<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
Report of Independent Accountants................ 17
Dividend Reinvestment Plan....................... 18
</TABLE>
VTF ANR 12/97
<PAGE> 2
LETTER TO SHAREHOLDERS
December 4, 1997
Dear Shareholder,
In the past year, we have been
participants in and witnesses to two
mergers that we believe have positioned
our company at the forefront of the
financial industry's evolution. Our [PHOTO]
latest announcement continues our
forward progress. I am pleased to
announce that Philip N. Duff, formerly
the chief financial officer of Morgan
Stanley, has joined Van Kampen American
Capital as president and chief DENNIS J. MCDONNELL AND DON G. POWELL
executive officer. I will continue as
chairman of the firm. Together, we will continue to work to the benefit of our
fund shareholders as Van Kampen American Capital advances toward the next
century.
ECONOMIC REVIEW
The last quarter of 1996 brought renewed strength and rumblings of
inflation, which continued to feed investors' uncertainties about the direction
of interest rates. This was reflected in the volatility of taxable yields, with
the 30-year Treasury ranging from a high of 6.70 percent to a low of 6.35
percent, and ending the period at 6.64 percent.
The bond market advanced in price during the first 10 months of 1997, but
its ascension was not a smooth ride. Bond prices fell early in the period as
economic growth soared, fueling concerns about rising inflation and a potential
interest rate hike by the Federal Reserve Board. When the Fed did raise interest
rates by a modest 0.25 percent in late March, bond prices fell further, sending
the yield of the 30-year U.S. Treasury bond above 7.0 percent for the first time
in six months. By mid-April, however, the market's mood had changed, reflecting
few signs of price pressures despite the economy's strength. Bonds also
benefited from continued heavy purchases by foreign investors and concerns that
the stock market rally was nearing an end. The 7.0 percent slump in the Dow
Jones Industrial Average on October 27 reinforced the benefit of owning bonds
for diversification. By the end of October, the yield on the 30-year Treasury
bond was near its lowest level in 20 months, at 6.15 percent.
Throughout 1997, municipal bond prices moved in the same direction as the
Treasury bond market, but gained less when Treasury prices rallied and lost less
when Treasuries fell. Between December 31, 1996 and October 31, 1997, the yield
on the long-term municipal revenue bond index fell 36 basis points as the yield
on the 30-year Treasury bond fell 48 basis points. Because yields move in the
opposite direction of prices, the smaller yield decline of municipal bonds
indicates that their prices did not rise as much as Treasuries.
Continued on page two
1
<PAGE> 3
Florida's economy remained strong, underpinned by continued growth in the
tourism and construction industries. The combination of brisk growth, which
boosted state tax revenues, and conservative fiscal management led the Standard
& Poor's Rating Group to upgrade its rating on the state's general obligation
bonds from AA to AA+. During the second half of the year, the supply overhang of
Florida municipal bonds moderated, eliminating a factor that had depressed bond
prices earlier in the year.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality*
As of October 31, 1997
<TABLE>
<S> <C>
AAA........... 82.8%
AA............ 12.3%
A............. 2.0%
BBB........... 2.9%
</TABLE>
*As a Percentage of Long-Term Investments
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's
TRUST STRATEGY
In managing the Trust, we used the following strategies:
We maintained a portfolio heavily invested in high-quality bonds. The high
concentration in AAA-rated securities in the portfolio reflects the
proliferation of insured bonds, which currently comprise well over half of new
issues in the municipal bond market and about 70 percent of new Florida
securities. Bonds rated AAA are extremely liquid and carry minimal credit risk.
When interest rates fall, as they did for most of the second half of the fiscal
year, these bonds tend to outperform lower-rated securities. Bonds rated BBB,
the lowest investment-grade credit rating assigned by Standard & Poor's, tend to
perform better when rates are rising, and have the potential to provide
additional income.
Portfolio turnover during the fiscal year was minimal due to market
conditions that afforded few opportunities to add value to existing holdings.
The average yield of bonds in the Trust's portfolio was higher than average
market yields. As a result, there often was not enough incentive to replace
bonds in the portfolio. Trading was also restrained by a frequent supply
shortage of Florida bonds, and expensive prices for those bonds that were
available. In addition, yield spreads between high-quality and low-quality bonds
were narrow due to the increasing number of insured bonds in the market. In this
environment, it was difficult to justify purchasing lower-rated securities and
assuming additional credit risk.
Acquisitions focused on enhancing the Trust's call protection. Because we
hope to limit the number of bonds that could be "called" at any one time, we
purchased new long-term discount securities that will not be callable for many
years. To increase income, we favored high-yielding bonds from a diversified mix
of market sectors. When searching for new securities for the Trust's portfolio,
we try to identify bonds that we believe will
Continued on page three
2
<PAGE> 4
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 Trust remains well-diversified by sector, but continues to maintain its
heaviest weightings in public education and health-care securities. Public
education bonds have benefited from strong retail demand due to their general
obligation backing and the fact that most are insured. Health-care bonds have
been underpinned by the continuing financial improvement of this sector due to
industry consolidation and efforts to control operating expenses.
During the second half of the fiscal year, the duration of the portfolio
declined slightly due to the market rally, which caused some bonds to trade to
their call dates rather than their maturity dates. Duration, which is expressed
in years, is a measure of a portfolio's sensitivity to interest rate movements.
Portfolios with short durations tend to perform better when interest rates are
rising, which occurred during the first half of the fiscal year. Conversely,
portfolios with long durations tend to perform better when rates are falling,
which characterized the second half. Looking ahead, we hope to take advantage of
trading opportunities in order to extend duration of the Trust. As of October
31, the duration of the Trust's bond portfolio stood at 5.95 years, compared to
7.34 years for the Lehman Brothers Municipal Bond Index.
Top Five Portfolio Industry Holdings by Sector as of October 31, 1997*
Public Education........................ 21.4%
Health Care............................. 18.6%
Retail Electric/Gas/Telephone........... 13.8%
General Purpose......................... 12.6%
Water & Sewer........................... 9.0%
*As a Percentage of Long-Term Investments
PERFORMANCE SUMMARY
For the one-year period ended October 31, 1997, the Van Kampen American
Capital Trust for Investment Grade Florida Municipals generated a total return
at market price of 11.00 percent(1). The Trust offered a tax-exempt distribution
rate of 5.76 percent(3), based on the closing common stock price on October 31,
1997. At the end of the reporting period, the closing share price of the Trust
traded at $17.1875, a 2.95 percent discount to its net asset value of $17.71.
Because income from the Trust is exempt from federal income taxes, this
distribution rate represents a yield equivalent to a taxable investment earning
9.00 percent(4) (for investors in the federal income tax bracket of 36 percent).
The Trust declared a capital gains distribution of $0.0768 per share paid
December 31, 1996, as a result of the sale of some assets that had appreciated
in value.
Continued on page four
3
<PAGE> 5
TWELVE-MONTH DISTRIBUTION HISTORY FOR THE PERIOD ENDED OCTOBER 31, 1997
[BAR CHART]
<TABLE>
<CAPTION>
Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct
1996 1996 1997 1997 1997 1997 1997 1997 1997 1997 1997 1997
<C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Dividends $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875 $.0875
Capital Gains $.15925
</TABLE>
OUTLOOK
We expect the economy to remain strong in the coming months, although the
growth rate might slow to a more moderate pace. The weakness in the Far East,
which was the impetus for the recent volatility in world stock markets, will
most likely reduce U.S. exports to the region. In turn, this could trim U.S.
economic growth as well as the earnings of many U.S. companies. As a result, we
believe there is little chance that the Fed will raise interest rates in the
coming months. A rate hike reemerges as a possibility if inflation picks up, or
if growth continues at its current brisk pace.
As a result of this outlook, we expect that the yield on the 30-year
Treasury bond will trade within a range of 5.75 percent and 6.50 percent for the
next six months, possibly falling further in mid-1998. A decline in rates would
not only boost the prices of long-term investments in the portfolio, but could
also positively affect the Trust as a result of its leveraged structure. That
structure, which involves borrowing short-term funds to purchase long-term
municipal bonds, provides common shareholders with above-market levels of
dividend income. It should be noted, however, that if short-term rates rise,
leveraged costs would increase; this would negatively impact the income and
performance of common shares.
We will continue to seek a balance between the Trust's total return and its
dividend income, and to add value through our investment strategies and bond
selection. Thank you for your continued confidence in Van Kampen American
Capital and your Trust's portfolio manager.
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 OCTOBER 31, 1997
VAN KAMPEN AMERICAN CAPITAL TRUST FOR INVESTMENT GRADE
FLORIDA MUNICIPALS
(NYSE TICKER SYMBOL--VTF)
<TABLE>
<S> <C>
COMMON SHARE TOTAL RETURNS
One-year total return based on market price(1)........... 11.00%
One-year total return based on NAV(2).................... 8.71%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 5.76%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).................................... 9.00%
SHARE VALUATIONS
Net asset value.......................................... $ 17.71
Closing common stock price............................... $17.1875
One-year high common stock price (07/08/97).............. $ 17.625
One-year low common stock price (12/17/96)............... $ 15.625
Preferred share rate(5).................................. 3.524%
</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.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 99.0%
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 $ 2,515,680
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 1,045,260
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 1,026,980
1,000 Bay Cnty, FL Sch Brd Ctfs Partn (AMBAC Insd).... 6.750 07/01/12 1,127,070
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 3,403,320
1,765 Cape Coral, FL Spl Oblig Rev Wastewtr Impt (FSA
Insd)........................................... 6.375 06/01/12 1,925,544
1,725 Collier Cnty, FL Cap Impt Rev Rfdg (FGIC
Insd)........................................... 5.750 10/01/13 1,796,708
2,010 Dade Cnty, FL Hsg Fin Auth Single Family Mtg Rev
Ser D Rfdg (FSA Insd)........................... 6.950 12/15/12 2,138,962
2,140 Dade Cnty, FL Sch Brd Ctfs Partn Ser A (MBIA
Insd)........................................... 5.750 05/01/09 2,279,186
5,325 Dade Cnty, FL Spl Oblig Cap Apprec Bond Ser B
Rfdg (AMBAC Insd)............................... * 10/01/27 900,351
2,000 Duval Cnty, FL Sch Dist Rfdg (AMBAC Insd)....... 6.300 08/01/08 2,195,460
1,000 Escambia Cnty, FL Pollutn Ctl Rev Champion Intl
Corp Proj....................................... 6.900 08/01/22 1,110,980
3,100 Escambia Cnty, FL Sch Brd Ctfs Partn (FSA
Insd)........................................... 6.375 02/01/12 3,360,338
1,900 Escambia Cnty, FL Sch Brd Ctfs Partn (FSA
Insd)........................................... 6.375 02/01/12 2,024,906
1,250 Florida Agriculture & Mechanical Univ Rev
Student Apt Fac (MBIA Insd)..................... 6.500 07/01/23 1,361,488
775 Florida Hsg Fin Agy Crossings Indian Run Apts V
(AMBAC Insd).................................... 6.100 12/01/26 811,200
3,000 Florida Hsg Fin Agy Homeowner Mtg Ser 3......... 6.350 07/01/28 3,176,970
4,000 Florida St Brd Edl Cap Outlay Pub Edl Ser A Rfdg
(Prerefunded @ 06/01/00)........................ * 06/01/12 1,573,240
5,000 Florida St Brd Edl Cap Outlay Pub Edl Ser C
(Prerefunded @ 06/01/02)........................ 6.625 06/01/22 5,542,950
250 Florida St Brd Regt Univ Sys Impt Rev (MBIA
Insd)........................................... 5.625 07/01/19 256,535
250 Florida St Dept Trans Alligator Alley Rev (FGIC
Insd)........................................... 5.125 07/01/22 244,335
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 1,949,442
2,775 Florida St Muni Pwr Agy Rev All Requirements Pwr
Supply Proj (AMBAC Insd)........................ 5.100 10/01/25 2,678,791
2,500 Florida St Muni Pwr Agy Rev All Requirements Pwr
Supply Proj (Prerefunded @ 10/01/02) (AMBAC
Insd)........................................... 6.250 10/01/12 2,766,775
4,750 Florida St Muni Pwr Agy Rev Stanton II Proj
(Prerefunded @ 10/01/02) (AMBAC Insd)........... 6.000 10/01/27 5,204,622
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <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 $ 3,272,850
1,500 Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl
Rev Tampa Elec Co Proj Ser 92 Rfdg.............. 8.000 05/01/22 1,739,850
2,500 Jacksonville, FL Elec Auth Rev Bulk Pwr Supply
Scherer (Prerefunded @ 10/01/00)................ 6.750 10/01/16 2,720,425
1,000 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)............................... 6.500 02/01/11 1,088,990
2,250 Jacksonville, FL Hosp Rev Univ Med Cent Inc Proj
(Connie Lee Insd)............................... 6.600 02/01/21 2,458,822
2,000 Jacksonville, FL Wtr & Swr Dev Rev Jacksonville
Suburban Util................................... 6.750 06/01/22 2,163,640
2,500 Jupiter, FL Wtr Rev Ser A Rfdg (AMBAC Insd)..... 6.250 10/01/18 2,696,450
9,970 Lakeland, FL Elec & Wtr Rev..................... * 10/01/13 4,390,289
2,230 Lakeland, FL Elec & Wtr Rev..................... 5.750 10/01/19 2,350,710
1,000 Martin Cnty, FL Indl Dev Auth Indl Dev Rev
Indiantown Cogeneration Proj A Rfdg............. 7.875 12/15/25 1,162,660
2,500 North Broward, FL Hosp Dist Hosp Rev
(Prerefunded @ 01/01/02) (MBIA Insd)............ 6.500 01/01/12 2,755,025
2,000 Ocala, FL Util Sys Rev Subser A Rfdg (AMBAC
Insd)........................................... 6.250 10/01/15 2,160,920
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC
Insd)........................................... * 10/01/12 467,020
1,000 Orange Cnty, FL Cap Impt Rev Rfdg (AMBAC
Insd)........................................... * 10/01/13 440,350
1,940 Orange Cnty, FL Tourist Dev Tax Rev Ser B (AMBAC
Insd)........................................... 6.500 10/01/19 2,168,357
1,240 Orlando & Orange Cnty Expwy Auth FL Expwy Rev Jr
Lien (Escrowed to Maturity) (FGIC Insd)......... 6.000 07/01/21 1,339,498
2,000 Osceola Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 06/01/02) (AMBAC Insd)........... 6.250 06/01/07 2,202,740
2,535 Oviedo, FL Pub Impt Rev Rfdg (MBIA Insd)........ 6.500 10/01/18 2,791,111
1,000 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd).................................... 6.000 08/01/06 1,102,710
2,750 Palm Beach Cnty, FL Sch Brd Ctfs Partn Ser A
(AMBAC Insd).................................... 6.375 08/01/15 3,092,210
1,000 Pasco Cnty, FL Sch Brd Ctfs Partn Ser A
(Prerefunded @ 08/01/02) (FSA Insd)............. 6.500 08/01/12 1,098,260
1,000 Pembroke Pines, FL Cons Util Sys Rev (FGIC
Insd)........................................... 6.250 09/01/11 1,078,140
2,390 Polk Cnty, FL Cap Impt Rev Rfdg (MBIA Insd)..... 6.250 12/01/11 2,605,913
110 Polk Cnty, FL Cap Impt Rev Rfdg (Prerefunded @
12/01/02) (MBIA Insd)........................... 6.250 12/01/11 122,029
1,100 Saint Cloud, FL Util Rev Rfdg (MBIA Insd)....... 6.375 08/01/15 1,190,552
1,000 Saint Lucie Cnty, FL Sales Tax Rev (Prerefunded
@ 10/01/02) (FGIC Insd)......................... 6.375 10/01/12 1,112,210
2,000 Saint Lucie Cnty, FL Solid Waste Disp Rev FL Pwr
& Lt Co Proj.................................... 6.700 05/01/27 2,164,580
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS (CONTINUED)
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------------
<C> <S> <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 $ 3,324,420
1,000 Santa Rosa Bay Brdg Auth FL Rev................. 6.250 07/01/28 1,048,300
------------
108,726,124
------------
PUERTO RICO 3.0%
3,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser
Y Rfdg (Embedded Cap) (FSA Insd) (a)............ 5.730 07/01/21 3,446,100
------------
TOTAL LONG-TERM INVESTMENTS 99.0%
(Cost $100,528,143)................................................. 112,172,224
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%.................................. 1,099,462
------------
NET ASSETS 100.0%........................................................... $113,271,686
============
</TABLE>
*Zero coupon bond
(a) 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 unrealized appreciation/depreciation. Upon
disposition, a realized gain or loss is recognized accordingly.
See Notes to Financial Statements
8
<PAGE> 10
STATEMENT OF ASSETS AND LIABILITIES
October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $100,528,143)....................... $112,172,224
Interest Receivable......................................... 1,642,112
Other....................................................... 1,584
------------
Total Assets.......................................... 113,815,920
------------
LIABILITIES:
Payables:
Custodian Bank............................................ 186,227
Investment Advisory Fee................................... 62,284
Income Distributions -- Common and Preferred Shares....... 57,305
Administrative Fee........................................ 19,164
Affiliates................................................ 10,195
Accrued Expenses............................................ 136,637
Trustees' Deferred Compensation and Retirement Plans........ 72,422
------------
Total Liabilities..................................... 544,234
------------
NET ASSETS.................................................. $113,271,686
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 800 issued
with liquidation preference of $50,000 per share)......... $ 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............................................. 60,766,571
Net Unrealized Appreciation................................. 11,644,081
Accumulated Undistributed Net Investment Income............. 696,247
Accumulated Net Realized Gain............................... 123,414
------------
Net Assets Applicable to Common Shares................ 73,271,686
------------
NET ASSETS.................................................. $113,271,686
============
NET ASSET VALUE PER COMMON SHARE ($73,271,686 divided
by 4,137,307 shares outstanding).......................... $ 17.71
============
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
STATEMENT OF OPERATIONS
For the Year Ended October 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 6,574,931
-----------
EXPENSES:
Investment Advisory Fee..................................... 726,046
Administrative Fee.......................................... 223,406
Preferred Share Maintenance................................. 109,135
Trustees' Fees and Expenses................................. 27,489
Legal....................................................... 7,500
Custody..................................................... 5,099
Amortization of Organizational Costs........................ 2,001
Other....................................................... 114,532
-----------
Total Expenses.......................................... 1,215,208
-----------
NET INVESTMENT INCOME....................................... $ 5,359,723
-----------
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 123,413
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 9,673,579
End of the Period......................................... 11,644,081
-----------
Net Unrealized Appreciation During the Period............... 1,970,502
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 2,093,915
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 7,453,638
===========
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended October 31, 1997 and 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
October 31, 1997 October 31, 1996
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 5,359,723 $ 5,331,751
Net Realized Gain.................................... 123,413 568,431
Net Unrealized Appreciation/Depreciation
During the Period.................................. 1,970,502 (79,877)
------------ ------------
Change in Net Assets from Operations................. 7,453,638 5,820,305
------------ ------------
Distributions from Net Investment Income:
Common Shares...................................... (4,095,722) (4,054,388)
Preferred Shares................................... (1,327,406) (1,406,134)
------------ ------------
(5,423,128) (5,460,522)
------------ ------------
Distributions from Net Realized Gain:
Common Shares...................................... (317,538) -0-
Preferred Shares................................... (113,072) -0-
------------ ------------
(430,610) -0-
------------ ------------
Total Distributions.................................. (5,853,738) (5,460,522)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 1,599,900 359,783
NET ASSETS:
Beginning of the Period.............................. 111,671,786 111,312,003
------------ ------------
End of the Period (Including accumulated
undistributed net investment
income of $696,247 and $756,187, respectively)..... $113,271,686 $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.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
March 27, 1992
(Commencement
Year Ended October 31, of Investment
------------------------------------------------ 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........... 1.295 1.289 1.300 1.288 1.294 .596
Net Realized and Unrealized
Gain/Loss..................... .507 .118 2.023 (2.731) 3.020 .107
------- ------- ------- ------- ------- -------
Total from Investment
Operations...................... 1.802 1.407 3.323 (1.443) 4.314 .703
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common Shareholders... .990 .980 .948 .936 .936 .390
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders...... .321 .340 .375 .257 .287 .135
Distributions from Net Realized
Gain:
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.............. 1.415 1.320 1.323 1.284 1.226 .525
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period.......................... $17.710 $17.323 $17.236 $15.236 $17.963 $14.875
======= ======= ======= ======= ======= =======
Market Price Per Share at End of
the Period...................... $17.1875 $16.500 $15.250 $13.500 $16.750 $14.875
Total Investment Return at Market
Price (b)....................... 11.00% 14.89% 20.50% (13.92%) 19.30% 1.74%*
Total Return at Net Asset Value
(c)............................. 8.71% 6.32% 19.85% (9.89%) 27.67% 1.65%*
Net Assets at End of the Period
(In millions)................... $ 113.3 $ 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)............... 5.62% 5.51% 5.67% 6.15% 6.01% 5.11%
Portfolio Turnover............... 2% 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
October 31, 1997
- --------------------------------------------------------------------------------
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. At October 31, 1997, 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.
13
<PAGE> 15
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1997
- --------------------------------------------------------------------------------
D. ORGANIZATIONAL COSTS--The Trust has 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 $25,000. These costs
were amortized on a straight line basis over the 60 month period ended March 26,
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.
At October 31, 1997, for federal income tax purposes, cost of long-term
investments is $100,528,143; the aggregate gross unrealized appreciation is
$11,644,081 and the aggregate gross unrealized depreciation is $0, resulting in
net unrealized appreciation of $11,644,081.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders. Due to inherent
differences in the recognition of income, expenses and realized gains/losses
under generally accepted accounting principles and federal income tax purposes,
permanent differences between book and tax basis reporting for the 1997 fiscal
year have been identified and appropriately reclassified. As a result, permanent
differences relating to the recognition of expenses which are not deductible for
tax purposes totaling $3,465 were reclassified from accumulated undistributed
net investment income to capital. In addition, permanent differences of $9,408
due to gain adjustments have been reclassified from accumulated net realized
gain to capital.
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.
For the year ended October 31, 1997, 100% of the income distributions made
by the Trust were exempt from federal income taxes. Additionally, during the
period, the Trust paid a 28% rate gain distribution of $430,610. In January,
1998, the Trust will provide tax information to shareholders for the 1997
calendar year.
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
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1997
- --------------------------------------------------------------------------------
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.
For the year ended October 31, 1997, the Trust recognized expenses of
approximately $1,100, representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom (Illinois), counsel to the Trust, of which a trustee of
the Trust is an affiliated person.
For the year ended October 31, 1997, the Trust recognized expenses of
approximately $50,900 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 trustee's annual retainer fee, which is
currently $2,500.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments were $2,475,067 and $3,484,644, 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 October 31, 1997, was 3.524%. During the
year ended October 31, 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
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
October 31, 1997
- --------------------------------------------------------------------------------
5. CAPITAL GAIN DISTRIBUTION
On December 1, 1997, the Trust declared a capital gain of $0.0225 per common
share, of which 93.3% is long-term and 6.7% is short-term, to common
shareholders of record on December 15, 1997 which will be payable on December
31, 1997.
16
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS
The Board of Trustees and Shareholders of
Van Kampen American Capital Trust for Investment Grade Florida Municipals:
We have audited the accompanying statement of assets and liabilities of Van
Kampen American Capital Trust for Investment Grade Florida Municipals (the
"Trust"), including the portfolio of investments, as of October 31, 1997, and
the related statement of operations for the year then ended, the statement of
changes in net assets for each of the two years in the period then ended, and
the financial highlights for each of the periods presented. These financial
statements and financial highlights are the responsibility of the Trust's
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
October 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred
to above present fairly, in all material respects, the financial position of Van
Kampen American Capital Trust for Investment Grade Florida Municipals as of
October 31, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the financial highlights for each of the periods presented, in conformity
with generally accepted accounting principles.
KPMG Peat Marwick LLP
Chicago, Illinois
December 4, 1997
17
<PAGE> 19
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, or if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-
8200. If you withdraw, you will receive, without
charge, a share certificate issued in your name for all full Common Shares
credited to your account under the Plan and a cash payment will be made for any
fractional Common Share credited to your account under the Plan. You may again
elect to participate in the Plan at any time by calling 1-800-341-2929 or
writing to the Trust at:
Van Kampen American Capital
Attn: Closed-End Funds
2800 Post Oak Blvd.
Houston, TX 77056
18
<PAGE> 20
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 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 Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
U.S. Real Estate Fund
Value 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
Morgan Stanley funds.
19
<PAGE> 21
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.
20
<PAGE> 22
RESULTS OF SHAREHOLDER VOTES
The Annual Meeting of Shareholders of the Trust was held on May 28, 1997,
where shareholders voted on a new investment advisory agreement, the election of
Trustees whose terms expired in 1997 and independent public accountants.
1) With regard to the approval of a new investment advisory agreement
between Van Kampen American Capital Investment Advisory Corp. and the Trust,
3,265,582 shares voted for the proposal, 105,576 shares voted against, 77,392
shares abstained and 0 shares represented broker non-votes.
2) With regard to the election of Rod Dammeyer as elected trustee by the
preferred shareholders of the Trust, 433 shares voted in his favor, 0 shares
withheld.
3) With regard to the election of Wayne W. Whalen as elected trustee by the
common shareholders of the Trust, 3,391,922 shares voted in his favor, 56,195
shares withheld.
4) With regard to the ratification of KPMG Peat Marwick LLP as independent
public accountants for its current fiscal year, 3,397,601 shares voted for the
proposal, 19,527 shares voted against, 31,422 shares abstained and 0 shares
represented broker non-votes.
21
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000883268
<NAME> VKAC TRUST FOR INVESTMENT GRADE FLORIDA MUNICIPALS
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> OCT-31-1997
<PERIOD-START> NOV-01-1996
<PERIOD-END> OCT-31-1997
<INVESTMENTS-AT-COST> 100,528,123
<INVESTMENTS-AT-VALUE> 112,172,224
<RECEIVABLES> 1,642,112
<ASSETS-OTHER> 1,584
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 113,815,920
<PAYABLE-FOR-SECURITIES> 0
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<OTHER-ITEMS-LIABILITIES> 544,234
<TOTAL-LIABILITIES> 544,234
<SENIOR-EQUITY> 40,000,000
<PAID-IN-CAPITAL-COMMON> 60,807,944
<SHARES-COMMON-STOCK> 4,137,307
<SHARES-COMMON-PRIOR> 4,137,307
<ACCUMULATED-NII-CURRENT> 696,247
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<ACCUMULATED-NET-GAINS> 123,414
<OVERDISTRIBUTION-GAINS> 0
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<NET-ASSETS> 113,271,686
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 6,574,931
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<EXPENSES-NET> (1,215,208)
<NET-INVESTMENT-INCOME> 5,359,723
<REALIZED-GAINS-CURRENT> 123,413
<APPREC-INCREASE-CURRENT> 1,970,502
<NET-CHANGE-FROM-OPS> 7,453,638
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (5,423,128)
<DISTRIBUTIONS-OF-GAINS> (430,610)
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<NET-CHANGE-IN-ASSETS> 1,599,900
<ACCUMULATED-NII-PRIOR> 756,187
<ACCUMULATED-GAINS-PRIOR> 440,019
<OVERDISTRIB-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 726,046
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 1,215,208
<AVERAGE-NET-ASSETS> 111,691,569
<PER-SHARE-NAV-BEGIN> 17.323
<PER-SHARE-NII> 1.295
<PER-SHARE-GAIN-APPREC> 0.507
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<AVG-DEBT-PER-SHARE> 0
</TABLE>
