File No. 333-01179
CIK #896994
Securities and Exchange Commission
Washington, D. C. 20549-1004
Post-Effective
Amendment No. 1
to
Form S-6
For Registration under the Securities Act of 1933 of
Securities of Unit Investment Trusts Registered on
Form N-8B-2
Van Kampen American Capital Equity Opportunity Trust, Series 29
(Exact Name of Trust)
Van Kampen American Capital Distributors, Inc.
(Exact Name of Depositor)
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
(Complete address of Depositor's principal executive offices)
Van Kampen American Capital Distributors, Inc. Chapman and Cutler
Attention: Don G. Powell Attention: Mark J. Kneedy
One Parkview Plaza 111 West Monroe Street
Oakbrook Terrace, Illinois 60181 Chicago, Illinois 60603
(Name and complete address of agents for service)
( X ) Check if it is proposed that this filing will become effective
on May 23, 1997 pursuant to paragraph (b) of Rule 485.
GLOBAL BLUE CHIP TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 29
PROSPECTUS PART ONE
NOTE: Part One of this Prospectus may not be distributed unless accompanied by
Part Two.Please retain both parts of this Prospectus for future reference.
THE TRUST
The Global Blue Chip Trust, Series 1 (the "Trust" ) is a unit
investment trust in the Van Kampen American Capital Equity Opportunity Trust,
Series 29 (the "Fund" ). The Global Blue Chip Trust offers investors
the opportunity to purchase Units representing proportionate interests in a
fixed, diversified portfolio of common stocks issued by some of the most
widely held and well-capitalized companies in the world (the "Equity
Securities" or "Securities" ). Unless terminated earlier, the Trust
will terminate on May 1, 2003 ("Mandatory Termination Date" ) and any
securities then held will, within a reasonable time thereafter, be liquidated
or distributed by the Trustee. Any Securities liquidated at termination will
be sold at the then current market value for such Securities; therefore, the
amount distributable in cash to a Unitholder upon termination may be more or
less than the amount such Unitholder paid for his Units. Unless otherwise
indicated, all amounts herein are stated in U.S. dollars computed on the basis
of the exchange rate for the relevant currency.
PUBLIC OFFERING PRICE
The Public Offering Price per Unit is equal to the aggregate underlying value
of the Equity Securities plus or minus cash, if any, in the Capital and Income
Accounts, divided by the number of Units outstanding, plus the applicable
sales charge as described herein. See "Summary of Essential Financial
Information" .
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
The Date of this Prospectus is May 23, 1997
GLOBAL BLUE CHIP TRUST, SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 29
Summary of Essential Financial Information
As of March 18, 1997
Managing Underwriter: International Assets Advisory Corp.
Sponsor: Van Kampen American Capital Distributors, Inc.
Supervisor (1): Van Kampen American Capital Investment Advisory Corp.
(An affiliate of the Sponsor)
Sub-Supervisor (1): Global Assets Advisors, Inc.
Evaluator: American Portfolio Evaluation Services
(A division of an affiliate of the Sponsor)
Trustee: The Bank of New York
<TABLE>
<CAPTION>
Global
Blue Chip
Trust
---------------
<S> <C>
General Information
Number of Units....................................................................................... 1,300,000
Fractional Undivided Interest in the Trust per Unit .................................................. 1/1,300,000
Public Offering Price: ...............................................................................
Aggregate Value of Securities in Portfolio <F2>...................................................... $ 14,182,693
Aggregate Value of Securities per Unit (including accumulated dividends)............................. $ 10.94
Sales Charge 5.5% (5.820% of Aggregate Value of Securities excluding principal cash) per Unit <F4>... $ .63
Public Offering Price per Unit <F3><F4>.............................................................. $ 11.57
Redemption Price per Unit............................................................................. $ 10.94
Secondary Market Repurchase Price per Unit............................................................ $ 10.94
Excess of Public Offering Price per Unit Over Redemption Price per Unit............................... $ .63
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Supervisor's Annual Supervisory Fee...Maximum of $.007 per Unit
Evaluator's Annual Fee ...............Maximum of $.0025 per Unit
Evaluation Time (5 ) .................Close of the relevent stock market
Date of Deposit.......................March 22, 1996
Mandatory Termination Date............May 1, 2003
Minimum Termination Value.............The Trust may be terminated if the net asset value of such Trust is less than $500,000
unless the net asset value of such Trust deposits has exceeded $15,000,000, then the Trust
Agreement may be terminated if the net asset value of such Trust is less than $3,000,000.
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Special Information......................................
Calculation of Estimated Net Annual Dividends per Unit...
Estimated Gross Annual Dividends per Unit............... $ .18772
Less: Estimated Expenses per Unit....................... $ .02132
Estimated Net Annual Dividends per Unit................. $ .16640
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Trustee's Annual Fee ...............$.008 per Unit
Income Distribution Record Date.....TENTH day of March, June, September and December
Income Distribution Date............TWENTY-FIFTH day of March, June, September and December
Capital Account Record Date.........TENTH day of December.
Capital Account Distribution Date...TWENTY-FIFTH day of December.
- ----------
<FN>
<F1>Pursuant to a contractual arrangement with the Supervisor, Global Assets
Advisors, Inc. will provide to the Supervisor on an agency basis supervisory
services in return for the entire supervisory fee.
<F2>Each Equity Security listed on a national or foreign securities exchange is
valued at the closing sale price or, if not listed, at the bid price. The
aggregate value of Securities in the Trust represents the U.S. dollar value
based on the bid side value of the related currency exchange rate at the
Evaluation Time.
<F3>Anyone ordering Units will have added to the Public Offering Price a pro rata
share of any cash in the Income and Capital Accounts.
<F4>Effective on each March 27, commencing March 27, 1997, the secondary sales
charge will decrease by .5 of 1% to a minimum sales charge of 3.0%. See "
Public Offering-Offering Price in Part Two."
<F5>For purposes of computing exchange rates only for the Foreign Securities, the
Evaluation Time shall be 4:00 p.m. New York time.
</TABLE>
PORTFOLIO
The Global Blue Chip Trust primarily consists of 15 domestic and foreign
common stocks of well-established companies located in various markets
throughout the world (certain of which are held in ADR form). All of the
Equity Securities are listed on a national or foreign securities exchange, the
NASDAQ National Market or are traded in the over-the-counter market as of the
Initial Date of Deposit.
PER UNIT INFORMATION
<TABLE>
<CAPTION>
1997<F1>
-------------
<S> <C>
Net asset value per Unit at beginning of period...................................................................... $ 9.49
=============
Net asset value per Unit at end of period............................................................................ $ 10.89
=============
Distributions to Unitholders of investment income including accumulated dividends paid on Units redeemed (average
Units outstanding for entire period)................................................................................. $ .12
=============
Distributions to Unitholders from Security sales proceeds (average Units outstanding for entire period).............. $ --
=============
Unrealized appreciation (depreciation) of Equity Securities (per Unit outstanding at end of period).................. $ 1.21
=============
Units outstanding at end of period................................................................................... 1,300,000
- ----------
<FN>
<F1>For the period from March 22, 1996 (date of deposit) through January 31, 1997.
</TABLE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors of Van Kampen American Capital Distributors, Inc.
and the Unitholders of Global Blue Chip Trust, Series 1 (Van Kampen American
Capital Equity Opportunity Trust, Series 29):
We have audited the accompanying statement of condition (including the
analysis of net assets) and the related portfolio of the Global Blue Chip
Trust, Series 1 (Van Kampen American Capital Equity Opportunity Trust, Series
29) as of January 31, 1997 and the related statements of operations and
changes in net assets for the period from March 22, 1996 (date of deposit)
through January 31, 1997. These statements are the responsibility of the
Trustee and the Sponsor. Our responsibility is to express an opinion on such
statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. Our
procedures included confirmation of securities owned at January 31, 1997 by
correspondence with the Trustee. An audit also includes assessing the
accounting principles used and significant estimates made by the Trustee and
the Sponsor, as well as evaluating the overall financial statement
presentation. We believe our audit provides a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of the Global Blue Chip Trust,
Series 1 (Van Kampen American Capital Equity Opportunity Trust, Series 29) as
of January 31, 1997, and the results of operations and changes in net assets
for the period from March 22, 1996 (date of deposit) through January 31, 1997,
in conformity with generally accepted accounting principles.
GRANT THORNTON LLP
Chicago, Illinois
April 4, 1997
<TABLE>
GLOBAL BLUE CHIP TRUST SERIES 1
Statements of Condition
January 31, 1997
<CAPTION>
Global
Blue Chip
Trust
<S> <C>
Trust property
Cash.................................................................................... $ 11,720
Securities at market value, (cost $12,582,994) (note 1)................................. 14,150,007
Accumulated dividends................................................................... --
Receivable for securities sold.......................................................... --
$ 14,161,727
==============
Liabilities and interest to Unitholders
Cash overdraft.......................................................................... $ --
Redemptions payable..................................................................... --
Interest to Unitholders................................................................. 14,161,727
$ 14,161,727
==============
Analysis of Net Assets
Interest of Unitholders (1,300,000 Units of fractional undivided interest outstanding)
Cost to original investors of 1,300,000 Units (note 1).................................. $ 13,319,000
Less initial underwriting commission (note 3)........................................... 736,006
--------------
12,582,994
Less redemption of 0 Units.............................................................. --
--------------
12,582,994
Undistributed net investment income
Net investment income................................................................... 148,225
Less distributions to Unitholders....................................................... 136,511
--------------
11,714
Realized gain (loss) on Security sale................................................... 6
Unrealized appreciation (depreciation) of Securities (note 2)........................... 1,567,013
Distributions to Unitholders of Security sale proceeds.................................. --
Net asset value to Unitholders.......................................................... $ 14,161,727
==============
Net asset value per Unit (1,300,000 Units outstanding)................................... $ 10.89
==============
</TABLE>
The accompanying notes are an integral part of these statement.
<TABLE>
GLOBAL BLUE CHIP TRUST, SERIES 1
Statements of Operations
Period from March 22, 1996 (date of deposit) through January 31, 1997
<CAPTION>
1997
-------------
<S> <C>
Investment income
Dividend income..................................................... $ 164,432
Expenses.............................................................
Trustee fees and expenses........................................... 7,792
Evaluator fees...................................................... 2,214
Supervisory fees.................................................... 6,201
-------------
Total expenses...................................................... 16,207
-------------
Net investment income............................................... 148,225
Realized gain (loss) from Securities sale
Proceeds............................................................ 6
Cost................................................................ --
-------------
Realized gain (loss)................................................ 6
Net change in unrealized appreciation (depreciation) of Securities... 1,567,013
-------------
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS..... $ 1,715,244
=============
</TABLE>
<TABLE>
Statements of Changes in Net Assets
Period from March 22, 1996 (date of deposit) January 31, 1997
<CAPTION>
1997
--------------
<S> <C>
Increase (decrease) in net assets
Operations:
Net investment income...................................................... $ 148,225
Realized gain (loss) on Securities sale ................................... 6
Net change in unrealized appreciation (depreciation) of Securities......... 1,567,013
--------------
Net increase (decrease) in net assets resulting from operations............ 1,715,244
Distributions to Unitholders from:
Net investment income...................................................... (136,511)
Securities sale proceeds................................................... --
Redemption of Units......................................................... --
--------------
Total increase (decrease).................................................. 1,578,733
Net asset value to Unitholders
Beginning of period........................................................ 4,742,898
Additional Securities purchased from proceeds of Unit Sales................ 7,840,096
--------------
End of period (including undistributed net investment income of $11,714)... $ 14,161,727
==============
</TABLE>
The accompanying notes are an integral part of these statements.
<TABLE>
GLOBAL BLUE CHIP TRUST, SERIES 1
PORTFOLIO as of January 31, 1997
<CAPTION>
Valuation of Securities
Number at January 31,
of Market Value Per 1997
Shares Name of Issuer Share (Note 1)
- ---------- ------------------------------------------ --------------------- ----------------------------
<S> <C> <C> <C>
17,423 Astra AB $ 47.8750 $ 834,126
- --------------------------------------------------------------------------------------------------------
24,268 Bayer AG 38.0000 922,184
- --------------------------------------------------------------------------------------------------------
78,328 Benetton Group S.P.A. 13.2452 1,037,472
- --------------------------------------------------------------------------------------------------------
28,608 Broken Hill Proprietary Company Limited 27.2500 779,568
- --------------------------------------------------------------------------------------------------------
19,446 Coca-Cola Company 57.8750 1,125,437
- --------------------------------------------------------------------------------------------------------
19,445 Honda Motor Company Limited 54.0000 1,050,030
- --------------------------------------------------------------------------------------------------------
29,409 Internationale Nederlanden Groep NV 37.6671 1,107,753
- --------------------------------------------------------------------------------------------------------
44,574 Keppel Corporation Ltd. 16.5000 735,471
- --------------------------------------------------------------------------------------------------------
15,874 L'Oreal 70.7500 1,123,086
- --------------------------------------------------------------------------------------------------------
16,097 McDonald's Corporation 45.5000 732,413
- --------------------------------------------------------------------------------------------------------
714 Nestle SA 1,084.7287 774,495
- --------------------------------------------------------------------------------------------------------
12,598 Reuters Holding PLC 63.8750 804,697
- --------------------------------------------------------------------------------------------------------
5,795 Royal Dutch Petroleum Company 175.0190 1,014,235
- --------------------------------------------------------------------------------------------------------
13,623 Sony Corporation 67.3750 917,850
- --------------------------------------------------------------------------------------------------------
17,017 Telefonica De Espana 70.0000 1,191,190
- --------------------------------------------------------------------------------------------------------
343,219 $ 14,150,007
========== ===========================
</TABLE>
The accompanying notes are an integral part of these statement.
GLOBAL BLUE CHIP TRUST SERIES 1
Notes to Financial Statements
January 31, 1997
- --------------------------------------------------------------------------
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Security Valuation - Securities listed are valued at the last closing sales
price of the relevent stock exchanges or, if not so listed, at the bid price.
Security Cost - The original cost to the Trust of the Securities was based on
the closing sale prices on the relevent stock exchanges. The cost was
determined on the day of the various Dates of Deposit.
Unit Valuation - The redemption price per Unit is the pro rata share of each
Unit based upon (1) the cash on hand in the Trust or monies in the process of
being collected, (2) the Securities in the Trust based on the value as
described in Note 1 and (3) accumulated dividends thereon, less accrued
expenses of the Trust, if any.
Federal Income Taxes - Each Unitholder is considered to be the owner of a pro
rata portion of the Trust and, accordingly, no provision has been made for
Federal Income Taxes.
Distributions to Unitholders of the Trust's taxable income will be taxable as
ordinary or capital gain income to Unitholders.
Other - The financial statements are presented on the accrual basis of
accounting. Any realized gains or losses from securities transactions are
reported on an identified cost basis.
NOTE 2 - PORTFOLIO
Unrealized Appreciation and Depreciation - An analysis of net unrealized
appreciation (depreciation) at January 31, 1997 is as follows:
<TABLE>
<CAPTION>
Global
Blue Chip
Trust
-------------
<S> <C>
Unrealized Appreciation $ 1,821,995
Unrealized Depreciation (254,982)
-------------
$ 1,567,013
=============
</TABLE>
NOTE 3 - OTHER
Marketability - Although it is not obligated to do so, the Managing
Underwriter intends to maintain a market for Units and to continuously offer
to purchase Units at prices, subject to change at any time, based upon the
value of the Securities in the portfolio of the Trust valued as described in
Note 1, plus accumulated dividends to the date of settlement. If the supply of
Units exceeds demand, or for other business reasons, the Managing Underwriter
may discontinue purchases of Units at such prices. In the event that a market
is not maintained for the Units, a Unitholder desiring to dispose of his Units
may be able to do so only by tendering such Units to the Trustee for
redemption at the redemption price.
Cost to Investors - The cost to original investors was based on the underlying
value of the Securities per Unit on the date of an investor's purchase, plus a
sales charge of 5.5% of the public offering price which is equivalent to
5.820% of the aggregate underlying value of the Securities. The secondary
market cost to investors is based on the determination of the underlying value
of the Securities per Unit on the date of an investor's purchase plus a sales
charge of 5.5% of the public offering price which is 5.820% of the underlying
value of the Securities. Effective on each March 27, commencing March 27,
1997, the secondary sales charge will decrease by .5 of 1% to a minimum sales
charge of 3.0%.
Compensation of Evaluator and Supervisor - The Supervisor receives a fee for
providing portfolio supervisory services for the Trust ($.007 per Unit, not to
exceed the aggregate cost of the Supervisor for providing such services to all
applicable Trusts). The Evaluator receives an annual fee for regularly
evaluating the Trust's portfolio. Both fees may be adjusted for increases
under the category "All Services Less Rent of Shelter" in the Consumer
Price Index.
Global Blue Chip Trust, Series 1
Prospectus Part Two
The Fund. Van Kampen American Capital Equity Opportunity Trust, Series 29 (the
"Fund" ) is comprised of one underlying unit investment trust
designated as the Global Blue Chip Trust, Series 1 ("the "Trust" ).
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a fixed, diversified portfolio of common stocks
issued by some of the most widely held and well-capitalized companies in the
world (the "Equity Securities" or "Securities" ). The
Securities include domestic and foreign common stocks, certain of which are
held in American Depositary Receipt form ("ADRs" ). The foreign common
stocks, excluding those held in ADR form, are referred to herein as the "
Foreign Securities." Unless terminated earlier, the Trust will terminate
on May 1, 2003 (the "Mandatory Termination Date" ) and any Securities
then held will, within a reasonable time thereafter, be liquidated or
distributed by the Trustee. Any Securities liquidated at termination will be
sold at the then current market value for such Securities; therefore, the
amount distributable in cash to a Unitholder upon termination may be more or
less than the amount such Unitholder paid for his Units.
Objective of the Trust. The objective of the Trust is to provide the potential
for capital appreciation, income and global diversification by investing in a
portfolio of actively traded equity securities issued by some of the most
widely held and well-capitalized companies in the world. See "
Portfolio" in Part One. There is, of course, no guarantee that the
objective of the Trust will be achieved.
Public Offering Price. The Public Offering Price of the Units of the Trust
includes the aggregate underlying value of the Securities in the Trust, the
applicable sales charge as described herein, and cash, if any, in the Income
and Capital Accounts held or owned by the Trust. The Public Offering Price per
Unit is based on the aggregate value of the Foreign Securities computed on the
basis of the bid side value of the applicable currency exchange rate for the
relevant currency expressed in U.S. dollars. The sales charge is reduced on a
graduated scale for sales involving at least 10,000 Units. If Units were
available for purchase at the date of the "Summary of Essential Financial
Information" in Part One, the Public Offering Price per Unit would have
been that amount set forth therein. The minimum purchase is 500 Units (100
Units for a tax-sheltered retirement plan). See "Public Offering."
NOTE: THIS PROSPECTUS MAY BE USED ONLY WHEN ACCOMPANIED BY PART ONE.
Both parts of this Prospectus should be retained for future reference.
This Prospectus is dated as of the date of the Prospectus Part One
accompanying this Prospectus Part Two.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
Dividend and Capital Distributions. Distributions of dividends and capital, if
any, received by the Trust will be paid in cash on the applicable Distribution
Date to Unitholders of record on the record date as set forth in the "
Summary of Essential Financial Information" in Part One. Any distribution
of income and/or capital will be net of the expenses of the Trust. See "
Taxation." Additionally, upon surrender of Units for redemption or
termination of the Trust, the Trustee will distribute to each Unitholder his
pro rata share of the Trust's assets, less expenses, in the manner set forth
under "Rights of Unitholders--Distributions of Income and Capital."
Secondary Market for Units. Although not obligated to do so, International
Assets Advisory Corp. (the "Managing Underwriter" ) currently intends
to maintain a market for Units of the Trust and offer to repurchase Units at
prices which are based on the aggregate underlying value of Equity Securities
in the Trust (generally determined by the closing sale prices of the
Securities) plus or minus cash, if any, in the Capital and Income Accounts of
the Trust. If a secondary market is not maintained, a Unitholder may redeem
Units at prices based upon the aggregate underlying value of the Equity
Securities in the Trust plus or minus a pro rata share of cash, if any, in the
Capital and Income Accounts of the Trust. See "Rights of
Unitholders--Redemption of Units."
Termination. Commencing on the Mandatory Termination Date, Securities will
begin to be sold in connection with the termination of the Trust. The Sponsor
will determine the manner, timing and execution of the sale of the Securities.
Written notice of any termination of the Trust shall be given by the Trustee
to each Unitholder at his address appearing on the registration books of the
Trust maintained by the Trustee. At least 30 days prior to the Mandatory
Termination Date the Trustee will provide written notice thereof to all
Unitholders. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time after the Trust is terminated.
See "Trust Administration--Amendment or Termination."
Portfolio Supervision. Van Kampen American Capital Investment Advisory Corp.,
the Supervisor for the Trust, has retained Global Assets Advisors, Inc. ("
Global Assets Advisors" ) as the Sub-Supervisor to provide research to the
Supervisor and perform portfolio supervisory services for the Trust. The
Sponsor believes that this arrangement is desirable in the present
circumstances due to the complexity of the foreign equity security markets and
Global Assets Advisors' expertise in providing equity research on individual
foreign equity securities, emerging markets and the foreign equity security
markets in general. The Supervisor will pay Global Assets Advisors the entire
supervisory fee for providing these services. See "Summary of Essential
Financial Information" in Part One.
Risk Factors. An investment in the Trust should be made with an understanding
of the risks associated therewith, including the possible deterioration of
either the financial condition of the issuers or the general condition of the
stock market and currency fluctuations, the lack of adequate financial
information concerning an issuer and exchange control restrictions impacting
foreign issuers. For certain risk considerations related to the Trust, see
"Risk Factors." Units of the Trust are not deposits or obligations of,
and are not guaranteed or endorsed by, any bank and are not federally insured
or otherwise protected by the Federal Deposit Insurance Corporation, the
Federal Reserve Board or any other agency and involve investment risk,
including the possible loss of the principal amount invested.
THE TRUST
- --------------------------------------------------------------------------
Van Kampen American Capital Equity Opportunity Trust, Series 29, which is
comprised of one unit investment trust, Global Blue Chip Trust, Series 1, was
created under the laws of the State of New York pursuant to a Trust Indenture
and Trust Agreement (the "Trust Agreement" ), dated the Initial Date of
Deposit, among Van Kampen American Capital Distributors, Inc., as Sponsor, Van
Kampen American Capital Investment Advisory Corp., as Supervisor, The Bank of
New York, as Trustee, and American Portfolio Evaluation Services, a division
of Van Kampen American Capital Investment Advisory Corp., as Evaluator.
The Trust offers investors the opportunity to purchase Units representing
proportionate interests in a portfolio of actively traded equity securities
issued by some of the most widely held and well-capitalized companies in the
world. Diversification of assets in the Trust will not eliminate the risk of
loss always inherent in the ownership of securities.
Unless terminated earlier, the Trust will terminate on the Mandatory
Termination Date set forth under "Summary of Essential Financial
Information" and any Securities then held will, within a reasonable time
thereafter, be liquidated or distributed by the Trustee. Any Securities
liquidated at termination will be sold at the then current market value for
such Securities; therefore, the amount distributable in cash to a Unitholder
upon termination may be more or less than the amount such Unitholder paid for
his Units.
On the Initial Date of Deposit, the Sponsor deposited with the Trustee the
Securities, including delivery statements relating to contracts for the
purchase of certain such Securities and an irrevocable letter of credit issued
by a financial institution in the amount required for such purchases.
Thereafter, the Trustee, in exchange for such Securities (and contracts) so
deposited, delivered to the Sponsor documentation evidencing the ownership of
Units of the Trust.
Each Unit of the Trust initially offered represents an undivided interest in
the Trust. To the extent that any Units are redeemed by the Trustee, the
fractional undivided interest in the Trust represented by each unredeemed Unit
will increase accordingly, although the actual interest in the Trust
represented by such fraction will remain unchanged. Units will remain
outstanding until redeemed upon tender to the Trustee by Unitholders, which
may include the Sponsor or the Managing Underwriter, or until the termination
of the Trust Agreement.
OBJECTIVE AND SECURITIES SELECTION
- --------------------------------------------------------------------------
The objective of the Trust is to provide the potential for capital
appreciation, income and global diversification by investing in a portfolio of
common stocks issued by some of the most widely held and well-capitalized
companies located in markets throughout the world (often considered to be "
blue chip" stocks). There is, of course, no assurance that the Trust
(which includes expenses and sales charges) will achieve its objective.
The Equity Securities selected for deposit in the Trust were chosen by
International Assets Advisory Corporation, the Managing Underwriter. The term
"blue chip" is typically reserved for the most widely recognized,
firmly established and financially strong companies. This designation is
generally based on a demonstrated track record of performance and market
acceptance. Accordingly, in selecting the Equity Securities, the Managing
Underwriter considered companies with market capitalization in excess of $1
billion that exhibit strong balance sheets, maintain a commanding position
within their industry, have provided above-average liquidity, possess
well-established and respected management and have historically displayed
consistent dividend-paying ability. While the portfolio contains a number of
"household names," such as Honda, Nestle, McDonald's, and Coca-Cola,
recognition alone is not enough--each stock must meet the criteria for
selection. The Trust seeks to capitalize on the strength and resilience of
these blue chip companies by identifying those which offer the potential to
provide favorable growth opportunities. The Trust is designed as a core
investment for any global equity portfolio and seeks to provide
diversification among industries and location of issuers. The Managing
Underwriter believes that financial soundness is the principal common
denominator of the portfolio Securities.
In addition to the criteria described above, the Securities were also chosen
to meet specific diversification parameters: (i) no industry is represented by
more than one company; (ii) due to recent volatility, technology stocks were
not considered for the portfolio; and (iii) in general, companies operating in
developed markets were favored in an effort to avoid the uncertainty in the
volatile economies of emerging markets. The ultimate goal of global
diversification is to provide the potential to decrease certain investment
risks. A portfolio which contains securities from multiple countries in varied
industries may help to provide a degree of protection from market volatility
specific to any one country or any one industry. The Trust seeks to help
investors achieve such diversification in a convenient and efficient manner.
Investors will be subject to taxation on the dividend income received by the
Trust and on gains from the sale or liquidation of Securities. Investors
should be aware that there is not any guarantee that the objective of the
Trust will be achieved because it is subject to the continuing ability of the
respective issuers to declare and pay dividends and because the market value
of the Securities can be affected by a variety of factors. Common stocks may
be especially susceptible to general stock market movements and to volatile
increases and decreases of value as market confidence in and perceptions of
the issuers change. Investors should be aware that there can be no assurance
that the value of the underlying Securities will increase or that the issuers
of the Securities will pay dividends on outstanding common shares. Any
distribution of income will generally depend upon the declaration of dividends
by the issuers of the Securities and the declaration of any dividends depends
upon several factors including the financial condition of the issuers and
general economic conditions. In addition, a decrease in the value of the
foreign currencies relative to the U.S. dollar will adversely affect the value
of the Trust's assets and income and the value of the Units of the Trust. See
"Risk Factors."
Investors should note that the above criteria was applied to the Securities
for inclusion in the Trust as of the Initial Date of Deposit. Subsequent to
the Initial Date of Deposit, the Securities may no longer meet the above
criteria. Should a Security no longer meet the criteria originally established
for inclusion in the Trust, such Security will not as a result thereof be
removed from the Trust portfolio.
Investors should be aware that the Trust is not a "managed" fund and
as a result the adverse financial condition of a company will not result in
its elimination from the portfolio except under extraordinary circumstances
(see "Trust Administration--Portfolio Administration" ). In addition,
Securities will not be sold by the Trust to take advantage of market
fluctuations or changes in anticipated rates of appreciation. The Trust may
continue to hold Securities even though the evaluation of the attractiveness
of the Securities may have changed and, if the evaluation were performed again
at that time, the Securities would not be selected for the Trust.
TRUST PORTFOLIO
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The Trust consists of domestic and foreign common stocks of well-established
companies located in various markets throughout the world (certain of which
are held in ADR form). All of the Equity Securities are listed on a national
or foreign securities exchange, the NASDAQ National Market or are traded in
the over-the-counter market. Each of the Securities was selected by the
Managing Underwriter based upon those factors referred to under "
Objectives and Securities Selection" above. The following is a general
description of each of the companies included in the Trust.
Astra AB. Astra AB develops, manufactures and markets pharmaceuticals. The
company makes agents for gastrointestinal diseases, including "Losec"
ulcer agents. Astra also produces agents for respiratory diseases,
cardiovascular preparations, anesthetics, agents for nervous system disorders
and anti-infective agents. The company markets its products in both Sweden and
abroad.
Bayer AG. Bayer AG produces and markets polymers, organic, industrial, health
care, agrochemicals and imaging technology products and equipment. The
company's products are used by the automotive, electrical
engineering/electronics, medical, construction, consumer goods, paper, water
treatment, agricultural, shipping, imaging and other industries. Bayer
operates in over 150 countries worldwide.
Benetton Group S.P.A. Benetton Group S.P.A. and its subsidiaries produce and
market fashion goods made from woolen and cotton yarn and fabric. The
company's products include shirts, trousers, shoes and a variety of
accessories. Benetton distributes much of its merchandise through small retail
stores which have free use of the trademark, in return for selling Benetton
products exclusively.
Broken Hill Proprietary Company Limited. Broken Hill Proprietary Company
Limited (and its subsidiaries) is an Australian based international resources
company. Broken Hill Proprietary's three principal areas of business are steel
production, minerals exploration and production (coal, iron ore, gold
diamonds, copper concentrate and manganese ore) and petroleum exploration,
production and refining.
Coca-Cola Company. The Coca-Cola Company manufactures, markets and distributes
soft drinks, soft drink syrups and concentrates worldwide, including "
Coca-Cola" , "Diet Coke" , "Tab" , "Sprite" , "
Fanta" , "Fresca" , "Cherry Coke" , "PowerAde" , "
Fruitopia" , and "Minute Maid" soda. Other products include juices,
juice drinks and mixers as: "Minute Maid" , "Hi-C" and "
Bacardi" brands.
Honda Motor Company Limited. Honda Motor Company Limited is one of Japan's
leading manufactures of automobiles and the largest manufacturer of
motorcycles in the world. It is internationally recognized for its expertise
and leadership in developing a wide variety of products ranging from small
general purpose engines to specialty sports cars. Established 48 years ago,
Honda and its many partners have created a global network of 83 production
facilities employing 92,800 workers in 39 countries, supplying Honda products
to approximately 150 countries. The company owns approximately 20% of Rover
Group PLC in the United Kingdom.
Internationale Nederlanden Groep NV. Internationale Nederlanden Groep NV (ING)
is an international financial services group which offers a wide range of
financial services to individuals, corporations and other institutions. The
company's services include commercial, savings and investment banking,
stockbroking, and life, property and commercial insurance. The company has
offices throughout the world.
Keppel Corporation Ltd. Keppel Corporation Ltd. provides a wide range of ship
repair and shipbuilding services, and is also active in property, banking and
financial services, transportation, telecommunications and engineering.
L'Oreal. L'Oreal manufactures, markets and sells health and beauty aids. The
company's products are sold internationally and include cosmetics, hair
products, moisturizers, perfumes and pharmaceuticals. L'Oreal also holds
interest in magazine publishing, film production and distribution and art
galleries.
McDonald's Corporation. McDonald's Corporation develops, operates, franchises
and services a worldwide system of restaurants. These restaurants prepare,
assemble, package and sell a limited menu of quickly prepared, moderately
priced foods. There are over 15,000 restaurants in the United States and 86
countries worldwide.
Nestle SA. Nestle SA is a holding company with subsidiaries that produce and
sell drinks, cereals, powdered milk, culinary products, frozen food,
chocolate, ready to eat dishes, refrigerated products, food service products,
pet food, pharmaceuticals and cosmetics. Nestle has 494 production facilities
in approximately 71 countries.
Reuters Holdings PLC. Reuters Holdings PLC is a United Kingdom based company
providing international news and information services. The company provides
economic and financial information to the business community and supplies news
services to the media. The company obtains its information from approximately
217 exchanges and over the counter markets, a network of over 1,639
journalists, photographers and cameramen and through subscribers.
Royal Dutch Petroleum Company. Royal Dutch Petroleum Company owns 60% of the
Royal Dutch/Shell Group of companies. These companies are involved in all
phases of the petroleum industry from exploration to final processing and
delivery. Royal Dutch Petroleum Company has no operations of its own, and
virtually the whole of its income is derived from its 60% interest in Royal
Dutch/Shell Group.
Sony Corporation. Sony Corporation manufactures consumer electronic equipment
including color television sets, videotape recorders, video cameras, CD
players and cassette players. The company also owns entertainment interests
such as Columbia and Tri-Star film studios, cinemas, videogames, and Columbia
and Epic records.
Telefonica De Espana. Telefonica De Espana provides telecommunications to
industrial, residential and municipal customers throughout Spain. The
company's products and services include telephones, mobile phones, telefaxes,
videoconferencing and audio-visual communications, such as television stations
and radios. Through its subsidiaries, the company manufactures and markets
information-age services and products.
The Trust consists of (a) the Equity Securities (including contracts for the
purchase thereof) listed under "Portfolio" in Part One as may continue
to be held from time to time in the Trust, (b) any additional Equity
Securities acquired and held by the Trust pursuant to the provisions of the
Trust Agreement and (c) any cash held in the Income and Capital Accounts.
Neither the Sponsor nor the Trustee shall be liable in any way for any failure
in any of the Equity Securities. However, should any contract for the purchase
of any of the Equity Securities initially deposited hereunder fail, the
Sponsor will, unless substantially all of the moneys held in the Trust to
cover such purchase are reinvested in substitute Equity Securities in
accordance with the Trust Agreement, refund the cash and sales charge
attributable to such failed contract to all Unitholders on or before the next
scheduled distribution date.
RISK FACTORS
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General. An investment in Units of the Trust should be made with an
understanding of the risks which an investment in domestic and foreign common
stocks entails, including the risk that the financial condition of the issuers
of the Equity Securities or the general condition of the common stock market
may worsen and the value of the Equity Securities and therefore the value of
the Units may decline. Common stocks are especially susceptible to general
stock market movements and to volatile increases and decreases of value as
market confidence in and perceptions of the issuers change. These perceptions
are based on unpredictable factors including expectations regarding
government, economic, monetary and fiscal policies, inflation and interest
rates, economic expansion or contraction, and global or regional political,
economic or banking crises. Shareholders of common stocks have rights to
receive payments from the issuers of those common stocks that are generally
subordinate to those of creditors of, or holders of debt obligations or
preferred stocks of, such issuers. Shareholders of common stocks of the type
held by the Trust have a right to receive dividends only when and if, and in
the amounts, declared by each issuer's board of directors and have a right to
participate in amounts available for distribution by such issuer only after
all other claims on such issuer have been paid or provided for. Common stocks
do not represent an obligation of the issuer and, therefore, do not offer any
assurance of income or provide the same degree of protection of capital as do
debt securities. The issuance of additional debt securities or preferred stock
will create prior claims for payment of principal, interest and dividends
which could adversely affect the ability and inclination of the issuer to
declare or pay dividends on its common stock or the rights of holders of
common stock with respect to assets of the issuer upon liquidation or
bankruptcy. The value of common stocks is subject to market fluctuations for
as long as the common stocks remain outstanding, and thus the value of the
Equity Securities in a portfolio may be expected to fluctuate over the life of
the Trust to values higher or lower than those prevailing on the Initial Date
of Deposit.
Holders of common stocks incur more risk than holders of preferred stocks and
debt obligations because common stockholders, as owners of the entity, have
generally inferior rights to receive payments from the issuer in comparison
with the rights of creditors of, or holders of debt obligations or preferred
stocks issued by, the issuer. Cumulative preferred stock dividends must be
paid before common stock dividends and any cumulative preferred stock dividend
omitted is added to future dividends payable to the holders of cumulative
preferred stock. Preferred stockholders are also generally entitled to rights
on liquidation which are senior to those of common stockholders.
Whether or not the Equity Securities are listed on a national securities
exchange, the principal trading market for the Equity Securities may be in the
over-the-counter market. As a result, the existence of a liquid trading market
for the Equity Securities may depend on whether dealers will make a market in
the Equity Securities. There can be no assurance that a market will be made
for any of the Equity Securities, that any market for the Equity Securities
will be maintained or of the liquidity of the Equity Securities in any markets
made. In addition, the Trust may be restricted under the Investment Company
Act of 1940 from selling Equity Securities to the Sponsor or the Managing
Underwriter. The price at which the Equity Securities may be sold to meet
redemption, and the value of the Trust, will be adversely affected if trading
markets for the Equity Securities are limited or absent.
Unitholders will be unable to dispose of any of the Equity Securities in the
Trust, as such, and will not be able to vote the Equity Securities. As the
holder of the Equity Securities, the Trustee will have the right to vote all
of the voting stocks in the Trust and will vote such stocks in accordance with
the instructions of the Sponsor (who may rely on the Supervisor). In the
absence of any such instructions, the Trustee will vote such Securities so as
to insure that the Securities are voted as closely as possible in the same
manner and the same general proportion as are shares held by owners other than
the Trust.
Foreign Equity Risks. Since the Equity Securities consist of securities of
foreign issuers, an investment in the Trust involves certain investment risks
that are different in some respects from an investment in a trust which
invests entirely in the securities of domestic issuers. These investment risks
include future political or governmental restrictions which might adversely
affect the payment or receipt of payment of dividends on the relevant Equity
Securities, the possibility that the financial condition of the issuers of the
Equity Securities may become impaired or that the general condition of the
relevant stock market may worsen (both of which would contribute directly to a
decrease in the value of the Equity Securities and thus in the value of the
Units), the limited liquidity and relatively small market capitalization of
the relevant securities market, expropriation or confiscatory taxation,
economic uncertainties and foreign currency devaluations and fluctuations. In
addition, for foreign issuers that are not subject to the reporting
requirements of the Securities Exchange Act of 1934, there may be less
publicly available information than is available from a domestic issuer. Also,
foreign issuers are not necessarily subject to uniform accounting, auditing
and financial reporting standards, practices and requirements comparable to
those applicable to domestic issuers. The securities of many foreign issuers
are less liquid and their prices more volatile than securities of comparable
domestic issuers. In addition, fixed brokerage commissions and other
transaction costs on foreign securities exchanges are generally higher than in
the United States and there is generally less government supervision and
regulation of exchanges, brokers and issuers in foreign countries than there
is in the United States. However, due to the nature of the issuers of the
Equity Securities, the Sponsor believes that adequate information will be
available to allow the Supervisor to provide portfolio surveillance for the
Trust.
Equity securities issued by non-U.S. issuers generally pay dividends in
foreign currencies and are principally traded in foreign currencies.
Therefore, there is a risk that the United States dollar value of these
securities will vary with fluctuations in the U.S. dollar foreign exchange
rates for the various Equity Securities. See "Exchange Rate" below.
Investors should also realize that, although certain Equity Securities are
ADRs, all foreign issuers which operate internationally are subject to
currency risks.
The securities of certain foreign issuers in the Trust are in ADR form. See
"Portfolio" . ADRs evidence American Depositary Receipts which
represent common stock deposited with a custodian in a depositary. American
Depositary Shares, and receipts therefor (ADRs), are issued by an American
bank or trust company to evidence ownership of underlying securities issued by
a foreign corporation. These instruments may not necessarily be denominated in
the same currency as the securities into which they may be converted. For
purposes of the discussion herein, the term ADR generally includes American
Depositary Shares. ADRs may be sponsored or unsponsored. In an unsponsored
facility, the depositary initiates and arranges the facility at the request of
market makers and acts as agent for the ADR holder, while the company itself
is not involved in the transaction. In a sponsored facility, the issuing
company initiates the facility and agrees to pay certain administrative and
shareholder-related expenses. Sponsored facilities use a single depositary and
entail a contractual relationship between the issuer, the shareholder and the
depositary; unsponsored facilities involve several depositaries with no
contractual relationship to the company. The depositary bank that issues an
ADR generally charges a fee, based on the price of the ADR, upon issuance and
cancellation of the ADR. This fee would be in addition to the brokerage
commissions paid upon the acquisition or surrender of the security. In
addition, the depositary bank incurs expenses in connection with the
conversion of dividends or other cash distributions paid in local currency
into U.S. dollars and such expenses are deducted from the amount of the
dividend or distribution paid to holders, resulting in a lower payout per
underlying shares represented by the ADR than would be the case if the
underlying share were held directly. The Trustee for this Trust acts as a
depositary for ADRs, certain of which may be included in the Trust's
portfolio. Certain tax considerations, including tax rate differentials and
withholding requirements, arising from applications of the tax laws of one
nation to nationals of another and from certain practices in the ADR market
may also exist with respect to certain ADRs. In varying degrees, any or all of
these factors may affect the value of the ADR compared with the value of the
underlying shares in the local market. In addition, the rights of holders of
ADRs may be different than those of holders of the underlying shares, and the
market for ADRs may be less liquid than that for the underlying shares. ADRs
are registered securities pursuant to the Securities Act of 1933 and may be
subject to the reporting requirements of the Securities Exchange Act of 1934.
On the basis of the best information available to the Sponsor at the present
time, none of the Equity Securities are subject to exchange control
restrictions under existing law which would materially interfere with payment
to the Trust of dividends due on, or proceeds from the sale of, the Equity
Securities. However, there can be no assurance that exchange control
regulations might not be adopted in the future which might adversely affect
payment to the Trust. In addition, the adoption of exchange control
regulations and other legal restrictions could have an adverse impact on the
marketability of international securities in the Trust and on the ability of
the Trust to satisfy its obligation to redeem Units tendered to the Trustee
for redemption.
Investors should be aware that it may not be possible to buy all Equity
Securities at the same time because of the unavailability of any Equity
Security, and restrictions applicable to the Trust relating to the purchase of
an Equity Security by reason of the federal securities laws or otherwise.
Foreign securities generally have not been registered under the Securities Act
of 1933 and may not be exempt from the registration requirements of such Act.
Sales of non-exempt Equity Securities by the Trust in the United States
securities markets are subject to severe restrictions and may not be
practicable. Accordingly, sales of these Equity Securities by the Trust will
generally be effected only in foreign securities markets. Although the Sponsor
does not believe that the Trust will encounter obstacles in disposing of the
Equity Securities, investors should realize that the Equity Securities may be
traded in foreign countries where the securities markets are not as developed
or efficient and may not be as liquid as those in the United States. The value
of the Equity Securities will be adversely affected if trading markets for the
Equity Securities are limited or absent.
Exchange Rate. The Trust is concentrated in Equity Securities that are
principally traded in foreign currencies and as such involves investment risks
that are substantially different from an investment in a fund which invests in
securities that are principally traded in United States dollars. The United
States dollar value of the portfolio (and hence of the Units) and of the
distributions from the portfolio will vary with fluctuations in the United
States dollar foreign exchange rates for the related foreign currencies. Most
foreign currencies have fluctuated widely in value against the United States
dollar for many reasons, including supply and demand of the respective
currency, the rate of inflation in the respective economies compared to the
United States, the impact of interest rate differentials between different
currencies on the movement of foreign currency rates, the balance of imports
and exports of goods and services, the soundness of the world economy and the
strength of the respective economy as compared to the economies of the United
States and other countries.
The post-World War II international monetary system was, until 1973, dominated
by the Bretton Woods Treaty, which established a system of fixed exchange
rates and the convertibility of the United States dollar into gold through
foreign central banks. Starting in 1971, growing volatility in the foreign
exchange markets caused the United States to abandon gold convertibility and
to effect a small devaluation of the United States dollar. In 1973, the system
of fixed exchange rates between a number of the most important industrial
countries of the world, among them the United States and most western European
countries, was completely abandoned. Subsequently, major industrialized
countries have adopted "floating" exchange rates, under which daily
currency valuations depend on supply and demand in a freely fluctuating
international market. Many smaller or developing countries have continued to
"peg" their currencies to the United States dollar although there has
been some interest in recent years in "pegging" currencies to "
baskets" of other currencies or to a Special Drawing Right administered by
the International Monetary Fund. Currencies are generally traded by leading
international commercial banks and institutional investors (including
corporate treasurers, money managers, pension funds and insurance companies).
From time to time, central banks in a number of countries also are major
buyers and sellers of foreign currencies, mostly for the purpose of preventing
or reducing substantial exchange rate fluctuations.
Exchange rate fluctuations are partly dependent on a number of economic
factors including economic conditions within countries, the impact of actual
and proposed government policies on the value of currencies, interest rate
differentials between the currencies and the balance of imports and exports of
goods and services and transfers of income and capital from one country to
another. These economic factors are influenced primarily by a particular
country's monetary and fiscal policies (although the perceived political
situation in a particular country may have an influence as well--particularly
with respect to transfers of capital). Investor psychology may also be an
important determinant of currency fluctuations in the short run. Moreover,
institutional investors trying to anticipate the future relative strength or
weakness of a particular currency may sometimes exercise considerable
speculative influence on currency exchange rates by purchasing or selling
large amounts of the same currency or currencies. However, over the long term,
the currency of a country with a low rate of inflation and a favorable balance
of trade should increase in value relative to the currency of a country with a
high rate of inflation and deficits in the balance of trade.
The Evaluator will estimate the current exchange rate for the appropriate
foreign currencies based on activity in the related currency exchange market.
However, since this market may be volatile and is constantly changing,
depending on the activity at any particular time of the large international
commercial banks, various central banks, large multi-national corporations,
speculators and other buyers and sellers of foreign currencies, and since
actual foreign currency transactions may not be instantly reported, the
exchange rates estimated by the Evaluator may not be indicative of the amount
in United States dollars the Trust would receive had the Trustee sold any
particular currency in the market. The foreign exchange transactions of the
Trust will be concluded by the Trustee with foreign exchange dealers acting as
principals on a spot (i.e., cash) buying basis. Although foreign exchange
dealers trade on a net basis, they do realize a profit based upon the
difference between the price at which they are willing to buy a particular
currency (bid price) and the price at which they are willing to sell the
currency (offer price).
TAXATION
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General. The following is a general discussion of certain of the federal
income tax consequences of the purchase, ownership and disposition of the
Units. The summary is limited to investors who hold the Units as capital
assets (generally, property held for investment) within the meaning of Section
1221 of the Internal Revenue Code of 1986 (the "Code" ). Unitholders
should consult their tax advisers in determining the federal, state, local and
any other tax consequences of the purchase, ownership and disposition of Units
in the Trust.
For purposes of the following discussion and opinions, it is assumed that each
Security is equity for federal income tax purposes. In the opinion of Chapman
and Cutler, special counsel for the Sponsor, under existing law:
1. The Trust is not an association taxable as a corporation for federal income
tax purposes; each Unitholder will be treated as the owner of a pro rata
portion of each of the assets of the Trust under the Code; and the income of
the Trust will be treated as income of the Unitholders thereof under the Code.
Each Unitholder will be considered to have received his pro rata share of
income derived from each Security when such income is considered to be
received by the Trust.
2. Each Unitholder will have a taxable event when the Trust disposes of a
Security (whether by sale, taxable exchange, liquidation, redemption, or
otherwise) or upon the sale or redemption of Units by such Unitholder. The
price a Unitholder pays for his Units is allocated among his pro rata portion
of each Security held by the Trust (in proportion to the fair market values
thereof on the valuation date nearest the date the Unitholder purchases his
Units) in order to determine his initial tax basis for his pro rata portion of
each Security held by the Trust. It should be noted that certain legislative
proposals have been made which could affect the calculation of basis for
Unitholders holding securities that are substantially identical to the
Securities. Unitholders should consult their own tax advisors with regard to
calculation of basis. For federal income tax purposes, a Unitholder's pro rata
portion of dividends as defined by Section 316 of the Code paid with respect
to a Security held by the Trust is taxable as ordinary income to the extent of
such corporation's current and accumulated "earnings and profits." A
Unitholder's pro rata portion of dividends paid on such Security which exceeds
such current and accumulated earnings and profits will first reduce a
Unitholder's tax basis in such Security, and to the extent that such dividends
exceed a Unitholder's tax basis in such Security shall generally be treated as
capital gain. In general, any such capital gain will be short-term unless a
Unitholder has held his Units for more than one year.
3. A Unitholder's portion of gain, if any, upon the sale or redemption of
Units or the disposition of Securities held by the Trust will generally be
considered a capital gain (except in the case of a dealer or a financial
institution) and, will generally be long-term if the Unitholder has held his
Units for more than one year (the date on which the Units are acquired (i.e.,
the "trade date" ) is excluded for purposes of determining whether the
Units have been held for more than one year). A Unitholder's portion of loss,
if any, upon the sale or redemption of Units or the disposition of Securities
held by the Trust will generally be considered a capital loss (except in the
case of a dealer or a financial institution) and, in general, will be
long-term if the Unitholder has held his Units for more than one year.
Unitholders should consult their tax advisers regarding the recognition of
gains and losses for federal income tax purposes.
Dividends Received Deduction. A corporation that owns Units will generally be
entitled to a 70% dividends received deduction with respect to such
Unitholder's pro rata portion or dividends received by the Trust (to the
extent such dividends are taxable as ordinary income, as discussed above, and
are attributable to domestic corporations) in the same manner as if such
corporation directly owned the Securities paying such dividends (other than
corporate Unitholders, such as "S" corporations, which are not
eligible for the deduction because of their special characteristics and other
than for purposes of special taxes such as the accumulated earnings tax and
the personal holding corporation tax). However, a corporation owning Units
should be aware that Sections 246 and 246A of the Code impose additional
limitations on the eligibility of dividends for the 70% dividends received
deduction. These limitations include a requirement that stock (and therefore
Units) must generally be held at least 46 days (as determined under Section
246(c) of the Code). Final regulations have been issued which address special
rules that must be considered in determining whether the 46 day holding period
requirement is met. Moreover, the allowable percentage of the deduction will
be reduced from 70% if a corporate Unitholder owns certain stock (or Units)
the financing of which is directly attributable to indebtedness incurred by
such corporation. It should be noted that various legislative proposals that
would affect the dividends received deduction have been introduced.
Unitholders should consult with their tax advisers with respect to the
limitations on and possible modifications to the dividends received deduction.
To the extent dividends received by the Trust are attributable to foreign
corporations, a corporation that owns Units will not be entitled to the
dividends received deduction with respect to its pro rata portion of such
dividends, since the dividends received deduction is generally available only
with respect to dividends paid by domestic corporations.
Limitations on Deductibility of Trust Expenses by Unitholders. Each
Unitholder's pro rata share of each expense paid by the Trust is deductible by
the Unitholder to the same extent as though the expense had been paid directly
by him. It should be noted that as a result of the Tax Reform Act of 1986,
certain miscellaneous itemized deductions, such as investment expenses, tax
return preparation fees and employee business expenses will be deductible by
an individual only to the extent they exceed 2% of such individual's adjusted
gross income. Unitholders may be required to treat some or all of the expenses
of the Trust as miscellaneous itemized deductions subject to this limitation.
Recognition of Taxable Gain or Loss Upon Disposition of Securities by the
Trust or Disposition of Units. As discussed above, a Unitholder may recognize
taxable gain (or loss) when a Security is disposed of by the Trust or if the
Unitholder disposes of a Unit. For taxpayers other than corporations, net
capital gains (which is defined as net long-term capital gain over net
short-term capital loss for a taxable year) are subject to a maximum marginal
stated tax rate of 28%. However, it should be noted that legislative proposals
are introduced from time to time that affect tax rates and could affect
relative differences at which ordinary income and capital gains are taxed.
"The Revenue Reconciliation Act of 1993" (the "Tax Act" )
raised tax rates on ordinary income while capital gains remain subject to a
28% maximum stated rate for taxpayers other than corporations. Because some or
all capital gains are taxed at a comparatively lower rate under the Tax Act,
the Tax Act includes a provision that recharacterizes capital gains as
ordinary income in the case of certain financial transactions that are "
conversion transactions" effective for transactions entered into after
April 30, 1993. Unitholders and prospective investors should consult with
their tax advisers regarding the potential effect of this provision on their
investment in Units.
If a Unitholder disposes of a Unit he is deemed thereby to have disposed of
his entire pro rata interest in all assets of the Trust including his pro rata
portion of all the Securities represented by a Unit. Legislative proposals
have been made that would treat certain transactions designed to reduce or
eliminate risk of loss and opportunities for gain as constructive sales for
purposes of recognition of gain (but not loss). Unitholders should consult
their own tax advisors with regard to any such constructive sale rules.
Computation of the Unitholder's Tax Basis. Initially, a Unitholder's tax basis
in his Units will generally equal the price paid by such Unitholder for his
Units. The cost of the Units is allocated among the Securities held in the
Trust in accordance with the proportion of the fair market values of such
Securities on the valuation date nearest the date the Units are purchased in
order to determine such Unitholder's tax basis for his pro rata portion of
each Security.
A Unitholder's tax basis in his Units and his pro rata portion of a Security
held by the Trust will be reduced to the extent dividends paid with respect to
such Security are received by the Trust which are not taxable as ordinary
income as described above.
Other Matters. Each Unitholder will be requested to provide the Unitholder's
taxpayer identification number to the Trustee and to certify that the
Unitholder has not been notified that payments to the Unitholder are subject
to back-up withholding. If the proper taxpayer identification number and
appropriate certification are not provided when requested, distributions by
the Trust to such Unitholder (including amounts received upon the redemption
of Units) will be subject to back-up withholding. Distributions by the Trust
(other than those that are not treated as United States source income, if any)
will generally be subject to United States income taxation and withholding in
the case of Units held by non-resident alien individuals, foreign corporations
or other non-United States persons. Such persons should consult their tax
advisers.
In general, income that is not effectively connected to the conduct of a trade
or business within the United States that is earned by non-U.S. Unitholders
and derived from dividends of foreign corporations will not be subject to U.S.
withholding tax provided that less than 25 percent of the gross income of the
foreign corporation for a three-year period ending with the close of its
taxable year preceding payment was not effectively connected to the conduct of
a trade or business within the United States. In addition, such earnings may
be exempt from U.S. withholding pursuant to a specific treaty between the
United States and a foreign county. Non-U.S. Unitholders should consult their
own tax advisers regarding the imposition of U.S. withholding on distributions
from the Trust.
It should be noted that payments to the Trust of dividends on Securities that
are attributable to foreign corporations may be subject to foreign withholding
taxes and Unitholders should consult their tax advisers regarding the
potential tax consequences relating to the payment of any such withholding
taxes by the Trust. Any dividends withheld as a result thereof will
nevertheless be treated as income to the Unitholders. Because, under the
grantor trust rules, an investor is deemed to have paid directly his share of
foreign taxes that have been paid or accrued, if any, an investor may be
entitled to a foreign tax credit or deduction for United States tax purposes
with respect to such taxes. Investors should consult their tax advisers with
respect to foreign withholding taxes and foreign tax credits.
At the termination of the Trust, the Trustee will furnish to each Unitholder
of the Trust a statement containing information relating to the dividends
received by the Trust on the Securities, the gross proceeds received by the
Trust from the disposition of any Security (resulting from redemption or the
sale of any Security), and the fees and expenses paid by the Trust. The
Trustee will also furnish annual information returns to Unitholders and to the
Internal Revenue Service.
Unitholders desiring to purchase Units for tax-deferred plans and IRAs should
consult their broker-dealers for details on establishing such accounts. Units
may also be purchased by persons who already have self-directed plans
established.
In the opinion of special counsel to the Fund for New York tax matters, the
Trust is not an association taxable as a corporation and the income of the
Trust will be treated as the income of the Unitholders under the existing
income tax laws of the State and City of New York.
The foregoing discussion relates only to the tax treatment of U.S. Unitholders
("U.S. Unitholders" ) with regard to federal and certain aspects of New
York State and City income taxes. Unitholders may be subject to taxation in
New York or in other jurisdictions and should consult their own tax advisers
in this regard. As used herein, the term "U.S. Unitholder" means an
owner of a Unit of the Trust that (a) is (i) for United States federal income
tax purposes a citizen or resident of the United States, (ii) a corporation,
partnership or other entity created or organized in or under the laws of the
United States or of any political subdivision thereof, or (iii) an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source or (b) does not qualify as a U.S. Unitholder in
paragraph (a) but whose income from a Unit is effectively connected with such
Unitholder's conduct of a United States trade or business. The term also
includes certain former citizens of the United States whose income and gain on
the Units will be taxable.
The tax discussion set forth above is a summary included for general
informational purposes only. In view of the individual nature of tax
consequences, each Unitholder is advised to consult his own tax adviser with
respect to the specific tax consequences of being a Unitholder of the Trust
and the exercise or expiration of the rights, including the effect and
applicability of state, local, foreign, and other tax laws and the possible
effects of changes in federal foreign or other tax laws.
TRUST OPERATING EXPENSES
- --------------------------------------------------------------------------
Initial Costs. All costs and expenses incurred in creating and establishing
the Trust, including the cost of the initial preparation, printing and
execution of the Trust Agreement and the certificates, legal and accounting
expenses, advertising and selling expenses, expenses of the Trustee, initial
fees of an evaluator and other out-of-pocket expenses have been borne by the
Sponsor at no cost to the Fund.
Compensation of Sponsor and Evaluator. The Sponsor will not receive any fees
in connection with its activities relating to the Trust. However, Van Kampen
American Capital Investment Advisory Corp., which is an affiliate of the
Sponsor, will receive an annual supervisory fee, payable in monthly
installments, which is not to exceed the amount set forth under "Summary
of Essential Financial Information" in Part One, for providing portfolio
supervisory services for the Trust. Such fee (which is based on the number of
Units outstanding on January 1 of each year for which such compensation
relates) may exceed the actual costs of providing such supervisory services
for this Trust, but at no time will the total amount received for portfolio
supervisory services rendered to all series of the Fund and to any other unit
investment trusts sponsored by the Sponsor for which the Supervisor provides
portfolio supervisory services in any calendar year exceed the aggregate cost
to the Supervisor of supplying such services in such year. Pursuant to a
contract with the Supervisor, Global Assets Advisors, Inc., a non-affiliated
firm regularly engaged in the business of evaluating, quoting or appraising
comparable securities, provides portfolio supervisory services for the Trust
and receives for such services the entire supervisory fee paid to the
Supervisor. In addition, American Portfolio Evaluation Services, which is a
division of Van Kampen American Capital Investment Advisory Corp., shall
receive for regularly providing evaluation services to the Trust the annual
per Unit evaluation fee, payable in monthly installments, set forth under "
Summary of Essential Financial Information" in Part One (which is based on
the number of Units of the Trust outstanding on January 1 of each year for
which such compensation relates) for regularly evaluating the Trust portfolio.
Both of the foregoing fees may be increased without approval of the
Unitholders by amounts not exceeding proportionate increases under the
category "All Services Less Rent of Shelter" in the Consumer Price
Index published by the United States Department of Labor or, if such category
is no longer published, in a comparable category. The Sponsor and the Managing
Underwriter will receive sales commissions and the Managing Underwriter may
realize other profits (or losses) in connection with the sale of Units and the
deposit of the Securities as described under "Public Offering--Sponsor and
Managing Underwriter Compensation" .
Trustee's Fee. For its services the Trustee will receive the annual per Unit
fee from the Trust set forth under "Summary of Essential Financial
Information" in Part One (which is based on the number of Units of the
Trust outstanding on January 1 of each year for which such compensation
relates). The Trustee's fees are payable in monthly installments on or before
the twenty-fifth day of each month from the Income Account of the Trust to the
extent funds are available and then from the Capital Account of the Trust. The
Trustee benefits to the extent there are funds for future distributions,
payment of expenses and redemptions in the Capital and Income Accounts since
these Accounts are non-interest bearing and the amounts earned by the Trustee
are retained by the Trustee. Part of the Trustee's compensation for its
services to the Trust is expected to result from the use of these funds. Such
fees may be increased without approval of the Unitholders by amounts not
exceeding proportionate increases under the category "All Services Less
Rent of Shelter" in the Consumer Price Index published by the United
States Department of Labor or, if such category is no longer published, in a
comparable category. For a discussion of the services rendered by the Trustee
pursuant to its obligations under the Trust Agreement, see "Rights of
Unitholders--Reports Provided" and "Trust Administration."
Miscellaneous Expenses. The following additional charges are or may be
incurred by the Trust: (a) normal expenses (including the cost of mailing
reports to Unitholders) incurred in connection with the operation of such
Trust, (b) fees of the Trustee for extraordinary services, (c) expenses of the
Trustee (including legal and auditing expenses) and of counsel designated by
the Sponsor, (d) various governmental charges, (e) expenses and costs of any
action taken by the Trustee to protect the Trust and the rights and interests
of Unitholders, (f) indemnification of the Trustee for any loss, liability or
expenses incurred in the administration of the Trust without negligence, bad
faith or wilful misconduct on its part, (g) foreign custodial and transaction
fees, (h) costs associated with liquidating the securities and (i)
expenditures incurred in contacting Unitholders upon termination of the Trust.
General. The fees and expenses set forth herein are payable out of the Trust.
When such fees and expenses are paid by or owing to the Trustee, they are
secured by a lien on the Trust's portfolio. Since the Equity Securities are
all common stocks, and the income stream produced by dividend payments is
unpredictable, the Sponsor cannot provide any assurance that dividends will be
sufficient to meet any or all expenses of the Trust. If the balances in the
Income and Capital Accounts are insufficient to provide for amounts payable by
the Trust, the Trustee has the power to sell Equity Securities to pay such
amounts. These sales may result in capital gains or losses to Unitholders. See
"Taxation."
PUBLIC OFFERING
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General. Units are offered at the Public Offering Price. The secondary market
public offering price is based on the aggregate underlying value of the
Securities in the Trust, an applicable sales charge (5.50% of the Public
Offering Price and which will be reduced by .5 of 1% on each March 27
commencing March 27, 1997, to a minimum sales charge of 3.0%), and cash, if
any, in the Income and Capital Accounts held or owned by the Trust. The Public
Offering Price is based on the aggregate value of the Foreign Securities
computed on the basis of the bid side value of the related currency exchange
rate expressed in U.S. dollars as of the Evaluation Time. The sales charge
applicable to quantity purchases is reduced on a graduated basis to any person
acquiring 10,000 or more Units as follows:
<TABLE>
<CAPTION>
Aggregate Number of Units
Purchased Sales Charge Reduction Per Unit
- -------------------------------- -------------------------------------------------
<S> <C>
10,000-24,999 0.60%
25,000-49,999 0.90
50,000-99,999 1.30
100,000 or more 2.10
</TABLE>
The sales charge reduction will primarily be the responsibility of the selling
Managing Underwriter, broker, dealer or agent. A Unitholder who purchases
additional Units of the Trust may obtain a reduced sales charge through a
right of accumulation on current purchases of Units. The applicable sales
charge on such additional purchases will be determined based on the total of
(a) the number of Units currently purchased plus (b) the total number of Units
previously purchased. The following purchases may be aggregated for purposes
of determining the total number of Units purchased: (i) individual purchases
on behalf of a single purchaser, the purchaser's spouse and the purchaser's
children under the age of 21 years; (ii) purchases in connection with an
employee benefits plan exclusively for the benefit of such individuals, such
as an IRA, individual plan under Internal Revenue Code section 403(b) or a
single-participant Keogh-type plan; and (iii) purchases made by a company
controlled by such individuals.
Registered representatives of the Managing Underwriter may purchase Units of
the Trust at the current Public Offering Price less the dealer's concession
for secondary market transactions. Registered representatives of selling
brokers, dealers, or agents may purchase Units of the Trust at the current
Public Offering Price less the dealer's concession.
Offering Price. The Public Offering Price of the Units will vary from the
amounts stated under "Summary of Essential Financial Information" in
Part One in accordance with fluctuations in the prices of the underlying
Securities in the Trust. The Public Offering Price per Unit is based on the
aggregate value of the Foreign Securities computed on the basis of the bid
side value of the related currency exchange rate expressed in U.S. dollars
during the secondary market.
As indicated above, the price of the Units was established by adding to the
determination of the aggregate underlying value of the Securities in the Trust
an amount initially equal to 5.820% of such value and dividing the sum so
obtained by the number of Units in the Trust outstanding. The Public Offering
Price shall include the proportionate share of any cash held in the Income and
Capital Accounts in the Trust. This computation produced a gross underwriting
profit initially equal to 5.5% of the Public Offering Price. Such price
determination as of the close of the relevant stock market on the day before
the Initial Date of Deposit was made on the basis of an evaluation of the
Securities in the Trust prepared by Interactive Data Corporation, a firm
regularly engaged in the business of evaluating, quoting or appraising
comparable securities. Thereafter, the Evaluator on each business day will
appraise or cause to be appraised the value of the underlying Securities in
the Trust as of the Evaluation Time and will adjust the Public Offering Price
of the Units commensurate with such valuation. Such Public Offering Price will
be effective for all orders received prior to 4:00 p.m. New York time on each
such day. Orders received by the Trustee or Managing Underwriter for
purchases, sales or redemptions after 4:00 p.m. New York time, or on a day
which is not a business day for the Trust, will be held until the next
determination of price. The term "business day" , as used herein and
under "Rights of Unitholders--Redemption of Units" , shall exclude any
day on which Securities representing greater than 33% of the aggregate value
of the Trust are not traded on the principal trading exchange for such
Securities due to customary business holiday on such exchange.
The value of the Equity Securities is determined on each business day by the
Evaluator in the following manner: if the Equity Securities are listed on a
national or foreign securities exchange, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange, at the closing bid prices. The evaluation of a
Security traded on a foreign securities exchange will take into consideration
any event or announcement occurring after the close of the related foreign
securities exchange and prior to the Evaluation Time which could have a
material affect on the value of such Security. If the Securities are not
listed on a national or foreign securities exchange or, if so listed and the
principal market therefore is other than on the exchange, the evaluation shall
generally be based on the current bid price on the over-the-counter market
(unless it is determined that these prices are inappropriate as a basis for
evaluation). If current bid prices are unavailable, the evaluation is
generally determined (a) on the basis of current bid prices for comparable
securities, (b) by appraising the value of the Equity Securities on the bid
side of the market or (c) by any combination of the above. The value of the
Equity Securities is based on the aggregate value of the Securities computed
on the basis of the bid side value of the currency exchange rate expressed in
U.S. dollars as of the Evaluation Time.
In offering the Units to the public, neither the Sponsor, the Managing
Underwriter nor any broker-dealers are recommending any of the individual
Securities in the Trust but rather the entire pool of Securities, taken as a
whole, which are represented by the Units.
Unit Distribution. Units will be distributed to the public by the Managing
Underwriter, broker-dealers and others at the Public Offering Price. Units
repurchased in the secondary market, if any, may be offered by this Prospectus
at the secondary market Public Offering Price in the manner described above.
It is the intention of the Sponsor to qualify Units of the Trust for sale in a
number of states. Sales will be made to any broker, dealer or bank at prices
which represent a concession or agency commission in connection with the
distribution of Units of 65% of the then current maximum sales charge.
However, resale of Units of the Trust by such Managing Underwriter, dealers
and others to the public will be made at the Public Offering Price described
in the prospectus.
Certain commercial banks are making Units of the Trust available to their
customers on an agency basis. A portion of the sales charge (equal to the
agency commission referred to above) is retained by or remitted to the banks.
Under the Glass-Steagall Act, banks are prohibited from underwriting Trust
Units; however, the Glass-Steagall Act does permit certain agency transactions
and the banking regulators have not indicated that these particular agency
transactions are not permitted under such Act. In addition, state securities
laws on this issue may differ from the interpretations of federal law
expressed herein and banks and financial institutions may be required to
register as dealers pursuant to state law.
To facilitate the handling of transactions, sales of Units shall normally be
limited to transactions involving a minimum of 500 Units (100 Units for a
tax-sheltered retirement plan). The Managing Underwriter reserves the right to
reject, in whole or in part, any order for the purchase of Units and to change
the amount of the concession or agency commission to dealers and others from
time to time.
Sponsor and Managing Underwriter Compensation. The Managing Underwriter will
receive the gross sales commission equal to the sales charge imposed on
purchases of Units, less any reduced sales charge for quantity purchases as
described under "General" above. Any such quantity discount provided
to investors will be borne by the Managing Underwriter or the selling dealer
or agent.
In addition, the Managing Underwriter realized a profit or sustained a loss,
as the case may be, as a result of the difference between the price paid for
the Securities by the Managing Underwriter and the cost of such Securities to
the Trust on the Initial Date of Deposit as well as on subsequent deposits.
The Sponsor has not participated as sole underwriter or as manager or as a
member of the underwriting syndicates or as an agent in a private placement
for any of the Securities in the Trust portfolio. The Managing Underwriter may
have further realized additional profit or loss during the initial offering
period as a result of the possible fluctuations in the market value of the
Securities in the Trust after a date of deposit, since all proceeds received
from purchasers of Units (excluding dealer concessions and agency commissions
allowed, if any) will be retained by the Managing Underwriter.
A person will become the owner of Units on the date of settlement provided
payment has been received. Cash, if any, made available to the Sponsor or
Managing Underwriter prior to the date of settlement for the purchase of Units
may be used in the Sponsor's or the Managing Underwriter's business and may be
deemed to be a benefit to the Sponsor or Managing Underwriter, subject to the
limitations of the Securities Exchange Act of 1934.
As stated under "Public Market" below, the Managing Underwriter
currently intends to maintain a secondary market for Units of the Trust. In so
maintaining a market, the Managing Underwriter will also realize profits or
sustain losses in the amount of any difference between the price at which
Units are purchased and the price at which Units are resold (which price
includes the applicable sales charge). In addition, the Managing Underwriter
or Sponsor will also realize profits or sustain losses resulting from a
redemption of such repurchased Units at a price above or below the purchase
price for such Units, respectively.
Public Market. Although it is not obligated to do so, the Managing Underwriter
currently intends to maintain a market for the Units offered hereby and offer
continuously to purchase Units at prices, subject to change at any time, based
upon the aggregate underlying value of the Equity Securities in the Trust
(computed as indicated under "Offering Price" above and "Rights of
Unitholders--Redemption of Units" ). The aggregate underlying value of the
Foreign Securities is computed on the basis of the bid side value of the
related currency exchange rate expressed in U.S. dollars. If the supply of
Units exceeds demand or if some other business reason warrants it, the
Managing Underwriter may either discontinue all purchases of Units or
discontinue purchases of Units at such prices. In the event that a market is
not maintained for the Units and the Unitholder cannot find another purchaser,
a Unitholder desiring to dispose of his Units will be able to dispose of such
Units by tendering them to the Trustee for redemption at the Redemption Price.
See "Rights of Unitholders--Redemption of Units." A Unitholder who
wishes to dispose of his Units should inquire of his broker as to current
market prices in order to determine whether there is in existence any price in
excess of the Redemption Price and, if so, the amount thereof.
Tax-Sheltered Retirement Plans. Units of the Trust are available for purchase
in connection with certain types of tax-sheltered retirement plans, including
Individual Retirement Accounts for individuals, Simplified Employee Pension
Plans for employees, qualified plans for self-employed individuals, and
qualified corporate pension and profit sharing plans for employees. The
purchase of Units of the Trust may be limited by the plans' provisions and
does not itself establish such plans. The minimum purchase in connection with
a tax-sheltered retirement plan is 100 Units.
RIGHTS OF UNITHOLDERS
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Certificates. The Trustee is authorized to treat as the record owner of Units
that person who is registered as such owner on the books of the Trustee.
Ownership of Units of the Trust will be evidenced by book entry unless a
Unitholder or the Unitholder's registered broker-dealer makes a written
request to the Trustee that ownership be evidenced by certificates. Units are
transferable by making a written request to the Trustee and, in the case of
Units evidenced by a certificate, by presentation and surrender of such
certificate to the Trustee properly endorsed or accompanied by a written
instrument or instruments of transfer. A Unitholder must sign such written
request, and such certificate or transfer instrument, exactly as his name
appears on the records of the Trustee and on the face of any certificate
representing the Units to be transferred with the signature guaranteed by a
participant in the Securities Transfer Agents Medallion Program ("
STAMP" ) or such other signature guarantee program in addition to, or in
substitution for, STAMP as may be accepted by the Trustee. In certain
instances the Trustee may require additional documents such as, but not
limited to, trust instruments, certificates of death, appointments as executor
or administrator or certificates of corporate authority. Certificates will be
issued in denominations of one Unit or any whole multiple thereof.
Although no such charge is now made or contemplated, the Trustee may require a
Unitholder to pay a reasonable fee for each certificate reissued or
transferred and to pay any governmental charge that may be imposed in
connection with each such transfer or interchange. Destroyed, stolen,
mutilated or lost certificates will be replaced upon delivery to the Trustee
of satisfactory indemnity, evidence of ownership and payment of expenses
incurred. Mutilated certificates must be surrendered to the Trustee for
replacement.
Distributions of Income and Capital. Any dividends received by the Trust with
respect to the Equity Securities therein are credited by the Trustee to the
Income Account of the Trust. Other receipts (e.g., capital gains, proceeds
from the sale of Securities, etc.) are credited to the Capital Account of the
Trust. Dividends with respect to the Foreign Securities to be credited to such
accounts are first converted into U.S. dollars at the applicable exchange rate.
The Trustee will distribute any net income received with respect to any of the
Securities in the Trust on or about the Income Account Distribution Dates to
Unitholders of record on the preceding Income Account Record Dates. See "
Summary of Essential Financial Information" in Part One. Proceeds received
on the sale of any Securities in the Trust, to the extent not used to meet
redemptions of Units or pay expenses, will be distributed annually on the
Capital Account Distribution Date to Unitholders of record on the preceding
Capital Account Record Date. Proceeds received from the disposition of any of
the Securities after a record date and prior to the following distribution
date will be held in the Capital Account of the Trust and not distributed
until the next distribution date applicable to the Capital Account. The
Trustee is not required to pay interest on funds held in the Capital or Income
Accounts (but may itself earn interest thereon and therefore benefits from the
use of such funds).
The distribution to Unitholders as of each record date will be made on the
following distribution date or shortly thereafter and shall consist of each
Unitholder's pro rata share of the cash in the Income Account after deducting
estimated expenses. Because dividends are not received by the Trust at a
constant rate throughout the year, such distributions to Unitholders are
expected to fluctuate from distribution to distribution. Persons who purchase
Units will commence receiving distributions only after such person becomes a
record owner. Notification to the Trustee of the transfer of Units is the
responsibility of the purchaser, but in the normal course of business such
notice is provided by the selling broker-dealer.
On or before the twenty-fifth day of each month, the Trustee will deduct
from the Income Account and, to the extent funds are not sufficient
therein, from the Capital Account of the Trust amounts necessary to pay
the expenses of the Trust (as determined on the basis set forth under "Trust
Operating Expenses"). The Trustee also may withdraw from said accounts such
amounts, if any, as it deems necessary to establish a reserve for any
governmental charges payable out of the Trust. Amounts so withdrawn shall
not be considered a part of the Trust's assets until such time as the
Trustee shall return all or any part of such amounts to the appropriate
accounts. In addition, the Trustee may withdraw from the Income and
Capital Accounts of the Trust such amounts as may be necessary to cover
redemptions of Units.
Reports Provided. The Trustee shall furnish Unitholders of the Trust in
connection with each distribution a statement of the amount of income and the
amount of other receipts (received since the preceding distribution), if any,
being distributed, expressed in each case as a dollar amount representing the
pro rata share of each Unit of the Trust outstanding. Within a reasonable
period of time after the end of each calendar year, the Trustee shall furnish
to each person who at any time during the calendar year was a registered
Unitholder of the Trust a statement (i) as to the Income Account: income
received, deductions for applicable taxes and for fees and expenses of the
Trust, for redemptions of Units, if any, and the balance remaining after such
distributions and deductions, expressed in each case both as a total dollar
amount and as a dollar amount representing the pro rata share of each Unit
outstanding on the last business day of such calendar year; (ii) as to the
Capital Account: the dates of disposition of any Securities and the net
proceeds received therefrom, deductions for payment of applicable taxes, fees
and expenses of the Trust held for distribution to Unitholders of record as of
a date prior to the determination and the balance remaining after such
distributions and deductions expressed both as a total dollar amount and as a
dollar amount representing the pro rata share of each Unit outstanding on the
last business day of such calendar year; (iii) a list of the Securities held
by such Trust and the number of Units of the Trust outstanding on the last
business day of such calendar year; (iv) the Redemption Price per Unit of the
Trust based upon the last computation thereof made during such calendar year;
and (v) amounts actually distributed during such calendar year from the Income
and Capital Accounts of the Trust, separately stated, expressed as total
dollar amounts.
In order to comply with federal and state tax reporting requirements,
Unitholders will be furnished, upon request to the Trustee, evaluations of the
Securities in the Trust furnished to it by the Evaluator.
Redemption of Units. A Unitholder may redeem all or a portion of his Units by
tender to the Trustee at its Unit Investment Trust Division, 101 Barclay
Street, 20th Floor, New York, New York 10286 and, in the case of Units
evidenced by a certificate, by tendering such certificate to the Trustee, duly
endorsed or accompanied by proper instruments of transfer with signature
guaranteed as described above (or by providing satisfactory indemnity, as in
connection with lost, stolen or destroyed certificates) and by payment of
applicable governmental charges, if any. No redemption fee will be charged. On
the third business day following such tender the Unitholder will be entitled
to receive in cash an amount for each Unit equal to the Redemption Price per
Unit next computed after receipt by the Trustee of such tender of Units and
converted into U.S. dollars as of the Evaluation Time set forth under "
Summary of Essential Financial Information" in Part One. The "date of
tender" is deemed to be the date on which Units are received by the
Trustee, except that with respect to Units received after 4:00 p.m. New York
time, the date of tender is the next business day as defined under "Public
Offering--Offering Price" and such Units will be deemed to have been
tendered to the Trustee on such day for redemption at the redemption price
computed on that day. Foreign securities exchanges are open for trading on
certain days which are U.S. holidays on which the Trust will not transact
business. The Securities will continue to trade on those days and thus the
value of the Trust may be significantly affected on days when a Unitholder
cannot sell or redeem his Units.
The Trustee is empowered to sell Securities of the Trust in order to make
funds available for redemption if funds are not otherwise available in the
Capital and Income Accounts of the Trust to meet redemptions. The Securities
to be sold will be selected by the Trustee from those designated on a current
list provided by the Supervisor for this purpose. Units so redeemed shall be
cancelled.
The Redemption Price per Unit (as well as the secondary market Public Offering
Price) will be determined on the basis of the aggregate underlying value of
the Equity Securities in the Trust, plus or minus cash, if any, in the Income
and Capital Accounts of the Trust. The Redemption Price per Unit is the pro
rata share of each Unit in the Trust determined on the basis of (i) the cash
on hand in the Trust, (ii) the value of the Securities in the Trust and (iii)
dividends receivable on the Equity Securities of the Trust trading ex-dividend
as of the date of computation, less (a) amounts representing taxes or other
governmental charges payable out of the Trust and (b) the accrued expenses of
the Trust. The Evaluator may determine the value of the Equity Securities in
the Trust in the following manner: if the Equity Securities are listed on a
national or foreign securities exchange, this evaluation is generally based on
the closing sale prices on that exchange (unless it is determined that these
prices are inappropriate as a basis for valuation) or, if there is no closing
sale price on that exchange, at the closing bid prices. If the Equity
Securities are not so listed or, if so listed and the principal market
therefore is other than on the exchange, the evaluation shall generally be
based on the current bid price on the over-the-counter market (unless these
prices are inappropriate as a basis for evaluation). If current bid prices are
unavailable, the evaluation is generally determined (a) on the basis of
current bid prices for comparable securities, (b) by appraising the value of
the Equity Securities of such Trust on the bid side of the market or (c) by
any combination of the above. The value of the Equity Securities in the
secondary market is based on the aggregate value of the Foreign Securities
computed on the basis of the bid side value of the applicable currency
exchange rate expressed in U.S. dollars as of the Evaluation Time.
The right of redemption may be suspended and payment postponed for any period
during which the New York Stock Exchange is closed, other than for customary
weekend and holiday closings, or any period during which the Securities and
Exchange Commission determines that trading on that Exchange is restricted or
an emergency exists, as a result of which disposal or evaluation of the
Securities in the Trust is not reasonably practicable, or for such other
periods as the Securities and Exchange Commission may by order permit.
TRUST ADMINISTRATION
- --------------------------------------------------------------------------
Managing Underwriter Purchases of Units. The Trustee shall notify the Managing
Underwriter of any Units tendered for redemption. If the Managing
Underwriter's bid in the secondary market at that time equals or exceeds the
Redemption Price per Unit, it may purchase such Units by notifying the Trustee
before the close of business on the next succeeding business day and by making
payment therefor to the Unitholder not later than the day on which the Units
would otherwise have been redeemed by the Trustee. Units held by the Managing
Underwriter may be tendered to the Trustee for redemption as any other Units.
The offering price of any Units acquired by the Managing Underwriter will be
in accord with the Public Offering Price described in the then currently
effective prospectus describing such Units. Any profit resulting from the
resale of such Units will belong to the Managing Underwriter which likewise
will bear any loss resulting from a lower offering or redemption price
subsequent to its acquisition of such Units.
Portfolio Administration. The portfolio of the Trust is not "managed"
by the Sponsor, Supervisor or the Trustee; their activities described herein
are governed solely by the provisions of the Trust Agreement. Traditional
methods of investment management for a managed fund typically involve frequent
changes in a portfolio of securities on the basis of economic, financial and
market analyses. While the Trust will not be managed, the Trust Agreement,
however, does provide that the Sponsor may (but need not) direct the Trustee
to dispose of an Equity Security in certain events such as the issuer having
defaulted on the payment on any of its outstanding obligations or the price of
an Equity Security has declined to such an extent or other such credit factors
exist so that in the opinion of the Sponsor the retention of such Securities
would be detrimental to the Trust. Pursuant to the Trust Agreement and with
limited exceptions, the Trustee may sell any securities or other properties
acquired in exchange for Equity Securities such as those acquired in
connection with a merger or other transaction. If offered such new or
exchanged securities or property, the Trustee shall reject the offer. However,
in the event such securities or property are nonetheless acquired by the
Trust, they may be accepted for deposit in the Trust and either sold by the
Trustee or held in the Trust pursuant to the direction of the Sponsor (who may
rely on the advice of the Supervisor). Proceeds from the sale of Securities
(or any securities or other property received by the Trust in exchange for
Equity Securities) are credited to the Capital Account for distribution to
Unitholders or to meet redemptions. Except as stated under "Trust
Portfolio" for failed securities and as provided in this paragraph, the
acquisition by the Trust of any securities other than the Securities is
prohibited.
As indicated under "Rights of Unitholders--Redemption of Units" above,
the Trustee may also sell Securities designated by the Supervisor, or if no
such designation has been made, in its own discretion, for the purpose of
redeeming Units of the Trust tendered for redemption and the payment of
expenses.
The Supervisor, in designating Equity Securities to be sold by the Trustee,
will generally make selections in order to maintain, to the extent
practicable, the proportionate relationship among the number of shares of
individual issues of Equity Securities in the Trust. To the extent this is not
practicable, the composition and diversity of the Equity Securities in the
Trust may be altered. In order to obtain the best price for the Trust, it may
be necessary for the Supervisor to specify minimum amounts (generally 100
shares) in which blocks of Equity Securities are to be sold.
Amendment or Termination. The Trust Agreement may be amended by the Trustee
and the Sponsor without the consent of any of the Unitholders (1) to cure any
ambiguity or to correct or supplement any provision thereof which may be
defective or inconsistent, or (2) to make such other provisions as shall not
adversely affect the Unitholders (as determined in good faith by the Sponsor
and the Trustee), provided, however, that the Trust Agreement may not be
amended to increase the number of Units (except as provided in the Trust
Agreement). The Trust Agreement may also be amended in any respect by the
Trustee and Sponsor, or any of the provisions thereof may be waived, with the
consent of the holders representing 51% of the Units of the Trust then
outstanding, provided that no such amendment or waiver will reduce the
interest in the Trust of any Unitholder without the consent of such Unitholder
or reduce the percentage of Units required to consent to any such amendment or
waiver without the consent of all Unitholders. The Trustee shall advise the
Unitholders of any amendment promptly after execution thereof.
The Trust may be liquidated at any time by consent of Unitholders representing
66 2/3% of the Units of the Trust then outstanding, or by the Trustee when the
value of the Equity Securities owned by the Trust, as shown by any evaluation,
is less than that amount set forth under Minimum Termination Value in "
Summary of Essential Financial Information" in Part One. The Trust
Agreement will terminate upon the sale or other disposition of the last
Security held thereunder, but in no event will it continue beyond the
Mandatory Termination Date stated under "Summary of Essential Financial
Information" in Part One.
Commencing on the Mandatory Termination Date, Equity Securities will begin to
be sold in connection with the termination of the Trust. The Sponsor will
determine the manner, timing and execution of the sales of the Equity
Securities. The Sponsor shall direct the liquidation of Securities in such
manner as to effectuate orderly sales and a minimal market impact. In the
event the Sponsor does not so direct, the Securities shall be sold within a
reasonable period and in such manner as the Trustee, in its sole discretion,
shall determine. At least 30 days before the Mandatory Termination Date the
Trustee will provide written notice of any termination to all Unitholders of
the Trust. Unitholders will receive a cash distribution from the sale of the
remaining Securities within a reasonable time following the Mandatory
Termination Date. The Trustee will deduct from the funds of the Trust any
accrued costs, expenses, advances or indemnities provided by the Trust
Agreement, including estimated compensation of the Trustee, costs of
liquidation and any amounts required as a reserve to provide for payment of
any applicable taxes or other governmental charges. Any sale of Securities in
the Trust upon termination may result in a lower amount than might otherwise
be realized if such sale were not required at such time. The Trustee will then
distribute to each Unitholder of the Trust his pro rata share of the balance
of the Income and Capital Accounts of the Trust.
Within 60 days after the final distribution Unitholders will be furnished a
final distribution statement of the amount distributable. At such time as the
Trustee in its sole discretion will determine that any amounts held in reserve
are no longer necessary, it will make distribution thereof to Unitholders in
the same manner.
Limitations on Liabilities. The Sponsor, the Evaluator, the Supervisor and the
Trustee shall be under no liability to Unitholders for taking any action or
for refraining from taking any action in good faith pursuant to the Trust
Agreement, or for errors in judgment, but shall be liable only for their own
willful misfeasance, bad faith or gross negligence (negligence in the case of
the Trustee) in the performance of their duties or by reason of their reckless
disregard of their obligations and duties hereunder.
The Trustee shall not be liable for depreciation or loss incurred by reason of
the sale by the Trustee of any of the Securities. In the event of the failure
of the Sponsor to act under the Trust Agreement, the Trustee may act
thereunder and shall not be liable for any action taken by it in good faith
under the Trust Agreement. The Trustee shall not be liable for any taxes or
other governmental charges imposed upon or in respect of the Securities or
upon the interest thereon or upon it as Trustee under the Trust Agreement or
upon or in respect of the Trust which the Trustee may be required to pay under
any present or future law of the United States of America or of any other
taxing authority having jurisdiction. In addition, the Trust Agreement
contains other customary provisions limiting the liability of the Trustee.
The Trustee, Sponsor, Supervisor and Unitholders may rely on any evaluation
furnished by the Evaluator and shall have no responsibility for the accuracy
thereof. Determinations by the Evaluator under the Trust Agreement shall be
made in good faith upon the basis of the best information available to it,
provided, however, that the Evaluator shall be under no liability to the
Trustee, Sponsor or Unitholders for errors in judgment. This provision shall
not protect the Evaluator in any case of willful misfeasance, bad faith, gross
negligence or reckless disregard of its obligations and duties.
Managing Underwriter and Sub-Supervisor. International Assets Advisory
Corporation ("IAAC" ), the Managing Underwriter for the Trust, is a
full-service securities brokerage firm specializing in global investing. IAAC
was formed as a Florida corporation in 1981 and registered as a broker/dealer
in 1982. The firm has focused on the sale of global debt and equity securities
to its clients. IAAC has developed an experienced team specializing in the
selection, research, trading, currency exchange and execution of individual
equity and fixed-income products on a global basis. Members of this team are
also affiliated with Global Assets Advisors, Inc. and have many years of
experience in the global marketplace. Global Assets Advisors, Inc., is the
Sub-Supervisor and provides research and portfolio supervisory services for
the Trust pursuant to a contract with the Supervisor. Global Assets Advisors
is a wholly-owned subsidiary of International Assets Holding Corporation and a
related corporation of IAAC. The principal offices of IAAC and Global Assets
Advisors are located at 250 Park Avenue South, Suite 200, Winter Park, Florida
32789. The telephone number is (800) 432-0000.
Sponsor. Van Kampen American Capital Distributors, Inc., a Delaware
corporation, is the Sponsor of the Trust. The Sponsor is an indirect
subsidiary of VK/AC Holding, Inc. Prior to October 31, 1996, VK/AC Holding,
Inc. was controlled, through the ownership of a substantial majority of its
common stock, by The Clayton & Dubilier Private Equity IV Limited Partnership.
On October 31, 1996, VK/AC Holding, Inc. became a wholly owned indirect
subsidiary of Morgan Stanley Group Inc. pursuant to the closing of an
Agreement and Plan of Merger among Morgan Stanley Group Inc., MSAM Holdings
II, Inc. and MSAM Acquisition Inc., whereby MSAM Acquisition Inc. was merged
with and into VK/AC Holding, Inc. and VK/AC Holding, Inc. was the surviving
corporation (the "Acquisition" ).
As a result of the Acquisition, VK/AC Holding, Inc. became a wholly owned
subsidiary of MSAM Holdings II, Inc. which, in turn, is a wholly owned
subsidiary of Morgan Stanley Group Inc. Morgan Stanley Group Inc. and various
of its directly or indirectly owned subsidiaries, including Morgan Stanley
Asset Management Inc., an investment adviser ("MSAM" ), Morgan Stanley
& Co. Incorporated, a registered broker-dealer and investment adviser, and
Morgan Stanley International, are engaged in a wide range of financial
services. Their principal businesses include securities underwriting,
distribution and trading; merger, acquisition, restructuring and other
corporate finance advisory activities; merchant banking; stock brokerage and
research services; asset management; trading of futures, options, foreign
exchange commodities and swaps (involving foreign exchange, commodities,
indices and interest rates); real estate advice, financing and investing; and
global custody, securities clearance services and securities lending. As of
December 31, 1996, MSAM, together with its affiliated investment advisory
companies, had approximately $113 billion of assets under management and
fiduciary advice.
On February 5, 1997, Morgan Stanley Group Inc. and Dean Witter, Discover & Co.
announced that they had entered into an Agreement and Plan of Merger to form
Morgan Stanley, Dean Witter, Discover & Co. Subject to certain conditions
being met, it is currently anticipated that the transaction will close in
mid-1997. Thereafter, Van Kampen American Capital Distributors, Inc. will be
an indirect subsidiary of Morgan Stanley, Dean Witter, Discover & Co.
Dean Witter, Discover & Co. is a financial services company with three major
businesses: full service brokerage, credit services and asset management.
Van Kampen American Capital Distributors, Inc. specializes in the underwriting
and distribution of unit investment trusts and mutual funds with roots in
money management dating back to 1926. The Sponsor is a member of the National
Association of Securities Dealers, Inc. and has offices at One Parkview Plaza,
Oakbrook Terrace, Illinois 60181, (630) 684-6000 and 2800 Post Oak Boulevard,
Houston, Texas 77056, (713) 993-0500. It maintains a branch office in
Philadelphia and has regional representatives in Atlanta, Dallas, Los Angeles,
New York, San Francisco, Seattle and Tampa. As of November 30, 1996 the total
stockholders' equity of Van Kampen American Capital Distributors, Inc. was
$129,451,000 (unaudited). (This paragraph relates only to the Sponsor and not
to the Trust or to any other Series thereof. The information is included
herein only for the purpose of informing investors as to the financial
responsibility of the Sponsor and its ability to carry out its contractual
obligations. More detailed financial information will be made available by the
Sponsor upon request.)
If the Sponsor shall fail to perform any of its duties under the Trust
Agreement or become incapable of acting or shall become bankrupt or its
affairs are taken over by public authorities, then the Trustee may (i) appoint
a successor Sponsor at rates of compensation deemed by the Trustee to be
reasonable and not exceeding amounts prescribed by the Securities and Exchange
Commission, (ii) terminate the Trust Agreement and liquidate the Trust as
provided therein or (iii) continue to act as Trustee without terminating the
Trust Agreement.
Trustee. The Trustee is The Bank of New York, a trust company organized under
the laws of New York. The Bank of New York has its offices at 101 Barclay
Street, New York, New York 10286, (800) 221-7668. The Bank of New York is
subject to supervision and examination by the Superintendent of Banks of the
State of New York and the Board of Governors of the Federal Reserve System,
and its deposits are insured by the Federal Deposit Insurance Corporation to
the extent permitted by law.
The duties of the Trustee are primarily ministerial in nature. It did not
participate in the selection of Securities for the Trust portfolio.
In accordance with the Trust Agreement, the Trustee shall keep proper books of
record and account of all transactions at its office for the Trust. Such
records shall include the name and address of, and the number of Units of the
Trust held by, every Unitholder of the Trust. Such books and records shall be
open to inspection by any Unitholder at all reasonable times during the usual
business hours. The Trustee shall make such annual or other reports as may
from time to time be required under any applicable state or federal statute,
rule or regulation (see "Rights of Unitholders--Reports Provided" ).
The Trustee is required to keep a certified copy or duplicate original of the
Trust Agreement on file in its office available for inspection at all
reasonable times during the usual business hours by any Unitholder, together
with a current list of the Securities held in the Trust.
Under the Trust Agreement, the Trustee or any successor trustee may resign and
be discharged of its responsibilities created by the Trust Agreement by
executing an instrument in writing and filing the same with the Sponsor. The
Trustee or successor trustee must mail a copy of the notice of resignation to
all Unitholders then of record, not less than 60 days before the date
specified in such notice when such resignation is to take effect. The Sponsor
upon receiving notice of such resignation is obligated to appoint a successor
trustee promptly. If, upon such resignation, no successor trustee has been
appointed and has accepted the appointment within 30 days after notification,
the retiring Trustee may apply to a court of competent jurisdiction for the
appointment of a successor. The Sponsor may remove the Trustee and appoint a
successor trustee as provided in the Trust Agreement at any time with or
without cause. Notice of such removal and appointment shall be mailed to each
Unitholder by the Sponsor. Upon execution of a written acceptance of such
appointment by such successor trustee, all the rights, powers, duties and
obligations of the original trustee shall vest in the successor. The
resignation or removal of a Trustee becomes effective only when the successor
trustee accepts its appointment as such or when a court of competent
jurisdiction appoints a successor trustee.
Any corporation into which a Trustee may be merged or with which it may be
consolidated, or any corporation resulting from any merger or consolidation to
which a Trustee shall be a party, shall be the successor trustee. The Trustee
must be a banking corporation organized under the laws of the United States or
any state and having at all times an aggregate capital, surplus and undivided
profits of not less than $5,000,000.
OTHER MATTERS
- --------------------------------------------------------------------------
Legal Opinions. The legality of the Units offered hereby has been passed upon
by Chapman and Cutler, 111 West Monroe Street, Chicago, Illinois 60603, as
counsel for the Sponsor. Kroll & Tract LLP has acted as counsel for the
Trustee.
Independent Certified Public Accountants. The statement of condition and the
related securities portfolio at the Initial Date of Deposit included in this
Prospectus have been audited by Grant Thornton LLP, independent certified
public accountants, as set forth in their report in this Prospectus, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing.
No person is authorized to give any information or to make any representations
not contained in this Prospectus; and any information or representation not
contained herein must not be relied upon as having been authorized by the
Trust, the Sponsor or the Managing Underwriter. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, securities
in any state to any person to whom it is not lawful to make such offer in such
state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Title Page
<S> <C>
The Trust 3
Objective and Securities Selection 3
Trust Portfolio 4
Risk Factors 6
Taxation 9
Trust Operating Expenses 12
Public Offering 14
Rights of Unitholders 16
Trust Administration 19
Other Matters 23
</TABLE>
This Prospectus contains information concerning the Fund and the Sponsor, but
does not contain all of the information set forth in the registration
statements and exhibits relating thereto, which the Fund has filed with the
Securities and Exchange Commission, Washington, D.C., under the Securities Act
of 1933 and the Investment Company Act of 1940, and to which reference is
hereby made.
PROSPECTUS
Part Two
GLOBAL BLUE CHIP TRUST,
SERIES 1
Van Kampen American Capital Equity Opportunity Trust, Series 29
Note: This Prospectus may be used only when accompanied by Part One. Both
parts of this Prospectus should be retained for future reference.
Dated as of the date of the Prospectus Part One accompanying this Prospectus
Part Two.
International Assets Advisory Corp.
250 Park Avenue South Suite 200
Winter Park, Florida 32789
Contents of Post-Effective Amendment
to Registration Statement
This Post-Effective Amendment to the Registration Statement
comprises the following papers and documents:
The facing sheet
The prospectus
The signatures
The Consent of Independent Accountants
Signatures
Pursuant to the requirements of the Securities Act of 1933, the
Registrant, Van Kampen American Capital Equity Opportunity Trust, Series
29, certifies that it meets all of the requirements for effectiveness of
this Registration Statement pursuant to Rule 485(b) under the Securities
Act of 1933 and has duly caused this Post-Effective Amendment to its
Registration Statement to be signed on its behalf by the undersigned
thereunto duly authorized, and its seal to be hereunto affixed and
attested, all in the City of Chicago and State of Illinois on the 23rd
day of May, 1997.
Van Kampen American Capital Equity Opportunity
Trust, Series 29
(Registrant)
By Van Kampen American Capital Distributors,
Inc.
(Depositor)
By Sandra A. Waterworth
Vice President
(Seal)
Pursuant to the requirements of the Securities Act of 1933, this
Amendment to the Registration Statement has been signed below on May 23,
1997 by the following persons who constitute a majority of the Board of
Directors of Van Kampen American Capital Distributors, Inc.:
Signature Title
Don G. Powell Chairman and Chief )
Executive Officer )
William R. Molinari President and Chief Operating)
Officer )
Ronald A. Nyberg Executive Vice President and )
General Counsel )
William R. Rybak Senior Vice President and )
Chief Financial Officer )
Sandra A. Waterworth ) (Attorney in Fact)*
____________________
* An executed copy of each of the related powers of attorney was filed
with the Securities and Exchange Commission in connection with the
Registration Statement on Form S-6 of Insured Municipals Income
Trust and Investors' Quality Tax-Exempt Trust, Multi-Series 203
(File No. 33-65744) and with the Registration Statement on Form S-6
of Insured Municipals Income Trust, 170th Insured Multi-Series (File
No. 33-55891) and the same are hereby incorporated herein by this
reference.
Consent of Independent Certified Public Accountants
We have issued our report dated April 4, 1997 accompanying the
financial statements of Van Kampen American Capital Equity Opportunity
Trust, Series 29 as of January 31, 1997, and for the period then ended,
contained in this Post-Effective Amendment No. 1 to Form S-6.
We consent to the use of the aforementioned report in the Post-
Effective Amendment and to the use of our name as it appears under the
caption "Auditors".
Grant Thornton LLP
Chicago, Illinois
May 23, 1997
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<NAME> IAGL
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<S> <C>
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<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-START> MAR-22-1996
<PERIOD-END> JAN-31-1997
<INVESTMENTS-AT-COST> 12582994
<INVESTMENTS-AT-VALUE> 14150007
<RECEIVABLES> 0
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 11720
<TOTAL-ASSETS> 14161727
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 0
<TOTAL-LIABILITIES> 0
<SENIOR-EQUITY> 0
<PAID-IN-CAPITAL-COMMON> 14161727
<SHARES-COMMON-STOCK> 1300000
<SHARES-COMMON-PRIOR> 1300000
<ACCUMULATED-NII-CURRENT> 11714
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 6
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 1567013
<NET-ASSETS> 14161727
<DIVIDEND-INCOME> 164432
<INTEREST-INCOME> 0
<OTHER-INCOME> 0
<EXPENSES-NET> 16207
<NET-INVESTMENT-INCOME> 148225
<REALIZED-GAINS-CURRENT> 6
<APPREC-INCREASE-CURRENT> 1567013
<NET-CHANGE-FROM-OPS> 1715244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> (136511)
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 0
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<SHARES-REINVESTED> 0
<NET-CHANGE-IN-ASSETS> 1578733
<ACCUMULATED-NII-PRIOR> 0
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<GROSS-ADVISORY-FEES> 6201
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 16207
<AVERAGE-NET-ASSETS> 13372361
<PER-SHARE-NAV-BEGIN> 9.49
<PER-SHARE-NII> 0.114
<PER-SHARE-GAIN-APPREC> 1.205
<PER-SHARE-DIVIDEND> 0
<PER-SHARE-DISTRIBUTIONS> 0
<RETURNS-OF-CAPITAL> 0
<PER-SHARE-NAV-END> 10.894
<EXPENSE-RATIO> 0.001
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
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