VAN KAMPEN AMERICAN CAPITAL TRUST, N-30D, 1997-02-28

VAN KAMPEN AMERICAN CAPITAL TRUST
N-30D, 1997-02-28

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<PAGE> 1

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Portfolio Highlights............................. 4
Portfolio Management Review...................... 5
Portfolio of Investments......................... 8
Statement of Assets and Liabilities.............. 15
Statement of Operations.......................... 16
Statement of Changes in Net Assets............... 17
Financial Highlights............................. 18
Notes to Financial Statements.................... 21
</TABLE>

HYF SAR 2/97
<PAGE> 2

LETTER TO SHAREHOLDERS
[PHOTO]
DENNIS J. MCDONNELL AND DON G.
POWELL
January 31, 1997

Dear Shareholder,
We are pleased to report that the
Van Kampen American Capital High Yield
Fund has continued to generate
positive investment performance. As
noted in earlier reports, VK/AC
Holding Inc., the parent company of
Van Kampen American Capital, Inc., was
acquired by Morgan Stanley Group Inc.,
a world leader in asset management and
investment banking. The transaction
was completed in October, and we are
excited about the opportunities it
creates for investors. As part of the acquisition, Van Kampen American Capital
became the distributor of Morgan Stanley retail funds on January 2, 1997.

ECONOMIC REVIEW
The U.S. economy experienced moderate growth and low inflation during the
reporting period. At the beginning of 1996, economists were concerned that the
tepid economic pace of late 1995 might continue, possibly leading to a recession
by year end. That assumption soon came into question, however, when non-farm
payrolls increased by a stunning 705,000 in February, the biggest one-month jump
in 13 years. Then, a larger-than-expected 4.7 percent rate in real GDP (the
nation's gross domestic product, adjusted for inflation) during the second
quarter confirmed that the economy was back in a strong-growth mode. By summer,
the earlier talk of recession and rate cuts had changed to concerns about
economic overheating and the possibility of interest rate hikes.
Despite mounting evidence of inflation, the Federal Reserve held to a stable
monetary policy, believing the supply-and-demand imbalances in the commodity
markets were temporary and that burdensome consumer debt loads would eventually
slow the economy without the need for higher interest rates. Events during the
second half of 1996 proved the wisdom of Federal Reserve policy; real GDP growth
moderated to 2.0 percent in the third quarter while commodity prices receded.
For the year, core producer prices rose by 0.6 percent, the second-lowest annual
increase on record. Including the volatile food and energy sectors, however,
prices at the retail level rose by 3.3 percent.

MARKET REVIEW
Shifting expectations and modest returns characterized the fixed-income
markets in 1996. The year began with long-term interest rates near their lowest
level since the 1960s, reflecting the view that the American economy was
weakening and that a series of rate cuts by the Fed would be forthcoming. But
the Fed's quarter-percentage point reduction in the federal funds rate on
January 31 would be the only monetary easing during 1996, and long-term rates
soon began rising amid signs of a tightening labor market and stronger-than-
expected economic growth. Fears that the Fed would reverse course and raise
short-term rates became widespread after the economy experienced strong growth
in the second

Continued on page two

1
<PAGE> 3

quarter. By July, the yield on the Treasury's benchmark 30-year bond had reached
7.2 percent, up from 5.95 percent at the beginning of the year.
The last half of 1996 was spent recovering some of the ground lost over the
first six months. Economic growth moderated, commodity prices declined, and
inflation remained tame. As the Fed held short-term rates steady, long-term
yields gradually fell back to 6.64 percent by year end.
Compared to 1995, when most sectors of the taxable fixed-income market
generated double-digit gains, 1996 was a year of generally lackluster
performance. The Lehman Brothers Aggregate Bond Index returned just 4.16 percent
for the 12-month period ended December 31, 1996, with short- and
intermediate-term bonds outperforming longer-term issues. Lower-rated corporate
bonds also outperformed, as investors felt comfortable enough to stretch for
yield given the better-than-expected economy. For the year, 30-year Treasury
bonds lost approximately one percent on a total-return basis. Treasury bond
losses might have been larger, but heavy foreign buying, especially among
Japanese investors, where low interest rates and a falling yen made high-quality
American bonds an attractive option, helped control losses.

OUTLOOK
We expect interest rates during 1997 to repeat last year's moderate up and
down pattern. Stronger-than-expected U.S. economic growth and faint rumblings of
inflationary pressures over the first half of the year could prompt a series of
modest credit tightenings by the Fed. We anticipate that by the fourth quarter
the economy will moderate enough to discourage any lingering concerns about
inflation and allow interest rates to begin to decline across the maturity
spectrum. Although economic growth could be accompanied by short-term market
fluctuation, we do not believe it will be strong enough to reignite price
pressures. The results of the November elections reinforce this view--the
combination of a Democratic president and a Republican Congress should help
restrain potential spending increases and large tax cuts, and therefore, keep
the budget deficit under control.
While domestic economic fundamentals may keep bond prices relatively stable,
the risk of external shocks to the market is growing. We cannot look at the U.S.
economy in isolation. Monetary policy has been unusually accommodative in many
foreign countries. If these economies gain significant strength in 1997, the
resulting demand for capital could divert buying power from the U.S. credit
market. Since foreign investors have become the marginal buyers of U.S. bonds,
we believe that increased competition for the global fixed-income dollar could
exert mild upward pressure on domestic interest rates over the year.
Additional details about your Fund, including a question and answer section
with your portfolio management team, are provided in this report. We appreciate
your continued confidence in your investment with Van Kampen American Capital.

Sincerely,

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

2
<PAGE> 4

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1996

VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV1... 8.01% 7.50% 7.50%
Six-month total return2................ 2.92% 3.50% 6.50%
One-year total return based on NAV1.... 12.48% 11.65% 11.65%
One-year total return2................. 7.10% 7.65% 10.65%
Five-year average annual total
return2................................ 10.89% N/A N/A
Ten-year average annual total
return(2).............................. 8.33% N/A N/A
Life-of-Fund average annual total
return2................................ 8.36% 8.05% 7.96%
Commencement date...................... 06/27/86 05/17/93 08/13/93
DISTRIBUTION RATE AND YIELD
Distribution rate3..................... 8.46% 8.15% 8.15%
SEC Yield4............................. 7.66% 7.26% 7.27%
N/A = Not Applicable
</TABLE>

1Assumes 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).

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

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

4SEC 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, 1996.

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 HIGHLIGHTS

VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND
TOP TEN ISSUERS AS OF DECEMBER 31, 1996

<TABLE>
<CAPTION>
PERCENTAGE OF FUND'S
LONG-TERM INVESTMENTS
<S> <C>
Connecticut Yankee Atomic
Power General............. 1.65%
Panamsat L.P. .............. 1.43%
SCI Television, Inc. ....... 1.43%
U.S. Can Co. ............... 1.39%
Owens Illinois, Inc. ....... 1.39%
Waban, Inc. ................ 1.35%
Global Marine, Inc. ........ 1.34%
IXC Communications, Inc. ... 1.31%
Thrifty Payless............. 1.30%
Schuller International
Group, Inc. .............. 1.22%
</TABLE>

CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM DEBT SECURITIES

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C> <C> <C>
AAA....... 2.9%
AA........ 0.6%
BBB....... 3.1%
BB........ 30.7%
B......... 57.0%
CCC....... 2.1%
Non-Rated... 3.6%
Pie Chart
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
<S> <C> <C> <C>
AAA....... 2.0%
AA........ 1.4%
A......... 0.9%
BBB....... 3.1%
BB........ 28.0%
B......... 53.0%
CCC....... 2.1%
Non-Rated... 9.5%
Pie Chart
</TABLE>

Based upon credit quality ratings issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.
TOP FIVE PORTFOLIO HOLDINGS BY SECTOR AS A PERCENTAGE OF LONG-TERM INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C>
Foreign Securities..... 15.7%
Printing, Publishing
and Broadcasting..... 7.8%
Telecommunications..... 7.1%
Oil and Gas............ 6.7%
Hotel, Motel, Inns and
Gaming............... 5.8%
</TABLE>

<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
<S> <C>
Foreign Securities.... 17.6%
Printing, Publishing
and Broadcasting.... 9.3%
Telecommunications.... 7.2%
Oil and Gas........... 8.6%
Hotel, Motel, Inns and
Gaming.............. 6.9%
</TABLE>

DURATION

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
<S> <C> <C>
Duration 3.60 years 3.75 years
</TABLE>

4
<PAGE> 6

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 that shaped the markets
during the past six months. The team includes Anne K. Lorsung, portfolio
manager, and Peter W. Hegel, chief investment officer for fixed-income
investments. The following excerpts reflect their views on the Fund's
performance during the six-month period ended December 31, 1996.
Q
WHAT WERE THE SIGNIFICANT FACTORS DRIVING THE PERFORMANCE OF HIGH YIELD
MARKETS DURING THE LAST SIX MONTHS OF 1996?
A
Interest rate trends improved for the fixed-income sector during the third
and fourth quarters of 1996, as the market rallied from declines seen
during the first half of the year. The Treasury markets were less volatile
in the second half of the year, as economic growth showed signs of slowing.
One of the main themes we saw in 1996 was the strong performance of several
of the more speculative market sectors, such as lower-rated corporate bonds,
certain zero-coupon securities, and select foreign emerging markets. From a
fundamental standpoint, the high yield market appeared very solid despite a
higher volume of new issuance, which would tend to suppress prices.
There was a relatively small number of bankruptcy or default situations, and
along with the fairly benign economic environment, investors became more
comfortable taking on added credit risk. The subsequent heavy and constant cash
flows into high yield mutual funds resulted in demand outpacing supply, and
strong returns in the high yield market.
Q
WHAT STEPS DID YOU TAKE TO POSITION THE FUND IN LIGHT OF THESE CONDITIONS?
A
We maintained a significant portion of the Fund's assets in higher-rated
credits, with approximately 37.3 percent of the portfolio in securities
rated BB or higher at year end. Our approach is to accept a slightly lower
yield to achieve potentially more stability in the Fund's net asset value.
The value of this approach becomes evident when the market hits a rough
spot, and we expect some volatility going into 1997. As such, we have kept the
Fund's duration relatively short. Duration is a measure of a bond's sensitivity
to changes in interest rates. The longer the Fund's duration, the greater the
effect of interest rate movements on net asset value. Funds with shorter
durations typically have performed better in rising rate environments, while
funds with longer durations have tended to do better when interest rates
decline. At year end, the Fund's duration stood at 3.6 years, compared to the
4.9 years of the Credit Suisse First Boston High Yield benchmark. To further
seek to minimize relative volatility, we have kept assets highly diversified,
with exposure to 24 industries.
Approximately 84 percent of assets are invested in the U.S. domestic market,
with 16 percent invested in foreign holdings at year end. Going forward, we
believe that we

5
<PAGE> 7

have captured much of the upside potential in the foreign sector and anticipate
reducing our exposure somewhat for other select opportunities.
Similar to other high yield mutual funds currently, we have significant
exposure to B-rated securities, which have provided more income than BB-rated
bonds, the highest quality rating within the non-investment grade category.
Currently, B-rated securities comprise 57 percent of the Fund's portfolio. We do
not expect to increase that percentage during the early part of 1997, as yield
spreads have narrowed significantly. With the current spread difference as tight
as it is, we do not feel the investor is adequately compensated for the
additional credit risk. As our credit research group adds significant value in
specific security selection in this sector, we will continue to leverage off
this expertise to seek to enhance yield in the Fund. For additional Fund
portfolio highlights, refer to page four.
Q
HOW HAS THE FUND PERFORMED DURING THE PAST SIX MONTHS?
A
The Fund posted a total return of 8.01 percent(1) (Class A shares at net
asset value) for the six-month period, and 12.48 percent(1) for the 12
months ended December 31, 1996.
The dividend was reduced in November from $.0750 per share to $.0725 per
share (Class A shares) in response to the rally we saw in foreign securities. As
we sold positions for a profit, the proceeds were reinvested into lower-yielding
securities at prevailing interest rate levels, reducing the immediate earning
power of the portfolio. Nonetheless, as of December 31, 1996, the Fund's
distribution rate stood at 8.46 percent(3) per share.
The Fund's return was supported by corporate acquisition activity that
created capital gains among some of its holdings, such as Thrifty Payless and
Bally Entertainment. When the issuer of a lower-rated security is purchased by a
company, the price of the lower-rated bond has tended to rise, as was the case
in Rite-Aid's purchase of Thrifty Payless and Hilton's acquisition of Bally. We
believe situations like these are evidence of the skill and thoroughness of our
high yield research team. Their ability to discover the potential of these
special situations is a true value to the Fund. Please refer to the chart on
page three for additional Fund performance results.
Q
GIVEN YOUR OUTLOOK FOR THE MARKETS, WHAT PORTFOLIO CHANGES HAVE BEEN MADE
OR COULD BE ANTICIPATED OVER THE NEXT SIX MONTHS?
A
We continue to be selective and take full advantage of our high yield
research capabilities. While we cannot ignore the big picture--such as the
potential for higher interest rates spurred by economic growth--we
anticipate finding success by focusing on the specific strength or weakness of
individual high-yield securities.
We do not anticipate any major shifts in our strategy or our allocations
among various sectors of the market. At year-end, some of our major allocations
were in telecommunications (7.1 percent), printing, publishing, and broadcasting
(7.8 percent), and hotel, motel, inns, and gaming (5.8 percent). These are
industries in which we can identify issuers with strong growth prospects,
favorable pricing environments, or, in the case of the gaming sector, issues
that have attractive risk/reward characteristics.

6
<PAGE> 8

We had previously trimmed our positions in cyclical industry bonds, such as
manufacturing and durable goods, as risks of a recession grew, and we do not
expect to add to that exposure in the near term. We feel cyclical companies are
not offering enough yield to offset the potential risks of owning these
securities.
Early indications that supply will remain strong in the foreseeable future
could spark some movement in the market. We believe our portfolio should
continue to provide relative stability for high yield investors who are
concerned about market value.
While there are several factors that could positively impact the market, we
believe in the short term it is more likely that interest rates will increase
rather than decline. If this occurs, the high yield sector should continue to
perform well. High yield bonds outperformed Treasuries during 1996 because a
growing economy has often improved their credit prospects, and their high coupon
payments may act as a buffer against rising interest rates. While our
expectation is that most fixed-income products will have relatively uneventful
price performance over the year, we are confident that the Fund will provide
steady dividend income.

[SIG]

Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
[SIG]

Anne K. Lorsung
Portfolio Manager

Please see footnotes on page three

7
<PAGE> 9

PORTFOLIO OF INVESTMENTS

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency U.S.($)
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DOMESTIC CORPORATE BONDS 73.0%
AEROSPACE & DEFENSE 1.0%
2,200 Sequa Corp................................. 9.625% 10/15/99 $ 2,282,500
1,600 Sequa Corp................................. 9.375 12/15/03 1,632,000
------------
3,914,500
------------
AUTOMOBILE 2.1%
2,600 Exide Corp................................. 10.750 12/15/02 2,717,000
1,750 JPS Automotive Products Corp............... 11.125 06/15/01 1,881,250
3,550 Speedy Muffler King, Inc................... 10.875 10/01/06 3,798,500
------------
8,396,750
------------
BEVERAGE, FOOD & TOBACCO 0.6%
2,350 Pilgrims Pride Corp........................ 10.875 08/01/03 2,361,750
------------
BUILDINGS & REAL ESTATE 3.1%
2,000 American Standard, Inc..................... 11.375 05/15/04 2,150,000
2,900 American Standard, Inc..................... 10.875 05/15/99 3,124,750
2,700 Clark Material Handling Corp............... 10.750 11/15/06 2,794,500
4,100 Schuller International Group, Inc.......... 10.875 12/15/04 4,571,500
------------
12,640,750
------------
CHEMICALS, PLASTICS & RUBBER 1.1%
4,258 ISP Holdings, Inc.......................... 9.750 02/15/02 4,470,900
------------
CONTAINERS, PACKAGING & GLASS 4.3%
1,900 Owens Illinois, Inc........................ 10.250 04/01/99 1,919,000
2,950 Owens Illinois, Inc........................ 11.000 12/01/03 3,289,250
2,100 S.D. Warren Co............................. 12.000 12/15/04 2,268,000
950 Stone Consolidated Corp.................... 10.250 12/15/00 1,009,375
1,850 Sweetheart Cup, Inc........................ 9.625 09/01/00 1,919,375
1,650 Sweetheart Cup, Inc........................ 10.500 09/01/03 1,736,625
5,000 U.S. Can Co................................ 13.500 01/15/02 5,225,000
------------
17,366,625
------------
DIVERSIFIED/CONGLOMERATE MANUFACTURING 3.1%
1,800 Aetna Industries, Inc...................... 11.875 10/01/06 1,939,500
4,000 Communications & Power Industries, Inc..... 12.000 08/01/05 4,490,000
1,750 Jordan Industries, Inc..................... 10.375 08/01/03 1,741,250
4,200 Talley Manufacturing & Technology, Inc..... 10.750 10/15/03 4,399,500
------------
12,570,250
------------
</TABLE>

See Notes to Financial Statements

8
<PAGE> 10

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency U.S.($)
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ECOLOGICAL 0.7%
1,800 Envirosource, Inc.......................... 9.750% 06/15/03 $ 1,692,000
1,100 Norcal Waste Systems, Inc. (b)............. 12.50/13.00 11/15/05 1,226,500
------------
2,918,500
------------
ELECTRONICS 3.6%
4,000 Advanced Micro Devices, Inc. .............. 11.000 08/01/03 4,350,000
4,250 Bell & Howell Co. (b)...................... 0/11.500 03/01/05 3,155,625
3,950 Computervision............................. 11.375 08/15/99 4,127,750
3,000 Exide Electronics Group, Inc. ............. 11.500 03/15/06 3,210,000
------------
14,843,375
------------
FARMING & AGRICULTURE 0.4%
1,750 Trans Resources, Inc. ..................... 11.875 07/01/02 1,767,500
------------
FINANCE 1.8%
3,650 American Annuity Group, Inc. .............. 11.125 02/01/03 3,932,875
3,300 Americo Life, Inc. ........................ 9.250 06/01/05 3,300,000
------------
7,232,875
------------
GROCERY 2.6%
3,650 Pantry, Inc. .............................. 12.000 11/15/00 3,504,000
3,700 Pathmark Stores, Inc. ..................... 9.625 05/01/03 3,552,000
3,600 Vons Cos., Inc. ........................... 9.625 04/01/02 3,762,000
------------
10,818,000
------------
HEALTHCARE 2.7%
3,100 Merit Behavioral Care Corp. ............... 11.500 11/15/05 3,332,500
500 Ornda Healthcorp........................... 12.250 05/15/02 532,500
3,250 Ornda Healthcorp........................... 11.375 08/15/04 3,753,750
3,100 Tenet Healthcare Corp. .................... 10.125 03/01/05 3,425,500
------------
11,044,250
------------
</TABLE>

See Notes to Financial Statements

9
<PAGE> 11

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

HOTEL, MOTEL, INNS & GAMING 5.8%
3,150 Argosy Gaming Co. ......................... 13.250% 06/01/04 $ 2,961,000
2,400 California Hotel Finance Corp. ............ 11.000 12/01/02 2,496,000
3,600 Coast Hotels & Casinos, Inc. .............. 13.000 12/15/02 3,978,000
2,700 Grand Casino, Inc. ........................ 10.125 12/01/03 2,713,500
2,850 Hollywood Casino, Inc. .................... 12.750 11/01/03 2,750,250
3,100 Majestic Star Casino L.L.C. ............... 12.750 05/15/03 3,324,750
3,000 MGM Grand Hotel Finance Corp. ............. 11.750 05/01/99 3,120,000
2,275 Trump Atlantic City Associates............. 11.250 05/01/06 2,263,625
------------
23,607,125
------------
LEISURE/ENTERTAINMENT 2.5%
1,000 Cobblestone Holdings, Inc. ................ * 06/01/04 435,000
1,200 Rayovac Corp. ............................. 10.250 11/01/06 1,230,000
4,050 Selmer, Inc. .............................. 11.000 05/15/05 4,404,375
3,850 Viacom International, Inc. ................ 10.250 09/15/01 4,186,875
------------
10,256,250
------------
MINING, STEEL, IRON & NON-PRECIOUS
METAL 3.8%
4,100 Armco, Inc. ............................... 11.375 10/15/99 4,305,000
3,850 Carbide/Graphite Group, Inc. .............. 11.500 09/01/03 4,215,750
3,000 Easco Corp. ............................... 10.000 03/15/01 3,030,000
1,000 Inland Steel Co. .......................... 12.000 12/01/98 1,070,000
2,750 WCI Steel, Inc. ........................... 10.000 12/01/04 2,805,000
------------
15,425,750
------------
OIL & GAS 6.7%
1,800 Clark R & M Holdings, Inc.................. * 02/15/00 1,296,000
2,400 Coda Energy, Inc........................... 10.500 04/01/06 2,544,000
3,700 Giant Industries, Inc...................... 9.750 11/15/03 3,838,750
4,645 Global Marine, Inc. (c).................... 12.750 12/15/99 5,016,600
4,150 KCS Energy, Inc............................ 11.000 01/15/03 4,523,500
1,750 Parker Drilling Co......................... 9.750 11/15/06 1,841,875
3,650 Petroleum Heat & Power, Inc................ 12.250 02/01/05 4,069,750
4,075 Triton Energy Corp......................... 9.750 12/15/00 4,258,375
------------
27,388,850
------------
PERSONAL & NON-DURABLE 1.7%
1,100 Cole National Group, Inc................... 9.875 12/31/06 1,124,750
1,250 Cole National Group, Inc. Senior Note...... 11.250 10/01/01 1,378,125
2,250 Revlon Consumer Products Corp.............. 9.375 04/01/01 2,311,875
1,100 Revlon Consumer Products Corp.............. 10.500 02/15/03 1,155,000
900 Revlon, Inc................................ 10.875 07/15/10 920,250
------------
6,890,000
------------

</TABLE>

See Notes to Financial Statements

10
<PAGE> 12

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency U.S.($)
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PRINTING, PUBLISHING & BROADCASTING 7.8%
1,000 Cablevision Industries Corp................ 10.750% 01/30/02 $ 1,055,000
1,200 Cablevision Systems Corp................... 10.750 04/01/04 1,245,000
1,350 Cablevision Systems Corp................... 10.500 05/15/16 1,397,250
2,700 Century Communications Corp................ 11.875 10/15/03 2,875,500
1,600 Comcast Corp............................... 9.375 05/15/05 1,664,000
1,500 Comcast Corp............................... 9.125 10/15/06 1,537,500
3,675 Insight Communications Co. L.P............. 11.250 03/01/00 3,803,625
2,700 International Cabletel, Inc. (b)........... 0/12.750 04/15/05 2,031,750
900 International Cabletel, Inc. (b)........... 0/11.500 02/01/06 614,250
1,100 JCAC, Inc.................................. 10.125 06/15/06 1,138,500
1,900 K-III Communications Corp.................. 10.625 05/01/02 1,999,750
1,600 K-III Communications Corp.................. 10.250 06/01/04 1,688,000
5,000 SCI Television, Inc........................ 11.000 06/30/05 5,375,000
1,200 Storer Communications, Inc................. 10.000 05/15/03 1,203,000
2,000 Young Broadcasting, Inc.................... 11.750 11/15/04 2,190,000
1,950 Young Broadcasting, Inc.................... 10.125 02/15/05 2,008,500
------------
31,826,625
------------
RETAIL 3.6%
1,000 Hosiery Corp. America, Inc................. 13.750 08/01/02 1,105,000
3,300 Loehmann's, Inc............................ 11.875 05/15/03 3,564,000
4,115 Thrifty Payless............................ 12.250 04/15/04 4,855,700
4,500 Waban, Inc................................. 11.000 05/15/04 5,062,500
------------
14,587,200
------------
TELECOMMUNICATIONS 7.1%
3,800 Centennial Cellular Corp................... 10.125 05/15/05 3,838,000
1,800 Echostar Communications Corp. (b).......... 0/12.875 06/01/04 1,489,500
3,500 EZ Communications, Inc..................... 9.750 12/01/05 3,657,500
1,350 Intermedia Communications of Florida,
Inc........................................ 13.500 06/01/05 1,549,125
2,700 Intermedia Communications of Florida, Inc.
(b)........................................ 0/12.500 05/15/06 1,782,000
4,450 IXC Communications, Inc.................... 12.500 10/01/05 4,895,000
2,950 Katz Media Corp............................ 10.500 01/15/07 3,031,125
2,700 Panamsat L.P............................... 9.750 08/01/00 2,855,250
1,400 Pricellular Wireless Corp.................. 14.000 11/15/01 1,386,000
2,600 Pricellular Wireless Corp. (b)............. 0/12.250 10/01/03 2,236,000
3,500 Teleport Communications Group (b).......... 0/11.125 07/01/07 2,415,000
------------
29,134,500
------------
</TABLE>

See Notes to Financial Statements

11
<PAGE> 13

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency U.S.($)
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TRANSPORTATION 1.0%
4,000 U.S. Air, Inc.............................. 8.625% 09/01/98 $ 4,010,000
------------
TEXTILES 0.9%
3,700 Dan River, Inc............................. 10.125 12/15/03 3,718,500
------------
UTILITIES 5.0%
3,000 AES Corp................................... 10.250 07/15/06 3,240,000
3,150 California Energy, Inc..................... 9.875 06/30/03 3,339,000
6,000 Connecticut Yankee Atomic Power General.... 12.000 06/01/00 6,180,000
1,450 El Paso Electric Co........................ 8.250 02/01/03 1,489,875
650 El Paso Electric Co........................ 8.900 02/01/06 685,750
3,200 Midland Funding Corp. II................... 11.750 07/23/05 3,576,000
1,650 National Energy Group, Inc................. 10.750 11/01/06 1,732,500
------------
20,243,125
------------
TOTAL DOMESTIC CORPORATE BONDS..................................... 297,433,950
------------
FOREIGN BONDS AND DEBT SECURITIES 15.7%
ARGENTINA 2.5%
2,000 Federal Republic of Argentina (Var. Rate
Cpn) (US$)................................. 5.250 03/31/23 1,260,000
2,000 Impsat Corp. (US$)......................... 12.125 07/15/03 2,110,000
2,000 Republic of Argentina (US$)................ 10.950 11/01/99 2,121,000
2,000 Republic of Argentina (Var. Rate Cpn)
(US$)...................................... 6.563 03/31/23 1,540,000
1,500 Telefonica De Argentina (US$).............. 11.875 11/01/04 1,665,000
1,500 Transportadora De Gas Del Sur SA (US$)..... 10.250 04/25/01 1,591,875
------------
10,287,875
------------
AUSTRALIA 0.5%
1,100 Commonwealth of Australia (AU$)............ 10.000 10/15/02 992,177
1,300 Commonwealth of Australia (AU$)............ 9.000 09/15/04 1,135,126
------------
2,127,303
------------
BRAZIL 0.8%
2,000 Brazil MYDFA Trust (US$)................... 6.688 09/15/07 1,712,500
2,600 Federal Republic of Brazil (Var. Rate Cp)
(US$)...................................... 5.000 04/15/24 1,628,250
------------
3,340,750
------------
CANADA 3.5%
3,700 Doman Industries Ltd. (US$)................ 8.750 03/15/04 3,478,000
4,000 Fonorola Inc. (US$)........................ 12.500 08/15/02 4,380,000
3,000 Fundy Cable Ltd. (US$)..................... 11.000 11/15/05 3,195,000
3,000 Rogers Communications, Inc. (US$).......... 10.875 04/15/04 3,165,000
------------
14,218,000
------------
COLUMBIA 0.9%
3,500 Financiera Energetica (US$)................ 9.375 09/15/06 3,720,500
------------
</TABLE>

See Notes to Financial Statements

12
<PAGE> 14

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency U.S.($)
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
INDONESIA 1.1%
4,000 Tjiwi Kimia International Finance (US$).... 13.250% 08/01/01 $ 4,550,000
------------
ITALY 0.5%
3,000,000 Federal Republic of Italy (Lira)........... 10.000 08/01/03 2,264,338
------------
LUXEMBOURG 0.3%
2,200 Millicom International Cellular SA (US$)
(b)........................................ 0/13.500 06/01/06 1,364,000
------------
MEXICO 0.9%
2,000 Petroleos Mexicanos (US$).................. 8.625 12/01/23 1,615,000
2,000 United Mexican States (US$)................ 11.375 09/15/16 2,090,000
------------
3,705,000
------------
MOROCCO 0.6%
3,000 Morocco Trust A Loan (US$) (e)............. 6.375 01/01/09 2,475,000
------------
NETHERLANDS 1.0%
4,200 Fresh Del Monte Produce N V (US$).......... 10.000 05/01/03 4,042,500
------------
PHILIPPINES 0.9%
1,000 Republic of Philippines (US$).............. 6.250 12/01/97 891,250
2,602 Republic of Philippines (US$).............. 8.750 10/07/16 2,702,828
------------
3,594,078
------------
POLAND 0.7%
1,000 Government of Poland (US$)................. 7.750 07/13/00 1,031,000
1,700 Government of Poland (Var. Rate Cpn.)
(US$)...................................... * 10/27/24 1,653,250
------------
2,684,250
------------
RUSSIA 0.6%
3,000 Vneshekonombank Loan Agreement (d)(e)
(US$)...................................... * 01/01/99 2,381,250
------------
SPAIN 0.5%
114,000 Government of Spain (Peseta)............... 12.250 03/25/00 1,040,467
125,000 Government of Spain (Peseta)............... 10.150 01/31/06 1,173,406
------------
2,213,873
------------
UNITED KINGDOM 0.4%
2,150 Telewest PLC (US$) (b)..................... 0/11.000 10/01/07 1,494,250
------------
TOTAL FOREIGN BONDS AND DEBT SECURITIES............................ 64,462,967
------------
U.S. GOVERNMENT OBLIGATIONS 0.8%
3,000 U.S. T-Notes............................... 9.000 05/15/98 3,128,160
------------
TOTAL LONG-TERM DEBT SECURITIES.................................... 365,025,077
------------
</TABLE>

See Notes to Financial Statements

13
<PAGE> 15

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
U.S. ($)
Description Market Value
- ---------------------------------------------------------------------------------------------
<S> <C>
EQUITIES 2.4%
American Telecasting, Inc. (8,370 common stock warrants) (g)................. $ 4,185
Cablevision Systems Corp. (15,484 preferred shares) (d) (f).................. 1,455,496
Capital Gaming International, Inc. (5,000 common stock warrants) (g)......... 0
Cobblestone Holdings, Inc. (1,000 common shares) (g)......................... 0
El Paso Electric Co. (18,975 preferred shares) (f)........................... 2,106,204
Exide Electronics Group, Inc. (2,950 common stock warrants) (g).............. 88,500
Fresenius Medical Care Capital Trust (2,500 preferred shares)................ 2,543,750
Hosiery Corp. of America, Inc. (1,000 common stock warrants) (g)............. 55,000
Intermedia Communications of Florida, Inc. (3,150 common stock warrants) (g). 126,000
Panamsat Corp. (2,047 preferred shares) (f).................................. 2,502,751
Supermarkets General Holdings Corp. (28,600 preferred shares)................ 743,600
------------
TOTAL EQUITIES..................................................... 9,625,486
------------
TOTAL LONG-TERM INVESTMENTS 91.9%
(Cost $360,492,501) (a)...................................................... 374,650,563
------------
SHORT-TERM INVESTMENTS 7.5%
Repurchase Agreement (J.P. Morgan, U.S. T-Note, $26,987,000 par, 7.250%
coupon, due 05/15/16, dated 12/31/96, to be sold on 01/02/97 at
$28,186,784)................................................................. 28,177,000
New Zealand T-Bills, (3,500,000 New Zealand Dollar par, yielding 9.943%,
maturing 01/08/97)........................................................... 2,471,897
------------
TOTAL SHORT-TERM INVESTMENTS 7.5%
(Cost $30,592,355) (a)....................................................... 30,648,897
OTHER ASSETS IN EXCESS OF LIABILITIES .6%..................................... 2,686,359
------------
NET ASSETS 100.0%............................................................. $407,985,819
------------
</TABLE>

*Zero coupon bond

(a) At December 31, 1996, cost for federal income tax purposes including
short-term investments is $391,084,856; the aggregate gross unrealized
appreciation is $15,493,901 and the aggregate gross unrealized depreciation
is $1,318,302, resulting in net unrealized appreciation including forward
currency contracts and foreign currency translation of other assets and
liabilities of $14,175,599.

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

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

(d) Securities purchased on a when issued or delayed delivery basis.

(e) Security is a bank loan participation.

(f) Payment-in-kind security.

(g) Non-income producing security.

See Notes to Financial Statements

14
<PAGE> 16

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $360,492,501)
(Note 1).................................................. $ 374,650,563
Short-Term Investments (Cost $30,592,355) (Note 1).......... 30,648,897
Cash........................................................ 854
Receivables:
Interest.................................................. 7,903,345
Fund Shares Sold.......................................... 504,770
Other....................................................... 33,337
---------------
Total Assets.......................................... 413,741,766
---------------
LIABILITIES:
Payables:
Securities Purchased...................................... 2,373,918
Income Distributions...................................... 1,774,684
Fund Shares Repurchased................................... 647,775
Investment Advisory Fee (Note 2).......................... 389,606
Distributor and Affiliates (Notes 2 and 6)................ 371,412
Deferred Compensation and Retirement Plans (Note 2)......... 80,595
Forward Currency Contracts (Note 5)......................... 73,849
Accrued Expenses............................................ 44,108
---------------
Total Liabilities..................................... 5,755,947
---------------
NET ASSETS.................................................. $ 407,985,819
----------
NET ASSETS CONSIST OF:
Capital (Note 3)............................................ $ 497,711,714
Net Unrealized Appreciation on Securities................... 14,175,599
Accumulated Distributions in Excess of Net Investment Income
(Note 1).................................................. (2,160,983)
Accumulated Net Realized Loss on Securities................. (101,740,511)
---------------
NET ASSETS.................................................. $ 407,985,819
----------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $281,679,086 and 28,764,500 shares of
beneficial interest issued and outstanding)............. $ 9.79
Maximum sales charge (4.75%* of offering price)......... .49
---------------
Maximum offering price to public........................ $ 10.28
----------
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $119,078,611 and 12,157,395 shares of
beneficial interest issued and outstanding)............. $ 9.79
----------
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $7,228,122 and 738,130 shares of
beneficial interest issued and outstanding)............. $ 9.79
----------
*On sales of $100,000 or more, the sales charge will be
reduced.
</TABLE>

See Notes to Financial Statements

15
<PAGE> 17

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $20,506)...... $19,417,594
Dividends................................................... 387,790
Other....................................................... 196,256
-------------
Total Income............................................ 20,001,640
-------------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 1,481,115
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B, and C of $333,833, $549,576, and $36,977,
respectively) (Note 6).................................... 920,386
Shareholder Services (Note 2)............................... 330,716
Trustees Fees and Expenses (Note 2)......................... 18,239
Legal (Note 2).............................................. 12,880
Other....................................................... 266,207
-------------
Total Expenses.......................................... 3,029,543
Less Fees Deferred and Expenses Reimbursed ($166,408 and
$5,042, respectively) (Note 2)........................ 171,450
-------------
Net Expenses............................................ 2,858,093
-------------
NET INVESTMENT INCOME....................................... $17,143,547
---------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................. $ 4,077,614
Forward Currency Contracts.............................. (133,274)
Foreign Currency Transactions........................... 267,419
-------------
Net Realized Gain on Securities............................. 4,211,759
-------------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period................................... 5,542,049
-------------
End of the Period:
Investments............................................. 14,214,604
Forward Currency Contracts.............................. (36,790)
Foreign Currency Translation............................ (2,215)
-------------
14,175,599
-------------
Net Unrealized Appreciation on Securities During the
Period.................................................... 8,633,550
-------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.............. $12,845,309
---------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $29,988,856
---------
</TABLE>

See Notes to Financial Statements

16
<PAGE> 18

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1996
and the Year Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
- ------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 17,143,547 $ 31,296,259
Net Realized Gain on Securities...................... 4,211,759 5,994,371
Net Unrealized Appreciation/Depreciation on
Securities
During the Period.................................. 8,633,550 (896,955)
---------- ----------
Change in Net Assets from Operations................. 29,988,856 36,393,675
---------- ----------
Distributions from Net Investment Income............. (17,143,547) (31,296,259)
Distributions in Excess of Net Investment Income
(Note 1)........................................... (593,523) (186,982)
---------- ----------
Distributions from and in Excess of Net Investment
Income*.......................................... (17,737,070) (31,483,241)
Return of Capital Distribution* (Note 1)............. -0- (1,853,192)
---------- ----------
Total Distributions................................ (17,737,070) (33,336,433)
---------- ----------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 12,251,786 3,057,242
---------- ----------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............................ 66,093,175 130,645,161
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 6,782,117 12,295,000
Cost of Shares Repurchased........................... (52,321,154) (81,944,626)
---------- ----------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 20,554,138 60,995,535
---------- ----------
TOTAL INCREASE IN NET ASSETS......................... 32,805,924 64,052,777
NET ASSETS:
Beginning of the Period.............................. 375,179,895 311,127,118
---------- ----------
End of the Period (Including accumulated
distributions in excess of net investment income of
$2,160,983, and $1,835,750, respectively).......... $407,985,819 $375,179,895
---------- ----------
</TABLE>

<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class December 31, 1996 June 30, 1996
- ------------------------------------------------------------------
<S> <C> <C>
Distributions from and in Excess of
Net Investment Income (Note 1):
Class A Shares................... $(12,785,431) $(24,518,181)
Class B Shares................... (4,638,434) (6,539,545)
Class C Shares................... (313,205) (425,515)
---------- ----------
$(17,737,070) $(31,483,241)
---------- ----------
Return of Capital Distribution
(Note 1):
Class A Shares................... $ -0- $ (1,394,959)
Class B Shares................... -0- (427,086)
Class C Shares................... -0- (31,147)
---------- ----------
$ -0- $ (1,853,192)
---------- ----------
</TABLE>

See Notes to Financial Statements

17
<PAGE> 19

FINANCIAL HIGHLIGHTS

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

<TABLE>
<CAPTION>
Year Ended June 30
Six months ended ----------------------------------------
Class A Shares December 31, 1996 1996 1995 1994 1993
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period............. $ 9.493 $ 9.398 $ 9.643 $10.380 $ 9.896
------ ------ ------ ------ ------
Net Investment Income..... .431 .878 .844 .908 1.118
Net Realized and
Unrealized Gain/Loss
Securities.............. .314 .147 (.099) (.595) .566
------ ------ ------ ------ ------
Total from Investment
Operations................ .745 1.025 .745 .313 1.684
------ ------ ------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)......... .445 .880 .815 .950 1.129
Return of Capital
Distribution (Note 1)... -0- .050 .175 .100 .071
------ ------ ------ ------ ------
Total Distributions......... .445 .930 .990 1.050 1.200
------ ------ ------ ------ ------
Net Asset Value, End of the
Period.................... $ 9.793 $ 9.493 $ 9.398 $ 9.643 $10.380
------ ------ ------ ------ ------
Total Return* (a)........... 8.01%** 11.26% 8.50% 2.92% 18.08%
Net Assets at End of the
Period (In millions)...... $ 281.7 $ 271.1 $ 253.3 $ 260.7 $ 251.5
Ratio of Expenses to Average
Net Assets *.............. 1.22% 1.31% 1.31% 1.32% 1.20%
Ratio of Net Investment
Income to Average Net
Assets *.................. 8.91% 9.16% 9.13% 8.85% 11.13%
Portfolio Turnover.......... 55%** 102% 152% 203% 198%
*If certain expenses had not been waived or reimbursed by VKAC, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................ 1.31% 1.31% N/A N/A N/A
Ratio of Net Investment
income to Average Net
Assets.................... 8.83% 9.15% N/A N/A N/A
</TABLE>

** Non-Annualized

(a) Total return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A -- Not applicable.

See Notes to Financial Statements

18
<PAGE> 20

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
May 17, 1993
Year Ended June 30, (Commencement
Six months ended --------------------------- of Distribution) to
Class B Shares December 31, 1996 1996 1995 1994 June 30, 1993(a)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the
Period................ $ 9.497 $ 9.398 $ 9.638 $10.382 $10.190
------ ------ ------ ------ ------
Net Investment
Income.............. .389 .797 .788 .889 .117
Net Realized and
Unrealized Gain/Loss
on Securities....... .317 .160 (.115) (.665) .217
------ ----- ------ ------ ------
Total from Investment
Operations............ .706 .957 .673 .224 .334
------ ----- ------ ------ ------
Less:
Distributions from and
in Excess of Net
Investment Income
(Note 1)............ .409 .812 .751 .877 .128
Return of Capital
Distribution (Note
1).................. -0- .046 .162 .091 .014
------ ----- ------ ------ ------
Total Distributions..... .409 .858 .913 .968 .142
------ ----- ------ ------ ------
Net Asset Value, End of
the Period............ $ 9.794 $ 9.497 $ 9.398 $ 9.638 $10.382
------ ------ ------ ------ ------
Total Return* (b)....... 7.50%** 10.55% 7.61% 2.11% 3.27%**
Net Assets at End of the
Period (In
millions)............. $ 119.1 $ 97.1 $ 55.9 $ 33.2 $ 2.7
Ratio of Expenses to
Average Net Assets*... 1.98% 2.07% 2.04% 2.13% 2.06%
Ratio of Net Investment
Income to Average Net
Assets*............... 8.13% 8.39% 8.35% 7.94% 7.17%
Portfolio Turnover...... 55%** 102% 152% 203% 198%
*If certain expenses had not been waived or reimbursed by VKAC, total return would have been
lower and the ratios would have been as follows:
Ratio of Expenses to
Average Net Assets.... 2.07% 2.07% N/A N/A N/A
Ratio of Net Investment
Income to Average Net
Assets................ 8.04% 8.38% N/A N/A N/A
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Total Return is based upon Net Asset Value which does not include payment of
maximum sales charge or contingent deferred sales charge.

N/A -- Not applicable.

See Notes to Financial Statements

19
<PAGE> 21

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Six Months Year Year August 13, 1993
Ended Ended Ended (Commencement of
December 31, June 30, June 30, Distribution) to
Class C Shares 1996 1996 1995 June 30, 1994(a)
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
Period...................... $ 9.495 $ 9.396 $ 9.643 $10.340
------ ------ ------ ------
Net Investment Income....... .393 .828 .745 .761
Net Realized and Unrealized
Loss on Securities........ .313 .129 (.079) (.605)
------ ------ ------ ------
Total from Investment
Operations.................. .706 .957 .666 .156
------ ------ ------ ------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)........... .409 .812 .751 .763
Return of Capital
Distribution
(Note 1).................. -0- .046 .162 .090
------ ------ ------ ------
Total Distributions........... .409 .858 .913 .853
------ ------ ------ ------
Net Asset Value, End of
Period...................... $ 9.792 $ 9.495 $ 9.396 $ 9.643
------ ------ ------ ------
Total Return* (b)............. 7.50%** 10.55% 7.61% 1.37%**
Net Assets at End of Period
(In millions)............... $ 7.2 $ 7.0 $ 2.0 $ 2.2
Ratio of Expenses to Average
Net Assets*................. 1.98% 2.06% 2.12% 2.14%
Ratio of Net Investment Income
to Average Net Assets*...... 8.14% 8.38% 8.13% 7.91%
Portfolio Turnover............ 55%** 102% 152% 203%
*If certain expenses had not been waived or reimbursed by VKAC, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets.................. 2.07% 2.07% N/A N/A
Ratio of Net Investment Income
to Average Net Assets....... 8.06% 8.38% N/A N/A
</TABLE>

** Non-Annualized

(a) Based on average shares outstanding.

(b) Total Return is based upon Net Asset Value which does not include payment of
maximum sales charge or contingent deferred sales charge.

N/A -- Not applicable.

See Notes to Financial Statements

20
<PAGE> 22

NOTES TO FINANCIAL STATEMENTS

December 31, 1996 (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. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

A. SECURITY VALUATION--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 60 days or less 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.

The Fund invests in repurchase agreements, which are short-term investments
in which the Fund acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The Fund may
invest independently in repurchase agreements, or transfer uninvested cash
balances into a pooled cash account

21
<PAGE> 23

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

along with other investment companies advised by Van Kampen American Capital
Investment Advisory Corp. (the "Adviser") or its affiliates, the daily aggregate
of which is invested in repurchase agreements. Repurchase agreements are fully
collateralized by the underlying debt security. The Fund will make payment for
such securities only upon physical delivery or evidence of book entry transfer
to the account of the custodian bank. The seller is required to maintain the
value of the underlying security at not less than the repurchase proceeds due
the Fund.

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

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, 1996, the Fund had an accumulated capital loss carryforward
for tax purposes of $105,683,980, which will expire between June 30, 1998 and
June 30, 2004. 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 relating to net realized currency gains totaling $134,145 were
reclassified from accumulated net realized gain/loss on investments to
accumulated undistributed net investment income.

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

22
<PAGE> 24

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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, 1996.

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>

For the six months ended December 31, 1996, the Adviser waived a portion of
its advisory fee. This waiver is voluntary and may be discontinued at any time.
Additionally during the period, the Adviser reimbursed the Fund for certain
trustees' compensation in connection with the July, 1995 increase in the number
of trustees of the Fund.

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, 1996, the Fund recognized expenses of
approximately $18,500 representing Van Kampen American Capital Distributors,
Inc.'s or its affiliates' (collectively "VKAC") cost of providing accounting,
cash management and legal services to the Fund.

ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
December 31, 1996,

23
<PAGE> 25

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

the Fund recognized expenses of approximately $239,900, representing ACCESS'
cost of providing transfer agency and shareholder services plus a profit.

Additionally, for the six months ended December 31, 1996, the Fund
reimbursed VKAC approximately $38,400 related to the direct cost of
consolidating the VKAC open-end fund complex. Payment was contingent upon the
realization by the Fund of cost efficiencies resulting from the consolidation.

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

The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC.

3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of shares of beneficial interest, 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, 1996, capital
aggregated $374,292,107,

24
<PAGE> 26

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

$116,343,499 and $7,076,108 for Class A, B and C shares, respectively. For the
six months ended December 31, 1996, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................... 3,747,308 $ 36,028,920
Class B................................... 2,939,457 28,232,710
Class C................................... 190,517 1,831,545
---------- ------------
Total Sales................................. 6,877,282 $ 66,093,175
---------- ------------
Dividend Reinvestment:
Class A................................... 504,128 $ 4,861,864
Class B................................... 182,700 1,762,704
Class C................................... 16,334 157,549
---------- ------------
Total Dividend Reinvestment................. 703,162 $ 6,782,117
---------- ------------
Repurchases:
Class A................................... (4,044,236) $(38,899,729)
Class B................................... (1,189,185) (11,458,031)
Class C................................... (203,350) (1,963,394)
---------- ------------
Total Repurchases........................... (5,436,771) $(52,321,154)
---------- ------------
</TABLE>

25
<PAGE> 27

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1996, capital aggregated $372,301,052, $97,806,116 and
$7,050,408 for Class A, B and C shares, respectively. For the year ended June
30, 1996, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................... 7,294,414 $ 69,532,238
Class B................................... 5,691,156 54,286,076
Class C................................... 717,313 6,826,847
---------- ------------
Total Sales................................. 13,702,883 $130,645,161
---------- ------------
Dividend Reinvestment:
Class A................................... 1,003,726 $ 9,564,922
Class B................................... 265,511 2,531,980
Class C................................... 20,771 198,098
---------- ------------
Total Dividend Reinvestment................. 1,290,008 $ 12,295,000
---------- ------------
Repurchases:
Class A................................... (6,692,159) $(63,898,755)
Class B................................... (1,675,635) (15,998,857)
Class C................................... (215,382) (2,047,014)
---------- ------------
Total Repurchases........................... (8,583,176) $(81,944,626)
---------- ------------
</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.

<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>

26
<PAGE> 28

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

For the six months ended December 31, 1996, VKAC, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $51,036 and CDSC on redeemed shares of approximately $131,196.
Sales charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $220,200,482 and $191,611,251,
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 securities. Upon
disposition, a realized gain or loss is recognized accordingly.

During the six months ended December 31, 1996, 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 forward currency contracts.

27
<PAGE> 29

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1996, the Fund has outstanding forward currency contracts as
follows:

<TABLE>
<CAPTION>
Original Current Unrealized
Forward Currency Contracts Value Value Depreciation
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Sells to Open
Australian Dollar,
2,509,344 expiring 1/21/97 to
2/11/97............................ $1,977,440 $1,993,715 $16,275
German Deutsche Mark,
1,545,550 expiring 3/20/97......... 1,000,000 1,009,598 9,598
Spanish Peseta,
259,020,000 expiring 1/15/97 to
4/15/97............................ 1,984,033 1,992,659 8,626
New Zealand Dollar,
3,500,000 expiring 1/8/97.......... 2,470,838 2,473,129 2,291
--------
$36,790
--------
</TABLE>

At December 31, 1996, the Fund had a realized loss on closed but unsettled
forward currency contracts of $37,059 scheduled to settle June 11, 1997.

6. DISTRIBUTION AND SERVICE PLANS

The Fund and its shareholders have adopted a distribution plan pursuant to Rule
12b-1 under the Investment Company Act of 1940 and a service plan (collectively
the "Plans"). The Plans govern payments for the distribution of the Fund's
shares, ongoing shareholder services and maintenance of shareholder accounts.

Annual fees under the Plans of up to .25% for Class A net assets and 1.00%
each for Class B and Class C net assets are accrued daily. Included in these
fees for the six months ended December 31, 1996, are payments to VKAC of
approximately $417,400.

28
<PAGE> 30

VAN KAMPEN AMERICAN CAPITAL HIGH YIELD FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
JACK E. NELSON
JEROME L. ROBINSON
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman

OFFICERS

DENNIS J. MCDONNELL*
President

RONALD A. NYBERG*
Vice President and Secretary

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

CURTIS W. MORELL*
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN*
Treasurer

TANYA M. LODEN*
Controller

PETER W. HEGEL*

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

SHAREHOLDER SERVICING AGENT

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

CUSTODIAN

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

LEGAL COUNSEL

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

INDEPENDENT ACCOUNTANTS

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.

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

RESULTS OF SHAREHOLDER VOTES

A Special Meeting of Shareholders of the Fund was held on October 25, 1996 where
shareholders voted on a new investment advisory agreement, changes to investment
policies and the ratification of KPMG Peat Marwick LLP as independent public
accountants. With regard to the approval of a new investment advisory agreement
between Van Kampen American Capital Investment Advisory Corp. and the Fund,
28,127,959 shares voted for the proposal, 675,255 shares voted against and
2,119,985 shares abstained. With regard to the approval of certain changes to
the Fund's fundamental investment policies with respect to investment in other
investment companies, 21,303,130 shares voted for the proposal, 850,270 shares
voted against and 2,200,649 shares abstained. With regard to the ratification of
KPMG Peat Marwick LLP as independent public accountants for the Fund, 28,475,960
shares voted for the proposal, 407,163 shares voted against and 2,040,075 shares
abstained.

29
<PAGE> 31

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 4
Portfolio Highlights............................. 5
Portfolio Management Review...................... 6
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 10
Statement of Operations.......................... 11
Statement of Changes in Net Assets............... 12
Financial Highlights............................. 13
Notes to Financial Statements.................... 16
</TABLE>

STGI SAR 2/97
<PAGE> 32

LETTER TO SHAREHOLDERS

January 31, 1997

Dear Shareholder,
We are pleased to report that the
Van Kampen American Capital Short-Term
Global Income Fund has generated
positive investment performance. As
noted in earlier reports, VK/AC [PHOTO]
Holding Inc., the parent company of
Van Kampen American Capital, Inc., was
acquired by Morgan Stanley Group Inc.,
a world leader in asset management and
investment banking. The transaction DENNIS J. MCDONNELL AND DON G. POWELL
was completed in October, and we are
excited about the opportunities it creates for Investors. As part of the
acquisition, Van Kampen American Capital became the distributor of Morgan
Stanley retail funds on January 2.

ECONOMIC REVIEW
The U.S. economy experienced moderate growth and low inflation during the
past 12 months. At the beginning of 1996, economists were concerned that the
slower economic pace of late 1995 might continue, possibly leading to a
recession by year end. That assumption soon came into question, however, when
non-farm payrolls increased by a stunning 705,000 in February, the biggest
one-month jump in 13 years. Then, a larger-than-expected 4.7 percent rate in
real GDP (the nation's gross domestic product, adjusted for inflation) during
the second quarter confirmed that the economy was back in a strong-growth mode.
By summer, the earlier talk of recession and rate cuts had changed to concerns
about economic overheating and the possibility of interest rate hikes.
Despite mounting evidence of inflation, the Federal Reserve held to a stable
monetary policy, believing the supply-and-demand imbalances in the commodity
markets were temporary and that burdensome consumer debt loads would eventually
slow the economy without the need for higher interest rates. Events during the
second half of 1996 proved the wisdom of Federal Reserve policy; real GDP growth
moderated to 2.0 percent in the third quarter while commodity prices receded.
For the year, core producer prices rose by 0.6 percent, the second-lowest annual
increase on record. Including the volatile food and energy sectors, however,
prices at the retail level rose by 3.3 percent.
With the exception of Japan, which continues to struggle with the effects of
deflation and a debt-ridden banking system, most foreign economies performed
well during 1996. In Europe, the drive to create a common currency by 1999 has
forced governments to get their fiscal houses in order, a development that
supported European financial assets. Pacific Rim (excluding Japan) nations also
prospered, although growth in Singapore, Malaysia, Taiwan, and Korea was hurt by
a sharp drop in export prices. Emerging economies, particularly in Latin
America, continued to grow briskly while making progress toward price stability
and debt reduction.

Continued on page two

1
<PAGE> 33

MARKET REVIEW

1996 was a good time to own global financial assets (excluding Japan). The
average U.S. and European stock gained more than 20 percent, and benign
inflation helped fixed-income prices remain in a relatively narrow range in most
developed nations. Bond prices soared in many emerging markets as economic
fundamentals continued to improve and the global supply of new bonds slowed. In
the United States, the year began with long-term interest rates near their
lowest level since the 1960s, reflecting the view that the U.S. economy was
weakening and that a series of rate cuts by the Fed would be forthcoming. But
the Fed's quarter-percentage point reduction in the federal funds rate on
January 31 would be the only monetary easing during 1996, and long-term rates
soon began rising amid signs of a tightening labor market and
stronger-than-expected economic growth. Fears that the Fed would reverse course
and raise short-term rates became widespread after the economy experienced
strong growth in the second quarter. By July, the yield on the Treasury's
benchmark 30-year bond reached 7.2 percent, up from 5.95 percent at the
beginning of the year.
The last half of 1996 was spent recovering some of the ground lost over the
first six months. Economic growth moderated, commodity prices declined, and
inflation remained tame. As the Fed held short-term rates steady, long-term
yields gradually fell back to 6.64 percent by year-end. For the year, the Lehman
Brothers Aggregate Bond Index returned 4.16 percent for the 12-month period
ended December 31, 1996, with short-and intermediate-term bonds outperforming
longer-term issues.
Global interest-rate trends generally followed those in the United States.
One consequence of the attempt to establish the European Monetary Union has been
to push long-term interest rates lower as governments cut their budget deficits
and borrowing requirements fall. On the short end of the yield curve, foreign
central banks have held rates down to counteract the fiscal drag resulting from
less government spending.

MARKET OUTLOOK

We expect domestic interest rates during 1997 to repeat last year's moderate
up and down pattern. Stronger-than-expected U.S. economic growth and faint
rumblings of inflationary pressures over the first half of the year could prompt
a series of modest credit tightenings by the Fed. We anticipate that by the
fourth quarter the economy will moderate enough to discourage any lingering
concerns about inflation and allow interest rates to decline across the maturity
spectrum. Although economic growth could be accompanied by short-term market
fluctuation, we do not believe it will be strong enough to reignite price
pressures. The results of the November elections reinforce this view--the
combination of a Democratic president and a Republican Congress should help
restrain potential spending increases and large tax cuts, and therefore, keep
the budget deficit under control.
While domestic economic fundamentals may keep bond prices relatively stable,
the risk of external shocks to the market is growing. We cannot look at the U.S.
economy in isolation. Monetary policy has been unusually accommodative in many
foreign countries. Spreads between short- and long-term rates were close to
three percent in both Japan and Germany during much of 1996; typically, steep
yield curves ignite economic activity, which in turn pushes long-term rates
higher. If global economies catch fire in 1997, the resulting demand for capital
could divert buying power from the U.S. credit market. Since

Continued on page three

2
<PAGE> 34

foreign investors have become the marginal buyers of American bonds, we believe
that increased competition for the global fixed-income dollar could exert mild
upward pressure on domestic interest rates over the year.
Additional details about your Fund, including a question and answer section
with your portfolio management team, are provided in this report. We appreciate
your continued confidence in your investment with Van Kampen American Capital.

Sincerely,

[SIG]
Don G. Powell

Chairman
Van Kampen American Capital
Investment Advisory Corp.

[SIG]
Dennis J. McDonnell

President
Van Kampen American Capital
Investment Advisory Corp.

3
<PAGE> 35
PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1996

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)..... 3.58% 3.19% 3.19%
Six-month total return(2).................. 0.16% 0.18% 2.18%
One-year total return(2)................... 3.21% 2.93% 5.05%
Five-year average annual total return(2)... 2.84% 2.76% N/A
Life-of-Fund average annual total
return(2)................................ 3.91% 3.43% 1.20%
Commencement date.......................... 09/28/90 07/22/91 08/13/93

DISTRIBUTION RATE AND YIELD

Distribution rate(3)....................... 6.62% 6.09% 6.09%
SEC Yield(4)............................... 4.49% 3.89% 3.89%
</TABLE>

N/A = Not Applicable

(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 (A shares) or contingent
deferred sales charge for early withdrawal (B and C shares).

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

(4)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, 1996. Had
certain expenses of the Fund not been assumed by VKAC, the SEC Yield would have
been 4.45%, 3.85% and 3.85% for Classes A, B and C, respectively, and the total
returns would have been lower.

4
<PAGE> 36

PORTFOLIO HIGHLIGHTS

VAN KAMPEN AMERICAN CAPITAL SHORT-TERM GLOBAL INCOME FUND

HOLDINGS AS A PERCENTAGE OF TOTAL INVESTMENTS

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, 1996 JUNE 30, 1996
<S> <C> <C>
U.S. Treasury Notes............. 59.5% ................... 78.1%
New Zealand Government.......... 13.4% ................... 9.7%
New Zealand Dollar-Currency..... 8.9% ................... N/A
Vermillion International Trust.. 8.4% ................... 8.3%
J.P. Morgan Repurchase
Agreement..................... 5.9% ................... N/A
Kingdom of Spain................ 3.9% ................... 3.9%
</TABLE>

N/A = Not Applicable

ASSET ALLOCATION AS A PERCENTAGE OF TOTAL INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C> <C> <C>
U.S. Government Bonds...... 59.5%
Foreign Investment Grade
Bonds.................... 34.6% [PIE CHART]
Other...................... 5.9%

AS OF JUNE 30, 1996

U.S. Government Bonds...... 78.1%
Foreign Investment Grade [PIE CHART]
Bonds.................... 21.9%
</TABLE>

5
<PAGE> 37

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 that
shaped the markets during the past six months. The team is led by Thomas J.
Slefinger, portfolio manager, and Peter W. Hegel, chief investment officer for
fixed-income investments. The following excerpts reflect their views on the
Fund's performance during the six-month period ended December 31, 1996.

Q WHAT FACTORS SHAPED THE PERFORMANCE OF THE FUND DURING THE PAST SIX
MONTHS?

A The European economies have been haunted by sluggish growth in recent
years, which has steadily driven interest rates down. Even the
traditionally higher-yielding markets, such as Italy and Spain, saw rates
converge toward the lower-yielding "core" markets, such as Germany, over the
first half of the year. Weak European economic conditions, including high
unemployment, low production and consumer activity, and very low inflation (even
deflation, in some cases) have persisted throughout the past six months, making
it unlikely that interest rates will increase significantly in the near term.
As a result, interest rates in the U.S. market are among the highest of the
developed countries, as much as 20 percent higher than the other G-7 markets
(Canada, France, Germany, Great Britain, Italy and Japan). In fact, U.S. rates
are at their highest point in relation to these markets in 25 years. Although
the U.S. bond market has underperformed other G-7 markets on a local currency
basis, it has been a top quartile performer when measured in U.S. dollars,
because the U.S. dollar has appreciated relative to most major foreign
currencies.
Domestically, economic growth picked up slightly, but the markets rallied in
the second half of the year when it appeared that growth was still within a
relatively moderate range. Inflation continued to look tame, as the core
Consumer Price Index (less the volatile food and energy sectors) increased by a
nominal 2.6 percent in 1996.

Q WHAT STEPS DID YOU TAKE TO POSITION THE FUND IN LIGHT OF THESE CONDITIONS?

A During the fourth quarter of 1996, the Fund took advantage of the strength
in the U.S. dollar. The portfolio was overweighted in the dollar-bloc bond
markets and currencies, which helped boost performance while limiting
exposure to foreign currency risk. On a risk-adjusted basis, the U.S. market was
a good place to be.
We have maintained the Fund's weightings in Italy, Spain, and New Zealand,
but we continued to overweight the U.S. market, placing nearly 80 percent of the
Fund's net assets in the United States by the end of the third quarter, the
highest percentage we have allocated in recent history. At year end,
approximately 60 percent of the Fund's assets were in the U.S. market, followed
by roughly 20 percent in New Zealand. For additional Fund portfolio highlights,
please refer to page five.

6
<PAGE> 38

Q HOW DID THE FUND PERFORM DURING THIS PERIOD?

A The Fund posted a total return of 3.58 percent(1) for the six months, and
6.70 percent(1) for the 12 months ended December 31, 1996 (Class A shares
at net asset value). From an income standpoint, the Fund's distribution
rate was 6.62 percent(3) at the end of the reporting period reflecting a monthly
dividend of $.0435 per Class A share and a maximum public offering price of
$7.88 per share. In comparison, the J.P. Morgan Three-Month U.S. LIBOR Return
Index generated a six-month total return of 2.06 percent. This is an unmanaged
index that 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. The J.P. Morgan Short-Term Global Index
generated a six-month total return of 4.06 percent; this unmanaged index tracks
the major bond markets of the world with maturities of three years or less.
These indices do not reflect any commissions or fees that would be paid by an
investor if an interest in the indices could be purchased.
Judging by the combination of return and relative stability that the Fund
has provided, we believe it has been a prudent alternative for investors seeking
current income from a short-term portfolio. Please refer to the chart on page
four for additional Fund performance results.

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

A As we begin the new year, global bonds could be vulnerable on a number of
fronts. Yields in some European bond markets have been suppressed for so
long that they may be reaching a rebound point. We also believe that
Europe could experience strong economic growth in 1997. If economic growth in
Europe and/or Japan accelerates, we could see an increase in the amount of goods
we export to foreign markets, adding momentum to our own growth rate. This, in
turn, may drive job growth in this country as companies gear up to meet
increased demand. Under these circumstances, wage growth could trigger higher
inflation, which the market would read as a signal of higher interest rates to
come.
In the United States, economic numbers look favorable, but an overheating
economy is not entirely out of the question. If growth were to rapidly
accelerate, we would look for higher inflation and an increase in short-term
interest rates initiated by the Federal Reserve.
We are optimistic that the U.S. dollar will remain strong relative to most
major foreign currencies, especially the European currencies. We are bullish on
the dollar versus the yen because Japan's fragile economic recovery and weak
banking system should keep Japanese interest rates very low. This will cause
investment capital to continue to flow out of Japan and into higher-yielding
bond markets, such as the United States.

7
<PAGE> 39

Q GIVEN THIS OUTLOOK, WHAT PORTFOLIO CHANGES HAVE BEEN MADE OR COULD BE
ANTICIPATED OVER THE NEXT SIX MONTHS?

A We expect to keep our overall portfolio structure unchanged from the
previous quarter as we head into 1997. We will underweight the European
and Japanese markets, and focus our attention on the U.S. bond market and
the U.S. dollar, where we see the greatest relative value and the most positive
risk/reward profile. The yield differential between the U.S. market and other
global markets is too attractive to ignore. Additionally, if economic growth is
modest and inflation remains in check, this creates a more favorable environment
for the U.S. bond market. As always, we will closely monitor any developments
that might warrant a change in our strategy.

[SIG]

Peter W. Hegel
Chief Investment Officer
Fixed Income Investments

[SIG]

Thomas J. Slefinger
Portfolio Manager

Please see footnotes on page four

8
<PAGE> 40

PORTFOLIO OF INVESTMENTS

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par
Amount
in Local
Currency Maturity U.S. $
(000) Description Coupon Date Market Value
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FIXED INCOME SECURITIES 108.9%
ITALY 9.2% LIRA
Government/Agency
15,000,000 Vermilion International Trust-BTPS 9.160% 12/01/97 $ 10,101,763
------------
NEW ZEALAND 24.2% NZ$
Government/Agency
5,500 New Zealand Government...................... 8.000 02/15/01 4,014,670
3,000 New Zealand T-Bill.......................... * 04/09/97 2,078,791
15,000 New Zealand T-Bill.......................... * 12/17/97 9,905,581
15,000 New Zealand Dollar-Currency................. 10,604,454
------------
26,603,496
------------
SPAIN 4.3% PESETA
Government/Agency
600,000 Kingdom of Spain............................ 7.300 07/30/97 4,690,283
------------
UNITED STATES 64.8% US$
Government/Agency
30,000 U.S. Treasury Notes (b)..................... 5.000 01/31/98 29,796,900
7,500 U.S. Treasury Notes......................... 5.875 11/15/99 7,474,200
13,000 U.S. Treasury Notes......................... 6.375 09/30/01 13,083,720
10,000 U.S. Treasury Notes......................... 5.875 11/30/01 9,859,300
5,000 U.S. Treasury Notes......................... 6.125 12/31/01 4,982,900
6,000 U.S. Treasury Notes......................... 6.500 10/15/06 6,035,580
------------
71,232,600
------------
REPURCHASE AGREEMENTS 6.4%
J.P. Morgan Repo, $7,021,000 par, 6.250% coupon, due 11/15/16 dated 12/31/96
to be sold on 01/02/97 at $7,023,438........................................ 7,021,000
------------
TOTAL INVESTMENTS 108.9%
(Cost $118,726,702) (a)..................................................... 119,649,142
LIABILITIES IN EXCESS OF OTHER ASSETS (8.9%)................................. (9,788,300)
------------
NET ASSETS 100.0%............................................................ $109,860,842
-----------
</TABLE>

*Zero coupon bond
(a) At December 31, 1996, the cost for federal income tax purposes is
$118,726,702; the aggregate gross unrealized appreciation is $1,405,999 and
the aggregate gross unrealized depreciation is $822,357, resulting in net
unrealized appreciation on investments, including foreign currency
translation of other assets and liabilities, forward currency contracts and
forward swap transactions of $583,642.
(b) Assets segregated as collateral for open forward currency contracts and open
forward swap transactions.
The following table summarizes the portfolio composition at December 31,
1996, 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>
U.S. Government Obligations....... 59.5%
AAA............................... 30.7
AA................................ 9.8
-----
100.0%
-----
</TABLE>

See Notes to Financial Statements

9
<PAGE> 41

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $118,726,702) (Note 1)... $119,649,142
Cash........................................................ 79,153
Receivables:
Interest.................................................. 1,366,965
Forward Currency Contracts and Swap Transactions (Note
5)...................................................... 1,037,032
Fund Shares Sold.......................................... 5,511
Other....................................................... 2,996
------------
Total Assets.......................................... 122,140,799
------------
LIABILITIES:
Payables:
Securities Purchased...................................... 9,905,581
Fund Shares Repurchased................................... 1,505,715
Income Distributions...................................... 256,582
Distributor and Affiliates (Notes 2 and 7)................ 193,489
Investment Advisory Fee (Note 2).......................... 52,243
Accrued Expenses............................................ 290,438
Deferred Compensation and Retirement Plans (Note 2)......... 75,909
------------
Total Liabilities..................................... 12,279,957
------------
NET ASSETS.................................................. $109,860,842
------------
NET ASSETS CONSIST OF:
Capital (Note 3)............................................ $175,112,822
Net Unrealized Appreciation on Securities................... 583,642
Accumulated Distributions in Excess of Net Investment Income
(Note 1).................................................. (1,964,922)
Accumulated Net Realized Loss on Securities................. (63,870,700)
------------
NET ASSETS.................................................. $109,860,842
------------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $44,279,549 and 5,811,370 shares of
beneficial interest issued and outstanding)............. $ 7.62
Maximum sales charge (3.25%* of offering price)......... .26
------------
Maximum offering price to public........................ $ 7.88
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $65,382,009 and 8,584,908 shares of
beneficial interest issued and outstanding)............. $ 7.62
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $199,284 and 26,167 shares of beneficial
interest issued and outstanding)........................ $ 7.62
============
</TABLE>

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

See Notes to Financial Statements

10
<PAGE> 42

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 4,089,398
------------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $59,131, $366,514 and $1,103, respectively)
(Note 7).................................................. 426,748
Investment Advisory Fee (Note 2)............................ 332,277
Shareholder Services (Note 2)............................... 140,925
Custody..................................................... 72,497
Trustees Fees and Expenses (Note 2)......................... 18,288
Legal (Note 2).............................................. 13,800
Interest (Note 6)........................................... 10,392
Other....................................................... 98,726
------------
Total Expenses.......................................... 1,113,653
Less Expenses Reimbursed (Note 2)....................... 23,083
------------
Net Expenses............................................ 1,090,570
------------
NET INVESTMENT INCOME....................................... $ 2,998,828
============
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................. $ 654,290
Options................................................. (133,121)
Forwards................................................ (1,136,942)
Foreign Currency Transactions........................... 632,609
------------
Net Realized Gain on Securities............................. 16,836
------------
Net Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period................................... (284,565)
------------
End of the Period:
Investments............................................. 922,440
Forwards................................................ (292,975)
Forward Swaps........................................... (30,378)
Foreign Currency Translation............................ (15,445)
------------
583,642
------------
Net Unrealized Appreciation on Securities During the
Period.................................................... 868,207
------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.............. $ 885,043
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 3,883,871
============
</TABLE>

See Notes to Financial Statements

11
<PAGE> 43

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1996 and
the Year Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
- ------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income....................................... $2,998,828 $ 9,665,816
Net Realized Gain/Loss on Securities........................ 16,836 (16,200,811)
Net Unrealized Appreciation/Depreciation on Securities
During the Period......................................... 868,207 20,009,929
------------ -------------
Change in Net Assets from Operations........................ 3,883,871 13,474,934
------------ -------------
Distributions from Net Investment Income.................... (2,998,828) -0-
Distributions in excess of Net Investment Income (Note 1)... (969,468) -0-
Return of Capital Distribution (Note 1)..................... -0- (11,609,288)
------------ ------------
Total Distributions(*)...................................... (3,968,296) (11,609,288)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES......... (84,425) 1,865,646
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold................................... 2,259,845 2,427,135
Net Asset Value of Shares Issued Through Dividend
Reinvestment.............................................. 2,236,812 6,370,708
Cost of Shares Repurchased.................................. (25,891,597) (79,947,106)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.......... (21,394,940) (71,149,263)
------------ ------------
TOTAL DECREASE IN NET ASSETS................................ (21,479,365) (69,283,617)
NET ASSETS:
Beginning of the Period..................................... $131,340,207 200,623,824
------------ ------------
End of the Period (Including accumulated distributions in
excess of net investment income of $1,964,922 and
$358,000, respectively)................................... $109,860,842 $131,340,207
============ ============
</TABLE>

<TABLE>
<CAPTION>
Six Months Ended Year Ended
(*)Distributions by Class December 31, 1996 June 30, 1996
- ----------------------------------------------------------------------------------
<S> <C> <C>
Distributions from and in Excess of
Net Investment Income (Note 1):
Class A Shares...................... $ (1,660,175) $ -0-
Class B Shares...................... (2,301,263) -0-
Class C Shares...................... (6,858) -0-
------------ ------------
$ (3,968,296) $ -0-
============ ============
Return of Capital Distribution (Note
1):
Class A Shares...................... $ -0- $ (4,481,275)
Class B Shares...................... -0- (7,116,453)
Class C Shares...................... -0- (11,560)
------------ ------------
$ -0- $(11,609,288)
============ ============
</TABLE>

See Notes to Financial Statements

12
<PAGE> 44

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30
December 31, --------------------------------------
Class A Shares 1996 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period.............................. $7.62 $7.56 $8.15 $9.11 $9.65
----- ----- ----- ----- -----
Net Investment Income................. .22 .49 .50 .59 .71
Net Realized and Unrealized Gain/Loss
on Securities....................... .05 .16 (.45) (.89) (.46)
----- ----- ----- ----- -----
Total from Investment Operations...... .27 .65 .05 (.30) .25
----- ----- ----- ----- -----
Less:
Distributions from and in Excess of
Net Investment Income (Note 1).... .27 -0- .37 .35 .79
Return of Capital Distribution (Note
1)................................ -0- .59 .27 .31 -0-
----- ----- ----- ----- -----
Total Distributions................... .27 .59 .64 .66 .79
----- ----- ----- ----- -----
Net Asset Value, End of the Period.... $7.62 $7.62 $7.56 $8.15 $9.11
===== ===== ===== ===== =====
Total Return* (a)..................... 3.58%** 8.81% .69% (3.61%) 2.86%
Net Assets at End of the Period (In
millions)........................... $44.3 $50.1 $72.5 $147.7 $205.9
Ratio of Expenses to Average Net
Assets*............................. 1.34% 1.31% 1.14% 1.13% 1.14%
Ratio of Net Investment Income to
Average
Net Assets*......................... 5.41% 6.54% 7.20% 6.64% 7.87%
Portfolio Turnover.................... 210%** 225% 204% 259% 141%
</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.............................. 1.38% 1.34% N/A N/A N/A
Ratio of Net Investment Income to
Average
Net Assets.......................... 5.37% 6.51% N/A N/A N/A
</TABLE>

** Non-Annualized

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

13
<PAGE> 45

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30
December 31, -----------------------------------
Class B Shares 1996 1996 1995 1994 1993
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period................................. $7.62 $7.56 $8.15 $9.10 $9.65
----- ----- ----- ----- -----
Net Investment Income.................... .15 .39 .41 .54 .67
Net Realized and Unrealized Gain/Loss on
Securities............................. .09 .20 (.42) (.90) (.49)
----- ----- ----- ----- -----
Total from Investment Operations......... .24 .59 (.01) (.36) .18
----- ----- ----- ----- -----
Less:
Distributions from and in Excess of Net
Investment Income (Note 1)........... .24 -0- .34 .32 .73
Return of Capital Distribution (Note
1)................................... -0- .53 .24 .27 -0-
----- ----- ----- ----- -----
Total Distributions...................... .24 .53 .58 .59 .73
----- ----- ----- ----- -----
Net Asset Value, End of the Period....... $7.62 $7.62 $7.56 $8.15 $9.10
===== ===== ===== ===== =====
Total Return* (a)........................ 3.19%** 8.02% (.14%) (4.22%) 2.02%
Net Assets at End of the Period (In
millions).............................. $65.4 $81.1 $127.9 $271.8 $393.1
Ratio of Expenses to Average Net
Assets*................................ 2.10% 2.09% 1.96% 1.85% 1.85%
Ratio of Net Investment Income to Average
Net Assets*............................ 4.66% 5.79% 6.42% 5.91% 7.20%
Portfolio Turnover....................... 210%** 225% 204% 259% 141%
* 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................................. 2.13% 2.12% N/A N/A N/A
Ratio of Net Investment Income to Average
Net Assets............................. 4.62% 5.76% N/A N/A N/A
</TABLE>

** Non-Annualized

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

14
<PAGE> 46

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
Six Months August 13, 1993
Ended (Commencement of
December 31, Year Ended Year Ended Distribution) to
Class C Shares 1996 June 30, 1996 June 30, 1995 June 30, 1994
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning
of the Period....... $7.62 $7.56 $8.16 $9.24
----- ----- ----- -----
Net Investment
Income.............. .09 .45 .50 .49
Net Realized and
Unrealized
Gain/Loss on
Securities.......... .15 .14 (.52) (1.05)
----- ----- ----- -----
Total from Investment
Operations.......... .24 .59 (.02) (.56)
----- ----- ----- -----
Less:
Distributions from
and in Excess of
Net Investment
Income (Note 1)... .24 -0- .34 .27
Return of Capital
Distribution (Note
1)................ -0- .53 .24 .25
----- ----- ----- -----
Total Distributions... .24 .53 .58 .52
----- ----- ----- -----
Net Asset Value, End
of the Period....... $7.62 $7.62 $7.56 $8.16
===== ===== ===== =====
Total Return* (a)..... 3.19%** 8.03% (.27%) (6.32%)**
Net Assets at End of
the Period
(In millions)....... $.2 $.2 $.2 $.2
Ratio of Expenses to
Average
Net Assets*......... 2.10% 2.07% 1.96% 1.84%
Ratio of Net
Investment Income to
Average Net
Assets*............. 4.68% 5.72% 6.30% 5.83%
Portfolio Turnover.... 210%** 225% 204% 259%
</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>
Ratio of Expenses to
Average
Net Assets.......... 2.14% 2.09% N/A N/A
Ratio of Net
Investment
Income to Average
Net
Assets.............. 4.64% 5.69% N/A N/A
</TABLE>

** Non-Annualized

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

15
<PAGE> 47

NOTES TO FINANCIAL STATEMENTS

December 31, 1996 (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.

A. SECURITY VALUATION--Investments are stated at value using the last available
bid price, or if not available, yield equivalents obtained from dealers in the
over-the-counter (OTC) or interbank market. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost.

16
<PAGE> 48

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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

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. 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, 1996, the Fund had an accumulated capital loss carryforward
for tax purposes of $64,736,057 which will expire between June 30, 2001 and June
30, 2004. 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 and
timing differences related to open options and forward transactions at the
Fund's fiscal year end.

F. 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
$637,454 were reclassified from accumulated net realized gain/loss on securities
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 likely that a
portion of the Fund's

17
<PAGE> 49

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

distribution 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, 1996.

For the six months ended December 31, 1996, Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") has agreed to assume
the Fund's registration and filing fees. This waiver is voluntary and may be
discontinued at any time.

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, 1996, the Fund recognized expenses of
approximately $11,400 representing VKAC's cost of providing accounting, cash
management and legal services to the Fund. Of this amount, approximately $900
has been assumed by VKAC.

ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
December 31, 1996, the Fund recognized expenses of approximately $101,700,
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. For the six months ended December 31, 1996, the Adviser reimbursed the
Fund for certain trustees' compensation in connection with the July 1995
increase in the number of trustees of the Fund.

18
<PAGE> 50

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1996, capital aggregated $66,038,789, $108,873,978 and
$200,055, for Classes A, B and C, respectively. For the six months ended
December 31, 1996, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.......................................... 180,312 $ 1,374,555
Class B.......................................... 98,761 749,240
Class C.......................................... 17,995 136,050
---------- ------------
Total Sales........................................ 297,068 $ 2,259,845
========== ============
Dividend Reinvestment:
Class A.......................................... 140,211 $ 1,065,840
Class B.......................................... 153,184 1,164,384
Class C.......................................... 866 6,588
---------- ------------
Total Dividend Reinvestment........................ 294,261 $ 2,236,812
========== ============
Repurchases:
Class A.......................................... (1,084,312) $ (8,249,566)
Class B.......................................... (2,306,366) (17,533,470)
Class C.......................................... (14,230) (108,561)
---------- ------------
Total Repurchases.................................. (3,404,908) $(25,891,597)
========== ============
</TABLE>

19
<PAGE> 51

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1996, capital aggregated $71,847,960, $124,493,824 and $165,978,
for Classes A, B and C, respectively. For the year ended June 30, 1996,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.......................................... 162,018 $ 1,242,482
Class B.......................................... 153,961 1,176,596
Class C.......................................... 1,057 8,057
----------- ------------
Total Sales........................................ 317,036 $ 2,427,135
=========== ============
Dividend Reinvestment:
Class A.......................................... 356,105 $ 2,727,316
Class B.......................................... 474,434 3,632,026
Class C.......................................... 1,485 11,366
----------- ------------
Total Dividend Reinvestment........................ 832,024 $ 6,370,708
=========== ============
Repurchases:
Class A.......................................... (3,533,398) $(27,079,054)
Class B.......................................... (6,899,452) (52,839,746)
Class C.......................................... (3,684) (28,306)
----------- ------------
Total Repurchases.................................. (10,436,534) $(79,947,106)
=========== ============
</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 three 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.

20
<PAGE> 52

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

For the six months ended December 31, 1996, VKAC, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of $556 and
CDSC on redeemed shares of approximately $7,000. Sales charges do not represent
expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $230,958,162 and $250,353,164,
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.

21
<PAGE> 53

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

Transactions in options for the six months ended December 31, 1996, were as
follows:

<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- ----------------------------------------------------------------------------
<S> <C> <C>
Outstanding at June 30, 1996.................. 1 $ (25,497)
Options Written and
Purchased (Net)............................. 3 (140,222)
Options Terminated in Closing
Transactions (Net).......................... (1) 25,497
Options Expired (Net)......................... (3) 140,222
--- -----------
Outstanding at June 30, 1996.................. -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 forwards.

At December 31, 1996, the Fund has outstanding forward currency contracts as
follows:

<TABLE>
<CAPTION>
FORWARD ORIGINAL CURRENT UNREALIZED
CURRENCY CONTRACTS VALUE VALUE DEPRECIATION
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
BUYS TO OPEN

Canadian Dollar,
3,339,000 expiring
01/27/97..................... $ 2,451,542 $ 2,442,784 $ 8,758

SELLS TO OPEN

Italian Lira,
15,418 million expiring
02/05/97..................... 10,000,000 10,144,342 144,342

New Zealand Dollar,
23,637,972 expiring 01/06/97-
01/13/97..................... 16,634,463 16,703,345 68,882

Spanish Peseta
593,977,500 expiring
02/05/97..................... 4,500,000 4,570,983 70,993
--------
$292,975
========
</TABLE>

At December 31, 1996, the Fund had realized gains on closed but unsettled
forward currency contracts of $1,362,326 scheduled to settle between January 2,
1997 and June 11, 1997.

22
<PAGE> 54

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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. A forward swap represents a commitment to enter into a swap agreement
at a future date.

The description of the forward swap transaction outstanding as of December
31, 1996, and unrealized depreciation are as follows:

<TABLE>
<CAPTION>
UNREALIZED
DESCRIPTION DEPRECIATION
- -----------------------------------------------------------------------
<S> <C>
Goldman Sachs, 10.0 million US$ notional amount,
effective 10/11/99, payment based upon the spread
between the 3 year French Franc fixed swap interest
rate versus the 3 year German Deutsche Mark fixed
swap interest rate................................... $30,378
=======
</TABLE>

6. BORROWINGS

In accordance with its investment policies, the Fund may borrow money from banks
or enter into reverse repurchase agreements to enable the Fund to satisfy
redemption requests and other temporary purposes.

The Fund was entered into reverse repurchase agreements under which the Fund
sells securities and agrees to repurchase them at a mutually agreed upon date
and price. During the reverse repurchase agreement period, the Fund continues to
receive principal and interest payments on these securities but pays interest to
the counter-party based upon a short-term interest rate. The average daily
balance of reverse repurchase agreements during the period was approximately
$445,000 with an average interest rate of 4.580%.

7. DISTRIBUTION AND SERVICE PLANS

Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these fees
for the six months ended December 31, 1996, are payments to VKAC of
approximately $288,700.

23
<PAGE> 55

FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL

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

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

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

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

MORGAN STANLEY FUND, INC.
Aggressive Equity Fund
American Value Fund
Asian Growth Fund
Emerging Markets Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
Worldwide High Income Fund

Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00
p.m. Central time at 1-800-341-2911 for Van Kampen American Capital funds, or
1-800-282-4404 for Morgan Stanley retail funds.

24
<PAGE> 56

VAN KAMPEN AMERICAN CAPITAL SHORT-TERM GLOBAL INCOME FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
JACK E. NELSON
JEROME L. ROBINSON
FERNANDO SISTO
WAYNE W. WHALEN* - Chairman

OFFICERS

DENNIS J. MCDONNELL*
President

RONALD A. NYBERG*
Vice President and Secretary

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

CURTIS W. MORELL*
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN*
Treasurer

TANYA M. LODEN*
Controller

PETER W. HEGEL*
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

SHAREHOLDER SERVICING AGENT

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

CUSTODIAN

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

LEGAL COUNSEL

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

INDEPENDENT ACCOUNTANTS

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.

A Special Meeting of Shareholders of the Fund was held on October 25, 1996 where
shareholders voted on a new investment advisory agreement, changes to investment
policies and the ratification of KPMG Peat Marwick LLP as independent public
accountants. With regard to the approval of a new investment advisory agreement
between Van Kampen American Capital Investment Advisory Corp. and the Fund,
10,047,970 shares voted for the proposal, 189,261 shares voted against and
804,583 shares abstained. With regard to the approval of certain changes to the
Fund's fundamental investment policies with respect to investment in other
investment companies, 7,500,603 shares voted for the proposal, 310,835 shares
voted against and 805,626 shares abstained. With regard to the ratification of
KPMG Peat Marwick LLP as independent public accountants for the Fund, 10,157,997
shares voted for the proposal, 106,025 shares voted against and 777,792 shares
abstained.

25
<PAGE> 57

TABLE OF CONTENTS

<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 4
Portfolio Highlights............................. 5
Portfolio Management Review...................... 6
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 15
Statement of Operations.......................... 16
Statement of Changes in Net Assets............... 17
Financial Highlights............................. 18
Notes to Financial Statements.................... 21
</TABLE>

SIF SAR 2/97

1
<PAGE> 58

LETTER TO SHAREHOLDERS

January 31, 1997

Dear Shareholder,
We are pleased to report that the
Van Kampen American Capital Strategic
Income Fund has continued to generate
solid investment performance. As [PHOTO]
noted in earlier reports, VK/AC
Holding Inc., the parent company of
Van Kampen American Capital, Inc.,
was acquired by Morgan Stanley Group
Inc., a world leader in asset DENNIS J. MCDONNELL AND DON G. POWELL
management and investment banking.
The transaction was completed in October, and we are excited about the
opportunities it creates for investors. As part of the acquisition, Van Kampen
American Capital became the distributor of Morgan Stanley retail funds on
January 2, 1997.

Continued on page two

1
<PAGE> 59

MARKET REVIEW

With the exception of Japan, 1996 was a good time to own global financial
assets. The average U.S. and European stock gained more than 20 percent, and
benign inflation helped fixed-income prices remain in a relatively narrow range
in most developed nations. Bond prices soared in many emerging markets as
economic fundamentals continued to improve and the global supply of new bonds
slowed. In the United States, the year began with long-term interest rates near
their lowest level since the 1960s, reflecting the view that the U.S. economy
was weakening and that a series of rate cuts by the Fed would be forthcoming.
But the Fed's quarter-percentage point reduction in the federal funds rate on
January 31 would be the only monetary easing during 1996, and long-term rates
soon began rising amid signs of a tightening labor market and
stronger-than-expected economic growth. Fears that the Fed would reverse course
and raise short-term rates became widespread after the economy experienced
strong growth in the second quarter. By July, the yield on the Treasury's
benchmark 30-year bond reached 7.2 percent, up from 5.95 percent at the
beginning of the year.
The last half of 1996 was spent recovering about half of the ground lost
over the first six months. Economic growth moderated, commodity prices declined,
and inflation remained tame. As the Fed held short-term rates steady, long-term
yields gradually fell back to 6.64 percent by year-end. For the year, the Lehman
Brothers Aggregate Bond Index returned 4.16 percent for the 12-month period
ended December 31, 1996, with short- and intermediate-term bonds outperforming
longer-term issues.
Global interest-rate trends generally followed those in the United States.
One consequence of the attempt to establish the European Monetary Union has been
to push long-term interest rates lower as governments cut their budget deficits
and borrowing requirements fall. On the short end of the yield curve, foreign
central banks have held rates down to counteract the fiscal drag resulting from
less government spending.

MARKET OUTLOOK

Continued on page three

2
<PAGE> 60

Sincerely,

[SIG]

Don G. Powell

Chairman
Van Kampen American Capital
Investment Advisory Corp.

[SIG]

Dennis J. McDonnell

President
Van Kampen American Capital
Investment Advisory Corp.

3
<PAGE> 61

PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1996

VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

TOTAL RETURNS

<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
Six-month total return based on NAV(1).. 9.32% 8.92% 8.84%
Six-month total return(2)............... 4.14% 4.92% 7.84%
One-year total return(2)................ 7.46% 8.10% 11.02%
Life-of-Fund average annual total
return(2)............................. 3.60% 3.51% 4.42%
Commencement date....................... 12/31/93 12/31/93 12/31/93

DISTRIBUTION RATE AND YIELD

Distribution rate(3).................... 7.90% 7.58% 7.59%
SEC Yield(4)............................ 5.63% 5.15% 5.15%
</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 (A shares) or
contingent deferred sales charge for early withdrawal (B and C shares).

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

(4) 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, 1996. Had
certain expenses of the Fund not been assumed by VKAC, total returns would have
been lower and the SEC Yield would have been 5.58%, 5.10% and 5.10% for Classes
A, B and C, respectively.

4
<PAGE> 62

PORTFOLIO HIGHLIGHTS

VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

TOP TEN HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS

<TABLE>
<CAPTION>
AS OF AS OF
DECEMBER 31, 1996 JUNE 30, 1996
<S> <C> <C>
FNMA REMICs.............. 9.3% ........... 9.2%
Financiera Energetica
Nacional .............. 4.6% ........... N/A
U.S. Treasury Note....... 3.4% ........... N/A
DLJ Emerging Markets..... 3.2% ........... N/A
Argentina 144A Floater... 3.1% ........... N/A
Transportadora de Gas del
Sur ................... 3.1% ........... 6.0%
Telstra Corp. Ltd........ 3.0% ........... N/A
Cyprus Amax Minerals..... 3.0% ........... N/A
Western Financial
Savings................ 2.6% ........... 3.6%
Long Island Lighting..... 2.3% ........... N/A
</TABLE>

N/A = Not Applicable
ASSET ALLOCATION AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C> <C>
Foreign Non-Investment Grade (mainly Emerging
Markets)...................................... 28.3%
Foreign Investment Grade...................... 19.9%
U.S. Government/Mortgage Backed Securities.... 16.1% [Pie Chart]
Domestic Non-Investment Grade................. 18.7%
Domestic Investment Grade..................... 15.8%
Common Stock.................................. 1.2%

<CAPTION>
AS OF JUNE 30, 1996
<S> <C> <C>
Foreign Non-Investment Grade (mainly Emerging
Markets)...................................... 31.8%
Foreign Investment Grade...................... 21.3%
U.S. Government/Mortgage Backed Securities.... 20.9% [Pie Chart]
Domestic Non-Investment Grade................. 14.9%
Domestic Investment Grade..................... 11.1%

</TABLE>

TOP TEN COUNTRIES AS A PERCENTAGE OF LONG-TERM INVESTMENTS

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C>
U.S.................... 49.1%
Argentina.............. 13.2%
Colombia............... 6.6%
Russia................. 4.7%
Australia.............. 4.0%
United Kingdom......... 3.0%
Poland................. 2.3%
Mexico................. 2.1%
Brazil................. 2.0%
Venezuela.............. 1.9%
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1996
<S> <C>
U.S................... 46.9%
Argentina............. 11.6%
France................ 4.8%
United Kingdom........ 4.7%
Canada................ 3.9%
Chile................. 3.5%
Poland................ 3.0%
Colombia.............. 3.0%
Panama................ 2.4%
Brazil................ 2.1%
</TABLE>

5
<PAGE> 63

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 that shaped the
markets during the past six months. The team is led by Robert Hickey, portfolio
manager, and Peter W. Hegel, chief investment officer for fixed-income
investments. The following excerpts reflect their views on the Fund's
performance during the six-month period ended December 31, 1996.

Q WHAT FACTORS SHAPED THE PERFORMANCE OF THE FUND OVER THE LAST SIX MONTHS?

A Fund performance was driven predominantly by total returns in the emerging
market and domestic high yield sectors, along with strong performance by
dollar-denominated assets worldwide. With market volatility at near-term lows,
our strategy was to buy higher-yielding securities with lower credit
quality. This was reinforced by the tight range in which the bond markets
traded during the second half of the year. Funds were rewarded by maximizing
yield premium in their portfolios, with the assumption that interest rates
would remain within a relatively narrow band.

Another factor that supported the Fund's performance was the availability
of credit worldwide. In the second half of 1996, we were able to inexpensively
leverage the Fund to enhance Fund performance. The positive carry (or yield in
excess of borrowing costs) was as attractive as it had been since 1989, which
encouraged us to buy higher-yielding securities to maximize the Fund's income.
Leveraging entails borrowing money at short-term interest rates and putting it
to work by investing in higher-yielding, longer-term securities. However, the
spread at which funds can be borrowed and the yield that can be captured in the
marketplace has been persistently narrow, making the leveraging technique
somewhat more expensive than we'd like. Borrowings provide the opportunity for
increased net income, but may also increase the Fund's investment risks.

Domestically, the strong economic growth of the first and second quarters
caused bond prices to fall dramatically. The markets (particularly U.S.
Treasuries and mortgage-backed securities) were driven by fears that the economy
might overheat, sparking higher inflation and prompting the Federal Reserve
Board to raise short-term interest rates. In the second half of the year,
however, expectations reversed as economic growth slowed, prompting a bond rally
in September that lasted through the end of the year.

Q WHAT STEPS DID YOU TAKE TO POSITION THE FUND IN LIGHT OF THESE CONDITIONS?

A We moved into higher-yielding sectors, particularly in emerging markets,
where yield spreads were very attractive. At calendar year end, we had
positioned 28.7 percent of the Fund's long-term investments in emerging market
securities, compared to 16.1 percent in U.S. government and mortgage-backed
securities. The emerging market sector has been the strongest performer over
the past six months, followed by the domestic investment-grade and lower grade
high-yield corporate markets.

6
<PAGE> 64

Domestically, we concentrated the portfolio's positions in BBB-rated and
AA-rated credits. BBB-rated exposure was acquired for its attractive yields and
improving credit fundamentals, while the AA-rated exposure was held for its
appeal to non-U.S. dollar investors. In 1996, the dollar was extremely strong
relative to the other G-7 currencies (Canada, France, Germany, Great Britain,
Italy, and Japan), creating strong demand for U.S. dollar-denominated
securities. Demand for quality securities caused the domestic corporate
investment-grade sector of the market to perform well.

In the high yield sector, we focused primarily on BB-rated securities. For
example, one trading opportunity involved Tele-Communications, Inc. (TCI), a
large cable television issuer in the United States. In anticipation of a
potential credit downgrade, yields on TCI and similar issues widened
dramatically. We took advantage of this widening spread to reallocate much of
the Fund's high-yield exposure into cable television issues, and were rewarded
with excellent returns when the rating agencies affirmed TCI's creditworthiness.
While we cannot ignore the big picture on the domestic side, such as the
potential for higher interest rates spurred by economic growth, we anticipate
finding success by focusing on the specific strength or weakness of individual
high-yield securities and industries.

In the emerging market sector, we saw good returns from certain Russian
issues, improved policy dynamics in Brazil, stronger fiscal conditions in the
Philippines, and performance improvements resulting from credit upgrades in
Poland and Hungary. Political factors hurt Colombian issues, although they have
recently bounced back. Political conditions also undermined the performance of
Argentinean issues, where we had been overweighted. In whole, however, emerging
markets contributed heavily to the performance of the Fund. For additional Fund
portfolio highlights, please refer to page five.

Q HOW WOULD YOU CHARACTERIZE THE FUND'S PERFORMANCE?

A We were pleased with the Fund's performance. Although the Fund was hurt by
the sharp increase in interest rates during the first half of the year, it has
steadily gained ground since then.

For the six months ended December 31, 1996, the Fund posted a total return
of 9.32 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 2.42 percent over the same period. Similarly, a composite
index of 20 percent of each Solomon Brothers Index for Mortgages, High Yield,
Corporate, Non-U.S. Dollar World Government Bond, and Brady Bonds produced a
total return of 7.43 percent over the same period. Keep in mind that neither
index reflects any commissions or fees that would be paid by an investor
purchasing the securities they represents. The Fund's distribution rate was 7.90
percent(3) as of calendar year end, reflecting a monthly dividend of $.0875 per
Class A share and a maximum public offering price of $13.29 per share. Please
refer to the chart on page four for additional Fund performance results.

7
<PAGE> 65

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

A We caution against viewing the U.S. market in isolation. Although our
fundamental economic conditions look positive, growth in overseas markets could
have a profound impact on our market. If economic growth outside the United
States accelerates, investment dollars could be drawn away from U.S. markets,
while forcing our interest rates to increase. At the same time, higher foreign
growth could increase the demand for U.S. goods, spurring our economy in an
effort to meet export demand.

While these may be long-term scenarios, they could influence our actions
in the first half of 1997. We will continue to stay overweighted in emerging
markets, because it appears that demand is strong, supply is adequate, and the
policy changes initiated by many of these economies have served them well. The
potential for volatility in these markets is somewhat offset by the high yields
which are available compared to developed markets. For now, we feel that the
Fund can take advantage of these opportunities while keeping a close eye on
developments in the domestic markets.

While there are several factors that could positively impact the market,
we believe it is more likely that interest rates will increase rather than
decline in the short term, although we do not anticipate a drastic move in
either direction. The high yield sector could continue to perform well in a
growing economy, which could improve the Fund's credit prospects, with high
coupons acting as a buffer against rising interest rates. Whether or not the
Fed reacts to higher growth by raising interest rates, market participants will
still price bonds in line with their own expectations, and we will react
accordingly.

[SIG]

Peter W. Hegel
Chief Investment Officer
Fixed Income Investments

[SIG]

Robert Hickey
Portfolio Manager

Please see footnotes on page four

8
<PAGE> 66

PORTFOLIO OF INVESTMENTS

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency Maturity U.S.$
(000) Description Coupon Date Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CORPORATE BONDS 82.5%
BANKING 7.0%
1,000 Banco Central del Uruguay - US$ (e)...... 6.750% 02/19/21 $ 825,000
3,000 Mellon Capital Trust I - US$ (c)......... 7.720 12/01/26 2,958,336
4,100 Western Financial Savings - US$ (c)...... 8.500 07/01/03 4,220,298
------------
8,003,634
------------
BEVERAGE, FOOD & TOBACCO 2.7%
3,000 Coca-Cola Femsa - US$.................... 8.950 11/01/06 3,048,750
------------
BUILDINGS AND REAL ESTATE 0.9%
1,000 Guangdong Enterprises - US$ (c).......... 8.750 12/15/03 994,780
------------
CONTAINERS, PACKAGING & GLASS 0.9%
1,000 U.S. Can Company - US$................... 13.500 01/15/02 1,045,000
------------
ELECTRONICS 3.9%
1,000 Bell & Howell Co. - US$ (d).............. 0/11.500 03/01/05 742,500
3,500 Long Island Lighting Co. - US$ (c)....... 9.750 05/01/21 3,657,500
------------
4,400,000
------------
FINANCE 17.2%
50 Avalon Properties - US$.................. 8.960 10/15/01 1,275,000
1,000 Contifinancial Corp. - US$ (c)........... 8.375 08/15/03 1,035,000
1,500 Federal Realty Investment Trust - US$
(c)...................................... 6.625 12/01/05 1,437,750
5,000 Financiera Energetica Nacional - US$
(c)...................................... 9.375 06/15/06 5,315,000
2,000 Financiera Energetica Nacional 144A - US$
(g)...................................... 9.375 09/15/06 2,126,000
5,000 First Federal Michigan - US$............. * 02/26/05 2,900,000
3,500 Fleet Capital Trust - US$................ 7.920 12/11/26 3,507,630
40 Merry Land & Investment - US$............ 8.290 12/10/26 1,930,000
------------
19,526,380
------------
HEALTHCARE 0.5%
500 Tenet Healthcare - US$................... 10.125 03/01/05 552,500
------------
HOME AND OFFICE FURNISHINGS 2.3%
100 MPEC International Capital L.P. - US$.... 9.125 09/21/05 2,625,000
------------
LEISURE AND AMUSEMENT 0.5%
500 Majestic Star Casino LLC - US$........... 12.750 05/15/03 536,250
------------
MINING 4.6%
400 Carbide/Graphite Group, Inc. - US$ (c)... 11.500 09/01/03 438,000
5,000 Cyprus Amax Minerals, Inc. - US$ (c)..... 6.625 10/15/05 4,817,345
------------
5,255,345
------------
</TABLE>

See Notes to Financial Statements

9
<PAGE> 67

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency Maturity U.S.$
(000) Description Coupon Date Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OIL & GAS 9.7%
3,000 Coastal Corp - US$....................... 9.750% 08/01/03 $ 3,439,206
500 Coda Energy - US$ (c).................... 10.500 04/01/06 530,000
500 Global Marine - US$ (c).................. 12.750 12/15/99 540,000
1,500 Oleoducto Central S.A. - US$ (c)......... 9.350 09/01/05 1,565,625
4,950 Transportadora de Gas del Sur S.A. -
US$...................................... 7.750 12/23/98 4,937,625
------------
11,012,456
------------
PAPER 1.4%
500 Doman Industries Ltd. - US$ (c).......... 8.750 03/15/04 470,000
500 Indah Kiat International Finance (Pulp
and Paper Corp) Global Bond - US$ (c).... 11.375 06/15/99 532,500
500 Tjiwi Kimia International BV - US$....... 13.250 08/01/01 568,750
------------
1,571,250
------------
PRINTING, PUBLISHING & BROADCASTING 3.8%
2,000 Insight Communications - US$............. 11.250 03/01/00 2,070,000
1,000 International Cabletel - US$............. * 02/01/06 682,500
500 K-III Communications - US$ (c)........... 10.625 05/01/02 526,250
1,000 SCI Television - US$..................... 11.000 06/30/05 1,075,000
------------
4,353,750
------------
RETAIL 2.7%
3,000 Wal-Mart Stores - US$.................... 6.750 05/24/02 3,040,500
------------
TELECOMMUNICATIONS 10.9%
2,000 Cablevision Systems - US$ (c)............ 9.875 05/15/06 2,055,000
500 Centennial Cellular Corp. - US$ (c)...... 10.125 05/15/05 505,000
1,000 Comcast Corp. - US$...................... 9.125 10/15/06 1,025,000
500 Impsat Corp. 144A- US$ (g)............... 12.125 07/15/03 527,500
1,000 Panamsat L.P. - US$ (c).................. 9.750 08/01/00 1,057,500
600 Pricellular Wireless Corp. - US$ (d)..... 0/12.250 10/01/03 516,000
1,000 Rogers Cablesystems - CA$................ 9.650 01/15/14 695,246
1,000 Telefonica de Argentina - US$............ 11.875 11/01/04 1,111,000
5,000 Telstra Corp. Ltd. - US$................. 6.500 11/28/05 4,887,500
------------
12,379,746
------------
TRANSPORTATION 2.4%
2,500 United Air Lines - US$ (c)............... 9.000 12/15/03 2,709,968
------------
UTILITIES 11.1%
500 AES Corp. - US$.......................... 10.250 07/15/06 540,000
1,000 Bridas Corp. - US$ (c)................... 12.500 11/15/99 1,072,500
2,000 Central Puerto S.A. - US$ (c)............ 10.700 08/01/01 2,033,220
1,000 Central Termica Guemes S.A. 144A - US$
(g)...................................... 12.000 11/26/01 1,020,000
1,000 El Paso Electric Co - US$ (c)............ 7.750 05/01/01 1,027,500
2,000 Enersis S.A. - US$....................... 6.600 12/01/26 1,967,310
</TABLE>

See Notes to Financial Statements

10
<PAGE> 68

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Par Amount
in Local
Currency Maturity U.S.$
(000) Description Coupon Date Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES (CONTINUED)
1,500 Midland Funding Corp II - US$ (c)........ 11.750% 07/23/05 $ 1,676,250
500 National Energy Group - US$.............. 10.750 11/01/06 525,000
1,000 Sodigas 144A - US$ (g)................... 10.500 07/06/99 1,036,250
1,655 Subic Power Corp. - US$.................. 9.500 12/28/08 1,729,655
------------
12,627,685
------------
Total Corporate Bonds............................................ 93,682,994
------------
FOREIGN GOVERNMENT AND AGENCY SECURITIES 35.0%
ARGENTINA 8.0%
5,000 Argentina 144A Floater - US$ (g)......... 8.200 08/15/99 5,000,000
2,500 Argentina Par Bond - US$ (d) (e)......... 5.250/5.500 03/31/23 1,575,000
2,000 Goldman Sachs Argentine Bocones Trust -
US$...................................... 13.375 08/15/01 2,464,000
------------
9,039,000
------------
AUSTRALIA 1.3%
1,900 Australian Government - AU$.............. 7.000 04/15/00 1,523,051
------------
BRAZIL 2.9%
2,000 Brazil MYDFA Trust Certs - US$........... 6.688 09/15/07 1,712,500
2,500 Brazil Pars - US$ (d) (e)................ 4.250 04/15/24 1,565,625
------------
3,278,125
------------
CANADA 0.9%
1,250 Canadian Government - CA$................ 7.500 03/01/01 985,084
------------
COLOMBIA 1.4%
1,500 Republic of Colombia - US$ (c)........... 8.660 10/07/16 1,568,385
------------
COSTA RICA 0.7%
1,000 Banco Central Costa Rica - US$ (e)....... 6.250 05/21/10 807,500
------------
ITALY 1.0%
1,500,000 Republic of Italy BTPS - ITL............. 9.500 05/01/01 1,092,320
------------
NEW ZEALAND 1.3%
2,000 New Zealand Government - NZ$............. 8.000 02/15/01 1,459,880
------------
POLAND 3.3%
3,500 Poland PDI Bond - US$ (d) (e)............ 3.750/4.000 10/27/14 2,948,750
1,000 Poland Registered PDI Bond - US$ (d)
(e)...................................... 3.750/4.000 10/27/14 842,500
------------
3,791,250
------------
RUSSIA 6.3%
2,500 Vnesheconombank Loans - US$.............. (f) (f) 1,984,375
5,000 DLJ Emerging Markets LDC - US$........... 5.500 12/30/97 5,196,000
------------
7,180,375
------------
SLOVAKIA 1.7%
2,000 New Slovakia Euro Bond 144A - US$ (g).... 7.250 12/19/06 1,966,620
------------

</TABLE>

See Notes to Financial Statements

11
<PAGE> 69

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

See Notes to Financial Statements

12
<PAGE> 70

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Security Description Shares Market Value
- ----------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCKS 1.7%
CIA Telecom Chile - ADR (Chile) - US$....................... 1,000 $ 101,125
Grupo Carso - ADR (Mexico) - US$............................ 10,000 105,000
Hong Kong Telecom LTD - ADR (Hong Kong) - US$............... 6,000 97,500
Grupo Casa Autrey - ADR (Mexico) - US$...................... 8,500 165,750
Lukoil Holdings - ADR (Russia) - US$........................ 7,500 350,625
Telecom Argentina - ADR (Argentina) - US$................... 27,000 1,090,125
Thai Military Bank - THB.................................... 15,000 29,537
------------
Total Common Stocks............................................. 1,939,662
------------
SWAP TRANSACTIONS 0.0%
Goldman Sachs, 40.0 million US$ notional amount, maturing 01/23/00,
payment based upon the spread between the 6 year French Franc fixed
swap interest rate versus the 6 year German Mark fixed swap interest
rate................................................................ (70,643)
------------
TOTAL LONG-TERM INVESTMENTS 142.1%
(Cost $157,429,001) (a)........................................... 161,342,554
SHORT TERM INVESTMENTS 2.2%
(Cost $2,500,000) (a)............................................. 2,504,500
LIABILITIES IN EXCESS OF OTHER ASSETS (44.3%)...................... (50,333,538)
------------
NET ASSETS 100.0%.................................................. $113,513,516
============
</TABLE>

* Zero coupon bond

(a) At December 31, 1996, cost for federal income tax purposes is $159,929,001;
the aggregate gross unrealized appreciation is $5,081,692 and the aggregate
gross unrealized depreciation is $1,342,614, resulting in net unrealized
appreciation on investments, foreign currency translation of other assets
and liabilities, forward currency contracts and option and futures
transactions of $3,739,078.

(b) Securities purchased on a when issued or delayed delivery basis.

(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments, open option, futures, forwards or swaps 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.

(f) Item represents an assignment of a bank loan which currently is in default
with the potential to be restructured at a future date. As of December 31,
1996, item is a non-income producing security.

(g) 144A securities are those which are exempt from registration under Rule 144A
of the Securities Act of 1933. These securities may be resold only in
transactions exempt from registration which are normally those transactions
with qualified institutional buyers.

See Notes to Financial Statements

13
<PAGE> 71

PORTFOLIO OF INVESTMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

The following table summarizes the portfolio composition at December 31, 1996,
based upon quality ratings issued by Standard & Poors. For securities not rated
by Standard & Poors, the Moody's rating is used.

PORTFOLIO COMPOSITION BY CREDIT QUALITY

<TABLE>
<S> <C>
U.S. Govt. and Agency
Obligations................ 16.3%
AAA.......................... 8.0
AA........................... 5.0
A............................ 2.9
BBB.......................... 20.3
BB........................... 22.6
B............................ 12.3
CCC.......................... 0.3
Non-Rated.................... 12.3
------
100.0%
======
</TABLE>

See Notes to Financial Statements

14
<PAGE> 72

STATEMENT OF ASSETS AND LIABILITIES

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $157,429,001)
(Note 1).................................................. $161,342,554
Short-Term Investments (Cost $2,500,000) (Note 1)........... 2,504,500
Receivables:
Securities Sold........................................... 10,602,617
Interest.................................................. 2,359,811
Fund Shares Sold.......................................... 425,175
Variation Margin on Futures (Note 5)...................... 79,617
Dividends................................................. 48,500
Options at Market Value (Net premiums paid of $500,988)
(Note 5).................................................. 203,938
Forward Currency Contracts (Note 5)......................... 93,268
Unamortized Organizational Expenses (Note 1)................ 67,869
Other....................................................... 788
------------
Total Assets............................................ 177,728,637
------------
LIABILITIES:
Payables:
Reverse Repurchase Agreements (Note 8).................... 29,852,635
Securities Purchased...................................... 24,058,723
Bank Borrowings (Note 8).................................. 8,675,787
Fund Shares Repurchased................................... 457,234
Income Distributions...................................... 441,374
Distributor and Affiliates (Notes 2 and 7)................ 165,607
Investment Advisory Fee (Note 2).......................... 95,590
Accrued Expenses............................................ 407,529
Deferred Compensation and Retirement Plans (Note 2)......... 60,642
------------
Total Liabilities....................................... 64,215,121
------------
NET ASSETS.................................................. $113,513,516
============
NET ASSETS CONSIST OF:
Capital (Note 3)............................................ $117,043,299
Net Unrealized Appreciation on Securities................... 3,739,078
Accumulated Distributions in Excess of Net Investment
Income.................................................... (883,009)
Accumulated Net Realized Loss on Securities................. (6,385,852)
------------
NET ASSETS.................................................. $113,513,516
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $38,895,215 and 3,072,116 shares of
beneficial interest issued and outstanding)............. $ 12.66
Maximum sales charge (4.75%* of offering price)......... .63
------------
Maximum offering price to public........................ $ 13.29
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $71,054,489 and 5,611,524 shares of
beneficial interest issued and outstanding)............. $ 12.66
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $3,563,812 and 281,706 shares of
beneficial interest issued and outstanding)............. $ 12.65
============
</TABLE>

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

See Notes to Financial Statements

15
<PAGE> 73

STATEMENT OF OPERATIONS

For the Six Months Ended December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest (Net of foreign withholding taxes of $12,917)...... $ 5,512,839
Dividends (Net of foreign withholding taxes of $453)........ 114,946
-----------
Total Income.......................................... 5,627,785
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 511,968
Distribution (12b-1) and Service Fees (Attributed to Classes
A, B and C of $45,738, $338,160 and $17,232, respectively)
(Note 7).................................................. 401,130
Shareholder Services (Note 2)............................... 99,521
Custody..................................................... 78,060
Trustees Fees and Expenses (Note 2)......................... 18,288
Amortization of Organizational Expenses (Note 1)............ 17,131
Legal (Note 2).............................................. 9,200
Other....................................................... 130,608
-----------
Total Operating Expenses.............................. 1,265,906
Less Expenses Reimbursed (Note 2)..................... 30,027
-----------
Net Operating Expenses................................ 1,235,879
Interest Expense (Note 8)............................. 828,278
-----------
NET INVESTMENT INCOME....................................... $ 3,563,628
===========
NET REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................... $ 3,352,109
Options................................................... (348,960)
Futures................................................... (1,501,002)
Forwards.................................................. (69,039)
Foreign Currency Transactions............................. (119,047)
-----------
Net Realized Gain on Securities............................. 1,314,061
-----------
Net Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period..................................... (794,446)
-----------
End of the Period:
Investments............................................... 3,918,053
Options................................................... (297,050)
Futures................................................... 25,173
Forwards.................................................. 93,268
Foreign Currency Translation.............................. (366)
-----------
3,739,078
-----------
Net Unrealized Appreciation on Securities During the
Period.................................................... 4,533,524
-----------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.............. $ 5,847,585
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 9,411,213
===========
</TABLE>

See Notes to Financial Statements

16
<PAGE> 74

STATEMENT OF CHANGES IN NET ASSETS

For the Six Months Ended December 31, 1996
and the Year Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 3,563,628 $ 7,166,242
Net Realized Gain on Securities.......................... 1,314,061 2,088,097
Net Unrealized Appreciation on Securities During the
Period.................................................. 4,533,524 1,185,450
------------ ------------
Change in Net Assets from Operations..................... 9,411,213 10,439,789
------------ ------------
Distributions from Net Investment Income................. (3,586,540) (7,166,242)
Distributions in Excess of Net Investment Income (Note
1)...................................................... (694,923) (721,843)
------------ ------------
Distributions from and in Excess of Net Investment
Income*................................................. (4,281,463) (7,888,085)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES...... 5,129,750 2,551,704
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold................................ 19,419,231 29,338,222
Net Asset Value of Shares Issued Through Dividend
Reinvestment............................................ 1,690,015 3,220,366
Cost of Shares Repurchased............................... (11,594,248) (20,206,493)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS....... 9,514,998 12,352,095
------------ ------------
TOTAL INCREASE IN NET ASSETS............................. 14,644,748 14,903,799
NET ASSETS:
Beginning of the Period.................................. 98,868,768 83,964,969
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $(883,009) and $22,912,
respectively)........................................... $113,513,516 $ 98,868,768
============ ============
</TABLE>

See Notes to Financial Statements

17
<PAGE> 75

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Year Ended Operations) to
Class A Shares December 31, 1996 June 30, 1996 June 30, 1995 June 30, 1994
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of the
Period......................... $12.065 $11.704 $11.975 $14.300
------- ------- ------- -------
Net Investment Income............ .447 1.013 .657 .566
Net Realized and Unrealized
Gain/Loss on Securities........ .674 .446 .272 (2.391)
------- ------- ------- -------
Total from Investment
Operations..................... 1.121 1.459 .929 (1.825)
------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1).............. .525 1.098 .793 .500
Return of Capital
Distribution................. -0- -0- .407 -0-
------- ------- ------- -------
Total Distributions.............. .525 1.098 1.200 .500
------- ------- ------- -------
Net Asset Value, End of the
Period......................... $12.661 $12.065 $11.704 $11.975
======= ======= ======= =======
Total Return* (a)................ 9.32%** 12.92% 8.46% (12.83%)**
Net Assets at End of the Period
(In millions).................. $ 38.9 $ 33.8 $ 29.6 $ 24.5
Ratio of Operating Expenses to
Average Net Assets*............ 1.81% 1.84% 1.98% 1.88%
Ratio of Interest Expense to
Average Net Assets (Note 8).... 1.55% 2.27% 2.38% .96%
Ratio of Net Investment Income to
Average Net Assets*............ 7.16% 8.34% 5.88% 9.27%
Portfolio Turnover............... 252%** 343% 253% 114%**
* If certain expenses had not been reimbursed by VKAC, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............. 1.86% 1.92% N/A N/A
Ratio of Net Investment Income to
Average Net Assets............. 7.10% 8.26% N/A N/A
</TABLE>

** Non-Annualized

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

18
<PAGE> 76

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Year Ended Operations) to
Class B Shares December 31, 1996 June 30, 1996 June 30, 1995 June 30, 1994
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period.................... $12.069 $11.706 $11.968 $14.300
------- ------- ------- -------
Net Investment Income........... .399 .926 .585 .515
Net Realized and Unrealized
Gain/Loss on Securities....... .674 .443 .245 (2.392)
------- ------- ------- -------
Total from Investment
Operations.................... 1.073 1.369 .830 (1.877)
------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)............. .480 1.006 .722 .455
Return of Capital
Distribution................ -0- -0- .370 -0-
------- ------- ------- -------
Total Distributions............. .480 1.006 1.092 .455
------- ------- ------- -------
Net Asset Value, End of the
Period........................ $12.662 $12.069 $11.706 $11.968
======= ======= ======= =======
Total Return* (a)............... 8.92%** 12.06% 7.62% (13.21%)**
Net Assets at End of the Period
(In millions)................. $ 71.1 $ 61.9 $ 52.6 $ 46.4
Ratio of Operating Expenses to
Average Net Assets*........... 2.57% 2.59% 2.68% 2.63%
Ratio of Interest Expense to
Average Net Assets (Note 8)... 1.55% 2.26% 2.38% .96%
Ratio of Net Investment Income
to Average Net Assets*........ 6.40% 7.58% 5.30% 8.48%
Portfolio Turnover.............. 252%** 343% 253% 114%**
* If certain expenses had not been reimbursed by VKAC, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............ 2.62% 2.67% N/A N/A
Ratio of Net Investment Income
to Average Net Assets......... 6.34% 7.50% N/A N/A
</TABLE>

** Non-Annualized

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

19
<PAGE> 77

FINANCIAL HIGHLIGHTS (CONTINUED)

<TABLE>
<CAPTION>
December 31, 1993
(Commencement
of Investment
Six Months Ended Year Ended Year Ended Operations) to
Class C Shares December 31, 1996 June 30, 1996 June 30, 1995 June 30, 1994
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period.................... $12.059 $11.699 $11.966 $14.300
------- ------- ------- -------
Net Investment Income........... .394 .944 .598 .509
Net Realized and Unrealized
Gain/Loss on Securities....... .678 .422 .227 (2.388)
------- ------- ------- -------
Total from Investment
Operations.................... 1.072 1.366 .825 (1.879)
------- ------- ------- -------
Less:
Distributions from and in
Excess of Net Investment
Income (Note 1)............. .480 1.006 .722 .455
Return of Capital
Distribution................ -0- -0- .370 -0-
------- ------- ------- -------
Total Distributions............. .480 1.006 1.092 .455
------- ------- ------- -------
Net Asset Value, End of the
Period........................ $12.651 $12.059 $11.699 $11.966
======= ======= ======= =======
Total Return* (a)............... 8.84%** 12.07% 7.53% (13.21%)**
Net Assets at End of the Period
(In millions)................. $ 3.6 $ 3.1 $ 1.7 $ 2.1
Ratio of Operating Expenses to
Average Net Assets*........... 2.56% 2.58% 2.69% 2.65%
Ratio of Interest Expense to
Average Net Assets (Note 8)... 1.55% 2.22% 2.38% .95%
Ratio of Net Investment Income
to Average Net Assets*........ 6.37% 7.49% 5.92% 8.36%
Portfolio Turnover.............. 252%** 343% 253% 114%**
* If certain expenses had not been reimbursed by VKAC, Total Return would have been lower and the
ratios would have been as follows:
Ratio of Operating Expenses to
Average Net Assets............ 2.62% 2.66% N/A N/A
Ratio of Net Investment Income
to Average Net Assets......... 6.31% 7.41% N/A N/A
** Non-Annualized
</TABLE>

(a) Total Return is based upon net asset value which does not include payment of
the maximum sales charge or contingent deferred sales charge.

N/A = Not Applicable

See Notes to Financial Statements

20
<PAGE> 78

NOTES TO FINANCIAL STATEMENTS

December 31, 1996 (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 its' 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.

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 60 days or less are valued at amortized cost.

21
<PAGE> 79

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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--Interest income is recorded on an accrual basis and
dividend income is recorded on the ex-dividend date. Original issue discount is
amortized over the expected life of each applicable security.

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 $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.

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, 1996, the Fund had an accumulated capital loss carryforward
for tax purposes of $7,885,927 which will expire between June 30, 2003 and June
30, 2004. 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 and
timing differences related to open futures and forward transactions at the
Fund's fiscal year end.

22
<PAGE> 80

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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 net currency losses
totaling $188,086 were reclassified from accumulated net realized gain/loss on
securities 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 likely that a
portion of the Fund's distribution 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, 1996.

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>

For the six months ended December 31, 1996, VKAC has agreed to assume the
Fund's registration and filing fees. This waiver is voluntary and may be
discontinued at any time.

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, 1996, the Fund recognized expenses of
approximately $13,000 representing VKAC's cost of providing accounting, cash
management and legal services to the Fund. Of this amount, approximately $800
has been assumed by VKAC.

ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
December 31, 1996, the Fund recognized expenses of approximately $75,800,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.

23
<PAGE> 81

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At December 31, 1996, VKAC owned 100 shares each of Classes A, B and C.

At December 31, 1996, capital aggregated $39,992,816, $73,324,013 and
$3,726,470 for Classes A, B and C, respectively. For the six months ended
December 31, 1996, transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................... 502,545 $ 6,237,434
Class B.................................... 989,573 12,222,345
Class C.................................... 77,751 959,452
---------- -------------
Total Sales.................................. 1,569,869 $ 19,419,231
========== =============
Dividend Reinvestment:
Class A.................................... 47,601 $ 591,095
Class B.................................... 82,435 1,024,563
Class C.................................... 5,987 74,357
---------- -------------
Total Dividend Reinvestment.................. 136,023 $ 1,690,015
========== =============
Repurchases:
Class A.................................... (281,609) $ (3,505,922)
Class B.................................... (592,771) (7,355,156)
Class C.................................... (59,195) (733,170)
---------- -------------
Total Repurchases............................ (933,575) $(11,594,248)
========== =============
</TABLE>

24
<PAGE> 82

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

At June 30, 1996, capital aggregated $36,670,209, $67,432,261 and $3,425,831
for Classes A, B and C, respectively. For the year ended June 30, 1996,
transactions were as follows:

<TABLE>
<CAPTION>
SHARES VALUE
- ---------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A.................................... 751,977 $ 9,046,110
Class B.................................... 1,498,860 18,147,281
Class C.................................... 178,450 2,144,831
---------- ------------
Total Sales.................................. 2,429,287 $ 29,338,222
========== ============
Dividend Reinvestment:
Class A.................................... 94,962 $ 1,139,581
Class B.................................... 163,856 1,965,307
Class C.................................... 9,612 115,478
---------- ------------
Total Dividend Reinvestment.................. 268,430 $ 3,220,366
========== ============
Repurchases:
Class A.................................... (575,267) $ (6,903,393)
Class B.................................... (1,024,433) (12,352,105)
Class C.................................... (78,275) (950,995)
---------- ------------
Total Repurchases............................ (1,677,975) $(20,206,493)
========== ============
</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>

25
<PAGE> 83

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

For the six-months ended December 31, 1996, VKAC, as Distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $15,600 and CDSC on redeemed shares of approximately $152,200.
Sales charges do not represent expenses of the Fund.

4. INVESTMENT TRANSACTIONS

During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $382,810,503 and $342,872,172,
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
securities. Upon disposition, a realized gain or loss is recognized accordingly,
except when exercising an option contract or taking delivery of a security
underlying a futures contract. In these instances, the recognition of gain or
loss is postponed until the disposal of the security underlying the option or
futures contract.

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

26
<PAGE> 84

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

Transactions in options for the six months ended December 31, 1996, were as
follows:

<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- ---------------------------------------------------------------------------
<S> <C> <C>
Outstanding at June 30, 1996................... 3 $ (458,000)
Options Written and Purchased (Net)............ 4,620 (1,757,969)
Options Terminated in Closing
Transactions (Net)........................... (3,861) 1,432,672
Options Exercised.............................. (52) (4,375)
Options Expired (Net).......................... (359) 286,684
--------- ------------
Outstanding at December 31, 1996............... 351 $ (500,988)
========= ============
</TABLE>

The descriptions and market values of the option contracts outstanding as of
December 31, 1996, are as follows:

<TABLE>
<CAPTION>
STRIKE
EXPIRATION PRICE/ MARKET
DESCRIPTION CONTRACTS DATE YIELD VALUE
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
German Mark Purchased Put......... 1 01/22/97 1.57 $ 18,000
U.S. Treasury Bond Future
Feb 1997 Purchased Put.......... 350 01/25/97 111 185,938
--- --------
351 $203,938
=== ========
</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.

Upon entering into futures contracts, the Fund maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the value
of the contract (the variation margin). The cost of securities acquired through
delivery under a contract is adjusted by the unrealized gain or loss on the
contract.

Transactions in futures contracts for the six months ended December 31,
1996, were as follows:

<TABLE>
<CAPTION>
CONTRACTS
- ------------------------------------------------------------------------
<S> <C>
Outstanding at June 30, 1996............................... 231
Futures Opened............................................. 3,752
Futures Closed............................................. (3,981)
---------
Outstanding at December 31, 1996........................... 2
=========
</TABLE>

27
<PAGE> 85

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

The futures contracts outstanding as of December 31, 1996, and the
descriptions and unrealized appreciation are as follows:

<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS APPRECIATION
- ----------------------------------------------------------------------------
<S> <C> <C>
10-Year Japanese Bond Future Mar 1997--
Sells to Open (Current Notional Value
$1,072,446 Per Contract)..................... 2 $25,173
= =======
</TABLE>

C. 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 forwards.

At December 31, 1996, the Fund has outstanding forward currency contracts as
follows:

<TABLE>
<CAPTION>
FORWARD ORIGINAL CURRENT UNREALIZED
CURRENCY VALUE VALUE APPRECIATION
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
SELLS TO OPEN
Australian Dollar,
1,000,000 expiring 01/06/97...... $ 800,000 $ 794,783 $ 5,217
Spanish Peseta,
260,320,000 expiring 01/13/97.... 2,017,985 2,004,483 13,502
Swedish Krona,
13,563,000 expiring 01/13/97..... 2,064,383 1,989,834 74,549
-------
$93,268
=======
</TABLE>

D. SWAP TRANSACTIONS--These securities, which are identified in the portfolio of
investments, represent an agreement between two parties to exchange a series of
cash flows based upon various indices at specified intervals.

E. INVERSE FLOATING SECURITY--These instruments, which are identified in the
portfolio of investments, have a coupon which 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

28
<PAGE> 86

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

borrowers. Most of these securities are guaranteed by federally sponsored
agencies such as Federal Home Loan Mortgage Corp (FHLMC), Federal National
Mortgage Association (FNMA) or Government National Mortgage Association (GNMA).

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 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 $45,000,000 revolving credit agreement which
expires on February 28, 1997. 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, 1996, was 7.25%. An annual commitment fee of .15% is charged on the unused
portion of the credit line.

29
<PAGE> 87

NOTES TO FINANCIAL STATEMENTS (CONTINUED)

December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------

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, 1996, the average interest rate in effect for reverse
repurchase agreements was 5.86%.

The average daily balance of bank borrowings and reverse repurchase
agreements for the six months ended December 31, 1996, was approximately
$28,570,100 with an average interest rate of 5.74%.

At December 31, 1996, these agreements represented 21.7% of the Fund's total
assets.

30
<PAGE> 88

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

35
<PAGE> 89

VAN KAMPEN AMERICAN CAPITAL STRATEGIC INCOME FUND

BOARD OF TRUSTEES

J. MILES BRANAGAN

LINDA HUTTON HEAGY

R. CRAIG KENNEDY

DENNIS J. MCDONNELL*

JACK E. NELSON

JEROME L. ROBINSON

FERNANDO SISTO

WAYNE W. WHALEN* - Chairman

OFFICERS

DENNIS J. MCDONNELL*
President

RONALD A. NYBERG*
Vice President and Secretary

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

CURTIS W. MORELL*
Vice President and Chief Accounting Officer

JOHN L. SULLIVAN*
Treasurer

TANYA M. LODEN*
Controller

PETER W. HEGEL*
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

SHAREHOLDER SERVICING AGENT

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

CUSTODIAN

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

LEGAL COUNSEL

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

INDEPENDENT ACCOUNTANTS

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.

A Special Meeting of Shareholders of the Fund was held on October 25, 1996 where
shareholders voted on a new investment advisory agreement, changes to investment
policies and the ratification of KPMG Peat Marwick LLP as independent public
accountants. With regard to the approval of a new investment advisory agreement
between Van Kampen American Capital Investment Advisory Corp. and the Fund,
6,414,820 shares voted for the proposal, 122,931 shares voted against and
423,464 shares abstained. With regard to the approval of certain changes to the
Fund's fundamental investment policies with respect to investment in other
investment companies, 3,902,031 shares voted for the proposal, 161,514 shares
voted against and 447,905 shares abstained. With regard to the ratification of
KPMG Peat Marwick LLP as independent public accountants for the Fund, 6,523,751
shares voted for the proposal, 85,582 shares voted against and 351,883 shares
abstained.