<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Economic Snapshot................................ 2
Performance Results.............................. 3
Glossary of Terms................................ 4
Portfolio Management Review...................... 5
Portfolio Highlights............................. 8
Portfolio of Investments......................... 9
Statement of Assets and Liabilities.............. 13
Statement of Operations.......................... 14
Statement of Changes in Net Assets............... 15
Financial Highlights............................. 16
Notes to Financial Statements.................... 18
Dividend Reinvestment Plan....................... 21
</TABLE>
VAP SAR 6/99
<PAGE> 2
LETTER TO SHAREHOLDERS
May 20, 1999
Dear Shareholder,
With the volatility that we've experienced in many financial markets in
recent months, some investors have sold securities because of uncertainty about
where the markets were going, only to be left rethinking whether they made the
right decision. We've witnessed this kind of market activity numerous times over
the past several years, sparked by concerns such as the impact of the Asian
economic crisis, high stock valuations, or, most recently, the stability of many
high-flying technology companies. While these fears eventually subsided,
investors who may have sold during this period were unable to reap the benefits
of the latest rally. That's partly because most of the recent big gains happened
in relatively short periods of time. This kind of volatility--and the danger of
making short-term decisions--highlights the importance of investing for the long
term, in accordance with your individual financial objectives.
Although the worst of the Asian crisis appears to be behind us, new concerns
are always emerging. In the coming months, we'll likely hear more about how the
year 2000 computer problem may affect the markets or that we're overdue for a
correction. While the markets could undoubtedly suffer as a result of these or
any number of other events, we encourage you to focus on your long-term
investment goals. Although nothing is certain, history has shown us that over
time, the markets tend to recover--and most investors want to be positioned to
take advantage of any recovery.
If you have concerns about market volatility or questions about how your
portfolio is structured to respond to these events, we encourage you to contact
your financial advisor. Your advisor can talk with you about sustaining a
long-term investment plan through a variety of market conditions. We hope that
Van Kampen Funds will play an important role as you and your advisor build a
portfolio designed to help you weather whatever the markets have in store.
Sincerely,
[SIG.]
Richard F. Powers III
Chairman
Van Kampen Investment Advisory Corp.
[SIG.]
Dennis J. McDonnell
President
Van Kampen Investment Advisory Corp.
1
<PAGE> 3
ECONOMIC SNAPSHOT
A surge in consumer confidence led to strong economic growth over the past
six months, as fears about the impact of the Asian financial crisis subsided. In
the fourth quarter, the nation's gross domestic product (GDP) rose at an
astounding 6.0 percent annual rate and remained strong at 4.5 percent through
the first quarter of 1999. This powerful level of growth is attributed to a
continued increase in consumer spending, a strong housing market, and high
retail sales--all the result of a more confident consumer given the positive
employment environment. The economy began to show signs of slowing down early in
1999, however, as corporate profits and wage growth declined.
Despite continued improvements in Asia and Latin America and the record
economic growth in the United States, inflation remained at bay in late 1998 as
commodity prices tumbled. Although rising oil prices pushed inflation up 3.3
percent on an annualized basis in the first four months of 1999, price increases
remained moderate enough overall to keep inflation-adjusted interest rates
attractive.
Our outlook for the domestic economy remains positive, although we
anticipate slower growth in the second half of the year. We look for a gradual
but steady rise in inflation throughout 1999 to more normal but certainly not
alarming levels. Internationally, low interest rates and improving financial
conditions should continue to support the economic progress we've witnessed
overseas.
INTEREST RATES AND INFLATION
April 30, 1997, through April 30, 1999
[GRAPH]
<TABLE>
<CAPTION>
INTEREST RATES INFLATION
-------------- ---------
<S> <C> <C>
Apr 1997 6.0000 2.5000
5.6250 2.2000
6.5000 2.3000
Jul 1997 6.0000 2.2000
5.5000 2.2000
6.2500 2.2000
Oct 1997 5.7500 2.1000
5.6875 1.8000
6.5000 1.7000
Jan 1998 5.5625 1.6000
5.6250 1.4000
6.1250 1.4000
Apr 1998 5.6250 1.4000
5.6875 1.7000
6.0000 1.7000
Jul 1998 5.5625 1.7000
5.9375 1.6000
5.7500 1.5000
Oct 1998 5.2500 1.5000
4.8750 1.5000
4.0000 1.6000
Jan 1999 4.8125 1.7000
4.8750 1.6000
5.1250 1.7000
Apr 1999 4.9375 2.3000
</TABLE>
Interest rates are represented by the closing midline federal funds rate
on the last day of each month. Inflation is indicated by the annual
percent change of the Consumer Price Index for all urban consumers at
the end of each month.
2
<PAGE> 4
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1999
VAN KAMPEN ADVANTAGE
PENNSYLVANIA MUNICIPAL INCOME TRUST
(NYSE TICKER SYMBOL--VAP)
<TABLE>
<S> <C>
COMMON SHARE TOTAL RETURNS
Six-month total return based on market price(1).......... (1.97%)
Six-month total return based on NAV(2)................... 1.37%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 5.84%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).................................... 9.39%
SHARE VALUATIONS
Net asset value.......................................... $ 17.42
Closing common stock price............................... $16.4375
Six-month high common stock price (01/04/99)............. $17.5625
Six-month low common stock price (01/14/99).............. $ 15.500
Preferred share rate(5).................................. 3.35%
</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 37.8%
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.
3
<PAGE> 5
GLOSSARY OF TERMS
CALL FEATURE: Allows the issuer to buy back a bond on specific dates at set
prices before maturity. These dates and prices are set when the bond is
issued. To compensate the bondholder for the potential loss of income and
ownership, a bond's call price is usually higher than the face value of the
bond. Bonds are usually called when interest rates drop so significantly
that the issuer can save money by issuing new bonds at lower rates.
CREDIT RATING: An evaluation of an issuer's credit history and capability of
repaying obligations. Standard & Poor's and Moody's Investors Service are
two companies that assign bond ratings. Standard & Poor's ratings range from
a high of AAA to a low of D, while Moody's ratings range from a high of Aaa
to a low of C.
DISCOUNT BOND: A bond whose market price is lower than its face value (or "par
value"). Because bonds usually mature at face value, a discount bond has
more potential to appreciate in price than a par bond does.
INSURED BOND: A bond that is insured against default by the bond insurer. If the
issuer defaults, the insurance company will step in and take over payments
of interest and principal when due. Once a bond is insured, it typically
carries the rating of the insurer. Most insurers are rated AAA.
INVESTMENT-GRADE BONDS: Securities rated BBB and above by Standard & Poor's or
Baa and above by Moody's Investors Service. Bonds rated below BBB or Baa are
noninvestment grade.
MATURITY LENGTH: The time it takes for a bond to mature. A bond issued in 1998
and maturing in 2008 is a 10-year bond.
MUNICIPAL BOND: A debt security issued by a state, municipality, or other
government entity to finance capital expenditures of public projects, such
as the construction of highways, public works, or school buildings. Interest
on public-purpose municipal bonds is exempt from federal income taxes and,
in some states, from state and local income taxes.
PREMIUM BOND: A bond whose market price is above its face value (or "par
value"). Because bonds usually mature at face value, a premium bond has less
potential to appreciate in price than a par bond does.
REFUNDING: Retiring an outstanding bond issue at maturity using money from the
sale of a new offering.
YIELD: The annual rate of return on an investment, expressed as a percentage.
YIELD SPREAD: The additional yield investors can earn by either investing in
bonds with longer maturities or by investing in bonds with lower ratings.
The spread is the difference in yield between bonds with short versus long
maturities or the difference in yield between high-quality bonds and
lower-quality bonds.
4
<PAGE> 6
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
We recently spoke with the management team of the Van Kampen Advantage
Pennsylvania Municipal Income Trust about the key events and economic forces
that shaped the markets during the reporting period. The team includes Dennis S.
Pietrzak, portfolio manager, and Peter W. Hegel, chief investment officer for
fixed-income investments. The following comments reflect their views on the
Trust's performance during the six months ended April 30, 1999.
Q HOW WOULD YOU DESCRIBE THE CONDITIONS IN THE MUNICIPAL MARKET DURING THE
PAST SIX MONTHS?
A Although most of the financial markets experienced volatility during the
period, the municipal market remained relatively stable. For the majority
of the six months, long-term municipal bond yields remained within a range
of about 5.1 to 5.3 percent, even as the Federal Reserve cut interest rates.
Much of the stability in the municipal market can be attributed to its isolation
from turbulence abroad. Concerns about the financial conditions in Asia and
Latin America hurt the stock and high-yield bond markets last fall, but had
little effect on municipals.
The positive economic and market conditions encouraged more municipalities
to take advantage of low interest rates and issue new bonds. Although the amount
of municipal debt increased, the credit quality of many issuers was not
compromised--in fact, it improved as the positive economic environment led to
stronger balance sheets. As a result, we saw more issuers using municipal bonds
to finance special growth and expansion projects, as opposed to financing their
regular operations.
The proportion of higher-yielding municipal bonds also increased during the
period as the number of insured bonds declined. Because bond insurers tightened
their underwriting criteria, more issuers came to market without insurance and
offered higher yields to compensate bondholders for the increased credit risk.
This benefited the Trust because it allowed our experienced research staff to
seek out those higher-yielding bonds that we felt had strong underlying quality.
Q WHY WERE MUNICIPAL BONDS SO ATTRACTIVE RELATIVE TO COMPARABLE TREASURY
BONDS?
A Toward the end of 1998, the yields on 30-year insured municipal bonds and
comparable U.S. Treasury bonds reached equivalent levels, which is a rare
occurrence. Typically, investment-grade municipal bonds have offered about 85 to
90 percent as much yield as comparable Treasury bonds because their interest
payments are exempt from federal income taxes. However, as Treasury yields fell
and municipal yields remained stable, the yield difference between the two types
of bonds shrank.
5
<PAGE> 7
Early in 1999, investors recognized the tremendous opportunities available in
the municipal market, and demand for municipals began to increase. In
conjunction with a recent slowdown in supply, this boost in municipal demand
pushed the municipal-to-Treasury yield ratio back to more traditional but still
attractive levels.
Q WHAT STRATEGIES DID YOU USE TO MANAGE THE TRUST?
A Our focus was on supporting the Trust's income stream while monitoring its
risk level and price volatility. As a result, we found value with 15- to
20-year maturities, as the intermediate range of the yield curve offered
almost as much yield as comparable 30-year bonds but is potentially less
volatile. In addition, we sold bonds in the portfolio that had a high risk of
being called, or repaid early by the issuer. These higher-yielding bonds had
increased in value since we purchased them, so we took advantage of the
opportunity to sell them at a premium and contribute to the Trust's total
return.
As a result of increasing financial pressures on the health-care industry,
we carefully monitored Pennsylvania bonds in this sector for potential
weaknesses or opportunities. The challenges imposed by managed care, along with
aging state demographics and changing Medicare reimbursement policies, made us
more cautious about this sector in recent months. Because most of the Trust's
health-care holdings are insured, we did not significantly change our allocation
of health-care bonds. However, we will closely follow the changes in this area
of the municipal market to assess the impact on the Trust.
Q HOW DID THE TRUST PERFORM DURING THE PERIOD?
A During the past six months, the Trust generated a total return of -1.97
percent(1) based on market price. This reflects a decrease in market price
from $17.2500 per share on October 31, 1998, to $16.4375 on April 30,
1999. In addition, the Trust provided a distribution rate of 5.84 percent(3)
based on its closing common stock price on April 30, 1999. Because the Trust is
exempt from federal and state income taxes, this distribution rate is equivalent
to a yield of 9.39 percent(4) on a taxable investment for shareholders in the
37.8 percent federal and state combined income tax bracket. The Trust's monthly
dividend of $.08 per share was unchanged during the reporting period. Past
performance does not guarantee future results. Please refer to the footnotes and
chart on page 3 for additional Trust performance results.
6
<PAGE> 8
Q WHAT DO YOU SEE AHEAD FOR THE MUNICIPAL MARKET?
A Strong economic performance should continue to bolster the credit
conditions of municipal issuers. In addition, we expect that this economic
strength will continue to make municipalities more likely to issue debt
for special projects rather than for general operating financing.
Although insured debt has been increasing in recent years, we have started
to see a reversal of this trend in the last few months, as municipal bond
insurers have become more cautious. If this caution continues, credit spreads
may widen as the proportion of higher-yielding uninsured bonds increases.
Finally, we see the potential for changes in traditional economic activity
toward the end of the year because of investor concerns about the year 2000
computer problem. These temporary concerns, however, may result in attractive
investment opportunities that our research staff can explore to uncover
potential value.
[SIG.]
Dennis S. Pietrzak
Portfolio Manager
[SIG.]
Peter W. Hegel
Chief Investment Officer
Fixed Income Investments
7
<PAGE> 9
PORTFOLIO HIGHLIGHTS
VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
TOP FIVE PORTFOLIO SECTORS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
<TABLE>
<CAPTION>
AS OF APRIL 30, 1999
<S> <C>
Health Care................. 24.4%
General Purpose............. 22.4%
Water & Sewer............... 11.3%
Multi-Family Housing........ 10.9%
Retail Elec/Gas/Telephone... 10.8%
</TABLE>
<TABLE>
<CAPTION>
AS OF OCTOBER 31, 1998
<S> <C>
Health Care................. 25.6%
General Purpose............. 22.6%
Water & Sewer............... 11.4%
Multi-Family Housing........ 11.0%
Retail Elec/Gas/Telephone... 10.9%
</TABLE>
PORTFOLIO COMPOSITION BY CREDIT QUALITY AS A PERCENTAGE OF LONG-TERM INVESTMENTS
AS OF APRIL 30, 1999
[PIE CHART]
<TABLE>
<CAPTION>
AAA/Aaa AA/Aa A/A
------- ----- ---
<S> <C> <C> <C>
AS OF APRIL 30, 1999 80.10% 5.80% 14.10%
</TABLE>
[PIE CHART]
<TABLE>
<CAPTION>
AAA/Aaa AA/Aa A/A
------- ----- ---
<S> <C> <C> <C>
AS OF OCTOBER 31, 1999 78.90% 5.80% 15.30%
</TABLE>
Based upon the highest credit quality ratings as issued by Standard & Poor's or
Moody's, respectively.
DIVIDEND HISTORY
FOR THE PERIOD ENDED APRIL 30, 1999
[BAR GRAPH]
Distribution per Common Share
<TABLE>
<CAPTION>
DIVIDENDS
---------
<S> <C>
'Nov 1998' 0.08
'Dec 1998' 0.08
'Jan 1999' 0.08
'Feb 1999' 0.08
'Mar 1999' 0.08
'Apr 1999' 0.08
</TABLE>
The dividend history represents past performance of the Trust and does not
predict the Trust's future distributions.
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS 98.7%
PENNSYLVANIA 91.0%
$2,500 Allegheny Cnty, PA Arpt Rev Gtr
Pittsburgh Intl Arpt Ser B (FSA
Insd)................................. 6.625% 01/01/22 $ 2,698,450
3,250 Allegheny Cnty, PA Hosp Dev Auth Rev
Hlth Cent Dev Inc Proj Rfdg (MBIA
Insd)................................. 6.300 09/01/13 3,531,092
3,750 Allegheny Cnty, PA Hosp Dev Auth Rev
Hlth Cent Presbyterian Univ Ser A
(Prerefunded @ 11/01/02) (MBIA
Insd)................................. 6.250 11/01/23 4,063,387
2,000 Allegheny Cnty, PA San Auth Swr Rev
(FGIC Insd)........................... 6.000 12/01/12 2,169,480
1,400 Bensalem Twp, PA Wtr & Swr Rev Ser A
(FSA Insd)............................ 6.500 12/01/14 1,502,494
5,000 Dauphin Cnty, PA Genl Auth Hosp Rev
Hapsco Western PA Hosp Proj B Rfdg
(MBIA Insd)........................... 6.250 07/01/16 5,417,300
1,000 Delaware Cnty, PA Cap Apprec Rfdg..... * 11/15/10 583,660
1,045 Delaware Cnty, PA Cap Apprec Rfdg..... * 11/15/11 576,443
1,225 Delaware Cnty, PA Cap Apprec Rfdg..... * 11/15/12 638,495
655 Delaware County, PA Rfdg.............. 6.000 11/15/14 696,625
2,345 Delaware County, PA Rfdg (Prerefunded
@ 11/15/02)........................... 6.000 11/15/14 2,523,666
3,050 Erie Cnty, PA Hosp Auth Rev Saint
Vincent Hlth Cent Proj Ser A (MBIA
Insd)................................. 6.375 07/01/22 3,315,777
1,510 Lackawanna Cnty, PA Multi Purp Stadium
Auth Stadium Rev Gtd (FGIC Insd)...... 6.150 08/15/05 1,629,139
1,380 Lackawanna Cnty, PA Multi Purp Stadium
Auth Stadium Rev Gtd (FGIC Insd)...... 6.200 08/15/06 1,490,993
1,000 Lackawanna Cnty, PA Multi Purp Stadium
Auth Stadium Rev Gtd (FGIC Insd)...... 6.300 08/15/07 1,083,490
4,500 Lehigh Cnty, PA Genl Purp Auth Rev
Hosp Muhlenberg Hosp Cent Ser A
(Prerefunded @ 07/15/04).............. 6.600 07/15/22 5,045,985
3,500 Lehigh Cnty, PA Indl Dev Auth Pollutn
Ctl Rev PA Pwr & Lt Co Proj Ser A Rfdg
(MBIA Insd)........................... 6.400 11/01/21 3,837,190
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$1,095 Mars, PA Area Sch Dist Ser AA (MBIA
Insd)................................. * 09/01/17 $ 445,523
1,095 Mars, PA Area Sch Dist Ser AA (MBIA
Insd)................................. * 09/01/18 421,006
1,095 Mars, PA Area Sch Dist Ser AA (MBIA
Insd)................................. * 09/01/19 395,175
1,095 Mars, PA Area Sch Dist Ser AA (MBIA
Insd)................................. * 09/01/20 372,738
1,095 Mars, PA Area Sch Dist Ser AA (MBIA
Insd)................................. * 09/01/21 353,072
1,000 McGuffey Sch Dist PA Ser B (AMBAC
Insd)................................. 4.750% 08/01/28 937,650
620 Montgomery Cnty, PA Higher Edl & Hlth
Auth Hosp Rev Abington Mem Hosp Ser A
(AMBAC Insd).......................... 6.000 06/01/16 669,625
1,080 Montgomery Cnty, PA Higher Edl & Hlth
Auth Hosp Rev Abington Mem Hosp Ser A
(Prerefunded @ 06/01/03) (AMBAC
Insd)................................. 6.000 06/01/16 1,187,838
1,000 Montgomery Cnty, PA Indl Dev Auth
Retirement Cmnty Rev Adult Cmntys
Total Svcs Ser B...................... 5.625 11/15/12 1,033,520
3,000 Montgomery Cnty, PA Indl Dev Auth Rev
Res Recovery (LOC-Banque Paribas)..... 7.500 01/01/12 3,163,530
2,925 Moon Twp, PA Muni Auth Wtr & Swr Rev
(Prerefunded @12/01/02) (FSA Insd).... 6.500 12/01/17 3,228,937
2,000 North Penn, PA Wtr Auth Wtr Rev (FGIC
Insd)................................. 6.200 11/01/22 2,165,700
1,500 Pennsylvania Hsg Fin Agy Single Family
Mtg Ser 53A........................... 6.000 10/01/15 1,575,855
3,490 Pennsylvania Intergvtl Coop Auth Spl
Tax Rev City of Philadelphia)
(Prerefunded @ 06/15/03) (MBIA
Insd)................................. 5.600 06/15/15 3,733,776
2,000 Pennsylvania Intergvtl Coop Auth Spl
Tax Rev City of Philadelphia
(Prerefunded @ 06/15/02).............. 6.800 06/15/22 2,184,680
4,250 Philadelphia, PA Gas Wks Rev 12th Ser
B (MBIA Insd)......................... 7.000 05/15/20 5,224,822
3,000 Philadelphia, PA Gas Wks Rev Ser 14
Rfdg (FSA Insd)....................... 6.250 07/01/08 3,311,190
3,500 Philadelphia, PA Hosp & Higher Edl Fac
Auth Hosp Rev Chestnut Hill Hosp...... 6.500 11/15/22 3,643,955
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- -------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$2,830 Philadelphia, PA Redev Auth Fin Corp
Mtg Rev Multi-Family Mtg Chinatown B
Rfdg (FNMA Collateralized)............ 6.750% 09/01/22 $ 2,986,697
4,265 Philadelphia, PA Redev Auth Fin Corp
Mtg Rev Multi-Family Mtg Cobbs Creek
Ser A Rfdg (FNMA Collateralized)...... 6.750 08/01/24 4,466,180
4,675 Philadelphia, PA Redev Auth
Multi-Family Hsg Rev Mtg Washington
Square Ser C Rfdg (FNMA
Collateralized)....................... 6.950 11/15/24 4,984,765
4,905 Philadelphia, PA Wtr & Swr Rev Cap
Apprec 14th Ser (MBIA Insd)........... * 10/01/07 3,400,146
4,800 Somerset Cnty, PA Genl Auth Comwlth
Lease Rev (Prerefunded 10/15/01) (FGIC
Insd)................................. 6.250 10/15/11 5,100,672
1,250 Spring Ford Area Sch Dist PA (FGIC
Insd)................................. 4.750 03/01/22 1,184,037
1,035 Unity Twp, PA Muni Auth Gtd Swr Cap
Apprec (AMBAC Insd)................... * 11/01/14 492,008
2,500 Upper Darby Twp, PA Rfdg (AMBAC
Insd)................................. 6.500 07/15/18 2,688,975
1,000 West Shore, PA Area Hosp Auth Hosp Rev
Holy Spirit Hosp Proj (MBIA Insd)..... 5.700 01/01/22 1,045,380
4,290 Westmoreland Cnty, PA Muni Auth Muni
Svc Rev Ser C (FGIC Insd)............. 5.000 08/15/10 4,356,667
------------
105,557,785
------------
PUERTO RICO 7.7%
1,100 Puerto Rico Comwlth Hwy & Tran Auth
Hwy Rev Ser T (Prerefunded @
07/01/02)............................. 6.500 07/01/22 1,210,979
2,000 Puerto Rico Pub Bldgs Auth Gtd Pub Edl
& Hlth Fac Ser K Rfdg................. 6.600 07/01/04 2,177,480
1,000 Puerto Rico Pub Bldgs Auth Gtd Pub Edl
& Hlth Fac Ser M Rfdg................. 5.750 07/01/15 1,064,340
4,000 Puerto Rico Pub Bldgs Auth Rev Gtd Ser
K (Prerefunded 07/01/02).............. 6.875 07/01/12 4,448,120
------------
8,900,919
------------
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Market Value
- -------------------------------------------------------------------------------------
<C> <C>
TOTAL INVESTMENTS 98.7%
(Cost $103,488,397)................................................ $114,458,704
OTHER ASSETS IN EXCESS OF LIABILITIES 1.3%.......................... 1,534,585
------------
NET ASSETS 100.0%................................................... $115,993,289
============
</TABLE>
* Zero coupon bond
AMBAC--AMBAC Indemnity Corporation
FGIC--Financial Guaranty Insurance Company
FNMA--Federal National Mortgage Association
FSA--Financial Security Assurance Inc.
MBIA--Municipal Bond Investors Assurance Corp.
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Total Investments (Cost $103,488,397)....................... $114,458,704
Receivables:
Interest.................................................. 2,089,914
Investments Sold.......................................... 10,000
Other....................................................... 1,653
------------
Total Assets.......................................... 116,560,271
------------
LIABILITIES:
Payables:
Custodian Bank............................................ 271,703
Investment Advisory Fee................................... 62,041
Income Distributions - Common and Preferred Shares........ 32,885
Administrative Fee........................................ 19,089
Affiliates................................................ 12,708
Trustees' Deferred Compensation and Retirement Plans........ 97,503
Accrued Expenses............................................ 71,053
------------
Total Liabilities..................................... 566,982
------------
NET ASSETS.................................................. $115,993,289
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 1,600 issued with liquidation preference of
$25,000 per share)........................................ $ 40,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 4,361,902 shares issued and
outstanding).............................................. 43,619
Paid in Surplus............................................. 64,141,911
Net Unrealized Appreciation................................. 10,970,307
Accumulated Undistributed Net Investment Income............. 750,323
Accumulated Net Realized Gain............................... 87,129
------------
Net Assets Applicable to Common Shares................ 75,993,289
------------
NET ASSETS.................................................. $115,993,289
============
NET ASSET VALUE PER COMMON SHARE ($75,993,289 divided by
4,361,902 shares outstanding)............................. $ 17.42
============
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $3,313,633
----------
EXPENSES:
Investment Advisory Fee..................................... 375,597
Administrative Fee.......................................... 115,568
Preferred Share Maintenance................................. 49,586
Trustees' Fees and Related Expenses......................... 12,394
Legal....................................................... 5,326
Custody..................................................... 3,624
Other....................................................... 76,194
----------
Total Expenses.......................................... 638,289
----------
NET INVESTMENT INCOME....................................... $2,675,344
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 91,464
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 12,061,488
End of the Period......................................... 10,970,307
----------
Net Unrealized Depreciation During the Period............... (1,091,181)
----------
NET REALIZED AND UNREALIZED LOSS............................ $ (999,717)
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,675,627
==========
</TABLE>
See Notes to Financial Statements
14
<PAGE> 16
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1999 and
the Year Ended October 31, 1998 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1999 October 31, 1998
- --------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income............................ $ 2,675,344 $ 5,411,564
Net Realized Gain................................ 91,464 107,703
Net Unrealized Appreciation/Depreciation During
the Period..................................... (1,091,181) 1,944,365
------------ ------------
Change in Net Assets from Operations............. 1,675,627 7,463,632
------------ ------------
Distributions from Net Investment Income:
Common Shares.................................. (2,093,585) (4,187,208)
Preferred Shares............................... (621,967) (1,417,648)
------------ ------------
Total Distributions.............................. (2,715,552) (5,604,856)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES..................................... (1,039,925) 1,858,776
NET ASSETS:
Beginning of the Period.......................... 117,033,214 115,174,438
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $750,323
and $790,531, respectively).................... $115,993,289 $117,033,214
============ ============
</TABLE>
See Notes to Financial Statements
15
<PAGE> 17
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share
of the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended ---------------------
April 30, 1999 1998 1997
- ----------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of the
Period (a).......................... $17.660 $17.234 $ 16.722
------- ------- --------
Net Investment Income............... .613 1.241 1.250
Net Realized and Unrealized
Gain/Loss......................... (.228) .470 .546
------- ------- --------
Total from Investment Operations...... .385 1.711 1.796
------- ------- --------
Less:
Distributions from Net Investment Income:
Paid to Common Shareholders....... .480 .960 .958
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders.................... .143 .325 .326
Distributions from and in Excess of
Net Realized Gain:
Paid to Common Shareholders....... -0- -0- -0-
Common Share Equivalent of
Distributions Paid to Preferred
Shareholders.................... -0- -0- -0-
------- ------- --------
Total Distributions................... .623 1.285 1.284
------- ------- --------
Net Asset Value, End of the Period.... $17.422 $17.660 $ 17.234
======= ======= ========
Market Price Per Share at End of the
Period.............................. $16.4375 $17.250 $16.4375
Total Investment Return at Market
Price (b)........................... (1.97%)* 11.03% 15.38%
Total Return at Net Asset Value (c)... 1.37%* 8.27% 9.04%
Net Assets at End of the Period (In
millions)........................... $ 116.0 $ 117.0 $ 115.2
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares**............................ 1.68% 1.67% 1.70%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (d)................... 5.41% 5.25% 5.48%
Portfolio Turnover.................... 3%* 3% 2%
* Non-Annualized
** Ratio of Expenses to Average Net
Assets Including Preferred
Shares............................. 1.10% 1.10% 1.10%
</TABLE>
(a) Net Asset Value at September 25, 1992, is adjusted for common and preferred
share offering costs of $.285 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.
16
<PAGE> 18
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 25, 1992
(Commencement
Year Ended October 31 of Investment
- ------------------------------------------- Operations) to
1996 1995 1994 1993 October 31, 1992(a)
- --------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$16.694 $14.629 $17.327 $14.443 $14.715
------- ------- ------- ------- -------
1.244 1.253 1.254 1.220 .042
.038 2.059 (2.774) 2.764 (.311)
------- ------- ------- ------- -------
1.282 3.312 (1.520) 3.984 (.269)
------- ------- ------- ------- -------
.928 .888 .876 .803 -0-
.326 .359 .275 .297 .003
-0- -0- .020 -0- -0-
-0- -0- .007 -0- -0-
------- ------- ------- ------- -------
1.254 1.247 1.178 1.100 .003
------- ------- ------- ------- -------
$16.722 $16.694 $14.629 $17.327 $14.443
======= ======= ======= ======= =======
$15.125 $14.000 $12.125 $16.125 $14.375
14.85% 23.03% (19.94%) 18.14% (4.17%)*
5.91% 20.65% (10.75%) 26.01% (3.73%)*
$ 112.9 $ 112.8 $ 103.8 $ 115.6 $ 103.0
1.77% 1.77% 1.80% 1.79% 1.31%
5.52% 5.68% 6.05% 5.70% 2.61%
2% 9% 5% 12% 0%*
1.14% 1.12% 1.15% 1.14% 1.18%
</TABLE>
See Notes to Financial Statements
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Advantage Pennsylvania Municipal Income Trust, (the "Trust") is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940, as amended. The Trust's investment objective
is to provide a high level of current income exempt from federal and
Pennsylvania income taxes and, where possible under local law, local income and
personal property taxes, consistent with preservation of capital. The Trust will
invest substantially all of its assets in Pennsylvania municipal securities
rated investment grade at the time of investment. The Trust commenced investment
operations on September 25, 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--Municipal bonds are valued by independent pricing
services or dealers using the mean of the bid and asked prices or, in the
absence of market quotations, at fair value based upon yield data relating to
municipal bonds with similar characteristics and general market conditions.
Securities which are not valued by independent pricing services are valued at
fair value using 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. As of April 30, 1999, there were no
when issued or delayed delivery purchase commitments.
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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. 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, 1998, the Trust had an accumulated capital loss
carryforward for tax purposes of $4,335, which will expire on October 31, 2005.
At April 30, 1999, for federal income tax purposes, cost of long-term
investments is $103,488,397; the aggregate gross unrealized appreciation is
$10,992,639 and the aggregate gross unrealized depreciation is $22,332,
resulting in net unrealized appreciation on long-term investments of
$10,970,307.
E. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays monthly
dividends from net investment income to common shareholders. 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
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 Van Kampen Funds Inc. or its affiliates (collectively "Van
Kampen"), 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.
For the six months ended April 30, 1999, the Trust recognized expenses of
approximately $1,000 representing legal services provided by Skadden, Arps,
Slate,
19
<PAGE> 21
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1999 (Unaudited)
- --------------------------------------------------------------------------------
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, 1999, the Trust recognized expenses of
approximately $27,400 representing Van Kampen's cost of providing accounting and
legal services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
officers of Van Kampen.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. 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 per trustee under the plan is $2,500.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $4,909,958 and $3,856,830, respectively.
4. PREFERRED SHARES
Effective with the close of business on April 23, 1999, the liquidation
preference on the Trust's preferred shares decreased from $50,000 to $25,000 per
share. This decrease was effected by means of a 2 for 1 stock split that doubled
the Trust's number of outstanding preferred shares. The total liquidation value
for the Trust was unchanged.
As of April 30, 1999, the Trust has outstanding 1,600 Auction Preferred
Shares ("APS"). Dividends are cumulative and the dividend rate is currently
reset every 28 days through an auction process. The rate in effect on April 30,
1999, was 3.35%. During the six months ended April 30, 1999, the rates ranged
from 2.99% to 3.35%.
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 $25,000 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
DIVIDEND REINVESTMENT PLAN
The Trust offers a dividend reinvestment plan (the "Plan") pursuant to which
Common Shareholders may elect to have dividends and capital gains distributions
reinvested in Common Shares of the Trust. The Trust declares dividends out of
net investment income, and will distribute annually net realized capital gains,
if any. Common Shareholders may join or withdraw from the Plan at any time.
If you decide to participate in the Plan, State Street Bank and Trust
Company, as your Plan Agent, will automatically invest your dividends and
capital gains distributions in Common Shares of the Trust for your account.
HOW TO PARTICIPATE
If you wish to participate and your shares are held in your own name, call
1-800-341-2929 for more information and a Plan brochure. If your shares are held
in the name of a brokerage firm, bank, or other nominee, you should contact your
nominee to see if it would participate in the Plan on your behalf. If you wish
to participate in the Plan, but your brokerage firm, bank or nominee is unable
to participate on your behalf, you should request that your shares be re-
registered in your own name which will enable your participation in the Plan.
HOW THE PLAN WORKS
Participants in the Plan will receive the equivalent in Common Shares valued on
the valuation date, generally at the lower of market price or net asset value,
except as specified below. The valuation date will be the dividend or
distribution payment date or, if that date is not a trading day on the national
securities exchange or market system on which the Common Shares are listed for
trading, the next preceding trading day. If the market price per Common Share on
the valuation date equals or exceeds net asset value per Common Share on that
date, the Trust will issue new Common Shares to participants valued at the
higher of net asset value or 95% of the market price on the valuation date. In
the foregoing situation, the Trust will not issue Common Shares under the Plan
below net asset value. If net asset value per Common Share on the valuation date
exceeds the market price per Common Share on that date, of if the Board of
Trustees should declare a dividend or capital gains distribution payable to the
Common Shareholders only in cash, participants in the Plan will be deemed to
have elected to receive Common Shares from the Trust valued at the market price
on that date. Accordingly, in this circumstance, the Plan Agent will, as agent
for the participants, buy the Trust's Common Shares in the open market for the
participants' accounts on or shortly after the payment date. If, before the Plan
Agent has completed its purchases, the market price exceeds the net asset value
per share of the Common Shares, the average per share purchase price paid by the
Plan Agent may exceed the net asset value of the Trust's Common Shares,
resulting in the acquisition of fewer Common Shares than if the dividend or
distribution had been paid in Common Shares issued by the Trust. All
reinvestments are in full and fractional Common Shares and are carried to three
decimal places.
Experience under the Plan may indicate that changes are desirable.
Accordingly, the Trust reserves the right to amend or terminate the Plan as
applied to any dividend or distribution paid subsequent to written notice of the
changes sent to all Common Shareholders of the Trust at least 90 days before the
record date for the dividend or distribution. The Plan also may be amended or
terminated by the Plan Agent by at least 90 days written notice to all Common
Shareholders of the Trust.
COSTS OF THE PLAN
The Plan Agent's fees for the handling of the reinvestment of dividends and
distributions will be paid by the Trust. However, each participant will pay a
pro rata share of brokerage commissions incurred with respect to the Plan
Agent's open market purchases in connection with the reinvestment of dividends
and distributions. No other charges will be made to participants for reinvesting
dividends or capital gains distributions, except for certain brokerage
commissions, as described above.
TAX IMPLICATIONS
You will receive tax information annually for your personal records and to help
you prepare your federal income tax return. The automatic reinvestment of
dividends and capital gains distributions does not relieve you of any income tax
which may be payable on dividends or distributions.
RIGHT TO WITHDRAW
Plan participants may withdraw at any time by calling 1-800-341-2929 or by
writing State Street Bank and Trust Company, P.O. Box 8200, Boston, MA 02266-
8200. If you withdraw, you will receive, without charge, a share certificate
issued in your name for all full Common Shares credited to your account under
the Plan and a cash payment will be made for any fractional Common Share
credited to your account under the Plan. You may again elect to participate in
the Plan at any time by calling 1-800-341-2929 or writing to the Trust at:
Van Kampen Funds Inc.
Attn: Closed-End Funds
2800 Post Oak Blvd., Houston, TX 77056
21
<PAGE> 23
VAN KAMPEN FUNDS
EQUITY FUNDS
Domestic
Aggressive Equity
Aggressive Growth
American Value
Comstock
Emerging Growth
Enterprise
Equity Growth
Equity Income
Growth
Growth and Income
Harbor
Pace
Real Estate Securities
Utility
Value
Global/International
Asian Growth
Emerging Markets
European Equity
Global Equity
Global Equity Allocation
Global Franchise
Global Managed Assets
International Magnum
Latin American
FIXED-INCOME FUNDS
Income
Corporate Bond
Global Fixed Income
Global Government Securities
Government Securities
High Income Corporate Bond
High Yield
High Yield & Total Return
Limited Maturity Government
Short-Term Global Income
Strategic Income
U.S. Government
U.S. Government Trust for Income
Worldwide High Income
Tax Exempt Income
California Insured Tax Free
Florida Insured Tax Free Income
High Yield Municipal
Insured Tax Free Income
Intermediate Term Municipal Income
Municipal Income
New York Tax Free Income
Pennsylvania Tax Free Income
Tax Free High Income
Capital Preservation
Reserve
Tax Free Money
SENIOR LOAN
Prime Rate Income Trust
Senior Floating Rate
To find out more about any of these funds, ask your financial advisor for
a prospectus, which contains more complete information, including sales
charges, risks, and expenses. Please read it carefully before you invest
or send money.
To view a current Van Kampen fund prospectus or to receive additional
fund information, choose from one of the following:
- - visit our Web site at WWW.VANKAMPEN.COM--to view a prospectus, select Download
Prospectus
- - call us at 1-800-341-2911 weekdays from 7:00 a.m. to 7:00 p.m. Central time.
Telecommunications Device for the Deaf users, call 1-800-421-2833.
- - e-mail us by visiting WWW.VANKAMPEN.COM and selecting Contact Us
22
<PAGE> 24
VAN KAMPEN ADVANTAGE PENNSYLVANIA MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
STEVEN MULLER
THEODORE A. MYERS
DON G. POWELL*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
A. THOMAS SMITH, III*
Vice President and Secretary
JOHN L. SULLIVAN*
Vice President, Treasurer and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
EDWARD C. WOOD, III*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN
INVESTMENT ADVISORY CORP.
1 Parkview Plaza
P.O. Box 5555
Oakbrook Terrace, Illinois 60181-5555
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 LLP
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company
Act of 1940.
(C) Van Kampen Funds Inc., 1999 All rights reserved.
(SM) denotes a service mark of Van Kampen Funds Inc.
23
<PAGE> 25
YEAR 2000 READINESS DISCLOSURE
Like other mutual funds, financial and business organizations and individuals
around the world, the Trust could be adversely affected if the computer systems
used by the Trust's investment adviser and other service providers do not
properly process and calculate date-related information and data from and after
January 1, 2000. This is commonly known as the "Year 2000 Problem." The Trust's
investment adviser is taking steps that it believes are reasonably designed to
address the Year 2000 Problem with respect to computer systems that it uses and
to obtain reasonable assurances that comparable steps are being taken by the
Trust's other major service providers. At this time, there can be no assurances
that these steps will be sufficient to avoid any adverse impact to the Trust. In
addition, the Year 2000 Problem may adversely affect the markets and the issuers
of securities in which the Trust may invest that, in turn, may adversely affect
the net asset value of the Trust. Improperly functioning trading systems may
result in settlement problems and liquidity issues. In addition, corporate and
governmental data processing errors may result in production problems for
individual companies or issuers and overall economic uncertainty. Earnings of
individual issuers will be affected by remediation costs, which may be
substantial and may be reported inconsistently in U.S. and foreign financial
statements. Accordingly, the Trust's investments may be adversely affected. The
statements above are subject to the Year 2000 Information and Readiness
Disclosure Act, which may limit the legal rights regarding the use of such
statements in the case of dispute.
24
<TABLE> <S> <C>
<ARTICLE> 6
<SERIES>
<NUMBER> 11
<NAME> ADV. PA MUNI INC. TRUST
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-31-1999
<PERIOD-START> NOV-01-1998
<PERIOD-END> APR-30-1999
<INVESTMENTS-AT-COST> 103,488,397
<INVESTMENTS-AT-VALUE> 114,458,704
<RECEIVABLES> 2,099,914
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,653
<TOTAL-ASSETS> 116,560,271
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 566,982
<TOTAL-LIABILITIES> 566,982
<SENIOR-EQUITY> 40,000,000
<PAID-IN-CAPITAL-COMMON> 64,185,530
<SHARES-COMMON-STOCK> 4,361,902
<SHARES-COMMON-PRIOR> 4,361,902
<ACCUMULATED-NII-CURRENT> 750,323
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 87,129
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 10,970,307
<NET-ASSETS> 115,993,289
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 3,313,633
<OTHER-INCOME> 0
<EXPENSES-NET> (638,289)
<NET-INVESTMENT-INCOME> 2,675,344
<REALIZED-GAINS-CURRENT> 91,464
<APPREC-INCREASE-CURRENT> (1,091,181)
<NET-CHANGE-FROM-OPS> 1,675,627
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (2,715,552)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
<NUMBER-OF-SHARES-REDEEMED> 0
<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> (1,039,925)
<ACCUMULATED-NII-PRIOR> 790,531
<ACCUMULATED-GAINS-PRIOR> (4,335)
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 375,597
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 638,289
<AVERAGE-NET-ASSETS> 76,525,222
<PER-SHARE-NAV-BEGIN> 17.660
<PER-SHARE-NII> 0.613
<PER-SHARE-GAIN-APPREC> (0.228)
<PER-SHARE-DIVIDEND> (0.623)
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 17.422
<EXPENSE-RATIO> 1.68
</TABLE>
