<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Portfolio Management Review...................... 4
Glossary of Terms................................ 7
Portfolio Highlights............................. 8
Portfolio of Investments......................... 10
Statement of Assets and Liabilities.............. 15
Statement of Operations.......................... 16
Statement of Changes in Net Assets............... 17
Financial Highlights............................. 18
Notes to Financial Statements.................... 20
Report of Independent Accountants................ 24
Dividend Reinvestment Plan....................... 25
</TABLE>
NOT FDIC INSURED. MAY LOSE VALUE. NO BANK GUARANTEE.
<PAGE> 2
LETTER TO SHAREHOLDERS
November 19, 1999
Dear Shareholder:
As we approach the end of the century--and the millennium--it seems
appropriate to take a look back at the progress we've made over the last 100
years and how the world of investing has changed over the generations. Although
rapid advances in technology and science have dramatically altered the world
that we live in today, one of the greatest shifts we've seen this century is the
increasing importance of investing for many Americans.
Once considered primarily for the wealthy, investing in the stock market is
now available to most people. In fact, almost 79 million individuals--who
represent almost half of all U.S. households--own stocks either directly or
through mutual funds. This is even more impressive when considering that just 16
years earlier, only 19 percent of households owned stocks. Another important
shift has been the need for retirement planning beyond a pension plan or Social
Security. The Investment Company Institute, the leading mutual fund industry
association, reports that 77 percent of all mutual fund shareholders earmarked
retirement as their primary financial goal in 1998.
Through all the changes in the investment environment over the past century,
the general principles that have made generations of investors successful remain
the same. Those that have stood the test of time include:
- Investing for the long-term
- Basing investment decisions on sound research
- Building a diversified portfolio
- Believing in the value of professional investment advice
While no one can predict the future, at Van Kampen, we believe that these
ideas will remain important tenets for investors well into the next century. As
we continue to focus on these principles, we hope that our decades of investment
experience can help bring you closer to your financial goals as we enter the new
millennium.
Sincerely,
[SIG]
Richard F. Powers, III
Chairman
Van Kampen Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen Investment Advisory Corp.
Source: Investment Company Institute
1
<PAGE> 3
ECONOMIC SNAPSHOT
ECONOMIC GROWTH
Americans continued their spending spree over the past year, keeping the
economy growing at a healthy pace. High levels of consumer confidence fueled
this heavy retail activity, which pushed the personal savings rate to a record
low as spending rates outpaced income growth. Although the U.S. economy
experienced a slowdown during the second quarter of 1999, growth rebounded
toward the end of the reporting period.
EMPLOYMENT SITUATION
The strong job market helped support the strength of the economy. During the
reporting period, the unemployment rate reached its lowest level in almost 30
years, and wages continued to climb. The wage pressures were balanced somewhat
by productivity gains. However, these pressures ultimately pushed the cost of
labor higher in the second quarter, as the employment cost index recorded its
biggest gain in eight years before returning to a more moderate level in the
third quarter.
INFLATION AND INTEREST RATES
Inflation remained tame throughout most of the reporting period, although a
sharp increase in oil prices contributed to a spike in April's consumer price
index report. The Federal Reserve Board remained active in guarding against
inflation and tempering the economy during this environment. The Fed reversed
its three interest rate cuts from the fall of 1998, raising rates in June,
August, and November 1999 to keep the economy from overheating.
U.S. GROSS DOMESTIC PRODUCT
Seasonally Adjusted Annualized Rates
Third Quarter 1997 through Third Quarter 1999
[BAR GRAPH]
<TABLE>
<S> <C>
97Q3 4.0
97Q4 3.10
98Q1 6.70
98Q2 2.10
98Q3 3.80
98Q4 5.90
99Q1 3.70
99Q2 1.90
99Q3 5.50
</TABLE>
Source: Bureau of Economic Analysis
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED OCTOBER 31, 1999
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
(NYSE TICKER SYMBOL - VOQ)
<TABLE>
<S> <C>
COMMON SHARE TOTAL RETURNS
One-year total return based on market price(1)............ (9.60%)
One-year total return based on NAV(2)..................... (3.40%)
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3).............................................. 6.20%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)................................. 10.41%
SHARE VALUATIONS
Net asset value........................................... $ 15.98
Closing common stock price................................ $ 16.25
One-year high common stock price (12/10/98)............... $ 19.500
One-year low common stock price (10/27/99)................ $ 16.250
Preferred share rate(5)................................... 3.450%
</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 40.4%
combined federal and state tax rate, which takes into consideration the
deductibility of individual state taxes paid.
(5) See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
3
<PAGE> 5
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
We recently spoke with representatives of the adviser of the Van Kampen Ohio
Quality Municipal Trust about the key events and economic forces that shaped the
markets during the past year. Timothy D. Haney, portfolio manager, has managed
the Trust since 1995 and worked in the investment industry since 1988. He is
joined by Peter W. Hegel, chief investment officer for fixed-income investments.
The following discussion reflects their views on the Trust's performance during
the 12 months ended October 31, 1999.
Q WHAT HAPPENED IN THE MUNICIPAL MARKET DURING THE
REPORTING PERIOD?
A Bonds of all types experienced price declines during the past 12 months as
interest rates rose, especially toward the end of the reporting period. In
addition to the negative effects of the Federal Reserve Board's two
interest-rate increases during the summer, the bond market declined as the
nation's strong economic growth continued to spark inflation fears, leading to
concern about future rate hikes. Because of low institutional demand for
municipal bonds during the period, these conditions affected municipals more
than their taxable counterparts--corporate and Treasury bonds. The yields of
newly issued 30-year AAA municipal bonds rose more than a full percentage point
during the 12-month period, so the prices of existing bonds dropped
concurrently. The bonds in the Trust's portfolio were not spared by this market
movement and suffered price declines along with the rest of the municipal
market.
The interest-rate increases also suppressed municipal bond supply, bringing
overall nationwide issuance down more than 20 percent in the first ten months of
the year compared with 1998. Supply was down in almost every sector, with
electric-utility and health-care bonds experiencing the most significant drops.
Although new issuance kept pace with last year's active market, the amount of
bonds issued through refinancing was down more than 50 percent for the year
through October. Many municipalities simply chose not to refinance outstanding
bonds because of the higher interest rates they would have to pay in the current
marketplace.
Q DID MUNICIPAL BONDS BENEFIT FROM THE STRONG ECONOMY?
A Yes. The effects of the healthy economy were reflected in the good credit
conditions in the municipal market, even though prices suffered. With the
exception of the health-care sector, overall credit quality remained high, and
we witnessed a number of credit upgrades as tax revenues kept municipal finances
strong.
4
<PAGE> 6
Q COULD YOU DESCRIBE OHIO'S ECONOMIC AND MUNICIPAL MARKET ENVIRONMENT DURING
THE YEAR?
A The state's economy remained strong, with a number of municipalities
experiencing credit rating upgrades as a result of their solid financial
positions. The economy in Ohio continued to diversify from manufacturing
into the tourism and service sectors, contributing to budget surpluses and
greater-than-expected tax revenues. We will continue to monitor recent
legislative changes that have affected the utility, education, and health-care
sectors to assess their impact on the municipal market.
Q WHAT TECHNIQUES DID YOU USE TO MANAGE THE TRUST IN
THESE CONDITIONS?
A We took advantage of the general market price declines to enhance the
current income potential and tax management of the Trust. We sold some of
our holdings that were prerefunded or were nearing their call dates and
replaced them with new issues. We also liquidated some holdings at a capital
loss to offset the gains we had earned in 1999. This allowed us to avoid the
need to distribute taxable capital gains to shareholders this year. New
purchases later in the year consisted of longer-maturity, higher-yielding
issues, which helped protect the Trust's long-term income stream. The new bonds
also had better protection against bond calls.
One result of this strategy was an increase in the portfolio's duration--or
sensitivity to interest-rate changes--which had become very short as a result of
prerefundings and anticipated bond calls during the past several years. This
duration increase occurred as we sold the bonds that were about to be called or
refunded and purchased longer-duration securities, including bonds with 20- to
30-year maturities and zero-coupon bonds. The longer duration negatively
affected the Trust's total return as interest rates climbed. However, the
duration was still much shorter than that of other similar funds, which
benefited the Trust.
Q WHAT AREAS OF THE MUNICIPAL MARKET WERE MOST ATTRACTIVE
TO YOU?
A Lower-rated investment grade bonds became very attractive as credit
spreads--the difference in yields between higher-quality and lower-quality
bonds--widened toward the end of the reporting period. Because we have a depth
of experience researching and selecting those lower-quality bonds that we feel
have been undervalued, the widening of credit spreads gave us a much wider range
from which to choose. We found some particularly attractive lower-rated bonds in
the industrial revenue sector, although our overall allocation to the sector
decreased moderately during the period as older holdings were called or sold. As
spreads widened, these bonds provided more attractive yields and helped support
the Trust's income stream. In addition, the income from these bonds provided
some level of cushion as interest rates increased. At the end of October, our
allocation of BBB and nonrated bonds stood at 15.0 percent. For additional
portfolio highlights, please refer to page 8.
5
<PAGE> 7
Q HOW DID THE TRUST PERFORM DURING THE PERIOD?
A Total return performance was disappointing because of the general downturn
in bond prices. In addition, the Trust's leverage component hurt its
performance during the period. Although leverage helps the Trust provide
higher income levels to common shareholders, it made the portfolio more
sensitive to the interest-rate increases during the reporting period. However,
the Trust's total return was supported by its duration, which was relatively
short even though we had increased it during the period. For the one-year period
ended October 31, 1999, the Trust returned -9.60 percent(1) based on market
price. This reflects a decrease in market price from $19.06 per share on October
31, 1998, to $16.25 per share on October 31, 1999.
In addition, the dividend remained unchanged during the past 12 months. The
monthly tax-exempt dividend of $0.084 per share translates to a distribution
rate of 6.20 percent(3) based on the Trust's closing market price on October 31,
1999. Because the Trust is exempt from federal and Ohio income taxes, this
distribution rate is equivalent to a taxable yield of 10.41 percent(4) for an
investor in the 40.4 percent combined federal and state income tax bracket.
Please refer to the chart and footnotes on page 3 for additional performance
results. Past performance does not guarantee future performance.
Q WHAT DO YOU SEE AHEAD FOR THE ECONOMY AND THE
MUNICIPAL MARKET?
A In the coming months, we will probably see a slowing economy, which may be
partly the result of year 2000 concerns. Wage increases will likely keep
inflation fears at the forefront, although increasing productivity should
be able to offset higher wage costs for employers.
Preparations for the turn of the millennium may also limit new issuance and
general market activity at the end of the year. Many municipal issuers are
planning to postpone issuing bonds until they feel certain that any potential
computer problems have been avoided, but we believe that market activity should
pick up early in 2000. In the meantime, we will continue to focus on finding
attractive-yielding bonds and protecting the Trust from bond calls as much as
possible. We will also use our extensive research capabilities to look for
attractive opportunities throughout the coming months.
[SIG]
Timothy D. Haney
Portfolio Manager
[SIG]
Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
6
<PAGE> 8
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.
CREDIT SPREAD: Also called quality spread, the difference in yield between
higher-quality issues and lower-quality issues. Normally, lower-quality
issues provide higher yields to compensate investors for the additional
credit risk.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has
more potential to appreciate in price than a par bond does.
DURATION: A measure of the sensitivity of a bond's price to changes in interest
rates, expressed in years. Each year of duration represents an expected 1
percent change in the price of a bond for every 1 percent change in interest
rates (i.e. a 5-year duration means the bond will fall about 5 percent in
value if interest rates rise by 1 percent). The longer a bond's duration,
the greater the effect of interest rate movements on its price. Typically,
funds with shorter durations perform better in rising rate environments,
while funds with longer durations perform better when rates decline.
INVESTMENT-GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody 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 1999
and maturing in 2009 is a 10-year bond.
PREREFUNDING: The process of issuing new bonds to refinance an outstanding
municipal bond issue prior to its maturity or call date. The proceeds from
the new bonds are generally invested in U.S. government securities.
Prerefunding typically occurs when interest rates decline and an issuer
replaces its higher-yielding bonds with current lower-yielding issues.
ZERO COUPON BONDS: A corporate or municipal bond that is traded at a deep
discount to face value and pays no interest. It is redeemed at maturity for
full face value.
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
TOP FIVE PORTFOLIO INDUSTRIES*
[BAR GRAPH]
<TABLE>
<CAPTION>
OCTOBER 31, 1999 OCTOBER 31, 1998
---------------- ----------------
<S> <C> <C>
Health Care 26.20 26.30
General Purpose 15.10 13.90
Industrial Revenue 9.60 11.80
Retail Elec/Gas/Teleph 8.30 9.00
Single-Family Housing 7.80 9.70
</TABLE>
* As a percentage of long-term investments
NET ASSET VALUE AND MARKET PRICE
(BASED UPON MONTH-END VALUES)
SEPTEMBER 1991 THROUGH OCTOBER 1999
[LINE GRAPH]
<TABLE>
<CAPTION>
MARKET PRICE NET ASSET VALUE
------------ ---------------
<S> <C> <C>
Sep 1991 15.00 14.95
Oct 1991 15.00 15.01
15.00 15.03
15.50 15.15
15.13 15.19
15.25 14.99
15.13 14.92
15.75 15.03
16.00 15.27
15.50 15.54
16.25 16.43
16.25 15.99
15.88 15.91
Oct 1992 15.00 15.50
15.50 15.87
15.75 15.97
15.88 16.15
16.75 16.99
16.00 16.81
16.88 16.90
16.63 16.87
16.75 17.05
16.88 17.09
17.25 17.44
17.38 17.72
Oct 1993 17.00 17.71
16.38 17.40
16.88 17.63
17.25 17.88
16.75 17.31
15.50 16.13
15.00 16.07
15.63 16.23
15.88 16.06
16.00 16.29
15.75 16.24
15.50 15.67
Oct 1994 15.25 15.12
14.38 14.58
14.63 14.98
14.50 15.53
15.63 16.12
15.75 16.23
15.88 16.16
15.88 16.72
16.00 16.41
15.75 16.44
15.88 16.60
15.75 16.70
Oct 1995 15.75 16.92
16.00 17.14
16.50 17.28
17.13 17.26
17.00 17.11
17.25 16.70
16.75 16.51
16.50 16.46
16.75 16.58
16.38 16.65
16.50 16.55
16.63 16.76
Oct 1996 16.63 16.99
17.00 17.27
17.00 17.06
17.00 16.97
17.00 17.05
16.88 16.72
17.00 16.78
16.88 16.98
17.50 17.08
17.94 17.49
17.00 17.23
17.44 17.36
Oct 1997 17.63 17.38
18.00 17.36
18.75 17.51
19.00 17.62
18.75 17.53
18.50 17.46
18.25 17.28
18.38 17.47
18.50 17.44
17.94 17.39
18.50 17.57
18.81 17.68
Oct 1998 19.06 17.57
19.13 17.47
19.13 17.40
18.31 17.52
18.75 17.34
18.63 17.22
18.69 17.18
18.50 17.03
18.31 16.64
18.38 16.63
17.63 16.39
17.25 16.28
Oct 1999 16.25 15.98
</TABLE>
The solid line above represents the Trust's net asset value (NAV), which
indicates overall changes in value among the Trust's underlying securities. The
Trust's market price is represented by the dashed line, which indicates the
price the market is willing to pay for shares of the Trust at a given time.
Market price is influenced by a range of factors, including supply and demand
and market conditions.
8
<PAGE> 10
PORTFOLIO HIGHLIGHTS (CONTINUED)
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM INVESTMENTS
{PIE CHART]
AS OF OCTOBER 31, 1999
<TABLE>
<S> <C>
AAA/Aaa..................... 65.0%
AA/Aa....................... 4.8%
A/A......................... 15.2%
BBB/Baa..................... 9.6%
Non-Rated .................. 5.4%
</TABLE>
[PIE CHART]
AS OF OCTOBER 31, 1998
<TABLE>
<S> <C>
AAA/Aaa..................... 58.2%
AA/Aa....................... 3.0%
A/A......................... 18.7%
BBB/Baa..................... 8.4%
Non-Rated .................. 11.7%
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
DISTRIBUTION HISTORY
FOR THE PERIOD ENDED OCTOBER 31, 1999
[BAR GRAPH]
<TABLE>
<CAPTION>
DIVIDENDS CAPITAL GAINS
--------- -------------
<S> <C> <C>
Nov 1998 0.0840 0.0000
Dec 1998 0.0840 0.0149
Jan 1999 0.0840 0.0000
Feb 1999 0.0840 0.0000
Mar 1999 0.0840 0.0000
Apr 1999 0.0840 0.0000
May 1999 0.0840 0.0000
Jun 1999 0.0840 0.0000
Jul 1999 0.0840 0.0000
Aug 1999 0.0840 0.0000
Sep 1999 0.0840 0.0000
Oct 1999 0.0840 0.0000
</TABLE>
The distribution history represents past performance of the Trust and does not
predict the Trust's future distributions.
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS 98.6%
OHIO 84.6%
$2,750 Akron, OH Wtrwrks Mtg Rev (Prerefunded
@ 03/01/01) (AMBAC Insd).............. 6.550% 03/01/12 $ 2,886,785
2,100 Alliance, OH Swr Sys Rev Rfdg (AMBAC
Insd)................................. 6.000 10/15/10 2,197,020
500 Athens Cnty, OH Cmnty Mental Hlth Rev
West Cent Proj Ser 1 (LOC - Bank
One).................................. 6.900 06/01/10 524,180
1,435 Avon Lake, OH City Schl Dist Cab S
(FGIC Insd)........................... * 12/01/11 736,011
1,000 Barberton, OH City Schl Dist (FGIC
Insd)................................. 5.125 11/01/22 892,390
1,000 Batavia, OH Local Sch Dist Rfdg (MBIA
Insd)................................. 5.625 12/01/22 970,650
1,000 Brecksville Broadview Heights, OH City
Sch Dist (FGIC Insd).................. 5.250 12/01/21 915,090
2,500 Carroll Cnty, OH Hosp Impt Rev Timken
Mercy Med Cent (Prerefunded @
12/01/01)............................. 7.125 12/01/18 2,690,500
3,250 Cincinnati & Hamilton Cnty, OH Port
Auth Indl Dev Rev Convention Garage Rfdg
(Prerefunded @ 12/01/02)............... 7.450 06/01/10 3,591,510
4,000 Cincinnati & Hamilton Cnty, OH Port
Auth Indl Dev Rev Sixth Street Garage Rfdg
(Prerefunded @ 12/01/02).............. 7.450 06/01/10 4,420,320
1,500 Cleveland, OH Arpt Sys Rev Ser A
(Prerefunded @ 01/01/00) (MBIA
Insd)................................. 7.375 01/01/10 1,538,835
500 Cleveland, OH Pub Pwr Sys Rev Impt
First Mtg Ser A (MBIA Insd)........... 7.000 11/15/17 531,865
1,000 Cleveland, OH Pub Pwr Sys Rev Impt
First Mtg Ser B Rfdg (MBIA Insd)...... 7.000 11/15/17 1,063,730
1,250 Columbus, OH Tax Increment Fin Rev
Easton Proj (AMBAC Insd).............. 4.875 12/01/24 1,059,450
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO (CONTINUED)
$1,000 Cuyahoga Cnty, OH Hlthcare Fac Rev
Judson Retirement Cmnty Ser A Rfdg.... 7.250% 11/15/18 $ 1,017,160
500 Cuyahoga Cnty, OH Hosp Rev Hlth
Cleveland Fairview Genl Hosp &
Lutheran Med Cent..................... 6.300 08/15/15 513,835
1,000 Cuyahoga Cnty, OH Hosp Rev Meridia
Hlth Sys (Prerefunded @ 08/15/01)..... 7.000 08/15/09 1,066,840
3,000 Cuyahoga Cnty, OH Hosp Rev Meridia
Hlth Sys (Prerefunded @ 08/15/01)..... 7.000 08/15/23 3,200,520
1,625 Edgewood, OH City Schl Dist Cap Apprec
Ser A Rfdg (MBIA Insd)................ * 12/01/12 778,700
1,625 Edgewood, OH City Schl Dist Cap Apprec
Ser A Rfdg (MBIA Insd)................ * 12/01/14 675,805
1,000 Edgewood, OH City Schl Dist Ser A Rfdg
(MBIA Insd)........................... 4.600 12/01/10 931,560
3,000 Erie Cnty, OH Hosp Impt Rev Firelands
Cmnty Hosp Proj Rfdg.................. 6.750 01/01/08 3,165,510
4,000 Erie Cnty, OH Hosp Impt Rev Firelands
Cmnty Hosp Proj Rfdg.................. 6.750 01/01/15 4,119,960
500 Fairfield, OH City Sch Dist (FGIC
Insd)................................. 7.100 12/01/08 567,025
500 Finneytown, OH Local Sch Dist (FGIC
Insd)................................. 6.200 12/01/17 524,775
2,500 Franklin Cnty, OH Convention Fac Auth
Tax & Lease Rev Antic Bonds Rfdg (MBIA
Insd)................................. 5.800 12/01/13 2,527,775
7,500 Gateway Econ Dev Corp Gtr Cleveland,
OH Excise Tax Rev Sr Lien Ser A (FSA
Insd)................................. 6.875 09/01/05 7,885,200
1,000 Gateway Econ Dev Corp Gtr Cleveland,
OH Stadium Rev........................ 6.500 09/15/14 993,790
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO (CONTINUED)
$3,000 Hamilton Cnty, OH Hlth Sys Rev
Providence Hosp Franciscan Rfdg
(Prerefunded @ 07/01/02).............. 6.875% 07/01/15 $ 3,222,270
1,000 Lorain Cnty, OH Hosp Rev Mtg Elyria
United Methodist Ser C Rfdg........... 6.875 06/01/22 1,006,350
2,000 Lorain, OH Hosp Impt Rev Lakeland
Cmnty Hosp Inc........................ 6.500 11/15/12 2,156,640
1,500 Lucas Cnty, OH Hlth Fac Rev OH
Presbyterian Ser A Rfdg............... 6.750 07/01/20 1,487,940
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 1,469,328
1,000 Middleburg Heights, OH Southwest Genl
Hlth Cent (FSA Insd).................. 5.625 08/15/15 966,420
1,000 Montgomery Cnty, OH Hosp Rev Grandview
Hosp & Med Cent Rfdg.................. 5.600 12/01/11 915,500
3,240 Ohio Hsg Fin Agy Mtg Rev Residential
Ser A2 (GNMA Collateralized).......... 6.625 03/01/26 3,342,935
5,550 Ohio Hsg Fin Agy Single Family Mtg
Rev................................... * 01/15/15 2,248,194
5,850 Ohio Hsg Fin Agy Single Family Mtg Rev
(Prerefunded @ 07/15/14).............. * 01/15/15 2,355,561
2,000 Ohio St Bldg Auth St Fac James Rhodes
Ser A Rfdg (Prerefunded @ 06/01/01)... 6.250 06/01/11 2,100,220
1,230 Ohio St Dept of Tran Ctfs Partn
Panhandle Rail Line Proj (FSA Insd)... 6.500 04/15/12 1,297,060
645 Ohio St Econ Dev Rev OH Enterprise Brd
Fd Ser 9.............................. 7.625 12/01/11 679,179
2,000 Ohio St Solid Waste Disp Rev USG Corp
Proj.................................. 6.050 08/01/34 1,849,260
2,250 Ohio St Tpk Commn Tpk Rev Ser B (FGIC
Insd)................................. 4.750 02/15/28 1,836,337
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO (CONTINUED)
$1,500 Ohio St Wtr Dev Auth Pollutn Ctl Fac
Rev Wtr Ctl Ln Fd St Match (MBIA
Insd)................................. 6.000% 12/01/11 $ 1,571,655
1,000 Ohio St Wtr Dev Auth Rev Swr Fac
Anheuser Busch Proj................... 6.000 08/01/38 962,860
1,000 Pike Cnty, OH Hlthcare Fac Rev Rfdg... 6.750 06/01/17 1,000,030
1,650 Toledo-Lucas Cnty, OH Port Auth Port
Rev Fac Cargill Inc Proj Rfdg......... 7.250 03/01/22 1,751,112
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 3,195,480
------------
87,401,122
------------
GUAM 2.6%
1,000 Guam Arpt Auth Rev Ser B.............. 6.700 10/01/23 1,048,330
2,000 Guam Pwr Auth Rev Ser A............... 5.125 10/01/29 1,688,700
------------
2,737,030
------------
PUERTO RICO 9.3%
5,000 Puerto Rico Comwlth Pub Impt Rfdg..... 3.000 07/01/06 4,437,050
1,815 Puerto Rico Elec Pwr Auth Pwr Rev Ser
P (Prerefunded @ 07/01/01)............ 7.000 07/01/11 1,937,440
2,000 Puerto Rico Elec Pwr Auth Pwr Rev Ser
P (Prerefunded @ 07/01/01)............ 7.000 07/01/21 2,134,920
1,000 Puerto Rico Elec Pwr Auth Pwr Rev Ser
T (Prerefunded @ 07/01/04)............ 6.375 07/01/24 1,096,830
------------
9,606,240
------------
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U. S. VIRGIN ISLANDS 2.1%
$2,000 Virgin Islands Pub Fin Auth Rev
Matching Fd Ln Nts Ser A Rfdg
(Prerefunded @ 10/01/02).............. 7.250% 10/01/18 $ 2,204,060
------------
TOTAL LONG-TERM INVESTMENTS 98.6%
(Cost $97,196,101)................................................. 101,948,452
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%.......................... 1,409,444
------------
NET ASSETS 100.0%................................................... $103,357,896
============
</TABLE>
* Zero coupon bond
AMBAC--AMBAC Indemnity Corporation
FGIC--Financial Guaranty Insurance Company
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $97,196,101)........................ $101,948,452
Cash........................................................ 92,099
Interest Receivable......................................... 1,704,291
Other....................................................... 7,835
------------
Total Assets.......................................... 103,752,677
------------
LIABILITIES:
Payables:
Income Distributions - Common and Preferred Shares........ 71,487
Investment Advisory Fee................................... 61,647
Administrative Fee........................................ 17,613
Affiliates................................................ 14,996
Trustees' Deferred Compensation and Retirement Plans........ 106,042
Accrued Expenses............................................ 122,996
------------
Total Liabilities..................................... 394,781
------------
NET ASSETS.................................................. $103,357,896
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 1,400 issued with liquidation preference of
$25,000 per share)........................................ $ 35,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 4,276,726 shares issued and
outstanding).............................................. 42,767
Paid in Surplus............................................. 63,293,096
Net Unrealized Appreciation................................. 4,752,351
Accumulated Undistributed Net Investment Income............. 359,268
Accumulated Net Realized Loss............................... (89,586)
------------
Net Assets Applicable to Common Shares................ 68,357,896
------------
NET ASSETS.................................................. $103,357,896
============
NET ASSET VALUE PER COMMON SHARE ($68,357,896 divided by
4,276,726 shares outstanding)............................. $ 15.98
============
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1999
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 6,520,965
-----------
EXPENSES:
Investment Advisory Fee..................................... 751,124
Administrative Fee.......................................... 214,607
Preferred Share Maintenance................................. 89,325
Trustees' Fees and Related Expenses......................... 15,625
Custody..................................................... 13,799
Legal....................................................... 8,217
Other....................................................... 171,591
-----------
Total Expenses.......................................... 1,264,288
Less Credits Earned on Cash Balances.................... 4,423
-----------
Net Expenses............................................ 1,259,865
-----------
NET INVESTMENT INCOME....................................... $ 5,261,100
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Loss....................................... $ (88,974)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................. 11,141,611
End of the Period....................................... 4,752,351
-----------
Net Unrealized Depreciation During the Period............... (6,389,260)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(6,478,234)
===========
NET DECREASE IN NET ASSETS FROM OPERATIONS.................. $(1,217,134)
===========
</TABLE>
See Notes to Financial Statements
16
<PAGE> 18
STATEMENT OF CHANGES IN NET ASSETS
For the Year Ended October 31, 1999,
the Two Months Ended October 31, 1998
and the Year Ended August 31, 1998
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Two Months Ended Year Ended
October 31, 1999 October 31, 1998 August 31, 1998
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............... $ 5,261,100 $ 882,724 $ 5,349,917
Net Realized Gain/Loss.............. (88,974) (615) 82,320
Net Unrealized Appreciation/Depreciation
During the Period................... (6,389,260) 35,591 1,627,892
------------ ------------ ------------
Change in Net Assets from
Operations........................ (1,217,134) 917,700 7,060,129
------------ ------------ ------------
Distributions from Net Investment
Income:
Common Shares..................... (4,298,594) (713,824) (4,266,805)
Preferred Shares.................. (1,173,442) (202,745) (1,244,255)
------------ ------------ ------------
(5,472,036) (916,569) (5,511,060)
------------ ------------ ------------
Distributions from Net Realized
Gain:
Common Shares..................... (63,246) -0- (96,478)
Preferred Shares.................. (19,074) -0- (26,754)
------------ ------------ ------------
(82,320) -0- (123,232)
------------ ------------ ------------
Total Distributions................. (5,554,356) (916,569) (5,634,292)
------------ ------------ ------------
NET CHANGE IN NET ASSETS FROM
INVESTMENT ACTIVITIES............. (6,771,490) 1,131 1,425,837
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued
Through Dividend Reinvestment..... 423,310 78,564 488,888
------------ ------------ ------------
TOTAL INCREASE/DECREASE IN NET
ASSETS............................ (6,348,180) 79,695 1,914,725
NET ASSETS:
Beginning of the Period............. 109,706,076 109,626,381 107,711,656
------------ ------------ ------------
End of the Period (Including
accumulated undistributed net
investment income of $359,268,
$570,204 and $604,049,
respectively)..................... $103,357,896 $109,706,076 $109,626,381
============ ============ ============
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Two Months Ended
-------------------------------------------------
October 31, 1999 October 31, 1998 1998
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the
Period (a)........................... $17.567 $ 17.567 $17.229
------- -------- -------
Net Investment Income.............. 1.233 .208 1.262
Net Realized and Unrealized
Gain/Loss........................ (1.514) .008 .406
------- -------- -------
Total from Investment Operations..... (.281) .216 1.668
------- -------- -------
Less:
Distributions from Net Investment
Income:
Paid to Common Shareholders...... 1.008 .168 1.008
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders................... 0.275 .048 .293
Distributions from Net Realized
Gains:
Paid to Common Shareholders...... .015 -0- .023
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders................... .004 -0- .006
------- -------- -------
Total Distributions.................. 1.302 .216 1.330
------- -------- -------
Net Asset Value, End of the Period... $15.984 $ 17.567 $17.567
======= ======== =======
Market Price Per Share at End of the
Period............................. $16.250 $19.0625 $18.500
Total Investment Return at Market
Price (b).......................... (9.60%) 4.00%* 15.39%
Total Return at Net Asset Value
(c)................................ (3.40%) 0.96%* 8.16%
Net Assets at End of the Period (In
millions).......................... $ 103.4 $ 109.7 $ 109.6
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares**........................... 1.75% 1.79% 1.75%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (d).................. 5.65% 5.44% 5.57%
Portfolio Turnover................... 20% 0%* 5%
*Non-Annualized
**Ratio of Expenses to Average Net
Assets Including Preferred
Shares............................. 1.18% 1.22% 1.18%
</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.
18
<PAGE> 20
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 27, 1991
Year Ended August 31, (Commencement
--------------------- of Investment
1997 1996 1995 1994 1993 Operations) to
- -------------------------------------------------------- August 31, 1992
<S> <C> <C> <C> <C> <C>
$16.554 $16.598 $16.239 $17.445 $15.988 $ 14.748
------- ------- ------- ------- ------- --------
1.278 1.267 1.275 1.290 1.291 1.006
.735 -0- .397 (1.195) 1.442 1.175
------- ------- ------- ------- ------- --------
2.013 1.267 1.672 .095 2.733 2.181
------- ------- ------- ------- ------- --------
1.008 1.008 .984 .984 .983 .731
.278 .303 .329 .208 .201 .210
.040 -0- -0- .091 .072 -0-
.012 -0- -0- .018 .020 -0-
------- ------- ------- ------- ------- --------
1.338 1.311 1.313 1.301 1.276 .941
------- ------- ------- ------- ------- --------
$17.229 $16.554 $16.598 $16.239 $17.445 $ 15.988
======= ======= ======= ======= ======= ========
$17.000 $16.500 $15.875 $15.750 $17.250 $ 16.250
9.55% 10.47% 7.34% (2.54%) 13.17% 13.59%*
10.70% 5.85% 8.74% (0.79%) 16.26% 11.78%*
$ 107.7 $ 104.7 $ 104.6 $ 103.0 $ 108.1 $ 101.8
1.78% 1.80% 1.81% 1.82% 1.72% 1.79%
5.89% 5.75% 6.00% 6.39% 6.61% 5.83%
7% 6% 24% 0% 18% 43%*
1.19% 1.20% 1.19% 1.22% 1.14% 1.22%
</TABLE>
See Notes to Financial Statements
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS
October 31, 1999
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen 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--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 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 October 31, 1999, there were no
when issued or delayed delivery purchase commitments.
20
<PAGE> 22
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
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.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset these losses against any future realized capital
gains. At October 31, 1999, the Trust had an accumulated capital loss
carryforward for tax purposes of $89,586 which will expire between October 31,
2006 and October 21, 2007.
At October 31, 1999, for federal income tax purposes the cost of long-term
investments is $97,196,101, the aggregate gross unrealized appreciation is
$5,635,780 and the aggregate gross unrealized depreciation is $883,429,
resulting in net unrealized appreciation on long-term investments of $4,752,351.
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.
F. EXPENSE REDUCTIONS--During the year ended October 31, 1999, the Trust's
custody fee was reduced by $4,423 as a result of credits earned on overnight
cash balances.
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 (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.
21
<PAGE> 23
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
For the year ended October 31, 1999, the Trust recognized expenses of
approximately $1,400 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 year ended October 31, 1999, the Trust recognized expenses of
approximately $52,700 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 under the plan is $2,500.
3. CAPITAL TRANSACTIONS
At October 31, 1999, October 31, 1998 and August 31, 1998, paid in surplus
related to common shares aggregated $63,293,096, $62,870,027 and $62,791,507,
respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
YEAR ENDED TWO MONTHS ENDED YEAR ENDED
OCTOBER 31, 1999 OCTOBER 31, 1998 AUGUST 31, 1998
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Beginning Shares........... 4,252,556 4,248,190 4,220,349
Shares Issued Through
Dividend Reinvestment.... 24,170 4,366 27,841
--------- --------- ---------
Ending Shares.............. 4,276,726 4,252,556 4,248,190
--------- --------- ---------
</TABLE>
4. INVESTMENT TRANSACTIONS
For the year ended October 31, 1999, the cost of purchases and proceeds from
sale of investments, excluding short-term investments, were $21,504,861 and
$21,796,994, respectively.
5. 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
22
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1999
- --------------------------------------------------------------------------------
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 October 31, 1999, the Trust has outstanding 1,400 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 October
31, 1999 was 3.450%. During the year ended October 31, 1999, the rates ranged
from 3.000% to 4.980%.
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.
23
<PAGE> 25
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders of
Van Kampen Ohio Quality Municipal Trust:
We have audited the accompanying statement of assets and liabilities of Van
Kampen Ohio Quality Municipal Trust (the "Trust"), including the portfolio of
investments, as of October 31, 1999, the related statement of operations for the
year then ended, the statement of changes in net assets for the year then ended,
for the two-month period ended October 31, 1998, and for the year ended August
31, 1998, and the financial highlights for each of the periods presented. These
financial statements and financial highlights are the responsibility of the
Trust's management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen Ohio Quality Municipal Trust as of October 31, 1999, the results of its
operations for the year then ended, the changes in its net assets for the year
then ended, for the two-month period ended October 31, 1998, and for the year
ended August 31, 1998, and the financial highlights for each of the periods
presented, in conformity with generally accepted accounting principles.
KPMG LLP
Chicago, Illinois
December 9, 1999
24
<PAGE> 26
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
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA
02266-8200. If you withdraw, you will receive, without charge, a share
certificate issued in your name for all full Common Shares credited to your
account under the Plan and a cash payment will be made for any fractional Common
Share credited to your account under the Plan. You may again elect to
participate in the Plan at any time by calling 1-800-341-2929 or writing to the
Trust at: Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
25
<PAGE> 27
VAN KAMPEN FUNDS
GROWTH
Aggressive Growth
American Value*
Emerging Growth
Enterprise
Equity Growth
Focus Equity
Growth
Pace
Small Cap Value
Technology
GROWTH AND INCOME
Comstock
Equity Income
Growth and Income
Harbor
Real Estate Securities
Utility
Value
GLOBAL/INTERNATIONAL
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Fixed Income
Global Franchise
Global Government Securities
Global Managed Assets
International Magnum
Latin American
Short-Term Global Income*
Strategic Income
Worldwide High Income
INCOME
Corporate Bond
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
U.S. Government
U.S. Government Trust for Income
CAPITAL PRESERVATION
Reserve
Tax Free Money
SENIOR LOAN
Prime Rate Income Trust
Senior Floating Rate
TAX FREE
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
To find out more about any of these funds, ask your financial advisor for a
prospectus, which contains more complete information, including sales charges,
risks, and ongoing expenses. Please read it carefully before you invest or send
money.
To view a current Van Kampen fund prospectus or to receive additional fund
information, choose from one of the following:
- - visit our Web site at WWW.VANKAMPEN.COM--to view a prospectus, select Download
Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Telecommunications Device for the Deaf users, call 1-800-421-2833.
- - e-mail us by visiting WWW.VANKAMPEN.COM and selecting Contact Us
* Closed to new investors
26
<PAGE> 28
VAN KAMPEN OHIO QUALITY MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*
STEVEN MULLER
THEODORE A. MYERS
RICHARD F. POWERS, III* -- Chairman
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
RICHARD F. POWERS, III*
President
DENNIS J. MCDONNELL*
Executive Vice President and Chief Investment Officer
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*
MICHAEL H. SANTO*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, IL 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
For Federal Income tax purposes, the following information is furnished with
respect to the distributions paid by the Trust during its taxable year ended
October 31, 1999. The Trust designed 100% of the income distributions as a
tax-exempt income distribution. Additionally, during the period, the Trust
designated and paid $42,470 as a 20% rate gain distribution. The distributions,
where applicable, were included on 1998's Form 1099-Div which was mailed to
shareholders in January of 1999. In January, 2000, the Trust will provide tax
information to shareholders for the 1999 calendar year.
* "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.
27
<PAGE> 29
RESULTS OF SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on June 16, 1999, where
shareholders voted on the election of trustees and the selection of independent
public accountants.
1) With regard to the election of the following trustees by the common
shareholders of the Trust:
<TABLE>
<CAPTION>
# OF SHARES
---------------------
IN FAVOR WITHHELD
- ------------------------------------------------------------------------
<S> <C> <C>
David C. Arch.................................... 3,620,292 38,304
Howard J Kerr.................................... 3,620,292 38,304
Dennis J. McDonnell.............................. 3,618,692 39,904
</TABLE>
The other trustees of the Trust whose terms did not expire in 1999 are: Rod
Dammeyer, Steven Muller, Theodore A. Myers, Don G. Powell*, Hugo Sonnenschein
and Wayne W. Whalen.
2) With regard to the ratification of KPMG LLP as independent public
accountants for the Trust, 3,604,011 shares voted in favor of the proposal,
17,362 shares voted against, and 37,225 shares abstained.
* On August 9, 1999, Don G. Powell resigned and the Board of Trustees appointed
Richard F. Powers, III.
28
<PAGE> 30
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
<CIK> 0000877649
<NAME> VK OHIO QUALITY MUNICIPAL TRUST
<SERIES>
<NUMBER> 11
<NAME> OH QUALITY
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> OCT-31-1999
<INVESTMENTS-AT-COST> 97,196,101
<INVESTMENTS-AT-VALUE> 101,948,452
<RECEIVABLES> 1,704,291
<ASSETS-OTHER> 7,835
<OTHER-ITEMS-ASSETS> 92,099
<TOTAL-ASSETS> 103,752,677
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 394,781
<TOTAL-LIABILITIES> 394,781
<SENIOR-EQUITY> 35,000,000
<PAID-IN-CAPITAL-COMMON> 63,335,863
<SHARES-COMMON-STOCK> 4,276,726
<SHARES-COMMON-PRIOR> 4,252,556
<ACCUMULATED-NII-CURRENT> 359,268
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> (89,586)
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 4,752,351
<NET-ASSETS> 103,357,896
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,520,965
<OTHER-INCOME> 0
<EXPENSES-NET> (1,259,865)
<NET-INVESTMENT-INCOME> 5,261,100
<REALIZED-GAINS-CURRENT> (88,974)
<APPREC-INCREASE-CURRENT> (6,389,260)
<NET-CHANGE-FROM-OPS> (1,217,134)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,472,036)
<DISTRIBUTIONS-OF-GAINS> (82,320)
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 24,170
<NET-CHANGE-IN-ASSETS> (6,348,180)
<ACCUMULATED-NII-PRIOR> 570,204
<ACCUMULATED-GAINS-PRIOR> 81,708
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 751,124
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,264,288
<AVERAGE-NET-ASSETS> 107,305,793
<PER-SHARE-NAV-BEGIN> 17.567
<PER-SHARE-NII> 1.233
<PER-SHARE-GAIN-APPREC> (1.514)
<PER-SHARE-DIVIDEND> (1.283)
<PER-SHARE-DISTRIBUTIONS> (0.019)
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 15.984
<EXPENSE-RATIO> 1.75
</TABLE>
