<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 6
Portfolio of Investments......................... 7
Statement of Assets and Liabilities.............. 10
Statement of Operations.......................... 11
Statement of Changes in Net Assets............... 12
Financial Highlights............................. 13
Notes to Financial Statements.................... 14
</TABLE>
VOQ SAR 4/98
<PAGE> 2
LETTER TO SHAREHOLDERS
March 23, 1998
Dear Shareholder,
The new year ushered in what
promises to be an exciting and
challenging time for investors. The
Taxpayer Relief Act of 1997, signed
into law by President Clinton in
August, creates many new opportunities [PHOTO]
for you and your family to take a more
active role in achieving your long-term
financial goals.
Most Americans will benefit from
the bill's $95 billion in tax cuts over DENNIS J. MCDONNELL AND DON G. POWELL
five years. The so-called Kiddie Credit
gives parents $400 in immediate tax
relief for every child under age 17, and families will find it easier to save
for their children's college expenses with the new Education IRA. The bill also
cuts capital gains tax rates for the first time in more than a decade and
loosens restrictions on tax-deductible IRA contributions. Perhaps the most
exciting feature is the new Roth IRA, which allows investment earnings to grow
tax free, not just tax deferred.
This year, more than ever, it could be important for you to talk with your
financial adviser about how to make the tax code work to your advantage. At Van
Kampen American Capital, we have prepared a variety of publications to help you
understand your choices under the new tax legislation. And with the help of your
adviser, we'll help you locate the many benefits hidden among the changing tax
landscape.
ECONOMIC REVIEW
The U.S. economy sustained its forward momentum throughout 1997, growing at
a moderate rate of 3.8 percent, as measured in terms of gross domestic product.
Despite this continuing growth trend, inflation not only remained low but was on
a decline.
Nevertheless, market watchers remained alert for signs of surging prices.
One cause of concern was the extremely tight labor market. The percentage of
unemployed Americans fell to a 24-year low of 4.6 percent in February, as the
strong economy created more jobs than expected and wages continued to rise. To
date, increased productivity has allowed the U.S. economy to absorb this
increase in the workforce without overheating or driving prices higher.
In Ohio, recently released financial statements for 1997 point toward
continued improvement in the state's financial position. Fund balances are well
maintained, revenues continue to exceed expenditures, and economic indicators
remain strong. Currently the state's monetary reserves are at higher levels than
they were before the last recession in 1990 and 1991. This is due to prudent
financial management during the six-year expansion in the economy.
Continued on page two
1
<PAGE> 3
MARKET REVIEW
The bond market rally continued during the past six months, with both
taxable and tax-exempt yields gradually drifting downward with minimal
volatility. Bond prices move in the opposite direction of bond yields, so as
bond yields fell during the period, bond prices were on the rise. Thirty-year
Treasury yields declined from 6.61 percent on August 29, 1997 to 5.91 percent on
February 27, 1998. In addition, the currency crisis in Asia helped spark the
domestic bond market, as U.S. Treasuries enjoyed an increase in demand from both
foreign and U.S. investors.
As is typical during bond market rallies, municipal bond yields also
declined, although municipals did not perform as strongly as taxable bonds.
Heavy supply and low yield levels contributed to the weaker performance of the
municipal market. Generic general obligation 30-year AAA-rated municipal yields
dropped from 5.30 percent to 4.96 percent at the end of the period.
Credit spreads--the difference in yield between high-quality issues and
low-quality issues--remained extremely tight during the past six months. Under
normal circumstances, low-quality issues provide higher yields in order to
compensate investors for additional credit risk. In 1997, close to 49 percent of
newly issued municipal bonds were insured--causing a scarcity of
higher-yielding, lower-rated securities. This shortage, combined with low yields
in the municipal market, resulted in very narrow credit spreads.
Municipal yields continued to be very attractive compared to taxable yields.
For example, the Bond Buyer Revenue Bond Index, composed of 25 revenue bonds
with an average rating of single-A and an average maturity of 30 years, is
representative of the bonds we typically purchase for the Trust. The Index was
yielding 5.36 percent at the end of the reporting period, while the 30-year
Treasury bond was yielding 5.91 percent. In other words, the difference between
municipal bonds yields and long-term Treasury yields is historically very
narrow.
While the volume of new issuance for Ohio has risen, demand for this
specialty state paper remains very strong, keeping prices at levels slightly
higher than general market securities.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality*
As of February 28, 1998
<TABLE>
<S> <C>
AAA............ 58.9%
AA............. 2.4%
A.............. 18.4%
BBB............ 8.2%
Non-Rated...... 12.1%
</TABLE>
*As a Percentage of Long-Term Investments
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's.
Continued on page three
2
<PAGE> 4
TRUST STRATEGY
We employed the following strategies in managing the Trust during the period:
- - At the inception of the Trust in 1991, we were able to invest the Trust's
initial assets in bonds with attractive coupons and yields, and many of
these securities remain in the portfolio today. These securities, with
coupons much higher than current market levels, are approaching their
10-year call date and are at risk of being either pre-refunded or called. If
this happens, we will need to replace them with new bonds at current lower
coupons.
To help minimize this risk as the call dates approach, we gradually reduced
the Trust's holdings of pre-refunded securities and replaced them with
longer-term discount securities or securities priced near face value. If the
bond market continues to rally, discount securities are more likely to rise
in price than premium securities.
- - Duration was also a major focus. At the end of the reporting period, the
duration of the portfolio stood at 5.04 years. Duration is a measurement
used to express the sensitivity of a bond's price to changes in interest
rates. Each year of duration represents an expected one-percent change in
the price of a bond for every one-percent change in interest rates.
Typically, funds with short durations perform better when interest rates are
rising, while funds with long durations perform better when rates are
declining. Our interest rate outlook, described in more detail below, is
moderately optimistic. However, lengthening the duration of the Trust would
significantly impact the dividend, so we will maintain a somewhat short
duration in order to support the Trust's high dividend.
- - Because of the narrow credit spreads between AAA-rated and lower-rated
offerings, most acquisitions during the period were AAA-rated, as these
securities provided more relative value. However, due to our research
experience, we were able to identify and purchase several non-insured issues
at attractive yields. Examples include Franklin County Health Care for
Friendship Village (NR/NR) and Montgomery County (Grandview) Hospital
(NR/BBB).
<TABLE>
<CAPTION>
TOP 5 PORTFOLIO INDUSTRY HOLDINGS BY SECTOR*
AS OF
FEBRUARY 28, 1998
<S> <C>
Health Care............................................. 25.7%
General Purpose......................................... 13.7%
Industrial Revenue...................................... 11.7%
Single-Family Housing................................... 9.5%
Retail Electric/Gas/Telephone........................... 9.0%
</TABLE>
*As a percentage of Long-Term Investments
PERFORMANCE SUMMARY
For the six months ended February 28, 1998, the Van Kampen American Capital
Ohio Quality Municipal Trust generated a total return at market price of 13.63
percent(1), including reinvestment of dividends totaling $.5040 per share and
capital gain dividends totaling $.0228 per share. The Trust offered a tax-exempt
distribution rate of
Continued on page four
3
<PAGE> 5
5.38 percent(3), based on the closing common stock price of $18.75 per share on
February 28, 1998. Because income from the Trust is exempt from federal income
tax, this distribution rate represents a yield equivalent to a taxable
investment earning 9.06 percent(4) (for investors in the 40.6 percent combined
federal and state income tax bracket). At the end of the reporting period, the
closing share price of the Trust traded at a 6.96 percent premium to its net
asset value of $17.53.
[DISTRIBUTION HISTORY GRAPH]
Six-month Distribution History
For the Period Ended February 28, 1998
<TABLE>
<CAPTION>
Capital Gains Dividends
<S> <C>
Sep 1997..................... $.0000 $.0840
Oct 1997..................... $.0000 $.0840
Nov 1997..................... $.0000 $.0840
Dec 1997..................... $.0228 $.0840
Jan 1998..................... $.0000 $.0840
Feb 1998..................... $.0000 $.0840
</TABLE>
The distribution history represents past performance of the Trust and does
not predict the Trust's future distributions.
OUTLOOK
We expect the U.S. economy and the demand for products and services to
remain strong in the coming months. However, the impact of the Asian financial
crisis is a looming question. The fallout from Asian currency devaluations in
late 1997 occurred at a time when the U.S. dollar was extremely strong against
most major foreign currencies. If Asia's purchasing power is sharply reduced due
to weakened currencies, analysts fear that U.S. export sales will slump. At the
same time, as Asian goods become cheaper relative to American goods, domestic
companies could face a period of price competition versus imported goods. Taken
together, these developments could cut into the earnings of U.S. corporations.
There is no debate that the Federal Reserve Board believes low inflation is
the ideal environment for the economy. Because inflation is low, it is unlikely
that the Fed will change short-term rates in the near future. While the Fed
continues to give credence to signs of economic strength, we believe it will
wait to determine the impact of the Asian situation before taking any action.
Longer term, interest rates need to be high enough to control economic growth.
With a focus on inflation rather than growth, the Fed will probably take any
necessary actions to keep inflation from rising. We will expect a rate increase
by the Fed only if there are signs of an acceleration in inflation.
Regarding the municipal bond market, we believe yields will remain near
current levels through at least mid-summer. This will depend not only on the
general economy
Continued on page five
4
<PAGE> 6
and the taxable bond market, but also tax-exempt bond supply and demand levels.
Given what we have seen this year, the market appears to be in a solid
equilibrium position, with strong demand to accommodate record municipal supply.
We believe the Trust is positioned to perform well in the coming months and
do not anticipate making major changes to the structure of the portfolio. We
continue to seek a balance between the Trust's total return and its dividend
income, as well as to add value through security selection. The Trust continues
to benefit from its leveraged capital structure, which provides common
shareholders with above-market levels of dividend income. While we believe it is
unlikely that short-term interest rates will rise, this event would have an
unfavorable effect on the dividend-paying ability of the common shares and would
also negatively impact the price.
We appreciate your continued confidence in Van Kampen American Capital and
your Trust's portfolio manager.
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 six
5
<PAGE> 7
PERFORMANCE RESULTS FOR THE PERIOD ENDED FEBRUARY 28, 1998
VAN KAMPEN AMERICAN CAPITAL OHIO QUALITY MUNICIPAL TRUST
(NYSE TICKER SYMBOL - VOQ)
<TABLE>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............ 13.63%
Six-month total return based on NAV(2)..................... 4.85%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................... 5.38%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)...................................... 9.06%
SHARE VALUATIONS
Net asset value............................................ $ 17.53
Closing common stock price................................. $ 18.75
Six-month high common stock price (02/10/98)............... $19.375
Six-month low common stock price (09/02/97)................ $17.125
Preferred share rate(5).................................... 3.448%
</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 40.6%
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.
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 99.9%
OHIO 85.4%
$ 715 Akron, OH Wtrwks Mtg Rev Rfdg & Impt (FGIC
Insd).......................................... 5.000% 03/01/18 $ 706,091
2,750 Akron, OH Wtrwrks Mtg Rev (Prerefunded @
03/01/01) (AMBAC Insd)......................... 6.550 03/01/12 2,996,042
2,100 Alliance, OH Swr Sys Rev Rfdg (AMBAC Insd)..... 6.000 10/15/10 2,308,782
500 Athens Cnty, OH Cmnty Mental Hlth Rev West Cent
Proj Ser 1..................................... 6.900 06/01/10 539,550
1,000 Batavia, OH Local Sch Dist Rfdg (MBIA Insd).... 5.625 12/01/22 1,077,690
2,500 Carroll Cnty, OH Hosp Impt Rev Timken Mercy Med
Cent (Prerefunded @ 12/01/01).................. 7.125 12/01/18 2,808,025
3,250 Cincinnati & Hamilton Cnty, OH Port Auth Indl
Dev Rev Convention Garage Rfdg (Prerefunded @
12/01/02)...................................... 7.450 06/01/10 3,772,177
4,000 Cincinnati & Hamilton Cnty, OH Port Auth Indl
Dev Rev Sixth Street Garage Rfdg (Prerefunded @
12/01/02)...................................... 7.450 06/01/10 4,642,680
2,500 Cleveland, OH Arpt Sys Rev Ser A (Prerefunded @
01/01/00) (MBIA Insd).......................... 7.375 01/01/10 2,703,050
500 Cleveland, OH Pub Pwr Sys Rev Impt First Mtg
Ser A (MBIA Insd).............................. 7.000 11/15/17 553,860
1,000 Cleveland, OH Pub Pwr Sys Rev Impt First Mtg
Ser B Rfdg (MBIA Insd)......................... 7.000 11/15/17 1,107,720
1,000 Cuyahoga Cnty, OH Hlthcare Fac Rev Judson
Retirement Cmnty Ser A Rfdg.................... 7.250 11/15/18 1,087,870
500 Cuyahoga Cnty, OH Hosp Rev Hlth Cleveland
Fairview Genl Hosp & Lutheran Med Cent......... 6.300 08/15/15 538,840
1,000 Cuyahoga Cnty, OH Hosp Rev Meridia Hlth Sys
(Prerefunded @ 08/15/01)....................... 7.000 08/15/09 1,111,730
3,000 Cuyahoga Cnty, OH Hosp Rev Meridia Hlth Sys
(Prerefunded @ 08/15/01)....................... 7.000 08/15/23 3,335,190
3,000 Erie Cnty, OH Hosp Impt Rev Firelands Cmnty
Hosp Proj Rfdg................................. 6.750 01/01/08 3,276,150
4,000 Erie Cnty, OH Hosp Impt Rev Firelands Cmnty
Hosp Proj Rfdg................................. 6.750 01/01/15 4,350,480
500 Fairfield, OH City Sch Dist (FGIC Insd)........ 7.100 12/01/08 598,235
500 Finneytown, OH Local Sch Dist (FGIC Insd)...... 6.200 12/01/17 577,345
2,500 Franklin Cnty, OH Convention Fac Auth Tax &
Lease Rev Antic Bonds Rfdg (MBIA Insd)......... 5.800 12/01/13 2,696,050
7,500 Gateway Econ Dev Corp Gtr Cleveland, OH Excise
Tax Rev Sr Lien Ser A (FSA Insd)............... 6.875 09/01/05 8,234,250
1,000 Gateway Econ Dev Corp Gtr Cleveland, OH Stadium
Rev............................................ 6.500 09/15/14 1,049,740
3,000 Hamilton Cnty, OH Hlth Sys Rev Providence Hosp
Franciscan Rfdg................................ 6.875 07/01/15 3,248,220
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
OHIO (CONTINUED)
$1,000 Lorain Cnty, OH Hosp Rev Mtg Elyria United
Methodist Rfdg................................. 6.875% 06/01/22 $ 1,102,270
2,000 Lorain, OH Hosp Impt Rev Lakeland Cmnty Hosp
Inc............................................ 6.500 11/15/12 2,266,460
1,500 Lucas Cnty, OH Hlth Fac Rev Ohio Presbyterian
Ser A Rfdg..................................... 6.750 07/01/20 1,656,990
1,400 Mahoning Cnty, OH Hosp Fac Rev YHA Inc Proj Ser
A Rfdg (Prerefunded @ 10/15/02) (MBIA Insd).... 7.000 10/15/08 1,568,084
1,000 Middleburg Heights, OH Southwest Genl Hlth Cent
(FSA Insd)..................................... 5.625 08/15/15 1,062,220
1,000 Montgomery Cnty, OH Hosp Rev Grandview Hosp &
Med Cent Rfdg.................................. 5.600 12/01/11 1,030,690
3,325 Ohio Hsg Fin Agy Mtg Rev Residential Ser A2
(GNMA Collateralized).......................... 6.625 03/01/26 3,565,996
5,550 Ohio Hsg Fin Agy Single Family Mtg Rev......... * 01/15/15 2,354,033
5,850 Ohio Hsg Fin Agy Single Family Mtg Rev
(Prerefunded @ 07/15/14)....................... * 01/15/15 2,440,445
1,215 Ohio Hsg Fin Agy Single Family Mtg Rev Ser A
(GNMA Collateralized).......................... 7.650 03/01/29 1,280,841
665 Ohio Hsg Fin Agy Single Family Mtg Rev Ser B
(GNMA Collateralized).......................... 8.100 12/15/08 694,925
2,350 Ohio St Air Quality Dev Auth Rev Ashland Oil
Inc Proj Rfdg.................................. 6.850 04/01/10 2,499,671
2,000 Ohio St Bldg Auth St Fac James Rhodes Ser A
Rfdg........................................... 6.250 06/01/11 2,126,300
1,230 Ohio St Dept of Tran Ctfs Partn Panhandle Rail
Line Proj (FSA Insd)........................... 6.500 04/15/12 1,344,673
645 Ohio St Econ Dev Rev OH Enterprise Brd Fd Ser
9.............................................. 7.625 12/01/11 713,628
3,000 Ohio St Univ Rev Genl Rcpts (Prerefunded @
12/01/98)...................................... 7.150 12/01/09 3,138,900
1,500 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev Wtr
Ctl Ln Fd St Match (MBIA Insd)................. 6.000 12/01/11 1,615,860
1,000 Pike Cnty, OH Hlthcare Fac Rev Rfdg............ 6.750 06/01/17 1,037,970
1,650 Toledo-Lucas Cnty, OH Port Auth Port Rev Fac
Cargill Inc Proj Rfdg.......................... 7.250 03/01/22 1,849,749
3,000 University of Cincinnati, OH Genl Rcpts Ser II
(Prerefunded @ 06/01/99)....................... 7.100 06/01/10 3,182,040
3,000 Westerville, OH Minerva Park & Blendon Jt Twp
Hosp Dist Rev Saint Ann's Hosp Ser B Rfdg
(AMBAC Insd)................................... 6.800 09/15/06 3,407,970
------------
93,259,482
------------
GUAM 1.0%
1,000 Guam Arpt Auth Rev Ser B....................... 6.700 10/01/23 1,098,210
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PUERTO RICO 11.5%
$5,000 Puerto Rico Comwlth Pub Impt Rfdg.............. 3.000% 07/01/06 $ 4,429,800
1,815 Puerto Rico Elec Pwr Auth Pwr Rev Ser P
(Prerefunded @ 07/01/01)....................... 7.000 07/01/11 2,017,046
4,500 Puerto Rico Elec Pwr Auth Pwr Rev Ser P
(Prerefunded @ 07/01/01)....................... 7.000 07/01/21 5,000,940
1,000 Puerto Rico Elec Pwr Auth Pwr Rev Ser T........ 6.375 07/01/24 1,111,620
------------
12,559,406
------------
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 2,245,160
------------
TOTAL INVESTMENTS 99.9%
(Cost $98,291,520)....................................................... 109,162,258
OTHER ASSETS IN EXCESS OF LIABILITIES 0.1%................................ 64,864
------------
NET ASSETS 100.0%......................................................... $109,227,122
============
</TABLE>
* Zero coupon bond
See Notes to Financial Statements
9
<PAGE> 11
STATEMENT OF ASSETS AND LIABILITIES
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $98,291,520)........................ $109,162,258
Cash........................................................ 24,865
Receivables:
Interest.................................................. 1,818,954
Investments Sold.......................................... 320,304
Other....................................................... 4,199
------------
Total Assets.......................................... 111,330,580
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 1,781,327
Investment Advisory Fee................................... 58,763
Income Distributions - Preferred Shares................... 52,900
Administrative Fee........................................ 16,790
Affiliates................................................ 8,822
Accrued Expenses............................................ 102,103
Trustees' Deferred Compensation and Retirement Plans........ 82,753
------------
Total Liabilities..................................... 2,103,458
------------
NET ASSETS.................................................. $109,227,122
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 700 issued with liquidation preference of $50,000
per share)................................................ $ 35,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 4,234,629 shares issued and
outstanding).............................................. 42,346
Paid in Surplus............................................. 62,556,248
Net Unrealized Appreciation................................. 10,870,738
Accumulated Undistributed Net Investment Income............. 686,151
Accumulated Net Realized Gain............................... 71,639
------------
Net Assets Applicable to Common Shares................ $ 74,227,122
------------
NET ASSETS.................................................. $109,227,122
============
NET ASSET VALUE PER COMMON SHARE ($74,227,122 divided by
4,234,629 shares outstanding)............................. $ 17.53
============
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF OPERATIONS
For the Six Months Ended February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 3,296,975
-----------
EXPENSES:
Investment Advisory Fee..................................... 377,118
Administrative Fee.......................................... 107,748
Preferred Share Maintenance................................. 50,235
Trustees' Fees and Expenses................................. 14,156
Legal....................................................... 4,969
Custody..................................................... 4,466
Other....................................................... 74,465
-----------
Total Expenses.......................................... 633,157
-----------
NET INVESTMENT INCOME....................................... $ 2,663,818
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 71,535
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 9,478,128
End of the Period......................................... 10,870,738
-----------
Net Unrealized Appreciation During the Period............... 1,392,610
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 1,464,145
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 4,127,963
===========
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended February 28, 1998
and the Year Ended August 31, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
February 28, 1998 August 31, 1997
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................. $ 2,663,818 $ 5,385,208
Net Realized Gain...................................... 71,535 123,232
Net Unrealized Appreciation During the Period.......... 1,392,610 2,970,759
------------ ------------
Change in Net Assets from Operations................... 4,127,963 8,479,199
------------ ------------
Distributions from Net Investment Income:
Common Shares........................................ (2,129,929) (4,245,209)
Preferred Shares..................................... (611,226) (1,174,847)
------------ ------------
(2,741,155) (5,420,056)
------------ ------------
Distributions from Net Realized Gain:
Common Shares........................................ (96,377) (166,218)
Preferred Shares..................................... (26,754) (51,734)
------------ ------------
(123,131) (217,952)
------------ ------------
Total Distributions.................................... (2,864,286) (5,638,008)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.... 1,263,677 2,841,191
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment......................................... 251,789 213,622
------------ ------------
TOTAL INCREASE IN NET ASSETS........................... 1,515,466 3,054,813
NET ASSETS:
Beginning of the Period................................ 107,711,656 104,656,843
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $686,151 and $763,488,
respectively)........................................ $109,227,122 $107,711,656
============ ============
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
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
1998 1997 1996 1995 1994 1993 August 31, 1992
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period (a).... $17.229 $16.554 $16.598 $16.239 $17.445 $15.988 $14.748
------- ------- ------- ------- ------- ------- -------
Net Investment Income.......... .629 1.278 1.267 1.275 1.290 1.291 1.006
Net Realized and Unrealized
Gain/Loss.................... .348 .735 -0- .397 (1.195) 1.442 1.175
------- ------- ------- ------- ------- ------- -------
Total from Investment
Operations..................... .977 2.013 1.267 1.672 .095 2.733 2.181
------- ------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders............... .504 1.008 1.008 .984 .984 .983 .731
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... .144 .278 .303 .329 .208 .201 .210
Distributions from Net Realized
Gains:
Paid to Common
Shareholders............... .023 .040 -0- -0- .091 .072 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... .006 .012 -0- -0- .018 .020 -0-
------- ------- ------- ------- ------- ------- -------
Total Distributions............. .677 1.338 1.311 1.313 1.301 1.276 .941
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period......................... $17.529 $17.229 $16.554 $16.598 $16.239 $17.445 $15.988
======= ======= ======= ======= ======= ======= =======
Market Price Per Share at End of
the Period..................... $18.750 $17.000 $16.500 $15.875 $15.750 $17.250 $16.250
Total Investment Return at
Market Price (b)............... 13.63%* 9.55% 10.47% 7.34% (2.54%) 13.17% 13.59%*
Total Return at Net Asset Value
(c)............................ 4.85%* 10.70% 5.85% 8.74% (0.79%) 16.26% 11.78%*
Net Assets at End of the Period
(In millions).................. $ 109.2 $ 107.7 $ 104.7 $ 104.6 $ 103.0 $ 108.1 $ 101.8
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares**....................... 1.72% 1.78% 1.80% 1.81% 1.82% 1.72% 1.79%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common
Shares (d)..................... 5.57% 5.89% 5.75% 6.00% 6.39% 6.61% 5.83%
Portfolio Turnover.............. 4%* 7% 6% 24% 0% 18% 43%*
*Non-Annualized
**Ratio of Expenses to Average
Net Assets Including
Preferred Shares.............. 1.17% 1.19% 1.20% 1.19% 1.22% 1.14% 1.22%
</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.
See Notes to Financial Statements
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
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, 1998, 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.
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
D. FEDERAL INCOME TAXES--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
At February 28, 1998, for federal income tax purposes, cost of long-term
investments is $98,291,520; the aggregate gross unrealized appreciation is
$10,870,745 and the aggregate gross unrealized depreciation is $7, resulting in
net unrealized appreciation on investments of $10,870,738.
E. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders.
Net realized gains, if any, are distributed annually 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.
For the six months ended February 28, 1998, the Trust recognized expenses of
approximately $700 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 February 28, 1998, the Trust recognized expenses of
approximately $25,100 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 provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
February 28, 1998 (Unaudited)
- --------------------------------------------------------------------------------
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 under the
plan is equal to the trustee's annual retainer fee, which is currently $2,500.
3. CAPITAL TRANSACTIONS
At February 28, 1998 and August 31, 1997, paid in surplus related to common
shares aggregated $62,556,248 and $62,304,602, respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
FEBRUARY 28, 1998 AUGUST 31, 1997
- -------------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares....................... 4,220,349 4,207,788
Shares Issued Through Dividend
Reinvestment......................... 14,280 12,561
--------- ---------
Ending Shares.......................... 4,234,629 4,220,349
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $5,319,966 and $4,081,810, 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, 1998 was 3.448%. During the
six months ended February 28, 1998, the rates ranged from 3.420% to 4.066%.
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.
16
<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
STEVEN MULLER
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., 1998
All rights reserved.
(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.
17
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> OH QUALITY
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1998
<PERIOD-START> SEP-01-1997
<PERIOD-END> FEB-28-1998
<INVESTMENTS-AT-COST> 98,291,520
<INVESTMENTS-AT-VALUE> 109,162,258
<RECEIVABLES> 2,139,258
<ASSETS-OTHER> 4,199
<OTHER-ITEMS-ASSETS> 24,865
<TOTAL-ASSETS> 111,330,580
<PAYABLE-FOR-SECURITIES> 1,781,327
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 322,131
<TOTAL-LIABILITIES> 2,103,458
<SENIOR-EQUITY> 35,000,000
<PAID-IN-CAPITAL-COMMON> 62,598,594
<SHARES-COMMON-STOCK> 4,234,629
<SHARES-COMMON-PRIOR> 4,220,349
<ACCUMULATED-NII-CURRENT> 686,151
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 71,639
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,870,738
<NET-ASSETS> 109,227,122
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,296,975
<OTHER-INCOME> 0
<EXPENSES-NET> (633,157)
<NET-INVESTMENT-INCOME> 2,663,818
<REALIZED-GAINS-CURRENT> 71,535
<APPREC-INCREASE-CURRENT> 1,392,610
<NET-CHANGE-FROM-OPS> 4,127,963
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,741,155)
<DISTRIBUTIONS-OF-GAINS> (123,131)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 14,280
<NET-CHANGE-IN-ASSETS> 1,515,466
<ACCUMULATED-NII-PRIOR> 763,488
<ACCUMULATED-GAINS-PRIOR> 123,235
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 377,118
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 633,157
<AVERAGE-NET-ASSETS> 108,659,694
<PER-SHARE-NAV-BEGIN> 17.229
<PER-SHARE-NII> 0.629
<PER-SHARE-GAIN-APPREC> 0.348
<PER-SHARE-DIVIDEND> (0.648)
<PER-SHARE-DISTRIBUTIONS> (0.029)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 17.529
<EXPENSE-RATIO> 1.72
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
