<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 5
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 9
Statement of Operations.......................... 10
Statement of Changes in Net Assets............... 11
Financial Highlights............................. 12
Notes to Financial Statements.................... 13
</TABLE>
VOQ SAR 4/97
<PAGE> 2
LETTER TO SHAREHOLDERS
March 21, 1997
Dear Shareholder,
As mentioned in your previous
report, VK/AC Holding, Inc., the parent
company of Van Kampen American Capital,
Inc., was acquired by Morgan Stanley
Group Inc., a world leader in asset
management and investment banking. The [PHOTO]
transaction was completed in October,
and we look forward to exploring the
opportunities it creates for investors. DENNIS J. MCDONNELL AND DON G. POWELL
As part of the acquisition, Van Kampen
American Capital became the distributor
of Morgan Stanley retail funds on January 2, 1997.
More recently, on February 5, 1997, it was announced that Morgan Stanley
Group Inc. and Dean Witter, Discover & Co. agreed to merge. The combined company
will be a preeminent global financial services firm, with leading market
positions in securities, asset management and credit services. As the financial
industry continues to witness unprecedented consolidations and new partnerships,
we believe those firms that want to offer investors the greatest opportunities
and services in the next century must be market leaders in all facets of their
business.
ECONOMIC REVIEW
Due to fears that strong economic growth would trigger higher inflation and
cause the Federal Reserve Board to raise interest rates, bond prices dropped
sharply in the first few months of 1996. The Fed ultimately decided to take no
action, however, and bond prices responded with a rally in May. The rally
continued through the latter part of 1996, with bonds regaining much of the loss
they had experienced earlier in the year. Election-year politics further
strengthened the municipal market; the flat federal income tax proposal lost
support, and the status quo of a split government (a Democratic president and a
Republican Congress) was maintained.
Fixed-income prices showed some volatility in the first two months of 1997,
but remained unchanged from year end. During the six-month reporting period,
municipal bond yields decreased an average of 25 basis points. In comparison,
taxable yields decreased 30 to 35 basis points over the same period. The Trust
performed well in this environment in which interest rates declined and the
price of bonds increased.
Continued on page two
1
<PAGE> 3
FUND STRATEGY
We employed the following strategies in managing the Trust:
- - We invested 41.8 percent of the Trust's long-term investments in AAA-rated
securities, and 29.5 percent in BBB-rated or non-rated (with an equivalent
rating of investment grade at the time of purchase) securities as of
February 28, 1997. Typically, we attempt to enhance the Trust's yield and
balance the rating distribution by exchanging a portion of the
higher-rated holdings for lower-rated, higher-yielding assets. While the
AAA-rated securities have provided safety of principal and total return
opportunities, lower-rated and non-rated bonds provide income potential and
have tended to exhibit lower price volatility as interest rates change. The
value of Trust shares will fluctuate. The majority of the Trust's AAA-rated
holdings, however, are owned at yields much higher than what is currently
available in the tax-exempt market. As we identify lower-rated bonds, they
will be purchased to replace the higher-quality, AAA-rated bonds that are
subject to early redemption in the near future.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality as a Percentage of Long-Term
Investments as of February 28, 1997
<TABLE>
<S> <C>
AAA....................... 41.8%
AA........................ 7.3%
A......................... 21.4%
BBB....................... 14.1%
Non-Rated................. 15.4%
</TABLE>
Based upon credit quality ratings issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.
- - Rather than focusing on market timing, we attempt to identify securities
that we believe will outperform within a sector and which can be acquired at
an attractive price. This "bottom-up" approach to security selection, aided
by our research team provides significant added value to the portfolio.
- - We invested in bonds in the 10- to 20-year range of the yield curve, seeking
to capture the maximum yield with less volatility. Yields on securities in
this maturity range were almost 90 percent of yields on securities maturing
in 30 years, with substantially reduced volatility--about two-thirds of the
longer maturity securities.
- - We adjusted the Trust's duration to seek to manage volatility. Duration,
which is expressed in years, is a measurement of the portfolio's volatility
to interest rate movements. Portfolios with shorter durations have tended to
perform better when interest rates are rising. At the end of the period, the
Trust's duration stood at 5.26 years, comparatively shorter than the Lehman
Brothers Municipal Bond Index benchmark of 7.59 years. While the shorter
duration boosted to the Trust's performance in the first half of 1996, it
prevented the Trust from taking full advantage of the decline in interest
rates during the latter half.
Continued on page three
2
<PAGE> 4
[BAR GRAPH]
Six-month Distribution History
For the Period Ended February 28, 1997
<TABLE>
<S> <C>
Sep 1996 ................... $.0840
Oct 1996 ................... $.0840
Nov 1996 ................... $.0840
Dec 1996 ................... $.1235
Jan 1997 ................... $.0840
Feb 1997 ................... $.0840
</TABLE>
The dividend and/or capital gains history represents past performance of the
Trust and does not predict the Trust's future distributions.
PERFORMANCE SUMMARY
We are pleased to report that the Van Kampen American Capital Ohio Quality
Municipal Trust continued its positive performance over the first half of its
fiscal year. For the six-month period ended February 28, 1997, the Trust
generated a total return at market price of 6.38 percent(1), including
reinvestment of income dividends totaling $.504 per share and capital gain
dividends totaling $.0395 per share. The Trust offered a tax-exempt distribution
rate of 5.93 percent(3), based on the closing common stock price of $17.00 per
share on February 28, 1997. Because income from the Trust is exempt from federal
and state income tax, this distribution rate represents a yield equivalent to
taxable investment earning 9.97 percent(4) (for Ohio investors in the 40.5
percent combined federal and state income tax bracket).
TOP 5 PORTFOLIO INDUSTRY HOLDINGS BY SECTOR*
<TABLE>
<CAPTION>
AS OF
FEBRUARY 28, 1997
<S> <C>
Health Care................................................... 27.4%
General Purpose............................................... 13.9%
Industrial Revenue............................................ 12.1%
Single-Family Housing......................................... 9.5%
Retail Electric/Gas/Telephone................................. 9.4%
</TABLE>
*As a Percentage of Long-Term Investments
Continued on page four
3
<PAGE> 5
MUNICIPAL MARKET OUTLOOK
Although Ohio's employment growth slowed below national averages in
mid-1996, the state continues to experience robust growth in retail trade and
services. In addition, unemployment remains low, and budget reserves have been
replenished to very healthy levels. The most significant pending issue is
funding for the Ohio's 612 public school districts. The constitutionality of the
funding mechanism is currently before the Ohio Supreme Court.
Nationwide, we continue to see signs of a strengthening economy. As a
result, we believe it is more likely that interest rates will rise rather than
decline, although we do not expect to see a drastic move in either direction. We
are, however, taking a defensive posture with the Fund by maintaining a
relatively short duration in the event of an increase in interest rates.
Relatively stable interest rates are favorable for the leveraged structure
of our closed-end funds, which involves borrowing short-term funds to purchase
long-term municipal securities. The leveraged capital structure of the Trust has
continued to provide common shareholders with above-market levels of dividend
income. It should be noted, however, that a significant rise in short-term
interest rates would have an unfavorable effect on the dividend-paying ability
of the common shares, and would also negatively impact the price.
We believe the Trust is positioned to perform well in the coming months, and
do not anticipate major changes in the portfolio's characteristics. We will
continue to seek to balance the Trust's total return and dividend income. At the
same time, we seek to manage the volatility of the Trust by adjusting the
duration when necessary, and to continue to add value through security
selection. Thank you for your confidence in Van Kampen American Capital and in
your Trust's management team.
Sincerely,
[SIG]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
Please see footnotes on page five
4
<PAGE> 6
PERFORMANCE RESULTS FOR THE PERIOD ENDED FEBRUARY 28, 1997
VAN KAMPEN AMERICAN CAPITAL OHIO QUALITY MUNICIPAL TRUST
(NYSE TICKER SYMBOL - VOQ)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)................................ 6.38%
Six-month total return based on NAV(2)......................................... 6.36%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock price(3)...................... 5.93%
Taxable-equivalent distribution rate as a % of closing common stock price(4)... 9.97%
SHARE VALUATIONS
Net asset value................................................................ $ 17.05
Closing common stock price..................................................... $ 17.00
Six-month high common stock price (02/18/97)................................... $17.375
Six-month low common stock price (09/24/96).................................... $16.375
Preferred share rate(5)........................................................ 3.385%
</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 40.5%
combined federal and state tax bracket, which takes into consideration the
deductibility of individual state taxes paid.
(5)See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
Market forecasts provided in this report may not necessarily come to pass.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
OHIO 83.7%
$2,750 Akron, OH Wtrwrks Rev Mtg (Prerefunded @
03/01/01) (AMBAC Insd)........................ 6.550% 03/01/12 $ 3,023,350
2,100 Alliance, OH Swr Sys Rev Rfdg (AMBAC Insd).... 6.000 10/15/10 2,225,055
500 Athens Cnty, OH Cmnty Mental Hlth Rev West
Cent Proj Ser 1............................... 6.900 06/01/10 528,170
750 Brecksville Broadview Heights, OH City Sch
Dist (FGIC Insd).............................. 5.250 12/01/21 718,388
2,500 Carroll Cnty, OH Hosp Impt Rev Timken Mercy
Med Cent (Prerefunded @ 12/01/01)............. 7.125 12/01/18 2,832,350
3,250 Cincinnati & Hamilton Cnty, OH Port Auth Indl
Dev Rev Convention Garage Rfdg................ 7.450 06/01/10 3,766,295
4,000 Cincinnati & Hamilton Cnty, OH Port Auth Indl
Dev Rev Sixth Street Garage Rfdg.............. 7.450 06/01/10 4,635,440
2,500 Cleveland, OH Arpt Sys Rev Ser A (MBIA
Insd)......................................... 7.375 01/01/10 2,721,300
500 Cleveland, OH Pub Pwr Sys Rev Impt 1st Mtg Ser
A (MBIA Insd)................................. 7.000 11/15/17 556,665
1,000 Cleveland, OH Pub Pwr Sys Rev Impt 1st Mtg Ser
B Rfdg (MBIA Insd)............................ 7.000 11/15/17 1,113,330
1,000 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty.............................. 7.250 11/15/18 1,008,000
500 Cuyahoga Cnty, OH Hosp Rev Hlth Cleveland
Fairview Genl Hosp & Lutheran Med Cent........ 6.300 08/15/15 511,435
1,000 Cuyahoga Cnty, OH Hosp Rev Meridia Hlth Sys... 7.000 08/15/09 1,082,810
3,000 Cuyahoga Cnty, OH Hosp Rev Meridia Hlth Sys... 7.000 08/15/23 3,235,980
3,000 Erie Cnty, OH Hosp Impt Rev Firelands Cmnty
Hosp Proj Rfdg................................ 6.750 01/01/08 3,181,650
4,000 Erie Cnty, OH Hosp Impt Rev Firelands Cmnty
Hosp Proj Rfdg................................ 6.750 01/01/15 4,226,680
500 Fairfield, OH City Sch Dist (FGIC Insd)....... 7.100 12/01/08 583,220
2,500 Franklin Cnty, OH Convention Fac Auth Tax &
Lease Rev Antic Bonds Rfdg (MBIA Insd)........ 5.800 12/01/13 2,563,575
7,500 Gateway Econ Dev Corp Gtr Cleveland, OH Excise
Tax Rev Sr Lien Ser A (FSA Insd).............. 6.875 09/01/05 8,253,300
1,000 Gateway Econ Dev Corp Gtr Cleveland, OH
Stadium Rev................................... 6.500 09/15/14 1,010,130
3,000 Hamilton Cnty, OH Hlth Sys Rev Providence Hosp
Franciscan Rfdg............................... 6.875 07/01/15 3,118,560
1,000 Lorain Cnty, OH Hosp Rev Mtg Elyria United
Methodist Rfdg................................ 6.875 06/01/22 1,015,670
2,000 Lorain, OH Hosp Impt Rev Lakeland Cmnty Hosp
Inc........................................... 6.500 11/15/12 2,109,360
1,500 Lucas Cnty, OH Hlth Fac Rev Ohio Prsbyterian
Ser A Rfdg.................................... 6.750 07/01/20 1,511,940
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ------------------------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OHIO (CONTINUED)
$1,400 Mahoning Cnty, OH Hosp Fac Rev YHA Inc Proj
Ser A Rfdg (MBIA Insd)........................ 7.000% 10/15/08 $ 1,532,090
1,500 Middleburg Heights, OH Southwest Genl Hlth
Cent
(FSA Insd).................................... 5.625 08/15/15 1,515,495
3,465 Ohio Hsg Fin Agy Mtg Rev Residential Ser A2
(GNMA Collateralized)......................... 6.625 03/01/26 3,584,023
5,850 Ohio Hsg Fin Agy Single Family Mtg Rev
(Prerefunded @ 07/15/14)...................... * 01/15/15 2,112,961
5,550 Ohio Hsg Fin Agy Single Family Mtg Rev
(Escrowed to Maturity)........................ * 01/15/15 1,986,289
1,380 Ohio Hsg Fin Agy Single Family Mtg Rev Ser A
(GNMA Collateralized)......................... 7.650 03/01/29 1,456,507
805 Ohio Hsg Fin Agy Single Family Mtg Rev Ser B
(GNMA Collateralized)......................... 8.100 12/15/08 852,157
2,350 Ohio St Air Quality Dev Auth Rev Ashland Oil
Inc Proj Rfdg................................. 6.850 04/01/10 2,450,133
2,000 Ohio St Bldg Auth St Fac James Rhodes Ser A
Rfdg.......................................... 6.250 06/01/11 2,100,420
1,230 Ohio St Dept of Tran Ctfs Partn Panhandle Rail
Line Proj (FSA Insd).......................... 6.500 04/15/12 1,344,181
645 Ohio St Econ Dev Rev OH Enterprise Brd Fd Ser
9............................................. 7.625 12/01/11 698,793
3,000 Ohio St Univ Rev Genl Rcpts (Prerefunded @
12/01/98)..................................... 7.150 12/01/09 3,220,530
1,500 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev Wtr
Ctl Ln Fd St Match (MBIA Insd)................ 6.000 12/01/11 1,562,745
1,000 Pike Cnty, OH Hlthcare Fac Rev Rfdg........... 6.750 06/01/17 1,010,540
1,650 Toledo-Lucas Cnty, OH Port Auth Port Rev Fac
Cargill Inc Proj Rfdg......................... 7.250 03/01/22 1,835,114
3,000 University of Cincinnati, OH Genl Rcpts Ser II
(Prerefunded @ 06/01/99)...................... 7.100 06/01/10 3,254,550
3,000 Westerville, OH Minerva Park & Blendon Jt Twp
Hosp Dist Rev Saint Anns Hosp Ser B Rfdg
(AMBAC Insd).................................. 6.800 09/15/06 3,389,850
------------
89,439,031
------------
GUAM 1.0%
1,000 Guam Arpt Auth Rev Ser B...................... 6.700 10/01/23 1,035,200
------------
PUERTO RICO 11.6%
5,000 Puerto Rico Comwlth Pub Impt Rfdg............. 3.000 07/01/06 4,175,800
1,815 Puerto Rico Elec Pwr Auth Pwr Rev Ser P
(Prerefunded @ 07/01/01)...................... 7.000 07/01/11 2,042,256
4,500 Puerto Rico Elec Pwr Auth Pwr Rev Ser P
(Prerefunded @ 07/01/01)...................... 7.000 07/01/21 5,063,445
1,000 Puerto Rico Elec Pwr Auth Pwr Rev Ser T....... 6.375 07/01/24 1,057,550
------------
12,339,051
------------
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
U. S. VIRGIN ISLANDS 2.0%
$2,000 Virgin Islands Pub Fin Auth Rev Matching Fd Ln
Nts Ser A Rfdg................................ 7.250% 10/01/18 $ 2,166,220
------------
TOTAL LONG-TERM INVESTMENTS 98.3%
(Cost $96,296,834) (a)................................................... 104,979,502
OTHER ASSETS IN EXCESS OF LIABILITIES 1.7%................................ 1,816,933
------------
NET ASSETS 100.0%......................................................... $106,796,435
============
</TABLE>
* Zero coupon bond
(a) At February 28, 1997, cost for federal income tax purposes is $96,296,834;
the aggregate gross unrealized appreciation is $8,684,539 and the aggregate
gross unrealized depreciation is $1,871, resulting in net unrealized
appreciation of $8,682,668.
See Notes to Financial Statements
8
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $96,296,834)
(Note 1).................................................. $104,979,502
Cash........................................................ 139,730
Receivables:
Interest.................................................. 1,821,513
Investments Sold.......................................... 455,000
Other....................................................... 1,867
------------
Total Assets.......................................... 107,397,612
------------
LIABILITIES:
Payables:
Income Distributions - Common and Preferred Shares........ 402,360
Investment Advisory Fee (Note 2).......................... 57,411
Administrative Fee (Note 2)............................... 16,403
Affiliates (Note 2)....................................... 4,070
Accrued Expenses............................................ 63,401
Deferred Compensation and Retirement Plans (Note 2)......... 57,532
------------
Total Liabilities..................................... 601,177
------------
NET ASSETS.................................................. $106,796,435
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 700 issued with liquidation preference of $50,000
per share) (Note 5)....................................... $ 35,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 4,210,353 shares issued and
outstanding) (Note 3)..................................... 42,103
Paid in Surplus............................................. 62,135,290
Net Unrealized Appreciation on Investments.................. 8,682,668
Accumulated Undistributed Net Investment Income............. 828,366
Accumulated Net Realized Gain on Investments................ 108,008
------------
Net Assets Applicable to Common Shares................ $ 71,796,435
------------
NET ASSETS.................................................. $106,796,435
============
NET ASSET VALUE PER COMMON SHARE ($71,796,435 divided by
4,210,353 shares outstanding)............................. $ 17.05
============
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 3,318,591
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 368,722
Administrative Fee (Note 2)................................. 105,334
Preferred Share Maintenance (Note 5)........................ 50,635
Custody..................................................... 17,540
Trustees Fees and Expenses (Note 2)......................... 13,207
Legal (Note 2).............................................. 8,326
Amortization of Organizational Expenses (Note 1)............ 427
Other....................................................... 64,065
-----------
Total Expenses.......................................... 628,256
-----------
NET INVESTMENT INCOME....................................... $ 2,690,335
===========
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Net Realized Gain on Investments............................ $ 107,986
-----------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period................................... 6,507,369
End of the Period......................................... 8,682,668
-----------
Net Unrealized Appreciation on Investments During the
Period.................................................... 2,175,299
-----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS............. $ 2,283,285
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 4,973,620
===========
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended February 28, 1997 and
the Year Ended August 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1997 August 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................. $ 2,690,335 $ 5,321,227
Net Realized Gain on Investments....................... 107,986 245,266
Net Unrealized Appreciation/Depreciation on Investments
During the Period.................................... 2,175,299 (250,268)
------------ ------------
Change in Net Assets from Operations................... 4,973,620 5,316,225
------------ ------------
Distributions from Net Investment Income:
Common Shares........................................ (2,120,812) (4,230,058)
Preferred Shares..................................... (538,824) (1,269,921)
------------ ------------
(2,659,636) (5,499,979)
------------ ------------
Distributions from Net Realized Gain on Investments
(Note 1):
Common Shares........................................ (166,199) -0-
Preferred Shares..................................... (51,734) -0-
------------ ------------
(217,933) -0-
------------ ------------
Total Distributions.................................... (2,877,569) (5,499,979)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.... 2,096,051 (183,754)
FROM CAPITAL TRANSACTIONS (NOTE 3):
Value of Common Shares Issued Through Dividend
Reinvestment......................................... 43,541 245,726
------------ ------------
TOTAL INCREASE IN NET ASSETS........................... 2,139,592 61,972
NET ASSETS:
Beginning of the Period................................ 104,656,843 104,594,871
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $828,366 and 797,667,
respectively)........................................ $106,796,435 $104,656,843
============ ============
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 27, 1991
Six Months (Commencement
Ended Year Ended August 31 of Investment
February 28, ----------------------------------- Operations) to
1997 1996 1995 1994 1993 August 31, 1992
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period (a)............... $16.554 $16.598 $16.239 $17.445 $15.988 $14.748
------- ------- ------- ------- ------- -------
Net Investment Income........ .639 1.267 1.275 1.290 1.291 1.006
Net Realized and Unrealized
Gain/Loss on Investments... .543 -0- .397 (1.195) 1.442 1.175
------- ------- ------- ------- ------- -------
Total from Investment
Operations................... 1.182 1.267 1.672 .095 2.733 2.181
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders............. .504 1.008 .984 .984 .983 .731
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders... .128 .303 .329 .208 .201 .210
Distributions from Net
Realized Gain on
Investments (Note 1):
Paid to Common
Shareholders............. .040 -0- -0- .091 .072 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders... .012 -0- -0- .018 .020 -0-
------- ------- ------- ------- ------- -------
Total Distributions........... .684 1.311 1.313 1.301 1.276 .941
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period....................... $17.052 $16.554 $16.598 $16.239 $17.445 $15.988
======= ======= ======= ======= ======= =======
Market Price Per Share at End
of the Period................ $17.000 $16.500 $15.875 $15.750 $17.250 $16.250
Total Investment Return at
Market Price (b)............. 6.38%* 10.47% 7.34% (2.54%) 13.17% 13.59%*
Total Return at Net Asset
Value (c).................... 6.36%* 5.85% 8.74% (0.79%) 16.26% 11.78%*
Net Assets at End of the
Period (In millions)......... $ 106.8 $ 104.7 $ 104.6 $ 103.0 $ 108.1 $ 101.8
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares................ 1.76% 1.80% 1.81% 1.82% 1.72% 1.79%
Ratio of Expenses to Average
Net Assets................... 1.18% 1.20% 1.19% 1.22% 1.14% 1.22%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common
Shares (d)................... 6.04% 5.75% 6.00% 6.39% 6.61% 5.83%
Portfolio Turnover............ 5%* 6% 24% 0% 18% 43%*
</TABLE>
(a) Net Asset Value at September 27, 1991, is adjusted for common and preferred
share offering costs of $.252 per 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 the 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.
* Non-Annualized
See Notes to Financial Statements
12
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
February 28, 1997 (Unaudited)
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1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Ohio Quality Municipal Trust (the "Trust") is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940, as amended. The Trust's investment objective
is to provide a high level of current income exempt from federal and Ohio income
taxes, consistent with preservation of capital. The Trust will invest in a
portfolio consisting substantially of Ohio 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 following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At February 28, 1997, there were no
when issued or delayed delivery purchase commitments.
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.
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<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
D. ORGANIZATIONAL EXPENSES--The Fund reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Fund's organization in the amount of $30,000. These costs
were amortized on a straight line basis over the 60 month period ended September
26, 1996.
E. 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.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends from
net investment income to common shareholders monthly. 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
American Capital 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 VKAC, 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.
Certain legal expenses are paid to 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 February 28, 1997, the Trust recognized expenses of
approximately $22,300 representing VKAC's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC.
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<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1997 (Unaudited)
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
At February 28, 1997 and August 31, 1996, paid in surplus related to common
shares aggregated $62,135,290 and $62,091,774, respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1997 AUGUST 31, 1996
- -------------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares....................... 4,207,788 4,192,971
Shares Issued Through Dividend
Reinvestment......................... 2,565 14,817
--------- ---------
Ending Shares.......................... 4,210,353 4,207,788
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $5,459,380 and $6,110,179, respectively.
5. PREFERRED SHARES
The Trust has outstanding 700 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every 28 days through an
auction process. The rate in effect on February 28, 1997 was 3.385%. During the
six months ended February 28, 1997, the rates ranged from 3.250% to 3.465%.
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 $50,000 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.
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<PAGE> 17
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
Emerging Growth Fund
Enterprise Fund
Growth Fund
Pace Fund
Growth & Income
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
MORGAN STANLEY FUND, INC.
Aggressive Equity Fund
American Value Fund
Asian Growth Fund
Emerging Markets Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
Worldwide High Income Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00
p.m. Central time at 1-800-341-2911 for Van Kampen American Capital funds, or
1-800-282-4404 for Morgan Stanley retail funds.
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<PAGE> 18
VAN KAMPEN AMERICAN CAPITAL OHIO QUALITY MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
THEODORE A. MYERS
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
Vice President
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
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 PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in
the Investment Company Act of 1940.
(C) Van Kampen American Capital Distributors, Inc., 1997
All rights reserved.
SM denotes a service mark of
Van Kampen American Capital Distributors, Inc.
RESULTS OF SHAREHOLDER VOTES
A Special Meeting of Shareholders of the Trust was held on October 23, 1996,
where shareholders voted on a new investment advisory agreement and changes to
investment policies. With regard to the approval of a new investment advisory
agreement between Van Kampen American Capital Investment Advisory Corp. and the
Trust, 3,115,837 shares voted for the proposal, 70,168 shares voted against,
99,859 shares abstained and 415,721 shares represented broker non-votes. With
regard to the approval of certain changes to the Trust's fundamental investment
policies with respect to investments in other investment companies, 1,939,945
shares voted for the proposal, 104,043 shares voted against, 104,242 shares
abstained and 1,553,335 shares represented broker non-votes.
17
