<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 4
Portfolio of Investments......................... 5
Statement of Assets and Liabilities.............. 11
Statement of Operations.......................... 12
Statement of Changes in Net Assets............... 13
Financial Highlights............................. 14
Notes to Financial Statements.................... 15
</TABLE>
VKA SAR 6/96
<PAGE> 2
LETTER TO SHAREHOLDERS
May 15, 1996
Dear Shareholder,
While interest rates drifted
downward during the fourth quarter of
last year, such was not the case in the
first quarter of 1996. Early in the
quarter, municipal bond prices
demonstrated increased volatility in
conjunction with February's economic
announcements, which revealed a revival [PHOTO]
in economic growth, impressive
employment levels, and moderate
inflation. This positive economic DENNIS J. MCDONNELL AND DON G. POWELL
environment, however, did not translate
into positive movement for the bond markets. Instead, the markets became wary,
because inflation often accompanies economic growth.
Other factors influencing the municipal bond market early in the year
included:
- Intense weather conditions, which hindered distribution and manufacturing,
were experienced by much of the United States and affected certain
municipal bond sectors.
- The expectation that a federal budget agreement was forthcoming helped
bolster municipal bonds, especially at the longer end of the spectrum.
- The proposal of tax reform--and the threat of municipal bonds having
diminished tax-exempt status--continued to dampen demand for municipals,
resulting in lower bond prices.
We believe the beginning of 1996 reflected the market's reaction to the
possibility of a return to long-term economic growth. This, coupled with
continued low inflationary conditions, has served to put the Federal Reserve
Board in a neutral policy mode, bringing relative calm to the market--although
currently at higher interest rate levels.
PERFORMANCE SUMMARY
The Van Kampen American Capital Advantage Municipal Income Trust's (ticker
symbol VKA) common stock price remained relatively stable during the six-month
period, closing at $14.375, while the general municipal bond market was down 4
percent for the same period, according to the Bond Buyer's 40 Municipal Bond
Index.
For the six-months ended April 30, 1996, the Trust posted a total return of
3.46 percent(1), based on market price. Longer term, the Trust achieved a
one-year total return of 8.10 percent(1), based on market price for the period
ended April 30, 1996, including reinvestment of dividends.
Continued on page two
1
<PAGE> 3
Many closed-end municipal bond funds are currently offering higher after-tax
yields than taxable income alternatives, and your Trust is no exception. Based
on the closing common stock price on April 30, 1996, the Advantage Municipal
Income Trust had a tax-exempt distribution rate of 7.10 percent(3). In other
words, investors in the 36 percent federal income tax bracket would have to earn
a yield of 11.09 percent(4) on a taxable investment to equal your Trust's
tax-exempt distribution rate.
MARKET OUTLOOK
The economy rebounded in the first quarter of 1996, despite poor weather in
the East and the remnants of a slow fourth quarter of 1995, which was hindered
by weak construction activity, two government shutdowns, and a strike at Boeing.
We believe the momentum of the first quarter can carry into the second, due in
part to renewed auto production in the aftermath of the General Motors strike
and an end to the budget stalemate between the White House and Congress. We
expect a modest slowdown in the summer months, as higher interest rates could
slow activity in interest-sensitive sectors of the economy, such as housing.
Top 5 Portfolio Holdings by Industry as of April 30, 1996
Single-Family Housing............. 18.7%
Industrial Revenue................ 11.1%
Transportation.................... 10.1%
Health Care........................ 9.7%
General Purpose.................... 8.6%
The Fed's protracted period of easing, and relatively neutral stance, favors
the growth we are currently experiencing. Given the strong employment situation
and commodity price increases, we think the Fed will await further economic
evidence before adjusting interest rates again--probably summertime at the
earliest. So far, guides such as the Consumer Price Index continue to indicate
modest levels of inflation. More importantly, we continue to see few signs of
emerging inflation in either unit labor costs, hourly earnings or the employment
cost index.
- --------------------------------------------------------------------------------
INVESTMENT TERM: REVENUE BONDS
Revenue bonds are one of the three most common types of municipal bonds--the
other two are general obligation bonds and municipal notes. Revenue bonds
are issued to finance income-generating projects such as turnpikes, toll
bridges and airports. The revenues these projects bring in are used to pay
interest and principal to bondholders.
- --------------------------------------------------------------------------------
Continued on page three
2
<PAGE> 4
Finally, as the November elections approach, the debate on tax reform may
grow. We believe the outcome in the long run will be positive, or at worst
neutral, for municipal bonds. That's good news for the market, which was
concerned that flat tax proposals could threaten the tax-exempt status of
municipal bonds. While the debate may not be over and legislation may be
forthcoming, the market should be more confident.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality
as of April 30, 1996
<TABLE>
<S> <C>
AAA................ 42%
AA................. 13%
A.................. 18%
BBB................ 21%
BB................. 5%
Non-Rated.......... 1%
</TABLE>
BASED UPON CREDIT QUALITY RATINGS ISSUED BY STANDARD & POOR'S.
FOR SECURITIES NOT RATED BY STANDARD & POOR'S, THE MOODY'S RATING IS USED.
Indeed, we expect investor demand for municipal securities to exceed
supply, which should add price stability to the general market. And with
municipal bond yields currently at attractive levels relative to Treasuries,
investor demand for tax-exempt securities should increase.
In summary, our view of the general municipal market is positive. From the
decreasing likelihood of tax reform in the near term to specific market
conditions, we believe the market is on solid ground. With our dedication to
comprehensive research and long-term investment perspective, we believe your
Trust is in a position to benefit in the coming months.
Sincerely,
[SIG]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[SIG]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
3
<PAGE> 5
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1996
VAN KAMPEN AMERICAN CAPITAL ADVANTAGE MUNICIPAL INCOME TRUST
(NYSE TICKER SYMBOL--VKA)
<TABLE>
<CAPTION>
COMMON SHARE TOTAL RETURNS
<S> <C>
Six-month total return based on market price(1)........... 3.46%
Six-month total return based on NAV(2).................... .49%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................ 7.10%
Taxable-equivalent distribution rate as a % of closing
common stock price(4)................................... 11.09%
SHARE VALUATIONS
Net asset value........................................... $ 15.19
Closing common stock price................................ $14.375
Six-month high common stock price (02/13/96).............. $15.375
Six-month low common stock price (03/15/96)............... $14.125
Preferred share (Series A) rate(5)........................ 3.790%
Preferred share (Series B) rate(5)........................ 3.750%
Preferred share (Series C) rate(5)........................ 3.640%
Preferred share (Series D) rate(5)........................ 3.870%
</TABLE>
(1)Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions for
the period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common stock price at the end of the period
indicated.
(2)Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3)Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4)The taxable-equivalent distribution rate is calculated assuming a 36% federal
income tax bracket.
(5)See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
4
<PAGE> 6
PORTFOLIO OF INVESTMENTS
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 1.1%
$ 6,050 Alabama Wtr Pollutn Ctl Auth Revolving Fund Ln
Ser A (AMBAC Insd)............................... 5.000% 08/15/15 $ 5,456,192
------------
ALASKA 2.8%
5,000 Alaska St Hsg Fin Corp Ser A (MBIA Insd)......... 5.875 12/01/30 4,776,150
10,000 Alaska St Hsg Fin Corp Ser A Rfdg................ 5.000 12/01/18 8,649,300
------------
13,425,450
------------
ARIZONA 1.3%
5,500 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Ser A Rfdg (FSA Insd)...... 7.250 07/15/10 6,030,915
------------
CALIFORNIA 7.0%
4,215 California Hlth Fac Fin Auth Rev Kaiser
Permanente Med Cent.............................. 5.450 10/01/13 3,929,729
5,000 California St Pub Wks Brd Lease Rev Var CA St
Univ Projs Ser A................................. 5.250 12/01/13 4,537,650
10,000 Foothill / Eastern Tran Corridor Agy CA Toll Road
Rev Sr Lien Ser A................................ * 01/01/20 2,026,000
2,000 Huntington Park, CA Redev Agy Single Family
Residential Mtg Rev Ser A Rfdg (FHA Gtd)......... 8.000 12/01/19 2,513,060
2,500 Los Angeles Cnty, CA Pub Wks Fin Auth Rev Cap
Constr Rfdg (AMBAC Insd)......................... 5.000 03/01/11 2,315,525
7,500 Los Angeles Cnty, CA Tran Comm Sales Tax Rev Prop
C Ser A (Prerefunded @ 07/01/02)................. 6.500 07/01/20 8,342,700
10,000 San Diego, CA Indl Dev Rev San Diego Gas & Elec
Ser A (Embedded Cap) (MBIA Insd)................. 6.100 09/01/18 9,938,600
------------
33,603,264
------------
COLORADO 4.0%
8,500 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E-470 Proj Ser C................................. * 08/31/26 916,980
2,675 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
B1............................................... 7.900 12/01/25 2,970,935
1,840 Colorado Hsg Fin Auth Single Family Pgm Sr Ser D1
Rfdg............................................. 8.000 12/01/24 2,049,061
6,170 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
E................................................ 8.125 12/01/24 6,851,045
2,000 Denver, CO City & Cnty Arpt Rev Ser B............ 7.500 11/15/25 2,113,840
3,215 Denver, CO City & Cnty Arpt Rev Ser C............ 6.350 11/15/01 3,375,814
1,000 Meridian Metro Dist CO Peninsular & Oriental
Steam Navig Co Rfdg.............................. 7.500 12/01/11 1,079,340
------------
19,357,015
------------
DISTRICT OF COLUMBIA 1.1%
5,000 District of Columbia Rev Howard Univ Ser A (MBIA
Insd)............................................ 7.250 10/01/20 5,430,900
------------
</TABLE>
See Notes to Financial Statements
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
GEORGIA 1.1%
$ 1,000 Atlanta, GA Spl Purp Fac Rev Delta Airls Ser B... 7.900% 12/01/18 $ 1,067,500
3,770 Monroe Cnty, GA Dev Auth Pollutn Ctl Rev
Oglethorpe Pwr Corp Scherer Ser A................ 6.800 01/01/12 4,065,191
------------
5,132,691
------------
HAWAII 1.5%
5,045 Hawaii St Arpt Sys Rev 2nd Ser (FGIC Insd)....... 7.500 07/01/20 5,517,061
1,705 Hawaii St Hsg Fin & Dev Corp Single Family Mtg
Purp Rev Ser A (FHA Gtd)......................... 8.125 07/01/17 1,785,783
------------
7,302,844
------------
ILLINOIS 5.9%
1,620 Aurora, IL Single Family Mtg Rev Ser B Rfdg (GNMA
Collateralized).................................. 8.050 09/01/25 1,773,641
3,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev American
Airls Inc Proj Ser B............................. 7.875 11/01/25 3,230,940
5,000 Chicago, IL O'Hare Intl Arpt Spl Fac Rev Intl
Terminal (MBIA Insd)............................. 6.750 01/01/18 5,210,150
5,000 Chicago, IL Sch Fin Auth Ser A (MBIA Insd)....... 5.000 06/01/09 4,730,750
3,000 Cicero, IL (MBIA Insd)........................... 6.500 12/01/14 3,136,410
3,545 Illinois Edl Fac Auth Rev Lake Forest College
(FSA Insd)....................................... 6.750 10/01/21 3,766,350
5,000 Regional Tran Auth IL Ser B (AMBAC Insd)......... 8.000 06/01/17 6,310,200
------------
28,158,441
------------
INDIANA 1.8%
4,000 Indiana Hlth Fac Fin Auth Hosp Rev Cmnty Hosps
Proj (MBIA Insd)................................. 6.850 07/01/22 4,231,160
2,000 Indiana Hlth Fac Fin Auth Hosp Rev Columbus Regl
Hosp Rfdg (FSA Insd)............................. 7.000 08/15/15 2,262,400
2,000 Indianapolis, IN Loc Pub Impt Bond Bank Ser D.... 6.500 02/01/22 2,019,960
------------
8,513,520
------------
KANSAS 2.3%
5,500 Burlington, KS Pollutn Ctl Rev KS Gas & Elec Co
Proj Rfdg (MBIA Insd)............................ 7.000 06/01/31 6,025,745
1,395 Sedgwick & Shawnee Cntys, KS Single Family Rev
Coll Mtg Ser A Rfdg (GNMA Collateralized)........ 8.050 05/01/24 1,543,777
3,025 Sedgwick Cnty, KS Single Family Mtg Rev Coll Ser
A Rfdg (GNMA Collateralized)..................... 8.125 05/01/24 3,348,039
------------
10,917,561
------------
KENTUCKY 1.7%
3,750 Kenton Cnty, KY Arpt Brd Arpt Rev Spl Fac Delta
Airls Proj Ser A................................. 7.125 02/01/21 3,896,925
4,450 Louisville & Jefferson Cnty, KY Metro Swr Dist
Drainage Rev Rfdg (MBIA Insd).................... 5.300 05/15/19 4,081,807
------------
7,978,732
------------
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
LOUISIANA 1.7%
$ 1,950 Louisiana Hsg Fin Agy Mtg Rev Multi Family
Emerald Pointe Apts (FHA Gtd).................... 7.100% 11/01/33 $ 2,026,576
2,515 Louisiana Hsg Fin Agy Mtg Rev Single Family
Access Pgm Ser B (GNMA Collateralized)........... 8.000 03/01/25 2,773,844
3,000 Saint Charles Parish, LA Environmental Impt Rev
LA Pwr & Lt Co Ser A (AMBAC Insd)................ 6.875 07/01/24 3,161,130
------------
7,961,550
------------
MARYLAND 1.9%
9,000 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty Dev
Single Family Pgm 3rd Ser (FHA Gtd).............. 7.375 04/01/26 9,265,500
------------
MASSACHUSETTS 3.1%
2,500 Chelsea, MA Sch Proj Ln Act 1948 (AMBAC Insd).... 6.500 06/15/12 2,641,200
3,955 Massachusetts Bay Tran Auth MA Genl Tran Sys Ser
A Rfdg........................................... 5.500 03/01/12 3,878,945
2,250 Massachusetts Bay Tran Auth MA Genl Tran Sys Ser
B Rfdg (MBIA Insd) (b)........................... 6.000 03/01/10 2,325,308
3,500 Massachusetts Muni Whsl Elec Co Pwr Supply Sys
Rev Ser A Rfdg (AMBAC Insd)...................... 5.000 07/01/10 3,268,580
3,250 Massachusetts St Hlth & Edl Fac Auth Rev Saint
Mem Med Cent Ser A............................... 6.000 10/01/23 2,638,252
------------
14,752,285
------------
MICHIGAN 4.1%
1,680 Michigan Higher Edl Fac Auth Rev Ltd Oblig Hope
College Proj Rfdg (Connie Lee Insd).............. 7.000 10/01/14 1,830,679
3,350 Michigan St Hosp Fin Auth Rev Hosp Mid-MI Oblig
Group............................................ 6.800 12/01/14 3,431,673
10,900 Michigan St Hsg Dev Auth Rental Hsg Rev Ser A
Rfdg............................................. 6.600 04/01/12 11,210,650
3,000 Michigan St Strategic Fund Ltd Oblig Rev Ser CC
Rfdg (FGIC Insd)................................. 6.950 09/01/21 3,238,350
------------
19,711,352
------------
MINNESOTA 1.1%
6,250 Southern MN Muni Pwr Agy Pwr Supply Sys Rev Ser A
Rfdg (MBIA Insd)................................. 4.750 01/01/16 5,351,250
------------
MISSISSIPPI 3.0%
6,795 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser B (GNMA Collateralized)........... 7.900 03/01/25 7,492,371
2,620 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser C (GNMA Collateralized)........... 8.125 12/01/24 2,899,135
3,775 Mississippi Home Corp Single Family Rev Mtg
Access Pgm Ser E (GNMA Collateralized)........... 8.100 12/01/25 4,165,712
------------
14,557,218
------------
MISSOURI 0.5%
2,100 Kansas City, MO Arpt Rev Genl Impt Ser A (FSA
Insd)............................................ 6.900 09/01/10 2,287,782
------------
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
w
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW JERSEY 5.3%
$10,000 New Jersey Econ Dev Auth St Contract Econ
Recovery (Embedded Cap).......................... 5.900% 03/15/21 $ 9,908,100
8,000 New Jersey Econ Dev Auth Wtr Fac Rev NJ American
Wtr Co Inc Proj Ser A (FGIC Insd)................ 6.875 11/01/34 8,562,160
2,000 New Jersey St Hwy Auth Garden St Pkwy Genl Rev Sr
Pkwy............................................. 6.250 01/01/14 2,069,260
4,650 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth Rev Pub
Svc Elec & Gas Ser D Rfdg (MBIA Insd)............ 6.550 10/01/29 4,865,899
------------
25,405,419
------------
NEW YORK 21.9%
1,500 Broome Cnty, NY Ctfs Partn Pub Safety Fac (MBIA
Insd)............................................ 5.250 04/01/15 1,382,445
1,500 Metropolitan Tran Auth NY Tran Fac Rev Ser K
Rfdg............................................. 6.250 07/01/11 1,506,975
4,250 New York City Indl Dev Agy Civic Fac Rev USTA
Natl Tennis Cent Proj (FSA Insd)................. 6.375 11/15/14 4,445,713
7,500 New York City Rfdg Ser I......................... 5.875 03/15/18 6,952,050
10 New York City Ser A.............................. 8.000 08/15/19 11,160
10,000 New York City Ser B (Embedded Cap)............... 6.600 10/01/16 10,079,200
1,650 New York City Ser C.............................. 7.125 08/15/12 1,710,605
1,325 New York City Ser C.............................. 7.000 08/15/16 1,388,017
2,875 New York City Ser C.............................. 7.250 08/15/24 3,016,306
3,970 New York St Dorm Auth Rev City Univ Ser F........ 5.000 07/01/14 3,394,787
2,000 New York St Dorm Auth Rev City Univ Sys Cons Ser
A................................................ 5.625 07/01/16 1,878,300
2,600 New York St Dorm Auth Rev Cons City Univ Sys 2nd
Genl Ser A....................................... 5.750 07/01/13 2,494,388
5,050 New York St Dorm Auth Rev Cons City Univ Sys 2nd
Genl Ser B....................................... 5.375 07/01/07 4,832,900
4,050 New York St Dorm Auth Rev Court Fac Lease Ser
A................................................ 5.300 05/15/07 3,902,418
5,000 New York St Dorm Auth Rev St Univ Edl Fac Ser A
Rfdg............................................. 5.500 05/15/08 4,850,100
2,000 New York St Dorm Auth Rev St Univ Edl Fac Ser
B................................................ 7.500 05/15/11 2,282,620
3,000 New York St Energy Resh & Dev Auth Elec Fac Rev
Cons Edison Co of NY Inc Proj Ser A.............. 6.750 01/15/27 3,109,470
4,175 New York St Med Care Fac Fin Agy Rev Mental Hlth
Services Fac Ser A............................... 7.500 02/15/21 4,591,080
2,300 New York St Med Care Fac Fin Agy Rev Mental Hlth
Services Impt Ser B.............................. 7.375 02/15/14 2,462,495
5,000 New York St Med Care Fac Fin Agy Rev NY Downtown
Hosp Ser A....................................... 6.800 02/15/20 5,141,750
6,750 New York St Med Care Fac Fin Agy Rev NY Hosp Mtg
Ser A (AMBAC Insd)............................... 6.300 08/15/06 7,342,650
7,000 New York St Med Care Fac Fin Agy Rev NY Hosp Mtg
Ser A (AMBAC Insd)............................... 6.400 08/15/07 7,636,230
2,000 New York St Med Care Fac Fin Agy Rev NY Hosp Mtg
Ser A (AMBAC Insd)............................... 6.600 02/15/11 2,135,900
3,000 New York St Pwr Auth Rev & Genl Purp Ser Y....... 6.750 01/01/18 3,230,400
7,500 New York St Thruway Auth Svc Contract Rev Loc Hwy
& Brdg........................................... 5.250 04/01/13 6,694,425
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
NEW YORK (CONTINUED)
$ 7,405 New York St Urban Dev Corp Rev Correctional Cap
Fac Ser 6........................................ 5.250% 01/01/11 $ 6,673,534
2,000 Triborough Brdg & Tunl Auth NY Rev Genl Purp Ser
X................................................ 6.500 01/01/19 2,107,640
------------
105,253,558
------------
NORTH CAROLINA 4.3%
10,000 North Carolina Eastn Muni Pwr Agy Pwr Sys Rev Ser
B Rfdg (Embedded Cap)............................ 6.000 01/01/14 9,816,100
11,000 North Carolina Muni Pwr Agy No 1 Catawba Elec Rev
(Embedded Cap)................................... 6.000 01/01/12 10,998,900
------------
20,815,000
------------
OHIO 0.1%
500 Butler Cnty, OH Waterworks Rev Butler Cnty Wtr
Dist (AMBAC Insd)................................ 5.125 12/01/21 455,570
------------
OKLAHOMA 0.4%
2,000 Oklahoma City, OK Indl & Cultural Fac Trust Rev
Dist Heating & Cooling Trigen.................... 6.750 09/15/17 2,048,860
------------
PENNSYLVANIA 0.9%
4,000 Pennsylvania Intergovt Coop Auth Spl Tax Rev
Philadelphia Funding Pgm (FGIC Insd)............. 6.750 06/15/21 4,293,800
------------
RHODE ISLAND 1.6%
7,800 Rhode Island Hsg & Mtg Fin Corp Homeownership
Oppty Ser 5...................................... 6.400 04/01/24 7,828,860
------------
TENNESSEE 1.1%
5,000 Tennessee Hsg Dev Agy Homeownership Proj T....... 7.375 07/01/23 5,180,400
------------
TEXAS 6.1%
4,000 Brazos River Auth TX Pollutn Ctl Rev Coll TX
Utils Elec Co Proj A............................. 7.875 03/01/21 4,392,200
1,000 Brazos, TX Higher Edl Auth Inc Student Ln Rev
Subser A2 Rfdg................................... 6.800 12/01/04 1,058,500
1,430 Brazos, TX Higher Edl Auth Inc Student Ln Rev
Subser C2 Rfdg................................... 7.100 11/01/04 1,541,469
5,000 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
American Airls Inc............................... 7.250 11/01/30 5,310,050
5,340 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
Delta Airls Inc.................................. 7.625 11/01/21 5,722,130
1,500 Dallas-Fort Worth, TX Intl Arpt Fac Impt Corp Rev
Delta Airls Inc.................................. 7.125 11/01/26 1,551,735
5,140 Little Elm, TX Indpt Sch Dist Rfdg (PSFG Insd)... 6.750 08/15/29 5,658,986
2,000 Tarrant Cnty, TX Jr College Dist................. 5.050 02/15/10 1,897,320
2,000 Texas St Dept Hsg & Cmnty Affairs Single Family
Rev Mtg Jr Lien Ser A Rfdg....................... 8.100 09/01/15 2,189,700
------------
29,322,090
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- --------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
UTAH 1.3%
$ 4,500 Intermountain Pwr Agy UT Pwr Supply Rev Ser B.... 7.000% 07/01/21 $ 4,779,360
1,525 Salt Lake City, UT Arpt Rev Delta Airls Inc
Proj............................................. 7.900 06/01/17 1,612,154
------------
6,391,514
------------
WASHINGTON 1.1%
1,400 King Cnty, WA Hsg Auth Hsg Rev Rev Pooled Sr Ser
A Rfdg........................................... 6.700 03/01/15 1,444,450
3,450 Washington St Pub Pwr Supply Sys Nuclear Proj No
2 Rev Ser B Rfdg (FSA Insd)...................... 7.000 07/01/12 3,734,798
------------
5,179,248
------------
WEST VIRGINIA 2.6%
2,500 Berkeley Cnty, WV Bldg Comm Hosp Rev City Hosp
Proj............................................. 6.500 11/01/22 2,512,950
5,000 Marshall Cnty, WV Pollutn Ctl Rev OH Pwr Co Proj
Ser C Rfdg (MBIA Insd)........................... 6.850 06/01/22 5,385,700
2,000 West Virginia St Hsg Dev Fund Hsg Fin Ser A...... 5.550 05/01/17 1,879,720
3,000 West Virginia St Hsg Dev Fund Hsg Fin Ser A...... 5.450 11/01/21 2,800,680
------------
12,579,050
------------
WISCONSIN 1.7%
5,000 Madison, WI Indl Dev Rev Madison Gas & Elec Co
Proj Ser A....................................... 6.750 04/01/27 5,210,950
3,000 Wisconsin Hsg & Econ Dev Auth Homeownership Rev
Ser A............................................ 6.450 03/01/17 3,047,670
------------
8,258,620
------------
WYOMING 0.5%
2,390 Wyoming Cmnty Dev Auth Insd Single Family Mtg Ser
B................................................ 6.700 06/01/17 2,469,396
------------
PUERTO RICO 2.4%
1,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy Rev Ser V
Rfdg............................................. 5.750 07/01/18 950,110
10,000 Puerto Rico Comwlth Hwy & Tran Ser Y (Embedded
Cap) (FSA Insd).................................. 5.730 07/01/21 10,572,600
------------
11,522,710
------------
TOTAL LONG-TERM INVESTMENTS 98.3%
(Cost $455,293,059) (a)...................................................... 472,198,557
OTHER ASSETS IN EXCESS OF LIABILITIES 1.7%.................................... 8,028,362
------------
NET ASSETS 100%...............................................................$480,226,919
============
* Zero coupon bond
</TABLE>
(a) At April 30, 1996, cost for federal income tax purposes is $455,293,059; the
aggregate gross unrealized appreciation is $19,318,021 and the aggregate
gross unrealized depreciation is $2,500,478, resulting in net unrealized
appreciation including option transactions of $16,817,543.
(b) Assets segregated as collateral for open option transactions.
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $455,293,059) (Note 1).............. $472,198,557
Receivables:
Interest............................................................. 8,513,289
Investments Sold..................................................... 483,356
Options at Market Value (Net premiums paid of $146,550) (Note 4)....... 58,595
Unamortized Organizational Expenses (Note 1)........................... 11,199
Other.................................................................. 13,755
------------
Total Assets..................................................... 481,278,751
------------
LIABILITIES:
Payables:
Income Distributions--Common and Preferred Shares.................... 358,365
Investment Advisory Fee (Note 2)..................................... 256,373
Custodian Bank....................................................... 150,932
Administrative Fee (Note 2).......................................... 78,884
Accrued Expenses....................................................... 168,708
Deferred Compensation and Retirement Plans (Note 2).................... 38,570
------------
Total Liabilities................................................ 1,051,832
------------
NET ASSETS............................................................. $480,226,919
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000 shares, 3,800
issued with liquidation preference of $50,000 per share) (Note 5).... $190,000,000
------------
Common Shares ($.01 par value with an unlimited number of shares
authorized, 19,106,785 shares issued and outstanding)................ 191,068
Paid in Surplus........................................................ 282,031,706
Net Unrealized Appreciation on Investments............................. 16,817,543
Accumulated Undistributed Net Investment Income........................ 2,996,155
Accumulated Net Realized Loss on Investments........................... (11,809,553)
------------
Net Assets Applicable to Common Shares............................... 290,226,919
------------
NET ASSETS............................................................. $480,226,919
============
NET ASSET VALUE PER COMMON SHARE ($290,226,919 divided
by 19,106,785 shares outstanding).................................... $ 15.19
============
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................................................... $ 14,955,010
------------
EXPENSES:
Investment Advisory Fee (Note 2)....................................... 1,591,130
Administrative Fee (Note 2)............................................ 489,579
Preferred Share Maintenance (Note 5)................................... 268,905
Legal (Note 2)......................................................... 13,104
Trustees Fees and Expenses (Note 2).................................... 11,117
Amortization of Organizational Expenses (Note 1)....................... 3,988
Other.................................................................. 183,581
------------
Total Expenses..................................................... 2,561,404
------------
NET INVESTMENT INCOME.................................................. $ 12,393,606
============
REALIZED AND UNREALIZED GAIN/LOSS ON INVESTMENTS:
Realized Gain/Loss on Investments:
Proceeds from Sales.................................................. $ 65,487,445
Cost of Securities Sold.............................................. (63,419,452)
------------
Net Realized Gain on Investments (Including realized gain on closed
futures transactions of $337,423).................................... 2,067,993
------------
Unrealized Appreciation/Depreciation on Investments:
Beginning of the Period.............................................. 26,078,502
End of the Period (Including unrealized depreciation on open option
transactions of $87,955)........................................... 16,817,543
------------
Net Unrealized Depreciation on Investments During the Period........... (9,260,959)
------------
NET REALIZED AND UNREALIZED LOSS ON INVESTMENTS........................ $ (7,192,966)
============
NET INCREASE IN NET ASSETS FROM OPERATIONS............................. $ 5,200,640
============
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1996
and the Year Ended October 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1996 October 31, 1995
<S> <C> <C>
- --------------------------------------------------------------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 12,393,606 $ 25,402,707
Net Realized Gain/Loss on Investments................ 2,067,993 (6,748,931)
Net Unrealized Appreciation/Depreciation on
Investments During the Period...................... (9,260,959) 39,257,119
------------ ------------
Change in Net Assets from Operations................. 5,200,640 57,910,895
------------ ------------
Distributions from Net Investment Income:
Common Shares...................................... (9,744,281) (19,488,668)
Preferred Shares................................... (3,520,060) (7,480,198)
------------ ------------
Total Distributions.................................. (13,264,341) (26,968,866)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (8,063,701) 30,942,029
NET ASSETS:
Beginning of the Period.............................. 488,290,620 457,348,591
------------ ------------
End of the Period (Including undistributed net
investment income of $2,996,155 and $3,866,890,
respectively)...................................... $480,226,919 $488,290,620
============ ============
</TABLE>
See Notes to Financial Statements
13
<PAGE> 15
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one common share of
the Trust outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
September 25, 1992
Six Months (Commencement
Ended Year Ended October 31 of Investment
April 30, --------------------------- Operations) to
1996 1995 1994 1993 October 31, 1992
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period (a).... $15.612 $13.992 $17.177 $14.587 $14.771
------- ------- ------- ------- -------
Net Investment Income.......... .649 1.330 1.354 1.369 .056
Net Realized and Unrealized
Gain/Loss on Investments..... (.377) 1.701 (3.148) 2.408 (.237)
------- ------- ------- ------- -------
Total from Investment
Operations..................... .272 3.031 (1.794) 3.777 (.181)
------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common
Shareholders............... .510 1.020 1.020 .884 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... .184 .391 .285 .303 .003
Distributions from Net Realized
Gain on Investments (Note 1):
Paid to Common
Shareholders............... -0- -0- .067 -0- -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders..... -0- -0- .019 -0- -0-
------- ------- ------- ------- -------
Total Distributions.............. .694 1.411 1.391 1.187 .003
------- ------- ------- ------- -------
Net Asset Value,
End of the Period.............. $15.190 $15.612 $13.992 $17.177 $14.587
======= ======= ======= ======= =======
Market Price Per Share at End of
the Period..................... $14.375 $14.375 $12.750 $16.000 $13.875
Total Investment Return at
Market Price (b)............... 3.46%* 21.06% (14.17%) 22.08% (7.50%)*
Total Return at Net Asset Value
(c)............................ .49%* 19.46% (12.71%) 24.24% (2.73%)*
Net Assets at End of the Period
(In millions).................. $480.2 $488.3 $457.3 $518.2 $468.7
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares......................... 1.69% 1.72% 1.64% 1.66% 1.12%
Ratio of Expenses to Average Net
Assets......................... 1.04% 1.03% 1.00% 1.03% 1.00%
Ratio of Net Investment Income to
Average Net Assets Applicable
to Common Shares (d)........... 5.87% 6.31% 6.81% 6.57% 3.52%
Portfolio Turnover............... 11.60%* 79.26% 132.59% 111.79% 14.83%*
</TABLE>
(a) Net asset value at September 25, 1992, is adjusted for common and preferred
share offering costs of $.229 per common share.
(b) Total investment return at market price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total return at net asset value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based on NAV.
(d) Net investment income is adjusted for common share equivalent of
distributions paid to preferred shareholders.
* Non-Annualized
See Notes to Financial Statements
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Advantage Municipal Income Trust (the "Trust") is
registered as a diversified closed-end management investment company under the
Investment Company Act of 1940, as amended. The Trust's investment objective is
to provide a high level of current income exempt from federal income tax,
consistent with preservation of capital. In normal market conditions, the Trust
will invest substantially all of its net assets in 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--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of less than 60 days are valued at
amortized cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis, with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made. At April 30, 1996, there were no
when issued or delayed delivery purchase commitments.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
D. ORGANIZATIONAL EXPENSES--The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Trust's organization in the amount of $40,000. These costs
are being amortized on a straight line basis over the 60 month period ending
September 24, 1997. Van Kampen American Capital Investment Advisory Corp. (the
"Adviser") has agreed that in the event any of the initial shares of the Trust
originally purchased by VKAC are redeemed during the amortization period, the
Trust will be reimbursed for any unamortized organizational 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 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, 1995, the Trust had an accumulated capital loss
carryforward for tax purposes of $13,877,546, of which $7,128,615 and $6,748,931
will expire on October 31, 2002 and 2003, respectively.
F. DISTRIBUTION OF INCOME AND GAINS--The Trust declares and pays dividends from
net investment income to common shareholders monthly. Net realized gains, if
any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains, which are included as ordinary income for tax
purposes.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Trust for an annual fee payable
monthly of .65% of the average net assets of the Trust. In addition, the Trust
will pay a monthly administrative fee to VKAC, the Trust's Administrator, at an
annual rate of .20% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom,
counsel to the Trust, of which a trustee of the Trust is an affiliated person.
For the six months ended April 30, 1996, the Trust recognized expenses of
approximately $14,500 representing VKAC's cost of providing accounting and legal
services to the Trust.
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust 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.
At April 30, 1996, VKAC owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
Aggregate purchases and cost of sales of investment securities, excluding
short-term notes, for the six months ended April 30, 1996, were $56,484,288 and
$63,419,452, respectively.
4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on investments. Upon disposition, a realized gain or
loss is recognized accordingly, except for exercised option contracts where the
recognition of gain or loss is postponed until the disposal of the security
underlying the option contract.
Summarized below are the specific types of derivative financial instruments
used by the Trust.
A. OPTION CONTRACTS--An option contract gives the buyer the right, but not the
obligation to buy (call) or sell (put) an underlying item at a fixed exercise
price during a specified period. These contracts are generally used by the Trust
to manage the portfolio's effective maturity and duration.
17
<PAGE> 19
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in options for the six months ended April 30, 1996, were as
follows:
<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- -------------------------------------------------------------------------
<S> <C> <C>
Outstanding at October 31, 1995................. -0- $ -0-
Options Written and Purchased (Net)............. 250 (146,550)
--- ---------
Outstanding at April 30, 1996................... 250 $(146,550)
=== =========
</TABLE>
The related futures contracts of the outstanding option transactions as of
April 30, 1996, and the description and market value is as follows:
<TABLE>
<CAPTION>
EXP. MONTH/ MARKET VALUE
CONTRACTS EXERCISE PRICE OF OPTIONS
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bond Futures
June 1996-Purchased Puts....... 250 Jun/106 $58,595
=== =======
</TABLE>
B. FUTURES CONTRACTS--A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Trust generally invests in futures on U.S. Treasury Bonds and the Municipal Bond
Index and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the portfolio's effective maturity and
duration.
The fluctuation in market value of the contracts is settled daily through a
cash margin account. Realized gains and losses are recognized when the contracts
are closed or expire.
Transactions in futures contracts for the six months ended April 30, 1996,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ---------------------------------------------------------------------
<S> <C>
Outstanding at October 31, 1995............................. -0-
Futures Opened.............................................. 150
Futures Closed.............................................. (150)
-----
Outstanding at April 30, 1996............................... -0-
=====
</TABLE>
C. EMBEDDED CAPS--These securities, which are identified in the portfolio of
investments, include a cap strike level such that the coupon payment may be
supplemented by cap payments if the floating rate index upon which the cap is
based rises above the strike level. The price of these securities may be more
volatile than the price of a comparable fixed rate security. The Trust invests
in these instruments as a hedge against a rise in the short-term interest rates
which it pays on its preferred shares.
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
5. PREFERRED SHARES
The Trust has outstanding 3,800 Auction Preferred Shares ("APS") in four series.
Series A, B and C each contain 1,000 shares while Series D contains 800 shares.
Dividends are cumulative and the dividend rate is reset every 28 days through an
auction process. The average rate in effect on April 30, 1996 was 3.757%. During
the six months ended April 30, 1996, the rates ranged from 3.33% to 4.50%.
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of Preferred Share Maintenance
expense.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $50,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
19
<PAGE> 21
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND
INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free
Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal
Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund
THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-341-2911 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
20
<PAGE> 22
VAN KAMPEN AMERICAN CAPITAL ADVANTAGE MUNICIPAL INCOME TRUST
OFFICERS AND TRUSTEES
DON G. POWELL*
Chairman and Trustee
DENNIS J. MCDONNELL*
President and Trustee
DAVID C. ARCH
Trustee
ROD DAMMEYER
Trustee
HOWARD J KERR
Trustee
THEODORE A. MYERS
Trustee
HUGO F. SONNENSCHEIN
Trustee
WAYNE W. WHALEN*
Trustee
PETER W. HEGEL*
Vice President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Treasurer
SCOTT E. MARTIN*
Assistant Secretary
WESTON B. WETHERELL*
Assistant Secretary
NICHOLAS DALMASO*
Assistant Secretary
JOHN L. SULLIVAN*
Controller
STEVEN M. HILL*
Assistant Treasurer
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
CUSTODIAN AND TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT AUDITORS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen American Capital Distributors, Inc., 1996
All rights reserved.
(SM) denotes a service mark of
Van Kampen American Capital Distributors, Inc.
21
