<PAGE>
TABLE OF CONTENTS
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Putting Your Fund's Performance in Perspec-
tive...................................... 4
Portfolio Management Review................. 5
Portfolio of Investments.................... 7
Statement of Assets and Liabilities......... 19
Statement of Operations..................... 20
Statement of Changes in Net Assets.......... 21
Financial Highlights........................ 22
Notes to Financial Statements............... 25
Report of Independent Accountants........... 31
</TABLE>
GEQ ANR 7/96
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
July 8, 1996
Dear Shareholder,
The past twelve months have been positive for most investors. U.S. equity
markets performed well and many global markets posted solid gains for the one-
year period ended May 31, 1996.
Events around the world--from the presidential election in the United States
to the presidential election in Russia--reiterate the need to maintain a di-
versified portfolio and long-term investment perspective. While short-term po-
litical and
economic events may affect investment performance, a long-term strategy that
includes international diversification may help you achieve your financial ob-
jectives.
MARKET OVERVIEW
In general terms, the U.S. dollar has risen against the Japanese yen, the
German deutschemark, and other currencies since the beginning of the fourth
quarter of 1995. Aided by a strong dollar, equity investments in the United
States have outperformed those in other markets during the reporting period.
The U.S. stock market demonstrated strong performance during the reporting
period. From June 1, 1995 to May 31, 1996, the total return of the Standard &
Poor's 500 Index was 28.45 percent. Several factors contributed to this posi-
tive equity market environment. During the first half of the period, stocks
and bonds rallied as economic indicators reflected low levels of inflation,
which reduced the likelihood that the Federal Reserve Board would raise inter-
est rates. During the twelve-month period the heavy influx of money into eq-
uity mutual funds also helped drive the market forward.
In developed countries, markets underperformed early in the one-year period,
but are now recovering. The Pacific Basin economies have experienced strong
growth, but their equity market returns trailed those in the United States on
a dollar-adjusted basis. European markets also did well--although not as well
as U.S. markets, measured in dollar terms. The Morgan Stanley Capital Interna-
tional Europe-Asia-Far East Index + Dividends, which measures market perfor-
mance of developed countries outside the United States, earned 11.01 percent
during the reporting period. Additional details on international market per-
formance is provided in the Portfolio Management Review section of this re-
port.
During the twelve-month period, bond prices generally appreciated in Euro-
pean markets and in dollar-bloc markets such as Australia and Canada, as eco-
nomic activity slowed and yields fell. However, entering 1996, yields in many
developed countries edged upwards as new concerns about inflation rates sur-
faced in the fixed-income markets. Meanwhile, bonds in most emerging markets
experienced a strong start in 1996 as capital flows returned to many develop-
ing economies because of attractive yields and renewed investor confidence.
Continued on page two
1
<PAGE>
ECONOMIC OUTLOOK
In general terms, there are positive signs for both the domestic and interna-
tional economies. The current consensus among economists is that the U.S. econ-
omy will be marked by moderate growth and relatively low inflation in the near
term. Overall, international stock markets should benefit from a stronger out-
look for corporate profits, productivity gains and subdued inflation. Addition-
ally, many international economies are entering higher growth cycles as the
U.S. economy moderates. Merger and acquisition activity and the increasing de-
termination by many companies to create greater shareholder value could also
enhance international equity returns.
We expect international bond markets will continue to be influenced by the
U.S. market. We anticipate relatively moderate global inflation due to more
prudent fiscal and monetary policies in emerging markets and increased competi-
tion in developed markets. As the European and Japanese economies begin to ex-
perience accelerating economic growth, we may see a modest rise in yields
because inflation concerns often accompany revitalized growth.
Global investing provides diversification and growth potential for your port-
folio, and investing in global mutual funds enhances those benefits. With a
comprehensive network of data and resources, your mutual fund portfolio manage-
ment team has up-to-the-minute information about events around the world. By
monitoring and adjusting the Fund's holdings, the team seeks opportunities cre-
ated by these worldwide events. You will find additional insights from your
portfolio manager and additional information about your investment on the fol-
lowing pages. Thank you for your continued confidence in your investment with
Van Kampen American Capital.
Sincerely,
/s/ Don G. Powell /s/ Dennis J. McDonnell
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Asset Management, Inc. Asset Management, Inc.
<PAGE>
PERFORMANCE RESULTS FOR THE PERIOD ENDED MAY 31, 1996
VAN KAMPEN AMERICAN CAPITAL GLOBAL EQUITY FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
One-year total return based on NAV1.................. 21.85% 20.90% 20.87%
One-year total return2............................... 14.84% 15.90% 19.87%
Three-year average annual total return2.............. 9.04% 9.49% N/A
Life-of-Fund average annual total return2............ 9.77% 9.21% 12.14%
Commencement Date.................................... 08/05/91 11/15/91 06/21/93
</TABLE>
N/A = Not Applicable
1Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (5.75% for A shares) or contingent
deferred sales charge for early withdrawal (5% for B and 1% for C shares).
2Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or
contingent deferred sales charge for early withdrawal (B and C shares).
See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth
more or less than their original cost.
3
<PAGE>
PUTTING YOUR FUND'S PERFORMANCE IN PERSPECTIVE
As you evaluate your progress toward achieving your financial goals, it is
important to track your investment portfolio's performance at regular inter-
vals. A good starting point is a comparison of your investment holdings to an
applicable benchmark, such as a broad-based market index. Such a comparison
can:
. Illustrate the general market environment in which your investments are
being managed
. Reflect the impact of favorable market trends or difficult market con-
ditions
. Help you evaluate the extent to which your Fund's management team has
responded to the opportunities and challenges presented to them over
the period measured
For these reasons, you may find it helpful to review the chart below, which
compares your Fund's performance to that of the Morgan Stanley Capital Inter-
national World Index + Dividends over time. As a broad-based, unmanaged sta-
tistical composite, this index does not reflect any commissions or fees which
would be incurred by an investor purchasing the securities it represents. Sim-
ilarly, its performance does not reflect any sales charges or other costs
which would be applicable to an actively managed portfolio, such as that of
the Fund.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Van Kampen American Capital Global Equity Fund vs. Morgan Stanley Capital
International World Index + Dividends. (August 1991 through May 1996)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
VKAC Global Equity Fund MSCI World Index + Dividends
- ------------------------------------------------------------------------------
<S> <C> <C>
Aug 1991 $ 9,424 $10,000
Dec 1991 10,330 10,708
Dec 1992 10,220 10,209
Dec 1993 12,311 12,570
Dec 1994 12,105 13,271
Dec 1995 14,117 16,100
May 1996 15,626 17,190
- -----------------------------------------------------------------------------
</TABLE>
The above chart reflects the performance of Class A shares of the Fund. The
performance of Class A shares will differ from that of other share classes of
the Fund because of the difference in sales charges and/or expenses paid by
shareholders investing in the different share classes. The Fund's performance
assumes reinvestment of all distributions for the period ended May 31, 1996,
and includes payment of the maximum sales charge (5.75% for A shares).
While past performance is not indicative of future performance, the above in-
formation provides a broader vantage point from which to evaluate the discus-
sion of the Fund's performance found in the following pages.
4
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL GLOBAL EQUITY FUND
The following is an interview with the management team of Van Kampen American
Capital Global Equity Fund. The Fund is co-managed by portfolio manager Jeff D.
New, Van Kampen American Capital (U.S. holdings), Peter Kysel, John Govett &
Co. Limited (international holdings), and Alan T. Sachtleben, Van Kampen
American Capital's executive vice president of equity investments.
Q WHAT HAVE BEEN THE OVERALL TRENDS IN THE WORLD EQUITY MARKETS DURING THE
YEAR ENDED MAY 31, 1996?
A During this period, steady economic growth in a low inflation environment
and strong investor demand for U.S. equity mutual funds resulted in the
U.S. stock market outperforming most foreign equity markets. This strong per-
formance combined with the resurgence of the U.S. dollar versus most major cur-
rencies, particularly the German mark and the Japanese yen, helped the U.S.
market outpace most foreign equity markets, in dollar terms, for the year ended
May 31,1996.
In an effort to stimulate economic growth, Japan maintained accommodative
monetary and fiscal policies throughout the period. It appears these policies
are working, as both market sentiment and economic fundamentals have been im-
proving in recent months. In fact, this environment has proved beneficial to
the Japanese stock market, as the Nikkei 225 Index rose 42 percent from May
1995 through May 1996. However, for U.S. investors, the Index realized only an
11 percent gain when adjusted for changes in the dollar-to-yen exchange rate.
Most major European countries experienced weak economic growth during the pe-
riod. Consequently, many European central banks have begun, and we feel are
likely to continue, to cut interest rates in an effort to stimulate growth.
While most European markets experienced modest positive returns during the pe-
riod, their results were overshadowed by the combination of strong U.S. returns
and a strengthening U.S. dollar.
After experiencing a two year decline, most Eastern European markets began to
stabilize in December of 1995. These markets have subsequently produced remark-
able performances, currently dominating most other global equity markets this
year. For example, the Morgan Stanley Capital International Poland Index is up
32.34 percent year-to-date through May 31, 1996.
Q OVER THE REPORTING PERIOD, WHICH OF THESE TRENDS HAVE HAD THE MOST
SIGNIFICANT INFLUENCE ON THE FUND, AND HOW DID YOU POSITION THE FUND IN
RESPONSE TO THESE EVENTS?
A Over the period, the Fund benefited from appreciation of the U.S. stock
market, as approximately 27 percent of the portfolio consisted of U.S.
holdings. The Fund was significantly underweighted in the U.S. when compared
with the Morgan Stanley International World Index, which had a U.S. weighting
of approximately 42 percent. For the most part, the portfolio was a mix of mid-
and large-capitalization companies, with a focus on those with a strong earn-
ings outlook. Several issues that showed strong performance were: United Waste
Systems, U.S. Robotics, Safeway and Worldcom.
During this period, we also gradually increased the Fund's exposure to the
Japanese stock market. At the same time, in order to protect the Fund's invest-
ment from a decline in the value of the Japanese yen, we hedged the yen to the
U.S. dollar. This enhanced the Fund's performance, which benefited from a rise
in the Japanese stock market without being adversely affected by a decline in
the Japanese yen.
5
<PAGE>
Since inception, the Fund has remained fully weighted in continental Euro-
pean stocks. During this reporting period, many medium-sized European compa-
nies performed well. Some examples include: Adidas, Gucci, and Ciba Geigy. In
contrast, over this period the Fund's exposure to the U.K. stock market was
slowly reduced, and this market has subsequently underperformed other European
stock markets. In late December 1995, we made the Fund's first investment in
the Czech Republic and have since increased the Fund's exposure to Eastern Eu-
ropean stocks to 3 percent of the overall portfolio. The addition of this re-
gion to the Fund's portfolio was timely, as Eastern European markets have
performed very well this year.
Q HOW DID THE FUND PERFORM DURING THE YEAR ENDED MAY 31, 1996?
A Class A shares achieved a total return at net asset value (without sales
charge) of 21.85 percent/1/. Over the same period, the Morgan Stanley
Capital International World Index + Dividends achieved a total return of 18.36
percent. Please keep in mind that the Index is unmanaged and is used as a
benchmark for general global equity funds. It does not reflect any commissions
or fees that would be paid by an investor purchasing the securities it repre-
sents. Please refer to the chart on page three for additional Fund performance
results.
Van Kampen Q IN GENERAL, WHAT IS YOUR OUTLOOK FOR THE
American Capital GLOBAL EQUITY MARKETS FOR THE REMAINDER OF
Global Equity Fund 1996 AND, MORE SPECIFICALLY, FOR THE FUND?
Top Five Countries
Represented
in the Portfolio
as of May 31, 1996 A Outside the U.S., we anticipate a global
economic recovery beginning in late 1996 and
continuing into 1997. Accordingly, while the
portfolio has been underweighted in the energy,
consumer and financial sectors and overweighted
in the capital goods sector, we have been re-
France cently acquiring more service and consumer re-
Hong Kong lated stocks. In the U.S., we anticipate that
Japan relatively low inflation and modest economic
United Kingdom growth will help growth stocks to outperform cy-
United States clical stocks in the coming months.
The Russian presidential election is an important economic event. We expect
the trading between Eastern and Western Europe and foreign investments in the
region will accelerate once the election is settled. This will provide us with
a more complete picture of the economic outlook for many European companies.
Going forward, we expect to alter the Fund's weightings in geographical re-
gions depending on the attractiveness of individual companies and countries.
For instance, after comparing market valuations, we believe the U.S. stock
market is at the high end; therefore, we have begun to decrease the Fund's ex-
posure to U.S. holdings.
/s/ Alan T. Sachtleben /s/ Jeff D. New /s/ Peter Kysel
Alan T. Sachtleben Jeff D. New Peter Kysel
Van Kampen American Capital Van Kampen American Capital John Govett & Co., Ltd.
Equity Investments Portfolio Manager Portfolio Manager
Please see footnotes on page three.
6
<PAGE>
PORTFOLIO OF INVESTMENTS
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
COMMON STOCK AND EQUIVALENTS 92.5%
AUSTRALIA 0.7%
90,000 Pioneer International Ltd............................ $ 275,840
179,000 Tab Corp Holdings Ltd................................ 785,777
60,000 WMC Ltd.............................................. 454,466
------------
1,516,083
------------
AUSTRIA 0.4%
1,800 AMS Austria Mikros................................... 194,237
7,400 Flughafen Wien....................................... 507,779
------------
702,016
------------
BELGIUM 0.2%
9,100 G.I.B. Holdings...................................... 409,152
------------
BRAZIL 0.6%
70,000 Centrais, Class B.................................... 884,100
40,000 Usiminas Usi......................................... 430,000
------------
1,314,100
------------
CANADA 0.5%
7,700 BCE Inc.............................................. 306,640
15,000 Canadian Pacific Ltd................................. 307,162
* 95,000 Grandetel Technologies, Inc.......................... 83,125
* 11,000 Inco Ltd............................................. 358,555
------------
1,055,482
------------
CZECH REPUBLIC 1.6%
* 6,800 Ceske Radiokomunickace............................... 960,723
* 5,700 IPS Praha............................................ 658,048
57,200 Komercni Banka....................................... 1,558,700
* 1,300 Leciva............................................... 118,374
* 1,200 Prazske Pivovary..................................... 78,049
------------
3,373,894
------------
DENMARK 0.8%
15,000 Bang & Olufsen Holding, Series B..................... 509,122
* 8,000 Carli Gry International.............................. 228,087
39,000 ISS International, Series B.......................... 761,137
1,000 Sophus Berendsen..................................... 133,220
------------
1,631,566
------------
FINLAND 0.2%
12,900 Finnlines............................................ 266,965
17,000 Valmet Corp.......................................... 263,409
------------
530,374
------------
FRANCE 4.5%
11,000 Bouygues............................................. 1,195,860
2,450 Chargeurs, SA........................................ 699,052
8,400 Christian Dior....................................... 1,186,188
488 Club Mediterranee.................................... 45,312
</TABLE>
7 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
7,500 Credit Local De France............................... $ 614,421
1,500 Ecco................................................. 359,803
* 11,880 Primagaz (Cie Gaz)................................... 1,266,250
* 1,080 Primagaz (Cie Gaz), Warrants, expiring 7/1/98........ 21,811
2,150 Roussel Uclaf........................................ 498,250
8,800 Sanofi............................................... 677,172
6,000 Sidel................................................ 1,477,512
6,675 Societe Generale..................................... 710,175
4,900 Union Assurance Federales............................ 638,863
------------
9,390,669
------------
GERMANY 3.2%
30,000 Adidas............................................... 2,251,966
2,060 Bayer................................................ 688,467
20,000 Berliner Elektro Holdings............................ 525,557
* 1,000 Ebara Corp., Warrants, expiring 3/13/98.............. 58,322
1,170 Hoechst.............................................. 389,336
* 27,900 Praktiker............................................ 667,333
22,000 RWE.................................................. 868,610
3,400 SAP.................................................. 475,688
14,950 Siemens.............................................. 838,415
------------
6,763,694
------------
HONG KONG 4.5%
730,000 First Pacific Co..................................... 1,004,808
250,000 Henderson Land Development........................... 1,890,194
455,000 Hong Kong Land Holding............................... 1,001,000
74,800 HSBC Holdings........................................ 1,131,092
135,000 Hutchison Whampoa.................................... 867,163
2,420,000 Jilin Chemical Industry, Class H..................... 491,050
120,000 Sun Hung Kai Properties.............................. 1,225,234
140,000 Swire Pacific........................................ 1,243,973
* 600,000 Tingyi Holding Co.................................... 162,848
76,000 Wharf Holdings....................................... 293,203
------------
9,310,565
------------
HUNGARY 1.0%
* 66,000 Borsodchem........................................... 1,270,500
30,000 OTP Bank............................................. 374,400
8,823 Pick Szeged.......................................... 374,978
------------
2,019,878
------------
INDONESIA 1.2%
1,646,000 BK Bira.............................................. 1,623,065
* 28,500 Perusahaan Persero Telekom........................... 869,250
------------
2,492,315
------------
</TABLE>
8 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
IRELAND 1.3%
170,000 Bank of Ireland...................................... $ 1,193,398
77,000 CRH.................................................. 736,231
650,000 Waterford Wedgewood.................................. 826,052
------------
2,755,681
------------
ISRAEL 0.7%
* 76,375 Tadiran Telecommunications Ltd....................... 1,374,750
------------
ITALY 1.3%
74,000 Eni, SPA............................................. 351,365
* 19,375 Gucci Group.......................................... 1,298,125
* 79,000 Mediolanum........................................... 767,612
55,900 Rinascente........................................... 375,141
------------
2,792,243
------------
JAPAN 16.2%
50,000 Ajinomoto Co......................................... 601,852
* 50,600 Bank of Tokyo........................................ 1,199,407
40,000 Daiichi Corp......................................... 1,040,741
40,000 Dainippon Screen Manufacturing Co.................... 374,074
90,000 Daiwa Securities..................................... 1,208,333
113,000 Denki Kagaku Kogyo................................... 415,380
15,000 Fuji Photo Film Co................................... 466,667
80,000 Fujitsu.............................................. 725,926
45,000 Honda Motor Co....................................... 1,083,333
9,000 ICOM Incorporated.................................... 96,667
60,000 Isuzu Motors......................................... 326,667
* 30,000 Japan Air Lines Co................................... 241,944
59,000 Japan Radio Co....................................... 830,370
14,000 JGC Corp............................................. 178,889
40,000 Kitano Construction Corp............................. 274,444
* 100,000 Kobe Steel........................................... 275,926
25,000 Komatsu.............................................. 238,426
70,000 Kumagai Gumi Co...................................... 294,907
50,000 Kurita Water Industries.............................. 1,157,407
9,000 Kyocera Corp......................................... 616,667
* 5,200 Lear Corp............................................ 200,850
130,000 Marubeni Corp........................................ 708,981
100,000 Matsushita Industries................................ 1,722,222
90,000 Mitsubishi Chemical.................................. 445,000
55,000 Mitsubishi Estate.................................... 768,981
130,000 Mitsubishi Heavy Industries.......................... 1,118,241
30,000 Mitsubishi Trust & Banking Corp. .................... 500,000
110,000 Mitsukoshi........................................... 1,212,040
</TABLE>
9 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
46,000 Nichiei Construction................................. $ 532,407
16,000 Nippon Hodo Co. ..................................... 262,222
71 Nippon Telephone & Telegraph Corp. .................. 516,722
25,000 Nippon Yusen KK...................................... 146,759
* 350,000 NKK Corp. ........................................... 1,024,074
60,000 Nomura Securities.................................... 1,133,333
42 NTT Data Communications Systems...................... 1,295,000
35,000 Omron Corp. ......................................... 709,722
65,000 Onward Kashiyama..................................... 1,059,259
90,000 Ricoh Co............................................. 908,333
10,000 Rohm Co.............................................. 625,926
21,000 Sankyo Co............................................ 497,778
12,000 Sanwa Bank........................................... 231,111
16,000 Secom Co............................................. 1,037,037
21,000 Shin Etsu Chemical Co. .............................. 420,000
50,000 Takashimaya Co....................................... 814,815
54,000,000 TB Finance........................................... 518,750
25,000 Tokio Marine & Fire Insurance Co. ................... 324,074
18,000 Tokyu Corp. ......................................... 134,833
65,000 Toshiba Corp. ....................................... 451,991
89,000 Toyota Motor Corp. .................................. 2,035,463
35,000 Yamanouchi Pharmarcy................................. 755,093
------------
33,759,044
------------
MALAYSIA 2.0%
145,000 Commerce Asset Holding............................... 975,766
123,000 DCB Holdings......................................... 408,933
* 30,750 DCB Holdings, Warrants, expiring 12/27/99............ 39,169
130,000 Jaya Tiasa Holdings.................................. 812,337
300,000 Metacorp Berhad...................................... 817,144
205,000 Resorts World........................................ 1,182,455
------------
4,235,804
------------
MEXICO 1.1%
100,000 Cemex................................................ 806,250
56,000 Empresas............................................. 805,000
10,010 Grupo Industria Maseca, Series B..................... 10,546
21,000 Telefonos de Mexico, SA.............................. 693,000
------------
2,314,796
------------
NETHERLANDS 3.5%
10,127 Aegon................................................ 485,147
13,400 ASM Lithography Holding.............................. 634,097
20,000 Koninklijke Ahold.................................... 1,072,914
42,500 Cap Volmac Group..................................... 838,799
13,300 Frans Maas Group..................................... 525,769
</TABLE>
10 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
12,609 ING Groep............................................ $ 1,038,258
7,000 KLM.................................................. 250,073
17,500 Philips Electronics, NV.............................. 614,687
8,200 Polygram............................................. 480,234
1,300 Royal Dutch Petroleum Co............................. 195,000
70,000 Ver Ned Uitgevers.................................... 1,147,877
------------
7,282,855
------------
NORWAY 1.6%
* 7,600 Multisoft............................................ 320,375
* 10,000 Netcom............................................... 122,632
6,500 Orkla, Class B....................................... 297,918
34,550 Protector Forsikring................................. 879,162
29,400 Schibsted............................................ 392,084
29,800 Spectec.............................................. 890,766
100,000 Uni Storebrand....................................... 482,862
------------
3,385,799
------------
PHILIPPINES 0.1%
2,500 Philippine Long Distance Telephone................... 143,750
------------
POLAND 0.2%
* 145,000 Fabryki Mebll Forte, Series C........................ 502,553
------------
PORTUGAL 0.3%
50,000 BCO Comm Portugues................................... 615,654
------------
SINGAPORE 1.8%
66,000 Cycle & Carriage..................................... 693,504
90,000 Fraser & Neave....................................... 977,636
50,000 Keppel Corp.......................................... 418,885
113,000 Overseas Union Bank.................................. 802,272
140,000 Singapore Land....................................... 944,267
------------
3,836,564
------------
SLOVAKIA 0.3%
* 6,000 Plastika Nitra....................................... 281,843
13,000 Ses.................................................. 217,488
1,700 Slovakofarma......................................... 155,411
------------
654,742
------------
SOUTH KOREA 0.4%
16,000 L.G. Chemical, Ltd................................... 334,080
13,500 Samsung Electronics Co............................... 428,625
1,042 Samsung Electronics Ltd.............................. 29,832
------------
792,537
------------
SPAIN 0.5%
16,320 Argentaria Corp...................................... 683,673
9,700 Cortefiel, SA........................................ 219,384
1,850 Gas Y Electricidad................................... 100,649
------------
1,003,706
------------
SWEDEN 2.3%
22,500 Astra, Series B...................................... 1,016,440
13,600 Autoliv.............................................. 394,743
</TABLE>
11 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
* 13,000 Celsius, Series B.................................... $ 400,547
* 20,500 Dahl International................................... 280,726
90,000 Nobel Biocare........................................ 1,627,644
240,000 Rottneros............................................ 275,070
50,000 Skandinavska Enskilda Banken, Series A............... 394,445
25,500 Stora Kopparbergs, Series B.......................... 335,911
------------
4,725,526
------------
SWITZERLAND 3.6%
* 4,600 Adia................................................. 1,065,920
240 Baloise Holdings..................................... 519,696
1,300 Ciba Geigy........................................... 1,430,364
5,000 CS Holdings.......................................... 431,482
530 Kuoni Reisen Holding................................. 1,120,136
750 Nestle............................................... 844,986
400 Publicitas Holdings.................................. 383,540
500 Schindler Holdings................................... 533,360
* 500 Schindler Holdings, Warrants, Expiring 12/16/96...... 839
* 1,300 Schweizerischer Bankverein........................... 231,123
450 SGS Holding.......................................... 1,013,983
------------
7,575,429
------------
TAIWAN 0.1%
25,000 Walsin Lihwa Corp.................................... 212,500
------------
THAILAND 0.8%
19,000 Siam Cement Co....................................... 1,024,797
* 135,000 Telecomasia Corp..................................... 301,173
71,600 Thai Military Bank PLC............................... 364,700
------------
1,690,670
------------
TURKEY 0.3%
8,700,000 Konfrut Gilda........................................ 586,753
------------
UNITED KINGDOM 7.8%
150,000 Astec................................................ 346,351
114,000 BAA.................................................. 860,344
75,000 Barclays............................................. 872,850
5,000 Barclays De Zoete, Warrants, Expiring 6/14/96........ 100,500
50,000 BOC Group............................................ 720,595
77,000 Boots Co............................................. 727,879
147,000 British Petroleum ................................... 1,264,296
40,000 British Telecom...................................... 220,363
190,000 Cable & Wireless..................................... 1,310,243
20,000 De La Rue............................................ 222,377
129,000 Dixons Group......................................... 1,000,535
48,000 Eurotherm............................................ 477,917
</TABLE>
12 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
250,000 FKI................................................. $ 668,294
38,600 General Accident.................................... 398,083
Harvey Nichols, PLC, private placement, purchased
* 81,000 4/23/96 for $331,665................................ 424,895
40,000 Marks & Spencer..................................... 286,688
50,000 National Westminster................................ 483,496
125,000 Next................................................ 1,089,609
* 12,831 Pliva............................................... 396,157
40,000 Premier Farnell..................................... 451,263
37,500 Reed International.................................. 648,536
88,000 Reuters Holdings.................................... 1,022,780
49,000 Sainsbury........................................... 301,077
260,000 Senior Engineering.................................. 439,176
11,500 Shell Transportation & Trading...................... 163,777
100,000 Standard Chartered.................................. 994,111
75,000 Tesco............................................... 350,418
------------
16,242,610
------------
UNITED STATES 26.9%
6,750 AAMES Financial Corp................................ 221,062
* 6,000 Adaptec, Inc........................................ 359,250
* 5,000 ADC Telecommunications Inc.......................... 230,000
7,300 AK Steel Holding Corp............................... 315,725
* 3,900 American Radio System Corp.......................... 149,175
* 3,900 Amgen, Inc.......................................... 232,050
* 12,300 Analog Devices, Inc................................. 339,787
* 5,400 Ascend Communications Inc........................... 361,125
* 5,900 Aspect Telecommunications Corp...................... 334,825
* 6,000 Atmel Corp.......................................... 213,000
5,000 Baker Hughes Inc.................................... 156,875
8,200 Bank of Boston Corp................................. 408,975
5,700 BankAmerica Corp.................................... 428,925
* 54,000 BE Semiconductor Industries......................... 884,250
4,700 Belden Inc.......................................... 150,400
4,700 Bemis Inc........................................... 155,687
5,500 Black & Decker Corp................................. 226,187
5,800 BMC Industries Inc.................................. 172,550
* 5,200 BMC Software Inc.................................... 327,600
5,700 Boeing Co. ......................................... 485,925
7,400 Boise Cascade Corp.................................. 310,800
2,700 Bristol Myers Squibb Co............................. 230,512
4,400 Brown (Alex) Inc.................................... 254,100
1,300 Burlington Northington Santa Fe..................... 110,175
* 7,200 Cadence Design Systems Inc.......................... 408,600
</TABLE>
13 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
* 6,600 Career Horizons Inc................................... $ 261,525
* 2,400 Cascade Communications Corp........................... 135,300
6,100 Case Corp............................................. 305,762
3,100 Champion International Corp........................... 136,787
9,000 Chase Manhattan Corp.................................. 630,000
8,900 Chrysler Corp......................................... 592,962
* 8,200 Cisco Systems Inc..................................... 448,950
4,400 Citicorp.............................................. 369,600
4,300 CMAC Investment Corp.................................. 234,350
* 2,200 Coherent Inc.......................................... 107,525
10,100 Computer Associates International Inc................. 734,775
8,100 Conseco Inc........................................... 293,625
* 2,500 Continental Airlines Inc.............................. 142,187
4,700 CSX Corp.............................................. 232,650
* 2,300 Cytec Industries, Inc................................. 205,850
4,500 Dayton Hudson Corp.................................... 459,000
6,000 Deere & Co............................................ 249,750
4,600 Dillard Department Stores Inc, Class A................ 184,000
7,100 Dover Corp............................................ 337,250
* 8,300 DST Systems Inc....................................... 289,462
* 29,400 Eckerd Corp........................................... 668,850
* 6,100 Emmis Broadcasting Corp............................... 268,400
* 9,500 Evergreen Media Co.................................... 380,000
4,500 Exxon Corp............................................ 381,375
26,900 Federal National Mortgage Association................. 830,537
2,900 First Data Corp....................................... 231,275
7,500 Ford Motor Corp....................................... 273,750
* 5,700 Fort Howard Corp...................................... 118,275
6,900 Frontier Corp......................................... 220,800
9,300 Gap Inc............................................... 312,712
* 7,000 Gateway 2000 Inc...................................... 265,125
* 5,000 General Instrument Corp............................... 154,375
* 10,500 General Nutrition Companies Inc....................... 162,750
* 4,900 Genzyme Corp.......................................... 285,425
1,800 Geon Co............................................... 48,825
* 10,100 Grand Casinos Inc..................................... 353,500
17,300 Green Tree Financial Group............................ 566,575
6,300 Greenfield Industries Inc............................. 237,825
5,900 Guidant Corp.......................................... 342,200
* 9,400 Gymboree Corp......................................... 319,600
4,400 Halliburton Co........................................ 244,750
</TABLE>
14 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
5,500 Harley Davidson Inc................................... $ 263,312
* 7,850 Health Management Association Inc, Class A............ 270,825
* 3,000 HealthCare Compare Corp............................... 145,125
* 8,000 Healthsouth Corp...................................... 280,000
5,700 Hewlett Packard, Co................................... 608,475
3,500 Illinois Tool Works, Inc.............................. 234,500
* 3,500 In Focus Systems...................................... 201,250
* 6,450 Infinity Broadcasting, Corp........................... 175,763
* 4,400 Input/Output, Inc..................................... 177,650
6,500 Intel Corp............................................ 490,750
* 9,300 International Rectifier Corp.......................... 241,800
* 14,000 Jefferson Smurfit Corp................................ 175,000
2,000 Johnson Controls, Inc................................. 139,500
3,700 Johnson & Johnson..................................... 360,288
* 6,200 Komag, Inc............................................ 214,675
* 10,200 Kroger Co............................................. 400,350
5,000 La Quinta Inns Inc.................................... 157,500
* 5,600 LCI International Inc................................. 178,500
* 8,800 Lincare Holdings, Inc................................. 332,200
7,300 Linear Technology Corp................................ 251,850
7,200 Liz Claiborne......................................... 267,300
* 4,600 Lucent Technologies, Inc.............................. 174,800
8,800 Marriott International, Inc........................... 418,000
* 2,600 Maxim Integrated Products, Inc........................ 88,400
22,000 MCI Communications Corp............................... 640,750
* 3,900 Medic Computer System, Inc............................ 362,700
3,900 Medtronic, Inc........................................ 219,375
5,200 Mentor Corp........................................... 115,700
5,600 Merck & Co., Inc...................................... 361,900
5,200 Merrill Lynch & Co., Inc.............................. 336,700
* 10,000 Metalclad Corp........................................ 31,875
4,500 MGIC Investment Corp.................................. 264,375
* 6,000 Microcom, Inc......................................... 116,250
* 5,700 Microsoft Corp........................................ 676,875
* 5,700 Mirage Resorts, Inc................................... 324,188
9,400 Money Store, Inc...................................... 246,750
5,200 Morgan Stanley Group, Inc............................. 257,400
* 4,100 MSC Industrial Direct, Inc., Class A.................. 142,988
* 10,000 NABI Inc.............................................. 135,625
4,200 NationsBank Corp...................................... 340,725
* 16,000 Nautica Enterprises, Inc.............................. 400,000
</TABLE>
15 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
* 6,400 Northwest Airlines Corp.............................. $ 254,400
* 3,700 Oakley, Inc.......................................... 188,238
* 9,800 Octel Communication Corp............................. 240,100
* 9,900 Office Max, Inc...................................... 258,638
11,800 Omnicom Group........................................ 514,775
* 8,650 Oracle System Corp................................... 286,531
* 5,800 Orthodontic Centers of America....................... 215,325
* 7,400 Outback Steakhouse Inc............................... 280,275
* 4,700 Pairgain Technologies, Inc........................... 478,225
7,800 PanEnergy Corp....................................... 250,575
8,300 Penncorp Financial Group, Inc........................ 253,150
* 3,000 PeopleSoft Inc....................................... 212,250
4,400 Pep Boys Manny, Moe & Jack........................... 145,200
19,400 PepsiCo, Inc......................................... 645,050
5,100 Pfizer Inc........................................... 360,825
1,600 Phelps Dodge Corp.................................... 109,600
23,400 Philip Morris Companies, Inc......................... 2,325,375
5,200 Philips Petroleum Co................................. 215,800
* 2,900 Physician Reliance Network Inc....................... 152,250
* 6,500 Picturetel Corp...................................... 255,125
16,200 Praxair, Inc......................................... 658,125
* 6,500 Promous Hotel Corp................................... 178,750
* 5,300 Proxim Inc........................................... 221,275
3,300 Raychem Corp......................................... 246,675
* 10,000 Renal Treatment Centers Inc.......................... 340,000
3,000 Rohm & Haas Co....................................... 203,250
* 22,800 Safeway Inc.......................................... 769,500
* 4,000 Sanmina Corp......................................... 147,500
7,500 Schering-Plough Corp................................. 439,688
* 8,800 SCI Systems, Inc..................................... 396,000
* 4,800 Seagate Technology, Inc.............................. 282,000
11,900 Sears, Roebuck & Co.................................. 605,413
9,400 Service Corp. International.......................... 525,225
3,500 Sigma Aldrich........................................ 196,000
* 12,200 Smith International, Inc............................. 384,300
4,900 Snap On, Inc......................................... 235,813
* 2,500 Sofamor/Danek Group Inc.............................. 89,375
* 2,700 Solectron Corp....................................... 117,113
2,400 Sonat Offshore Drilling Inc.......................... 127,200
* 6,000 Sonic Corp........................................... 144,000
11,600 Sprint Corp.......................................... 491,550
</TABLE>
16 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Number
of Shares Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
* 12,600 Staples Inc........................................ $ 252,000
5,700 Student Loan Marketing Association................. 423,938
* 11,900 Sun Microsystems Inc............................... 745,238
11,750 SunAmerica, Inc.................................... 658,000
* 4,000 Synopsys Inc....................................... 179,000
* 4,700 Tellabs Inc........................................ 303,150
4,800 Texaco Inc......................................... 402,000
4,700 Textron, Inc....................................... 398,325
* 4,800 3Com Corp.......................................... 236,400
4,200 Tiffany & Co....................................... 318,675
7,500 TJX Companies Inc.................................. 264,375
* 4,400 Tommy Hilfiger Corp................................ 242,000
7,350 Travelers Group Inc................................ 305,025
* 9,500 Trump Hotels & Casino Resorts...................... 299,250
9,400 Union Carbide Corp. ............................... 405,375
3,100 United Technologies Corp........................... 339,063
* 9,600 United Waste Systems, Inc.......................... 529,200
* 2,800 Universal Health Services Inc...................... 72,800
* 7,100 U.S. Office Products Co............................ 269,800
* 5,800 US Robotics Corp................................... 532,150
* 10,000 USA Waste Services Inc............................. 295,000
* 6,400 Vons Companies Inc................................. 233,600
* 6,100 Watson's Pharmaceuticals Inc....................... 274,500
8,800 Wellman Inc........................................ 199,100
1,100 Wells Fargo & Co................................... 265,100
4,200 Willamette Industries Inc.......................... 252,000
9,400 Williams Companies Inc............................. 472,350
* 4,350 Wind River System Inc.............................. 138,656
* 13,700 WorldCom, Inc...................................... 669,588
------------
56,123,900
------------
TOTAL COMMON STOCKS AND EQUIVALENTS (Cost
$166,702,201)..................................... 193,117,654
------------
</TABLE>
17 See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount Description Market Value
- --------------------------------------------------------------------------------
<C> <S> <C>
CONVERTIBLE CORPORATE OBLIGATIONS 0.6%
$ 290,000 Acer, Inc., 4.00%, 06/10/01........................ $ 701,800
400,000 United Micro, 1.25%, 06/08/04...................... 487,500
------------
TOTAL CONVERTIBLE CORPORATE OBLIGATIONS (Cost
$1,461,425)....................................... 1,189,300
------------
REPURCHASE AGREEMENT 5.7%
11,840,000 State Street Bank & Trust Co, dated 5/31/96, 5.27%,
due 06/03/96 (collateralized by U.S. Government
Obligations in a pooled cash account) repurchase
proceeds $11,845,200 (Cost $11,840,000)........... 11,840,000
------------
TOTAL INVESTMENTS (Cost $180,003,626) 98.8%..................... 206,146,954
OTHER ASSETS AND LIABILITIES, NET 1.2%.......................... 2,534,912
------------
NET ASSETS 100%................................................. $208,681,866
============
</TABLE>
*Non-income producing security
18 See Notes to Financial Statements
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $180,003,626)................. $206,146,954
Foreign currency, at market value (Cost $936,072)................ 943,481
Cash............................................................. 536
Receivable for investments sold.................................. 2,803,870
Unrealized appreciation of forward currency exchange contracts... 1,806,101
Dividends and interest receivable................................ 802,826
Receivable for Fund shares sold.................................. 530,418
Other assets and receivables..................................... 2,129
------------
TOTAL ASSETS.................................................... 213,036,315
------------
LIABILITIES
Payable for investments purchased................................ 3,282,645
Payable for Fund shares redeemed................................. 306,402
Unrealized depreciation of forward currency exchange contracts... 196,382
Due to Adviser................................................... 168,430
Due to Distributor............................................... 124,414
Due to shareholder service agent................................. 101,910
Deferred Trustees' compensation.................................. 12,889
Accrued expenses and other payables.............................. 161,377
------------
TOTAL LIABILITIES............................................... 4,354,449
------------
NET ASSETS, equivalent to $13.98 per share for Class A, $13.53
per share for Class B, and $13.66 per share for Class C shares.. $208,681,866
============
NET ASSETS WERE COMPRISED OF
Shares of beneficial interest, at par; 7,632,191 Class A,
6,857,163 Class B and 671,872 Class C shares outstanding........ $ 151,612
Capital surplus.................................................. 175,275,338
Undistributed net realized gain on securities.................... 5,810,832
Net unrealized appreciation (depreciation) of securities
Investments..................................................... 26,143,328
Forward currency exchange contracts............................. 1,609,719
Foreign currency................................................ 7,409
Other foreign denominated assets and liabilities................ (18,486)
Accumulated net investment loss.................................. (297,886)
------------
NET ASSETS....................................................... $208,681,866
============
</TABLE>
19 See Notes to Financial Statements
<PAGE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Dividends (net of $304,621 of foreign taxes withheld at source).. $ 2,642,255
Interest......................................................... 411,302
-----------
Total investment income......................................... 3,053,557
-----------
EXPENSES
Management fees.................................................. 1,605,816
Shareholder service agent's fees and expenses.................... 987,711
Accounting services.............................................. 31,987
Service fees--Class A............................................ 193,897
Distribution and service fees--Class B........................... 756,195
Distribution and service fees--Class C........................... 74,033
Trustees' fees and expenses...................................... 36,883
Audit fees....................................................... 51,803
Custodian fees................................................... 263,752
Legal fees....................................................... 4,510
Reports to shareholders.......................................... 79,200
Registration and filing fees..................................... 83,146
Organization expenses............................................ 14,622
Miscellaneous.................................................... 27,260
Retirement plan expense reimbursement (see Note 4)............... (5,200)
-----------
Total expenses.................................................. 4,205,615
-----------
NET INVESTMENT LOSS.............................................. (1,152,058)
===========
REALIZED AND UNREALIZED GAIN (LOSS) ON SECURITIES
Net realized gain on securities
Investments..................................................... 13,436,447
Foreign currency and forward currency exchange contracts........ 917,724
Net unrealized appreciation (depreciation) of securities during
the period
Investments..................................................... 16,851,899
Foreign currency................................................ 551
Forward currency exchange contracts............................. 1,547,114
Other foreign denominated assets and liabilities................ (10,699)
-----------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES................... 32,743,036
===========
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS................. $31,590,978
===========
</TABLE>
20 See Notes to Financial Statements
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended May 31
--------------------------
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period ................... $131,365,013 $ 95,717,344
------------ ------------
OPERATIONS
Net investment loss............................... (1,152,058) (918,859)
Net realized gain (loss) on securities............ 14,354,171 (1,653,364)
Net unrealized appreciation of securities during
the period....................................... 18,388,865 6,127,108
------------ ------------
Increase in net assets resulting from operations.. 31,590,978 3,554,885
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM (see Note 1H)
Net realized gain on securities
Class A........................................... (1,775,643) --
Class B........................................... (1,920,148) --
Class C........................................... (187,369) --
------------ ------------
(3,883,160) --
------------ ------------
Excess of book-basis net realized gain on
securities
Class A........................................... -- (1,311,980)
Class B........................................... -- (1,438,472)
Class C........................................... -- (155,182)
------------ ------------
-- (2,905,634)
------------ ------------
Total distributions.............................. (3,883,160) (2,905,634)
------------ ------------
CAPITAL TRANSACTIONS
Proceeds from shares sold
Class A........................................... 63,861,473 42,797,541
Class B........................................... 29,925,908 29,086,706
Class C........................................... 3,401,773 4,030,850
------------ ------------
97,189,154 75,915,097
------------ ------------
Proceeds from shares issued for distributions
reinvested
Class A........................................... 1,683,743 1,240,023
Class B........................................... 1,807,274 1,341,370
Class C........................................... 159,854 131,350
------------ ------------
3,650,871 2,712,743
------------ ------------
Cost of shares redeemed
Class A........................................... (32,888,196) (26,555,840)
Class B........................................... (16,089,389) (14,514,920)
Class C........................................... (2,253,405) (2,558,662)
------------ ------------
(51,230,990) (43,629,422)
------------ ------------
Increase in net assets resulting from capital
transactions..................................... 49,609,035 34,998,418
------------ ------------
INCREASE IN NET ASSETS............................. 77,316,853 35,647,669
------------ ------------
NET ASSETS, end of period (including accumulated
net investment loss of $297,886 and $69,365,
respectively)..................................... $208,681,866 $131,365,013
============ ============
</TABLE>
21 See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS
Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
----------------------------------------------------
Aug. 5
Year Ended May 31 1991/(1)/ to
--------------------------------------- May 31,
1996/(2)/ 1995/(2)/ 1994 1993/(2)/ 1992/(2)/
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value, beginning
of period................. $11.79 $11.67 $10.76 $10.44 $ 9.33
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Investment income........ .24 .23 .26 .235 .21
Expenses................. (.28) (.27) (.32) (.29) (.185)
------ ------ ------ ------ ------
Net investment income
(loss).................... (.04) (.04) (.06) (.055) .025
Net realized and
unrealized gain on
securities............... 2.561 .42 1.0125 .7775 1.145
------ ------ ------ ------ ------
Total from investment
operations................ 2.521 .38 .9525 .7225 1.17
------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM
(see Note 1H)
Net realized gain on
securities............... (.331) -- (.0425) (.4025) (.06)
Excess of book-basis net
realized gain on
securities............... -- (.26) -- -- --
------ ------ ------ ------ ------
Total distributions....... (.331) (.26) (.0425) (.4025) (.06)
------ ------ ------ ------ ------
Net asset value, end of
period.................... $13.98 $11.79 $11.67 $10.76 $10.44
====== ====== ====== ====== ======
TOTAL RETURN /(4)/........ 21.85% 3.36% 9.17% 7.13% 12.56%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions)................ $106.7 $60.1 $41.8 $12.7 $8.4
Average net assets
(millions)................ $77.6 $54.5 $25.8 $9.2 $6.2
Ratios to average net
assets (annualized)/(3)/
Expenses................. 2.22% 2.29% 2.46% 2.93% 2.07%
Expenses, without expense
reimbursement............ 2.23% -- -- 3.28% --
Net investment income
(loss)................... (.30%) (.35%) (.46%) (.57%) .29%
Net investment loss,
without expense
reimbursement........... (.31%) -- -- (.92%) --
Average commission rate
per equity stock traded.. $.02 -- -- -- --
Portfolio turnover rate... 94% 120% 116% 120% 135%
</TABLE>
(1) Commencement of offering of sales.
(2) Based on average month-end shares outstanding.
(3) See Notes 2 and 4.
(4) Total return for a period of less than one year is not annualized. Total
return does not consider the effect of sales charges.
22 See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
-----------------------------------------------------
Nov. 15,
Year Ended May 31 1991/(1)/ to
--------------------------------------- May 31,
1996/(2)/ 1995/(2)/ 1994 1993/(2)/ 1992/(2)/
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
PER SHARE OPERATING
PERFORMANCE
Net asset value,
beginning of period..... $11.50 $11.48 $10.67 $10.46 $ 9.78
------ ------ ------ ------ ------
INCOME FROM INVESTMENT
OPERATIONS
Investment income...... .23 .22 .22 .235 .16
Expenses............... (.37) (.35) (.35) (.37) (.165)
------ ------ ------ ------ ------
Net investment loss..... (.14) (.13) (.13) (.135) (.005)
Net realized and
unrealized gain on
securities.............. 2.501 .41 .9825 .7475 .745
------ ------ ------ ------ ------
Total from investment
operations.............. 2.361 .28 .8525 .6125 .74
------ ------ ------ ------ ------
LESS DISTRIBUTIONS FROM
(see Note 1H)
Net realized gain on
securities ............ (.331) -- (.0425) (.4025) (.06)
Excess of book-basis
net realized gain on
securities............. -- (.26) -- -- --
------ ------ ------ ------ ------
Total distributions..... (.331) (.26) (.0425) (.4025) (.06)
------ ------ ------ ------ ------
Net asset value, end of
period.................. $13.53 $11.50 $11.48 $10.67 $10.46
====== ====== ====== ====== ======
TOTAL RETURN /(4)/...... 20.90% 2.62% 8.21% 6.15% 7.58%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of
period (millions)....... $92.8 $64.7 $48.8 $6.9 $1.2
Average net assets
(millions).............. $75.6 $59.4 $26.4 $2.8 $0.5
Ratios to average net
assets (annualized)/(3)/
Expenses............... 2.99% 3.05% 3.21% 3.88% 3.11%
Expenses, without
expense reimbursement. 2.99% -- -- 4.50% --
Net investment loss.... (1.11%) (1.11%) (1.19%) (1.41%) (.12%)
Net investment loss,
without expense
reimbursement.......... (1.11%) -- -- (2.02%) --
Average commission rate
per equity stock traded. $.02 -- -- -- --
Portfolio turnover rate. 94% 120% 116% 120% 135%
</TABLE>
(1) Commencement of offering of shares.
(2) Based on average month-end shares outstanding.
(3) See Notes 2 and 4.
(4) Total return for a period of less than one year is not annualized. Total
return does not consider the effect of sales charges.
23 See Notes to Financial Statements
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of beneficial interest outstanding throughout each of
the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C/(2)/
----------------------------
Year Ended
May 31 June 21,
-------------- 1993/(1)/ to
1996 1995 May 31, 1994
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period............. $11.61 $11.59 $10.29
------ ------ ------
INCOME FROM INVESTMENT OPERATIONS
Investment income............................... .24 .22 .24
Expenses........................................ (.38) (.35) (.37)
------ ------ ------
Net investment loss.............................. (.14) (.13) (.13)
Net realized and unrealized gain on securities... 2.521 .41 1.4725
------ ------ ------
Total from investment operations................. 2.381 .28 1.3425
------ ------ ------
LESS DISTRIBUTIONS FROM (see Note 1H)
Net realized gain on securities ................ (.331) -- (.0425)
Excess of book-basis net realized gain on
securities...................................... -- (.26) --
------ ------ ------
Total distributions.............................. (.331) (.26) (.0425)
------ ------ ------
Net asset value, end of period................... $13.66 $11.61 $11.59
====== ====== ======
TOTAL RETURN /(4)/............................... 20.87% 2.60% 13.06%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions)............. $9.2 $6.6 $5.1
Average net assets (millions).................... $7.4 $6.2 $2.4
Ratios to average net assets (annualized)/(3)/
Expenses........................................ 3.00% 3.05% 3.21%
Expenses, without expense reimbursement......... 3.00% -- --
Net investment loss............................. (1.10%) (1.13%) (1.15%)
Net investment loss, without expense
reimbursement................................... (1.10%) -- --
Average commission rate per equity stock traded.. $.02 -- --
Portfolio turnover rate.......................... 94% 120% 116%
</TABLE>
(1) Commencement of offering of shares.
(2) Based on average month-end shares outstanding.
(3) See Note 4.
(4) Total return for a period of less than one year is not annualized. Total
return does not consider the effect of sales charges.
24 See Notes to Financial Statements
<PAGE>
NOTES TO FINANCIAL STATEMENTS
- -------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital World Portfolio Series Trust (formerly American
Capital World Portfolio Series) is registered under the Investment Company Act
of 1940, as amended, as a diversified open-end management investment company
which offers shares in two separate portfolios, one of which is described in
this report: Van Kampen American Capital Global Equity Fund (the "Fund"). The
investment objective of the Fund is to provide long-term growth through in-
vestments in an internationally diversified portfolio of equity securities.
Investments in foreign securities involve certain risks not ordinarily associ-
ated with investments in securities of domestic issuers, including fluctua-
tions in foreign exchange rates, future political and economic developments,
and the possible imposition of exchange controls or other foreign governmental
laws or restrictions.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The prep-
aration of financial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that
affect the amounts reported. Actual amounts may differ from the estimates.
A. INVESTMENT VALUATIONS-Securities listed or traded on a national securities
exchange are valued at the last sale price. Unlisted securities and listed se-
curities for which the last sale price is not available are valued at the most
recent bid price. Securities for which market quotations are not readily
available are valued at fair value under a method approved by the Board of
Trustees.
Short-term investments with a maturity of 60 days or less when purchased are
valued at amortized cost, which approximates market value. Short-term invest-
ments with a maturity of more than 60 days when purchased are valued based on
market quotations until the remaining days to maturity become less than 61
days. From such time, until maturity, the investments are valued at amortized
cost.
B. REPURCHASE AGREEMENTS-A repurchase agreement is a short-term investment in
which the Fund acquires ownership of a debt security and the seller agrees to
repurchase the security at a future time and specified price. The Fund may in-
vest independently in repurchase agreements, or transfer uninvested cash bal-
ances into a pooled cash account along with other investment companies advised
by Van Kampen American Capital Asset Management, Inc. (the "Adviser"), the
daily aggregate of which is invested in repurchase agreements. Repurchase
agreements are collateralized by the underlying debt security. The Fund will
make payment for such securities only upon physical delivery or evidence of
book entry transfer to the account of the custodian bank. The seller is re-
quired to maintain the value of the underlying security at not less than the
repurchase proceeds due the Fund.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
C. FOREIGN CURRENCY TRANSLATION-The market values of foreign securities, for-
ward currency exchange contracts and other assets and liabilities stated in
foreign currency are translated into U.S. dollars based on quoted exchange
rates as of noon Eastern Time. The cost of securities is determined using his-
torical exchange rates. Income and expenses are translated at prevailing ex-
change rates when accrued or incurred. Gains and losses on the sale of
securities are not segregated for financial reporting purposes between amounts
arising from changes in exchange rates and amounts arising from changes in the
market prices of securities. Realized gain and loss on foreign currency in-
cludes the net realized amount from the sale of currency and the amount real-
ized between trade date and settlement date on security transactions.
D. FORWARD CURRENCY EXCHANGE CONTRACTS-The Fund enters into forward currency
exchange contracts in order to hedge its exposure to changes in foreign cur-
rency exchange rates on its foreign portfolio holdings or to settle transac-
tions. A forward currency exchange contract is a commitment to buy or sell a
foreign security at a set price on a future date. Changes in the value of the
contract are recognized by marking the contract to market on a daily basis to
reflect current currency translation rates. The Fund realizes gains or losses
at the time the forward currency exchange contract is closed. Risks may arise
as a result of the potential inability of the counterparties to meet the terms
of their contracts, and from unanticipated movements in the value of a foreign
currency relative to the U.S. dollar.
E. FUTURES CONTRACTS-Transactions in futures contracts are utilized in strate-
gies to manage the market risk of the Fund's investments by increasing or de-
creasing the percentage of assets effectively invested. The purchase of a
futures contract increases the impact on net asset value of changes in the
market price of investments. There is also a risk that the market movement of
such instruments may not be in the direction forecasted.
Upon entering into futures contracts, the Fund maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. A portion of these funds is held as collateral in
an account in the name of the broker, the Fund's agent in acquiring the
futures position. During the period the futures contract is open, changes in
the value of the contract ("variation margin") are recognized by marking the
contract to market on a daily basis. As unrealized gains or losses are in-
curred, variation margin payments are received from or made to the broker.
Upon the closing or cash settlement of a contract, gains or losses are real-
ized. The cost of securities acquired through delivery under a contract is ad-
justed by the unrealized gain or loss on the contract.
F. FEDERAL INCOME TAXES-No provision for federal income taxes is required be-
cause the Fund has elected to be taxed as a "regulated investment company" un-
der the Internal Revenue Code and intends to maintain this qualification by
annually distributing all of its taxable net investment income and taxable net
realized gains on investments to its shareholders.
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
G. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME-Investment transac-
tions are accounted for on the trade date. Realized gains and losses on in-
vestments are determined on the basis of identified cost. Dividend income is
recorded on the ex-dividend date or when information becomes available, which-
ever is later. Interest income is accrued daily.
Under the applicable foreign tax laws, a withholding tax may be imposed on
interest, dividends and realized gains generated from foreign investments.
Such withholding taxes are reflected on the Statement of Operations as a re-
duction of the related income or gain.
H. DIVIDENDS AND DISTRIBUTIONS-Dividends and distributions to shareholders are
recorded on the record date. The Fund distributes tax basis earnings in accor-
dance with the minimum distribution requirements of the Internal Revenue Code,
which may differ from generally accepted accounting principles. Such dividends
or distributions may result in dividends or distributions in excess of finan-
cial statement earnings.
I. DEBT DISCOUNT OR PREMIUM-The Fund accounts for discounts and premiums on
the same basis as is used for federal income tax reporting. Accordingly, orig-
inal issue discounts on debt securities purchased are amortized over the life
of the security. Premiums on debt securities are not amortized. Market dis-
counts are recognized at the time of sale as realized gains for book purposes
and ordinary income for tax purposes.
J. ORGANIZATION COSTS-Organization expenses of approximately $75,000 were de-
ferred and are being amortized over a five-year period ending September, 1996.
NOTE 2--MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
The Adviser serves as investment manager to the Fund. The Adviser has entered
into a subadvisory agreement with John Govett & Co., Ltd. (the "Subadviser"),
who provides advisoryservices to the Fund and the Adviser with respect to the
Fund's investments in foreign securities. Management fees are calculated
monthly, based on the average daily net assets of the Fund at the annual rate
of 1.00%. The Adviser pays 50% of its management fee to the Subadviser.
At the annual meeting in July 1995, Fund shareholders approved the reorgani-
zation of the Fund as a Delaware business trust and an expansion of the Board
from eight to fourteen trustees (the "Consolidation"). Van Kampen American
Capital ("VKAC") agreed to initially bear the expenses, aggregating $69,224,
relating to the Consolidation. However, if during the five-year period ending
July 2000, the Fund realizes a benefit from the Consolidation, the Fund will
reimburse VKAC the amount of the savings, not to exceed the amount of the Con-
solidation expenses. During the period, savings of $18,028 were realized by
the Fund, and reimbursed to VKAC.
Under the terms of the advisory agreement, if the total ordinary business
expenses of the Fund, exclusive of taxes, interest and distribution plans, ex-
ceed the most restrictive expense
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
limitation applicable in the states where the Fund's shares are qualified for
sale, the Adviser will reimburse the Fund for the excess. Such reimbursement
shall be made monthly. The most restrictive expense limitation in effect was
California's which aggregated 2 1/2% of the first $30 million of average daily
net assets, 2% of the next $70 million of average daily net assets and 1 1/2%
of the average daily net assets in excess of $100 million. No reimbursement
was made during the current period.
ACCESS Investor Services, an affiliate of the Adviser, serves as the Fund's
shareholder service agent. These services are provided at cost plus a profit.
For the period, such fees aggregated $852,280.
The Fund was advised that Van Kampen American Capital Distributors, Inc.
(the "Distributor") and Advantage Capital Corp. (the "Retail Dealer"), both
affiliates of the Adviser, received $34,742 and $13,980, respectively, as
their portion of the commissions charged on sales of Fund shares during the
period. As of January 2, 1996, the Retail Dealer was no longer an affiliate of
the Adviser.
Under the Distribution Plans, each class of shares pays up to .25% per annum
of its average net assets to reimburse the Distributor for expenses and serv-
ice fees incurred. Class B and C shares pay an additional fee of up to .75%
per annum of their average daily net assets to reimburse the Distributor for
its distribution expenses. Actual distribution expenses incurred by the Dis-
tributor for Class B and C shares may exceed the amounts reimbursed to the
Distributor by the Fund. At the end of the period, the unreimbursed expenses
incurred by the Distributor under the Class B and C plans aggregated approxi-
mately $2.1 million and $86,000, respectively, and may be carried forward and
reimbursed through either the collection of the contingent deferred sales
charges from share redemptions or, subject to the annual renewal of the plans,
future Fund reimbursements of distribution fees.
Legal fees during the period were for services rendered by former counsel of
the Fund, O'Melveny & Myers. A former trustee was of counsel to that firm.
Certain officers and trustees of the Fund are officers and trustees of the
Adviser, the Distributor, and the shareholder service agent.
NOTE 3--INVESTMENT ACTIVITY
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $179,348,197 and $144,729,981,
respectively.
For federal income tax purposes, the identified cost of portfolio securities
and foreign currency was $181,149,726. Net unrealized appreciation aggregated
$25,940,709, gross unrealized appreciation aggregated $31,100,514 and gross
unrealized depreciation aggregated $5,159,805.
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
At the end of the period, the Fund held the following open forward currency
exchange contracts:
<TABLE>
<CAPTION>
SETTLEMENT U.S. DOLLAR UNREALIZED UNREALIZED
CURRENCY (000) DATE VALUE APPRECIATION (DEPRECIATION)
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FRENCH FRANC
15,030 (receivable)....... 04/11/97 $ 2,952,200 $ 47,800 $ --
JAPANESE YEN
296,760 (receivable)...... 09/24/96 2,792,361 207,639 --
316,740 (payable)......... 09/24/96 2,980,363 -- (19,638)
19,980 (receivable)....... 09/24/96 188,002 1,742 --
481,450 (receivable)...... 11/13/96 4,562,338 437,662 --
478,700 (receivable)...... 11/13/96 4,536,278 463,722 --
474,300 (receivable)...... 11/13/96 4,494,583 505,417 --
209,790 (payable)......... 11/13/96 1,988,021 -- (11,979)
529,700 (payable)......... 11/13/96 5,019,567 19,567 --
66,560 (receivable)....... 11/13/96 630,739 5,590 --
405,600 (receivable)...... 01/24/97 3,883,038 116,962 --
SWEDISH KRONA
10,302 (receivable)....... 11/13/96 1,530,391 -- (30,391)
UNITED KINGDOM
2,668 (receivable)........ 07/16/97 4,134,374 -- (134,374)
----------- ---------- ---------
TOTAL FORWARD CURRENCY EXCHANGE
CONTRACTS............................ $39,692,255 $1,806,101 $(196,382)
----------- ---------- ---------
</TABLE>
NOTE 4--TRUSTEE COMPENSATION
Trustees who are not affiliated with the Adviser are compensated by the Fund
at the annual rate of $779 plus a fee of $22 per day for Board and Committee
meetings attended. During the period, such fees aggregated $24,043.
The Fund has a deferred compensation plan and a defined benefits retirement
plan for its trustees not affiliated with the Adviser. These plans are not
funded, and obligations under the plans will be paid solely out of the Fund's
general account. The Fund will not reserve or set aside funds for the payment
of its obligations under the plans by any form of trust or escrow.
Under the deferred compensation plan, trustees may elect to defer all or a
portion of their compensation to a later date. Each trustee covered under the
plan elects to earn on the deferred balances an amount equal to the total re-
turn of the Fund or equal to the income earned by the Fund on its short-term
investments.
Under the retirement plan, which became effective in January 1996, benefits
which are based on years of service will be received by the trustee for a ten-
year period. The maximum annual benefit for each trustee is $2,500. Retirement
plan expenses for the period aggregated $5,200. During the calendar year 1996,
the Adviser agreed to reimburse the Fund for these plan expenses.
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- -------------------------------------------------------------------------------
NOTE 5--CAPITAL
The Fund offers three classes of shares at their respective net asset values
per share, plus a sales charge which is imposed either at the time of purchase
(Class A) or at the time of redemption on a contingent deferred basis (Class B
and C). All classes of shares have the same rights, except that Class B and C
shares bear the cost of distribution fees and certain other class specific ex-
penses. Class B and C shares automatically convert to Class A shares six years
and ten years after purchase, respectively, subject to certain conditions. Re-
alized and unrealized gains or losses, investment income and expenses (other
than class specific expenses) are allocated daily to each class of shares
based upon the relative proportion of net assets of each class.
The Fund has an unlimited number of shares of $.01 par value beneficial in-
terest authorized. Transactions in shares of beneficial interest were as fol-
lows:
<TABLE>
<CAPTION>
YEAR ENDED MAY 31
1996 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
Shares sold
Class A............................................... 4,966,925 3,727,775
Class B............................................... 2,370,872 2,555,706
Class C............................................... 268,622 350,959
---------- ----------
7,606,419 6,634,440
---------- ----------
Shares issued for distributions reinvested
Class A............................................... 136,185 114,288
Class B............................................... 150,464 126,187
Class C............................................... 13,189 12,253
---------- ----------
299,838 252,728
---------- ----------
Shares redeemed
Class A............................................... (2,565,199) (2,333,611)
Class B............................................... (1,288,844) (1,306,968)
Class C............................................... (181,673) (229,693)
---------- ----------
(4,035,716) (3,870,272)
---------- ----------
Increase in shares outstanding.......................... 3,870,541 3,016,896
---------- ----------
</TABLE>
NOTE 6--FUND REORGANIZATION
On July 21, 1995, the shareholders approved the reorganization of the Fund to
a Delaware Business Trust and the election of fourteen trustees. On August 31,
1995, the reorganization became effective.
30
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
VAN KAMPEN AMERICAN CAPITAL GLOBAL EQUITY FUND
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen American Capital
Global Equity Fund (the "Fund") at May 31, 1996, and the results of its opera-
tions, the changes in its net assets and the financial highlights for each of
the periods presented, in conformity with generally accepted accounting prin-
ciples. These financial statements and financial highlights (hereafter re-
ferred to as "financial statements") are the responsibility of the Fund's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these financial
statements in accordance with generally accepted auditing standards which re-
quire that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and dis-
closures in the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall fi-
nancial statement presentation. We believe that our audits, which included
confirmation of securities at May 31, 1996 by correspondence with the custo-
dian and brokers and the application of alternative procedures where confirma-
tions from brokers were not received, provide a reasonable basis for the
opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
July 22, 1996
31
<PAGE>
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
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
Texas Tax Free Income Fund
THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund
Ask your investment 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 direct at 1-800-341-2911 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
32
<PAGE>
VAN KAMPEN AMERICAN CAPITAL GLOBAL EQUITY FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL
DONALD C. MILLER*
JACK E. NELSON
DON G. POWELL
JEROME L. ROBINSON
FERNANDO SISTO*
WAYNE W. WHALEN
WILLIAM S. WOODSIDE
*Co-Chairman of the Board
OFFICERS
DON G. POWELL
President and Chief Executive Officer
DENNIS J. MCDONNELL
Executive Vice President
RONALD A. NYBERG
Vice President and Secretary
EDWARD C. WOOD, III
Vice President and Chief Financial Officer
CURTIS W. MORELL
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN
Treasurer
TANYA M. LODEN
Controller
WILLIAM N. BROWN
PETER W. HAGEL
ROBERT C. PECK, JR.
ALAN T. SACHTLEBEN
PAUL R. WOLKENBERG
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
INVESTMENT SUBADVISER
JOHN GOVETT & CO., LTD.
Shackleton House
4 Battle Bridge Lane
London, SE1 2HR England
DISTRIBUTOR
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
SHAREHOLDER SERVICE AGENT
ACCESS INVESTORS SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK AND TRUST CO.
225 Franklin Street
Boston, Massachusetts 02110
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
(C)Van Kampen etc. American Capital Distribu-
tors, Inc., 1996
All rights reserved.
SM denotes a service mark of
Van Kampen American Capital Distributors,
Inc.
This report is submitted for the general information of the shareholders of
the Fund. It is not authorized for distribution to prospective investors un-
less 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. If used for distribution to prospec-
tive investors after 09/30/96, this annual report must be accompanied by a Van
Kampen American Capital Global Equity Fund performance data update for the
most recent quarter.
33
