<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 5
Portfolio of Investments......................... 6
Statement of Assets and Liabilities.............. 12
Statement of Operations.......................... 13
Statement of Changes in Net Assets............... 14
Financial Highlights............................. 15
Notes to Financial Statements.................... 16
</TABLE>
VMO 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 [PHOTO]
management. More recently, on
February 5, 1997, Morgan Stanley Group
Inc. and Dean Witter, Discover & Co.
announced their agreement to merge, and
you received a proxy in April. The merger DENNIS J. MCDONNELL AND DON G. POWELL
was completed on May 31, 1997, creating
the combined company of Morgan Stanley, Dean Witter, Discover & Co. This
preeminent global financial services firm boasts a market capitalization of $21
billion and leading market positions in securities, asset management, and
credit services. As the financial industry continues to witness unprecedented
consolidations and new partnerships, we believe that those firms that are
leaders in all facets of their business will be able to offer investors the
greatest opportunities and services as we move into the next century. We are
confident that this merger will provide investors with those benefits.
ECONOMIC REVIEW
Bond prices were volatile during the six months ended April 30, 1997. Prices
initially rose as the economy slowed, erasing fears of an interest rate hike by
the Federal Reserve Board. The November election of a Democratic president and
Republican Congress was positive for bonds because the split government was
viewed as a restraint on spending increases that could potentially swell the
budget deficit. In addition, support diminished for radical tax reform that
could threaten the tax-free status of municipal bonds.
By the beginning of 1997, the situation changed. Bond prices began to fall
as the economy picked up speed, culminating in a 5.60 percent annualized growth
rate in the first quarter. This strength, coupled with warnings by Fed Chairman
Alan Greenspan that tighter monetary policy might be appropriate, reignited
fears of a rate hike. On March 25, the Fed raised short-term rates by a modest
0.25 percent, which sent the 30-year Treasury bond yield above 7.00 percent for
the first time in six months. By the end of April, the 30-year Treasury bond
yield slipped back below 7.00 percent as the market turned its attention to
positive news about inflation, and bonds recovered some of their earlier losses.
Throughout most of the six months ended April 30, municipal bonds generally
outperformed Treasuries. Between October 31 and April 30, yields on long-term
municipal revenue bonds rose 21 basis points, while yields on 30-year Treasury
bonds jumped 31 basis points. Because bond yields move in the opposite direction
of prices, the smaller
Continued on page two
1
<PAGE> 3
increase in municipal yields meant that municipal bond prices did not fall as
sharply as Treasury bond prices did. A relatively stable supply of new issues,
combined with an increase in retail demand contributed to the improved
performance of municipal bonds.
FUND STRATEGY
In managing the Trust, we maintained a concentration in high-quality bonds.
As of April 30, approximately 52 percent of the Trust's long-term investments
were AAA, the highest credit rating assigned to bonds by the Standard & Poor's
Ratings Group. Most of the AAA-rated bonds are insured securities, which are
extremely liquid and provide the potential for safety of principal. These bonds
have tended to perform better when interest rates are falling, which was not the
case for most of the period. In addition, approximately 22 percent of long-term
investments were rated AA or A, and approximately 26 percent were rated BBB or
below. BBB is the lowest credit rating Standard & Poor's assigns to bonds in the
investment-grade category.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality as a Percentage
of Long-Term Investments as of April 30, 1997
<TABLE>
<S> <C>
AAA................... 52.1%
AA.................... 13.0%
A..................... 9.4%
BBB................... 22.8%
BB.................... 2.7%
</TABLE>
Based upon credit quality rating s issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.
Portfolio turnover was moderate during the period because the average yield
of bonds in the portfolio was higher than current market yields. Activity was
also limited by the tight spreads between yields of AAA-rated bonds and
lower-rated bonds. These spreads remained narrow due to the increasing number of
insured bonds in the municipal market. As a result, there was often not enough
yield reward to justify the additional credit risk associated with purchasing
lower-rated securities.
We sold bonds that we believed had limited upside potential, and used the
proceeds of those sales to purchase intermediate-term discount bonds. (A bond
that is priced at its face value is selling at par. If it is priced below par,
it is selling at a discount. Conversely, a bond priced above par is selling at a
premium.) Acquisitions favored AAA-rated securities because of the tight credit
spreads, but also included some BBB-rated bonds to increase the yield of the
Trust. When buying new securities for the portfolio, we attempt to identify
those bonds that we believe will outperform within a particular sector and that
can be purchased at an attractive price. We believe this "bottom-up" approach,
supported by our research, provides significant added value to the portfolio.
We maintained a shorter 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
Continued on page three
2
<PAGE> 4
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 duration stood at 7.51
years compared to 8.10 years for the Lehman Brothers Municipal Bond Index
benchmark.
[DIVIDEND HISTORY GRAPH]
Six-month Dividend History
for the Period Ended April 30, 1997
<TABLE>
<CAPTION>
Distribution
per Share
----------------
<S> <C>
Nov 1996........... $.0750
Dec 1996........... $.0750
Jan 1997........... $.0750
Feb 1997........... $.0750
Mar 1997........... $.0750
Apr 1997........... $.0750
</TABLE>
The dividend 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 Municipal
Opportunity Trust 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 5.13 percent(1). The Trust offered a
tax-exempt distribution rate of 6.43 percent(3), based on the closing common
stock price of $14.00 per share on April 30, 1997. Because income from the Trust
is exempt from federal income tax, this distribution rate represents a yield
equivalent to a taxable investment earning 10.05 percent(4) (for investors in
the 36 percent federal income tax bracket). At the end of the reporting period,
the closing share price of the Trust traded at a 12.5 percent discount to its
net asset value of $16.00.
Top Five Portfolio Industry Holdings by Sector as of April 30, 1997*
General Purpose................... 18.9%
Wholesale Electric................ 13.8%
Health Care....................... 11.8%
Single-Family Housing............. 11.6%
Airport............................ 9.3%
*As a Percentage of Long-Term Investments
Continued on page four
3
<PAGE> 5
MUNICIPAL MARKET OUTLOOK
We continue to see signs of a strong economy, although we do not expect the
unusually brisk growth rate of the first quarter to be sustained throughout the
year. As a result, we believe the Fed will monitor the economy closely and take
aggressive action to control growth if inflation picks up or the high growth
rate is sustained. However, if growth slows, we believe the Fed will leave rates
unchanged. Given this outlook, we expect that yields on the 30-year Treasury
bond will range between 6.75 and 7.40 percent for the remainder of the year,
with higher levels occurring early and lower yields dominating the second half
of 1997. Although short-term interest rates have risen, this has not had a
significant impact on the leveraged structure of the Trust.
We believe the Trust is positioned to perform well in the coming months, and
we do not anticipate major structural changes in the portfolio. In light of our
expectations for interest rates, we will continue to maintain a slightly
defensive posture by keeping a relatively short duration for the portfolio and
adjusting the duration when prudent. We will also continue to seek a balance
between the Trust's total return and its dividend income, as well as to add
value through security selection. Thank you for your continued confidence in Van
Kampen American Capital and your Trust's team of managers.
Sincerely,
[SIG]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
Please see footnotes on page five
4
<PAGE> 6
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1997
VAN KAMPEN AMERICAN CAPITAL MUNICIPAL OPPORTUNITY TRUST
(NYSE TICKER SYMBOL--VMO)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)........... 5.13%
Six-month total return based on NAV(2).................... 2.05%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3).................................................. 6.43%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)..................................... 10.05%
SHARE VALUATIONS
Net asset value........................................... $ 16.00
Closing common stock price................................ $14.000
Six-month high common stock price (02/26/97).............. $14.375
Six-month low common stock price (12/17/96)............... $13.250
Preferred share (Series A) rate(5)........................ 3.680%
Preferred share (Series B) rate(5)........................ 3.573%
</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 #5, 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
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 0.9%
$ 1,500 Huntsville-Madison Cnty, AL Arpt Auth Arpt
Terminal Rev (MBIA Insd)....................... 5.400% 07/01/19 $ 1,408,650
2,000 Mobile, AL Indl Dev Brd Solid Waste Disp Rev
Mobile Energy Svcs Co Proj Rfdg................ 6.950 01/01/20 2,116,140
------------
3,524,790
------------
CALIFORNIA 6.1%
1,235 California Hsg Fin Agy Rev Multi-Family Hsg III
Ser A (MBIA Insd).............................. 5.850 08/01/17 1,224,750
1,545 California Hsg Fin Agy Rev Home Mtg Ser B1..... 6.300 08/01/08 1,601,779
2,000 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
Southern CA Edison Co (Embedded Cap) (AMBAC
Insd).......................................... 6.000 07/01/27 2,019,260
1,255 California Rural Home Mtg Fin Mtg Backed Secs
Pgm Ser C (GNMA Collateralized) (d)............ 6.40/7.80 02/01/28 1,395,772
5,000 Contra Costa, CA Home Mtg Fin Auth Home Mtg Rev
(MBIA Insd).................................... * 09/01/17 1,553,950
4,000 Foothill/Eastern Tran Agy Conv Cap Apprec Sr
Lien Ser A (d)................................. 0/7.050 01/01/10 2,595,520
5,000 Orange Cnty, CA Recovery Ctfs Ser A (MBIA
Insd).......................................... 6.000 07/01/06 5,318,350
5,000 Orange Cnty, CA Recovery Ctfs Ser A (MBIA
Insd).......................................... 6.000 07/01/08 5,313,450
3,000 Orange Cnty, CA Recovery Ser A Rfdg (MBIA
Insd).......................................... 6.000 06/01/08 3,214,500
------------
24,237,331
------------
COLORADO 6.1%
2,000 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E470 Proj Ser B................................ 7.000 08/31/26 2,141,280
1,000 Castle Rock, CO Multi-Family Rev Hsg Pines at
Castle Rock Ser A (FSA Insd)................... 6.100 12/01/16 1,004,580
1,500 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
A2............................................. 7.250 05/01/27 1,642,320
1,445 Colorado Hsg Fin Auth Single Family Proj Sr Ser
A3............................................. 7.000 11/01/24 1,502,395
1,500 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
C1............................................. 7.550 11/01/27 1,663,230
3,500 Denver, CO City & Cnty Arpt Rev Ser A (c)...... 8.500 11/15/07 3,953,600
7,000 Denver, CO City & Cnty Arpt Rev Ser A (c)...... 8.875 11/15/12 8,237,530
1,750 Denver, CO City & Cnty Arpt Rev Ser B (MBIA
Insd).......................................... 6.250 11/15/06 1,869,140
1,000 Denver, CO City & Cnty Arpt Rev Ser B (MBIA
Insd).......................................... 6.250 11/15/07 1,069,280
1,000 Highlands Ranch Metro Dist No 2 CO Rfdg (FSA
Insd).......................................... 6.500 06/15/11 1,112,380
------------
24,195,735
------------
CONNECTICUT 1.0%
1,700 Mashantucket Western Pequot Tribe CT Spl Rev
Ser A (e)...................................... 6.500 09/01/06 1,809,276
2,000 Mashantucket Western Pequot Tribe CT Spl Rev
Ser A (e)...................................... 6.400 09/01/11 2,065,740
------------
3,875,016
------------
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DISTRICT OF COLUMBIA 0.5%
$ 2,000 Metropolitan Washington, DC Arpt Auth Genl Arpt
Rev Ser A (FGIC Insd).......................... 7.250% 10/01/10 $ 2,169,220
------------
FLORIDA 0.8%
3,000 Florida St Brd Edl Cap Outlay Pub Edl Ser A.... 5.875 06/01/16 3,044,130
------------
GEORGIA 2.9%
3,370 Fulton Cnty, GA Lease Rev (e).................. 7.250 06/15/10 3,832,701
7,000 Georgia Muni Elec Auth Pwr Rev Ser A (MBIA
Insd).......................................... 6.500 01/01/20 7,768,950
------------
11,601,651
------------
HAWAII 1.4%
5,000 Hawaii St Arpt Sys Rev Ser 2................... 7.000 07/01/18 5,344,700
------------
ILLINOIS 6.1%
5,000 Chicago, IL O'Hare Intl Arpt Rev Genl Arpt
Second Lien Ser A (MBIA Insd) (c).............. 6.375 01/01/12 5,330,050
6,400 Chicago, IL Sch Fin Auth Ser A (MBIA Insd)..... 5.000 06/01/09 6,125,312
1,000 Chicago, IL Single Family Mtg Rev Ser A
(GNMA Collateralized).......................... 7.000 09/01/27 1,095,570
1,195 Chicago, IL Single Family Mtg Rev Ser B
(GNMA Collateralized).......................... 7.625 09/01/27 1,319,412
1,500 Dundee Twp, IL (FSA Insd)...................... 5.450 12/01/16 1,433,865
3,285 Illinois Hlth Fac Auth Rev Midwest Physician
Group Ltd Proj................................. 8.125 11/15/19 3,613,434
1,475 Regional Tran Auth IL Ser A (AMBAC Insd)....... 6.500 06/01/15 1,576,554
1,410 Sangamon Cnty, IL Cmnty Unit Sch Dist No 5
(FGIC Insd).................................... 6.400 12/01/03 1,518,316
1,865 Sangamon Cnty, IL Cmnty Unit Sch Dist No 5
(FGIC Insd).................................... 6.500 12/01/05 2,042,585
------------
24,055,098
------------
INDIANA 0.7%
2,500 Purdue Univ, IN Univ Rev Student Fee Ser B..... 6.750 07/01/09 2,756,750
------------
KENTUCKY 1.0%
1,475 Kenton Cnty, KY Arpt Brd Rev Cincinnati/Northn
KY Intl Arpt Ser A Rfdg (MBIA Insd) (b)........ 6.200 03/01/08 1,514,250
1,000 Kenton Cnty, KY Arpt Brd Rev Cincinnati/ Northn
KY Intl Arpt Ser A Rfdg (MBIA Insd) (b)........ 5.750 03/01/02 1,008,440
1,350 Kentucky Hsg Corp Hsg Rev Ser B (b)............ 6.250 07/01/28 1,360,152
------------
3,882,842
------------
MAINE 1.0%
2,305 Maine Edl Ln Auth Rev Supplemental Pgm Ser
A1............................................. 7.000 12/01/16 2,439,819
1,265 Maine Edl Ln Auth Rev Supplemental Pgm Ser
A2............................................. 7.150 12/01/16 1,344,771
------------
3,784,590
------------
</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>
MARYLAND 1.7%
$ 3,500 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Rev Single Family Pgm Seventh Ser.......... 7.250% 04/01/19 $ 3,699,570
3,005 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Rev Single Family Pgm Seventh Ser.......... 7.300 04/01/25 3,173,881
------------
6,873,451
------------
MASSACHUSETTS 1.3%
2,000 Massachusetts St Hlth & Edl Fac Auth Rev New
England Med Cent Hosp Ser G (Embedded Swap)
(MBIA Insd).................................... 3.100 07/01/13 1,750,740
3,000 Plymouth Cnty, MA Ctfs Partn Ser A............. 7.000 04/01/22 3,307,200
------------
5,057,940
------------
MICHIGAN 1.2%
4,500 Monroe Cnty, MI Pollutn Ctl Rev Coll Detroit
Edison Monroe Ser 1 (MBIA Insd)................ 6.875 09/01/22 4,846,455
------------
MISSISSIPPI 1.6%
3,750 Mississippi Home Corp Single Family Rev Mtg Ser
C (GNMA Collateralized) (d).................... 5.50/7.60 06/01/29 4,191,412
2,000 Mississippi Home Corp Single Family Rev Mtg Ser
F (GNMA Collateralized) (d).................... 6.00/7.55 12/01/27 2,201,760
------------
6,393,172
------------
MISSOURI 1.4%
1,485 Saint Charles Cnty, MO Indl Dev Auth Indl Rev
Dev Westchester Vlg Apts Ser A Rfdg (FNMA
Collateralized)................................ 6.150 02/01/27 1,488,297
870 Saint Louis Cnty, MO Single Family (MBIA
Insd).......................................... 6.900 04/01/16 898,623
3,000 Sikeston, MO Elec Rev Rfdg (MBIA Insd) (c)..... 6.200 06/01/10 3,253,830
------------
5,640,750
------------
NEVADA 1.1%
4,000 Clark Cnty, NV Indl Dev Rev NV Pwr Co Proj Ser
A (FGIC Insd).................................... 6.700 06/01/22 4,233,840
------------
NEW JERSEY 5.6%
20,000 New Jersey Econ Dev Auth St Contract Econ
Recovery (Embedded Cap) (MBIA Insd)............ 5.900 03/15/21 20,516,600
1,395 New Jersey Hlthcare Fac Fin Auth Rev Christ
Hosp Group Issue (Connie Lee Insd)............. 7.000 07/01/04 1,548,827
------------
22,065,427
------------
NEW MEXICO 2.2%
925 Hobbs, NM Single Family Mtg Rev Rfdg........... 8.750 07/01/11 1,026,685
5,205 New Mexico Mtg Fin Auth Single Family Mtg Pgm
Ser G (GNMA Collateralized).................... 7.250 07/01/26 5,485,498
2,000 University of NM Technology Dev Corp Lease Rev
Univ Cent Resh Pk Proj Ser A (MBIA Insd)....... 6.450 08/15/18 2,125,360
------------
8,637,543
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NEW YORK 21.1%
$ 3,000 Metropolitan Tran Auth NY Svcs Contract Tran
Fac Ser 5 Rfdg................................. 7.000% 07/01/12 $ 3,225,390
1,440 New York City Indl Dev Agy Spl Fac Rev Terminal
One Group Assn Proj............................ 6.100 01/01/09 1,470,442
3,000 New York City Indl Dev Agy Spl Fac Rev Terminal
One Group Assn Proj............................ 6.000 01/01/15 2,978,730
10,000 New York City Ser A............................ 7.000 08/01/07 10,924,600
5,000 New York City Ser A Rfdg....................... 7.000 08/01/05 5,443,200
2,875 New York City Ser B............................ 5.700 08/15/07 2,865,886
5,335 New York City Ser D (c)........................ 7.500 02/01/19 5,883,065
2,665 New York City Ser D (Prerefunded @ 02/01/02)
(c)............................................ 7.500 02/01/19 3,000,977
4,500 New York City Ser I............................ 6.000 04/15/12 4,477,905
1,500 New York St Dorm Auth Rev Mental Hlth Svcs Fac
Ser A.......................................... 5.750 08/15/12 1,472,940
2,070 New York St Dorm Auth Rev Mental Hlth Svcs Fac
Ser B.......................................... 5.750 08/15/10 2,045,201
6,060 New York St Dorm Auth Rev City Univ Ser F...... 5.500 07/01/12 5,801,117
2,100 New York St Dorm Auth Rev City Univ Ser F...... 5.000 07/01/20 1,802,493
1,365 New York St Dorm Auth Rev St Univ Edl Fac Ser B
Rfdg........................................... 5.250 05/15/09 1,322,357
4,325 New York St Energy Resh & Dev Auth St Svc
Contract Rev Western NY Nuclear Svc Cent
Proj........................................... 5.500 04/01/99 4,386,761
1,900 New York St Mtg Agy Rev Homeowner Mtg Ser 58... 6.400 04/01/27 1,936,879
6,400 New York St Thruway Auth Svc Contract Rev
Loc Hwy & Brdg................................. 5.750 04/01/09 6,377,856
1,100 New York St Urban Dev Corp Rev Correctional Cap
Fac Ser 4...................................... 5.375 01/01/23 989,912
3,500 Port Auth NY & NJ Cons 97th Ser (FGIC Insd).... 6.650 01/15/23 3,730,755
5,640 Port Auth NY & NJ Cons 109th Ser............... 5.375 07/15/22 5,370,577
2,500 Port Auth NY & NJ Spl Oblig Spl Proj JFK Intl
Arpt Terminal 6 (MBIA Insd) (b)................ 6.000 12/01/07 2,629,900
5,400 Port Auth NY & NJ Spl Oblig Spl Proj JFK Intl
Arpt Terminal 6 (MBIA Insd) (b)................ 5.750 12/01/22 5,282,928
------------
83,419,871
------------
NORTH CAROLINA 2.9%
11,000 North Carolina Muni Pwr Agy No 1 Catawba Elec
Rev (MBIA Insd)................................ 6.000 01/01/12 11,656,150
------------
OHIO 1.3%
1,000 Akron, OH Ctfs Partn Akron Muni Baseball
Stadium Proj (d)............................... 0/6.500 12/01/07 770,850
3,000 Lucas Cnty, OH Hosp Rev Promedica Hlthcare
Oblig (MBIA Insd).............................. 6.000 11/15/07 3,189,030
1,000 Ohio St Air Quality Dev Auth Rev JMG Funding
Ltd Partnership Proj Rfdg (AMBAC Insd)......... 6.375 04/01/29 1,039,380
------------
4,999,260
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OKLAHOMA 2.2%
$ 2,000 Tulsa, OK Indl Auth Hosp Rev Hillcrest Med Cent
Proj Rfdg (Connie Lee Insd).................... 6.125% 06/01/05 $ 2,105,920
3,140 Tulsa, OK Indl Auth Hosp Rev Hillcrest Med Cent
Proj Rfdg (Connie Lee Insd).................... 6.250 06/01/08 3,327,992
3,000 Tulsa, OK Muni Arpt Tran Rev American Airls
Inc............................................ 7.600 12/01/30 3,226,260
------------
8,660,172
------------
OREGON 0.5%
2,000 Oregon St Econ Dev Rev Georgia Pacific Corp.... 6.350 08/01/25 2,033,700
------------
PENNSYLVANIA 7.2%
10,000 Allegheny Cnty, PA Hosp Dev Auth Rev Pittsburgh
Mercy Hlth Sys Inc (AMBAC Insd)................ 5.625 08/15/26 9,624,500
6,655 Berks Cnty, PA Muni Auth Rev Highlands at
Wyomissing Proj B.............................. 6.875 10/01/17 6,969,049
8,500 Geisinger Auth PA Hlth Sys Ser A............... 6.400 07/01/22 8,853,005
2,000 Pennsylvania Hsg Fin Agy Single Family Mtg Ser
57a............................................ 6.150 04/01/27 1,999,880
1,000 Pennsylvania Intergvtl Co-op Auth Spl Tax Rev
City of Philadelphia (Prerefunded @ 06/15/02).. 6.800 06/15/22 1,088,190
------------
28,534,624
------------
TEXAS 4.0%
1,000 Austin, TX Util Sys Rev Rfdg (AMBAC Insd)
(b)............................................ 6.500 11/15/05 1,069,570
4,500 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp
Rev Delta Airls Inc (c)........................ 7.000 11/01/01 4,718,205
2,525 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp
Rev Delta Airls Inc............................ 7.625 11/01/21 2,720,183
5,000 Ector Cnty, TX Hosp Dist Hosp Rev Med Cent Hosp
(c)............................................ 7.300 04/15/12 5,611,700
1,857 Texas Genl Svcs Comm Partn Int Lease Purch
Ctfs. (e)...................................... 7.250 08/01/11 1,866,385
------------
15,986,043
------------
UTAH 2.1%
1,500 Intermountain Pwr Agy UT Pwr Supply Rev Ser B
Rfdg (MBIA Insd)............................... 5.750 07/01/19 1,485,960
1,500 Intermountain Pwr Agy UT Rev Ser E Rfdg (FSA
Insd).......................................... 6.000 07/01/06 1,590,435
3,000 Salt Lake City, UT Hosp Rev IHC Hosp Inc Rfdg
(Embedded Cap) (d)............................. 0/5.500 02/15/17 2,860,680
2,460 Utah St Hsg Fin Agy Single Family Mtg Sr Issue
B3............................................. 7.100 07/01/24 2,563,197
------------
8,500,272
------------
VIRGINIA 2.1%
8,200 Roanoke, VA Indl Dev Auth Hosp Rev Roanoke Mem
Hosp Carilion Hlth Sys Ser B Rfdg (MBIA Insd)
(d)............................................ 4.70/6.25 07/01/20 8,127,594
------------
WASHINGTON 7.2%
9,850 Bellevue, WA Convention Cent Comp Int Rfdg
(MBIA Insd).................................... * 02/01/25 1,881,350
1,000 King Cnty, WA Ser B............................ 6.625 12/01/15 1,081,750
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 1,145 King Cnty, WA Ser D (b)........................ 5.750% 12/01/11 $ 1,150,026
10,975 Washington St Pub Pwr Supply Sys Nuclear Proj
No 1 Rev Ser A Rfdg (MBIA Insd)................ 5.700 07/01/17 10,710,722
10,000 Washington St Pub Pwr Supply Sys Nuclear Proj
No 1 Rev Ser B Rfdg (MBIA Insd)................ 5.600 07/01/15 9,747,800
2,000 Washington St Pub Pwr Supply Sys Nuclear Proj
No 2 Rev Ser A Rfdg (AMBAC Insd)............... 6.000 07/01/08 2,113,260
5,125 Washington St Pub Pwr Supply Sys Nuclear Proj
No 3 Rev Ser C Rfdg (MBIA Insd)................ * 07/01/14 1,875,955
------------
28,560,863
------------
WEST VIRGINIA 2.1%
8,000 Harrison Cnty, WV Cmnty Solid Waste Disp Rev
West Penn Pwr Co Proj Ser A (c)................ 6.875 04/15/22 8,438,720
------------
WISCONSIN 1.2%
1,000 Madison, WI Indl Dev Rev Madison Gas & Elec Co
Proj Ser A..................................... 6.750 04/01/27 1,050,430
3,500 Wisconsin Hsg & Econ Dev Auth Homeownership Rev
Ser C.......................................... 6.250 09/01/17 3,562,230
------------
4,612,660
------------
WYOMING 0.4%
1,500 Wyoming Cmnty Dev Auth Hsg Rev Ser 2 (b)....... 6.350 06/01/29 1,509,960
------------
TOTAL LONG-TERM INVESTMENTS 98.9%
(Cost $371,253,366) (a)...................................................... 391,260,320
SHORT-TERM INVESTMENTS 3.6%
(Cost $14,100,000)(a)........................................................ 14,100,000
LIABILITIES IN EXCESS OF OTHER ASSETS (2.5%).................................. (9,761,380)
------------
NET ASSETS 100.0%............................................................. $395,598,940
============
</TABLE>
*Zero coupon bond
(a) At April 30, 1997, for federal income tax purposes cost for long- and
short-term investments is $385,353,366; the aggregate gross unrealized
appreciation is $20,458,854 and the aggregate gross unrealized depreciation
is $1,238,906, resulting in net unrealized appreciation including open
futures transactions of $19,219,948.
(b) Securities purchased on a when issued or delayed delivery basis.
(c) Assets segregated as collateral for when issued or delayed delivery purchase
commitments and open futures transactions.
(d) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(e) Private placement issue.
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $371,253,366)
(Note 1).................................................. $391,260,320
Short-Term Investments (Cost $14,100,000) (Note 1).......... 14,100,000
Cash........................................................ 99,663
Receivables:
Interest.................................................. 6,359,807
Securities Sold........................................... 248,433
Other....................................................... 5,505
------------
Total Assets.......................................... 412,073,728
------------
LIABILITIES:
Payables:
Securities Purchased...................................... 15,441,354
Income Distributions--Common and Preferred Shares......... 353,505
Investment Advisory Fee (Note 2).......................... 210,358
Variation Margin on Futures (Note 4)...................... 112,063
Administrative Fee (Note 2)............................... 64,725
Affiliates (Note 2)....................................... 14,068
Accrued Expenses............................................ 218,239
Deferred Compensation and Retirement Plans (Note 2)......... 60,476
------------
Total Liabilities..................................... 16,474,788
------------
NET ASSETS.................................................. $395,598,940
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 3,000 issued with liquidation preference of
$50,000 per share) (Note 5)............................... $150,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 15,352,891 shares issued and
outstanding).............................................. 153,529
Paid in Surplus............................................. 226,719,758
Net Unrealized Appreciation on Securities................... 19,219,948
Accumulated Undistributed Net Investment Income............. 1,274,105
Accumulated Net Realized Loss on Securities................. (1,768,400)
------------
Net Assets Applicable to Common Shares................ 245,598,940
------------
NET ASSETS.................................................. $395,598,940
============
NET ASSET VALUE PER COMMON SHARE ($245,598,940 divided
by 15,352,891 shares outstanding)......................... $ 16.00
============
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $11,574,051
-----------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 1,283,260
Administrative Fee (Note 2)................................. 394,849
Preferred Share Maintenance (Note 5)........................ 189,160
Custody..................................................... 24,006
Trustees Fees and Expenses (Note 2)......................... 12,809
Legal (Note 2).............................................. 11,645
Amortization of Organizational Costs (Note 1)............... 3,788
Other....................................................... 123,844
-----------
Total Expenses.......................................... 2,043,361
-----------
NET INVESTMENT INCOME....................................... $ 9,530,690
===========
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................... $ 224,558
Futures................................................... (622,332)
-----------
Net Realized Loss on Securities............................. (397,774)
-----------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period..................................... 20,761,700
-----------
End of the Period:
Investments............................................... 20,006,954
Futures................................................... (787,006)
-----------
19,219,948
-----------
Net Unrealized Depreciation on Securities During the
Period.................................................... (1,541,752)
-----------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES.............. $(1,939,526)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 7,591,164
===========
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
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................................... $ 9,530,690 $ 19,513,539
Net Realized Gain/Loss on Securities.................... (397,774) 4,500,707
Net Unrealized Depreciation on Securities During the
Period................................................ (1,541,752) (423,449)
------------ ------------
Change in Net Assets from Operations.................... 7,591,164 23,590,797
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (6,908,532) (13,909,348)
Preferred Shares...................................... (2,588,208) (5,459,584)
------------ ------------
Total Distributions..................................... (9,496,740) (19,368,932)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (1,905,576) 4,221,865
NET ASSETS:
Beginning of the Period................................. 397,504,516 393,282,651
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $1,274,105 and $1,240,155,
respectively)......................................... $395,598,940 $397,504,516
============ ============
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
April 24, 1992
Six Months (Commencement
Ended Year Ended October 31 of Investment
April 30, ------------------------------------- Operations) to
1997 1996 1995 1994 1993 October 31, 1992
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period (a).... $16.121 $15.846 $14.389 $17.297 $14.990 $14.771
------- ------- ------- ------- ------- -------
Net Investment Income.......... .621 1.271 1.275 1.303 1.354 .611
Net Realized and Unrealized
Gain/Loss on Securities...... (.126) .266 1.584 (2.918) 2.332 .083
------- ------- ------- ------- ------- -------
Total from Investment
Operations..................... .495 1.537 2.859 (1.615) 3.686 .694
------- ------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders............... .450 .906 1.012 1.020 1.020 .340
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... .169 .356 .390 .273 .282 .135
Distributions from Net Realized
Gain on Securities (Note 1):
Paid to Common
Shareholders............... -0- -0- -0- -0- .057 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... -0- -0- -0- -0- .020 -0-
------- ------- ------- ------- ------- -------
Total Distributions............. .619 1.262 1.402 1.293 1.379 .475
------- ------- ------- ------- ------- -------
Net Asset Value, End of the
Period......................... $15.997 $16.121 $15.846 $14.389 $17.297 $14.990
======= ======= ======= ======= ======= =======
Market Price Per Share at End of
the Period..................... $14.000 $13.750 $13.625 $13.000 $16.375 $14.500
Total Investment Return at
Market Price (b)............... 5.13%* 7.72% 12.70% (14.96%) 20.85% (1.16%)*
Total Return at Net Asset Value
(c)............................ 2.05%* 7.61% 17.74% (11.30%) 23.17% 2.10%*
Net Assets at End of the Period
(In millions).................. $ 395.6 $ 397.5 $ 393.3 $ 370.9 $ 415.6 $ 380.1
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares......................... 1.66% 1.66% 1.75% 1.69% 1.62% 1.54%
Ratio of Expenses to Average Net
Assets......................... 1.03% 1.03% 1.06% 1.05% 1.02% 1.04%
Ratio of Net Investment Income
to Average Net Assets
Applicable to Common Shares
(d)............................ 5.64% 5.73% 5.87% 6.43% 6.51% 5.82%
Portfolio Turnover.............. 22%* 85% 70% 76% 52% 53%*
</TABLE>
(a) Net Asset Value at April 24, 1992, is adjusted for common and preferred
share offering costs of $.229 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
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Municipal Opportunity Trust (the "Trust") is
registered as a diversified closed-end management investment company under the
Investment Company Act of 1940, as amended. The Trust's investment objective is
to provide a high level of current income exempt from federal income tax,
consistent with preservation of capital. The Trust will invest in a portfolio
consisting substantially of municipal obligations rated investment grade at the
time of investment. The Trust commenced investment operations on April 24, 1992.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
D. ORGANIZATIONAL COSTS--The Trust reimbursed Van Kampen American Capital
Distributors Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
the Trust's organization in the amount of $40,000. These costs were amortized on
a straight line basis over the 60 month period ended April 23, 1997.
E. FEDERAL INCOME TAXES--It is the Trust's policy to comply with the
requirements of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 1996, the Trust had an accumulated capital loss
carryforward for tax purposes of $2,109,740 which will expire on October 31,
2003.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .65% of the average net assets of the Trust. In addition, the Trust
will pay a monthly administrative fee to VKAC, the Trust's Administrator, at an
annual rate of .20% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom
(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 $43,300 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
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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.
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 $85,212,383 and $88,493,968,
respectively.
4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on securities. Upon disposition, a realized gain or
loss is recognized accordingly, except when taking delivery of a security
underlying a futures contract. In this instance, the recognition of gain or loss
is postponed until the disposal of the security underlying the futures contract.
Summarized below are the types of derivative financial instruments used by
the Trust.
A. FUTURES CONTRACTS--A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
Index, and typically closes the contracts prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration. Upon entering into futures contracts, the Trust maintains, in a
segregated account with its custodian, securities with a value equal to its
obligation under the futures contracts. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin).
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in futures contracts for the six months ended April 30, 1997,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- --------------------------------------------------------------------
<S> <C>
Outstanding at October 31, 1996.......................... 200
Futures Opened........................................... 1,301
Futures Closed........................................... (1,175)
------
Outstanding at April 30, 1997............................ 326
======
</TABLE>
The futures contracts outstanding as of April 30, 1997, and the description
and unrealized depreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS DEPRECIATION
- ---------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Bond and Futures:
June 1997 - Sells to Open (Current Notional
Value of $109,281 per contract)............ 326 $787,006
=== ========
</TABLE>
B. INDEXED SECURITIES--These instruments are identified in the portfolio of
investments. Their price may be more volatile than the price of a comparable
fixed rate security.
An Embedded Cap security includes a cap strike level such that the coupon
payment may be supplemented by cap payments if the floating rate index upon
which the cap is based rises above the strike level. The Trust invests in these
instruments as a hedge against a rise in the short term interest rates which it
pays on its preferred shares.
An Embedded Swap security includes a swap component such that the fixed
coupon component of the underlying bond is adjusted by the difference between
the securities fixed swap rate and the floating swap index. 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.
5. PREFERRED SHARES
The Trust has outstanding 3,000 Auction Preferred Shares ("APS") in two series
of 1,500 shares each. Dividends are cumulative and the dividend rate on each
series is currently reset every 28 days through an auction process. The average
rate in effect on April 30, 1997 was 3.63%. During the six months ended April
30, 1997, the rates ranged from 3.35% to 3.947%.
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.
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
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.
20
<PAGE> 22
VAN KAMPEN AMERICAN CAPITAL MUNICIPAL OPPORTUNITY TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
THEODORE A. MYERS
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
Vice President
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act
of 1940.
(C) Van Kampen American Capital Distributors, Inc., 1997 All rights reserved.
(SM) denotes a service mark of Van Kampen American Capital Distributors, Inc.
21
