VAN KAMPEN AMERICAN CAPITAL TRUST, N-30D, 1996-02-28

VAN KAMPEN AMERICAN CAPITAL TRUST
N-30D, 1996-02-28

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<PAGE> 1

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Portfolio Management Review...................... 4
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 14
Statement of Operations.......................... 15
Statement of Changes in Net Assets............... 16
Financial Highlights............................. 17
Notes to Financial Statements.................... 20
</TABLE>

HYF SAR 2/96
<PAGE> 2

LETTER TO SHAREHOLDERS

January 30, 1996

Dear Shareholder,
For most investors, it would be
hard to surpass the success enjoyed
during the second half of 1995. After
getting off to a strong start in the
first half of the year, the stock and [PHOTO]
bond markets continued to achieve
substantial gains, driven by a
combination of continuing economic
growth and low inflation. The strength
of equity and fixed-income securities
throughout 1995 was particularly
impressive because it followed a year DENNIS J. MCDONNELL AND DON G.
in which both markets declined. People POWELL
who remained invested during 1995
generally shared in the growth of the markets, while those investors who
retreated after 1994's downturn may have missed out on the double-digit returns.
The rebound in the markets last year reinforces the importance of
maintaining a long-term perspective for your investments. While the environment
for stocks and bonds remains positive, it is unlikely that 1996 will see a
repeat of the markets' strong 1995 performance. However, over the long-term,
stocks have outperformed virtually all other types of investments, and bonds
have met the needs of investors who seek capital preservation and regular
income.

ECONOMIC OVERVIEW

The rate of economic growth slowed during the second half of 1995, as
measured by the gross domestic product (the value of all goods and services
produced in the United States). GDP grew at an annual rate of more than 4.2
percent in the third quarter of 1995, but slowed to an estimated 2 to 3 percent
in the fourth quarter, with retail and auto sales particularly sluggish. The
slower growth rate eased concerns about a rise in inflation and allowed the
Federal Reserve Board in late December to lower short-term interest rates by a
quarter-percentage point. The reduction in rates during the latter half of 1995
is expected to help generate moderate economic growth in 1996, just as the Fed's
raising of short-term rates in 1994 helped slow economic growth in 1995.
The cut in short-term rates, combined with modest growth forecasts, was
viewed by the financial markets as a positive event, pushing up both stock and
bond prices. For the six months ended December 31, 1995, the Standard & Poor's
500-Stock Index achieved a total return of 14.40 percent. The yield on 10-year
Treasury notes was 5.57 percent on December 31, compared to 6.20 percent on June
30. Bond prices and yields move in opposite directions, so bond prices rose.
Many observers expect the Fed to cut rates further if Congress and the President
are able to reach an agreement on the federal budget, provided economic
conditions justify further easing.
With a low inflation, low interest rate environment, corporate earnings
remained quite strong during the year, helping to push stocks to new highs. The
strongest sectors were technology and finance, as these stocks benefited from
the impact of the Internet, telecommunications deregulation and bank mergers.
U.S. companies with global operations also did well, aided by a declining U.S.
dollar.

Continued on page two

1
<PAGE> 3

ECONOMIC OUTLOOK

Looking ahead, we are cautiously optimistic. We expect the economy to grow
at a rate of 2 to 3 percent throughout 1996, with growth stronger in the second
half of the year as the full impact of the Fed's rate cuts take effect. Lower
rates will have the greatest impact on interest-sensitive industries, such as
housing. Although inflation appears to be under control, there probably will be
some cyclical upward pressure in 1996.
The current economic conditions are ideal for stocks, especially those of
smaller companies, because they tend to be affected less by economic cycles. The
outlook for the fixed-income market--including municipal bonds--is positive,
too. In the near-term, we believe domestic markets will benefit from a stable
U.S. dollar and increased business activity driven in part by a number of
strategic reorganizations of some of the nation's blue chip industry leaders.
During recent months, debate over tax reform and the federal deficit has
dominated the agenda in Washington. Now that we are in a presidential election
year, tax reform likely will replace the budget battle as the top issue in
Washington. There has been varied speculation about the impact of these issues
on the economy and on various types of investments. We are following the tax
reform debate very closely, and we will keep you updated on this issue
throughout the year. See the winter issue of Your Portfolio for a detailed
discussion of tax reform.
On the following pages, you can read about your Fund's performance in 1995,
as well as the portfolio management team's outlook for the Fund in the coming
months. We hope that you will find this information helpful.

CORPORATE NEWS

As part of our commitment to helping you achieve your investment goals, Van
Kampen American Capital strives to provide shareholders with the best service in
the mutual fund industry. That is why we are especially pleased to have received
the 1995 Quality Tested Service Seal, which is awarded annually by DALBAR, Inc.,
an independent research firm. The Seal, which symbolizes the achievement of the
highest tier of service in the mutual fund industry, was awarded to American
Capital annually from 1990 to 1994 and we are honored that the service provided
by Van Kampen American Capital has achieved the same level of excellence.

Sincerely,

Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.

Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.

2
<PAGE> 4

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1995

VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
One-year total return based on NAV(1).. 17.52% 16.63% 16.50%
One-year total return(2)............... 11.94% 12.63% 15.50%
Five-year average annual total
return(2)............................ 15.03% N/A N/A
Life-of-Fund average annual total
return(2)............................ 7.95% 6.24% 6.38%
Commencement date...................... 06/27/86 05/17/93 08/13/93
DISTRIBUTION RATE AND YIELD
Distribution rate(3)................... 9.57% 9.30% 9.30%
SEC Yield(4)........................... 8.50% 8.14% 8.15%
N/A = Not Applicable
</TABLE>

(1)Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (4.75% for A shares) or contingent deferred
sales charge for early withdrawal (4% for B shares and 1% for C shares).

(2)Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (4.75% for all A shares)
or contingent deferred sales charge for early withdrawal (4% for B shares and 1%
for C shares).

(3)Distribution rate represents the monthly annualized distributions of the Fund
at the end of the period and not the earnings of the Fund.

(4)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 December 30, 1995. Had
certain expenses of the Fund not been assumed by VKAC, the SEC Yield would have
been 8.49%, 8.13% and 8.14% for Classes A, B and C, respectively and total
returns would have been lower.

See the Fund Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth more
or less than their original cost.

3
<PAGE> 5

PORTFOLIO MANAGEMENT REVIEW

VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND

We recently spoke with the management team of the Van Kampen American Capital
High Yield Fund about the key events and economic forces which shaped the
markets during the first half of the Fund's fiscal year. The team includes Anne
K. Lorsung, portfolio manager, and Robert C. Peck, Jr., executive vice president
for fixed-income investments, Van Kampen American Capital Investment Advisory
Corp. The following excerpts reflect their views on the Fund's performance
during the six-month period ended December 31, 1995.

<TABLE>
<S> <C>
HOW WOULD YOU CHARACTERIZE THE MARKET CONDITIONS IN WHICH THE
Q FUND OPERATED OVER THE LAST SIX MONTHS OF 1995?

The focus of attention in the high yield market was the effect
A of slower-than-expected economic growth on corporate earnings.
The economy showed signs of a persistent, moderate upward
trend, but it did not build enough momentum to ease worries
about some
of the more highly leveraged companies that issue high yield debt.
</TABLE>

In an environment of slow growth and weaker earnings, the risk of default
increases among the more cyclical companies, such as those in the steel, paper,
and retail industries. As a result, the market was a bit jittery at times,
causing it to react severely to negative news, which brought about a dramatic
sell-off in a few of the weaker credits.

Fortunately, that was not the norm, and the Fund's net asset value was not
hurt by defaulting securities. Even though the default rate within the high
yield market was somewhat higher during 1995 than in recent years, prices held
up in general and were basically flat during the second half of 1995. High yield
bonds generally earned their coupon (stated interest rate), but did not provide
a great deal of price appreciation during this time frame.

The biggest price movements were in the Treasury market, where the slow
economy, low inflation, and falling interest rates brought on a strong rally. As
a result, the spread (difference in yield) between high yield securities and
Treasury securities was wider at the end of the year than it was at mid-year.
This reflects the perceived increase in risk of high yield securities due to
slower economic growth.

<TABLE>
<S> <C>
Q HOW DID YOU REACT TO THESE CONDITIONS?

Because of sluggish economic growth, we have remained
A underweighted in cyclical industries since reducing our
exposure to that sector earlier in the year. We have instead
focused on issues in more defensive--or at least less
cyclical--sectors, such as cable television and
telecommunications. This worked in our favor throughout the third and
fourth quarters of 1995.
</TABLE>

We have also maintained a significant allocation to foreign holdings, both
in European government securities and emerging market securities. These
securities have provided high yields and reduce the impact on the portfolio of
slower U.S. economic growth. We expect to maintain 15 to 20 percent of the
Fund's assets in the foreign sector.

Portfolio Allocations by Sector as of December 31, 1995

<TABLE>
<S> <C>
Buildings & Real Estate....... 8.0%
Containers, Packaging
& Glass..................... 4.7%
Diversified/Conglomerate
Manufacturing............... 5.5%
Hotel, Motel, Inns & Gaming... 5.0%
Oil & Gas..................... 7.3%
Printing, Publishing
& Broadcasting.............. 9.7%
Telecommunications............ 8.9%
Foreign....................... 16.5%
Grocery....................... 3.8%
Healthcare.................... 3.9%
Insurance..................... 3.6%
Other*........................ 23.1%

</TABLE>
*Other consists of 14 sectors, each under 3.5%

4
<PAGE> 6

We think our recent emphasis on foreign holdings has been--and will be--an
important move for the Fund. First of all, it positions the portfolio in a
sector of the market which should benefit from an increased demand for higher
yielding securities, especially if interest rates in the U.S. and abroad
continue to fall. Second, it has enabled us to put more of the Fund's cash to
work. We ended fiscal year 1995 with a cash position of about 15 percent, but
the portfolio is now down to around 8 percent (as of December 31, 1995). Our
goal in 1996 is to further decrease our cash position, perhaps to the 3 to 5
percent range.

Finally, our philosophy has been to be very selective in our portfolio
commitments, and to achieve significant diversification within the portfolio.
The largest exposure to any single long-term issue is less than 2 percent of the
Fund's total assets, yet our level of credit quality is generally higher than is
typical of a high yield mutual fund. Much of this we believe is due to the size
and skill of our credit research team, which includes six analysts dedicated
solely to the evaluation of high yield securities.

<TABLE>
<S> <C>
Q HOW HAS THE FUND PERFORMED DURING THIS REPORTING PERIOD?

Reflecting the lower interest rate environment that we've seen
A since the first quarter of 1995, the Fund's dividend was
decreased effective January 1, 1996. The Fund's Class A share
monthly dividend as of January 1, 1996, was $0.0750 per share,
which translates
into a distribution rate of 8.97 percent based on the maximum offering
price of $10.03 per share on December 31, 1995.
</TABLE>

For the six-month period, Class A shares generated a total return at net
asset value of 6.85 percent1, compared to the 5.97 percent total return in the
First Boston High Yield Index over the same time period. The Index is a
broad-based, unmanaged index that reflects the general performance of a wide
range of selected bonds within the public high yield debt market. It does not
reflect any commissions or fees that would be paid by an investor purchasing the
securities it represents. (Please refer to the chart on page three for
additional Fund performance results.)

<TABLE>
<S> <C>
Q WHAT IS YOUR OUTLOOK FOR THE MARKET IN THE MONTHS AHEAD?

In the high yield bond market, the condition of the economy
A probably will be a greater factor than the direction of
interest rates. A reasonable rate of economic growth is
important to the financial fitness of companies which have
high yield debt outstanding. The
</TABLE>

Federal Reserve has taken steps to control inflation and keep the economy
growing, but there tends to be a lag between the Fed's actions and any visible
result in the economy, so the first part of 1996 could challenge further the
viability of weaker credits in the marketplace.

Because of its emphasis on better quality credits and foreign issues, we
feel the Fund is appropriately positioned for an economic environment of slow
growth, low inflation and generally declining yields. However, we retain the
flexibility to adapt to changing conditions. If the economy strengthens, we are
in a position to shift assets into more cyclical issues, and we may consider
reducing our foreign holdings in favor of attractive domestic issues. In any
case, we will continue to be vigilant in looking for opportunities to add value
to the portfolio.

<TABLE>
<S> <C>
Robert C. Peck, Jr. Anne K. Lorsung
Executive Vice President Portfolio Manager
Fixed Income Investments
</TABLE>

Please see footnotes on page three

5
<PAGE> 7

PORTFOLIO OF INVESTMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- --------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS 70.0%
AEROSPACE & DEFENSE 1.0%
1,200 Sequa Corp............................ 9.625% 10/15/99 $ 1,188,000
2,600 Sequa Corp............................ 9.375 12/15/03 2,450,500
------------
3,638,500
------------
AUTOMOBILE 1.1%
500 Chrysler Financial Corp. (Var. Rate
Cpn.)................................. 10.340 05/15/08 508,750
3,150 Exide Corp............................ 10.000 04/15/05 3,417,750
------------
3,926,500
------------
BEVERAGE, FOOD & TOBACCO 1.0%
900 Fleming Cos. Inc. (Var. Rate Cpn.).... 8.125 12/15/01 774,000
3,000 Pilgrims Pride Corp................... 10.875 08/01/03 2,685,000
------------
3,459,000
------------
BUILDINGS & REAL ESTATE 6.8%
2,900 American Standard Inc................. 10.875 05/15/99 3,211,750
1,700 American Standard Inc................. 11.375 05/15/04 1,882,750
4,800 Building Material Corp. (b)........... 0/11.750 07/01/04 3,264,000
3,500 Schuller International Group Inc...... 10.875 12/15/04 3,955,000
3,500 Southdown Inc......................... 14.000 10/15/01 3,850,000
3,600 Value Property Trust.................. 11.125 09/29/02 3,636,000
4,400 Walter Industries Inc................. 12.190 03/15/00 4,455,000
------------
24,254,500
------------
CHEMICALS, PLASTICS & RUBBER 0.7%
2,300 G I Holdings Inc...................... * 10/01/98 1,776,750
500 NL Industries Inc..................... 11.750 10/15/03 535,000
------------
2,311,750
------------
CONTAINERS, PACKAGING & GLASS 4.0%
550 Anchor Glass Container Corp........... 10.250 06/30/02 448,250
700 Anchor Glass Container Corp........... 9.875 12/15/08 427,000
2,200 Atlantis Group Inc. (d)............... 11.000 02/15/03 1,925,000
950 Owens Illinois Inc.................... 10.250 04/01/99 983,250
900 Owens Illinois Inc.................... 10.500 06/15/02 958,500
2,050 Owens Illinois Inc.................... 11.000 12/01/03 2,326,750
2,100 S.D. Warren Co........................ 12.000 12/15/04 2,320,500
5,130 Silgan Holdings Inc. (b).............. 0/13.250 12/15/02 4,911,975
------------
14,301,225
------------
</TABLE>

See Notes to Financial Statements

6
<PAGE> 8

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
DIVERSIFIED/CONGLOMERATE
MANUFACTURING 4.7%
3,400 Communications & Power Industries Inc.
(c)................................... 12.000% 08/01/05 $ 3,502,000
3,395 IMO Industries Inc.................... 12.250 08/15/97 3,411,975
4,250 Jordan Industries Inc................. 10.375 08/01/03 3,612,500
2,150 Republic Engineered Steels Inc........ 9.875 12/15/01 1,940,375
1,800 Talley Industries Inc. (b)............ 0/12.250 10/15/05 1,345,500
2,900 Talley Manufacturing & Technology
Inc................................... 10.750 10/15/03 2,914,500
------------
16,726,850
------------
ECOLOGICAL 1.4%
3,300 Envirosource Inc...................... 9.750 06/15/03 2,887,500
2,200 Norcal Waste Systems Inc. (b)......... 12.50/13.50 11/15/05 2,227,500
------------
5,115,000
------------
ELECTRONICS 1.5%
4,200 Bell & Howell Holdings Co. (b)........ 0/11.500 03/01/05 2,761,500
2,550 Computervision........................ 11.375 08/15/99 2,683,875
------------
5,445,375
------------
FARMING & AGRICULTURE 0.8%
2,900 Trans Resources Inc................... 11.875 07/01/02 2,682,500
------------
GROCERY 3.3%
3,200 Pantry Inc. .......................... 12.000 11/15/00 3,152,000
4,300 Pathmark Stores Inc. ................. 9.625 05/01/03 4,181,750
3,000 Purity Supreme Inc. .................. 11.750 08/01/99 3,292,500
900 Safeway Inc. ......................... 9.350 03/15/99 965,250
------------
11,591,500
------------
HEALTHCARE 3.3%
1,100 Merit Behavioral Care Corp. .......... 11.500 11/15/05 1,144,000
3,250 Ornda Healthcorp...................... 11.375 08/15/04 3,656,250
1,850 Paracelsus Healthcare Corp. .......... 9.875 10/15/03 1,868,500
4,600 Tenet Healthcare Corp. ............... 10.125 03/01/05 5,094,500
------------
11,763,250
------------
</TABLE>

See Notes to Financial Statements

7
<PAGE> 9

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
HOTEL, MOTEL, INNS & GAMING 4.2%
200 Aztar Corp. .......................... 13.750% 10/01/04 $ 222,000
4,500 California Hotel Finance Corp. ....... 11.000 12/01/02 4,770,000
3,150 GB Property Funding Corp. ............ 10.875 01/15/04 2,779,875
3,600 Hollywood Casino Inc. ................ 12.750 11/01/03 3,276,000
750 Station Casinos Inc. ................. 9.625 06/01/03 736,875
3,150 Trump Plaza Funding Inc. ............. 10.875 06/15/01 3,276,000
------------
15,060,750
------------
INSURANCE 3.1%
3,650 American Annuity Group Inc. .......... 11.125 02/01/03 3,951,125
2,750 Americo Life Inc. (d)................. 9.250 06/01/05 2,626,250
3,300 Nacolah Holding Corp. ................ 9.500 12/01/03 3,465,000
300 Orion Capital Corp. .................. 9.125 09/01/02 339,000
500 Reliance Group Holdings Inc. ......... 9.000 11/15/00 516,250
------------
10,897,625
------------
LEISURE 0.9%
3,000 Alliance Entertainment Corp. ......... 11.250 07/15/05 3,022,500
------------
MINING, STEEL, IRON & NON-PRECIOUS
METAL 2.6%
2,500 Armco Inc. ........................... 11.375 10/15/99 2,562,500
2,900 Carbide/Graphite Group Inc. .......... 11.500 09/01/03 3,146,500
3,000 Easco Corp. .......................... 10.000 03/15/01 3,015,000
650 Magma Copper Co. ..................... 11.500 01/15/02 690,625
------------
9,414,625
------------
OIL & GAS 6.2%
1,800 Clark R & M Holdings Inc. ............ * 02/15/00 1,201,500
2,700 Giant Industries Inc. ................ 9.750 11/15/03 2,733,750
4,500 Global Marine Inc. ................... 12.750 12/15/99 4,995,000
3,500 Petroleum Heat & Power Inc. .......... 12.250 02/01/05 3,902,500
2,050 Plains Resources Inc. (d)............. 12.000 10/01/99 2,147,375
3,400 TransTexas Gas Corp. ................. 11.500 06/15/02 3,502,000
550 Triton Energy Corp. .................. * 11/01/97 475,750
3,250 Triton Energy Corp. (b)............... 0/9.750 12/15/00 3,071,250
125 United Meridian Corp. ................ 10.375 10/15/05 132,500
------------
22,161,625
------------
</TABLE>

See Notes to Financial Statements

8
<PAGE> 10

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

See Notes to Financial Statements

9
<PAGE> 11

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
TELECOMMUNICATIONS 7.6%
700 Cablevision Systems Corp.............. 10.750% 04/01/04 $ 742,000
3,500 Centennial Cellular Corp.............. 10.125 05/15/05 3,692,500
2,300 Continental Cablevision Inc........... 8.300 05/15/06 2,311,500
3,150 Intermedia Communications of Florida,
Inc. (Including 3,150 common stock
warrants)............................. 13.500 06/01/05 3,528,000
2,500 IXC Communications Inc. (Var. Rate
Cpn.)................................. 13.000 10/01/05 2,675,000
3,050 Metrocall Inc......................... 10.375 10/01/07 3,248,250
2,100 Mobilemedia Communications Inc. (b)... 0/10.500 12/01/03 1,638,000
1,550 Mobilemedia Communications Inc........ 9.375 11/01/07 1,604,250
2,700 Panamsat L.P. (b)..................... 0/11.375 08/01/03 2,200,500
3,200 Pricellular Wireless Corp. (b)........ 0/14.000 11/15/01 2,816,000
800 Pricellular Wireless Corp. (b)........ 0/12.250 10/01/03 618,000
2,300 Winstar Communications Inc. (b)....... 0/14.000 10/15/05 1,219,000
1,150 Winstar Communications Inc............ * 10/15/05 609,500
------------
26,902,500
------------
TEXTILES 0.9%
3,300 Dan River Inc......................... 10.125 12/15/03 3,052,500
------------
TRANSPORTATION 0.8%
3,000 U.S. Air.............................. 8.625 09/01/98 2,955,000
------------
UTILITIES 1.5%
1,800 California Energy Inc................. 9.875 06/30/03 1,885,500
3,200 Midland Funding Corp. II.............. 11.750 07/23/05 3,352,000
------------
5,237,500
------------
Total Corporate Bonds....................................... 248,775,075
------------
FOREIGN BONDS AND DEBT
SECURITIES 14.0%
Argentina 1.7%
3,550 Federal Republic of Argentina
(Var. Rate Cpn.) (US$).......... 5.000 03/31/23 2,032,375
2,000 Sodigas Pampeana (US$)............ 10.500 07/06/99 1,947,500
2,000 Telefonica De Argentina (US$)..... 8.375 10/01/00 1,902,500
------------
5,882,375
------------
Australia 0.6%
1,300 Commonwealth of Australia (AU$)... 9.000 09/15/04 1,017,631
1,900 New South Wales Trust (AU$)....... 6.500 05/01/06 1,222,276
------------
2,239,907
------------
</TABLE>

See Notes to Financial Statements

10
<PAGE> 12

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN BONDS AND DEBT SECURITIES (CONTINUED)
Brazil 0.8%
1,900 Federal Republic of Brazil
(Var. Rate Cpn.) (US$).......... 6.688% 01/01/01 $ 1,636,375
2,600 Federal Republic of Brazil
(US$)........................... 4.250 04/15/24 1,381,250
------------
3,017,625
------------
Canada 3.2%
2,100 Doman Industries Ltd. (US$)....... 8.750 03/15/04 2,026,500
2,500 Fonorola Inc. (US$)............... 12.500 08/15/02 2,631,250
2,500 Fundy Cable Ltd. (US$)............ 11.000 11/15/05 2,631,250
400 Rogers Cantel Mobile Inc. (US$)... 10.750 11/01/01 423,000
3,600 Rogers Communications Inc.
(US$)........................... 10.875 04/15/04 3,762,000
------------
11,474,000
------------
Colombia 0.9%
3,150 Oleoducto Central South America
(US$)........................... 9.350 09/01/05 3,197,250
------------
Denmark 0.6%
5,640 Kingdom of Denmark (Kroner)....... 9.000 11/15/98 1,107,279
6,000 Kingdom of Denmark (Kroner)....... 8.000 03/15/06 1,136,677
------------
2,243,956
------------
Ecuador 0.2%
2,000 Federal Republic of Ecuador
(US$)........................... 3.000 02/28/25 725,000
------------
Indonesia 1.1%
2,750 Indah Kiat International Finance
Co. B.V. (US$).................. 11.875 06/15/02 2,784,375
900 Tjiwi Kimia International Finance
(US$)........................... 13.250 08/01/01 981,000
------------
3,765,375
------------
Italy 0.6%
1,700,000 Federal Republic of Italy
(Lira).......................... 9.000 10/01/98 1,045,824
1,650,000 Federal Republic of Italy
(Lira).......................... 10.500 04/01/00 1,047,169
------------
2,092,993
------------
Morocco 0.4%
2,000 Morocco Trust A Loan (US$) (e).... * 01/01/09 1,350,000
------------
Poland 1.2%
5,700 Government of Poland
(Var. Rate Cpn.) (US$).......... 6.875 10/27/24 4,296,375
------------
Spain 0.9%
129,500 Government of Spain (Peseta)...... 10.250 11/30/98 1,094,611
114,000 Government of Spain (Peseta)...... 12.250 03/25/00 1,031,827
125,000 Government of Spain (Peseta)...... 10.150 01/31/06 1,050,185
------------
3,176,623
------------
</TABLE>

See Notes to Financial Statements

11
<PAGE> 13

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ---------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN BONDS AND DEBT SECURITIES (CONTINUED)
Sweden 0.7%
7,000 Kingdom of Sweden (Krona)......... 10.250% 05/05/00 $ 1,132,386
7,300 Kingdom of Sweden (Krona)......... 13.000 06/15/01 1,323,295
-------------
2,455,681
-------------
United Kingdom 1.1%
1,800 International Cabletel Inc.
(US$)........................... 12.750 04/15/05 1,147,500
2,950 Telewest Plc (US$) (b)............ 0/11.000 10/01/07 1,777,375
650 United Kingdom Treasury (Pound)... 8.500 12/07/05 1,085,184
-------------
4,010,059
-------------
Total Foreign Bonds and Debt Securities................... 49,927,219
-------------
U.S. GOVERNMENT OBLIGATIONS 1.0%
3,500 U.S. Treasury Note................ 9.375 04/15/96 3,540,320
-------------
Total Debt Securities..................................... 302,242,614
-------------
EQUITIES 1.5%
American Telecasting Inc. (8,370 common stock warrants)................... 25,110
Cablevision Systems Corp. (22,204 preferred shares) (f)................... 2,292,563
Capital Gaming International Inc. (5,000 common stock warrants)........... 0
Casino America Inc. (5,873 common stock warrants)......................... 5,873
Panamsat L.P. (1,806 preferred shares) (f)................................ 2,031,750
Supermarkets General Holdings Corp. (28,600 preferred shares)............. 825,825
-------------
Total Equities.......................................................... 5,181,121
-------------
TOTAL LONG-TERM INVESTMENTS 86.5%
(Cost $297,035,454) (a)................................................... 307,423,735
-------------
SHORT-TERM INVESTMENTS 11.0%
Repurchase Agreement (State Street Bank & Trust, U.S. Treasury Note,
$24,390,000 par, 7.500% coupon, due 11/15/16, dated 12/29/95, to be sold
on 01/02/96 at $28,204,008)............................................. 28,186,000
Goldman Sachs Czech Koruna Linked CP ($3,000,000 par, yielding 10.400%,
maturing 02/22/96)...................................................... 2,977,200
J.P. Morgan Indonesian Rupiah Linked CD ($2,000,000 par, yielding 15.900%,
maturing 05/29/96)...................................................... 1,885,690
J.P. Morgan Polish Zloty Linked CD ($2,106,638 par, yielding 23.970%,
maturing 01/17/96)...................................................... 2,064,506
Mexican Cetes (17,711,500 Peso par, yielding 46.050%, maturing
05/30/96)............................................................... 1,916,896
New Zealand Treasury Bill (3,000,000 New Zealand Dollar par, yielding
8.143%, maturing 09/18/96).............................................. 1,850,719
-------------
TOTAL SHORT-TERM INVESTMENTS (Cost $38,975,038) (a)......................... 38,881,011
-------------
OTHER ASSETS IN EXCESS OF LIABILITIES 2.5%................................. 9,024,720
-------------
NET ASSETS 100%............................................................ $ 355,329,466
=============
*Zero coupon bond
</TABLE>

See Notes to Financial Statements

12
<PAGE> 14

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

(a) At December 31, 1995, cost for federal income tax purposes including
short-term investments is $336,010,492; the aggregate gross unrealized
appreciation is $12,959,731 and the aggregate gross unrealized
depreciation is $2,734,579, resulting in net unrealized appreciation
including foreign currency translation of other assets and liabilities
and forward currency contracts of $10,225,152.

(b) Security is a "Step-up" bond where the coupon increases or steps up at a
predetermined date.

(d) Assets segregated as collateral for when issued or delayed delivery
purchase commitments and open forward transactions.

(e) Security is a bank loan participation.

(f) Payment-in-kind security.

The following Table summarizes the portfolio composition at December 31, 1995,
based upon quality ratings issued by Standard & Poor's. For securities not rated
by Standard & Poor's, the Moody's rating is used.

PORTFOLIO COMPOSITION BY CREDIT QUALITY

<TABLE>
<S> <C>
AAA...................... 1.9%
AA....................... 1.2
A........................ 0.5
BBB...................... 56.3
BB....................... 23.8
B........................ 1.2
CCC...................... 1.7
Non-Rated................ 13.4
-----
100.0%
=====
</TABLE>

See Notes to Financial Statements

13
<PAGE> 15

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $297,035,454) (Note 1).............. $ 307,423,735
Short-Term Investments (Cost $38,975,038) (Note 1)..................... 38,881,011
Cash................................................................... 826
Receivables:
Interest............................................................. 6,826,258
Investments Sold..................................................... 4,706,412
Fund Shares Sold..................................................... 1,489,819
Other.................................................................. 50,187
-------------
Total Assets..................................................... 359,378,248
-------------
LIABILITIES:
Payables:
Income Distributions................................................. 1,789,424
Investments Purchased................................................ 914,033
Fund Shares Repurchased.............................................. 455,053
Investment Advisory Fee (Note 2)..................................... 220,505
Forward Currency Contracts (Note 5).................................. 37,363
Accrued Expenses....................................................... 632,404
-------------
Total Liabilities................................................ 4,048,782
-------------
NET ASSETS............................................................. $ 355,329,466
=============
NET ASSETS CONSIST OF:
Capital (Note 3)....................................................... $ 456,764,666
Net Unrealized Appreciation on Investments and Foreign Currency........ 10,225,152
Accumulated Distributions in Excess of Net Investment Income (Note
1)................................................................... (3,478,368)
Accumulated Net Realized Loss on Investments........................... (108,181,984)
-------------
NET ASSETS............................................................. $ 355,329,466
=============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net assets
of $269,349,519 and 28,195,793 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 9.55
Maximum sales charge (4.75%* of offering price).................... .48
-------------
Maximum offering price to public................................... $ 10.03
=============
Class B Shares:
Net asset value and offering price per share (Based on net assets
of $80,394,658 and 8,415,852 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 9.55
=============
Class C Shares:
Net asset value and offering price per share (Based on net assets
of $5,585,289 and 584,926 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 9.55
=============
*On sales of $100,000 or more, the sales charge will be reduced.
</TABLE>

See Notes to Financial Statements

14
<PAGE> 16

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $15,451).................. $17,261,652
Dividend................................................................ 184,226
Other................................................................... 274,078
-----------
Total Income........................................................ 17,719,956
-----------
EXPENSES:
Investment Advisory Fee (Note 2)........................................ 1,252,281
Distribution (12b-1) and Service Fees (Allocated to Classes A, B, and C
of $322,214, $333,847, and $19,066, respectively) (Note 6)............ 675,127
Shareholder Services (Note 2)........................................... 294,293
Trustees Fees and Expenses (Note 2)..................................... 31,960
Legal (Note 2).......................................................... 21,344
Other................................................................... 201,536
-----------
Total Expenses...................................................... 2,476,541
Less Expenses Reimbursed............................................ 18,943
-----------
Net Expenses........................................................ 2,457,598
-----------
NET INVESTMENT INCOME................................................... $15,262,358
===========
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS AND FOREIGN CURRENCY:
Net Realized Gain on Investments and Foreign Currency (Including
realized loss on foreign currency transactions of $313,177)........... $ 2,891,112
-----------
Unrealized Appreciation/Depreciation on Investments and Foreign
Currency:
Beginning of the Period............................................... 6,439,004
End of the Period (Including unrealized appreciation on foreign
currency translation of other assets and liabilities of $3,563 and
unrealized depreciation on forward currency contracts of $72,665)... 10,225,152
-----------
Net Unrealized Appreciation on Investments and Foreign Currency During
the Period............................................................ 3,786,148
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY.... $ 6,677,260
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $21,939,618
===========
</TABLE>

See Notes to Financial Statements

15
<PAGE> 17

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1995
And the Year Ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1995 June 30, 1995
<S> <C> <C>
- --------------------------------------------------------------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 15,262,358 $ 26,497,560
Net Realized Gain/Loss on Investments and Foreign
Currency........................................... 2,891,112 (18,692,466)
Net Unrealized Appreciation on Investments
and Foreign Currency During the Period............. 3,786,148 16,038,701
------------ ------------
Change in Net Assets from Operations................. 21,939,618 23,843,795
------------ ------------
Distributions from Net Investment Income............. (13,387,800) (25,471,594)
Distributions in Excess of Net Investment Income
(Note 1)........................................... (3,144,283) -0-
------------ ------------
Distributions from and in Excess of Net Investment
Income*.......................................... (16,532,083) (25,471,594)
Return of Capital Distribution* (Note 1)............. -0- (5,584,355)
------------ ------------
Total Distributions................................ (16,532,083) (31,055,949)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 5,407,535 (7,212,154)
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............................ 68,865,035 73,674,367
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 6,101,428 11,308,840
Cost of Shares Repurchased........................... (36,171,650) (62,721,749)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 38,794,813 22,261,458
------------ ------------
TOTAL INCREASE IN NET ASSETS......................... 44,202,348 15,049,304
NET ASSETS:
Beginning of the Period.............................. 311,127,118 296,077,814
------------ ------------
End of the Period (Including undistributed net
investment income of $(3,478,368) and $(1,895,466),
respectively)...................................... $355,329,466 $311,127,118
============ ============
</TABLE>

<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class December 31, 1995 June 30, 1995
<S> <C> <C>
--------------------------------------------------------------------------
Distributions from and in Excess of
Net Investment Income:
Class A Shares................... $ (13,263,947) $ (21,911,417)
Class B Shares................... (3,093,910) (3,405,059)
Class C Shares................... (174,226) (155,035)
Class D Shares................... N/A (83)
------------- -------------
$ (16,532,083) $ (25,471,594)
============= =============
Return of Capital Distribution:
Class A Shares................... $ -0- $ (4,709,317)
Class B Shares................... -0- (846,910)
Class C Shares................... -0- (28,115)
Class D Shares................... N/A (13)
------------- -------------
$ -0- $ (5,584,355)
============= =============
</TABLE>

See Notes to Financial Statements

16
<PAGE> 18

FINANCIAL HIGHLIGHTS

The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30
December 31, ------------------------------
Class A Shares 1995 1995 1994 1993 1992
<S> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Net Asset Value,
Beginning of Period................. $ 9.398 $ 9.643 $10.380 $ 9.896 $ 9.202
------- ------- ------- ------- -------
Net Investment Income............... .448 .844 .908 1.118 1.169
Net Realized and Unrealized
Gain/Loss on Investments and
Foreign Currency.................. .187 (.099) (.595) .566 .813
------- ------- ------- ------- -------
Total from Investment Operations...... .635 .745 .313 1.684 1.982
------- ------- ------- ------- -------
Less:
Distributions from and in Excess of
Net Investment Income (Note 1).... .480 .815 .950 1.129 1.189
Return of Capital Distribution
(Note 1).......................... -0- .175 .100 .071 .099
------- ------- ------- ------- -------
Total Distributions................... .480 .990 1.050 1.200 1.288
------- ------- ------- ------- -------
Net Asset Value, End of Period........ $ 9.553 $ 9.398 $ 9.643 $10.380 $ 9.896
======= ======= ======= ======= =======
Total Return*......................... 6.85%** 8.50% 2.92% 18.08% 22.85%
Net Assets at End of Period (In
millions)........................... $ 269.3 $ 253.3 $ 260.7 $ 251.5 $ 221.4
Ratio of Expenses to Average Net
Assets*............................. 1.31% 1.31% 1.32% 1.20% 1.42%
Ratio of Net Investment Income to
Average Net Assets*................. 9.28% 9.13% 8.85% 11.13% 12.12%
Portfolio Turnover.................... 48.88% 151.51% 202.7% 198.06% 173.97%
*If certain expenses had not been assumed by VKAC, total return would have been lower and
the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets.............................. 1.32% N/A N/A N/A N/A
Ratio of Net Investment Income to
Average Net Assets.................. 9.27% N/A N/A N/A N/A
**Non-Annualized
</TABLE>

N/A = Not Applicable

See Notes to Financial Statements

17
<PAGE> 19

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Year Year
Six Months Ended Ended May 17, 1993
Ended June June (Commencement
December 31, 30, 30, of Distribution)
Class B Shares 1995 1995 1994 to June 30, 1993
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net Asset Value, Beginning of
Period......................... $ 9.398 $ 9.638 $10.382 $10.190
------- ------- ------- -------
Net Investment Income.......... .403 .788 .889 .117
Net Realized and Unrealized
Gain/Loss on Investments and
Foreign Currency............. .196 (.115) (.665) .217
------- ------- ------- -------
Total from Investment
Operations..................... .599 .673 .224 .334
------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1).............. .444 .751 .877 .128
Return of Capital Distribution
(Note 1)..................... -0- .162 .091 .014
------- ------- ------- -------
Total Distributions.............. .444 .913 .968 .142
------- ------- ------- -------
Net Asset Value, End of Period... $ 9.553 $ 9.398 $ 9.638 $10.382
======= ======= ======= =======
Total Return*.................... 6.44%** 7.61% 2.11% 3.27%**
Net Assets at End of Period (In
millions)...................... $ 80.4 $ 55.9 $ 33.2 $ 2.7
Ratio of Expenses to Average Net
Assets*........................ 2.07% 2.04% 2.13% 2.06%
Ratio of Net Investment Income to
Average Net Assets*............ 8.49% 8.35% 7.94% 7.17%
Portfolio Turnover............... 48.88% 151.51% 202.70% 198.06%
*If certain expenses had not been assumed by VKAC, total return would have been lower
and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets......................... 2.08% N/A N/A N/A
Ratio of Net Investment Income to
Average Net Assets............. 8.48% N/A N/A N/A
**Non-Annualized
</TABLE>

N/A = Not Applicable.

See Notes to Financial Statements

18
<PAGE> 20

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Year
Six Months Ended August 13, 1993
Ended June (Commencement of
December 31, 30, Distribution) to
Class C Shares 1995 1995 June 30, 1994
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------
Net Asset Value, Beginning of Period... $ 9.396 $ 9.643 $10.340
------- ------- -------
Net Investment Income................ .426 .745 .761
Net Realized and Unrealized Loss on
Investments and Foreign Currency... .171 (.079) (.605)
------- ------- -------
Total from Investment Operations....... .597 .666 .156
------- ------- -------
Less:
Distributions from and in Excess of
Net Investment Income (Note 1)..... .444 .751 .763
Return of Capital Distribution (Note
1)................................. -0- .162 .090
------- ------- -------
Total Distributions.................... .444 .913 .853
------- ------- -------
Net Asset Value, End of Period......... $ 9.549 $ 9.396 $ 9.643
======= ======= =======
Total Return*.......................... 6.45%** 7.61% 1.37%**
Net Assets at End of Period (In
millions)............................ $ 5.6 $ 2.0 $ 2.2
Ratio of Expenses to Average Net
Assets*.............................. 2.07% 2.12% 2.14%
Ratio of Net Investment Income to
Average Net Assets*.................. 8.39% 8.13% 7.91%
Portfolio Turnover..................... 48.88% 151.51% 202.70%
*If certain expenses had not been assumed by VKAC, total return would have been lower
and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets............................... 2.08% N/A N/A
Ratio of Net Investment Income to
Average Net Assets................... 8.38% N/A N/A
**Non-annualized
</TABLE>

N/A = Not Applicable

See Notes to Financial Statements

19
<PAGE> 21

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen American Capital High Yield Fund (the "Fund") is organized as a
series of Van Kampen American Capital Trust, a Delaware business trust (the
"Trust"), and is registered as a diversified open-end management investment
company under the Investment Company Act of 1940, as amended. The Fund's primary
investment objective is to provide a high level of current income through
investment in medium and lower grade domestic corporate debt securities. The
Fund also may invest up to 35% of its assets in foreign government and corporate
debt securities of comparable quality. The Fund commenced investment operations
on June 27, 1986. The Fund commenced distribution of its Class B and C shares on
May 17, 1993 and August 13, 1993, respectively.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.

A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost.

B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Fund may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Fund will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.

C. INVESTMENT INCOME AND EXPENSES--Interest income and expenses are recorded on
an accrual basis. Dividend income is recorded on the ex-dividend date. Bond
discount is amortized over the expected life of each applicable security.

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.

20
<PAGE> 22

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

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 such losses against any future realized capital
gains. At June 30, 1995, the Fund had an accumulated capital loss carryforward
for tax purposes of $102,028,402. Of this amount, $4,105,907, $55,057,263,
$30,093,392, $45,384 and $12,726,456 will expire on June 30, 1998, 1999, 2000,
2002 and 2003, respectively. Net realized gains or losses may differ for
financial and tax reporting purposes primarily as a result of post October 31
losses which are not recognized for tax purposes until the first day of the
following fiscal year.

E. DISTRIBUTION OF INCOME AND GAINS--The Fund declares daily and pays monthly
dividends from net investment income. Net investment income for federal income
tax purposes includes gains and losses realized on foreign currency
transactions. These gains and losses are included as net realized gains and
losses for financial reporting purposes. Permanent book and tax basis
differences resulting from these items totaling $313,177 were reclassified from
accumulated net realized gain/loss on investments to accumulated undistributed
net investment income.

Due to inherent differences in the recognition of interest income under
generally accepted accounting principles and federal income tax purposes, for
those securities which the Fund has placed on non-accrual status, the amount of
distributable net investment income may differ between book and federal income
tax purposes for a particular period. These differences are temporary in nature,
but may result in book basis distributions in excess of net investment income
for certain periods.

Net realized gains, if any, are distributed annually. Distributions from net
realized gains for book purposes may include short-term capital gains, which are
included as ordinary income for tax purposes.

For tax purposes, the determination of a return of capital distribution is
made at the end of the Fund's fiscal year. Therefore, while it is likely that a
portion of the Fund's distributions will ultimately be characterized as a return
of capital for tax purposes, no such designation has been made for the six
months ended December 31, 1995.

21
<PAGE> 23

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

F. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars at the mean of the quoted bid and ask prices of such currencies
against the U.S. dollar. Purchases and sales of portfolio securities are
translated at the rate of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated at rates prevailing when accrued.

G. BANK LOAN PARTICIPATIONS--The Fund invests in participation interests of
loans to foreign entities. When the Fund purchases a participation of a foreign
loan interest, the Fund typically enters into a contractual agreement with the
lender or other third party selling the participation, but not with the borrower
directly. As such, the Fund assumes credit risk for the borrower, selling
participant or other persons positioned between the Fund and the borrower.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen American
Capital Investment Advisory Corp. (the "Adviser") will provide investment advice
and facilities to the Fund for an annual fee payable monthly as follows:

<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
<S> <C>
- -------------------------------------------------------------------------
First $500 million.................................. .75 of 1%
Over $500 million................................... .65 of 1%
</TABLE>

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.

For six months ended December 31, 1995, the Fund recognized expenses of
approximately $19,500 representing VKAC's cost of providing accounting, cash
management and legal services to the Fund.

In July, 1995, the Fund began using ACCESS Investor Services, Inc., an
affiliate of the Adviser, as the transfer agent of the Fund. For the six months
ended December 31, 1995, the Fund recognized expenses of approximately $193,500,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.

Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.

22
<PAGE> 24

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

who are not officers of VKAC. The Fund's liability under the deferred
compensation and retirement plans at December 31, 1995, was approximately
$47,200.

At December 31, 1995, VKAC owned 100 shares each of Classes B and C,
respectively.

3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of common shares, Classes A, B and C,
each with a par value of $.01 per share. There are an unlimited number of shares
of each class authorized. At December 31, 1995, capital aggregated $370,248,703,
$80,873,700 and $5,642,263 for Class A, B and C shares, respectively. For the
six months ended December 31, 1995, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Sales:
Class A.................................... 3,907,621 $ 37,038,608
Class B.................................... 2,870,945 27,231,942
Class C.................................... 484,541 4,594,485
---------- ------------
Total Sales.................................. 7,263,107 $ 68,865,035
========== ============
Dividend Reinvestment:
Class A.................................... 517,845 $ 4,912,154
Class B.................................... 117,773 1,117,733
Class C.................................... 7,542 71,541
---------- ------------
Total Dividend Reinvestment.................. 643,160 $ 6,101,428
========== ============
Repurchases:
Class A.................................... (3,180,992) $(30,154,285)
Class B.................................... (516,257) (4,889,978)
Class C.................................... (119,084) (1,127,387)
---------- ------------
Total Repurchases............................ (3,816,333) $(36,171,650)
========== ============
</TABLE>

23
<PAGE> 25

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1995, capital aggregated $358,452,226, $57,414,003 and
$2,103,624 for Class A, B and C shares, respectively. For the year ended June
30, 1995, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- --------------------------------------------------------------------------
Sales:
Class A.................................... 4,486,285 $ 41,415,162
Class B.................................... 3,320,361 30,775,474
Class C.................................... 160,125 1,483,731
Class D.................................... -0- -0-
---------- ------------
Total Sales.................................. 7,966,771 $ 73,674,367
========== ============
Dividend Reinvestment:
Class A.................................... 1,055,695 $ 9,744,229
Class B.................................... 159,582 1,472,222
Class C.................................... 10,007 92,378
Class D.................................... 1 11
---------- ------------
Total Dividend Reinvestment.................. 1,225,285 $ 11,308,840
========== ============
Repurchases:
Class A.................................... (5,626,205) $(51,959,218)
Class B.................................... (978,937) (9,050,461)
Class C.................................... (186,357) (1,710,842)
Class D.................................... (121) (1,228)
---------- ------------
Total Repurchases............................ (6,791,620) $(62,721,749)
========== ============
</TABLE>

Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). The CDSC will be imposed
on most redemptions made within six years of the purchase for Class B and one
year of the purchase for Class C as detailed in the following schedule. The
Class B and C shares bear the expense of their respective deferred sales
arrangements, including higher distribution and service fees and incremental
transfer agency costs.

24
<PAGE> 26

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
- -------------------------------------------------------------------------
First............................................ 4.00% 1.00%
Second........................................... 3.75% None
Third............................................ 3.50% None
Fourth........................................... 2.50% None
Fifth............................................ 1.50% None
Sixth............................................ 1.00% None
Seventh and Thereafter........................... None None
</TABLE>

For the six months ended December 31, 1995, VKAC, as Distributor for the
Fund, received net commissions on sales of the Fund's Class A shares of
approximately $65,500 and CDSC on the redeemed shares of Classes B and C of
approximately $90,400. Sales charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the year ended December 31, 1995, were $180,508,412 and
$141,577,723, 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, foreign currency
exposure, 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 on investments. Upon
disposition, a realized gain or loss is recognized accordingly.

During the period, the Fund entered into forward currency contracts, a type
of derivative. These instruments are commitments to purchase or sell a foreign
currency at a future date at a negotiated forward rate. The gain or loss arising
from the difference between the original value of the contract and the closing
value of such contract is included as a component of realized gain/loss on
investments and foreign currency.

25
<PAGE> 27

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1995, the Fund has outstanding forward currency contracts as
follows:

<TABLE>
<CAPTION>
UNREALIZED
ORIGINAL CURRENT APPRECIATION
FORWARD CURRENCY CONTRACTS VALUE VALUE /DEPRECIATION
<S> <C> <C> <C>
- ----------------------------------------------------------------------------
Sells to Open
Swiss Franc, expiring 02/21/96 to
06/24/96.......................... $3,760,185 $3,823,306 $(63,121)
German Deutsche Mark, expiring
02/21/96 to 06/10/96.............. 4,473,926 4,515,835 (41,909)
Japanese Yen, expiring 6/24/96...... 2,000,000 1,967,635 32,365
--------
$(72,665)
========
</TABLE>

At December 31, 1995, the Fund had realized gains on closed but unsettled
forward currency contracts of $35,302 scheduled to settle February 21, 1996.

6. DISTRIBUTION AND SERVICE PLANS

The Fund and its shareholders have adopted a distribution plan (the
"Distribution Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940 and a service plan (the "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 shares and 1.00% each
for Class B and Class C shares are accrued daily. Included in these fees for the
six months ended December 31, 1995, are payments to VKAC of approximately
$248,600.

26
<PAGE> 28

FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL

GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund

EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund

FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income

TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free
Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Limited Term Municipal
Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund

THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund

Ask your investment adviser for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.

27
<PAGE> 29
VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
DONALD C. MILLER - Chairman
JACK E. NELSON
DON G. POWELL*
JEROME L. ROBINSON
FERNANDO SISTO
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE

OFFICERS

DON G. POWELL*
President and Chief Executive Officer
DENNIS J. MCDONNELL*
Executive Vice President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller

WILLIAM N. BROWN*
PETER W. HEGEL*
ROBERT C. PECK, JR.*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

DISTRIBUTOR

VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

TRANSFER AGENT

ACCESS INVESTOR
SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606

INDEPENDENT AUDITORS

KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601

* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C) Van Kampen American Capital Distributors, Inc., 1996 All rights reserved.

SM denotes a service mark of Van Kampen American Capital Distributors, Inc.

This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data.
28
<PAGE> 30

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Portfolio Management Review...................... 4
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 8
Statement of Operations.......................... 9
Statement of Changes in Net Assets............... 10
Financial Highlights............................. 11
Notes to Financial Statements.................... 14
</TABLE>

SIGI SAR 2/96
<PAGE> 31

LETTER TO SHAREHOLDERS

January 30, 1996

Dear Shareholder:
For most investors, it would be
hard to surpass the success enjoyed
during 1995. The U.S. stock and bond
markets achieved substantial gains,
driven by a combination of continuing
economic growth and low inflation, and [PHOTO]
many foreign markets also enjoyed
attractive returns. The strength of the
U.S. equity and fixed-income markets in
1995 was particularly impressive
because it followed a year in which
both markets declined. People who DENNIS J. MCDONNELL AND DON G. POWELL
remained invested during 1995 generally
shared in the growth of the markets,
while those investors who retreated after 1994's downturn may have missed out on
the double-digit returns.
The rebound in the markets last year reinforces the importance of
maintaining a long-term perspective for your investments, and of maintaining a
diversified portfolio of domestic and foreign investments. While the environment
for stocks and bonds in many major markets remains positive, it is unlikely that
1996 will see a repeat of the U.S. markets' strong 1995 performance. However,
over the long-term, stocks have outperformed virtually all other types of
investments, bonds have met the needs of investors who seek capital preservation
and regular income, and foreign securities provide portfolio diversification.

ECONOMIC OVERVIEW
The U.S. economy grew throughout 1995, though the rate of growth slowed
toward year-end. The gross domestic product (the value of all goods and services
produced in the United States) grew at an annual rate of more than 4.2 percent
in the third quarter of 1995, but slowed to an estimated 2 to 3 percent in the
fourth quarter, with retail and auto sales particularly sluggish. The slower
growth rate eased concerns about a rise in inflation and allowed the Federal
Reserve Board to lower short-term interest rates by a quarter-percentage point
in late December. The reduction in rates during the latter half of 1995 is
expected to help generate moderate economic growth in 1996, just as the Fed's
raising of short-term rates in 1994 helped slow economic growth in 1995.
The cut in short-term rates, combined with modest growth forecasts, was
viewed by the financial markets as a positive event, pushing up both stock and
bond prices. For the year ended December 31, 1995, the Standard & Poor's
500-Stock Index achieved a total return of 37.45 percent. The yield on 10-year
Treasury notes was 5.57 percent on December 31, compared to 7.83 percent at the
beginning of the year. Because bond prices and yields move in opposite
directions, bond prices rose. Many observers expect the Fed to cut rates further
if Congress and the President are able to reach an agreement on the federal
budget, provided economic conditions justify further easing.
A number of major stock and bond markets overseas also did well in 1995.
Among foreign stock markets, the larger European markets--such as the United
Kingdom and Germany--lagged the smaller European markets due to their tight
monetary policy (keeping short-term rates relatively high), which was driven by
their fear of inflation.

Continued on page two

1
<PAGE> 32

Among the smaller European stock markets, such as Switzerland and Sweden, stocks
on average have appreciated in dollar terms on par with the S&P 500.
In the fixed-income markets, those countries regarded as being in the U.S.
dollar bloc performed well, particularly in Canada and Australia. These markets
are highly influenced by events in the United States and have tended to mirror
its economic trends.

ECONOMIC OUTLOOK
We believe foreign markets will continue to be influenced by U.S. interest
rate movements and trends in corporate profitability and foreign exchange rates.
This was recently apparent when several countries, including France, England and
Germany, lowered short-term interest rates in early December. We believe this
reflects a global trend toward lower interest rates, as inflation fears continue
to subside around the world.
In terms of the U.S. markets, we are cautiously optimistic. We expect the
domestic economy to grow at a rate of 2 to 3 percent throughout 1996, with
growth stronger in the second half of the year as the full impact of the Fed's
rate cuts take effect. Lower rates will have the greatest impact on
interest-sensitive industries, such as housing. Although inflation appears to be
under control, there probably will be some cyclical upward pressure in 1996.
The current economic conditions are ideal for stocks, especially those of
smaller companies, because they tend to be affected less by economic cycles. The
outlook for the fixed-income market is positive, too. In the near-term, we
believe domestic markets will benefit from a stable U.S. dollar and increased
business activity driven in part by a number of strategic reorganizations of
some of the nation's blue chip industry leaders.
During recent months, debate over tax reform and the federal deficit has
dominated the agenda in Washington. Now that we are in a presidential election
year, tax reform likely will replace the budget battle as the top issue in
Washington. There has been varied speculation about the impact tax reform could
have on the economy and on various types of investments. We are following the
tax reform debate very closely, and we will keep you updated on this issue
throughout the year. See the winter issue of Your Portfolio for a detailed
discussion of tax reform.
On the following pages, you can read about your Fund's performance in 1995,
as well as the portfolio management team's outlook for the Fund in the coming
months. We hope that you will find this information helpful.

CORPORATE NEWS
As part of our commitment to helping you achieve your investment goals, Van
Kampen American Capital strives to provide shareholders with the best service in
the mutual fund industry. That is why we are especially pleased to have received
the 1995 Quality Tested Service Seal, which is awarded annually by DALBAR, Inc.,
an independent research firm. The Seal, which symbolizes the achievement of the
highest tier of service in the mutual fund industry, was awarded to American
Capital annually from 1990 to 1994 and we are honored that the service provided
by Van Kampen American Capital has achieved the same level of excellence.

Sincerely,

Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Investment Advisory Corp. Investment Advisory Corp.

2
<PAGE> 33

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1995

VAN KAMPEN AMERICAN CAPITAL SHORT-TERM GLOBAL INCOME FUND

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS

<S> <C> <C> <C>
Six-month total return based on NAV(1)... 5.63% 5.25% 5.11%
Six-month total return(2)................ 2.19% 2.25% 4.11%
One-year total return(2)................. 3.11% 2.81% 4.50%
Five-year average annual total return(2). 3.40% N/A N/A
Life-of-Fund average annual total
return(2).............................. 3.40% 2.84% (.75%)
Commencement date........................ 09/28/90 07/22/91 08/13/93

DISTRIBUTION RATE AND YIELD

Distribution rate(3)..................... 7.56% 7.09% 7.10%
SEC Yield(4)............................. 5.38% 4.80% 4.80%
</TABLE>

(1) Assumes reinvestment of all distributions for the period and does
not include payment of the maximum sales charge (3.25% for A shares) or
contingent deferred sales charge for early withdrawal (3% for B shares and 1%
for C shares).

(2) Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (3.25% for A shares) or
contingent deferred sales charge for early withdrawal (3% for B shares and 1%
for C shares).

(3) Distribution rate represents the monthly annualized distributions
of the Fund at the end of the period and not the earnings of the Fund.

(4) 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 December 30, 1995. Had
certain expenses of the Fund not been assumed by VKAC, the SEC Yield would have
been 5.34%, 4.76% and 4.76% for Classes A, B and C, respectively, and the total
returns would have been lower.

3
<PAGE> 34

PORTFOLIO MANAGEMENT REVIEW

VAN KAMPEN AMERICAN CAPITAL SHORT-TERM GLOBAL INCOME FUND

We recently spoke with the management team of the Van Kampen American Capital
Short-Term Global Income Fund about the key events and economic forces which
shaped the markets during the first half of the Fund's fiscal year. The team
includes Thomas J. Slefinger, portfolio manager, and Peter Hegel, executive vice
president, Van Kampen American Capital Investment Advisory Corp. The following
excerpts reflect their views on the Fund's performance during the six-month
period ended December 31, 1995.

HOW WOULD YOU DESCRIBE THE MARKET CONDITIONS IN WHICH THE FUND
Q OPERATED OVER THE LAST SIX MONTHS OF 1995?

When you invest in global bond markets, your primary
A considerations are interest rates and currency exchange rates.
We've recently seen a wide spread between the yields available
in worldwide markets. For example, the core European markets,
such as Germany and Switzerland, have had historically low yields
in comparison to the second-tier markets, such as Italy, Spain, and Sweden.

Much of this divergence we believe is a reflection of the monetary policy
adopted by the central bank in each respective country. In their efforts to
offset slow economic growth, low inflation, and high unemployment, Germany and
other central banks have eased--that is, they have lowered key lending rates to
make it easier to borrow money, encouraging the flow of capital into businesses
and the local economy.

The other side of the coin is the relative strength of the various
currencies around the world, which influences the pricing of government and
corporate bonds issued in worldwide markets; countries with weaker currencies
have to offer a higher rate of return to compensate for the exchange rate.

Our challenge has been to allocate the Fund's assets into those countries
which offer the best relative value.

WHAT ARE SOME OF THE FACTORS YOU'VE TAKEN UNDER CONSIDERATION
Q IN MAKING YOUR DECISIONS?

Many of our decisions are driven by the belief that it's
A almost inevitable that interest rates in the European markets
will converge toward some middle ground.

Anticipating the opportunity for capital appreciation as rates in the
higher-yielding markets come down (causing bond prices to go up), we have
shifted more of the portfolio's assets out of the core European markets (ending
the period at 21.3 percent of Investments) and into the higher-yielding European
markets (representing 40.5 percent). We have also moved assets out of U.S.
securities (reduced to 16.4 percent of Investments) in favor of other
higher-yielding dollar bloc markets, such as Canada (representing 10.4 percent)
and Australia (representing 6.6 percent).

Still, a big part of the equation will be how currency exchange rates
influence the actual rate of return we experience in each of these markets. The
Fund continues to attempt to hedge currency risk while maintaining a portfolio
that is neutral to the U.S. dollar.

That could become a moot point if the European Economic Community
successfully integrates into a single economic entity with a single currency.
The key attraction of the most recent initiative, known as EMU (for European
Monetary Union), is the increased political and economic clout it would provide,
but it also contains provisions requiring member countries to meet certain
criteria for fiscal health, such as reducing debt to less than 60 percent of GDP
(Gross Domestic Product) and maintaining a low inflation rate.

Any success in the move toward one currency would be another reason to
expect the convergence of interest rates across the European bloc. In the
meantime, we're content to take advantage of the divergence in market interest
rates and collect large coupons from the second-tier markets.

Q WHAT OTHER ADJUSTMENTS HAVE YOU MADE TO THE FUND'S PORTFOLIO?

We took steps to attempt to reduce volatility by adopting a
A more conservative approach. We're focusing on high credit
quality, with 70.8 percent of net assets invested in
securities which are rated AAA or the equivalent. The portfolio's foreign
component, for example, is made up entirely of government securities; the
Fund has no exposure to corporate debt.

4
<PAGE> 35

The Fund's average maturity (2.1 years as of December 31, 1995) is a bit shorter
than usual, which should help protect the relative stability of the Fund if
interest rates were to go up sharply and unexpectedly. Volatility over the past
six months has been relatively low, with the Fund achieving a slight, steady
increase in net asset value for the six-month period.

While not actually initiating any immediate actions, because the Fund's
non-fundamental investment policies have been recently amended by the Fund's
Board of Trustees, we will be able to pursue additional investment opportunities
in the future. The Fund now has the ability to purchase securities with an
average maturity of three years or less, and a credit rating of at least BBB
from Standard & Poor's Rating Group or Baa from Moody's (or unrated securities
of comparable quality).

[PIE CHART]

Portfolio Allocation by Country as of December 31, 1995

<TABLE>
<S> <C>
United States......... 16.4%
Italy................. 14.2%
Canada................ 10.4%
Germany............... 7.0%
France................ 6.7%
Australia............. 6.6%
Spain................. 6.6%
United Kingdom........ 6.3%
Denmark............... 6.2%
Ireland............... 5.5%
New Zealand........... 4.8%
Sweden................ 4.8%
Other................. 4.5%

</TABLE>

HOW HAS THE FUND PERFORMED AND WHAT ARE ITS PROSPECTS FOR THE
Q MONTHS AHEAD?

The Fund turned in a very strong performance for the six-month
A period ended December 31, 1995. It generated a total return
(Class A shares at net asset value) of 5.63 percent(1), compared
to the 2.44 percent total return of the J.P. Morgan 3-month U.S. LIBOR Return
Index over the same time period. The Index is unmanaged and tracks the London
Interbank Offered Rate, a key short-term interest rate that the most
creditworthy international banks dealing in Eurodollars charge each other for
large loans. It does not reflect any commissions or fees that would be paid by
an investor if an interest in the index could be purchased. The Fund's Class A
share distribution rate as of December 31, 1995, was 7.56 percent(3), and its
year-end Class A share net asset value was $7.68 per share--up from $7.56 as of
June 30, 1995.

In our opinion, the Fund continues to be an excellent choice for investors
who want to diversify into global markets. While not a substitute for a money
market fund, it seeks to provide high current income, consistent with prudent
investment risk. With its current portfolio allocations, the Fund should be well
positioned to benefit from the convergence of market rates in Europe and from
the persistently positive environment for fixed-income investing. (Please refer
to the chart on page three for additional Fund performance results.)

Peter W. Hegel Thomas J. Slefinger
Executive Vice President Portfolio Manager
Fixed Income Investments

Please see footnotes on page three

5
<PAGE> 36

PORTFOLIO OF INVESTMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
In Local
Currency
(000) Description Coupon Maturity U.S. $ Market Value
- ----------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
AUSTRALIA 6.4% AU$
Government/Agency 6.4%
7,000 New South Wales Treasury........... 7.500% 02/01/98 $ 5,210,718
6,600 Australian Government.............. 7.000 08/15/98 4,866,850
----------
10,077,568
----------
CANADA 10.1% CA$
Government/Agency 10.1%
8,000 Alberta Province................... 9.750 05/08/98 6,318,858
7,000 Canadian Government................ 6.500 09/01/98 5,172,464
5,000 Canadian Wheat Bond................ 7.500 12/29/97 3,752,289
800 Ontario Province CDA............... 8.750 04/16/97 606,371
----------
15,849,982
----------
DENMARK 6.1% KRONER
Government/Agency 6.1%
48,500 Kingdom of Denmark (Bullets)....... 9.000 11/15/98 9,521,810
----------
FRANCE 6.6% FRANC
Government/Agency 6.6%
49,900 French BTAN........................ 5.750 11/12/98 10,282,763
----------
GERMANY 6.8% MARK
Government/Agency 6.8%
14,766 Bundesobligation................... 5.250 10/20/98 10,642,832
----------
IRELAND 5.3% POUND
Government/Agency 5.3%
5,000 Republic of Ireland................ 8.750 07/27/97 8,332,533
----------
ITALY 13.9% LIRA
Government/Agency 13.9%
12,500,000 Republic of Italy-BTPS............. 10.500 07/15/98 7,930,539
15,000,000 Vermilion International Trust-BTPS. 9.160 12/01/97 9,340,968
7,000,000 European Investment Bank........... 10.255 03/16/98 4,415,978
----------
21,687,485
----------
NETHERLANDS 1.4% GUILDER
Government/Agency 1.4%
3,389 Kingdom of Netherlands............. 6.250 07/15/98 2,212,237
----------
NEW ZEALAND 4.7% NZ$
Government/Agency 4.7%
6,500 New Zealand Government............. 10.000 07/15/97 4,366,338
4,500 New Zealand Government............. 8.000 07/15/98 2,959,300
----------
7,325,638
----------
PORTUGAL 3.0% ESCUDO
Government/Agency 3.0%
300,000 International Bank Recon & Dev..... 11.500 02/28/97 2,056,957
400,000 Nordic Investment Bank............. 9.750 09/27/96 2,712,544
----------
4,769,501
----------
SPAIN 6.5% PESETA
Government/Agency 6.5%
600,000 Kingdom of Spain................... 7.300 07/30/97 4,824,979
630,000 Kingdom of Spain................... 9.900 10/31/98 5,286,703
----------
10,111,682
----------
</TABLE>

See Notes to Financial Statements

6
<PAGE> 37

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

(a) At December 31, 1995, the cost for federal income tax purposes is
$152,184,092; the aggregate gross unrealized appreciation is $2,368,644 and
the aggregate gross unrealized depreciation is $2,104,293, resulting in net
unrealized appreciation on investments, foreign currency translation of
other assets and liabilities, forward currency contracts and swap
transactions of $264,351.

The following table summarizes the portfolio composition at December 31,
1995, based upon quality ratings issued by Standard & Poor's. For securities not
rated by Standard & Poor's, the Moody's rating is used.

PORTFOLIO COMPOSITION BY CREDIT QUALITY

See Notes to Financial Statements

7
<PAGE> 38

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1995 (Unaudited)

<TABLE>
----------------------------------------------------------------------------------------
<S> <C>
ASSETS:
Investments, at Market Value (Cost $152,184,092) (Note 1)............... $ 154,067,107
Receivables:
Interest.............................................................. 4,177,425
Fund Shares Sold...................................................... 263,990
Other................................................................... 6,097
--------------
Total Assets...................................................... 158,514,619
==============
LIABILITIES:
Payables:
Fund Shares Repurchased............................................... 542,131
Income Distributions.................................................. 441,488
Investment Advisory Fee (Note 2)...................................... 72,161
Custodian Bank........................................................ 50,439
Forward Currency and Swap Contracts (Note 5).......................... 35,377
Accrued Expenses........................................................ 723,024
--------------
Total Liabilities................................................. 1,864,620
--------------
NET ASSETS.............................................................. $ 156,649,999
==============
NET ASSETS CONSIST OF:
Capital (Note 3)........................................................ $ 240,019,265
Net Unrealized Appreciation on Investments and Foreign Currency......... 264,351
Accumulated Distributions in Excess of Net Investment Income (Note 1)... (18,109,044)
Accumulated Net Realized Loss on Investments............................ (65,524,573)
--------------
NET ASSETS.............................................................. $ 156,649,999
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net assets
of $56,704,001 and 7,379,065 shares of capital stock issued and
outstanding) (Note 3)............................................... $ 7.68
Maximum sales charge (3.25%* of offering price)..................... .26
--------------
Maximum offering price to public.................................... $ 7.94
==============
Class B Shares:
Net asset value and offering price per share (Based on net assets of
$99,786,663 and 13,001,258 shares of capital stock issued and
outstanding) (Note 3)............................................... $ 7.68
==============
Class C Shares:
Net asset value and offering price per share (Based on net assets of
$159,335 and 20,764 shares of capital stock issued and outstanding)
(Note 3)............................................................ $ 7.67
==============
</TABLE>

*On sales of $25,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

8
<PAGE> 39

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1995 (Unaudited)
<TABLE>
- --------------------------------------------------------------------------------------
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $65,486)................. $ 7,798,463
------------
EXPENSES:
Distribution (12b-1) and Service Fees (Allocated to Classes A, B and C
of $28,149, $571,124 and $862, respectively) (Note 6)................ 600,135
Investment Advisory Fee (Note 2)....................................... 489,415
Shareholder Services (Note 2).......................................... 207,054
Custody................................................................ 111,750
Trustees Fees and Expenses (Note 2).................................... 32,960
Legal (Note 2)......................................................... 28,520
Amortization of Organizational Expenses (Note 1)....................... 2,523
Other.................................................................. 158,882
------------
Total Expenses..................................................... 1,631,239
Less Expenses Reimbursed........................................... 13,125
------------
Net Expenses....................................................... 1,618,114
------------
NET INVESTMENT INCOME.................................................. $ 6,180,349
============
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS AND FOREIGN CURRENCY:
Net Realized Loss on Investments and Foreign Currency (Including
realized loss on foreign currency transactions of $18,358,986 and
realized gain on closed and expired option transactions of
$1,037,485).......................................................... $(17,237,348)
------------
Net Unrealized Appreciation/Depreciation on Investments and Foreign
Currency:
Beginning of the Period.............................................. (20,294,494)
End of the Period (Including unrealized depreciation on foreign
currency translation of other assets and liabilities, forward
currency contracts and swap transactions of $12,091, $1,568,946 and
$37,627, respectively)............................................. 264,351
------------
Net Unrealized Appreciation on Investments and Foreign Currency During
the Period........................................................... 20,558,845
------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY... $ 3,321,497
============
NET INCREASE IN NET ASSETS FROM OPERATIONS............................. $ 9,501,846
============
</TABLE>

See Notes to Financial Statements

9
<PAGE> 40

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1995
and the Year Ended June 30, 1995 (Unaudited)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------

Six Months Ended Year Ended
December 31, 1995 June 30, 1995
- ------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 6,180,349 $ 19,761,456
Net Realized Loss on Investments and Foreign
Currency........................................... (17,237,348) (12,602,409)
Net Unrealized Appreciation/Depreciation on
Investments and Foreign Currency During the
Period............................................. 20,558,845 (7,738,870)
------------ -------------
Change in Net Assets from Operations................. 9,501,846 (579,823)
------------ -------------
Distributions from Net Investment Income............. (6,180,349) (14,866,346)
Distributions in Excess of Net Investment Income
(Note 1)........................................... (349,553) -0-
------------ -------------
Distributions from and in Excess of Net Investment
Income*.......................................... (6,529,902) (14,866,346)
Return of Capital Distribution* (Note 1)............. -0- (7,736,408)
------------ -------------
Total Distributions.................................. (6,529,902) (22,602,754)
------------ -------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 2,971,944 (23,182,577)
------------ -------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............................ 1,568,731 6,199,457
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 3,562,774 12,635,688
Cost of Shares Repurchased........................... (52,077,274) (214,719,738)
------------ -------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (46,945,769) (195,884,593)
------------ -------------
TOTAL DECREASE IN NET ASSETS......................... (43,973,825) (219,067,170)
NET ASSETS:
Beginning of the Period.............................. 200,623,824 419,690,994
------------ -------------
End of the Period (Including undistributed net
investment income of $(18,109,044) and $(588,190),
respectively)...................................... $156,649,999 $ 200,623,824
============ =============
</TABLE>

<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class December 31, 1995 June 30, 1995
------------------------------------------------------------------
<S> <C> <C>
Distributions from and in Excess of
Net Investment Income (Note 1):
Class A Shares................... $(2,476,789) $ (5,617,141)
Class B Shares................... (4,047,019) (9,240,772)
Class C Shares................... (6,094) (8,387)
Class D Shares................... N/A (46)
----------- ------------

$(6,529,902) $(14,866,346)
============ =============
Return of Capital Distribution
(Note 1):
Class A Shares................... $ -0- $ (2,908,177)
Class B Shares................... -0- (4,822,441)
Class C Shares................... -0- (5,768)
Class D Shares................... N/A (22)
------------ ------------
$ -0- $ (7,736,408)
============ =============
</TABLE>

N/A = Not Applicable

See Notes to Financial Statements

10
<PAGE> 41

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 June 30
Ended
December 31, ----------------------------
Class A Shares 1995 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period................................. $7.56 $8.15 $9.11 $9.65 $9.49
----- ----- ----- ----- -----
Net Investment Income.................... .27 .50 .59 .71 .69
Net Realized and Unrealized Gain/Loss on
Investments and Foreign Currency....... .15 (.45) (.89) (.46) .34
----- ----- ----- ----- -----

Total from Investment Operations......... .42 .05 (.30) .25 1.03
----- ----- ----- ----- -----
Less:
Distributions from and in Excess of Net
Investment Income (Note 1)........... .30 .37 .35 .79 .87
Return of Capital Distribution
(Note 1)............................. -0- .27 .31 -0- -0-
----- ----- ----- ----- -----
Total Distributions...................... .30 .64 .66 .79 .87
----- ----- ----- ----- -----
Net Asset Value, End of the Period....... $7.68 $7.56 $8.15 $9.11 $9.65
===== ===== ===== ===== =====
Total Return*............................ 5.63%** .69% (3.61%) 2.86% 11.35%
Net Assets at End of the Period
(In millions).......................... $56.7 $72.5 $147.7 $205.9 $205.1
Ratio of Expenses to Average Net
Assets*................................ 1.24% 1.14% 1.13% 1.14% 1.32%
Ratio of Net Investment Income to Average
Net Assets*............................ 7.57% 7.20% 6.64% 7.87% 8.12%
Portfolio Turnover....................... 65.96% 203.92% 259.10% 141.22% 64.87%
</TABLE>

* If certain expenses had not been assumed by VKAC, total return would have been
lower and the ratios would have been as follows:

<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of Expenses to Average Net
Assets................................. 1.25% N/A N/A N/A N/A
Ratio of Net Investment Income to Average
Net Assets............................. 7.56% N/A N/A N/A N/A
</TABLE>

** Non-Annualized

N/A = Not Applicable

See Notes to Financial Statements

11
<PAGE> 42

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Year Ended June 30 July 22, 1991
(Commencement of
Six Months Ended ----------------------- Distribution) to
Class B Shares December 31, 1995 1995 1994 1993 June 30, 1992

- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning
of the Period........ $7.56 $8.15 $9.10 $9.65 $9.43
---- ---- ---- ---- ----
Net Investment
Income............... .23 .41 .54 .67 .78
Net Realized and
Unrealized Gain/Loss
on Investments and
Foreign Currency..... .16 (.42) (.90) (.49) .19
---- ---- ---- ---- ----
Total from Investment
Operations........... .39 (.01) (.36) .18 .97
---- ---- ---- ---- ----
Less:
Distributions from
and in Excess of
Net Investment
Income (Note 1).... .27 .34 .32 .73 .75
Return of Capital
Distribution
(Note 1)........... -0- .24 .27 -0- -0-
---- ---- ---- ---- ----
Total Distributions.... .27 .58 .59 .73 .75
---- ---- ---- ---- ----
Net Asset Value, End
of the Period........ $7.68 $7.56 $8.15 $9.10 $9.65
==== ==== ==== ==== ====
Total Return*.......... 5.25%** (.14%) (4.22%) 2.02% 10.47%**
Net Assets at End of
the Period
(In millions)........ $99.8 $127.9 $271.8 $393.1 $241.7
Ratio of Expenses to
Average Net
Assets*.............. 2.16% 1.96% 1.85% 1.85% 2.08%
Ratio of Net Investment
Income to Average Net
Assets*.............. 6.66% 6.42% 5.91% 7.20% 8.62%
Portfolio Turnover..... 65.96% 203.92% 259.10% 141.22% 64.87%
</TABLE>

* If certain expenses had not been assumed by VKAC, total return would have
been lower and the ratios would have been as follows:

<TABLE>
<S> <C> <C> <C> <C> <C>
Ratio of Expenses to
Average Net Assets... 2.17% N/A N/A N/A N/A
Ratio of Net Investment
Income to Average Net
Assets............... 6.65% N/A N/A N/A N/A
</TABLE>

** Non-Annualized

N/A = Not Applicable

See Notes to Financial Statements

12
<PAGE> 43

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
August 13, 1993
(Commencement of
Six Months Ended Year Ended Distribution) to
Class C Shares December 31, 1995 June 30, 1995 June 30, 1994

- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning
of the Period................... $7.56 $8.16 $9.24
----- ---- ----
Net Investment Income............. .28 .50 .49
Net Realized and Unrealized
Gain/Loss on Investments
and Foreign Currency............ .10 (.52) (1.05)
----- ---- ----
Total from Investment
Operations...................... .38 (.02) (.56)
----- ---- ----
Less:
Distributions from and in Excess
of Net Investment Income
(Note 1)...................... .27 .34 .27
Return of Capital Distribution
(Note 1)...................... -0- .24 .25
----- ---- ----
Total Distributions............... .27 .58 .52
----- ---- ----
Net Asset Value, End of the
Period.......................... $7.67 $7.56 $8.16
===== ===== =====
Total Return*..................... 5.11%** (.27%) (6.32%)**
Net Assets at End of the Period
(In millions)................... $.2 $.2 $.2
Ratio of Expenses to Average
Net Assets*..................... 2.19% 1.96% 1.84%
Ratio of Net Investment Income to
Average Net Assets*............. 6.60% 6.30% 5.83%
Portfolio Turnover................ 65.96% 203.92% 259.10%
</TABLE>

* If certain expenses had not been assumed by VKAC, total return would have been
lower and the ratios would have been as follows:

<TABLE>
<S> <C> <C> <C>
Ratio of Expenses to Average
Net Assets...................... 2.21% N/A N/A
Ratio of Net Investment
Income to Average Net
Assets.......................... 6.59% N/A N/A
</TABLE>

** Non-Annualized

N/A = Not Applicable

See Notes to Financial Statements

13
<PAGE> 44

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen American Capital Short-Term Global Income Fund (the "Fund") is
organized as a series of Van Kampen American Capital Trust (the "Trust"), a
Delaware business trust, and is registered as a non-diversified open-end
management investment company under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to seek a high level of current
income, consistent with prudent investment risk through investment in a global
portfolio of investment grade debt securities denominated in various currencies
and multi-national currency units and having an average maturity of three years
or less. The Fund commenced investment operations on September 28, 1990. The
distribution of the Fund's Class B and Class C shares commenced on July 22,
1991, and August 13, 1993, respectively.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.

A. SECURITY VALUATION--Investments are stated at value using the last available
bid price or yield equivalents obtained from dealers in the over-the-counter
(OTC) or interbank market. Short-term securities with remaining maturities of
less than 60 days are valued at amortized cost.

C. INVESTMENT INCOME AND EXPENSES--Interest income and expenses are recorded on
an accrual basis. Bond premium and original issue discount are amortized over
the expected life of each applicable security.

14
<PAGE> 45

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

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.

D. CURRENCY TRANSLATION--Assets and liabilities denominated in foreign
currencies and commitments under forward currency contracts are translated into
U.S. dollars at the mean of the quoted bid and ask prices of such currencies
against the U.S. dollar. Purchases and sales of portfolio securities are
translated at the rate of exchange prevailing when such securities were acquired
or sold. Income and expenses are translated at rates prevailing when accrued.

E. ORGANIZATIONAL EXPENSES--The Fund has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Fund's organization in the amount of $250,000. These costs
were amortized over the 60 month period ended September 28, 1995.

F. 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 such losses against any future realized capital
gains. At June 30, 1995, the Fund had an accumulated capital loss carryforward
for tax purposes of $62,900,163. Of this amount, $10,010,730 and $52,889,433
will expire on June 30, 2001 and 2003, respectively. Net realized gains or
losses may differ for financial and tax reporting purposes primarily as a result
of post October 31 losses which are not recognized for tax purposes until the
first day of the following fiscal year.

G. DISTRIBUTION OF INCOME AND GAINS--The Fund declares daily and pays monthly
dividends from net investment income. Net investment income for federal income
tax purposes includes gains and losses realized on transactions in foreign
currencies and options on foreign currencies. These realized gains and losses
are included as net realized gains or losses for financial reporting purposes.
Permanent book and tax basis differences relating to currency losses totaling
$17,171,301 were reclassified from accumulated net realized gain/loss on
investments to accumulated undistributed net investment income.

Net realized gains on securities, if any, are distributed annually.

For tax purposes, the determination of a return of capital distribution is
made at the end of the Fund's fiscal year. Therefore, while it is extremely
likely that all or a portion of

15
<PAGE> 46

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

the Fund's distributions will ultimately be characterized as a return of capital
for tax purposes, no such designation has been made for the six months ended
December 31, 1995.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES

Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly of .55% of the Fund's average net assets.

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.

For the six months ended December 31, 1995, the Fund recognized expenses of
approximately $16,800 representing VKAC's cost of providing accounting, cash
management and legal services to the Fund. Of this amount, approximately $4,700
has been assumed by VKAC.

In July, 1995, the Fund began using ACCESS Investor Services, Inc., an
affiliate of the Adviser, as the transfer agent of the Fund. For the six months
ended December 31, 1995, the Fund recognized expenses of approximately $149,200,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.

Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.

The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC. The Fund's liability under the
deferred compensation and retirement plans at December 31, 1995, was
approximately $44,900.

At December 31, 1995, VKAC owned 1,396 and 100 shares of Classes B and C,
respectively.

3. CAPITAL TRANSACTIONS

The Fund has outstanding three classes of common shares, Classes A, B and C,
each with a par value of $.01 per share. There are an unlimited number of shares
of each class authorized.

16
<PAGE> 47

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1995, capital aggregated $85,420,742, $154,417,256 and
$181,267, for Classes A, B and C, respectively. For the six months ended
December 31, 1995, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------
<S> <C> <C>

Sales:
Class A.................................. 111,836 $ 859,086
Class B.................................. 91,965 702,255
Class C.................................. 969 7,390
---------- ------------
Total Sales................................ 204,770 $ 1,568,731
========== ============
Dividend Reinvestment:
Class A.................................. 192,586 $ 1,477,031
Class B.................................. 271,226 2,079,811
Class C.................................. 774 5,932
---------- ------------
Total Dividend Reinvestment................ 464,586 $ 3,562,774
========== ============
Repurchases:
Class A.................................. (2,515,791) $(19,290,757)
Class B.................................. (4,272,319) (32,758,422)
Class C.................................. (3,657) (28,095)
---------- ------------
Total Repurchases.......................... (6,791,767) $(52,077,274)
========== ============
</TABLE>

17
<PAGE> 48

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1995, capital aggregated $102,375,382, $184,393,612 and
$196,040, for Classes A, B and C, respectively. For the year ended June 30,
1995, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................. 147,880 $ 1,164,395
Class B.................................. 633,871 5,017,062
Class C.................................. 2,233 18,000
Class D.................................. -0- -0-
---------- -------------
Total Sales................................ 783,984 $ 6,199,457
========== =============
Dividend Reinvestment:
Class A.................................. 640,247 $ 5,003,613
Class B.................................. 973,210 7,618,093
Class C.................................. 1,792 13,973
Class D.................................. 1 9
---------- -------------
Total Dividend Reinvestment................ 1,615,250 $ 12,635,688
========== =============
Repurchases:
Class A.................................. (9,324,231) $ (73,225,277)
Class B.................................. (18,052,147) (141,454,897)
Class C.................................. (4,985) (38,532)
Class D.................................. (124) (1,032)
---------- -------------
Total Repurchases.......................... (27,381,487) $(214,719,738)
========== =============
</TABLE>

18
<PAGE> 49

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

the expense of their respective deferred sales arrangements, including higher
distribution and service fees and incremental transfer agency costs.

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- -------------------------------------------------------------------
<S> <C> <C>
First...................................... 3.00% 1.00%
Second..................................... 2.00% None
Third...................................... 1.00% None
Fourth and Thereafter...................... None None
</TABLE>

For the six months ended December 31, 1995, VKAC, as Distributor for the
Fund, received net commissions on sales of the Fund's Class A shares of $360 and
CDSC on the redeemed shares of Classes B and C of approximately $46,100. Sales
charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

Aggregate purchases and cost of sales of investment securities, excluding U.S.
Government securities and short-term notes, for the six months ended December
31, 1995, were $98,147,796 and $94,048,457, 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.

Summarized below are the specific types of derivative financial instruments
used by the Fund.

A. OPTION CONTRACTS--An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Fund
to manage the portfolio's foreign currency exposure and effective maturity and
duration.

19
<PAGE> 50

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

Transactions in options for the six months ended December 31, 1995, were as
follows:

<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- ----------------------------------------------------------------------------
<S> <C> <C>
Outstanding at June 30, 1995................... 11 $(1,537,634)
Options Written and
Purchased (Net).............................. 35 430,966
Options Terminated in Closing
Transactions (Net)........................... (43) 667,895
Options Expired (Net).......................... (3) 438,773
-- -----------
Outstanding at December 31, 1995............... -0- $ -0-
== ===========

</TABLE>

B. FORWARD CURRENCY CONTRACTS--These instruments are commitments to purchase or
sell a foreign currency at a future date at a negotiated forward rate. The gain
or loss arising from the difference between the original value of the contract
and the closing value of such contract is included as a component of realized
gain/loss on investments and foreign currency.

At December 31, 1995, the Fund has outstanding forward currency contracts as
follows:

<TABLE>
<CAPTION>
UNREALIZED
FORWARD ORIGINAL CURRENT APPRECIATION/
CURRENCY CONTRACTS VALUE VALUE DEPRECIATION
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
BUYS TO OPEN
German Mark,
expiring 03/18/96............ $ 9,041,483 $ 9,060,916 $ 19,433
Japanese Yen,
expiring 01/29/96............ 5,008,866 4,864,547 (144,319)
Mexican Peso,
expiring 03/04/96............ 1,000,000 974,339 (25,661)

SELLS TO OPEN
Australian Dollar,
expiring 01/16/96............ 8,961,600 8,911,021 50,579
British Pound Sterling,
expiring 03/15/96............ 10,035,711 10,106,737 (71,026)
Canadian Dollar,
expiring 06/13/96............ 14,474,922 14,635,117 (160,195)
Danish Krone,
expiring 02/29/96............ 9,101,660 9,106,421 (4,761)
</TABLE>

20
<PAGE> 51

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
UNREALIZED
FORWARD ORIGINAL CURRENT APPRECIATION/
CURRENCY CONTRACTS VALUE VALUE DEPRECIATION
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
French Franc,
expiring 03/07/96 -
03/15/96..................... $13,531,445 $13,808,503 $ (277,058)
German Mark,
expiring 03/12/96 -
06/12/96..................... 30,635,106 30,912,506 (277,400)
Irish Pound,
expiring 02/12/96............ 8,224,515 8,166,599 57,916
Italian Lira,
expiring 02/27/96............ 9,293,680 9,372,926 (79,246)
Japanese Yen,
expiring 02/20/96............ 6,000,000 5,897,838 102,162
Netherlands Guilder,
expiring 03/27/96............ 2,500,000 2,500,377 (377)
New Zealand Dollar,
expiring 02/01/96............ 7,193,450 7,171,646 21,804
Portuguese Escudo,
expiring 02/05/96............ 4,466,004 4,487,974 (21,970)
Spanish Peseta,
expiring 03/18/96............ 8,920,027 9,019,816 (99,789)
Swedish Krona,
expiring 01/11/96............ 7,120,986 7,521,981 (400,995)
Swiss Franc,
expiring 02/29/96 -
06/18/96..................... 15,000,000 15,258,043 (258,043)
-----------
$(1,568,946)
===========
</TABLE>

At December 31, 1995, the Fund had realized gains on closed but unsettled
forward currency contracts of $1,571,196 scheduled to settle between January 5,
1996 and September 3, 1996.

C. SWAP TRANSACTIONS--A swap represents an agreement between two parties to
exchange a series of cash flows based upon various indices at specified
intervals.

21
<PAGE> 52

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

The interest rate swap transaction outstanding as of December 31, 1995, and
the description and unrealized depreciation is as follows:

<TABLE>
<CAPTION>
UNREALIZED
DESCRIPTION DEPRECIATION
- ----------------------------------------------------------------------
<S> <C>
Goldman Sachs, 49.8 million US$ notional amount,
maturing 03/18/96, payment based upon the spread
between the 10 year German Bund versus the 3 month
German LIBOR.......................................... $37,627
-------
</TABLE>

6. DISTRIBUTION AND SERVICE PLANS

Annual fees under the Plans of up to .25% for Class A and 1.00% each for
Class B and Class C shares are accrued daily. Included in these fees for the six
months ended December 31, 1995, are payments to VKAC of approximately $400,300.

22
<PAGE> 53

FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL

GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund

EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund

THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund

23
<PAGE> 54

VAN KAMPEN AMERICAN CAPITAL SHORT-TERM GLOBAL INCOME FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN

LINDA HUTTON HEAGY

ROGER HILSMAN

R. CRAIG KENNEDY

DENNIS J. MCDONNELL*

DONALD C. MILLER - Chairman

JACK E. NELSON

DON G. POWELL*

JEROME L. ROBINSON

FERNANDO SISTO

WAYNE W. WHALEN*

WILLIAM STEWART WOODSIDE

OFFICERS

DON G. POWELL*
President and Chief Executive Officer

DENNIS J. MCDONNELL*
Executive Vice President

RONALD A. NYBERG*
Vice President and Secretary

EDWARD C. WOOD III*
Vice President and Chief Financial Officer

CURTIS W. MORELL*
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN*
Treasurer

TONYA M. LODEN*
Controller

WILLIAM N. BROWN*
PETER W. HEGEL*
ROBERT C. PECK, JR.*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

DISTRIBUTOR

VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

TRANSFER AGENT

ACCESS INVESTOR SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606

INDEPENDENT AUDITORS

KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601

* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.

SM denotes a service mark of Van Kampen American Capital Distributors, Inc.

24
<PAGE> 55

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Portfolio Management Review...................... 4
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 11
Statement of Operations.......................... 12
Statement of Changes in Net Assets............... 13
Financial Highlights............................. 14
Notes to Financial Statements.................... 17
</TABLE>

SIF SAR 2/96
<PAGE> 56

LETTER TO SHAREHOLDERS

January 30, 1996

Dear Shareholder,
For most investors, it would be
hard to surpass the success enjoyed
during 1995. The U.S. stock and bond
markets achieved substantial gains,
driven by a combination of continuing [PHOTO]
economic growth and low inflation, and
many foreign markets also enjoyed
attractive returns. The strength of the
U.S. equity and fixed-income markets in
1995 was particularly impressive
because it followed a year in which
both markets declined. People who DENNIS J. MCDONNELL AND DON G. POWELL
remained invested during 1995 generally
shared in the growth of
the markets, while those investors who retreated after 1994's downturn may have
missed out on the double-digit returns.
The rebound in the markets last year reinforces the importance of
maintaining a long-term perspective for your investments, and of maintaining a
diversified portfolio of domestic and foreign investments. While the environment
for stocks and bonds in many major markets remains positive, it is unlikely that
1996 will see a repeat of the U.S. markets' strong 1995 performance. However,
over the long-term, stocks have outperformed virtually all other types of
investments, bonds have met the needs of investors who seek capital preservation
and regular income, and foreign securities provide portfolio diversification.

ECONOMIC OVERVIEW

The U.S. economy grew throughout 1995, though the rate of growth slowed
toward year-end. The gross domestic product (the value of all goods and services
produced in the United States) grew at an annual rate of more than 4.2 percent
in the third quarter of 1995, but slowed to an estimated 2 to 3 percent in the
fourth quarter, with retail and auto sales particularly sluggish. The slower
growth rate eased concerns about a rise in inflation and allowed the Federal
Reserve Board to lower short-term interest rates by a quarter-percentage point
in late December. The reduction in rates during the latter half of 1995 is
expected to help generate moderate economic growth in 1996, just as the Fed's
raising of short-term rates in 1994 helped slow economic growth in 1995.
The cut in short-term rates, combined with modest growth forecasts, was
viewed by the financial markets as a positive event, pushing up both stock and
bond prices. For the year ended December 31, 1995, the Standard & Poor's
500-Stock Index achieved a total return of 37.45 percent. The yield on 10-year
Treasury notes was 5.57 percent on December 31, compared to 7.83 percent at the
beginning of the year. Because bond prices and yields move in opposite
directions, bond prices rose. Many observers expect the Fed to cut rates further
if Congress and the President are able to reach an agreement on the federal
budget, provided economic conditions justify further easing.
A number of major stock and bond markets overseas also did well in 1995.
Among foreign stock markets, the larger European markets--such as the United
Kingdom and Germany--lagged the smaller European markets due to their tight
monetary policy (keeping short-term rates relatively high), which was driven by
their fear of inflation.

Continued on page two

1
<PAGE> 57

ECONOMIC OUTLOOK

We believe foreign markets will continue to be influenced by U.S. interest
rate movements and trends in corporate profitability and foreign exchange rates.
This was recently apparent when several countries, including France, England and
Germany, lowered short-term interest rates in early December. We believe this
reflects a global trend toward lower interest rates, as inflation fears continue
to subside around the world.
In terms of the U.S. markets, we are cautiously optimistic. We expect the
domestic economy to grow at a rate of 2 to 3 percent throughout 1996, with
growth stronger in the second half of the year as the full impact of the Fed's
rate cuts take effect. Lower rates will have the greatest impact on
interest-sensitive industries, such as housing. Although inflation appears to be
under control, there probably will be some cyclical upward pressure in 1996.
The current economic conditions are ideal for stocks, especially those of
smaller companies, because they tend to be affected less by economic cycles. The
outlook for the fixed-income market is positive, too. In the near-term, we
believe domestic markets will benefit from a stable U.S. dollar and increased
business activity driven in part by a number of strategic reorganizations of
some of the nation's blue chip industry leaders.
During recent months, debate over tax reform and the federal deficit has
dominated the agenda in Washington. Now that we are in a presidential election
year, tax reform likely will replace the budget battle as the top issue in
Washington. There has been varied speculation about the impact tax reform could
have on the economy and on various types of investments. We are following the
tax reform debate very closely, and we will keep you updated on this issue
throughout the year. See the winter issue of Your Portfolio for a detailed
discussion of tax reform.
On the following pages, you can read about your Fund's performance in 1995,
as well as the portfolio management team's outlook for the Fund in the coming
months. We hope that you will find this information helpful.

CORPORATE NEWS

Sincerely,

Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.

Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.

2
<PAGE> 58

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1995
VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
Six-month total return based on NAV(1).... 9.40% 8.88% 8.89%
Six-month total return(2)................. 4.21% 4.88% 7.89%
One-year total return(2).................. 17.56% 18.34% 21.13%
Life-of-Fund average annual total
return(2)............................... (0.73%) (0.65%) 0.81%
Commencement date......................... 12/31/93 12/31/93 12/31/93

DISTRIBUTION RATE AND YIELD
Distribution rate(3)...................... 8.66% 8.35% 8.36%
SEC Yield(4).............................. 7.90% 7.53% 7.53%
</TABLE>

(2)Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (4.75% for A shares) or
contingent deferred sales charge for early withdrawal (4% for B shares and 1%
for C shares).

(3)Distribution rate represents the monthly annualized distributions of the Fund
at the end of the period and not the earnings of the Fund.

(4)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 December 30, 1995. Had
certain expenses of the Fund not been assumed by VKAC, the SEC Yield would have
been 7.85%, 7.48% and 7.48% for Classes A, B and C, respectively, and the total
returns would have been lower.

3
<PAGE> 59

PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

We recently spoke with the management team of the Van Kampen American Capital
Strategic Income Fund about the key events and economic forces which shaped the
markets during the first half of the Fund's fiscal year. The team includes
Robert Hickey, portfolio manager, and Peter W. Hegel, executive vice president,
Van Kampen American Capital Investment Advisory Corp. The following excerpts
reflect their views on the Fund's performance during the six-month period ended
December 31, 1995.

Q HOW WOULD YOU CHARACTERIZE THE MARKET CONDITIONS IN WHICH THE
FUND OPERATED OVER THE LAST SIX MONTHS OF 1995?

A Because the Fund's investments are allocated among five major
market sectors, there is a wide array of conditions and
variables which can influence the Fund's
performance. Over the past six months, the key factors have been the
low rate of inflation and slow economic growth worldwide, which have
driven down interest rates in the United States and around the world.
Falling interest rates are always welcome in the fixed-income markets,
because bond prices go up as interest rates come down.

In terms of world currencies, the U.S. dollar stabilized in relation to the
Japanese yen and the German mark in August, and strengthened considerably during
the third and fourth quarter of 1995. Emerging markets were hit hard in 1994,
but they have greatly rewarded those investors who waited patiently for a
recovery. Overall, the marketplace has shown confidence in the fiscal policies
and political commitment within these countries, and their performance has the
potential to be strong again in 1996.

Q HOW DID YOU REACT TO THESE MARKET CONDITIONS?

A Because we emphasize a long-term perspective in managing the
Fund, when emerging markets fell out-of-favor, we chose to
reevaluate our position in these
securities rather than eliminate it. After much review, including
discussions with policy makers of emerging countries, we believed
fundamentals were still strong and the market was overreacting. Our
research and patience was well rewarded as investor confidence
increased and emerging market securities experienced a strong fourth
quarter.

Generally, we have positioned the Fund's portfolio on the long-end of the
yield curve. Therefore, as interest rates fell during the period and Treasuries
rallied, this had a positive effect on the Fund. Additionally, to gain a degree
of cash flow certainty we overweighted the Fund's position in corporate
securities, while underweighting holdings of mortgage-backed securities.

In the emerging market sector, we have favored securities which are
associated with real assets, such as bonds issued by oil, utility, and telephone
companies. We continue to keep the Fund's exposure to foreign currencies fairly
low, avoiding the yen in particular.

In the high yield sector, we had respectable performance, successfully
avoiding those securities which demonstrated a high potential for credit
deterioration. We tended to favor the less-cyclical, higher-quality issues
within this sector, and we received some valuable support from our internal
credit research team, which includes six analysts dedicated solely to the
evaluation of high yield securities.

4
<PAGE> 60

[PIE CHART]

Portfolio Holdings by Major Market Sector as of December 31, 1995

<TABLE>
<S> <C>
Foreign Non-Investment Grade
(mainly Emerging Markets)........... 29.7%
Foreign Investment Grade.............. 25.3%
U.S. Government/Mortgage.............. 22.8%
Domestic Non-Investment Grade
(mainly High Yield bonds)........... 14.9%
Domestic Investment Grade............. 7.3%

</TABLE>
Q HOW HAS THE FUND PERFORMED DURING THIS REPORTING PERIOD?

A The Fund has continued to be very strong over the last half of
the year. For the six-month period ended December 31, 1995,
the Fund generated a total return of 9.40 percent(1) (Class A
shares at net asset value). In comparison,
the Lehman Brothers Aggregate Bond Index, a broad-based, unmanaged
index generated a total return of 6.31 percent over the same period.
The Index does not reflect any commissions or fees that would be paid
by an investor purchasing the securities it represents.

The Fund's Class A share monthly dividend as of December 31, 1995, was
$.0925 per share, which translates into a distribution rate of 8.66 percent(3)
based on its December 31, 1995 offering price. The Fund's Class A share net
asset value closed the period at $12.21 per share--up from $11.70 as of June 30,
1995. The dividend is lower than it has been in the recent past, reflecting the
lower interest rate environment that we've seen since the first quarter of 1995.

Q WHAT IS YOUR OUTLOOK FOR THE MARKET IN THE MONTHS AHEAD?

A It seems that the pattern of low inflation, moderate economic
growth in the 2 to 3 percent range, and lower interest rates
will continue into 1996. The coming
year will probably be less volatile than the last two years, but still
positive overall for the fixed-income markets.

The quick gains of 1995 appear to be over--we do not expect any more rallies
of the magnitude we saw this year in U.S. Treasuries--and we're a bit wary of
the high yield sector going into 1996. Instead, we'll focus on the investment
grade corporate sector, which looks like it should be fairly strong. Overall, we
still see value in and remain optimistic about the emerging markets sector.

Peter W. Hegel
Executive Vice President
Fixed Income Investments

Robert Hickey
Portfolio Manager

Please see footnotes on page three

5
<PAGE> 61

PORTFOLIO OF INVESTMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS 65.0%
BANKING 15.7%
25,000 ABN/AMRO Bank - THB..................... 9.100% 08/05/97 $ 967,447
1,000 Banco Central Del Uruguay Ser B - US$... 6.750 02/19/21 700,000
3,000 Banco Del Estado - US$.................. 8.390 08/01/01 3,210,000
1,000 Banco Rio De La Plata Yankee - US$
(c)..................................... 8.500 07/15/98 991,250
1,000 National Bank of Hungary - US$.......... 8.875 11/01/13 861,050
3,500 Santander Finance - US$ (c)............. 6.775 09/29/49 3,228,750
4,100 Western Financial Savings - US$......... 8.500 07/01/03 4,412,728
----------
14,371,225
----------
BEVERAGE, FOOD, & TOBACCO 0.2%
250 Fleming Cos Inc (Var Rate Cpn) - US$.... 8.125 12/15/01 215,000
----------
BUILDINGS AND REAL ESTATE 3.1%
1,000 Doman Industries - US$.................. 8.750 03/15/04 965,000
1,000 Guangdong Enterprise - US$.............. 8.750 12/15/03 902,660
1,000 Walter Industries - US$................. 12.190 03/15/00 1,012,500
----------
2,880,160
----------
CHEMICALS, PLASTICS AND RUBBER 3.0%
2,500 W.R. Grace & Co - US$ (c)............... 8.000 08/15/04 2,747,575
----------
CONTAINERS, PACKAGING & GLASS 0.5%
50 Anchor Glass Container Corp - US$....... 10.250 06/30/02 40,750
500 Atlantis Group Inc - US$................ 11.000 02/15/03 437,500
----------
478,250
----------
FINANCE 10.1%
3,500 BBV International Finance - US$......... 6.875 10/27/05 3,574,375
500 Indah Kiat International Finance
(Pulp and Paper Corp) Global Bond - US$
(c)..................................... 11.375 06/15/99 512,500
5,000 Telecom Corp - New Zealand Finance -
US$..................................... 6.500 10/11/01 5,129,700
----------
9,216,575
----------
HEALTHCARE 1.2%
1,000 Tenet Healthcare Corp - US$............. 10.125 03/01/05 1,107,500
----------
HOTEL, MOTEL, INNS & GAMING 0.5%
500 GB Property Funding - US$............... 10.875 01/15/04 441,250
----------
MINING 0.5%
400 Carbide/Graphite Group Inc - US$........ 11.500 09/01/03 434,000
----------
NATURAL RESOURCES 2.3%
2,000 Cyprus Amax Minerals Co - US$........... 7.375 05/15/07 2,140,424
----------
</TABLE>

See Notes to Financial Statements

6
<PAGE> 62

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS (CONTINUED)
OIL & GAS 5.0%
300 Global Marine - US$..................... 12.750% 12/15/99 $ 333,000
420 Plains Resources Inc - US$.............. 12.000 10/01/99 439,950
1,000 Sodigas Pampeana - US$.................. 10.500 07/06/99 973,750
2,950 Transportadora De Gas Del Sur - US$..... 7.750 12/23/98 2,832,000
----------
4,578,700
----------
PRINTING, PUBLISHING & BROADCASTING 1.7%
1,000 Century Communications - US$............ 9.750 02/15/02 1,035,000
500 K-III Communications - US$.............. 10.625 05/01/02 535,000
----------
1,570,000
----------
RETAIL 2.6%
2,000 Dayton Hudson Co - US$.................. 9.340 02/25/03 2,361,172
----------
TELECOMMUNICATIONS 4.4%
1,000 Panamsat LP - US$....................... 9.750 08/01/00 1,060,000
600 Pricellular Wire - US$ (d).............. 0/12.250 10/01/03 463,500
1,000 Rogers Cable Systems - CA$.............. 9.650 01/15/14 630,904
2,000 Telecom Argentina - US$................. 8.375 10/18/00 1,892,500
----------
4,046,904
----------
TRANSPORTATION 7.2%
2,000 Delta Air Lines - US$................... 8.520 01/30/04 2,140,538
1,928 Jet Equipment Trust - US$ (c)........... 8.080 06/15/96 1,944,465
2,000 United Air Lines - US$.................. 10.250 07/15/21 2,521,894
----------
6,606,897
----------
UTILITIES 7.0%
1,000 Bridas Corp - US$....................... 12.500 11/15/99 995,000
1,000 Central Termica Guemes - US$............ 12.000 11/29/96 985,000
1,000 Empresa Distribuidor Del Sur - US$...... 9.825 05/17/96 1,000,000
1,500 Midland Funding Corp II - US$........... 11.750 07/23/05 1,571,250
897 Subic Power Corp - US$.................. 9.500 12/28/08 842,759
1,000 Telefonica De Argentina - US$........... 11.875 11/01/04 1,045,000
----------
6,439,009
----------
Total Corporate Bonds.................................. 59,634,641
----------
</TABLE>

See Notes to Financial Statements

7
<PAGE> 63

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN GOVERNMENT AND AGENCY
SECURITIES 40.4%
ARGENTINA 6.9%
3,000 Argentina Discount Bond - US$ (e)....... 6.563% 03/31/23 $ 1,965,000
1,000 Argentina Floating Rate Bond - US$
(e)..................................... 6.813 03/31/05 712,500
2,000 Argentina Par Bond - US$ (c) (e)........ 5.000 03/31/23 1,145,000
2,000 Goldman Sachs Argentine Bocones Trust -
US$..................................... 13.375 08/15/01 2,120,000
500 Republic of Argentina Global Bond -
US$..................................... 8.375 12/20/03 421,875
----------
6,364,375
----------
AUSTRALIA 1.6%
1,750 New South Wales Treasury - AU$ (c)...... 11.500 07/01/99 1,453,564
----------
BRAZIL 3.4%
2,122 Brazil C Bond - US$..................... 8.000 04/15/14 1,215,083
1,900 Brazil IDU - US$ (e).................... 6.688 01/01/01 1,636,375
500 Brazil Pars - US$....................... 4.000 04/15/24 265,625
----------
3,117,083
----------
CANADA 1.4%
349 Canadian Government - CA$ (c)........... 5.750 03/01/99 252,134
1,500 Canadian Government - CA$ (c)........... 6.500 06/01/04 1,061,699
----------
1,313,833
----------
COLUMBIA 4.0%
1,500 Ocensa - US$............................ 9.350 09/01/05 1,522,500
2,225 Republic of Columbia - US$.............. 7.250 02/23/04 2,130,437
----------
3,652,937
----------
COSTA RICA 0.7%
1,000 Banco Central Costa Rica - US$ (e)...... 6.250 05/21/10 610,000
----------
ECUADOR 1.1%
1,550 Ecuador Discount Bond - US$ (e)......... 6.813 02/28/25 784,688
561 Ecuador PDI Bond - US$ (e).............. 6.813 02/28/15 186,533
----------
971,221
----------
FINLAND 1.7%
6,000 Finnish Government - FIM (c)............ 9.500 03/15/04 1,573,045
----------
GERMANY 2.1%
1,200 Bundes-Obligation - DEM................. 8.375 01/20/97 876,682
1,500 Deutschland Republic - DEM.............. 6.000 09/15/03 1,060,300
----------
1,936,982
----------
</TABLE>

See Notes to Financial Statements

8
<PAGE> 64

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FOREIGN GOVERNMENT AND AGENCY SECURITIES
(CONTINUED)
ITALY 0.7%
1,000,000 Republic of Italy - ITL (c)............. 8.500% 04/01/99 $ 602,723
----------
NEW ZEALAND 1.4%
2,000 New Zealand Government - NZ$ (c)........ 9.000 11/15/96 1,314,069
----------
NIGERIA 1.0%
2,002 Nigeria Par Bond with Warrants - US$ (c)
(e)..................................... 6.250 11/15/20 962,000
----------
PHILIPPINES 0.9%
1,000 Philippines Government (FLIRB) - US$
(e)..................................... 5.000 06/01/08 773,750
----------
POLAND 4.6%
6,500 Poland PDI Bond - US$ (e)............... 3.750 10/27/14 4,216,875
----------
RUSSIA 0.9%
3,000 Vneshekonombank Loans - CHF............. (b) (b) 871,261
----------
SPAIN 2.4%
265,000 Spanish Government - ESP (c)............ 11.000 06/15/97 2,238,409
----------
SWEDEN 2.0%
3,500 Swedish Government - SEK (c)............ 11.000 01/21/99 567,352
7,500 Swedish Government - SEK (c)............ 10.250 05/05/03 1,245,463
----------
1,812,815
----------
SWITZERLAND 0.0%
8 Swiss Franc (Currency).................. 6,502
----------
UNITED KINGDOM 3.0%
1,425 UK Treasury Bonds - GBP................. 7.000 11/06/01 2,215,157
350 UK Treasury Bonds - GBP................. 6.750 11/26/04 520,461
----------
2,735,618
----------
VENEZUELA 0.6%
1,005 Venezuelan Par Bond with Oil Obligation
Certificates - US$ (e).................. 6.750 03/31/20 572,500
----------
Total Foreign Government and Agency Securities......... 37,099,562
----------
US GOVERNMENT AND AGENCY SECURITIES 5.7%
3,000 FNMA Note............................... 8.000 04/13/05 3,134,850
2,000 US Treasury Note........................ 7.125 09/30/99 2,120,660
----------
Total US Government and Agency Securities.............. 5,255,510
----------
</TABLE>

See Notes to Financial Statements

9
<PAGE> 65

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency U.S. $
(000) Description Coupon Maturity Market Value
------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MORTGAGE-BACKED SECURITIES (US) 25.5%
62,096 DLJ Mortgage Acceptance Corp (Interest
Only)................................... 3.831% 09/25/25 $ 3,929,493
5,636 FHLMC 1624-KZ........................... 6.000 12/15/08 5,128,577
4,040 FNMA REMIC #93-180 SB (Inverse Fltg).... 3.217 09/25/00 3,787,258
75 FNMA REMIC #93-55 M PAC (Interest
Only)................................... 727.220 09/25/06 1,800,000
2,000 FNMA REMIC #92-33 S (Inverse Fltg)...... 14.160 03/25/22 2,128,750
5,000 FNMA REMIC #93-206 SE (Inverse Fltg).... 3.711 11/25/23 2,925,000
5,000 FNMA REMIC #95-11A (Inverse Fltg)....... * 01/25/24 3,684,375
----------
Total Mortgage-Backed Securities (US).................. 23,383,453
----------
TOTAL LONG-TERM INVESTMENTS 136.6%
(Cost $120,742,312) (a)................................................... 125,373,166
SHORT-TERM INVESTMENTS 3.1%
(Cost $3,138,386) (a)..................................................... 2,837,427
LIABILITIES IN EXCESS OF OTHER ASSETS (39.7%)............................. (36,443,848)
----------
NET ASSETS 100.0%......................................................... $ 91,766,745
----------
</TABLE>

* Zero coupon bond

(a) At December 31, 1995, cost for federal income tax purposes including
short-term investments is $123,880,698; the aggregate gross unrealized
appreciation is $6,284,064 and the aggregate gross unrealized depreciation is
$2,783,430, resulting in net unrealized appreciation on investments, foreign
currency translation of other assets and liabilities, option, futures and swap
transactions of $3,500,634.

(b) Item represents an assignment of a bank loan which currently is in default
with the potential to be restructured at a future date. Settlement of the
purchase transaction will occur in conjunction with the restructuring. As of
December 31, 1995, item is a non-income producing security.

(c) Assets segregated as collateral for when issued or delayed delivery
purchase commitments, currency indexed securities, open option, futures or swap
transactions or borrowings of the Fund.

(d) Security is a "Step-up" bond where the coupon increases, or steps up, at a
predetermined date.

(e) Item represents a "Brady Bond" which is a product of the "Brady Plan" under
which various Latin American, African and southeast Asian nations have converted
their outstanding external defaulted commercial bank loans into bonds. Certain
Brady Bonds have been collateralized, as to principal due at maturity, by U.S.
Treasury zero coupon bonds with a maturity date equal to the final maturity date
of such Brady Bonds.

PORTFOLIO COMPOSITION BY CREDIT QUALITY

<TABLE>
<S> <C>
U.S. Govt. and Agency Obligations... 22.8%
AAA................................. 5.9
AA.................................. 11.2
A................................... 9.9
BBB................................. 5.6
BB.................................. 19.9
B................................... 5.6
CCC................................. 0.4
NR.................................. 18.7
------
100.0%
----
</TABLE>

See Notes to Financial Statements

10
<PAGE> 66

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $120,742,312) (Note 1).............. $125,373,166
Short-Term Investments (Cost $3,138,386) (Note 1)...................... 2,837,427
Receivables:
Investments Sold..................................................... 3,605,347
Interest............................................................. 3,076,386
Fund Shares Sold..................................................... 461,333
Swap Transactions (Note 5)........................................... 3,683
Unamortized Organizational Expenses (Note 1)........................... 101,944
Options at Market Value (Net premiums paid of $216,400) (Note 5)....... 45,340
Other.................................................................. 1,605
------------
Total Assets....................................................... 135,506,231
------------
LIABILITIES:
Payables:
Bank Borrowings (Note 8)............................................. 30,620,292
Investments Purchased................................................ 6,345,040
Reverse Repurchase Agreements (Note 8)............................... 5,281,470
Income Distributions................................................. 380,004
Investment Advisory Fee (Note 2)..................................... 259,630
Fund Shares Repurchased.............................................. 145,199
Margin on Futures (Note 5)........................................... 74,375
Accrued Expenses....................................................... 633,476
------------
Total Liabilities.................................................. 43,739,486
------------
NET ASSETS............................................................. $ 91,766,745
----------
NET ASSETS CONSIST OF:
Capital (Note 3)....................................................... $ 99,233,657
Net Unrealized Appreciation on Investments and Foreign Currency........ 3,500,634
Accumulated Distributions in Excess of Net Investment Income (Note
1)................................................................... (608,090)
Accumulated Net Realized Loss on Investments........................... (10,359,456)
------------
NET ASSETS............................................................. $ 91,766,745
----------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net assets
of $32,174,583 and 2,635,367 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 12.21
Maximum sales charge (4.75%* of offering price).................... .61
------------
Maximum offering price to public................................... $ 12.82
----------
Class B Shares:
Net asset value and offering price per share (Based on net assets
of $56,779,388 and 4,649,048 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 12.21
----------
Class C Shares:
Net asset value and offering price per share (Based on net assets
of $2,812,774 and 230,485 shares of capital stock issued and
outstanding) (Note 3).............................................. $ 12.20
----------
</TABLE>

*On sales of $100,000 or more, the sales charge will be reduced.

See Notes to Financial Statements

11
<PAGE> 67

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $5,452)................... $ 5,796,727
-----------
EXPENSES:
Investment Advisory Fee (Note 2)........................................ 463,346
Distribution (12b-1) and Service Fees (Allocated to Classes A, B and C
of $38,529, $272,533 and $10,881, respectively) (Note 7).............. 321,943
Shareholder Services (Note 2)........................................... 80,441
Custody................................................................. 65,583
Trustees Fees and Expenses (Note 2)..................................... 33,260
Amortization of Organizational Expenses (Note 1)........................ 17,130
Legal (Note 2).......................................................... 11,040
Other................................................................... 102,402
-----------
Total Operating Expenses.......................................... 1,095,145
Less Expenses Reimbursed.......................................... 42,548
-----------
Net Operating Expenses............................................ 1,052,597
Interest Expense (Note 8)......................................... 1,197,416
-----------
NET INVESTMENT INCOME................................................... $ 3,546,714
---------
NET REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS AND FOREIGN
CURRENCY:
Net Realized Loss on Investments and Foreign Currency (Including
realized gain on foreign currency transactions of $3,221 and realized
loss on closed and expired option and futures transactions of $156,512
and $772,148, respectively)........................................... $(1,382,792)
-----------
Net Unrealized Appreciation/Depreciation on Investments and Foreign
Currency:
Beginning of the Period................................................. (1,979,896)
End of the Period (Including unrealized appreciation on swap
transactions and foreign currency translation of other assets and
liabilities of $3,683 and $9,054, respectively and unrealized
depreciation on option and futures transactions of $171,060 and
$670,938, respectively)............................................... 3,500,634
-----------
Net Unrealized Appreciation on Investments and Foreign Currency During
the Period............................................................ 5,480,530
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCY.... $ 4,097,738
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS.............................. $ 7,644,452
---------
</TABLE>

See Notes to Financial Statements

12
<PAGE> 68

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1995
and the Year Ended June 30, 1995 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1995 June 30, 1995
<S> <C> <C>
- ------------------------------------------------------------------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 3,546,714 $ 4,245,759
Net Realized Loss on Investments and Foreign Currency.... (1,382,792) (5,113,942)
Net Unrealized Appreciation on Investments and Foreign
Currency During the Period.............................. 5,480,530 6,772,099
--------- ----------
Change in Net Assets from Operations..................... 7,644,452 5,903,916
--------- ----------
Distributions from Net Investment Income................. (3,546,714) (4,415,661)
Distributions in Excess of Net Investment Income (Note
1)...................................................... (353,413) (533,006)
--------- ----------
Distributions from and in Excess of Net Investment
Income*................................................. (3,900,127) (4,948,667)
Return of Capital Distribution* (Note 1)................. -0- (2,635,924)
--------- ----------
Total Distributions...................................... (3,900,127) (7,584,591)
--------- ----------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES...... 3,744,325 (1,680,675)
--------- ----------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold................................ 11,610,134 25,816,917
Net Asset Value of Shares Issued Through Dividend
Reinvestment............................................ 1,624,316 3,244,998
Cost of Shares Repurchased............................... (9,176,999) (16,415,322)
--------- ----------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS....... 4,057,451 12,646,593
--------- ----------
TOTAL INCREASE IN NET ASSETS............................. 7,801,776 10,965,918
NET ASSETS:
Beginning of the Period.................................. 83,964,969 72,999,051
--------- ----------
End of the Period (Including undistributed net investment
income of $(608,090) and $(407,598), respectively)...... $ 91,766,745 $ 83,964,969
--------- ----------
</TABLE>

<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class December 31, 1995 June 30, 1995
<S> <C> <C>
------------------------------------------------------------------------------
Distributions from and in Excess of
Net Investment Income (Note 1):
Class A Shares....................... $ (1,449,350) $ (1,773,941)
Class B Shares....................... (2,357,749) (3,039,599)
Class C Shares....................... (93,028) (135,127)
------------ ------------
$ (3,900,127) $ (4,948,667)
------------ ------------
Return of Capital Distribution (Note
1):
Class A Shares....................... $ -0- $ (957,995)
Class B Shares....................... -0- (1,618,412)
Class C Shares....................... -0- (59,517)
------------ ------------
$ -0- $ (2,635,924)
------------ ------------
</TABLE>

See Notes to Financial Statements

13
<PAGE> 69

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Operations) to
Class A Shares December 31, 1995 June 30, 1995 June 30, 1994
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
the Period.................... $11.704 $11.975 $14.300
------ ------ ------
Net Investment Income........... .533 .657 .566
Net Realized and Unrealized
Gain/Loss on Investments and
Foreign Currency.............. .535 .272 (2.391)
------ ------ ------
Total from Investment
Operations.................... 1.068 .929 (1.825)
------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)............. .563 .793 .500
Return of Capital Distribution
(Note 1).................... -0- .407 -0-
------ ------ ------
Total Distributions............. .563 1.200 .500
------ ------ ------
Net Asset Value, End of the
Period........................ $12.209 $11.704 $11.975
------ ------ ------
Total Return*................... 9.40%** 8.46% (12.83%)**
Net Assets at End of the Period
(In millions)................. $32.2 $29.6 $24.5
Ratio of Operating Expenses to
Average Net Assets*........... 1.93% 1.98% 1.88%
Ratio of Interest Expense to
Average Net Assets (Note 8)... 2.76% 2.38% .96%
Ratio of Net Investment Income
to Average Net Assets*........ 8.65% 5.88% 9.27%
Portfolio Turnover.............. 158.28% 252.74% 114.04%
* If certain expenses had not been assumed by VKAC, total return would have been lower
and the ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............ 2.03% N/A N/A
Ratio of Net Investment Income
to Average Net Assets......... 8.55% N/A N/A
</TABLE>

** Non-Annualized

N/A = Not Applicable

See Notes to Financial Statements

14
<PAGE> 70

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Operations) to
Class B Shares December 31, 1995 June 30, 1995 June 30, 1994
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
the Period.................... $11.706 $11.968 $14.300
------ ------ ------
Net Investment Income........... .489 .585 .515
Net Realized and Unrealized
Gain/Loss on Investments and
Foreign Currency.............. .534 .245 (2.392)
------ ------ ------
Total from Investment
Operations.................... 1.023 .830 (1.877)
------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)............. .516 .722 .455
Return of Capital Distribution
(Note 1).................... -0- .370 -0-
------ ------ ------
Total Distributions............. .516 1.092 .455
------ ------ ------
Net Asset Value, End of the
Period........................ $12.213 $11.706 $11.968
------ ------ ------
Total Return*................... 8.88%** 7.62% (13.21%)**
Net Assets at End of the Period
(In millions)................. $56.8 $52.6 $46.4
Ratio of Operating Expenses to
Average Net Assets*........... 2.69% 2.68% 2.63%
Ratio of Interest Expense to
Average Net Assets (Note 8)... 2.75% 2.38% .96%
Ratio of Net Investment Income
to Average Net Assets*........ 7.90% 5.30% 8.48%
Portfolio Turnover.............. 158.28% 252.74% 114.04%
* If certain expenses had not been assumed by VKAC, total return would have been lower
and the ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............ 2.78% N/A N/A
Ratio of Net Investment Income
to Average Net Assets......... 7.80% N/A N/A
</TABLE>

** Non-Annualized

N/A = Not Applicable

See Notes to Financial Statements

15
<PAGE> 71

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Operations) to
Class C Shares December 31, 1995 June 30, 1995 June 30, 1994
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------
Net Asset Value, Beginning of
the Period.................... $11.699 $11.966 $14.300
------ ------ ------
Net Investment Income........... .511 .598 .509
Net Realized and Unrealized
Gain/Loss on Investments and
Foreign Currency.............. .510 .227 (2.388)
------ ------ ------
Total from Investment
Operations.................... 1.021 .825 (1.879)
------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)............. .516 .722 .455
Return of Capital Distribution
(Note 1).................... -0- .370 -0-
------ ------ ------
Total Distributions............. .516 1.092 .455
------ ------ ------
Net Asset Value, End of the
Period........................ $12.204 $11.699 $11.966
------ ------ ------
Total Return*................... 8.89%** 7.53% (13.21%)**
Net Assets at End of the Period
(In millions)................. $2.8 $1.7 $2.1
Ratio of Operating Expenses to
Average Net Assets*........... 2.69% 2.69% 2.65%
Ratio of Interest Expense to
Average Net Assets (Note 8)... 2.80% 2.38% .95%
Ratio of Net Investment Income
to Average Net Assets*........ 7.79% 5.92% 8.36%
Portfolio Turnover.............. 158.28% 252.74% 114.04%
* If certain expenses had not been assumed by VKAC, total return would have been lower
and the ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............ 2.80% N/A N/A
Ratio of Net Investment Income
to Average Net Assets......... 7.68% N/A N/A
** Non-Annualized
</TABLE>

N/A = Not Applicable

See Notes to Financial Statements

16
<PAGE> 72

NOTES TO FINANCIAL STATEMENTS

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

1. SIGNIFICANT ACCOUNTING POLICIES

Van Kampen American Capital Strategic Income Fund (the "Fund") is organized as a
series of Van Kampen American Capital Trust (the "Trust"), a Delaware business
trust, and is registered as a non-diversified open-end management investment
company under the Investment Company Act of 1940, as amended. The Fund's primary
investment objective is to seek to provide shareholders with high current
income, while it's secondary investment objective is to seek capital
appreciation. The Fund will allocate its investments among the following market
sectors: U.S. government securities, domestic investment grade income
securities, domestic lower grade income securities, foreign investment grade
income securities and foreign lower grade income securities. The Fund borrows
money for investment purposes which will create the opportunity for enhanced
return, but also should be considered a speculative technique and may increase
the Fund's volatility. The Fund commenced investment operations on December 31,
1993, with three classes of common shares, Class A, Class B and Class C shares.

The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.

A. SECURITY VALUATION--Investments are stated at value using market quotations,
prices provided by market makers or, if such valuations are not available,
estimates obtained from yield data relating to instruments or securities with
similar characteristics in accordance with procedures established in good faith
by the Board of Trustees. Foreign investments are stated at value using the last
available bid price or yield equivalents obtained from dealers in the
over-the-counter (OTC) or interbank market. Short-term securities with remaining
maturities of less than 60 days are valued at amortized cost.

C. INVESTMENT INCOME AND EXPENSES--Interest income and expenses are recorded on
an accrual basis. Original issue discount is amortized over the expected life of
each applicable security.

17
<PAGE> 73

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

E. ORGANIZATIONAL EXPENSES--The Fund will reimburse Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Fund's organization in the amount of $170,000. These costs
are being amortized on a straight line basis over the 60 month period ending
December 31, 1998. Van Kampen American Capital Investment Advisory Corp. (the
"Adviser") has agreed that in the event any of the initial shares of the Fund
originally purchased by VKAC are redeemed during the amortization period, the
Fund will be reimbursed for any unamortized organizational expenses in the same
proportion as the number of shares redeemed bears to the number of initial
shares held at the time of redemption.

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 such losses against any future realized capital
gains. At June 30, 1995, the Fund had an accumulated capital loss carryforward
for tax purposes of $4,216,449, which will expire on June 30, 2003. Net realized
gains or losses may differ for financial and tax reporting purposes primarily as
a result of post October 31 losses which are not recognized for tax purposes
until the first day of the following fiscal year.

18
<PAGE> 74

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

options on foreign currencies. These realized gains and losses are included as
net realized gains or losses for financial reporting purposes. Permanent book
and tax basis differences relating to net currency gains totaling $152,921 were
reclassified from accumulated net realized gain/loss on investments to
accumulated undistributed net investment income.

Net realized gains on securities, if any, are distributed annually.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly as follows:

<TABLE>
<CAPTION>
AVERAGE MANAGED ASSETS % PER ANNUM
<S> <C>
- -----------------------------------------------------------------------
First $500 million...................................... .75 of 1%
Next $500 million....................................... .70 of 1%
Over $1 billion......................................... .65 of 1%
</TABLE>

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.

For the six months ended December 31, 1995, the Fund recognized expenses of
approximately $10,500 representing VKAC's cost of providing accounting, cash
management and legal services to the Fund.

In July, 1995, the Fund began using ACCESS Investor Services, Inc., an
affiliate of the Adviser, as the transfer agent of the Fund. For the six months
ended December 31, 1995, the Fund recognized expenses of approximately $56,400,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.

Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.

19
<PAGE> 75

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1995, VKAC owned 100 shares each of Classes A, B and C.

At December 31, 1995, capital aggregated $34,619,094, $61,512,027 and
$3,102,536 for Classes A, B and C, respectively. For the six months ended
December 31, 1995, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
<S> <C> <C>
- ----------------------------------------------------------------------
Sales:
Class A.................................. 371,048 $ 4,407,860
Class B.................................. 521,783 6,198,347
Class C.................................. 84,671 1,003,927
-------- -----------
Total Sales................................ 977,502 $11,610,134
-------- -----------
Dividend Reinvestment:
Class A.................................. 45,857 $ 544,542
Class B.................................. 86,451 1,026,690
Class C.................................. 4,461 53,084
-------- -----------
Total Dividend Reinvestment................ 136,769 $ 1,624,316
-------- -----------
Repurchases:
Class A.................................. (313,445) $(3,721,219)
Class B.................................. (453,190) (5,384,788)
Class C.................................. (6,023) (70,992)
-------- -----------
Total Repurchases.......................... (772,658) $(9,176,999)
-------- -----------
</TABLE>

20
<PAGE> 76

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1995, capital aggregated $33,387,911, $59,671,778 and $2,116,517
for Classes A, B and C, respectively. For the year ended June 30, 1995,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................... 970,765 $ 11,135,557
Class B.................................... 1,206,027 13,927,571
Class C.................................... 65,188 753,789
---------- ------------
Total Sales.................................. 2,241,980 $ 25,816,917
---------- ------------
Dividend Reinvestment:
Class A.................................... 90,046 $ 1,025,064
Class B.................................... 185,189 2,109,222
Class C.................................... 9,720 110,712
---------- ------------
Total Dividend Reinvestment.................. 284,955 $ 3,244,998
---------- ------------
Repurchases:
Class A.................................... (576,467) $ (6,551,783)
Class B.................................... (772,126) (8,730,596)
Class C.................................... (103,217) (1,132,943)
---------- ------------
Total Repurchases............................ (1,451,810) $(16,415,322)
---------- ------------
</TABLE>

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
<S> <C> <C>
- -------------------------------------------------------------------
First...................................... 4.00% 1.00%
Second..................................... 3.75% None
Third...................................... 3.50% None
Fourth..................................... 2.50% None
Fifth...................................... 1.50% None
Sixth...................................... 1.00% None
Seventh and Thereafter..................... None None
</TABLE>

21
<PAGE> 77

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

For the six months ended December 31, 1995, VKAC, as Distributor for the
Fund, received net commissions on sales of the Fund's Class A shares of
approximately $14,900 and CDSC on the redeemed shares of Classes B and C of
approximately $116,000. Sales charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the six months ended December 31, 1995, were $197,502,797
and $187,321,904, 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, manage the portfolio's effective yield, foreign currency exposure,
maturity and duration or generate potential gain. 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 on
investments. Upon disposition, a realized gain or loss is recognized
accordingly, except for exercised option contracts where the recognition of gain
or loss is postponed until the disposal of the security underlying the option
contract.

Summarized below are the specific types of derivative financial instruments
used by the Fund.

22
<PAGE> 78

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

Transactions in options for the six months ended December 31, 1995, were as
follows:

<TABLE>
<CAPTION>
CONTRACTS PREMIUM
<S> <C> <C>
- ---------------------------------------------------------------------------
Outstanding at June 30, 1995.................... 5 $(268,450)
Options Written and Purchased (Net)............. 1,080 (946,083)
Options Terminated in Closing
Transactions (Net)............................ (503) 530,576
Options Exercised............................... (201) 56,600
Options Expired (Net)........................... (377) 410,957
----- ---------
Outstanding at December 31, 1995................ 4 $(216,400)
----- ---------
</TABLE>

The descriptions and market values of the option contracts outstanding as of
December 31, 1995, are as follows:

<TABLE>
<CAPTION>
STRIKE
OPENING EXPIRATION PRICE/ MARKET
DESCRIPTION TRANSACTION DATE YIELD VALUE
<S> <C> <C> <C> <C>
- --------------------------------------------------------------------------------
French Franc Put................. Buy 03/04/96 5.01% $ 8,200
German Mark Put.................. Buy 03/04/96 1.43% 19,400
Mexican Discount Put............. Buy 01/08/96 68.06% 1,240
Swiss Franc Put.................. Buy 03/04/96 1.16% 16,500
-------
$45,340
-------
</TABLE>

B. FUTURES CONTRACTS--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 typically closes
the contract prior to the delivery date. These contracts are generally used to
manage the portfolio's effective maturity and duration.

The fluctuation in market value of the contracts is settled daily through a
cash margin account. Realized gains and losses are recognized when the contracts
are closed or expire.

Transactions in futures contracts for the six months ended December 31,
1995, were as follows:

<TABLE>
<CAPTION>
CONTRACTS
<S> <C>
- ------------------------------------------------------------------------
Outstanding at June 30, 1995.............................. 299
Futures Opened............................................ 3,401
Futures Closed............................................ (3,480)
-----
Outstanding at December 31, 1995.......................... 220
-----
</TABLE>

23
<PAGE> 79

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

The futures contracts outstanding as of December 31, 1995, and the
descriptions and unrealized depreciation are as follows:

<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS DEPRECIATION
<S> <C> <C>
- ----------------------------------------------------------------------------
20-Year U.S. Treasury Bond Future Mar 1996--
Sells to Open................................ 200 $660,938
10-Year U.S. Treasury Bond Future Mar 1996--
Sells to Open................................ 20 10,000
--- ---------
220 $670,938
--- ---------
</TABLE>

C. SWAP TRANSACTIONS--A swap represents an agreement between two parties to
exchange a series of cash flows based upon various indices at specified
intervals.

The interest rate swap transaction outstanding as of December 31, 1995, and
the description and unrealized appreciation is as follows:

<TABLE>
<CAPTION>
UNREALIZED
DESCRIPTION APPRECIATION
<S> <C>
- -------------------------------------------------------------------------
Goldman Sachs, 25.5 million US$ notional amount,
maturing 03/18/96, payment based upon the spread
between the 10 year German Bund versus the 3 month
German LIBOR.......................................... $3,683
------
</TABLE>

D. INDEXED SECURITIES--These instruments are identified in the portfolio of
investments.

An Inverse Floating security is one where the coupon is inversely indexed to
a short-term floating interest rate multiplied by a specified factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. The price of these securities may be more
volatile than the price of a comparable fixed rate security. These instruments
are typically used by the Fund to enhance the yield of the portfolio.

6. MORTGAGE-BACKED SECURITIES

A Mortgage-Backed Security (MBS) is a pass-through security created by pooling
mortgages and selling participations in the principal and interest payments
received from borrowers. Most of these securities are guaranteed by federally
sponsored agencies such as Federal Home Loan Mortgage Corp (FHLMC) or Federal
National Mortgage Association (FNMA).

A Collateralized Mortgage Obligation (CMO) is a bond which is collateralized
by a pool of MBS's. The Fund also invests in REMIC's (Real Estate Mortgage
Investment Conduit) which are simply another form of CMO. These MBS pools are
divided into classes or

24
<PAGE> 80

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

tranches with each class having its own characteristics. For instance, a PAC
(Planned Amortization Class) is a specific class of mortgages with the most
stable cash flows and the lowest prepayment risk.

A MBS may also be stripped to create an Interest Only (IO) or a Principal
Only (PO) security. An IO represents ownership in the cash flows of the interest
payments made from a specific pool of MBS. The cash flow on this instrument
decreases as the mortgage principal balance is repaid by the borrower.
Conversely, a PO represents an ownership interest in the cash flows of the
principal payments made from a specified pool of MBS. The cash flows on this
instrument would increase in a declining interest rate environment as
prepayments on the underlying mortgages increase. IO's and PO's are typically
used to manage interest rate exposure in the Fund's portfolio.

7. DISTRIBUTION AND SERVICE PLANS

8. BORROWINGS

In accordance with its investment policies, the Fund may borrow money from banks
or enter into reverse repurchase agreements or dollar rolls for investment
purposes in an amount up to 33.3% of its total assets.

The Fund has entered into a $40,000,000 revolving credit agreement which
expires on April 30, 1996. Interest is charged under the agreement at a rate of
1.10% above the federal funds rate. The interest rate in effect at December 31,
1995, was 6.875%. An annual commitment fee of 1/4 of 1% is charged on the unused
portion of the credit line.

The Fund has entered into reverse repurchase agreements under which the Fund
sells securities and agrees to repurchase them at a mutually agreed upon date
and price. At December 31, 1995, the average interest rate in effect for reverse
repurchase agreements was 6.184%.

25
<PAGE> 81

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------

The average daily balance of bank borrowings and reverse repurchase
agreements for the six-months ended December 31, 1995, was approximately
$36,069,300 with an average interest rate of 6.57%.

At December 31, 1995, these agreements represented 26.5% of the Fund's total
assets.

26
<PAGE> 82

FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL

GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund

EQUITY
Growth
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund

THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund

27
<PAGE> 83

VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN

LINDA HUTTON HEAGY

ROGER HILSMAN

R. CRAIG KENNEDY

DENNIS J. MCDONNELL*

DONALD C. MILLER - Chairman

JACK E. NELSON

DON G. POWELL*

JEROME L. ROBINSON

FARNANDO SISTO

WAYNE W. WHALEN*

WILLIAM STEWART WOODSIDE

OFFICERS

DON G. POWELL*
President and Chief Executive Officer

DENNIS J. MCDONNELL*
Executive Vice President

RONALD A. NYBERG*
Vice President and Secretary

EDWARD C. WOOD, III*
Vice President and Chief Financial Officer

CURTIS W. MORELL*
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN*
Treasurer

TANYA M. LODEN*
Controller

WILLIAM N. BROWN*
PETER W. HEGEL*
ROBERT C. PECK, JR.*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents

INVESTMENT ADVISER

VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

DISTRIBUTOR

VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181

TRANSFER AGENT

ACCESS INVESTOR
SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256

CUSTODIAN

STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105

LEGAL COUNSEL

SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606

INDEPENDENT AUDITORS

KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601

* "Interested" persons of the Fund, as defined in the Investment Company Act of
1940.

(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.

28
<PAGE> 84
VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

PORTFOLIO OF INVESTMENTS
December 31, 1995 (Unaudited)

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
LOCAL
CURRENCY
PAR
AMOUNT S&P MOODY'S U.S. $ MARKET
(000) DESCRIPTION RATING RATING COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
FOREIGN BONDS AND DEBT SECURITIES 81.4%

ARGENTINA 6.8%

400 Banco De Galicia Y Buenos Aires (US$) BB- B1 9.000 % 11/01/03 $ 349,000
---------

BULGARIA 2.2%

250 Republic of Bulgaria (Var. Rate Coupon) (US$) NR NR 6.717 07/28/11 115,625
---------

COSTA RICA 11.7%

370 Banco Central Costa Rica (Var. Rate Coupon) (US$) NR NR 6.727 05/21/05 296,192

500 Banco Central Costa Rica (US$) NR NR 6.250 05/21/10 305,000
---------
601,192
---------
DOMINICAN REPUBLIC 4.2%

500 Republica Dominica Banco Central (Var. Rate
Coupon) (US$) NR NR 7.250 08/30/09 215,000
---------
HUNGARY 8.4%

500 National Bank of Hungary (US$) BB+ Ba1 8.875 11/01/13 430,525
---------

MEXICO 8.9%

500 Empresa ICA Society Contro (US$) NR B1 9.750 02/11/98 460,000
---------

MOROCCO 6.5%

500 Morocco Trust A Loan (US$) (b) NR NR 6.594 01/01/09 337,500
---------

PANAMA 6.9%

500 Panama Loan Agreement (US$) (b) NR NR * 01/30/15 357,700
---------

PHILIPPINES 7.5%

500 Central Bank Philippines (Var. Rate Coupon) (US$) NR NR 5.000 06/01/08 386,875
---------

POLAND 18.3%

500 Poland Debt Conversion Bond (Var. Rate Coupon) (US$) NR NR 5.000 10/27/19 265,000

175 Poland New Money Bond (Var. Rate Coupon) (US$) NR NR 6.875 10/27/09 115,500

500 Poland Par Bond (Var. Rate Coupon) (US$) NR NR 2.750 10/27/24 238,125

500 Poland PDI Bond (US$) NR NR 3.750 10/27/14 324,375
---------
943,000
---------
</TABLE>

See Notes to Financial Statements
<PAGE> 85

VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1995 (Unaudited)

(Cost $4,157,329)(a) $ 4,196,417
-----------

SHORT-TERM INVESTMENTS 18.1%

Mexican Cetes (5,588,990 Peso par, yielding 54.750%, maturing 09/05/96) 546,740

Repurchase Agreement (State Street Bank & Trust, U.S. Treasury Note,
$335,000 par, 7.500% coupon, due 11/15/16, dated 12/29/95, to be sold
on 01/02/96 at $386,247) 386,000
-----------

TOTAL SHORT-TERM INVESTMENTS

(Cost $898,658)(a) 932,740
-----------
OTHER ASSETS IN EXCESS OF LIABILITIES 0.5% 25,606
-----------
NET ASSETS 100% $ 5,154,763
===========
</TABLE>

*Zero coupon bond

(a) At December 31, 1995, cost for federal income tax purposes including
short-term investments is $5,055,987; the aggregate gross unrealized
appreciation is $358,344 and the aggregate gross unrealized depreciation is
$285,174, resulting in net unrealized appreciation of $73,170.

(b) Security is a bank loan participation (Note 1H).

See Notes to Financial Statements
<PAGE> 86
VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995 (UNAUDITED)

<TABLE>
<S> <C>
ASSETS:

Investments, at Market Value (Cost $4,157,329) (Note 1) $ 4,196,417
Short-Term Investments (Cost $898,658) (Note 1) 932,740
Cash 364
Interest Receivable 79,513
Unamortized Organizational Expenses (Note 1) 72,353
Other 179
-----------------
Total Assets 5,281,566
-----------------

LIABILITIES:

Payables:
Organizational Expenses 58,870
Investment Advisory Fee (Note 2) 4,360
Accrued Expenses 63,573
-----------------
Total Liabilities 126,803
-----------------
NET ASSETS $ 5,154,763
=================

NET ASSETS CONSIST OF:
Capital (Note 3) $ 6,014,290
Net Unrealized Appreciation on Investments 73,170
Accumulated Distributions in Excess of Net Investment Income (Note 1) (15,981)
Accumulated Net Realized Loss on Investments (916,716)
-----------------
NET ASSETS $ 5,154,763
=================

MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net assets of
$3,093,027 and 235,378 shares of capital stock and outstanding) (Note 3) $13.14
Maximum sales charge (4.75%* of offering price) 0.66
-----------------
Maximum offering price to public $13.80
=================
Class B Shares:
Net asset value and offering price per share (Based on net assets of $1,030,868
and 78,449 shares of capital stock issued and outstanding) (Note 3) $13.14
=================
Class C Shares:
Net asset value and offering price per share (Based on net assets of $1,030,868
and 78,449 shares of capital stock issued and outstanding) (Note 3) $13.14
=================

</TABLE>

*On sales of $100,000 or more, the sales charge will be reduced.

See Notes to Financial Statements
<PAGE> 87
VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995 (UNAUDITED)

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest $ 563,078
-----------------
EXPENSES:

Investment Advisory Fee (Note 2) 46,080
Custody 26,727
Audit 15,125
Amortization of Organizational Expenses (Note 1) 12,092
Legal (Note 2) 4,600
Trustees Fees and Expenses (Note 2) 4,048
Other 7,774
-----------------
Total Expenses 116,446
Less Fees Deferred 18,323
-----------------
Net Expenses 98,123
-----------------
NET INVESTMENT INCOME $ 464,955
=================
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS AND
FOREIGN CURRENCY:

Net Realized Gain on Investments and Foreign Currency (Including
realized loss on foreign currency transactions of $24,691 and
realized gain on option transactions of $128,000) $ 576,518
-----------------
Net Unrealized Appreciation/Depreciation on Investments
and Foreign Currency:

Beginning of the Period (29,199)

End of the Period 73,170
-----------------
Net Unrealized Appreciation on Investments and Foreign
Currency During the Period 102,369
-----------------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND
FOREIGN CURRENCY $ 678,887
=================
NET INCREASE IN NET ASSETS FROM OPERATIONS $ 1,143,842
=================

</TABLE>

See Notes to Financial Statements
<PAGE> 88
VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

STATEMENT OF CHANGES IN NET ASSETS
FOR THE SIX MONTHS ENDED DECEMBER 31, 1995
AND THE YEAR ENDED JUNE 30, 1995 (UNAUDITED)

<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1995 JUNE 30, 1995
----------------- --------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income $ 464,955 $ 832,844
Net Realized Gain/Loss on Investments and Foreign Currency 576,518 (864,621)
Net Unrealized Appreciation on Investments
and Foreign Currency During the Period 102,369 614,314
----------------- ------------------
Change in Net Assets from Operations 1,143,842 582,537
----------------- ------------------
Distributions from Net Investment Income (964,439) (546,234)
Distributions in Excess of Net Investment Income (Note 1) (15,981) 0
----------------- ------------------
Distributions from and in Excess of Net Investment Income* (980,420) (546,234)
----------------- ------------------

NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES 163,422 36,303
----------------- ------------------
FROM CAPITAL TRANSACTIONS (NOTE 3):

Cost of Shares Repurchased (4,000,000) 0
----------------- ------------------
TOTAL INCREASE/DECREASE IN NET ASSETS (3,836,578) 36,303

NET ASSETS:
Beginning of the Period 8,991,341 8,955,038
----------------- ------------------
End of the Period (Including undistributed net investment
income of ($15,981) and $524,175, respectively) $ 5,154,763 $ 8,991,341
================= ==================

<CAPTION>
SIX MONTHS ENDED YEAR ENDED
*DISTRIBUTIONS BY CLASS DECEMBER 31, 1995 JUNE 30, 1995
------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Distributions from and in Excess of Net Investment Income:
Class A Shares $ (588,140) $ (327,678)
Class B Shares (196,140) (109,278)
Class C Shares (196,140) (109,278)
----------------- -----------------
$ (980,420) $ (546,234)
================= =================

</TABLE>

See Notes to Financial Statements
<PAGE> 89

VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

FINANCIAL HIGHLIGHTS
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE
OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, 1993
(COMMENCEMENT
SIX MONTHS OF INVESTMENT
ENDED YEAR ENDED OPERATIONS) TO
CLASS A SHARES DECEMBER 31, 1995 JUNE 30, 1995 JUNE 30, 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the Period $ 12.839 $ 12.806 $ 14.300
----------------- ------------------ ----------------
Net Investment Income 0.626 1.189 0.419
Net Realized and Unrealized Gain/Loss on Investments
and Foreign Currency 1.076 (0.376) (1.913)
----------------- ------------------ ----------------
Total from Investment Operations 1.702 0.813 (1.494)

Less Distributions from and in Excess
of Net Investment Income (Note 1) 1.400 0.780 0.000
----------------- ------------------ ----------------
Net Asset Value, End of the Period $ 13.141 $ 12.839 $ 12.806
================= ================== ================

Total Return* 13.43%** 6.82% -10.42%**

Net Assets at End of the Period (In millions) $3.1 $5.4 $5.4

Ratio of Expenses to Average Net Assets* 2.13% 2.11% 2.88%

Ratio of Net Investment Income to Average Net Assets* 10.07% 9.64% 6.51%

Portfolio Turnover 60.97% 260.21% 117.62%

*If certain fees had not been deferred by VKAC,
total return would have been lower and the ratios
would have been as follows:

Ratio of Expenses to Average Net Assets 2.52% 2.46% N/A

Ratio of Net Investment Income to Average Net Assets 9.67% 9.30% N/A
</TABLE>

** Non-annualized

N/A = Not Applicable

See Notes to Financial Statements
<PAGE> 90

VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

FINANCIAL HIGHLIGHTS (CONTINUED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE
OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, 1993
(COMMENCEMENT
SIX MONTHS OF INVESTMENT
ENDED YEAR ENDED OPERATIONS) TO
CLASS B SHARES DECEMBER 31, 1995 JUNE 30, 1995 JUNE 30, 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the Period $ 12.840 $ 12.760 $ 14.300
----------------- ------------------ ----------------
Net Investment Income 0.587 1.190 0.370
Net Realized and Unrealized Gain/Loss on Investments
and Foreign Currency 1.114 (0.330) (1.910)
----------------- ------------------ ----------------
Total from Investment Operations 1.701 0.860 (1.540)

Less Distributions from and in Excess
of Net Investment Income (Note 1) 1.400 0.780 0.000
----------------- ------------------ ----------------
Net Asset Value, End of the Period $ 13.141 $ 12.840 $ 12.760
================= ================== ================

Total Return* 13.42%** 7.24% -10.77%**

Net Assets at End of the Period (In millions) $1.0 $1.8 $1.8

Ratio of Expenses to Average Net Assets* 2.13% 2.08% 3.64%

Ratio of Net Investment Income to Average Net Assets* 10.07% 9.67% 5.76%

Portfolio Turnover 60.97% 260.21% 117.62%

*If certain fees had not been deferred by VKAC,
total return would have been lower and the ratios
would have been as follows:

Ratio of Expenses to Average Net Assets 2.52% 2.43% N/A

Ratio of Net Investment Income to Average Net Assets 9.67% 9.33% N/A
</TABLE>

** Non-annualized

N/A = Not Applicable

See Notes to Financial Statements

<PAGE> 91

VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND

FINANCIAL HIGHLIGHTS (CONTINUED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE
OF THE FUND OUTSTANDING THROUGHOUT THE PERIODS INDICATED. (UNAUDITED)

<TABLE>
<CAPTION>
DECEMBER 31, 1993
(COMMENCEMENT
SIX MONTHS OF INVESTMENT
ENDED YEAR ENDED OPERATIONS) TO
CLASS C SHARES DECEMBER 31, 1995 JUNE 30, 1995 JUNE 30, 1994
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the Period $ 12.840 $ 12.760 $ 14.300
----------------- ------------------ ----------------
Net Investment Income 0.587 1.190 0.370
Net Realized and Unrealized Gain/Loss on Investments
and Foreign Currency 1.114 (0.330) (1.910)
----------------- ------------------ ----------------
Total from Investment Operations 1.701 0.860 (1.540)

Less Distributions from and in Excess
of Net Investment Income (Note 1) 1.400 0.780 0.000
----------------- ------------------ ----------------
Net Asset Value, End of the Period $ 13.141 $ 12.840 $ 12.760
================= ================== ================

Total Return* 13.42%** 7.24% -10.77%**

Net Assets at End of the Period (In millions) $1.0 $1.8 $1.8

Ratio of Expenses to Average Net Assets* 2.13% 2.08% 3.64%

Ratio of Net Investment Income to Average Net Assets* 10.07% 9.67% 5.76%

Portfolio Turnover 60.97% 260.21% 117.62%

*If certain fees had not been deferred by VKAC,
total return would have been lower and the ratios
would have been as follows:

Ratio of Expenses to Average Net Assets 2.52% 2.43% N/A

Ratio of Net Investment Income to Average Net Assets 9.67% 9.33% N/A
</TABLE>

** Non-annualized

N/A = Not Applicable

See Notes to Financial Statements
<PAGE> 92
VAN KAMPEN AMERICAN CAPITAL
EMERGING MARKETS INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995 (UNAUDITED)

1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Emerging Markets Income Fund (the "Fund") is
organized as a series of Van Kampen American Capital Trust, a Delaware
business trust (the "Trust") and is registered as a diversified open-end
management investment company under the Investment Company Act of 1940, as
amended. The Fund's primary investment objective is to seek to provide its
shareholders with high current income. The Fund has a secondary investment
objective of seeking capital appreciation. The Fund commenced investment
operations on December 31, 1993, with three classes of common shares, Class A,
Class B and Class C.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements.

A. SECURITY VALUATION - Investments are stated at value using market
quotations, prices provided by market makers or, if such valuations are not
available, estimates obtained from yield data relating to instruments or
securities with similar characteristics in accordance with procedures
established in good faith by the Board of Trustees. Foreign investments are
stated at value using the last available bid price or yield equivalents
obtained from dealers in the over-the-counter (OTC) or interbank market.
Short-term securities with remaining maturities of less than 60 days are valued
at amortized cost.

B. SECURITY TRANSACTIONS - Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
The Fund may purchase and sell securities on a "when issued" or "delayed
delivery" basis, with settlement to occur at a later date. The value of the
security so purchased is subject to market fluctuations during this period.
The Fund will maintain, in a segregated account with its custodian, assets
having an aggregate value at least equal to the amount of the when issued or
delayed delivery purchase commitments until payment is made. At December 31,
1995, there were no when issued or delayed delivery purchase commitments.

C. INVESTMENT INCOME AND EXPENSES - Interest income and expenses are recorded
on an accrual basis. Dividend income is recorded on the ex-dividend date.
Original issue discount is amortized over the expected life of each applicable
security.
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 liablilities 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.

D. CURRENCY TRANSLATION - Assets and liabilities denominated in foreign
currencies are translated into U.S. dollars at the mean of the quoted bid and
asked prices of such currencies against the U.S. dollar. Purchases and sales
of portfolio securities are translated at the rate of exchange prevailing when
such securities were acquired or sold. Income and expenses are translated at
rates of exchange prevailing when accrued.

E. ORGANIZATIONAL EXPENSES - The Fund will reimburse Van Kampen American
Capital Distributors, Inc. or its affiliates ("collectively VKAC") for costs
incurred in connection with the Fund's organization in the amount of $120,000.
These costs are being amortized on a straight line basis over the 60 month
period ending December 31, 1998. Van Kampen American Capital Investment
Advisory Corp. (the "Adviser") has agreed that in the event any of the initial
shares of the Fund originally purchased by VKAC are redeemed during the
amortization period, the Fund will be reimbursed for any unamortized
organizational expenses in the same proportion as the number of shares redeemed
bears to the number of initial shares held at the time of redemption.

F. 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 and gains
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 such losses against any future
realized capital gains. At June 30, 1995, the Fund had an accumulated capital
loss carryforward for tax purposes of $769,051 which will expire on June 30,
2003. Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of post October 31 losses which are not
recognized for tax purposes until the first day of the following fiscal year.

G. DISTRIBUTION OF INCOME AND GAINS - Dividends from net investment income and
net realized gains, if any, are distributed annually. Net investment income
for federal income tax purposes includes gains and losses realized on
transactions in foreign currencies. These gains and losses are included as net
realized gains or losses for financial reporting purposes. Permanent book and
tax basis differences relating to net currency losses totaling $24,691 were
reclassified from accumulated net realized gain/loss on investments to
accumulated undistributed net investment income.

H. BANK LOAN PARTICIPATIONS - The Fund invests in participation interests of
loans to foreign entities. When the Fund purchases a participation of a
foreign loan interest,
<PAGE> 93
VAN KAMPEN AMERICAN CAPITAL
EMERGING MARKETS INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995 (UNAUDITED)

H. BANK LOAN PARTICIPATIONS (CONTINUED)
the Fund typically enters into a contractual agreement with the lender or other
third party selling the participation, but not with the borrower directly. As
such, the Fund assumes credit risk for the borrower, selling participant or
other persons positioned between the Fund and the borrower.

2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser and
Sub-Adviser, VKM Global Emerging Markets Advisors, will provide investment
advice and facilities to the Fund for an annual fee payable monthly as follows:

<TABLE>
<CAPTION>
Average Net Assets % Per Annum
------------------ --------------
<S> <C>
First $500 million 1.00%
Next $500 million .95%
Over $1 billion .90%
</TABLE>

Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.
For the six months ended December 31, 1995, the Fund recognized expenses
of approximately $5,800 representing VKAC's cost of providing accounting, cash
management and legal to the Fund.
In July, 1995, the fund began using ACCESS Investor Services, Inc., and
affiliate of the Adviser, as the transfer agent of the Fund. For the six
months ended December 31, 1995, the Fund recognized expenses of approximately
$4,000, representing ACCESS' cost of providing transfer agency and shareholder
services plus a profit.
Certain officers and trustees of the Fund are also officers and directors
of VKAC. The Fund does not compensate its officers or trustees who are
officers of VKAC. The Fund has implemented deferred compensation and
retirement plans for its Trustees. Under the deferred compensation plan,
Trustees may elect to defer all or a portion of their compensation to a later
date. The Fund's liability under the deferred compensation and retirement
plans at December 31, 1995, was approximately $8,200.
At December 31, 1995, VKAC owned all shares of Classes A, B and C,
respectively.

3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of common shares, Classes A, B and C,
each with a par value of $.01 per share. There are an unlimited number of
shares of each class without par value authorized. At December 31, 1995,
capital aggregated $3,607,886, $1,203,202 and $1,203,202 for Classes A, B and
C, respectively.

For the six months ended December 31, 1995, transactions in common shares
were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
---------- ------------
<S> <C> <C>
Repurchases:
Class A (184,722) $(2,399,544)
Class B (61,651) (800,228)
Class C (61,651) (800,228)
---------- ------------
Total Repurchases (308,024) $(4,000,000)
========== ============
</TABLE>

At June 30, 1995, capital aggregated $6,007,430, $2,003,430 and $2,003,430
for Class A,B and C shares, respectively. There were no capital transactions
for the year ended June 30, 1995.

Class B and Class C shares are offered without a front end sales charge,
but are subject to a contingent deferred sales charge (CDSC). The CDSC will be
imposed on most redemptions made within six years of the purchase for Class B
and one year of the purchase for Class C as detailed in the following schedule.
The Class B and Class C shares bear the expense of their respective deferred
sales arrangements, including higher distribution and service fees and
incremental transfer agency costs. VKAC waived the CDSC for those shares
redeemed during the six month period ending December 31, 1995.

<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge

Class B Class C
Year of Redemption Shares Shares
----------------------------- -------- --------
<S> <C> <C>
First 4.00% 1.00%
Second 3.75% None
Third 3.50% None
Fourth 2.50% None
Fifth 1.50% None
Sixth 1.00% None
Seventh and Thereafter None None
</TABLE>

4. INVESTMENT TRANSACTIONS
Aggregate purchases and cost of sales of investment securities, excluding
short-term investments, for the six months ended December 31, 1995 were
$4,578,438 and $7,215,197, 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.

<PAGE> 94
VAN KAMPEN MERRITT
EMERGING MARKETS INCOME FUND
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1995 (UNAUDITED)

5. DERIVATIVE FINANCIAL INSTRUMENTS (CONTINUED)
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, manage the portfolio's effective yield, maturity, duration and
foreign currency exposure or to generate potential gain. 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 on investments. Upon disposition, a realized gain or
loss is recognized accordingly, except for exercised option contracts where the
recognition of gain or loss is postponed until the disposal of the security
underlying the option contract.

An option contract gives the buyer the right , but not the obligation to
buy (call) or sell (put) an underlying item at a fixed exercise price during a
specified period. These contracts are generally used by the fund to manage the
portfolio's effective maturity and duration.

Transactions in options for the six months ended December 31, 1995, were
as follows:

<TABLE>
<CAPTION>
Contracts Premium
--------- ---------
<S> <C> <C>
Outstanding at June 30, 1995 3 $(67,000)
Options Terminated in
Closing Transaction (Net) (3) 67,000
--------- ---------
Outstanding at
December 31, 1995 -0- $-0-
========= =========
</TABLE>

6. DISTRIBUTION AND SERVICE PLANS
The Fund and its Shareholders have adopted a distribution plan (the
"Distribution Plan") pursuant to Rule 12b-1 under the Investment Company Act of
1940 and a service plan (the "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.
Since the Fund is not currently offering its shares to the public, no fees
related to the Plans are being accrued and no payments under the Plan have been
made to VKAC.

<PAGE> 95
VAN KAMPEN AMERICAN CAPITAL EMERGING MARKETS INCOME FUND
- -------------------------------------------------------------------------------

BOARD OF TRUSTEES INVESTMENT ADVISER

J. MILES BRANAGAN VAN KAMPEN AMERICAN CAPITAL
LINDA HUTTON HEAGY INVESTMENT ADVISORY CORP.
ROGER HILSMAN One Parkview Plaza
R. CRAIG KENNEDY Oakbrook Terrace, Illinois 60181
DENNIS J. MCDONNELL*
DONALD C. MILLER - CHAIRMAN SUB-ADVISER
JACK E. NELSON
DON G. POWELL* VKM Global Emerging Markets Advisors
JEROME L. ROBINSON 400 Madison Avenue
FERNANDO SISTO New York, New York 10017
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE DISTRIBUTOR

VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
OFFICERS One Parkview Plaza
Oakbrook Terrace, Illinois 60181
DON G. POWELL*
President and Chief TRANSFER AGENT
Executive Officer
ACCESS INVESTOR
DENNIS J. MCDONNELL* SERVICES, INC.
Executive Vice President P.O. Box 1713
Boston, Massachusetts 02105
RONALD A. NYBERG*
Vice President and Secretary CUSTODIAN

EDWARD C. WOOD, III* STATE STREET BANK AND TRUST COMPANY
Vice President and 225 Franklin Street
Chief Financial Officer P.O. Box 1713
Boston, Massachusetts 02105
CURTIS W. MORELL*
Vice President and LEGAL COUNSEL
Chief Accounting Officer
SKADDEN, ARPS, SLATE, MEAGHER & FLOM
JOHN L. SULLIVAN* 333 West Wacker Drive
Treasurer Chicago, Illinois 60606

TANYA M. LODEN*
Controller INDEPENDENT AUDITORS

WILLIAM N. BROWN* KPMG PEAT MARWICK LLP
PETER W. HEGEL* Peat Marwick Plaza
ROBERT C. PECK, JR.* 303 East Wacker Drive
ALAN T. SACHTLEBEN* Chicago, Illinois 60601
PAUL R. WOLKENBERG*
Vice Presidents

*"Interested" persons of the Fund as defined in the
Investment Company Act of 1940