<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Management Review................. 4
Portfolio of Investments.................... 6
Statement of Assets and Liabilities......... 10
Statement of Operations..................... 11
Statement of Changes in Net Assets.......... 12
Financial Highlights........................ 13
Notes to Financial Statements............... 16
</TABLE>
TXM SAR 5/95
<PAGE>
LETTER TO SHAREHOLDERS
DON G. POWELL
May 5, 1995
Dear Shareholder:
During the six-month period covered by this report,
October 1, 1994 through March 31, 1995, we saw the close of a challenging and
difficult year in the financial markets--and the beginning of a new year, with
renewed optimism and strength on many fronts.
MARKET OVERVIEW
In an effort to moderate economic growth and keep inflation under control,
the Federal Reserve Board (the "Fed") raised the federal funds rate (the rate
banks charge each other for overnight loans) seven times since February 1994.
As a result, the fed funds rate doubled from 3 percent to 6 percent, its high-
est level in three years. Intermediate- and long-term interest rates quickly
followed the Fed's lead and moved significantly higher as well. The yield on
30-year Treasury securities, for example, began 1994 at 6.35 percent and in-
creased to a high of 8.16 percent, before retreating to 7.89 percent at the end
of the year. However, since yields and prices move in opposite directions, this
had a negative impact on prices of fixed-income securities, including municipal
bonds.
Stock market investors did not fare much better during this rising interest
rate environment, despite the robust economy and stronger corporate earnings.
Concerned that higher interest rates and the prospect for continued rate hikes
might altogether extinguish the economic expansion, the equity market sputtered
for most of 1994. The S&P 500 Index, for example, produced a 1.36 percent total
return for 1994, while the average share price change for the year for all
stocks listed on the New York Stock Exchange was down 9.22 percent.
In contrast, 1995 began more positively as the bond market got a boost from
growing sentiment that the Fed had stabilized economic growth while keeping in-
flation under control, and that it may be near the end of its tightening cycle.
Subsequently, the yield on 30-year Treasury securities fell to 7.43 percent at
the end of March--down nearly three quarters of a percentage point--from its
November 1994 high of 8.16 percent. The stock market responded in late February
with the Dow Jones Industrial Average breaking through the 4000 mark, setting a
new record high and raising expectations for a stronger market in 1995. At the
same time, almost all other major stock indexes rose, including the S&P 500 In-
dex, the New York Stock Exchange Composite Index, and the Nasdaq Composite In-
dex. The first quarter ended with the Dow Jones Industrial Average up 8.4
percent year-to-date, and the S&P 500 and Nasdaq Composite Indexes gaining 9
percent and 8.7 percent, respectively.
Additionally, at the end of March, the Van Kampen American Capital Index of
Investor Intentions reached 431 among self-described "knowledgeable" investors,
an increase of 5 percent over the previous month of 411. The index, computed
from an independently conducted survey and published by Van Kampen American
Capital, measures the investment climate (investors' confidence) by asking
1,000 investors about what they intend to do with
(Continued on page two)
1
<PAGE>
their money over the next 60-90 days. Among "knowledgeable" investors, a total
of 56.6 percent said the next 60-90 days would be a "good" time to invest.
"Knowledgeable" investors are those respondents who rate their investment
knowledge at five or higher on a seven-point scale, and who own stocks, bonds,
or mutual funds.
On the following pages, you can read about your Fund's performance during the
past six months, as well as portfolio management's outlook for 1995. We hope
that you will find the information contained in the question-and-answer section
helpful.
Additionally, we are pleased to announce the addition of Joseph A. Piraro to
the portfolio management team of the Texas Municipal Securities Fund effective
April 3, 1995. Mr. Piraro has 24 years of experience in the tax-free fixed-in-
come sector, and will be primarily responsible for the day-to-day management of
the Fund's investment portfolio. You can be assured that the Fund's portfolio
management team remains committed to seeking high current income and preserva-
tion of capital.
CORPORATE NEWS
As you may have already noticed, we have adopted a new design for our share-
holder reports that reflects our new identity as Van Kampen American Capital.
Going forward, we will continue to look for new ways to improve upon the pre-
sentation of information in your Fund's report.
In addition, we have developed a new corporate ad campaign introducing Van
Kampen American Capital. Full page ads appeared in The Wall Street Journal in
the first quarter of 1995--watch for more advertising throughout the year.
We look forward to communicating with you on a regular basis, providing in-
formation about your Fund's performance, new investment opportunities, and our
newly created company. We appreciate your continued confidence in your Fund and
Van Kampen American Capital.
Sincerely,
LOGO
Don G. Powell
PresidentVan Kampen American Capital
Asset Management, Inc.
2
<PAGE>
PERFORMANCE RESULTS FOR THE PERIOD ENDED MARCH 31, 1995
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 5.63% 5.21% 5.20%
Six-month total return/2/............................ 0.62% 1.21% 4.20%
One-year total return/2/............................. 1.82% 2.04% 5.03%
Three-year average annual total return/2/............ 5.92% N/A N/A
Life-of-Fund average annual total return/2/.......... 5.76% 4.04% 2.71%
Commencement Date.................................... 03/02/92 07/27/92 08/30/93
DISTRIBUTION RATES AND YIELD
Distribution Rate/3/................................. 5.20% 4.73% 4.72%
Taxable Equivalent Distribution Rate/4/.............. 8.13% 7.39% 7.38%
SEC Yield/5/......................................... 4.99% 4.34% 4.34%
</TABLE>
N/A = Not Applicable
/1/Assumes reinvestment of all distributions for the period ended March 31,
1995, and does not include payment of the maximum sales charge (4.75% for A
shares) or contingent deferred sales charge (4% for B shares and 1% for C
shares).
/2/Standardized total return for the period ended March 31, 1995.
/3/Distribution rate (based on maximum sales charge) represents the monthly
annualized distributions of the Fund at the end of March 1995, and not the
earnings of the Fund.
/4/Taxable equivalent calculations reflect federal income tax rate of 36%. A
portion of the interest income may be subject to the federal alternative
minimum tax (AMT).
/5/If the adviser had not voluntarily waived some of the management fees, the
SEC yields on the Fund would have been lower (4.42% for A shares, 3.80% for B
shares and 3.80% for C shares). The expense waiver may be discontinued at any
time, at which time yield and total return will decrease.
See the Fund Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Investor's shares, when redeemed, may be
worth more or less than their original cost.
3
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES FUND
The following is an interview with the management team of American Capital
Texas Municipal Securities Fund. The team is led by Joseph A. Piraro,
portfolio manager, and Dennis J. McDonnell, vice president of the Fund.
Q. WHAT MARKET CONDITIONS HAD THE GREATEST IMPACT ON THE FUND'S PERFORMANCE
DURING THE SIX MONTHS ENDED MARCH 31, 1995?
A. As the Federal Reserve Board (the "Fed") continued to raise short-term
interest rates throughout 1994, the fixed-income market continued to suf-
fer. Consequently, municipal bond funds experienced an average loss of nearly
6 percent for the year. But by the start of 1995, the bond market began to
show significant signs of recovery. The yield on the Bond Buyer Index, an un-
managed municipal bond index, for example, fell from its high of 7.37 percent
in November to 6.37 percent at the end of March. Because bond yields and
prices move in opposite directions, falling yields provided a boost for bond
prices.
The bond market rally was led by a general sentiment that the Fed, through
several interest rate hikes, had succeeded in moderating economic growth and
suppressing inflation. Orders for durable-goods, such as appliances and auto-
mobiles, were down for February--their first decline in four months. Durable-
goods orders are typically considered a key indicator of the economy's general
direction because they affect production and employment levels.
Additionally, the municipal market was positively impacted by the supply and
demand relationship at the start of 1995. January, typically a big month for
refundings and call dates among bond issuers, placed additional investment
money into the hands of investors. Subsequently, demand for municipal bonds by
investors seeking to reinvest their money into newly issued municipal bonds
exceeded supply. This lower supply compounded with increased demand helped
prices on municipal bonds to appreciate.
Q. HOW DID YOU POSITION THE FUND IN RESPONSE TO THESE EVENTS?
A. In staying consistent with the Fund's investment objective of seeking
high current income and preservation of capital, we continued to focus on
long-term bonds with high coupon rates and bonds that we believed would pro-
vide relative stability to the portfolio. As a result, we did not reposition
the portfolio in any major way.
<TABLE>
<CAPTION>
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS OF MARCH 31, 1995
<S> <C>
AAA 25%
AA 12%
A 21%
BAA 19%
BA & B 1%
NON-RATED 20%
CASH & EQUIVALENTS 2%
</TABLE>
4
<PAGE>
The Fund's portfolio continues to hold the majority of its rated securities
in AAA-rated municipal bonds (the highest credit rating assigned to municipal
bonds by Standard & Poor's Ratings Group).
Q. HOW DID THE FUND PERFORM DURING THE SIX-MONTHS ENDED MARCH 31, 1995?
A. At its current annualized dividend level of $0.540 per share, the Fund
provides shareholders with a tax-free distribution rate of 5.20 per-
cent/3/ (Class A Shares) as of March 31, 1995. At this distribution rate, the
Fund provides shareholders in the 36 percent federal income tax bracket with a
yield equivalent to a taxable investment earning 8.13 percent/4/.
For the six-month period ended March 31, 1995, the Fund produced a total re-
turn of 5.63 percent/1/ (for Class A Shares based on net asset value). This
performance compares favorably to the Lehman Brothers Municipal Bond Index
which earned a total return of 5.54 percent over the same period. The Lehman
Index is a broad-based unmanaged index of municipal bonds and does not reflect
any commissions or fees that would be paid by an investor purchasing the secu-
rities it represents. (Please refer to the chart on page three for additional
Fund performance results).
Q. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN 1995 AND, MORE
SPECIFICALLY, FOR THE FUND?
A. We believe the supply and demand dynamics for the municipal market will
continue to favorably influence municipal bond prices. The volume of
newly issued municipal bonds for the first quarter of 1995 was down 47 percent
compared to the same time period in 1994. A decline in supply combined with
steady demand should produce price stability.
Later this year, we may see interest rates edge up a bit if the Fed feels
there is still too much strength in the economy, and is compelled to raise in-
terest rates once again. But, we do not anticipate the same level of volatility
from a rate hike that we saw in the municipal market last year. Going forward,
we remain comfortable with how the Fund is currently positioned, and believe
the Fund continues to provide shareholders with long-term value. Moreover, we
believe the expertise of the Fund's management team and extensive research ca-
pabilities enables the Fund to take advantage of a variety of investment oppor-
tunities.
[Signature of Dennis J. McDonnell] [Signature of Joseph A. Piraro]
Dennis J. McDonnell Joseph A. Piraro
Vice President Portfolio Manager
American Capital Texas Securities Fund
Please see footnotes on page three.
5
<PAGE>
See Notes to Financial Statements
PORTFOLIO OF INVESTMENTS
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
-------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 97.6%
EDUCATION 7.9%
Clear Creek, Texas, Independent
$375 School District, G.O............... 6.250% 02/01/11 $ 396,105
500 Houston, Texas, Higher Education
Finance Corp., Rev. (University of
St. Thomas Project)................ 7.250 12/01/07 513,805
500 North Texas Higher Education
Authority, Inc., Texas Student Loan
Rev., Refunding, Series D.......... 6.300 04/01/09 505,540
500 Victoria, Texas, Independent School
District, Refunding................ * 02/15/08 236,210
----------------
TOTAL EDUCATION.................... 1,651,660
----------------
HOSPITALS 23.2%
105 Abilene, Texas, Health Facilities
Development Corp. (Hendrick Medical
Center Project), FGIC.............. 9.500 90/01/13 109,202
170 Bell County, Texas, Health
Facilities Development Corp.
(King's Daughters Hospital)........ 9.250 07/01/08 188,757
750 Denton, Texas, Health Facilities
Development Corp., Refunding
(Lutheran Good Samaritan
Hospitals), AMBAC.................. 6.000 06/01/18 733,410
175 Edinburg, Texas, Hospital
Authority, Rev., (Edinburg General
Hospital Project 86)............... 10.000 07/01/11 181,063
Harris County, Texas, Health
Facilities Development Corp.,
Health Care System Rev.
250 Memorial Hospital System Project.. 7.125 06/01/15 264,438
375 Sisters of Charity................ 7.100 07/01/21 396,986
90 Jefferson County, Texas, Health
Facility Authority (Baptist Health
Care Project)...................... 8.300 10/01/14 98,024
185 Lubbock, Texas, Health Facilities
Development Corp., Rev. (Methodist
Hospital), AMBAC................... 7.250 12/01/19 207,416
155 Montgomery County, Texas, Health
Facilities Development Corp.,
Hospital Mortgage Rev. (Woodlands
Medical Center Project)............ 8.850 08/15/14 168,036
500 Richardson, Texas, Hospital
Authority, Refunding & Improvement
Rev. (Richardson Medical Center)... 6.750 12/01/23 502,580
300 Rusk County, Texas, Health Facility
Corp., Refunding, Hospital Rev.
(Henderson Memorial Hospital
Project)........................... 7.750 04/01/13 308,820
500 Tarrant County, Texas, Health
Facilities Development Corp.,
Refunding & Improvement, Hospital
Rev. (Fort Worth Osteopathic
Hospital).......................... 7.000 05/15/28 509,740
250 Texas Health Facilities Development
Corp., Hospital Rev., (Fort Worth
Children's Center), FGIC........... 6.250 12/01/12 254,874
Tyler Texas, Health Facilities
Development Corp., Refunding Rev.
(East Texas Medical Center--
Regional Health)
150 Series A.......................... 8.250 11/01/06 169,002
500 Series B.......................... 6.750 11/01/25 482,155
210 Weslaco, Texas, Health Facilities
Development Corp., Hospital Rev.
(Weslaco Health Facility).......... 10.375 06/01/16 245,293
----------------
TOTAL HOSPITALS.................... 4,819,796
----------------
</TABLE>
6
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
-------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
HOUSING 12.6%
$500 Austin, Texas, Housing Finance
Corp., Multi-Family Mtg............ 6.500% 10/01/10 $ 493,765
500 Baytown, Texas, Property Management
& Development Corp., Series A
(Baytown Terrace Project).......... 6.100 08/15/21 490,325
340 Bexar County, Texas, Housing
Finance Corp., Rev., Series B...... 9.250 04/01/16 356,622
115 East Texas Housing Finance Corp.,
Single Family Mtg. Rev............. 7.200 01/01/26 117,657
250 El Paso, Texas, Housing Authority,
Multi-Family Mtg. Rev., Series A... 6.250 12/01/09 250,382
135 El Paso, Texas, Property Finance
Authority, Inc., Single Family Mtg.
Rev., Series A..................... 8.700 12/01/18 145,064
150 Galveston, Texas, Property Finance
Authority, Inc., Single Family Mtg.
Rev., Series A..................... 8.500 09/01/11 170,808
30 Harris County, Texas, Housing
Financing Corp., Single Family Mtg.
Rev., Series 1983-A................ 10.125 07/15/03 30,112
100 Harris County, Texas, Housing
Financing Corp., Single Family Mtg.
Rev., Series 1983-A................ 10.375 07/15/14 100,311
10 Harris County, Texas, Housing
Financing Corp., Single Family Mtg.
Rev................................ 11.250 04/15/06 10,266
50 Houston, Texas, Housing Finance
Corp., Single Family Mtg. Rev...... 10.000 09/15/14 51,441
190 Texas Housing Agency, Single Family
Mtg. Rev., Refunding, Series A..... 7.150 09/01/12 198,145
190 Travis County, Texas, Housing
Finance Corp., Single Family Mtg.
Rev................................ 8.200 04/01/22 196,308
----------------
TOTAL HOUSING...................... 2,611,206
----------------
MISCELLANEOUS 13.3%
60 Fort Bend County, Texas, Levee
Improvement, District No. 11, G.O.. 8.700 03/01/10 65,728
250 Garland, Texas, Economic
Development Authority, IDR (Yellow
Freight System, Inc. Project)...... 8.000 12/01/16 263,463
250 Lockhart, Texas, Correctional
Facilities Rev., Financing Corp.,
MBIA............................... 6.625 04/01/12 258,603
60 Sabine River Authority, Texas,
Refunding, PCR (Texas Utilities
Co.), Series 1986.................. 9.000 09/01/07 65,740
500 Sabine River Authority, Texas,
Refunding, PCR (Texas Utilities
Co.)............................... 7.750 04/01/16 520,125
295 Texas General Services Community
Partner Interests, (Office Building
and Land Acquisition Project)...... 7.000 08/01/09 302,859
Texas State, G.O.,
250 National Research Lab Commission.. 7.125 04/01/20 276,280
500 Refunding (Superconducting
Project), Series C................ 6.000 04/01/12 503,105
250 Refunding, Veterans Land.......... 6.500 12/01/21 259,008
250 Travis County, Texas, G.O.,
Refunding, Series A, MBIA.......... 5.500 03/01/03 253,350
----------------
TOTAL MISCELLANEOUS................ 2,768,261
----------------
</TABLE>
7
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
-------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL UTILITY DISTRICT
(MUD) 13.9%
$250 Brazoria County, Texas, MUD No. 2,
Refunding.......................... 7.000% 09/01/08 $ 253,840
60 Fort Bend County, Texas, MUD No.
25, Refunding...................... 8.000 10/01/15 63,737
250 Harris County, Texas, MUD No. 120,
Refunding.......................... 8.000 08/01/14 275,578
500 Harris County, Texas, MUD No. 322.. 6.250 05/01/18 463,785
500 Mills Road, Texas, MUD, Refunding.. 6.500 09/01/14 486,545
125 Mission Bend, Texas, MUD No. 2..... 10.000 09/01/00 145,293
250 Montgomery County, Texas, MUD,
MBIA............................... 6.250 03/01/10 258,043
50 Montgomery County, Texas, MUD, No.
4.................................. 8.900 09/01/02 56,269
250 Montgomery County, Texas, MUD...... 6.000 09/01/16 225,515
250 Montgomery County, Texas, MUD...... 6.000 09/01/19 225,495
100 West Harris County, Texas, MUD No.
1, Refunding....................... 7.000 04/01/05 103,806
300 Woodlands, Texas, Metro Center,
MUD, Refunding, Series B........... 7.100 04/01/07 333,648
----------------
TOTAL MUD.......................... 2,891,554
----------------
NURSING HOMES 1.3%
250 San Antonio, Texas, Health
Facilities Development Corp., Rev.
(Encore Nursing Center Partner).... 8.250 12/01/19 263,935
----------------
TRANSPORTATION 2.5%
250 Harris County, Texas, Toll Road
Rev. .............................. 6.750 08/01/14 263,635
250 Texas State Turnpike Authority,
Dallas North Toll Road, Tollway
Rev. .............................. 6.000 01/01/20 243,378
----------------
TOTAL TRANSPORTATION............... 507,013
----------------
UTILITIES--COMBINATION ELECTRIC,
GAS AND/OR WATER 14.4%
Austin, Texas, Utility System Rev.
500 Refunding......................... 6.000 05/15/15 495,350
220 Series B.......................... 7.800 11/15/12 243,221
435 City of Brownsville, Texas,
Utilities System Priority Rev.,
Series 1990, AMBAC................. 6.500 09/01/17 449,677
250 Colorado River, Texas, Municipal
Water District (Water Transmission
Facilities Project A), AMBAC....... 6.625 01/01/21 268,450
250 Guadalupe Blanco River Authority,
Texas, IDR......................... 6.350 07/01/22 254,190
Port of Corpus Christi, Texas, IDR
(Valero Refining & Marketing Co.)
385 Series A.......................... 10.250 06/01/17 429,306
100 Series B.......................... 10.625 06/01/08 112,250
220 San Antonio, Texas, Electric and
Gas Rev., Series A................. 6.500 02/01/12 228,008
500 Willow Fork, Texas, Drainage
District........................... 7.000 03/01/11 517,080
----------------
TOTAL UTILITIES--COMBINATION
ELECTRIC,
GAS AND/OR WATER................... 2,997,532
----------------
</TABLE>
8
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
See Notes to Financial Statements
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
-------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTILITIES--ELECTRIC 3.1%
$125 Brazos River Authority Texas, PCR
(Texas Utilities Electric Co.,
Project A)......................... 9.875% 10/01/17 $ 138,572
100 Matagorda County, Texas, Navigation
District 1, Control Rev. (Central
Power & Light Co. Project)......... 7.875 12/01/16 106,732
435 Texas Municipal Power Agency, Rev.. 5.500 09/01/13 405,812
----------------
TOTAL UTILITIES--ELECTRIC.......... 651,116
----------------
UTILITIES--WATER AND SEWER 5.4%
250 Coastal Water Authority, Texas
Water Rev., AMBAC.................. 6.250 12/15/17 254,345
100 Harris County, Texas, Water Control
And Improvement District No. 75.... 7.000 03/01/14 103,416
500 Houston, Texas, Water and Sewer
System, Refunding Rev., Series B... 6.375 12/01/14 509,330
250 Tarrant County, Texas, Water
Control and Improvement Rev........ 6.000 03/01/10 261,095
----------------
TOTAL UTILITIES--WATER AND SEWER... 1,128,186
----------------
TOTAL MUNICIPAL BONDS (Cost
$19,812,112)....................... 20,290,259
----------------
REPURCHASE AGREEMENT 1.1%
225 Salomon Brothers, Inc., dated
3/31/95 (Collaterized by U.S.
Government obligations in a pooled
cash account), repurchase proceeds
$225,118 (Cost $225,000)........... 6.270 04/03/95 225,000
----------------
TOTAL INVESTMENTS (Cost $20,037,112) 98.7% ................ 20,515,259
OTHER ASSETS AND LIABILITIES, NET 1.3%..................... 278,350
----------------
NET ASSETS 100%............................................ $ 20,793,609
----------------
</TABLE>
*Zero Coupon
G.O.--General Obligation bond
IDR--Industrial Development Revenue bond
PCR--Pollution Control Revenue bond
Rev.--Revenue bond
Insurers:
AMBAC--AMBAC Indemnity Corp.
FGIC--Financial Guaranty Insurance Co.
MBIA--Municipal Bond Investor's Assurance Corp.
9
<PAGE>
See Notes to Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS
Investments, at market value (Cost $20,037,112).............. $ 20,515,259
Cash......................................................... 3,065
Interest receivable.......................................... 406,137
Receivable for investments sold.............................. 15,030
Receivable for Fund shares sold.............................. 6,774
Other assets................................................. 5,775
----------------
Total Assets................................................ 20,952,040
----------------
LIABILITIES
Dividends payable............................................ 48,413
Payable for Fund shares purchased............................ 20,020
Due to Distributor........................................... 16,922
Deferred directors' compensation............................. 4,647
Due to shareholder service agent............................. 2,076
Accrued expenses and other payables.......................... 66,353
----------------
Total Liabilities........................................... 158,431
----------------
NET ASSETS, equivalent to $9.90 per share for Class A and
Class B shares and $9.91 per share for Class C shares....... $ 20,793,609
----------------
NET ASSETS WERE COMPRISED OF:
Capital stock, at par; 1,193,994 Class A, 771,709 Class B and
133,643 Class C shares outstanding.......................... $ 20,993
Capital surplus.............................................. 20,346,447
Accumulated net realized loss on securities.................. (35,698)
Net unrealized appreciation of securities.................... 478,147
Accumulated deficit.......................................... (16,280)
----------------
NET ASSETS at March 31, 1995................................. $ 20,793,609
----------------
</TABLE>
10
<PAGE>
See Notes to Financial Statements
STATEMENT OF OPERATIONS
Six Months Ended March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME
Interest..................................................... $ 733,813
----------------
EXPENSES
Management fees.............................................. 63,095
Service fees--Class A........................................ 12,831
Distribution and service fees--Class B....................... 39,344
Distribution and service fees--Class C....................... 5,905
Accounting services.......................................... 33,147
Registration and filing fees................................. 15,985
Audit fees................................................... 13,550
Reports to shareholders...................................... 13,235
Shareholder service agent's fees and expenses................ 9,075
Directors' fees and expenses................................. 5,435
Custodian fees............................................... 2,200
Legal fees................................................... 1,740
Organization expenses........................................ 1,500
Miscellaneous................................................ 640
Expense reimbursement (see Note 2) .......................... (21,032)
----------------
Total expenses.............................................. 196,650
----------------
NET INVESTMENT INCOME....................................... 537,163
----------------
REALIZED AND UNREALIZED GAIN ON SECURITIES
Net realized gain on securities.............................. 10,174
Net unrealized appreciation of securities during the period.. 552,465
----------------
NET REALIZED AND UNREALIZED GAIN ON SECURITIES.............. 562,639
----------------
INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $ 1,099,802
----------------
</TABLE>
11
<PAGE>
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
March 31, 1995 September 30, 1994
--------------------------------------------------------------------------------
<S> <C> <C>
NET ASSETS, beginning of period.......... $22,616,594 $25,210,015
----------- -----------
Operations
Net investment income................... 537,163 1,279,721
Net realized gain (loss) on securities.. 10,174 (39,911)
Net unrealized appreciation
(depreciation) of securities during the
period................................. 552,465 (1,799,595)
----------- -----------
Increase (decrease) in net assets
resulting from operations.............. 1,099,802 (559,785)
----------- -----------
Distributions to shareholders from
net investment income
Class A................................. (338,950) (849,857)
Class B................................. (191,546) (383,566)
Class C................................. (28,575) (40,808)
----------- -----------
(559,071) (1,274,231)
----------- -----------
Excess of book-basis net realized gain
on securities (Note 1D)
Class A................................. -- (21,198)
Class B................................. -- (9,656)
Class C................................. -- (729)
----------- -----------
-- (31,583)
----------- -----------
Total distributions..................... (559,071) (1,305,814)
----------- -----------
Capital transactions
Proceeds from shares sold
Class A................................. 232,294 1,892,676
Class B................................. 255,582 2,691,555
Class C................................. 138,913 1,309,798
----------- -----------
626,789 5,894,029
----------- -----------
Proceeds from shares issued for
distributions reinvested
Class A................................. 155,448 428,301
Class B................................. 93,251 197,947
Class C................................. 5,224 10,051
----------- -----------
253,923 636,299
----------- -----------
Cost of shares redeemed
Class A................................. (1,708,080) (6,308,560)
Class B................................. (1,467,212) (872,378)
Class C................................. (69,136) (77,212)
----------- -----------
(3,244,428) (7,258,150)
----------- -----------
Decrease in net assets from capital
transactions........................... (2,363,716) (727,822)
----------- -----------
DECREASE IN NET ASSETS................... (1,822,985) (2,593,421)
----------- -----------
NET ASSETS, end of period................ $20,793,609 $22,616,594
----------- -----------
</TABLE>
12
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS
Selected data for a share of capital stock outstanding throughout each of the
periods indicated (Unaudited).
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class A
--------------------------------------------------
Six Months Year Ended March 2, 1992(/1/)
Ended September 30 through
March 31, ------------------ September 30,
1995 1994 1993(/2/) 1992(/2/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFOR-
MANCE
Net asset value, beginning
of period................. $9.64 $10.36 $ 9.74 $9.45
----- ------ ------ -----
Income from operations
Investment income......... .33 .64 .63 .42
Expenses.................. (.08) (.17) (.19) (.09)
Expense reimburse-
ment(/3/)................ .01 .07 .13 .03
----- ------ ------ -----
Net investment income...... .26 .54 .57 .36
Net realized and unrealized
gains or losses on securi-
ties...................... .27 (.7025) .65 .23
----- ------ ------ -----
Total from investment oper-
ations.................... .53 (.1625) 1.22 .59
----- ------ ------ -----
Less distributions from
Net investment income..... (.27) (.545) (.5875) (.30)
Net realized gains on se-
curities................. -- (.0125) (.0125) --
----- ------ ------ -----
Total distributions........ (.27) (.5575) (.60) (.30)
----- ------ ------ -----
Net asset value, end of pe-
riod...................... $9.90 $ 9.64 $10.36 $9.74
----- ------ ------ -----
TOTAL RETURN(/4/).......... 5.63% (1.62%) 12.94% 6.30%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions)................ $11.8 $ 12.8 $ 18.0 $14.1
Average net assets (mil-
lions).................... $12.0 $ 15.7 $ 16.8 $11.7
Ratios to average net as-
sets (annualized)(/3/)
Expenses.................. 1.53% 1.03% 0.61% 0.93%
Expenses, without expense
reimbursement............ 1.73% 1.70% 1.86% 1.41%
Net investment income..... 5.46% 5.41% 5.74% 5.94%
Net investment income,
without expense reim-
bursement................ 5.26% 4.74% 4.49% 5.45%
Portfolio turnover rate.... 0% 10% 5% 4%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding.
(3) See Note 2.
(4) Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.
13
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding throughout each of the
periods indicated (Unaudited).
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class B
----------------------------------------------
July 27,
Six Months Year Ended 1992(/1/)
Ended September 30 through
March 31, ------------------- September 30,
1995 1994 1993(/2/) 1992(/2/)
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PER SHARE OPERATING PERFOR-
MANCE
Net asset value, beginning of
period....................... $9.64 $ 10.35 $ 9.74 $ 9.91
----- ------- ------- ------
Income from operations
Investment income............ .33 .65 .63 .09
Expenses..................... (.12) (.25) (.26) (.04)
Expense reimbursement(/3/)... .01 .07 .13 .015
----- ------- ------- ------
Net investment income......... .22 .47 .50 .065
Net realized and unrealized
gains or losses on
securities................... .272 (.7065) .633 (.103)
----- ------- ------- ------
Total from investment opera-
tions........................ .492 (.2365) 1.133 (.038)
----- ------- ------- ------
Less distributions from
Net investment income........ (.232) (.461) (.5105) (.132)
Net realized gains on securi-
ties........................ -- (.0125) (.0125) --
----- ------- ------- ------
Total distributions........... (.232) (.4735) (.523) (.132)
----- ------- ------- ------
Net asset value, end of peri-
od........................... $9.90 $ 9.64 $ 10.35 $ 9.74
----- ------- ------- ------
TOTAL RETURN(/4/)............. 5.21% (2.35%) 11.97% (.73%)
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period
(millions)................... $ 7.7 $ 8.6 $ 7.1 $ 0.9
Average net assets (millions). $ 7.9 $ 8.4 $ 4.6 $ 0.5
Ratios to average net assets
(annualized)(/3/)
Expenses..................... 2.33% 1.80% 1.30% 1.41%
Expenses, without expense re-
imbursement................. 2.53% 2.47% 2.55% 2.15%
Net investment income........ 4.68% 4.66% 4.92% 3.83%
Net investment income, with-
out expense reimbursement... 4.48% 3.99% 3.67% 3.07%
Portfolio turnover rate....... 0% 10% 5% 4%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding.
(3) See Note 2.
(4) Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.
14
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (CONTINUED)
Selected data for a share of capital stock outstanding throughout each of the
periods indicated (Unaudited).
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Class C
----------------------------------------
August 30,
Six Months 1993(/1/)
Ended Year Ended through
March 31, September 30 September 30,
1995 1994(/2/) 1993(/2/)
--------------------------------------------------------------------------------
<S> <C> <C> <C>
PER SHARE OPERATING PERFORMANCE
Net asset value, beginning of period. $9.65 $10.36 $10.28
----- ------ ------
Income from operations
Investment income................... .33 .64 .05
Expenses............................ (.12) (.25) (.02)
Expense reimbursement(/3/).......... .01 .07 .01
----- ------ ------
Net investment income................ .22 .46 .04
Net realized and unrealized gains or
losses on securities................ .272 (.6965) .121
----- ------ ------
Total from investment operations..... .492 (.2365) .161
----- ------ ------
Less distributions from
Net investment income............... (.232) (.461) (.081)
Net realized gains on securities.... -- (.0125) --
----- ------ ------
Total distributions.................. (.232) (.4735) (.081)
----- ------ ------
Net asset value, end of period....... $9.91 $ 9.65 $10.36
----- ------ ------
TOTAL RETURN(/4/).................... 5.20% (2.35%) 1.57%
RATIOS/SUPPLEMENTAL DATA
Net assets, end of period (millions). $ 1.3 $ 1.2 $ 0.1
Average net assets (millions)........ $ 1.2 $ 0.9 $ .02
Ratios to average net assets
(annualized)(/3/)
Expenses............................ 2.31% 1.79% 0.66%
Expenses, without expense reimburse-
ment............................... 2.51% 2.46% 1.89%
Net investment income............... 4.65% 4.59% 4.17%
Net investment income, without ex-
pense reimbursement................ 4.45% 3.92% 2.92%
Portfolio turnover rate.............. 0% 10% 5%
</TABLE>
(1) Commencement of operations
(2) Based on average month-end shares outstanding.
(3) See Note 2.
(4) Total return for periods of less than one full year are not annualized.
Total return does not consider the effect of sales charges.
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
American Capital Texas Municipal Securities, Inc. (the "Fund") is registered
under the Investment Company Act of 1940, as amended, as a non-diversified,
open-end management investment company. The following is a summary of signifi-
cant accounting policies consistently followed by the Fund in the preparation
of its financial statements.
A. INVESTMENT VALUATIONS-Investments in municipal bonds are valued at the most
recently quoted bid prices or at bid prices based on a matrix system (which
considers such factors as security prices, yields, maturities and ratings) fur-
nished by dealers and an independent pricing service.
Short-term investments with a maturity of 60 days or less when purchased are
valued at amortized cost, which approximates market value. Short-term invest-
ments with a maturity of more than 60 days when purchased are valued based on
market quotations until the remaining days to maturity becomes less than 61
days. From such time, until maturity, the investments are valued at amortized
cost.
Issuers of certain securities owned by the Fund have obtained insurance guar-
anteeing their timely payment of principal at maturity and interest. Such in-
surance reduces financial risk but not market risk of the security.
Fund investments include lower rated debt securities which may be more sus-
ceptible to adverse economic conditions than other investment grade holdings.
These securities are often subordinated to the prior claims of other senior
lenders and uncertainties exist as to an issuer's ability to meet principal and
interest payments. At March 31, 1995, debt securities rated below investment
grade and comparable unrated securities represented approximately 21% of the
investment portfolio.
B. FEDERAL INCOME TAXES--No provision for federal income taxes is required be-
cause the Fund has elected to be taxed as a "regulated investment company" un-
der the Internal Revenue Code and intends to maintain this qualification by
annually distributing all of its taxable net investment income and taxable net
realized capital gains to its shareholders. It is anticipated that no further
distributions of capital gains will be made until tax basis capital loss
carryforwards expire or are offset by net realized capital gains.
Approximately $38,000 of financial statement losses are deferred for tax pur-
poses to the 1995 fiscal year.
C. INVESTMENT TRANSACTIONS AND RELATED INVESTMENT INCOME-Investment transac-
tions are accounted for on the trade date. Realized gains and losses on invest-
ments are determined on the basis of identified cost. Interest income is
accrued daily.
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
D. DIVIDENDS AND DISTRIBUTIONS-The Fund declares dividends from net investment
income each business day. Dividends and distributions to shareholders are re-
corded on the record dates. The Fund distributes tax basis earnings in accor-
dance with the minimum distribution requirements of the Internal Revenue Code,
which may differ from generally accepted accounting principals. Such dividends
and distributions may exceed financial statement earnings.
The Fund intends to continue to invest principally in tax-exempt obligations
sufficient in amount to qualify the Fund to pay "exempt-interest dividends" as
defined in the Internal Revenue Code. However, a portion of such dividends may
represent tax preference items subject to alternative minimum tax.
E. DEBT DISCOUNT OR PREMIUM-The Fund accounts for debt discounts and premiums
on the same basis as is followed for federal income tax reporting. Accordingly,
original issue debt discounts and all premiums are amortized over the life of a
security. Market discounts are recognized at the time of sale as realized gains
for book purposes and ordinary income for tax purposes.
F. WHEN-ISSUED SECURITIES-Delivery and payment for securities purchased on a
when- issued basis may take place up to 45 days after the date of the transac-
tion. The securities purchased are subject to market fluctuations during this
period. To meet the payment obligation, sufficient cash or liquid securities,
equal to the amount that will be due, are set aside with the custodian.
G. ORGANIZATION COSTS-Organization expenses of approximately $15,000 were de-
ferred and are being amortized over a five year period ending April 1997.
NOTE 2--MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Van Kampen American Capital Assets Management, Inc. (the "Adviser") serves as
investment manager of the Fund. Management fees are paid monthly, based on the
average daily net assets of the Fund at an annual rate of .60% of the first
$300 million, .55% of the next $300 million, and .50% of the amount in excess
of $600 million. From time to time, the Adviser may voluntarily elect to reim-
burse the Fund a portion of the Fund's expenses. This reimbursement may be dis-
continued at any time without prior notice. For the period ended March 31,
1995, such reimbursement was $21,032.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
Accounting services include the salaries and overhead expenses of the Fund's
Treasurer and the personnel operating under his direction. Charges are allo-
cated among investment companies advised or sub-advised by the Adviser. For the
period ended March 31, 1995, these charges included $3,112 as the Fund's share
of the employee costs attributable to the Fund's accounting officers. A portion
of the accounting services expenses was paid to the Adviser in reimbursement of
personnel, facilities and equipment costs attributable to the provision of ac-
counting services to the Fund. The services provided by the Adviser are at
cost.
ACCESS Investor Services, Inc., an affiliate of the Adviser, serves as the
Fund's shareholder service agent. These services are provided at cost plus a
profit. For the period ended March 31, 1995, such fees aggregated $6,181.
The Fund has been advised that Van Kampen American Capital Distributors, Inc.
(the "Distributor") and Advantage Capital Corp. (the "Retail Dealer"), both af-
filiates of the Adviser, received $1,235 and $90, respectively, as their por-
tion of the commissions charged on sales of Fund shares during the period.
Under the Distribution Plans, each class of shares pays up to .25% per annum
of its average net assets to reimburse the Distributor for expenses and service
fees incurred. Class B shares and Class C shares pay an additional fee of up to
.75% per annum of their average net assets to reimburse the Distributor for its
distribution expenses. Actual distribution expenses incurred by the Distributor
for Class B shares and Class C shares may exceed the amounts reimbursed to the
Distributor by the Fund. At March 31, 1995, the unreimbursed expenses incurred
by the Distributor under the Class B and Class C plans aggregated approximately
$314,000 and $18,000, respectively, and may be carried forward and reimbursed
through either the collection of the contingent deferred sales charges from
shares redemptions or, subject to the annual renewal of the plans, future Fund
reimbursements of distribution fees.
Legal fees were for services rendered by O'Melveny & Myers, counsel for the
Fund. Lawrence J. Sheehan, of counsel to that firm, is a director of the Fund.
Certain officers and directors of the Fund are officers and directors of the
Adviser, the Distributor, the Retail Dealer and the shareholder service agent.
NOTE 3--INVESTMENT ACTIVITY
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments, were $30,000 and $2,566,049, respec-
tively.
For federal income tax purposes, the identified cost of investments owned at
March 31, 1995 was $20,037,155. Net unrealized appreciation of investments ag-
gregated $478,104, gross unrealized appreciation of investments aggregated
$627,673, and gross unrealized depreciation of investments aggregated $149,569.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
NOTE 4--DIRECTOR COMPENSATION
Fund directors who are not affiliated with the Adviser are compensated by the
Fund at the annual rate of $720 plus a fee of $15 per day for Board and Commit-
tee meetings attended. The Chairman receives additional fees from the Fund at
an annual rate of $270. During the period, such fees aggregated $4,334.
The directors may participate in a voluntary deferred compensation plan (the
"Plan"). The Plan is not funded, and obligations under the Plan will be paid
solely out of the Fund's general accounts. The Fund will not reserve or set
aside funds for the payment of its obligations under the Plan by any form of
trust or escrow. Each director covered under the Plan elects to be credited
with an earnings component on amounts deferred equal to the income earned by
the Fund on its short-term investments or equal to the total return of the
Fund.
NOTE 5--CAPITAL
The Fund offers three classes of shares at their respective net asset values
per share, plus a sales charge which is imposed either at the time of purchase
(the Class A shares) or at the time of redemption on a contingent deferred ba-
sis (the Class B shares and Class C shares). All classes of shares have the
same rights, except that Class B shares and Class C shares bear the cost of
distribution fees and certain other class specific expenses. Realized and
unrealized gains or losses, investment income and expenses (other than class
specific expenses) are allocated daily to each class of shares based upon the
relative proportion of net assets of each class. Class B shares and Class C
shares automatically convert to Class A shares six years and ten years after
purchase, respectively, subject to certain conditions.
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
March 31, 1995 (Unaudited)
--------------------------------------------------------------------------------
The Fund has 200 million of each class of shares of $.01 par value capital
stock authorized. Transactions in shares of capital stock were as follows:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
MARCH 31, SEPTEMBER 30,
1995 1994
--------------------------------------------------------------------------------
<S> <C> <C>
Shares sold
Class A............................................. 24,316 187,834
Class B............................................. 26,896 265,842
Class C............................................. 14,099 128,146
-------- --------
65,311 581,822
-------- --------
Shares issued for distributions reinvested
Class A............................................. 16,234 42,661
Class B............................................. 9,743 19,840
Class C............................................. 545 1,010
-------- --------
26,522 63,511
-------- --------
Shares redeemed
Class A............................................. (178,125) (637,534)
Class B............................................. (153,746) (87,755)
Class C............................................. (7,224) (7,831)
-------- --------
(339,095) (733,120)
-------- --------
Decrease in shares outstanding....................... (247,262) (87,787)
-------- --------
</TABLE>
20
<PAGE>
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND INTERNATIONAL
Govett Emerging Markets Fund
AC Global Equity Fund
Govett Global Government Income Fund
AC Global Government Securities
AC Global Managed Assets Fund
Govett International Equity Fund
Govett Latin America Fund
Govett Pacific Strategy Fund
EQUITY
Growth
AC Emerging Growth Fund
AC Enterprise Fund
AC Pace Fund
Govett Smaller Companies Fund
Growth & Income
VKM Balanced Fund
AC Comstock Fund
AC Equity Income Fund
AC Growth and Income Fund
VKM Growth and Income Fund
AC Harbor Fund
AC Real Estate Securities Fund
VKM Utility Fund
AC Utilities Income Fund
FIXED INCOME
VKM Adjustable Rate U.S. Government Fund
AC Corporate Bond Fund
AC Federal Mortgage Trust
AC Government Securities
VKM High Yield Fund
AC High Yield Investments
VKM Money Market Fund
VKM Prime Rate Income Trust
AC Reserve Fund
VKM Short-Term Global Income Fund
VKM Strategic Income Fund
VKM U.S. Government Fund
AC U.S. Government Trust for Income
TAX-FREE
VKM California Insured Tax Free Fund
VKM Florida Insured Tax Free Income Fund
VKM Insured Tax Free Income Fund
VKM Limited Term Municipal Income Fund
AC Municipal Bond Fund
VKM Municipal Income Fund
VKM New Jersey Tax Free Income Fund
VKM New York Tax Free Income Fund
VKM Pennsylvania Tax Free Income Fund
AC Tax-Exempt Trust
--High Yield Municipal Portfolio
--Insured Municipal Portfolio
VKM Tax Free High Income Fund
VKM Tax Free Money Fund
AC Texas Municipal Securities
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-421-5666 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
21
<PAGE>
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES, INC.
BOARD OF DIRECTORS
J. MILES BRANAGAN
RICHARD E. CARUSO
ROGER HILSMAN
DON G. POWELL
DAVID REES
LAWRENCE J. SHEEHAN
FERNANDO SISTO*
WILLIAM S. WOODSIDE
*Chairman of the Board
OFFICERS
DON G. POWELL
President
CURTIS W. MORELL
Vice President and Treasurer
DENNIS J. McDONNELL
RONALD A. NYBERG
ROBERT C. PECK, JR.
PAUL R. WOLKENBERG
Vice Presidents
TANYA M. LODEN
Vice President and Controller
NORI L. GABERT
Vice President and Secretary
J. DAVID WISE
Vice President and Assistant Secretary
PERRY F. FARRELL
M. ROBERT SULLIVAN
Assistant Treasurers
HUEY P. FALGOUT, JR.
Assistant Secretary
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
2800 Post Oak Blvd.
Houston, Texas 77056
DISTRIBUTOR
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
2800 Post Oak Blvd.
Houston, Texas 77056
SHAREHOLDER SERVICE AGENT
ACCESS INVESTORS SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK
AND TRUST CO.
225 Franklin Street
Boston, Massachusetts 02110
COUNSEL
O'MELVENY & MYERS
400 South Hope Street
Los Angeles, California 90071
(c) Van Kampen American Capital Distributors, Inc., 1995 All rights reserved.
SM denotes a service mark of Van Kampen American Capital Distributors, Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund
which contains additional information on how to purchase shares, the sales
charge, and other pertinent data.
22
<PAGE>
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES, INC.
THIS PAGE INTENTIONALLY LEFT BLANK
23
<PAGE>
AMERICAN CAPITAL TEXAS MUNICIPAL SECURITIES, INC.
THIS PAGE INTENTIONALLY LEFT BLANK
24
