<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Portfolio of Investments......................... 3
Statement of Assets and Liabilities.............. 5
Statement of Operations.......................... 6
Statement of Changes in Net Assets............... 7
Financial Highlights............................. 8
Notes to Financial Statements.................... 9
</TABLE>
TFMM SAR 2/97
<PAGE> 2
LETTER TO SHAREHOLDERS
February 10, 1997
Dear Shareholder,
The Tax-Free Money Fund's
performance is ultimately a function
of short-term interest rates. As a
result, market participants keep a
close eye on the key economic
indicators that influence Federal [PHOTO]
Reserve policy--most notably,
economic growth and inflation.
Throughout the reporting period,
market fluctuations have been driven
by signs of economic strength and the
accompanying fear of higher
inflation. It is widely accepted that DENNIS J. MCDONNELL AND DON G. POWELL
a significant increase in inflation
would likely spur the Fed to increase short-term rates.
For example, the economy showed signs of accelerated growth during the
second quarter of the calendar year, when real GDP (gross domestic product,
adjusted for inflation) grew at an annualized rate of 4.7 percent, much higher
than the 2.0 percent growth rate seen during the year's first quarter. The fear
that rapid growth would spark inflation caused the market to sell off. Then,
data released in late October indicated that the economy had slowed to a 2.0
percent annual growth rate in the third quarter, sparking a rally in Treasury
bond prices. The decision by the Fed to leave rates unchanged further settled
the markets. In the meantime, investors continue to track key indicators--such
as consumer spending, wages, corporate earnings, and employment levels--for
clues to the market's direction.
PERFORMANCE SUMMARY
In keeping with the Fund's investment philosophy, we focus on only the
highest quality short-term municipal securities. We currently employ a strategy
that shortens the average maturity of the portfolio to reflect the possibility
of higher short-term rates associated with heightened economic growth and a
potential increase in the Fed's discount rate (maturity is the date on which a
bond is scheduled to repay the principal (par value) to the bondholders). The
Fund's average maturity at December 31, 1996 was 54 days, versus the IBC
Financial Data average maturity of 50 days.
The Fund's seven-day average yield on December 31, 1996 was 3.05 percent(1)
while the Fund posted a six-month total return of 1.39 percent(2). By
comparison, the average return for tax-free money market funds, as calculated by
Lipper Analytical Services, Inc., was 1.46 percent for the six-month period.
Because income from the Fund is exempt from federal income tax, it is
important to compare its effective annual yield as of December 31, 1996 of 2.76
percent to
(1)Had certain expenses of the Fund not been assumed by the Adviser, the Fund's
seven-day yield would have been 2.55 percent and the total return would have
been lower.
(2)Six-month total return assumes reinvestment of all distributions for the
period ended December 31, 1996.
Continued on page two
1
<PAGE> 3
an equivalent taxable rate. For example, if you were in the 36 percent federal
income tax bracket, then you would have needed a taxable equivalent rate of 4.31
percent to equal the tax-free yield of your Tax Free Money Fund.
PORTFOLIO HOLDINGS BY INVESTMENT TYPE [PIE CHART]
AS OF DECEMBER 31, 1996 AS OF JUNE 30, 1996
Updates (Commercial Paper) 8.4% Updates (Commercial Paper) 11.3%
Seven-Day Floaters 38.3% Seven-Day Floaters 40.1%
Dates 24.4% Dates 23.6%
Bonds/Notes 28.9% Bonds/Notes 25.0%
OUTLOOK
We believe the economy will grow at a modest pace in 1997, near 2.5 percent,
although there could be periods of strong economic growth. While these growth
spurts may be accompanied by short-term market fluctuation, we do not believe
they will be strong enough to reignite inflation. We believe that any
acceleration in economic activity and to concerns about the high level of stock
prices could prompt the Fed to nudge interest rates higher in 1997, though not
before March.
CORPORATE NEWS
As you may be aware, shareholders approved the acquisition of VK/AC Holding,
Inc. by Morgan Stanley Group Inc. We believe this acquisition will further help
investors achieve their long-term goals. Morgan Stanley's strong global presence
and commitment to superior investment performance complement our broad range of
investment products, money management capability and high level of service.
Thank you for 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.
Fund shares are not guaranteed or insured by the U.S. government, and there is
no assurance that the Fund will be able to maintain a stable net asset value of
$1.00.
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.
2
<PAGE> 4
PORTFOLIO OF INVESTMENTS
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Security Description Date Purchase Cost
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
DATES 24.4%
$2,500 Brazos River Auth TX Utils Elec Co Proj Ser
1996 B (AMBAC Insd)........................... 01/02/97 4.750% $ 2,500,000
1,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Ser 1983 C (LOC: Royal Bank of
Canada)....................................... 01/02/97 5.000 1,500,000
1,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Ser 1983 D (LOC: Royal Bank of
Canada)....................................... 01/02/97 5.000 1,500,000
1,400 New York City Muni Wtr Fin Auth Wtr Swr Sys
Ser 1995 A (FGIC Insd)........................ 01/02/97 4.700 1,400,000
300 New York City Ser B (FGIC Insd)............... 01/02/97 4.500 300,000
1,500 Wilmington, DE Hosp Rev Bonds Ser 1986 A
(LOC: Toronto-Dominion Bank).................. 01/02/97 4.950 1,500,000
-----------
Total Dates.................................... 8,700,000
-----------
7 DAY FLOATERS 38.3%
1,000 Calhoun Cnty, MI Econ Dev Corp Rev
(LOC: Comerica Bank).......................... 01/07/97 4.100 1,000,000
1,400 City of Chillicothe, IA Pollutn Ctl Rev
Midwest Pwr Sys Ser 1993 A Rfdg (Gtd: Midwest
Power Systems, Inc.).......................... 01/07/97 4.150 1,400,000
1,380 City of Sterling Heights, MI Econ Dev Corp Rev
Rfdg (LOC: First Chicago/NBD Corp)............. 01/07/97 4.100 1,380,000
1,300 Dade Cnty, FL Fltg Capital Asset Acquisition
Ser S (LOC: Sanwa Bank)...................... 01/07/97 4.450 1,300,000
1,110 Fort Bend, TX Indl Dev Corp Indl Dev Rev Rfdg
(Gtd: W.W. Grainger, Inc.).................... 01/07/97 4.200 1,110,000
1,100 Illinois Dev Fin Auth Indl Dev Rev Field
Container Corp Rfdg (LOC: Amer Nat'l Bank &
Trust of Chicago)............................. 01/07/97 4.200 1,100,000
1,000 Illinois Dev Fin Auth Rev Roosevelt Univ Ser
1995 (LOC: Amer Nat'l Bank & Trust of
Chicago)...................................... 01/07/97 4.200 1,000,000
1,100 Illinois Dev Fin Auth Rev Ser 1994 Lake Forest
Academy (LOC: The Northern Trust Company)..... 01/07/97 4.200 1,100,000
1,000 Iowa Hsg Fin Auth Small Bus Ln Proj Ser 1985 A
(LOC: Federal Home Loan Bank of Des Moines)... 01/07/97 4.000 1,000,000
400 Minnesota St Higher Edl Coordinating Brd Ser
1994 A Rfdg (LOC: Norwest Bank)............... 01/07/97 4.150 400,000
1,000 Pleasant Hill, CA Redev Agy Var Hsg Chateau
III Proj Ser A (LOC: Heller Financial)........ 01/07/97 4.350 1,000,000
800 Saint Paul, MN Hsg & Redev Auth Rev Ser 1985 A
(LOC: Federal Home Loan Bank of Des Moines)... 01/07/97 4.250 800,000
</TABLE>
See Notes to Financial Statements
3
<PAGE> 5
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Security Description Date Purchase Cost
- -----------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
7 DAY FLOATERS (CONTINUED)
$ 500 Utah St Brd Regents Student Ln Rev Ser 1993 A
(Gtd: Student Ln Marketing Assoc)............. 01/07/97 4.250% $ 500,000
600 Washington St Hsg Fin Comm Multi-Family Mtg
Rev Rfdg (LOC: Harris Trust & Savings Bank)... 01/07/97 4.250 600,000
-----------
Total 7 Day Floaters.............................................. 13,690,000
-----------
UPDATES (COMMERCIAL PAPER) 8.4%
1,500 York Cnty, SC Pollutn Ctl Rev Ser 1990 Rfdg
(Gtd: Duke Power Co.)......................... 01/16/97 3.625 1,500,000
1,500 Wayne Cnty, MI Downriver Swr Disp Sys Ser 1994
B (LOC: Comerica Bank)........................ 02/13/97 3.450 1,500,000
-----------
Total Updates (Commercial Paper).................................. 3,000,000
-----------
BONDS/NOTES 28.9%
1,515 Port Seattle, WA Rev Ser 1995 A Rfdg (AMBAC
Insd)......................................... 02/01/97 5.500 1,517,297
1,000 New York, NY Rev Antic Nts Ser A.............. 04/15/97 4.500 1,002,269
325 Trenton, NJ Wtr Util Ser B (FSA Insd)......... 04/15/97 5.300 326,394
825 Polk County, IA Genl Oblig.................... 06/01/97 4.300 826,991
490 Washington St Hsg Fin Comm Single Family Prog
Ser 1A-S (FGIC Insd)......................... 06/01/97 3.800 490,000
1,000 Maine St Tax Antic Nts........................ 06/27/97 4.500 1,002,916
1,500 Idaho St Tax Antic Nts........................ 06/30/97 4.500 1,503,957
500 Saint Louis, MO Tax & Rev Antic Nts Ser
1996......................................... 06/30/97 4.750 501,854
2,110 Texas St Tax & Rev Antic Nts Ser 1996......... 08/29/97 4.750 2,122,785
1,010 City of Ashdown, AR Indl Dev Rev Ser 1981
(Gtd: Allied Signal Corp.).................... 11/01/97 4.000 1,009,944
-----------
Total Bonds/Notes................................................. 10,304,407
-----------
TOTAL INVESTMENTS 100.0% (a).............................................. 35,694,407
OTHER ASSETS IN EXCESS OF LIABILITIES 0.0%................................ 14,159
-----------
NET ASSETS 100.0%......................................................... $35,708,566
-----------
</TABLE>
(a) At December 31, 1996, cost is identical for both book and federal income tax
purposes.
See Notes to Financial Statements
4
<PAGE> 6
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Amortized Cost which Approximates Market
(Note 1).................................................. $35,694,407
Cash........................................................ 36,442
Receivables:
Interest.................................................. 260,205
Fund Shares Sold.......................................... 75,502
Other....................................................... 5,455
-----------
Total Assets.......................................... 36,072,011
-----------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 168,276
Distributor and Affiliates (Notes 2 and 4)................ 28,529
Income Distributions...................................... 20,802
Deferred Compensation and Retirement Plans (Note 2)......... 73,284
Accrued Expenses............................................ 72,554
-----------
Total Liabilities..................................... 363,445
-----------
NET ASSETS.................................................. $35,708,566
===========
NET ASSETS CONSIST OF:
Capital (Note 3)............................................ $35,731,854
Accumulated Net Realized Loss on Investments................ (23,288)
-----------
NET ASSETS (Equivalent to $1.00 per share for 35,731,854
shares outstanding)....................................... $35,708,566
===========
</TABLE>
See Notes to Financial Statements
5
<PAGE> 7
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $651,039
--------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 90,886
Distribution (12b-1) and Service Fees (Note 4).............. 45,443
Shareholder Services (Note 2)............................... 37,263
Registration................................................ 19,420
Trustees Fees and Expenses (Note 2)......................... 15,662
Printing.................................................... 14,720
Custody..................................................... 14,166
Legal (Note 2).............................................. 6,440
Other....................................................... 24,957
--------
Total Expenses.......................................... 268,957
Less Fees Deferred and Expenses Reimbursed ($90,886 and
$24,668, respectively)................................ 115,554
--------
Net Expenses............................................ 153,403
--------
NET INVESTMENT INCOME....................................... $497,636
========
NET REALIZED GAIN ON INVESTMENTS............................ $ 1,290
========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $498,926
========
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
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................................. $ 497,636 $ 1,019,399
Net Realized Gain on Investments...................... 1,290 -0-
------------ ------------
Change in Net Assets from Operations.................. 498,926 1,019,399
Distributions from Net Investment Income.............. (497,636) (1,019,399)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES... 1,290 -0-
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............................. 45,198,604 67,200,916
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................ 375,773 762,564
Cost of Shares Repurchased............................ (45,499,978) (65,505,643)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS.... 74,399 2,457,837
------------ ------------
TOTAL INCREASE IN NET ASSETS.......................... 75,689 2,457,837
NET ASSETS:
Beginning of the Period............................... 35,632,877 33,175,040
------------ ------------
End of the Period..................................... $ 35,708,566 $ 35,632,877
============ ============
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share
of the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended Year Ended June 30
December 31, ---------------------------------
1996 1996 1995 1994 1993
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $1.00 $1.00 $1.00 $1.00 $1.00
------- ---- ---- ---- ----
Net Investment Income......................... .014 .029 .027 .017 .019
Less Distributions from Net Investment
Income...................................... .014 .029 .027 .017 .019
------- ---- ---- ---- ----
Net Asset Value, End of Period................ $1.00 $1.00 $1.00 $1.00 $1.00
======= ==== ==== ==== ====
Total Return*................................. 1.39%** 2.93% 2.73% 1.70% 1.93%
Net Assets at End of Period (In millions)..... $35.7 $35.6 $33.2 $37.4 $43.1
Ratio of Expenses to Average Net Assets*...... .85% .85% .89% .81% .72%
Ratio of Net Investment Income to Average Net
Assets*..................................... 2.76% 2.89% 2.68% 1.69% 1.92%
* If certain expenses had not been assumed by
VKAC, total return would have been lower and
the ratios would have been as follows:
Ratio of Expenses to Average Net Assets....... 1.49% 1.53% 1.38% 1.29% .97%
Ratio of Net Investment Income to Average Net
Assets...................................... 2.12% 2.21% 2.20% 1.20% 1.67%
</TABLE>
** Non-Annualized
See Notes to Financial Statements
8
<PAGE> 10
NOTES TO FINANCIAL STATEMENTS
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Tax Free Money Fund (the "Fund") is organized as a
Delaware business trust. The Fund is an open-end diversified management
investment company registered under the Investment Company Act of 1940, as
amended. The Fund's investment objective is to provide a high level of current
income exempt from federal income taxes consistent with the preservation of
capital and liquidity through investment in a broad range of municipal
securities that will mature within 12 months of the date of purchase. The Fund
commenced investment operations on November 5, 1986.
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 valued at amortized cost, which
approximates market. Under this valuation method, a portfolio instrument is
valued at cost and any discount or premium is amortized on a straight-line basis
to the maturity of the instrument.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis.
Interest income is recorded on an accrual basis.
C. 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, if any, 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
of $24,578 which expires between June 30, 1998 and June 30, 2001. Net realized
gains or losses may differ for financial reporting and tax 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.
9
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
D. DISTRIBUTION OF INCOME AND GAINS--The Fund declares dividends from net
investment income daily and automatically reinvests such dividends daily. Net
realized gains, if any, are distributed annually. Shareholders can elect to
receive the cash equivalent of their daily dividends at each month end.
2. INVESTMENT ADVISORY FEES 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 facilities and
investment advice to the Fund for an annual fee payable monthly as follows:
<TABLE>
<CAPTION>
AVERAGE NET ASSETS % PER ANNUM
- ---------------------------------------------------------------------
<S> <C>
First $500 million...................................... .500 of 1%
Next $500 million....................................... .475 of 1%
Next $500 million....................................... .425 of 1%
Over $1.5 billion....................................... .375 of 1%
</TABLE>
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom
(Illinois), counsel to the Fund, of which a trustee of the Fund is an affiliated
person.
For the six months ended December 31, 1996, the Fund recognized expenses of
approximately $6,900 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, the Fund recognized expenses of approximately $25,400,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.
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 is authorized to issue an unlimited number of shares of beneficial
interest with a par value of $.01 per share. At December 31, 1996 and June 30,
1996, capital
10
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
aggregated $35,731,854 and $35,657,455, respectively. Transactions in shares
were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1996 June 30, 1996
- ------------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares...................... 35,657,455 33,199,618
----------- -----------
Shares Sold........................... 45,198,604 67,200,916
Shares Issued Through Dividend
Reinvestment........................ 375,773 762,564
Shares Repurchased.................... (45,499,978) (65,505,643)
----------- -----------
Net Change in Shares Outstanding...... 74,399 2,457,837
----------- -----------
Ending Shares......................... 35,731,854 35,657,455
=========== ===========
</TABLE>
4. 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% of the Fund's average net assets are
accrued daily. Included in these fees for the six months ended December 31,
1996, are payments to VKAC of approximately $15,900.
11
<PAGE> 13
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.
12
<PAGE> 14
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY 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.
(C) Van Kampen American Capital Distributors, Inc., 1997. All rights reserved.
SM denotes a service mark of Van Kampen American Capital Distributors, Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data.
RESULTS OF SHAREHOLDER VOTES
A Special Meeting of Shareholders of the Fund was held on October 25, 1996,
where shareholders voted on a new investment advisory agreement, 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, 22,888,355 shares voted for the proposal, 352,427 shares voted against and
965,677 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, 22,322,296 shares voted for the proposal, 545,193 shares
voted against and 1,094,354 shares abstained. With regard to the ratification of
KPMG Peat Marwick LLP as independent public accountants for the Fund, 23,074,654
shares voted for the proposal, 171,827 shares voted against and 959,978 shares
abstained.
13
