statements
<PAGE>
Notes to Financial Statements
May 31, 1998 (Unaudited)
================================================================================
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
investment 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
operations 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 by independent pricing
services or dealers using the most recently quoted bid price or, in the absence
of market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services are valued at fair value
using procedures established in good faith by the Board of Trustees. 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 82% of the FundOs
investment portfolio at the end of the period.
B. Security Transactions--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Fund may purchase and sell securities on a "when issued" or "delayed 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 aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
54
<PAGE>
Notes to Financial Statements (Continued)
May 31, 1998 (Unaudited)
================================================================================
The Fund may invest 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 balances 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 fully collateralized by the
underlying debt securities. The Fund will make payment for such securities only
upon physical delivery or evidence of book entry transfer to the account of the
custodian bank. The seller is required to maintain the value of the underlying
security at not less than the repurchase proceeds due the Fund.
C. Income and Expenses--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the life of each
applicable security. Expenses of the Fund are allocated on a pro rata basis to
each class of shares, except for distribution and service fees and transfer
agency costs which are unique to each class of shares.
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 November 30, 1997, the Fund had an accumulated capital loss
carryforward for tax purposes of $23,896,048 which expires between November 30,
1998 and November 30, 2005. Of this amount, $192,128 will expire in 1998. Net
realized gains or losses differ 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 and
gains or losses recognized for tax purposes on open futures positions at
November 30, 1997.
At May 31, 1998, for federal income tax purposes, cost of long-term
investments is $1,283,657,358; the aggregate gross unrealized appreciation is
$88,699,121 and the aggregate gross unrealized depreciation is $3,147,166,
resulting in net unrealized appreciation of $85,551,955.
E. Distribution of Income and Gains--The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed annually.
Due to inherent differences in the recognition of expenses under generally
accepted accounting principles and federal income tax purposes, the amount of
distributed net investment income
55
<PAGE>
Notes to Financial Statements (Continued)
May 31, 1998 (Unaudited)
================================================================================
may differ for a particular period. These differences are temporary in nature,
but may result in book basis distribution in excess of net investment income for
certain periods.
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:
Average Net Assets % Per Annum
==================================================
First $300 million.................. .60 of 1%
Next $300 million................... .55 of 1%
Over $600 million................... .50 of 1%
For the six months ended May 31, 1998, the Fund recognized expenses of
approximately $13,400 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.
For the six months ended May 31, 1998, the Fund recognized expenses of
approximately $134,800 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 six months ended May 31, 1998,
the Fund recognized expenses of approximately $345,500. Beginning in 1998, the
transfer agency fees are determined through negotiations with the Fund's Board
of Trustees and are based on competitive market benchmarks.
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 provides deferred compensation and retirement plans for its trustees
who are not officers of VKAC. Under the deferred compensation plan, trustees may
elect to defer all or a portion of their compensation to a later date. Benefits
under the retirement plan are payable for a ten-year period and are based upon
each trustee's years of service to the Fund. The maximum annual benefit per
trustee under the plan is $2,500.
3. Capital Transactions
The Fund has outstanding three classes of shares of beneficial interest, Classes
A, B and C, each with a par value of $.01 per share. There are an unlimited
number of shares of each class authorized. At May 31, 1998, capital aggregated
$796,078,395, $429,978,810 and $97,946,247 for Classes A, B, and C,
respectively. For the six months ended May 31, 1998, transactions were as
follows:
56
<PAGE>
Notes to Financial Statements (Continued)
May 31, 1998 (Unaudited)
================================================================================
<TABLE>
<CAPTION>
Shares Value
================================================================================
<S> <C> <C>
Sales:
Class A..................................... 6,911,325 $ 80,165,033
Class B..................................... 2,946,449 34,162,594
Class C..................................... 1,025,854 11,884,305
---------- ------------
Total Sales................................... 10,883,628 $126,211,932
========== ============
Dividend Reinvestment:
Class A..................................... 948,464 $ 11,013,165
Class B..................................... 449,255 5,214,273
Class C..................................... 129,152 1,497,067
---------- ------------
Total Dividend Reinvestments.................. 1,526,871 $ 17,724,505
========== ============
Repurchases:
Class A..................................... (4,510,254) $(52,269,739)
Class B..................................... (1,687,242) (19,569,818)
Class C..................................... (309,546) (3,585,937)
---------- ------------
Total Repurchases............................. (6,507,042) $(75,425,494)
========== ============
</TABLE>
At November 30, 1997, capital aggregated $757,169,936, $410,171,761, and
$88,150,812 for Classes A, B, and C, respectively. For the year ended
November 30, 1997, transactions were as follows:
<TABLE>
<CAPTION>
Shares Value
================================================================================
<S> <C> <C>
Sales:
Class A..................................... 18,562,392 $ 210,055,169
Class B..................................... 10,089,692 114,185,577
Class C..................................... 4,036,766 45,697,832
----------- -------------
Total Sales................................... 32,688,850 $ 369,938,578
=========== =============
Dividend Reinvestment:
Class A..................................... 1,614,240 $ 18,155,813
Class B..................................... 745,441 8,385,472
Class C..................................... 175,898 1,978,396
----------- -------------
Total Dividend Reinvestments.................. 2,535,579 $ 28,519,681
=========== =============
Repurchases:
Class A..................................... (7,837,512) $ (87,719,551)
Class B..................................... (2,749,344) (30,839,936)
Class C..................................... (723,574) (8,114,312)
----------- -------------
Total Repurchases............................. (11,310,430) $(126,673,799)
=========== =============
</TABLE>
57
<PAGE>
Notes to Financial Statements (Continued)
May 31, 1998 (Unaudited)
================================================================================
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 five years of the purchase for Class B and one
year of the purchase for Class C as detailed in the following schedule.
<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 six months ended May 31, 1998, VKAC, as distributor for the Fund,
received net commissions on sales of the Fund's Class A shares of approximately
$177,900 and CDSC on the redeemed shares of Classes B and C of approximately
$269,500. Sales charges do not represent expenses of the Fund.
4. Investment Transactions
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $235,121,169 and $176,343,555,
respectively.
5. Derivative Financial Instruments
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Fund's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation. Upon disposition, a realized gain or loss is
recognized accordingly, except when exercising an option contract or taking
delivery of a security underlying a futures contract. In these instances the
recognition of gain or loss is postponed until the disposal of the security
underlying the option or futures contract.
58
<PAGE>
Notes to Financial Statements (Continued)
May 31, 1998 (Unaudited)
================================================================================
During the period the Fund invested in future contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Fund
generally invests in futures on U.S. Treasury Bonds and the Municipal Bond Index
and typically closes the contract prior to the delivery date. These contracts
are generally used to manage the portfolio's effective maturity and duration.
Upon entering into future contracts, the Fund maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the value
of the contract (the variation margin).
Transactions in futures contracts for the six months ended May 31, 1998,
were as follows:
Contracts
================================================================================
Outstanding at November 30, 1997.................................. 200
Futures Opened.................................................... 250
Futures Closed.................................................... (450)
---------
Outstanding at May 31, 1998....................................... -0-
=========
6. Distribution and Service Plans
The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (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 six months ended May 31, 1998, are payments retained by VKAC of
approximately $1,566,600.
59
<PAGE>
Funds Distributed by Van Kampen American Capital
EQUITY FUNDS
Domestic
MS Aggressive Equity
VKAC Aggressive Growth
MS American Value
VKAC Comstock
VKAC Emerging Growth
VKAC Enterprise
VKAC Equity Income
VK Equity Growth
VKAC Growth
VKAC Growth and Income
VKAC Harbor
VKAC Pace
VKAC Real Estate Securities
MS U.S. Real Estate
VKAC Utility
MS Value
International/Global
MS Asian Growth
MS Emerging Markets
MS Global Equity
MS Global Equity Allocation
VKAC Global Managed Assets
MS Latin American
FIXED-INCOME FUNDS
Income
VKAC Corporate Bond
VKAC Global Government Securities
VKAC Government Securities
VKAC High Income Corporate Bond
MS High Yield
VKAC High Yield
VKAC Limited Maturity Government
VKAC Short-Term Global Income
VKAC Strategic Income
VKAC U.S. Government
VKAC U.S. Government Trust for Income
MS Worldwide High Income
Tax Exempt Income
VKAC California Insured Tax Free
VKAC Florida Insured Tax Free Income
VKAC High Yield Municipal
VKAC Insured Tax Free Income
VKAC Intermediate Term
Municipal Income
VKAC Municipal Income
VKAC New York Tax Free Income
VKAC Pennsylvania Tax Free Income
VKAC Tax Free High Income
Capital Preservation
VKAC Prime Rate Income Trust
VKAC Reserve
VKAC Senior Floating Rate
VKAC Tax Free Money
To find out more about any of these funds, ask your financial adviser for a
prospectus, which contains more complete information, including sales charges,
risks, and expenses. Please read it carefully before you invest or send money.
To view a current Van Kampen American Capital or Morgan Stanley fund prospectus
or to receive additional fund information, choose from one of the following:
. visit our web site at www.vkac.com -- to view prospectuses, select
Investors' Place, then Download a Prospectus
. call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central
time (Telecommunications Device for the Deaf users, call 1-800-421-2833)
. e-mail us by visiting www.vkac.com and selecting Investors' Place
60
<PAGE>
Van Kampen American Capital High Yield Municipal Fund
Board of Trustees
J. Miles Branagan
Richard M. DeMartini*
Linda Hutton Heagy
R. Craig Kennedy
Jack E. Nelson
Don G. Powell*
Phillip B. Rooney
Fernando Sisto
Wayne W. Whalen* - Chairman
Officers
Dennis J. McDonnell*
President
Ronald A. Nyberg*
Vice President and Secretary
Edward C. Wood, III*
Vice President and Chief Financial Officer
Curtis W. Morell*
Vice President and Chief Accounting Officer
John L. Sullivan*
Treasurer
Tanya M. Loden*
Controller
Peter W. Hegel*
Paul R. Wolkenberg*
Vice Presidents
Investment Adviser
Van Kampen American Capital
Asset Management, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Distributor
Van Kampen American Capital
Distributors, Inc.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
Shareholder Servicing Agent
ACCESS Investor
Services, Inc.
P.O. Box 418256
Kansas City, Missouri 64141-9256
Custodian
State Street Bank
and Trust Company
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
Legal Counsel
Skadden, Arps, Slate,
Meagher & Flom (Illinois)
333 West Wacker Drive
Chicago, Illinois 60606
Independent Accountants
PricewaterhouseCoopers LLP
200 E. Randolph Drive
Chicago, Illinois 60601
* "Interested" persons of the Fund, as defined in the Investment Company Act
of 1940.
(C) Van Kampen American Capital Distributors, Inc., 1998
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. After September 30, 1998, the report, if used with
prospective investors, must be accompanied by a quarterly performance update.
61
<PAGE>
Van Kampen American Capital Distributors, Inc. Bulk Rate
One Parkview Plaza U.S. Postage
Oakbrook Terrace, Illinois 60181 PAID
VAN KAMPEN
AMERICAN CAPITAL
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> HIGH YIELD MUNI A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 1,283,656,258<F1>
<INVESTMENTS-AT-VALUE> 1,369,209,313<F1>
<RECEIVABLES> 39,224,041<F1>
<ASSETS-OTHER> 63,042<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 1,408,496,396<F1>
<PAYABLE-FOR-SECURITIES> 9,157,734<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,038,875<F1>
<TOTAL-LIABILITIES> 22,196,609<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 796,078,395
<SHARES-COMMON-STOCK> 71,434,754
<SHARES-COMMON-PRIOR> 68,085,219
<ACCUMULATED-NII-CURRENT> (453,421)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (22,803,299)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 85,553,055<F1>
<NET-ASSETS> 831,459,399
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 46,979,940<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (8,120,477)<F1>
<NET-INVESTMENT-INCOME> 38,859,463<F1>
<REALIZED-GAINS-CURRENT> 888,421<F1>
<APPREC-INCREASE-CURRENT> 21,088,734<F1>
<NET-CHANGE-FROM-OPS> 60,836,618<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (25,094,598)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,911,325
<NUMBER-OF-SHARES-REDEEMED> (4,510,254)
<SHARES-REINVESTED> 948,464
<NET-CHANGE-IN-ASSETS> 51,575,151
<ACCUMULATED-NII-PRIOR> 487,485<F1>
<ACCUMULATED-GAINS-PRIOR> (23,691,720)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 3,596,870<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 8,120,477<F1>
<AVERAGE-NET-ASSETS> 813,460,572
<PER-SHARE-NAV-BEGIN> 11.454
<PER-SHARE-NII> 0.350
<PER-SHARE-GAIN-APPREC> 0.193
<PER-SHARE-DIVIDEND> (0.358)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.639
<EXPENSE-RATIO> 0.90
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1> This item relates to the Fund on a composite
basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 12
<NAME> HIGH YIELD MUNI B
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 1,283,656,258<F1>
<INVESTMENTS-AT-VALUE> 1,369,209,313<F1>
<RECEIVABLES> 39,224,041<F1>
<ASSETS-OTHER> 63,042<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 1,408,496,396<F1>
<PAYABLE-FOR-SECURITIES> 9,157,734<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,038,875<F1>
<TOTAL-LIABILITIES> 22,196,609<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 429,978,810
<SHARES-COMMON-STOCK> 38,871,288
<SHARES-COMMON-PRIOR> 37,162,826
<ACCUMULATED-NII-CURRENT> (453,421)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (22,803,299)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 85,553,055<F1>
<NET-ASSETS> 452,266,680
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 46,979,940<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (8,120,477)<F1>
<NET-INVESTMENT-INCOME> 38,859,463<F1>
<REALIZED-GAINS-CURRENT> 888,421<F1>
<APPREC-INCREASE-CURRENT> 21,088,734<F1>
<NET-CHANGE-FROM-OPS> 60,836,618<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (12,050,200)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,946,449
<NUMBER-OF-SHARES-REDEEMED> (1,687,242)
<SHARES-REINVESTED> 449,255
<NET-CHANGE-IN-ASSETS> 26,688,986
<ACCUMULATED-NII-PRIOR> 487,485<F1>
<ACCUMULATED-GAINS-PRIOR> (23,691,720)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 3,596,870<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 8,120,477<F1>
<AVERAGE-NET-ASSETS> 442,401,959
<PER-SHARE-NAV-BEGIN> 11.452
<PER-SHARE-NII> 0.307
<PER-SHARE-GAIN-APPREC> 0.191
<PER-SHARE-DIVIDEND> (0.316)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.634
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1> This item relates to the Fund on a composite
basis and not on a class basis
</FN>
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 6
<SERIES>
<NUMBER> 13
<NAME> HIGH YIELD MUNI C
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> DEC-01-1997
<PERIOD-END> MAY-31-1998
<INVESTMENTS-AT-COST> 1,283,656,258<F1>
<INVESTMENTS-AT-VALUE> 1,369,209,313<F1>
<RECEIVABLES> 39,224,041<F1>
<ASSETS-OTHER> 63,042<F1>
<OTHER-ITEMS-ASSETS> 0<F1>
<TOTAL-ASSETS> 1,408,496,396<F1>
<PAYABLE-FOR-SECURITIES> 9,157,734<F1>
<SENIOR-LONG-TERM-DEBT> 0<F1>
<OTHER-ITEMS-LIABILITIES> 13,038,875<F1>
<TOTAL-LIABILITIES> 22,196,609<F1>
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 97,946,247
<SHARES-COMMON-STOCK> 8,825,083
<SHARES-COMMON-PRIOR> 7,979,623
<ACCUMULATED-NII-CURRENT> (453,421)<F1>
<OVERDISTRIBUTION-NII> 0<F1>
<ACCUMULATED-NET-GAINS> (22,803,299)<F1>
<OVERDISTRIBUTION-GAINS> 0<F1>
<ACCUM-APPREC-OR-DEPREC> 85,553,055<F1>
<NET-ASSETS> 102,573,708
<DIVIDEND-INCOME> 0<F1>
<INTEREST-INCOME> 46,979,940<F1>
<OTHER-INCOME> 0<F1>
<EXPENSES-NET> (8,120,477)<F1>
<NET-INVESTMENT-INCOME> 38,859,463<F1>
<REALIZED-GAINS-CURRENT> 888,421<F1>
<APPREC-INCREASE-CURRENT> 21,088,734<F1>
<NET-CHANGE-FROM-OPS> 60,836,618<F1>
<EQUALIZATION> 0<F1>
<DISTRIBUTIONS-OF-INCOME> (2,655,571)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,025,854
<NUMBER-OF-SHARES-REDEEMED> (309,546)
<SHARES-REINVESTED> 129,152
<NET-CHANGE-IN-ASSETS> 11,283,055
<ACCUMULATED-NII-PRIOR> 487,485<F1>
<ACCUMULATED-GAINS-PRIOR> (23,691,720)<F1>
<OVERDISTRIB-NII-PRIOR> 0<F1>
<OVERDIST-NET-GAINS-PRIOR> 0<F1>
<GROSS-ADVISORY-FEES> 3,596,870<F1>
<INTEREST-EXPENSE> 0<F1>
<GROSS-EXPENSE> 8,120,477<F1>
<AVERAGE-NET-ASSETS> 97,520,468
<PER-SHARE-NAV-BEGIN> 11.440
<PER-SHARE-NII> 0.307
<PER-SHARE-GAIN-APPREC> 0.192
<PER-SHARE-DIVIDEND> (0.316)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 11.623
<EXPENSE-RATIO> 1.65
<AVG-DEBT-OUTSTANDING> 0<F1>
<AVG-DEBT-PER-SHARE> 0<F1>
<FN>
<F1> This item relates to the Fund on a composite
basis and not on a class basis
</FN>
</TABLE>
