<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>
VTJ SAR 6/97
<PAGE> 2
LETTER TO SHAREHOLDERS
June 5, 1997
Dear Shareholder,
As mentioned in your previous
report, VK/AC Holding, Inc., the parent
company of Van Kampen American Capital,
Inc., was acquired by Morgan Stanley
Group Inc., a world leader in asset
management. More recently, on February [PHOTO]
5, 1997, Morgan Stanley Group Inc. and
Dean Witter, Discover & Co. announced
their agreement to merge, and you DENNIS J. MCDONNELL AND DON G. POWELL
received a proxy in April. The merger
was completed on May 31, 1997, creating
the combined company of Morgan Stanley, Dean Witter, Discover & Co. This
preeminent global financial services firm boasts a market capitalization of $21
billion and leading market positions in securities, asset management, and credit
services. As the financial industry continues to witness unprecedented
consolidations and new partnerships, we believe that those firms that are
leaders in all facets of their business will be able to offer investors the
greatest opportunities and services as we move into the next century. We are
confident that this merger will provide investors with those benefits.
ECONOMIC REVIEW
Bond prices were volatile during the six months ended April 30, 1997. Prices
initially rose as the economy slowed, erasing fears of an interest rate hike by
the Federal Reserve Board. The November election of a Democratic president and
Republican Congress was positive for bonds because the split government was
viewed as a restraint on spending increases that could potentially swell the
budget deficit. In addition, support diminished for radical tax reform that
could threaten the tax-free status of municipal bonds.
By the beginning of 1997, the situation changed. Bond prices began to fall
as the economy picked up speed, culminating in a 5.60 percent annualized growth
rate in the first quarter. This strength, coupled with warnings by Fed Chairman
Alan Greenspan that tighter monetary policy might be appropriate, reignited
fears of a rate hike. On March 25, the Fed raised short-term rates by a modest
0.25 percent, which sent the 30-year Treasury bond yield above 7.00 percent for
the first time in six months. By the end of April, the 30-year Treasury bond
yield slipped back below 7.00 percent as the market turned its attention to
positive news about inflation, and bonds recovered some of their earlier losses.
Throughout most of the six months ended April 30, municipal bonds generally
outperformed Treasuries. Between October 31 and April 30, yields on long-term
municipal revenue bonds rose 21 basis points, while yields on 30-year Treasury
bonds jumped 31 basis points. Because bond yields move in the opposite direction
of prices, the smaller
Continued on page two
1
<PAGE> 3
increase in municipal yields meant that municipal bond prices did not fall as
sharply as Treasury bond prices did. A relatively stable supply of new issues,
combined with an increase in retail demand, contributed to the improved
performance of municipal bonds.
The supply of New Jersey municipal securities was especially tight, which
helped to underpin the local bond market. The New Jersey economy grew at a
moderate rate that was slightly below the national average, but the state budget
continued to show a surplus, albeit the smallest one in six years. Looking
ahead, New Jersey faces the challenges of a severely underfunded state pension
system, inequality in school funding, and the lack of a long-term solution to
pay for indigent care in its health-care system.
FUND STRATEGY
In managing the Trust, we maintained a heavy weighting in high-quality
bonds, which dominate the New Jersey municipal security market. As of April 30,
approximately 67 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. Approximately 28 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. In addition, approximately 2
percent of long-term investments were non-rated. AAA-rated bonds are extremely
liquid because most are insured. They provide the potential for safety of
principal and 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.................................... 66.7%
AA..................................... 18.6%
A...................................... 9.5%
BBB.................................... 2.7%
Non-Rated.............................. 2.5%
</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 the supply of New
Jersey bonds was tight and market conditions offered few opportunities to add
value over existing holdings. The average yield of bonds in the portfolio was
higher than market yields. In addition, yield spreads remained tight between
AAA-rated bonds and lower-rated bonds. As a result, there was often not enough
yield reward to justify the additional credit risk of purchasing lower-rated
securities.
We maintained the Trust's high concentrations in general purpose,
health-care, and water and sewer bonds. General purpose bonds were supported by
New Jersey's strong
Continued on page three
2
<PAGE> 4
economy, while health-care bonds benefited from this sector's financial
improvement. Looking ahead, however, New Jersey faces challenges in funding
indigent care. Facilities that serve many indigent people have experienced large
cuts in their reimbursement rates from the state and could be further stressed.
During the fourth quarter, the Trust was negatively affected by the
announcement of an early call on Mercer County Improvement Authority bonds,
which accounted for about 13 percent of the Trust's assets at the time. The
bonds had been issued to finance a waste incinerator project and were called
when the project was canceled. These high-yielding premium bonds will be
difficult to replace, but the Trust will concentrate on replacing this yield
when opportunities arise.
We maintained a relatively short duration during this period of rising
interest rates in order to potentially reduce the Trust's volatility to rate
increases. 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. At the end of the
period, the Trust's portfolio duration stood at 7.48 years compared to 7.80
years for the Lehman Brothers New Jersey Municipal Bond Index benchmark.
[BAR CHART]
Six-month Distribution History
For the Period Ended April 30, 1997
<TABLE>
<CAPTION>
Distribution per Share
Dividends Capital Gains
<S> <C> <C>
Nov 1997 $.0790 $.0883
Dec 1996 $.0790
Jan 1997 $.0790
Feb 1997 $.0790
Mar 1997 $.0790
Apr 1997 $.0790
</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 New Jersey 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 3.11 percent(1). The
Trust offered a tax-exempt distribution rate of 6.17 percent(3), based on the
closing common stock price of $15.375 per share on April 30, 1997. Because
income from the Trust is exempt from federal and New Jersey state income taxes,
this distribution rate represents a yield equivalent to a taxable
Continued on page four
3
<PAGE> 5
investment earning 10.30 percent(4) (for investors in the combined federal and
state income tax bracket of 40.10 percent). At the end of the reporting period,
the closing share price of the Trust traded at a 7.60 percent discount to its
net asset value of $16.64.
The Trust declared a capital gains distribution of $0.0093 per share payable
on December 31, 1996, due to the sale of some securities that had appreciated in
value.
TOP FIVE PORTFOLIO INDUSTRY HOLDINGS BY SECTOR AS OF APRIL 30, 1997*
General Purpose................... 27.6%
Health Care....................... 14.5%
Water & Sewer..................... 12.9%
Waste Disposal.................... 11.5%
Transportation.................... 11.4%
*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
NEW JERSEY MUNICIPALS
(NYSE TICKER SYMBOL--VTJ)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)............ 3.11%
Six-month total return based on NAV(2)..................... 1.01%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 6.17%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)...................................... 10.30%
SHARE VALUATIONS
Net asset value............................................ $ 16.64
Closing common stock price................................. $15.375
Six-month high common stock price (12/04/96)............... $16.250
Six-month low common stock price (04/16/97)................ $15.000
Preferred share rate(5).................................... 3.600%
</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 40.1%
combined federal and state income tax bracket, which takes into consideration
the deductibility of individual state taxes paid.
(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 necessarily come to pass.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
NEW JERSEY 89.9%
$ 2,500 Aberdeen Twp, NJ Muni Util Auth Swr Rev Cap Impt
Ser B (FGIC Insd)............................... 6.500% 02/01/22 $ 2,669,325
2,000 Bergen Cnty, NJ Util Auth Wtr Pollutn Ctl Rev
Ser A (FGIC Insd)............................... 6.500 12/15/12 2,182,660
1,000 Bordentown, NJ Swr Auth Rev Ser C (MBIA Insd)... 6.800 12/01/25 1,079,410
1,500 Brick Twp, NJ Muni Util Auth Rev (AMBAC Insd)... 6.500 12/01/12 1,620,855
2,000 Camden Cnty, NJ Muni Util Auth Swr Rev Cap
Apprec Ser B (FGIC Insd)........................ * 09/01/14 706,900
2,500 Camden Cnty, NJ Muni Util Auth Swr Rev Cap
Apprec Ser B (FGIC Insd)........................ * 09/01/15 826,275
4,095 Camden, NJ (FSA Insd)........................... * 02/15/11 1,927,271
2,330 Edgewater, NJ Muni Util Auth Rev Swr Rfdg (MBIA
Insd)........................................... * 11/01/12 991,182
840 Essex Cnty, NJ Impt Auth Lease Jail & Youth
House Proj (Prerefunded @ 12/01/04) (AMBAC
Insd)........................................... 6.600 12/01/07 939,170
3,000 Essex Cnty, NJ Impt Auth Rev Irvington Twp Sch
Dist (Prerefunded @10/01/02) (FSA Insd)......... 6.625 10/01/17 3,302,520
4,875 Hudson Cnty, NJ Ctfs Partn Correctional Fac Rfdg
(MBIA Insd)..................................... 6.600 12/01/21 5,229,217
2,000 Mercer Cnty, NJ Impt Auth Rev Ewing Brd Edl
Lease Proj (Prerefunded @ 05/15/02) (MBIA
Insd)........................................... 6.400 05/15/11 2,171,820
2,300 Mercer Cnty, NJ Impt Auth Rev Gtd Site &
Disposal Fac Proj Rfdg Solid Waste Rfdg......... * 04/01/08 1,295,015
6,500 Mercer Cnty, NJ Impt Auth Rev Gtd Site &
Disposal Fac Proj Rfdg Solid Waste Rfdg......... * 04/01/10 3,228,745
7,055 Mercer Cnty, NJ Impt Auth Rev Gtd Site &
Disposal Fac Proj Rfdg Solid Waste Rfdg......... * 04/01/12 3,099,332
4,375 Mercer Cnty, NJ Impt Auth Rev Solid Waste Ser A
Rfdg (Prerefunded @ 05/15/97) (FGIC Insd)....... 6.700 04/01/13 4,380,338
2,500 New Jersey Bldg Auth St Bldg Rev (Prerefunded @
06/15/99)....................................... 6.250 06/15/13 2,633,825
535 New Jersey Econ Dev Auth Econ Dev Rev Ser F..... 6.600 06/01/12 551,564
445 New Jersey Econ Dev Auth Econ Dev Rev Ser Y..... 6.600 06/01/12 458,777
2,000 New Jersey Econ Dev Auth Mkt Transition Fac Rev
Sr Lien Ser A (MBIA Insd)....................... 5.800 07/01/07 2,093,460
1,000 New Jersey Econ Dev Auth Mkt Transition Fac Rev
Sr Lien Ser A (MBIA Insd)....................... 5.800 07/01/08 1,040,650
1,500 New Jersey Econ Dev Auth Mkt Transition Fac Rev
Sr Lien Ser A (MBIA Insd)....................... 5.800 07/01/09 1,541,940
300 New Jersey Econ Dev Auth Pollutn Ctl Rev (AMBAC
Insd)........................................... 7.100 07/01/15 328,296
10,000 New Jersey Econ Dev Auth St Contract Econ
Recovery (Embedded Cap) (MBIA Insd) (d)......... 5.900 03/15/21 10,258,300
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW JERSEY (CONTINUED)
$ 4,575 New Jersey Hlthcare Fac Fin Auth Rev Atlantic
City Med Cent Ser C Rfdg........................ 6.800% 07/01/11 $ 4,907,053
500 New Jersey Hlthcare Fac Fin Auth Rev Christ Hosp
Group Issue (Connie Lee Insd)................... 7.000 07/01/04 555,135
250 New Jersey Hlthcare Fac Fin Auth Rev Elizabeth
Genl Med Cent Ser C............................. 7.375 07/01/15 264,380
2,200 New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
Cent at Passaic (FSA Insd)...................... 6.500 07/01/11 2,367,222
2,000 New Jersey Hlthcare Fac Fin Auth Rev Genl Hosp
Cent at Passaic (FSA Insd)...................... 6.750 07/01/19 2,171,520
2,000 New Jersey Hlthcare Fac Fin Auth Rev Hackensack
Med Cent (FGIC Insd)............................ 6.625 07/01/11 2,141,220
2,500 New Jersey Hlthcare Fac Fin Auth Rev Hackensack
Med Cent (FGIC Insd)............................ 6.625 07/01/17 2,671,650
1,150 New Jersey St................................... 6.800 07/15/06 1,275,465
4,750 New Jersey St Hsg & Mtg Fin Agy Rev............. 6.600 11/01/14 4,984,412
4,800 New Jersey St Hwy Auth Garden St Pkwy Genl Rev
Sr Pkwy......................................... 6.250 01/01/14 5,073,648
2,000 North Bergen Twp, NJ (FSA Insd)................. * 08/15/09 1,035,220
2,675 Passaic Vly, NJ Wtr Comm Wtr Supply Rev Cap
Apprec Ser A (FGIC Insd)........................ * 12/15/09 1,360,104
2,000 Passaic Vly, NJ Wtr Comm Wtr Supply Rev Cap
Apprec Ser A (FGIC Insd)........................ * 12/15/10 956,200
1,000 Paterson, NJ (FSA Insd)......................... 6.600 02/15/07 1,074,120
2,850 Port Auth NY & NJ Cons Ser 78 (b)............... 6.500 04/15/11 3,044,342
2,000 Rockaway Vly, NJ Regl Swr Auth Swr Rev Rfdg
(MBIA Insd)..................................... * 12/15/09 1,016,900
1,225 Rutgers St Univ of NJ Ser A Rfdg................ 6.500 05/01/18 1,307,443
2,000 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth Rev Pub
Svc Elec & Gas Ser D Rfdg (MBIA Insd)........... 6.550 10/01/29 2,148,860
165 Union City, NJ (FSA Insd)....................... 6.375 11/01/10 181,533
1,500 Union City, NJ (MBIA Insd)...................... 6.700 09/01/12 1,631,850
------------
94,725,124
------------
GUAM 4.2%
1,000 Guam Arpt Auth Rev Ser B........................ 6.700 10/01/23 1,023,470
1,800 Guam Govt Ltd Oblig Hwy Ser A Rfdg (FSA Insd)... 6.300 05/01/12 1,881,162
1,500 Guam Govt Ser A................................. 5.625 09/01/02 1,506,735
------------
4,411,367
------------
</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>
PUERTO RICO 4.7%
$ 1,750 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser
T (Prerefunded @ 07/01/02)........................ 6.500% 07/01/22 $ 1,913,152
1,700 Puerto Rico Comwlth Pub Impt (Prerefunded @
07/01/02) (c)..................................... 6.800 07/01/21 1,881,662
1,000 Puerto Rico Pub Bldgs Auth Rev Gtd Ser K
(Prerefunded @ 07/01/02).......................... 6.875 07/01/21 1,110,260
------------
4,905,074
------------
TOTAL LONG-TERM INVESTMENTS 98.8%
(Cost $96,962,669)(a)............................................................... 104,041,565
OTHER ASSETS IN EXCESS OF LIABILITIES 1.2%........................................... 1,292,540
------------
NET ASSETS 100.0%.................................................................... $105,334,105
============
</TABLE>
* Zero coupon bond
(a) At April 30, 1997, cost for federal income tax purposes is $96,962,669; the
aggregate gross unrealized appreciation is $7,168,470 and the aggregate
gross unrealized depreciation is $89,574, resulting in net unrealized
appreciation of $7,078,896.
(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. The
derivative instruments are marked to market each day with the change in
value reflected in the unrealized appreciation/depreciation on investments.
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 $96,962,669) (Note 1).............. $104,041,565
Cash............................................................................ 96,760
Receivables:
Interest...................................................................... 1,528,102
Investments Sold.............................................................. 970,379
Other........................................................................... 1,345
------------
Total Assets.............................................................. 106,638,151
------------
LIABILITIES:
Payables:
Investments Purchased......................................................... 959,608
Investment Advisory Fee (Note 2).............................................. 56,009
Income Distributions--Common and Preferred Shares............................. 51,786
Administrative Fee (Note 2)................................................... 17,233
Affiliates (Note 2)........................................................... 4,767
Accrued Expenses................................................................ 154,155
Deferred Compensation and Retirement Plans (Note 2)............................. 60,488
------------
Total Liabilities......................................................... 1,304,046
------------
NET ASSETS...................................................................... $105,334,105
============
NET ASSETS CONSIST OF:
Preferred Shares ($.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, 3,925,373 shares issued and outstanding).......................... 39,254
Paid in Surplus................................................................. 57,511,539
Net Unrealized Appreciation on Investments...................................... 7,078,896
Accumulated Undistributed Net Investment Income................................. 714,327
Accumulated Net Realized Loss on Investments.................................... (9,911)
------------
Net Assets Applicable to Common Shares.................................... 65,334,105
------------
NET ASSETS...................................................................... $105,334,105
============
NET ASSET VALUE PER COMMON SHARE ($65,334,105 divided by 3,925,373
shares outstanding)........................................................... $ 16.64
============
</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.................................................... $ 3,098,265
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 342,875
Administrative Fee (Note 2)................................. 105,500
Preferred Share Maintenance (Note 4)........................ 54,119
Custody..................................................... 16,880
Trustees Fees and Expenses (Note 2)......................... 12,833
Legal (Note 2).............................................. 3,620
Amortization of Organizational Costs (Note 1)............... 2,001
Other....................................................... 49,499
-----------
Total Expenses.......................................... 587,327
-----------
NET INVESTMENT INCOME....................................... $ 2,510,938
===========
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Net Realized Loss on Investments............................ $ (9,915)
-----------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period................................... 8,181,770
End of the Period......................................... 7,078,896
-----------
Net Unrealized Depreciation on Investments During the
Period.................................................... (1,102,874)
-----------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS............. $(1,112,789)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 1,398,149
===========
</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................................... $ 2,510,938 $ 5,050,553
Net Realized Gain/Loss on Investments................... (9,915) 50,811
Net Unrealized Appreciation/Depreciation on Investments
During the Period..................................... (1,102,874) 265,619
------------ ------------
Change in Net Assets from Operations.................... 1,398,149 5,366,983
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (1,860,501) (3,689,685)
Preferred Shares...................................... (685,099) (1,414,964)
------------ ------------
(2,545,600) (5,104,649)
------------ ------------
Distributions from Net Realized Gain on Investments
(Note 1):
Common Shares......................................... (36,663) (81,248)
Preferred Shares...................................... (14,144) (35,215)
------------ ------------
(50,807) (116,463)
------------ ------------
Total Distributions..................................... (2,596,407) (5,221,112)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (1,198,258) 145,871
NET ASSETS:
Beginning of the Period................................. 106,532,363 106,386,492
------------ ------------
End of the period (Including accumulated undistributed
net investment income of $714,327 and $748,989,
respectively)......................................... $105,334,105 $106,532,363
============ ============
</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>
Six March 27, 1992
Months (Commencement
Ended Year Ended October 31 of Investment
April 30, ------------------------------------- Operations) to
1997 1996 1995 1994 1993 October 31, 1992
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period
(a)......................... $16.949 $16.912 $14.800 $18.181 $14.882 $14.678
------- ------- ------- ------- ------- -------
Net Investment Income....... .640 1.286 1.288 1.286 1.314 .578
Net Realized and Unrealized
Gain/Loss on Securities... (.283) .081 2.138 (3.371) 3.309 .156
------- ------- ------- ------- ------- -------
Total from Investment
Operations.................. .357 1.367 3.426 (2.085) 4.623 .734
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders............ .474 .940 .924 .924 .924 .385
Common Share Equivalent of
Distributions Paid to
Preferred
Shareholders............ .175 .360 .390 .292 .278 .145
Distributions from Net
Realized Gain on Securities (Note 1):
Paid to Common
Shareholders............ .009 .021 -0- .061 .092 -0-
Common Share Equivalent of
Distributions Paid to
Preferred
Shareholders............ .004 .009 -0- .019 .030 -0-
------- ------- ------- ------- ------- -------
Total Distributions........... .662 1.330 1.314 1.296 1.324 .530
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period...................... $16.644 $16.949 $16.912 $14.800 $18.181 $14.882
======= ======= ======= ======= ======= -------
Market Price Per Share
at End of the Period........ $15.375 $15.375 $14.750 $13.125 $16.750 $14.750
Total Investment Return at
Market Price (b)............ 3.11%* 10.91% 19.79% (16.32%) 20.92% .83%*
Total Return at Net Asset
Value (c)................... 1.01%* 6.09% 21.03% (13.59%) 29.84% 1.62%*
Net Assets at End of the
Period (In millions)........ $105.3 $106.5 $106.4 $98.1 $111.4 $98.4
Ratio of Expenses to Average
Net Assets Applicable to
Common Shares............... 1.78% 1.80% 1.89% 1.85% 1.80% 1.77%
Ratio of Expenses to Average
Net Assets.................. 1.11% 1.12% 1.15% 1.15% 1.12% 1.23%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common Shares
(d)......................... 5.55% 5.50% 5.63% 5.99% 6.15% 4.83%
Portfolio Turnover............ 1%* 11% 14% 12% 19% 28%*
</TABLE>
(a) Net Asset Value at March 27, 1992, is adjusted for common and preferred
share offering costs of $.322 per common share.
(b) Total Investment Return at Market Price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based upon NAV.
(d) Net Investment Income is adjusted for the common share equivalent of
distributions paid to preferred shareholders.
* Non-Annualized
See Notes to Financial Statements
12
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Trust for Investment Grade New Jersey Municipals
(the "Trust") is registered as a diversified closed-end management investment
company under the Investment Company Act of 1940, as amended. The Trust's
investment objective is to provide a high level of current income exempt from
federal income taxes and New Jersey gross income taxes, consistent with
preservation of capital. The Trust will invest substantially all of its assets
in New Jersey municipal securities 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 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.
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 $8,300 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 $952,900 and $1,529,266, respectively.
4. PREFERRED SHARES
The Trust has outstanding 800 Auction Preferred Shares ("APS"). Dividends are
cumulative and the dividend rate is reset through an auction process every 28
days. The rate in effect on April 30, 1997, was 3.600%. During the six months
ended April 30, 1997, the rates ranged from 3.372% to 3.925%.
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 NEW JERSEY 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
