<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 5
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 9
Statement of Operations.......................... 10
Statement of Changes in Net Assets............... 11
Financial Highlights............................. 12
Notes to Financial Statements.................... 13
</TABLE>
VTF 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
5, 1997, Morgan Stanley Group Inc. and [PHOTO]
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.
In Florida, economic growth was strong and outpaced the national average. As
a result, the state government collected higher-than-expected revenues which,
combined with spending restraint, helped to boost reserves. Although these
economic factors were positive for the Florida municipal bond market, a large
supply of Florida bonds in early 1997 had a slightly negative impact on state
municipal bond prices. That pressure on prices was lifted when the increase in
the yields of Florida bonds, which move in the opposite direction of prices,
attracted more buyers for the securities.
FUND STRATEGY
In managing the Trust, we maintained a heavy weighting in high-quality bonds
during the period. As of April 30, 74 percent of the Trust's long-term
investments were AAA-rated, the highest credit rating assigned to bonds by the
Standard & Poor's Ratings Group. In addition, approximately 23 percent of
long-term investments were rated AA or A, and approximately 3 percent were rated
BBB, the lowest rating Standard & Poor's assigns to bonds in the
investment-grade category. AAA-rated bonds are extremely liquid because most are
insured. They provide the potential for safety of principal but have tended to
perform better when interest rates are falling, which was not the case for most
of the period. BBB-rated securities have tended to outperform when rates are
rising and have the potential to provide additional income.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality as a Percentage of Long-Term
Investments as of April 30, 1997
<TABLE>
<S> <C>
AAA............ 74.0%
AA............. 20.9%
A.............. 2.2%
BBB............ 2.9%
</TABLE>
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 was minimal during the period because market conditions
offered few opportunities to add value over existing holdings. The average yield
of bonds in the portfolio was higher than market yields, and spreads between the
yields of AAA-rated bonds and lower-rated bonds were tight. These spreads
remained narrow due to the increasing number of insured bonds in the municipal
market. As a result, there was often not enough yield reward to justify the
additional credit risk of purchasing lower-rated securities.
Sales focused on high-coupon bonds priced to short calls, while purchases
emphasized longer-maturity bonds and higher-discount par bonds to enhance the
portfolio's call protection and income. In other words, we hope to lessen the
concentration
Continued on page three
2
<PAGE> 4
of bonds that can be called at any one time. (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.
We shortened the Trust's duration slightly during the period. Duration,
which is expressed in years, is a measure of a portfolio's sensitivity to
interest rate movements. Portfolios with long durations have tended to perform
better when rates are falling, and portfolios with short durations have tended
to perform better when rates are rising. The shortened duration reduced the
Trust's volatility to interest rate increases over the previous six months. At
the end of the period, the Trust's duration stood at 6.83 years compared to the
duration of the Lehman Brothers Florida Municipal Bond Index benchmark, which
was 8.31 years. We look to lengthen the Trust's duration in the future as we
seek to add longer-term bonds to the portfolio, but we recognize that
opportunities to do so may be limited.
[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 $.0825 $.1593
Dec 1996 $.0825
Jan 1997 $.0825
Feb 1997 $.0825
Mar 1997 $.0825
Apr 1997 $.0825
</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
Investment Grade Florida 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 3.53 percent(1). The Trust
offered a tax-exempt distribution rate of 6.00 percent(3), based on the closing
common stock price of $16.50 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 9.38 percent(4) (for investors
in the 36 percent federal income tax bracket). At the end of
Continued on page four
3
<PAGE> 5
the reporting period, the closing share price of the Trust traded at a 2.42
percent discount to its net asset value of $16.91.
The Trust declared a capital gains distribution of $0.0768 per share payable
on December 31, 1996, due to the sale of some assets that had appreciated in
value.
TOP FIVE PORTFOLIO INDUSTRY HOLDINGS BY SECTOR AS OF APRIL 30, 1997*
Public Education........................ 21.5%
Health Care............................. 18.8%
Retail Electric/Gas/Telephone........... 13.5%
General Purpose......................... 12.4%
Water & Sewer........................... 8.9%
*As a Percentage of Long-Term Investments
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 INVESTMENT GRADE
FLORIDA MUNICIPALS
(NYSE TICKER SYMBOL--VTF)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............ 3.53%
Six-month total return based on NAV(2)..................... .92%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock price(3).. 6.00%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).................................... 9.38%
SHARE VALUATIONS
Net asset value............................................ $ 16.91
Closing common stock price................................. $16.500
Six-month high common stock price (03/04/97)............... $16.750
Six-month low common stock price (12/17/96)................ $15.625
Preferred share rate(5).................................... 3.570%
</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 income tax bracket.
(5) 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.
Market forecasts provided in this report may not necessary come to pass.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS
FLORIDA 96.0%
$ 2,250 Alachua Cnty, FL Hlth Fac Auth Hlth Fac Rev
Santa Fe Hlthcare Fac (Prerefunded @
11/15/00)....................................... 7.600% 11/15/13 $ 2,503,012
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 1,018,900
1,000 Alachua Cnty, FL Hlth Fac Auth Hlth Fac Rev
Shands Hosp at the Univ of FL (MBIA Insd)....... 5.750 12/01/15 998,240
1,000 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC Insd).... 6.750 07/01/12 1,094,490
3,000 Brevard Cnty, FL Hlth Fac Auth Wuesthoff Mem
Hosp Ser B Rfdg (Prerefunded @ 04/01/02) (MBIA
Insd)........................................... 7.200 04/01/13 3,353,220
1,765 Cape Coral, FL Spl Oblig Rev Wastewtr Impt (FSA
Insd)........................................... 6.375 06/01/12 1,868,835
1,725 Collier Cnty, FL Cap Impt Rev Rfdg (FGIC
Insd)........................................... 5.750 10/01/13 1,735,764
2,290 Dade Cnty, FL Hsg Fin Auth Single Family Mtg Rev
Ser D Rfdg (FSA Insd) (c)....................... 6.950 12/15/12 2,417,507
2,140 Dade Cnty, FL Sch Brd Ctfs Partn Ser A (MBIA
Insd)........................................... 5.750 05/01/09 2,187,487
5,325 Dade Cnty, FL Spl Oblig Cap Apprec Bond Ser B
Rfdg (AMBAC Insd)............................... * 10/01/27 830,540
2,000 Duval Cnty, FL Sch Dist Rfdg (AMBAC Insd)....... 6.300 08/01/08 2,133,680
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion Intl
Corp Proj....................................... 6.900 08/01/22 1,062,200
3,100 Escambia Cnty, FL Sch Brd Ctfs Partn
(Prerefunded @ 02/01/02) (FSA Insd)............. 6.375 02/01/12 3,302,988
1,900 Escambia Cnty, FL Sch Brd Ctfs Partn (FSA
Insd)........................................... 6.375 02/01/12 1,986,659
1,250 Florida Agriculture & Mechanical Univ Rev
Student Apt Fac (MBIA Insd)..................... 6.500 07/01/23 1,331,425
775 Florida Hsg Fin Agy Crossings Indian Run Apts V
(AMBAC Insd).................................... 6.100 12/01/26 776,225
3,000 Florida Hsg Fin Agy Homeowner Mtg Ser 3......... 6.350 07/01/28 3,061,650
4,000 Florida St Brd Edl Cap Outlay Pub Edl Ser A Rfdg
(Prerefunded @ 06/01/00)........................ * 06/01/12 1,511,480
5,000 Florida St Brd Edl Cap Outlay Pub Edl Ser C
(Prerefunded @ 06/01/02)........................ 6.625 06/01/22 5,442,950
250 Florida St Brd Regt Univ Sys Impt Rev (MBIA
Insd) (b)....................................... 5.625 07/01/19 246,860
1,810 Florida St Div Bond Fin Dept Genl Svcs Rev Dept
Natural Res Preservation 2000 Ser A (MBIA
Insd)........................................... 6.250 07/01/13 1,894,002
2,775 Florida St Muni Pwr Agy Rev All Requirements Pwr
Supply Proj (AMBAC Insd)........................ 5.100 10/01/25 2,511,264
2,500 Florida St Muni Pwr Agy Rev All Requirements Pwr
Supply Proj (Prerefunded @ 10/01/02) (AMBAC
Insd)........................................... 6.250 10/01/12 2,707,850
4,750 Florida St Muni Pwr Agy Rev Stanton Il Proj
(Prerefunded @ 10/01/02) (AMBAC Insd)........... 6.000 10/01/27 5,088,865
195 Greater Orlando Aviation Auth Orlando, FL Arpt
Fac Rev (Prerefunded @ 10/01/98)................ 8.250 10/01/08 209,276
</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
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 3,000 Hillsborough Cnty, FL Hosp Auth Hosp Rev Tampa
Genl Hosp Proj Rfdg (FSA Insd).................. 6.375% 10/01/13 $ 3,153,330
1,500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Ser 92 Rfdg.............. 8.000 05/01/22 1,734,915
2,500 Jacksonville, FL Elec Auth Rev Bulk Pwr Supply
Scherer (Prerefunded @ 10/01/00)................ 6.750 10/01/16 2,699,025
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)............................... 6.500 02/01/11 1,060,770
2,250 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)............................... 6.600 02/01/21 2,386,328
2,000 Jacksonville, FL Wtr & Swr Dev Rev Jacksonville
Suburban Util................................... 6.750 06/01/22 2,124,160
2,500 Jupiter, FL Wtr Rev Ser A Rfdg (AMBAC Insd)..... 6.250 10/01/18 2,602,175
9,970 Lakeland, FL Elec & Wtr Rev..................... * 10/01/13 3,936,854
2,230 Lakeland, FL Elec & Wtr Rev..................... 5.750 10/01/19 2,260,596
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj A Rfdg............. 7.875 12/15/25 1,129,840
2,500 North Broward, FL Hosp Dist Hosp Rev
(Prerefunded @ 01/01/02) (MBIA Insd)............ 6.500 01/01/12 2,710,825
2,000 Ocala, FL Util Sys Rev Subser A Rfdg (AMBAC
Insd)........................................... 6.250 10/01/15 2,083,940
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC
Insd)........................................... * 10/01/12 421,000
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC
Insd)........................................... * 10/01/13 394,870
1,940 Orange Cnty, FL Tourist Dev Tax Rev Ser B (AMBAC
Insd)........................................... 6.500 10/01/19 2,085,616
1,240 Orlando & Orange Cnty Expwy Auth FL Expwy Rev Jr
Lien (Escrowed to Maturity) (FGIC Insd)......... 6.000 07/01/21 1,297,561
2,000 Osceola Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 06/01/02) (AMBAC Insd)........... 6.250 06/01/07 2,159,420
2,535 Oviedo, FL Pub Impt Rev Rfdg (MBIA Insd)........ 6.500 10/01/18 2,725,277
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd).................................... 6.000 08/01/06 1,059,570
2,750 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd).................................... 6.375 08/01/15 2,906,695
1,000 Pasco Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 08/01/02) (FSA Insd)............. 6.500 08/01/12 1,077,290
1,000 Pembroke Pines, FL Cons Util Sys Rev (FGIC
Insd)........................................... 6.250 09/01/11 1,049,110
2,390 Polk Cnty, FL Cap Impt Rev Rfdg (MBIA Insd)..... 6.250 12/01/11 2,523,314
110 Polk Cnty, FL Cap Impt Rev Rfdg (Prerefunded @
12/01/02) (MBIA Insd)........................... 6.250 12/01/11 119,332
1,100 Saint Cloud, FL Util Rev Rfdg (MBIA Insd)....... 6.375 08/01/15 1,152,305
1,000 Saint Lucie Cnty, FL Sales Tax Rev (Prerefunded
@ 10/01/02) (FGIC Insd)......................... 6.375 10/01/12 1,089,040
2,000 Saint Lucie Cnty, FL Solid Waste Disp Rev FL Pwr
& Lt Co Proj.................................... 6.700 05/01/27 2,131,500
</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
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
FLORIDA (CONTINUED)
$ 3,000 Saint Petersburg, FL Hlth Fac Auth Rev Allegany
Hlth Sys Ser A (MBIA Insd)...................... 7.000% 12/01/15 $ 3,263,130
1,000 Santa Rosa Bay Bridge Auth FL Rev............... 6.250 07/01/28 992,430
------------
105,605,587
------------
PUERTO RICO 3.0%
3,000 Puerto Rico Comwlth Hwy & Tran Ser Y (Embedded
Cap) (FSA Insd) (d)............................. 5.730 07/01/21 3,228,780
------------
TOTAL LONG-TERM INVESTMENTS 99.0%
(Cost $100,554,958) (a)............................................. 108,834,367
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%.................................. 1,147,956
------------
NET ASSETS 100.0%........................................................... $109,982,323
============
</TABLE>
* Zero coupon bond
(a) At April 30, 1997, cost for federal income tax purposes is $100,554,958; the
aggregate gross unrealized appreciation is $8,289,868 and the aggregate
gross unrealized depreciation is $10,459, resulting in net unrealized
appreciation of $8,279,409.
(b) Securities purchased on a when issued or delayed delivery basis.
(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments.
(d) 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 price of these
securities may be more volatile than the price of a comparable fixed rate
security. 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.
These 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.
See Notes to Financial Statements
8
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $100,554,958) (Note 1).............. $108,834,367
Cash............................................................................. 165,281
Interest Receivable.............................................................. 1,624,476
Other............................................................................ 1,075
------------
Total Assets............................................................... 110,625,199
------------
LIABILITIES:
Payables:
Investments Purchased.......................................................... 246,354
Income Distributions -- Common and Preferred Shares............................ 105,597
Investment Advisory Fee (Note 2)............................................... 58,469
Administrative Fee (Note 2).................................................... 17,991
Affiliates (Note 2)............................................................ 4,632
Accrued Expenses................................................................. 149,345
Deferred Compensation and Retirement Plans (Note 2).............................. 60,488
------------
Total Liabilities.......................................................... 642,876
------------
NET ASSETS....................................................................... $109,982,323
============
NET ASSETS CONSIST OF:
Preferred Shares ($.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....................................... 8,279,409
Accumulated Undistributed Net Investment Income.................................. 780,550
Accumulated Net Realized Gain on Investments..................................... 120,363
------------
Net Assets Applicable to Common Shares..................................... 69,982,323
------------
NET ASSETS....................................................................... $109,982,323
============
NET ASSET VALUE PER COMMON SHARE ($69,982,323 divided by 4,137,307
shares outstanding)........................................................... $ 16.91
============
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................................................... $ 3,267,681
-----------
EXPENSES:
Investment Advisory Fee (Note 2)....................................... 358,411
Administrative Fee (Note 2)............................................ 110,287
Preferred Share Maintenance (Note 4)................................... 54,119
Trustees Fees and Expenses (Note 2).................................... 12,833
Legal (Note 2)......................................................... 3,525
Custody................................................................ 3,514
Amortization of Organizational Costs (Note 1).......................... 2,001
Other.................................................................. 55,274
-----------
Total Expenses..................................................... 599,964
-----------
NET INVESTMENT INCOME.................................................. $ 2,667,717
===========
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Net Realized Gain on Investments....................................... $ 110,954
-----------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period.............................................. 9,673,579
End of the Period.................................................... 8,279,409
-----------
Net Unrealized Depreciation on Investments During the Period........... (1,394,170)
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS........................ $(1,283,216)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS............................. $ 1,384,501
===========
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
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...................................... $ 2,667,717 $ 5,331,751
Net Realized Gain on Investments.......................... 110,954 568,431
Net Unrealized Depreciation on Investments
During the Period....................................... (1,394,170) (79,877)
------------ ------------
Change in Net Assets from Operations...................... 1,384,501 5,820,305
------------ ------------
Distributions from Net Investment Income:
Common Shares........................................... (2,047,860) (4,054,388)
Preferred Shares........................................ (595,494) (1,406,134)
------------ ------------
(2,643,354) (5,460,522)
------------ ------------
Distributions from
Net Realized Gain on Investments (Note 1):
Common Shares........................................... (317,538) -0-
Preferred Shares........................................ (113,072) -0-
------------ ------------
(430,610) -0-
------------ ------------
Total Distributions....................................... (3,073,964) (5,460,522)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES.............................................. (1,689,463) 359,783
NET ASSETS:
Beginning of the Period................................... 111,671,786 111,312,003
------------ ------------
End of the Period (Including accumulated undistributed net
investment income of $780,550 and $756,187,
respectively).......................................... $109,982,323 $111,671,786
============ ============
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 27, 1992
Six 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)................ $17.323 $17.236 $15.236 $17.963 $14.875 $14.697
------- ------- ------- ------- ------- -------
Net Investment Income......... .645 1.289 1.300 1.288 1.294 .596
Net Realized and Unrealized
Gain/Loss on Investments.... (.311) .118 2.023 (2.731) 3.020 .107
------- ------- ------- ------- ------- -------
Total from Investment
Operations.................... .334 1.407 3.323 (1.443) 4.314 .703
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders.............. .495 .980 .948 .936 .936 .390
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders.... .144 .340 .375 .257 .287 .135
Distributions from Net
Realized Gain on Investments
(Note 1):
Paid to Common
Shareholders.............. .077 -0- -0- .071 .002 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders.... .027 -0- -0- .020 .001 -0-
------- ------- ------- ------- ------- -------
Total Distributions............ .743 1.320 1.323 1.284 1.226 .525
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period........................ $16.914 $17.323 $17.236 $15.236 $17.963 $14.875
======= ======= ======= ======= ======= =======
Market Price Per Share at End
of the Period................. $16.500 $16.500 $15.250 $13.500 $16.750 $14.875
Total Investment Return at
Market Price (b).............. 3.53%* 14.89% 20.50% (13.92%) 19.30% 1.74%*
Total Return at Net Asset Value
(c)........................... .92%* 6.32% 19.85% (9.89%) 27.67% 1.65%*
Net Assets at End of the Period
(In millions)................. $ 110.0 $ 111.7 $ 111.3 $ 103.0 $ 114.3 $ 101.5
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares................. 1.70% 1.77% 1.79% 1.81% 1.76% 1.72%
Ratio of Expenses to Average
Net Assets.................... 1.09% 1.13% 1.12% 1.15% 1.12% 1.21%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common Shares
(d)........................... 5.87% 5.51% 5.67% 6.15% 6.01% 5.11%
Portfolio Turnover............. 1%* 12% 6% 10% 9% 9%*
</TABLE>
(a) Net Asset Value at March 27, 1992, is adjusted for common and preferred
share offering costs of $.303 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 common share equivalent of
distributions paid to preferred shareholders.
* Non-Annualized
See Notes to Financial Statements
12
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital 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's
investment objective is to provide a high level of current income exempt from
federal income taxes and Florida state intangibles taxes, consistent with
preservation of capital. The Trust will invest in a portfolio consisting
substantially of Florida municipal obligations rated investment grade at the
time of investment. 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. 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.
D. ORGANIZATIONAL COSTS--The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
the Trust's organization in the amount of $25,000. These costs were amortized on
a straight line basis over the 60 month period ended March 25, 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.
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 .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
(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 $16,600 representing VKAC's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to 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.
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
At April 30, 1997, VKAC owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments were $1,495,988 and $2,248,277, 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, 1997, was 3.570%. During the
six months ended April 30, 1997, the rates ranged from 3.350% to 4.290%.
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.
15
<PAGE> 17
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.
16
<PAGE> 18
VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE FLORIDA 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.
17
