<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Glossary of Terms................................ 4
Portfolio Management Review...................... 5
Portfolio Highlights............................. 8
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 27
Statement of Operations.......................... 28
Statement of Changes in Net Assets............... 29
Financial Highlights............................. 30
Notes to Financial Statements.................... 32
Dividend Reinvestment Plan....................... 39
</TABLE>
VKQ SAR 6/99
<PAGE> 2
LETTER TO SHAREHOLDERS
May 20, 1999
Dear Shareholder,
With the volatility that we've experienced in many financial markets in
recent months, some investors have sold securities because of uncertainty about
where the markets were going, only to be left rethinking whether they made the
right decision. We've witnessed this kind of market activity numerous times over
the past several years, sparked by concerns such as the impact of the Asian
economic crisis, high stock valuations, or, most recently, the stability of many
high-flying technology companies. While these fears eventually subsided,
investors who may have sold during this period were unable to reap the benefits
of the latest rally. That's partly because most of the recent big gains happened
in relatively short periods of time. This kind of volatility--and the danger of
making short-term decisions--highlights the importance of investing for the long
term, in accordance with your individual financial objectives.
Although the worst of the Asian crisis appears to be behind us, new concerns
are always emerging. In the coming months, we'll likely hear more about how the
year 2000 computer problem may affect the markets or that we're overdue for a
correction. While the markets could undoubtedly suffer as a result of these or
any number of other events, we encourage you to focus on your long-term
investment goals. Although nothing is certain, history has shown us that over
time, the markets tend to recover--and most investors want to be positioned to
take advantage of any recovery.
If you have concerns about market volatility or questions about how your
portfolio is structured to respond to these events, we encourage you to contact
your financial advisor. Your advisor can talk with you about sustaining a
long-term investment plan through a variety of market conditions. We hope that
Van Kampen Funds will play an important role as you and your advisor build a
portfolio designed to help you weather whatever the markets have in store.
Sincerely,
[SIG.]
Richard F. Powers III
Chairman
Van Kampen Investment Advisory Corp.
[SIG.]
Dennis J. McDonnell
President
Van Kampen Investment Advisory Corp.
1
<PAGE> 3
ECONOMIC SNAPSHOT
A surge in consumer confidence led to strong economic growth over the past
six months, as fears about the impact of the Asian financial crisis subsided. In
the fourth quarter, the nation's gross domestic product (GDP) rose at an
astounding 6.0 percent annual rate and remained strong at 4.5 percent through
the first quarter of 1999. This powerful level of growth is attributed to a
continued increase in consumer spending, a strong housing market, and high
retail sales--all the result of a more confident consumer given the positive
employment environment. The economy began to show signs of slowing down early in
1999, however, as corporate profits and wage growth declined.
Despite continued improvements in Asia and Latin America and the record
economic growth in the United States, inflation remained at bay in late 1998 as
commodity prices tumbled. Although rising oil prices pushed inflation up 3.3
percent on an annualized basis in the first four months of 1999, price increases
remained moderate enough overall to keep inflation-adjusted interest rates
attractive.
Our outlook for the domestic economy remains positive, although we
anticipate slower growth in the second half of the year. We look for a gradual
but steady rise in inflation throughout 1999 to more normal but certainly not
alarming levels. Internationally, low interest rates and improving financial
conditions should continue to support the economic progress we've witnessed
overseas.
INTEREST RATES AND INFLATION
April 30, 1997, through April 30, 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Apr 1997 6.0000 2.5000
5.6250 2.2000
6.5000 2.3000
Jul 1997 6.0000 2.2000
5.5000 2.2000
6.2500 2.2000
Oct 1997 5.7500 2.1000
5.6875 1.8000
6.5000 1.7000
Jan 1998 5.5625 1.6000
5.6250 1.4000
6.1250 1.4000
Apr 1998 5.6250 1.4000
5.6875 1.7000
6.0000 1.7000
Jul 1998 5.5625 1.7000
5.9375 1.6000
5.7500 1.5000
Oct 1998 5.2500 1.5000
4.8750 1.5000
4.0000 1.6000
Jan 1999 4.8125 1.7000
4.8750 1.6000
5.1250 1.7000
Apr 1999 4.9375 2.3000
</TABLE>
Interest rates are represented by the closing midline federal funds rate
on the last day of each month. Inflation is indicated by the annual
percent change of the Consumer Price Index for all urban consumers at
the end of each month.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1999
VAN KAMPEN MUNICIPAL TRUST
(NYSE TICKER SYMBOL--VKQ)
<TABLE>
<S> <C>
COMMON SHARE TOTAL RETURNS
Six-month total return based on market price(1)........... .45%
Six-month total return based on NAV(2).................... .21%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3).................................................. 6.00%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)..................................... 9.38%
SHARE VALUATIONS
Net asset value........................................... $16.520
Closing common stock price................................ $16.000
Six-month high common stock price (12/10/98).............. $17.375
Six-month low common stock price (04/28/99)............... $15.875
Preferred share (Series A) rate(5)........................ 3.600%
Preferred share (Series B) rate(5)........................ 3.270%
Preferred share (Series C) rate(5)........................ 3.750%
Preferred share (Series D) rate(5)........................ 3.300%
</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 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 36%
federal income tax bracket.
(5) See "Notes to Financial Statements" footnote #6, 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.
On August 20, 1998, the Trust's Board of Trustees voted to change the Trust's
fiscal year end from August 31 to October 31, effective at the close of the
August 31, 1998 fiscal year. As a result, the fiscal year commenced on
September 1, 1998 and ended on October 31, 1998. The financial information for
the two-month transition period appears in a separate column in this April 30,
1999 semiannual report. If you would like to receive the audited financial
statements for this two-month period, please contact our Investor Services
Department at 1-800-341-2929.
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.
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.
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.
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. Most insurers are rated AAA.
INVESTMENT-GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody's Investors Service. Bonds rated below BBB or Baa are
noninvestment grade.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1998
and maturing in 2008 is a 10-year bond.
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,
in some states, 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.
REFUNDING: Retiring an outstanding bond issue at maturity using money from the
sale of a new offering.
YIELD: The annual rate of return on an investment, expressed as a percentage.
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.
4
<PAGE> 6
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN MUNICIPAL TRUST
We recently spoke with the management team of the Van Kampen Municipal Trust
about the key events and economic forces that shaped the markets during the
reporting period. The team includes David C. Johnson, 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 April 30, 1999.
Q HOW WOULD YOU DESCRIBE THE CONDITIONS IN THE MUNICIPAL MARKET DURING THE
PAST SIX MONTHS?
A Although most of the financial markets experienced volatility during the
period, the municipal market remained relatively stable. For the majority
of the six months, long-term municipal bond yields remained within a range
of about 5.1 to 5.3 percent, even as the Federal Reserve cut interest rates.
Much of the stability in the municipal market can be attributed to its isolation
from turbulence abroad. Concerns about the financial conditions in Asia and
Latin America hurt the stock and high-yield bond markets last fall, but had
little effect on municipals.
The positive economic and market conditions encouraged more municipalities
to take advantage of low interest rates and issue new bonds. Although the amount
of municipal debt increased, the credit quality of many issuers was not
compromised--in fact, it improved as the positive economic environment led to
stronger balance sheets. As a result, we saw more issuers using municipal bonds
to finance special growth and expansion projects, as opposed to financing their
regular operations.
The proportion of higher-yielding municipal bonds also increased during the
period as the number of insured bonds declined. Because bond insurers tightened
their underwriting criteria, more issuers came to market without insurance and
offered higher yields to compensate bondholders for the increased credit risk.
This benefited the Trust because it allowed our experienced research staff to
seek out those higher-yielding bonds that we felt had strong underlying quality.
Q WHY WERE MUNICIPAL BONDS SO ATTRACTIVE RELATIVE TO COMPARABLE TREASURY
BONDS?
A Toward the end of 1998, the yields on 30-year insured municipal bonds and
comparable U.S. Treasury bonds reached equivalent levels, which is a rare
occurrence. Typically, investment-grade municipal bonds have offered about 85 to
90 percent as much yield as comparable Treasury bonds because their interest
payments are exempt from federal income taxes. However, as Treasury yields fell
and municipal yields remained stable, the yield difference between the two types
of bonds shrank. Early in 1999, investors recognized the tremendous
opportunities available in the municipal market, and demand for municipals began
to increase. In conjunction with a recent slowdown in supply, this boost in
municipal demand pushed the municipal-to-Treasury yield ratio back to more
traditional but still attractive levels.
5
<PAGE> 7
Q WHAT STRATEGIES DID YOU USE TO MANAGE THE TRUST?
A As a result of increasing financial pressures on the hospital and
health-care industry, we reduced the Trust's holdings in this sector.
Although many health-care bonds remain attractive, the challenges imposed
by managed care and changing Medicare reimbursement policies have led us to look
to other sectors in recent months. We sold some lower-rated health-care issues
and replaced them with longer-maturity insured bonds. In addition, we sold bonds
in the portfolio that had a high risk of being called, or repaid early by the
issuer. These higher-yielding securities had increased in value since we
purchased them, so we took advantage of the opportunity to sell them at a
premium and contribute to the Trust's total return.
Another strategy we used to enhance performance was to purchase bonds issued
in states that have strong demand for municipal bonds as a result of heavy state
and local taxation. In particular, we purchased securities issued in New York
and California. The large supply of bonds in these states provided a number of
opportunities to find attractive bonds with appreciation potential.
Q HOW DID YOU FIND VALUE IN THE MUNICIPAL MARKET?
A By working closely with our experienced research analysts, we continued to
seek bonds that may be temporarily out of favor but that we feel have the
potential to appreciate in price if market circumstances change. For
example, last year we purchased securities issued by the Long Island Power
Authority (LIPA) in what was the largest municipal bond issuance in history.
Because the volume of LIPA bonds was so large, they were offered at below-market
prices to ensure that the entire block of bonds would be sold. During the
reporting period, we sold our LIPA holdings because we felt that the issue had
finally been absorbed by the market and had reached our target price. For
additional portfolio highlights, please refer to page 8.
Q HOW DID THE TRUST PERFORM DURING THE PERIOD?
A During the past six months, the Trust generated a total return of 0.45
percent(1) based on market price. This reflects a decrease in market price
from $16.8125 per share on October 31, 1998, to $16.00 on April 30, 1999.
In addition, the Trust provided a distribution rate of 6.00 percent(3) based on
its closing common stock price on April 30, 1999. Because the Trust is exempt
from federal income taxes, this distribution rate is equivalent to a yield of
9.38 percent(4) on a taxable investment for shareholders in the 36 percent
federal income tax bracket. The Trust's monthly dividend of $.08 per share was
unchanged during the reporting period. Past performance does not guarantee
future results. Please refer to the footnotes and chart on page 3 for additional
Trust performance results.
6
<PAGE> 8
Q WHAT DO YOU SEE AHEAD FOR THE MUNICIPAL MARKET?
A Strong economic performance should continue to bolster the credit
conditions of municipal issuers. In addition, we expect that this economic
strength will continue to make municipalities more likely to issue debt
for special projects rather than for general operating financing.
Although insured debt has been increasing in recent years, we have started
to see a reversal of this trend in the last few months, as municipal bond
insurers have become more cautious. If this caution continues, credit spreads
may widen as the proportion of higher-yielding uninsured bonds increases.
Finally, we see the potential for changes in traditional economic activity
toward the end of the year because of investor concerns about the year 2000
computer problem. These temporary concerns, however, may result in attractive
investment opportunities that our research staff can explore to uncover
potential value.
[SIG]
David C. Johnson
Portfolio Manager
[SIG]
Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN MUNICIPAL TRUST
TOP FIVE PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF APRIL 30, 1999
<S> <C>
General Purpose............. 18.2%
Health Care................. 12.9%
Industrial Revenue.......... 10.2%
Public Education............ 6.3%
Single-Family Housing....... 6.2%
</TABLE>
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1998
<C> <C>
Health Care................. 18.0%
General Purpose............. 13.6%
Industrial Revenue.......... 12.3%
Wholesale Electric.......... 8.0%
Retail/Gas/Telephone........ 7.9%
</TABLE>
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM
INVESTMENTS
<TABLE>
<CAPTION>
AAA/Aaa AA/Aa A/A BBB/Baa BB/Ba Non-Rated
-------- ----- ----- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
AS OF APRIL 30, 1999 50.4% 7.8% 13.5% 16.6% 0.6% 11.1%
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
AAA/Aaa AA/Aa A/A BBB/Baa BB/Ba Non-Rated
-------- ----- ----- ------- ----- ---------
<S> <C> <C> <C> <C> <C> <C>
AS OF OCTOBER 30, 1998 46.5% 9.2% 13.7% 19.0% 0.6% 11.0%
</TABLE>
[PIE CHART]
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
DISTRIBUTION HISTORY
FOR THE PERIOD ENDED APRIL 30, 1999
[BAR GRAPH]
<TABLE>
<CAPTION>
Distribution per Common Share Dividends Capital Gains
--------- -------------
<S> <C> <C>
Nov 1998 $.0800 $.0000
Dec 1998 $.0800 $.4253
Jan 1999 $.0800 $.0000
Feb 1999 $.0800 $.0000
Mar 1999 $.0800 $.0000
Apr 1999 $.0800 $.0000
</TABLE>
The distribution history represents past performance of the Trust and does not
predict the Trust's future distributions.
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS 100.4%
ALABAMA 0.2%
$ 1,500 Jefferson Cnty, AL Swr Rev Cap
Impt Wts Ser A (FGIC Insd)...... 5.125% 02/01/39 $ 1,465,050
------------
CALIFORNIA 7.5%
9,000 Alameda Corridor Tran Auth CA
Rev Cap Apprec Ser 1999A (MBIA
Insd)........................... * 10/01/34 1,405,350
25,865 Anaheim, CA Pub Fin Auth Lease
Rev Cap Apprec Sub Pub Impts
Proj Ser C (FSA Insd)........... * 09/01/23 7,309,190
12,800 Anaheim, CA Pub Fin Auth Lease
Rev Cap Apprec Sub Pub Impts
Proj Ser C (FSA Insd)........... * 09/01/29 2,605,312
11,280 Anaheim, CA Pub Fin Auth Lease
Rev Cap Apprec Sub Pub Impts
Proj Ser C (FSA Insd)........... * 09/01/30 2,174,558
5,500 Anaheim, CA Pub Fin Auth Lease
Rev Cap Apprec Sub Pub Impts
Proj Ser C (FSA Insd)........... * 09/01/31 1,005,400
16,080 Anaheim, CA Pub Fin Auth Lease
Rev Cap Apprec Sub Pub Impts
Proj Ser C (FSA Insd)........... * 03/01/37 2,169,353
3,000 California Hlth Fac Fin Rev Ser
A (CA Mtg Insd)................. 5.250 08/01/17 3,035,940
5,000 California St................... 4.500 12/01/17 4,708,150
5,000 Contra Costa, CA Home Mtg Fin
Auth Home Mtg Rev (MBIA Insd)... * 09/01/17 2,010,800
1,500 Davis, CA Pub Fac Fin Auth Loc
Agy Rev......................... 6.600 09/01/25 1,584,750
2,000 Del Mar, CA Race Track Auth Rev
Rfdg............................ 6.000 08/15/06 2,120,160
7,210 Delano, CA Ctfs Partn Ser A
(Prerefunded @ 01/01/03)........ 9.250 01/01/22 8,760,511
2,240 Huntington Park, CA Redev Agy
Rev Tax Alloc Santa Fe Redev.... 6.200 10/01/27 2,306,551
3,000 Los Angeles, CA Uni Sch Dist
Ctfs Partn Multiple Pptys Proj
Ser A (FSA Insd)................ 5.500 10/01/16 3,149,400
</TABLE>
See Notes to Financial Statements
10
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 3,860 Midpeninsula Reg Open Space Dist
CA Fin Auth Rev Cap Apprec
(AMBAC Insd).................... * 09/01/27 $ 860,548
2,000 Midpeninsula Reg Open Space Dist
CA Fin Auth Rev Cap Apprec
(AMBAC Insd).................... * 09/01/30 379,180
10,000 Orange Cnty, CA Recovery Ctfs
Ser A Rfdg (MBIA Insd) (b)...... 6.000% 06/01/09 11,365,800
5,695 Sacramento, CA City Fin Auth Rev
Comb Proj B (MBIA Insd)......... * 11/01/14 2,682,744
1,375 San Bernardino, CA Jt Pwrs Fin
Auth Alloc Rev Central City
Merged Proj A Rfdg (AMBAC
Insd)........................... 5.750 07/01/20 1,524,916
4,000 San Francisco, CA City & Cnty
Arpts Comm Intl Arpt Rev Second
Ser Issue 13B (MBIA Insd)....... 5.625 05/01/21 4,172,600
7,000 San Joaquin Hills, CA Tran
Corridor Agy Toll Rd Rev Cap
Apprec Ser A Rfdg (MBIA Insd)... * 01/15/30 1,404,760
1,000 Stockton, CA Cmnty Fac Dist Spl
Tax No. 1-A..................... 5.800 09/01/14 1,021,230
------------
67,757,203
------------
COLORADO 9.6%
19,500 Arapahoe Cnty, CO Cap Impt Trust
Fund Hwy Rev E-470 Proj Ser C
(Prerefunded @ 08/31/05)........ * 08/31/26 3,130,530
5,000 Boulder Cnty, CO Rev Natl Cent
Atmosphere Impt & Rfdg.......... 6.900 12/01/07 5,411,900
8,500 Boulder Cnty, CO Rev Natl Cent
Atmosphere Impt & Rfdg.......... 7.000 12/01/13 9,204,140
1,345 Colorado Hsg Fin Auth Single
Family Pgm Sr Gtd Mtg Ln D3 (FHA
Gtd)............................ 7.200 08/01/23 1,450,462
9,135 Denver, CO City & Cnty Arpt Rev
Ser A (b)....................... 8.250 11/15/12 9,805,052
11,695 Denver, CO City & Cnty Arpt Rev
Ser A (b)....................... 8.500 11/15/23 12,599,491
</TABLE>
See Notes to Financial Statements
11
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COLORADO (CONTINUED)
$ 7,795 Denver, CO City & Cnty Arpt Rev
Ser A (b)....................... 8.000% 11/15/25 $ 8,340,494
865 Denver, CO City & Cnty Arpt Rev
Ser A (Prerefunded @
11/15/00)....................... 8.250 11/15/12 942,660
8,790 Denver, CO City & Cnty Arpt Rev
Ser D (b)....................... 7.000 11/15/25 9,297,886
2,310 Denver, CO City & Cnty Arpt Rev
Ser D (Prerefunded @
11/15/01)....................... 7.000 11/15/25 2,497,041
22,000 Meridian Metro Dist CO
Peninsular & Oriental Steam
Navig Co Rfdg (LOC: Meridian
Assoc East) (b)................. 7.500 12/01/11 23,867,800
------------
86,547,456
------------
CONNECTICUT 3.4%
7,140 Connecticut St Hlth & Edl Fac
Auth Rev Nursing Home Proj
AHF/Hartford (Prerefunded @
11/01/04)....................... 7.125 11/01/24 8,360,726
3,540 Mashantucket Western Pequot
Tribe CT Spl Rev Ser A,
144A--Private Placement (c)..... 6.400 09/01/11 3,892,513
3,460 Mashantucket Western Pequot
Tribe CT Spl Rev Ser A,
144A--Private Placement
(Prerefunded @ 09/01/07) (c).... 6.400 09/01/11 4,026,886
3,500 Mashantucket Western Pequot
Tribe CT Spl Rev Ser B,
144A-Private
Placement (c)................... 5.750 09/01/18 3,608,360
7,000 Mashantucket Western Pequot
Tribe CT Spl Rev Ser B,
144A--Private Placement (c)..... 5.750 09/01/27 7,194,320
4,000 Stamford, CT Hsg Auth
Multi-Family Rev Fairfield Apts
Proj Rfdg....................... 4.750 12/01/28 3,978,560
------------
31,061,365
------------
DELAWARE 0.5%
2,000 Delaware St Econ Dev Auth Rev
Exempt Fac Delmarva Pwr & Lt
Co.............................. 7.500 10/01/17 2,044,920
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DELAWARE (CONTINUED)
$ 2,460 Delaware St Hsg Auth Rev Sr Home
Mtg Ser B Subser B2............. 7.200% 12/01/21 $ 2,594,193
------------
4,639,113
------------
DISTRICT OF COLUMBIA 0.4%
1,000 District of Columbia Hosp Rev
Medlantic Hlthcare Group A Rfdg
(MBIA Insd)..................... 5.875 08/15/19 1,101,390
2,000 District of Columbia Rev
Carnegie Endowment.............. 5.750 11/15/26 2,081,280
------------
3,182,670
------------
FLORIDA 3.3%
2,600 Brevard Cnty, FL Sch Brd Ctfs
Partn Ser A (AMBAC Insd)........ 5.400 07/01/10 2,781,090
1,000 Hillsborough Cnty, FL Indl Dev
Auth Indl Dev Rev Univ Cmnty
Hosp (MBIA Insd)................ 5.750 08/15/14 1,076,220
3,000 Martin Cnty, FL Indl Dev Auth
Indl Dev Rev Indiantown
Cogeneration Proj Ser A Rfdg.... 7.875 12/15/25 3,206,940
13,455 Miami-Dade Cnty, FL Spl Oblig
Sub Ser A Rfdg (MBIA Insd)...... * 10/01/22 3,882,171
24,385 Miami-Dade Cnty, FL Spl Oblig
Sub Ser A Rfdg (MBIA Insd)...... * 10/01/23 6,641,011
10,000 Miami-Dade Cnty, FL Spl Oblig
Sub Ser A Rfdg (MBIA Insd)...... * 10/01/24 2,570,100
7,615 Sarasota Cnty, FL Hlth Fac Auth
Rev Hlthcare Kobernick/Meadow Pk
(Prerefunded @ 07/01/02)........ 10.000 07/01/22 9,112,490
------------
29,270,022
------------
GEORGIA 5.3%
45,000 Georgia Loc Govt Ctfs Partn
Grantor Trust Ser A (MBIA Insd)
(b)............................. 4.750 06/01/28 42,839,550
4,000 Muni Elec Auth GA Proj 1 Sub Ser
A (Prerefunded @ 01/01/04)
(AMBAC Insd).................... 6.250 01/01/14 4,459,720
------------
47,299,270
------------
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HAWAII 1.4%
$ 2,420 Honolulu, HI City & Cnty Ser D
(FGIC Insd) (a)................. 4.650% 02/01/07 $ 2,422,662
2,565 Honolulu, HI City & Cnty Ser D
(FGIC Insd) (a)................. 4.700 02/01/08 2,565,744
2,000 Honolulu, HI City & Cnty Ser D
(FGIC Insd) (a)................. 4.750 02/01/09 1,996,820
6,500 Honolulu, HI City & Cnty
Wastewtr Sys Rev (FGIC Insd).... 4.500 07/01/28 5,851,755
------------
12,836,981
------------
ILLINOIS 8.8%
4,650 Bedford Park, IL Tax Increment
Rev Sr Lien Bedford City Sq
Proj............................ 9.250 02/01/12 5,227,158
3,650 Carol Stream, IL First Mtg Rev
Windsor Pk Mnr Proj............. 7.000 12/01/13 3,909,077
40,000 Chicago, IL Brd Ed Sch Reform
Cap Apprec Ser B-1 (FGIC
Insd)........................... * 12/01/30 7,428,000
5,000 Chicago, IL Midway Arpt Rev Ser
B (MBIA Insd)................... 5.000 01/01/35 4,756,600
2,500 Chicago, IL O'Hare Intl Arpt Spl
Fac Rev American Airls Inc Proj
Rfdg............................ 8.200 12/01/24 2,938,250
7,475 Chicago, IL O'Hare Intl Arpt Spl
Fac Rev United Airls Inc........ 8.400 05/01/04 7,903,317
4,315 Chicago, IL O'Hare Intl Arpt Spl
Fac Rev United Airls Inc Ser
B............................... 8.950 05/01/18 4,724,407
2,750 Chicago, IL Park Dist Ser B
(FGIC Insd)..................... 4.750 01/01/26 2,555,520
1,000 Hodgkins, IL Tax Increment...... 9.500 12/01/09 1,142,100
3,200 Hodgkins, IL Tax Increment
(Prerefunded @ 12/01/01)........ 9.500 12/01/09 3,706,528
4,000 Hodgkins, IL Tax Increment Ser A
Rfdg............................ 7.625 12/01/13 4,418,920
2,500 Illinois Dev Fin Auth Rev
Catholic Charities Hsg Dev...... 6.350 01/01/25 2,579,000
2,705 Illinois Dev Fin Auth Rev Loc
Govt Pgm Aurora East Sch (MBIA
Insd)........................... * 12/01/15 1,175,187
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 2,000 Illinois Dev Fin Auth Solid
Waste Disp Rev Waste Mgmt Inc
Proj............................ 5.050% 01/01/10 $ 2,000,020
1,740 Illinois Edl Fac Auth Rev
Riverside Hlth Sys Ser A Rfdg... 5.900 10/01/14 1,781,308
2,500 Illinois Hlth Fac Auth Rev
Evangelical Hosp Ser C Rfdg (FSA
Insd)........................... 6.750 04/15/12 2,761,375
7,750 Illinois Hlth Fac Auth Rev
Fairview Oblig Group Proj Ser A
(Prerefunded @ 10/01/02)........ 9.500 10/01/22 9,263,575
4,455 Illinois Hlth Fac Auth Rev
Hinsdale Hosp Ser B Rfdg........ 9.000 11/15/15 4,925,760
1,500 Illinois Hlth Fac Auth Rev Sarah
Bush Lincoln Hlth Cent
(Prerefunded
@ 5/15/02)...................... 7.250 05/15/12 1,678,425
290 Illinois Hsg Dev Auth Rev
Homeowner Mtg Subser A2......... 7.125 08/01/26 307,794
1,510 Roselle, IL Multi-Family Hsg Rev
Waterbury Apts Ser A Rfdg (GNMA
Collateralized)................. 7.000 01/01/25 1,650,068
2,230 St Clair Cnty, IL Cap Impt Rev
McKendree Clg Proj Rfdg......... 6.000 02/01/24 2,208,481
------------
79,040,870
------------
INDIANA 0.6%
2,500 Indiana Bond Bank Spl Pgm Ser
F............................... 7.150 08/01/15 2,670,300
2,739 Indiana St Dev Fin Auth Indl Dev
Rev
Unr-Rohn Inc Proj............... 7.500 03/01/11 2,952,213
------------
5,622,513
------------
KENTUCKY 0.7%
2,000 Ashland, KY Solid Waste Rev
Ashland Oil Inc Proj............ 7.200 10/01/20 2,147,300
4,000 Elsmere, KY Indl Dev Rev Rfdg... 6.750 04/01/10 4,268,400
------------
6,415,700
------------
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LOUISIANA 1.6%
$ 735 East Baton Rouge, LA Mtg Fin
Auth Single Family Mtg Pur Ser A
Rfdg (GNMA Collateralized)
(b)............................. 7.100% 10/01/24 $ 774,543
4,225 East Baton Rouge, LA Mtg Fin
Auth Single Family Mtg Pur Ser C
Rfdg (GNMA Collateralized)
(b)............................. 7.000 04/01/32 4,439,926
9,588 Louisiana St Univ & Agricultural
& Mechanical College Univ Rev... 5.750 10/30/18 9,488,207
------------
14,702,676
------------
MAINE 0.1%
1,000 Maine Vets Homes ME Rev......... 7.750 10/01/20 1,118,210
------------
MARYLAND 2.4%
2,300 Baltimore, MD Cap Apprec Cons
Pub Impt & Rfdg (FGIC Insd)..... * 10/15/06 1,657,886
1,845 Baltimore, MD Cap Apprec Ser A
(FGIC Insd)..................... * 10/15/07 1,237,220
2,075 Baltimore, MD Cap Apprec Ser A
(Prerefunded @ 10/15/05) (FGIC
Insd)........................... * 10/15/07 1,413,615
132,445 Maryland St Cmnty Dev Admin Dept
Hsg & Cmnty Dev Single Family
Rev Pgm 6....................... * 04/01/30 14,006,059
3,460 Maryland St Hlth & Higher Edl
Facs Auth Rev Medlantic/Helix
Issue Ser B (AMBAC Insd)........ 5.250 08/15/38 3,567,779
------------
21,882,559
------------
MASSACHUSETTS 1.3%
1,000 Massachusetts St Dev Fin Agy Rev
Boston Architectural Cent....... 6.100 09/01/18 987,060
1,000 Massachusetts St Dev Fin Agy Rev
Boston Architectural Cent....... 6.250 09/01/28 984,700
2,600 Massachusetts St Hlth & Edl Fac
Auth Rev Med Cent of Central MA
Ser A (Prerefunded @
07/01/01)....................... 7.100 07/01/21 2,833,766
5,000 Massachusetts St Hlth & Edl Fac
Auth Rev New England Med Cent
Hosp Ser G (Embedded Swap) (MBIA
Insd) (d)....................... 3.100/5.000 07/01/13 4,993,100
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MASSACHUSETTS (CONTINUED)
$ 1,375 Massachusetts St Hlth & Edl Fac
Auth Rev Winchester Hosp Ser D
Rfdg (Connie Lee Insd).......... 5.750% 07/01/14 $ 1,478,221
------------
11,276,847
------------
MICHIGAN 2.5%
4,000 Detroit, MI Loc Dev Fin Auth Tax
Increment Sr Ser B.............. 6.700 05/01/21 4,126,080
1,000 Detroit, MI Loc Dev Fin Auth Ser
C............................... 6.850 05/01/21 1,034,280
1,180 Hillsdale, MI Hosp Fin Auth Hosp
Rev Hillsdale Cmnty Hlth Cent... 5.750 05/15/18 1,188,272
2,000 Michigan Muni Bond Auth Rev Loc
Govt Ln Ser C-A (FSA Insd)...... * 06/15/13 1,003,860
5,000 Michigan St Hosp Fin Auth Rev
Detroit Med Cent Oblig Ser A.... 5.250 08/15/28 4,536,100
1,000 Michigan St Hosp Fin Auth Rev
Hosp Genesys Regl Med Ser A
Rfdg............................ 5.375 10/01/13 1,013,010
1,000 Michigan St Hosp Fin Auth Rev
Hosp Genesys Regl Med Ser A Rfdg
(ACA Insd)...................... 5.500 10/01/18 1,005,860
2,000 Michigan St Hosp Fin Auth Rev
Hosp Genesys Regl Med Ser A Rfdg
(ACA Insd)...................... 5.500 10/01/27 2,005,400
1,720 Michigan St Hosp Fin Auth Rev
Saratoga Cmnty Hosp Rfdg
(Prerefunded @ 06/01/02)........ 8.750 06/01/10 1,962,090
5,000 Michigan St Strategic Fd Ltd
Oblig Rev Detroit Edison Co Ser
A Rfdg (MBIA Insd) (a).......... 5.550 09/01/29 5,074,100
------------
22,949,052
------------
MISSISSIPPI 0.5%
1,985 Mississippi Home Corp Single
Family Rev Mtg Ser F (GNMA
Collateralized)................. 7.550 12/01/27 2,258,870
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MISSISSIPPI (CONTINUED)
$ 2,000 Perry Cnty, MS Pollutn Ctl Rev
Leaf River Forest Proj Rfdg..... 5.200% 10/01/12 $ 1,998,000
------------
4,256,870
------------
MISSOURI 1.5%
1,400 Ellisville, MO Indl Dev Auth Rev
Rfdg & Impt Gambrill Gardens
Proj (a)........................ 6.100 06/01/20 1,403,038
1,000 Ellisville, MO Indl Dev Auth Rev
Rfdg & Impt Gambrill Gardens
Proj (a)........................ 6.200 06/01/29 1,000,670
1,740 Good Shepherd Nursing Home Dist
MO Nursing Home Fac Rev
(Prerefunded @ 08/15/05)........ 7.625 07/01/15 2,106,618
3,750 Hannibal, MO Indl Dev Auth Hlth
Fac Rev Hannibal Regl Hlthcare
Sys Inc (Prerefunded @
09/01/01)....................... 9.500 03/01/22 4,381,875
2,810 Perry Cnty, MO Nursing Home Rev
Rfdg............................ 5.900 03/01/28 2,719,097
2,000 Sikeston, MO Elec Rev Rfdg (MBIA
Insd)........................... 5.000 06/01/11 2,051,400
------------
13,662,698
------------
MONTANA 0.5%
3,900 Montana St Coal Severance Tax
Broadwater Pwr Proj Ser A
Rfdg............................ 6.875 12/01/17 4,161,144
------------
NEBRASKA 0.5%
1,250 American Pub Energy Agy NE Gas
Sup Rev NE Pub Gas Agy Proj Ser
A (AMBAC Insd).................. 4.375 06/01/10 1,224,150
2,000 American Pub Energy Agy NE Gas
Sup Rev NE Pub Gas Agy Proj Ser
A (AMBAC Insd).................. 5.250 06/01/11 2,107,080
995 Nebraska Invt Fin Auth Single
Family Hsg Rev Ser D (GNMA
Collateralized)................. 5.850 09/01/28 1,034,024
------------
4,365,254
------------
NEVADA 0.4%
795 Henderson, NV Loc Impt Dist No
T-4 Ser A....................... 8.500 11/01/12 838,630
1,345 Reno, NV Redev Agy Tax Alloc
Downtown Redev Sr Lien Ser F
Rfdg (MBIA Insd)................ 5.000 09/01/13 1,350,393
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEVADA (CONTINUED)
$ 1,000 Reno, NV Redev Agy Tax Alloc
Downtown Redev Sr Lien Ser F
Rfdg (MBIA Insd)................ 5.000% 09/01/14 $ 1,001,040
------------
3,190,063
------------
NEW HAMPSHIRE 0.6%
3,955 New Hampshire High Edl & Hlth
Fac Auth Rev Cheshire Med Ctr... 4.875 07/01/28 3,627,091
2,000 New Hampshire High Edl & Hlth
Fac Auth Rev Riverwoods at
Exeter Ser A.................... 6.500 03/01/23 2,135,300
------------
5,762,391
------------
NEW JERSEY 5.6%
4,000 Camden Cnty, NJ Impt Auth Lease
Rev-A........................... 8.000 06/01/27 4,451,200
1,000 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/00 972,960
1,000 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/02 900,440
1,000 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/03 864,500
1,000 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/04 827,850
1,460 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/05 1,153,736
1,465 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/06 1,104,493
1,615 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/07 1,161,136
1,555 Eastern Camden Cnty, NJ Regl Sch
Dist Rfdg (FGIC Insd)........... * 03/01/08 1,064,522
25,000 New Jersey Econ Dev Auth St
Contract Econ Recovery (Embedded
Cap) (MBIA Insd) (b)............ 5.900 03/15/21 28,168,000
5,000 New Jersey Econ Dev Auth Wtr Fac
Rev (FGIC Insd) (b)............. 6.500 04/01/22 5,413,450
</TABLE>
See Notes to Financial Statements
18
<PAGE> 20
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW JERSEY (CONTINUED)
$ 3,500 New Jersey St Turnpike Auth
Turnpike Rev Ser C (FSA Insd)... 6.500% 01/01/16 $ 4,173,050
------------
50,255,337
------------
NEW MEXICO 0.1%
429 Santa Fe, NM Single Family Mtg
Rev Rfdg........................ 8.450 12/01/11 456,996
------------
NEW YORK 9.1%
5,550 Metro Tran Auth NY Svcs Contract
Commuter Fac Ser N Rfdg (b)..... 6.000 07/01/11 5,796,309
1,900 Metro Tran Auth NY Svcs Contract
Tran Fac Ser N Rfdg............. 6.000 07/01/11 1,984,322
2,000 New York City Hlth & Hosp Corp
Rev Ser A Rfdg (AMBAC Insd)..... 5.750 02/15/22 2,093,380
7,000 New York City Ser A (b)......... 6.250 08/01/08 7,854,140
25 New York City Ser A............. 7.750 08/15/12 27,468
5,420 New York City Ser B (b)......... 7.500 02/01/05 5,985,685
665 New York City Ser C............. 7.100 08/15/10 711,617
420 New York City Ser F............. 8.250 11/15/02 469,720
5,535 New York City Ser J............. 5.200 08/01/16 5,596,162
5,000 New York City Subser A1
(Embedded Swap)................. 5.435 08/01/12 5,340,450
1,250 New York St Dorm Auth Rev
FHA-Sarah Neuman Nursing Home
(AMBAC Insd).................... 5.500 08/01/37 1,296,000
5,000 New York St Dorm Auth Rev City
Univ Ser F (b).................. 5.500 07/01/12 5,186,000
6,800 New York St Dorm Auth Rev Cons
City Univ Sys Ser A (b)......... 5.625 07/01/16 7,305,784
4,250 New York St Energy Resh & Dev
Auth Fac Rev Cons Edison Co Proj
Ser B Rfdg (MBIA Insd).......... 5.250 08/15/20 4,301,723
4,425 New York St Environmental Fac
Corp Pollutn Ctl Rev Ser E
(Prerefunded @ 6/15/04)......... 6.700 06/15/10 5,053,040
2,950 New York St Environmental Fac
Corp Pollutn Ctl Rev St Wtr
Revolving Fd Ser E.............. 6.700 06/15/10 3,326,833
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 2,920 New York St Med Care Fac Fin Agy
Rev Mental Hlth Svcs Fac Ser
D............................... 7.400% 02/15/18 $ 3,214,248
6,150 New York St Urban Dev Corp Rev
Correctional Cap Fac Ser A Rfdg
(FSA Insd) (b).................. 5.250 01/01/14 6,515,248
3,000 Onondaga Cnty, NY Indl Dev Agy
Swr Fac Rev Bristol--Meyers
Squibb Co Proj.................. 5.750 03/01/24 3,265,950
6,335 Plainedge, NY Union Free Sch
Dist #2063...................... 6.000 06/01/12 6,684,316
------------
82,008,395
------------
NORTH CAROLINA 2.3%
2,500 North Carolina Eastern Muni Pwr
Agy Pwr Sys Rev Ser C (ACA
Insd)........................... 5.000 01/01/21 2,368,400
3,750 North Carolina Med Care Comm
Hlthcare Fac Rev Novant Hlth
Proj Ser A (MBIA Insd).......... 5.000 10/01/18 3,697,162
13,300 North Carolina Muni Pwr Agy #1
Catawba Elec Rev (MBIA Insd)
(b)............................. 6.000 01/01/12 15,023,946
------------
21,089,508
------------
OHIO 3.9%
3,245 Cleveland Cuyahoga Cnty, OH Dev
Port Auth Rev Cleveland Bond Fd
Ser B........................... 5.375 05/15/18 3,223,907
5,375 Franklin Cnty, OH Hosp Rev Holy
Cross Hlth Sys Ser B Rfdg (MBIA
Insd) (b)....................... 5.250 06/01/10 5,598,869
1,905 Jefferson Cnty, OH Impt & Rfdg
(FSA Insd)...................... 5.700 12/01/13 2,120,417
3,000 Jefferson Cnty, OH Impt & Rfdg
(FSA Insd)...................... 5.000 12/01/17 3,009,030
1,070 Montgomery Cnty, OH Hosp Rev
Grandview Hosp & Med Cent
Rfdg............................ 5.250 12/01/02 1,059,632
2,400 Montgomery Cnty, OH Hosp Rev
Grandview Hosp & Med Cent
Rfdg............................ 5.375 12/01/05 2,353,680
2,270 Montgomery Cnty, OH Hosp Rev
Kettering Med Cent Impt & Rfdg
(MBIA Insd)..................... 6.250 04/01/20 2,643,528
</TABLE>
See Notes to Financial Statements
20
<PAGE> 22
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO (CONTINUED)
$ 1,000 Ohio St Air Qual Dev Auth Rev
JMG Funding Ltd Partn Proj Rfdg
(AMBAC Insd).................... 6.375% 04/01/29 $ 1,109,810
3,000 Parma, OH Hosp Impr Rev Parma
Cmnty Gen Hosp Assoc Rfdg....... 5.375 11/01/29 2,991,060
5,000 Reynoldsburg, OH Hlth Care Fac
Rev Wesley Ridge Proj (GNMA
Collateralized)................. 6.150 10/20/38 5,425,950
1,100 Toledo, OH Sewage Sys Rev Rfdg &
Impt Mtg (MBIA Insd)............ 4.100 11/15/07 1,088,659
2,140 Toledo, OH Wtrwks Rev Rfdg &
Impt Mtg (FGIC Insd)............ 4.000 11/15/06 2,120,034
1,640 Toledo, OH Wtrwks Rev Rfdg &
Impt Mtg (FGIC Insd)............ 4.100 11/15/07 1,623,092
1,000 Toledo, OH Wtrwks Rev Rfdg &
Impt Mtg (FGIC Insd)............ 5.250 11/15/13 1,054,080
------------
35,421,748
------------
OKLAHOMA 1.5%
2,475 Cleveland Cnty, OK Home Ln Auth
Single Family Mtg Rev Rfdg...... 8.000 08/01/12 2,616,545
1,240 Kay Cnty, OK Home Fin Auth Rev
Single Family Mtg Ser A Rfdg
(AMBAC Insd).................... 7.000 11/01/11 1,515,925
6,915 Oklahoma Hsg Fin Agy Single
Family Rev Mtg Class B (GNMA
Collateralized)................. 7.997 08/01/18 7,646,123
1,500 Tulsa, OK Muni Arpt Tran Rev
American Airls Inc.............. 7.600 12/01/30 1,617,300
------------
13,395,893
------------
PENNSYLVANIA 2.9%
2,500 Allegheny Cnty, PA Hosp Dev Auth
Rev Hosp OH Vly Genl Hosp
Rfdg............................ 5.875 04/01/11 2,543,950
2,000 Berks Cnty, PA Muni Auth Rev
Phoebe Devitt Homes Proj A1
Rfdg............................ 5.700 05/15/18 1,947,860
1,000 Berks Cnty, PA Muni Auth Rev
Phoebe Devitt Homes Proj A1
Rfdg............................ 5.750 05/15/22 973,840
1,150 Butler Cnty, PA Hosp Auth Hosp
Rev Butler Mem Hosp Ser A (FSA
Insd)........................... 5.250 07/01/12 1,184,385
</TABLE>
See Notes to Financial Statements
21
<PAGE> 23
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$ 2,165 Clarion Cnty, PA Hosp Auth Hosp
Rev Clarion Hosp Proj
(Prerefunded @ 07/01/01)........ 8.500% 07/01/21 $ 2,415,663
2,475 Harrisburg, PA Cap Apprec Notes
Ser F Rfdg (AMBAC Insd)......... * 03/15/14 1,182,085
2,000 Montgomery Cnty, PA Indl Dev
Auth Retirement Cmnty Rev Adult
Cmntys Total Svcs Ser B......... 5.625 11/15/12 2,067,040
2,700 Pennsylvania Econ Dev Fin Auth
Res Recovery Rev Colver Proj Ser
D............................... 7.125 12/01/15 3,018,870
5,000 Pennsylvania Intergovernmental
Cooperative Auth Spl Tax Rev
Philadelphia Funding Pgm (FGIC
Insd)........................... 5.250 06/15/13 5,204,950
6,000 Philadelphia, PA Sch Dist Ser A
(MBIA Insd)..................... 4.500 04/01/23 5,470,740
------------
26,009,383
------------
RHODE ISLAND 1.1%
2,420 Providence, RI Redev Agy Ctfs
Partn
Ser A........................... 8.000 09/01/24 2,631,435
4,750 Rhode Island Hsg & Mtg Fin Corp
Ser 8 (Inverse Fltg)............ 10.671 04/01/24 5,296,250
2,000 Rhode Island St Hlth & Edl Bldg
Corp Rev Higher Edl Fac Roger
Williams (Prerefunded @
11/15/04) (Connie Lee Insd)..... 7.250 11/15/24 2,361,620
------------
10,289,305
------------
TENNESSEE 1.7%
5,000 Municipal Energy Acquisition
Corp TN Gas Rev (FSA Insd)...... 4.000 03/01/05 4,970,200
6,000 Municipal Energy Acquisition
Corp TN Gas Rev (FSA Insd)...... 4.125 03/01/07 5,920,680
4,148 Shelby Cnty, TN Hlth Edl & Hsg
Fac Brd Rev Multi-Family Mtg
Rock Creek Plaza Rfdg (GNMA
Collateralized)................. 7.375 01/20/27 4,473,742
------------
15,364,622
------------
</TABLE>
See Notes to Financial Statements
22
<PAGE> 24
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEXAS 8.8%
$ 6,500 Alliance Arpt Auth Inc TX Spl
Fac Rev American Airls Inc Proj
(b)............................. 7.500% 12/01/29 $ 6,935,240
6,000 Brazos River Auth TX Pollutn Ctl
Rev Coll TX Util Elec Co Proj A
(AMBAC Insd) (b)................ 6.750 04/01/22 6,528,360
420 Brazos, TX Higher Edl Auth Inc
Student Ln Rev Subser C2 Rfdg... 7.100 11/01/04 468,896
2,500 Coastal Bend Hlth Fac Dev TX Ser
C (Inverse Fltg) (AMBAC Insd)... 8.238 11/15/13 2,881,250
15,000 Dallas-Fort Worth, TX Intl Arpt
Fac Impt Corp Rev American Airls
Inc (b)......................... 7.500 11/01/25 15,969,300
3,600 Dallas-Fort Worth, TX Intl Arpt
Fac Impt Corp Rev Delta Airls
Inc............................. 7.625 11/01/21 3,913,128
3,885 Houston, TX Indpt Sch Dist Pub
Cap Apprec Cesar E Chavez Ser A
(AMBAC Insd).................... * 09/15/18 1,420,745
3,885 Houston, TX Indpt Sch Dist Pub
Cap Apprec Cesar E Chavez Ser A
(AMBAC Insd).................... * 09/15/20 1,272,609
3,885 Houston, TX Indpt Sch Distt Pub
Cap Apprec Cesar E Chavez Ser A
(AMBAC Insd).................... * 09/15/21 1,200,776
48,500 Houston, TX Wtr & Swr Sys Rev
Cap Apprec Jr Lien Ser A Rfdg
(FSA Insd)...................... * 12/01/21 14,983,105
3,000 Houston, TX Wtr & Swr Sys Rev
Cap Apprec Ser A Rfdg (FSA Insd)
(a)............................. 4.750 12/01/24 2,816,100
14,100 North East Indpt Sch Dist TX.... 4.500 10/01/28 12,728,352
4,850 Region One Ed Svc Cent Sub-Tech
Fac Proj........................ 6.590 12/15/17 5,136,011
2,200 Rockwall, TX Indpt Sch Dist Cap
Apprec Rfdg (PSF Gtd)........... * 08/15/17 835,780
1,698 Texas Genl Svcs Comm Partn Int
Lease Purch Ctfs................ 7.250 08/01/11 1,736,060
------------
78,825,712
------------
</TABLE>
See Notes to Financial Statements
23
<PAGE> 25
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTAH 0.6%
$ 3,845 Bountiful, UT Hosp Rev South
Davis Cmnty Hosp Proj
(Prerefunded @ 06/15/04)........ 9.500% 12/15/18 $ 4,908,989
880 Utah St Hsg Fin Agy Single
Family Mtg Insd Ser E2 (FHA
Gtd)............................ 7.150 07/01/24 923,331
------------
5,832,320
------------
VIRGINIA 1.3%
3,000 Charles City Cnty, VA Indl Dev
Auth Solid Waste Disp Fac Rev
Waste Mgmt VA Inc Proj Rfdg..... 4.875 02/01/09 2,977,950
1,500 Henrico Cnty, VA Indl Dev Auth
Pub Fac Lease Rev Henrico Cnty
Regl Jail Proj.................. 6.500 08/01/10 1,702,125
1,500 Henrico Cnty, VA Indl Dev Auth
Pub Fac Lease Rev Henrico Cnty
Regl Jail Proj.................. 7.125 08/01/21 1,745,385
5,000 Roanoke, VA Indl Dev Auth Hosp
Rev Roanoke Mem Hosp Ser B Rfdg
(MBIA Insd) (d)................. 4.700/6.250 07/01/20 5,330,100
------------
11,755,560
------------
WASHINGTON 2.0%
5,000 Bellevue, WA Convention Cent
Auth Spl Oblig Rev Rfdg (MBIA
Insd)........................... * 02/01/24 1,366,100
1,750 Washington St Pub Pwr Supply Sys
Nuclear Proj No 1 Rev (MBIA
Insd)........................... 5.750 07/01/12 1,886,150
10,495 Washington St Pub Pwr Supply Sys
Nuclear Proj No 1 Rev Ser B Rfdg
(MBIA Insd) (b)................. 5.600 07/01/15 10,910,182
9,000 Washington St Pub Pwr Supply Sys
Nuclear Proj No 3 Rev (MBIA
Insd)........................... * 07/01/16 3,771,720
------------
17,934,152
------------
WEST VIRGINIA 0.8%
6,550 Harrison Cnty, WV Cnty Cmnty
Solid Waste Disp Rev Potomac
Edison Co Ser A (b)............. 6.875 04/15/22 7,057,167
------------
WISCONSIN 2.1%
1,115 Hartford, WI Wtr & Elec Sys Rev
(AMBAC Insd).................... 5.000 07/01/16 1,106,671
</TABLE>
See Notes to Financial Statements
24
<PAGE> 26
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WISCONSIN (CONTINUED)
$ 1,000 Madison, WI Indl Dev Rev Madison
Gas & Elec Co Proj A............ 6.750% 04/01/27 $ 1,076,570
5,250 Wisconsin Hsg & Econ Dev Auth
Hsg Rev Ser B (b)............... 7.050 11/01/22 5,662,335
7,280 Wisconsin St Hlth & Edl Fac Auth
Rev Children's Hosp (FGIC
Insd)........................... 5.000 08/15/10 7,391,311
4,275 Wisconsin St Hlth & Edl Fac Auth
Rev Marquette Univ (MBIA
Insd)........................... 4.750 06/01/23 4,015,080
------------
19,251,967
------------
WYOMING 1.0%
4,000 Wyoming Cmnty Dev Auth Single
Family Ser G (FHA Gtd).......... 7.250 06/01/21 $ 4,256,960
4,000 Wyoming Cmnty Dev Auth Single
Family Ser H (FHA Gtd).......... 7.100 06/01/12 4,307,480
------------
8,564,440
------------
PUERTO RICO 2.0%
14,875 Puerto Rico Comwlth Hwy & Tran
Auth Tran Rev Ser A (b)......... 4.750 07/01/38 14,176,470
4,000 Puerto Rico Pub Bldgs Auth Gtd
Pub Ed & Hlth Fac Ser M......... 5.700 07/01/16 4,220,040
------------
18,396,510
------------
</TABLE>
See Notes to Financial Statements
25
<PAGE> 27
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
- --------------------------------------------------------------------------------------
<S> <C>
TOTAL INVESTMENTS 100.4%
(Cost $852,186,429)................................................. $904,374,992
LIABILITIES IN EXCESS OF OTHER ASSETS (0.4%)......................... (3,525,843)
------------
NET ASSETS 100.0%.................................................... $900,849,149
============
</TABLE>
* Zero coupon bond
(a) Securities purchased on a when issued or delayed delivery basis.
(b) Assets segregated as collateral for when issued or delayed delivery purchase
commitments and open future transactions.
(c) 144A securities are those which are exempt from registration under rule 144A
of the Securities Act of 1933. These securities may only be resold in
transactions exempt from registration which are normally transactions with
qualified institutional buyers.
(d) Security is a "Step-up" bond where the coupon increases or steps up at a
predetermined date.
- -------------------------------------------------------------------------------
ACA -- American Capital Access
AMBAC -- AMBAC Indemnity Corporation
CA Mtg -- California Mortgage Insurance
Connie Lee -- Connie Lee Insurance Company
FGIC -- Financial Guaranty Insurance Company
FHA -- Federal Housing Administration
FSA -- Financial Security Assurance Inc.
GNMA -- Government National Mortgage Association
MBIA -- Municipal Bond Investors Assurance Corp.
PSF -- Public School Fund
See Notes to Financial Statements
26
<PAGE> 28
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 and October 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 30, 1999 October 31, 1998
- ------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS:
Total Investments (Cost $852,186,429 and $876,174,143,
respectively)............................................ $904,374,992 $ 947,409,856
Receivables:
Interest................................................. 15,106,743 16,745,334
Investments Sold......................................... 1,069,513 8,361,081
Variation Margin on Futures.............................. 294,375 12,656
Options at Market Value (Net premiums received of -0- and
$498,615, respectively).................................. -0- 89,062
Other..................................................... 1,606 4,935
------------ ---------------
Total Assets......................................... 920,847,229 $ 972,622,924
------------ ---------------
LIABILITIES:
Payables:
Investments Purchased.................................... 17,287,822 36,663,553
Custodian Bank........................................... 1,318,977 3,502,876
Investment Advisory Fee.................................. 519,432 555,190
Income and Capital Gain Distributions - Common and
Preferred Shares....................................... 369,050 747,859
Administrative Fee....................................... 148,409 158,626
Affiliates............................................... 41,373 29,919
Accrued Expenses.......................................... 196,055 236,977
Trustees' Deferred Compensation and Retirement Plans...... 116,962 102,017
------------ ---------------
Total Liabilities.................................... 19,998,080 41,997,017
------------ ---------------
NET ASSETS................................................ $900,849,149 $ 930,625,907
============ ===============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 12,000 issued with liquidation preference of
$25,000 per share -- See Note 6)......................... $300,000,000 $ 300,000,000
------------ ---------------
Common Shares ($.01 par value with an unlimited number of
shares authorized)....................................... 363,654 362,705
Paid in Surplus........................................... 538,413,671 536,817,998
Net Unrealized Appreciation............................... 52,551,909 72,656,123
Accumulated Undistributed Net Investment Income........... 5,339,055 4,571,670
Accumulated Net Realized Gain............................. 4,180,860 16,217,411
------------ ---------------
Net Assets Applicable to Common Shares............... 600,849,149 630,625,907
------------ ---------------
NET ASSETS................................................ $900,849,149 $ 930,625,907
============ ===============
COMMON SHARES OUTSTANDING................................. 36,365,393 36,270,469
============ ===============
NET ASSET VALUE PER COMMON SHARE.......................... $ 16.52 $ 17.39
============ ===============
</TABLE>
See Notes to Financial Statements
27
<PAGE> 29
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1999 and
the Two Months Ended October 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Two Months Ended
April 30, 1999 October 31, 1998
- -----------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest...................................... $ 26,545,065 $ 9,244,761
------------ ------------
EXPENSES:
Investment Advisory Fee....................... 3,166,238 1,089,100
Administrative Fee............................ 904,639 311,171
Preferred Share Maintenance................... 391,695 135,485
Custody....................................... 29,375 4,698
Trustees' Fees and Related Expenses........... 28,202 13,797
Legal......................................... 16,411 7,648
Other......................................... 212,456 97,445
------------ ------------
Total Expenses............................ 4,749,016 1,659,344
------------ ------------
NET INVESTMENT INCOME......................... $ 21,796,049 $ 7,585,417
============ ============
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments................................. $ 7,208,479 $ 2,621,006
Options..................................... 609,356 -0-
Futures..................................... (2,200,957) 2,202,003
------------ ------------
Net Realized Gain............................. 5,616,878 4,823,009
------------ ------------
Unrealized Appreciation/Depreciation:
Beginning of the Period..................... 72,656,123 74,571,449
------------ ------------
End of the Period:
Investments............................... 52,188,563 71,235,713
Futures................................... 363,346 832,733
Options................................... -0- 587,677
------------ ------------
52,551,909 72,656,123
------------ ------------
Net Unrealized Appreciation/Depreciation
During the Period........................... (20,104,214) (1,915,326)
------------ ------------
NET REALIZED AND UNREALIZED GAIN/LOSS......... $(14,487,336) $ 2,907,683
============ ============
NET INCREASE IN NET ASSETS FROM OPERATIONS.... $ 7,308,713 $ 10,493,100
============ ============
</TABLE>
See Notes to Financial Statements
28
<PAGE> 30
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1999, the Two Months Ended October 31, 1998
and the Year Ended August 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Two Months Ended Year Ended
April 30, 1999 October 31, 1998 August 31, 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............... $ 21,796,049 $ 7,585,417 $ 45,706,310
Net Realized Gain................... 5,616,878 4,823,009 13,636,918
Net Unrealized
Appreciation/Depreciation During
the Period........................ (20,104,214) (1,915,326) 12,546,410
------------- ------------- -------------
Change in Net Assets from
Operations........................ 7,308,713 10,493,100 71,889,638
------------- ------------- -------------
Distributions from Net Investment
Income:
Common Shares..................... (17,439,766) (5,803,033) (34,818,029)
Preferred Shares.................. (3,588,898) (758,421) (10,827,208)
------------- ------------- -------------
(21,028,664) (6,561,454) (45,645,237)
------------- ------------- -------------
Distributions from Net Realized
Gains:
Common Shares..................... (15,464,760) -0- -0-
Preferred Shares.................. (2,188,669) (1,479,439) -0-
------------- ------------- -------------
(17,653,429) (1,479,439) -0-
------------- ------------- -------------
Total Distributions................. (38,682,093) (8,040,893) (45,645,237)
------------- ------------- -------------
NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES............. (31,373,380) 2,452,207 26,244,401
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued
through Dividend Reinvestment..... 1,596,622 -0- -0-
------------- ------------- -------------
TOTAL INCREASE/DECREASE IN NET
ASSETS............................ (29,776,758) 2,452,207 26,244,401
NET ASSETS:
Beginning of the Period............. 930,625,907 928,173,700 901,929,299
------------- ------------- -------------
End of the Period (Including
accumulated undistributed net
investment income of $5,339,055,
$4,571,670 and
$3,547,707, respectively)......... $ 900,849,149 $ 930,625,907 $ 928,173,700
============= ============= =============
</TABLE>
See Notes to Financial Statements
29
<PAGE> 31
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 Two Months Ended --------
April 30, 1999 October 31, 1998 1998
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the Period
(a)...................................... $ 17.387 $ 17.319 $ 16.596
----------- ----------- --------
Net Investment Income.................... .599 .210 1.260
Net Realized and Unrealized Gain/Loss.... (.399) .080 .722
----------- ----------- --------
Total from Investment Operations........... .200 .290 1.982
----------- ----------- --------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders............ .480 .160 .960
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders......................... .099 .021 .299
Distributions from Net Realized Gain:
Paid to Common Shareholders............ .425 -0- -0-
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders......................... .060 .041 -0-
----------- ----------- --------
Total Distributions........................ 1.064 .222 1.259
----------- ----------- --------
Net Asset Value, End of the Period......... $ 16.523 $ 17.387 $ 17.319
=========== =========== ========
Market Price Per Share at End of the
Period................................... $ 16.000 $ 16.8125 $16.1875
Total Investment Return at Market
Price (b)................................ .45%* 4.84%* 9.06%
Total Return at Net Asset Value (c)........ .21%* 1.33%* 10.38%
Net Assets at End of the Period (In
millions)................................ $ 900.8 $ 930.6 $ 928.2
Ratio of Expenses to Average Net Assets
Applicable to Common Shares**............ 1.57% 1.57% 1.57%
Ratio of Net Investment Income to Average
Net Assets Applicable to Common Shares
(d)...................................... 6.00% 6.48% 5.66%
Portfolio Turnover......................... 37%* 6%* 94%
* Non-Annualized
** Ratio of Expenses to Average Net Assets
Including Preferred Shares............... 1.05% 1.07% 1.06%
</TABLE>
(a) Net Asset Value at September 27, 1991, is adjusted for common and preferred
share offering costs of $.192 per common share.
(b) 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.
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based upon NAV.
(d) Net Investment Income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
30
<PAGE> 32
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 27, 1991
(Commencement
Year Ended August 31, of Investment
- --------------------------------------------------- Operations) to
1997 1996 1995 1994 1993 August 31, 1992
- ------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$15.842 $15.734 $15.562 $17.035 $16.328 $14.808
------- ------- ------- ------- ------- -------
1.275 1.295 1.311 1.347 1.410 1.166
.734 .105 .266 ( 1.424) .780 1.370
------- ------- ------- ------- ------- -------
2.009 1.400 1.577 ( .077) 2.190 2.536
------- ------- ------- ------- ------- -------
.960 .990 1.084 1.116 1.100 .811
.295 .302 .321 .280 .246 .205
-0- -0- -0- -0- .111 -0-
-0- -0- -0- -0- .026 -0-
------- ------- ------- ------- ------- -------
1.255 1.292 1.405 1.396 1.483 1.016
------- ------- ------- ------- ------- -------
$16.596 $15.842 $15.734 $15.562 $17.035 $16.328
======= ======= ======= ======= ======= =======
$15.750 $14.500 $14.250 $15.000 $16.750 $16.125
15.87% 8.98% 2.39% ( 3.94%) 11.90% 13.24%*
11.14% 7.09% 8.55% ( 2.22%) 12.31% 14.64%*
$ 901.9 $ 874.6 $ 870.7 $ 864.4 $ 917.9 $ 891.7
1.61% 1.61% 1.65% 1.64% 1.59% 1.49%
6.04% 6.20% 6.48% 6.52% 7.08% 6.85%
54% 36% 49% 47% 48% 100%*
1.07% 1.06% 1.07% 1.09% 1.06% 1.03%
</TABLE>
See Notes to Financial Statements
31
<PAGE> 33
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen 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 income tax, consistent with preservation of
capital. The Trust will invest in a portfolio consisting substantially of
municipal obligations rated investment grade at the time of investment, but may
invest up to 20% of its assets in unrated securities which are believed to be of
comparable quality to those rated investment grade. The Trust commenced
investment operations on September 27, 1991.
The Trust changed its fiscal year-end from August 31 to October 31. As
mentioned in your last report, due to the relatively short span of time between
the August 31, 1998 report and the October 31, 1998 report, the October 31, 1998
report was not distributed but rather the October data is included as part of
this April 30, 1999 semi-annual report.
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-- Municipal bonds are valued by independent pricing
services or dealers using the mean of the bid and asked prices or, in the
absence of market quotations, at fair value based upon yield data relating to
municipal bonds with similar characteristics and general market conditions.
Securities which are not valued by independent pricing services are valued at
fair value using 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
32
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
with its custodian, assets having an aggregate value at least equal to the
amount of the when issued or delayed delivery purchase commitments until payment
is made.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
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.
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of the deferral for tax purposes of losses
relating to wash sale transactions and open futures positions, which are marked
to market for tax purposes at October 31, 1998.
At April 30, 1999, for federal income tax purposes, cost of long-term
investments is $852,202,036; the aggregate gross unrealized appreciation is
$54,939,970 and the aggregate gross unrealized depreciation is $2,767,014,
resulting in net unrealized appreciation on long-term investments of
$52,172,956.
At October 31, 1998, for federal income tax purposes, cost of long-term
investments is $876,189,749; the aggregate gross unrealized appreciation is
$71,637,395 and the aggregate gross unrealized depreciation is $417,288,
resulting in net unrealized appreciation on long-term investments of
$71,220,107.
E. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends
monthly from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
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 .70% of the average
net assets of the Trust. In addition, the Trust will pay a monthly
administrative fee to Van Kampen Funds Inc. or its affiliates
33
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
(collectively "Van Kampen"), the Trust's Administrator, at an annual rate of
.20% of the average net assets of the Trust. The administrative services
provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
For the six months ended April 30, 1999 and the two months ended October 31,
1998, the Trust recognized expenses of approximately $8,100 and $3,800
respectively, 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 April 30, 1999 and the two months ended October 31,
1998, the Trust recognized expenses of approximately $98,500 and $38,400
respectively, representing Van Kampen's cost of providing accounting and legal
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 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 April 30, 1999, October 31, 1998, and August 31, 1998 common share paid in
surplus aggregated $538,413,671, $536,817,998 and $536,817,998 respectively:
<TABLE>
<CAPTION>
SIX MONTHS ENDED TWO MONTHS ENDED YEAR ENDED
APRIL 30, 1999 OCTOBER 31, 1998 AUGUST 31, 1998
- -----------------------------------------------------------------------------
<S> <C> <C> <C>
Beginning Shares..... 36,270,469 36,270,469 36,270,469
Shares Issued Through
Dividend
Reinvestment....... 94,924 -0- -0-
---------- ---------- ----------
Ending Shares........ 36,365,393 36,270,469 36,270,469
========== ========== ==========
</TABLE>
4. INVESTMENT TRANSACTIONS
For the six months ended April 30, 1999, the cost of purchases and proceeds from
sales of investments, excluding short-term investments, were $338,313,645 and
$371,051,457, respectively. For the two months ended October 31, 1998, the cost
of purchases and
34
<PAGE> 36
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
proceeds from sales of investments, excluding short-term investments, were
$74,192,631 and $54,087,541, respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index. The Trust has a variety of reasons to use derivative instruments, such
as to attempt to protect the Trust against possible changes in the market value
of its portfolio and to manage the portfolio's effective yield, maturity and
duration. All of the Trust's portfolio holdings, including derivative
instruments, are marked to market each day with the change in value reflected in
the unrealized appreciation/depreciation. Upon disposition, a realized gain or
loss is recognized accordingly, except when exercising a call option contract or
taking delivery of a security underlying a futures contract. In this instance,
the recognition of gain or loss is postponed until the disposal of the security
underlying the option or futures contract.
Summarized below are the specific types of derivative financial instruments
used by the Trust.
A. OPTION CONTRACTS--An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Trust
to manage the portfolio's effective maturity and duration.
Transactions in options for the six months ended April 30, 1999 and the two
months ended October 31, 1998, were as follows:
<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- --------------------------------------------------------------------------
<S> <C> <C>
Outstanding at August 31, 1998................ -0- $ -0-
Options Written and Purchased (Net)........... 2,100 498,615
Options Terminated in Closing Transactions
(Net)....................................... -0- -0-
Options Expired (Net)......................... -0- -0-
------- -----------
Outstanding at October 31, 1998............... 2,100 498,615
Options Written and Purchased (Net)........... 1,100 394,996
Options Terminated in Closing Transactions
(Net)....................................... (2,300) (1,063,401)
Options Expired (Net)......................... (900) 169,790
------- -----------
Outstanding at April 30, 1999................. -0- $ -0-
======= ===========
</TABLE>
35
<PAGE> 37
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
B. FUTURES CONTRACTS--A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
Index and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration.
Upon entering into futures contracts, the Trust maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the value
of the contract (the variation margin). The risk of loss associated with a
futures contract is in excess of the variation margin reflected on the Statement
of Assets and Liabilities.
Transactions in futures contracts for the six months ended April 30, 1999
and the two months ended October 31, 1998 were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- -----------------------------------------------------------------------
<S> <C>
Outstanding at August 31, 1998............................ 400
Futures Opened............................................ 2,300
Futures Closed............................................ (1,961)
------
Outstanding at October 31, 1998........................... 739
Futures Opened............................................ 3,596
Futures Closed............................................ (3,583)
------
Outstanding at April 30, 1999............................. 752
======
</TABLE>
The futures contracts outstanding as of April 30, 1999 and the descriptions
and unrealized appreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
- --------------------------------------------------------------------------
<S> <C> <C>
Long Contracts--June 1999 US Treasury Bond
Future (Current notional value of $120,188
per contract)............................. 202 $(324,386)
Short Contracts--June 1999 Municipal Bond
Future (Current notional value of $123,188
per contract)............................. 550 687,732
------ ---------
752 $ 363,346
====== =========
</TABLE>
36
<PAGE> 38
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
The futures contracts outstanding as of October 31, 1998 and the
descriptions and unrealized appreciation/depreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
- --------------------------------------------------------------------------
<S> <C> <C>
Long Contracts--Dec. 1998 US Treasury Bond
Future (Current notional value of $128,906
per contract)............................. 327 $ 646,071
Short Contracts--Dec. 1998 Municipal Bond
Future (Current notional value of $125,469
per contract)............................. 412 186,662
------ ---------
739 $ 832,733
====== =========
</TABLE>
C. INDEXED SECURITIES--These instruments are identified in the portfolio of
investments. The price of these securities may be more volatile than the price
of a comparable fixed rate security.
An Inverse Floating security is one where the coupon is inversely indexed to
a short-term floating interest rate multiplied by a specified factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. These instruments are typically used by the
Trust to enhance the yield of the portfolio.
An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The Trust invests in these
instruments as a hedge against a rise in the short-term interest rates which it
pays on its preferred shares.
An Embedded Swap security includes a swap component such that the fixed
coupon component of the underlying bond is adjusted by the difference between
the security's fixed swap rate and the floating swap index. As the floating rate
rises, the coupon is reduced. Conversely, as the floating rate declines, the
coupon is increased. The Trust invests in these instruments as a hedge against a
rise in the short-term interest rates which it pays on its preferred shares.
6. PREFERRED SHARES
Effective with the close of business on April 23, 1999, the liquidation
preference on the Trust's preferred shares decreased from $50,000 to $25,000 per
share. This decrease was effected by means of a 2 for 1 stock split that doubled
the Trust's number of outstanding preferred shares. The total liquidation value
for the Trust was unchanged.
As of April 30, 1999, the Trust had outstanding 12,000 Auction Preferred
Shares ("APS") in four series of 3,000 shares each. Dividends are cumulative and
the dividend rate is periodically reset through an auction process. The dividend
periods for Series A and
37
<PAGE> 39
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Series C are 7 days, while Series B and Series D are 28 days. The average rate
in effect on April 30, 1999, was 3.48%. During the six months ended April 30,
1999, the rates ranged from 2.70% to 5.875%.
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 APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests, and the APS are subject to
mandatory redemption if the tests are not met.
38
<PAGE> 40
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
changes 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
prorata 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
39
<PAGE> 41
VAN KAMPEN 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
A. THOMAS SMITH, III*
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
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.
40
<PAGE> 42
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.
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> MUNICIPAL TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 852,186,429
<INVESTMENTS-AT-VALUE> 904,374,992
<RECEIVABLES> 16,470,631
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,606
<TOTAL-ASSETS> 920,847,229
<PAYABLE-FOR-SECURITIES> 17,287,822
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 2,710,258
<TOTAL-LIABILITIES> 19,998,080
<SENIOR-EQUITY> 300,000,000
<PAID-IN-CAPITAL-COMMON> 538,777,325
<SHARES-COMMON-STOCK> 36,365,393
<SHARES-COMMON-PRIOR> 36,270,469
<ACCUMULATED-NII-CURRENT> 5,339,055
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 4,180,860
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 52,551,909
<NET-ASSETS> 900,849,149
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 26,545,065
<OTHER-INCOME> 0
<EXPENSES-NET> (4,749,016)
<NET-INVESTMENT-INCOME> 21,796,049
<REALIZED-GAINS-CURRENT> 5,616,878
<APPREC-INCREASE-CURRENT> (20,104,214)
<NET-CHANGE-FROM-OPS> 7,308,713
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (21,028,664)
<DISTRIBUTIONS-OF-GAINS> (17,653,429)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 94,924
<NET-CHANGE-IN-ASSETS> (29,776,758)
<ACCUMULATED-NII-PRIOR> 4,571,670
<ACCUMULATED-GAINS-PRIOR> 16,217,411
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 3,166,238
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 4,749,016
<AVERAGE-NET-ASSETS> 611,788,736
<PER-SHARE-NAV-BEGIN> 17.387
<PER-SHARE-NII> 0.599
<PER-SHARE-GAIN-APPREC> (0.399)
<PER-SHARE-DIVIDEND> (0.579)
<PER-SHARE-DISTRIBUTIONS> (0.485)
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 16.523
<EXPENSE-RATIO> 1.57
</TABLE>
