<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Portfolio of Investments......................... 4
Statement of Assets and Liabilities.............. 6
Statement of Operations.......................... 7
Statement of Changes in Net Assets............... 8
Financial Highlights............................. 9
Notes to Financial Statements.................... 10
</TABLE>
TFMM SAR 2/98
<PAGE> 2
LETTER TO SHAREHOLDERS
February 9, 1997
Dear Shareholder,
The new year ushers in what
promises to be an exciting and
challenging time for investors. The
Taxpayer Relief Act signed into law
by President Clinton in August [PHOTO]
creates many new opportunities for
you and your family to take a more DENNIS J. MCDONNELL AND DON G. POWELL
active role in achieving your
long-term financial goals.
Most Americans will benefit from
the bill's $95 billion in tax cuts
over five years. The so-called Kiddie
Credit gives parents $400 in
immediate tax relief for every child under age 17, and families will find it
easier to save for their children's college expenses through the new Education
IRA. The bill also cuts capital gains tax rates for the first time in over a
decade and loosens restrictions on tax-deductible IRA contributions. Perhaps the
most exciting feature of all is the new Roth IRA, which allows investment
earnings to grow tax free, not just tax deferred.
This year more than ever, it could be important for you to talk to your
financial adviser about how to make the tax code work to your advantage. At Van
Kampen American Capital, we have prepared a variety of publications to help you
understand your choices under the new tax legislation. And with the help of your
adviser, we'll help you locate the many benefits hidden among the changing tax
landscape.
ECONOMIC REVIEW
In the months following a March interest rate increase by the Federal
Reserve Board, investors slowly came to the realization that additional Fed
intervention was unlikely for the remainder of the year. This was ushered in by
a new paradigm of continuing strong GDP growth, underpinned by consistently
positive economic indicators but a surprising absence of inflationary pressures.
Any rumblings of Fed tightenings in the last few months of the reporting period
were put to rest as ripple effects from the fall 1997 Asian currency crisis hit
U.S. shores.
PORTFOLIO STRATEGY
We employed a strategy that lengthened the average maturity of the portfolio
to reflect the possibility of lower short-term rates associated with the
implications of the Asian crisis on the U.S. economy. The Fund's average
maturity on December 31, 1997 was 53 days, versus the IBC Financial Data average
maturity of 50 days.
During the reporting period, the increased seasonal issuance of short-term
instruments caused rates to peak in June and July. In response to this, we
lengthened the average maturity to about 70 days to take advantage of the higher
yields available. We continued to focus on only the highest quality short-term
municipal securities. Short-term
Continued on page two
1
<PAGE> 3
variable rate securities, which outperformed expectations during the period,
accounted for close to 65 percent of the portfolio. In order to meet different
maturities and the various inflows and outflows of the Fund, the remainder of
the portfolio was invested in long-term, 1-year notes and some tax-free
commercial paper.
PERFORMANCE SUMMARY
The Fund's seven-day average yield on December 31, 1997 was 3.17 percent,
while the Fund posted a six-month total return of 1.47 percent. By comparison,
the average return for tax-free money market funds, as calculated by Lipper
Analytical Services, Inc., was 1.57 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, 1997 of 2.91
percent to 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 4.55 percent to equal the tax-free yield on your Tax Free
Money Fund.
PORTFOLIO HOLDINGS BY INVESTMENT TYPE AS A PERCENTAGE OF TOTAL INVESTMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1997 AS OF JUNE 30, 1997
<S> <C> <C> <C>
Updates (Commercial Paper)...... 4.8% Updates (Commercial Paper)....... 4.6%
Dates........................... 17.1% [PIE CHART] Dates............................ 44.7% [PIE CHART]
Seven-Day Floaters.............. 49.4% Seven-Day Floaters............... 36.7%
Bonds/Notes..................... 28.7% Bonds/Notes...................... 14.0%
</TABLE>
OUTLOOK
We expect the U.S. economy to remain strong going into 1998, although its
growth rate is likely to slow from current levels. The expediency with which the
crisis in Southeast Asia is resolved will play a key role in how the Fed will
manage the U.S. interest rate environment in the coming year. We are cautiously
optimistic that interest rates will remain fairly stable, if not slightly lower
in the coming year. In the event that conditions in Southeast Asia stabilize and
that the U.S. economy begins to show increased signs of price appreciation and
wage pressures, the Fed is likely to take preemptive measures to keep inflation
in check.
We will continue to monitor events in Asia and other market developments in
order to assess their effects on the portfolio. At this time, we do not
anticipate making any major changes to the portfolio until market conditions
shift more dramatically. We will continue to seek to achieve the Fund's
objective of relative stability, daily liquidity, and a competitive
Continued on page three
2
<PAGE> 4
level of income, and will look to add value through careful security selection.
Thank you for your continued confidence and trust in Van Kampen American Capital
and your Fund's team of managers.
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.
3
<PAGE> 5
PORTFOLIO OF INVESTMENTS
December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Description Date Purchase Cost
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS
DATES 17.0%
$ 500 Brazos River Auth TX Utils Elec Co Proj Ser
1996 B (AMBAC Insd)........................... 01/02/98 4.600% $ 500,000
1,100 Delaware Cnty, PA Indl Dev Auth Arpt Fac Rev
(Gtd: United Parcel Service).................. 01/02/98 5.000 1,100,000
1,100 Perry Cnty, MS Pollutn Ctl Rev Ser 1992 Rfdg
(LOC: Credit Suisse).......................... 01/02/98 5.000 1,100,000
1,500 Pinal Cnty, AZ Indl Dev Auth Pollutn Ctl Rev
Ser 1984 (LOC: Nat'l Westminster Bank)........ 01/02/98 4.950 1,500,000
1,200 Port of Portland, OR Pollutn Ctl Rev
(LOC: Bank of Nova Scotia).................... 01/02/98 5.000 1,200,000
----------
TOTAL DATES....................................................... 5,400,000
----------
7 DAY FLOATERS 48.8%
1,500 Albuquerque, NM Arpt Rev Ser A................ 01/07/98 3.750 1,500,000
900 Calhoun Cnty, MI Econ Dev Corp Rev
(LOC: Comerica Bank).......................... 01/07/98 3.950 900,000
1,400 City of Chillicothe, IA Pollutn Ctl Rev
Midwest Pwr Sys Ser 1993 A Rfdg (Gtd: Midwest
Power Systems, Inc.).......................... 01/07/98 3.850 1,400,000
1,310 City of Sterling Heights, MI Econ Dev Corp Rev
Rfdg (LOC: First Chicago/NBD Corp)............ 01/07/98 3.900 1,310,000
1,000 Dade Cnty, FL Fltg Capital Asset Acquisition
Ser S (LOC: Sanwa Bank Ltd.).................. 01/07/98 4.200 1,000,000
1,110 Fort Bend, TX Indl Dev Corp Indl Dev Rev W.W.
Grainger Proj Rfdg (LOC: The Northern Trust
Company)...................................... 01/07/98 4.150 1,110,000
1,500 Gibson Cnty, IN Pollutn Ctl Rev Toyota Motor
Manufacturing Proj............................ 01/07/98 4.350 1,500,000
1,000 Illinois Dev Fin Auth Rev Roosevelt Univ Ser
1995 (LOC: Amer Nat'l Bank & Trust of
Chicago)...................................... 01/07/98 3.950 1,000,000
1,100 Illinois Dev Fin Auth Rev Ser 1994 Lake Forest
Academy (LOC: The Northern Trust Company)..... 01/07/98 3.950 1,100,000
1,500 Iowa Fin Auth Rev Burlington Med Cent......... 01/07/98 4.150 1,500,000
218 Minnesota St Higher Edl Coordinating Brd Ser
1994 A Rfdg (LOC: Norwest Bank)............... 01/07/98 3.900 218,000
1,000 Montgomery Cnty, MD Hsg Oppntys Commission Hsg
Rev........................................... 01/07/98 3.950 1,000,000
500 Utah St Brd Regents Student Ln Rev Ser 1993 A
(Gtd: Student Ln Marketing Assn.)............. 01/07/98 3.750 500,000
1,500 Washington St Hsg Fin Comm Multi-Family Mtg
Rev Rfdg (LOC: Harris Trust & Savings Bank)... 01/07/98 4.200 1,500,000
----------
TOTAL 7 DAY FLOATERS.............................................. 15,538,000
----------
</TABLE>
See Notes to Financial Statements
4
<PAGE> 6
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Discount
Par Yield on
Amount Maturity Date of Amortized
(000) Description Date Purchase Cost
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UPDATES (COMMERCIAL PAPER) 4.7%
$ 1,500 Wayne Cnty, MI Downriver Swr Disp Sys Ser 1994
B (LOC: Comerica Bank)........................ 01/21/98 3.700% $ 1,500,000
-----------
BONDS/NOTES 28.4%
1,500 Chicago, IL Mandatory Tender Nts Ser 1997
(LOC: Morgan Guaranty)........................ 02/06/98 3.650 1,500,000
1,010 City of Ashdown, AR Indl Dev Rev Ser 1981
(Gtd: Allied Signal Corp.).................... 01/06/11 4.050 1,010,000
1,000 Greater Texas Student Ln Corp Ser 1996 A Rfdg
(Gtd: Student Ln Marketing Assn.)............. 04/01/05 3.700 1,000,000
1,000 Idaho St Tax Anticipation Nts................. 06/30/98 3.880 1,003,555
1,500 Philadelphia, PA Tax and Rev Anticipation Nts.
Ser A......................................... 06/30/98 4.500 1,503,575
1,500 St Louis, MO, Tax and Rev Anticipation Nts.... 06/30/98 3.850 1,504,654
1,500 Texas St Tax and Rev Anticipation Nts Ser A... 08/31/98 3.825 1,508,897
-----------
TOTAL BONDS/NOTES................................................. 9,030,681
-----------
TOTAL INVESTMENTS 98.9% (A).................................................. 31,468,681
OTHER ASSETS IN EXCESS OF LIABILITIES 1.1%................................... 364,283
-----------
NET ASSETS 100.0%............................................................ $31,832,964
===========
</TABLE>
(a) At December 31, 1997, cost is identical for both book and federal income tax
purposes.
See Notes to Financial Statements
5
<PAGE> 7
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Amortized Cost which Approximates Market.... $31,468,681
Cash........................................................ 66,169
Receivables:
Fund Shares Sold.......................................... 330,524
Interest.................................................. 271,833
Other....................................................... 24,109
-----------
Total Assets.......................................... 32,161,316
-----------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 93,516
Distributor and Affiliates................................ 35,933
Income Distributions...................................... 19,170
Trustees' Deferred Compensation and Retirement Plans........ 112,340
Accrued Expenses............................................ 67,393
-----------
Total Liabilities..................................... 328,352
-----------
NET ASSETS.................................................. $31,832,964
===========
NET ASSETS CONSIST OF:
Capital..................................................... $31,853,933
Accumulated Undistributed Net Investment Income............. 438
Accumulated Net Realized Loss............................... (21,407)
-----------
NET ASSETS (Equivalent to $1.00 per share for 31,853,933
shares outstanding)....................................... $31,832,964
===========
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $607,408
--------
EXPENSES:
Investment Advisory Fee..................................... 80,852
Distribution (12b-1) and Service Fees....................... 40,453
Shareholder Services........................................ 34,605
Registration................................................ 18,310
Shareholder Reports......................................... 14,720
Audit....................................................... 12,328
Trustees Fees and Expenses.................................. 11,139
Accounting.................................................. 9,384
Legal....................................................... 6,440
Custody..................................................... 3,719
Other....................................................... 4,750
--------
Total Expenses.......................................... 236,700
Less Fees Deferred and Expenses Reimbursed ($80,852 and
$18,148, respectively)................................ 99,000
--------
Net Expenses............................................ 137,700
--------
NET INVESTMENT INCOME....................................... $469,708
========
NET REALIZED GAIN........................................... $ 60
--------
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $469,768
========
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 1997
and the Year Ended June 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1997 June 30, 1997
- -------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 469,708 $ 978,816
Net Realized Gain........................................ 60 3,111
----------- -----------
Change in Net Assets from Operations..................... 469,768 981,927
Distributions from Net Investment Income................. (469,397) (978,689)
----------- -----------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES...... 371 3,238
----------- -----------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold................................ 52,456,659 94,162,306
Net Asset Value of Shares Issued Through Dividend
Reinvestment........................................... 469,397 978,689
Cost of Shares Repurchased............................... (54,157,889) (97,712,684)
----------- -----------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS....... (1,231,833) (2,571,689)
----------- -----------
TOTAL DECREASE IN NET ASSETS............................. (1,231,462) (2,568,451)
NET ASSETS:
Beginning of the Period.................................. 33,064,426 35,632,877
----------- -----------
End of the Period (Including accumulated undistributed
net investment income of $438 and $127,
respectively).......................................... $31,832,964 $33,064,426
=========== ===========
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
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, ---------------------------------
1997 1997 1996 1995 1994
- -----------------------------------------------------------------------------------------------
<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........................ .015 .028 .029 .027 .017
Less Distributions from Net Investment
Income..................................... .015 .028 .029 .027 .017
----- ----- ----- ----- -----
Net Asset Value, End of Period............... $1.00 $1.00 $1.00 $1.00 $1.00
===== ===== ===== ===== =====
Total Return*................................ 1.47%** 2.82% 2.93% 2.73% 1.70%
Net Assets at End of Period (In millions).... $31.8 $33.1 $35.6 $33.2 $37.4
Ratio of Expenses to Average Net Assets*..... .86% .85% .85% .89% .81%
Ratio of Net Investment Income to Average Net
Assets*.................................... 2.95% 2.78% 2.89% 2.68% 1.69%
* 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...... 1.48% 1.45% 1.53% 1.38% 1.29%
Ratio of Net Investment Income to Average Net
Assets..................................... 2.32% 2.17% 2.21% 2.20% 1.20%
</TABLE>
** Non-annualized
See Notes to Financial Statements
9
<PAGE> 11
NOTES TO FINANCIAL STATEMENTS
December 31, 1997 (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, 1997, the Fund had an accumulated capital loss carryforward
of $21,467 which expires between June 30, 1998 and June 30, 2001. Of this
amount, $3,166 will expire on June 30, 1998.
10
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (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 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...................................... .500 of 1%
Next $500 million....................................... .475 of 1%
Next $500 million....................................... .425 of 1%
Over $1.5 billion....................................... .375 of 1%
</TABLE>
For the six months ended December 31, 1997, the Fund recognized expenses of
approximately $2,800, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Fund, of which a trustee of the
Fund is an affiliated person.
For the six months ended December 31, 1997, the Fund recognized expenses of
approximately $13,100 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, 1997, the Fund recognized expenses of approximately $21,000,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.
The Fund provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to defer all or a portion of their compensation to a later
date. Benefits under the retirement plan are payable for a ten-year period and
are based upon each trustee's years of service to the Fund. The maximum annual
benefit per trustee under the plan is equal to $2,500.
11
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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, 1997 and June 30,
1997, capital aggregated $31,853,933 and $33,085,766, respectively. Transactions
in shares were as follows:
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1997 June 30, 1997
- -----------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares.......................... 33,085,766 35,657,455
----------- -----------
Shares Sold............................... 52,456,659 94,162,306
Shares Issued Through Dividend
Reinvestment............................ 469,397 978,689
Shares Repurchased........................ (54,157,889) (97,712,684)
----------- -----------
Net Change in Shares Outstanding.......... (1,231,833) (2,571,689)
----------- -----------
Ending Shares............................. 31,853,933 33,085,766
=========== ===========
</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,
1997, are payments retained by VKAC of approximately $15,200.
12
<PAGE> 14
VAN KAMPEN AMERICAN CAPITAL TAX FREE MONEY FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
RICHARD M. DEMARTINI*
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
JACK E. NELSON
DON G. POWELL*
PHILLIP B. ROONEY
FERNANDO SISTO
WAYNE W. WHALEN*- Chairman
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
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., 1998.
All rights reserved.
(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund which
contains additional information on how to purchase shares, the sales charge, and
other pertinent data. After June 30, 1998, the report, if used with prospective
investors, must be accompanied by a quarterly performance update.
13
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 011
<NAME> TAX FREE MONEY A
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> DEC-31-1997
<INVESTMENTS-AT-COST> 31,468,681
<INVESTMENTS-AT-VALUE> 31,468,681
<RECEIVABLES> 602,357
<ASSETS-OTHER> 24,109
<OTHER-ITEMS-ASSETS> 66,169
<TOTAL-ASSETS> 32,161,316
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 328,352
<TOTAL-LIABILITIES> 328,352
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 31,853,933
<SHARES-COMMON-STOCK> 31,853,933
<SHARES-COMMON-PRIOR> 33,085,766
<ACCUMULATED-NII-CURRENT> 438
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (21,407)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 0
<NET-ASSETS> 31,832,964
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 607,408
<OTHER-INCOME> 0
<EXPENSES-NET> (137,700)
<NET-INVESTMENT-INCOME> 469,708
<REALIZED-GAINS-CURRENT> 60
<APPREC-INCREASE-CURRENT> 0
<NET-CHANGE-FROM-OPS> 469,768
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (469,397)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 52,456,659
<NUMBER-OF-SHARES-REDEEMED> (54,157,889)
<SHARES-REINVESTED> 469,397
<NET-CHANGE-IN-ASSETS> (1,231,462)
<ACCUMULATED-NII-PRIOR> 127
<ACCUMULATED-GAINS-PRIOR> (21,467)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 80,852
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 236,700
<AVERAGE-NET-ASSETS> 31,892,288
<PER-SHARE-NAV-BEGIN> 1.000
<PER-SHARE-NII> 0.015
<PER-SHARE-GAIN-APPREC> 0.000
<PER-SHARE-DIVIDEND> (0.015)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 1.000
<EXPENSE-RATIO> 0.86
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
