<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Highlights........................ 4
Performance in Perspective.................. 5
Portfolio Management Review................. 6
Portfolio of Investments.................... 9
Statement of Assets and Liabilities......... 10
Statement of Operations..................... 11
Statement of Changes in Net Assets.......... 12
Financial Highlights........................ 13
Notes to Financial Statements............... 16
Report of Independent Accountants........... 24
</TABLE>
GTI ANR 11/96
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
DENNIS J. MCDONNELL AND DON G. POWELL
November 4, 1996
Dear Shareholder,
As you may already be aware, an agreement was reached in late June for VK/AC
Holding Inc., the parent company of Van Kampen American Capital, Inc., to be
acquired by the Morgan Stanley Group Inc. While this announcement may appear
commonplace in an ever-changing financial industry, we believe it represents
an exciting opportunity for shareholders of our investment products.
With Morgan Stanley's global leadership in investment banking and asset man-
agement and Van Kampen American Capital's reputation for competitive long-term
performance and superior investor services, together we will offer a broader
range of investment opportunities and expertise.
The new ownership will not affect our commitment to pursuing excellence in
all aspects of our business. And we expect very little change in the way your
mutual fund account is maintained and serviced. We value our relationship with
you and look forward to communicating more details of this transaction, which
was completed October 31, 1996.
Regarding the U.S. Government Trust for Income, you will find in this report
performance results for the 12-month period ended September 30, 1996, along
with an interview with your fund's portfolio management team.
ECONOMIC REVIEW
The economy demonstrated an acceleration in growth during the last half of
the 12-month reporting period. After a nominal 0.3 percent rise in the last
quarter of 1995--due in part to weak construction activity, two government
shutdowns, and a strike at Boeing--real GDP (the nation's gross domestic prod-
uct, adjusted for inflation) rose by 2.0 percent in this year's first quarter.
And, as anticipated, the economy grew by a much stronger 4.7 percent in the
second quarter, partly reflecting a rebound from the aftermath of the General
Motors strike earlier in the year, an end to the budget stalemate between the
White House and Congress, and extreme weather conditions in many parts of the
country. Upward momentum has been assisted by consumer spending, as indicated
by a 3 percent rise in retail sales in the first nine months of this calendar
year (a 5 percent rise during the Fund's fiscal year).
In the manufacturing sector, economic reports, such as the National Associa-
tion of Purchasing Managers Index, suggested a continued rebound in production
from last winter's lower levels. In June, this index reached an 18-month high.
Strong exports and a replenishing of inventories have helped support this mo-
mentum.
Surprisingly healthy economic activity led to concerns that inflation may
rise and the Federal Reserve Board might tighten monetary policy. Inflation
remains modest, however, with consumer prices rising at about a 3 percent an-
nual rate over the past year, and the closely
Continued on page two
1
<PAGE>
watched "core" Consumer Price Index, which excludes volatile food and energy
components, has risen year after year at rates between 2.7 and 3.0 percent per
year. In general, recent reports have suggested an upward creep in labor-re-
lated costs. The Producer Price Index, which measures prices paid by wholesal-
ers to producers, has indicated low wholesale prices in each of the past four
months, from June through September.
ECONOMIC OUTLOOK
We anticipate that the economy will continue to grow during the balance of
1996, albeit at more moderate rates than the second quarter's swift pace. We
expect rates of inflation to remain near current levels and the Fed to maintain
a steady monetary policy in the coming months. That suggests little movement in
short-term interest rates and a continuation of the current trading range for
yields on long-term bonds.
As always, we appreciate your continued confidence in your investment with
Van Kampen American Capital.
Sincerely,
/s/ Don G. Powell /s/ Dennis J. McDonnell
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Asset Management, Inc. Asset Management, Inc.
2
<PAGE>
PERFORMANCE RESULTS FOR THE PERIOD ENDED SEPTEMBER 30, 1996
VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
<S> <C> <C> <C>
TOTAL RETURNS
One-year total return based on NAV/1/....... 3.57% 2.70% 2.70%
One-year total return/2/.................... (1.37%) (1.16%) 1.74%
Life-of-Fund average annual total return/2/. 3.36%/3/ 3.30%/3/ 2.86%/3/
Commencement Date........................... 10/06/92 10/06/92 04/12/93
DISTRIBUTION RATE AND YIELD
Distribution Rate/4/........................ 6.52% 6.11% 6.11%
SEC Yield/5/................................ 5.43% 5.08% 5.08%
</TABLE>
/1/Assumes reinvestment of all distributions for the period and does not include
payment of the maximum sales charge (4.75% for A shares) or contingent
deferred sales charge for early withdrawal (4% for B shares and 1% for C
shares).
/2/Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or
contingent deferred sales charge for early withdrawal (B and C shares).
/3/Total return from November 2, 1992 (date the Fund's investment strategy was
implemented) through the period end.
/4/Distribution rate represents the monthly annualized distributions of the Fund
at the end of the period and not the earnings of the Fund.
/5/SEC Yield is a standardized calculation prescribed by the Securities and
Exchange Commission for determining the amount of net income a portfolio
should theoretically generate for the 30-day period ending September 30, 1996.
See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth
more or less than their original cost.
3
<PAGE>
PORTFOLIO HIGHLIGHTS
VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
COUPON DISTRIBUTION AS OF SEPTEMBER 30, 1996
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
Coupon Rate Percentage of Portfolio
<S> <C>
6-7 10.2%
7-8 20.5%
8-9 11.0%
9-10 40.6%
10 or More 17.7%
</TABLE>
PORTFOLIO COMPOSITION BY SECTOR
[PIE CHART APPEARS HERE]
<TABLE>
<CAPTION>
As of September 30, 1996
<S> <C>
GNMA 17.6%
FNMA 10.4%
Treasury/Agency 48.0%
CMO 13.8%
FHLMC 10.2%
As of March 31, 1996
GNMA 17.4%
FNMA 9.9%
Treasury/Agency 45.4%
CMO 23.3%
FHLMC 4.0%
</TABLE>
DURATION
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, 1996 AS OF MARCH 31, 1996
<S> <C> <C>
Duration 4.2 years 4.2 years
</TABLE>
4
<PAGE>
PUTTING YOUR FUND'S PERFORMANCE IN PERSPECTIVE
As you evaluate your progress toward achieving your financial goals, it is
important to track your investment portfolio's performance at regular inter-
vals. A good starting point is a comparison of your investment holdings to an
applicable benchmark, such as a broad-based market index. Such a comparison
can:
. Reflect the impact of favorable market trends or difficult market con-
ditions
. Help you evaluate the extent to which your fund's management team has
responded to the opportunities and challenges presented to them over
the period measured
For these reasons, you may find it helpful to review the chart below, which
compares your fund's performance to that of the Merrill Lynch Intermediate-
Term U.S. Government Index over time. As a broad-based unmanaged statistical
composite, this index does not reflect any commissions or fees which would be
incurred by an investor purchasing the securities it represents. Similarly,
its performance does not reflect any sales charges or other costs which would
be applicable to an actively managed portfolio, such as that of the Fund.
GROWTH OF A HYPOTHETICAL $10,000 INVESTMENT
Van Kampen American Capital U.S. Government Trust for Income vs. Merrill
Lynch Intermediate-Term U.S. Government Index (November 1992 through
September 1996)
[GRAPH APPEARS HERE]
<TABLE>
<CAPTION>
VKAC U.S. Government Merrill Lynch Intermediate-Term
Trust for Income U.S. Government Index
-------------------- -------------------------------
<S> <C> <C>
11/30/92 $ 9,525 $10,000
12/31/92 9,891 10,128
12/31/93 10,297 10,959
12/31/94 9,886 10,782
12/31/95 11,419 12,351
9/30/96 11,381 12,553
</TABLE>
The above chart reflects the performance of Class A shares of the Fund. The
performance of Class A shares will differ from that of other share classes of
the Fund because of the difference in sales charges and/or expenses paid by
shareholders investing in the different share classes. The Fund's performance
assumes reinvestment of all distributions for the period ended September 30,
1996, and includes payment of the maximum sales charge (4.75% for A shares).
While past performance is not indicative of future performance, the above in-
formation provides a broader vantage point from which to evaluate the discus-
sion of the Fund's performance found in the following pages.
5
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
We recently spoke with the management team of the Van Kampen American Capital
U.S. Government Trust for Income about the key events and economic forces that
shaped the markets during the Fund's fiscal year. The team includes Ted V.
Mundy, portfolio manager, and Peter W. Hegel, executive vice president for
fixed-income investments. The following excerpts reflect their views on the
Fund's performance during the 12-month period ended September 30, 1996.
THE FOLLOWING KEY TERMS HAVE BEEN LISTED IN THE ORDER IN WHICH YOU WILL FIND
THEM IN THIS REPORT.
FED FUNDS RATE: The rate banks charge each other for overnight loans. The Fed-
eral Reserve Board uses this rate to affect the direction of interest rates.
BASIS POINT: A measure used in quoting yields on bonds. One hundred basis
points is equal to one percent. For example, if a bond's yield changes from
7.00 to 6.65 percent, it would be considered a 35 basis point move.
DURATION: A measure of a bond's sensitivity to changes in interest rates,
which is expressed in years. To understand the importance of duration, con-
sider that it has a direct impact on a fund's net asset value. The longer the
duration, the greater the effect of changes in interest rate movements on net
asset value.
COUPON: The interest rate on a fixed-income security, usually expressed as an
annual percentage of the bond's principal value.
MORTGAGE-BACKED SECURITIES: Securities backed by pools of similar mortgages
which allow investors to receive payments of interest and principal passed
through from the underlying mortgages. These securities are generally issued
by agencies of the U.S. government, such as Federal Home Loan Mortgage Corpo-
ration (FHLMC, "FreddieMac"), Federal National Mortgage Association (FNMA,
"FannieMae"), and Government National Mortgage Association (GNMA,
"GinnieMae").
HOW WOULD YOU CHARACTERIZE THE MARKET CONDITIONS IN WHICH THE FUND OPER-
Q ATED DURING THE PAST FISCAL YEAR (THE 12 MONTHS ENDED SEPTEMBER 30,
1996)?
A The year can be divided into three market environments:
. From October 1995 to January 1996, the outlook for the fixed-income market
was positive. Expectations were high that the economy would continue to show
signs of weakness, resulting in a further easing of monetary policy and
lower interest rates. In mid-December and again in late January, investors
were rewarded as the Federal Reserve Board lowered the federal funds rate--
from 5.75 percent to 5.50 percent and then to 5.25 percent. Fixed- income
securities moved steadily higher in price as interest rates gradually de-
clined (bonds appreciate in value as yields decline).
6
<PAGE>
. From February to April 1996, interest rates reversed course. A surge in Feb-
ruary's employment report suggested a higher growth rate in the economy and
ignited inflationary concerns. The yield on benchmark five-year Treasury notes
rose 130 basis points, and their value declined by approximately 5.3 percent.
. From May to September 1996, the fixed-income market did not move dramati-
cally in either direction, as expectations for economic growth and inflation
moderated. Interest rates remained within a range between about 6.25 percent
and 6.75 percent, as represented by the yield on benchmark five-year Trea-
sury notes.
Q WHAT SIGNIFICANT INVESTMENT TECHNIQUES AND STRATEGIES WERE USED TO PUR-
SUE THE FUND'S INVESTMENT OBJECTIVE?
A Because the Fund's objective is to provide investors with a high level
of current income, we make portfolio changes with an eye toward main-
taining a competitive distribution rate. Here is how we positioned the Fund
with respect to the three market environments described above:
. To take advantage of the market's rally--October 1995 through January 1996--
the Fund's duration was maintained at about 4.5 years, compared with a neu-
tral posture of approximately 4.2 years. Additionally, because interest
rates were trending lower, we focused on purchasing lower coupon mortgage-
backed securities, which would be expected to have less exposure to home-
owner prepayments.
. In response to the market's decline in value from February through April, we
took a more defensive stance, slightly reducing the Fund's duration to 4.1
years in February. We also decreased the Fund's position in Treasury securi-
ties, favoring mortgage-backed securities, which have generally performed
better in a rising interest rate environment.
. We increased the Fund's duration to a more neutral position as yields began
to fluctuate within a more narrow range from May to September. We continued
to emphasize mortgage-backed securities, favoring higher coupon alterna-
tives. In the current market environment of declining refinancing activity,
these securities should become increasingly attractive.
Q HOW HAS THE FUND PERFORMED DURING THE REPORTING PERIOD?
A For the 12-month period ended September 30, 1996, the Fund generated a
total return of 3.57 percent/1/ (Class A shares at net asset value). Ad-
ditionally, the Fund's Class A shares provided shareholders with a competitive
distribution rate of 6.52 percent/3/, based upon the maximum offering price as
of September 30, 1996 and a monthly dividend of $0.04625 per share. In con-
trast, as of September 30, the yield on benchmark five-year Treasury notes was
6.45 percent.
For this same period, the Merrill Lynch Intermediate-Term Government Index
had a total return of 5.05 percent. This broad-based index attempts to measure
the market performance of government securities with maturities between one
and ten years. Keep in mind that the index, which is unmanaged, does not re-
flect in its performance any commissions or fees that would be paid by an in-
vestor purchasing the securities it represents.
7
<PAGE>
Q WHAT IS YOUR OUTLOOK FOR THE MONTHS AHEAD?
A We believe economic growth will remain moderate with alternating periods
of faster and slower activity. This, along with expectations for infla-
tion to remain fairly stable, should keep fixed-income securities within their
current yield ranges. Until economic indicators clearly demonstrate a changing
market environment for fixed-income securities, we expect to keep the Fund's
duration close to its current neutral posture and maintain an overweighted po-
sition in mortgage-backed securities.
/s/ Peter W. Hegel /s/ Ted V. Mundy
Peter W. Hegel Ted V. Mundy
Executive Vice President Portfolio Manager
Fixed Income Investments
Please see footnotes on page three
8
<PAGE>
PORTFOLIO OF INVESTMENTS
September 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
COLLATERALIZED MORTGAGE OBLIGATIONS 14.6%
$ 3,490 Capstead Mortgage CMO,
Series 93-2CA3............. 9.713% 08/25/23 $ 3,580,995
12,284 Federal National Mortgage
Association, Series 94-87F. 5.981 03/25/09 12,309,040
5,327 Prudential Home Mortgage
Securities, Series 93-23A7. 10.000 06/25/08 5,545,386
10,000 Salomon Brothers Mortgage
Securities,
Series 93-5A3.............. 7.364 10/25/23 10,000,000
------------
TOTAL COLLATERALIZED MORTGAGE OBLIGATIONS............ 31,435,421
------------
U.S. GOVERNMENT AGENCY OBLIGATIONS 38.2%
9,912 Federal Home Loan Mortgage
Corp. Gold 30 Year Pools... 6.500 02/01/26-05/01/26 9,320,182
9,203 Federal Home Loan Mortgage
Corp. Gold 30 Year Pools... 7.500 02/01/26 9,105,362
9,074 Federal National Mortgage
Association 15 Year Pool
#337543.................... 7.000 10/01/09 8,966,094
10,022 Federal National Mortgage
Association 30 Year Pools.. 7.000 10/01/25-03/01/26 9,671,460
4,827 Federal National Mortgage
Association 30 Year Pools.. 8.500 01/01/22-10/01/24 4,950,783
9,628 Government National
Mortgage Association Pools. 7.500 01/15/26 9,504,676
16,676 Government National
Mortgage Association Pools. 8.000 10/15/21-08/15/24 16,832,220
6,878 Government National
Mortgage Association Pools. 8.500 12/15/17 7,172,365
6,097 Government National
Mortgage Association Pools. 9.000 03/15/18-12/15/29 6,389,078
------------
TOTAL U.S. GOVERNMENT AGENCY OBLIGATIONS............. 81,912,220
------------
U.S. GOVERNMENT OBLIGATIONS 45.9%
10,000 U.S. Treasury Bonds........ 10.750 08/15/05 12,657,800
10,000 U.S. Treasury Bonds........ 7.625 02/15/25 10,729,700
10,000 U.S. Treasury Notes (b).... 8.875 11/15/97 10,317,200
21,500 U.S. Treasury Notes........ 9.250 08/15/98 22,669,170
14,000 U.S. Treasury Notes........ 8.000 08/15/99 14,619,080
22,000 U.S. Treasury Notes (b).... 11.625 11/15/02 27,572,160
------------
TOTAL U.S. GOVERNMENT OBLIGATIONS.................... 98,565,110
------------
FORWARD PURCHASE COMMITMENTS 7.1%
5,000 Federal Home Loan Mortgage
Corp.
Gold 15 Year Nugget
(November Forward)......... 6.000 12/31/23 4,740,650
10,000 U.S. Treasury Notes
(December Forward)......... 9.250 08/15/98 10,474,800
------------
TOTAL FORWARD PURCHASE COMMITMENTS................... 15,215,450
------------
TOTAL LONG-TERM INVESTMENTS 105.8%
(Cost $231,420,842) (a)....................................... 227,128,201
REPURCHASE AGREEMENT 1.1%
Donaldson, Lufkin & Jenrette Securities ($2,270,000 par
collateralized by U.S. Government obligations in a pooled cash
account, dated 9/30/96, to be sold on 10/01/96 at $2,270,359). 2,270,000
LIABILITIES IN EXCESS OF OTHER ASSETS (6.9%)................... (14,773,355)
------------
NET ASSETS 100.0%.............................................. $214,624,846
------------
</TABLE>
(a) At September 30, 1996, cost for federal income tax purposes is
$231,420,842; the aggregate gross unrealized appreciation is $803,954 and
the aggregate gross unrealized depreciation is $5,096,595; resulting in net
unrealized depreciation of $4,292,641.
(b) Assets segregated as collateral for open futures transactions and open
forward commitments.
See Notes to Financial Statements
9
<PAGE>
STATEMENT OF ASSETS AND LIABILITIES
September 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $231,420,842) (Note 1)........ $227,128,201
Short-Term Investments (Note 1).................................. 2,270,000
Receivables:
Securities Sold................................................. 10,238,077
Interest........................................................ 2,917,041
Fund Shares Sold................................................ 27,798
Unamortized Organizational Expenses (Note 1)..................... 3,000
Other............................................................ 60,463
------------
Total Assets.................................................... 242,644,580
------------
LIABILITIES:
Payables:
Securities Purchased............................................ 25,877,919
Fund Shares Repurchased......................................... 965,649
Income Distributions............................................ 710,625
Distributor and Affiliates (Notes 2 and 6)...................... 228,659
Investment Advisory Fee (Note 2)................................ 108,118
Variation Margin on Futures (Note 5)............................ 24,752
Bank Overdraft.................................................. 1,394
Accrued Expenses................................................. 83,973
Deferred Compensation and Retirement Plans (Note 2).............. 18,645
------------
Total Liabilities............................................... 28,019,734
------------
NET ASSETS....................................................... $214,624,846
------------
NET ASSETS CONSIST OF:
Capital (Note 3)................................................. $266,878,426
Accumulated Distributions in Excess of Net Investment Income..... (5,046)
Net Unrealized Depreciation on Securities........................ (4,183,278)
Accumulated Net Realized Loss on Securities...................... (48,065,256)
------------
NET ASSETS....................................................... $214,624,846
------------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net
assets of $45,213,315 and 5,576,196 shares of beneficial
interest issued and outstanding) (Note 3)....................... $ 8.11
Maximum sales charge (4.75%* of offering price)................. .40
------------
Maximum offering price to public................................ $ 8.51
------------
Class B Shares:
Net asset value and offering price per share (Based on net
assets of $150,815,471 and 18,608,946 shares of beneficial
interest issued and outstanding) (Note 3)....................... $ 8.10
------------
Class C Shares:
Net asset value and offering price per share (Based on net
assets of $18,596,060 and 2,294,682 shares of beneficial
interest issued and outstanding) (Note 3)....................... $ 8.10
------------
</TABLE>
*On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements
10
<PAGE>
STATEMENT OF OPERATIONS
For the Year Ended September 30, 1996
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.......................................................... $19,854,952
Other............................................................. 334,260
-----------
Total Income..................................................... 20,189,212
-----------
EXPENSES:
Distribution (12b-1) and Service Fees (Attributed to Classes A, B
and C of $138,911, $1,747,988 and $228,349, respectively) (Note
6)............................................................... 2,115,248
Investment Advisory Fee (Note 2).................................. 1,520,100
Shareholder Services (Note 2)..................................... 398,218
Trustees Fees and Expenses (Note 2)............................... 19,806
Legal (Note 2).................................................... 15,657
Amortization of Organizational Expenses (Note 1).................. 3,250
Other ............................................................ 295,353
-----------
Total Expenses................................................... 4,367,632
Less Expenses Reimbursed (Note 2)................................ 3,200
-----------
Net Expenses..................................................... 4,364,432
-----------
NET INVESTMENT INCOME............................................. $15,824,780
-----------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments ..................................................... $(3,705,680)
Futures.......................................................... 679,386
Forwards......................................................... (750,512)
-----------
Net Realized Loss on Securities................................... (3,776,806)
-----------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period.......................................... 47,132
-----------
End of the Period:
Investments...................................................... (4,292,641)
Futures.......................................................... 109,363
-----------
(4,183,278)
-----------
Net Unrealized Depreciation on Securities During the Period....... (4,230,410)
-----------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES.................... $(8,007,216)
-----------
NET INCREASE IN NET ASSETS FROM OPERATIONS........................ $ 7,817,564
-----------
</TABLE>
See Notes to Financial Statements
11
<PAGE>
STATEMENT OF CHANGES IN NET ASSETS
For the Years Ended September 30, 1996 and 1995
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended Year Ended
September 30, 1996 September 30, 1995
- ---------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................... $ 15,824,780 $ 22,165,708
Net Realized Loss on Securities......... (3,776,806) (14,887,473)
Net Unrealized Appreciation/Depreciation
on Securities During the Period........ (4,230,410) 23,095,865
------------ ------------
Change in Net Assets from Operations.... 7,817,564 30,374,100
------------ ------------
Distributions from Net Investment
Income:
Class A Shares......................... (3,792,860) (5,658,550)
Class B Shares......................... (10,629,590) (14,806,014)
Class C Shares......................... (1,389,674) (2,231,929)
------------ ------------
(15,812,124) (22,696,493)
------------ ------------
Distributions from Net Realized Gain on
Securities:
Class A Shares......................... -0- (44,467)
Class B Shares......................... -0- (131,320)
Class C Shares......................... -0- (20,769)
------------ ------------
-0- (196,556)
------------ ------------
Total Distributions..................... (15,812,124) (22,893,049)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES.............................. (7,994,560) 7,481,051
------------ ------------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold............... 14,763,888 26,939,711
Net Asset Value of Shares Issued Through
Dividend Reinvestment................... 6,411,519 9,373,393
Cost of Shares Repurchased.............. (97,053,619) (84,779,032)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS............................ (75,878,212) (48,465,928)
------------ ------------
TOTAL DECREASE IN NET ASSETS............ (83,872,772) (40,984,877)
NET ASSETS:
Beginning of the Period................. 298,497,618 339,482,495
------------ ------------
End of the Period (Including
undistributed net investment income of
$(5,046) and $35,614, respectively).... $214,624,846 $298,497,618
------------ ------------
</TABLE>
See Notes to Financial Statements
12
<PAGE>
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 6, 1992
Year Ended September (Commencement
30, of Investment
---------------------- Operations) to
Class A Shares 1996 1995 1994 September 30, 1993 (a)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $ 8.38 $8.17 $9.26 $9.43
------ ------ ------- ------
Net Investment Income....... .565 .63 .67 .81
Net Realized and Unrealized
Gain/Loss on Securities.... (.274) .23 (1.0085) (.1795)
------ ------ ------- ------
Total from Investment
Operations................... .291 .86 (.3385) .6305
------ ------ ------- ------
Less:
Distributions from Net
Investment Income.......... .563 .645 .674 .8005
Distributions from Net
Realized Gain on
Securities................. -0- .005 .0775 -0-
------ ------ ------- ------
Total Distributions.......... .563 .65 .7515 .8005
------ ------ ------- ------
Net Asset Value, End of the
Period....................... $8.108 $8.38 $8.17 $9.26
------ ------ ------- ------
Total Return (b)............. 3.57% 10.97% (3.82%) 8.07%(c)
Net Assets at End of the
Period (In millions)......... $45.2 $70.2 $75.3 $92.4
Ratio of Expenses to Average
Net Assets (d)............... 1.13% 1.09% 1.07% 1.07%
Ratio of Net Investment
Income to Average Net Assets
(d).......................... 6.83% 7.67% 7.89% 8.71%
Portfolio Turnover........... 282% 262% 122% 281%*
</TABLE>
*Non-Annualized
(a) Based on average month-end shares outstanding.
(b) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(c) Total return from November 2, 1992 (date the Fund's investment strategy was
implemented) through September 30, 1993 without annualization.
(d) For the year ended September 30, 1996, the impact of expenses reimbursed by
VKAC was less than 0.01% of average net assets. For the period ended
September 30, 1993, the ratios of expenses and net investment income to
average net assets would have been 1.15% and 8.64%, respectively, had VKAC
not reimbursed certain expenses of the Fund.
See Notes to Financial Statements
13
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
October 6, 1992
Year Ended September (Commencement
30, of Investment
---------------------- Operations) to
Class B Shares 1996 1995 1994 September 30, 1993 (a)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period................... $8.38 $8.17 $9.26 $9.43
------ ------ ------- ------
Net Investment Income....... .504 .57 .61 .70
Net Realized and Unrealized
Gain/Loss on Securities.... (.277) .228 (1.0205) (.1475)
------ ------ ------- ------
Total from Investment
Operations................... .227 .798 (.4105) .5525
------ ------ ------- ------
Less:
Distributions from Net
Investment Income.......... .503 .583 .602 .7225
Distributions from Net
Realized Gain on
Securities................. -0- .005 .0775 -0-
------ ------ ------- ------
Total Distributions.......... .503 .588 .6795 .7225
------ ------ ------- ------
Net Asset Value, End of the
Period....................... $8.104 $8.38 $8.17 $9.26
------ ------ ------- ------
Total Return (b)............. 2.70% 10.14% (4.61%) 7.24%(c)
Net Assets at End of the
Period (In millions)......... $150.8 $200.2 $226.7 $242.8
Ratio of Expenses to Average
Net Assets (d)............... 1.89% 1.85% 1.82% 1.81%
Ratio of Net Investment
Income to Average Net Assets
(d).......................... 6.08% 6.92% 7.11% 7.70%
Portfolio Turnover........... 282% 262% 122% 281%*
</TABLE>
*Non-Annualized
(a) Based on average month-end shares outstanding.
(b) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(c) Total return from November 2, 1992 (date the Fund's investment strategy was
implemented) through September 30, 1993 without annualization.
(d) For the year ended September 30, 1996, the impact of expenses reimbursed by
VKAC was less than 0.01% of average net assets. For the period ended
September 30, 1993, the ratios of expenses and net investment income to
average net assets would have been 1.89% and 7.62%, respectively, had VKAC
not reimbursed certain expenses of the Fund.
See Notes to Financial Statements
14
<PAGE>
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended September April 12, 1993
30, (Commencement
---------------------- of Distribution) to
Class C Shares 1996 1995 1994 September 30, 1993 (a)
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of
the Period..................... $8.38 $8.17 $9.25 $9.41
------ ------ ------- ------
Net Investment Income......... .502 .57 .63 .33
Net Realized and Unrealized
Gain/Loss on Securities...... (.275) .228 (1.0305) (.1561)
------ ------ ------- ------
Total from Investment
Operations..................... .227 .798 (.4005) .1739
------ ------ ------- ------
Less:
Distributions from Net
Investment Income............ .503 .583 .602 .3339
Distributions from Net
Realized Gain on Securities.. -0- .005 .0775 -0-
------ ------ ------- ------
Total Distributions............ .503 .588 .6795 .3339
------ ------ ------- ------
Net Asset Value, End of the
Period......................... $8.104 $8.38 $8.17 $9.25
------ ------ ------- ------
Total Return (b)............... 2.70% 10.14% (4.51%) 2.10%*
Net Assets at End of the Period
(In millions).................. $18.6 $28.1 $37.5 $37.8
Ratio of Expenses to Average
Net Assets (c)................. 1.89% 1.85% 1.82% 1.76%
Ratio of Net Investment Income
to Average Net Assets (c)...... 6.08% 6.94% 7.08% 7.26%
Portfolio Turnover............. 282% 262% 122% 281%*
</TABLE>
*Non-Annualized
(a) Based on average month-end shares outstanding.
(b) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
(c) For the year ended September 30, 1996, the impact of expenses reimbursed by
VKAC was less than 0.01% of average net assets. For the period ended
September 30, 1993, the ratios of expenses and net investment income to
average net assets would have been 1.83% and 7.18%, respectively, had VKAC
not reimbursed certain expenses of the Fund.
See Notes to Financial Statements
15
<PAGE>
NOTES TO FINANCIAL STATEMENTS
September 30, 1996
- -------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital U.S. Government Trust for Income (the "Fund") is
organized as a Delaware business trust, and is registered as a diversified
open-end management investment company under the Investment Company Act of
1940, as amended. The Fund's investment objective is to seek a high level of
income by primarily investing in debt securities issued or guaranteed by the
U.S. Government, its agencies or instrumentalities. The Fund commenced invest-
ment operations on October 6, 1992 with two classes of common shares, Class A
and Class B shares. The distribution of the Fund's Class C shares commenced on
April 12, 1993.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The prep-
aration of financial statements in conformity with generally accepted account-
ing principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of con-
tingent 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.
For those securities where quotations or prices are not available, valuations
are determined 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 Fund may purchase and sell securities on a "when issued" or "delayed de-
livery" basis, with settlement to occur at a later date. The value of the se-
curity so purchased is subject to market fluctuations during this period. The
Fund will maintain, in a segregated account with its custodian, assets having
an aggregate value at least equal to the amount of the when issued or delayed
delivery purchase commitments until payment is made. At September 30, 1996,
there were no when issued or delayed delivery purchase commitments.
The Fund invests in repurchase agreements, which are short-term investments
in which the Fund acquires ownership of a debt security and the seller agrees
to repurchase the security at a future time and specified price. The Fund may
invest independently in repurchase agreements, or transfer uninvested cash
balances into a pooled cash account along with other investment companies ad-
vised by Van Kampen American Capital Asset Management, Inc. (the "Adviser") or
its affiliates, the daily aggregate of which is invested in repurchase agree-
ments. Repurchase agreements are fully collateralized by the underlying debt
security. The Fund will make payment for such securities only upon physical
delivery or evidence of book entry
16
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
transfer to the account of the custodian bank. The seller is required to main-
tain the value of the underlying security at not less than the repurchase pro-
ceeds due the Fund.
C. INVESTMENT INCOME-Interest income is recorded on an accrual basis. Original
issue discount is amortized over the expected life of each applicable securi-
ty. Premiums on debt securities are not amortized. Market discounts are recog-
nized at the time of sale as realized gains for book purposes and ordinary
income for tax purposes.
D. ORGANIZATIONAL EXPENSES-The Fund has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred
in connection with the Fund's organization in the amount of $15,000. These
costs are being amortized on a straight line basis over the 60 month period
ending September 30, 1997. The Adviser has agreed that in the event any of the
initial shares of the Fund originally purchased by VKAC are redeemed during
the amortization period, the Fund will be reimbursed for any unamortized orga-
nizational expenses in the same proportion as the number of shares redeemed
bears to the number of initial shares held at the time of redemption.
E. FEDERAL INCOME TAXES-It is the Fund's policy to comply with the require-
ments of the Internal Revenue Code applicable to regulated investment compa-
nies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
The Fund 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 these losses against any future realized capi-
tal gains. At September 30, 1996, the Fund had an accumulated capital loss
carryforward for tax purposes of $45,290,497 which will expire between Septem-
ber 30, 2003 and 2004. Net realized loss differs for financial and tax report-
ing purposes as a result of post October 31 losses which are not recognized
for tax purposes until the first day of the following fiscal year and gains
recognized for tax purposes on open futures positions at September 30, 1996.
F. DISTRIBUTION OF INCOME AND GAINS-The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are distrib-
uted annually. Distributions from net realized gains for book purposes may in-
clude short-term capital gains and gains on futures transactions. All short-
term capital gains and a portion of futures gains are included in ordinary
income for tax purposes.
17
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
Permanent book and tax basis differences relating to the accretion of market
discounts and recognition of gains/losses on paydowns of mortgage pool obliga-
tions totaling $53,316 were reclassified from accumulated undistributed net
investment income to accumulated net realized gain/loss on securities.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee, pay-
able monthly, of .60% of the Fund's average daily net assets.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Fund, of which a trustee of the Fund is an affiliated person.
For the year ended September 30, 1996, the Fund recognized expenses of ap-
proximately $91,300 representing VKAC's cost of providing accounting services
to the Fund. These services are provided by VKAC at cost.
ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the year ended
September 30, 1996, the Fund recognized expenses of approximately $312,700,
representing ACCESS' cost of providing transfer agency and shareholder serv-
ices plus a profit.
Additionally, for the year ended September 30, 1996, the Fund paid VKAC ap-
proximately $27,800 related to the direct cost of consolidating the VKAC open-
end fund complex. Payment was contingent upon the realization by the Fund of
cost efficiencies resulting from the consolidation.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers
of VKAC.
The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer
all or a portion of their compensation to a later date. The retirement plan
covers those trustees who are not officers of VKAC. During the year ended Sep-
tember 30, 1996, VKAC reimbursed the Fund for expenses related to the retire-
ment plan. VKAC plans to continue to reimburse these expenses for the
remainder of the 1996 calendar year.
At September 30, 1996, VKAC owned 5,302 shares each of Classes A and B, re-
spectively, and 53 shares of Class C.
18
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of shares of beneficial interest, Clas-
ses A, B and C, each with a par value of $.01 per share. There are an unlimited
number of shares of each class authorized.
At September 30, 1996, capital aggregated $56,972,639, $185,219,741 and
$24,686,046 for Classes A, B and C, respectively. For the year ended September
30, 1996, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A............................................ 549,325 $ 4,588,334
Class B............................................ 953,675 7,950,236
Class C............................................ 266,808 2,225,318
----------- ------------
Total Sales......................................... 1,769,808 $ 14,763,888
----------- ------------
Dividend Reinvestment:
Class A............................................ 182,960 $ 1,516,218
Class B............................................ 509,206 4,213,922
Class C............................................ 82,271 681,379
----------- ------------
Total Dividend Reinvestment......................... 774,437 $ 6,411,519
----------- ------------
Repurchases:
Class A............................................ (3,531,939) $(29,385,104)
Class B............................................ (6,746,410) (55,996,788)
Class C............................................ (1,403,810) (11,671,727)
----------- ------------
Total Repurchases................................... (11,682,159) $(97,053,619)
----------- ------------
</TABLE>
19
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
At September 30, 1995, capital aggregated $80,253,191, $229,052,371 and
$33,451,076 for Classes A, B and C, respectively. For the year ended September
30, 1995, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A............................................ 1,088,787 $ 8,966,043
Class B............................................ 1,628,971 13,459,583
Class C............................................ 550,021 4,514,085
----------- ------------
Total Sales......................................... 3,267,779 $ 26,939,711
----------- ------------
Dividend Reinvestment:
Class A............................................ 277,298 $ 2,282,526
Class B............................................ 725,355 5,967,976
Class C............................................ 136,641 1,122,891
----------- ------------
Total Dividend Reinvestment......................... 1,139,294 $ 9,373,393
----------- ------------
Repurchases:
Class A............................................ (2,204,895) $(18,106,434)
Class B............................................ (6,211,959) (50,895,128)
Class C............................................ (1,929,164) (15,777,470)
----------- ------------
Total Repurchases................................... (10,346,018) $(84,779,032)
----------- ------------
</TABLE>
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). The CDSC will be imposed
on most redemptions made within five years of the purchase for Class B and one
year of the purchase for Class C as detailed in the following schedule. The
Class B and C shares bear the expense of their respective deferred sales ar-
rangements, including higher distribution and service fees and incremental
transfer agency costs.
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C>
First........................................................... 4.00% 1.00%
Second.......................................................... 4.00% None
Third........................................................... 3.00% None
Fourth.......................................................... 2.50% None
Fifth........................................................... 1.50% None
Sixth and Thereafter............................................ None None
</TABLE>
20
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
For the year ended September 30, 1996, VKAC, as Distributor for the Fund,
received commissions on sales of the Fund's Class A shares of approximately
$9,300 and CDSC on redeemed shares of approximately $811,500. Sales charges do
not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding short-term investments and forward purchase commitments, were
$695,324,803 and $780,006,633, respectively.
5. 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 Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of
its portfolio or generate potential gain. All of the Fund's portfolio hold-
ings, including derivative instruments, are marked to market each day with the
change in value reflected in the unrealized appreciation/depreciation on secu-
rities. Upon disposition, a realized gain or loss is recognized accordingly,
except in instances where the Fund accepts delivery of a security underlying a
forward commitment. In these situations, the recognition of gain or loss is
postponed until the disposal of this underlying security.
Summarized below are the specific types of derivative financial instruments
used by the Fund.
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
Fund generally invests in exchange traded futures contracts on U.S. Treasury
Bonds and typically closes the contract prior to the delivery date. These con-
tracts are generally used to manage the portfolio's effective maturity and du-
ration.
Upon entering into futures contracts, the Fund 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).
21
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
Transactions in futures contracts, each with a par value of $100,000, for
the year ended September 30, 1996, were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- --------------------------------------------------------------------------------
<S> <C>
Outstanding at September 30, 1995.................................... 265
Futures Opened....................................................... 5,765
Futures Closed....................................................... (5,880)
------
Outstanding at September 30, 1996.................................... 150
------
</TABLE>
The futures contracts outstanding as of September 30, 1996, and the descrip-
tions and unrealized appreciation/depreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
- --------------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Long Bond Future
Dec 1996--Buys to Open............................... 20 $ 23,499
5-Year U.S. Treasury Note Future
Dec 1996--Sells to Open.............................. 30 (378)
10-Year U.S. Treasury Note Future
Dec 1996--Buys to Open............................... 100 86,242
--- --------
150 $109,363
--- --------
</TABLE>
B. FORWARD COMMITMENTS-The Fund trades certain securities under the terms of
forward commitments, whereby the settlement occurs at a specific future date.
Forward commitments are privately negotiated transactions between the Fund and
dealers. While forward commitments are outstanding, the Fund maintains suffi-
cient collateral of cash or securities in a segregated account with its custo-
dian. Forward purchase commitments are included in the portfolio of
investments, with changes in value reflected as a component of unrealized
appreciation/depreciation on investments.
22
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
September 30, 1996
- -------------------------------------------------------------------------------
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 and a service plan (col-
lectively the "Plans"). The Plans govern payments for the distribution of the
Fund's shares, ongoing shareholder services and maintenance of shareholder ac-
counts.
Annual fees under the Plans of up to .25% of Class A net assets and 1.00%
each of Class B and Class C net assets are accrued daily. Included in these
fees for the year ended September 30, 1996, are payments to VKAC of approxi-
mately $1,540,900.
23
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
TO THE SHAREHOLDERS AND BOARD OF TRUSTEES OF
VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
In our opinion, the accompanying statement of assets and liabilities, includ-
ing the portfolio of investments, and the related statements of operations and
of changes in net assets and the financial highlights present fairly, in all
material respects, the financial position of Van Kampen American Capital U.S.
Government Trust for Income (the "Fund") at September 30, 1996, and the re-
sults of its operations, the changes in its net assets and the financial high-
lights for each of the periods presented, in conformity with generally
accepted accounting principles. These financial statements and financial high-
lights (hereafter referred to as "financial statements") are the responsibil-
ity of the Fund's management; our responsibility is to express an opinion on
these financial statements based on our audits. We conducted our audits of
these financial statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reason-
able assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence support-
ing the amounts and disclosures in the financial statements, assessing the ac-
counting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits, which included confirmation of securities at September 30, 1996 by
correspondence with the custodian and brokers and the application of alterna-
tive auditing procedures where confirmations from brokers were not received,
provide a reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Houston, Texas
November 11, 1996
24
<PAGE>
VAN KAMPEN AMERICAN CAPITAL U.S. GOVERNMENT TRUST FOR INCOME
BOARD OF TRUSTEES
J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
DONALD C. MILLER - Co-Chairman
JACK E. NELSON
JEROME L. ROBINSON
FERNANDO SISTO - Co-Chairman
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE
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*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
DISTRIBUTOR
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
SHAREHOLDER SERVICING AGENT
ACCESS INVESTOR
SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
*"Interested" persons of the Fund, as defined in the Investment Company Act of
1940.
(C)Van Kampen American Capital Distributors, Inc., 1996
All rights reserved.
/SM/denotes a service mark of Van Kampen American Capital Distributors, Inc.
This report is submitted for the general information of the shareholders of
the Fund. It is not authorized for distribution to prospective investors un-
less it has been preceded or is accompanied by an effective prospectus of the
Fund which contains additional information on how to purchase shares, the
sales charge, and other pertinent data.
25
