<PAGE> 1
<TABLE>
<S> <C>
Table of Contents
OVERVIEW
LETTER TO SHAREHOLDERS 1
ECONOMIC SNAPSHOT 2
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS 4
PORTFOLIO AT A GLANCE
CREDIT QUALITY 6
SIX-MONTH DIVIDEND HISTORY 6
TOP FIVE STATES 7
TOP FIVE INDUSTRIES 7
Q&A WITH YOUR PORTFOLIO MANAGERS 8
GLOSSARY OF TERMS 12
BY THE NUMBERS
YOUR FUND'S INVESTMENTS 13
FINANCIAL STATEMENTS 53
NOTES TO FINANCIAL STATEMENTS 59
VAN KAMPEN FUNDS
THE VAN KAMPEN FAMILY OF FUNDS 66
FUND OFFICERS AND IMPORTANT ADDRESSES 67
</TABLE>
It is times like these when money-management experience may make a difference.
NOT FDIC INSURED MAY LOSE VALUE NO BANK GUARANTEE
<PAGE> 2
OVERVIEW
LETTER TO SHAREHOLDERS
June 20, 2000
Dear Shareholder,
Whether you have held your fund for years or just joined the Van Kampen family
of shareholders in the last few months, you are likely to have questions and
even some concerns about how recent market volatility has affected your
investment. I encourage you to review the following Q&A in which your portfolio
manager provides an update on how your fund is being managed in this
environment.
It is times like these when money-management experience may make a difference.
Toward that end, you should know that Van Kampen is one of the nation's oldest
investment-management firms, with a history of money management dating back to
1926. Our portfolio managers have invested in all types of market
conditions--during bull and bear markets, periods of inflation and rising
interest rates, and now a technology revolution. We have managed money long
enough to understand short-term market volatility and the value of investing for
the long term.
As we head into the second half of 2000, count on us to
continue to draw on the wisdom of our 76 years of experience.
Along those lines, Van Kampen's "Generations of Experience" is
the theme of a national advertising campaign that kicked off this spring. The
message emphasizes our depth of investment-management history, as well as our
firm belief that with the right investments, anyone can realize life's true
wealth.
Sincerely,
<TABLE>
<S> <C>
[SIG]
Richard F. Powers, III
President and CEO
Van Kampen Investments
</TABLE>
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
ECONOMIC GROWTH CONTINUED TO BE STRONG WITH THE GROSS DOMESTIC PRODUCT (GDP),
THE PRIMARY MEASURE OF ECONOMIC GROWTH, INCREASING TO A 5.5 ANNUALIZED
PERCENTAGE RATE IN THE FIRST QUARTER OF 2000. THIS WAS THE THIRD CONSECUTIVE
QUARTER IN WHICH THE ECONOMY GREW FASTER THAN 5 PERCENT. HIGH LEVELS OF CONSUMER
CONFIDENCE, LOW LEVELS OF UNEMPLOYMENT, AND INCREASING PRODUCTIVITY WERE PRIMARY
FACTORS UNDERLYING THE HEALTHY ECONOMY.
CONSUMER SPENDING AND EMPLOYMENT
INFLATION FEARS CONTINUED TO MOUNT BECAUSE OF STRONG CONSUMER SPENDING AND THE
TIGHT LABOR MARKET. FOR MOST OF THE REPORTING PERIOD, RISING INTEREST RATES DID
LITTLE TO REIN IN ROBUST CONSUMER SPENDING. ALTHOUGH RETAIL SALES GROWTH
MODERATED IN APRIL AND MAY, THE FACTORS UNDERPINNING CONSUMER ACTIVITY--RISING
WAGES AND LOW UNEMPLOYMENT--REMAINED LARGELY UNCHANGED.
IN ADDITION, THE JOBLESS RATE HOVERED NEAR ITS LOWEST LEVEL IN THREE DECADES.
THE EMPLOYMENT COST INDEX ACCELERATED SHARPLY IN THE FIRST QUARTER OF 2000,
REFLECTING RISING WAGES AS EMPLOYERS VIED TO ATTRACT AND RETAIN SKILLED WORKERS.
THESE WAGE PRESSURES, IN TURN, BEGAN TO AFFECT PRICES, AS COMPANIES STARTED TO
RAISE THE COST OF GOODS AND SERVICES TO COMPENSATE FOR HIGHER LABOR COSTS.
INTEREST RATES AND INFLATION
STRONG GDP NUMBERS PROMPTED THE FEDERAL RESERVE BOARD TO RAISE INTEREST RATES
AND REMAIN ACTIVE IN GUARDING AGAINST INFLATION AND TEMPERING ECONOMIC GROWTH.
THE CONSUMER PRICE INDEX (CPI) ALSO ROSE TO HIGHER LEVELS DURING THE REPORTING
PERIOD. BOTH GDP AND CPI DATA WARRANTED AN INCREASE OF SHORT-TERM RATES BY 0.25
PERCENT IN NOVEMBER AND FEBRUARY AND BY 0.50 PERCENT IN MAY.
THE PERSONAL CONSUMPTION EXPENDITURES PRICE INDEX, A MEASURE OF INFLATION
WATCHED BY FEDERAL RESERVE POLICY MAKERS, ROSE TO 3.1 PERCENT IN THE FIRST
QUARTER OF 2000. GIVEN THE FEDERAL RESERVE'S AIM TO ACHIEVE AN ECONOMIC GROWTH
RATE BETWEEN 3 AND 4 PERCENT, A RANGE THAT WOULD BE CONSIDERED LESS LIKELY TO
PROMPT HIGHER INFLATION, FURTHER INTEREST RATE HIKES MAY BE LIKELY BEFORE THE
END OF THE YEAR.
2
<PAGE> 4
U.S. GROSS DOMESTIC PRODUCT
SEASONALLY ADJUSTED ANNUALIZED RATES
(March 31, 1998 - March 31, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
U.S. GROSS DOMESTIC PRODUCT
---------------------------
<S> <C>
Mar 98 6.70
Jun 98 2.10
Sep 98 3.80
Dec 98 5.90
Mar 99 3.70
Jun 99 1.90
Sep 99 5.70
Dec 99 7.30
Mar 00 5.50
</TABLE>
Source: Bureau of Economic Analysis
INTEREST RATES AND INFLATION
(May 31, 1998 - May 31, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
May 98 5.50 1.70
5.50 1.70
5.50 1.70
Aug 98 5.50 1.60
5.25 1.50
5.00 1.50
Nov 98 4.75 1.50
4.75 1.60
4.75 1.70
Feb 99 4.75 1.60
4.75 1.70
4.75 2.30
May 99 4.75 2.10
5.00 2.00
5.00 2.10
Aug 99 5.25 2.30
5.25 2.60
5.25 2.60
Nov 99 5.50 2.60
5.50 2.70
5.50 2.70
Feb 00 5.75 3.20
6.00 3.70
6.00 3.00
May 00 6.50 3.10
</TABLE>
Interest rates are represented by the closing midline federal funds target rate
on the last day of each month. Inflation is indicated by the annual percent
change of the Consumer Price Index for all urban consumers at the end of each
month.
3
<PAGE> 5
PERFORMANCE SUMMARY
RETURN HIGHLIGHTS
(as of May 31, 2000)
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Six-month total return based on
NAV(1) -.76% -1.15% -1.06%
-------------------------------------------------------------------------
Six-month total return(2) -5.51% -5.00% -2.03%
-------------------------------------------------------------------------
One-year total return(2) -7.61% -7.36% -4.63%
-------------------------------------------------------------------------
Five-year average annual total
return(2) 4.53% 4.51% 4.75%
-------------------------------------------------------------------------
Ten-year average annual total
return(2) 6.36% N/A N/A
-------------------------------------------------------------------------
Life-of-Fund average annual total
return(2) 6.36% 5.38%(3) 4.74%
-------------------------------------------------------------------------
Commencement date 01/02/86 07/20/92 12/10/93
-------------------------------------------------------------------------
Distribution rate(4) 6.07% 5.58% 5.59%
-------------------------------------------------------------------------
Taxable-equivalent distribution
rate(5) 9.48% 8.72% 8.73%
-------------------------------------------------------------------------
SEC Yield(6) 6.29% 5.84% 5.85%
-------------------------------------------------------------------------
</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 Class A shares) or
contingent deferred sales charge ("CDSC"). On purchases of Class A shares of $1
million or more, a CDSC of 1% may be imposed on certain redemptions made within
one year of purchase. Returns for Class B shares are calculated without the
effect of the maximum 4% CDSC, charged on certain redemptions made within one
year of purchase and declining thereafter to 0% after the fifth year. Returns
for Class C shares are calculated without the effect of the maximum 1.00% CDSC,
charged on certain redemptions made within one year of purchase. If the sales
charges were included, total returns would be lower.
(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (4.75% for Class A
shares) or contingent deferred sales charge ("CDSC"). On purchases of Class A
shares of $1 million or more, a CDSC of 1% may be imposed on certain redemptions
made within one year of purchase. Returns for Class B shares are calculated with
the effect of the maximum 4% CDSC, charged on certain redemptions made within
one year of purchase and declining thereafter to 0% after the fifth year.
Returns for Class C shares are calculated with the effect of the maximum 1.00%
CDSC, charged on certain redemptions made within one year of purchase.
(3) The total return reflects the conversion of Class B shares into Class A
shares six years after the end of the calendar month in which the shares were
purchased.
(4) Distribution rate represents the monthly annualized distributions of the
Fund at the end of the period and not the earnings of the Fund.
4
<PAGE> 6
(5) Taxable-equivalent calculations reflect a federal income tax rate of 36%.
(6) 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, 2000.
A portion of the interest income may be subject to the federal alternative
minimum tax (AMT).
An investment in the Fund is subject to investment risks, and you could lose
money on your investment in the Fund. Please review the Risk/Return Summary of
the Prospectus for further details on investment risks. Fund shares, when
redeemed, may be worth more or less than their original cost. Past performance
is no guarantee of future results. Investment return and net asset value will
fluctuate with market conditions.
5
<PAGE> 7
PORTFOLIO AT A GLANCE
CREDIT QUALITY
(as a percentage of long-term investments)
<TABLE>
<CAPTION>
As of May 31, 2000
<S> <C> <C>
- AAA/Aaa............ 4.0%
- AA/Aa.............. 1.6%
- A/A................ 2.5%
- BBB/Baa............ 5.4%
- BB/Ba.............. 4.9%
- B/B................ 0.9%
- CCC/Caa............ 0.4%
- CC/Ca.............. 0.1%
- Non-Rated.......... 80.2%
[PIE CHART]
<CAPTION>
As of November 30, 1999
<S> <C> <C>
- AAA/Aaa............ 3.6%
- AA/Aa.............. 0.9%
- A/A................ 2.4%
- BBB/Baa............ 4.5%
- BB/Ba.............. 4.7%
- B/B................ 0.8%
- CCC/Caa............ 0.1%
- Non-Rated.......... 83.0%
[PIE CHART]
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
SIX-MONTH DIVIDEND HISTORY
(for the six months ending May 31, 2000)
[BAR GRAPH]
<TABLE>
<CAPTION>
DIVIDENDS
---------
<S> <C>
12/99 0.0560
1/00 0.0560
2/00 0.0560
3/00 0.0560
4/00 0.0560
5/00 0.0560
</TABLE>
The dividend history represents past performance of the fund's Class A shares
and is no guarantee of the fund's future dividends.
6
<PAGE> 8
TOP FIVE STATES
(as a percentage of long-term investments--May 31, 2000)
<TABLE>
<S> <C> <C>
Pennsylvania 9.7%
---------------------------------------------------------------------
Florida 8.5%
---------------------------------------------------------------------
Illinois 8.1%
---------------------------------------------------------------------
Massachusetts 7.5%
---------------------------------------------------------------------
New York 5.3%
---------------------------------------------------------------------
</TABLE>
TOP FIVE INDUSTRIES
(as a percentage of long-term investments)
[BAR GRAPH]
<TABLE>
<CAPTION>
MAY 31, 2000 NOVEMBER 30, 1999
------------ -----------------
<S> <C> <C>
Other Care 22.2 23.1
Industrial Revenue 17.1 17.5
Health Care 17.0 17.1
Multi-Family Housing 14.4 14.6
Tax District 6.2 6.3
</TABLE>
7
<PAGE> 9
Q&A WITH YOUR PORTFOLIO MANAGERS
WE RECENTLY SPOKE WITH THE MANAGEMENT TEAM OF THE VAN KAMPEN HIGH YIELD
MUNICIPAL FUND ABOUT THE KEY EVENTS AND ECONOMIC FORCES THAT SHAPED THE MARKETS
DURING THE PAST SIX MONTHS. THE TEAM IS LED BY WAYNE D. GODLIN, PORTFOLIO
MANAGER, WHO HAS MANAGED THE FUND SINCE MARCH 1990 AND HAS WORKED IN THE
INVESTMENT INDUSTRY SINCE 1984. THE FOLLOWING DISCUSSION REFLECTS HIS VIEWS ON
THE FUND'S PERFORMANCE DURING THE SIX-MONTH PERIOD ENDED MAY 31, 2000.
Q HOW WOULD YOU DESCRIBE THE
MARKET ENVIRONMENT IN WHICH
THE FUND HAS OPERATED DURING
THE PAST SIX MONTHS?
A Although the municipal market performed poorly over the past six months,
with slightly negative returns, municipals generally performed better than other
fixed-income investments. Most corporate bonds, government bonds, and mortgage-
backed securities fared worse.
The reason for the lackluster performance among municipal bonds was
three-fold. First, the Federal Reserve Board raised interest rates several times
during the reporting period. When long-term interest rates rise, bond prices
fall, making it difficult for interest-rate sensitive bond funds to produce
attractive returns. Second, the participants in the municipal market were
unclear as to which direction interest rates were headed. This uncertainty
resulted in a choppy market. Third, credit spreads between higher-quality AAA
rated bonds and lower-quality BBB and lower-rated bonds widened due to fears of
a slowing economy. When spreads widen, lower-rated bonds, such as those held by
the fund, typically underperform higher-quality bonds, such as those that are
insured or rated AAA.
Q HOW DID YOU POSITION THE FUND
IN THIS ENVIRONMENT?
A Our approach is very similar in nature to that of many equity mutual funds,
which focus on the fundamental value of the underlying companies in which they
invest, rather than economic forecasts. We primarily evaluate municipal bonds on
an individual basis--regardless of whether credit spreads are tight or wide--and
we continue to position the fund for the long term. Our research team of eight
analysts, located throughout the country, helps us continue to maintain a highly
diversified portfolio by geography and sector, which is an important strategy
when investing in high-yield, high-risk municipal bonds. Diversification allows
us to help minimize the effects of weakness in a specific municipality or
economic sector.
8
<PAGE> 10
There was a subtle shift in the makeup of the portfolio during this
reporting period. We reduced the fund's exposure to nonrated credits at the
beginning of the period by approximately 6 to 7 percent and reallocated the
proceeds to higher-yielding, rated bonds with longer durations, without changing
the fund's distribution rate.
Q WHAT PERCENTAGE OF THE FUND'S
ASSETS ARE INVESTED IN NONRATED
BONDS, AND WHY?
A As of May 31, 2000, 80 percent of the fund's long-term investments were
invested in nonrated bonds. We believe these bonds continue to provide
exceptional value to shareholders, particularly when compared to rated municipal
bonds. The difference in yield between Aaa rated bonds and higher-risk Baa rated
bonds was only 73 basis points--5.91 percent compared to 6.64 percent as of May
31, 2000. However, by making the jump to nonrated bonds, we have the potential
to pick up another 75 to 100 basis points in yield. In addition, we've found
over the last 10 years that these bonds have tangible upside potential for three
primary reasons.
First, there are fewer participants in the nonrated municipal market. Most
investors, including institutional and mutual fund investors, lack the
significant analytical resources and experience necessary to evaluate municipals
that haven't been rated. With fewer skilled participants, investors are in a
better position to negotiate higher yields from the issuers. Second, the risks
associated with non-rated bonds are often greater, which means the issuers must
offer potentially higher yields to investors. Third, many of the nonrated
municipals purchased by our group have improved in credit quality over long
periods of time. Their price has increased in lockstep with their real and
perceived credit quality, benefiting the fund's shareholders with capital
appreciation in addition to yield. As a result of this strategy, the fund
benefited from significant improvements in the credit quality of its holdings,
which helped to offset the effects of weakness in the overall municipal bond
market.
Q WHAT OTHER FACTORS CONTRIBUTED
TO THE FUND'S PERFORMANCE?
A One factor contributing to the fund's performance was from our investments
in life-care projects. Life-care centers typically offer a mix of independent
housing, assisted living, and long-term care facilities for elderly people.
Life-care facilities, which have private payments as their primary source of
revenues, were largely unaffected by cutbacks in Medicare and Medicaid payments.
For additional fund portfolio highlights, please refer to page 6.
Q HOW DID THE FUND PERFORM
DURING THE PAST SIX MONTHS?
A Considering the poor market conditions we faced during the period, the
fund's performance fared well relative to its benchmark, the Lehman Brothers
Municipal Bond Index. For the six months ended May 31, 2000, the fund's total
return
9
<PAGE> 11
was -0.76 percent (Class A shares at net asset value; if the maximum sales
charge of 4.75 percent were included, the return would have been lower). The
fund's net asset value closed the reporting period at $10.54 per Class A share,
down from $10.96 at the beginning of the period. As of May 31, 2000, the fund's
Class A share tax-exempt distribution rate was 6.07 percent, representing a
taxable equivalent distribution rate of 9.48 percent for an investor in the 36
percent federal income tax bracket.
By comparison, the Lehman Brothers Municipal Bond Index returned 1.02
percent during the same six-month period. This broad-based index of municipal
bonds does not reflect any commissions or sales charges that would be paid by an
investor purchasing the securities it represents. Such costs would lower the
performance of the index. It is not possible to invest directly in an index.
Please refer to the footnotes and chart on page 4 for additional fund
performance results. Past performance is no guarantee of future results.
Q HOW DID THE FUND'S PERFORMANCE
COMPARE TO THAT OF ITS PEERS?
A As of May 2000, the fund had been rated five stars by Morningstar for 99
consecutive months--the eighth- longest five-star track record of any fund in
any Morningstar category.
We typically have maintained a greater percentage of fund assets in
higher-yielding, lower-rated securities than other funds in our peer group,
which has historically helped the fund outpace its peer average. As of May 31,
2000, the fund's performance earned an overall rating of five stars from
Morningstar in the Municipal Bond Fund Category, which means it was ranked in
the top 10 percent of funds within its category. The fund's Class A shares
received five stars in each of the 3, 5, and 10-year periods, which were
calculated among 1,690, 1,441, and 408 funds in the municipal bond fund
category, respectively, as of May 31, 2000.
Morningstar is an independent rating company, and the five-star composite
rating is the highest rating it assigns in its monthly mutual fund reviews.
Morningstar ratings are calculated from the fund's 3, 5, and 10-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. 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. 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.
10
<PAGE> 12
Q WHAT IS YOUR OUTLOOK FOR THE
FUND IN THE NEXT SIX MONTHS?
A We are optimistic. Investors have been comforted by the Federal Reserve's
aggressive stance in fighting inflation, which may bring institutional investors
back into the municipal market. In addition, credit spreads are narrowing again,
which may indicate that the market is growing confident that the Fed has
inflation and economic growth under control. Yields are also back up to a level
that might capture the attention of equity investors and yield seekers.
Certainly things could change, but we believe the indicators are pointing toward
a healthier municipal market ahead.
We will continue to focus on our strengths: conducting primary market
research and finding value in nonrated bonds. Historically, the fund has
succeeded over the long run by utilizing this strategy, and we will continue to
invest this way because we believe it works. Over time, we believe these
strengths should continue to help the fund as it seeks to achieve its investment
objective--providing shareholders with as high a level of interest income exempt
from federal income tax as is consistent with the investment policies of the
fund.
11
<PAGE> 13
GLOSSARY OF TERMS
A HELPFUL GUIDE TO SOME OF THE COMMON TERMS YOU'RE LIKELY TO SEE IN THIS REPORT
AND OTHER FINANCIAL PUBLICATIONS.
BOND: A debt security issued by a government or corporation that pays a
bondholder a stated rate of interest and repays the principal at the maturity
date.
CLASS A SHARES: A division of mutual fund shares, which are generally divided
into three groupings, called Class A, Class B, and Class C shares. The specific
features of each are dependent on varying fees and sales charges. In most cases,
Class A shares will have no redemption fee (contingent deferred sales charge).
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investors Service are two
companies that assign bond ratings. Standard & Poor's ratings range from a high
of AAA to a low of D, while Moody's ratings range from a high of Aaa to a low of
C.
CREDIT SPREAD: Also called quality spread, the difference in yield between
higher-quality issues (such as Treasury securities) and lower-quality issues.
Normally, lower-quality issues provide higher yields to compensate investors for
the additional credit risk.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest rate
movements on its price. Typically, funds with shorter durations perform better
in rising rate environments, while funds with longer durations perform better
when rates decline.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1999
and maturing in 2009 is a 10-year bond. For corporate bonds, short-term bonds
usually mature in five years or less, intermediate-term bonds mature in five to
ten years, and long-term bonds mature after ten years.
MUNICIPAL BOND: A debt security issued by a state, municipality, or other state
or local government entity to finance capital expenditures of public projects,
such as the construction of highways, public works, or school buildings.
Interest on public-purpose municipal bonds is exempt from federal income taxes
and, in some states, from state and local income taxes.
YIELD: The annual rate of return on an investment, expressed as a percentage.
12
<PAGE> 14
BY THE NUMBERS
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
THE FOLLOWING PAGES DETAIL YOUR FUND'S PORTFOLIO OF INVESTMENTS AT THE END OF
THE REPORTING PERIOD.
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 95.6%
ALABAMA 0.7%
$1,000 Alabama Spl Care Facs Fin Auth Montgomery
Rev...................................... 6.300% 06/01/24 $ 852,650
5,000 Alabama St Indl Dev Auth Solid Waste Disp
Rev Pine City Fiber Co................... 6.450 12/01/23 4,685,150
2,000 Alabama St Space Science Exhibit
Commission Ctfs Partn.................... 6.875 10/01/24 1,837,720
4,000 West Jefferson Cnty, AL Amusement & Pub
Pk Auth First Mtg Visionland Proj........ 6.375 02/01/29 2,645,640
--------------
10,021,160
--------------
ALASKA 0.7%
5,000 Alaska St Hsg Fin Corp Genl Mtg Ser A
(MBIA Insd).............................. 6.000 06/01/49 4,738,700
3,000 Juneau, AK City & Borough Nonrecourse
Rev...................................... 6.875 12/01/25 2,713,080
2,250 Seward, AK Rev AK Sealife Cent Proj...... 7.650 10/01/16 2,246,940
--------------
9,698,720
--------------
ARIZONA 2.3%
1,190 Casa Grande, AZ Indl Dev Auth Rfdg....... 8.250 12/01/15 1,169,437
2,843 Chandler, AZ Indl Dev Auth Rev Chandler
Fin Cent Proj Ser 1986 (c)............... 7.250 12/01/16 2,354,715
3,000 Flagstaff, AZ Indl Dev Auth Rev Sr Living
Cmnty Northern AZ Ser A.................. 6.200 09/01/28 2,478,390
5,500 Maricopa Cnty, AZ Indl Dev Auth Multi-
Family Hsg Rev, 144A (a) (e)............. 6.625 07/01/33 4,963,145
3,000 Maricopa Cnty, AZ Indl Dev Auth Sr Living
Fac Rev.................................. 7.750 04/01/15 2,955,960
1,000 Peoria, AZ Indl Dev Auth Rev Sierra Winds
Life Ser A Rfdg.......................... 6.375 08/15/29 842,190
1,000 Peoria, AZ Indl Dev Auth Rev Sierra Winds
Life Ser A Rfdg.......................... 6.500 08/15/31 857,200
1,000 Phoenix, AZ Indl Dev Auth Arpt Fac Rev
America West Airls Inc Proj.............. 6.250 06/01/19 909,200
3,000 Pima Cnty, AZ Indl Dev Auth
Multi-Family Rev, 144A (e)............... 6.625 10/01/28 2,763,600
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
ARIZONA (CONTINUED)
$2,000 Pima Cnty, AZ Indl Dev Auth Rev
La Posada at Park Cent Ser A............. 7.000% 05/15/27 $ 1,880,500
3,600 Pima Cnty, AZ Indl Dev Auth Sr Living
Catalina Vlg Rev Ser A................... 6.500 07/01/29 3,025,728
1,025 Pinal Cnty, AZ Indl Dev Auth Casa Grande
Regl Med Cent Proj Ser A................. 8.125 12/01/22 1,056,693
475 Pinal Cnty, AZ Indl Dev Auth Casa Grande
Regl Med Cent Proj Ser B................. 8.125 12/01/22 489,687
2,115 Red Hawk Canyon Cmnty Facs
Dist No 2 AZ Dist Assmt Rev.............. 6.500 12/01/12 1,980,274
1,035 Scottsdale, AZ Indl Dev Auth Rev First
Mtg Westminster Vlg Ser A Rfdg........... 8.000 06/01/11 1,077,611
2,000 Scottsdale, AZ Indl Dev Auth Rev First
Mtg Westminster Vlg Ser A Rfdg........... 8.250 06/01/15 2,092,140
1,845 Tucson, AZ Indl Dev Auth Rev Clarion
Santa Rita Hotel Ser A Rfdg, 144A (e).... 6.375 12/01/16 1,644,781
--------------
32,541,251
--------------
ARKANSAS 0.3%
4,065 Jackson Cnty, AR Hlthcare Fac Brd First
Mtg Hosp Rev Newport Hosp &
Clinic Inc............................... 7.375 11/01/11 3,882,563
--------------
CALIFORNIA 4.4%
1,255 Abag Fin Auth For Nonprofit Corps
CA Ctfs Partn............................ 6.375 11/15/15 1,145,175
1,455 Abag Fin Auth For Nonprofit Corps
CA Ctfs Partn............................ 6.375 11/15/28 1,266,577
1,210 California Edl Fac Auth Rev Pacific
Graduate Sch of Psych.................... 7.600 11/01/21 1,222,911
2,315 California Edl Fac Auth Rev Pacific
Graduate Sch of Psych.................... 8.000 11/01/21 2,401,373
2,850 Contra Costa Cnty, CA Multi-Family
Hsg Rev.................................. 6.750 12/01/30 2,610,970
2,000 Corona, CA Ctfs Partn Vista Hosp Sys Inc
Ser B.................................... 9.500 07/01/20 1,757,800
2,500 Corona, CA Ctfs Partn Vista Hosp Sys Inc
Ser C.................................... 8.375 07/01/11 2,243,575
1,250 Culver City, CA Redev Fin Auth Rev
Subordinated Tax Allocation Ser B Rfdg... 6.250 11/01/25 1,207,537
1,035 Davis, CA Pub Fac Fin Auth Loc Agy Rev... 6.600 09/01/25 1,031,202
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$1,500 Folsom, CA Spl Tax Cmnty Fac Dist No 7
Rfdg..................................... 7.250% 09/01/21 $ 1,559,550
1,000 Fontana, CA Spl Tax Cmnty Facs Dist 11
Ser A Rfdg............................... 6.500 09/01/28 946,280
2,000 Fontana, CA Spl Tax Cmnty Facs Dist 11
Ser B.................................... 6.500 09/01/28 1,892,560
2,585 Fresno, CA Ctfs Partn.................... 8.500 05/01/16 2,661,206
840 Healdsburg, CA Ctfs Partn Nuestro Hosp
Inc...................................... 6.250 11/01/08 771,834
2,500 Healdsburg, CA Ctfs Partn Nuestro Hosp
Inc...................................... 6.375 11/01/28 2,082,725
975 Indio, CA Pub Fin Auth Rev Tax
Increment................................ 6.500 08/15/27 958,396
2,000 Lake Elsinore, CA Pub Fin Auth Loc Agy
Rev Ser F................................ 7.100 09/01/20 2,052,540
1,500 Los Angeles, CA Cmnty Fac Dist Spl Tax No
3 Cascades Business Pk................... 6.400 09/01/22 1,454,025
1,000 Los Angeles, CA Regl Arpts Impt Corp
Lease Rev................................ 6.350 11/01/25 922,110
4,500 Millbrae, CA Residential Fac Rev Magnolia
of Millbrae Proj Ser A................... 7.375 09/01/27 4,323,645
1,000 Moreno Vly, CA Spl Tax Towngate Cmnty Fac
Dist 87-1................................ 7.125 10/01/23 1,023,890
2,000 Perris, CA Pub Fin Auth Loc Agy Rev Ser
D........................................ 7.875 09/01/25 2,108,060
1,500 Rancho Cucamonga, CA Cmnty Fac Dist Spl
Tax No 88-2.............................. 8.250 09/01/19 1,681,725
2,965 Reedley, CA Ctfs Partn................... 7.500 10/01/26 2,956,105
3,105 Richmond, CA Redev Agy Multi-Family Rev
Ser A.................................... 7.500 09/01/23 3,124,406
2,000 Sacramento, CA City Fin Auth Rev Sr
Convention Ctr Hotel Ser A............... 6.250 01/01/30 1,815,860
1,945 Sacramento, CA Spl Tax Cmnty Fac Dist No
97-1 Ser A............................... 6.700 09/01/17 1,972,658
2,000 Sacramento, CA Spl Tax Cmnty Fac Dist No
97-1 Ser A............................... 6.750 09/01/27 2,011,660
2,500 San Bernardino, CA Assoc Cmntys Fin Auth
Hlthcare Ctfs Partn...................... 6.900 05/01/27 2,047,950
3,120 San Jose, CA Multi-Family Hsg Rev Helzer
Courts Apts Ser A, 144A (e).............. 6.400 12/01/41 2,814,240
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$1,900 San Luis Obispo, CA Ctfs Partn Vista Hosp
Sys Inc.................................. 8.375% 07/01/29 $ 1,620,890
1,995 Simi Valley, CA Cmnty Dev Agy Coml
Sycamore Plaza II Rfdg................... 6.000 09/01/12 2,001,863
2,000 Vallejo, CA Ctfs Partn Touro Univ........ 7.250 06/01/16 1,962,060
2,000 Ventura, CA Port Dist Ctfs Partn......... 6.375 08/01/28 1,885,440
--------------
63,538,798
--------------
COLORADO 3.1%
2,000 Arvada, CO Multi-Family Rev Hsg Arvada
Nightingale Proj Rfdg.................... 6.250 12/01/18 1,834,100
1,060 Berry Creek Metro Dist CO Rfdg........... 7.300 12/01/12 1,088,662
1,000 Colorado Hlth Fac Auth Rev Baptist Home
Assn Ser A............................... 6.250 08/15/13 914,600
2,250 Colorado Hlth Fac Auth Rev Baptist Home
Assn Ser A............................... 6.375 08/15/24 1,932,323
1,500 Colorado Hlth Fac Auth Rev Christian
Living Campus Proj....................... 9.000 01/01/25 1,629,645
2,000 Colorado Hlth Fac Auth Rev Shalom Pk Proj
Rfdg..................................... 7.250 12/15/25 1,971,340
1,225 Colorado Hlth Fac Auth Rev Sr Living Fac
Eaton Terrace Ser A...................... 6.800 07/01/09 1,163,358
3,250 Colorado Hlth Fac Auth Rev Sr Living Fac
Eaton Terrace Ser A...................... 7.250 07/01/22 2,975,440
1,100 Colorado Hlth Facs Auth Hlth &
Residential Care Facs Rev................ 6.000 07/01/29 886,710
750 Colorado Hlth Facs Auth Rev Ser A Rfdg... 5.875 07/01/28 594,908
2,000 Colorado Hsg Fin Auth Single Family Pgm
Sr B 2................................... 6.800 04/01/30 2,090,860
1,250 Cordillera Metro Dist, CO Eagle Cnty
(Prerefunded @ 12/01/04)................. 8.250 12/01/13 1,417,863
3,000 Cottonwood Wtr & Sanitation Dist CO Ser A
Rfdg..................................... 7.750 12/01/20 3,042,750
1,055 Denver, CO City & Cnty Indl Dev Rev
Jewish Cmnty Cent Proj................... 7.375 03/01/09 1,094,974
1,130 Denver, CO City & Cnty Indl Dev Rev
Jewish Cmnty Cent Proj................... 7.500 03/01/14 1,165,335
815 Denver, CO City & Cnty Indl Dev Rev
Jewish Cmnty Cent Proj................... 7.875 03/01/19 848,928
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
COLORADO (CONTINUED)
$1,770 Denver, CO Urban Renewal Auth Tax
Increment Rev South Bdwy/ Montgomery
Ward..................................... 8.500% 05/01/16 $ 1,887,032
2,000 Eagle Cnty, CO Air Term Corp Rev Arpt
Term Proj................................ 7.500 05/01/21 2,001,940
1,900 Eagle Riverview Affordable Hsg Corp, CO
Multi-Family Rev......................... 6.300 07/01/29 1,726,834
1,735 Eaglebend, CO Affordable Hsg Corp Multi-
Family Rev Hsg Proj...................... 6.400 07/01/17 1,646,931
1,500 Eaglebend, CO Affordable Hsg Corp Multi-
Family Rev Hsg Proj...................... 6.450 07/01/21 1,415,955
3,990 Lafayette, CO Indl Dev Rev Rocky Medium
Term Note Instr Proj Ser A............... 7.000 10/01/18 3,602,332
500 Lafayette, CO Indl Dev Rev Rocky Medium
Term Note Instr Proj Ser B............... 6.125 10/01/08 470,805
4,120 Northern Metro Dist, CO Adams Cnty Rfdg,
144A (e)................................. 6.500 12/01/16 3,998,542
140 Skyland Metro Dist, CO Gunnison Cnty Rfdg
(Var Rate Cpn)........................... 8.250 12/01/08 98,840
750 Snowmass Vlg, CO Multi-Family Hsg Rev Ser
A Rfdg................................... 8.000 09/01/14 769,620
2,000 Telluride, CO Hsg Auth Hsg Rev Shandoka
Apts Proj Rfdg........................... 7.875 06/01/17 2,047,160
--------------
44,317,787
--------------
CONNECTICUT 1.4%
2,110 Connecticut St Dev Auth First Mtg Gross
Rev Hlthcare Proj CT Baptist Homes Inc
Proj..................................... 8.750 09/01/12 2,284,750
1,500 Connecticut St Dev Auth First Mtg Gross
Rev Hlthcare Proj CT Baptist Homes Inc
Proj..................................... 9.000 09/01/22 1,646,925
1,325 Connecticut St Dev Auth Hlthcare Rev
Indpt Living Proj Ser B (Prerefunded @
07/01/03)................................ 8.000 07/01/17 1,450,186
1,500 Connecticut St Dev Auth Indl Afco Cargo
Bdl LLC Proj............................. 8.000 04/01/30 1,494,675
3,315 Connecticut St Dev Auth Indl Dev Rev
Watson Foods Co Inc Proj................. 5.900 06/01/28 2,837,706
500 Connecticut St Dev Auth Mystic Marinelife
Aquar Proj Ser A......................... 7.000 12/01/27 486,875
2,500 Connecticut St Hlth & Edl Fac Auth Rev
Tolland Cnty Hlthcare Inc Ser A
(Prerefunded @ 07/01/01)................. 9.200 07/01/21 2,682,875
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
CONNECTICUT (CONTINUED)
$1,100 Connecticut St Hlth & Edl Fac Auth Rev
Tolland Cnty Hlthcare Inc Ser A.......... 6.875% 07/01/27 $ 1,051,281
300 Connecticut St Hlth & Edl Facs Auth
Rev...................................... 6.875 07/01/17 291,912
1,800 Greenwich, CT Hsg Auth Multi-Family Rev
Hsg Greenwich Close Ser A................ 6.350 09/01/27 1,654,164
1,690 Greenwich, CT Hsg Auth Multi-Family Rev
Hsg Greenwich Close Ser B................ 7.500 09/01/27 1,566,732
1,400 Manchester, CT Redev Agy Multi-Family Mtg
Rev Bennet Hsg Dev Rfdg.................. 7.200 12/01/18 1,411,970
1,920 New Haven, CT Indl Fac Rev Adj Govt Cent
Thermal Energies......................... 7.250 07/01/09 1,908,883
--------------
20,768,934
--------------
DELAWARE 0.6%
2,040 Delaware St Econ Dev Auth Indl Dev Rev
First Mtg Dover Hlthcare Rfdg............ 7.875 04/01/08 2,082,595
930 Delaware St Econ Dev Auth Rev Osteopathic
Hosp Assn of DE Ser A (Prerefunded @
07/01/04)................................ 9.500 01/01/22 1,079,525
2,055 Sussex Cnty, DE Assisted Living Fac Rev
Heritage At Milford Proj................. 7.250 07/01/29 1,862,714
3,455 Wilmington, DE Multi-Family Rent Rev Hsg
Electra Arms Sr Assoc Proj............... 6.250 06/01/28 3,047,068
--------------
8,071,902
--------------
DISTRICT OF COLUMBIA 0.3%
1,545 District of Columbia Rev Methodist Home
Issue.................................... 6.000 01/01/29 1,246,861
3,500 District of Columbia Rev Natl Pub Radio
Ser A.................................... 7.700 01/01/23 3,588,165
--------------
4,835,026
--------------
FLORIDA 8.1%
965 Arbor Greene Cmnty Dev Dist FL Spl Assmt
Rev...................................... 6.300 05/01/19 886,652
1,500 Bay Cnty, FL Hosp Sys Rev Bay Med Cent
Proj Rfdg (Prerefunded @ 10/01/04)....... 8.000 10/01/12 1,654,230
500 Bay Cnty, FL Hosp Sys Rev Bay Med Cent
Proj Rfdg (Prerefunded @ 10/01/04)....... 8.000 10/01/19 563,415
1,730 Bayside Impt Cmnty Dev Dist, FL Ser A.... 6.300 05/01/18 1,585,061
1,270 Bobcat Trail Cmnty, FL Dev Dist Cap Impt
Rev Ser A................................ 7.500 05/01/19 1,291,946
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$ 935 Bobcat Trail Cmnty, FL Dev Dist Cap Impt
Rev Ser B................................ 6.750% 05/01/04 $ 926,566
3,335 Boca Raton, FL Hsg Auth Mtg Hsg Rev First
Lien Banyan Place Sr Living Ser A........ 7.150 04/01/31 2,968,617
910 Boca Raton, FL Hsg Auth Mtg Hsg Rev
Second Lien Banyan Place Sr Living Ser
B........................................ 8.700 10/01/32 869,332
140 Charlotte Cnty, FL Indl Dev Auth Rev
Beverly Enterprises Rfdg................. 10.000 06/01/11 147,444
1,090 Collier Cnty, FL Indl Dev Auth Retirement
Rental Hsg Rev Rfdg...................... 10.750 03/01/03 1,147,214
4,205 Fishhawk Cmnty, FL Dev Dist Spl Assmt
Rev (a).................................. 7.625 05/01/18 4,330,183
4,000 Florida Hsg Fin Corp Rev Hsg Beacon Hill
Apts Ser C............................... 6.610 07/01/38 3,723,280
4,000 Florida Hsg Fin Corp Rev Hsg Cypress
Trace Apts Ser G......................... 6.600 07/01/38 3,739,320
4,000 Florida Hsg Fin Corp Rev Hsg Westbrook
Apts Ser U1.............................. 6.450 01/01/39 3,638,920
5,000 Florida Hsg Fin Corp Rev Hsg Westchase
Apts Ser B (a)........................... 6.610 07/01/38 4,680,200
795 Fort Walton Beach, FL Indl Dev Rev First
Mtg Fort Walton Beach Venture Proj....... 10.500 12/01/16 813,659
980 Heritage Harbor Cmnty Dev Dist FL Rev
Recntl................................... 7.750 05/01/19 933,822
1,000 Heritage Harbor Cmnty Dev Dist FL Rev Spl
Assmt Ser A.............................. 6.700 05/01/19 950,170
960 Hernando Cnty, FL Indl Dev Rev Beverly
Enterprises Rfdg......................... 10.000 09/01/11 1,017,149
3,000 Hialeah Gardens, FL Indl Dev Rev
Waterford Convalescent Ser A Rfdg........ 8.250 12/01/14 3,123,960
1,500 Hillsborough Cnty, FL Hsg Fin Auth Multi-
Family Rev Clipper Cove Apts Proj Ser
A........................................ 7.375 07/01/40 1,474,950
1,500 Homestead, FL Indl Dev Rev Brookwood
Gardens Cent Proj Ser A Rfdg............. 8.250 12/01/14 1,561,980
1,225 Lake Bernadette, FL Cmnty Dev Dist Spl
Assmt Rev Ser A.......................... 8.000 05/01/17 1,270,533
2,325 Lake Saint Charles, FL Cmnty Dev Dist Spl
Assmt Rev................................ 7.875 05/01/17 2,368,036
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$2,350 Largo, FL Sun Coast Hlth Sys Rev Hosp
Rfdg..................................... 6.300% 03/01/20 $ 1,893,113
680 Lee Cnty, FL Indl Dev Auth Econ Rev
Encore Nursing Cent Partn Rfdg........... 8.125 12/01/07 704,052
5,000 Leon Cnty, FL Edl Facs Auth Rev Southgate
Residence Hall Ser A Rfdg................ 6.750 09/01/28 4,732,000
4,055 Mount Dora, FL Hlth Fac Auth Hlth Rev.... 7.125 08/15/21 3,885,866
975 North Springs, FL Impt Dist Spl Assmt
Rev...................................... 7.000 05/01/19 970,369
2,590 Northern Palm Beach Cnty, FL Impt Dist
Wtr Ctl & Impt Unit Dev 16 Rfdg.......... 7.500 08/01/24 2,537,319
400 Orange Cnty, FL Hlth Fac Auth Rev First
Mtg Orlando Lutheran Twr Rfdg............ 8.125 07/01/06 409,548
2,035 Orange Cnty, FL Hlth Fac Auth Rev First
Mtg Orlando Lutheran Twr Rfdg............ 8.400 07/01/14 2,163,510
1,325 Orange Cnty, FL Hlth Fac Auth Rev First
Mtg Orlando Lutheran Twr Rfdg............ 8.625 07/01/20 1,428,774
1,250 Orange Cnty, FL Hlth Fac Auth Rev First
Mtg Orlando Lutheran Twr Rfdg............ 8.750 07/01/26 1,342,225
1,000 Orange Cnty, FL Hlth Fac Auth Rev
Westminster Community Care............... 6.500 04/01/12 934,940
2,000 Orange Cnty, FL Hlth Fac Auth Rev
Westminster Community Care............... 6.600 04/01/24 1,762,180
4,000 Orange Cnty, FL Hlth Facs Auth Rev Hosp
Regl Hlthcare Sys Ser E.................. 6.000 10/01/26 3,756,160
2,345 Orange Cnty, FL Hsg Fin Auth Hsg Alhambra
Trace Apts Proj Ser C.................... 7.375 04/01/28 2,391,407
2,400 Orange Cnty, FL Hsg Fin Auth Multi-Family
Rev Mtg Hands Inc Proj Ser A............. 7.875 10/01/15 2,512,920
2,535 Orange Cnty, FL Hsg Fin Auth Multi-Family
Rev Mtg Hands Inc Proj Ser A............. 8.000 10/01/25 2,664,767
395 Orange Cnty, FL Indl Dev Auth Rev Beverly
Enterprises Proj Rfdg.................... 9.250 08/01/10 414,272
2,900 Overoaks, FL Cmnty Dev Dist Cap Impt
Rev...................................... 8.250 05/01/17 3,081,946
3,000 Pinellas Cnty, FL Edl Fac Auth Rev
College Harbor Proj Ser A................ 8.250 12/01/21 3,011,130
500 Pinellas Cnty, FL Edl Facs Auth Rev
College Harbor Proj Ser A................ 8.500 12/01/28 508,365
975 Piney Z Cmnty Dev Dist FL Cap Impt Rev
Ser A.................................... 7.250 05/01/19 958,688
</TABLE>
See Notes to Financial Statements
20
<PAGE> 22
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,150 Piney Z Cmnty Dev Dist FL Cap Impt Rev
Ser B.................................... 6.500% 05/01/02 $ 1,137,442
750 Plantation, FL Hlth Fac Auth Rev Covenant
Retirement Cmnty Inc (Prerefunded @
12/01/02)................................ 7.750 12/01/22 808,132
2,000 Poinciana Cmnty Dev Dist FL Ser A........ 7.125 05/01/31 1,946,360
245 Santa Rosa Cnty, FL Indl Dev Auth Rev
First Mtg Sandy Ridge Care Cent.......... 10.500 04/01/16 247,452
1,500 Sarasota Cnty, FL Hlth Fac Auth Hlth Fac
Sunnyside Pptys.......................... 6.700 07/01/25 1,319,355
1,000 Sarasota Cnty, FL Hlth Fac Auth Rev
Hlthcare Jewish Hsg Council.............. 7.375 07/01/16 928,590
1,000 Sarasota Cnty, FL Hlth Fac Auth Rev
Hlthcare Manatee Jewish Rfdg............. 7.000 07/01/16 924,720
1,000 St John's Cnty, FL Indl Dev Auth Hlthcare
Rev Bayview Proj Ser A................... 7.100 10/01/16 964,820
2,000 St John's Cnty, FL Indl Dev Auth Hlthcare
Rev Bayview Proj Ser A................... 7.100 10/01/26 1,913,900
2,230 Tamarac, FL Indl Dev Rev Sun Belt
Precision Prods Inc...................... 6.500 08/01/17 2,067,366
1,600 Tampa Palms, FL Open Space & Trans Cmnty
Dev Dist Rev Cap Impt Area 7 Proj........ 8.500 05/01/17 1,699,904
2,100 Tampa Palms, FL Open Space & Trans Cmnty
Dev Dist Rev Cap Impt Area 7 Proj........ 7.500 05/01/18 2,145,675
3,000 Tampa, FL Hosp Rev Cap Impt H Lee Moffitt
Ser A.................................... 5.750 07/01/29 2,680,740
3,000 University Square Cmnty Dev Dist FL Cap
Impt Rev................................. 6.750 05/01/20 2,890,260
710 Volusia Cnty, FL Indl Dev Auth Bishops
Glen Proj Rfdg........................... 7.125 11/01/06 757,208
2,000 Volusia Cnty, FL Indl Dev Auth Bishops
Glen Proj Rfdg........................... 7.625 11/01/26 2,267,500
1,630 Westchase East Cmnty, FL Dev Dist Cap
Impt Rev................................. 7.500 05/01/17 1,663,611
1,960 Westchase East Cmnty, FL Dev Dist Cap
Impt Rev................................. 7.300 05/01/18 1,992,163
--------------
116,085,388
--------------
</TABLE>
See Notes to Financial Statements
21
<PAGE> 23
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
GEORGIA 2.1%
$ 850 Americus Sumter Cnty, GA Hosp Auth Rev
South GA Methodist Ser A Rfdg............ 6.250% 05/15/19 $ 725,492
1,000 Americus Sumter Cnty, GA Hosp Auth Rev
South GA Methodist Ser A Rfdg............ 6.375 05/15/29 841,160
1,640 Athens Clarke Cnty, GA Residential Care
Fac for the Elderly Auth Rev............. 6.350 10/01/17 1,447,661
1,720 Athens Clarke Cnty, GA Residential Care
Fac for the Elderly Auth Rev............. 6.375 10/01/27 1,472,526
2,976 Atlanta, GA Urban Residential Fin Auth
Multi-Family Mtg Rev Hsg Peachtree Apts
Proj Ser A............................... 8.500 04/01/26 3,161,363
3,000 Atlanta, GA Urban Residential Fin Auth
Multi-Family Mtg Rev Hsg Peachtree Apts
Proj Ser C (g)........................... 2.400 04/01/26 442,500
3,300 Atlanta, GA Urban Residential Fin Auth
Multi-Family Rev Proj Ser A.............. 6.750 07/01/30 3,061,047
375 Coweta Cnty, GA Residential Care Fac For
The Elderly Auth Rev First Lien Wesley
Woods Ser A.............................. 7.625 10/01/06 385,905
1,500 Coweta Cnty, GA Residential Care Fac For
The Elderly Auth Rev First Lien Wesley
Woods Ser A.............................. 8.200 10/01/16 1,587,735
1,500 Coweta Cnty, GA Residential Care Fac For
The Elderly Auth Rev First Lien Wesley
Woods Ser A.............................. 8.250 10/01/26 1,592,355
500 Forsyth Cnty, GA Hosp Auth Rev GA Baptist
Hlthcare Sys Proj........................ 6.000 10/01/08 457,555
1,500 Forsyth Cnty, GA Hosp Auth Rev GA Baptist
Hlthcare Sys Proj........................ 6.250 10/01/18 1,284,105
1,500 Forsyth Cnty, GA Hosp Auth Rev GA Baptist
Hlthcare Sys Proj........................ 6.375 10/01/28 1,255,635
3,000 Fulton Cnty, GA Dev Auth Spec Fac Rev
Delta Airls Inc Proj..................... 5.450 05/01/23 2,484,630
1,520 Fulton Cnty, GA Hsg Auth Multi-Family Hsg
Rev...................................... 6.375 02/01/08 1,458,546
4,000 Fulton Cnty, GA Hsg Auth Multi-Family Hsg
Rev...................................... 6.500 02/01/28 3,687,920
1,175 Fulton Cnty, GA Residential Care Fac
Elderly Auth Rev......................... 6.900 07/01/19 1,049,487
1,810 Fulton Cnty, GA Residential Care Sr Lien
RHA Asstd Living Ser A................... 7.000 07/01/29 1,575,858
</TABLE>
See Notes to Financial Statements
22
<PAGE> 24
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
GEORGIA (CONTINUED)
$ 300 Richmond Cnty, GA Dev Auth Nursing Home
Rev Beverly Enterprises GA
Proj Rfdg................................ 8.750% 06/01/11 $ 315,729
2,500 Rockdale Cnty, GA Dev Auth Solid Waste
Disp Visy Paper Inc Proj................. 7.500 01/01/26 2,538,325
--------------
30,825,534
--------------
HAWAII 0.4%
805 Hawaii Cnty, HI Impt Dist No 17 Spl Assmt
Kaloko Subdivision....................... 9.500 08/01/11 804,911
3,205 Hawaii St Dept Trans Spl Fac Continental
Airls Inc................................ 5.625 11/15/27 2,531,309
2,470 Hawaii St Hsg Fin & Dev Corp Single
Family Mtg Rev Ser A (FNMA
Collateralized).......................... 5.350 07/01/18 2,245,477
--------------
5,581,697
--------------
IDAHO 0.1%
2,000 Idaho Hlth Facs Auth Rev Vly Vista Care
Ser A Rfdg (a)........................... 7.875 11/15/29 1,891,120
--------------
ILLINOIS 7.7%
1,475 Bedford Park, IL Tax Increment Rev 71st &
Cicero Proj Rfdg......................... 7.375 01/01/12 1,505,857
895 Bedford Park, IL Tax Increment Rev Sr
Lien Bedford City Sq Proj................ 9.250 02/01/12 957,462
2,720 Broadview, IL Tax Increment Rev Sr Lien
(Prerefunded @ 07/01/04)................. 8.250 07/01/13 2,988,165
250 Carol Stream, IL First Mtg Rev Windsor
Park Manor Proj Rfdg..................... 7.000 12/01/13 241,760
2,000 Carol Stream, IL First Mtg Rev Windsor
Park Manor Proj Rfdg..................... 7.200 12/01/14 1,961,320
415 Cary, IL Spl Tax Svc Area No 1 Cambridge
Ser A.................................... 7.500 03/01/10 416,208
1,185 Cary, IL Spl Tax Svc Area No 1 Cambridge
Ser A.................................... 7.625 03/01/30 1,173,790
1,150 Chicago, IL Neighborhoods Alive 21 Pgm
Ser A (FGIC Insd)........................ 6.000 01/01/28 1,132,405
1,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Inc Proj Ser A............ 8.200 12/01/24 1,080,010
540 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Inc Proj Ser A............ 7.875 11/01/25 552,782
3,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc......................... 8.500 05/01/18 3,574,620
</TABLE>
See Notes to Financial Statements
23
<PAGE> 25
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
$2,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Proj Ser A.................. 5.350% 09/01/16 $ 1,672,220
1,440 Chicago, IL Tax Increment................ 7.250 01/01/14 1,458,734
3,000 Chicago, IL Wtr Rev Rfdg (FGIC Insd)..... 5.250 11/01/27 2,625,270
3,000 Clay Cnty, IL Hosp Rev................... 5.900 12/01/28 2,395,950
3,000 Crestwood, IL Tax Increment Rev Rfdg..... 7.250 12/01/08 3,074,400
2,500 Godfrey, IL Rev United Methodist Vlg
Ser A.................................... 5.875 11/15/29 1,955,925
500 Hodgkins, IL Tax Increment Ser A Rfdg.... 9.500 12/01/09 542,485
4,000 Hodgkins, IL Tax Increment Ser A
Rfdg (a)................................. 7.625 12/01/13 4,178,760
3,000 Hoopeston, IL Hosp Cap Impt Rev Hoopeston
Cmnty Mem Hosp Rfdg...................... 6.550 11/15/29 2,611,050
3,500 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A......................... 8.500 12/01/15 3,828,195
3,000 Huntley, IL Spl Svc Area No 10 Ser A..... 6.500 03/01/29 2,726,610
2,450 Huntley, IL Spl Svc Area No 6............ 6.750 02/01/25 2,283,914
1,000 Huntley, IL Spl Svc Area No 7............ 6.300 03/01/28 883,970
500 Illinois Dev Fin Auth Econ Dev Rev Latin
School of Chicago Proj................... 5.650 08/01/28 431,920
2,470 Illinois Dev Fin Auth Hlth Fac Rev Cmnty
Living Options........................... 7.125 03/01/10 2,484,030
625 Illinois Dev Fin Auth Rev Cmnty Fac
Clinic Altgeld Proj...................... 8.000 11/15/06 641,750
1,750 Illinois Dev Fin Auth Rev Cmnty Fac
Clinic Altgeld Proj...................... 8.000 11/15/16 1,785,893
2,000 Illinois Dev Fin Auth Rev Debt
Restructure-East Saint Louis............. 7.375 11/15/11 2,131,940
4,000 Illinois Edl Fac Auth Rev Peace Mem
Ministries Proj.......................... 7.500 08/15/26 4,010,240
1,500 Illinois Edl Facs Auth Rev Lifelink Corp
Oblig Group Rfdg......................... 5.850 02/15/20 1,227,915
4,295 Illinois Edl Facs Auth Rev Lifelink Corp
Oblig Group Rfdg......................... 5.700 02/15/24 3,366,850
3,250 Illinois Hlth Fac Auth Rev............... 7.500 01/01/11 2,880,865
2,000 Illinois Hlth Fac Auth Rev Central
Baptist Home Proj........................ 7.125 11/15/29 1,843,920
1,475 Illinois Hlth Fac Auth Rev Covenant
Retirement Cmntys Ser A.................. 7.600 12/01/12 1,551,641
3,000 Illinois Hlth Fac Auth Rev Fairview Oblig
Group Ser A Rfdg......................... 7.400 08/15/23 2,937,720
</TABLE>
See Notes to Financial Statements
24
<PAGE> 26
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
$2,250 Illinois Hlth Fac Auth Rev Fairview
Residence Rockford Ser A................. 6.500% 08/15/29 $ 1,942,223
445 Illinois Hlth Fac Auth Rev Hinsdale
Ser C.................................... 9.500 11/15/19 463,810
1,700 Illinois Hlth Fac Auth Rev Lifelink Corp
Oblig Group Ser B (Prerefunded @
02/15/05)................................ 8.000 02/15/25 1,898,849
4,000 Illinois Hlth Fac Auth Rev Lutheran Home
& Svcs Proj Ser A........................ 7.500 08/15/26 4,012,080
2,000 Illinois Hlth Fac Auth Rev OSF Hlthcare
Sys...................................... 6.250 11/15/29 1,845,280
1,000 Illinois Hlth Facs Auth Rev Bohemian
Tabor Hills Ser B Rfdg................... 5.900 11/15/24 825,710
8,862 Illinois St Real Estate Lease Ctfs
(a)(c)................................... 7.116 06/15/18 9,724,208
980 Jackson Park Hosp Fndtn Chicago, IL
Ser A.................................... 9.000 03/01/05 920,632
990 Loves Park, IL Rev Hoosier Care Proj
Ser A.................................... 7.125 06/01/34 877,407
765 Peoria, IL Spl Tax Weaverridge Spl Svc
Area..................................... 7.625 02/01/08 783,964
2,050 Peoria, IL Spl Tax Weaverridge Spl Svc
Area..................................... 8.050 02/01/17 2,129,027
1,473 Robbins, IL Res Recovery Rev
Restructuring Proj Ser A (f)............. 8.375 10/15/16 657,521
577 Robbins, IL Res Recovery Rev
Restructuring Proj Ser B (f)............. 8.375 10/15/16 257,291
229 Robbins, IL Res Recovery Rev
Restructuring Proj Ser C................. 7.250 10/15/09 220,765
989 Robbins, IL Res Recovery Rev
Restructuring Proj Ser C................. 7.250 10/15/24 929,523
231 Robbins, IL Res Recovery Rev
Restructuring Proj Ser D................. * 10/15/09 108,583
1,265 Round Lake Beach, IL Tax Increment Rev
Rfdg..................................... 7.200 12/01/04 1,312,463
2,500 Round Lake Beach, IL Tax Increment Rev
Rfdg..................................... 7.500 12/01/13 2,626,725
</TABLE>
See Notes to Financial Statements
25
<PAGE> 27
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
ILLINOIS (CONTINUED)
$2,750 Saint Charles, IL Indl Dev Rev Tri-City
Cent Proj................................ 7.500% 11/01/13 $ 2,752,750
3,855 Saint Charles, IL Multi-Family Hsg Rev
Bonds Wessel Court Proj.................. 7.600 04/01/24 3,865,755
2,000 Saint Charles, IL Spl Svc Area No 21..... 6.625 03/01/28 1,783,260
--------------
111,054,372
--------------
INDIANA 2.5%
450 Carmel, IN Retirement Rental Hsg Rev
Beverly Enterprises Inc Proj Rfdg........ 8.750 12/01/08 475,614
1,100 Crawfordsville, IN Redev Cmnty Dist Tax
Increment Rev............................ 7.350 02/01/17 1,051,336
1,390 Delaware Cnty, IN Redev Dist Tax
Increment Rev............................ 6.875 02/01/18 1,295,119
2,500 East Chicago, IN Solid Waste Disposal Rev
USG Corp Proj............................ 6.375 08/01/29 2,338,750
1,000 Indiana Hlth Fac Auth Cmnty Hartsfield
Vlg Proj Ser A........................... 6.375 08/15/27 854,310
1,000 Indiana Hlth Fac Auth Saint Anthony
Home..................................... 7.000 05/15/17 963,710
1,000 Indiana Hlth Fac Auth Saint Anthony
Home..................................... 7.250 05/15/24 976,670
2,395 Indiana Hlth Fac Fin Auth Rev Hoosier
Care Proj Ser A.......................... 7.125 06/01/34 2,122,617
2,925 Indiana Hlth Fac Fin Auth Rev Metro
Hlth/IN Inc Proj......................... 6.300 12/01/23 2,455,654
3,000 Indiana Hlth Fac Fin Auth Rev Metro
Hlth/IN Inc Proj......................... 6.400 12/01/33 2,472,870
2,592 Indiana St Dev Fin Auth Indl Dev Rev
Unr-Rohn Inc Proj, 144A (e).............. 7.500 03/01/11 2,646,562
8,270 Indianapolis, IN Arpt Auth Rev Spl Fac
United Airls Proj Ser A.................. 6.500 11/15/31 7,542,984
175 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/10 72,803
135 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/11 51,696
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/12 45,766
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/13 42,128
</TABLE>
See Notes to Financial Statements
26
<PAGE> 28
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
INDIANA (CONTINUED)
$ 125 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/14 $ 37,277
125 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/15 34,161
125 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B...................... * 12/30/16 31,433
2,000 South Bend, IN Econ Dev Rev Ser A........ 6.250% 11/15/29 1,669,760
300 Valparaiso, IN Econ Dev Rev First Mtg
Whispering Pines Cent.................... 7.300 01/01/02 301,611
980 Valparaiso, IN Econ Dev Rev First Mtg
Whispering Pines Cent.................... 7.500 01/01/07 983,528
1,405 Valparaiso, IN Econ Dev Rev First Mtg
Whispering Pines Cent.................... 7.750 01/01/12 1,410,016
2,045 Valparaiso, IN Econ Dev Rev First Mtg
Whispering Pines Cent.................... 8.000 01/01/17 2,052,117
400 Wells Cnty, IN Hosp Auth Rev Caylor
Nickel Med Cent Inc Rfdg................. 8.500 04/15/03 433,904
3,600 Wells Cnty, IN Hosp Auth Rev Caylor
Nickel Med Cent Inc Rfdg................. 8.750 04/15/12 4,021,812
--------------
36,384,208
--------------
IOWA 0.7%
1,000 Bremer Cnty, IA Hlthcare & Residential
Fac Rev Proj Rfdg........................ 7.250 11/15/29 931,420
1,500 Cedar Rapids, IA Rev First Mtg Cottage
Grove Ser A Rfdg......................... 5.875 07/01/28 1,186,245
3,000 Iowa Fin Auth Cmnty Provider Rev Boys &
Girls Home Family Proj (ACA Insd) (b).... 6.250 12/01/28 2,813,430
2,770 Iowa Fin Auth Multi-Family Rev Hsg Park
West Proj Rfdg........................... 8.000 10/01/23 2,778,310
2,265 Iowa Fin Auth Retirement Fac Presbyterian
Homes Mill Pond.......................... 6.000 10/01/33 1,804,956
1,000 Palo Alto Cnty, IA Hosp Rev Palo Alto
Cnty Hosp Proj........................... 6.000 08/01/28 809,730
--------------
10,324,091
--------------
KANSAS 0.7%
1,000 Lawrence, KS Coml Dev Rev Holiday Inn Sr
Ser A Rfdg............................... 8.000 07/01/16 1,019,430
2,000 Lenexa, KS Hlthcare Fac Rev Lakeview Vlg
Ser B.................................... 6.250 05/15/26 1,721,940
3,000 Manhattan, KS Coml Dev Rev Holiday Inn Sr
Ser A Rfdg............................... 8.000 07/01/16 3,073,020
</TABLE>
See Notes to Financial Statements
27
<PAGE> 29
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
KANSAS (CONTINUED)
$1,150 Olathe, KS Sr Living Fac Rev Aberdeen Vlg
Inc Ser A................................ 8.000% 05/15/30 $ 1,142,169
3,125 Shawnee Cnty, KS Rev United Methodist
Homes Inc Ser A Rfdg..................... 6.125 11/15/19 2,656,250
--------------
9,612,809
--------------
KENTUCKY 0.5%
1,195 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac
Delta Airls Proj Ser A................... 8.100 12/01/15 1,220,035
1,000 Kenton Cnty, KY Arpt Brd Spl Mesaba
Aviation Inc Proj Ser A.................. 6.625 07/01/19 929,340
2,000 Kenton Cnty, KY Arpt Brd Spl Fac Rev
Mesaba Aviation Inc Proj Ser A........... 6.700 07/01/29 1,829,740
3,000 Newport, KY Pub Pptys Corp Rev First Mtg
Pub Prkg & Plaza A 1..................... 8.500 01/01/27 2,952,450
--------------
6,931,565
--------------
LOUISIANA 2.1%
4,700 Hodge, LA Util Rev (a)................... 9.000 03/01/10 4,799,734
1,065 Iberia Parish, LA Hosp Svc Dist No 1 Hosp
Rev...................................... 7.500 05/26/06 1,042,497
2,000 Iberia Parish, LA Hosp Svc Dist No 1 Hosp
Rev...................................... 8.000 05/26/16 1,954,260
4,000 Lake Charles, LA Harbor & Terminal Dist
Port Fac Rev Trunkline Lng Co Rfdg (a)... 7.750 08/15/22 4,278,400
200 Louisiana Hsg Fin Agy Rev Multi-Family
Hsg Plantation Ser A..................... 9.000 01/01/03 199,538
4,675 Louisiana Hsg Fin Agy Rev Multi-Family
Hsg Plantation Ser A..................... 7.125 01/01/28 4,294,408
4,000 Louisiana Loc Govt Environment Facs Cmnty
Dev Auth Rev Hlthcare Saint James Place
Ser A Rfdg (a)........................... 8.000 11/01/29 3,828,080
570 Louisiana Pub Fac Auth Rev Indl Dev
Beverly Enterprises Inc Rfdg............. 8.250 09/01/08 591,284
1,000 Louisiana Pub Facs Auth Rev Progressive
Hlthcare................................. 6.375 10/01/20 853,920
1,000 Louisiana Pub Facs Auth Rev Progressive
Hlthcare................................. 6.375 10/01/28 823,510
1,150 Port New Orleans, LA Indl Dev Rev
Avondale Inds Inc Proj Rfdg.............. 8.250 06/01/04 1,191,331
2,500 Saint James Parish, LA Solid Waste Disp
Rev Kai Ser Alum Proj.................... 7.750 08/01/22 2,575,525
</TABLE>
See Notes to Financial Statements
28
<PAGE> 30
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
LOUISIANA (CONTINUED)
$3,000 Saint Tammany, LA Pub Trust Fin Auth Rev
Christwood Proj Rfdg..................... 5.700% 11/15/28 $ 2,310,030
500 West Feliciana Parish, LA Pollutn Ctl Rev
Gulf States Util Co Proj Ser A........... 7.500 05/01/15 515,430
1,000 West Feliciana Parish, LA Pollutn Ctl Rev
Gulf States Util Co Proj Ser B........... 9.000 05/01/15 1,040,090
--------------
30,298,037
--------------
MAINE 0.5%
3,200 Maine Fin Auth Solid Waste Disposal Rev
Boise Cascade Corp Proj.................. 7.900 06/01/15 3,245,824
2,000 Maine Hlth & Higher Edl Facs Auth Rev
Piper Shores Ser A (a)................... 7.550 01/01/29 1,906,120
1,500 Maine Vets Homes ME Rev.................. 7.750 10/01/20 1,550,445
--------------
6,702,389
--------------
MARYLAND 1.5%
1,250 Anne Arundel Cnty, MD Spl Tax Dist
Arundel Mills Proj....................... 7.100 07/01/29 1,221,375
2,000 Anne Arundel Cnty, MD Spl Tax Dist
Farmington Vlg Proj Ser A................ 6.250 06/01/25 1,766,880
2,500 Baltimore Cnty, MD Mtg Rev Shelter Elder
Care Ser A............................... 7.250 11/01/29 2,238,600
1,750 Baltimore Cnty, MD Nursing Fac Eastpoint
Rehab & Nursing Cent Ser A............... 6.750 04/01/28 1,380,750
2,000 Baltimore Cnty, MD Pollutn Ctl Rev
Bethlehem Steel Corp Proj Ser A Rfdg..... 7.550 06/01/17 2,007,920
2,500 Baltimore Cnty, MD Pollutn Ctl Rev
Bethlehem Steel Corp Proj Ser B Rfdg..... 7.500 06/01/15 2,526,950
1,500 Frederick Cnty, MD Spl Oblig Urbana Cmnty
Dev Auth................................. 6.625 07/01/25 1,388,985
2,000 Maryland St Econ Dev Corp Afco Cargo BWI
LLC Proj................................. 6.500 07/01/24 1,750,460
1,175 Montgomery Cnty, MD Econ Dev Editorial
Projs In Edl Ser A, 144A (e)............. 6.250 09/01/08 1,089,625
3,730 Montgomery Cnty, MD Econ Dev Editorial
Projs In Edl Ser A, 144A (e)............. 6.400 09/01/28 3,238,274
850 Prince Georges Cnty, MD Hosp Rev (f)..... 6.375 01/01/23 352,750
3,000 Prince Georges Cnty, MD Spl Oblig Spl
Assmt Woodview Ser A..................... 8.000 07/01/26 3,219,300
--------------
22,181,869
--------------
</TABLE>
See Notes to Financial Statements
29
<PAGE> 31
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MASSACHUSETTS 7.2%
$ 715 Massachusetts St Dev Fin Agy Mchsp Human
Svcs Providers Ser A..................... 7.500% 07/01/10 $ 699,949
1,025 Massachusetts St Dev Fin Agy Mchsp Human
Svcs Providers Ser A..................... 8.000 07/01/20 1,002,594
5,455 Massachusetts St Dev Fin Agy New England
Cent For Children (a).................... 6.000 11/01/19 4,471,300
1,090 Massachusetts St Dev Fin Agy Rev Boston
Architectural Cent....................... 6.100 09/01/18 992,870
1,445 Massachusetts St Dev Fin Agy Rev Boston
Architectural Cent....................... 6.250 09/01/28 1,298,333
1,385 Massachusetts St Dev Fin Agy Rev Greater
Lynn Mental Hlth Ser B................... 6.375 06/01/18 1,205,421
3,945 Massachusetts St Dev Fin Agy Rev
Hillcrest Edl Cent Inc................... 6.375 07/01/29 3,688,615
5,000 Massachusetts St Dev Fin Agy Rev Hlthcare
Fac Alliance Ser A....................... 7.100 07/01/32 4,556,800
2,410 Massachusetts St Dev Fin Agy Rev
Lexington Montessori Sch Issue........... 6.625 08/01/29 2,269,521
3,000 Massachusetts St Hlth & Edl Christopher
House Ser A Rfdg......................... 6.875 01/01/29 2,690,130
1,410 Massachusetts St Hlth & Edl Fac Auth Rev
Indpt Living Ser A....................... 8.100 07/01/18 1,546,756
2,000 Massachusetts St Indl Fin Agy Assisted
Living Fac Rev........................... 8.000 09/01/27 2,047,320
2,000 Massachusetts St Indl Fin Agy Assisted
Living Fac Rev........................... 7.500 12/01/27 1,953,440
1,000 Massachusetts St Indl Fin Agy First Mtg
Pilgrim Inc Proj......................... 6.500 10/01/15 875,060
4,000 Massachusetts St Indl Fin Agy Hlthcare
Fac Rev Metro Hlth Fndtn Inc Proj Ser
A........................................ 6.750 12/01/27 3,587,040
450 Massachusetts St Indl Fin Agy Indl Rev
Beverly Enterprises Inc/Gloucester &
Lexington Proj Rfdg...................... 8.000 05/01/02 449,928
800 Massachusetts St Indl Fin Agy Indl Rev
Beverly Enterprises Inc/Gloucester &
Lexington Proj Rfdg...................... 8.375 05/01/09 833,848
500 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent.......................... 8.000 12/01/06 518,250
1,000 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent.......................... 8.375 12/01/13 1,085,610
</TABLE>
See Notes to Financial Statements
30
<PAGE> 32
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MASSACHUSETTS (CONTINUED)
$3,000 Massachusetts St Indl Fin Agy Rev Dimmock
Cmnty Hlth Cent.......................... 8.500% 12/01/20 $ 3,269,670
2,555 Massachusetts St Indl Fin Agy Rev East
Boston Neighborhood Proj................. 7.500 07/01/16 2,425,027
2,560 Massachusetts St Indl Fin Agy Rev East
Boston Neighborhood Proj................. 7.625 07/01/26 2,424,832
710 Massachusetts St Indl Fin Agy Rev
Evergreen Cent Inc....................... 8.000 11/01/06 736,320
3,900 Massachusetts St Indl Fin Agy Rev
Evergreen Cent Inc, 144A (e)............. 9.250 11/01/11 4,067,973
1,230 Massachusetts St Indl Fin Agy Rev
Evergreen Cent Inc....................... 8.375 11/01/13 1,343,443
2,165 Massachusetts St Indl Fin Agy Rev
Evergreen Cent Inc....................... 8.500 11/01/20 2,407,523
1,005 Massachusetts St Indl Fin Agy Rev First
Mtg Evanswood Bethzatha Ser A Rfdg....... 7.400 01/15/09 755,047
2,000 Massachusetts St Indl Fin Agy Rev First
Mtg Evanswood Bethzatha Ser A Rfdg....... 7.625 01/15/14 1,503,420
2,000 Massachusetts St Indl Fin Agy Rev First
Mtg Evanswood Bethzatha Ser A Rfdg....... 7.875 01/15/20 1,503,860
1,000 Massachusetts St Indl Fin Agy Rev First
Mtg Reeds Landing Proj................... 7.750 10/01/00 1,000,260
8,300 Massachusetts St Indl Fin Agy Rev First
Mtg Reeds Landing Proj (a)............... 8.625 10/01/23 8,793,352
1,700 Massachusetts St Indl Fin Agy Rev First
Mtg Stone Institute & Newton............. 7.700 01/01/14 1,730,447
1,760 Massachusetts St Indl Fin Agy Rev
Glenmeadow Retirement Cmnty Ser C
(Prerefunded @ 02/15/06)................. 8.250 02/15/08 2,035,088
1,000 Massachusetts St Indl Fin Agy Rev
Glenmeadow Retirement Cmnty Ser C
(Prerefunded @ 02/15/06)................. 8.625 02/15/26 1,171,130
2,570 Massachusetts St Indl Fin Agy Rev Greater
Lynn Mental Hlth......................... 6.200 06/01/08 2,379,126
6,000 Massachusetts St Indl Fin Agy Rev Greater
Lynn Mental Hlth (a)..................... 6.375 06/01/18 5,214,180
3,560 Massachusetts St Indl Fin Agy Rev Greater
Lynn Mental Hlth (Prerefunded @
06/01/04)................................ 8.800 06/01/14 4,292,363
740 Massachusetts St Indl Fin Agy Rev
Hillcrest Edl Cent Inc Proj (Escrowed to
Maturity)................................ 8.000 07/01/05 826,750
</TABLE>
See Notes to Financial Statements
31
<PAGE> 33
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MASSACHUSETTS (CONTINUED)
$ 115 Massachusetts St Indl Fin Agy Rev
Hillcrest Edl Cent Inc Proj (Escrowed to
Maturity)................................ 7.500% 07/01/00 $ 115,255
2,850 Massachusetts St Indl Fin Agy Rev
Hillcrest Edl Cent Inc Proj (Prerefunded
@ 07/01/05).............................. 8.450 07/01/18 3,262,338
1,085 Massachusetts St Indl Fin Agy Rev HMES
Issue.................................... 7.000 09/01/12 1,029,133
3,380 Massachusetts St Indl Fin Agy Rev JRC
Assisted Living.......................... 7.500 07/01/26 3,133,395
2,600 Massachusetts St Indl Fin Agy Rev
Montserrat College Art Issue Ser A....... 7.000 12/01/27 2,433,860
2,000 Massachusetts St Indl Fin Agy Rev Sr
Living Fac Forge Hill Proj............... 6.750 04/01/30 1,636,880
1,820 Massachusetts St Indl Fin Agy Rev Waarc
Inc Proj (Prerefunded @ 09/01/05)........ 7.750 09/01/25 2,050,812
2,000 Massachusetts St Indl Fin Agy Trustees
Deerfield Academy........................ 6.750 10/01/28 1,693,800
5,000 Massachusetts St Tpk Auth Ser A (MBIA
Insd).................................... 5.000 01/01/37 4,157,350
--------------
103,165,419
--------------
MICHIGAN 1.9%
1,000 Detroit, MI Loc Dev Fin Auth Tax
Increment Sr Ser B, 144A (e)............. 6.700 05/01/21 944,230
3,480 Detroit, MI Loc Dev Fin Auth Tax
Increment Sub Ser C...................... 6.850 05/01/21 3,305,930
1,060 Dickinson Cnty, MI Mem Hosp Sys Hosp Rev
(Prerefunded @ 11/01/04)................. 7.625 11/01/05 1,123,971
1,000 Dickinson Cnty, MI Mem Hosp Sys Hosp Rev
(Prerefunded @ 11/01/04)................. 8.000 11/01/14 1,117,320
1,590 Grand Blanc Academy MI Ctfs Partn........ 7.750 02/01/30 1,543,143
3,265 Kalamazoo, MI Econ Dev Corp Rev Econ Dev
Heritage Ser A (a)....................... 7.250 05/15/25 2,910,715
2,390 Meridian, MI Econ Dev Corp First Mtg
Burcham Hills Ser A Rfdg................. 7.500 07/01/13 2,376,019
3,430 Meridian, MI Econ Dev Corp First Mtg
Burcham Hills Ser A Rfdg................. 7.750 07/01/19 3,460,321
2,700 Michigan St Hosp Fin Auth Rev Hosp Henry
Ford Hlth Ser A Rfdg..................... 5.250 11/15/25 2,243,295
1,000 Michigan St Hosp Fin Auth Rev Ascension
Hlth Credit Ser A........................ 6.125 11/15/26 950,470
</TABLE>
See Notes to Financial Statements
32
<PAGE> 34
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MICHIGAN (CONTINUED)
$ 500 Michigan St Hosp Fin Auth Rev Hosp
Genesys Hlth Sys Ser A Rfdg (Prerefunded
@ 10/01/05).............................. 7.500% 10/01/07 $ 561,140
1,500 Michigan St Hosp Fin Auth Rev Hosp
Genesys Hlth Sys Ser A Rfdg (Prerefunded
@ 10/01/05).............................. 8.100 10/01/13 1,725,660
1,051 Michigan St Strategic Fd Ltd Oblig Rev
Great Lakes Pulp & Fiber Proj (d)........ 8.000 12/01/27 231,302
4,000 Michigan St Strategic Fd Solid Waste Disp
Rev Genesee Pwr Station Proj............. 7.500 01/01/21 4,082,280
--------------
26,575,796
--------------
MINNESOTA 2.6%
1,750 Albertville, MN Multi-Family Rev Hsg
Cottages Albertville Proj Ser A.......... 6.750 09/01/29 1,616,335
1,020 Austin, MN Multi-Family Rev Hsg Cedars of
Austin Proj Rfdg......................... 7.500 04/01/17 1,024,610
2,000 Austin, MN Multi-Family Rev Hsg Cedars of
Austin Proj Rfdg......................... 7.500 04/01/18 2,009,040
1,955 Brooklyn Cent MN Multi-Family Hsg Rev
Four Courts Apts Proj Ser A Rfdg......... 7.400 12/01/15 1,937,268
1,220 Brooklyn Cent MN Multi-Family Hsg Rev
Four Courts Apts Proj Ser A Rfdg......... 7.500 06/01/25 1,206,434
1,460 Cambridge, MN Hsg & Hlthcare Fac Rev
Grandview West Proj Ser A................ 6.000 10/01/28 1,180,322
1,495 Cambridge, MN Hsg & Hlthcare Fac Rev
Grandview West Proj Ser B................ 6.000 10/01/33 1,196,538
1,375 Carlton, MN Hlth & Hsg Facs Inter-Faith
Social Svcs Inc Proj..................... 7.500 04/01/19 1,305,893
1,250 Carlton, MN Hlth & Hsg Facs Inter-Faith
Social Svcs Inc Proj..................... 7.750 04/01/29 1,194,563
750 Chicago City, MN Hlth Fac Rev Part
Pleasant Heights Proj Ser A Rfdg......... 7.300 07/01/25 751,163
3,000 Columbia Heights, MN Multi-Family Crest
View Corp Proj........................... 6.000 03/01/33 2,400,420
2,700 Dakota Cnty, MN Hsg & Redev.............. 6.250 05/01/29 2,431,674
1,200 Maplewood, MN Hlthcare Fac Rev VOA Care
Cent Proj................................ 7.450 10/01/16 1,210,032
1,000 Minneapolis, MN Hlthcare Fac Rev Ebenezer
Society Proj Ser A....................... 7.200 07/01/23 956,680
1,000 Minneapolis, MN Hlthcare Fac Rev Saint
Olaf Residence Inc Proj.................. 7.100 10/01/23 943,010
</TABLE>
See Notes to Financial Statements
33
<PAGE> 35
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MINNESOTA (CONTINUED)
$ 350 Minneapolis, MN Multi-Family Rev Hsg
Belmont Apts Proj........................ 7.250% 11/01/16 $ 343,077
1,320 Minneapolis, MN Multi-Family Rev Hsg
Belmont Apts Proj (a).................... 7.625 11/01/27 1,293,890
3,040 New Brighton, MN Rental Hsg Rev
Polynesian Vlg Apts Proj Ser A Rfdg...... 7.500 10/01/17 3,101,226
700 New Hope, MN Multi-Family Rev Hsg
Broadway Lanel Proj...................... 7.750 09/01/07 701,358
2,320 New Hope, MN Multi-Family Rev Hsg
Broadway Lanel Proj...................... 8.000 09/01/18 2,315,128
735 North Saint Paul, MN Multi-Family Rev Hsg
Cottages North Saint Paul Rfdg........... 9.000 02/01/09 752,721
2,220 North Saint Paul, MN Multi-Family Rev Hsg
Cottages North Saint Paul Rfdg........... 9.250 02/01/22 2,272,325
2,255 Northfield, MN Hlthcare Facs Rev Three
Links Care Cent Proj..................... 5.875 04/01/29 1,794,822
1,000 Saint Paul, MN Port Auth Hotel Fac Rev
Radisson Kellogg Proj Ser 2.............. 7.375 08/01/29 950,000
2,000 Spring Lake Park, MN Multi-Family Hsg
Cottages Spring Lake Rfdg (LOC: Zapp Natl
Bank St Cloud)........................... 8.375 01/01/22 1,959,760
--------------
36,848,289
--------------
MISSISSIPPI 0.6%
895 Lowndes Cnty, MS Hosp Rev Golden Triangle
Med Cent Rfdg............................ 8.500 02/01/10 914,439
2,615 Mississippi Bus Fin Corp MS Pollutn Ctl
Rev Sys Energy Res Inc Proj.............. 5.875 04/01/22 2,210,930
2,200 Mississippi Dev Bank Spl Oblig Diamond
Lakes Utils Ser A Rfdg................... 6.250 12/01/17 2,050,708
2,710 Ridgeland, MS Urban Renewal Rev The
Orchard Ltd Proj Ser A Rfdg.............. 7.750 12/01/15 2,742,981
--------------
7,919,058
--------------
MISSOURI 1.8%
2,755 Ellisville, MO Indl Dev Auth Rev Rfdg &
Impt Gambrill Gardens Proj............... 6.200 06/01/29 2,296,155
945 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj...................... 7.250 04/01/07 918,890
2,000 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj...................... 7.625 04/01/17 1,904,760
1,000 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj...................... 7.625 04/01/18 951,090
</TABLE>
See Notes to Financial Statements
34
<PAGE> 36
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
MISSOURI (CONTINUED)
$3,610 Good Shepard Nursing Home Dist MO Nursing
Home Fac Rev Rfdg........................ 5.900% 08/15/23 $ 2,935,002
2,625 Jefferson Cnty, MO Indl Dev Auth Indl Rev
Cedars Hlthcare Cent Proj Ser A Rfdg..... 8.250 12/01/15 2,706,113
3,000 Kansas City, MO Multi-Family Hsg Rev Vlg
Green Apts Proj.......................... 6.250 04/01/30 2,702,310
1,075 Missouri St Hlth & Edl Fac Bethesda Hlth
Group Inc Proj Ser A Rfdg................ 7.500 08/15/12 1,123,461
3,000 Perry Cnty, MO Nursing Home Rev Rfdg..... 5.900 03/01/28 2,403,090
1,615 Saint Louis, MO Tax Increment Rev Scullin
Redev Area Ser A......................... 10.000 08/01/10 1,892,166
3,325 Saline Cnty, MO Indl Dev Auth Hlth Facs
Rev John Fitzgibbon Mem Hosp Inc......... 6.500 12/01/28 2,784,288
3,600 Valley Park, MO Indl Dev Auth Sr Hsg Rev
Cape Albeon Proj......................... 6.150 12/01/33 3,136,212
--------------
25,753,537
--------------
MONTANA 0.2%
2,825 Montana St Brd Invt Res Recovery Rev
Yellowstone Energy L P Proj.............. 7.000 12/31/19 2,630,979
--------------
NEVADA 0.9%
1,000 Boulder City, NV Hosp Rev Boulder City
Hosp Inc Proj Rfdg....................... 5.850 01/01/22 812,980
3,075 Clark Cnty, NV Assisted Living Homestead
Boulder City Proj........................ 6.500 12/01/27 2,671,406
1,000 Clark Cnty, NV Indl Dev Rev NV Pwr Co
Proj Ser B Rfdg.......................... 5.900 10/01/30 851,230
1,000 Clark Cnty, NV Indl Dev Rev NV Pwr Co
Proj Ser C Rfdg.......................... 5.500 10/01/30 812,190
2,000 Henderson, NV............................ 5.500 04/01/20 1,892,500
1,480 Henderson, NV Loc Impt Dist No T-10...... 7.500 08/01/15 1,525,155
985 Las Vegas, NV Spl Impt Dist No 505
Elkhorn Springs.......................... 8.000 09/15/13 1,019,416
1,020 Nevada St Dept Commerce Hlth Fac Rev
Washoe Convalescent Cent Proj Rfdg....... 8.125 06/01/03 1,036,249
2,935 Washoe Cnty, NV Impt Bonds Spl Assmt Dist
No 23.................................... 6.500 11/01/17 2,981,255
--------------
13,602,381
--------------
</TABLE>
See Notes to Financial Statements
35
<PAGE> 37
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW HAMPSHIRE 2.6%
$ 435 New Hampshire Higher Edl & Hlth Fac Auth
Rev Colby-Sawyer College Issue........... 7.200% 06/01/12 $ 445,253
2,565 New Hampshire Higher Edl & Hlth Fac Auth
Rev Colby-Sawyer College Issue........... 7.500 06/01/26 2,638,615
860 New Hampshire Higher Edl & Hlth Fac Auth
Rev First Mtg Odd Fellows Home Rfdg...... 8.000 06/01/04 867,276
2,000 New Hampshire Higher Edl & Hlth Fac Auth
Rev First Mtg Odd Fellows Home Rfdg...... 9.000 06/01/14 2,239,680
1,000 New Hampshire Higher Edl & Hlth Fac Auth
Rev Havenwood-Heritage Heights........... 7.350 01/01/18 1,007,400
4,825 New Hampshire Higher Edl & Hlth Fac Auth
Rev Havenwood-Heritage Heights (a)....... 7.450 01/01/25 4,846,664
2,295 New Hampshire Higher Edl & Hlth Fac Auth
Rev Hlthcare Visiting Nurse, 144A (e).... 7.250 09/01/23 2,201,548
1,370 New Hampshire Higher Edl & Hlth Fac Auth
Rev Monadock Cmnty Hosp Issue
(Prerefunded @ 10/01/00)................. 9.125 10/01/20 1,415,744
2,000 New Hampshire Higher Edl & Hlth Fac Auth
Rev New London Hosp Assn Proj............ 7.500 06/01/05 2,080,420
1,000 New Hampshire Higher Edl & Hlth Fac Auth
Rev Riverwoods at Exeter Ser A........... 6.500 03/01/23 875,800
3,300 New Hampshire Higher Edl & Hlth Fac Auth
Rev Vly Regl Hosp, 144A (e).............. 7.350 04/01/23 3,308,745
2,000 New Hampshire Higher Edl & Hlth Facs Auth
Rev...................................... 6.125 03/01/19 1,817,580
4,845 New Hampshire Higher Edl & Hlth Facs Auth
Rev Rfdg................................. 6.300 07/01/29 4,319,075
1,000 New Hampshire Hlth & Edl Facs Auth Rev NH
College Issue............................ 7.500 01/01/31 988,670
3,720 New Hampshire St Business Fin Auth Elec
Fac Rev Plymouth Cogeneration............ 7.750 06/01/14 3,734,248
3,000 New Hampshire St Business Fin Auth Rev
Alice Peck Day Hlth Systems Ser A Rfdg... 7.000 10/01/29 2,711,820
975 New Hampshire St Hsg Fin Auth Single
Family Rev Mtg Acquisition Ser G......... 6.300 01/01/26 963,944
1,325 New Hampshire St Hsg Fin Auth Single
Family Rev............................... 5.900 07/01/28 1,247,567
--------------
37,710,049
--------------
</TABLE>
See Notes to Financial Statements
36
<PAGE> 38
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW JERSEY 4.5%
$4,990 Camden Cnty, NJ Impt Auth Lease Rev
Dockside Refrig (a)...................... 8.400% 04/01/24 $ 4,887,605
4,500 Camden Cnty, NJ Impt Auth Lease Rev
Kaighn PT Marine Term Ser A (a).......... 8.000 06/01/27 4,396,095
500 New Jersey Econ Dev Auth Econ Dev Rev
Green Acres Manor Inc Ser A Rfdg......... 8.000 01/01/09 508,820
1,000 New Jersey Econ Dev Auth Econ Dev Rev
Green Acres Manor Inc Ser A Rfdg......... 8.250 01/01/17 1,023,430
1,000 New Jersey Econ Dev Auth Econ Dev Rev
Proj Ser A Rfdg.......................... 6.750 07/01/19 943,750
310 New Jersey Econ Dev Auth Econ Dev Rev
Zirb Ser Greenbriar Inc Ser A Rfdg....... 7.375 07/15/03 310,431
915 New Jersey Econ Dev Auth Econ Dev Rev
Zirb Ser Greenbriar Inc Ser A Rfdg....... 7.750 07/15/08 933,391
250 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A............................... 7.000 02/01/10 245,083
1,500 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A............................... 7.375 02/01/17 1,506,435
3,500 New Jersey Econ Dev Auth First Mtg Cranes
Mill Ser A............................... 7.500 02/01/27 3,520,475
500 New Jersey Econ Dev Auth First Mtg Gross
Rev Burnt Tavern Convalescent Ser A
Rfdg..................................... 9.000 11/15/13 523,335
840 New Jersey Econ Dev Auth First Mtg Gross
Rev Stone Arch Nursing Home Proj Rfdg.... 8.750 12/01/10 880,438
1,000 New Jersey Econ Dev Auth Holt Hauling &
Warehsg Rev Ser G Rfdg................... 8.400 12/15/15 980,120
3,000 New Jersey Econ Dev Auth Meridian
Assisted Living Rev Proj................. 6.750 08/01/30 2,577,780
500 New Jersey Econ Dev Auth Rev First Mtg
Fellowship Vlg Proj Ser A (Prerefunded @
01/01/05)................................ 8.500 01/01/10 572,295
1,000 New Jersey Econ Dev Auth Rev First Mtg
Fellowship Vlg Proj Ser A (Prerefunded @
01/01/05)................................ 9.250 01/01/25 1,174,170
975 New Jersey Econ Dev Auth Rev First Mtg
Millhouse Proj Ser A..................... 8.250 04/01/10 1,025,856
2,060 New Jersey Econ Dev Auth Rev First Mtg
Millhouse Proj Ser A..................... 8.500 04/01/16 2,192,293
1,860 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................. 7.500 11/01/05 1,865,952
</TABLE>
See Notes to Financial Statements
37
<PAGE> 39
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW JERSEY (CONTINUED)
$1,100 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................. 8.500% 11/01/16 $ 1,148,125
1,500 New Jersey Econ Dev Auth Rev First Mtg
Winchester Gardens Ser A................. 8.625 11/01/25 1,571,685
1,890 New Jersey Econ Dev Auth Rev Kullman
Assoc Proj Ser A......................... 6.125 06/01/18 1,672,404
2,500 New Jersey Econ Dev Auth Rev Sr Living
Fac Esplandade Near...................... 7.000 06/01/39 2,181,050
855 New Jersey Econ Dev Auth Rev Sr Mtg Arbor
Glen Proj Ser A.......................... 8.000 05/15/02 889,431
750 New Jersey Econ Dev Auth Rev Sr Mtg Arbor
Glen Proj Ser A.......................... 8.000 05/15/04 813,488
2,560 New Jersey Econ Dev Auth Rev Sr Mtg Arbor
Glen Proj Ser A (Prerefunded @
05/15/06)................................ 8.750 05/15/26 3,048,806
4,500 New Jersey Econ Dev Auth Rev Sr Mtg Arbor
Glen Proj Ser A Rfdg..................... 6.000 05/15/28 3,624,300
5,000 New Jersey Econ Dev Auth Spl Fac Rev
Continental Airls Inc Proj............... 6.250 09/15/19 4,527,450
5,000 New Jersey Econ Dev Auth Spl Fac Rev
Continental Airls Inc Proj............... 6.250 09/15/29 4,400,800
2,500 New Jersey Hlthcare Fac Fin Auth Rev Care
Institute Inc Cherry Hill Proj........... 7.750 07/01/10 2,358,325
3,100 New Jersey Hlthcare Fac Fin Auth Rev
Raritan Bay Med Cent Issue Rfdg.......... 7.250 07/01/14 2,868,492
950 New Jersey St Edl Fac Auth Rev Caldwell
College Ser A............................ 7.250 07/01/25 975,241
4,000 New Jersey St Edl Fac Auth Rev Felician
College of Lodi Ser D.................... 7.375 11/01/22 4,120,720
--------------
64,268,071
--------------
NEW MEXICO 1.3%
5,000 Albuquerque, NM Retirement Fac Rev La
Vida Liena Proj Ser B Rfdg............... 6.600 12/15/28 4,232,700
2,970 Bernalillo Cnty, NM Multi-Family Hsg
Brentwood Gardens Apt B1................. 6.600 10/15/28 2,712,234
1,570 Bernalillo Cnty, NM Multi-Family Rev Hsg
Sr Solar Villas Apts Ser F............... 7.250 10/15/22 1,486,994
3,000 Farmington, NM Pollutn Ctl Rev Public Svc
Co NM Proj Ser A......................... 6.600 10/01/29 2,833,230
2,000 New Mexico Regional Hsg Auth Region VI
Multi-Family Rev......................... 6.750 06/15/29 1,850,000
</TABLE>
See Notes to Financial Statements
38
<PAGE> 40
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW MEXICO (CONTINUED)
$2,500 New Mexico St Hosp Equip Ln Council Hosp
Rev Mem Med Cent Inc Proj................ 5.500% 06/01/28 $ 1,927,650
2,920 RHA Hsg Dev Corp NM Multi-Family Rev Mtg
Woodleaf Apts Proj Ser A Rfdg............ 7.125 12/15/27 2,729,032
655 Santa Fe, NM Indl Rev Casa Real Nursing
Home Rfdg................................ 9.750 01/01/13 676,091
--------------
18,447,931
--------------
NEW YORK 5.0%
1,000 Amherst, NY Indl Dev Agy Sr Rev Sharrey
Zedek Proj Ser A (a)..................... 7.000 12/01/24 926,670
1,500 Amherst, NY Indl Dev Agy Sr Rev Sharrey
Zedek Proj Ser A (a)..................... 7.000 12/01/34 1,355,490
2,000 Bethlehem, NY Indl Dev Agy Sr Hsg Rev Van
Allen Proj Ser A......................... 6.875 06/01/39 1,746,740
1,340 Brookhaven, NY Indl Dev Agy Sr
Residential Hsg Rev Woodcrest Estates Fac
Ser A.................................... 6.250 12/01/23 1,138,196
2,000 Brookhaven, NY Indl Dev Agy Sr
Residential Hsg Rev Woodcrest Estates Fac
Ser A.................................... 6.375 12/01/37 1,677,340
2,000 Castle Rest Residential Hlthcare Fac NY
Rev Hlthcare Fac Ser B................... 8.000 08/01/10 1,892,280
4,800 Islip, NY Cmnty Dev Agy Cmnty Dev Rev NY
Institute of Technology Rfdg (a)......... 7.500 03/01/26 4,934,304
3,900 Metropolitan Transn Auth NY Ser A (FGIC
Insd).................................... 5.875 04/01/25 3,824,769
1,350 Monroe Cnty, NY Indl Dev Agy Rev Indl Dev
Empire Sports Proj Ser A................. 6.250 03/01/28 1,039,473
1,000 Mount Vernon, NY Indl Dev Agy Civic Fac
Rev...................................... 6.200 06/01/29 830,450
3,500 New York City Indl Dev Agy Civic Fac Rev
Cmnty Res Developmentally Disabled....... 7.500 08/01/26 3,528,525
3,960 New York City Indl Dev Agy Civic Fac Rev
Our Lady of Mercy Med Cent Pkg Corp
Proj..................................... 8.500 12/30/22 4,198,788
5,000 New York City Indl Dev Agy Laguardia
Assoc LP Proj Rfdg....................... 6.000 11/01/28 4,212,300
1,500 New York City Indl Dev Civic Touro
College Proj Ser A....................... 6.350 06/01/29 1,366,755
1,000 New York City Muni Wtr Fin Auth Wtr & Swr
Sys Rev Ser A............................ 5.750 06/15/31 959,530
3,000 New York City Ser A (b).................. 6.000 05/15/30 2,932,620
</TABLE>
See Notes to Financial Statements
39
<PAGE> 41
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW YORK (CONTINUED)
$2,000 New York St Dorm Auth Lease Rev St Univ
Dorm Facs Ser A.......................... 6.000% 07/01/30 $ 1,960,320
2,500 New York St Dorm Auth Revs Mental Hlth
Svcs Ser B (MBIA Insd)................... 5.000 02/15/24 2,136,575
2,000 New York St Dorm Auth Revs Mount Sinai
Hlth Ser A............................... 6.500 07/01/25 2,013,200
3,995 New York St Mtg Agy Rev Homeowner Mtg Ser
84....................................... 5.950 04/01/30 3,804,438
2,000 New York St Mtg Agy Rev Homeowner Mtg Ser
90....................................... 6.350 10/01/30 2,022,780
2,665 Newark-Wayne Cmnty Hosp Inc NY Hosp Rev
Ser A.................................... 7.600 09/01/15 2,693,356
2,000 North Syracuse, NY Hsg Auth Rev Janus
Park Proj................................ 8.000 06/01/14 1,105,380
1,250 Oneida Cnty, NY Indl Dev Agy Civic Fac
Saint Elizabeth Med Ser A................ 5.875 12/01/29 989,825
650 Onondaga Cnty, NY Indl Dev Agy Civic Fac
Rev Iroquois Nursing Home Ser B.......... 7.000 02/01/09 600,555
675 Oswego Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 7.000 02/01/12 612,913
1,500 Peekskill, NY Indl Dev Agy Sr Drum Hill
Sr Living Proj........................... 6.375 10/01/28 1,269,030
1,275 Rensselaer Cnty, NY Indl Dev Agy East
Greebush Cntr Proj Rfdg Ser A, 144A
(e)...................................... 7.000 02/01/11 1,182,142
1,480 Rensselaer Cnty, NY Indl Dev Agy East
Greebush Cntr Proj Rfdg Ser B, 144A
(e)...................................... 7.000 02/01/11 1,377,895
2,800 Rockland Cnty, NY Indl Dev Agy Civic Fac
Rev Dominican College Proj, 144A (e)..... 6.250 05/01/28 2,332,344
2,000 Saratoga Cnty, NY Indl Dev Agy Sr Hsg
Rev...................................... 6.875 06/01/39 1,744,620
1,000 Suffolk Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 7.250 01/01/20 932,380
2,000 Suffolk Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 7.250 01/01/30 1,827,580
1,500 Suffolk Cnty, NY Indl Dev Agy Cont Care
Retirement Cmnty Rev (a)................. 7.250 11/01/28 1,418,325
3,100 Suffolk Cnty, NY Indl Dev Agy Indl Dev
Rev Spellman High Voltage Fac Ser A...... 6.375 12/01/17 2,825,185
</TABLE>
See Notes to Financial Statements
40
<PAGE> 42
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
NEW YORK (CONTINUED)
$ 400 Syracuse, NY Hsg Auth Rev Sub Proj
Loretto Rest Ser B....................... 7.500% 08/01/10 $ 374,476
695 Ulster Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 6.250 06/01/08 652,487
1,000 Ulster Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 6.400 06/01/14 913,000
1,000 Ulster Cnty, NY Indl Dev Agy Civic Fac
Rev...................................... 6.450 06/01/24 870,490
--------------
72,223,526
--------------
NORTH CAROLINA 0.3%
5,000 Charlotte, NC Spl Fac Rev Charlotte
Douglas Intl Rfdg........................ 5.600 07/01/27 3,853,700
--------------
NORTH DAKOTA 0.4%
2,610 Devils Lake, ND Hlthcare Facs Rev & Impt
Lk Reg Lutheran Rfdg..................... 6.100 10/01/23 2,170,137
3,000 Grand Forks, ND Sr Hsg Rev Spl Term 4000
Vly Square Proj.......................... 6.250 12/01/34 2,402,040
1,990 Grand Forks, ND Sr Hsg Rev Spl Term 4000
Vly Square Proj.......................... 6.375 12/01/34 1,622,526
--------------
6,194,703
--------------
OHIO 2.7%
1,500 Athens Cnty, OH Hosp Fac Rev O'Bleness
Mem Hosp Proj............................ 7.100 11/15/23 1,445,340
3,800 Cleveland, OH Arpt Spl Rev Continental
Airls Inc Proj........................... 5.375 09/15/27 2,892,104
1,000 Cuyahoga Cnty, OH Hlthcare Fac Rev
Jennings Hall............................ 7.200 11/15/14 986,730
1,500 Cuyahoga Cnty, OH Hlthcare Fac Rev
Jennings Hall............................ 7.300 11/15/23 1,491,600
2,500 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty Ser A Rfdg.............. 7.250 11/15/13 2,466,175
1,500 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty Ser A Rfdg.............. 7.250 11/15/18 1,464,375
1,195 Cuyahoga Cnty, OH Multi-Family Rev Hsg
Mtg Colonnade Apts Ser A Rfdg............ 7.500 12/01/17 1,125,355
2,305 Cuyahoga Cnty, OH Multi-Family Rev Hsg
Mtg Colonnade Apts Ser A Rfdg............ 7.750 12/01/28 2,148,421
2,500 Cuyahoga Cnty, OH Multi-Family Rev Hsg
Park Lane Apts Proj Ser A................ 8.250 07/01/28 2,575,000
</TABLE>
See Notes to Financial Statements
41
<PAGE> 43
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
OHIO (CONTINUED)
$3,000 Dayton, OH Spl Facs Rev Afco Cargo Day
LLC Proj................................. 6.300% 04/01/22 $ 2,567,340
220 Fairfield, OH Econ Dev Rev Beverly
Enterprises Inc Proj Rfdg................ 8.500 01/01/03 224,486
2,200 Hamilton Cnty, OH Multi-Family Rev Hsg
Garden Hill Washington Park Apts......... 7.750 10/01/21 2,227,852
1,370 Harrison, OH Harrison Ave Kmart Proj Ser
A........................................ 8.125 12/01/02 1,402,442
1,000 Madison Cnty, OH Hosp Impt Rev Madison
Cnty Hosp Proj Rfdg...................... 6.250 08/01/18 861,030
2,465 Madison Cnty, OH Hosp Impt Rev Madison
Cnty Hosp Proj Rfdg...................... 6.400 08/01/28 2,083,270
5,000 Montgomery Cnty, OH Hlthcare Fac Rev Ser
B Rfdg................................... 6.250 02/01/22 4,266,550
3,000 Ohio St Solid Waste Rev CSC Ltd Proj..... 8.500 08/01/22 2,383,800
2,000 Ohio St Solid Waste Rev Rep Engineered
Steels Proj.............................. 8.250 10/01/14 400,220
4,000 Ohio St Solid Waste Rev Rep Engineered
Steels Proj.............................. 9.000 06/01/21 801,440
2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev
Coll Cleveland Elec Ser A Rfdg........... 8.000 10/01/23 2,114,180
2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev
Coll Toledo Edison Ser A Rfdg............ 8.000 10/01/23 2,114,180
--------------
38,041,890
--------------
OKLAHOMA 0.4%
2,000 Oklahoma Cnty, OK Fin Auth Epworth Villa
Proj Ser A Rfdg.......................... 7.000 04/01/25 1,924,740
2,800 Oklahoma Dev Fin Auth Rev Hilcrest
Hlthcare Sys Ser A Rfdg.................. 5.625 08/15/29 2,110,080
500 Woodward, OK Muni Auth Hosp Rev.......... 8.250 11/01/09 525,280
500 Woodward, OK Muni Auth Hosp Rev Rfdg
(Prerefunded @ 11/01/00)................. 9.250 11/01/14 518,625
--------------
5,078,725
--------------
</TABLE>
See Notes to Financial Statements
42
<PAGE> 44
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
OREGON 0.8%
$2,000 Clackamas Cnty, OR Hosp Fac Auth Rev
Willamette View Inc Proj Ser A........... 7.500% 11/01/29 $ 1,929,860
1,000 Clatsop Care Cent Hlth Dist OR Rev Sr
Hsg...................................... 6.000 08/01/14 870,750
4,000 Clatsop Care Cent Hlth Dist OR Rev Sr
Hsg...................................... 6.875 08/01/28 3,405,280
1,745 Douglas Cnty, OR Hosp Fac Auth Rev
Elderly Hsg Forest Glen Ser A............ 7.500 09/01/27 1,601,805
4,000 Oregon St Hlth Hsg Edl & Cultural Facs
Auth..................................... 7.250 06/01/28 3,721,160
--------------
11,528,855
--------------
PENNSYLVANIA 9.2%
635 Allegheny Cnty, PA Hosp Dev Auth Rev..... 7.375 08/01/04 594,252
1,945 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Fac Allegheny Vly Sch.................... 7.500 02/01/10 2,139,519
3,120 Allegheny Cnty, PA Hosp Dev Auth Rev Hlth
Fac Allegheny Vly Sch.................... 7.875 02/01/20 3,488,597
2,000 Allegheny Cnty, PA Hosp Dev Hlthcare Facs
Villa Saint Joseph....................... 6.000 08/15/28 1,617,340
1,695 Allegheny Cnty, PA Indl Dev Auth Lease
Rev...................................... 6.625 09/01/24 1,492,617
6,750 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl
Rev Coll Toledo Edison Co Proj Rfdg
(a)...................................... 7.625 05/01/20 7,041,330
4,000 Beaver Cnty, PA Indl Dev Auth Pollutn Ctl
Rev Coll Toledo Edison Co Proj Ser A
Rfdg (a)................................. 7.750 05/01/20 4,253,200
1,000 Bucks Cnty, PA Indl Dev Auth Rev First
Mtg Hlthcare Fac Chandler................ 6.100 05/01/14 887,120
2,500 Bucks Cnty, PA Indl Dev Auth Rev First
Mtg Hlthcare Fac Chandler................ 6.300 05/01/29 2,105,425
2,000 Chartiers Vly, PA Indl & Coml Dev Auth
First Mtg Rev Rfdg....................... 7.400 12/01/15 2,008,680
3,500 Cliff House Ctfs Tr Var Sts Ctfs Partn
Ser A.................................... 6.625 06/01/27 3,120,005
1,000 Crawford Cnty, PA Hosp Auth Sr Living Fac
Rev...................................... 6.250 08/15/29 852,080
1,000 Cumberland Cnty, PA Indl Dev Auth Rev
First Mtg Woods Cedar Run Ser A Rfdg..... 6.500 11/01/18 863,510
3,250 Cumberland Cnty, PA Indl Dev Auth Rev
First Mtg Woods Cedar Run Ser A Rfdg..... 6.500 11/01/28 2,674,977
4,000 Dauphin Cnty, PA Genl Auth Rev Hotel &
Conf Cent Hyatt Regency.................. 6.200 01/01/29 3,504,680
4,000 Dauphin Cnty, PA Genl Auth Rev Office &
Pkg Forum Place Ser A.................... 6.000 01/15/25 3,526,840
</TABLE>
See Notes to Financial Statements
43
<PAGE> 45
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$5,500 Dauphin Cnty, PA Genl Auth Rev Office &
Pkg Riverfront Office (a)................ 6.000% 01/01/25 $ 4,908,695
820 Delaware Cnty, PA Auth Rev First Mtg
Riddle Vlg Proj (Prerefunded @
06/01/02)................................ 8.750 06/01/10 889,798
2,800 Delaware Cnty, PA Auth Rev First Mtg
Riddle Vlg Proj (Prerefunded @
06/01/02)................................ 9.250 06/01/22 3,063,956
2,500 Delaware Cnty, PA Auth Rev First Mtg
Riddle Vlg Proj Rfdg..................... 7.000 06/01/26 2,319,075
2,100 Delaware Cnty, PA Auth Rev White Horse
Vlg Ser A Rfdg........................... 7.500 07/01/18 2,103,570
3,500 Grove City, PA Area Hosp Auth Hlth Fac
Rev...................................... 6.625 08/15/29 2,972,515
2,000 Harrisburg, PA Auth Office & Pkg Rev Ser
A........................................ 6.000 05/01/19 1,801,560
3,000 Lehigh Cnty, PA Genl Purp Auth Rev First
Mtg Bible Fellowship Proj................ 6.000 12/15/23 2,470,380
2,315 Lehigh Cnty, PA Genl Purp Auth Rev First
Mtg Bible Fellowship Proj................ 8.000 12/15/23 2,561,710
3,000 Lehigh Cnty, PA Genl Purp Auth Rev
Kidspeace Oblig Group Rfdg............... 6.000 11/01/18 2,537,250
4,000 Lehigh Cnty, PA Genl Purp Auth Rev
Kidspeace Oblig Group Rfdg............... 6.000 11/01/23 3,298,760
1,790 Lehigh Cnty, PA Indl Dev Auth Hlth Fac
Rev Lifepath Inc Proj.................... 6.100 06/01/18 1,497,532
3,000 Lehigh Cnty, PA Indl Dev Auth Hlth Fac
Rev Lifepath Inc Proj.................... 6.300 06/01/28 2,431,980
4,560 Lehigh Cnty, PA Indl Dev Auth Rev
Rfdg (a)................................. 8.000 08/01/12 4,635,970
3,000 Luzerne Cnty, PA Indl Dev Auth Exmpt Fac
Rev PA Gas & Wtr Co Proj Ser A Rfdg...... 7.200 10/01/17 3,148,980
1,800 Luzerne Cnty, PA Indl Dev Auth First Mtg
Gross Rev Rfdg........................... 7.875 12/01/13 1,842,120
2,500 Montgomery Cnty, PA Higher Edl & Hlth
Auth Rev................................. 6.625 07/01/19 2,194,950
1,000 Montgomery Cnty, PA Higher Edl & Hlth
Auth Rev................................. 6.750 07/01/29 864,600
379 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A.. 9.250 12/01/00 387,224
2,000 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A.. 6.000 12/01/10 1,852,600
</TABLE>
See Notes to Financial Statements
44
<PAGE> 46
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$ 500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A.. 7.000% 12/01/10 $ 485,400
1,500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A.. 7.250 12/01/15 1,463,970
1,000 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser
A........................................ 6.250 12/01/17 869,220
4,000 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A.. 7.400 12/01/20 3,931,800
2,500 Montgomery Cnty, PA Indl Dev Auth Rev
First Mtg The Meadowood Corp Proj Ser A
(Prerefunded @ 12/01/00)................. 10.250 12/01/20 2,613,925
3,505 Montgomery Cnty, PA Indl Dev Auth Rev
Hlthcare Adv Geriatric Ser A............. 8.375 07/01/23 3,624,696
645 Montgomery Cnty, PA Indl Dev Auth Rev
Pennsburg Nursing & Rehab Cent
(Prerefunded @ 03/31/04)................. 7.625 07/01/18 704,766
2,660 Montgomery Cnty, PA Indl Dev Auth Rev
Wordsworth Academy....................... 7.750 09/01/14 2,720,754
1,930 Montgomery Cnty, PA Indl Dev Auth Rev
Wordsworth Academy....................... 7.750 09/01/24 1,948,644
2,200 Montgomery Cnty, PA Indl Rev GDL Farms
Corp Proj Rfdg........................... 6.500 01/01/20 1,944,118
2,500 Northeastern PA Hosp & Edl Auth Hlthcare
Rev...................................... 7.125 10/01/29 2,355,350
2,000 Pennsylvania St Higher Edl Fac Auth Rev
Auth Allegheny Gen Hosp Ser A............ 7.125 09/01/07 1,716,000
4,000 Philadelphia, PA Auth for Indl Dev Rev
Coml RMK Rfdg............................ 7.750 12/01/17 4,170,400
1,000 Philadelphia, PA Auth for Indl Dev Rev
First Mtg Crime Prevention Assoc......... 6.125 04/01/19 906,670
95 Philadelphia, PA Auth for Indl Dev Rev
Long-Term Care Maplewood (Prerefunded @
07/01/04)................................ 8.000 01/01/14 104,161
1,500 Philadelphia, PA Hosp & Higher Edl Fac
Auth Hosp Rev (f)........................ 7.000 07/01/05 525,000
1,000 Philadelphia, PA Hosp & Higher Edl Fac
Auth Hosp Rev (f)........................ 7.250 07/01/18 350,000
</TABLE>
See Notes to Financial Statements
45
<PAGE> 47
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$ 900 Philadelphia, PA Hosp & Higher Edl Fac
Auth Hosp Rev Rfdg....................... 6.500% 07/01/23 $ 794,268
1,180 Philadelphia, PA Hosp & Higher Edl Fac
Auth Hosp Rev Rfdg....................... 6.500 07/01/27 1,033,586
1,765 Philadelphia, PA Hosps & Higher Edl Fac
Auth Hosp Rev Rfdg....................... 7.250 03/01/24 1,674,102
1,465 Scranton Lackawanna, PA Hlth & Welfare
Auth Rev Rfdg............................ 7.250 01/15/17 1,362,216
3,100 Scranton Lackawanna, PA Hlth & Welfare
Auth Rev Rfdg............................ 7.350 01/15/22 2,843,506
2,400 Southern Chester Cnty, PA Hlth & Higher
Ed Auth Mtg Rev Rfdg..................... 6.300 06/01/10 2,251,128
250 Warren Cnty, PA Indl Dev Auth Beverly
Enterprises Rfdg......................... 9.000 11/01/12 262,352
2,100 Washington Cnty, PA Hosp Auth Rev
Canonsburg Genl Hosp Rfdg................ 7.350 06/01/13 2,004,744
2,500 Westmoreland Cnty, PA Indl Dev Auth Rev
Hlthcare Facs Redstone Rfdg.............. 5.850 11/15/29 1,973,700
--------------
132,587,873
--------------
RHODE ISLAND 0.1%
2,000 Rhode Island St Econ Dev Corp Rev Sub Nt
Oblig Providence Place................... 7.250 07/01/20 1,871,480
--------------
SOUTH CAROLINA 1.0%
690 Charleston Cnty, SC Hlth Fac Rev First
Mtg Episcopal Proj Rfdg (Prerefunded @
04/01/01)................................ 9.750 04/01/16 728,171
3,500 Charleston Cnty, SC Indl Rev Zeigler Coal
Hldg Rfdg................................ 6.950 08/10/28 2,823,940
750 South Carolina Jobs Econ Dev Auth Econ
Dev Rev Westminster Presbyterian Cent.... 6.750 11/15/10 735,195
500 South Carolina Jobs Econ Dev Auth Econ
Dev Rev Westminster Presbyterian Cent.... 7.500 11/15/20 489,250
750 South Carolina Jobs Econ Dev Auth Hlth
Fac Rev First Mtg Lutheran Homes SC Proj
(Prerefunded @ 10/01/02)................. 8.000 10/01/22 816,075
3,000 South Carolina Jobs Econ Dev Auth Hlth
Facs Rev First Mtg Westley Commons
Proj..................................... 7.750 10/01/24 2,831,130
</TABLE>
See Notes to Financial Statements
46
<PAGE> 48
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
SOUTH CAROLINA (CONTINUED)
$1,000 South Carolina Jobs Econ Dev Auth Hosp
Facs Rev Impt Palmetto Hlth Alliance
Ser A.................................... 7.375% 12/15/21 $ 960,970
5,095 South Carolina St Hsg Fin & Dev Auth
Multi-Family Rev (a)..................... 6.750 05/01/28 4,745,432
--------------
14,130,163
--------------
SOUTH DAKOTA 0.5%
2,500 Mobridge, SD Hlthcare Facs Rev Mobridge
Regl Hosp Proj........................... 6.500 12/01/22 2,168,450
3,000 South Dakota Hsg Dev Auth Homeownership
Mtg Ser F................................ 5.800 05/01/28 2,812,830
1,000 South Dakota St Hlth & Edl Fac Auth Rev
Huron Regl Med Cent...................... 7.250 04/01/20 1,005,550
1,600 Winner, SD Econ Dev Rev Winner Regl
Hlthcare Cent Rfdg....................... 6.000 04/01/28 1,298,176
--------------
7,285,006
--------------
TENNESSEE 1.1%
4,950 Chattanooga, TN Indl Dev Brd Indl Rev Dev
Market Street Proj Rfdg.................. 7.000 12/15/12 4,781,601
1,050 Chattanooga, TN Indl Dev Brd Indl Rev Dev
Market Street Proj Rfdg.................. 7.000 12/15/12 1,014,279
3,000 Elizabethton, TN Hlth & Edl Fac Brd Rev
Rfdg..................................... 7.750 07/01/29 2,902,740
3,500 Shelby Cnty, TN Hlth Edl & Hsg Hlthcare
Fac Kirby Pines Ser A.................... 6.375 11/15/25 3,001,075
2,100 Sweetwater, TN Indl Dev Brd Mtg Rev Wood
Presbyterian Home Proj................... 7.500 01/01/18 1,918,770
2,845 Sweetwater, TN Indl Dev Brd Mtg Rev Wood
Presbyterian Home Proj................... 7.750 01/01/29 2,631,141
--------------
16,249,606
--------------
TEXAS 3.4%
725 Abia Dev Corp TX Arpt Facs Rev Austin
Belly Port Dev Proj Ser A................ 6.250 10/01/08 678,303
3,775 Abia Dev Corp TX Arpt Facs Rev Austin
Belly Port Dev Proj Ser A................ 6.500 10/01/23 3,350,539
1,000 Alliance Arpt Auth Inc TX Spl Fac Rev Fed
Express Corp Proj........................ 6.375 04/01/21 958,260
1,700 Atlanta, TX Hosp Auth Hosp Fac Rev....... 6.750 08/01/29 1,504,279
2,000 Austin-Bergstrom Landhost Enterprises Inc
TX Arpt Hotel Sr Ser A................... 6.750 04/01/27 1,792,900
</TABLE>
See Notes to Financial Statements
47
<PAGE> 49
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
TEXAS (CONTINUED)
$ 865 Bell Cnty, TX Hlth Fac Dev Corp Rev Hosp
Proj..................................... 9.250% 07/01/08 $ 892,360
3,985 Bell Cnty, TX Indl Dev Corp Solid Waste
Disposal Rev............................. 7.600 12/01/17 3,657,991
3,000 Dallas-Fort Worth, TX Intl Arpt Joint
Ser A.................................... 6.000 11/01/32 2,899,350
1,000 Dallas-Fort Worth, TX Intl Arpt Joint
Ser A.................................... 6.000 11/01/28 971,420
500 Dallas-Fort Worth, TX Intl Arpt Fac Impt
Corp Rev American Airls Inc.............. 7.500 11/01/25 506,420
1,500 Dallas-Fort Worth, TX Intl Arpt Fac Impt
Corp Rev American Airls Inc.............. 7.250 11/01/30 1,516,170
1,250 Dallas-Fort Worth, TX Intl Arpt Fac Impt
Corp Rev Delta Airls Inc................. 7.625 11/01/21 1,273,650
2,665 De Soto, TX Hlth Fac Dev Park Manor
Sr Care.................................. 7.750 12/01/16 2,675,500
1,500 Houston, TX Arpt Sys Rev Spl Fac
Continental Airls Ser B.................. 6.125 07/15/27 1,278,945
1,450 Houston, TX Arpt Sys Rev Spl Fac
Continental Airls Ser C.................. 6.125 07/15/27 1,249,885
2,500 Lubbock, TX Hlth Facs Dev Corp Rev First
Mtg Carillon Proj Ser A.................. 6.500 07/01/19 2,175,400
3,400 Meadow Parc Dev Inc, TX Multi-Family Rev
Hsg Meadow Parc Apts Proj................ 6.500 12/01/30 3,073,022
750 North Central, TX Hlth Fac Dev Corp Rev
Retirement Fac NW Sr Hsg Ser A........... 7.500 11/15/29 719,153
1,000 North Central, TX Hlth Fac Dev Corp Rev
Retirement Fac NW Sr Hsg Ser A........... 7.250 11/15/19 944,390
3,175 Orange, TX Hsg Dev Corp Multi-Family Rev
Hsg Vlgs At Pine Hallow.................. 8.000 03/01/28 3,088,354
3,255 Rusk Cnty, TX Hlth Fac Corp Hosp Rev
Henderson Mem Hosp Proj Rfdg............. 7.750 04/01/13 3,323,192
500 San Antonio, TX Hlth Fac Dev Corp Rev
Encore Nursing Cent Partn................ 8.250 12/01/19 523,155
2,000 San Antonio, TX Hsg Fin Corp Multi-Family
Hsg Rev Beverly Oaks Apts Proj Ser A..... 7.750 02/01/27 1,911,080
</TABLE>
See Notes to Financial Statements
48
<PAGE> 50
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
TEXAS (CONTINUED)
$1,960 San Antonio, TX Hsg Fin Corp Multi-Family
Hsg Rev Marbach Manor Apts Proj Ser A.... 8.125% 06/01/27 $ 1,914,018
1,500 Tarrant Cnty, TX Hlth Fac Dev Corp Rev
Mtg Cumberland Rest Ser A Rfdg........... 7.000 08/15/19 1,416,090
1,401 Texas Genl Svcs Cmty Partn Interests
Office Bldg & Land Acquisition Proj...... 7.000 08/01/24 1,430,317
3,500 Woodhill Pub Fac Corp TX Hsg Woodhill
Apts Proj (a)............................ 7.500 12/01/29 3,418,870
--------------
49,143,013
--------------
UTAH 0.3%
1,500 Carbon Cnty, UT Solid Waste Disposal Rev
Laidlaw Environmental Ser A Rfdg......... 7.450 07/01/17 1,338,645
500 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj..................................... 7.600 09/01/06 470,495
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj..................................... 7.800 09/01/15 909,800
1,000 Tooele Cnty, UT Pollutn Ctl Rev Laidlaw
Environmental Ser A Rfdg................. 7.550 07/01/27 140,390
2,000 Utah St Hsg Fin Agy Rev RHA Cmnty Svcs
Proj Ser A............................... 6.875 07/01/27 1,824,780
--------------
4,684,110
--------------
VERMONT 0.9%
1,500 Vermont Econ Dev Auth Rev Mtg Wake Robin
Corp Proj Ser B.......................... 6.750 03/01/29 1,338,930
2,050 Vermont Edl & Hlth Bldgs Fin Agy Rev..... 6.500 10/01/14 1,989,443
4,130 Vermont Edl & Hlth Bldgs Fin Agy Rev..... 6.625 10/01/29 3,888,849
3,000 Vermont Edl & Hlth Bldgs Fin Agy Rev
Hlthcare Fac Copley Manor Proj........... 6.250 04/01/29 2,515,110
535 Vermont Edl & Hlth Bldgs Fin Agy Rev VT
Council Dev Mental Hlth Ser A............ 6.000 12/15/09 491,296
1,030 Vermont Edl & Hlth Bldgs Fin Agy Rev VT
Council Dev Mental Hlth Ser A............ 6.125 12/15/14 908,769
1,375 Vermont Edl & Hlth Bldgs Fin Agy Rev VT
Council Dev Mental Hlth Ser A............ 6.250 12/15/19 1,183,834
--------------
12,316,231
--------------
</TABLE>
See Notes to Financial Statements
49
<PAGE> 51
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
VIRGINIA 2.3%
$2,955 Alexandria, VA Indl Dev Auth Rev Saint
Coletta Sch Proj......................... 7.750% 10/15/26 $ 2,880,209
235 Alexandria, VA Indl Dev Auth Rev Saint
Coletta Sch Proj......................... 7.750 10/15/26 226,037
6,600 Alexandria, VA Redev & Hsg Auth 3001 Pk
Cent Apts Ser A Rfdg (a)................. 6.375 04/01/34 5,923,434
380 Covington-Alleghany Cnty, VA Indl Dev
Auth Beverly Enterprises Inc Proj Rfdg... 9.375 09/01/01 384,412
2,000 Dulles Town Cent Cmnty Dev Auth Dulles
Town Cent Proj........................... 6.250 03/01/26 1,835,200
3,000 Fairfax Cnty, VA Redev & Hsg Auth Multi-
Family Hsg Rev........................... 7.600 10/01/36 3,092,700
345 Greensville Cnty, VA Indl Dev Auth Rev
Wheeling Steel Proj Ser A................ 6.375 04/01/04 329,751
800 Greensville Cnty, VA Indl Dev Auth Rev
Wheeling Steel Proj Ser A................ 7.000 04/01/14 717,672
2,550 Hampton, VA Redev & Hsg Auth Rev First
Mtg Olde Hampton Ser A Rfdg.............. 6.500 07/01/16 2,329,119
1,161 Henry Cnty, VA Indl Dev Auth Indl Dev Rev
5Bs Inc Proj Ser A....................... 7.400 09/01/17 1,126,476
1,500 Hopewell, VA Indl Dev Auth Res Recovery
Rev Stone Container Corp Proj Rfdg....... 8.250 06/01/16 1,554,375
4,000 Peninsula Ports Auth VA Rev Port Fac
Zeigler Coal Rfdg........................ 6.900 05/02/22 3,239,200
1,000 Pittsylvania Cnty, VA Indl Dev Auth Rev
Exmpt Fac Ser A.......................... 7.450 01/01/09 1,017,230
5,980 Richmond, VA Redev & Hsg Auth Multi-
Family Rev Ser A Rfdg (Var Rate Cpn)..... 7.500 12/15/21 5,927,376
855 Virginia Small Business Fing Indl Dev SIL
Clean Wtr Proj (a)....................... 7.250 11/01/09 842,987
1,700 Virginia Small Business Fing Indl Dev SIL
Clean Wtr Proj (a)....................... 7.250 11/01/24 1,657,194
--------------
33,083,372
--------------
WASHINGTON 0.7%
1,900 King Cnty, WA Hsg Auth Hsg Rev Colonial
Gardens Apts Proj........................ 6.200 07/01/29 1,688,587
600 King Cnty, WA Pub Hosp Dist No 004
Snoqualmie Vly Hosp...................... 7.000 12/01/11 588,660
400 King Cnty, WA Pub Hosp Dist No 004
Snoqualmie Vly Hosp...................... 7.250 12/01/15 387,904
</TABLE>
See Notes to Financial Statements
50
<PAGE> 52
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
WASHINGTON (CONTINUED)
$2,500 Spokane Cnty, WA Indl Dev Corp Solid
Waste Disp Rev........................... 7.600% 03/01/27 $ 2,564,825
235 Tacoma, WA Hsg Auth Rev Hsg Wedgewood
Homes Proj, 144A (e)..................... 6.000 01/01/28 205,338
500 Tacoma, WA Hsg Auth Rev Hsg Wedgewood
Homes Proj, 144A (e)..................... 6.000 02/01/28 436,805
1,000 Tacoma, WA Hsg Auth Rev Hsg Wedgewood
Homes Proj, 144A (e)..................... 6.000 03/01/28 873,360
1,680 Tacoma, WA Hsg Auth Rev Hsg Wedgewood
Homes Proj, 144A (e)..................... 6.000 04/01/28 1,467,060
1,000 Vancouver, WA Hsg Auth Rev Hsg Maple
Knoll Apts Proj.......................... 6.000 10/01/17 923,940
1,000 Vancouver, WA Hsg Auth Rev Hsg Maple
Knoll Apts Proj.......................... 6.200 10/01/27 906,390
--------------
10,042,869
--------------
WEST VIRGINIA 0.3%
1,250 Randolph Cnty, WV Bldg Comm Rev Crossover
Elkins Regl Proj Rfdg.................... 6.125 07/01/23 1,043,825
475 Randolph Cnty, WV Bldg Comm Rev Davis Mem
Hosp Proj Ser A Rfdg & Impt (Prerefunded
@ 11/01/01).............................. 7.650 11/01/21 498,094
2,540 Weirton, WV Pollutn Ctl Rev Weirton Steel
Proj Rfdg................................ 8.625 11/01/14 2,492,604
--------------
4,034,523
--------------
WISCONSIN 1.5%
2,590 Baldwin, WI Hosp Rev Mtg Ser A........... 6.375 12/01/28 2,247,809
265 Wisconsin Hsg & Econ Dev Auth
Homeownership Rev Ser F.................. 7.550 07/01/26 270,931
6,725 Wisconsin St Hlth & Edl Fac Auth Rev
Auroro Hlthcare Inc Ser A................ 5.600 02/15/29 5,263,994
2,250 Wisconsin St Hlth & Edl Fac Auth Rev
Clement Manor Rfdg....................... 5.750 08/15/24 1,782,720
3,000 Wisconsin St Hlth & Edl Fac Auth Rev Fh
Hlthcare Dev Inc Proj.................... 6.250 11/15/20 2,614,980
635 Wisconsin St Hlth & Edl Fac Auth Rev Hess
Mem Hosp Assn (ACA Insd)................. 7.200 11/01/05 653,110
</TABLE>
See Notes to Financial Statements
51
<PAGE> 53
YOUR FUND'S INVESTMENTS
May 31, 2000 (Unaudited)
<TABLE>
<CAPTION>
PAR
AMOUNT MARKET
(000) DESCRIPTION COUPON MATURITY VALUE
<C> <S> <C> <C> <C>
WISCONSIN (CONTINUED)
$2,000 Wisconsin St Hlth & Edl Facs Auth Rev
Hess Memorial Hosp Assn (ACA Insd)....... 7.875% 11/01/22 $ 2,189,920
2,490 Wisconsin St Hlth & Edl Fac Auth Rev Natl
Regency of New Berlin Proj............... 8.000 08/15/25 2,570,975
3,000 Wisconsin St Hlth & Edl Milwaukee
Catholic Home Proj....................... 7.500 07/01/26 3,014,370
500 Wisconsin St Hlth & Edl Rev Mem Hosp At
Oconomowoc Inc Proj...................... 6.350 07/01/17 521,855
--------------
21,130,664
--------------
WYOMING 0.2%
2,335 Wyoming Cmnty Dev Auth Hsg Rev........... 6.250 06/01/27 2,290,261
--------------
U. S. VIRGIN ISLANDS 0.2%
1,965 University of Virgin Islands Pub Fin Auth
Ser A (Prerefunded @ 10/01/04)........... 7.650 10/01/14 2,196,752
--------------
TOTAL LONG-TERM INVESTMENTS 95.6%
(Cost $1,449,226,836).............................................. 1,370,438,052
SHORT-TERM INVESTMENTS 3.0%
(Cost $43,160,000)................................................. 43,160,000
--------------
TOTAL INVESTMENTS 98.6%
(Cost $1,492,386,836).............................................. 1,413,598,052
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%.......................... 20,081,105
--------------
NET ASSETS 100.0%.................................................... $1,433,679,157
==============
</TABLE>
* Zero coupon bond
(a) Assets segregated as collateral for when-issued or delayed delivery purchase
commitments.
(b) Securities purchased on a when-issued or delayed delivery basis.
(c) Interest is accruing at less than the stated coupon.
(d) Payment-in-kind security.
(e) 144A/Private Placement securities are those which are exempt from
registration under Rule 144A of the Securities Act of 1933, as amended.
These securities may only be resold in transactions exempt from registration
which are normally transactions with qualified institutional buyers.
(f) Non-income producing security.
(g) Interest only strip.
ACA--American Capital Access
FGIC--Financial Guaranty Insurance Company
FNMA--Federal National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
52
<PAGE> 54
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
May 31, 2000 (Unaudited)
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $1,492,386,836)..................... $1,413,598,052
Cash........................................................ 53,811
Receivables:
Interest.................................................. 30,874,685
Fund Shares Sold.......................................... 2,896,266
Investments Sold.......................................... 2,863,818
Other....................................................... 88,023
--------------
Total Assets............................................ 1,450,374,655
--------------
LIABILITIES:
Payables:
Investments Purchased..................................... 7,320,092
Income Distributions...................................... 3,968,487
Fund Shares Repurchased................................... 3,751,402
Distributor and Affiliates................................ 712,137
Investment Advisory Fee................................... 638,345
Trustees' Deferred Compensation and Retirement Plans........ 202,238
Accrued Expenses............................................ 102,797
--------------
Total Liabilities....................................... 16,695,498
--------------
NET ASSETS.................................................. $1,433,679,157
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,517,856,254
Accumulated Undistributed Net Investment Income............. 1,638,900
Accumulated Net Realized Loss............................... (7,027,213)
Net Unrealized Depreciation................................. (78,788,784)
--------------
NET ASSETS.................................................. $1,433,679,157
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $942,111,040 and 89,376,657 shares of
beneficial interest issued and outstanding)............. $ 10.54
Maximum sales charge (4.75%* of offering price)......... .53
--------------
Maximum offering price to public........................ $ 11.07
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $370,308,015 and 35,159,018 shares of
beneficial interest issued and outstanding)............. $ 10.53
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $121,260,102 and 11,524,945 shares of
beneficial interest issued and outstanding)............. $ 10.52
==============
</TABLE>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
53
<PAGE> 55
Statement of Operations
For the Six Months Ended May 31, 2000 (Unaudited)
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 52,280,879
------------
EXPENSES:
Investment Advisory Fee..................................... 3,839,264
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $1,165,142, $1,972,003 and $595,956,
respectively)............................................. 3,733,101
Shareholder Services........................................ 436,455
Trustees' Fees and Related Expenses......................... 51,216
Custody..................................................... 41,332
Legal....................................................... 21,960
Other....................................................... 313,321
------------
Total Expenses.......................................... 8,436,649
Less Credits Earned on Cash Balances.................... 4,740
------------
Net Expenses............................................ 8,431,909
------------
NET INVESTMENT INCOME....................................... $ 43,848,970
============
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 2,058,078
------------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... (20,127,531)
End of the Period......................................... (78,788,784)
Net Unrealized Depreciation During the Period............... (58,661,253)
------------
NET REALIZED AND UNREALIZED LOSS............................ $(56,603,175)
============
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(12,754,205)
============
</TABLE>
See Notes to Financial Statements
54
<PAGE> 56
Statement of Changes in Net Assets
For the Six Months Ended May 31, 2000 and the Year Ended November 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
MAY 31, 2000 NOVEMBER 30, 1999
-----------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................ $ 43,848,970 $ 84,903,528
Net Realized Gain................................ 2,058,078 6,456,181
Net Unrealized Depreciation During the Period.... (58,661,253) (101,332,627)
-------------- --------------
Change in Net Assets from Operations............. (12,754,205) (9,972,918)
-------------- --------------
Distributions from Net Investment Income:
Class A Shares................................. (29,304,075) (54,739,327)
Class B Shares................................. (10,897,856) (22,510,591)
Class C Shares................................. (3,280,057) (5,939,920)
-------------- --------------
Total Distributions.............................. (43,481,988) (83,189,838)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES..................................... (56,236,193) (93,162,756)
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold........................ 191,452,149 354,696,692
Net Asset Value of Shares Issued Through Dividend
Reinvestment................................... 20,638,463 37,916,959
Cost of Shares Repurchased....................... (233,592,576) (255,511,932)
-------------- --------------
CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (21,501,964) 137,101,719
-------------- --------------
TOTAL INCREASE/DECREASE IN NET ASSETS............ (77,738,157) 43,938,963
NET ASSETS:
Beginning of the Period.......................... 1,511,417,314 1,467,478,351
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of
$1,638,900 and $1,271,918, respectively)....... $1,433,679,157 $1,511,417,314
============== ==============
</TABLE>
See Notes to Financial Statements
55
<PAGE> 57
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED NOVEMBER 30,
CLASS A SHARES ENDED -------------------------------------
MAY 31, 2000 1999 1998 1997 1996
----------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF THE
PERIOD......................... $10.956 $11.664 $11.454 $11.139 $11.180
------- ------- ------- ------- -------
Net Investment Income............ .338 .686 .699 .729 .735
Net Realized and Unrealized
Gain/Loss...................... (.417) (.720) .217 .312 (.041)
------- ------- ------- ------- -------
Total from Investment
Operations..................... (.079) (.034) .916 1.041 .694
Less Distributions from and in
Excess of Net Investment
Income......................... .336 .674 .706 .726 .735
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD......................... $10.541 $10.956 $11.664 $11.454 $11.139
======= ======= ======= ======= =======
Total Return (a)................. -.76%* -.37% 8.28% 9.63% 6.47%
Net Assets at End of the Period
(In millions).................. $ 942.1 $ 970.0 $ 905.0 $ 779.9 $ 621.0
Ratio of Expenses to Average Net
Assets (b)..................... .90% .90% .91% .95% 1.01%
Ratio of Net Investment Income to
Average Net Assets (b)......... 6.32% 6.03% 6.01% 6.50% 6.64%
Portfolio Turnover............... 8%* 22% 26% 29% 23%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge ("CDSC"). On purchases of $1 million or more, a CDSC of 1% may
be imposed on certain redemptions made within one year of purchase. If the
sales charges were included, total returns would be lower.
(b) For the years ended November 30, 1996 and 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
56
<PAGE> 58
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED NOVEMBER 30,
CLASS B SHARES ENDED ----------------------------------------
MAY 31, 2000 1999 1998 1997 1996
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................... $10.946 $11.658 $11.452 $11.136 $11.180
------- ------- ------- ------- -------
Net Investment Income........... .297 .606 .612 .645 .653
Net Realized and Unrealized
Gain/Loss..................... (.417) (.728) .216 .313 (.046)
------- ------- ------- ------- -------
Total from Investment
Operations.................... (.120) (.122) .828 .958 .607
Less Distributions from and in
Excess of Net Investment
Income........................ .294 .590 .622 .642 .651
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD........................ $10.532 $10.946 $11.658 $11.452 $11.136
======= ======= ======= ======= =======
Total Return (a)................ -1.15%* -1.11% 7.41% 8.82% 5.67%
Net Assets at End of the Period
(In millions)................. $ 370.3 $ 416.2 $ 451.9 $ 425.6 $ 323.8
Ratio of Expenses to Average Net
Assets (b).................... 1.65% 1.66% 1.67% 1.71% 1.77%
Ratio of Net Investment Income
to Average Net Assets (b)..... 5.56% 5.27% 5.26% 5.74% 5.88%
Portfolio Turnover.............. 8%* 22% 26% 29% 23%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining thereafter to 0% after the
fifth year. If the sales charge was included, total returns would be lower.
(b) For the years ended November 30, 1996 and 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
57
<PAGE> 59
Financial Highlights
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS YEAR ENDED NOVEMBER 30,
CLASS C SHARES ENDED ----------------------------------------
MAY 31, 2000 1999 1998 1997 1996
-------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................... $10.934 $11.646 $11.440 $11.126 $11.170
------- ------- ------- ------- -------
Net Investment Income........... .298 .595 .613 .644 .652
Net Realized and Unrealized
Gain/Loss..................... (.416) (.717) .215 .312 (.045)
------- ------- ------- ------- -------
Total from Investment
Operations.................... (.118) (.122) .828 .956 .607
Less Distributions from and in
Excess of Net Investment
Income........................ .294 .590 .622 .642 .651
------- ------- ------- ------- -------
NET ASSET VALUE, END OF THE
PERIOD........................ $10.522 $10.934 $11.646 $11.440 $11.126
======= ======= ======= ======= =======
Total Return (a)................ -1.06%* -1.20% 7.42% 8.82% 5.68%
Net Assets at End of the Period
(In millions)................. $ 121.3 $ 125.2 $ 110.6 $ 91.3 $ 50.0
Ratio of Expenses to Average
Net Assets (b)................ 1.65% 1.65% 1.67% 1.70% 1.77%
Ratio of Net Investment Income
to Average Net Assets (b)..... 5.56% 5.27% 5.25% 5.69% 5.86%
Portfolio Turnover.............. 8%* 22% 26% 29% 23%
</TABLE>
* Non-Annualized
(a) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower.
(b) For the years ended November 30, 1996 and 1997, the impact on the Ratios of
Expenses and Net Investment Income to Average Net Assets due to Van Kampen's
reimbursement of certain expenses was less than 0.01%.
See Notes to Financial Statements
58
<PAGE> 60
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen High Yield Municipal Fund (the "Fund") is organized as a series of
the Van Kampen 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 seek to
provide investors with as high a level of interest income exempt from federal
income tax as is consistent with the investing policies of the Fund. The Fund's
investment advisor generally seeks to achieve the Fund's investment objective by
investing primarily in a portfolio of medium- and lower-grade 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 VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices 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, which approximates market value.
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 68% of the Fund's
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,
59
<PAGE> 61
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
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.
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 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 is amortized and original issue discount is accreted over the life of
each applicable security. Income and 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, 1999, the Fund had an accumulated capital loss
carryforward for tax purposes of $9,025,107 which expires between November 30,
2003 and November 30, 2005. Net realized gains or losses differ for financial
reporting and tax purposes primarily as a result of the deferral of losses
relating to wash sale transactions.
At May 31, 2000, for federal income tax purposes, cost of long- and
short-term investments is $1,492,447,386; the aggregate gross unrealized
appreciation is $18,659,998 and the aggregate gross unrealized depreciation is
$97,509,332, resulting in net unrealized depreciation on long- and short-term
investments of $78,849,334.
60
<PAGE> 62
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
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 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 and Van
Kampen Advisors Inc. (the "Subadvisers") will provide investment advice and
facilities to the Fund for an annual fee payable monthly as follows:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSETS % PER ANNUM
<S> <C>
First $300 million.......................................... .60 of 1%
Next $300 million........................................... .55 of 1%
Over $600 million........................................... .50 of 1%
</TABLE>
For the six months ended May 31, 2000, the Fund recognized expenses of
approximately $22,000 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, 2000, the Fund recognized expenses of
approximately $41,500 representing Van Kampen Funds Inc. or its affiliates'
(collectively "Van Kampen") cost of providing accounting services to the Fund.
Van Kampen Investor Services Inc., an affiliate of the Adviser, serves as
the shareholder servicing agent for the Fund. For the six months ended May 31,
2000, the Fund recognized expenses of approximately $329,400. 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
Van Kampen. The Fund does not compensate its officers or trustees who are
officers of Van Kampen.
The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. 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
61
<PAGE> 63
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
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
At May 31, 2000, capital aggregated $999,713,594, $389,742,179 and $128,400,481
for Classes A, B, and C, respectively. For the six months ended May 31, 2000,
transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................. 13,030,761 $ 138,891,902
Class B............................................. 3,161,290 33,588,704
Class C............................................. 1,782,887 18,971,543
----------- -------------
Total Sales........................................... 17,974,938 $ 191,452,149
=========== =============
Dividend Reinvestment:
Class A............................................. 1,332,504 $ 14,216,824
Class B............................................. 435,656 4,646,014
Class C............................................. 166,723 1,775,625
----------- -------------
Total Dividend Reinvestments.......................... 1,934,883 $ 20,638,463
=========== =============
Repurchases:
Class A............................................. (13,527,143) $(144,539,818)
Class B............................................. (6,462,133) (68,961,254)
Class C............................................. (1,873,123) (20,091,504)
----------- -------------
Total Repurchases..................................... (21,862,399) $(233,592,576)
=========== =============
</TABLE>
62
<PAGE> 64
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
At November 30, 1999, capital aggregated $991,144,686, $420,468,715 and
$127,744,817 for Classes A, B, and C, respectively. For the year ended November
30, 1999, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
Sales:
Class A............................................... 20,648,778 $ 233,722,916
Class B............................................... 7,393,673 83,518,334
Class C............................................... 3,318,976 37,455,442
----------- -------------
Total Sales............................................. 31,361,427 $ 354,696,692
=========== =============
Dividend Reinvestment:
Class A............................................... 2,220,022 $ 25,257,877
Class B............................................... 836,714 9,525,387
Class C............................................... 276,072 3,133,695
----------- -------------
Total Dividend Reinvestments............................ 3,332,808 $ 37,916,959
=========== =============
Repurchases:
Class A............................................... (11,909,062) $(135,612,380)
Class B............................................... (8,967,116) (101,266,235)
Class C............................................... (1,644,564) (18,633,317)
----------- -------------
Total Repurchases....................................... (22,520,742) $(255,511,932)
=========== =============
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). Class B shares purchased
on or after June 1, 1996, and any dividend reinvestment Class B shares received
thereon, automatically convert to Class A shares eight years after the end of
the calendar month in which the shares were purchased. Class B shares purchased
before June 1, 1996, and any dividend reinvestment Class B shares received
thereon, automatically convert to Class A shares six years after the end of the
calendar month in which the shares were purchased. For the six months ended May
31, 2000 and the year ended November 30, 1999, 4,608,001 and 4,200,418 Class B
shares automatically converted to Class A shares, respectively, and are shown in
the above tables as sales of Class A shares and repurchases of Class B shares.
Class C shares purchased before January 1, 1997, and any dividend reinvestment
plan C shares received thereon, automatically convert to Class A shares ten
years after the end of the calendar month in which the shares are purchased.
Class C shares purchased on or after January 1, 1997 do not possess a conversion
feature. For the six months ended May 31, 2000, no Class C shares converted to
Class A shares. The CDSC will be imposed on most redemptions
63
<PAGE> 65
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
made within five years of the purchase for Class B shares and one year of the
purchase for Class C shares as detailed in the following schedule.
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
AS A PERCENTAGE OF
DOLLAR AMOUNT
SUBJECT TO 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, 2000, Van Kampen, as distributor for the
Fund, received net commissions on sales of the Fund's Class A shares of
approximately $78,000 and CDSC on the redeemed shares of Classes B and C of
approximately $504,600. 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 $107,104,675 and $152,945,846,
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 taking delivery of a security underlying a
futures contract. In this instance the recognition of gain or loss is postponed
until the disposal of the security underlying the futures contract.
The Fund may invest 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
64
<PAGE> 66
NOTES TO
FINANCIAL STATEMENTS
May 31, 2000 (Unaudited)
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, cash or liquid 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).
There were no transactions in futures contracts during the period ended May
31, 2000.
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, as amended, 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, 2000, are payments retained by Van Kampen
of approximately $1,437,700.
7. BORROWINGS
In accordance with its investment policies, the Fund may borrow from banks for
temporary purposes and is subject to certain other customary restrictions.
Effective November 30, 1999, the Fund, in conjunction with certain other funds
of Van Kampen, has entered in to a $650,000,000 committed line of credit
facility with a group of banks which expires on November 28, 2000, but is
renewable with the consent of the participating banks. Each Fund is permitted to
utilize the facility in accordance with the restrictions of its prospectus. In
the event the demand for the credit facility meets or exceeds $650 million on a
complex-wide basis, each Fund will be limited to its pro-rata percentage based
on the net assets of each participating fund. Interest on borrowings is charged
under the agreement at a rate of 0.50% above the federal funds rate per annum.
An annual commitment fee of 0.09% per annum is charged on the unused portion of
the credit facility, which each fund incurs based on its pro-rate percentage of
quarterly net assets. The Fund has not borrowed against the credit facility
during the period.
65
<PAGE> 67
VAN KAMPEN FUNDS
THE VAN KAMPEN
FAMILY OF FUNDS
Growth
Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth*
Mid Cap Growth
Pace
Select Growth
Small Cap Value
Tax Managed Equity Growth
Technology
Growth and Income
Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
International Magnum
Latin American
Strategic Income
Tax Managed Global Franchise
Worldwide High Income
Income
Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income
Capital Preservation
Reserve
Tax Free Money
Senior Loan
Prime Rate Income Trust
Senior Floating Rate
Tax Free
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal**
Insured Tax Free Income
Intermediate Term Municipal
Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
To find out more about any of these funds, ask your financial advisor for a
prospectus, which contains more complete information, including sales charges,
risks, and ongoing expenses. Please read it carefully before you invest or send
money.
To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:
- visit our Web site at
WWW.VANKAMPEN.COM--
to view a prospectus, select
Download Prospectus [COMPUTER ICON]
- 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.
[PHONE ICON]
- e-mail us by visiting
WWW.VANKAMPEN.COM and
selecting Contact Us
[MAIL ICON]
* Closed to new investors
** Open to new investors for a limited time
66
<PAGE> 68
FUND OFFICERS AND IMPORTANT ADDRESSES
VAN KAMPEN HIGH YIELD MUNICIPAL FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
JERRY D. CHOATE
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RICHARD F. POWERS, III*
President
STEPHEN L. BOYD*
Executive Vice President and
Chief Investment Officer
A. THOMAS SMITH III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
RICHARD A. CICCARONE*
WAYNE D. GODLIN*
JOHN R. REYNOLDSON*
MICHAEL H. SANTO*
JOHN H. ZIMMERMANN, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
INVESTMENT SUBADVISER
VAN KAMPEN ADVISORS INC.
40 Broad Street, Suite 915
Boston, Massachusetts 02109
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 218256
Kansas City, Missouri 64121-8256
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 AUDITORS(1)
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
(1) Independent auditors for the Fund perform an annual audit of the Fund's
financial statements. The Board of Trustees has engaged Ernst & Young LLP
to be the Fund's independent auditors. PricewaterhouseCoopers LLP has
ceased being the Fund's independent auditors effective May 18, 2000. The
cessation of the client-auditor relationship between the Fund and
PricewaterhouseCoopers was based solely on a possible future business
relationship by PricewaterhouseCoopers with an affiliate of the Fund's
investment adviser.
* "Interested persons" of the Fund, as defined in the Investment Company Act of
1940, as amended.
(C) Van Kampen Funds Inc., 2000. All rights reserved.
(SM) denotes a service mark of Van Kampen Funds 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 charges on
shares of the Fund, and other pertinent
data. After October 31, 2000, the report, if used with prospective investors,
must be accompanied by a quarterly performance update.
67
