<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 3
Glossary of Terms................................ 4
Portfolio Management Review...................... 6
Portfolio Highlights............................. 9
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 13
Statement of Operations.......................... 14
Statement of Changes in Net Assets............... 15
Financial Highlights............................. 16
Notes to Financial Statements.................... 18
Dividend Reinvestment Plan....................... 21
</TABLE>
VKC SAR 2/99
<PAGE> 2
LETTER TO SHAREHOLDERS
January 20, 1999
Dear Shareholder,
The past decade has been a remarkable time for investors. Together, we've
witnessed one of the greatest bull markets in investment history, unprecedented
growth in mutual fund investing, and a surge in personal retirement planning.
The coming millennium promises to hold even more opportunities.
To lead us into this new era of investing, Richard F. Powers III has joined
Van Kampen as Chairman and Chief Executive Officer. He comes to us from our
parent company, Morgan Stanley Dean Witter & Co., where he served as Executive
Vice President and Director of Marketing. He brings 27 years of experience in
the financial services industry, including an extensive background in product
management, strategic planning and brand development.
Although former Chairman Don G. Powell retired on January 1, he will remain
active in the industry and the community. Mr. Powell plans to continue his
service as a member of the board of directors of the Investment Company
Institute, the leading mutual fund industry association, and he will remain a
trustee of your trust.
ECONOMIC OVERVIEW
Despite a stormy year in the global economy, the United States ended 1998
with only a moderate slowdown in growth. The nation's gross domestic product, a
measure of economic health, grew 3.9 percent during the year, matching 1997's
growth rate and indicating that our nation's economy remains strong. A
continuation of low inflation--only a 1.6 percent increase in the consumer price
index over the last 12 months--also helped sustain the domestic economy and kept
inflation-adjusted interest rates attractive.
Although the year ended on a positive note, the economic environment was
quite unsettled in the third quarter, with the Asian financial crisis
contributing to slowing corporate profits in the United States. Given the
uncertainty surrounding emerging market nations and the near-collapse of a major
U.S. hedge fund, the stock and bond markets experienced significant volatility
during this period. With instability as a backdrop, American and foreign
investors alike pursued a flight to quality--seeking the relative safety of
large-company stocks and government bonds.
In the last few months of the year the global financial situation improved
in conjunction with the Federal Reserve's interest rate decreases. In response
to declining corporate profits and mounting international concerns, the Fed
lowered interest rates three times, with 0.25 percent cuts in September,
October, and November. These rate cuts, coupled with a wave of corporate mergers
and cost-cutting measures, lent the support needed to keep the economy growing.
Dozens of foreign central banks also reduced interest rates in an effort to
stimulate their economies. These actions gave a boost to investor confidence and
encouraged a return to a more diversified range of investments in the last few
months of the year.
Continued on page 2
1
<PAGE> 3
MARKET REVIEW
The bond market continued to rally as interest rates fell during the year,
with U.S. Treasury securities outpacing corporate and municipal bonds in price
appreciation. Investors' desire for safer investments amid the global economic
storm led to strong demand for high-quality bonds. In fact, the U.S. Treasury
bond was considered one of the most attractive places to invest by both domestic
and international investors, propelling the 30-year Treasury yield to 4.71
percent in October--its lowest yield since the federal government began selling
these bonds in 1977. Meanwhile, the prices of municipal bonds across the credit
quality spectrum were suppressed by excess supply, as many bond issuers took
advantage of low interest rates to refinance outstanding debt and issue new
bonds. At several points during the year, the yield on a AAA-rated long-term
municipal bond surpassed the yield of the 30-year U.S. Treasury bond--an unusual
occurrence given municipals' tax-exempt status.
OUTLOOK
Our outlook for the domestic economy is positive, and we anticipate
continued low inflation and healthy economic growth. However, the aftereffects
of the global economic slowdown may continue to put pressure on corporate
earnings in the first half of the year. Internationally, we anticipate that low
interest rates and declining inflation will lead to improvements in troubled
areas such as Asia and Latin America. With the successful launch of the euro,
the new European transnational currency, we believe that many foreign markets
will become increasingly attractive in 1999.
In the long term, we are optimistic that the stock market will continue its
record growth, although we could experience additional volatility in the months
ahead if concerns about high stock valuations and increasing earnings pressure
become more pronounced. Combined with growing questions about corporate and
government reactions to the Year 2000 computer problem, we could see an
increasingly cautious market by mid-year.
Additional details about your trust, including a question-and-answer section
with your portfolio management team, are provided in this report. As always, we
are pleased to have the opportunity to share with you the progress of your
investment.
Sincerely,
[SIG]
Richard F. Powers III
Chairman
Van Kampen Investment Advisory
Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen Investment Advisory
Corp.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED DECEMBER 31, 1998
VAN KAMPEN CALIFORNIA MUNICIPAL TRUST
(AMEX TICKER SYMBOL--VKC)
<TABLE>
<S> <C>
TOTAL RETURNS
Six-month total return based on market price(1)........... 0.46%
Six-month total return based on NAV(2).................... 4.48%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................ 5.32%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)................................. 9.17%
SHARE VALUATIONS
Net asset value........................................... $ 10.50
Closing common stock price................................ $ 11.50
Six-month high common stock price (08/18/98).............. $ 12.375
Six-month low common stock price (09/22/98)............... $11.0625
Preferred share rate(5)................................... 3.25%
</TABLE>
(1) Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions for
the period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common stock price at the end of the period
indicated.
(2) Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3) Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4) The taxable-equivalent distribution rate is calculated assuming a 42%
combined federal and state tax bracket, which takes into consideration the
deductibility of individual state taxes paid.
(5) See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
3
<PAGE> 5
GLOSSARY OF TERMS
CALL FEATURE: Allows the issuer to buy back a bond on specific dates at set
prices before maturity. These dates and prices are set when the bond is
issued. To compensate the bondholder for the potential loss of income and
ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly
that the issuer can save money by issuing new bonds at lower rates.
COUPON RATE: The stated rate of interest the bond pays on an annual basis,
expressed as a percentage of the face value.
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investors Service are
two companies that assign bond ratings. Standard & Poor's ratings range from
a high of AAA to a low of D, while Moody's ratings range from a high of Aaa
to a low of C.
CREDIT SPREAD: Also called quality spread, the difference in yield between
higher-quality issues (such as Treasury securities) and lower-quality
issues. Normally, lower-quality issues provide higher yields to compensate
investors for the additional credit risk.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has
more potential to appreciate in price than a par bond does.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates. The longer a bond's duration, the greater the effect of interest rate
movements on net asset value. Typically, funds with shorter durations
perform better in rising rate environments, while funds with longer
durations perform better when rates decline.
FEDERAL RESERVE BOARD (THE FED): The governing body of the Federal Reserve
System, which is the central bank system of the United States. Its
policy-making committee, called the Federal Open Market Committee, meets
eight times a year to establish monetary policy and monitor the economic
pulse of the United States.
INFLATION: A persistent and measurable rise in the general level of prices.
Inflation is widely measured by the Consumer Price Index, an economic
indicator that measures the change in the cost of purchased goods and
services.
INSURED BOND: A bond that is insured against default by the bond insurer. If the
issuer defaults, the insurance company will step in and take over payments
of interest and principal when due. Once a bond is insured, it typically
carries the rating of the insurer.
4
<PAGE> 6
INVESTMENT GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody's Investor Services. Bonds rated below BBB or Baa are
noninvestment grade.
MUNICIPAL BOND: A debt security issued by a state, municipality, or other
government entity to finance capital expenditures of public projects, such
as the construction of highways, public works, or school buildings. Interest
on public-purpose municipal bonds is exempt from federal income taxes and,
potentially, from state and local income taxes.
PREMIUM BOND: A bond whose market price is above its face value (or "par
value"). Because bonds usually mature at face value, a premium bond has less
potential to appreciate in price than a par bond does.
YIELD: The annual rate of return on an investment, expressed as a percentage.
For bonds and notes, the yield is the annual interest divided by the market
price.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and
lower-quality bonds.
ZERO COUPON BONDS: A corporate or municipal bond that is traded at a deep
discount to face value and pays no interest. It may be redeemed at maturity
for full face value.
5
<PAGE> 7
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN CALIFORNIA MUNICIPAL TRUST
We recently spoke with the management team of the Van Kampen California
Municipal Trust about the key events and economic forces that shaped the markets
during the past six months. The team includes Joseph A. Piraro, portfolio
manager, and Peter W. Hegel, chief investment officer for fixed-income
investments. The following comments reflect their views on the Trust's
performance during the six months ended December 31, 1998.
Q HOW WOULD YOU CHARACTERIZE THE MARKET CONDITIONS IN WHICH THE TRUST
OPERATED DURING THE REPORTING PERIOD?
A Interest rates remained low throughout the period, with the Federal
Reserve lowering rates three times toward the end of the year. While
Treasury bonds saw a significant increase in prices as a result, municipal
bonds experienced only moderate appreciation. The year's overwhelming supply
held municipals back as issuers took advantage of the low interest rate
environment to issue new bonds and refinance older bonds. In fact, during the
year, municipal bond supply increased 31 percent over 1997, with an estimated
$290 billion in new issuance. Despite their generally lower yields, municipal
bonds continued to represent an excellent value in the marketplace, especially
when considering their tax advantages.
Q WHAT WAS UNIQUE ABOUT THE CALIFORNIA MUNICIPAL MARKET?
A The state's economy remained healthy, despite the effects of the Asian
crisis. In California, many jobs are tied to Asia, so we are carefully
monitoring how that region's problems are affecting growth in the state.
Because we felt that it would take some time for the Asian situation to be
resolved, we focused on high-quality and insured bonds to help shelter the Trust
in the event of an economic slowdown.
Another situation to watch is the impact of the 1998 elections on municipal
bond issuance. In November, California voters approved a resolution calling for
significant municipal bond issuance to support education spending in the state.
As a result, we anticipate a sizable increase in the issuance of high-quality
education bonds in 1999. While the passage of the resolution did not affect our
management of the Trust during the reporting period, we plan to keep a close eye
on how this level of issuance will affect the market and the education sector
going forward.
Q HOW DID THESE CONDITIONS AFFECT YOUR MANAGEMENT OF THE TRUST?
A The heavy supply of municipal bonds meant that we had more bonds to choose
from as we replaced bonds that were refinanced (or "called") by their
issuer or sold from the portfolio. With interest rates at such low levels,
many bonds are being called as their issuers refinance their debt at today's
lower rates. When this happens, we must reinvest the proceeds from the called
bonds into bonds paying current lower interest rates. As a result, we attempted
to sell bonds that would be called soon and replace them with
6
<PAGE> 8
bonds that had better call protection. In fact, we were able to purchase some
noncallable bonds, which can't be removed from the portfolio until their stated
maturity unless we decide to sell them.
Another way we have been managing the Trust to maximize its income potential
is by investing in "forward delivery" bonds. With these bonds, we agreed to
purchase them far in advance of their issuance date in exchange for higher
yields. This process helps us lock in today's interest rates for as many years
as possible to protect the Trust's income stream in the event that rates
continue to fall.
Q WHAT OTHER STRATEGIES DID YOU PURSUE OVER THE PAST SIX MONTHS?
A We focused on extending the Trust's duration, which is a measure of its
sensitivity to changes in interest rates. In anticipation of a continued
decline in interest rates, we purchased bonds with longer durations so
that the Trust could more fully benefit from bond price appreciation as rates
dropped. We also purchased zero coupon and discount bonds to help achieve this
same goal. These bonds tend to be more sensitive to rate changes than bonds
purchased at face value or at a premium, and thus they tend to appreciate more
when interest rates fall.
We also took advantage of current market conditions to enhance the credit
quality of the Trust. As bonds were called or sold from the portfolio, we
replaced them with AAA-rated bonds whenever we felt it was beneficial. With a
minimal difference in yield between AAA bonds and lower-rated bonds, we felt
that higher-rated bonds provided a better value. More than 65 percent of the
portfolio's holdings were AAA-rated at the end of the year. For additional
portfolio highlights, please refer to page 9.
Q HOW DID THE TRUST PERFORM DURING THE YEAR?
A The Trust generated a 0.46 percent(1) total return based on market price
for the six-month period ended December 31, 1998. This reflects a decrease
in market price from $12.125 on June 30, 1998, to $11.50 on December 31,
1998. In addition, the Trust provided a distribution rate of 5.32 percent(3)
based on its closing common stock price on December 31, 1998. Because the Trust
is exempt from federal and state income taxes, this distribution rate is
equivalent to a yield of 9.17 percent(4) on a taxable investment for
shareholders in the 42 percent combined federal and state income tax bracket.
In September, the Board of Trustees approved a decrease in the Trust's
monthly dividend from $0.0575 per share to $0.0510 per share. As higher-yielding
bonds were called from the portfolio, we had to replace them with current,
lower-yielding bonds, which resulted in a decline in the Trust's earnings.
Despite the dividend decrease, we believe that the Trust offers a competitive
yield, especially when considering its exemption from federal and state income
taxes. Please refer to the chart on page 3 for additional performance numbers.
7
<PAGE> 9
Q HOW DID LEVERAGE AFFECT THE TRUST'S RETURNS?
A The Trust employs leverage to help enhance returns to shareholders. The
process involves borrowing money at short-term interest rates by issuing
preferred shares, and then investing the proceeds into longer-term bonds,
which typically pay higher rates. The difference between the long-term rates
earned by the Trust and the short-term rates paid on the preferred shares is
passed along to shareholders in the Trust's dividend.
Shareholders benefited from the use of leverage during the reporting period.
As short-term interest rates inched lower, we paid less interest on our
preferred shares and more of the Trust's earnings were available for common
shareholders. This income helped support the Trust's dividend as interest rates
continued to decline. It should be noted that an increase in short-term interest
rates would raise the Trust's borrowing costs and have a negative effect on the
dividend-paying ability of common shares and possibly the price of those shares.
Q WHAT IS YOUR OUTLOOK FOR THE COMING MONTHS?
A We believe that 1999 will present a positive environment for bonds, with a
continuation of low interest rates. Leverage should play an important role
in supporting the Trust because we anticipate an attractive spread between
short- and long-term interest rates.
In addition, we believe that fewer bonds will be coming to market insured,
which will provide a greater selection of lower-rated investment-grade bonds
with competitive yields. This will allow our experienced research staff to
carefully select those bonds with higher coupon rates that they believe have the
strongest underlying quality. We also anticipate that the difference in yields
between lower-rated and higher-rated bonds will tend to increase.
We believe that municipal bonds will represent an excellent value throughout
1999. If the international situation remains uncertain and the stock market
experiences ongoing volatility, the demand for investment-grade bonds should
stay strong. Municipal bonds should continue to provide significantly higher
yields than Treasury bonds on an after-tax basis, and we expect to see demand
for them pick up in the later half of the year as the market recognizes their
value.
[SIG]
Joseph A. Piraro
Portfolio Manager
[SIG]
Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
Please see footnotes on page 3
8
<PAGE> 10
PORTFOLIO HIGHLIGHTS
VAN KAMPEN CALIFORNIA MUNICIPAL TRUST
TOP TEN PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1998
<S> <C>
Tax District................ 20.2%
Single-Family Housing....... 16.6%
Transportation.............. 10.4%
Health Care................. 8.3%
Multi-Family Housing........ 7.6%
Water & Sewer............... 6.9%
Public Building............. 6.7%
Public Education............ 6.2%
Industrial Revenue.......... 5.5%
Higher Education............ 4.1%
</TABLE>
<TABLE>
<CAPTION>
AS OF JUNE 30, 1998
<S> <C>
Single-Family Housing....... 17.4%
Tax District................ 12.0%
Transportation.............. 10.8%
Public Education............ 9.2%
Health Care................. 8.8%
Water & Sewer............... 7.2%
Multi-Family Housing........ 6.1%
Higher Education............ 6.1%
Industrial Revenue.......... 5.7%
Public Building............. 5.0%
</TABLE>
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS
A PERCENTAGE OF LONG-TERM INVESTMENTS
[PIE CHART]
<TABLE>
<CAPTION>
AAA AA A BBB
--- -- - ---
<S> <C> <C> <C> <C>
As of December 31, 1998 65.60 10.20 12.70 11.50
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
AAA AA A BBB
--- -- - ---
<S> <C> <C> <C> <C>
As of June 30, 1998 63.30 10.80 12.30 13.60
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's.
DIVIDEND HISTORY
[BAR GRAPH]
FOR THE PERIOD ENDED DECEMBER 31, 1998
<TABLE>
<CAPTION>
DISTRIBUTION PER COMMON SHARE
INCOME DIVIDENDS CAPITAL GAINS
---------------- -------------
<S> <C> <C>
7/98 0.0575
8/98 0.0575
9/98 0.0510
10/98 0.0510
11/98 0.0510
12/98 0.0510 0.3251
</TABLE>
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA MUNICIPAL BONDS 103.2%
$ 790 Bay Area Govt Assn CA Rev Tax Alloc CA Redev Agy
Pool Rev Ser A (FSA Insd)....................... 6.000% 12/15/15 $ 861,455
500 Brea & Olinda, CA Unified Sch Dist Ctfs Partn Sr
High Sch Pgm Ser A Rfdg (FSA Insd).............. 6.000 08/01/09 543,765
1,000 California Edl Fac Auth Rev Student Ln CA Ln Pgm
Ser A (MBIA Insd)............................... 6.000 03/01/16 1,052,380
1,500 California Hlth Fac Fin Auth Rev Saint Joseph
Hlth Sys Ser A (Prerefunded @ 07/01/01)......... 6.750 07/01/21 1,643,430
1,000 California Hsg Fin Agy Rev Home Mtg Ser E (AMBAC
Insd)........................................... 6.100 08/01/29 1,071,650
1,985 California Hsg Fin Agy Rev Home Mtg Ser N....... 6.375 02/01/27 2,148,604
2,665 California Hsg Fin Agy Rev Homeowner Mtg Ser
D............................................... * 08/01/20 510,427
12,470 California Hsg Fin Agy Rev Homeowner Mtg Ser D
(AMBAC Insd).................................... * 08/01/20 2,365,060
1,000 California Hsg Fin Agy Rev Multi-Family Hsg III
Ser A (MBIA Insd)............................... 5.850 08/01/17 1,055,280
2,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
Southn CA Edison Co (AMBAC Insd) (c)............ 6.000 07/01/27 2,142,920
885 California Rural Home Mtg Fin Auth Single Family
Mtg Rev Ser C (GNMA Collateralized)............. 7.800 02/01/28 1,043,557
45 California St (MBIA Insd)....................... 6.000 10/01/14 49,039
1,000 California St Pub Wks Brd Lease Rev Var CA St
Univ Projs Ser A (Prerefunded @ 10/01/04)....... 6.300 10/01/10 1,145,760
1,000 California St Pub Wks Brd Lease Rev Var CA St
Univ Projs Ser A (Prerefunded @ 10/01/04)....... 6.375 10/01/14 1,149,600
1,000 California St Ser BH (FSA Insd)................. 5.400 12/01/15 1,029,050
1,000 California St Ser BH (FSA Insd)................. 5.500 12/01/24 1,028,890
3,000 California Statewide Cmntys Dev Auth Spl Fac
United Airls.................................... 5.625 10/01/34 3,076,380
785 Central Contra Costa, CA Santn Dist Rev Wastewtr
Fac Impt Proj (Prerefunded @ 09/01/04) (MBIA
Insd)........................................... 6.250 09/01/11 897,545
1,000 Contra Costa, CA Tran Auth Sales Tax Rev Ser
A............................................... 6.875 03/01/07 1,087,960
1,000 Desert Hosp Dist CA Hosp Rev Ctfs Partn Desert
Hosp Corp Proj (Prerefunded @ 07/01/00)......... 8.100 07/01/20 1,090,340
1,280 El Cerrito, CA Redev Agy Tax Alloc (MBIA
Insd)........................................... 5.250 07/01/15 1,345,139
2,000 Emeryville, CA Pub Fin Auth Rev Hsg Increment
Sub Lien A (Prerefunded @ 02/01/01)............. 7.875 02/01/15 2,209,920
1,000 Emeryville, CA Pub Fin Auth Shellmound Park
Redev & Hsg Proj B (MBIA Insd).................. 5.000 09/01/19 1,000,340
1,000 Folsom, CA Spl Tax Cmnty Fac Dist No 2 Rfdg
(Connie Lee Insd)............................... 5.250 12/01/19 1,025,450
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 1,000 Fontana, CA Redev Agy Tax Southeast Indl Park
Proj Rfdg (MBIA Insd)........................... 5.000% 09/01/22 $ 995,120
3,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Sr Lien Ser A............................ * 01/01/28 639,780
1,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Conv Cap Apprec Sr Lien Ser A (a)............... 0/7.050 01/01/10 832,230
5,435 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Sr Lien Ser A............................ * 01/01/19 1,883,282
2,000 Los Angeles Cnty, CA Ctfs Partn Disney Parking
Proj Rfdg (AMBAC Insd).......................... 4.750 03/01/23 1,923,400
1,223 Los Angeles Cnty, CA Tran Comm Lease Rev Dia RR
Lease Ltd (FSA Insd)............................ 7.375 12/15/06 1,338,121
1,390 Metropolitan Wtr Dist Southn CA Wtrwks Rev Ser
C............................................... 5.000 07/01/37 1,372,444
1,800 Mountain View Los Altos CA Union High Sch Dist
Ctfs Partn (MBIA Insd).......................... 5.625 08/01/16 1,852,992
1,095 Paramount, CA Redev Agy Tax Alloc Redev Proj
Area No 1 Ser B (Prerefunded @ 08/01/03) (MBIA
Insd)........................................... * 08/01/26 196,312
1,000 Roseville, CA Fin Auth Local Agy Rev Northeast
Cmnty Fac Dist Bond Ser A Rfdg (FSA Insd)....... 5.000 09/01/21 1,000,810
1,000 Sacramento, CA City Fin Auth Lease Rev (AMBAC
Insd)........................................... 4.750 05/01/23 960,620
1,000 San Bernardino Cnty, CA Ctfs Partn Med Cent Fin
Proj (MBIA Insd)................................ 5.000 08/01/28 991,560
1,000 San Diego, CA Hsg Auth Multi-Family Hsg Rev
(GNMA Collateralized)........................... 5.000 07/20/18 999,970
1,000 San Dimas, CA Redev Agy Tax Alloc Creative
Growth A (FSA Insd)............................. 5.000 09/01/16 1,015,680
1,210 San Jose, CA Redev Tax Alloc Hsg Set Aside Mergd
Area Ser E (MBIA Insd).......................... 5.750 08/01/17 1,306,026
865 Santa Barbara, CA Ctfs Partn.................... 7.650 05/01/15 918,959
1,450 Santa Barbara, CA Ctfs Partn Wtr Sys Impt Proj &
Rfdg (AMBAC Insd)............................... 6.700 04/01/27 1,589,055
1,300 Santa Clara Cnty, CA Fin Auth Lease Rev Multiple
Facs Proj Ser B (AMBAC Insd) (b)................ 5.500 05/15/10 1,362,660
1,170 South Gate, CA Pub Fin Auth Tax Alloc Rev Hsg
Redev Proj No 1 Ser A (MBIA Insd)............... 5.000 09/01/19 1,174,540
75 Southern CA Home Fin Auth Single Family Mtg Rev
Ser B (GNMA Collateralized)..................... 7.750 03/01/24 78,610
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 600 Southern CA Pub Pwr Auth Pwr Proj Rev
Multi-Projs..................................... 5.500% 07/01/20 $ 605,532
2,000 Westminster, CA Redev Agy Tax Alloc Rev Coml
Redev Proj No 1 Ser A Rfdg (Prerefunded @
08/01/01)....................................... 7.300 08/01/21 2,225,020
-----------
TOTAL INVESTMENTS 103.2%
(Cost $51,495,447)........................................................... 55,836,664
LIABILITIES IN EXCESS OF OTHER ASSETS (3.2%).................................. (1,713,287)
-----------
NET ASSETS 100.0%............................................................. $54,123,377
-----------
* Zero coupon bond
</TABLE>
(a) Security is a "step up" bond where the coupon increases or steps up at a
predetermined date.
(b) Security purchased on a when issued or delayed delivery purchase commitment.
(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments.
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $51,495,447)........................ $55,836,664
Interest Receivable......................................... 913,503
Other....................................................... 2,681
-----------
Total Assets.......................................... 56,752,848
-----------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,365,507
Custodian Bank............................................ 1,027,630
Income Distributions--Preferred Shares.................... 28,494
Investment Advisory Fee................................... 27,838
Affiliates................................................ 7,096
Trustees' Deferred Compensation and Retirement Plans........ 93,551
Accrued Expenses............................................ 79,355
-----------
Total Liabilities..................................... 2,629,471
-----------
NET ASSETS.................................................. $54,123,377
===========
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 1,000,000
shares, 400 shares are issued and outstanding with a
liquidation preference of $50,000 per share).............. $20,000,000
-----------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 3,250,262 shares issued and
outstanding).............................................. 32,503
Paid in Surplus............................................. 29,489,597
Net Unrealized Appreciation................................. 4,341,217
Accumulated Net Realized Gain............................... 182,833
Accumulated Undistributed Net Investment Income............. 77,227
-----------
Net Assets Applicable to Common Shares................ 34,123,377
-----------
NET ASSETS.................................................. $54,123,377
===========
NET ASSET VALUE PER COMMON SHARE ($34,123,377 divided by
3,250,262 shares outstanding)............................. $ 10.50
===========
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
STATEMENT OF OPERATIONS
For the Six Months Ended December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $1,582,647
----------
EXPENSES:
Investment Advisory Fee..................................... 166,035
Preferred Share Maintenance................................. 34,676
Accounting Services......................................... 22,888
Legal....................................................... 3,680
Custody..................................................... 3,321
Other....................................................... 39,581
----------
Total Expenses.......................................... 270,181
----------
NET INVESTMENT INCOME....................................... $1,312,466
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 469,507
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 4,251,646
End of the Period......................................... 4,341,217
----------
Net Unrealized Appreciation During the Period............... 89,571
----------
NET REALIZED AND UNREALIZED GAIN............................ $ 559,078
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,871,544
==========
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended December 31, 1998
and the Year Ended June 30, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
December 31, 1998 June 30, 1998
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income..................................... $ 1,312,466 $ 2,748,965
Net Realized Gain......................................... 469,507 1,007,981
Net Unrealized Appreciation During the Period............. 89,571 658,196
----------- -----------
Change in Net Assets from Operations...................... 1,871,544 4,415,142
----------- -----------
Distributions from Net Investment Income:
Common Shares........................................... (1,033,283) (2,306,556)
Preferred Shares........................................ (337,645) (718,601)
----------- -----------
(1,370,928) (3,025,157)
Distributions from Net Realized Gain--Common Shares....... (1,053,992) (711,433)
----------- -----------
Total Distributions....................................... (2,424,920) (3,736,590)
----------- -----------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES....... (553,376) 678,552
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment............................................ 153,168 222,838
----------- -----------
TOTAL INCREASE/DECREASE IN NET ASSETS..................... (400,208) 901,390
NET ASSETS:
Beginning of the Period................................... 54,523,585 53,622,195
----------- -----------
End of the Period (Including accumulated undistributed net
investment income of $77,227 and $135,689,
respectively)........................................... $54,123,377 $54,523,585
=========== ===========
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months
Ended ------------------------------
December 31, 1998 1998 1997 1996
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of the Period.... $10.667 $10.450 $10.283 $10.395
------- ------- -------- -------
Net Investment Income..................... .405 .851 .888 .919
Net Realized and Unrealized Gain/Loss..... .175 .524 .393 (.001)
------- ------- -------- -------
Total from Investment Operations............ .580 1.375 1.281 .918
------- ------- -------- -------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders............. .319 .715 .750 .750
Common Share Equivalent of Distributions
Paid to Preferred Shareholders........ .104 .222 .211 .230
Distributions from Net Realized Gain Paid
to Common Shareholders.................. .325 .221 .153 .050
------- ------- -------- -------
Total Distributions......................... .748 1.158 1.114 1.030
------- ------- -------- -------
Net Asset Value, End of the Period.......... $10.499 $10.667 $10.450 $10.283
======= ======= ======== =======
Market Price Per Share at End of the
Period.................................... $11.500 $12.125 $12.1875 $10.875
Total Investment Return at Market Price
(a)....................................... 0.46%* 7.77% 21.40% 9.02%
Total Return at Net Asset Value (b)......... 4.48%* 11.40% 10.76% 6.62%
Net Assets at End of the Period (In
millions)................................. $54.1 $54.5 $53.6 $52.9
Ratio of Expenses to Average Net Assets
Applicable to Common Shares**............. 1.54% 1.57% 1.58% 1.65%
Ratio of Net Investment Income to Average
Net Assets Applicable to Common Shares
(c)....................................... 5.54% 5.91% 6.51% 6.57%
Portfolio Turnover.......................... 20%* 53% 30% 19%
* Non-Annualized
** Ratio of Expenses to Average Net Assets
Including Preferred Shares.............. .98% .99% .99% 1.03%
</TABLE>
*** If certain expenses had not been assumed by Van Kampen, the annualized Ratio
of Expenses to Average Net Assets Applicable to Common Shares, Ratio of
Expenses to Average Net Assets Including Preferred Shares and the Ratio of
Net Investment Income to Average Net Assets Applicable to Common Shares
would have been 2.06%, 1.22% and 6.80% for the year ended June 30, 1991 and
1.31%, 1.13% and 6.21% for the year ended June 30, 1990.
(a) Total Investment Return at Market Price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(b) Total Return at Net Asset Value (NAV) reflects the change in the value of
the Trust's assets with reinvestment of dividends based upon NAV.
(c) Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
16
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended June 30
- --------------------------------------------------------------
1995 1994 1993 1992 1991 1990
- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$10.301 $10.963 $10.147 $ 9.408 $9.095 $9.212
------- ------- ------- ------- ------ ------
.951 .956 .968 .946 .975 .719
.111 (.740) .788 .719 .313 (.117)
------- ------- ------- ------- ------ ------
1.062 .216 1.756 1.665 1.288 .602
------- ------- ------- ------- ------ ------
.725 .712 .663 .654 .648 .648
.237 .156 .167 .245 .327 .071
.006 .010 .110 .027 -0- -0-
------- ------- ------- ------- ------ ------
.968 .878 .940 .926 .975 .719
------- ------- ------- ------- ------ ------
$10.395 $10.301 $10.963 $10.147 $9.408 $9.095
======= ======= ======= ======= ====== ======
$10.750 $10.625 $10.875 $9.875 $9.750 $9.125
8.67% 4.32% 18.49% 8.44% 14.51% (.95%)
8.47% .35% 16.19% 15.54% 10.85% 4.27%
$53.0 $52.6 $54.5 $51.9 $49.5 $48.4
1.65% 1.53% 1.57% 2.07% 1.88%*** .50%***
7.02% 7.28% 7.62% 7.74% 6.98%*** 7.01%***
16% 11% 18% 41% 99% 100%
1.02% 97% .98% 1.26% 1.11%*** .43%***
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen California Municipal Trust, formerly known as Van Kampen American
Capital California Municipal Trust, (the "Trust") is registered as a diversified
closed-end management investment company under the Investment Company Act of
1940, as amended. The Trust's investment objective is to provide a high level of
current income exempt from federal and California income taxes with safety of
principal. The Trust will invest in a portfolio consisting substantially of
California municipal obligations rated investment grade at the time of
investment. The Trust commenced investment operations on November 1, 1988.
The following is a summary of significant accounting policies consistently
followed by the Trust 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
Trust 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 Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
D. FEDERAL INCOME TAXES--It is the Trust'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.
At December 31, 1998, cost of long-term investments for federal income tax
purposes is $51,495,447; the aggregate gross unrealized appreciation is
$4,352,603 and the aggregate gross unrealized depreciation is $11,386, resulting
in net unrealized appreciation on long-term investments of $4,341,217.
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 year.
E. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually to common shareholders. Distributions from net
realized gains for book purposes may include short-term capital gains, which are
included as ordinary income for tax purposes.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
Investment Advisory Corp. (the "Adviser") will provide investment advice and
facilities to the Trust for an annual fee payable monthly of .60% of the average
net assets of the Trust.
For the six months ended December 31, 1998, the Trust recognized expenses of
approximately $600 representing legal services provided by Skadden, Arps, Slate,
Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of the Trust
is an affiliated person.
For the six months ended December 31, 1998, the Trust recognized expenses of
approximately $26,100 representing Van Kampen Inc.'s or its affiliates'
(collectively "Van Kampen") cost of providing accounting, legal and certain
shareholder services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
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 Trust. The maximum annual benefit per trustee
under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At December 31, 1998 and June 30, 1998, paid in surplus related to common shares
aggregated $29,489,597 and $29,336,568, respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
DECEMBER 31, 1998 JUNE 30, 1998
- ----------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares......................... 3,236,436 3,217,303
Shares Issued Through Dividend
Reinvestment........................... 13,826 19,133
--------- ---------
Ending Shares............................ 3,250,262 3,236,436
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $13,949,108 and $11,079,801 respectively.
5. REMARKETED PREFERRED SHARES
The Trust has outstanding 400 shares of Remarketed Preferred Shares ("RP").
Dividends are cumulative and the rate is reset through an auction process every
28 days. The rate in effect on December 31, 1998, was 3.25%, and for the six
months then ended rates ranged from 3.00% to 3.75%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The RP are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests, and the RP are subject to
mandatory redemptions if the tests are not met.
20
<PAGE> 22
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
change sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-
8200. If you withdraw, you will receive, without charge, a share certificate
issued in your name for all full Common Shares credited to your account under
the Plan and a cash payment will be made for any fractional Common Share
credited to your account under the Plan. You may again elect to participate in
the Plan at any time by calling 1-800-341-2929 or writing to the Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
21
<PAGE> 23
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation
Reserve
Tax Free Money
Senior Loan
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these funds, ask your financial advisor for a
prospectus, which contains more complete information, including sales charges,
risks, and expenses. Please read it carefully before you invest or send money.
To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:
- - visit our Web site at
WWW.VANKAMPEN.COM--to view a prospectus, select Download Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Telecommunications Device for the Deaf users, call 1-800-421-2833.
- - e-mail us by visiting
WWW.VANKAMPEN.COM and selecting Contact Us
22
<PAGE> 24
VAN KAMPEN CALIFORNIA MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
STEVEN MULLER
THEODORE A. MYERS
DON G. POWELL*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and
Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
CUSTODIAN AND TRANSFER AGENT
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 LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen Funds Inc., 1999 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
23
<PAGE> 25
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations and individuals
around the world, the Trust could be adversely affected if the computer systems
used by the Trust's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Trust's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Trust's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Trust. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Trust may invest that, in turn, may adversely affect
the net asset value of the Trust. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Trust's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act, which may limit the legal rights regarding the use of such
statements in the case of dispute.
24
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> VK CALIFORNIA MUNICIPAL TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JUL-01-1998
<PERIOD-END> DEC-31-1998
<INVESTMENTS-AT-COST> 51,495,447
<INVESTMENTS-AT-VALUE> 55,836,664
<RECEIVABLES> 913,503
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 2,681
<TOTAL-ASSETS> 56,752,848
<PAYABLE-FOR-SECURITIES> 1,365,507
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 1,263,964
<TOTAL-LIABILITIES> 2,629,471
<SENIOR-EQUITY> 20,000,000
<PAID-IN-CAPITAL-COMMON> 29,522,100
<SHARES-COMMON-STOCK> 3,250,262
<SHARES-COMMON-PRIOR> 3,236,436
<ACCUMULATED-NII-CURRENT> 77,227
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 182,833
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,341,217
<NET-ASSETS> 54,123,377
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,582,647
<OTHER-INCOME> 0
<EXPENSES-NET> (270,181)
<NET-INVESTMENT-INCOME> 1,312,466
<REALIZED-GAINS-CURRENT> 469,507
<APPREC-INCREASE-CURRENT> 89,571
<NET-CHANGE-FROM-OPS> 1,871,544
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (1,370,928)
<DISTRIBUTIONS-OF-GAINS> (1,053,992)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 13,826
<NET-CHANGE-IN-ASSETS> (400,208)
<ACCUMULATED-NII-PRIOR> 135,689
<ACCUMULATED-GAINS-PRIOR> 767,318
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 166,035
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 270,181
<AVERAGE-NET-ASSETS> 34,881,198
<PER-SHARE-NAV-BEGIN> 10.667
<PER-SHARE-NII> 0.405
<PER-SHARE-GAIN-APPREC> 0.175
<PER-SHARE-DIVIDEND> (0.423)
<PER-SHARE-DISTRIBUTIONS> (0.325)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.499
<EXPENSE-RATIO> 1.54
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
