<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
Letter to Shareholders...................... 1
Performance Results......................... 3
Portfolio Highlights........................ 4
Portfolio Management Review................. 5
Portfolio of Investments.................... 8
Statement of Assets and Liabilities......... 19
Statement of Operations..................... 20
Statement of Changes in Net Assets.......... 21
Financial Highlights........................ 22
Notes to Financial Statements............... 25
</TABLE>
GMA SAR 8/96
<PAGE>
LETTER TO SHAREHOLDERS
[PHOTO OF DENNIS J. MCDONNELL AND DON G. POWELL]
August 1, 1996
Dear Shareholder,
As you may be aware, an agreement was reached in late June for VK/AC Holding,
Inc., the parent company of Van Kampen American Capital, Inc., to be acquired
by the Morgan Stanley Group Inc. While this announcement may appear commonplace
in an ever-changing financial industry, we believe it represents an exciting
opportunity for shareholders of our investment products.
With Morgan Stanley's global leadership in investment banking and asset man-
agement and Van Kampen American Capital's reputation for competitive long-term
performance and superior investor services, together we will offer a broader
range of investment opportunities and expertise.
The new ownership will not affect our commitment to pursuing excellence in
all aspects of our business. And, we expect very little change in the way your
mutual fund account is maintained and serviced.
A proxy will be mailed to you shortly explaining the acquisition and asking
for your vote of approval. Please read it carefully and return your response
for inclusion in the shareholder vote. We value our relationship with you and
look forward to communicating more details of this transaction, which is antic-
ipated to be completed in November.
ECONOMIC REVIEW
The economy demonstrated an acceleration in growth during the six-month re-
porting period. After a nominal 0.3 percent growth rate in the last quarter of
1995, GDP (the nation's gross domestic product) rose by 2.0 percent in this
year's first quarter. And, as anticipated, the economy grew by 4.2 percent in
the second quarter, partly reflecting a recovery from the effects of labor
strikes earlier in the year and extreme weather conditions across the country.
Upward momentum has been assisted by consumer spending, as indicated by a 5.6
percent rise in retail sales in the first five months of this year versus the
comparable 1995 period.
In the manufacturing sector, economic reports, such as the National Associa-
tion of Purchasing Managers Index, suggested a continued rebound in production
from last winter's lower levels. In June, this index reached its highest level
since early 1995. Strong levels of exports and a replenishing of inventories
have helped support this momentum.
Surprisingly healthy economic activity led to concerns that inflation may
rise and the Federal Reserve Board might tighten monetary policy. Inflation re-
mains modest, however, with consumer prices rising at about a 3 percent annual
rate over the past year. Meanwhile, the closely watched "core" Consumer Price
Index, which excludes volatile food and energy components, has risen year over
year at rates between 2.7 and 3.0 percent per year, with mid-1996 readings at a
moderate 2.7 percent. In general, recent reports have suggested an upward creep
in labor-related costs, while indicating that prices of many commodities have
begun to decline.
Continued on page two
1
<PAGE>
MARKET REVIEW
The stock market averages posted attractive gains for the six-month period
ended June 30, 1996, with most major averages posting all-time highs. The Dow
Jones Industrial Average rose 10.9 percent from 5095 to 5654, and the NASDAQ
Composite Index rose 12.6 percent from 1052 to 1185.
Corporate earnings, which were an important contributor to last year's strong
U.S. stock market, continued to move ahead during the reporting period. Unex-
pectedly strong economic activity helped lift reported profits above expecta-
tions for the period. Through the rest of 1996, we expect earnings will be
supportive, but perhaps not the primary factor in the movement of the major
stock market averages.
The U.S. stock market outperformed most foreign equity markets due in part to
the dollar's strength against the German mark and the Japanese yen. Other mar-
kets, including the United Kingdom and many in Eastern Europe, demonstrated
strength during the reporting period. Specific details are included in the
portfolio management review.
Long-term interest rates in larger European economies reacted similarly to
U.S. rates, rising steadily after hitting their low point in late January. How-
ever, European yields have proven more resilient than their U.S. counterparts.
Yields in Germany, France, Belgium, Austria, and the Netherlands rose through
March but have since traded in a relatively narrow range, whereas U.S. yields
have risen consistently since February.
This outperformance of foreign bond markets since February reflects worldwide
expectations that growth is reviving at a faster rate in the U.S. than in Eu-
rope. In general, economic activity has been slow in larger economies and slow-
ing in the smaller economies. The easy monetary policy pursued by Japan added
further support to the international bond markets.
OUTLOOK
We anticipate that reasonably strong economic growth will continue during the
balance of 1996, albeit at more moderate rates than the second quarter's swift
pace. While we expect rates of inflation to remain near current levels, the Fed
may begin to lean toward greater restraint in its monetary policy in the coming
months. That suggests an upward bias for short-term interest rates and for
yields on long-term bonds to remain steady at current levels. In particular, we
expect 10-year Treasury yields to remain within a trading range of 6.50 and
7.25 percent.
We look for economies worldwide to be on stronger footing for the rest of
1996 and into next year. We anticipate that bond yields will remain relatively
unchanged--unless signs of inflation reappear. In general, increasing economic
strength should provide a positive environment for companies--and equity mar-
kets--throughout the world.
Additional details about your Fund, including a question and answer section
with your portfolio management team, is provided in this report. We appreciate
your continued confidence in your investment with Van Kampen American Capital.
Sincerely,
/s/ Don G. Powell /s/ Dennis J. McDonnell
Don G. Powell Dennis J. McDonnell
Chairman President
Van Kampen American Capital Van Kampen American Capital
Asset Management, Inc. Asset Management, Inc.
2
<PAGE>
PERFORMANCE RESULTS FOR THE PERIOD ENDED JUNE 30, 1996
VAN KAMPEN AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND
<TABLE>
<CAPTION>
A SHARES B SHARES C SHARES
TOTAL RETURNS
<S> <C> <C> <C>
Six-month total return based on NAV/1/............... 7.37% 6.91% 6.90%
Six-month total return/2/............................ 2.24% 2.91% 5.90%
One-year total return/2/............................. 8.24% 8.64% 11.50%
Life-of-Fund average annual total return/2/.......... 6.37% 6.59% 7.98%
Commencement Date.................................... 05/16/94 05/16/94 05/16/94
</TABLE>
/1/Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge(4.75% for A shares) or contingent
deferred sales charge for early withdrawal (4% for B shares and 1% for C
shares).
/2/Standardized total return. Assumes reinvestment of all distributions for the
period and includes payment of the maximum sales charge (A shares) or
contingent deferred sales charge for early withdrawal (B and C shares).
See the Prior Performance section of the current prospectus. Past performance
does not guarantee future results. Investment return and net asset value will
fluctuate with market conditions. Fund shares, when redeemed, may be worth more
or less than their original cost.
3
<PAGE>
PORTFOLIO HIGHLIGHTS
VAN KAMPEN AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND
TOP TEN HOLDINGS AS A PERCENTAGE OF LONG-TERM INVESTMENTS
AS OF % AS OF
JUNE 30, 1996 SIX MONTHS AGO
<TABLE>
<S> <C> <C>
U.S. Treasury Notes, 6.75%, 2/28/97.................... 8.8%............. 10.3%
U.S. Treasury Notes, 8.00%,10/15/96.................... 4.9%............. 6.1%
U.S. Treasury Notes, 5.75%, 8/15/03.................... 2.3%............. 2.9%
U.S. Treasury Notes, 7.50%, 2/15/05.................... 2.1%............. 2.6%
Adidas................................................. 1.0%............. 0.5%
Next................................................... 0.9%............. 0.4%
Philip Morris Companies, Inc........................... 0.9%............. 0.8%
Daiwa Securities Co., Ltd.............................. 0.9%............. 1.2%
Matsushita Electric Industrial Co...................... 0.8%............. 0.3%
Reuters Holdings....................................... 0.8%............. 0.7%
</TABLE>
[Pie Chart]
ASSET ALLOCATION
As of June 30, 1996
Stocks.............. 75.6%
Bonds............... 18.1%
Cash & Short-
Term Investments.. 2.7%
Other............... 3.6%
[Pie Chart]
As of December 31, 1995
Stocks.............. 63.2%
Bonds............... 24.7%
Cash & Short-
Term Investments.. 6.1%
Other............... 6.0%
TOP TEN COUNTRIES AS A PERCENTAGE OF NET ASSETS
<TABLE>
<CAPTION>
AS OF JUNE 30, 1996
<S> <C>
United States....... 39.9%
Japan............... 14.9%
United Kingdom...... 7.6%
France.............. 4.8%
Netherlands......... 3.6%
Hong Kong........... 3.2%
Switzerland......... 2.9%
Sweden.............. 2.5%
Germany............. 2.4%
Norway.............. 1.9%
</TABLE>
<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
<S> <C>
United States....... 53.7%
Japan............... 14.2%
United Kingdom...... 8.4%
France.............. 3.9%
Netherlands......... 2.5%
Hong Kong........... 2.7%
Switzerland......... 2.9%
Sweden.............. 3.8%
Germany............. 2.8%
Norway.............. 0.9%
</TABLE>
4
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
VAN KAMPEN AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND
We recently spoke with the management team of the Van Kampen American Capital
Global Managed Assets Fund about the key events and economic forces that shaped
the markets during the past six months. The Fund is co-managed by portfolio
manager Jeff D. New and John R. Reynoldson of Van Kampen American Capital (U.S.
holdings), Alan Doyle and Peter Kysel of John Govett & Co. Limited
(international holdings), and Alan T. Sachtleben, Van Kampen American Capital's
executive vice president of equity investments. The following excerpts reflect
their views on the Fund's performance during the six-month period ended June
30, 1996.
KEY TERM
YIELD CURVE: The relationship of yields to maturity for bonds of similar qual-
ity but differing maturity. For example, the yields of U.S. Treasury securities
maturing in 1, 5, 10 and 30 years, viewed together, will often reflect a pat-
tern of increasing yield as maturity extends--creating an upward sloping
"curve." If there is little difference among the yields, the "curve" is said to
be flat.
WHAT TRENDS HAVE YOU SEEN IN THE GLOBAL EQUITY AND BOND MARKETS OVER THE
Q SIX-MONTH PERIOD ENDED JUNE 30, 1996?
A During the first six months of 1996, the global economic environment for
equities and fixed-income securities has generally remained positive, as
economic growth and inflation remained relatively moderate. The exception has
been the U.S. bond market, which has substantially declined since February.
Global Equity Market Trends:
. The U.S. equity market continued to show strength as economic growth re-
mained positive and inflation remained low. Combined with a continued
resurgence of the U.S. dollar versus most major currencies, particularly
the German mark and the Japanese yen, the U.S. market outperformed (in
dollar terms) most foreign equity markets.
. Japan's accommodative monetary and fiscal policies appeared to be work-
ing, as both market sentiment and economic fundamentals have been im-
proving in recent months. In this environment, we have seen smaller
company stocks, particularly those oriented towards economic recovery
and commodities, lead the Japanese market upwards.
. In the U.K., lower interest rates helped to stimulate consumer spending,
despite fears over job security and limited growth in personal incomes.
However, continued political uncertainty--the Conservative party pres-
ently maintains a majority in Parliament by only one seat--could ad-
versely affect the marketplace.
. After experiencing a two-year decline, most Eastern European markets be-
gan to stabilize in December of 1995. These markets have subsequently
produced remarkable performances, currently dominating most global eq-
uity markets this year. For example,
5
<PAGE>
the Morgan Stanley Capital International Poland Index and Turkey Index
returned 50.55 percent and 31.66 percent, respectively, year-to-date
through June 30, 1996.
. Many core European banks have pursued an accomodative monetary policy
over the period, which has led to gains in most developed European mar-
kets. Spain and France have returned 12.34 percent and 10.26 percent,
respectively, year-to-date.
Global Bond Market Trends:
. Continued signs of strong economic growth have renewed inflation fears,
causing prices in the U.S. bond market to decline. We believe lingering
market concerns about the outlook for inflation in the U.S. combined
with political uncertainty, will keep long-term interest rates near the
upper end of their recent trading range in the near term.
. In an effort to stimulate economic growth, most European central banks
have lowered interest rates. This has caused bond prices to rise, al-
lowing many of these markets to outperform the U.S. bond market this
year.
. Optimism about the possibilities for monetary union in Europe has led to
a steepening of the yield curves in the core countries of Germany and
France. This optimism, combined with low short-term interest rates in
Germany, has led to a flight of capital out of the core European coun-
tries to the higher-yielding peripheral countries of Europe, such as
Sweden, Spain and Italy.
Q WHAT INFLUENCE DID THESE TRENDS HAVE ON THE FUND'S PERFORMANCE AND HOW
DID YOU POSITION THE FUND IN RESPONSE?
A After enjoying a strong 1995, we were not as optimistic for global bond
markets in 1996. Subsequently, we kept the Fund's overall weighting in
fixed-income securities low. Believing European bond markets may not provide
much more upside potential, we have reduced the Fund's exposure to these mar-
kets in favor of the U.S. bond market where yields have risen to more attrac-
tive levels.
Over the period, we maintained the Fund's allocation of overweighting equi-
ties and underweighting bonds. The improved sentiment in the international eq-
uity markets throughout the period resulted in the enhancement of the Fund's
performance. Please refer to page four for Fund portfolio highlights.
Q HOW DID THE FUND PERFORM DURING THE SIX MONTHS ENDEDJUNE 30, 1996?
A Class A shares achieved a total return at net asset value of 7.37 per-
cent/1/. Over the same period, the Morgan Stanley Capital International
World Index (an unmanaged index that is used as a benchmark for general global
equity funds) had a total return of 5.79 percent. The J.P. Morgan Global Traded
Government Index (an unmanaged index of major foreign and U.S. Government bonds
that are weighted by the total market value of each country's securities and
reflect variations in currency value) achieved a total return of-1.16 percent
for the reporting period. Please keep in mind that these indices are unmanaged,
statistical composites and do not reflect any commissions or fees that would be
paid by an investor purchasing the securities they represent. Please refer to
the chart on page three for additional Fund performance results.
6
<PAGE>
Q WHAT IS YOUR OUTLOOK FOR THE GLOBAL MARKET FOR THE REMAINDER OF 1996?
A Global equity markets have experienced strong performance over the past
year and we believe current valuations suggest the possibility of a
short-term price correction. We believe equities in most countries will remain
attractive as long as economic growth remains moderate and inflation subdued.
We believe that the strong economic growth rates forecasted for many emerging
markets will provide additional opportunity for capital appreciation.
We expect yields in the European bond markets to generally remain near cur-
rent levels, unless economic growth triggers inflationary pressure. Before year
end, we expect a tightening in Japan's monetary policy as economic growth gains
momentum. For the U.S., we believe current bond yields adequately compensate
investors for the inflation risk present in the U.S. economy.
/s/ Alan T. Sachtleben /s/ Jeff D. New /s/ John R. Reynoldson
Alan T. Sachtleben Jeff D. New John R. Reynoldson
Van Kampen American Van Kampen American Van Kampen American
Capital Capital Capital
Executive Vice Portfolio Manager Portfolio Manager
President
Equity Investments
/s/ Alan Doyle /s/ Peter Kysel
Alan Doyle Peter Kysel
John Govett & Co. John Govett & Co.
Limited Limited
Portfolio Manager Portfolio Manager
Please see footnotes on page three.
7
<PAGE>
PORTFOLIO OF INVESTMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
COMMON STOCK AND EQUIVALENTS 77.4%
AUSTRALIA 0.5%
TABCORP Holdings, Ltd.................................... 25,000 $ 112,967
WMC, Ltd................................................. 5,000 35,756
-----------
148,723
-----------
AUSTRIA 0.5%
Austria Mikro System Intl................................ 240 22,421
Wolford, AG.............................................. 500 122,378
-----------
144,799
-----------
BELGIUM 0.3%
GIB Holdings, Ltd........................................ 2,100 96,072
-----------
BRAZIL 0.6%
Centrais Eletricas Brasileiras--ADR...................... 7,300 106,799
Usiminas, SA............................................. 5,000 55,650
-----------
162,449
-----------
CANADA 0.4%
Grandetel Technologies, Inc. (b)......................... 20,000 25,000
Inco, Ltd................................................ 2,000 64,381
Seagram Co., Ltd......................................... 1,300 43,562
-----------
132,943
-----------
CZECH REPUBLIC 1.2%
Ceske Radiokomunickace (b)............................... 700 174,463
Komercni Banka--GDR (b).................................. 4,000 108,000
IPS Praha (b)............................................ 700 81,798
-----------
364,261
-----------
DENMARK 0.8%
Bang & Olufsen Holding (b)............................... 2,000 78,518
ISS International Service System......................... 7,000 156,525
-----------
235,043
-----------
FRANCE 4.8%
Bouygues................................................. 1,500 167,392
Chargeurs................................................ 400 111,984
Christian Dior........................................... 1,000 130,259
Club Mediterranee........................................ 244 21,869
Cofinec, SA (b).......................................... 4,000 191,040
Ecco, SA................................................. 400 100,708
Europeene De Prop........................................ 600 69,407
GTM Entrepose............................................ 1,600 103,896
Primagaz (Cie Gaz)....................................... 1,008 104,355
Roussel Uclaf............................................ 700 168,073
Sidel.................................................... 700 178,144
Union Assurance Federales................................ 600 74,072
-----------
1,421,199
-----------
</TABLE>
8
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
GERMANY 2.4%
Adidas................................................... 3,300 $ 277,586
Bayer.................................................... 4,000 141,401
Berliner Elektro Holdings................................ 2,000 55,837
Prakticker (b)........................................... 4,900 127,133
RWE...................................................... 1,450 56,550
Siemens.................................................. 1,300 69,510
-----------
728,017
-----------
HONG KONG 3.2%
First Pacific Co......................................... 58,000 89,164
Henderson Land Development............................... 20,000 149,855
Hong Kong Land Holding................................... 65,000 146,250
HSBC Holdings............................................ 4,800 72,551
Hutchison Whampoa........................................ 16,000 100,661
Jilin Chemical Industries, Class H....................... 330,000 58,405
Road King Infrastructure, Ltd. (b)....................... 50,000 54,808
Sun Hung Kai Properties.................................. 11,000 111,197
Swire Pacific, Ltd., Class A............................. 17,000 145,495
Tingyi (Cayman Islands) Holding Co. (b).................. 100,000 27,452
-----------
955,838
-----------
HUNGARY 0.9%
BorsodChem--GDR.......................................... 5,000 97,750
Graboplast Textiles...................................... 7,510 171,074
-----------
268,824
-----------
INDONESIA 0.7%
BK Bira.................................................. 142,500 128,571
Perusahaan Persero Telekom............................... 3,000 89,250
-----------
217,821
-----------
IRELAND 0.3%
Waterford Wedgewood...................................... 60,000 77,586
-----------
ISRAEL 0.4%
Tadiran Telecommunications, Ltd. (b)..................... 7,625 122,000
-----------
ITALY 1.3%
Gucci Group.............................................. 3,125 201,563
Mediolanum (b)........................................... 20,000 199,184
-----------
400,747
-----------
JAPAN 14.9%
Bank of Tokyo--Mitsubishi................................ 7,400 172,541
Daiichi Corp............................................. 6,000 174,462
Dainippon Screen Manufacturing Co., Ltd.................. 8,000 71,394
Daiwa Securities Co., Ltd................................ 19,000 244,960
Denki Kagaku Kogyo....................................... 17,000 61,555
Fujitsu General.......................................... 12,000 109,724
</TABLE>
9
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
JAPAN (CONTINUED)
Honda Motor Co........................................... 6,000 $ 155,809
Japan Airlines Co........................................ 5,000 40,552
Japan Radio Co........................................... 7,000 100,489
Japan Securities Finance................................. 4,000 64,737
JGC Corp................................................. 4,000 52,668
Komatsu, Ltd............................................. 4,000 39,501
Kumagai Gumi Co.......................................... 10,000 40,232
Kurita Water Industries.................................. 5,000 122,068
Kyocera Corp............................................. 2,000 141,727
Marubeni Corp............................................ 10,000 54,862
Matsushita Electric Industrial Co........................ 13,000 242,491
Mitsubishi Chemical...................................... 22,000 101,788
Mitsubishi Estate........................................ 4,000 55,228
Mitsubishi Heavy Industries.............................. 17,000 148,137
Mitsukoshi, Ltd.......................................... 20,000 213,962
Nichiei Construction..................................... 6,000 70,772
Nippon Hodo.............................................. 3,000 51,022
Nippon Telephone & Telegraph Corp........................ 10 74,247
NKK Corp................................................. 60,000 182,142
Nomura Securities Co., Ltd............................... 11,000 215,243
NTT Data Communications Systems Corp..................... 6 179,948
Omron Corp............................................... 7,000 149,134
Onward Kashiyama Co., Ltd................................ 9,000 147,305
Ricoh Corp., Ltd......................................... 11,000 116,673
Rohm Co.................................................. 2,000 132,401
Sanwa Bank............................................... 3,000 55,685
Secom.................................................... 2,000 132,401
Tadano................................................... 9,000 87,231
Takashimaya Co........................................... 6,000 93,266
Tokio Marine & Fire Insurance Co......................... 4,000 53,399
Tokyu Corp............................................... 7,000 53,445
Toshiba Corp............................................. 10,000 71,321
Toyota Motor Corp........................................ 2,000 50,107
Yamanouchi Pharmaceutical................................ 5,000 108,810
-----------
4,433,439
-----------
MALAYSIA 1.4%
Commerce Asset Holding................................... 10,000 60,934
Jaya Tiasa Holdings...................................... 15,000 87,793
Malaysian Pacific Industries............................. 26,000 108,399
Resort Worlds............................................ 30,000 171,978
-----------
429,104
-----------
</TABLE>
10
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
MEXICO 0.8%
Cemex, SA--ADR........................................... 11,000 $ 84,047
Empresas ICA Sociedad Controladora, SA--ADR.............. 6,000 83,250
Telefonos de Mexico--ADR................................. 2,400 80,400
-----------
247,697
-----------
NETHERLANDS 3.6%
Ahold (Koninklijke)...................................... 4,000 216,945
ASM Lithography Holding (b).............................. 3,200 132,278
BE Semiconductor Industries (b).......................... 9,000 133,313
Cap Volmac Group......................................... 7,000 137,496
Frans Maas Group......................................... 1,000 39,812
ING Groep................................................ 5,196 129,786
Philips Electronics, Inc................................. 2,100 68,513
Polygram................................................. 600 35,462
Royal Dutch Petroleum Co................................. 200 30,750
Ver Ned Uitgevers........................................ 10,000 155,380
-----------
1,079,735
-----------
NORWAY 1.9%
Orka, Class B............................................ 1,500 73,045
Orkla.................................................... 1,500 79,056
Protector Forsikrg....................................... 6,285 157,873
Schibsted................................................ 3,400 44,012
Uni-Storebrand (b)....................................... 13,000 58,498
Visual Management Application............................ 30,500 164,507
-----------
576,991
-----------
POLAND 0.2%
Fabryki Mebli Forte...................................... 17,000 58,187
-----------
PORTUGAL 0.8%
BCO Communications Portugues............................. 10,000 118,211
Portugal Telecommunications (b).......................... 5,000 130,767
-----------
248,978
-----------
RUSSIA 1.1%
Mosenergo (b)............................................ 7,000 193,357
Torgovy Dom GUM (b)...................................... 4,000 120,000
-----------
313,357
-----------
SINGAPORE 1.5%
Fraser & Neave, Ltd...................................... 10,800 111,750
Keppel Corp.............................................. 15,000 125,443
Overseas Union Bank...................................... 10,000 68,746
Singapore Land........................................... 20,000 135,365
-----------
441,304
-----------
</TABLE>
11
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
SOUTH KOREA 0.3%
LG Chemical Ltd.......................................... 1,800 $ 29,700
Samsung Electric Co.--GDR................................ 1,815 43,796
Samsung Electronic--GDR.................................. 110 2,667
-----------
76,163
-----------
SPAIN 0.3%
Tabacalera, SA........................................... 1,900 95,738
-----------
SWEDEN 2.5%
Astra AB, Class B........................................ 4,000 174,619
Autoliv.................................................. 2,800 85,437
Celsius.................................................. 3,000 95,165
Nobel Biocare............................................ 10,000 185,798
Rottneros................................................ 35,000 40,709
Stora Kopparbergs........................................ 2,900 38,330
Skandinaviska Enskilda Banley............................ 15,000 120,089
-----------
740,147
-----------
SWITZERLAND 2.9%
Adia, SA................................................. 500 125,580
Ascom Holdings........................................... 50 50,392
Ciba Geigy............................................... 150 182,971
CS Holdings.............................................. 875 83,287
Nestle................................................... 80 91,441
Schindler Holdings....................................... 100 106,563
SGS Holdings............................................. 90 215,605
-----------
855,839
-----------
THAILAND 0.7%
National Financial & Securities Co....................... 9,000 40,063
Siam Cement Co........................................... 2,000 98,168
Telecomasia (b).......................................... 17,000 35,829
Thailand Military Bank................................... 7,200 28,363
-----------
202,423
-----------
TURKEY 0.3%
Konfrut Gida............................................. 1,300,000 88,651
-----------
UNITED KINGDOM 7.6%
Astec (BSR).............................................. 50,000 116,089
BAA...................................................... 22,000 159,388
Bank of Ireland.......................................... 20,000 136,900
BOC Group................................................ 5,500 78,883
Boots Co................................................. 16,000 143,873
Cable & Wireless......................................... 25,000 165,204
De La Rue................................................ 5,000 46,203
Dixons Group............................................. 14,000 114,583
</TABLE>
12
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
UNITED KINGDOM (CONTINUED)
Harvey Nichols (b)....................................... 8,000 $ 41,994
Marks & Spencer.......................................... 8,000 58,456
National Westminster..................................... 10,000 95,357
Next..................................................... 30,000 262,308
Pliva DD--GDR............................................ 4,861 186,070
Premier Farnell.......................................... 10,000 105,141
Reuters Holdings......................................... 20,000 241,963
Sainsbury, J............................................. 12,000 70,632
Shell Transportion & Trading............................. 3,000 43,982
Sun Life & Province (b).................................. 35,000 120,671
Tesco.................................................... 15,000 68,489
-----------
2,256,186
-----------
UNITED STATES 18.3%
AK Steel Holding Corp.................................... 800 31,286
Aames Financial Corp..................................... 600 21,525
Adaptec, Inc............................................. 400 18,950
ADC Telecommunications, Inc. (b)......................... 700 31,500
Alex Brown, Inc.......................................... 500 28,250
American Radio Systems Corp., Class A.................... 500 21,500
Amgen, Inc. (b).......................................... 500 27,000
Analog Devices, Inc...................................... 1,050 26,775
Apache Corp.............................................. 500 16,438
Ascend Communications, Inc. (b).......................... 500 28,125
Aspect Telecommunications Corp. (b)...................... 600 29,700
Atmel Corp............................................... 600 18,075
Baker Hughes, Inc........................................ 500 16,438
Bank of Boston Corp...................................... 800 39,600
BankAmerica Corp......................................... 600 45,450
Belden, Inc.............................................. 500 15,000
Bemis, Inc............................................... 400 14,000
Black & Decker Corp...................................... 700 27,038
BMC Industries Inc.-- MN (b)............................. 600 17,250
BMC Software, Inc........................................ 800 47,800
Boeing Co................................................ 600 52,275
Boise Cascade Corp....................................... 310 11,354
Bristol Myers Squibb Co.................................. 500 45,000
Burlington Northern...................................... 200 16,175
Cadence Design Sys, Inc. (b)............................. 825 27,844
Career Horizons, Inc. (b)................................ 700 24,500
Cascade Communications (b)............................... 300 20,400
Case Corp................................................ 600 28,800
</TABLE>
13
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
Chase Manhattan Corp..................................... 900 $ 63,563
Chrysler Corp............................................ 900 55,800
Cisco Systems, Inc. (b).................................. 800 45,300
Citicorp................................................. 500 41,313
CMAC Investment Corp..................................... 400 23,000
Coherent, Inc............................................ 200 10,400
Computer Associates International, Inc................... 1,000 71,250
Conseco, Inc............................................. 900 36,000
Continental Airlines, Inc., Class B...................... 300 18,525
CSX Corp................................................. 500 24,125
Cytec Industries, Inc. (b)............................... 300 25,650
Dayton Hudson Corp....................................... 500 51,563
Deere & Co............................................... 600 24,000
Dillard Department Stores, Inc........................... 100 3,650
Dover Corp............................................... 700 32,288
DST Systems, Inc. (b).................................... 900 28,800
Eckerd (Jack) Corp. (b).................................. 300 67,875
Emmis Broadcasting Corp., Class A (b).................... 700 35,000
Equifax Inc.............................................. 1,200 31,500
Evergreen Media Corp. (b)................................ 1,100 47,025
Exxon Corp............................................... 500 43,438
Federal National Mortgage Association.................... 2,700 90,450
First Data Corp.......................................... 400 31,850
Ford Motor Co............................................ 800 25,900
Fort Howard Corp. (b).................................... 600 11,925
Frontier Corp............................................ 700 21,438
Gap, Inc................................................. 1,200 38,550
General Nutrition Companies, Inc. (b).................... 1,000 17,500
Genzyme Corp............................................. 500 25,125
Green Tree Financial Corp................................ 1,800 56,250
Greenfield Industries, Inc............................... 600 19,800
Guidant Corp............................................. 600 29,550
Gymboree Corp............................................ 700 21,350
Harley Davidson, Inc..................................... 600 24,675
Health Management Association, Inc., Class A (b)......... 1,275 25,819
Healthcare Compare Corp.................................. 300 14,625
Healthsouth Rehabilitation (b)........................... 1,100 39,600
Hewlett Packard Co....................................... 250 24,906
Hilton Hotels Corp....................................... 200 22,500
Illinois Tool Works, Inc................................. 400 27,050
Input/Output, Inc. (b)................................... 400 12,950
</TABLE>
14
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
Intel Corp............................................... 800 $ 58,750
Johnson Control, Inc..................................... 200 13,900
Johnson & Johnson........................................ 1,300 64,350
Komag, Inc............................................... 100 2,638
Kroger Co. (b)........................................... 1,000 39,500
La Quinta Inns, Inc...................................... 600 20,100
LCI International, Inc. (b).............................. 800 25,100
Lear Seating Corp. (b)................................... 500 17,625
Lincare Holdings, Inc. (b)............................... 950 37,288
Linear Technology Corp................................... 700 21,000
Liz Claiborne, Inc....................................... 700 24,238
Lucent Technologies, Inc................................. 500 18,938
Marriot International, Inc............................... 950 51,063
MCI Communications Corp.................................. 2,200 56,375
Medic Computer Systems, Inc. (b)......................... 400 32,450
Medtronic, Inc........................................... 500 28,000
Mentor Corp.............................................. 600 15,300
Merck & Co., Inc......................................... 600 38,775
Merrill Lynch & Co., Inc................................. 500 32,563
Metalclad Corp........................................... 4,000 12,250
MGIC Investment Corp..................................... 400 22,450
Microsoft Corp. (b)...................................... 600 72,075
Mirage Resorts, Inc. (b)................................. 700 37,800
Money Store, Inc......................................... 900 19,913
Morgan Stanley Group, Inc................................ 500 24,563
MSC Industrial Direct, Inc., Class A..................... 400 12,900
Nationsbank Corp......................................... 400 33,050
Nautica Enterprises, Inc. (b)............................ 1,100 31,625
Northwest Airlines Corp., Class A........................ 600 23,700
Oakley, Inc.............................................. 400 18,200
Octel Communications..................................... 800 15,800
Officemax, Inc........................................... 1,000 23,875
Omnicom Group, Inc....................................... 1,300 60,450
Oracle System Corp. (b).................................. 1,050 41,409
Orthodontic Centers of America (b)....................... 550 14,575
Outback Steakhouse, Inc. (b)............................. 700 24,139
Pairgain Technologies, Inc. (b).......................... 800 49,600
Panenergy Corp........................................... 800 26,300
Penncorp Financial Group, Inc............................ 900 28,575
Peoplesoft, Inc. (b)..................................... 350 24,938
Pep Boys Manny Moe & Jack................................ 400 13,600
</TABLE>
15
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
PepsiCo, Inc............................................. 2,100 $ 74,288
Pfizer, Inc.............................................. 500 35,688
Phelps Dodge Corp........................................ 200 12,475
Philip Morris Companies., Inc............................ 2,400 249,600
Phillips Petroleum Co.................................... 500 20,938
Physician Reliance Network (b)........................... 1,000 22,250
Picturetel Corp. (b)..................................... 600 23,625
Praxair, Inc............................................. 1,700 71,825
Promus Hotel Corp. (b)................................... 600 17,775
Proxim, Inc.............................................. 500 20,125
RAC Financial Group, Inc. (b)............................ 500 14,125
Raychem Corp............................................. 400 28,750
Renal Treatment Centers, Inc. (b)........................ 1,100 31,625
Ross Stores, Inc......................................... 500 17,375
Safeway, Inc. (b)........................................ 2,300 75,900
Sanmina Corp. (b)........................................ 400 10,800
Schering-Plough Corp..................................... 800 50,200
SCI Systems, Inc. (b).................................... 900 36,563
Sears Roebuck & Co....................................... 1,200 58,350
Service Corp. International.............................. 1,100 63,250
Sigma-Aldrich Corp....................................... 400 21,400
Smith International, Inc. (b)............................ 1,200 36,150
Snap-On, Inc............................................. 550 26,056
Sofamor/Danek Group, Inc................................. 400 11,100
Sonat Offshore Drilling, Inc............................. 300 15,150
Sonic Corp. (b).......................................... 800 19,400
Sprint Corp.............................................. 1,200 50,400
Staples, Inc. (b)........................................ 1,100 21,450
Student Loan Marketing Association....................... 600 44,400
Sunamerica, Inc.......................................... 1,150 64,975
Sun Microsystems, Inc. (b)............................... 1,200 70,650
Synopsys, Inc............................................ 600 23,850
Tellabs, Inc. (b)........................................ 500 33,438
Texaco, Inc.............................................. 600 50,325
Textron, Inc............................................. 250 19,969
3Com Corp................................................ 400 18,300
Tiffany & Co............................................. 400 29,200
TJX Companies, Inc....................................... 800 27,000
Tommy Hilfiger Corp. (b)................................. 400 21,450
Travelers Group, Inc..................................... 700 31,938
Trump Hotels & Casino Resorts (b)........................ 1,000 28,500
</TABLE>
16
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Shares Market Value
- --------------------------------------------------------------------------------
<S> <C> <C>
UNITED STATES (CONTINUED)
UCAR International, Inc. (b)............................ 500 $ 20,813
Union Carbide Corp...................................... 600 23,850
United Technologies Corp................................ 300 34,500
United Waste System, Inc. (b)........................... 2,000 64,500
Universal Health Services, Inc., Class B (b)............ 600 15,675
US Office Products Co. (b).............................. 800 33,600
US Robotics Co. (b)..................................... 600 51,300
USA Waste Services, Inc. (b)............................ 1,000 29,625
Vons Cosmetics, Inc. (b)................................ 700 26,163
Watson's Pharmaceuticals, Inc. (b)...................... 600 22,725
Wellman, Inc............................................ 900 21,038
Wells Fargo & Co........................................ 100 23,888
Willamette Industries, Inc.............................. 200 11,900
Williams Companies., Inc................................ 950 47,025
Wind River System, Inc. (b)............................. 550 18,975
WorldCom, Inc. (b)...................................... 1,400 77,524
-----------
5,463,395
-----------
TOTAL COMMON STOCK AND EQUIVALENTS..................... 23,083,656
-----------
</TABLE>
<TABLE>
<S> <C>
UNITED STATES CORPORATE OBLIGATIONS 0.5%
Acer, Inc. ($30,000 par, 4.000% coupon, 06/10/01 maturity,
convertible into 58,274 common shares).............................. $ 76,350
United Micro Electric ($50,000 par, 1.250% coupon, 06/08/04
maturity, convertible into 53,640 common shares)................... 65,563
----------
141,913
----------
UNITED STATES GOVERNMENT/AGENCY OBLIGATION 18.1%
GNMA Note ($193,000 par, 8.000% coupon, 04/15/22 maturity).......... 194,779
U.S. Treasury Note (1,400,000 par, 8.000% coupon, 10/15/96 maturity)
(c)................................................................. 1,410,724
U.S. Treasury Note (2,500,000 par, 6.750% coupon, 02/28/97 maturity)
(c)................................................................. 2,518,775
U.S. Treasury Note (700,000 par, 5.750% coupon, 08/15/03 maturity).. 666,532
U.S. Treasury Note (560,000 par, 7.500% coupon, 02/15/05 maturity).. 589,052
----------
5,379,862
----------
</TABLE>
17
See Notes to Financial Statements
<PAGE>
PORTFOLIO OF INVESTMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Description Market Value
- -----------------------------
<C> <S> <C>
TOTAL LONG-TERM
INVESTMENTS
96.0%
(Cost
$25,879,652)
(a)........... $28,605,431
REPURCHASE
AGREEMENT 2.7%
Bank of
America
($820,000 par,
collateralized
by U.S.
Government
obligations in
a pooled cash
account, 5.45%
coupon, dated
06/28/96, to
be sold on
07/01/96 at
$820,372)..... 820,000
FOREIGN
CURRENCY 1.1%
(Various
Denominations,
Cost $315,114)
............... 315,143
OTHER ASSETS IN
EXCESS OF
LIABILITIES
0.2%.......... 58,111
-----------
NET ASSETS
100.0%........ $29,798,685
-----------
</TABLE>
(a) At June 30, 1996, the cost for federal income tax purposes is $25,903,522;
the aggregate gross unrealized appreciation is $3,763,088 and the aggregate
gross unrealized depreciation is $821,898, resulting in net unrealized
appreciation on investments, foreign currency translation of other assets
and liabilities and forward currency contracts of $2,941,190.
(b) Non-income producing security as this stock currently does not declare div-
idends.
(c) Assets segregated as collateral for forward purchase commitments.
18
See Notes to Financial Statements
<PAGE>
See Notes to Financial Statements
STATEMENT OF ASSETS AND LIABILITIES
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
<TABLE>
<S> <C>
ASSETS:
Investments, at Market Value (Cost $25,879,652) (Note 1).......... $28,605,431
Repurchase Agreement (Note 1)..................................... 820,000
Foreign currency, at market value (Cost $315,114)................. 315,143
Receivables:
Securities Sold.................................................. 293,577
Interest......................................................... 114,221
Fund Shares Sold................................................. 70,287
Dividends........................................................ 52,643
Forward Commitments and Foreign Currency Contracts................ 254,991
Other............................................................. 15,702
-----------
Total Assets..................................................... 30,541,995
-----------
LIABILITIES:
Payables:
Securities Purchased............................................. 437,463
Fund Shares Repurchased.......................................... 100,156
Custodian Bank................................................... 45,428
Distributor and Affiliates (Notes 2 and 6)....................... 36,019
Investment Advisory Fee (Note 2)................................. 24,403
Accrued Expenses.................................................. 91,884
Deferred Compensation and Retirement Plans (Note 2)............... 7,957
-----------
Total Liabilities................................................ 743,310
-----------
NET ASSETS........................................................ $29,798,685
-----------
NET ASSETS CONSIST OF:
Capital (Note 3).................................................. $26,363,733
Net Unrealized Appreciation on Securities......................... 2,965,060
Accumulated Net Realized Gain on Securities....................... 474,449
Accumulated Distributions in Excess of Net Investment Income (Note
1)................................................................ (4,557)
-----------
NET ASSETS........................................................ $29,798,685
-----------
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on net
assets of $17,785,636 and 1,643,436 shares of capital stock
issued and outstanding) (Note 3)................................. $ 10.82
Maximum sales charge (4.75%* of offering price).................. .54
-----------
Maximum offering price to public................................. $ 11.36
-----------
Class B Shares:
Net asset value and offering price per share (Based on net assets
of $9,950,984 and 928,003 shares of capital stock issued and
outstanding) (Note 3)............................................ $ 10.72
-----------
Class C Shares:
Net asset value and offering price per share (Based on net assets
of $2,062,065 and 192,002 shares of capital stock issued and
outstanding) (Note 3)............................................ $ 10.74
-----------
</TABLE>
*On sales of $100,000 or more, the sales charge will be reduced.
19
<PAGE>
See Notes to Financial Statements
STATEMENT OF OPERATIONS
For the Six Months Ended June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
INVESTMENT INCOME:
Interest............................................................ $ 228,470
Dividends (Net of foreign withholding taxes of $23,526)............. 215,077
----------
Total Income....................................................... 443,547
----------
EXPENSES:
Investment Advisory Fee (Note 2).................................... 137,261
Custody............................................................. 70,172
Distribution (12b-1) and Service Fees (Allocated to Classes A, B and
C of $11,394, $44,053 and $10,071, respectively) (Note 6).......... 65,518
Shareholder Services (Note 2)....................................... 63,850
Registration and Filing Fees........................................ 54,180
Printing............................................................ 26,456
Audit............................................................... 24,115
Trustees Fees and Expenses (Note 2)................................. 8,311
Amortization of Organizational Expenses (Note 1).................... 1,640
Other............................................................... 21,842
----------
Total Expenses..................................................... 473,345
Less Fees Deferred and Expenses Reimbursed ($37,875 and $2,000,
respectively)...................................................... 39,875
----------
Net Expenses....................................................... 433,470
----------
NET INVESTMENT INCOME............................................... $ 10,077
----------
REALIZED AND UNREALIZED GAIN/LOSS ON SECURITIES:
Realized Gain/Loss on Securities:
Investments........................................................ $ 581,497
Foreign Currency Transactions...................................... (33,181)
Forwards........................................................... (44,583)
----------
Net Realized Gain on Securities..................................... 503,733
----------
Unrealized Appreciation/Depreciation on Securities:
Beginning of the Period............................................ 1,574,817
----------
End of the Period:
Investments........................................................ 2,725,779
Forwards........................................................... 240,095
Foreign Currency Translation....................................... (814)
----------
2,965,060
----------
Net Unrealized Appreciation on Securities During the Period......... 1,390,243
----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS..................... $1,893,976
----------
NET INCREASE IN NET ASSETS FROM OPERATIONS.......................... $1,904,053
----------
</TABLE>
20
<PAGE>
See Notes to Financial Statements
STATEMENT OF CHANGES IN NET ASSETS
For the Six Months Ended June 30, 1996
and the Year Ended December 31, 1995 (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Six Months Ended Year Ended
June 30, 1996 December 31, 1995
- --------------------------------------------------------------------------------
<S> <C> <C>
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income..................... $ 10,077 $ 102,217
Net Realized Gain on Securities........... 503,733 747,602
Net Unrealized Appreciation on Securities
During the Period........................ 1,390,243 1,997,291
----------- -----------
Change in Net Assets from Operations...... 1,904,053 2,847,110
----------- -----------
Distributions from Net Investment Income.. -0- (105,143)
Distributions in Excess of Net Investment
Income (Note 1)........................... -0- (21,853)
----------- -----------
Distributions from and in Excess of Net
Investment Income*........................ -0- (126,996)
Distribution from Net Realized Gain on
Securities (Note 1)....................... (197,680) (444,628)
----------- -----------
Total Distributions....................... (197,680) (571,624)
----------- -----------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES................................ 1,706,373 2,275,486
----------- -----------
FROM CAPITAL TRANSACTIONS (NOTE 3):
Proceeds from Shares Sold................. 4,399,280 8,340,329
Net Asset Value of Shares Issued Through
Dividend Reinvestment..................... 106,756 547,728
Cost of Shares Repurchased................ (1,868,751) (5,860,394)
----------- -----------
NET CHANGE IN NET ASSETS FROM CAPITAL
TRANSACTIONS.............................. 2,637,285 3,027,663
----------- -----------
TOTAL INCREASE IN NET ASSETS.............. 4,343,658 5,303,149
NET ASSETS:
Beginning of the Period................... 25,455,027 20,151,878
----------- -----------
End of the Period (Including undistributed
net investment income of $(4,557) and
$(14,634), respectively)................. $29,798,685 $25,455,027
----------- -----------
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended Year Ended
*Distributions by Class June 30, 1996 December 31, 1995
--------------------------------------------------------------------------
<S> <C> <C>
Distributions from and in Excess of
Net Investment Income (Note 1):
Class A Shares..................... $ -0- $(109,529)
Class B Shares..................... -0- (14,553)
Class C Shares..................... -0- (2,914)
--------- ---------
$ -0- $(126,996)
--------- ---------
Distributions from and in Excess of
Net Realized Gain on Investments
(Note 1):
Class A Shares..................... $(119,578) $(270,443)
Class B Shares..................... (63,686) (142,058)
Class C Shares..................... (14,416) (32,127)
--------- ---------
$(197,680) $(444,628)
--------- ---------
</TABLE>
21
<PAGE>
FINANCIAL HIGHLIGHTS
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 16, 1994
Six Months Year (Commencement of
Ended Ended Investment
June 30, December 31, Operations) to
Class A Shares 1996 1995 December 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
the Period...................... $ 10.15 $ 9.19 $ 9.44
------- ------ ------
Net Investment Income.......... .020 .08 .10
Net Realized and Unrealized
Gain/Loss on Securities....... .728 1.1375 (.2475)
------- ------ ------
Total from Investment
Operations...................... .748 1.2175 (.1475)
------- ------ ------
Less:
Distributions from and in
Excess of Net
Investment Income (Note 1).... -0- .0775 .075
Distributions from and in
Excess of Net
Realized Gain on Securities
(Note 1)...................... .076 .18 .0275
------- ------ ------
Total Distributions............. .076 .2575 .1025
------- ------ ------
Net Asset Value, End of the
Period......................... $10.822 $10.15 $ 9.19
------- ------ ------
Total Return* (a)............... 7.37%** 13.30% (1.57%)**
Net Assets at End of the Period
(In millions).................. $ 17.8 $ 15.5 $ 11.5
Ratio of Expenses to
Average Net Assets*............ 2.81% 2.79% 2.75%
Ratio of Net Investment Income
to
Average Net Assets*............ .42% .81% 1.54%
Portfolio Turnover.............. 44%** 135% 50%**
*If certain expenses had not been assumed by VKAC, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets......................... 3.10% 3.68% 2.76%
Ratio of Net Investment Income
to
Average Net Assets............. .13% (.07)% 1.53%
</TABLE>
**Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
See Notes to Financial Statements
22
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of the Fund
outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 16, 1994
Six Months Year (Commencement
Ended Ended of Investment
June 30, December 31, Operations) to
Class B Shares 1996 1995 December 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
the Period..................... $ 10.10 $ 9.17 $ 9.44
------- ------ ------
Net Investment Income......... (.016) (.01) .01
Net Realized and Unrealized
Gain/Loss on Securities...... .715 1.1375 (.2065)
------- ------ ------
Total from Investment
Operations..................... .699 1.1275 (.1965)
------- ------ ------
Less:
Distributions from and in
Excess of Net
Investment Income (Note 1)... -0- .0175 .046
Distributions from and in
Excess of Net
Realized Gain on Securities
(Note 1)..................... .076 .18 .0275
------- ------ ------
Total Distributions............ .076 .1975 .0735
------- ------ ------
Net Asset Value, End of the
Period......................... $10.723 $10.10 $ 9.17
------- ------ ------
Total Return* (a).............. 6.91%** 12.31% (2.09%)**
Net Assets at End of the Period
(In millions).................. $10.0 $8.1 $7.4
Ratio of Expenses to Average
Net Assets*................... 3.69% 3.73% 3.92%
Ratio of Net Investment Income
to
Average Net Assets*........... (.45%) (.09%) .13%
Portfolio Turnover............. 44%** 135% 50%**
*If certain expenses had not been assumed by VKAC, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets.................... 3.98% 4.61% 3.93%
Ratio of Net Investment Income
to
Average Net Assets............ (.74%) (.97%) .12%
</TABLE>
**Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
23
<PAGE>
See Notes to Financial Statements
FINANCIAL HIGHLIGHTS (CONTINUED)
The following schedule presents financial highlights for one share of
the Fund outstanding throughout the periods indicated. (Unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
May 16, 1994
Six Months Year (Commencement
Ended Ended of Investment
June 30, December 31, Operations) to
Class C Shares 1996 1995 December 31, 1994
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Asset Value, Beginning of
the Period..................... $ 10.12 $ 9.20 $ 9.44
------- ------- ------
Net Investment Income......... (.025) (.02) .05
Net Realized and Unrealized
Gain/Loss on Securities...... .721 1.1375 (.2165)
------- ------- ------
Total from Investment
Operations..................... .696 1.1175 (.1665)
------- ------- ------
Less:
Distributions from and in
Excess of Net
Investment Income (Note 1)... -0- .0175 .046
Distributions from and in
Excess of Net
Realized Gain on Securities
(Note 1)..................... .076 .18 .0275
------- ------- ------
Total Distributions............ .076 .1975 .0735
------- ------- ------
Net Asset Value, End of the
Period......................... $10.740 $ 10.12 $ 9.20
------- ------- ------
Total Return*.................. 6.90%** 12.16% (1.77%)**
Net Assets at End of the Period
(In millions).................. $ 2.1 $ 1.9 $ 1.3
Ratio of Operating Expenses to
Average Net Assets*........... 3.72% 3.79% 3.36%
Ratio of Net Investment Income
to
Average Net Assets*........... (.49%) (.18%) .80%
Portfolio Turnover............. 44%** 135% 50%**
*If certain expenses had not been assumed by VKAC, total return would have
been lower and the ratios would have been as follows:
Ratio of Operating Expenses to
Average
Net Assets.................... 4.01% 4.67% 3.38%
Ratio of Net Investment Income
to
Average Net Assets............ (.78%) (1.06%) .78%
</TABLE>
**Non-Annualized
(a) Total return is based upon net asset value which does not include payment
of the maximum sales charge or contingent deferred sales charge.
24
<PAGE>
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen American Capital Global Managed Assets Fund (the "Fund") is orga-
nized as a Delaware business trust, and is registered as a non-diversified
open-end management investment company under the Investment Company Act of
1940, as amended. The Fund's investment objective is to seek total return
through a managed balance of foreign and domestic equity and debt securities.
The Fund commenced investment operations on May 16, 1994, with three classes of
common shares, Class A, Class B and Class C shares.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The prepa-
ration of financial statements in conformity with generally accepted accounting
principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent as-
sets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
A. SECURITY VALUATION-Investments in securities listed on a securities exchange
shall be valued at their sale price as of the close of such securities ex-
change. Investments in securities not listed on a securities exchange shall be
valued based on their last quoted bid price or, if not available, their fair
value as determined by the Board of Trustees. Fixed income investments are
stated at values using market quotations or, if such valuations are not avail-
able, estimates obtained from yield data relating to instruments or securities
with similar characteristics in accordance with procedures established in good
faith by the Board of Trustees. Short-term securities with remaining maturities
of less than 60 days are valued at amortized cost.
B. SECURITY TRANSACTIONS-Security transactions are recorded on a trade date ba-
sis. Realized gains and losses are determined on an identified cost basis.
A repurchase agreement is a short-term investment in which the Fund acquires
ownership of a debt security and the seller agrees to repurchase the security
at a future time and specified price. The Fund may invest independently in re-
purchase agreements or transfer uninvested cash balances into a pooled cash ac-
count along with other investment companies advised by Van Kampen American
Capital Asset Management Inc. (the "Adviser"), the daily aggregate of which is
invested in repurchase agreements. Repurchase agreements are collateralized by
the underlying debt security. The Fund will make payment for such securities
only upon physical delivery or evidence of book entry transfer to the account
of the custodian bank. The seller is required to maintain the value of the un-
derlying security at not less than the repurchase proceeds due the Fund.
25
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
C. INVESTMENT INCOME-Dividend income is recorded on the ex-dividend date and
interest income is recorded on an accrual basis. The Fund accounts for dis-
counts and premiums on the same basis as is used for federal income tax report-
ing. Accordingly, original issue discounts on debt securities purchased are
amortized over the life of the security. Premiums on debt securities are not
amortized. Market discounts are recognized at the time of sale as realized
gains for book purposes and ordinary income for tax purposes.
D. CURRENCY TRANSLATION-Assets and liabilities denominated in foreign curren-
cies and commitments under forward currency contracts are translated into U.S.
dollars based on quoted exchange rates as of noon Eastern Time. Purchases and
sales of portfolio securities are translated at the rate of exchange prevailing
when such securities were acquired or sold. Income and expenses are translated
at rates prevailing when accrued.
E. ORGANIZATIONAL EXPENSES-The Fund will reimburse Van Kampen American Capital
Distributors, Inc. or its affiliates (collectively "VKAC") for costs incurred
in connection with the Fund's organization in the amount of $15,000. These
costs are being amortized on a straight line basis over the 60 month period
ending May 15, 1999. The Adviser has agreed that in the event any of the ini-
tial shares of the Fund originally purchased by VKAC are redeemed during the
amortization period, the Fund will be reimbursed for any unamortized organiza-
tional expenses in the same proportion as the number of shares redeemed bears
to the number of initial shares held at the time of redemption.
F. FEDERAL INCOME TAXES-It is the Fund's policy to comply with the requirements
of the Internal Revenue Code applicable to regulated investment companies and
to distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
G. DISTRIBUTION OF INCOME AND GAINS-The Fund declares and pays dividends annu-
ally from net investment income and, if any, from net realized gains on securi-
ties. Net investment income for federal income tax purposes includes gains and
losses realized on transactions in foreign currencies. These realized gains and
losses are included as net realized gains or losses for financial reporting
purposes.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, the Adviser will
provide investment advice and facilities to the Fund for an annual fee payable
monthly. The Adviser has entered into a subadvisory agreement with John Govett
& Co., Ltd. (the "Subadviser"), who
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
provides advisory services to the Fund and the Adviser with respect to the
Fund's investments in foreign securities. Investment advisory fees are calcu-
lated monthly, based on the average daily net assets of the Fund at the annual
rate of 1.00%. The Adviser pays 50% of its investment advisory fee to the
Subadviser.
For the six months ended June 30, 1996, the Fund recognized expenses of ap-
proximately $16,800 representing VKAC's cost of providing accounting services
to the Fund. These services are provided by VKAC at cost.
ACCESS Investor Services, Inc. ("ACCESS"), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months
ended June 30, 1996, the Fund recognized expenses of approximately $51,200,
representing ACCESS' cost of providing transfer agency and shareholder services
plus a profit.
Certain officers and trustees of the Fund are also officers and directors of
VKAC. The Fund does not compensate its officers or trustees who are officers of
VKAC.
The Fund has implemented deferred compensation and retirement plans for its
trustees. Under the deferred compensation plan, trustees may elect to defer all
or a portion of their compensation to a later date. The retirement plan covers
those trustees who are not officers of VKAC.
At June 30, 1996, VKAC owned 999,864, 4,015 and 54,479 shares of Classes A, B
and C, respectively.
27
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
3. CAPITAL TRANSACTIONS
The Fund has outstanding three classes of common shares, Classes A, B and C,
each with a par value of $.01 per share. There are an unlimited number of
shares of each class authorized.
At June 30, 1996, capital aggregated $15,689,532, $8,853,515 and $1,820,686
for Classes A, B and C, respectively. For the six months ended June 30, 1996,
transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- -------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................................ 175,437 $1,853,584
Class B................................................ 207,830 2,172,660
Class C................................................ 35,917 373,036
-------- -----------
Total Sales............................................. 419,184 $ 4,399,280
-------- -----------
Dividend Reinvestment:
Class A................................................ 4,087 $ 42,818
Class B................................................ 5,488 57,078
Class C................................................ 654 6,860
-------- -----------
Total Dividend Reinvestment............................. 10,229 $ 106,756
-------- -----------
Repurchases:
Class A................................................ (64,518) $ (683,044)
Class B................................................ (87,570) (908,294)
Class C................................................ (26,402) (277,413)
-------- -----------
Total Repurchases....................................... (178,490) $(1,868,751)
-------- -----------
</TABLE>
28
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
At December 31, 1995, capital aggregated $14,476,174, $7,532,071 and
$1,718,203 for Classes A, B and C, respectively. For the year ended December
31, 1995, transactions were as follows:
<TABLE>
<CAPTION>
SHARES VALUE
- --------------------------------------------------------------------------------
<S> <C> <C>
Sales:
Class A................................................. 400,789 $ 3,909,901
Class B................................................. 315,134 3,055,675
Class C................................................. 138,887 1,374,753
-------- -----------
Total Sales.............................................. 854,810 $ 8,340,329
-------- -----------
Dividend Reinvestment:
Class A................................................. 37,488 $ 376,012
Class B................................................. 13,757 138,274
Class C................................................. 3,320 33,442
-------- -----------
Total Dividend Reinvestment.............................. 54,565 $ 547,728
-------- -----------
Repurchases:
Class A................................................. (166,010) $(1,662,569)
Class B................................................. (329,324) (3,228,108)
Class C................................................. (96,043) (969,717)
-------- -----------
Total Repurchases........................................ (591,377) $(5,860,394)
-------- -----------
</TABLE>
29
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
Class B and C shares are offered without a front end sales charge, but are
subject to a contingent deferred sales charge (CDSC). The CDSC will be imposed
on most redemptions made within five years of the purchase for Class B and one
year of the purchase for Class C as detailed in the following schedule. The
Class B and C shares bear the expense of their respective deferred sales ar-
rangements, including higher distribution and service fees and incremental
transfer agency costs.
<TABLE>
<CAPTION>
CONTINGENT
DEFERRED SALES
CHARGE
YEAR OF REDEMPTION CLASS B CLASS C
- --------------------------------------------------------------------------------
<S> <C> <C>
First........................................................... 4.00% 1.00%
Second.......................................................... 4.00% None
Third........................................................... 3.00% None
Fourth.......................................................... 2.50% None
Fifth........................................................... 1.50% None
Sixth and Thereafter............................................ None None
</TABLE>
For the six months ended June 30, 1996, VKAC, as Distributor for the Fund,
received commissions on sales of the Fund's Class A shares of approximately
$1,900 and CDSC on the redeemed shares of approximately $10,100. Sales charges
do not represent expenses of the Fund.
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of invest-
ments, excluding U.S. Government Securities, short-term investments and forward
commitments, were $14,167,209 and $12,192,583, respectively.
5. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate
or index.
The Fund has a variety of reasons to use derivative instruments, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio, manage the portfolio's effective yield, foreign currency exposure,
or generate potential gain. All of the Fund's portfolio holdings, including de-
rivative instruments, are market to market each day with the change in value
reflected in the unrealized appreciation/depreciation on investments. Upon dis-
position, a realized gain or loss is recognized accordingly.
30
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
FORWARD COMMITMENTS
The Fund trades certain securities under the terms of forward commitments,
whereby the settlement occurs at a specific future date. Forward commitments
are privately negotiated transactions between the Fund and dealers. While for-
ward commitments are outstanding, the Fund maintains sufficient collateral of
cash or securities in a segregated account with its custodian. The commitments
are marked to market on a daily basis with changes in value reflected as a com-
ponent of unrealized appreciation on forwards.
The following forward purchase commitments were outstanding as of June 30,
1996:
<TABLE>
<CAPTION>
Par
Amount
in Local
Currency Unrealized
(000) Description Coupon Maturity Appreciation
- -------------------------------------------------------------------------------
<C> <S> <C> <C> <C>
DENMARK (Kingdom of)
3,500 Settlement 07/05/96.................. 8.000% 03/15/06 $15,210
SPAIN (Government of)
49,000 Settlement 10/07/96.................. 10.100 10/07/96 5,315
DUTCH GOVERNMENT
220 Settlement 07/05/96.................. 7.000 06/15/05 1,263
600 Settlement 07/15/96.................. 7.000 06/15/05 7,926
GERMANY (Treuhandanstalt)
800 Settlement 10/21/96.................. 6.750 05/13/04 4,452
UNITED STATES
208 FHLMC, settlement 09/12/96 7.500 01/01/99 1,583
US Treasury Notes, settlement
708 08/08/96............................. 5.750 08/15/03 12,361
-------
Total Forward Purchase Commitments
(Cost $2,889,811).................................... $48,110
-------
</TABLE>
31
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
CLOSED BUT UNSETTLED FORWARD COMMITMENTS
In certain situations, the Fund has entered into closing transactions for
outstanding forward commitments prior to settlement of the obligation. In doing
so, the Fund realizes a gain or loss on the transaction at the time the forward
commitment is closed. However, settlement of both the purchase and sale is
still scheduled to occur in the denominated foreign currency at a future date.
The net foreign currency difference on the trade is marked to market daily and
included as a component of unrealized gain/loss on forwards.
The following closed but unsettled forward transactions were still outstand-
ing at June 30, 1996:
<TABLE>
<CAPTION>
Local Currency US$
--------------------- Net Receivable Unrealized
Description/Currency Receivable Payable (Payable) Gain/Loss
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMMONWEALTH OF AUSTRALIA--AU$
(610,000 par, 10.00%,
10/15/07).................... 693,243 680,016 $10,393 $ 2,863
KINGDOM OF SPAIN--ESP
(66,000,000 par, 10.15%,
01/31/06).................... 72,744,181 70,601,432 16,739 25,263
KINGDOM OF SWEDEN--SEK
(4,200,000 par, 6.00%,
02/09/03).................... 3,687,757 3,606,148 12,328 (3,562)
------- -------
$39,460 $24,564
------- -------
</TABLE>
32
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- --------------------------------------------------------------------------------
FORWARD CURRENCY CONTRACTS
A forward currency contract is a commitment to purchase or sell a foreign
currency at a future date at a negotiated forward rate. Upon the settlement of
the contract, a realized gain or loss is recognized and is included as a compo-
nent of realized gain/loss on forwards.
The following forward currency contracts were outstanding as of June 30,
1996:
<TABLE>
<CAPTION>
UNREALIZED
ORIGINAL CURRENT APPRECIATION/
DESCRIPTION VALUE VALUE DEPRECIATION
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
BUYS TO OPEN
German Mark,
expiring 10/21/96............................. $544,507 $543,056 $ (1,451)
Danish Krone,
expiring 10/21/96............................. 584,795 583,372 (1,423)
Japanese Yen,
expiring 09/24/96............................. 300,000 293,201 (6,799)
expiring 10/21/96............................. 821,473 816,603 (4,870)
expiring 11/13/96............................. 500,000 489,051 (10,949)
expiring 11/13/96............................. 650,000 642,101 (7,899)
Netherlands Guilder,
expiring 10/21/96............................. 478,232 475,951 (2,281)
Spanish Peseta,
expiring 10/21/96............................. 403,273 404,112 839
SELLS TO OPEN
French Franc,
expiring 04/11/97............................. 400,000 394,982 5,018
British Pound Sterling,
expiring 07/17/97............................. 500,000 518,120 (18,120)
Japanese Yen,
expiring 09/24/96............................. 300,000 274,706 25,294
expiring 09/24/96............................. 18,974 18,495 479
expiring 11/13/96............................. 500,000 446,368 53,632
expiring 11/13/96............................. 500,000 448,932 51,068
expiring 11/13/96............................. 500,000 442,265 57,735
expiring 11/13/96............................. 105,779 103,172 2,607
expiring 01/24/97............................. 800,000 764,163 35,837
Swedish Krona,
expiring 07/05/96............................. 12,184 12,326 (142)
expiring 11/13/96............................. 300,000 311,154 (11,154)
--------
$167,421
--------
</TABLE>
33
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
June 30, 1996 (Unaudited)
- -------------------------------------------------------------------------------
6. DISTRIBUTION AND SERVICE PLANS
The Fund and its shareholders have adopted a distribution plan pursuant to
Rule 12b-1 under the Investment Company Act of 1940 and a service plan (col-
lectively the "Plans"). The Plans govern payments for the distribution of the
Fund's shares, ongoing shareholder services and maintenance of shareholder ac-
counts.
Annual fees under the Plans of up to .25% for Class A and 1.00% each for
Class B and Class C shares are accrued daily. Included in these fees for the
six months ended June 30, 1996, are payments to VKAC of approximately $35,000.
34
<PAGE>
FUNDS DISTRIBUTED BY VAN KAMPEN AMERICAN CAPITAL
GLOBAL AND INTERNATIONAL
Global Equity Fund
Global Government Securities Fund
Global Managed Assets Fund
Short-Term Global Income Fund
Strategic Income Fund
EQUITY
Growth
Aggressive Growth Fund
Emerging Growth Fund
Enterprise Fund
Pace Fund
Growth & Income
Balanced Fund
Comstock Fund
Equity Income Fund
Growth and Income Fund
Harbor Fund
Real Estate Securities Fund
Utility Fund
FIXED INCOME
Corporate Bond Fund
Government Securities Fund
High Income Corporate Bond Fund
High Yield Fund
Limited Maturity Government Fund
Prime Rate Income Trust
Reserve Fund
U.S. Government Fund
U.S. Government Trust for Income
TAX-FREE
California Insured Tax Free Fund
Florida Insured Tax Free Income Fund
High Yield Municipal Fund
Insured Tax Free Income Fund
Intermediate Term Municipal Income Fund
Municipal Income Fund
New Jersey Tax Free Income Fund
New York Tax Free Income Fund
Pennsylvania Tax Free Income Fund
Tax Free High Income Fund
Tax Free Money Fund
Texas Tax Free Income Fund
THE GOVETT FUNDS
Emerging Markets Fund
Global Income Fund
International Equity Fund
Latin America Fund
Pacific Strategy Fund
Smaller Companies Fund
Ask your investment representative for a prospectus containing more complete
information, including sales charges and expenses. Please read it carefully
before you invest or send money. Or call us direct at 1-800-341-2911 weekdays
from 7:00 a.m. to 7:00 p.m. Central time.
35
<PAGE>
VAN KAMPEN AMERICAN CAPITAL GLOBAL MANAGED ASSETS FUND
BOARD OF TRUSTEES
J. MILES BRANAGAN
LINDA HUTTON HEAGY
ROGER HILSMAN
R. CRAIG KENNEDY
DENNIS J. MCDONNELL*
DONALD C. MILLER - Co-Chairman
JACK E. NELSON
DON G. POWELL*
JEROME L. ROBINSON
FERNANDO SISTO - Co-Chairman
WAYNE W. WHALEN*
WILLIAM S. WOODSIDE
OFFICERS
DON G. POWELL*
President and Chief Executive Officer
DENNIS J. MCDONNELL*
Executive Vice President
RONALD A. NYBERG*
Vice President and Secretary
EDWARD C. WOOD, III*
Vice President and Chief Financial Officer
CURTIS W. MORELL*
Vice President and Chief Accounting Officer
JOHN L. SULLIVAN*
Treasurer
TANYA M. LODEN*
Controller
WILLIAM N. BROWN*
PETER W. HEGEL*
ROBERT C. PECK, JR.*
ALAN T. SACHTLEBEN*
PAUL R. WOLKENBERG*
Vice Presidents
INVESTMENT ADVISER
VAN KAMPEN AMERICAN CAPITAL
ASSET MANAGEMENT, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
INVESTMENT SUBADVISER
JOHN GOVETT & CO., LTD.
Shackleton House
4 Battle Bridge Lane
London, SE1 2HR England
DISTRIBUTOR
VAN KAMPEN AMERICAN CAPITAL
DISTRIBUTORS, INC.
One Parkview Plaza
Oakbrook Terrace, Illinois 60181
SHAREHOLDER SERVICING AGENT
ACCESS INVESTOR
SERVICES, INC.
P.O. Box 418256
Kansas City, Missouri 64141-9256
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02105
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT ACCOUNTANTS
PRICE WATERHOUSE LLP
1201 Louisiana
Houston, Texas 77002
*"Interested" persons of the Fund,
as defined in the
Investment Company Act of 1940.
(C)Van Kampen American Capital Dis-
tributors, Inc., 1996
All rights reserved.
SMdenotes a service mark of
Van Kampen American Capital Dis-
tributors, Inc.
This report is submitted for the general information of the shareholders of the
Fund. It is not authorized for distribution to prospective investors unless it
has been preceded or is accompanied by an effective prospectus of the Fund
which contains additional information on how to purchase shares, the sales
charge, and other pertinent data.
36
<PAGE>
