<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 5
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 11
Statement of Operations.......................... 12
Statement of Changes in Net Assets............... 13
Financial Highlights............................. 14
Notes to Financial Statements.................... 15
</TABLE>
VIM SAR 6/97
<PAGE> 2
LETTER TO SHAREHOLDERS
June 5, 1997
Dear Shareholder,
As mentioned in your previous
report, VK/AC Holding, Inc., the parent
company of Van Kampen American Capital,
Inc., was acquired by Morgan Stanley
Group Inc., a world leader in asset
management. More recently, on February [PHOTO]
5, 1997, Morgan Stanley Group Inc. and
Dean Witter, Discover & Co. announced
their agreement to merge, and you DENNIS J. MCDONNELL AND DON G. POWELL
received a proxy in April. The merger
was completed on May 31, 1997, creating
the combined company of Morgan Stanley, Dean Witter, Discover & Co. This
preeminent global financial services firm boasts a market capitalization of $21
billion and leading market positions in securities, asset management, and credit
services. As the financial industry continues to witness unprecedented
consolidations and new partnerships, we believe that those firms that are
leaders in all facets of their business will be able to offer investors the
greatest opportunities and services as we move into the next century. We are
confident that this merger will provide investors with those benefits.
ECONOMIC REVIEW
Bond prices were volatile during the six months ended April 30, 1997. Prices
initially rose as the economy slowed, erasing fears of an interest rate hike by
the Federal Reserve Board. The November election of a Democratic president and
Republican Congress was positive for bonds because the split government was
viewed as a restraint on spending increases that could potentially swell the
budget deficit. In addition, support diminished for radical tax reform that
could threaten the tax-free status of municipal bonds.
By the beginning of 1997, the situation changed. Bond prices began to fall
as the economy picked up speed, culminating in a 5.60 percent annualized growth
rate in the first quarter. This strength, coupled with warnings by Fed Chairman
Alan Greenspan that tighter monetary policy might be appropriate, reignited
fears of a rate hike. On March 25, the Fed raised short-term rates by a modest
0.25 percent, which sent the 30-year Treasury bond yield above 7.00 percent for
the first time in six months. By the end of April, the 30-year Treasury bond
yield slipped back below 7.00 percent as the market turned its attention to
positive news about inflation, and bonds recovered some of their earlier losses.
Throughout most of the six months ended April 30, municipal bonds generally
outperformed Treasuries. Between October 31 and April 30, yields on long-term
municipal revenue bonds rose 21 basis points, while yields on 30-year Treasury
bonds jumped 31 basis points. Because bond yields move in the opposite direction
of prices, the smaller
Continued on page two
1
<PAGE> 3
increase in municipal yields meant that municipal bond prices did not fall as
sharply as Treasury bond prices did. A relatively stable supply of new issues,
combined with an increase in retail demand, contributed to the improved
performance of municipal bonds.
FUND STRATEGY
In managing the Trust, we maintained a 100 percent concentration in
AAA-rated, insured bonds during the period. These securities have the highest
credit rating assigned to bonds by the Standard & Poor's Ratings Group and, as a
result, are extremely easy to trade. AAA-rated securities have tended to perform
better when interest rates are declining and provide the potential for safety of
principal. Because of these characteristics, insured bonds performed best during
the early part of the reporting period, when interest rates fell.
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS A PERCENTAGE OF
LONG-TERM INVESTMENTS AS OF APRIL 30, 1997
AAA................................ 100%
Based upon credit quality ratings issued by Standard &
Poor's.
For securities not rated by Standard & Poor's, the Moody's
rating is used.
Portfolio turnover during the period was minimal because market conditions
offered few opportunities to add value over existing holdings. The average
yields of bonds in the portfolio were higher than current market yields.
Acquisitions focused on short-term bonds with 10-year maturities to seek to
enhance the yield of the portfolio and on longer term discount bonds with
maturities of around 25 years to increase the portfolio's call protection. In
other words, we hope to lessen the concentration of bonds that can be called at
the same time.
Premium bonds were sold in order to buy a larger amount of discount
securities. In addition, bonds issued by high-tax states, such as New York and
California, were emphasized because they have the potential to appreciate due to
strong demand. During the fourth quarter, the portfolio was negatively impacted
by an extraordinary call on our $8.5 million Mercer County Improvement District
holdings. The bonds, which had been priced at a premium, were called at par due
to the cancellation of the incinerator project for which they were issued. (A
bond that is priced at its face value is selling at par. If it is priced below
par, it is selling at a discount. Conversely, a bond priced above par is selling
at a premium.) When buying new securities for the portfolio, we attempt to
identify those bonds that we believe will outperform within a particular sector
and that can be purchased at an attractive price. We believe this "bottom-up"
approach, supported by our research, provides significant added value to the
portfolio.
The duration of the portfolio was increased during this period as a result
of certain acquisitions. Duration, which is expressed in years, is a measure of
a portfolio's sensitivity to interest rate movements. Portfolios with longer
durations have tended to perform better when interest rates are rising, and
portfolios with shorter durations have tended to perform better when rates are
falling. At the end of the period, the Trust's duration stood at 7.58 years
compared to 7.84 for the Lehman Brothers Insured Municipal Bond Index benchmark.
Continued on page three
2
<PAGE> 4
[DISTRIBUTION HISTORY GRAPH]
Six-month Distribution History
For the Period Ended April 30, 1997
<TABLE>
<CAPTION>
Distribution per Share
Dividends Capital Gains
<S> <C> <C>
Nov 1996..................... $.0875
Dec 1996..................... $.0875 $.2483
Jan 1997..................... $.0875
Feb 1997..................... $.0875
Mar 1997..................... $.0875
Apr 1997..................... $.0875
</TABLE>
The dividend and/or capital gains history represents past performance of the
Trust and does not predict the Trust's future distributions.
PERFORMANCE SUMMARY
We are pleased to report that the Van Kampen American Capital Trust for
Insured Municipals continued its positive performance over the first half of its
fiscal year. For the six-month period ended April 30, 1997, the Trust generated
a total return at market price of 3.46 percent(1). The Trust offered a
tax-exempt distribution rate of 6.56 percent(3), based on the closing common
stock price of $16.00 per share on April 30, 1997. Because income from the Trust
is exempt from federal income tax, this distribution rate represents a yield
equivalent to a taxable investment earning 10.25 percent(4) (for investors in
the 36 percent federal income tax bracket). At the end of the reporting period,
the closing share price of the Trust traded at a 1.54 percent discount to its
net asset value of $16.25.
Due to the sale of some assets that had appreciated in value, the Trust's
Board of Trustees declared a capital gains distribution of $0.1608 per share
payable on December 31, 1996.
TOP FIVE PORTFOLIO INDUSTRY HOLDINGS BY SECTOR AS OF APRIL 30, 1997*
Airport........................... 18.0%
Health Care....................... 15.8%
Multi-Family Housing.............. 12.0%
Single-Family Housing............. 11.3%
Retail Electric/Gas/Telephone...... 9.9%
*As a Percentage of Long-Term Investments
Continued on page four
3
<PAGE> 5
MUNICIPAL MARKET OUTLOOK
We continue to see signs of a strong economy, although we do not expect the
unusually brisk growth rate of the first quarter to be sustained throughout the
year. As a result, we believe the Fed will monitor the economy closely and take
aggressive action to control growth if inflation picks up or the high growth
rate is sustained. However, if growth slows, we believe the Fed will leave rates
unchanged. Given this outlook, we expect that yields on the 30-year Treasury
bond will range between 6.75 and 7.40 percent for the remainder of the year,
with higher levels occurring early and lower yields dominating the second half
of 1997. Although short-term interest rates have risen, this has not had a
significant impact on the leveraged structure of the Trust.
We believe the Trust is positioned to perform well in the coming months, and
we do not anticipate major structural changes in the portfolio. In light of our
expectations for interest rates, we will continue to maintain a slightly
defensive posture by keeping a relatively short duration for the portfolio and
adjusting the duration when prudent. We will also continue to seek a balance
between the Trust's total return and its dividend income, as well as to add
value through security selection. Thank you for your continued confidence in Van
Kampen American Capital and your Trust's team of managers.
Sincerely,
[SIG]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
Please see footnotes on page five
4
<PAGE> 6
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1997
VAN KAMPEN AMERICAN CAPITAL TRUST FOR INSURED MUNICIPALS
(NYSE TICKER SYMBOL--VIM)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............ 3.46%
Six-month total return based on NAV(2)..................... 1.48%
DISTRIBUTION RATES
Distribution rate as a % of closing stock price(3)......... 6.56%
Taxable-equivalent distribution rate as a % of closing
stock price(4)........................................... 10.25%
SHARE VALUATIONS
Net asset value............................................ $ 16.25
Closing stock price........................................ $16.000
Six-month high common stock price (03/13/97)............... $16.750
Six-month low common stock price (12/17/96)................ $15.750
Preferred share (Series A) rate(5)......................... 3.569%
Preferred share (Series B) rate(5)......................... 3.750%
</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 common stock price at the end of the period
indicated.
(2)Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3)Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4)The taxable-equivalent distribution rate is calculated assuming a 36% federal
tax bracket.
(5)See "Notes to Financial Statements" footnote #6, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
Market forecasts provided in this report may not necessarily come to pass.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 2.7%
$1,000 Birmingham-Carraway, AL Methodist Hlth Sys Ser A
(Connie Lee Insd)............................... 5.875% 08/15/25 $ 1,000,660
2,000 Huntsville, AL Pub Bldg Auth Lease Rev Muni
Justice Pub & Safety Cent A (MBIA Insd)......... 5.900 10/01/16 2,017,700
4,000 Huntsville-Madison Cnty, AL Arpt Auth Arpt
Terminal Rev (MBIA Insd)........................ 5.400 07/01/19 3,756,400
------------
6,774,760
------------
ALASKA 0.4%
850 Alaska St Hsg Fin Corp Coll Mtg Oblig Ser A
Subser A2 (GNMA Collateralized)................. 7.050 06/01/25 891,557
------------
ARIZONA 2.4%
1,500 Arizona Hlth Fac Auth Hosp Sys Rev Phoenix
Baptist Hosp & Med Rfdg (MBIA Insd)............. 6.250 09/01/11 1,593,255
1,538 Peoria, AZ Indl Dev Auth Multi-Family Rev Sr Hsg
Casa Del Rio A Rfdg (GNMA Collateralized)....... 7.300 02/20/15 1,675,128
2,490 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Ser A Rfdg (FSA Insd)..... 7.250 07/15/10 2,746,445
------------
6,014,828
------------
CALIFORNIA 16.0%
6,235 California Hsg Fin Agy Rev Amt Home Mtg Ser B
(MBIA Insd)..................................... 6.100 02/01/28 6,255,014
2,500 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
Pacific Gas & Elec Ser B (FSA Insd)............. 6.350 06/01/09 2,643,700
9,000 Los Angeles Cnty, CA Pension Oblig Ctfs Ltd Muni
Oblig Ser A (MBIA Insd) (c)..................... 6.900 06/30/08 10,359,630
7,500 Mount Diablo, CA Hosp Dist Rev Ser A (Embedded
Cap) (AMBAC Insd)............................... 5.125 12/01/23 6,702,525
1,155 Paramount, CA Redev Agy Tax Alloc (MBIA Insd)... 6.250 08/01/10 1,229,613
3,600 Sacramento Cnty, CA Arpt Ser A (MBIA Insd)...... 5.900 07/01/24 3,592,404
1,000 San Francisco, CA City & Cnty Redev Agy Hotel
Tax Rev (FSA Insd).............................. 6.750 07/01/15 1,094,490
9,000 San Jose, CA Single Family Mtg Rev Ser A Cap
Apprec (GEMIC Mtg Collateralized)............... * 04/01/16 3,051,090
4,240 University of CA Rev Multi-Purp Proj Ser D (MBIA
Insd)........................................... 6,300 09/01/14 4,461,710
------------
39,390,176
------------
COLORADO 0.9%
2,330 Castle Rock, CO Multi-Family Rev Hsg Pines at
Castle Rock Ser A (FSA Insd).................... 6.100 12/01/16 2,340,671
------------
FLORIDA 2.3%
1,000 Hillsborough Cnty, FL Aviation Tampa Intl Arpt
Ser A (FGIC Insd)............................... 6.000 10/01/23 1,006,100
1,000 Jacksonville, FL Wtr & Swr Rev United Wtr FL
Proj (AMBAC Insd)............................... 6.350 08/01/25 1,039,210
1,335 Orange Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Ser A (GNMA Collateralized)................. 6.200 10/01/16 1,349,685
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
FLORIDA (CONTINUED)
$1,300 Pinellas Cnty, FL Hsg Fin Auth Single Family Mtg
Rev (GNMA Collateralized)....................... 6.000% 09/01/18 $ 1,304,251
1,000 Pinellas Cnty, FL Hsg Fin Auth Single Family Mtg
Rev (GNMA Collateralized)....................... 6.100 09/01/29 1,003,240
------------
5,702,486
------------
HAWAII 2.2%
3,500 Hawaii St Dept Budget & Fin Spl Purp Mtg Rev
Hawaiian Elec Co Proj Ser B (MBIA Insd)......... 7.600 07/01/20 3,800,055
1,450 Hawaii St Dept Budget & Fin Spl Purp Rev
Hawaiian Elec Co (MBIA Insd).................... 6.550 12/01/22 1,519,049
------------
5,319,104
------------
ILLINOIS 8.6%
9,050 Chicago, IL O'Hare Intl Arpt Spl Fac Rev Intl
Terminal (MBIA Insd)............................ 6.750 01/01/18 9,659,517
2,940 Chicago, IL Residential Mtg Rev Ser B Rfdg (MBIA
Insd)........................................... * 10/01/09 1,242,003
3,000 Onterie Cent Hsg Fin Corp IL Mtg Rev Onterie
Cent Proj Ser A Rfdg (MBIA Insd)................ 7.000 07/01/12 3,176,880
6,150 Onterie Cent Hsg Fin Corp IL Mtg Rev Onterie
Cent Proj Ser A Rfdg (MBIA Insd)................ 7.050 07/01/27 6,478,349
1,125 Peoria, IL Pub Bldg Comm Sch Bldg & Sch Fac Rev
Sch Dist 150 Proj B (AMBAC Insd)................ * 12/01/08 552,139
------------
21,108,888
------------
KANSAS 3.3%
3,500 Burlington, KS Pollutn Ctl Rev KS Gas & Elec Co
Proj Rfdg (MBIA Insd)........................... 7.000 06/01/21 3,785,110
2,000 Kansas St Dev Fin Auth Hlth Fac Rev Stormont
Vail Hlthcare Inc G (MBIA Insd)................. 5.800 11/15/21 2,012,300
2,030 Olathe Labette Cnty, KS Single Family Mtg Rev
Coll Ser A-I Rfdg (GNMA Collateralized)......... 8.100 08/01/23 2,247,230
------------
8,044,640
------------
KENTUCKY 1.2%
1,000 Kenton Cnty, KY Arpt Brd Rev Cincinnati/Northn
KY Intl Arpt Ser A Rfdg (MBIA Insd) (b)......... 5.850 03/01/04 1,011,350
1,000 Kenton Cnty, KY Arpt Brd Rev Cincinnati/Northn
KY Intl Arpt Ser A Rfdg (MBIA Insd) (b)......... 6.100 03/01/07 1,020,800
1,000 Kenton Cnty, KY Arpt Brd Rev Cincinnati/Northn
KY Intl Arpt Ser A Rfdg (MBIA Insd) (b)......... 6.200 03/01/08 1,026,610
------------
3,058,760
------------
LOUISIANA 4.1%
3,145 Calcasieu Parish, LA Mem Hosp Svc Dist Hosp Rev
Lake Charles Mem Hosp Proj Ser A (Connie Lee
Insd)........................................... 6.650 12/01/21 3,362,414
1,000 Louisiana Hsg Fin Agy Mtg Rev Coll Mtg Malta
Square Proj (GNMA Collateralized)............... 6.450 09/01/27 1,021,530
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
LOUISIANA (CONTINUED)
$2,395 Louisiana Pub Fac Auth Rev (Embedded Cap) (FGIC
Insd)........................................... 5.875% 02/15/11 $ 2,456,408
65 Louisiana Pub Fac Auth Rev Student Ln LA
Opportunity Ln A (FSA Insd)..................... 6.600 01/01/04 68,773
1,005 Louisiana Pub Fac Auth Rev Student Ln LA
Opportunity Ln A (FSA Insd)..................... 6.700 01/01/05 1,063,722
670 Louisiana Pub Fac Auth Rev Student Ln LA
Opportunity Ln A (FSA Insd)..................... 6.800 01/01/06 709,658
1,420 Louisiana Pub Fac Auth Rev Student Ln LA
Opportunity Ln A (FSA Insd)..................... 6.850 01/01/09 1,484,837
------------
10,167,342
------------
MARYLAND 0.7%
1,675 Prince Georges Cnty, MD Hsg Auth Mtg Rev
Riverview Terrace Ser A Rfdg (GNMA
Collateralized)................................. 6.400 12/20/10 1,755,819
------------
MASSACHUSETTS 1.8%
4,390 Massachusetts Edl Ln Auth Rev Issue E Ser A Edl
Ln Rev Muni Forwards Issue E Ser A (AMBAC
Insd)........................................... 7.000 01/01/10 4,534,738
------------
MICHIGAN 4.6%
6,000 Detroit, MI Econ Dev Corp Res Recovery Rev Ser A
(FSA Insd) (c).................................. 6.875 05/01/09 6,424,080
1,000 Monroe Cnty, MI Econ Dev Corp Ltd Oblig Rev Coll
Detroit Edison Co Ser Rfdg (FGIC Insd).......... 6.950 09/01/22 1,173,150
3,500 Monroe Cnty, MI Pollutn Ctl Rev Coll Detroit
Edison Monroe Ser 1 (MBIA Insd)................. 6.875 09/01/22 3,769,465
------------
11,366,695
------------
MISSISSIPPI 4.2%
2,285 Mississippi Home Corp Single Family Rev Mtg
Access Pgm (GNMA Collateralized)................ 7.100 05/01/23 2,417,324
1,760 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser C (GNMA Collateralized).......... 8.125 12/01/24 1,948,074
1,625 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser D (GNMA Collateralized).......... 8.100 12/01/24 1,801,085
1,370 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser E (GNMA Collateralized).......... 8.100 12/01/25 1,520,549
2,500 Mississippi Hosp Equip & Fac Auth Rev Rush Med
Fndtn Proj (Connie Lee Insd).................... 6.700 01/01/18 2,660,100
------------
10,347,132
------------
MISSOURI 0.8%
1,000 Missouri St Hsg Dev Comm Multi-Family Hsg
Brookstone A (FSA Insd)......................... 6.000 12/01/16 997,650
1,095 Missouri St Hsg Dev Comm Multi-Family Hsg Truman
Farm A (FSA Insd)............................... 5.750 10/01/11 1,094,945
------------
2,092,595
------------
NEBRASKA 0.9%
2,150 Nebraska Invt Fin Auth Single Family Mtg Rev
(Inverse Fltg) (GNMA Collateralized)............ 9.312 09/15/24 2,244,063
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEVADA 3.9%
$9,000 Clark Cnty, NV Indl Dev Rev NV Pwr Co Proj Ser A
(FGIC Insd)..................................... 6.700% 06/01/22 $ 9,526,140
------------
NEW HAMPSHIRE 0.4%
1,000 New Hampshire St Business Fin Auth Wtr Fac Rev
Pennichuck Wtrwks Inc (AMBAC Insd) (b).......... 6.300 05/01/22 1,020,690
------------
NEW JERSEY 3.4%
8,250 New Jersey Hlthcare Fac Fin Auth Rev Overlook
Hosp Assn Ser E (FGIC Insd)..................... 6.700 07/01/13 8,453,115
------------
NEW MEXICO 2.1%
1,900 Albuquerque, NM Arpt Rev Ser A (AMBAC Insd)..... 6.600 07/01/16 2,014,703
2,070 New Mexico Edl Assistance Fndtn Student Ln Rev
Ser A (AMBAC Insd).............................. 6.850 04/01/05 2,196,187
1,000 New Mexico Mtg Fin Auth Single Family Mtg Pg A2
(GNMA Collateralized)........................... 6.050 07/01/16 1,000,750
------------
5,211,640
------------
NEW YORK 2.4%
1,000 Albany Cnty, NY Arpt Auth Arpt Rev (FSA Insd)... 5.375 12/15/17 937,200
5,000 Port Auth NY & NJ Spl Oblig Spl Proj JFK Intl
Arpt Terminal 6 (MBIA Insd) (b)................. 5.750 12/01/25 4,879,850
------------
5,817,050
------------
OHIO 0.4%
1,000 Cuyahoga Cnty, OH Multi-Family Rev Hsg Mtg Natl
Terminal Apartments Proj (FNMA Insd)............ 5.750 07/01/06 1,027,150
------------
PENNSYLVANIA 7.1%
7,500 Allegheny Cnty, PA Arpt Rev Gtr Pittsburgh Intl
Arpt Ser A (FSA Insd)........................... 6.800 01/01/10 8,062,200
4,000 Allegheny Cnty, PA Arpt Rev Gtr Pittsburgh Intl
Arpt Ser B (FSA Insd)........................... 6.625 01/01/32 4,183,320
2,000 Allegheny Cnty, PA Hosp Dev Auth Rev Pittsburgh
Mercy Hlth Sys Inc (AMBAC Insd)................. 5.625 08/15/26 1,924,900
1,330 Allegheny Cnty, PA Residential Fin Auth Mtg Rev
Single Family (GNMA Collateralized)............. 7.100 05/01/24 1,392,031
1,950 Sayre, PA Hlthcare Fac Auth Rev Hosp VHA PA/VHA
East Fin Pgm B (AMBAC Insd)..................... 6.375 07/01/22 2,029,287
------------
17,591,738
------------
RHODE ISLAND 0.7%
1,500 Rhode Island Port Auth & Econ Dev Corp Arpt Rev
Ser A (FSA Insd)................................ 7.000 07/01/14 1,701,825
------------
SOUTH CAROLINA 4.0%
9,150 South Carolina St Port Auth Port Rev (AMBAC
Insd)........................................... 6.750 07/01/21 9,753,076
------------
TENNESSEE 0.5%
1,085 Memphis Shelby Cnty, TN Arpt Rev Ser A Rfdg
(MBIA Insd) (b)................................. 6.250 02/15/10 1,114,469
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TEXAS 12.4%
$1,085 Brazos River Auth TX Johnson Cnty Surface (AMBAC
Insd) (b)....................................... 5.800% 09/01/11 $ 1,078,848
5,000 Brazos River Auth TX Pollutn Ctl Rev Coll TX
Util Elec Co Proj A (AMBAC Insd)................ 6.750 04/01/22 5,343,600
5,000 Brazos River Auth TX Pollutn Ctl Rev Coll TX
Util Elec Co Proj B (FGIC Insd)................. 6.625 06/01/22 5,270,700
1,000 Brazos River Auth TX Pollutn Ctl Rev Coll TX
Util Elec Co Proj C (FGIC Insd)................. 6.700 10/01/22 1,060,690
2,305 Harris Cnty, TX Hsg Fin Corp Multi-Family Hsg
Rev Cypress Ridge Apts (FSA Insd)............... 6.350 06/01/26 2,341,788
3,000 Houston, TX Arpt Sys Rev Spl Fac People Mover A
(FSA Insd)...................................... 5.500 07/15/17 2,864,220
4,000 Houston, TX Arpt Sys Rev Sub Lien Ser A (FGIC
Insd)........................................... 6.750 07/01/21 4,263,640
1,800 Midland, TX Ctfs Oblig Arpt Sub Lien (FSA
Insd)........................................... 5.850 03/01/13 1,810,692
4,320 Texas St Veterans Hsg Assistance (MBIA Insd).... 6.800 12/01/23 4,507,747
2,000 Tyler, TX Hlth Fac Dev Corp Hosp Rev Mother
Frances Hosp of Tyler (FGIC Insd)............... 6.500 07/01/23 2,112,740
------------
30,654,665
------------
VIRGINIA 0.8%
1,495 Harrisonburg, VA Redev & Hsg Auth Multi-Family
Hsg Rev (FSA Insd).............................. 6.200 04/01/17 1,506,183
------------
WISCONSIN 2.9%
5,000 Wisconsin St Hlth & Edl Fac Auth Rev Children's
Hosp (Embedded Cap) (FGIC Insd)................. 5.000 08/15/10 4,783,550
1,250 Wisconsin St Hlth & Edl Fac Auth Rev Felician
Hlth Care Ser A Rfdg (AMBAC Insd)............... 7.000 01/01/15 1,329,825
1,000 Wisconsin St Hlth & Edl Fac Auth Rev Saint Lukes
Med Cent Proj (MBIA Insd)....................... 7.100 08/15/19 1,087,580
------------
7,200,955
------------
PUERTO RICO 2.2%
5,000 Puerto Rico Comwlth Hwy & Tran Ser Y (Embedded
Cap) (FSA Insd)................................. 5.730 07/01/21 5,381,300
------------
TOTAL LONG-TERM INVESTMENTS 100.1%
(Cost $235,215,537) (a).................................................... 247,114,250
SHORT-TERM INVESTMENTS 2.7%
(Cost $6,600,000) (a)...................................................... 6,600,000
LIABILITIES IN EXCESS OF OTHER ASSETS (2.8%)................................. (6,922,192)
------------
NET ASSETS 100.0%........................................................... $246,792,058
============
</TABLE>
*Zero coupon bond
(a) At April 30, 1997, for federal income tax purposes, cost of long- and
short-term investments is $241,815,537; the aggregate gross unrealized
appreciation is $12,426,993 and the aggregate gross unrealized depreciation
is $528,280, resulting in net unrealized appreciation of $11,898,713.
(b) Securities purchased on a when issued or delayed delivery basis.
(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments.
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $235,215,537)
(Note 1).................................................. $247,114,250
Short-Term Investments (Cost $6,600,000) (Note 1)........... 6,600,000
Cash........................................................ 41,593
Receivables:
Interest.................................................. 4,621,493
Securities Sold........................................... 112,045
Other....................................................... 3,722
------------
Total Assets.......................................... 258,493,103
------------
LIABILITIES:
Payables:
Securities Purchased...................................... 11,098,641
Income Distributions -- Common and Preferred Shares....... 240,061
Investment Advisory Fee (Note 2).......................... 121,118
Administrative Fee (Note 2)............................... 40,373
Affiliates (Note 2)....................................... 7,775
Accrued Expenses............................................ 131,865
Deferred Compensation and Retirement Plans (Note 2)......... 61,212
------------
Total Liabilities..................................... 11,701,045
------------
NET ASSETS.................................................. $246,792,058
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 1,800 issued with liquidation preference of
$50,000 per share) (Note 6)............................... $ 90,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 9,648,688 shares issued and
outstanding) (Note 3)..................................... 96,487
Paid in Surplus............................................. 142,142,746
Net Unrealized Appreciation on Securities................... 11,898,713
Accumulated Undistributed Net Investment Income............. 1,644,375
Accumulated Net Realized Gain on Securities................. 1,009,737
------------
Net Assets Applicable to Common Shares................ 156,792,058
------------
NET ASSETS.................................................. $246,792,058
============
NET ASSET VALUE PER COMMON SHARE ($156,792,058 divided
by 9,648,688 shares outstanding).......................... $ 16.25
============
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 7,492,243
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 740,759
Administrative Fee (Note 2)................................. 246,920
Preferred Share Maintenance (Note 6)........................ 127,877
Custody..................................................... 14,474
Trustees Fees and Expenses (Note 2)......................... 12,833
Legal (Note 2).............................................. 8,145
Amortization of Organizational Costs (Note 1)............... 1,797
Other....................................................... 100,291
-----------
Total Expenses.......................................... 1,253,096
-----------
NET INVESTMENT INCOME....................................... $ 6,239,147
===========
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................... $ 1,081,917
Options................................................... 12,401
Futures................................................... (84,581)
-----------
Net Realized Gain on Securities............................. 1,009,737
-----------
Net Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period................................... 15,065,205
End of the Period:
Investments............................................. 11,898,713
-----------
Net Unrealized Depreciation on Securities During the
Period.................................................... (3,166,492)
-----------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES.............. $(2,156,755)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 4,082,392
===========
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1997 and the Year Ended
October 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1997 October 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 6,239,147 $ 12,738,618
Net Realized Gain on Securities......................... 1,009,737 2,792,852
Net Unrealized Depreciation on
Securities During the Period.......................... (3,166,492) (2,254,455)
------------ ------------
Change in Net Assets from Operations.................... 4,082,392 13,277,015
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (5,065,224) (10,110,226)
Preferred Shares...................................... (1,174,668) (3,199,725)
------------ ------------
(6,239,892) (13,309,951)
------------ ------------
Distributions from Net Realized Gain on Investments
(Note 1):
Common Shares......................................... (1,551,231) -0-
Preferred Shares...................................... (519,894) -0-
------------ ------------
(2,071,125) -0-
------------ ------------
Total Distributions..................................... (8,311,017) (13,309,951)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (4,228,625) (32,936)
FROM CAPITAL TRANSACTIONS (NOTE 3):
Value of Common Shares Issued Through Dividend
Reinvestment........................................ -0- 476,622
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS................... (4,228,625) 443,686
NET ASSETS:
Beginning of the Period................................. 251,020,683 250,576,997
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $1,644,375 and $1,645,120,
respectively)......................................... $246,792,058 $251,020,683
============ ============
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six January 24, 1992
Months (Commencement
Ended Year Ended October 31 of Investment
April 30, -------------------------------------- Operations) to
1997 1996 1995 1994 1993 October 31, 1992
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of the Period (a)......... $16.688 $16.693 $14.883 $18.213 $15.278 $14.737
------- ------- ------- ------- ------- -------
Net Investment Income..... .647 1.323 1.340 1.351 1.365 .924
Net Realized and
Unrealized Gain/Loss on
Securities.............. (.223) .054 1.883 (3.150) 2.949 .340
------- ------- ------- ------- ------- -------
Total from Investment
Operations................ .424 1.377 3.223 (1.799) 4.314 1.264
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders.......... .525 1.050 1.050 1.050 .970 .525
Common Share Equivalent
of Distributions Paid
to Preferred
Shareholders.......... .122 .332 .363 .301 .293 .198
Distributions from Net
Realized Gain on
Securities:
Paid to Common
Shareholders.......... .161 -0- -0- .146 .086 -0-
Common Share Equivalent
of Distributions Paid
to Preferred
Shareholders.......... .054 -0- -0- .034 .030 -0-
------- ------- ------- ------- ------- -------
Total Distributions......... .862 1.382 1.413 1.531 1.379 .723
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period.................... $16.250 $16.688 $16.693 $14.883 $18.213 $15.278
======= ======= ======= ======= ======= =======
Market Price Per Share at
End of the Period......... $16.000 $16.125 $15.750 $13.500 $17.250 $14.500
Total Investment Return at
Market Price (b).......... 3.46%* 9.19% 24.96% (15.57%) 26.98% .09%*
Total Return at Net Asset
Value (c)................. 1.48%* 6.53% 19.80% (12.20%) 26.75% 5.33%*
Net Assets at End of the
Period (In millions)...... $ 246.8 $ 251.0 $ 250.6 $ 233.2 $ 265.2 $ 237.0
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares............. 1.59% 1.60% 1.63% 1.57% 1.54% 1.51%
Ratio of Expenses to Average
Net Assets................ 1.02% 1.02% 1.03% 1.01% .99% 1.01%
Ratio of Net Investment
Income to Average Net
Assets Applicable to
Common Shares (d)......... 6.43% 5.99% 6.16% 6.33% 6.29% 6.08%
Portfolio Turnover.......... 22%* 35% 28% 26% 38% 90%*
</TABLE>
(a) Net Asset Value at January 24, 1992, is adjusted for common and preferred
share offering costs of $.263 per common share.
(b) Total Investment Return at Market Price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based upon NAV.
(d) Net Investment Income is adjusted for the common share equivalent of
distributions paid to preferred shareholders.
* Non-Annualized
See Notes to Financial Statements
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Trust for Insured Municipals (the "Trust") is
registered as a diversified closed-end management investment company under the
Investment Company Act of 1940, as amended. The Trust's investment objective is
to provide a high level of current income exempt from federal income tax,
consistent with preservation of capital. In normal market conditions, the Trust
intends to invest substantially all of its assets in municipal securities which
are covered by insurance with respect to the timely payment of principal and
interest. The Trust commenced investment operations on January 24, 1992.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
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.
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
D. ORGANIZATIONAL COSTS--The Trust reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Trust's organization in the amount of $40,000. These costs
were amortized on a straight line basis over the 60 month period ended January
23, 1997.
E. FEDERAL INCOME TAXES--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
G. INSURANCE EXPENSE--The Trust typically invests in insured bonds. Any
portfolio securities not specifically covered by a primary insurance policy are
insured either through secondary market insurance or portfolio insurance. The
insurance policies guarantee the timely payment of principal and interest on the
securities in the Trust's portfolio.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen
American Capital Investment Advisory Corp. (the "Adviser") will provide
investment advice and facilities to the Trust for an annual fee payable monthly
of .60% of the average net assets of the Trust. In addition, the Trust will pay
a monthly administrative fee to VKAC, the Trust's Administrator, at an annual
rate of .20% of the average net assets of the Trust. The administrative services
provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom
(Illinois), counsel to the Trust, of which a trustee of the Trust is an
affiliated person.
For the six months ended April 30, 1997, the Trust recognized expenses of
approximately $30,500 representing VKAC's cost of providing accounting and legal
services to the Trust.
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to defer all or a portion of their compensation to a later
date. Benefits under the retirement plan are payable for a ten-year period and
are based upon each trustee's years of service to the Trust. The maximum annual
benefit under the plan is equal to the trustees' annual retainer fee, which is
currently $2,500.
3. CAPITAL TRANSACTIONS
At April 30, 1997 and October 31, 1996, paid in surplus related to common shares
aggregated $142,142,746 and $142,142,746, respectively.
Transactions in common shares were as follows:
<TABLE>
<CAPTION>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 1997 OCTOBER 31, 1996
- --------------------------------------------------------------------------
<S> <C> <C>
Beginning Shares...................... 9,648,688 9,619,286
Shares Issued Through Dividend
Reinvestment........................ -0- 29,402
--------- ---------
Ending Shares......................... 9,648,688 9,648,688
========= =========
</TABLE>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $60,959,037 and $55,304,089,
respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on securities. Upon disposition, a realized gain or
loss is recognized accordingly.
Summarized below are the specific types of derivative financial instruments
used by the Trust.
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
A. OPTION CONTRACTS--An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Trust
to manage the portfolio's effective maturity and duration.
Transactions in options for the six months ended April 30, 1997, were as
follows:
<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- -------------------------------------------------------------------------
<S> <C> <C>
Outstanding at October 31, 1996.................... -0- $ -0-
Options Written and Purchased (Net)................ 200 (110,987)
Options Terminated in Closing Transactions (Net)... (200) 110,987
---- ---------
Outstanding at April 30, 1997...................... -0- $ -0-
==== =========
</TABLE>
B. FUTURES CONTRACTS--A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
Index and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration.
Upon entering into futures contracts, the Trust maintains, in a segregated
account with its custodian, securities with a value equal to its obligation
under the futures contracts. During the period the futures contract is open,
payments are received from or made to the broker based upon changes in the value
of the contract (the variation margin). The cost of securities acquired through
delivery under a contract is adjusted by the unrealized gain or loss on the
contract.
Transactions in futures contracts, each with a par value of $100,000, for
the six months ended April 30, 1997, were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ---------------------------------------------------------------------
<S> <C>
Outstanding at October 31, 1996........................... -0-
Futures Opened............................................ 400
Futures Closed............................................ (400)
----
Outstanding at April 30, 1997............................. -0-
====
</TABLE>
C. INDEXED SECURITIES--These instruments are identified in the portfolio of
investments. The price of these securities may be more volatile than the price
of a comparable fixed rate security.
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
An Inverse Floating security is one where the coupon is inversely indexed to
a short-term floating interest rate multiplied by a specified factor. As the
floating rate rises, the coupon is reduced. Conversely, as the floating rate
declines, the coupon is increased. These instruments are typically used by the
Trust to enhance the yield of the portfolio.
An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The Trust invests in these
instruments as a hedge against a rise in the short-term interest rates which it
pays on its preferred shares.
6. PREFERRED SHARES
The Trust has outstanding 1,800 Auction Preferred Shares ("APS") in two series
of 900 shares each. Dividends are cumulative and the dividend rate is
periodically reset through an auction process. The dividend periods for Series A
and Series B are 28 days. The average rate in effect on April 30, 1997, was
3.660%. During the six months ended April 30, 1997, the rates ranged from 3.360%
to 5.300%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
19
<PAGE> 21
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
Emerging Growth Fund
Enterprise Fund
Growth Fund
Pace Fund
Growth & Income
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
MORGAN STANLEY
FUND, INC.
Aggressive Equity Fund
American Value Fund
Asian Growth Fund
Emerging Markets Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
U.S. Real Estate Fund
Worldwide High Income Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00 p.m.
Central time at 1-800-341-2911 for Van Kampen American Capital funds, or
1-800-282-4404 for Morgan Stanley retail funds.
20
<PAGE> 22
VAN KAMPEN AMERICAN CAPITAL TRUST FOR INSURED MUNICIPALS
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
THEODORE A. MYERS
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and
Chief Financial Officer
CURTIS W. MORELL*
Vice President and
Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
Vice President
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
CUSTODIAN AND
TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen American Capital Distributors, Inc., 1997 All rights reserved.
(SM) denotes a service mark of Van Kampen American Capital Distributors, Inc.
21
