<PAGE> 1
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders........................... 1
Performance Results.............................. 5
Portfolio of Investments......................... 6
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>
VKS SAR 6/97
<PAGE> 2
LETTER TO SHAREHOLDERS
June 5, 1997
Dear Shareholder,
As mentioned in your previous
report, VK/AC Holding, Inc., the parent
company of Van Kampen American Capital,
Inc., was acquired by Morgan Stanley
Group Inc., a world leader in asset
management. More recently, on February [PHOTO]
5, 1997, Morgan Stanley Group Inc. and
Dean Witter, Discover & Co. announced
their agreement to merge, and you
received a proxy in April. The merger DENNIS J. MCDONNELL AND DON G. POWELL
was completed on May 31, 1997, creating
the combined company of Morgan Stanley, Dean Witter, Discover & Co. This
preeminent global financial services firm boasts a market capitalization of $21
billion and leading market positions in securities, asset management, and credit
services. As the financial industry continues to witness unprecedented
consolidations and new partnerships, we believe that those firms that are
leaders in all facets of their business will be able to offer investors the
greatest opportunities and services as we move into the next century. We are
confident that this merger will provide investors with those benefits.
ECONOMIC REVIEW
Bond prices were volatile during the six months ended April 30, 1997. Prices
initially rose as the economy slowed, erasing fears of an interest rate hike by
the Federal Reserve Board. The November election of a Democratic president and
Republican Congress was positive for bonds because the split government was
viewed as a restraint on spending increases that could potentially swell the
budget deficit. In addition, support diminished for radical tax reform that
could threaten the tax-free status of municipal bonds.
By the beginning of 1997, the situation changed. Bond prices began to fall
as the economy picked up speed, culminating in a 5.6 percent annualized growth
rate in the first quarter. This strength, coupled with warnings by Fed Chairman
Alan Greenspan that tighter monetary policy might be appropriate, reignited
fears of a rate hike. On March 25, the Fed raised short-term rates a modest 0.25
percent, which sent the 30-year Treasury bond yield above 7.00 percent for the
first time in six months. By the end of April, the 30-year Treasury bond yield
slipped back below 7.00 percent as the market turned its attention to positive
news about inflation, and bonds recovered some of their earlier losses.
Throughout most of the six months ended April 30, municipal bonds generally
have outperformed Treasuries. Between October 31 and April 30, yields on
long-term municipal revenue bonds rose 21 basis points, while yields on 30-year
Treasury bonds jumped 31 basis points. Because bond yields move in the opposite
direction of prices, the smaller increase in municipal yields meant that
municipal bond prices did not fall as sharply as
Continued on page two
1
<PAGE> 3
Treasury bond prices did. A relatively stable supply of new issues, combined
with an increase in retail demand, contributed to the improved performance of
municipal bonds.
FUND STRATEGY
In managing the Trust, we maintained a "barbell" approach to credit quality,
which means we invested in both the highest and lowest levels of the
investment-grade rating spectrum. Investing at both ends of the rating spectrum
helps to balance the portfolio's volatility to interest rate movements.
AAA-rated securities typically have tended to perform better when interest rates
are declining and provide the potential for safety of principal. They are
extremely liquid because most are insured bonds. BBB-rated securities have
tended to perform better when rates are rising, and they have the potential to
provide additional income. As of April 30, 1997, approximately 49 percent of the
Trust's long-term investments were rated AAA, the highest credit rating assigned
to bonds by the Standard & Poor's Ratings Group, and approximately 16 percent
were rated AA or A. In addition, approximately 35 percent of long-term
investments were rated BBB or below. BBB is the lowest rating Standard & Poor's
assigns to bonds in the investment-grade category.
[CREDIT QUALITY GRAPH]
Portfolio Composition by Credit Quality
as of April 30, 1997
<TABLE>
<S> <C>
AAA............. 48.7%
AA.............. 14.7%
A............... 1.7%
BBB............. 28.6%
BB.............. 5.3%
B............... 0.8%
Non Rated....... 0.2%
</TABLE>
Based upon credit quality ratings issued by Standard & Poor's. For securities
not rated by Standard & Poor's, the Moody's rating is used.
Portfolio turnover during the period was moderate because market conditions
offered few opportunities to add value over existing holdings. The average
yields of bonds in the portfolio were higher than market yields, and spreads
between the yields of AAA-rated bonds and lower-rated bonds were tight. These
spreads remained narrow due to the increasing number of insured bonds in the
municipal market. As a result, there was often not enough yield reward to
justify the additional credit risk associated with purchasing lower-rated
securities.
Activity focused on selling long-maturity, lower-yielding securities in
order to purchase short- and intermediate-term higher-yielding bonds. When
buying new securities for the portfolio, we attempt to identify those bonds that
we believe will outperform within a particular sector and that can be purchased
at an attractive price. We believe this "bottom-up" approach, supported by our
research, provides significant added value to the portfolio.
Continued on page three
2
<PAGE> 4
We continued to maintain the Trust's heavy concentrations in health-care,
general purpose, and single-family housing sectors. The health-care sector has
improved financially as facilities focus on keeping expenses under control,
serving the requirements of managed care organizations, and competing with one
another in order to expand their market share. General purpose bonds have
benefited from the improved balance sheets of most states, and single-family
housing bonds have been underpinned by strong retail demand and a tendency to
perform well when interest rates rise.
We shortened the duration during this period of rising interest rates in
order to potentially reduce the Trust's volatility to rate increases. Duration,
which is expressed in years, is a measure of a portfolio's sensitivity to
interest rate movements. Portfolios with long durations have tended to perform
better when rates are falling, and portfolios with short durations have tended
to perform better when rates are rising. At the end of the period, the Trust's
portfolio duration stood at 6.61 years compared to 8.10 years for the Lehman
Brothers Municipal Bond Index benchmark.
[DIVIDEND HISTORY GRAPH]
SIX-MONTH DIVIDEND HISTORY
FOR THE PERIOD ENDED APRIL 30, 1997
Distribution
per Share
---------------
Nov. 1996................... $.0650
Dec. 1996................... $.0650
Jan. 1997................... $.0650
Feb. 1997................... $.0650
Mar. 1997................... $.0650
Apr. 1997................... $.0650
The dividend history represents past performance of the Trust and does not
predict the Trust's future distributions:
PERFORMANCE SUMMARY
We are pleased to report that the Van Kampen American Capital Strategic
Sector Municipal Trust continued its positive performance over the first half of
its fiscal year. For the six-month period ended April 30, 1997, the Trust
generated a total return at market price of 4.41 percent(1). The Trust offered a
tax-exempt distribution rate of 6.57 percent(3), based on the closing common
stock price of $11.875 per share on April 30, 1997. Because income from the
Trust is exempt from federal income tax, this distribution rate represents a
yield equivalent to a taxable investment earning 10.27 percent(4) (for investors
in the 36 percent federal income tax bracket). At the end of the reporting
period, the closing share price of the Trust traded at a 12.2 percent discount
to its net asset value of $13.53.
continued on page four
3
<PAGE> 5
TOP FIVE PORTFOLIO INDUSTRY HOLDINGS BY SECTOR AS OF APRIL 30, 1997*
Health Care....................... 27.2%
General Purpose................... 16.6%
Utilities......................... 16.3%
Housing........................... 13.8%
Education......................... 8.7%
*As a Percentage of Long-Term
Investments
MUNICIPAL MARKET OUTLOOK
We continue to see signs of a strong economy, although we do not expect the
unusually brisk growth rate of the first quarter to be sustained throughout the
year. As a result, we believe the Fed will monitor the economy closely and take
aggressive action to control growth if inflation picks up or the high growth
rate is sustained. However, if growth slows, we believe the Fed will leave rates
unchanged. Given this outlook, we expect that yields on the 30-year Treasury
bond will range between 6.75 and 7.40 percent for the remainder of the year,
with higher levels occurring early and lower yields dominating the second half
of 1997. Although short-term interest rates have risen, this has not had a
significant impact on the leveraged structure of the Trust.
We believe the Trust is positioned to perform well in the coming months, and
we do not anticipate major structural changes in the portfolio. In light of our
expectations for interest rates, we will continue to maintain a slightly
defensive posture by keeping a relatively short duration for the portfolio and
adjusting the duration when prudent. We will also continue to seek a balance
between the Trust's total return and its dividend income, as well as to add
value through security selection. Thank you for your continued confidence in Van
Kampen American Capital and your Trust's team of managers.
Sincerely,
[sig]
Don G. Powell
Chairman
Van Kampen American Capital
Investment Advisory Corp.
[sig]
Dennis J. McDonnell
President
Van Kampen American Capital
Investment Advisory Corp.
Please see footnotes on page five
4
<PAGE> 6
PERFORMANCE RESULTS FOR THE PERIOD ENDED APRIL 30, 1997
VAN KAMPEN AMERICAN CAPITAL STRATEGIC SECTOR MUNICIPAL TRUST
(NYSE TICKER SYMBOL--VKS)
COMMON SHARE TOTAL RETURNS
<TABLE>
<CAPTION>
<S> <C>
Six-month total return based on market price(1)............ 4.41%
Six-month total return based on NAV(2)..................... 1.90%
DISTRIBUTION RATES
Distribution rate as a % of closing common stock
price(3)................................................. 6.57%
Taxable-equivalent distribution rate as a % of closing
common stock price(4).................................... 10.27%
SHARE VALUATIONS
Net asset value............................................ $ 13.53
Closing common stock price................................. $11.875
Six-month high common stock price (03/04/97)............... $12.375
Six-month low common stock price (04/14/97)................ $11.250
Preferred share (Series A) rate(5)......................... 3.62%
Preferred share (Series B) rate(5)......................... 3.61%
</TABLE>
(1)Total return based on market price assumes an investment at the market price
at the beginning of the period indicated, reinvestment of all distributions for
the period in accordance with the Trust's dividend reinvestment plan, and sale
of all shares at the closing common stock price at the end of the period
indicated.
(2)Total return based on net asset value (NAV) assumes an investment at the
beginning of the period indicated, reinvestment of all distributions for the
period, and sale of all shares at the end of the period, all at NAV.
(3)Distribution rate represents the monthly annualized distributions of the
Trust at the end of the period and not the earnings of the Trust.
(4)The taxable-equivalent distribution rate is calculated assuming a 36% federal
income tax bracket.
(5)See "Notes to Financial Statements" footnote #5, for more information
concerning Preferred Share reset periods.
A portion of the interest income may be taxable for those investors subject to
the federal alternative minimum tax (AMT).
Past performance does not guarantee future results. Investment return, stock
price and net asset value will fluctuate with market conditions. Trust shares,
when sold, may be worth more or less than their original cost.
Market forecasts provided in this report may not necessarily come to pass.
5
<PAGE> 7
PORTFOLIO OF INVESTMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MUNICIPAL BONDS
ALABAMA 1.9%
$ 5,000 Alabama Wtr Pollutn Ctl Auth Revolving Fd Ln
Ser A (AMBAC Insd)............................ 5.000% 08/15/15 $ 4,583,900
------------
CALIFORNIA 15.4%
3,330 Anaheim, CA Ctfs Partn Anaheim Mem Hosp Assn
Rfdg (AMBAC Insd)............................. 5.000 05/15/13 3,111,885
3,000 California Hlth Fac Fin Auth Rev Kaiser
Permanente Med Cent........................... 5.450 10/01/13 2,866,680
6,420 California Pollutn Ctl Fin Auth Pollutn Ctl
Rev Pacific Gas & Elec Co Ser B (MBIA Insd)... 6.350 06/01/09 6,811,556
1,255 California Rural Home Mtg Fin Mtg Backed Secs
Pgm Ser C (GNMA Collateralized) (b) (e)....... 6.40/7.80 02/01/28 1,395,773
10,000 California Statewide Cmntys Dev Auth Rev Ctfs
Partn Insd Children's Hosp Rfdg (MBIA Insd)... 4.750 06/01/21 8,412,200
2,000 Los Angeles Cnty, CA Pub Wks (FSA Insd)....... 5.500 10/01/18 1,961,680
2,000 Mount Diablo, CA Hosp Dist Rev Ser A (Embedded
Cap) (AMBAC Insd)............................. 5.125 12/01/23 1,787,340
3,000 Orange Cnty, CA Recovery Ser A Rfdg (MBIA
Insd)......................................... 6.000 06/01/08 3,214,500
4,300 Paramount, CA Redev Agy Tax Alloc Redev Proj
Area No 1 Rfdg (MBIA Insd) (e)................ 6.250 08/01/23 4,493,414
3,500 San Bernardino Cnty, CA Ctfs Partn Med Cent
Fin Proj (MBIA Insd).......................... 5.000 08/01/28 3,118,500
------------
37,173,528
------------
COLORADO 5.8%
1,000 Arapahoe Cnty, CO Cap Impt Trust Fund Hwy Rev
E470 Proj Ser B............................... 7.000 08/31/26 1,070,640
2,000 Colorado Hsg Fin Auth Multi-Family Hsg Insd
Mtg Ser A..................................... 6.800 10/01/37 2,086,280
1,500 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
C1............................................ 7.550 11/01/27 1,663,230
4,880 Colorado Hsg Fin Auth Single Family Pgm Sr Ser
F............................................. 8.625 06/01/25 5,469,748
3,415 Denver, CO City & Cnty Arpt Rev Ser B......... 6.900 11/15/00 3,614,846
------------
13,904,744
------------
CONNECTICUT 1.3%
3,000 Mashantucket Western Pequot Tribe CT Spl Rev
Ser A (c)..................................... 6.400 09/01/11 3,098,610
------------
FLORIDA 0.1%
340 Escambia Cnty, FL Hlth Fac Auth Rev........... 4.250 01/01/98 339,803
------------
GEORGIA 2.8%
3,000 Atlanta, GA Spl Purp Fac Rev Delta Airls Ser
B............................................. 7.900 12/01/18 3,217,140
1,425 Georgia Muni Elec Auth Pwr Rev Ser A Rfdg
(FGIC Insd)................................... 5.500 01/01/12 1,429,873
2,000 Georgia Muni Elec Auth Pwr Rev Ser Z Rfdg
(FGIC Insd)................................... 5.500 01/01/12 1,990,880
------------
6,637,893
------------
</TABLE>
See Notes to Financial Statements
6
<PAGE> 8
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
ILLINOIS 5.8%
$ 2,060 Alton, IL Hosp Fac Rev Saint Anthony's Hlth
Cent.......................................... 5.875% 09/01/06 $ 2,087,563
4,500 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
American Airls Inc Proj Ser A................. 7.875 11/01/25 4,846,230
1,235 Chicago, IL O'Hare Intl Arpt Spl Fac Rev
United Airls Inc Proj Ser 84C................. 8.200 05/01/18 1,328,156
5,450 Illinois Hlth Fac Auth Rev Westlake Cmnty
Hosp.......................................... 7.750 01/01/04 5,756,181
------------
14,018,130
------------
INDIANA 2.8%
3,000 Kokomo, IN Hosp Auth Hosp Rev Saint Joseph
Hosp & Hlth Cent Rfdg......................... 6.000 08/15/02 3,036,210
2,000 Kokomo, IN Hosp Auth Hosp Rev Saint Joseph
Hosp & Hlth Cent Rfdg......................... 6.250 08/15/05 2,082,940
990 La Porte Cnty, IN Hosp Auth Hosp Fac Rev La
Porte Hosp Inc Rfdg.......................... 5.900 03/01/01 1,000,108
540 La Porte Cnty, IN Hosp Auth Hosp Fac Rev La
Porte Hosp Inc Rfdg........................... 6.000 03/01/02 546,032
------------
6,665,290
------------
IOWA 2.2%
5,000 Muscatine, IA Elec Rev Rfdg (AMBAC Insd)
(e)........................................... 6.125 01/01/12 5,167,800
------------
KANSAS 2.2%
5,000 Burlington, KS Pollutn Ctl Rev KS Gas & Elec
Co Proj Rfdg (MBIA Insd)...................... 7.000 06/01/31 5,407,300
------------
KENTUCKY 2.8%
2,415 Kenton Cnty, KY Arpt Brd Rev (MBIA Insd)
(d)........................................... 5.900 03/01/05 2,447,941
4,020 Louisville, KY Hsg Assistance Corp Mtg Rev
Carrousel Pptys Ser A Rfdg (FHA Gtd).......... 8.300 07/01/24 4,359,127
------------
6,807,068
------------
LOUISIANA 1.0%
2,250 Saint Charles Parish, LA Pollutn Ctl Rev LA
Pwr & Lt Co Proj (FSA Insd)................... 7.500 06/01/21 2,461,995
------------
MARYLAND 6.8%
4,435 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Rev Single Family Pgm Seventh Ser......... 7.300 04/01/25 4,684,247
6,325 Maryland St Hlth & Higher Edl Fac Auth Rev
Greater Baltimore Med Cent Rfdg (FGIC Insd)... 5.000 07/01/13 5,927,474
6,270 Maryland St Hlth & Higher Edl Fac Auth Rev
Subn Hosp Rfdg (AMBAC Insd)................... 5.000 07/01/13 5,875,931
------------
16,487,652
------------
MASSACHUSETTS 1.6%
1,775 Massachusetts Muni Whsl Elec Co Pwr Supply Sys
Rev Ser B Rfdg................................ 6.750 07/01/05 1,909,030
1,705 Massachusetts St Hlth & Edl Fac Auth Rev Vly
Regl Hlth Sys Ser C Rfdg (Connie Lee Insd).... 7.000 07/01/09 1,900,632
------------
3,809,662
------------
</TABLE>
See Notes to Financial Statements
7
<PAGE> 9
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
MICHIGAN 1.7%
$ 1,355 Flint, MI Hosp Bldg Auth Rev Hurley Med Cent
Ser A Rfdg.................................... 5.750% 07/01/03 $ 1,349,322
2,745 Michigan Muni Bond Auth Rev St Revolving Fd... 5.400 10/01/14 2,679,806
------------
4,029,128
------------
MISSISSIPPI 2.0%
2,000 Mississippi Home Corp Single Family Rev Mtg
Ser C (GNMA Collateralized) (b)............... 5.50/7.60 06/01/29 2,235,420
1,000 Mississippi Home Corp Single Family Rev Mtg
Ser F (GNMA Collateralized) (b)............... 6.00/7.55 12/01/27 1,100,880
1,335 Mississippi Home Corp Single Family Rev Ser D
(GNMA Collateralized)......................... 8.100 12/01/24 1,479,661
------------
4,815,961
------------
MISSOURI 0.8%
765 Missouri St Hlth & Edl Fac Auth Hlth Fac Rev
Lake of the Ozarks Genl Hosp.................. 6.250 02/15/11 775,878
995 Missouri St Hsg Dev Comm Mtg Rev Single Family
Ln Ser A (GNMA Collateralized)................ 7.200 09/01/26 1,079,097
------------
1,854,975
------------
NEVADA 1.0%
2,385 Nevada Hsg Div Single Family Pgm Ser E (FHA
Gtd).......................................... 6.900 10/01/11 2,475,582
------------
NEW JERSEY 2.4%
900 Camden Cnty, NJ Impt Auth Rev Hlth Care Dev
Proj Cooper Hlth Sys.......................... 4.300 02/15/98 899,739
2,000 New Jersey Econ Dev Auth Dist Heating &
Cooling Rev Trigen Trenton Ser A.............. 6.200 12/01/10 2,031,100
2,500 New Jersey Econ Dev Auth Wtr Fac Rev NJ
American Wtr Co Inc Proj Ser A (FGIC Insd).... 6.875 11/01/34 2,723,725
------------
5,654,564
------------
NEW YORK 11.9%
1,615 New York City Muni Wtr Fin Auth Wtr & Swr Sys
Rev Ser A (Prerefunded @ 06/15/99) (FGIC
Insd)......................................... 6.750 06/15/14 1,715,033
4,915 New York City Ser B........................... 7.000 08/15/16 5,243,666
85 New York City Ser B (Prerefunded @
08/15/04)..................................... 7.000 08/15/16 96,060
1,140 New York City Ser B........................... 7.250 08/15/19 1,255,596
1,380 New York City Ser B (Prerefunded @
08/15/04)..................................... 7.250 08/15/19 1,580,445
5,665 New York City Ser C........................... 7.250 08/15/24 6,044,328
300 New York City Ser C (Prerefunded @
08/15/01)..................................... 7.250 08/15/24 329,574
2,000 New York City Ser G........................... 5.750 02/01/14 1,924,940
4,355 New York St Dorm Auth Rev Court Fac Lease Ser
A............................................. 5.500 05/15/10 4,205,580
595 New York St Med Care Fac Fin Agy Rev Mental
Hlth Svcs Fac Impt Ser B...................... 7.625 08/15/17 652,227
1,285 New York St Med Care Fac Fin Agy Rev Mental
Hlth Svcs Fac Impt Ser B (Prerefunded @
08/15/01)..................................... 7.625 08/15/17 1,444,854
4,350 Triborough Brdg & Tunl Auth NY Rev Genl Purp
Ser A Rfdg.................................... 5.000 01/01/12 4,080,518
------------
28,572,821
------------
</TABLE>
See Notes to Financial Statements
8
<PAGE> 10
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OHIO 2.0%
$ 1,000 Akron, OH Ctfs Partn Akron Muni Baseball
Stadium Proj (b).............................. 0/6.500% 12/01/07 $ 770,850
1,000 Delaware Cnty, OH Hlthcare Fac Rev Mtg Centrum
at Willow Brook (FHA Gtd) (e)................. 6.550 02/01/35 1,034,960
2,045 Marion Cnty, OH Hosp Impt Rev Cmnty Hosp
Rfdg.......................................... 6.000 05/15/05 2,088,027
1,000 Miami Cnty, OH Hosp Fac Rev Upper Vly Med Cent
Ser C Rfdg & Impt............................. 6.000 05/15/06 1,030,260
------------
4,924,097
------------
OKLAHOMA 1.1%
2,750 Shawnee, OK Hosp Auth Hosp Rev MidAmerica
Hlthcare Inc Rfdg............................. 6.125 10/01/14 2,698,795
------------
PENNSYLVANIA 12.3%
1,000 Allegheny Cnty, PA Indl Dev Auth Rev
Environmental Impt USX Corp Proj Rfdg......... 6.100 07/15/20 1,003,040
3,000 Butler Cnty, PA Hosp Auth Hosp Rev North Hills
Passavant Hosp Ser A (Prerefunded @ 06/01/01)
(FSA Insd).................................... 6.900 06/01/09 3,284,610
3,000 Delaware Cnty, PA Auth Hlth Care Rev Mercy
Hlth Corp Southeastn B........................ 6.000 11/15/07 3,051,990
2,000 Northeastern, PA Hosp & Edl Auth (AMBAC
Insd)......................................... 5.250 01/01/26 1,843,080
6,000 Pennsylvania Intergovtl Coop Auth Spl Tax Rev
City of Philadelphia Fdg Pgm (FGIC Insd)...... 5.350 06/15/07 6,027,600
10,000 Pennsylvania St Ctfs Partn Ser A Rfdg (AMBAC
Insd)......................................... 5.400 07/01/09 9,994,800
4,325 Philadelphia, PA Hosps & Higher Ed Auth Fac
Hosp Rev...................................... 6.350 07/01/07 4,465,130
------------
29,670,250
------------
TEXAS 4.3%
3,000 Harris Cnty, TX Toll Rd Sr Lien Rfdg (AMBAC
Insd)......................................... 4.950 08/15/06 2,970,090
2,000 Houston, TX Arpt Sys Rev Spl Fac Continental
Airls......................................... 6.125 07/15/17 1,939,640
3,190 San Antonio, TX Arpt Sys Rev Rfdg (AMBAC
Insd)......................................... 7.375 07/01/13 3,584,826
1,880 Texas Hsg Agy Residential Dev Rev Mtg Ser D
(GNMA Collateralized)......................... 8.400 01/01/21 1,963,717
------------
10,458,273
------------
UTAH 3.5%
3,000 Intermountain Pwr Agy UT Pwr Supply Rev Ser B
Rfdg (MBIA Insd).............................. 5.750 07/01/19 2,971,920
3,000 Salt Lake City, UT Arpt Rev Delta Airls Inc
Proj.......................................... 7.900 06/01/17 3,161,070
2,285 Utah St Hsg Fin Agy Single Family Mtg Sr Ser
D2............................................ 6.850 07/01/25 2,365,866
------------
8,498,856
------------
WASHINGTON 2.0%
2,030 Washington St Pub Pwr Supply Sys Nuclear Proj
No 3 Rev Ser C Rfdg (MBIA Insd)............... * 07/01/13 794,055
3,380 Washington St Pub Pwr Supply Sys Nuclear Proj
No 3 Rev Ser C Rfdg (MBIA Insd)............... * 07/01/15 1,158,664
3,000 Washington St Ser B........................... 5.500 05/01/18 2,961,390
------------
4,914,109
------------
</TABLE>
See Notes to Financial Statements
9
<PAGE> 11
PORTFOLIO OF INVESTMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Par
Amount
(000) Description Coupon Maturity Market Value
- ---------------------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
TOTAL LONG-TERM INVESTMENTS 97.5%
(Cost $222,937,988) (a)...................................................... 235,130,786
SHORT-TERM INVESTMENTS 1.7%
(Cost $4,219,206) (a)........................................................ 4,219,206
OTHER ASSETS IN EXCESS OF LIABILITIES 0.8%.................................... 1,905,238
------------
NET ASSETS 100.0%............................................................. $241,255,230
============
*Zero coupon bond
(a) At April 30, 1997, for federal income tax purposes, cost of long- and
short-term investments is $227,157,194; the aggregate gross unrealized
appreciation is $12,437,255 and the aggregate gross unrealized depreciation
is $354,820, resulting in net unrealized appreciation including open option
and futures transactions of $12,082,435.
(b) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(c) Private placement issue.
(d) Security purchased on a when issued or delayed deliver basis.
(e) Assets segregated as collateral for when issued or delayed delivery purchase
commitments, open options and open futures transactions.
</TABLE>
See Notes to Financial Statements
10
<PAGE> 12
STATEMENT OF ASSETS AND LIABILITIES
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Long-Term Investments, at Market Value (Cost $222,937,988)
(Note 1).................................................. $235,130,786
Short-Term Investments (Cost $4,219,206) (Note 1)........... 4,219,206
Cash........................................................ 59,024
Receivables:
Interest.................................................. 4,682,796
Securities Sold........................................... 222,990
Unamortized Organizational Costs (Note 1)................... 5,820
Other....................................................... 4,132
------------
Total Assets.......................................... 244,324,754
------------
LIABILITIES:
Payables:
Securities Purchased...................................... 2,472,240
Income Distributions--Common and Preferred Shares......... 176,614
Investment Advisory Fee (Note 2).......................... 128,208
Variation Margin on Futures (Note 4)...................... 60,182
Administrative Fee (Note 2)............................... 29,586
Affiliates (Note 2)....................................... 5,355
Accrued Expenses............................................ 101,209
Deferred Compensation and Retirement Plans (Note 2)......... 60,192
Options at Market Value (Net premiums paid of $14,243) (Note
4)........................................................ 35,938
------------
Total Liabilities..................................... 3,069,524
------------
NET ASSETS.................................................. $241,255,230
============
NET ASSETS CONSIST OF:
Preferred Shares ($.01 par value, authorized 100,000,000
shares, 1,900 issued with liquidation preference of
$50,000 per share) (Note 5)............................... $ 95,000,000
------------
Common Shares ($.01 par value with an unlimited number of
shares authorized, 10,806,700 shares issued and
outstanding).............................................. 108,067
Paid in Surplus............................................. 149,167,283
Net Unrealized Appreciation on Securities................... 12,082,435
Accumulated Undistributed Net Investment Income............. 667,705
Accumulated Net Realized Loss on Securities................. (15,770,260)
------------
Net Assets Applicable to Common Shares................ 146,255,230
------------
NET ASSETS.................................................. $241,255,230
============
NET ASSET VALUE PER COMMON SHARE ($146,255,230 divided
by 10,806,700 shares outstanding)......................... $ 13.53
============
</TABLE>
See Notes to Financial Statements
11
<PAGE> 13
STATEMENT OF OPERATIONS
For the Six Months Ended April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest.................................................... $ 7,104,306
------------
EXPENSES:
Investment Advisory Fee (Note 2)............................ 782,927
Administrative Fee (Note 2)................................. 180,675
Preferred Share Maintenance (Note 5)........................ 128,600
Custody..................................................... 21,765
Trustees Fees and Expenses (Note 2)......................... 12,809
Legal (Note 2).............................................. 7,915
Amortization of Organizational Costs (Note 1)............... 3,966
Other....................................................... 93,786
------------
Total Expenses.......................................... 1,232,443
------------
NET INVESTMENT INCOME....................................... $ 5,871,863
============
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments............................................... $ 444,385
Options................................................... (150,057)
Futures................................................... 62,267
------------
Net Realized Gain on Securities............................. 356,595
------------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period................................... 13,932,357
------------
End of the Period:
Investments............................................. 12,192,798
Options................................................. (50,181)
Futures................................................. (60,182)
------------
12,082,435
------------
Net Unrealized Depreciation on Securities During the
Period.................................................... (1,849,922)
------------
NET REALIZED AND UNREALIZED LOSS ON SECURITIES.............. $(1,493,327)
============
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 4,378,536
============
</TABLE>
See Notes to Financial Statements
12
<PAGE> 14
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended April 30, 1997 and the
Year Ended October 31, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
April 30, 1997 October 31, 1996
- --------------------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................... $ 5,871,863 $ 12,061,348
Net Realized Gain/Loss on Securities.................... 356,595 (1,677,218)
Net Unrealized Appreciation/Depreciation on Securities
During the Period..................................... (1,849,922) 969,703
------------ ------------
Change in Net Assets from Operations.................... 4,378,536 11,353,833
------------ ------------
Distributions from Net Investment Income:
Common Shares......................................... (4,214,293) (8,536,845)
Preferred Shares...................................... (1,620,567) (3,395,189)
------------ ------------
Total Distributions..................................... (5,834,860) (11,932,034)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES..... (1,456,324) (578,201)
NET ASSETS:
Beginning of the Period................................. 242,711,554 243,289,755
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $667,705 and $630,702,
respectively)......................................... $241,255,230 $242,711,554
============ ============
</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>
January 22, 1993
(Commencement
Six Months Year Ended October 31, of Investment
Ended --------------------------- Operations) to
April 30, 1997 1996 1995 1994 October 31, 1993
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of the Period (a)..... $13.669 $13.722 $12.284 $15.253 $13.808
------- ------- ------- ------- -------
Net Investment Income........... .543 1.116 1.147 1.181 .803
Net Realized and Unrealized
Gain/Loss on Securities....... (.138) (.065) 1.507 (2.927) 1.329
------- ------- ------- ------- -------
Total from Investment
Operations...................... .405 1.051 2.654 (1.746) 2.132
------- ------- ------- ------- -------
Less:
Distributions from Net
Investment Income:
Paid to Common Shareholders... .390 .790 .874 .938 .547
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders...... .150 .314 .342 .244 .140
Distributions from Net Realized
Gain on Securities (Note 1):
Paid to Common Shareholders... -0- -0- -0- .034 -0-
Common Share Equivalent of
Distributions Paid to
Preferred Shareholders...... -0- -0- -0- .007 -0-
------- ------- ------- ------- -------
Total Distributions............... .540 1.104 1.216 1.223 .687
------- ------- ------- ------- -------
Net Asset Value, End of the
Period.......................... $13.534 $13.669 $13.722 $12.284 $15.253
======= ======= ======= ======= =======
Market Price Per Share at End of
the Period...................... $11.875 $11.750 $11.875 $10.750 $14.625
Total Investment Return at Market
Price (b)....................... 4.41%* 5.69% 18.79% (20.83%) 8.26%*
Total Return at Net Asset
Value (c)....................... 1.90%* 5.58% 19.39% (13.59%) 12.82%*
Net Assets at End of the Period
(In millions)................... $241.3 $242.7 $243.3 $227.7 $259.8
Ratio of Expenses to Average Net
Assets Applicable to Common
Shares.......................... 1.68% 1.67% 1.77% 1.61% 1.49%
Ratio of Expenses to Average Net
Assets.......................... 1.02% 1.01% 1.06% .99% 1.02%
Ratio of Net Investment Income to
Average Net Assets Applicable to
Common Shares (d)............... 5.80% 5.91% 6.14% 6.76% 5.97%
Portfolio Turnover................ 16%* 24% 75% 165% 114%*
</TABLE>
(a) Net Asset Value at January 22, 1993, is adjusted for common and preferred
share offering costs of $.217 per common share.
(b) Total Investment Return at Market Price reflects the change in market value
of the common shares for the period indicated with reinvestment of dividends
in accordance with the Trust's dividend reinvestment plan.
(c) Total Return at Net Asset Value (NAV) reflects the change in value of the
Trust's assets with reinvestment of dividends based upon NAV.
(d) Net Investment Income is adjusted for the common share equivalent of
distributions paid to preferred shareholders.
* Non-Annualized
See Notes to Financial Statements
14
<PAGE> 16
NOTES TO FINANCIAL STATEMENTS
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Strategic Sector Municipal Trust (the "Trust") is
registered as a non-diversified closed-end management investment company under
the Investment Company Act of 1940, as amended. The Trust's investment objective
is to provide a high level of current income exempt from federal income tax,
consistent with preservation of capital. The Trust will invest in a portfolio
consisting substantially of municipal obligations from those market sectors
which the Adviser feels will best meet the Trust's investment objective. The
Trust commenced investment operations on January 22, 1993.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
A. SECURITY VALUATION--Investments are stated at value using market quotations
or, if such valuations are not available, estimates obtained from yield data
relating to instruments or securities with similar characteristics in accordance
with procedures established in good faith by the Board of Trustees. Short-term
securities with remaining maturities of 60 days or less are valued at amortized
cost.
B. SECURITY TRANSACTIONS--Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
maintain, in a segregated account with its custodian, assets having an aggregate
value at least equal to the amount of the when issued or delayed delivery
purchase commitments until payment is made.
C. INVESTMENT INCOME--Interest income is recorded on an accrual basis. Bond
premium and original issue discount are amortized over the expected life of each
applicable security.
D. ORGANIZATIONAL COSTS--The Trust has reimbursed Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred in
connection with the Trust's organization in the amount of $40,000. These costs
are being amortized on a
15
<PAGE> 17
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
straight line basis over the 60 month period ending January 21, 1998. 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 costs 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, 1996, the Trust had an accumulated capital loss
carryforward for tax purposes of $16,152,523 which will expire between October
31, 2002 and October 31, 2004. Net realized loss differs for financial and tax
reporting purposes primarily as a result of gains or losses recognized for tax
purposes on open option positions.
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 .15% of the average net assets of the Trust. The administrative
services provided by the Administrator include record keeping and reporting
responsibilities with respect to the Trust's portfolio and preferred shares and
providing certain services to shareholders.
Certain legal expenses are paid to Skadden, Arps, Slate, Meagher & Flom
(Illinois), counsel to the Trust, of which a trustee of the Trust is an
affiliated person.
For the six months ended April 30, 1997, the Trust recognized expenses of
approximately $25,900 representing VKAC's cost of providing accounting and legal
services to the Trust.
16
<PAGE> 18
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Certain officers and trustees of the Trust are also officers and directors
of VKAC. The Trust does not compensate its officers or trustees who are officers
of VKAC.
The Trust provides deferred compensation and retirement plans for its
trustees who are not officers of VKAC. Under the deferred compensation plan,
trustees may elect to defer all or a portion of their compensation to a later
date. Benefits under the retirement plan are payable for a ten-year period and
are based upon each trustee's years of service to the Trust. The maximum annual
benefit under the plan is equal to the trustees' annual retainer fee, which is
currently $2,500.
At April 30, 1997, VKAC owned 6,700 common shares of the Trust.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $37,456,439 and $42,300,211,
respectively.
4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Trust has a variety of reasons to use derivative instruments, such as to
attempt to protect the Trust against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Trust's portfolio holdings, including derivative instruments, are
marked to market each day with the change in value reflected in the unrealized
appreciation/depreciation on securities. Upon disposition, a realized gain or
loss is recognized accordingly, except when exercising an option contract or
taking delivery of a security underlying a futures contract. In these instances,
the recognition of gain or loss is postponed until the disposal of the security
underlying the option or futures 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, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in options for the six months ended April 30, 1997, were as
follows:
<TABLE>
<CAPTION>
CONTRACTS PREMIUM
- -------------------------------------------------------------------------
<S> <C> <C>
Outstanding at October 31, 1996................... 15 $(28,246)
Options Written and Purchased (Net)............... 1,897 (133,453)
Options Terminated in Closing Transactions
(Net)........................................... (199) (41,927)
Options Expired (Net)............................. (1,013) 189,383
------ --------
Outstanding at April 30, 1997..................... 700 $(14,243)
====== ========
</TABLE>
The related futures contracts of the outstanding option transactions as of
April 30, 1997, and the descriptions and market values are as follows:
<TABLE>
<CAPTION>
MARKET
EXPIRATION MONTH/ VALUE OF
CONTRACTS EXERCISE PRICE OPTIONS
- ------------------------------------------------------------------------------
<S> <C> <C> <C>
U.S. Treasury Bond Futures
June 1997 Written Call
(Current Notional Value of
$109,281 per contract)......... 100 Jun/110 $(46,875)
June 1997 Written Put
(Current Notional Value of
$109,281 per contract)......... 300 Jun/105 (4,688)
June 1997 Purchased Put
(Current Notional Value of
$109,281 per contract)......... 200 Jun/104 3,125
June 1997 Purchased Put
(Current Notional Value of
$109,281 per contract)......... 100 Jun/107 12,500
------- -----------
700 $(35,938)
------- ===========
</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. Upon entering into futures contracts, the Trust maintains, in a
segregated account with its custodian, securities with a value equal to its
obligation under the futures contracts. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin).
18
<PAGE> 20
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
April 30, 1997 (Unaudited)
- --------------------------------------------------------------------------------
Transactions in futures contracts for the six months ended April 30, 1997,
were as follows:
<TABLE>
<CAPTION>
CONTRACTS
- ----------------------------------------------------------------------
<S> <C>
Outstanding at October 31, 1996............................ -0-
Futures Opened............................................. 250
Futures Closed............................................. (150)
----
Outstanding at April 30, 1997.............................. 100
====
</TABLE>
The futures contracts outstanding as of April 30, 1997, and the description
and unrealized depreciation are as follows:
<TABLE>
<CAPTION>
UNREALIZED
CONTRACTS DEPRECIATION
- --------------------------------------------------------------------------
<S> <C> <C>
U.S. Treasury Bond Futures
June 1997 - Sells to Open (Current Notional
Value of $109,281 per contract)............... 100 $60,182
--- -------
</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.
5. PREFERRED SHARES
The Trust has outstanding 1,900 Auction Preferred Shares ("APS") in two series.
Series A contains 1,000 shares while Series B contains 900 shares. Dividends are
cumulative and the dividend rate for both Series is currently reset every 28
days through an auction process. At April 30, 1997, the average rate in effect
was 3.615%. During the six months ended April 30, 1997, the rates ranged from
3.30% to 3.70%.
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
Growth Fund
Pace Fund
Growth & Income
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
MORGAN STANLEY
FUND, INC.
Aggressive Equity Fund
American Value Fund
Asian Growth Fund
Emerging Markets Fund
Global Equity Allocation Fund
Global Fixed Income Fund
High Yield Fund
International Magnum Fund
Latin American Fund
U.S. Real Estate Fund
Worldwide High Income Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us weekdays from 7:00 a.m. to 7:00 p.m.
Central time at 1-800-341-2911 for Van Kampen American Capital funds, or
1-800-282-4404 for Morgan Stanley retail funds.
20
<PAGE> 22
VAN KAMPEN AMERICAN CAPITAL STRATEGIC SECTOR MUNICIPAL TRUST
BOARD OF TRUSTEES
DAVID C. ARCH
ROD DAMMEYER
HOWARD J KERR
DENNIS J. MCDONNELL*--Chairman
THEODORE A. MYERS
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN*
OFFICERS
DENNIS J. MCDONNELL*
President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
PETER W. HEGEL*
Vice President
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
INVESTMENT ADVISORY CORP.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
CUSTODIAN AND
TRANSFER AGENT
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM (ILLINOIS)
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
KPMG PEAT MARWICK LLP
Peat Marwick Plaza
303 East Wacker Drive
Chicago, Illinois 60601
* "Interested" persons of the Trust, as defined in the Investment Company Act of
1940.
(C) Van Kampen American Capital Distributors, Inc., 1997 All rights reserved.
(SM) denotes a service mark of Van Kampen American Capital Distributors, Inc.
21
