<TABLE>
<CAPTION>
Table of Contents
<S> <C>
Letter to Shareholders ................ 1
Performance Results ................... 3
Portfolio of Investments ............. 4
Statement of Assets and Liabilities ... 7
Statement of Operations ............... 8
Statement of Changes in Net Assets .... 9
Financial Highlights ................. 10
Notes to Financial Statements ......... 11
</TABLE>
Page: 1
Letter to Shareholders
June 16, 1995
Dear Shareholder:
During the six-month period covered by this report, November 1, 1994 through
April 30, 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
Most of 1994 was a difficult period for fixed income investors as the
Federal Reserve Board's crusade against inflation drove interest rates
markedly higher. The yield on 30-year Treasury securities, for example, climbed
from 6.35 percent as the year began to a high of 8.16 percent by early November.
As interest rates rose, fixed-income investments declined in value.
The fixed-income markets have rebounded considerably since late 1994, however,
with growing confidence that the Fed's inflation fighting initiatives have taken
hold. The yield on 30-year Treasury securities fell to 7.34 percent by the end
of April 1995 and to approximately 6.50 percent at the time of this writing.
This rate reversal has pushed bond prices back to February 1994 levels.
Closed-end municipal bond funds, in particular, have been among the greatest
beneficiaries in this rally, earning back virtually all of last year's losses
and posting attractive returns.
Performance Summary
The Trust achieved a six-month total return of 11.94 percent <F1>, based on
market price, for the period ended April 30, 1995. This robust performance can
be partially attributed to the Trust's leveraged capital structure, which has
helped it to more fully benefit from a fall in long-term interest rates over
the last six months. While leveraging adds certain financing risks and
volatility, it is designed, over time, to provide shareholders with enhanced
returns by taking advantage of the yield differential between long-term and
short-term interest rates.
Clearly, the Trust recovered from the difficult previous six-month period and
made significant price gains. The Trust's closing stock price, for example,
gained more than 8 percent from its $13.500 level on October 31, 1994, to
$14.625 on April 30, 1995. As the graph on the following page shows, we've also
seen the Trust's net asset value rebound during the last six months.
Moreover, we are pleased to report that the Trust's Board of Trustees approved
a dividend increase effective May 1 and payable May 31, 1995. Based on the new
annualized dividend level of $0.96 per common share, the Trust provides a
tax-exempt distribution rate of
6.56 percent, based on the closing stock price of $14.625 per share on April 30,
1995. For shareholders in the 36 percent federal income tax bracket, this
distribution rate represents a yield equivalent to a taxable investment earning
10.25 percent <F4>.
[ PHOTO ]
Dennis J. McDonnell and Don G. Powell
(Continued on page two)
Page: 2
Outlook
The outlook for fixed-income securities appears favorable. To date, inflation
remains under control, and recent economic data continues to suggest a slowdown
in the economy. First-quarter gross domestic product, for example, grew at an
annual rate of 2.8 percent, substantially lower than its fourth-quarter rate of
5.1 percent last year. Many analysts now expect GDP to grow at an annual rate
between 1 and 2 percent in the second half of this year. Should this scenario
play out, we suspect that the Fed is more likely to lower than raise
short-term rates, which would be a positive development for
all fixed-income investors.
Regarding the municipal market, we remain optimistic about the current
supply-and- demand dynamics. With much of the refinancing by municipal
issuers behind us,we expect new-issue supply to remain low in 1995 and
demand for municipals to be steady, if not strong. A decline in supply combined
with steady demand should lend price stability and price support to this market.
We believe the Trust will continue to provide shareholders with long-term value,
as we seek to maintain a high level of current income over time.
[GRAPH]
Trust Rebounds in 1995
<TABLE>
COMPARISON OF NAV AND MARKET PRICE OF THE TRUST
<CAPTION>
Measurement Market
Period NAV Price
<S> <C> <C>
30-Apr-94 $16.07 14.625
31-May-94 $16.29 14.750
30-Jun-94 $16.01 14.875
31-Jul-94 $16.36 15.000
31-Aug-94 $16.34 14.875
30-Sep-94 $15.86 14.375
31-Oct-94 $15.24 13.500
30-Nov-94 $14.58 13.125
31-Dec-94 $15.29 13.250
31-Jan-95 $15.94 14.000
28-Feb-95 $16.49 14.500
31-Mar-95 $16.51 14.500
30-Apr-95 $16.38 14.625
</TABLE>
Corporate News
As you may have already noticed, we have adopted a new design for our
shareholder 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 presentation of information in your Trust's report. In addition, we have
developed a new corporate advertising 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
information about your Trust's performance, new investment opportunities, and
our newly created company. We appreciate your continued confidence in your
investment with Van Kampen American Capital.
Sincerely,
Don G. Powell
Chief Executive Officer
Van Kampen American Capital Investment Advisory Corp.
Dennis J. McDonnell
President
Van Kampen American Capital Investment Advisory Corp.
Page: 3
Performance Results for the Period Ended April 30, 1995
Van Kampen Merritt Trust For Investment Grade Florida Municipals
(NYSE Ticker Symbol VTF)
<TABLE>
Total Returns
<CAPTION>
<S> <C>
Six-month total return based on market price<F1> .................................. 11.94%
Six-month total return based on NAV<F2> ........................................... 10.70%
Distribution Rates
Distribution rate as a % of initial offer stock price<F3> ......................... 6.24%
Taxable-equivalent distribution rate as a % of initial offer stock price<F4> ...... 9.75%
Distribution rate as a % of 04/30/95 closing stock price<F3> ...................... 6.40%
Taxable-equivalent distribution rate as a % of 04/30/95 closing stock price<F4> ... 10.00%
Share Valuations
Net asset value as of 04/30/95 .................................................... $ 16.38
Preferred share rate as of 04/30/95<F5> ........................................... 4.10%
Closing common stock price as of 04/30/95 ........................................ $ 14.625
Six-month high common stock price (04/07/95) ..................................... $ 14.875
Six-month low common stock price (11/08/94) ...................................... $ 11.750
<FN>
<F1> Total return based on market price assumes an investment at the market
price at the beginning of the period indicated, reinvestment of all
distributions for the period in accordance with the Trust's dividend
reinvestment plan, and sale of all shares at the closing stock price
at the end of the period indicated.
<F2> 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 net asset value.
<F3> Distribution rate represents the monthly annualized distributions
of the Trust at the end of April 1995, and not the earnings of
the Trust.
<F4> The taxable-equivalent distribution rate is calculated assuming a
36% federal tax bracket.
<F5> See "Notes to Financial Statements" footnote #4, 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.
</FN>
</TABLE>
Page: 4
<TABLE>
Portfolio of Investments
April 30,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
Florida Municipal Bonds 98.2%
$ 2,250 Alachua Cnty, FL Hlth Fac Auth Hlth Fac
Rev Santa Fe Hlthcare Fac ............................. 7.600% 11/15/13 $ 2,316,037
1,000 Alachua Cnty, FL Hlth Fac Auth Hlth Fac Rev
Shands Hosp at the Univ of FL (MBIA Insd) ............. 6.000 12/01/11 1,009,630
1,000 Alachua Cnty, FL Hlth Fac Auth Hlth Fac Rev
Shands Hosp at the Univ of FL (MBIA Insd) ............. 5.750 12/01/15 968,300
1,000 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC Insd) .......... 6.750 07/01/12 1,078,930
3,000 Brevard Cnty, FL Hlth Fac Auth Wuesthoff
Mem Hosp Ser B Rfdg (MBIA Insd) ....................... 7.200 04/01/13 3,269,730
1,765 Cape Coral, FL Spl Oblig Rev Wastewtr Impt
(FSA Insd) ........................................... 6.375 06/01/12 1,821,957
1,725 Collier Cnty, FL Cap Impt Rev Rfdg (FGIC Insd) ........ 5.750 10/01/13 1,686,601
1,000 Dade Cnty, FL Aviation Rev (MBIA Insd) ............... 5.750 10/01/12 964,780
3,000 Dade Cnty, FL Hsg Fin Auth Single Family Mtg
Rev Ser D Rfdg (FSA Insd) ............................ 6.950 12/15/12 3,152,400
2,140 Dade Cnty, FL Sch Brd Ctfs Partn Ser A (MBIA Insd) ... 5.750 05/01/09 2,113,678
1,240 Dade Cnty, FL Seaport (AMBAC Insd) ................... 6.250 10/01/10 1,278,366
3,000 Dunedin, FL Util Sys Rev (Prerefunded @ 10/01/99)
(FGIC Insd) ........................................... 6.000 10/01/14 3,145,500
2,000 Duval Cnty, FL Sch Dist Rfdg (AMBAC Insd) ............ 6.300 08/01/08 2,089,560
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion Intl
Corp Proj ............................................. 6.900 08/01/22 1,021,040
5,000 Escambia Cnty, FL Sch Brd Ctfs Partn (FSA Insd) ...... 6.375 02/01/12 5,102,300
1,250 Florida Agriculture & Mechanical Univ Rev Student
Apt Fac (MBIA Insd) .................................. 6.500 07/01/23 1,297,138
4,000 Florida St Brd Edl Cap Outlay Pub Edl Ser A Rfdg
(Prerefunded @ 06/01/00) ............................. * 06/01/12 1,351,800
5,000 Florida St Brd Edl Cap Outlay Pub Edl Ser C .......... 6.625 06/01/22 5,178,200
1,810 Florida St Div Bond Fin Dept Genl Svcs Rev Dept
Nat Res Preservation 2000 Ser A (MBIA Insd) .......... 6.250 07/01/13 1,843,376
2,500 Florida St Muni Pwr Agy Rev All Requirements
Pwr Supply Proj (Prerefunded @ 10/01/02)
(AMBAC Insd) ......................................... 6.250 10/01/12 2,715,000
4,750 Florida St Muni Pwr Agy Rev Stanton Il Proj
(Prerefunded @ 10/01/02) (AMBAC Insd) ................ 6.000 10/01/27 5,101,072
195 Greater Orlando Aviation Auth Orlando FL Arpt
Fac Rev (Prerefunded @ 10/01/98) ...................... 8.250 10/01/08 218,792
3,000 Hillsborough Cnty, FL Hosp Auth Hosp Rev Tampa
Genl Hosp Proj Rfdg (FSA Insd) ....................... 6.375 10/01/13 3,097,320
1,500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl Rev
Tampa Elec Co Proj Ser 92 Rfdg ....................... 8.000 05/01/22 1,751,205
</TABLE>
See Notes to Financial Statements
Page: 5
<TABLE>
Portfolio of Investments (Continued)
April 30,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
$ 1,445 Hillsborough Cnty, FL Indl Dev Auth Rev Allegany
Hlth Sys J Knox Vlg (MBIA Insd) ....................... 5.750% 12/01/21 $ 1,373,314
2,500 Jacksonville, FL Elec Auth Rev Bulk Pwr Supply
Scherer (Prerefunded @ 10/01/00) ..................... 6.750 10/01/16 2,745,450
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd) ..................................... 6.500 02/01/11 1,035,620
2,250 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd) ..................................... 6.600 02/01/21 2,321,325
2,000 Jacksonville, FL Wtr & Swr Dev Rev Jacksonville
Suburban Util ......................................... 6.750 06/01/22 2,085,300
2,500 Jupiter, FL Wtr Rev Ser A Rfdg (AMBAC Insd) .......... 6.250 10/01/18 2,534,100
9,970 Lakeland, FL Elec & Wtr Rev ........................... * 10/01/13 3,289,203
2,230 Lakeland, FL Elec & Wtr Rev ........................... 5.750 10/01/19 2,128,691
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj A Rfdg .................. 7.875 12/15/25 1,062,160
2,500 North Broward, FL Hosp Dist Hosp Rev (MBIA Insd) ..... 6.500 01/01/12 2,607,325
2,000 Ocala, FL Util Sys Rev Subser A Rfdg (AMBAC Insd) .... 6.250 10/01/15 2,031,240
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC Insd) ....... * 10/01/12 352,760
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC Insd) ....... * 10/01/13 329,910
1,940 Orange Cnty, FL Tourist Dev Tax Rev Ser B
(AMBAC Insd) ......................................... 6.500 10/01/19 2,014,593
2,760 Orlando & Orange Cnty Expwy Auth FL Expwy
Rev Jr Lien (FGIC Insd) ............................... 6.000 07/01/21 2,713,218
1,240 Orlando & Orange Cnty Expwy Auth FL Expwy
Rev Jr Lien (Escrowed to Maturity) (FGIC Insd) ....... 6.000 07/01/21 1,257,955
2,000 Osceola Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd) ......................................... 6.250 06/01/07 2,087,880
2,535 Oviedo, FL Pub Impt Rev Rfdg (MBIA Insd) ............. 6.500 10/01/18 2,636,172
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd) ......................................... 6.000 08/01/06 1,045,880
2,750 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd) ......................................... 6.375 08/01/15 2,844,847
1,000 Pasco Cnty, FL Sch Brd Ctfs Partn Ser A (FSA Insd) ... 6.500 08/01/12 1,040,270
1,000 Pembroke Pines, FL Cons Util Sys Rev (FGIC Insd) ..... 6.250 09/01/11 1,024,020
2,390 Polk Cnty, FL Cap Impt Rev Rfdg (MBIA Insd) .......... 6.250 12/01/11 2,485,935
110 Polk Cnty, FL Cap Impt Rev Rfdg
(Prerefunded @ 12/01/02) (MBIA Insd) .................. 6.250 12/01/11 119,885
1,100 Saint Cloud, FL Util Rev Rfdg (MBIA Insd) ............. 6.375 08/01/15 1,130,019
1,000 Saint Lucie Cnty, FL Sales Tax Rev
(Prerefunded @ 10/01/02) (FGIC Insd) ................. 6.375 10/01/12 1,093,000
2,000 Saint Lucie Cnty, FL Solid Waste Disp Rev FL
Pwr & Lt Co Proj ..................................... 6.700 05/01/27 2,039,200
</TABLE>
See Notes to Financial Statements
Page: 6
<TABLE>
Portfolio of Investments (Continued)
April 30,1995 (Unaudited)
- -------------------------------------------------------------------------------------
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<CAPTION>
<S> <C> <C> <C> <C>
$ 1,675 Saint Petersburg, FL Hlth Fac Auth Rev
Allegany Hlth Sys Ln Pgm (MBIA Insd) ... 5.750% 12/01/21 $ 1,591,903
3,000 Saint Petersburg, FL Hlth Fac Auth Rev
Allegany Hlth Sys Ser A (MBIA Insd) ..... 7.000 12/01/15 3,230,670
--------------
Total Long-Term Investments 98.2%
(Cost $99,574,148) <F1> .............................................. 105,824,557
Short-Term Investments at Amortized Cost 0.6% ...................... 600,000
Other Assets in Excess of Liabilities 1.2% ........................ 1,346,318
--------------
Net Assets 100% ..................................................... $ 107,770,875
--------------
*Zero coupon bond
<FN>
<F1> At April 30, 1995, cost for federal income tax purposes is $99,574,148; the
aggregate gross unrealized appreciation is $6,253,601 and the aggregate gross
unrealized depreciation is $3,192, resulting in net unrealized appreciation
of $6,250,409.
</FN>
</TABLE>
The following table summarizes the portfolio composition at April 30, 1995,
based upon quality ratings issued by Standard & Poor's. For securities not rated
by Standard & Poor's, the Moody's rating is used.
Portfolio Composition by Credit Quality
<TABLE>
<CAPTION>
<S> <C>
AAA ... 76.2%
AA .... 15.5
A ..... 4.1
BBB ... 4.2
-------
100.0%
-------
</TABLE>
See Notes to Financial Statements
Page: 7
<TABLE>
Statement of Assets and Liabilities
April 30,1995 (Unaudited)
- ---------------------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Assets:
Investments, at Market Value (Cost $99,574,148) (Note 1) .................... $ 105,824,557
Short-Term Investments (Note 1) ............................................. 600,000
Cash ....................................................................... 20,697
Interest Receivable ......................................................... 1,722,607
Unamortized Organizational Expenses (Note 1) ............................... 9,530
---------------
Total Assets ................................................................ 108,177,391
---------------
Liabilities:
Payables:
Income Distributions - Common and Preferred Shares ......................... 104,976
Investment Advisory Fee (Note 2) ............................................ 58,143
Administrative Fee (Note 2) ................................................ 17,890
Accrued Expenses ............................................................ 225,507
---------------
Total Liabilities ........................................................... 406,516
---------------
Net Assets .................................................................. $ 107,770,875
---------------
Net Assets Consist of:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 800 issued
with liquidation preference of $50,000 per share) (Note 4) .................. $ 40,000,000
---------------
Common Shares ($.01 par value with an unlimited number of shares authorized,
4,137,307 shares issued and outstanding) ................................... 41,373
Paid in Surplus ............................................................ 60,760,628
Net Unrealized Appreciation on Investments ................................. 6,250,409
Accumulated Undistributed Net Investment Income ............................ 948,320
Accumulated Net Realized Loss on Investments ................................ (229,855)
---------------
Net Assets Applicable to Common Shares ...................................... 67,770,875
---------------
Net Assets .................................................................. $ 107,770,875
---------------
Net Asset Value Per Common Share($67,770,875 divided
by 4,137,307 shares outstanding) ............................................ $ 16.38
---------------
</TABLE>
See Notes to Financial Statements
Page: 8
<TABLE>
Statement of Operations
For the Six Months Ended April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
<S> <C>
Investment Income:
Interest ....................................................... $ 3,288,329
--------------
Expenses:
Investment Advisory Fee (Note 2) .............................. 338,305
Administrative Fee (Note 2) .................................... 104,094
Preferred Share Maintenance (Note 4) ........................... 49,594
Trustees Fees and Expenses (Note 2) ............................ 10,498
Legal (Note 2) ................................................ 7,421
Amortization of Organizational Expenses (Note 1) .............. 2,478
Other .......................................................... 87,282
--------------
Total Expenses ................................................. 599,672
--------------
Net Investment Income .......................................... $ 2,688,657
--------------
Realized and Unrealized Gain/Loss on Investments:
Realized Gain/Loss on Investments:
Proceeds from Sales ............................................ $ 4,027,445
Cost of Securities Sold ........................................ (4,195,516)
--------------
Net Realized Loss on Investments ............................. (168,071)
--------------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period ....................................... 1,316,627
End of the Period .............................................. 6,250,409
--------------
Net Unrealized Appreciation on Investments During the Period ... 4,933,782
--------------
Net Realized and Unrealized Gain on Investments ................ $ 4,765,711
--------------
Net Increase in Net Assets from Operations ..................... $ 7,454,368
--------------
</TABLE>
See Notes to Financial Statements
Page: 9
<TABLE>
Statement of Changes in Net Assets
For the Six Months Ended April 30,1995 and the Year Ended October 31,1994
(Unaudited)
- --------------------------------------------------------------------------------
<CAPTION>
Six Months Ended Year Ended
April 30,1995 October 31,1994
<S> <C> <C>
From Investment Activities:
Operations:
Net Investment Income ............................................. $ 2,688,657 $ 5,327,748
Net Realized Loss on Investments .................................. (168,071) (61,784)
Net Unrealized Appreciation/Depreciation on Investments
During the Period ................................................ 4,933,782 (11,236,551)
---------------- ---------------
Change in Net Assets from Operations ............................. 7,454,368 (5,970,587)
---------------- ---------------
Distributions from Net Investment Income:
Common Shares ..................................................... (1,936,209) (3,872,454)
Preferred Shares ................................................. (783,835) (1,062,722)
---------------- ---------------
(2,720,044) (4,935,176)
---------------- ---------------
Distributions from Net Realized Gain on Investments:
Common Shares ..................................................... -0- (292,508)
Preferred Shares ................................................. -0- (83,392)
---------------- ---------------
-0- (375,900)
---------------- ---------------
Total Distributions .............................................. (2,720,044) (5,311,076)
---------------- ---------------
Net Change in Net Assets from Investment Activities ............... 4,734,324 (11,281,663)
Net Assets:
Beginning of the Period .......................................... 103,036,551 114,318,214
---------------- ---------------
End of the Period (Including undistributed net investment income of
$948,320 and $979,707, respectively) ............................. $ 107,770,875 $ 103,036,551
---------------- ---------------
</TABLE>
See Notes to Financial Statements
Page: 10
<TABLE>
<CAPTION>
Financial Highlights
The following schedule presents financial highlights for one common share of the
Trust outstanding throughout the periods indicated.(Unaudited)
- --------------------------------------------------------------------------------------------
March 27,1992
Six Months Year Year (Commencement
Ended Ended Ended of Investment
April 30, October 31, October 31, Operations) to
1995 1994 1993 October 31,1992
<S> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period <F1>............. $ 15.236 $ 17.963 $ 14.875 $ 14.697
---------- ------------ ----------- ---------------
Net Investment Income ............... .649 1.288 1.294 .596
Net Realized and Unrealized
Gain/Loss on Investments ........... 1.152 (2.731) 3.020 .107
---------- ------------ ----------- ---------------
Total from Investment Operations ... 1.801 (1.443) 4.314 .703
---------- ------------ ----------- ---------------
Less:
Distributions from Net
Investment Income:
Paid to Common Shareholders ......... .468 .936 .936 .390
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders .............. .189 .257 .287 .135
Distributions from Net Realized
Gain on Investments:
Paid to Common Shareholders ......... -0- .071 .002 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders .............. -0- .020 .001 -0-
---------- ------------ ----------- ---------------
Total Distributions ................. .657 1.284 1.226 .525
---------- ------------ ----------- ---------------
Net Asset Value, End of Period ..... $ 16.380 $ 15.236 $ 17.963 $ 14.875
---------- ------------ ----------- ---------------
Market Price Per Share
at End of Period .................... $ 14.625 $ 13.500 $ 16.750 $ 14.875
Total Investment Return at Market
Price (Non-Annualized) <F2> ......... 11.94% (13.92%) 19.30% 1.74%
Total Return at Net Asset Value
(Non-Annualized) <F3> .............. 10.70% (9.89%) 27.67% 1.65%
Net Assets at End of Period
(In millions) ....................... $ 107.8 $ 103.0 $ 114.3 $ 101.5
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares (Annualized) ................. 1.84% 1.81% 1.76% 1.72%
Ratio of Expenses to Average
Net Assets (Annualized) ............ 1.14% 1.15% 1.12% 1.21%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (Annualized) <F4> ..... 5.84% 6.15% 6.01% 5.11%
Portfolio Turnover .................. 4.10% 9.55% 8.97% 9.01%
<FN>
<F1> Net asset value at March 27, 1992 is adjusted for common and preferred
share offering costs of $.303 per common share.
<F2> 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.
<F3> Total return at net asset value (NAV) reflects the change in value of
the Trust's assets with reinvestment of dividends based upon NAV.
<F4> Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
</FN>
</TABLE>
See Notes to Financial Statements
Page: 11
Notes to Financial Statements
April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------
1. Significant Accounting Policies
Van Kampen Merritt Trust for Investment Grade Florida Municipals (the "Trust")
is registered as a non-diversified closed-end management investment company
under the Investment Company Act of 1940, as amended. The Trust commenced
investment operations on March 27, 1992.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements.
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 less than 60 days are valued at
amortized cost.
B. Security Transactions-Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At April 30, 1995, there were no
when issued or delayed delivery purchase commitments.
C. Investment Income-Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
D. Organizational Expenses-The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates ("VKAC") for costs incurred in connection
with the Trust's organization and initial registration in the amount of $25,000.
These costs are being amortized on a straight line basis over the 60 month
period ending March 26, 1997. Van Kampen American Capital Investment Advisory
Corp. (the "Adviser") has agreed that in the event any of the initial shares of
the Trust originally purchased by VKAC are redeemed during the amortization
period, the Trust will be reimbursed for any unamortized organizational expenses
in the same proportion as the number of shares redeemed bears to the number of
initial shares held at the time of redemption.
Page: 12
Notes to Financial Statements (Continued)
April 30,1995 (Unaudited)
- --------------------------------------------------------------------------------
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.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 1994, the Trust had an accumulated capital loss
carryforward for tax purposes of $61,784, which will expire on October 31, 2002.
F. Distribution of Income and Gains-The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
2. Investment Advisory Agreement and Other Transactions with Affiliates
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .65% 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,
counsel to the Trust, of which a trustee of the Trust is an affiliated person.
For the six months ended April 30, 1995, the Trust recognized expenses of
approximately $6,700 representing VKAC's cost of providing accounting and legal
and services to the Trust.
Certain officers and trustees of the Trust are also officers and directors of
VKAC. The Trust does not compensate its officers or trustees who are officers of
VKAC.
The Trust has implemented deferred compensation and retirement plans for its
Trustees. Under the deferred compensation plan, Trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those Trustees who are not officers of
Page: 13
Notes to Financial Statements (Continued)
April 30,1995 (Unaudited)
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VKAC. The Trust's liability under the deferred compensation and retirement plans
at April 30, 1995, was approximately $13,400.
At April 30, 1995, VKAC owned 6,700 common shares of the Trust.
3. Investment Transactions
Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the six months ended April 30, 1995, were $8,278,970 and
$4,195,516, respectively.
4. Preferred Shares
The Trust has outstanding 800 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is currently reset every 28 days through an
auction process. The rate in effect on April 30, 1995, was 4.10%. During the six
months ended April 30, 1995, the rates ranged from 3.30% to 4.70%.
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.
Page: 14
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
VKM Short-Term Global Income Fund
VKM Strategic Income 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 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.
Page: 15
Van Kampen Merritt Trust For Investment Grade Florida Municipals
Officers and Trustees
Don G. Powell*
Chairman and Trustee
Dennis J. McDonnell*
President and Trustee
David C. Arch
Trustee
Rod Dammeyer
Trustee
Howard J Kerr
Trustee
Theodore A. Myers
Trustee
Hugo F. Sonnenschein
Trustee
Wayne W. Whalen*
Trustee
Peter W. Hegel*
Vice President
Ronald A. Nyberg*
Vice President and Secretary
Edward C. Wood, III*
Vice President and Treasurer
Scott E. Martin*
Assistant Secretary
Weston B. Wetherell*
Assistant Secretary
Nicholas Dalmaso*
Assistant Secretary
John L. Sullivan*
Controller
Steven M. Hill*
Assistant Treasurer
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
333 West Wacker Drive Chicago, Illinois 60606
Independent Auditors
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., 1995 All rights reserved.
SM denotes a service mark of
Van Kampen American Capital Distributors, Inc.
Page: 16
Van Kampen Merritt Trust For Investment Grade Florida Municipals
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