Aim Tax Exempt Funds N-CSR Certified annual shareholder report (management investment company)

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES

Investment Company Act file number 811- 07890

AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)*

(Exact name of registrant as specified in charter)

11 Greenway Plaza, Suite 2500 Houston, Texas 77046
(Address of principal executive offices) (Zip code)

Philip A. Taylor 11 Greenway Plaza, Suite 2500 Houston, Texas 77046
(Name and address of agent for service)

Registrant’s telephone number, including area code: (713) 626-1919

Date of fiscal year end: 9/30

Date of reporting period: 9/30/10

* Funds included are: Invesco Municipal Fund, Van Kampen California Insured Tax Free Fund, Invesco Van Kampen Insured Tax Free Income Fund, Invesco Van Kampen Intermeidate Term Municipal Income Fund, Invesco Van Kampen Municipal Income Fund and Invesco Van Kampen New York Tax Free Income Fund.

Item 1. Reports to Stockholders.

Annual Report to Shareholders	September 30, 2010
Invesco Municipal Fund

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
15	Financial Statements
17	Notes to Financial Statements
23	Financial Highlights
24	Auditor’s Report
25	Fund Expenses
26	Approval of Investment Advisory and Sub-Advisory Agreements
28	Tax Information
29	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

     Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2 Invesco Municipal Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3 Invesco Municipal Fund

Management’s Discussion of Fund Performance

Performance summary

At net asset value, all share classes of Invesco Municipal Fund posted positive returns for the 12-month reporting period ended September 30, 2010. The Fund’s Class A shares underperformed the Invesco Custom Municipal Index . The Fund’s security selection on the long-end of the yield curve, and security selection in the tax-supported sector were the main detractors from relative performance versus the Invesco Custom Municipal Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	3.96	%
Class B Shares*	3.27
Class C Shares*	3.27
Class Y Shares	4.21
Barclays Capital 10-Year Municipal Index▼	6.62
Barclays Capital 5-Year Municipal Index▼	5.63
Custom Invesco Municipal Index■	6.13
Lipper Intermediate Municipal Debt Funds Index▼	5.46

▼	Lipper Inc.; ■Invesco, Barclays Capital
*	Share Class incepted during reporting period. Please see page 7 for detailed explanation of Fund performance.

How we invest

Our investment objective is to realize above-average total return over a market cycle of three to five years, consistent with the conservation of capital and the realization of current income that is exempt from federal income tax.

     We seek to invest primarily in fixed income securities issued by local, state and regional governments that provide income that is exempt from federal income taxes (municipal securities). The Fund may purchase municipal securities that pay interest that is subject to the federal alternative minimum tax and securities on which the interest payments are taxable. The Fund may invest in high yield municipal securities (commonly referred to as “junk bonds”). The Fund will ordinarily seek to maintain an average weighted maturity of between five and 10 years, although there is no

minimum or maximum maturity for any individual security.

     The Fund may, but it is not required to, use derivative instruments for a variety of purposes, including hedging, risk management, portfolio management or to earn income. Derivatives are financial instruments whose value is based on the value of another underlying asset, interest rate, index or financial instrument. The Fund’s use of derivatives may involve the purchase and sale of derivative instruments such as futures, swaps, inverse floating rate securities, and other related instruments and techniques.

     The Fund may invest in securities of foreign issuers, including issuers located in emerging market or developing countries. The securities in which the Fund may invest may be denominated in U.S. dollars or in currencies other than U.S. dollars. The Fund may also invest in

public bank loans made by banks or other financial institutions. These public bank loans may be rated investment grade or below investment grade.

     We employ a value approach toward fixed income investing. We will vary the Fund’s average duration and maturity and the amount invested in particular types of securities based on the risks and potential rewards offered by different investments. We analyze the credit risk, prepayment risk and call risk posed by specific securities considered for investment.

     We may sell securities when we believe that expected after-tax risk-adjusted return is low compared to other investment opportunities.

Market conditions and your Fund

Market conditions during the 12 months covered in this report were influenced by two broad themes: private sector recovery and concerns over sovereign creditworthiness. In the U.S. and across the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels, and few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high unemployment and export weakness continued to

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	61	%
General Obligation Bonds	38
Pre-refunded Bonds	1

Top 10 Holdings*

1.   Mount San Antonio Community College District	2.5	%
2.   County of Miami-Dade	2.0
3.   Miami-Dade County School Board	1.9
4.   Regional Transportation District	1.7
5.   District of Columbia	1.7
6.   Illinois Finance Authority	1.5
7.   Florida State Mid-Bay Bridge Authority	1.3
8.   City of Houston	1.3
9.   Chicago Transit Authority	1.3
10. Seminole County School Board	1.3

Total Net Assets	$346.5 million
Total Number of Holdings*		167

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

*Excluding money market fund holdings.

4 Invesco Municipal Fund

weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased 3.7%.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by saying, “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

     Sector performance was driven by quality spread tightening largely as a result of continued flows into the municipal market combined with less tax-exempt issuance. Fund flows remained strong after a record 2009. In addition, year-to-date issuance through the end of the reporting period was about 2.2% ahead of last year’s pace, at $293.2 billion versus $286.9 billion.³ However, approximately 30% of supply since the beginning of the year was in the form of taxable municipals.³

     At net asset value, the Fund generated positive absolute returns for the reporting period, but underperformed the Custom Invesco Municipal Index. In terms of the yield curve, security selection on the long end of the curve detracted from returns.

     During the reporting period, lower rated tax-exempt bonds experienced greater price increases than high quality issues. An overweight exposure to BBB and non-rated bonds was a positive contributor to relative and absolute returns; however, this was slightly offset by security selection.

     At the sector level, the Fund’s security selection in the tax-supported sector, specifically local general obligation bonds, was the primary detractor on a relative basis. Security selection in the transportation sector and utility sector also detracted from returns.

     Our underweight exposure to pre-refunded bonds contributed to relative performance during the period. Also, security selection within bonds issued in Texas contributed to returns.

     Thank you for investing in Invesco Municipal Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Thomas Byron

Portfolio manager, is manager of Invesco Municipal Fund. Mr. Byron joined Invesco in 2010. He earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Municipal Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Robert Wimmel

Portfolio manager, is manager of Invesco Municipal Fund. Mr. Wimmel joined Invesco in 2010.
Mr. Wimmel earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the University of Illinois, Chicago.

5 Invesco Municipal Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class without Sales Charges since Inception

Index data from 9/30/92, Fund data from 10/1/92

Results of a $10,000 Investment – Oldest Share Class with Sales Charges since Inception

Index data from 12/31/07, Fund data from 1/2/08

Past performance cannot guarantee comparable future results.

     The performance data shown in the first chart above is that of the Fund’s Class Y shares. The performance of the Fund’s other share classes will differ primarily due to different sales charge structures and class expenses and may be greater than or less than the performance of the Fund’s Class Y shares. The data shown in this chart includes reinvested distributions, Fund expenses and management fees. Index results include reinvested dividends.

     The performance data shown in the second chart above is that of the Fund’s Class A shares. The performance of the

Fund’s other share classes will differ primarily due to different sales charge structures and class expenses and may be greater than or less than the performance of the Fund’s Class A shares. The data shown in the second chart above includes reinvested distributions, Fund expenses and management fees. Index results include reinvested dividends, but they do not reflect sales charges.

     Performance of the peer group reflects fund expenses and management fees; performance of a market index does not. Performance shown in the charts and table does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     The first chart above is a logarithmic chart, which present the fluctuations in the value of the Fund’s share class and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in charts over longer time periods. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. Each segment represents a doubling, or 100% change, in the value of the investment.

6 Invesco Municipal Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

							After Taxes on Distributions
				After Taxes			and Sale of
	Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (1/2/08)		0.54	%		0.08	%		0.57	%
1 Year		-0.96			-1.80			-0.16
Class B Shares
Inception		0.57	%		0.13	%		0.63	%
1 Year		-1.73			-2.52			-0.64
Class C Shares
Inception		1.59	%		1.16	%		1.50	%
1 Year		2.27			1.48			1.96
Class Y Shares
Inception (10/1/92)		5.56	%		5.32	%		5.24	%
10 Years		4.66			4.41			4.36
5 Years		3.46			3.06			3.19
1 Year		4.21			3.27			3.25

Effective June 1, 2010, Class H, Class L and Class P shares of the predecessor fund advised by Morgan Stanley Investment Advisors Inc. were reorganized into Class A shares and Class I shares were reorganized into Class Y shares, of Invesco Municipal Fund. Returns shown above for Class Y and Class A shares are blended returns of the predecessor fund and Invesco Municipal Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Class B and Class C shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class P shares restated to reflect the higher 12b-1fees applicable to Class B and Class C shares, respectively. Class B and Class C shares performance reflects any applicable fee waivers or expense reimbursements. The inception date of the predecessor fund’s Class P shares was January 2, 2008.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.75%, 1.50%, 1.50% and 0.50%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.77%, 1.52%, 1.52% and

0.52%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. The CDSC on Class B shares declines from 5% beginning at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

continued from page 8

Other information

n	The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.
n	The returns shown in management’s discussion of Fund performance are based on net asset values calculated for

shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.

n Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

7 Invesco Municipal Fund

Invesco Municipal Fund’s investment objective is to realize above-average total return over a market cycle of three to five years, consistent with the conservation of capital and the realization of current income that is exempt from federal income tax.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n

A derivative instrument often has risks similar to its underlying instrument and may have additional risks, including imperfect correlation between the value of the derivative and the underlying instrument, risks of default by the other party to certain transactions, magnification of losses incurred due to changes in the market value of the securities, instruments, indices or interest rates to which they relate, and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.

n

The prices of fixed income securities respond to economic developments, particularly interest rate changes, changes in the general level of spreads between U.S. Treasury and non-Treasury securities, and changes in the actual or perceived creditworthiness of the issuer of the fixed income security. Securities with longer durations are likely to be more sensitive to changes in interest rates, generally making them more volatile than securities with shorter durations. Lower rated fixed income securities have greater volatility because there is less certainty that principal and interest payments will be made as scheduled.

n	The Fund’s investments in high yield securities expose it to a substantial degree of credit risk. High yield securities may be issued by companies that are restructuring, are smaller and less creditworthy or are more highly indebted than other companies, and therefore they may have more difficulty making scheduled payments of principal and interest. High yield securities may experience reduced liquidity, and sudden and substantial decreases in price, and may have a higher incidence of default than higher grade securities.
n	Municipal obligations may be general obligations or revenue bonds. General obligation bonds are secured by the issuer’s full faith and credit as well as its taxing power for payment of principal or interest. Revenue bonds are payable solely from the revenues derived from a specified revenue source, and therefore involve the risk that the revenues so derived will not be sufficient to meet interest and/or principal payment obligations. Municipal securities involve the risk that an issuer may call securities for redemption, which could force the Fund to reinvest the proceeds at a lower rate of interest.
n	Investments in foreign markets entail special risks such as currency, political, economic and market risks. There also may be greater market volatility, less reliable financial information, higher transaction and custody costs, decreased market liquidity and less government and exchange regulation associated with investments in foreign markets. The risks of investing in emerging market countries are greater than risks associated with investments in foreign developed countries. In addition, the Fund’s investments may be denominated in foreign currencies and therefore, changes in the value of a country’s currency compared to the U.S. dollar may affect the value of the Fund’s investments.

About indexes used in this report

n	The Barclays Capital 10-Year Municipal Index is an unmanaged index with maturities between nine and 12 years. The Barclays Capital 10-Year Municipal Index is the 10-Year total return subset of the Barclays Capital Municipal Bond Index.
n	The Barclays Capital 5-Year Municipal Index is an unmanaged index of long-term, fixed-rate, investment-grade, tax-exempt bonds representative of the municipal bond market. The Barclays Capital 5-Year Municipal Index is the 5-year (4-6) component of the Barclays Capital Municipal Bond Index.
n	The Custom Invesco Municipal Index is an unmanaged index comprised of the Barclays Capital Long Municipal Index from October 1, 1992 to March 31, 1996, and 50% Barclays Capital 10-Year Municipal Index and 50% Barclays Capital 5-Year Municipal Index thereafter.
n	The Lipper Intermediate Municipal Debt Funds Index is an unmanaged index considered representative of intermediate municipal debt funds tracked by Lipper.
n	The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols

Class A Shares	MSMHX
Class B Shares	IMUGX
Class C Shares	IMUHX
Class Y Shares	MPMFX

8 Invesco Municipal Fund

Schedule of Investments

September 30, 2010

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Municipal Obligations–99.3%
Alaska–0.9%
Alaska Railroad Corp., Revenue Bonds, (FGIC)(a)		5.00	%		08/01/15	$	2,680	$	3,031,857
Arizona–0.4%
Maricopa County Pollution Control, Arizona Public Service Co., Ser 2009 A(b)		6.00	%		05/01/29		1,400		1,514,940
California–17.2%
California State Public Works Board, Revenue Bonds		5.50	%		06/01/15		1,275		1,397,005
California State Public Works Board, Revenue Bonds		5.25	%		06/01/13		1,150		1,241,195
California State, General Obligation Bonds		5.25	%		02/01/14		1,375		1,526,374
County of Riverside, (AMBAC; COP)(a)		5.00	%		11/01/14		3,500		3,878,000
Eureka, Union School District, General Obligation Bonds, (MBIA)(a)(c)		0.00	%		08/01/28		1,500		514,515
Indio Redevelopment Agency, Tax Allocation, Ser 2008 A		5.00	%		08/15/24		1,470		1,506,941
Indio, Redevelopment Agency, Tax Allocation, Tax Allocation Ser 2008 A		5.125	%		08/15/25		2,015		2,071,380
Long Beach, Community College District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		05/01/14		2,465		2,281,727
Los Angeles, Unified School District, General Obligation Bonds, Election of 2004 Ser I		5.25	%		07/01/22		3,200		3,694,528
Mount San Antonio, Community College District, General Obligation Bonds, (MBIA)(a)(c)		0.00	%		08/01/16		10,000		8,523,100
Murrieta Valley, Unified School District, Public Financing Authority, General Obligation Bonds, (FSA)(a)(c)		0.00	%		09/01/24		620		308,834
Murrieta Valley, Unified School District, Public Financing Authority, General Obligation Bonds, (FSA)(a)(c)		0.00	%		09/01/27		4,050		1,660,419
Norwalk-LA Mirada, Unified School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		08/01/25		8,900		4,037,129
Palomar Pomerado Health, (MBIA)(a)(c)		0.00	%		08/01/19		4,320		2,983,349
Palomar Pomerado Health, (MBIA)(a)(c)		0.00	%		08/01/16		1,880		1,570,590
Palomar Pomerado Health, (MBIA)(a)(c)		0.00	%		08/01/17		4,970		3,932,115
Santa Ana, Unified School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		08/01/19		3,425		2,406,576
Santa Ana, Unified School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		08/01/20		2,050		1,348,100
Twin Rivers Unified School District, Ser 2009 (BANs)(c)		0.00	%		04/01/14		2,950		2,685,503
Union Elementary School District, General Obligation Bonds, (MBIA)(a)(c)		0.00	%		09/01/27		6,000		2,459,880
William S. Hart Union High School District, General Obligation Bonds, (FSA)(a)(c)		0.00	%		09/01/21		7,065		4,287,324
William S. Hart Union High School District, General Obligation Bonds, (FSA)(a)(c)		0.00	%		09/01/22		3,000		1,666,590
William S. Hart Union High School District, General Obligation Bonds, (FSA)(a)(c)		0.00	%		09/01/24		7,725		3,785,791
									59,766,965
Colorado–2.0%
Regional Transportation District, (AMBAC; COP)(a)		5.25	%		07/15/19		1,000		1,073,420
Regional Transportation District, (AMBAC; COP)(a)		5.00	%		12/01/12		5,540		5,970,292
									7,043,712
District of Columbia–2.5%
District of Columbia, General Obligation Bonds, (FSA)(a)		5.00	%		06/01/16		2,325		2,720,134
District of Columbia, General Obligation Bonds, (FSA)(a)		5.00	%		06/01/19		5,000		5,779,050
									8,499,184
Florida–14.8%
Citizens Property Insurance Corp., Revenue Bonds, (MBIA)(a)		5.00	%		03/01/12		3,000		3,113,670
County of Miami-Dade, Revenue Bonds, (FGIC)(a)		5.00	%		08/01/12		6,655		7,070,538

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Florida–(continued)
County of Miami-Dade, Revenue Bonds, (FGIC)(a)		5.00	%		08/01/13	$	1,810	$	1,964,954
County of Osceola, Revenue Bonds, (AMBAC)(a)		5.00	%		10/01/12		1,930		2,067,030
County of Osceola, Revenue Bonds, (AMBAC)(a)		5.00	%		10/01/13		3,140		3,456,638
County of St. Lucie, Transportation Revenue Bonds, (AMBAC)(a)		5.00	%		08/01/13		1,000		1,109,480
Florida Municipal Loan Council, Revenue Bonds, (MBIA)(a)		5.00	%		10/01/12		1,040		1,121,359
Florida Municipal Loan Council, Revenue Bonds, (MBIA)(a)		5.00	%		10/01/13		1,630		1,803,236
Florida State Board of Education, Revenue Bonds, (AMBAC)(a)		5.00	%		07/01/19		2,500		2,786,850
Florida State Mid-Bay Bridge Authority, Ser 2008 (AGC)(a)		5.00	%		10/01/22		4,225		4,556,916
Miami-Dade County School Board, General Obligation Bonds, (COP; FGIC)(a)		5.00	%		05/01/13		5,995		6,475,140
Palm Beach County School Board, General Obligation Bonds, (MBIA)(a)		5.00	%		08/01/13		3,735		4,118,510
Palm Beach County School Board, General Obligation Bonds, (MBIA)(a)		5.00	%		08/01/12		3,545		3,799,531
Seminole County, School Board, (AMBAC; COP)(a)		5.00	%		07/01/12		4,070		4,328,933
Tallahassee Blueprint 2000 Intergovernmental Agency, Revenue Bonds, (MBIA)(a)		5.00	%		10/01/14		1,500		1,683,840
Tallahassee Blueprint 2000 Intergovernmental Agency, Revenue Bonds, (MBIA)(a)		5.00	%		10/01/13		1,605		1,766,848
									51,223,473
Illinois–12.3%
Chicago, Board of Education, General Obligation Bonds, (FSA)(a)		5.00	%		12/01/17		1,010		1,184,013
Chicago, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		01/01/19		4,000		2,891,760
Chicago, Transit Authority, Revenue Bonds, (AGC)(a)		5.25	%		06/01/24		3,965		4,346,948
Chicago, Transit Authority, Ser 2008 (AGC)(a)		5.25	%		06/01/23		2,200		2,424,686
Cook County, School District, General Obligation Bonds, (MBIA)(a)(c)		0.00	%		12/01/22		4,125		2,421,334
Illinois Finance Authority, Edward Hospital, Revenue Bonds, (AMBAC)(a)		6.00	%		02/01/23		900		1,001,970
Illinois Finance Authority, Edward Hospital, Revenue Bonds, (AMBAC)(a)		6.00	%		02/01/24		1,175		1,294,028
Illinois Finance Authority, Edward Hospital, Revenue Bonds, (AMBAC)(a)		6.00	%		02/01/26		380		414,238
Illinois Finance Authority, Elmhurst, Revenue Bonds		7.00	%		11/15/15		1,000		1,006,670
Illinois Finance Authority, Gas Supply, Revenue Bonds(b)		3.75	%		02/01/33		5,150		5,178,222
Illinois Finance Authority, Northwestern Memorial Hospital, Revenue Bonds, Ser 2009 B		5.00	%		08/15/16		1,890		2,133,413
Illinois Health Facilities Authority, Revenue Bonds, (MBIA)(a)		5.00	%		11/15/12		1,000		1,002,420
Illinois Municipal Electric Agency, Revenue Bonds, (FGIC)(a)		5.00	%		02/01/13		1,065		1,148,954
Illinois Municipal Electric Agency, Revenue Bonds, (FGIC)(a)		5.00	%		02/01/15		1,000		1,120,930
Kendall, Kane & Will Counties, Community School District No. 308, General Obligation Bonds, (FSA)(a)(c)		0.00	%		02/01/23		5,540		3,316,410
Kendall, Kane & Will Counties, Community School District No. 308, General Obligation Bonds, (FSA)(a)(c)		0.00	%		02/01/25		2,250		1,203,908
Lake County, Community Consolidated School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		12/01/21		330		234,713
Lake County, Community Consolidated School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		12/01/19		3,585		2,593,747
Lake County, Community Consolidated School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		12/01/21		4,045		2,612,099
Madison & Jersey Counties, Unit School District, General Obligation Bonds, (FSA)(a)(c)		0.00	%		12/01/20		2,900		1,875,314
Metropolitan Pier & Exposition Authority, Dedicated State Tax, Revenue Bonds, (MBIA)(a)(c)		0.00	%		12/15/23		4,250		2,245,487
Metropolitan Pier & Exposition Authority, Dedicated State Tax, Revenue Bonds, (MBIA)(a)(d)		0.00	%		06/15/20		925		933,714
									42,584,978
Indiana–9.6%
Crown Point, Multi-School Building Corp., Revenue Bonds, (MBIA)(a)(c)		0.00	%		01/15/24		5,200		2,889,432
Eagle, Union Middle School Building, Revenue Bonds, (AMBAC)(a)		4.90	%		07/05/16		1,000		1,016,960
Eagle, Union Middle School Building, Revenue Bonds, (AMBAC)(a)		5.00	%		07/05/17		1,500		1,525,605
Fort Wayne Hospital Authority, Revenue Bonds, (MBIA)(a)		4.70	%		11/15/11		520		522,007

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Indiana–(continued)
Indiana Port Commission, Revenue Bonds		4.10	%		05/01/12	$	3,450	$	3,561,573
Indiana Transportation Finance Authority, Highway Revenue Bonds, (AMBAC)(a)(c)		0.00	%		12/01/16		1,695		1,453,768
Merrillville, Multi School Building Corp., Revenue Bonds		5.00	%		01/15/17		1,260		1,434,031
Merrillville, Multi School Building Corp., Revenue Bonds		5.00	%		07/15/17		1,285		1,469,372
Michigan City, Area-Wide School Building Corp., Revenue Bonds, (FGIC)(a)(c)		0.00	%		01/15/18		3,000		2,417,100
Michigan City, Area-Wide School Building Corp., Revenue Bonds, (FGIC)(a)(c)		0.00	%		01/15/20		1,750		1,274,332
Michigan City, Area-Wide School Building Corp., Revenue Bonds, (FGIC)(a)(c)		0.00	%		01/15/17		2,000		1,685,800
Noblesville, High School Building Corp., Revenue Bonds, (AMBAC)(a)(c)		0.00	%		02/15/19		1,850		1,353,756
Noblesville, High School Building Corp., Revenue Bonds, (AMBAC)(a)		5.00	%		07/10/13		2,475		2,750,715
North Side, High School Building Corp., Revenue Bonds, (FSA)(a)		5.25	%		07/15/13		2,910		3,283,935
Northwest Allen County, Middle School Building Corp., (FSA)(a)		5.00	%		07/15/16		1,395		1,621,674
Northwest Allen County, Middle School Building Corp., (FSA)(a)		5.00	%		07/15/19		3,200		3,668,096
Westfield High School Building Corp., Revenue Bonds, (FSA)(a)		5.00	%		01/10/13		1,285		1,403,503
									33,331,659
Iowa–0.4%
Iowa Finance Authority, Private University, Revenue Bonds, (CIFG)(a)		5.00	%		04/01/13		1,210		1,295,728
Kansas–0.9%
Harvey County, Unified School District No. 373 Newton Refunding & Improvement, (MBIA)(a)		5.00	%		09/01/19		2,630		3,033,731
Kentucky–0.6%
Kentucky Asset Liability Commission, Revenue Bonds, (MBIA)(a)		5.00	%		09/01/14		1,800		2,063,700
Louisiana–2.6%
Louisiana Correctional Facilities Corp., Revenue Bonds, (AMBAC)(a)		5.00	%		09/01/12		1,230		1,320,442
Louisiana Local Government Environmental Facilities, Community Development Authority, Revenue Bonds, Bossier City Public Improvement Projects, (AMBAC)(a)		5.00	%		11/01/13		1,320		1,463,444
Louisiana Local Government Environmental Facilities, Community Development Authority, Revenue Bonds, Bossier City Public Improvement Projects, (AMBAC)(a)		5.00	%		11/01/15		1,200		1,368,012
Louisiana Offshore Terminal Authority, Revenue Bonds, Deepwater Port Ser 2007 B-2(b)		4.30	%		10/01/37		2,850		2,896,654
New Orleans, Audubon Commission, General Obligation Bonds, (FSA)(a)		5.00	%		10/01/13		1,695		1,855,466
									8,904,018
Massachusetts–0.5%
Massachusetts State Health & Educational Facilities Authority, Revenue Bonds, (AMBAC)(a)		4.80	%		07/01/12		1,665		1,675,989
Michigan–6.9%
Brandon School District, General Obligation Bonds, (FSA; Q-SBLF)(a)		5.00	%		05/01/19		1,395		1,604,334
Brandon School District, General Obligation Bonds, (FSA; Q-SBLF)(a)		5.00	%		05/01/18		1,410		1,641,480
Brandon School District,General Obligation Bonds, (FSA; Q-SBLF)(a)		5.00	%		05/01/16		1,425		1,642,940
Dearborn, School District, General Obligation Bonds, (FGIC; Q-SBLF)(a)		5.00	%		05/01/16		2,480		2,855,050
Greenville, Public Schools, General Obligation Bonds, (FSA; Q-SBLF)(a)		5.00	%		05/01/16		1,410		1,625,645
Greenville, Public Schools, General Obligation Bonds, (FSA; Q-SBLF)(a)		5.00	%		05/01/18		1,235		1,437,750
Lansing,Board of Water & Light, Revenue Bonds, (Series A)		5.00	%		07/01/24		1,000		1,108,910
Michigan State Strategic Fund, Michigan House of Representatives Facilities, Revenue Bonds, (AGC)(a)		5.25	%		10/15/23		1,485		1,658,923
Saginaw, Hospital Financing Authority, Revenue Bonds, (MBIA)(a)		5.375	%		07/01/19		1,265		1,266,632
Traverse City, Public Schools, (FSA)(a)		5.00	%		05/01/17		2,300		2,708,549
Traverse City, Public Schools, (FSA)(a)		5.00	%		05/01/18		2,280		2,700,842

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Michigan–(continued)
Traverse City, Public Schools, (FSA)(a)		5.00	%		05/01/19	$	2,260	$	2,644,607
Warren, Consolidated School District, General Obligation Bonds, (Q-SBLF)(a)		4.15	%		05/01/14		1,000		1,063,680
									23,959,342
Missouri–0.9%
Manchester, Tax Increment and Transportation Refunding, Revenue Bonds		6.00	%		11/01/25		3,000		3,101,640
Nebraska–0.6%
Nebraska Public Power District, Revenue Bonds, (FSA)(a)		5.00	%		01/01/13		2,000		2,188,320
Nevada–2.2%
Director of the State of Nevada Department of Business & Industry, Revenue Bonds, (AMT)(b)		5.625	%		12/01/26		1,100		1,166,286
Las Vegas, Redevelopment Agency, Ser A		6.25	%		06/15/16		1,475		1,670,098
Washoe County, General Obligation Bonds, (FSA)(a)(c)		0.00	%		07/01/18		4,235		3,434,712
Washoe County, School District, School Improvement, General Obligation Bonds, (Series A)		4.75	%		06/01/26		1,405		1,497,337
									7,768,433
New Jersey–1.0%
Monmouth County, Improvement Authority, Revenue Bonds, (AMBAC)(a)		5.00	%		12/01/16		1,010		1,154,985
Monmouth County, Improvement Authority, Revenue Bonds, (AMBAC)(a)		5.00	%		12/01/17		2,000		2,291,200
									3,446,185
New Mexico–0.7%
New Mexico Finance Authority, Revenue Bonds, (MBIA)(a)		5.00	%		06/15/13		1,000		1,106,200
New Mexico Finance Authority, Revenue Bonds, (MBIA)(a)		5.00	%		06/15/14		1,200		1,358,904
									2,465,104
New York–0.4%
Suffolk County Industrial Development Agency, Civic Facility Refunding, Revenue Bonds		5.00	%		03/01/26		1,300		1,333,332
Ohio–0.8%
Cleveland, Income Tax, Bridges & Roadways, Revenue Bonds, (AGC)(a)		5.00	%		10/01/25		1,555		1,726,703
Ohio State Water Development Authority, Pollution Control Facilities Ser 2009 A(b)		5.875	%		06/01/33		865		968,731
									2,695,434
Oregon–0.4%
Gilliam County, Solid Waste Disposal, Revenue Bonds, (AMT)(b)		4.875	%		07/01/38		1,400		1,450,148
Pennsylvania–4.5%
Allegheny County,Hospital Development Authority, Revenue Bonds, University of Pittsburgh Medical Center, (Series A)		5.00	%		09/01/18		3,000		3,415,530
Cranberry Township, General Obligation Bonds, (FGIC)(a)		4.80	%		12/01/18		1,310		1,366,553
Dover, Area School District, General Obligation Bonds, (FGIC)(a)		5.00	%		04/01/16		1,000		1,021,280
Elizabeth Forward, School District, (MBIA)(a)(c)		0.00	%		09/01/11		1,250		1,239,950
Girard Area, School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		10/01/18		700		531,741
Girard Area, School District, General Obligation Bonds, (FGIC)(a)(c)		0.00	%		10/01/19		250		178,975
Montour, School District, General Obligation Bonds, (MBIA)(a)(c)		0.00	%		01/01/13		300		287,169
Penn Hills Municipality, General Obligation Bonds, (Series B)(c)		0.00	%		12/01/13		210		184,252
Penn Hills Municipality, General Obligation Bonds, (Series B)(c)		0.00	%		06/01/12		1,615		1,512,980
Pennsylvania State Financing Authority, Aliquippa School District, Revenue Bonds(c)		0.00	%		06/01/12		685		664,183
Philadelphia, Authority for Industrial Development, (FSA)(a)		5.00	%		02/15/15		2,150		2,469,920

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Pennsylvania–(continued)
Pittsburgh, Water & Sewer Authority, Water & Sewer System, Revenue Bonds, (FSA)(a)		5.00	%		09/01/13	$	1,000	$	1,109,450
Steel Valley, Allegheny County School District, General Obligation Bonds(c)		0.00	%		11/01/11		1,170		1,149,747
Steel Valley, Allegheny County School District, General Obligation Bonds(c)		0.00	%		11/01/17		650		512,512
									15,644,242
Puerto Rico–0.6%
Puerto Rico Electric Power Authority, Revenue Bonds		5.00	%		07/01/24		2,000		2,165,120
Rhode Island–0.3%
Tobacco Settlement Financing Corp., Asset Backed Revenue Bonds, 2002-A		6.00	%		06/01/23		1,010		1,022,514
South Carolina–0.6%
Greenwood Fifty School Facilities, Inc., Installment Purchase, Revenue Bonds, (AGC)(a)		5.00	%		12/01/11		1,000		1,046,960
Lexington County, Revenue Bonds, Ser 2007 A		5.00	%		11/01/16		165		185,081
Richland County, Revenue Bonds		6.10	%		04/01/23		725		746,351
									1,978,392
Tennessee–0.4%
Memphis-Shelby Sports Authority, Inc., Revenue Bonds, Memphis Arena Project, (MBIA)(a)		5.00	%		11/01/13		1,410		1,545,727
Texas–8.8%
Amarillo, General Obligation Bonds, (MBIA)(a)		5.00	%		05/15/13		1,020		1,132,016
Brownsville, Utility System, Revenue Bonds, (FSA)(a)		5.00	%		09/01/23		1,240		1,410,165
Capital Area Cultural Education Facilities Finance Corp., Revenue Bonds		5.50	%		04/01/23		1,670		1,749,275
City of Houston, General Obligation Bonds, (MBIA)(a)		5.00	%		03/01/16		1,000		1,175,530
County of Bexar, General Obligation Bonds, (FSA)(a)		5.00	%		06/15/14		1,330		1,523,329
Greenville, Electric Utility System, Revenue Bonds		5.00	%		02/15/26		2,475		2,665,996
Harris County, Health Facilities Development Corp., Thermal Utilities, Revenue Bonds, (AGC)(a)		5.25	%		11/15/24		1,950		2,173,373
Houston, Community College System, Revenue Bonds, (AMBAC)(a)		4.00	%		04/15/12		1,465		1,541,854
Houston, Hotel Occupancy, Ser 2001 (AMBAC; FSA)(a)(c)		0.00	%		09/01/25		2,575		1,285,672
Houston, Hotel Occupancy, Revenue Bonds, (AMBAC;FSA)(a)(c)		0.00	%		09/01/26		9,600		4,518,624
Houston, Utility System, Revenue Bonds, (FGIC)(a)		5.00	%		11/15/13		1,000		1,130,350
Lubbock, General Obligation Bonds, (FSA)(a)		5.00	%		02/15/14		1,355		1,537,220
Sam Rayburn, Municipal Power Agency, Revenue Bonds		6.00	%		10/01/21		650		672,126
Tarrant County, Cultural Education Facilities Finance Corp., Revenue Bonds		7.25	%		11/15/16		1,800		1,835,928
Tarrant County, Cultural Education Facilities Finance Corp., Revenue Bonds		5.00	%		02/15/14		2,000		2,202,400
Texas State Turnpike Authority, Revenue Bonds, (AMBAC)(a)(c)		0.00	%		08/15/18		5,700		4,007,214
									30,561,072
Utah–1.7%
Intermountain Power Agency, Power Supply, Revenue Bonds, (ETM)(c)		0.00	%		07/01/17		1,750		1,434,755
University of Utah, General Obligation Bonds, (AMBAC; COP)(a)		5.00	%		12/01/11		1,495		1,575,371
University of Utah, General Obligation Bonds, (AMBAC; COP)(a)		5.00	%		12/01/12		1,545		1,689,751
University of Utah, General Obligation Bonds, (AMBAC; COP)(a)		5.00	%		12/01/13		1,000		1,128,650
									5,828,527
Washington–3.3%
City of Seattle, Revenue Bonds		5.00	%		02/01/18		1,795		2,080,674
Clark County, School District No. 117, Camas, General Obligation Bonds, (FSA)(a)		5.00	%		12/01/13		1,500		1,694,490

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Washington–(continued)
Washington State Motor Vehicle Fuel Facilities, General Obligation Bonds, (AMBAC)(a)(c)		0.00	%		06/01/14	$	3,025	$	2,870,574
Washington State Motor Vehicle Fuel Facilities, General Obligation Bonds, (AMBAC)(a)(c)		0.00	%		06/01/15		3,250		2,994,518
Washington State Motor Vehicle Fuel Facilities, General Obligation Bonds, (AMBAC)(a)(c)		0.00	%		06/01/16		1,885		1,677,744
									11,318,000
Wisconsin–0.5%
Badger TOB Asset Securitization Corp., Revenue Bonds		6.125	%		06/01/27		625		668,556
Wisconsin State Health & Educational Facilities Authority, Revenue Bonds, (AMBAC)(a)		5.625	%		02/15/12		1,000		1,057,460
									1,726,016
TOTAL INVESTMENTS–99.3% (Cost $320,322,090)									344,167,482
OTHER ASSETS LESS LIABILITIES–0.7%									2,366,885
NET ASSETS–100.0%								$	346,534,367

Investment Abbreviations:

AGC	– Assured Guaranty Corp.
AMBAC	– AMBAC Assurance Corp.
AMT	– Alternative Minimum Tax
BANs	– Bond Anticipation Notes
CIFG	– CIFG Assurance North America, Inc.
COP	– Certificates of Participation
ETM	– Escrowed to Maturity
FGIC	– Financial Guaranty Insurance Co.
FSA	– Financial Security Assurance Inc.
MBIA	– MBIA Insurance Corp.
Q-SBLF	– Qualified State Bond Loan Fund
Ser.	– Series

Notes to Schedule of Investments:

(a)	Principal and/or interest payments are secured by the bond insurance company listed.
(b)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on September 30, 2010.
(c)	Capital appreciation bond.
(d)	Security is a “step-up” bond where the coupon increases on a predetermined future date.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Municipal Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investments, at value (Cost $320,322,090)	$	344,167,482
Receivables for:
Investments sold		334,123
Fund shares sold		72,310
Interest		3,308,019
Investment for trustee deferred compensation and retirement plans		34
Other assets		26,154
Total assets		347,908,122
Liabilities:
Payables for:
Fund shares reacquired		1,139,927
Amount due custodian		34,890
Accrued fees to affiliates		108,424
Accrued other operating expenses		89,799
Trustee deferred compensation and retirement plans		715
Total liabilities		1,373,755
Net assets applicable to shares outstanding	$	346,534,367
Net assets consist of:
Shares of beneficial interest	$	445,165,259
Undistributed net investment income		1,455,254
Undistributed net realized gain (loss)		(123,931,538	)
Unrealized appreciation		23,845,392
	$	346,534,367
Net Assets:
Class A	$	115,442,792
Class B	$	10,259
Class C	$	585,023
Class Y	$	230,496,293
Shares outstanding, $0.001 par value per share, unlimited number of shares authorized:
Class A		9,554,212
Class B		849
Class C		48,399
Class Y		19,081,259
Class A:
Net asset value per share	$	12.08
Maximum offering price per share
(Net asset value of $12.08 divided by 95.25%)	$	12.68
Class B:
Net asset value and offering price per share	$	12.08
Class C:
Net asset value and offering price per share	$	12.09
Class Y:
Net asset value and offering price per share	$	12.08

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Municipal Fund

Statement of Operations

For the year ended September 30, 2010

Investment income:
Dividends	$	168,758
Interest		17,243,309
Total investment income		17,412,067
Expenses:
Advisory fees		1,461,864
Administrative services fees		267,901
Custodian fees		14,882
Distribution fees:
Class A		360,743
Class B		34
Class C		913
Transfer agent fees — A, B, C and Y		65,836
Trustees’ and officers’ fees and benefits		12,792
Other		279,673
Total expenses		2,464,638
Less: Fees waived		(163,037	)
Net expenses		2,301,601
Net investment income		15,110,466
Realized and unrealized gain (loss) from:
Net realized gain (loss) from:
Investment securities		(20,835,335	)
Futures contracts		(2,581,669	)
		(23,417,004	)
Change in net unrealized appreciation of:
Investment securities		19,832,821
Futures contracts		1,376,834
		21,209,655
Net realized and unrealized gain (loss)		(2,207,349	)
Net increase in net assets resulting from operations	$	12,903,117

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Municipal Fund

Statement of Changes In Net Assets

For the years ended September 30, 2010 and 2009

	2010			2009
Operations:
Net investment income	$	15,110,466		$	29,697,261
Net realized gain (loss)		(23,417,004	)		(99,370,000	)
Change in net unrealized appreciation		21,209,655			102,075,619
Net increase in net assets resulting from operations		12,903,117			32,402,880
Distributions to shareholders from net investment income:
Class A		(4,046,400	)		(2,836,979	)
Class B		(85	)		—
Class C		(2,346	)		—
Class Y		(12,793,462	)		(32,166,314	)
Total distributions from net investment income		(16,842,293	)		(35,003,293	)
Share transactions–net:
Class A		32,579,119			2,447,416
Class B		10,085			—
Class C		579,985			—
Class Y		(214,067,863	)		(619,537,806	)
Net increase (decrease) in net assets resulting from share transactions		(180,898,674	)		(617,090,390	)
Net increase (decrease) in net assets		(184,837,850	)		(619,690,803	)
Net assets:
Beginning of year		531,372,217			1,151,063,020
End of year (includes undistributed net investment income of $1,455,254 and $3,236,490, respectively)	$	346,534,367		$	531,372,217

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Municipal Fund (the “Fund”) is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Morgan Stanley Municipal Portfolio, (“Acquired Fund”), an investment portfolio of Morgan Stanley Institutional Fund Trust. The Acquired Fund was reorganized on June 1, 2010 (The “Reorganization Date”) through the transfer of all its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class H, Class L and Class P shares received Class A shares of the Fund . Holders of the Acquired Fund’s Class I shares received Class Y shares of the Fund.

  Information for the Acquired Fund’s Class H, Class L and Class P shares prior to the Reorganization is included with Class A shares and information for the Acquired Fund’s Class I shares is included with Class Y shares of the Fund throughout this report.

  The Fund’s investment objective is to realize above-average total return over a market cycle of three to five years, consistent with the conservation of capital and the realization of current income that is exempt from federal income tax.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A. Security Valuations — Securities, including restricted securities, are valued according to the following policy.

17        Invesco Municipal Fund

	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates income and realized and unrealized capital gains and losses to a class based on the relative net assets of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

18        Invesco Municipal Fund

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

  The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee the Adviser based at the annual rate of 0.375% of the Fund’s average daily net assets. Prior to the Reorganization, the Acquired Fund paid an advisory fee of $991,640 to Morgan Stanley Investment Management Inc. (“MSIM”) based on the annual rate above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the date of Reorganization, the Adviser has contractually agreed, through at least June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual fund operating expenses after fee waiver (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.75%, 1.50%, 1.50% and 0.50%, respectively, of average daily net assets. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the total annual fund operating expenses after fee waiver to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of the Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, MSIM had voluntarily agreed to waive fees and/or reimburse expenses to limit total annual fund operating expenses after fee waivers and/or expense reimbursements of Class H, Class I, Class L and Class P shares to 0.75%, 0.50%, 1.00% and 0.75%, respectively of the Acquired Fund’s average daily net assets.

  For year ended September 30, 2010, the Adviser and MSIM waived advisory fees of $54,315 and $108,722, respectively.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, the Acquired Fund paid an administration fee of $229,920 to MSIM and JPMorgan Investor Services Co. For period ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees.

  Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian, fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Prior to the Reorganization, the Acquired Fund paid $133,276 to Morgan Stanley Services Company, Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, the expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  The Trust has entered into master distribution agreements with Invesco Distributors, Inc. (“IDI”) to serve as the distributor for the Class A, Class B, Class C and Class Y shares of the Fund. The Trust has adopted plans pursuant to Rule 12b-1 under the 1940 Act with respect to the Fund’s Class A, Class B and Class C shares (collectively the “Plans”). The Fund, pursuant to the Plans, pays IDI compensation at the annual rate of 0.25% of the Fund’s average daily net assets of Class A shares and 1.00% of the average daily net assets of each class of Class B and Class C shares. Of the Plan payments, up to 0.25% of the average daily net assets of each class of shares may be paid to furnish continuing personal shareholder services to customers who purchase and own shares of such classes. Any amounts not paid as a service fee under the Plans would constitute an asset-based sales charge. Rules of the Financial Industry Regulatory Authority (“FINRA”) impose a cap on the total sales charges, including asset-based sales charges that may be paid by any class of shares of the Fund. . Prior to the Reorganization, the Acquired Fund paid distribution fees of $284,640 to Morgan Stanley Distribution Inc. (“MSDI”). For the year ended September 30, 2010, expenses incurred under the Plans are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $1,118 in front-end sales commissions from the sale of Class A shares.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

  Level 1 — Prices are determined using quoted prices in an active market for identical assets.

19        Invesco Municipal Fund

Level 2 —

Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.

Level 3 —

Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The following is a summary of the tiered valuation input levels, as of September 30, 2010. The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

  During the year ended September 30, 2010, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Municipal Obligations	$	—	$	344,167,482	$	—	$	344,167,482

NOTE 4—Derivative Investments

Effective July 1, 2009, the Fund has implemented new required disclosures about derivative instruments and hedging activities in accordance with GAAP. GAAP has intended to improve financial reporting about derivative instruments and hedging activities by requiring enhanced disclosures to enable investors to better understand their effects on an entity’s financial position and financial performance. The enhanced disclosure has no impact on the results of operations reported in the financial statements.

  The table below summarizes the gains (losses) on derivative instruments, detailed by primary risk exposure, recognized in earnings during the period:

	Location of Gain (Loss) on
	Statement of Operations
	Futures*
Realized Gain (Loss)
Interest rate risk	$	(2,581,669	)
Change in Unrealized Appreciation
Interest rate risk		1,376,834
Total	$	(1,204,835	)

*  The average value of futures outstanding during the period was $92,021,112.

NOTE 5—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  During the year ended September 30, 2010, the Fund paid legal fees of $255 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust.

NOTE��6—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

20        Invesco Municipal Fund

NOTE 7—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	1,189,213	$	3,038,286
Long-term capital gain		15,653,080		31,965,007
Total distributions	$	16,842,293	$	35,003,293

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	1,055,409
Net unrealized appreciation — investments		24,238,644
Temporary book/tax differences		(715	)
Post-October deferrals		(23,864,993	)
Capital loss carryforward		(100,059,237	)
Shares of beneficial interest		445,165,259
Total net assets	$	346,534,367

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation difference is attributable primarily to bonds with market discounts and GAAP adjustments.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2017	$	2,642,290
September 30, 2018		97,416,947
Total capital loss carryforward	$	100,059,237

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 8—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $28,758,767 and $184,263,874, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	25,162,444
Aggregate unrealized (depreciation) of investment securities		(923,800	)
Net unrealized appreciation of investment securities	$	24,238,644
Cost of investments for tax purposes is $319,928,838.

NOTE 9—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of sale of bonds with premium, on September 30, 2010, undistributed net investment income was decreased by $49,409, undistributed net realized gain (loss) was increased by $49,412 and shares of beneficial interest decreased by $3. This reclassification had no effect on the net assets of the Fund.

21        Invesco Municipal Fund

NOTE 10—Share Information

	Summary of Share Activity
	Year ended September 30,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sold:
Class A		8,300,378			98,310,710			4,497,635		$	52,162,336
Class B		842			10,000			—			—
Class C		48,311			578,923			—			—
Class Y		3,661,335			43,402,158			6,661,270			75,328,277
Issued as reinvestment of dividends:
Class A		298,154			3,529,282			245,000			2,760,000
Class B		7			85			—			—
Class C		130			1,575			—			—
Class Y		1,008,958			11,956,447			2,727,000			30,567,000
Reacquired:
Class A		(5,836,446	)		(69,260,873	)		(4,681,089	)		(52,474,920	)
Class B		—			—			—			—
Class C		(42	)		(513	)		—			—
Class Y		(22,790,639	)		(269,426,468	)		(64,874,169	)		(725,433,083	)
Net increase (decrease) in share activity		(15,309,012	)	$	(180,898,674	)		(55,424,353	)	$	(617,090,390	)

^(a) There is an entity that is a record owner of more than 5% of the outstanding shares of the Fund and owns 30% of the outstanding shares of the Fund. IDI has an agreement with this entity to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to this entity, which is considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as, securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by this entity are also owned beneficially.

Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

22        Invesco Municipal Fund

NOTE 11—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated. Information presented prior to the reorganization date includes financial data for the Class H shares of the Acquired Fund.

																														Ratio of			Ratio of
					Net gains																									expenses			expenses
					(losses)																									to average			to average net			Ratio of net
	Net asset				on securities						Dividends			Distributions																net assets			assets without			investment
	value,		Net		(both			Total from			from net			from net									Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment		realized and			investment			investment			realized			Total			Redemption			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)		unrealized)			operations			income			gains			Distributions			Fees			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Class A
Year ended 09/30/10	$	12.09	$	0.98	$	(0.53	)	$	0.45		$	(0.46	)	$	—		$	(0.46	)	$	—		$	12.08		3.87	%	$	115,443		0.80	%(d)		0.84	%(d)		3.42	%(d)		7	%
Year ended 09/30/09		11.58		0.48		0.56			1.04			(0.53	)		—			(0.53	)		0.00	(e)		12.09		9.36			6,083		0.75	(f)		0.81	(f)		4.18	(f)(g)		5
Year ended 09/30/08(h)		12.70		0.42		(1.20	)		(0.78	)		(0.34	)		—			(0.34	)		0.00	(e)		11.58		(6.31	)		8,593		0.80	(f)(i)		0.79	(f)(i)		4.56	(f)(g)(i)		43
Class B
Year ended 09/30/10(h)		11.88		0.11		0.19			0.30			(0.10	)		—			(0.10	)		—			12.08		2.54			10		1.50	(d)(i)		1.50	(d)(i)		2.72	(d)(i)		7
Class C
Year ended 09/30/10(h)		11.88		0.11		0.20			0.31			(0.10	)		—			(0.10	)		—			12.09		2.62			585		1.50	(d)(i)		1.50	(d)(i)		2.72	(d)(i)		7
Class Y
Year ended 09/30/10		12.08		0.45		0.04			0.49			(0.49	)		—			(0.49	)		—			12.08		4.21			230,496		0.47	(d)		0.51	(d)		3.75	(d)		7
Year ended 09/30/09		11.58		0.51		0.55			1.06			(0.56	)		—			(0.56	)		0.00	(e)		12.08		9.65			449,459		0.50	(f)		0.52	(f)		4.46	(f)(g)		5
Year ended 09/30/08		12.82		0.60		(1.24	)		(0.64	)		(0.55	)		(0.05	)		(0.60	)		0.00	(e)		11.58		(5.24	)		1,073,173		0.49	(f)		0.50	(f)		4.80	(f)(g)		43
Year ended 09/30/07		12.86		0.49		(0.01	)		0.48			(0.52	)		—			(0.52	)		0.00	(e)		12.82		3.76			936,633		0.50	(f)		0.50	(f)		3.80	(f)(g)		29
Year ended 09/30/06		12.66		0.39		0.29			0.68			(0.48	)		—			(0.48	)		0.00	(e)		12.86		5.53			662,162		0.49	(f)		0.49			3.09			43

(a)	Calculated using average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and it is not annualized for periods less than one year, if applicable.
(c)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(d)	Ratios are based on average daily net assets (000’s omitted) of $110,654, $10, $273 and $302,010 for Class A, Class B, Class C and Class Y shares, respectively.
(e)	Amount is less than $0.005 per share.
(f)	The ratios reflect the rebate of certain Fund expenses in connections with the investments in Morgan Stanley affiliates during the period. The effect of the rebate on the ratios is less than 0.005%, 0.01% and less than 0.005% for the years ended September 30, 2009, 2008, and 2007, respectively.
(g)	Ratio of net investment income to average net assets without fee waivers and/or expenses absorbed was 4.44% and 4.79% for Class Y shares and 4.17% and 4.56% for Class A shares for the years ended September 30, 2009 and 2008.
(h)	Commencement date of January 2, 2008 for Class A shares and June 1, 2010 for Class B and Class C shares.
(i)	Annualized.

NOTE 12—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen Intermediate Term Municipal Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 13—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

23        Invesco Municipal Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Municipal Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Municipal Fund (formerly known as Morgan Stanley Municipal Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 24, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

24        Invesco Municipal Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2010 through September 30, 2010.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2,3		(09/30/10)		Period2,4		Ratio2
Class A	$	1,000.00	$	1,045.10	$	3.54	$	1,021.61	$	3.50		0.69	%
Class B		1,000.00		1,042.00		5.12		1,017.55		7.59		1.50
Class C		1,000.00		1,042.00		5.12		1,017.55		7.59		1.50
Class Y		1,000.00		1,046.40		2.26		1,022.86		2.23		0.44

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010 through September 30, 2010 (as of close of business June 1, 2010 through September 30, 2010 for the Class B and Class C shares), after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year. For the Class B and Class C shares actual expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 122 (as of close of business June 1, 2010 through September 30, 2010)/365. Because the Class B and Class C shares have not been in existence for a full six month period, the actual ending account value and expense information shown may not provide a meaningful comparison to fund expense information of classes that show such data for a full six month period and, because the actual ending account value and expense information in the expense example covers a short time period, return and expense data may not be indicative of return and expense data for longer time periods. Effective June 1, 2010, the Fund’s adviser has contractually agreed to waive advisory fees and/or reimburse expenses to the extent necessary to limit Total Annual Fund Operating Expense of Class A and Class Y to 0.75% and 0.50% of average daily net assets, respectively. The annualized expense ratios restated as if these agreements had been in effect throughout the entire most recent fiscal half year are 0.75% and 0.50% for Class A and Class Y shares, respectively.
3	The actual expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal year are $3.85 and $2.57 for Class A and Class Y, respectively.
4	The hypothetical expenses paid restated as if the changes discussed above had been in effect throughout the entire most recent fiscal half year are $3.80 and $2.54 for Class A and Class Y, respectively.

25        Invesco Municipal Fund

Approval of Investment Advisory and Sub-Advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco Municipal Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Morgan Stanley retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these

26        Invesco Municipal Fund

services to Invesco Funds in accordance with the terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

27        Invesco Municipal Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Qualified Dividend Income*	46.89%
Corporate Dividends Received Deduction*	46.89%
Tax-Exempt Interest Dividends*	98.29%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

28        Invesco Municipal Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Morgan Stanley Institutional Fund Trust - Municipal Portfolio was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		24,683,426		515,751		406,376		0

29        Invesco Municipal Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

     Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-066242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the

Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

MS-MUNI-AR-1 Invesco Distributors, Inc.

Invesco Van Kampen California
Insured Tax Free Fund

Annual Report to Shareholders September 30, 2010

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
13	Financial Statements
16	Financial Highlights
19	Notes to Financial Statements
26	Auditor’s Report
27	Fund Expenses
28	Approval of Investment Advisory and Sub-Advisory Agreements
30	Tax Information
31	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

     Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2 Invesco Van Kampen California Insured Tax Free Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3 Invesco Van Kampen California Insured Tax Free Fund

Management’s Discussion of Fund Performance

Performance summary

All share classes at net asset value (NAV) of Invesco Van Kampen California Insured Tax Free Fund posted positive returns during the 12-month reporting period ended September 30, 2010. The Fund’s class A shares at NAV underperformed the Fund’s broad market benchmark, the Barclays Capital Municipal Bond Index, and the Fund’s style-specific benchmark, the Barclays Capital California Insured Municipal Bond Index. The Fund’s security selection in BBB-rated bonds and tobacco bonds were the main detractors from relative performance versus the Barclays Capital California Municipal Bond Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	4.72	%
Class B Shares	4.29
Class C Shares	3.96
Class Y Shares	4.93
Barclays Capital Municipal Bond Index ▼ (Broad Market Index)	5.81
Barclays Capital California Insured Municipal Bond Index ▼(Style-Specific Index)	6.11

^▼Lipper Inc.

How we invest

The Fund’s investment objective is to provide only California investors with a high level of current income exempt from federal and California income taxes, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured California municipal securities.

     Under normal market conditions, we seek to achieve the Fund’s investment objective by investing at least 80% of net assets (plus any borrowings for investment purposes) in a portfolio of California municipal securities that are insured at the time of purchase as to timely payment of principal and interest by an entity whose claims-paying ability is rated at least A by Standard & Poor’s or an equivalent rating by another agency. The Fund is designed for investors who are residents of California for California tax purposes.

We manage the Fund’s portfolio and adjust the average maturity of portfolio investments based upon our expectations about the direction of interest rates and other economic factors. In selecting securities for investment, we use our research capabilities to identify and monitor attractive investment opportunities and to seek to protect the Fund’s portfolio from early payment by issuers of such securities. In conducting research and analysis, we consider a number of factors, including general market and economic conditions and credit, interest rate and prepayment risks. Portfolio securities are typically sold when our assessments of any of these factors materially change. Although the Fund invests in insured municipal securities, insurance does not protect the Fund from market fluctuations in the value of these securities, but only guarantees timely payment of principal and interest of such investments.

     We buy and sell securities for the Fund’s portfolio with a view toward seeking a high level of current income exempt from federal and California income taxes and select securities

we believe have reasonable credit risk considered in relation to the investment policies of the Fund. As a result, the Fund will not necessarily invest in the highest yielding California municipal securities permitted by its investment policies if we determine that market risks or credit risks associated with such investments would subject the Fund’s portfolio to undue risk. The potential realization of capital gains or losses resulting from possible changes in interest rates will not be a major consideration and frequency of portfolio turnover generally will not be a limiting factor if we consider it advantageous to purchase or sell securities. We may sell securities based on factors such as degradation in credit quality, a decision to shorten or lengthen the fund’s duration, or reducing exposure to a particular sector or issuer.

Market conditions and your Fund

Market conditions during the 12-month reporting period were influenced by two broad themes: private sector recovery and concerns over sovereign creditwor-thiness. In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high unemployment continued to weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased at an annual rate of 3.7%.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy: “Financial conditions have become less

Portfolio Composition

By security type, based on total investments

Revenue Bonds	79.9	%
General Obligation Bonds	17.7
Pre-refunded Bonds	2.4

Total Net Assets	$174.5 million
Total Number of Holdings*		133

Top Five Sectors

1. Tax Allocation	27.9	%
2. Public Education	16.9
3. Higher Education	12.3
4. Water & Sewer	10.4
5. Public Buildings	8.8

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

*Excluding money market fund holdings.

4 Invesco Van Kampen California Insured Tax Free Fund

supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

     Sector performance was driven by quality spread tightening largely as a result of continued flows into the municipal market combined with less tax-exempt issuance. As a result, BBB-rated and lower credit quality sectors outperformed. Fund flows remained strong after a record 2009. In addition, year-to-date issuance through the reporting period is about 2.2% ahead of last year’s pace, at $293.2 billion versus $286.9 billion.³ However, approximately 30% of supply since the beginning of the year was in the form of taxable municipals.³

     While many states are currently facing budgetary challenges, California has perhaps received more press than most. The state still benefits from its large and diverse economic base and above-average wealth levels. However, its large exposure to the housing crisis, falling tax revenues and recent budgetary shortfalls posed considerable challenges. Although rating agencies have downgraded the state’s credit rating and the market has reacted accordingly, the negative impact was tempered somewhat by the issuance of taxable Build America Bonds and the continued decrease in supply of tax-exempt debt.

     At NAV, the Fund generated positive absolute returns for the reporting period. In terms of yield curve strategy, security selection in the 15- to 20-year range of the curve and at the longer end of the curve enhanced returns relative to the Barclays Capital California Insured Municipal Bond Index.

     During the reporting period, lower rated tax-exempt bonds experienced greater price appreciation relative to higher quality issues. An overweight exposure in BBB-rated bonds enhanced Fund returns. However, that was offset by poor security selection in that credit rating category. Security selection among unrated bonds contributed to returns for the period.

     At a sector level, the Fund’s underweight exposure to state general obligation bonds and security selection in dedicated tax bonds detracted from performance. In addition, the Fund’s security selection in the tobacco sector was a primary detractor from performance.

     Security selection in health care and industrial revenue bonds/pollution control revenue bonds contributed to performance during the reporting period.

     We may use inverse floating rate securities in Invesco Van Kampen California Insured Tax Free Fund to help manage duration, yield curve exposure and credit exposure and to potentially enhance yield. Over the reporting period, the exposure to inverse floating rate securities contributed to Fund returns.

     Thank you for investing in Invesco Van Kampen California Insured Tax Free Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Thomas Byron

Portfolio manager, is manager of Invesco Van Kampen California Insured Tax Free Fund. Mr. Byron joined Invesco in 2010. He earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen California Insured Tax Free Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Robert Wimmel

Portfolio manager, is manager of Invesco Van Kampen California Insured Tax Free Fund. Mr. Wimmel joined Invesco in 2010. Mr. Wimmel earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the University of Illinois, Chicago.

5 Invesco Van Kampen California Insured Tax Free Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 11/30/85, Fund data from 12/13/85

Past performance cannot guarantee comparable future results.

     The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees; performance of a market index does not.

Performance shown in the chart and table(s) does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the

one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

6 Invesco Van Kampen California Insured Tax Free Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

							After Taxes on Distributions
				After Taxes			and Sale of
	Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (12/13/85)		5.87	%		5.23	%		5.22	%
10 Years		3.69			3.51			3.62
5 Years		1.63			1.34			1.74
1 Year		-0.27			-1.42			0.16
Class B Shares
Inception (4/30/93)		4.26	%		4.15	%		4.18	%
10 Years		3.97			3.79			3.83
5 Years		2.25			1.97			2.29
1 Year		-0.71			-1.80			-0.12
Class C Shares
Inception (8/13/93)		3.69	%		3.59	%		3.64	%
10 Years		3.44			3.28			3.35
5 Years		1.89			1.63			1.90
1 Year		2.96			1.95			2.22
Class Y Shares
Inception (8/12/05)		2.82	%		2.52	%		2.79	%
5 Years		2.86			2.56			2.82
1 Year		4.93			3.65			3.58

Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen California Insured Tax Free Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen California Insured Tax Free Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.92%, 1.67%, 1.67% and 0.67%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2005, the CDSC on Class B shares declines from 3% at the time of purchase to 0% at the beginning of the fifth year. For shares purchased after June 1, 2005 and before June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines

from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

continued from page 8

n The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require

adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns

based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.

7 Invesco Van Kampen California Insured Tax Free Fund

Invesco Van Kampen California Insured Tax Free Fund’s investment objective is to provide only California investors with a high level of current income exempt from federal and California income taxes, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured California municipal securities.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n	The yields of municipal securities, or of insured municipal securities, may move differently and adversely compared to the yields of the overall debt securities markets. The Fund may invest up to 20% of its net assets in municipal securities subject to the federal alternative minimum tax. There could be changes in applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.
n	Because the Fund invests substantially all of its assets in a portfolio of California municipal securities, the Fund is more susceptible to political, economic, regulatory or other factors affecting issuers of California municipal securities than a fund that does not limit its investments to such issuers.
n	A downgrade of an insurer’s claims-paying ability may result in increased credit risk of the municipal securities insured by such insurer and may result in a downgrade of the rating assigned to the municipal securities insured by such insurer. The securities could experience a decrease in market price as a result of such a downgrade. In the even the ratings assigned to such municipal securities decline below investment grade, such municipal

	securities would probably become less liquid or even illiquid. There can be no assurance that an issuer will be able to honor its obligations with respect to municipal securities in the Fund’s portfolio.
n	Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid. Certain derivative transactions may give rise to a form of leverage. Leverage magnifies the potential for gain and the risk of loss.
n	Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Credit risk should be low for the Fund because it invests substantially all of its assets in insured municipal securities. In the event that the insurers of the Fund’s insured municipal securities are downgraded in their claims-paying abilities by a nationally recognized statistical rating organization (NRSRO), the Fund would be subject to potential market value declines and increased credit risk on the municipal securities insured by such insurer.
n	The income you receive from the Fund is based primarily on prevailing interest rates, which can vary widely over the short-and long-term. If interest rates drop, your income from the Fund may drop as well.
n	If interest rates fall, it is possible that issuers of securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from these securities would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.

n Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities. Generally, the Fund’s municipal securities are insured as to timely payment of principal and interest by a private insurance company.

About indexes used in this report

n	The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
n	The Barclays Capital California Insured Municipal Bond Index tracks the performance of California issued municipal bonds with two or more years to maturity.
n	The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

n The Chartered Financial Analyst^® (CFA^®) designation is globally recognized and attests to a charter-holder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

continued on page 7

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols

Class A Shares	VKCIX
Class B Shares	VCIBX
Class C Shares	VCICX
Class Y Shares	VCIIX

8 Invesco Van Kampen California Insured Tax Free Fund

Schedule of Investments

September 30, 2010

						Par
						Amount
	Coupon			Maturity		(000)		Value
Municipal Bonds–103.7%
California–102.8%
Alhambra, CA City Elem Sch Dist Cap Apprec, Ser A (AGM Insd)		*			09/01/20	$	1,925	$	1,223,318
Apple Valley, CA Pub Fin Auth Lease Rev Town Hall Annex Proj, Ser A (AMBAC Insd)		5.000	%		09/01/27		2,365		2,502,974
Arcadia, CA Uni Sch Dist Election 2006, Ser A (AGM Insd)		5.000			08/01/37		1,500		1,558,875
Bakersfield, CA Wastewater Rev, Ser A (AGM Insd)		5.000			09/15/32		1,000		1,051,820
Bay Area Govt Assn CA Lease Rev Cap Proj, Ser A (AMBAC Insd)		5.250			07/01/17		1,430		1,626,697
Bay Area Govt Assn CA Lease Rev West Sacramento, Ser A (Syncora Gtd)		5.000			09/01/29		2,735		2,807,259
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(a)		5.000			04/01/39		1,250		1,319,963
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(a)		5.125			04/01/39		1,500		1,606,875
Bonita, CA Uni Sch Dist Election 2004, Ser A (NATL Insd)		5.000			08/01/28		1,000		1,064,450
Brea & Olinda, CA Uni Sch Dist Ctf Partn Rfdg, Ser A (AGM Insd)		5.500			08/01/18		1,850		1,931,308
Byron Bethany JT Pwrs Auth CA Lease Rev Admin Bldg Proj, Ser A (CIFG Insd)		4.625			10/01/32		515		528,158
California Ed Fac Auth Rev Claremont McKenna College(a)		5.000			01/01/38		2,100		2,207,331
California Ed Fac Auth Rev Univ Pacific (NATL Insd)		5.875			11/01/20		2,165		2,169,438
California Ed Fac Auth Rev Univ Southn CA, Ser A(a)		5.250			10/01/39		1,800		1,971,504
California Hlth Fac Fin Auth Rev Adventist Hlth Sys West, Ser A		5.750			09/01/39		500		525,960
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser A		6.000			07/01/39		500		549,550
California Hlth Fac Fin Auth Rev Childrens Hosp (AGM Insd)		5.250			07/01/38		1,700		1,752,887
California Hlth Fac Fin Auth Rev Providence Hlth & Svc, Ser C		6.500			10/01/38		1,000		1,160,120
California Hlth Fac Fin Auth Rev Scripps Hlth, Ser A		5.000			11/15/36		500		512,865
California Mun Fin Auth Rev Eisenhower Med Ctr, Ser A		5.500			07/01/30		500		513,630
California Mun Fin Auth Rev Eisenhower Med Ctr, Ser A		5.750			07/01/40		500		510,805
California Muni Fin Auth Ctf Partn Cmnty Hosp Cent CA		5.250			02/01/37		500		481,335
California Spl Dist Assn Fin Corp Ctf Partn Spl Dist Fin Pgm, Ser DD (AGM Insd)		5.625			01/01/27		1,050		1,051,428
California St (FGIC Insd)		6.250			09/01/12		640		676,614
California St Univ Rev Systemwide, Ser A (AGL Insd)		5.250			11/01/38		1,000		1,071,650
California St Univ Rev Systemwide, Ser A (AGM Insd)		5.000			11/01/39		500		520,300
California Statewide Cmnty Dev Auth Rev FHA Insd Mtg Methodist Hosp Proj (FHA Gtd)		6.750			02/01/38		500		581,635
California Statewide Cmnty Dev Auth Rev Sr Living Southn CA Presbyterian Homes		7.250			11/15/41		500		555,630
California Statewide Cmnty Dev Auth Wtr Rev, Ser A (AGM Insd)		5.000			10/01/26		1,900		1,986,811
California Statewide Cmntys Dev Auth Rev Amern Baptist Homes West		6.250			10/01/39		500		512,085
Castaic Lake Wtr Agy CA Ctf Partn Wtr Sys Impt Proj Rfdg, Ser A (NATL Insd)		7.000			08/01/12		2,000		2,223,940
Castaic Lake Wtr Agy CA Rev Ctf Partn, Ser A (NATL Insd) (Prerefunded @ 02/01/11)		5.250			08/01/23		3,000		3,079,800
Cerritos, CA Cmnty College Dist Election 2004, Ser A (NATL Insd)		5.000			08/01/26		100		104,876
Cerritos, CA Cmnty College Dist Election 2004, Ser A (NATL Insd)		5.000			08/01/28		125		130,303
Coachella, CA Fin Auth Tax Alloc Rev Redev Proj 1 & 2 Rfdg, Ser A (Syncora Gtd)		5.250			12/01/30		1,160		1,147,820
Contra Costa, CA Cmnty College Dist Election 2002 (NATL Insd)		5.000			08/01/29		1,400		1,458,100
Desert, CA Cmnty College Dist, Ser C (AGM Insd)		5.000			08/01/37		2,500		2,594,300
El Dorado, CA Irr Dist Ctf Partn, Ser A (AGL Insd)		5.750			08/01/39		1,000		1,054,110
El Monte, CA Un High Sch Dist Election Of 2008, Ser A (AGL Insd)		5.500			06/01/34		1,000		1,092,450
Fairfield, CA Cmnty Fac Dist Spl Tax No 3 North Cordelia Gen Impt		6.000			09/01/32		1,200		1,252,512
Fairfield, CA Ctf Partn Fairfield Wtr, Ser A (NATL Insd)		5.000			04/01/42		2,330		2,362,900

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Van Kampen California Insured Tax Free Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Fontana, CA Redev Agy Tax Alloc Dwntwn Redev Proj Rfdg (NATL Insd)		5.000	%		09/01/21	$	1,480	$	1,480,444
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900			08/01/17		590		674,972
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900			08/01/18		630		721,564
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900			08/01/19		675		776,297
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900			08/01/20		720		824,119
Glendora, CA Pub Fin Auth Rev Tax Alloc Proj No 1, Ser A (NATL Insd)		5.000			09/01/24		2,425		2,452,766
Golden St Tob Sec Corp CA Tob Settlement Rev Asset Bkd Sr, Ser A-1		4.500			06/01/27		695		622,539
Golden St Tob Sec Corp CA Tob Settlement Rev Asset Bkd Sr, Ser A-1		5.750			06/01/47		1,500		1,142,295
Golden Vly Uni Sch Dist CA Election 2006, Ser A (AGM Insd)		5.000			08/01/41		1,000		1,031,760
Hanford, CA Jt Un High Sch Dist Election 1998, Ser C (NATL Insd)		5.700			08/01/28		2,230		2,424,701
Hawaiian Gardens, CA Redev Agy Proj No 1 Tax Alloc, Ser A (AMBAC Insd)		5.000			12/01/25		2,275		2,294,656
Hesperia, CA Pub Fin Auth Rev Redev & Hsg Proj, Ser A (Syncora Gtd)		5.000			09/01/31		2,025		1,650,314
Imperial Irr Dist CA Ctf Partn Elec Sys Proj (AGM Insd)		5.250			11/01/23		1,000		1,100,030
Imperial Irr Dist CA Ctf Partn Wtr Sys Proj (AMBAC Insd)		5.000			07/01/19		1,450		1,466,472
Indio, CA Redev Agy Tax Alloc Sub Merged Redev Proj Area, Ser A		5.625			08/15/35		750		758,978
Inglewood, CA Redev Agy Tax Alloc Merged Redev Proj Rfdg, Ser A (AMBAC Insd)		5.250			05/01/23		2,000		2,031,240
Irvine, CA Pub Fac & Infrastructure Auth Assmt Rev, Ser B (AMBAC Insd)		5.000			09/02/23		1,670		1,674,426
Kern Cnty, CA Ctfs Partn Cap Impt Proj, Ser A (AGL Insd)		5.750			08/01/35		1,000		1,078,810
La Canada, CA Uni Sch Dist Election 2004, Ser A (NATL Insd)		5.500			08/01/28		1,000		1,065,800
La Quinta, CA Fin Auth Loc Agy Rev, Ser A (AMBAC Insd)		5.250			09/01/24		2,000		2,052,180
La Quinta, CA Redev Agy Tax Alloc Redev Proj Area No 1 (AMBAC Insd)		5.000			09/01/22		2,000		2,069,980
Lodi, CA Wastewater Sys Rev Ctf Partn, Ser A (AGM Insd)		5.000			10/01/37		1,000		1,027,630
Los Angeles, CA Cmnty College Dist 2003 Election, Ser F1(a)		5.000			08/01/33		2,000		2,131,220
Los Angeles, CA Ctf Partn Real Ppty Pgm, Ser T (NATL Insd)		5.000			02/01/19		1,975		2,024,217
Los Angeles, CA Dept Wtr & Pwr Wtrwks Rev, Ser C (NATL Insd)		5.000			07/01/26		1,000		1,065,130
Los Angeles, CA Dept Wtr & Pwr Wtrwks Rev Sys Sub, Ser A-2 (AMBAC Insd)		5.000			07/01/44		1,000		1,039,690
Los Angeles, CA Mtg Rev FHA Sec 8 Asstd Proj Rfdg, Ser A (NATL Insd)		6.100			07/01/25		1,045		1,046,505
Los Angeles, CA Uni Sch Dist Election 2004, Ser H (AGM Insd)		5.000			07/01/32		1,000		1,054,070
Los Angeles Cnty, CA Ctf Partn Disney Pkg Proj Rfdg (AMBAC Insd)		4.750			03/01/23		1,000		1,000,160
Los Angeles Cnty, CA Met Trans Auth Sales Tax Rev Prop A First Tier, Ser A (AMBAC Insd)		5.000			07/01/35		1,000		1,047,020
Los Angeles Cnty, CA Sch Regionalized Business Svcs Ctf Cap Apprec Pooled Fin, Ser A (AMBAC Insd)		*			08/01/24		1,265		517,878
Lynwood, CA Uni Sch Dist 2002 Election, Ser A (AGM Insd)		5.000			08/01/27		1,000		1,018,180
Metropolitan Wtr Dist Southn CA Wtrwks Rev, Ser A (AGM Insd)		5.000			07/01/35		1,520		1,598,888
Monrovia, CA Fin Auth Lease Rev Hillside Wilderness Preserve (AMBAC Insd)		5.000			12/01/20		1,105		1,165,797
Montclair, CA Redev Agy Tax Allocation Redev Proj No V Rfdg (NATL Insd)		5.000			10/01/20		2,000		2,034,460
Montebello, CA Uni Sch Dist Election Of 2004, Ser A-1 (AGL Insd)		5.250			08/01/34		1,000		1,068,790
Morongo Band Of Mission Indians CA Enterprise Rev Indians Enterprise Casino, Ser B(b)		6.500			03/01/28		1,000		962,180
Mountain View, CA Shoreline Regl Pk Cmnty Tax Alloc, Ser A (NATL Insd)		5.250			08/01/16		1,570		1,588,479
Norco, CA Fin Auth Enterprise Rev Rfdg (AGM Insd)		5.625			10/01/34		1,000		1,082,520
Oceanside, CA Ctf Partn Rfdg, Ser A (AMBAC Insd)		5.200			04/01/23		1,300		1,323,309
Pacifica, CA Wastewtr Rev Rfdg (AMBAC Insd)		5.000			10/01/25		1,145		1,176,087
Palm Desert, CA Fin Auth Tax Alloc Rev Proj Area No 4 Rfdg, Ser A (NATL Insd)		5.000			10/01/29		1,200		1,197,804
Palm Springs, CA Fin Auth Lease Rev Convention Ctr Proj Rfdg, Ser A (NATL Insd)		5.250			11/01/19		1,340		1,405,794
Palomar Pomerado Hlthcare Dist CA Ctf Partn		6.750			11/01/39		500		555,525
Panama-Buena Vista Uni Sch Dist CA Ctf Partn Sch Constr Proj (NATL Insd)		5.000			09/01/30		1,045		1,080,906

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Van Kampen California Insured Tax Free Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Paramount, CA Uni Sch Dist Election 2006 (AGM Insd)		5.250	%		08/01/30	$	2,000	$	2,146,280
Pittsburg, CA Uni Sch Dist Election 2006, Ser B (AGM Insd)		5.500			08/01/31		1,000		1,101,760
Pomona, CA Pub Fin Auth Rev Merged Redev Proj, Ser AD (NATL Insd)		5.000			02/01/15		2,020		2,035,392
Pomona, CA Pub Fin Auth Rev Merged Redev Proj, Ser AD (NATL Insd)		5.000			02/01/16		1,110		1,117,259
Pomona, CA Pub Fin Auth Rev Sub Merged Redev Proj		5.125			02/01/33		1,000		905,550
Port Hueneme, CA Ctf Partn Cap Impt Pgm Rfdg (NATL Insd)		6.000			04/01/19		1,360		1,574,377
Poway, CA Redev Agy Tax Alloc Paguay Redev Proj (AMBAC Insd)		5.375			06/15/20		1,055		1,079,138
Poway, CA Uni Sch Dist Election 2008 Impt Dist 2007, Ser 1-A		*			08/01/26		2,000		884,360
Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho Redev Hsg Set Aside, Ser A (NATL Insd)		5.000			09/01/34		1,000		957,590
Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho Redev Proj (NATL Insd)		5.375			09/01/25		3,000		3,020,700
Rancho Mirage, CA Jt Pwr Fin Auth Ctf Partn Eisenhower Med Rmkt, Ser B (NATL Insd)		4.875			07/01/22		1,000		1,026,840
Redding, CA Redev Agy Tax Alloc Canby Hilltop Cypress Redev, Ser A (NATL Insd)		5.000			09/01/23		1,400		1,419,208
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)		5.000			10/01/28		500		535,900
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)(a)		5.000			10/01/38		1,800		1,859,310
Riverside, CA Wtr Rev, Ser B (AGM Insd)		5.000			10/01/33		1,000		1,063,330
Rohnert Pk, CA Cmnty Dev Commn Tax Alloc Rev Hsg Redev Proj, Ser H (NATL Insd)		4.375			08/01/30		6,375		5,711,745
Sacramento, CA City Fin Auth Rev Cap Impt (AMBAC Insd)		5.000			12/01/33		70		70,628
Sacramento Cnty, CA Arpt Sys Rev Sr, Ser A (AGM Insd)		5.000			07/01/32		1,000		1,044,660
Sacramento Cnty, CA Arpt Sys Rev Sr, Ser A (AGM Insd)		5.000			07/01/41		1,015		1,044,821
Sacramento Cnty, CA San Dist Fin Auth Rev Sacramento Regl Cnty San (NATL Insd)		5.000			12/01/29		2,000		2,143,940
San Diego, CA Cmnty College Dist Election 2002(a)		5.250			08/01/33		1,500		1,643,595
San Diego CA Pub Fac Fin Auth Lease Rev Rfdg Master Rfdg Proj, Ser A		5.250			03/01/40		1,500		1,527,225
San Diego, CA Pub Fac Fin Auth Rev Pooled Fin Southcrest, Ser B (Radian Insd)		5.250			10/01/27		2,535		2,615,841
San Francisco, CA City & Cnty Arpt Commn Intl Arpt, Ser E		6.000			05/01/39		1,000		1,127,590
San Jose Evergreen CA Cmnty College Dist Election 2004, Ser B (AGM Insd)		*			09/01/31		3,110		915,895
San Leandro, CA Ctf Partn Jt Proj Area Fin (NATL Insd)		5.100			12/01/26		1,000		1,021,940
Santa Monica, CA Cmnty College Dist Ctf Partn Rfdg, Ser A (AMBAC Insd)		5.250			02/01/23		2,450		2,508,629
Shafter, CA Cmnty Dev Agy Tax Alloc Rev Cmnty Dev Proj Area No 1 Rfdg, Ser A (AGM Insd)		5.000			11/01/36		1,460		1,481,739
Sierra View Loc Hlthcare Dist CA Rev		5.250			07/01/32		500		501,365
South Gate, CA Pub Fin Auth Tax Alloc Rev South Gate Redev Proj No 1 (Syncora Gtd)		5.750			09/01/22		1,000		1,043,790
Southern CA Logistics Arpt Auth Southn CA Logistics Arpt		5.375			12/01/22		2,365		2,165,725
Southern CA Logistics Arpt Auth Southn CA Logistics Arpt		6.100			12/01/37		1,250		1,127,875
Temecula, CA Redev Agy Tax Alloc Rev Temecula Redev Proj No 1 (NATL Insd)		5.125			08/01/27		2,150		2,150,301
Tobacco Sec Auth Southn CA Tob Settlement Sr, Ser A-1		5.125			06/01/46		2,500		1,702,650
Turlock, CA Pub Fin Auth Tax Alloc Rev (AGM Insd)		5.000			09/01/36		2,500		2,480,150
Twin Rivers, CA Uni Sch Fac Brdg Prog (AGM Insd)(c)		3.500			06/01/41		1,000		999,960
University CA Regt Med Ctr Pooled Rev, Ser A (BHAC Insd)		4.500			05/15/47		2,555		2,533,104
University CA Rev, Ser O(a)		5.750			05/15/23		705		858,528
University CA Rev, Ser O(a)		5.750			05/15/25		1,050		1,268,411
Val Verde, CA Uni Sch Dist Ctf Partn Ref, Ser A (AGL Insd)		5.125			03/01/36		1,475		1,499,647
Walnut, CA Enegry Ctr Auth Rev Rfdg, Ser A		5.000			01/01/35		1,000		1,047,460
Washington, CA Uni Sch Dist Yolo Cnty Ctf Partn New High Sch Proj (AMBAC Insd)		5.125			08/01/37		1,170		1,192,546
West Contra Costa, CA Uni Sch Dist Cabs (NATL Insd)		*			08/01/25		2,500		1,048,575

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Van Kampen California Insured Tax Free Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Westn Riverside Cnty, CA Wtr & Wastewater Fin Auth Western Muni Wtr Dist Impt (AGL Insd)		5.625	%		09/01/39	$	1,000	$	1,080,560
Yosemite, CA Cmnty College Dist Cap Apprec (AGM Insd)		*			08/01/25		3,000		1,454,430
									179,381,287
Puerto Rico–0.9%
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A (Prerefunded @ 08/01/11)(c)		5.000			08/01/39		1,000		1,039,860
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser C		5.000			08/01/35		500		518,055
									1,557,915
TOTAL INVESTMENTS–103.7% (Cost $176,252,218)									180,939,202
Floating Rate Note and Dealer Trust Obligations Related to Securities Held–(5.2%) (Cost ($9,080,000))
(9,080) Notes with interest rates ranging from 0.27% to 0.32% at 09/30/10 and contractual maturities of collateral ranging from 05/15/23 to 10/01/39 (See Note 1(K) in the Notes to the Financial Statements)(d)									(9,080,000	)
TOTAL NET INVESTMENTS–98.5% (Cost $167,172,218)									171,859,202
OTHER ASSETS IN EXCESS OF LIABILITIES–1.5%									2,635,470
NET ASSETS–100.0%								$	174,494,672

Percentages are calculated as a percentage of net assets.

Investment Abbreviations:

AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– AMBAC Indemnity Corp.
BHAC	– Berkshire Hathaway Assurance Corp.
CIFG	– CDC IXIS Financial Guaranty
FGIC	– Financial Guaranty Insurance Co.
FHA	– Federal Housing Administration
NATL	– National Public Finance Guarantee Corp.
Radian	– Radian Asset Assurance
Syncora Gtd	– Syncora Guaranteed Limited

Notes to Schedule of Investments:

*	Zero coupon bond
(a)	Underlying security related to Special Purpose Trusts entered into by the Trust. See Note 1(K) in the Notes to Financial Statements.
(b)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(c)	Variable Rate Coupon
(d)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at September 30, 2010. At September 30, 2010, Fund investments with a value of $14,866,736 are held by the Dealer Trusts and serve as collateral for the $9,080,000 in floating rate note and dealer trust obligations outstanding at that date.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Van Kampen California Insured Tax Free Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investments, at value (Cost $176,252,218)	$	180,939,202
Cash		895,489
Receivables:
Interest		2,210,803
Fund shares sold		167,524
Other		5,916
Total assets		184,218,934
Liabilities:
Payables:
Floating rate note and dealer trust obligations		9,080,000
Fund shares repurchased		323,145
Income distributions		127,900
Distributor and affiliates		68,540
Accrued expenses		124,255
Trustees’ deferred compensation and retirement plans		422
Total liabilities		9,724,262
Net assets	$	174,494,672
Net assets consist of:
Capital (par value of $0.001 per share with an unlimited number of shares authorized)	$	182,605,216
Net unrealized appreciation		4,686,984
Accumulated undistributed net investment income		422,243
Accumulated net realized gain (loss)		(13,219,771	)
Net assets	$	174,494,672
Maximum offering price per share:
Class A shares:
Net asset value and redemption price per share (Based on net assets of $158,624,781 and 9,321,781 shares of beneficial interest issued and outstanding)	$	17.02
Maximum sales charge (4.75% of offering price)		0.85
Maximum offering price to public	$	17.87
Class B Shares:
Net asset value and offering price per share (Based on net assets of $6,152,738 and 355,496 shares of beneficial interest issued and outstanding)	$	17.31
Class C Shares:
Net asset value and offering price per share (Based on net assets of $9,142,201 and 536,938 shares of beneficial interest issued and outstanding)	$	17.03
Class Y Shares:
Net asset value and offering price per share (Based on net assets of $574,952 and 33,822 shares of beneficial interest issued and outstanding)	$	17.00

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Van Kampen California Insured Tax Free Fund

Statement of Operations

For the Year Ended September 30, 2010

Investment income:
Interest	$	9,651,862
Expenses:
Investment advisory fee		857,713
Distribution fees:
Class A		405,977
Class B		45,237
Class C		92,412
Interest, line of credit and residual trust expenses		94,459
Transfer agent fees		84,129
Professional fees		77,822
Administrative services fees		73,221
Reports to shareholders		50,779
Trustees’ and officers’ fees and benefits		26,265
Custody		15,651
Registration fees		5,215
Other		11,448
Total expenses		1,840,328
Net investment income		7,811,534
Realized and unrealized gain (loss):
Net realized gain (loss)		(1,098,943	)
Unrealized appreciation (depreciation)
Beginning of the period		3,572,670
End of the period		4,686,984
Net unrealized appreciation during the period		1,114,314
Net realized and unrealized gain		15,371
Net increase in net assets from operations	$	7,826,905

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Van Kampen California Insured Tax Free Fund

Statements of Changes in Net Assets

	For the			For the
	year ended			year ended
	September 30,			September 30,
	2010			2009
From Investment Activities:
Operations:
Net investment income	$	7,811,534		$	8,288,993
Net realized gain (loss)		(1,098,943	)		(8,205,902	)
Net unrealized appreciation during the period		1,114,314			19,815,330
Change in net assets from operations		7,826,905			19,898,421
Distributions from net investment income:
Class A shares		(7,233,300	)		(7,635,206	)
Class B shares		(284,719	)		(429,662	)
Class C shares		(353,842	)		(411,175	)
Class Y shares		(15,430	)		(27,284	)
Total distributions		(7,887,291	)		(8,503,327	)
Net change in net assets from investment activities		(60,386	)		11,395,094
From capital transactions:
Proceeds from shares sold		14,385,854			21,834,709
Net asset value of shares issued through dividend reinvestment		6,357,503			6,710,892
Cost of shares repurchased		(36,904,766	)		(46,459,564	)
Net change in net assets from capital transactions		(16,161,409	)		(17,913,963	)
Total increase (decrease) in net assets		(16,221,795	)		(6,518,869	)
Net assets:
Beginning of the period		190,716,467			197,235,336
End of the period (including accumulated undistributed net investment income of $422,243 and $536,916, respectively)	$	174,494,672		$	190,716,467

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Van Kampen California Insured Tax Free Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Class A shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.99		$	15.92		$	17.83		$	18.57		$	18.80
Net investment income(a)		0.73			0.72			0.77			0.72			0.71
Net realized and unrealized gain (loss)		0.04			1.09			(1.94	)		(0.68	)		0.03
Total from investment operations		0.77			1.81			(1.17	)		0.04			0.74
Less:
Distributions from net investment income		0.74			0.74			0.74			0.71			0.73
Distributions from net realized gain		-0-			-0-			-0-			0.07			0.24
Total distributions		0.74			0.74			0.74			0.78			0.97
Net asset value, end of the period	$	17.02		$	16.99		$	15.92		$	17.83		$	18.57
Total return		4.72	%(b)		11.86	%(c)		(6.81	)%(c)		0.15	%(c)		4.14	%(c)
Net assets at end of the period (in millions)	$	158.6		$	171.5		$	172.1		$	194.2		$	190.0
Ratio of expenses to average net assets		0.97	%(d)		0.96	%		1.29	%		1.16	%		0.91	%
Ratio of net investment income to average net assets		4.41	%(d)		4.61	%		4.41	%		3.91	%		3.86	%
Portfolio turnover		9	%		30	%		34	%		37	%		31	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.92	%(d)		0.95	%		0.90	%		0.93	%		0.91	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $162,662.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Van Kampen California Insured Tax Free Fund

Financial Highlights—(continued)

	Class B shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.29		$	16.19		$	18.12		$	18.86		$	19.07
Net investment income(a)		0.68			0.73			0.78			0.73			0.77
Net realized and unrealized gain (loss)		0.03			1.10			(1.97	)		(0.69	)		0.02
Total from investment operations		0.71			1.83			(1.19	)		0.04			0.79
Less:
Distributions from net investment income		0.69			0.73			0.74			0.71			0.76
Distributions from net realized gain		-0-			-0-			-0-			0.07			0.24
Total distributions		0.69			0.73			0.74			0.78			1.00
Net asset value, end of the period	$	17.31		$	17.29		$	16.19		$	18.12		$	18.86
Total return		4.29	%(b)(d)		11.82	%(c)(e)		(6.81	)%(c)(e)		0.10	%(c)(e)		4.40	%(c)(e)
Net assets at end of the period (in millions)	$	6.2		$	8.3		$	11.2		$	17.2		$	25.3
Ratio of expenses to average net assets		1.37	%(d)(f)		1.00	%(e)		1.30	%(e)		1.17	%(e)		0.69	%(e)
Ratio of net investment income to average net assets		4.00	%(d)(f)		4.57	%(e)		4.38	%(e)		3.90	%(e)		4.08	%(e)
Portfolio turnover		9	%		30	%		34	%		37	%		31	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.32	%(d)(f)		0.99	%(e)		0.90	%(e)		0.93	%(e)		0.69	%(e)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 4%, charged on certain redemptions made within one year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income to Average Net Assets reflect actual 12b-1 fees of 0.65%.
(e)	The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income to Average Net Assets reflect actual 12b-1 fees of less than 1%.
(f)	Ratios are annualized and based on average daily net assets (000’s omitted) of $6,953.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

17        Invesco Van Kampen California Insured Tax Free Fund

Financial Highlights—(continued)

	Class C shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.00		$	15.94		$	17.84		$	18.58		$	18.81
Net investment income(a)		0.61			0.60			0.66			0.58			0.57
Net realized and unrealized gain (loss)		0.04			1.08			(1.95	)		(0.68	)		0.03
Total from investment operations		0.65			1.68			(1.29	)		(0.10	)		0.60
Less:
Distributions from net investment income		0.62			0.62			0.61			0.57			0.59
Distributions from net realized gain		-0-			-0-			-0-			0.07			0.24
Total distributions		0.62			0.62			0.61			0.64			0.83
Net asset value, end of the period	$	17.03		$	17.00		$	15.94		$	17.84		$	18.58
Total return		3.96	%(b)(d)		10.98	%(c)		(7.40	)%(c)(e)		(0.57	)%(c)(e)		3.36	%(c)
Net assets at end of the period (in millions)	$	9.1		$	10.6		$	10.6		$	10.7		$	9.9
Ratio of expenses to average net assets		1.69	%(d)(f)		1.76	%		1.90	%(e)		1.88	%(e)		1.66	%
Ratio of net investment income to average net assets		3.69	%(d)(f)		3.81	%		3.82	%(e)		3.19	%(e)		3.11	%
Portfolio turnover		9	%		30	%		34	%		37	%		31	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.64	%(d)(f)		1.75	%		1.51	%(e)		1.65	%(e)		1.66	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income to Average Net Assets reflect actual 12b-1 fees of 0.97%.
(e)	The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net Investment Income to Average Net Assets reflect actual 12b-1 fees of less than 1%.
(f)	Ratios are annualized and based on average daily net assets (000’s omitted) of $9,543.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

18        Invesco Van Kampen California Insured Tax Free Fund

Financial Highlights—(continued)

	Class Y shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.98		$	15.91		$	17.82		$	18.57		$	18.80
Net investment income(a)		0.76			0.76			0.81			0.76			0.74
Net realized and unrealized gain (loss)		0.04			1.09			(1.94	)		(0.69	)		0.05
Total from investment operations		0.80			1.85			(1.13	)		0.07			0.79
Less:
Distributions from net investment income		0.78			0.78			0.78			0.75			0.78
Distributions from net realized gain		-0-			-0-			-0-			0.07			0.24
Total distributions		0.78			0.78			0.78			0.82			1.02
Net asset value, end of the period	$	17.00		$	16.98		$	15.91		$	17.82		$	18.57
Total return		4.93	%(b)		12.14	%(c)		(6.57	)%(c)		0.35	%(c)		4.40	%(c)
Net assets at end of the period (in millions)	$	0.6		$	0.4		$	3.4		$	3.9		$	3.9
Ratio of expenses to average net assets		0.72	%(d)		0.70	%		1.04	%		0.91	%		0.66	%
Ratio of net investment income to average net assets		4.59	%(d)		4.82	%		4.65	%		4.16	%		4.11	%
Portfolio turnover		9	%		30	%		34	%		37	%		31	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.67	%(d)		0.68	%		0.65	%		0.68	%		0.66	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized and based on average daily net assets (000’s omitted) of $333.
	On June 1, 2010 the Fund’s former Class I Shares were reorganized into Class Y shares.

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen California Insured Tax Free Fund (the “Fund”), is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen California Insured Tax Free Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Tax Free Trust. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.

  Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.

  The Fund’s investment objective is to provide only California investors with a high level of current income exempt from federal and California income taxes, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured California municipal securities.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A. Security Valuations — Securities, including restricted securities, are valued according to the following policy.

19        Invesco Van Kampen California Insured Tax Free Fund

	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these

20        Invesco Van Kampen California Insured Tax Free Fund

	arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in Corporate Loans and Corporate Debt Securities and other portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.
J.	Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located.
	Since, many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
	There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
K.	Floating Rate Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating rate note and dealer trust obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest, line of credit and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The average floating rate notes outstanding and average annual interest and fee rate related to residual interests during the year ended September 30, 2010 were $9,074,469 and 0.94%, respectively.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $100 million		0	.500%
Next $150 million		0	.450%
Next $250 million		0	.425%
Over $500 million		0	.400%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $576,867 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.95%, 1.70%, 1.70% and 0.70% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $19,520 to VKII. For the year ended September 30, 2010, expenses incurred under these

21        Invesco Van Kampen California Insured Tax Free Fund

agreements are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Pursuant to such agreement, for the period ended September 30, 2010, IIS was paid $27,558 for providing such services. Prior to the Reorganization, the Acquired Fund paid $30,767 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.

  With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class A, Class B and Class C shares. Pursuant to such agreements, the Acquired Fund paid $371,279 to VKFI.

  For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $3,240 in front-end sales commissions from the sale of Class A shares and $66, $674 and $3 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Prior to the Reorganization, VKFI retained $27,166 in front-end sales commissions from the sale of Class A shares and $3,940, for CDSC imposed on redemptions by shareholders.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Municipal Securities	$	—	$	180,939,202	$	—	$	180,939,202

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

22        Invesco Van Kampen California Insured Tax Free Fund

  For the period ended September 30, 2010, the Fund paid legal fees of $214 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $9,950 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	31,112	$	1,520
Tax exempt income		7,856,179		8,524,382
Total distributions	$	7,887,291	$	8,525,902

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	322,931
Net unrealized appreciation — investments		4,803,565
Temporary book/tax differences		(422	)
Post-October deferrals		(1,007,430	)
Capital loss carryforward		(12,229,188	)
Shares of beneficial interest		182,605,216
Total net assets	$	174,494,672

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2016	$	803,875
September 30, 2017		4,399,730
September 30, 2018		7,025,583
Total capital loss carryforward	$	12,229,188

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

23        Invesco Van Kampen California Insured Tax Free Fund

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $15,928,827 and $31,985,987, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	7,922,297
Aggregate unrealized (depreciation) of investment securities		(3,118,732	)
Net unrealized appreciation of investment securities	$	4,803,565
Cost of investments for tax purposes is $176,135,637.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of bond premium amortization, on September 30, 2010, undistributed net investment income was decreased by $38,916, undistributed net realized gain (loss) was increased by $57,140 and shares of beneficial interest decreased by $18,224. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Year ended September 30,
	2010(a)						2009
	Shares			Value			Shares			Value
Sales:
Class A		694,475	(b)	$	11,505,316	(b)		1,181,328		$	18,493,953
Class B		43,931			738,443			62,803			998,267
Class C		104,789			1,739,987			121,763			1,871,059
Class Y		23,997			402,108			29,503			471,430
Total Sales		867,192		$	14,385,854			1,395,397		$	21,834,709
Dividend Reinvestment:
Class A		354,583		$	5,883,700			388,255		$	6,082,610
Class B		12,663			213,475			21,111			335,653
Class C		15,384			255,349			16,979			266,187
Class Y		297			4,979			1,730			26,442
Total Dividend Reinvestment		382,927		$	6,357,503			428,075		$	6,710,892
Repurchases:
Class A		(1,819,602	)	$	(30,232,589	)		(2,290,738	)	$	(35,609,509	)
Class B		(182,921	)(b)		(3,089,972	)(b)		(292,391	)		(4,655,834	)
Class C		(204,611	)		(3,391,151	)		(180,799	)		(2,777,958	)
Class Y		(11,555	)		(191,054	)		(222,050	)		(3,416,263	)
Total Repurchases		(2,218,689	)	$	(36,904,766	)		(2,985,978	)	$	(46,459,564	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 29% of the outstanding shares of the Fund. IDI has an agreement with these entities(b) to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Includes automatic conversion of 87,449 Class B shares into 88,954 Class A shares at a value of $1,483,855.

Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

NOTE 10—Purposes and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed

24        Invesco Van Kampen California Insured Tax Free Fund

rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such instruments are typically created by a Special Purpose Trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the Special Purpose Trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

  The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

  In certain instances, the short-term floating rate interests created by the Special Purpose Trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

  The Fund may also invest in private placement securities. TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities.

NOTE 11—Borrowings

During the period ended September 30, 2010, the Acquired Fund entered into a $150,000,000 joint revolving bank credit facility. The Fund terminated its participation in the facility on May 31, 2010.

NOTE 12—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

NOTE 13—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco California Tax-Free Income Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

25        Invesco Van Kampen California Insured Tax Free Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Van Kampen California Insured Tax Free Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen California Insured Tax Free Fund (formerly known as Van Kampen California Insured Tax Free Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 20, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

26        Invesco Van Kampen California Insured Tax Free Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2010, through September 30, 2010.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2		(09/30/10)		Period3		Ratio4
A	$	1,000.00	$	1,058.27	$	4.95	$	1,020.26	$	4.86		0.96	%
B		1,000.00		1,055.88		7.32		1,017.95		7.18		1.42
C		1,000.00		1,054.47		8.81		1,016.50		8.64		1.71
Y		1,000.00		1,059.00		3.66		1,021.51		3.60		0.71

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010, through September 30, 2010, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year.
3	Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect a one-half year period.
4	The expense ratios for Class B and C Shares reflect actual 12b-1 fees of less than 1%.

27        Invesco Van Kampen California Insured Tax Free Fund

Approval of Investment Advisory and Sub-Advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco Van Kampen California Insured Tax Free Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Van Kampen retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

  The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these

28        Invesco Van Kampen California Insured Tax Free Fund

services to Invesco Funds in accordance with the terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

29        Invesco Van Kampen California Insured Tax Free Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Tax Exempt Interest Dividends*	99.60%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

30        Invesco Van Kampen California Insured Tax Free Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Van Kampen California Insured Tax Free Fund was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		6,103,404		230,088		542,677		0

31        Invesco Van Kampen California Insured Tax Free Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

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Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

     Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-66242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the

SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

VK-CAITF-AR-1           Invesco Distributors, Inc.

Annual Report to Shareholders September 30, 2010

Invesco Van Kampen Insured Tax Free
Income Fund

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
18	Financial Statements
21	Financial Highlights
24	Notes to Financial Statements
31	Auditor’s Report
32	Fund Expenses
33	Approval of Investment Advisory and Sub-Advisory Agreements
35	Tax Information
36	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

      Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2 Invesco Van Kampen Insured Tax Free Income Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3 Invesco Van Kampen Insured Tax Free Income Fund

Management’s Discussion of Fund Performance

Performance summary

All share classes of Invesco Van Kampen Insured Tax Free Income Fund posted positive returns at net asset value (NAV) during the 12-month reporting period ended September 30, 2010. The Fund’s Class A shares at NAV underperformed the Fund’s broad market and style-specific benchmark, the Barclays Capital Municipal Bond Index. The Fund’s security selection in utilities and tobacco securities were the main detractors from performance versus the Barclays Capital Municipal Bond Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	4.98	%
Class B Shares	4.14
Class C Shares	4.20
Class Y Shares	5.18
Barclays Capital Municipal Bond Index▼(Broad Market/Style-Specific Index)	5.81

^▼ Lipper Inc.

How we invest

Our investment objective is to provide investors with a high level of current income exempt from federal income taxes, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured municipal securities.

     We seek to achieve the Fund’s investment objective by investing at least 80% of the Fund’s net assets in a portfolio of municipal securities that are insured at the time of purchase as to timely payment of principal and interest by an entity whose claims-paying ability is rated at least A by Standard & Poor’s (S&P) or an equivalent rating by another rating agency.

     We actively manage the Fund’s portfolio and adjust the average maturity of portfolio investments based upon our expectations about the direction of interest rates and other economic factors. In selecting securities for investment, we use our research capabilities to identify

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	87.8	%
General Obligation Bonds	8.4
Pre-refunded Bonds	3.7
Cash/Other	0.1

and monitor attractive investment opportunities and to seek to protect the Fund’s portfolio from early payment by issuers of such securities. In conducting our research and analysis, we consider a number of factors, including general market and economic conditions and credit, interest rate and prepayment risks. Portfolio securities are typically sold when the assessments of any of these factors materially change. Although the Fund invests in insured municipal securities, insurance does not protect the Fund from fluctuations in the value of insured securities, but only guarantees timely payment of principal and interest of such investments.

     We buy and sell securities for the Fund’s portfolio with a view toward seeking a high level of current income exempt from federal income tax and select securities that we believe have reasonable credit risk when considered in relation to the investment policies of the Fund. As a result, the Fund will not necessarily invest in the highest yielding

Top Five Sectors

1. Hospital	14.2	%
2. Wholesale Electric	13.2
3. Airports	12.2
4. Higher Education	8.5
5. Public Education	7.9

municipal securities permitted by its investment policies if we determine that market risks or credit risks associated with such investments would subject the Fund’s portfolio to undue risk. The potential realization of capital gains or losses resulting from possible changes in interest rates will not be a major consideration, and frequency of portfolio turnover generally will not be a limiting factor if we consider it advantageous to purchase or sell securities. We may sell securities based on factors such as degradation in credit quality, a decision to shorten or lengthen the Fund’s duration, or reducing exposure to a particular sector or issuer.

Market conditions and your Fund

Market conditions during the reporting period were influenced by two broad themes: private sector recovery and concerns over sovereign creditworthiness. In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high

Total Net Assets	$887.4 million
Total Number of Holdings	269

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

4 Invesco Van Kampen Insured Tax Free Income Fund

unemployment continued to weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased 3.7%.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

     Sector performance was driven by quality spread tightening largely as a result of continued flows into the municipal market combined with less tax-exempt issuance. As a result, BBB-rated and lower credit quality sectors outperformed. Fund flows

remained strong after a record 2009. In addition, year-to-date issuance through the reporting period was about 2.2% ahead of last year’s pace, at $293.2 billion versus $286.9 billion.³ However, approximately 30% of supply since the beginning of the year was in the form of taxable municipal bonds.³

      The Fund generated positive absolute returns for the reporting period. In terms of yield curve strategy, security selection in the 12- to 20-year range of the curve slightly contributed to Fund returns over the period.

     During the reporting period, lower rated tax-exempt bonds and non-rated bonds experienced greater price appreciation relative to higher quality issues. An overweight exposure in BBB- and non-rated bonds was a positive factor. However, this was more than offset by poor security selection in those areas.

     At the sector level, the Fund’s underweight position and security selection in tax-supported bonds, specifically state and local general obligation bonds, was a main contributor to performance for the period. Security selection in tobacco and utilities were main detractors from Fund performance.

     We may use inverse floating rate securities in Invesco Van Kampen Insured Tax Free Income Fund to help manage duration, yield curve exposure and credit exposure and to potentially enhance yield. Over the reporting period, our exposure to inverse floating rate securities contributed to Fund returns.

     Thank you for investing in Invesco Van Kampen Insured Tax Free Income Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Thomas Byron

Portfolio manager, is manager of Invesco Van Kampen Insured Tax Free Income Fund. Mr. Byron joined Invesco in 2010. He earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen Insured Tax Free Income Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Robert Wimmel

Portfolio manager, is manager of Invesco Van Kampen Insured Tax Free Income Fund. Mr. Wimmel joined Invesco in 2010. Mr. Wimmel earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the University of Illinois, Chicago.

5 Invesco Van Kampen Insured Tax Free Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Class since Inception

Index data from 11/30/84, Fund data from 12/14/84

Past performance cannot guarantee comparable future results.

     The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees; performance of a market index does not.

Performance shown in the chart and table(s) does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the

one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

6 Invesco Van Kampen Insured Tax Free Income Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

								After Taxes
								on Distributions
					After Taxes			and Sale of
		Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (12/14/84)			6.45	%		5.52	%		5.54	%
10	Years		3.71			3.41			3.59
5	Years		1.43			1.10			1.55
1	Year		0.00			-1.15			0.34
Class B Shares
Inception (5/3/93)			4.10	%		3.88	%		3.98	%
10	Years		3.58			3.28			3.41
5	Years		1.30			1.01			1.40
1	Year		-0.86			-1.86			-0.26
Class C Shares
Inception (8/13/93)			3.55	%		3.34	%		3.46	%
10	Years		3.43			3.14			3.28
5	Years		1.64			1.35			1.68
1	Year		3.20			2.20			2.38
Class Y Shares
Inception (8/12/05)			2.63	%		2.29	%		2.62	%
5	Years		2.66			2.32			2.64
1	Year		5.18			3.90			3.74

Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen Insured Tax Free Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Insured Tax Free Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.00%, 1.75%, 1.75% and 0.75%, respectively. The expense ratios presented above may

vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the seventh year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their

shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

7 Invesco Van Kampen Insured Tax Free Income Fund

Invesco Van Kampen Insured Tax Free Income Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured municipal securities.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n	The yields of municipal securities, or of insured municipal securities, may move differently and adversely compared to the yields of the overall debt securities markets. The Fund may invest up to 20% of its net assets in municipal securities subject to the federal alternative minimum tax. There could be changes in applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.
n	A downgrade of an insurer’s claims-paying ability may result in increased credit risk of the municipal securities insured by such insurer and may result in a downgrade of the rating assigned to the municipal securities insured by such insurer. The securities could experience a decrease in market price as a result of such a downgrade. In the event the ratings assigned to such municipal securities decline below investment grade, such municipal securities would probably become less liquid or even illiquid. There can be no assurance that an issuer will be able to honor its obligations with respect to municipal securities in the Fund’s portfolio.
n	Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by

	the other party to the transaction; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.
n	Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Credit risk should be low for the Fund because it invests substantially all of its assets in insured municipal securities. In the event that the insurers of the Fund’s insured municipal securities are downgraded in their claims-paying abilities by a nationally recognized statistical rating organization (NRSRO), the Fund would be subject to potential market value declines and increased credit risk on the municipal securities insured by such insurer.
n	The income you receive from the Fund is based primarily on prevailing interest rates, which can vary widely over the short-and long-term. If interest rates drop, your income from the Fund may drop as well.
n	If interest rates fall, it is possible that issuers of callable securities held by the Fund will call or prepay their securities before their maturity dates. In this event, the proceeds from the called securities would most likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders and termination of any conversion option on convertible securities.
n	Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities. Generally,

the Fund’s municipal securities are insured as to timely payment of principal and interest by a private insurance company. This insurance does not, however, guarantee that the prices of these securities will remain stable during interest rate changes.

About indexes used in this report

n	The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
n	The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

n

The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

n

The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols

Class A Shares	VKMTX
Class B Shares	VMTBX
Class C Shares	VMTCX
Class Y Shares	VMTIX

8 Invesco Van Kampen Insured Tax Free Income Fund

Schedule of Investments

September 30, 2010

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Municipal Bonds–105.6%
Alabama–0.8%
Birmingham, AL Wtrwks & Swr Brd Rev, Ser A (NATL Insd)		5.000	%		01/01/21	$	1,095	$	1,187,823
Houston Cnty, AL Hlthcare Auth, Ser A (AMBAC Insd)		5.250	%		10/01/30		3,670		3,495,418
Selma, AL Indl Dev Brd Rev Gulf Opportunity Zone Intl Paper Co Proj, Ser A		6.250	%		11/01/33		2,300		2,483,701
									7,166,942
Alaska–2.0%
Alaska St Intl Arpt Rev Rfdg, Ser B (NATL Insd)		5.000	%		10/01/24		6,525		7,036,103
Alaska St Intl Arpt Rev Rfdg, Ser D (NATL Insd)		5.000	%		10/01/24		9,570		10,319,618
									17,355,721
Arizona–2.2%
Arizona Hlth Fac Auth Rev Banner Hlth, Ser D (BHAC Insd)		5.500	%		01/01/38		5,000		5,352,400
Arizona St Univ Ctf Partn Resh Infrastructure Proj (AMBAC Insd)		5.250	%		09/01/24		885		942,242
Goodyear, AZ McDowell Rd Coml Corridor Impt Dist (AMBAC Insd)		5.250	%		01/01/32		1,665		1,703,578
Maricopa Cnty, AZ Pollutn Ctl Corp Pollutn Ctl Rev El Paso Elec Co Rfdg, Ser A (FGIC Insd)		4.800	%		08/01/40		4,500		4,238,100
Pima Cnty, AZ Indl Dev Auth AZ Charter Sch Proj, Ser O		5.250	%		07/01/31		1,750		1,542,345
Salt Riv Proj AZ Agric Impt & Pwr Dist Elec Sys Rev, Ser A(a)		5.000	%		01/01/25		3,000		3,422,670
Salt Riv Proj AZ Agric Impt & Pwr Dist Elec Sys Rev, Ser A(a)		5.000	%		01/01/28		2,000		2,238,420
									19,439,755
California–20.6%
Bay Area Govt Assn CA Rev Tax Alloc CA Redev Pool, Ser A (Syncora Gtd)		5.250	%		09/01/35		3,780		3,493,552
Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC Insd)		5.000	%		10/01/30		2,205		1,859,454
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser A		6.000	%		07/01/39		3,000		3,297,300
California Hlth Fac Fin Auth Rev Sutter Hlth, Ser A (NATL Insd)		5.350	%		08/15/28		1,630		1,637,498
California Hsg Fin Agy Rev Home Mtg, Ser G (AMT)(a)		5.050	%		02/01/29		10,935		10,467,747
California Hsg Fin Agy Rev Home Mtg, Ser K (AMT)		5.300	%		08/01/23		3,500		3,515,680
California Hsg Fin Agy Rev Home Mtg, Ser K (AMT)		5.450	%		08/01/28		4,000		3,892,080
California St Dept Vet Affairs Home Pur Rev, Ser A (AMT)(a)		4.950	%		12/01/37		9,585		8,961,687
California St Dept Vet Affairs Home Pur Rev, Ser B (AMT)		5.150	%		12/01/27		4,250		4,302,743
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin Pgm, Ser C (AGM Insd)		5.000	%		10/01/29		2,980		3,073,095
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin Pgm, Ser C (AGM Insd)		5.250	%		10/01/34		2,715		2,762,811
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin, Ser 2004A (AGM Insd)		5.000	%		10/01/29		1,095		1,129,208
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin, Ser 2004A (AGM Insd)		5.250	%		10/01/24		3,920		4,286,324
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev, Ser D (AGM Insd)		5.000	%		10/01/26		4,615		4,855,488
Capistrano, CA Uni Sch Dist (NATL Insd)		5.000	%		09/01/25		7,430		7,482,827
Desert Hot Springs, CA Redev Agy Tax Alloc Merged Redev Proj, Ser A-2		5.250	%		09/01/28		2,000		2,027,720
Earlimart, CA Elem Sch Dist, Ser 1 (AMBAC Insd)		6.700	%		08/01/21		425		519,949
Golden St Tob Sec Corp CA Tob Settlement Rev, Ser A-1		4.500	%		06/01/27		850		761,379
Golden St Tob Sec Corp CA Tob Settlement Rev, Ser A-1		5.750	%		06/01/47		4,575		3,484,000
Golden West Sch Fin Auth CA Rev Rfdg, Ser A (NATL Insd)		5.750	%		08/01/19		265		320,589
Hawthorne, CA Cmnty Redev Agy Tax Alloc Proj Area No 2 (Syncora Gtd)		5.250	%		09/01/36		7,000		6,801,830
Loma Linda, CA Redev Agy Tax Alloc, Ser A (Syncora Gtd)		5.250	%		07/01/30		3,360		3,391,349

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
California–(continued)
Los Angeles, CA Univ Sch Dist Election 2004, Ser H (AGM Insd)		5.000	%		07/01/32	$	2,610	$	2,751,123
Los Angeles Cnty, CA Met Trans Auth Sales Tax Rev Prop A First Tier Sr, Ser A (AMBAC Insd)		5.000	%		07/01/35		2,000		2,094,040
Merced, CA Irr Dist Rev Ctf Partn Elec Sys Proj (Syncora Gtd)		5.250	%		09/01/36		10,000		9,049,900
Metropolitan Wtr Dist Southn CA Wtrwks Rev, Ser A (AGM Insd)		5.000	%		07/01/35		2,000		2,103,800
Paramount, CA Uni Sch Dist Election 2006 (AGM Insd)		5.250	%		08/01/30		1,000		1,073,140
Pittsburg, CA Uni Sch Dist Election 2006, Ser B (AGM Insd)		5.500	%		08/01/31		2,420		2,666,259
Port Oakland, CA Rfdg Inter Lien, Ser A (NATL Insd) (AMT)		5.000	%		11/01/29		4,000		3,939,400
Poway, CA Uni Sch Dist Spl Tax Cmnty Fac Dist No 6-4S Ranch (AMBAC Insd)		5.000	%		09/01/35		10,000		9,154,800
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)(a)		5.000	%		10/01/38		6,335		6,543,738
San Diego, CA Cmnty College Dist Election 2002(a)		5.250	%		08/01/33		7,500		8,217,975
San Francisco, CA City & Cnty Arpts Commn Intl Arpt, Ser 23-A (AGM Insd) (AMT)		5.000	%		05/01/30		2,390		2,393,657
San Marcos, CA Pub Fac Auth Rev Tax Increment Pass-Thru Rfdg, Ser A (AMBAC Insd)		5.000	%		10/01/31		5,140		5,057,914
Santa Monica, CA Cmnty College Rfdg, Ser A (AMBAC Insd)		5.000	%		02/01/27		2,785		2,793,717
South Orange Cnty, CA Pub Fin Auth Spl Tax Rev Ladera Ranch, Ser A (AMBAC Insd)		5.000	%		08/15/27		5,380		5,380,861
South Tahoe, CA Jt Pwr Fin Redev Proj Area No 1 Rfdg, Ser A (AMBAC Insd)		5.000	%		10/01/35		2,000		1,881,800
Tobacco Sec Auth Southn CA Tob Settlement, Ser A-1		5.125	%		06/01/46		9,000		6,129,540
Twin Rivers, CA Uni Sch Dist Ctf Partn Sch Fac Brdg Pgm (AGM Insd)(b)		3.500	%		06/01/41		2,000		1,999,920
University CA Regt, Ser A (BHAC Insd)		4.500	%		05/15/47		3,510		3,479,919
University CA Rev, Ser O(a)		5.750	%		05/15/23		3,275		3,988,197
University CA Rev, Ser O(a)		5.750	%		05/15/25		4,815		5,816,568
Vernon, CA Elec Sys Rev, Ser A		5.125	%		08/01/21		3,000		3,201,330
Washington, CA Uni Sch Dist Yolo Cnty Partn New High Sch Proj (AMBAC Insd)		5.000	%		08/01/30		4,440		4,533,728
West Contra Costa, CA Uni Sch Dist Cabs (NATL Insd)		*			08/01/27		12,865		4,605,927
Yosemite, CA Cmnty College Dist Cap Apprec (AGM Insd)		*			08/01/24		3,570		1,897,634
									183,079,197
Colorado–2.7%
Colorado Ed & Cultural Fac Auth Rev Charter Sch Aurora Academy Sch Proj Rfdg, Ser A (Syncora Gtd)		5.250	%		02/15/34		3,745		3,768,332
Colorado Ed & Cultural Fac Auth Rev Charter Sch Bromley Sch Proj Rfdg (Syncora Gtd)		5.250	%		09/15/32		2,500		2,547,400
Colorado Ed & Cultural Fac Auth Rev Rfdg Charter Sch Challenge Proj Rfdg (CIFG Insd)		5.000	%		06/01/37		1,070		1,092,117
Colorado Hlth Fac Auth Rev Poudre Vly CO Hlth Fac Auth Hosp, Ser A (AGM Insd)		5.200	%		03/01/31		1,600		1,714,032
Colorado Springs, CO Hosp Rev Conv (AGM Insd)		5.250	%		12/15/20		3,375		3,831,165
Colorado Springs, CO Hosp Rev Conv (AGM Insd)		5.250	%		12/15/21		3,530		3,985,511
Compark Business Campus Met Dist Co Rfdg & Impt, Ser A (Radian Insd)		5.600	%		12/01/34		2,000		1,716,960
Denver, CO Convention Ctr Hotel Auth Rev Rfdg (Syncora Gtd)		5.000	%		12/01/35		5,680		5,165,619
									23,821,136
District of Columbia–1.2%
District Columbia Income Tax Rev, Ser A(a)		5.000	%		12/01/23		6,430		7,408,325
District Columbia Income Tax Rev, Ser B(a)		5.000	%		12/01/24		2,570		2,949,743
									10,358,068
Florida–9.7%
Citizens Ppty Ins Corp FL High Risk Sr Sec, Ser A-1		5.000	%		06/01/14		3,000		3,199,050
Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC Insd)		5.950	%		07/01/20		115		119,762
Florida Hsg Fin Corp Rev Homeowner Mtg, Ser 1 (GNMA Collateralized) (AMT)		5.800	%		07/01/28		1,770		1,896,626

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Florida–(continued)
Florida Hsg Fin Corp Rev Homeowner Mtg, Ser 1 (GNMA Collateralized) (AMT)		6.000	%		07/01/39	$	1,090	$	1,131,169
Florida Intergovnmtl Fin, Ser C1 (AMBAC Insd)		5.125	%		02/01/31		1,000		1,001,440
Florida Muni Ln Council Rev, Ser B (NATL Insd)		5.750	%		11/01/14		575		582,854
Florida St Brd Ed Cap Outlay Pub Ed, Ser C (NATL Insd) (Prerefunded @ 6/01/11)		5.000	%		06/01/23		1,185		1,233,609
Florida St Brd of Regt Hsg Rev (NATL Insd)		5.750	%		07/01/14		750		760,200
Gulf Breeze, FL Rev Loc Govt (FGIC Insd)		5.150	%		12/01/20		1,340		1,359,108
Gulf Breeze, FL Rev Loc Govt (FGIC Insd)(b)		5.650	%		12/01/20		500		506,570
Hillsborough Cnty, FL Aviation Auth Rev, Ser A (AGL Insd) (AMT)		5.375	%		10/01/33		2,500		2,592,075
Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl Rev Hillsborough Cnty Rfdg (AMBAC Insd)(b)		5.000	%		12/01/34		800		836,464
Key West, FL Util Brd Elec Rev Cap Apprec, Ser D (AMBAC Insd)(c)		*			10/01/13		1,000		946,430
Miami-Dade Cnty, FL Aviation Rev Miami Intl Arpt (AGL Insd) (AMT)		5.000	%		10/01/38		16,100		16,231,054
Miami-Dade Cnty, FL Ed Fac Auth Rev Univ Miami, Ser A (BHAC Insd)		5.500	%		04/01/38		4,000		4,252,120
Miami-Dade Cnty, FL Sch Brd Ctf Partn, Ser B (AGL Insd)		5.250	%		05/01/26		5,000		5,494,500
Miami-Dade Cnty, FL Expwy Auth Toll Sys Rev, Ser A (AGL Insd)		5.000	%		07/01/35		3,350		3,483,497
Miami-Dade Cnty, FL Wtr & Swr Rev Miami-Dade Cnty Wtr & Swr Sys (AGM Insd)		5.000	%		10/01/39		4,500		4,765,905
Orange Cnty, FL Sch Brd Ctf, Ser B(d)		0.280	%		08/01/32		2,000		2,000,000
Orlando, FL Cmnty Redev Agy Tax Rep Drive Unvl Blvd Rfdg (AMBAC Insd)		5.125	%		04/01/20		1,000		1,008,480
Palm Beach Cnty, FL Hlth Fac Auth Rev Waterford Proj		5.250	%		11/15/17		2,200		2,315,940
Polk Cnty, FL Sch Brd Ctf Partn Master Lease, Ser A (AGM Insd)		5.500	%		01/01/16		750		766,125
Port Saint Lucie, FL Spl Assmt Rev Util Svc Area No 3 & 4A (NATL Insd)		5.000	%		10/01/18		635		635,705
Port Saint Lucie, FL Util Rev Rfdg Sys (AGL Insd)		5.000	%		09/01/35		1,500		1,578,540
Putnam Cnty, FL Dev Auth Pollutn Ctl Rev Rfdg Seminole Proj, Ser A (AMBAC Insd)(b)		5.350	%		03/15/42		3,000		3,333,510
Saint Johns Cnty, FL Indl Dev Auth First Mtg Rev Presbyterian Retirement, Ser A		5.625	%		08/01/34		5,000		4,944,600
Saint Johns Cnty, FL Indl Dev Auth Professional Golf Proj Rfdg (NATL Insd)		5.250	%		09/01/12		535		555,394
Saint Lucie Cnty, FL Sch Brd Ctf, Ser A (AGM Insd)		5.000	%		07/01/21		1,000		1,036,050
Seminole Tribe FL Spl Oblig Rev, Ser A(e)		5.250	%		10/01/27		500		477,275
Seminole Tribe FL Spl Oblig Rev, Ser A(e)		5.750	%		10/01/22		500		503,750
Sunrise, FL Util Sys Rev (AMBAC Insd)(c)		5.200	%		10/01/22		1,725		2,038,640
Sunrise, FL Util Sys Rev (AMBAC Insd)		5.200	%		10/01/22		2,275		2,468,489
Tallahassee, FL Hlth Fac Rev Tallahassee Mem Regl Med Rfdg, Ser A (NATL Insd)		6.625	%		12/01/13		6,255		6,275,204
Village Ctr Cmnty Dev Dist FL, Ser A (NATL Insd)		5.200	%		11/01/25		1,000		972,460
Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry Riddle Rfdg, Ser B (AMBAC Insd)		5.250	%		10/15/19		3,735		3,738,324
Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry Riddle Rfdg, Ser B (AMBAC Insd)		5.250	%		10/15/22		1,000		1,000,510
									86,041,429
Georgia–5.3%
Atlanta, GA Tax Allocation Rfdg Atlantic Sta Proj (AGL Insd)		5.250	%		12/01/21		1,370		1,455,132
Atlanta, GA Tax Allocation Rfdg Atlantic Sta Proj (AGL Insd)		5.250	%		12/01/22		1,000		1,055,490
Bleckley-Cochran, GA Dev Auth Student Hsg Fac Rev MGC Real Estate Fndtn, Ser A (CIFG Insd)		5.000	%		07/01/25		4,390		4,659,985
Bleckley-Cochran, GA Dev Auth Student Hsg Fac Rev MGC Real Estate Fndtn, Ser A (CIFG Insd)		5.000	%		07/01/36		11,355		11,672,940
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (AMBAC Insd)		6.400	%		01/01/13		14,530		15,417,928
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (AMBAC Insd) (Prerefunded @ 1/01/11)		6.400	%		01/01/13		160		162,482
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (NATL Insd)		6.500	%		01/01/17		9,445		11,144,722
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (NATL Insd) (Prerefunded @ 1/01/14)		6.500	%		01/01/17		145		172,127

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Georgia–(continued)
Georgia Muni Elec Auth Pwr Rev, Ser Y (AMBAC Insd)(c)		6.400	%		01/01/13	$	860	$	921,782
Georgia Muni Elec Auth Pwr Rev, Ser Y (NATL Insd) (Prerefunded @ 1/01/16)		6.500	%		01/01/17		410		486,883
									47,149,471
Hawaii–0.5%
Honolulu, HI City & Cnty, Ser A(a)		5.250	%		04/01/29		4,120		4,703,227
Idaho–0.7%
Idaho Hsg & Fin Assn Single Family Mtg Rev, Class I, Ser A (AMT)		5.625	%		07/01/28		975		1,031,404
Idaho Hsg & Fin Assn Single Family Mtg Rev, Class I, Ser B (AMT)		5.375	%		07/01/28		1,290		1,348,682
Idaho Hsg & Fin Assn Single Family Mtg Rev, Class III, Ser A (AMT)		5.700	%		07/01/28		3,665		3,871,449
									6,251,535
Illinois–13.7%
Bourbonnais, IL Indl Proj Rev Olivet Nazarene Univ Proj (Radian Insd)		5.125	%		11/01/37		3,755		3,789,246
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser A (NATL Insd)		*			12/01/19		1,500		1,045,935
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser A (NATL Insd)		*			12/01/25		1,020		504,880
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser B-1 (NATL Insd)		*			12/01/19		2,845		1,983,790
Chicago, IL Midway Arpt Rev Second Lien Rfdg, Ser B (AMBAC Insd)		5.000	%		01/01/21		5,925		6,301,948
Chicago, IL Midway Arpt Rev Second Lien Rfdg, Ser B (AMBAC Insd)		5.000	%		01/01/22		6,220		6,580,325
Chicago, IL O’Hare Intl Arpt Rev Gen Arpt Third Lien, Ser A (AGL Insd)		5.250	%		01/01/24		6,000		6,499,500
Chicago, IL O’Hare Intl Arpt Rev Gen Arpt Third Lien, Ser A (AGL Insd)		5.250	%		01/01/26		3,855		4,143,354
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser A (AGL Insd)		5.000	%		01/01/29		1,000		1,041,070
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser A-2 (AGM Insd) (AMT)(a)		5.750	%		01/01/20		9,170		9,811,717
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.000	%		01/01/34		5,000		5,097,250
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/21		2,840		3,022,868
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/23		3,120		3,296,155
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/24		1,430		1,506,233
Chicago, IL Pk Dist, Ser C (NATL Insd)		5.500	%		01/01/19		615		633,733
Chicago, IL Proj Rfdg, Ser A (AMBAC Insd)		5.625	%		01/01/39		145		153,397
Chicago, IL Proj Rfdg, Ser A (NATL Insd) (Prerefunded @ 1/01/11)		5.500	%		01/01/38		50		51,158
Chicago, IL, Ser A (AGL Insd)(a)		5.250	%		01/01/24		4,200		4,649,946
Chicago, IL, Ser A (AGL Insd)(a)		5.250	%		01/01/25		4,400		4,847,744
Cook Cnty, IL Sch Dist No 100 Berwyn South Cap Apprec (AGM Insd)		8.100	%		12/01/16		345		465,678
Cook Cnty, IL Sch Dist No 100 Berwyn South Cap Apprec (AGM Insd)		8.200	%		12/01/14		290		370,130
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/17		2,605		2,018,588
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/18		2,995		2,189,794
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/19		4,210		2,909,320
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/20		4,050		2,645,176
Du Page Cnty, IL Cmnty High Sch (AGM Insd)		5.600	%		01/01/22		3,000		3,254,640
Grundy, Kendall & Will Cntys, IL (AMBAC Insd)		5.500	%		05/01/20		540		553,111
Grundy, Kendall & Will Cntys, IL (AMBAC Insd)		5.500	%		05/01/21		340		348,354
Huntley, IL Spl Svc Area No 10 Spl Tax Rfdg (AGL Insd)		5.100	%		03/01/29		3,000		3,157,860
Illinois Dev Fin Auth Rev Sch Dist Pgm Rockford Sch 205 (AGM Insd)		6.650	%		02/01/11		2,000		2,040,180
Illinois Fin Auth Rev IL Fin Auth Roosevelt Univ		5.400	%		04/01/27		1,000		1,015,870
Illinois Fin Auth Rev Resurrection Hlthcare, Ser A (AGM Insd)		5.500	%		05/15/24		12,000		12,798,480

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Illinois–(continued)
Illinois Fin Auth Rev Sherman Hlth Sys, Ser 2007-A		5.500	%		08/01/37	$	1,500	$	1,464,930
Illinois Med Dist (NATL Insd)		5.250	%		06/01/32		2,000		2,021,520
Lake Cnty, IL Cmnty Cons Sch Dist No 50 Woodland Cap Apprec, Ser B (NATL Insd)		*			12/01/14		1,200		1,098,132
Lake Cnty, IL Cmnty Unit Sch Dist No 60 Waukegan Cap Apprec, Ser A (AGM Insd)(c)		*			12/01/17		2,875		2,301,265
Lake Cnty, IL Cmnty Unit Sch Dist No 60 Waukegan Cap Apprec, Ser A (AGM Insd)		*			12/01/17		3,915		3,094,181
McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No 158 Cap Apprec (NATL Insd)		*			01/01/17		3,000		2,373,720
McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No 158 Cap Apprec (NATL Insd)		*			01/01/18		4,000		2,988,520
McHenry Cnty, IL Cmnty High Sch Dist No 154 Cap Apprec (NATL Insd)		*			01/01/16		1,330		1,159,428
Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expn, Ser A (NATL Insd)		5.250	%		06/15/42		6,000		6,083,340
									121,312,466
Indiana–0.3%
Indiana Hlth & Ed Fac Fin Auth Rev Rfdg Saint Francis, Ser E (AGM Insd)		5.250	%		05/15/41		2,000		2,107,900
Plainfield, IN Cmnty High Sch Bldg Corp First Mtg (NATL Insd)		5.000	%		01/15/30		500		518,530
									2,626,430
Iowa–0.8%
Iowa Fin Auth Hlth Fac Rev, Ser A (AGL Insd)		5.250	%		08/15/29		1,500		1,645,305
Iowa St Spl Oblig IJobs Pgm, Ser A(a)(f)		5.000	%		06/01/27		4,650		5,191,446
									6,836,751
Kansas–0.3%
Wyandotte Cnty, Kansas City, KA Univ Govt Util Sys Rev, Ser A (BHAC Insd)		5.000	%		09/01/29		2,000		2,197,940
Kentucky–1.4%
Kentucky Econ Dev Fin Auth Louisville Arena Proj Rev, Ser A-1 (AGL Insd)		6.000	%		12/01/38		4,000		4,370,320
Kentucky St Ppty & Bldgs Commn Rev Rfdg Proj No 93 (AGL Insd)		5.250	%		02/01/28		3,000		3,366,240
Paducah, KY Elec Plt Brd Rev, Ser A (AGL Insd)		5.250	%		10/01/35		4,000		4,296,240
									12,032,800
Louisiana–2.2%
Calcasieu Parish, LA Mem Hosp Svc Dist Hosp Rev Lake Charles Mem Hosp Proj, Ser A (Connie Lee Insd)		6.375	%		12/01/12		1,935		1,936,606
Calcasieu Parish, LA Mem Hosp Svc Dist Hosp Rev Lake Charles Mem Hosp Proj, Ser A (Connie Lee Insd)		6.500	%		12/01/18		5,530		5,710,610
Lafayette, LA Util Rev (NATL Insd)		5.250	%		11/01/24		7,500		8,365,425
Louisiana St Gas & Fuels Tax Rev, Ser A (AGL Insd)		5.000	%		05/01/28		2,500		2,695,950
New Orleans, LA Aviation Brd Rev Rfdg Restructuring Garbs, Ser A-1 (AGL Insd)		6.000	%		01/01/23		1,000		1,168,810
									19,877,401
Massachusetts–0.7%
Massachusetts Muni Whsl Elec Co Nuclear Mix, Ser 1-A (NATL Insd)		5.250	%		07/01/13		2,350		2,465,831
Massachusetts Muni Whsl Elec Co Proj No. 6-A, Ser A (NATL Insd)		5.250	%		07/01/16		175		182,501
Massachusetts St Hlth & Ed Fac Auth Rev Caregroup, Ser B-2 (NATL Insd)		5.375	%		02/01/27		2,000		2,100,880
Massachusetts St Hsg Fin Agy Hsg, Ser C (AMT)		5.100	%		12/01/27		1,745		1,797,542
									6,546,754

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Michigan–0.8%
Detroit, MI Swr Disp Rev Sr Lien, Ser B (AGM Insd)		7.500	%		07/01/33	$	5,750	$	7,068,015
Michigan Tob Settlement Fin Auth Tob Settlement Asset Sr, Ser A		6.000	%		06/01/48		500		385,700
									7,453,715
Minnesota–0.9%
Minneapolis, MN Hlthcare Sys Rev Fairview Hlth Svc, Ser B (AGL Insd)		6.500	%		11/15/38		4,000		4,599,320
Saint Paul, MN Hsg & Redev Auth Hlthcare Fac Rev Hlth Partners Oblig Grp Proj		5.250	%		05/15/36		3,000		2,933,670
									7,532,990
Mississippi–0.1%
Harrison Cnty, MS Wastewtr Mgmt & Solid Wastewtr Treatment Fac Rfdg, Ser A (FGIC Insd)(c)		8.500	%		02/01/13		1,000		1,131,470
Missouri–0.3%
Bi-state Dev Agy MO IL Metro Dist Mass Tran Sales Tax Metrolink Cross Cnty Extn (AGL Insd)		5.000	%		10/01/39		2,000		2,107,100
Mehlville, MO Sch Dist No R-9 Ctf Partn, Ser A (AGM Insd)		5.500	%		03/01/16		220		224,120
Mehlville, MO Sch Dist No R-9 Ctf Partn, Ser A (AGM Insd)		5.500	%		03/01/17		230		234,308
									2,565,528
Nebraska–2.6%
Municipal Energy Agy of NE Pwr Supply Sys Rev Rfdg, Ser A (BHAC Insd)		5.375	%		04/01/39		3,000		3,291,450
Nebraska Pub Pwr Dist Rev Gen, Ser B (BHAC Insd)		5.000	%		01/01/37		15,570		16,402,372
Saunders Cnty, NE (AGM Insd)		5.000	%		11/01/35		3,620		3,651,096
									23,344,918
Nevada–1.7%
Clark Cnty, NV Arpt Rev Sub Lien, Ser A-1 (NATL Insd) (AMT)		5.500	%		07/01/20		3,045		3,206,294
Clark Cnty, NV Arpt Rev Sub Lien, Ser A-1 (NATL Insd) (AMT)		5.500	%		07/01/21		3,000		3,134,970
Clark Cnty, NV Passenger Fac Charge Rev Las Vegas McCarran Intl Arpt, Ser A (AGM Insd)		5.250	%		07/01/39		4,000		4,196,920
Nevada St Muni Bd Bk Proj, Ser F (AGM Insd)		5.000	%		12/01/23		3,500		3,860,360
Reno, NV Cap Impt Rev (NATL Insd)		5.125	%		06/01/26		935		939,684
									15,338,228
New Hampshire–0.5%
Manchester, NH Gen Arpt Rev Rfdg Gen, Ser A (AGM Insd)		5.125	%		01/01/30		4,500		4,718,655
New Jersey–1.2%
New Jersey Econ Dev Auth Rev Sch Fac Constr, Ser Z (AGL Insd)		5.500	%		12/15/34		1,000		1,120,870
New Jersey St Hsg & Mtg Fin Agy Rev, Ser AA		6.375	%		10/01/28		940		1,061,053
Tobacco Settlement Fin Corp NJ, Ser 1A		4.750	%		06/01/34		6,430		4,589,220
Tobacco Settlement Fin Corp NJ, Ser 1A		5.000	%		06/01/41		6,140		4,257,476
									11,028,619
New Mexico–0.3%
New Mexico St Hosp Equip Ln Council Hosp Rev Presbyterian Hlthcare Svc, Ser A(a)		6.375	%		08/01/32		2,000		2,283,460
New York–2.6%
Long Island Pwr Auth NY Elec Sys Rev Gen, Ser A (BHAC Insd)		5.500	%		05/01/33		5,000		5,646,900
New York City Hlth & Hosp Hlth Sys, Ser A (AGM Insd)		5.000	%		02/15/21		5,470		5,616,870
New York City Indl Dev Agy Civic Fac Rev Polytechnic Univ Proj (ACA Insd)		5.250	%		11/01/27		5,000		5,052,800
New York City Indl Dev Agy Rev Queens Baseball Stad Pilot (AGL Insd)		6.375	%		01/01/39		1,000		1,131,660

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
New York–(continued)
New York NY Adj Sub, Ser A(d)		0.300	%		11/01/26	$	2,450	$	2,450,000
New York St Dorm Auth Rev Insd Brooklyn Law Sch, Ser B (Syncora Gtd)		5.375	%		07/01/21		3,105		3,234,789
									23,133,019
North Carolina–1.1%
Johnston, NC Mem Hosp Auth (AGM Insd)		5.250	%		10/01/24		6,000		6,608,580
North Carolina Med Care Commn Hlthcare Fac Rev Wake Med, Ser A (AGL Insd)		5.625	%		10/01/38		1,100		1,151,634
North Carolina Tpk Auth Triangle Expwy Sys Rev, Ser A (AGL Insd)		5.125	%		01/01/24		2,000		2,216,740
									9,976,954
North Dakota–0.6%
Mercer Cnty, ND Pollutn Ctl Rev Antelope Vly Sta Rfdg (AMBAC Insd)		7.200	%		06/30/13		3,580		3,872,200
Oliver Cnty, ND Pollutn Ctl Rev Square Butte Elec Coop Rfdg, Ser A (AMBAC Insd)		5.300	%		01/01/27		970		972,473
									4,844,673
Ohio–1.3%
Lorain Cnty, OH Hosp Rev Fac Catholic Rfdg, Ser C-1 (AGM Insd)		5.000	%		04/01/24		1,750		1,892,328
Montgomery Cnty, OH Rev Miami Vly Hosp, Ser A		6.000	%		11/15/28		2,825		3,017,806
Ohio Hsg Fin Agy Multifamily Hsg Mtg Covenant, Ser C (GNMA Collateralized) (AMT)		6.100	%		09/20/49		2,845		3,105,403
Ohio St Air Quality Dev Auth Rev Pollutn Ctl First Energy Rfdg, Ser C		5.625	%		06/01/18		3,000		3,357,960
									11,373,497
Oklahoma–1.9%
Chickasaw Nation, OK Hlth Sys(e)		6.250	%		12/01/32		1,000		1,073,690
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/21		2,395		2,767,039
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/22		2,395		2,748,119
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/23		4,075		4,643,870
McAlester, OK Pub Wks Auth Util Cap Apprec, Ser A (AGM Insd)		*			02/01/30		4,320		1,461,975
Oklahoma Colleges Brd Regt Stad Univ Cent OK, Ser B (AMBAC Insd)		5.500	%		06/01/24		2,000		2,201,960
Tulsa, OK Cmnty College Rev (AMBAC Insd)		5.500	%		07/01/22		2,000		2,123,580
									17,020,233
Pennsylvania–2.2%
Allegheny Cnty, PA Hosp Dev Auth Rev Insd Hlth Sys, Ser A (NATL Insd) (Prerefunded @ 11/15/10)		6.500	%		11/15/30		5,000		5,139,200
Allegheny Cnty, PA Hosp Dev Auth Rev Pittsburgh Mercy Hlth Sys Inc (AMBAC Insd)(c)		5.625	%		08/15/26		4,875		5,189,974
Lycoming Cnty, PA Auth College Rev PA College of Technology (AMBAC Insd)		5.350	%		07/01/26		3,000		3,004,530
Pennsylvania St Tpk Commn Tpk Rev, Ser A (AGL Insd)		5.000	%		06/01/24		4,000		4,464,160
Pittsburgh & Allegheny Cnty, PA Sports & Exhib Auth Sales Reg Asset Dist Rfdg (AGM Insd)		5.000	%		02/01/31		2,000		2,122,760
									19,920,624
South Carolina–2.4%
Easley, SC Util Rev Impt & Rfdg (AGM Insd) (Prerefunded @ 12/01/15)		5.000	%		12/01/34		5,170		6,036,182
South Carolina Jobs Econ Dev Auth Hosp Rev Rfdg & Impt Anmed Hlth, Ser B (AGL Insd)		5.500	%		02/01/38		3,000		3,226,920
South Carolina Jobs Econ Dev Auth Indl Rev Elec & Gas Co Proj, Ser A (AMBAC Insd)		5.200	%		11/01/27		6,500		6,866,925
Spartanburg Cnty, SC Regl Hlth Svc Dist Rfdg, Ser D (AGL Insd)		5.250	%		04/15/22		4,465		4,979,234
									21,109,261

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
South Dakota–1.2%
South Dakota St Hlth & Ed Fac Auth Vocational Ed Prog (AGL Insd)		5.500	%		08/01/38	$	3,000	$	3,245,460
South Dakota St Lease Rev Tr Ctf, Ser A (AGM Insd)		6.625	%		09/01/12		2,750		2,941,785
South Dakota St Lease Rev Tr Ctf, Ser A (AGM Insd)		6.700	%		09/01/17		4,000		4,839,200
									11,026,445
Texas–8.2%
Alamo, TX Cmnty College Dist Combined Fee Rfdg (AGM Insd)		5.000	%		11/01/22		620		644,285
Dallas Fort Worth, TX Intl Arpt Rev Impt, Ser B (AGM Insd) (AMT)		5.375	%		11/01/21		4,000		4,256,920
Dallas Fort Worth, TX Intl Arpt Rev Impt, Ser B (AGM Insd) (AMT)		5.500	%		11/01/19		6,110		6,633,566
Dallas, TX Civic Ctr Rfdg & Impt (AGL Insd)		5.250	%		08/15/34		4,000		4,276,200
Houston, TX Util Sys Rev First Lien Rfdg, Ser A (BHAC Insd)		5.250	%		05/15/23		22,500		24,911,100
Mission, TX Econ Dev Corp Solid Waste Disp Rev Waste Mgmt Inc Proj (AMT)(b)		6.000	%		08/01/20		3,000		3,266,970
North TX Twy Auth Rev Rfdg Sys First Tier, Ser A		5.625	%		01/01/33		2,500		2,667,425
Nueces Riv Auth TX Wtr Supply Rev Fac Corpus Christi Proj Rfdg (AGM Insd)		5.000	%		07/15/25		2,750		2,942,280
Nueces Riv Auth TX Wtr Supply Rev Fac Corpus Christi Proj Rfdg (AGM Insd)		5.000	%		03/01/27		2,000		2,121,660
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Rev Christus Hlth Rfdg, Ser A (AGL Insd)		6.500	%		07/01/37		4,250		4,772,580
Tarrant Cnty, TX Hlth Fac Dev Corp Hlth Sys Rev, Ser B (FGIC Insd)(c)		5.000	%		09/01/15		1,750		1,978,042
Texas Private Activity Surface Trans Corp Sr Lien Nt Mobility		6.875	%		12/31/39		1,850		2,045,009
Texas St Tpk Auth Cent TX Tpk First Tier, Ser A (AMBAC Insd)		5.500	%		08/15/39		10,000		10,140,500
Texas Trans Commn Cent TX Tpk Sys Rev Rfdg First Tier Put(b)		5.000	%		08/15/42		2,000		2,026,220
									72,682,757
Utah–0.1%
Provo, UT Elec Rev 1984 Rfdg, Ser A (AMBAC Insd)(c)		10.375	%		09/15/15		370		466,588
Utah Hsg Corp Single Family Mtg Rev, Class III, Ser C-1 (AMT)		5.700	%		07/01/28		660		697,178
									1,163,766
Washington–9.6%
Chelan Cnty, WA Sch Dist No 246 (AGM Insd) (Prerefunded @ 6/01/12)		5.000	%		12/01/21		4,115		4,428,769
Energy Northwest WA Elec Rev Columbia Generating Rfdg, Ser A (AGM Insd)		5.500	%		07/01/17		11,340		11,849,619
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser A (AGM Insd)		5.500	%		07/01/17		4,500		4,702,230
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser A (AGM Insd)		5.500	%		07/01/18		14,500		15,151,630
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser B (AGM Insd)		6.000	%		07/01/16		5,000		5,460,300
Energy Northwest WA Wind Proj (AMBAC Insd)		5.000	%		07/01/23		1,365		1,415,478
Fife, WA Wtr & Swr Rev (NATL Insd)		5.125	%		04/01/24		890		906,412
King Cnty, WA Hsg Auth Cap Pgm Rev Egis Hsg Pgm (AGM Insd) (AMT)		5.300	%		06/01/23		1,025		1,082,605
King Cnty, WA Pub Hosp Dist No 001, Ser A (AGL Insd)		5.250	%		12/01/28		3,575		3,945,656
Lynnwood, WA Pub Fac Dist Rev Convention Ctr (AMBAC Insd)		5.000	%		12/01/34		4,140		4,212,119
Snohomish Cnty, WA Pub Util 1 (AGM Insd)		5.000	%		12/01/24		145		155,018
Snohomish Cnty, WA Pub Util 1 (AGM Insd)		5.500	%		12/01/23		2,565		2,806,238
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.250	%		09/01/33		3,000		3,071,820
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.750	%		12/01/25		2,000		2,213,040
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.750	%		12/01/26		2,420		2,561,739
Washington St Hlthcare Fac Auth Rev Multicare Hlth Sys, Ser B (AGL Insd)		6.000	%		08/15/39		2,000		2,201,880

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)			Value
Washington–(continued)
Washington St Hlthcare Fac Auth Rev Providence Hlth, Ser D (AGM Insd)		5.250	%		10/01/33	$	5,000		$	5,397,800
Washington St Motor Vehicle Fuel, Ser 2010-B(a)		5.000	%		08/01/30		12,500			13,949,126
										85,511,479
West Virginia–0.2%
West Virginia Econ Dev Auth Lease Rev Correctional Juvenile & Pub, Ser A (NATL Insd)		5.500	%		06/01/19		1,530			1,636,136
Wyoming–0.4%
Wyoming Cmnty Dev Auth Hsg Rev, Ser 1 (AMT)		5.300	%		12/01/23		2,985			3,122,489
Puerto Rico–0.3%
Puerto Rico Indl Tourist Ed Med & Environmental Ctl Fac Hosp Aux (NATL Insd)		6.250	%		07/01/16		2,380			2,389,996
TOTAL INVESTMENTS–105.6% (Cost $895,459,397)										937,105,935
Floating Rate Note and Dealer Trust Obligations Related to Securities Held–(6.9%)
(Cost ($60,880,000))
Notes with interest rates ranging from 0.27% to 1.02% at 09/30/10, and contractual maturities of collateral ranging from 01/01/20 to 10/01/38 (See Note 1(K) in the Notes to Financial Statements)(g)							(60,880	)		(60,880,000	)
TOTAL NET INVESTMENTS–98.7% (Cost $834,579,397)										876,225,935
OTHER ASSETS IN EXCESS OF LIABILITIES–1.3%										11,223,129
NET ASSETS–100.0%									$	887,449,064

Percentages are calculated as a percentage of net assets.

Investment Abbreviations:

ACA	– American Capital Access
AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– AMBAC Indemnity Corp.
AMT	– Alternative Minimum Tax
BHAC	– Berkshire Hathaway Assurance Corp.
CIFG	– CDC IXIS Financial Guaranty
Connie Lee	– Connie Lee Insurance Co.
FGIC	– Financial Guaranty Insurance Co.
GNMA	– Government National Mortgage Association
NATL	– National Public Finance Guarantee Corp.
Radian	– Radian Asset Assurance
Syncora Gtd	– Syncora Guaranteed Limited

Notes to Schedule of Investments:

*	Zero coupon bond
(a)	Underlying security related to Special Purpose Trusts entered into by the Fund. See Note 1(K) in the Notes to Financial Statements.
(b)	Variable Rate Coupon
(c)	Escrowed to Maturity
(d)	Demand Security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on September 30, 2010.
(e)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(f)	Security is subject to a shortfall agreement which may require the Fund to pay amounts to a counterparty in the event of a significant decline in the market value of the security underlying the inverse floater. In case of a shortfall, the maximum potential amount of payments the Fund could ultimately be required to make under the agreement is $3,100,000. However, such shortfall payment would be reduced by the proceeds from the sale of the security underlying the inverse floater.
(g)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect on September 30, 2010. At September 30, 2010, the Fund’s investments with a value of $105,451,736 are held by the Dealer Trusts and serve as collateral for the $60,880,000 in floating rate note and dealer trust obligations outstanding at that date.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

17        Invesco Van Kampen Insured Tax Free Income Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investments, at value (Cost $895,459,397)	$	937,105,935
Receivables:
Interest		13,406,103
Fund shares sold		307,797
Investments sold		186,395
Other		16,483
Total assets		951,022,713
Liabilities:
Payables:
Floating rate note and dealer trust obligations		60,880,000
Fund shares repurchased		1,338,861
Income distributions		476,883
Custodian bank		376,495
Distributor and affiliates		327,656
Accrued expenses		171,753
Trustees’ deferred compensation and retirement plans		2,001
Total liabilities		63,573,649
Net assets	$	887,449,064
Net assets consist of:
Capital (Par value of $0.01 per share with an unlimited number of shares authorized)	$	935,082,950
Net unrealized appreciation		41,646,538
Accumulated undistributed net investment income		1,635,917
Accumulated net realized gain (loss)		(90,916,341	)
Net assets	$	887,449,064
Maximum offering price per share:
Class A Shares:
Net asset value and redemption price per share (Based on net assets of $835,024,089 and 49,920,462 shares of beneficial interest issued and outstanding)	$	16.73
Maximum sales charge (4.75% of offering price)		0.83
Maximum offering price to public	$	17.56
Class B Shares:
Net asset value and offering price per share (Based on net assets of $15,261,377 and 913,642 shares of beneficial interest issued and outstanding)	$	16.70
Class C Shares:
Net asset value and offering price per share (Based on net assets of $34,613,804 and 2,074,411 shares of beneficial interest issued and outstanding)	$	16.69
Class Y Shares:
Net asset value and offering price per share (Based on net assets of $2,549,794 and 152,451 shares of beneficial interest issued and outstanding)	$	16.73

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

18        Invesco Van Kampen Insured Tax Free Income Fund

Statement of Operations

For the year ended September 30, 2010

Investment income:
Interest	$	47,773,152
Expenses:
Investment advisory fee		4,535,162
Distribution fees:
Class A		2,061,877
Class B		160,935
Class C		314,853
Interest, line of credit and residual trust expenses		637,928
Transfer agent fees		470,612
Administrative services fees		217,165
Professional fees		90,604
Reports to shareholders		87,047
Registration fees		63,129
Custody		45,038
Trustees’ and officers’ fees and benefits		43,569
Other		31,692
Total expenses		8,759,611
Net investment income		39,013,541
Realized and unrealized gain (loss):
Realized gain (loss):
Investments		(5,408,512	)
Unrealized appreciation:
Beginning of the period		33,175,049
End of the period		41,646,538
Net unrealized appreciation during the period		8,471,489
Net realized and unrealized gain		3,062,977
Net increase in net assets from operations	$	42,076,518

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

19        Invesco Van Kampen Insured Tax Free Income Fund

Statements of Changes in Net Assets

	For the			For the
	year ended			year ended
	September 30,			September 30,
	2010			2009
From investment activities:
Operations:
Net investment income	$	39,013,541		$	38,969,843
Net realized gain (loss)		(5,408,512	)		(26,484,657	)
Net unrealized appreciation during the period		8,471,489			102,350,822
Change in net assets from operations		42,076,518			114,836,008
Distributions from net investment income:
Class A shares		(37,017,316	)		(39,120,943	)
Class B shares		(596,355	)		(796,416	)
Class C shares		(1,162,505	)		(1,034,865	)
Class Y shares		(107,683	)		(66,232	)
Total distributions		(38,883,859	)		(41,018,456	)
Net change in net assets from investment activities		3,192,659			73,817,552
From capital transactions:
Proceeds from shares sold		71,010,993			95,103,790
Net asset value of shares issued through dividend reinvestment		32,739,430			34,054,395
Cost of shares repurchased		(130,186,721	)		(126,636,981	)
Net change in net assets from capital transactions		(26,436,298	)		2,521,204
Total increase (decrease) in net assets		(23,243,639	)		76,338,756
Net assets:
Beginning of the period		910,692,703			834,353,947
End of the period (including accumulated undistributed net investment income of $1,635,917 and $1,208,301, respectively)	$	887,449,064		$	910,692,703

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

20        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Class A shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.66		$	15.30		$	17.72		$	18.59		$	18.87
Net investment income(a)		0.73			0.72			0.77			0.74			0.72
Net realized and unrealized gain (loss)		0.07			1.40			(2.43	)		(0.84	)		0.09
Total from investment operations		0.80			2.12			(1.66	)		(0.10	)		0.81
Less:
Distributions from net investment income		0.73			0.76			0.76			0.71			0.71
Distributions from net realized gain		-0-			-0-			-0-			0.06			0.38
Total distributions		0.73			0.76			0.76			0.77			1.09
Net asset value, end of the period	$	16.73		$	16.66		$	15.30		$	17.72		$	18.59
Total return		4.98	%(b)		14.32	%(c)		(9.57	)%(c)		(0.63	)%(c)		4.49	%(c)
Net assets at end of the period (in millions)	$	835.0		$	859.0		$	794.4		$	983.3		$	1,075.9
Ratio of expenses to average net assets		0.95	%(d)		1.00	%		1.47	%		1.54	%		1.00	%
Ratio of net investment income to average net assets		4.46	%(d)		4.71	%		4.58	%		4.02	%		3.87	%
Portfolio turnover(e)		5	%		21	%		59	%		51	%		45	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.88	%(d)		0.90	%		0.89	%		0.88	%		0.88	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $832,158.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

21        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

	Class B shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.64		$	15.28		$	17.70		$	18.57		$	18.85
Net investment income(a)		0.60			0.61			0.64			0.60			0.58
Net realized and unrealized gain (loss)		0.06			1.39			(2.43	)		(0.84	)		0.09
Total from investment operations		0.66			2.00			(1.79	)		(0.24	)		0.67
Less:
Distributions from net investment income		0.60			0.64			0.63			0.57			0.57
Distributions from net realized gain		-0-			-0-			-0-			0.06			0.38
Total distributions		0.60			0.64			0.63			0.63			0.95
Net asset value, end of the period	$	16.70		$	16.64		$	15.28		$	17.70		$	18.57
Total return		4.14	%(b)		13.49	%(c)		(10.27	)%(c)		(1.38	)%(c)		3.71	%(c)
Net assets at end of the period (in millions)	$	15.3		$	18.3		$	20.7		$	30.0		$	43.0
Ratio of expenses to average net assets		1.70	%(d)		1.75	%		2.22	%		2.29	%		1.75	%
Ratio of net investment income to average net assets		3.71	%(d)		3.97	%		3.79	%		3.25	%		3.11	%
Portfolio turnover(e)		5	%		21	%		59	%		51	%		45	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.63	%(d)		1.65	%		1.64	%		1.63	%		1.63	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 4%, charged on certain redemptions made within one year of purchase and declining to 0% after the sixth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $16,093.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

22        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

	Class C shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.62		$	15.27		$	17.68		$	18.55		$	18.84
Net investment income(a)		0.60			0.60			0.65			0.60			0.58
Net realized and unrealized gain (loss)		0.07			1.39			(2.43	)		(0.84	)		0.08
Total from investment operations		0.67			1.99			(1.78	)		(0.24	)		0.66
Less:
Distributions from net investment income		0.60			0.64			0.63			0.57			0.57
Distributions from net realized gain		-0-			-0-			-0-			0.06			0.38
Total distributions		0.60			0.64			0.63			0.63			0.95
Net asset value, end of the period	$	16.69		$	16.62		$	15.27		$	17.68		$	18.55
Total return		4.20	%(b)		13.50	%(c)		(10.28	)%(c)		(1.38	)%(c)		3.66	%(c)
Net assets at end of the period (in millions)	$	34.6		$	30.8		$	18.4		$	19.0		$	21.3
Ratio of expenses to average net assets		1.70	%(d)		1.75	%		2.23	%		2.29	%		1.75	%
Ratio of net investment income to average net assets		3.71	%(d)		3.95	%		3.83	%		3.26	%		3.11	%
Portfolio turnover(e)		5	%		21	%		59	%		51	%		45	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.63	%(d)		1.65	%		1.64	%		1.63	%		1.63	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $31,485.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

23        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

	Class Y shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.66		$	15.30		$	17.72		$	18.59		$	18.87
Net investment income(a)		0.77			0.76			0.82			0.78			0.75
Net realized and unrealized gain (loss)		0.07			1.40			(2.44	)		(0.84	)		0.10
Total from investment operations		0.84			2.16			(1.62	)		(0.06	)		0.85
Less:
Distributions from net investment income		0.77			0.80			0.80			0.75			0.75
Distributions from net realized gain		-0-			-0-			-0-			0.06			0.38
Total distributions		0.77			0.80			0.80			0.81			1.13
Net asset value, end of the period	$	16.73		$	16.66		$	15.30		$	17.72		$	18.59
Total return		5.24	%(b)		14.60	%(c)		(9.34	)%(c)		(0.38	)%(c)		4.75	%(c)
Net assets at end of the period (in millions)	$	2.5		$	2.6		$	0.8		$	1.1		$	2.4
Ratio of expenses to average net assets		0.70	%(d)		0.75	%		1.22	%		1.29	%		0.75	%
Ratio of net investment income to average net assets		4.71	%(d)		4.99	%		4.83	%		4.23	%		4.11	%
Portfolio turnover(e)		5	%		21	%		59	%		51	%		45	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.63	%(d)		0.65	%		0.64	%		0.63	%		0.63	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $2,296.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.
	On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y shares.

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen Insured Tax Free Income Fund (the “Fund”), is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds, (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Insured Tax Free Income Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Tax Free Trust. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.

  Information for the Acquired Fund’s – Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.

  The Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, with liquidity and safety of principal, primarily through investment in a diversified portfolio of insured municipal securities.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

24        Invesco Van Kampen Insured Tax Free Income Fund

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into

25        Invesco Van Kampen Insured Tax Free Income Fund

	contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.
J.	Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located.
	Since many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
	There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
K.	Floating Rate Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating rate note and dealer trust obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest, line of credit and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The average floating rate notes outstanding and average annual interest and fee rate related to residual interests during the year ended September 30, 2010 were $61,746,700 and 1.02%, respectively.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $500 million		0	.525%
Next $500 million		0	.500%
Next $500 million		0	.475%
Over $1.5 billion		0	.450%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $3,024,267 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.90%, 1.65%, 1.65% and 0.65% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the

26        Invesco Van Kampen Insured Tax Free Income Fund

Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $47,141 to VKII. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  Prior to the Reorganization, under a legal services agreement, VKII provided legal services to the Acquired Fund. Pursuant to such agreement, the Acquired Fund paid $30,477 to VKII.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Pursuant to such agreement, for the period ended September 30, 2010, IIS was paid $160,304 for providing such services. Prior to the Reorganization, the Acquired Fund paid $189,076 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.

  With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class A, Class B and Class C shares. Pursuant to such agreements, the Acquired Fund paid $1,688,840 to VKFI.

  For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $22,802 in front-end sales commissions from the sale of Class A shares and $1,686, $6,207, $888 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Prior to the Reorganization, VKFI retained $128,535 in front-end sales commissions from the sale of Class A shares and $21,589, for CDSC imposed on redemptions by shareholders.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Municipal Securities	$	—	$	937,105,935	$	—	$	937,105,935

27        Invesco Van Kampen Insured Tax Free Income Fund

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period ended September 30, 2010, the Fund paid legal fees of $357 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expenses of $20,369 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP (“Skadden”), of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	9,286	$	29,572
Ordinary income-tax exempt		38,874,573		41,064,410
Total distributions	$	38,883,859	$	41,093,982

Tax Components of Net Assets at Period-End:

	2010
Undistributed tax exempt income	$	424,086
Net unrealized appreciation — investments		44,004,183
Temporary book/tax differences		(60	)
Post-October deferrals		(4,918,046	)
Capital loss carryforward		(87,144,049	)
Shares of beneficial interest		935,082,950
Total net assets	$	887,449,064

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

  The Fund utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2015	$	210,390
September 30, 2016		7,990,386
September 30, 2017		67,058,676
September 30, 2018		11,884,597
Total capital loss carryforward	$	87,144,049

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

28        Invesco Van Kampen Insured Tax Free Income Fund

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $49,872,340 and $76,924,894, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	63,728,402
Aggregate unrealized (depreciation) of investment securities		(19,724,219	)
Net unrealized appreciation of investment securities	$	44,004,183
Cost of investments for tax purposes is $893,101,752.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of tax accretion, on September 30, 2010, undistributed net investment income (loss) was increased by $297,934 and undistributed net realized gain (loss) was decreased by $297,934. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	For the year ended						For the year ended
	September 30, 2010(a)						September 30, 2009
	Shares			Value			Shares			Value
Sales:
Class A		3,568,189(b	)	$	58,117,008(b	)		4,721,752		$	72,022,286
Class B		177,983			2,903,003			241,156			3,659,440
Class C		549,575			8,960,449			1,105,383			16,713,973
Class Y		62,608			1,030,533			176,519			2,708,091
Total Sales		4,358,355			71,010,993			6,244,810			95,103,790
Dividend Reinvestment:
Class A		1,913,300			31,209,441			2,112,832			32,508,834
Class B		30,780			501,061			42,859			657,783
Class C		59,355			966,490			53,424			823,201
Class Y		3,833			62,438			4,184			64,577
Total Dividend Reinvestment		2,007,268			32,739,430			2,213,299			34,054,395
Repurchases:
Class A		(7,131,391	)		(116,348,902	)		(7,187,016	)		(109,397,004	)
Class B		(394,573	)(b)		(6,423,120	)(b)		(538,764	)		(8,221,319	)
Class C		(387,035	)		(6,301,595	)		(510,845	)		(7,792,281	)
Class Y		(68,446	)		(1,113,104	)		(81,048	)		(1,226,377	)
Total Repurchases		(7,981,445	)	$	(130,186,721	)		(8,317,673	)	$	(126,636,981	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 33% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Includes automatic conversion of 96,499 Class B shares into 96,368 Class A shares at a value of $1,578,390.

  Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

NOTE 10—Purposes and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such

29        Invesco Van Kampen Insured Tax Free Income Fund

instruments are typically created by a special purpose trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the special purpose trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

  The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

  In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

  The Fund may also invest in private placement securities. TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities.

NOTE 11—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

NOTE 12—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would transfer all of its assets and liabilities to Invesco Van Kampen Municipal Income Fund (the “Acquiring Fund”) in exchange for shares of the Acquiring Fund. The Agreement requires approval of the Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

NOTE 13—Borrowings

During the period ended September 30, 2010, the Acquired Fund entered into a $150,000,000 joint revolving bank credit facility. The Fund terminated its participation in the facility on May 31, 2010.

30        Invesco Van Kampen Insured Tax Free Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Van Kampen Insured Tax Free Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen Insured Tax Free Fund (formerly known as Van Kampen Insured Tax Free Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 20, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

31        Invesco Van Kampen Insured Tax Free Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. This example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2010, through September 30, 2010.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
			ACTUAL				(5% annual return before expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2		(09/30/10)		Period2		Ratio
A	$	1,000.00	$	1,058.08	$	4,85	$	1,020.36	$	4.76		0.94	%
B		1,000.00		1,053.61		8.70		1,016.60		8.54		1.69
C		1,000.00		1,054.25		8.70		1,016.60		8.54		1.69
Y		1,000.00		1,058.74		3.56		1,021.61		3.50		0.69

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010 through September 30, 2010, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year.

32        Invesco Van Kampen Insured Tax Free Income Fund

Approval of Investment Advisory and Sub-Advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco Van Kampen Insured Tax Free Income Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Van Kampen retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these

33        Invesco Van Kampen Insured Tax Free Income Fund

services to Invesco Funds in accordance with the terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

34        Invesco Van Kampen Insured Tax Free Income Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Tax-Exempt Interest Dividends*	99.27%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

35        Invesco Van Kampen Insured Tax Free Income Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Van Kampen Insured Tax Free Income Fund was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		32,639,758		1,243,369		1,849,291		0

36        Invesco Van Kampen Insured Tax Free Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

     Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-66242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the SEC website, sec.gov.

Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

VK-ITFI-AR-1 Invesco Distributors, Inc.

Annual Report to Shareholders September 30, 2010

Invesco Van Kampen Intermediate Term Municipal Income Fund

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
20	Financial Statements
23	Financial Highlights
26	Notes to Financial Statements
33	Auditor’s Report
34	Fund Expenses
35	Approval of Investment Advisory and Sub-Advisory Agreements
37	Tax Information
38	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

     Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2 Invesco Van Kampen Intermediate Term Municipal Income Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3 Invesco Van Kampen Intermediate Term Municipal Income Fund

Management’s Discussion of Fund Performance

Performance summary

All share classes of Invesco Van Kampen New York Tax Free Income Fund at net asset value (NAV) posted positive returns during the 12-month reporting period ended September 30, 2010. The Fund’s Class A shares at NAV outperformed both the Fund’s broad market benchmark, the Barclays Capital Municipal Bond Index, and the Fund’s style-specific index, the Barclays Capital New York Municipal Index. The Fund’s security selection on the long end of the yield curve and an overweight position and security selection in BBB-rated bonds and non-rated bonds were the main contributors to relative outperformance versus the Barclays Capital New York Municipal Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	6.24	%
Class B Shares	5.46
Class C Shares	5.53
Class Y Shares	6.56
Barclays Capital Municipal Bond Index▼ (Broad Market Index/Style-Specific Index)	5.81

^▼Lipper Inc.;

How we invest

The Fund’s investment objective is to provide investors with a high level of current income exempt from federal income taxes, consistent with preservation of capital.

     Under normal market conditions, we seek to achieve the Fund’s investment objective by investing at least 65% of the Fund’s total assets in investment grade municipal securities. Investment grade securities are rated BBB or higher by S&P or Baa or higher by Moody’s or an equivalent rating by another agency or unrated securities which we determine to be of comparable quality. However, the Fund may not invest more than 20% of its total assets in unrated investment grade securities.

     Under normal market conditions, the Fund may invest up to 35% of its total assets in municipal securities rated below investment grade and unrated municipal

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	92.4	%
General Obligation Bonds	5.2
Pre-refunded Bonds	2.0
Cash/Other	0.4

securities which we determine to be of comparable quality at the time of purchase. Lower grade securities are commonly referred to as junk bonds and involve greater risks than investments in higher grade securities. With respect to such investments, the Fund has not established any limit on the percentage of its portfolio that may be invested in securities in any one rating category.

     The Fund may invest all or a substantial portion of its assets in municipal securities that are subject to the federal alternative minimum tax. Accordingly, the Fund may not be a suitable investment for investors who are already subject to the federal alternative minimum tax or could become subject to the federal alternative minimum tax as a result of an investment in the Fund. From time to time, the Fund temporarily may invest up to 10% of its total assets in tax

Top Five Sectors*

1.	Hospital	17.6	%
2.	Utilities	8.4
3.	Life Care	7.5
4.	Wholesale Electric	6.5
5.	Airports	6.2

exempt money market funds, and such instruments will be treated as investments in municipal securities. We may sell securities based on factors such as degradation in credit quality, a decision to shorten or lengthen the Fund’s duration, or reducing exposure to a particular sector or issuer.

Market conditions and your Fund

Market conditions during the reporting period were influenced by two broad themes: private sector recovery and concerns over sovereign creditworthiness. In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high unemployment continued to weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased 3.7%.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

Total Net Assets	$358.1 million
Total Number of Holdings*	321

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

*Excluding money market fund holdings.

4 Invesco Van Kampen Intermediate Term Municipal Income Fund

     Sector performance was driven by quality spread tightening largely a result of continued flows into the municipal market combined with less tax-exempt issuance. As a result, BBB-rated and lower credit quality sectors outperformed. Fund flows have continued to remain strong after a record 2009.³ In addition, year-to-date issuance through the reporting period is about 2.2% ahead of last year’s pace, at $293.2 billion versus $286.9 billion.³ However, approximately 30% of supply since the beginning of the year was in the form of taxable municipal bonds.³

     At NAV, the Fund generated positive returns for the reporting period. In terms of yield curve positioning, security selection in the 12- to 15- year range of the curve contributed to returns relative to the Barclays Capital Municipal Bond Index.

     During the reporting period, lower rated tax-exempt bonds experienced greater price appreciation relative to higher quality issues. An overweight exposure to BBB- and non-rated bonds was a positive contributor to relative and absolute returns.

     At the sector level, the Fund’s underweight exposure to the pre-refunded sector contributed to returns. Security selection in education, and an overweight position and security selection in health care also contributed to returns during the reporting period.

     Security selection in transportation bonds slightly detracted from performance during the period.

     We may use inverse floating rate securities in Invesco Van Kampen Intermediate Term Municipal Income Fund to help manage duration, yield curve exposure and credit exposure and to potentially enhance yield. Over the reporting period, the exposure to inverse floating rate securities in the Fund enhanced returns.

     Thank you for investing in Invesco Van Kampen Intermediate Term Municipal Income Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Thomas Byron

Portfolio manager, is manager of Invesco Van Kampen Intermediate Term Municipal Income Fund. Mr. Byron joined Invesco in 2010. He earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen Intermediate Term Municipal Income Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Robert Wimmel

Portfolio manager, is manager of Invesco Van Kampen Intermediate Term Municipal Income Fund. Mr. Wimmel joined Invesco in 2010. Mr. Wimmel earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the University of Illinois, Chicago.

5 Invesco Van Kampen Intermediate Term Municipal Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 5/28/93, index data from 5/31/93

Past performance cannot guarantee comparable future results.

     The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management fees. Index results include reinvested dividends, but they do not reflect sales charges. Results for Class B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the Fund at the close of the reporting period and paid the applicable contingent deferred sales charges. Index results include reinvested dividends, but

they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees; performance of a market index does not. Performance shown in the chart and table(s) does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

6 Invesco Van Kampen Intermediate Term Municipal Income Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

								After Taxes
								on Distributions
					After Taxes			and Sale of
		Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (5/28/93)			4.87	%		4.77	%		4.71	%
10	Years		4.39			4.23			4.17
5	Years		3.60			3.36			3.37
1	Year		1.18			0.14			1.07
Class B Shares
Inception (5/28/93)			4.82	%		4.71	%		4.63	%
10	Years		4.67			4.51			4.38
5	Years		4.01			3.80			3.73
1	Year		0.46			-0.40			0.56
Class C Shares
Inception (10/19/93)			4.08	%		3.99	%		3.93	%
10	Years		4.15			4.00			3.89
5	Years		3.83			3.63			3.52
1	Year		4.53			3.66			3.21
Class Y Shares
Inception (8/12/05)			4.81	%		4.56	%		4.45	%
5	Years		4.86			4.60			4.49
1	Year		6.56			5.42			4.61

Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen Intermediate Term Municipal Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Intermediate Term Municipal Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.89%, 1.64%, 1.64% and 0.64%, respectively.¹ The

total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.99%, 1.74%, 1.74% and 0.74%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2005, the CDSC on Class B shares declines from 3% at the time of purchase to 0% at the beginning of the fifth year. For shares purchased after June 1, 2005 and before June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the sixth year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

7 Invesco Van Kampen Intermediate Term Municipal Income Fund

Invesco Van Kampen Intermediate Term Municipal Income Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, consistent with preservation of capital.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n	The yields of municipal securities may move differently and adversely compared to the yields of the overall debt securities markets. Although the interest received from municipal securities generally is exempt from federal income tax, the Fund may invest all or a substantial portion of its total assets in municipal securities subject to the federal alternative minimum tax. In addition, there could be changes in applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.
n	Risks of derivatives include imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.
n	Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Medium-grade obligations possess speculative characteristics so that changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of the issuer to make principal and interest payments than in the case of higher-rated securities. The credit quality of

	noninvestment grade securities is considered speculative by recognized rating agencies with respect to the issuer’s continuing ability to pay interest and principal. Lower-grade securities (also sometimes know as junk bonds) may have less liquidity and a higher incidence of default than higher-grade securities. The Fund may incur higher expenses to protect the Fund’s interest in such securities. The credit risks and market prices of lower-grade securities generally are more sensitive to negative issuer developments or adverse economic conditions than are higher-grade securities.
n	The income you receive from the Fund is based primarily on prevailing interest rates, which can vary widely over the short and long term. If interest rates drop, your income from the Fund may drop as well.
n	If interest rates fall, it is possible that issuers of debt securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from the called securities would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.
n	Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities. As interest rates change, zero coupon bonds often fluctuate more in price than traditional debt securities and may subject the Fund to greater market risk than a fund that does not own these types of securities.

About indexes used in this report

n The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.

n	The Fund is not managed to track the performance of any particular index, including the indexes defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the indexes.
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

n	The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.
n	The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.
n	Industry classifications used in this report are generally according to the Global Industry Classification Standard, which was developed by and is the exclusive property and a service mark of MSCI Inc. and Standard & Poor’s.

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols

Class A Shares	VKLMX
Class B Shares	VKLBX
Class C Shares	VKLCX
Class Y Shares	VKLIX

8 Invesco Van Kampen Intermediate Term Municipal Income Fund

Schedule of Investments

September 30, 2010

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Municipal Bonds–100.8%
Alabama–0.7%
Dothan Houston Cnty, AL Arpt Auth (NATL Insd) (AMT)		5.400	%		12/01/15	$	1,260	$	1,290,643
Healthcare Auth for Baptist Hlth AL, Ser A(a)		6.125	%		11/15/36		1,000		1,048,450
									2,339,093
Alaska–0.9%
Alaska Muni Bd Bk, Ser 1		5.000	%		09/01/22		250		275,190
Alaska Muni Bd Bk, Ser 1		5.250	%		09/01/24		400		442,500
Matanuska-Susitna Boro, AK Lease Rev Goose Creek Correctional Ctr (AGL Insd)		5.000	%		09/01/19		1,000		1,188,360
Matanuska-Susitna Boro, AK Lease Rev Goose Creek Correctional Ctr (AGL Insd)		5.500	%		09/01/23		1,000		1,185,570
									3,091,620
Arizona–3.5%
Glendale AZ Indl Dev Auth Midwestern Univ		5.000	%		05/15/26		2,000		2,112,520
Maricopa Cnty, AZ Indl Dev Auth Hlth Fac Rev Catholic Hlthcare West, Ser A		5.000	%		07/01/14		500		550,145
Maricopa Cnty, AZ Indl Dev Auth Hlth Fac Rev Catholic Hlthcare West, Ser C(a)		5.000	%		07/01/38		1,500		1,641,375
Maricopa Cnty, AZ Pollutn Rfdg AZ Pub Svc Co, Ser A(a)		6.000	%		05/01/29		1,000		1,082,100
Navajo Cnty, AZ Pollutn Ctl Corp Rev, Ser C(a)		5.500	%		06/01/34		1,000		1,085,850
Navajo Cnty, AZ Pollutn Ctl Corp Rev, Ser E(a)		5.750	%		06/01/34		1,000		1,083,340
Phoenix, AZ Civic Impt Corp Arpt Rev Sr Lien, Ser B (AMT)		5.000	%		07/01/13		1,000		1,090,050
Phoenix, AZ Indl Dev Auth Ed Rev Career Success Sch Proj		6.125	%		01/01/20		500		524,965
Pima Cnty, AZ Indl Dev Auth Wtr & Waste Wtr Rev Global Wtr Resh LLC Proj (AMT)		6.375	%		12/01/18		500		505,805
Pinal Cnty, AZ Elec Dist No. 4 Sys Rev		5.250	%		12/01/18		500		541,280
Salt River Proj AZ Agric Impt & Pwr Dist Elec Sys Rev, Ser A		5.000	%		01/01/22		1,000		1,160,670
University Med Ctr Corp AZ Hosp Rev		5.250	%		07/01/17		1,000		1,091,190
									12,469,290
California–13.0%
Adelanto, CA Pub Util Auth Rev Rfdg Util Sys Proj, Ser A		5.375	%		07/01/19		1,000		1,069,370
Alhambra, CA Rev Atherton Baptist Homes, Ser B		6.625	%		01/01/17		1,450		1,461,063
Beverly Hills, CA Uni Sch Dist Cap Apprec 2008 Election		*			08/01/21		2,000		1,338,460
California Hlth Fac Fin Auth Rev Adventist Hlth Sys West, Ser C		5.000	%		03/01/14		500		544,830
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser F(a)		5.000	%		07/01/27		500		549,675
California Muni Fin Auth Ctf Partn Cmnty Hosp Cent CA		5.000	%		02/01/21		2,000		2,050,040
California Muni Fin Auth Ed Fac Rev High Tech High Chula Vista, Ser B(b)		5.500	%		07/01/18		875		899,360
California Muni Fin Auth Rev Eisenhower Med Ctr, Ser A		5.000	%		07/01/19		250		264,508
California Muni Fin Auth Rev Eisenhower Med Ctr, Ser A		5.000	%		07/01/20		725		756,806
California St Dept Wtr Res Pwr, Ser A (AMBAC Insd) (Prerefunded @ 5/01/12)		5.375	%		05/01/18		1,500		1,633,080
California St Dept Wtr Res Pwr Supply Rev, Ser F-5		5.000	%		05/01/22		2,000		2,282,940
California Statewide Cmnty Dev Auth Rev Mtg Methodist Hosp Proj (FHA Gtd)		6.250	%		08/01/24		2,000		2,401,340
California Statewide Cmnty Dev Auth Rev Sr Living-Southn CA Presbyterian Homes		5.250	%		11/15/14		1,275		1,324,126
California Statewide Cmnty Dev Auth Rev Sr Living-Southn CA Presbyterian Homes		6.250	%		11/15/19		600		650,394
Carlsbad, CA Spl Tax Non Escrow Cmnty Fac 3 Impt 2		5.700	%		09/01/22		1,000		988,550
Desert Hot Springs, CA Redev Agy Tax Alloc Merged Redev Proj, Ser A2		5.000	%		09/01/23		1,000		1,030,140

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
California–(continued)
Fresno, CA Wtr Sys Rev, Ser A-1		5.500	%		06/01/22	$	1,000	$	1,169,530
Los Angeles, CA Uni Sch Dist, Ser F		5.000	%		07/01/19		1,500		1,764,210
Morongo Band of Mission Indians CA Enterprise Rev Indians Enterprise Casino, Ser B(b)		5.500	%		03/01/18		185		177,115
Palm Springs, CA Arpt Rfdg Sub Palm Springs Intl Arpt (AMT)		5.300	%		07/01/13		320		320,458
Perris, CA Pub Fin Auth Rev Tax Alloc		4.750	%		10/01/13		565		582,283
Port Oakland, CA, Ser L (NATL Insd) (AMT)		5.000	%		11/01/21		1,330		1,349,471
Port Oakland, CA, Ser L (NATL Insd) (Prerefunded @ 11/01/12) (AMT)		5.000	%		11/01/21		170		185,997
Poway, CA Uni Sch Dist Election 2008 Impt Dist 07-1-A		*			08/01/21		3,000		1,805,550
Richmond, CA Jt Pwr Fin Auth Rev Lease Point Potrero, Ser A		6.250	%		07/01/24		1,500		1,690,725
Sacramento Cnty, CA Arpt Sys Sub-Pfc/Gnt, Ser D		5.375	%		07/01/26		2,000		2,190,000
San Diego Cnty Calif Regl Arpt, Sub Ser A		5.000	%		07/01/28		2,565		2,772,457
San Francisco, CA City & Cnty Redev Fin Auth Tax Alloc Mission Bay South Redev, Ser D		6.000	%		08/01/20		1,085		1,233,862
San Francisco, CA City & Cnty Redev Fin Auth Tax Alloc Mission Bay South Redev, Ser D		6.250	%		08/01/22		1,000		1,131,030
Southern CA Pub Pwr Auth Rev Milford Wind Corridor Proj, Ser 1		5.000	%		07/01/24		2,000		2,279,380
Twin Rivers CA Uni Dist Sch Fac Brdg Prog (AGM Insd)(a)		3.500	%		06/01/41		1,500		1,499,940
Twin Rivers Uni Sch Dist CA Bd Antic Nts		*			04/01/14		750		682,755
University CA Rev, Ser O(c)		5.750	%		05/15/23		795		968,127
University CA Rev, Ser O(c)		5.750	%		05/15/25		1,185		1,431,492
Vernon, CA Elec Sys Rev, Ser A		5.125	%		08/01/21		1,500		1,600,665
Vernon, CA Elec Sys Rev, Ser A		5.500	%		08/01/15		1,000		1,130,610
West Contra Costa, CA Uni Sch Dist Election of 2005, Ser B		6.000	%		08/01/23		1,000		1,170,830
									46,381,169
Colorado–2.4%
Colorado Hlth Fac Auth Rev Christian Living Cmnty Proj, Ser A		5.250	%		01/01/15		500		517,855
Colorado Springs, CO Util Rev Sys Sub Lien Impt, Ser A		5.000	%		11/15/19		1,560		1,732,427
Denver, CO City & Cnty Arpt Rev Rfdg, Ser D (AGM Insd) (AMT)		5.500	%		11/15/12		1,000		1,052,190
Denver, CO City & Cnty Just Sys(c)		5.000	%		08/01/24		2,000		2,298,020
Denver, CO City & Cnty Just Sys(c)		5.000	%		08/01/25		500		571,790
Pitkin Cnty, CO Indl Dev Rev Proj Ser A(j)		0.300	%		04/01/16		500		500,000
Regional Transn Dist CO Denver Trans Partners		5.000	%		01/15/22		750		771,600
University of CO Enterprise Sys Rev, Ser A		5.500	%		06/01/25		1,000		1,178,270
									8,622,152
Connecticut–0.3%
Hamden, CT Fac Rev Whitney Ctr Proj, Ser B		6.125	%		01/01/14		1,000		1,014,340
Delaware–0.1%
New Castle Cnty, DE Rev Newark Charter Sch Inc Proj		5.000	%		09/01/22		500		496,875
Florida–6.0%
Brevard Cnty, FL Sch Brd Ctf Rfdg, Ser B (NATL Insd)		5.000	%		07/01/20		1,000		1,066,280
Broward Cnty, FL Arpt Sys Rev Rfdg, Ser E (NATL Insd) (AMT)		5.375	%		10/01/13		1,000		1,002,840
Citizens Ppty Ins Corp FL High Risk Sr Sec, Ser A-1		5.250	%		06/01/17		2,000		2,148,240
Highlands Cnty, FL Hlth Fac Auth Rev Adventist Hlth, Ser A(a)		6.500	%		11/15/38		3,000		3,662,790
Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl Rev Hillsborough Cnty IDA Rfdg (AMBAC Insd)(a)		5.000	%		12/01/34		1,650		1,725,207
Lakeland, FL Energy Sys Rev Rfdg(d)(e)		1.050	%		10/01/12		3,000		2,991,870

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Florida–(continued)
Lakeland, FL Energy Sys Rev Rfdg(d)(e)		1.400	%		10/01/14	$	2,000	$	1,979,380
Landmark at Doral Cmnty Dev Dist FL Spl Assmt, Ser B(f)		5.200	%		05/01/15		250		79,900
Main Str Cmnty Dev Dist FL Cap Impt Rev, Ser B (Acquired 2/19/08, Cost $250,000)(g)		6.900	%		05/01/17		250		239,670
Orange Cnty, FL Hlth Fac Auth Rev Hlthcare Orlando Lutheran Rfdg		5.375	%		07/01/20		500		485,960
Orange Cnty, FL Sch Brd Ctf, Ser A (AMBAC Insd)		5.250	%		08/01/14		1,500		1,610,730
Putnam Cnty, FL Dev Auth Pollutn Ctl Rev Rfdg Seminole Proj, Ser A (AMBAC Insd)(a)		5.350	%		03/15/42		1,000		1,111,170
Seminole Tribe FL Spl Oblig Rev, Ser A(b)		5.750	%		10/01/22		750		755,625
Tampa FL Solid Waste Sys Rev Ref (AGM Insd) (AMT)		5.000	%		10/01/18		1,000		1,078,200
Tampa FL Solid Waste Sys Rev Ref (AGM Insd) (AMT)		5.000	%		10/01/19		1,000		1,074,350
Tolomato Cmnty Dev Dist FL Spl Assmt		6.450	%		05/01/23		670		542,398
									21,554,610
Georgia–1.6%
Atlanta, GA Tax Alloc Beltline Proj, Ser B		6.750	%		01/01/20		1,000		1,050,790
Atlanta, GA Tax Alloc Eastside Proj, Ser B		5.400	%		01/01/20		1,200		1,262,016
Atlanta, GA Wtr & Wastewtr Rev, Ser A		5.250	%		11/01/17		1,500		1,732,395
Fulton Cnty, GA Dev Auth Rev Robert Woodruff Rfdg, Ser B		5.250	%		03/15/24		1,000		1,107,850
Putnam Cnty, GA Dev Auth Pollutn Ctl Rev GA Pwr Co, Ser 1		5.100	%		06/01/23		600		621,132
									5,774,183
Hawaii–1.2%
Hawaii St Dept Budget & Fin Spl Purp Rev Kahala Nui Proj, Ser A		7.875	%		11/15/23		250		270,957
Hawaii St Dept Budget & Fin Spl Purp Rev, Ser C-2		6.400	%		11/15/14		2,000		2,024,220
Hawaii St, Ser DK(c)		5.000	%		05/01/23		1,875		2,133,413
									4,428,590
Idaho–0.4%
Idaho Hlth Fac Auth Rev Saint Lukes Hlth Sys Proj, Ser A		6.500	%		11/01/23		500		579,545
Idaho Hsg & Fin Assn Single Family Mtg Rev, Ser A (AMT)		5.000	%		07/01/17		910		970,733
									1,550,278
Illinois–5.1%
Bartlett, IL Tax Increment Rev Sr Lien Quarry Redev Proj Rfdg		5.600	%		01/01/23		1,000		880,710
Bourbonnais IL Indl Proj Rev Olivet Nazarene Univ Proj		5.125	%		11/01/25		1,500		1,569,090
Chicago, IL Increment Alloc Rev Rfdg NT Roosevelt Square ABLA, Ser A		7.130	%		03/15/22		1,000		1,015,480
Chicago IL Tx Increment Rev Nts-Metramarket Chicago Proj, Ser A		6.870	%		02/15/24		1,350		1,419,822
Hodgkins, IL Tax Increment Rev Sr Lien Rfdg		5.000	%		01/01/14		500		536,045
Huntley, IL Spl Svc Area No 7 Spl Tax Rfdg (AGL Insd)		4.600	%		03/01/17		1,033		1,117,293
Illinois Dev Fin Auth Pollutn Ctl Rev Amerencips Rfdg, Ser A(a)		5.500	%		03/01/14		1,000		1,003,990
Illinois Fin Auth Rev Advocate Hlthcare Network, Ser D		6.125	%		11/01/23		1,000		1,191,990
Illinois Fin Auth Rev Art Inst Chicago, Ser A		5.250	%		03/01/19		1,000		1,171,320
Illinois Fin Auth Rev Fairview Oblig Grp Rfdg, Ser A		6.000	%		08/15/22		750		708,570
Illinois Fin Auth Rev IL Inst Technology		6.250	%		02/01/19		1,635		1,784,668
Illinois Fin Auth Rev Landing at Plymouth Pl Proj, Ser A		5.250	%		05/15/14		500		502,505
Illinois Fin Auth Rev Silver Cross Hosp & Med Rfdg		6.000	%		08/15/23		1,000		1,107,980
Illinois Fin Auth Rev Temps 65 Pk Pl Elmhurst, Ser D-2		7.000	%		11/15/15		1,000		1,006,670
Illinois Hlth Fac Auth Rev Sherman Hlth Sys (AMBAC Insd)		5.250	%		08/01/17		1,500		1,500,705

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)			Value
Illinois–(continued)
Lincolnshire, IL Spl Svc Area Sedgebrook Proj		5.000	%		03/01/11	$	100		$	99,659
Pingree Grove Vlg, IL Spl Svc Area No 1 Spl Tax Cambridge Lakes Proj, Ser 05		5.250	%		03/01/15		745			726,077
Round Lake Beach, IL Tax Increment Rev		4.650	%		12/15/13		740			740,903
										18,083,477
Indiana–2.9%
Allen Cnty, IN Juvenile Just Ctr First Mtg (AMBAC Insd)		5.500	%		01/01/18		1,000			1,030,520
Carmel Cnty, IN Redev Auth Opt Income Tax Lease Rent Rev (NATL Insd)		5.000	%		07/01/22		1,000			1,089,460
Crown Point, IN Econ Dev Rev Temp Wittenberg Vlg Proj, Ser C-1		7.250	%		11/15/14		1,000			1,003,320
Hobart, IN Bldg Corp First Mtg (NATL Insd)		5.500	%		07/15/13		830			929,384
Indiana Hlth & Ed Fac Fin Auth Hosp Rev Cmnty Fndtn Northwest IN		5.500	%		03/01/22		500			529,505
Indiana Hlth & Ed Fac Fin Auth Rev Rfdg Saint Francis (AGM Insd)		5.250	%		11/01/24		365			402,821
Indiana Hlth & Ed Fac Fin Auth Rev Rfdg Saint Francis (AGM Insd)		5.250	%		11/01/25		200			219,572
Indiana Hlth & Ed Fac Fin Auth Rev Rfdg Saint Francis (AGM Insd)		5.250	%		11/01/26		175			191,041
Indiana Muni Pwr Agy Pwr Supply Sys Rev, Ser B		5.250	%		01/01/24		500			559,180
Indiana St Fin Auth Environmental Fac Rev IN Pwr & LT Co Proj Rfdg, Ser A		4.900	%		01/01/16		2,000			2,200,160
Indianapolis, IN Arpt Auth Rev Rfdg Spl Fac Fed Ex Corp Proj (AMT)		5.100	%		01/15/17		760			820,967
Saint Joseph Cnty, IN Econ Dev Rev Holy Cross Vlg Notre Dame Proj, Ser A		5.750	%		05/15/13		400			409,096
University Southn IN Rev Student Fee, Ser J (AGL Insd)		5.000	%		10/01/19		1,000			1,152,510
										10,537,536
Iowa–1.2%
Altoona, IA Urban Renewal Tax Increment Rev Annual Appropriation		5.625	%		06/01/23		1,000			1,092,550
Coralville, IA Ctf Partn, Ser D		5.250	%		06/01/22		500			536,900
Iowa Fin Auth Hlth Care Fac Rev Westn Home Proj		6.850	%		11/01/19		1,310			1,353,505
Iowa Fin Auth Hlth Fac Rev IA Hlth Sys (AGL Insd)		5.000	%		02/15/19		1,000			1,153,590
										4,136,545
Kansas–1.1%
Burlington, KS Environmental Impt Rev KC Pwr Lt Rfdg, Ser B (Syncora Gtd)(a)		5.000	%		12/01/23		1,000			1,018,300
Kansas St Dev Fin Auth Hlth Fac Rev Hays Med Ctr Inc, Ser L		5.250	%		11/15/16		500			548,945
Kansas St Dev Fin Auth Hosp Rev Adventist Hlth		5.500	%		11/15/23		1,000			1,162,670
Shawnee Cnty, KS Sch Dist 501 Topeka (Prerefunded @ 2/01/12)		5.000	%		02/01/20		1,000	��		1,061,950
Wyandotte Cnty, KS City KS Univ Brd of Public Util Office Bldg Complex Proj (NATL Insd)		5.000	%		05/01/11		120			122,886
										3,914,751
Kentucky–1.3%
Kentucky Econ Dev Fin Auth Hosp Fac Rev Baptist Hlthcare Sys, Ser A		5.000	%		08/15/18		1,000			1,150,670
Kentucky Econ Dev Fin Auth Hosp Fac Rev Baptist Hlthcare Sys, Ser A		5.375	%		08/15/24		1,000			1,116,370
Kentucky Hsg Corp Hsg Rev, Ser A (AMT)		5.000	%		01/01/23		310			322,214
Louisville & Jefferson Cnty, KY, Ser C (AGM Insd) (AMT)		5.500	%		07/01/17		1,000			1,068,680
Paducah, KY Elec Plant Brd Rev, Ser A (AGL Insd)		5.000	%		10/01/25		1,000			1,120,030
										4,777,964
Louisiana–1.8%
Calcasieu Parish, LA Mem Hosp Svc Dist Hosp Rev Lake Charles Mem Hosp Proj, Ser A (Connie Lee Insd)		6.500	%		12/01/18		1,000			1,032,660
Lakeshore Vlg Master Cmnty Dev Dist LA Spl Assmt		5.250	%		07/01/17		593			323,422

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Louisiana–(continued)
Louisiana St Citizens Ppty Ins Corp Assmt Rev, Ser B (AMBAC Insd)		5.000	%		06/01/20	$	1,000	$	1,034,830
Louisiana St Citizens Ppty Ins Corp Assmt Rev, Ser C-1 (AGL Insd)		5.875	%		06/01/23		1,000		1,133,170
New Orleans, LA Aviation Brd Rev Restructuring Garbs Rfdg, Ser A-1 (AGL Insd)		5.000	%		01/01/18		1,235		1,354,758
New Orleans, LA Aviation Brd Rev Restructuring Garbs Rfdg, Ser A-1 (AGL Insd)		5.000	%		01/01/19		500		547,885
Rapides Fin Auth LA Rev Cleco Pwr Proj (AMT)(a)		5.250	%		11/01/37		1,000		1,064,390
									6,491,115
Maryland–2.7%
Maryland St Econ Dev Corp Econ Dev Rev Trans Fac Proj, Ser A		5.125	%		06/01/20		2,250		2,384,482
Maryland St Econ Dev Corp Student Hsg Rev Univ MD College Pk Proj Rfdg (CIFG Insd)		5.000	%		06/01/13		1,000		1,067,340
Maryland St Econ Dev Corp Univ MD College Pk Proj(h)		5.750	%		06/01/13		625		711,038
Maryland St Hlth & Higher Ed Fac Auth Rev Johns Hopkins Hlth Sys, Ser B(a)		5.000	%		05/15/48		500		563,840
Maryland St Hlth & Higher Ed Fac Auth Rev Washington Cnty Hosp		5.250	%		01/01/23		250		262,105
Maryland St Hlth & Higher King Farm Presbyterian Cmnty, Ser B		5.000	%		01/01/17		395		383,620
Maryland St Trans Auth Grant & Rev Antic		5.250	%		03/01/20		3,000		3,661,260
Prince Georges Cnty, MD Spl Oblig Natl Harbor Proj		4.700	%		07/01/15		500		514,110
									9,547,795
Massachusetts–2.9%
Massachusetts Dev Fin Agy Sr Living Fac Rev, Ser B2		6.250	%		06/01/14		710		710,603
Massachusetts St. Hlth & Ed Fac Auth(j)		0.260	%		10/01/26		635		635,000
Massachusetts St Dev Fin Agy Rev Brandeis Univ, Ser O-2		5.000	%		10/01/25		3,000		3,313,230
Massachusetts St Dev Fin Agy Rev Carleton Willard Vlg		5.250	%		12/01/25		650		672,523
Massachusetts St Dev Fin Agy Rev Sabis Intl Chrt, Ser A		6.700	%		04/15/21		500		550,660
Massachusetts St Dev Fin Agy Solid Waste Disp Rev Dominion Energy Brayton Rfdg, Ser 1(a)		5.750	%		12/01/42		1,500		1,667,805
Massachusetts St Hlth & Ed Fac Auth Rev Caregroup, Ser D (NATL Insd)		5.250	%		07/01/23		1,500		1,571,340
Massachusetts St Hlth & Ed Fac Auth Rev Northeastern Univ, Ser T-2(a)		4.100	%		10/01/37		1,000		1,042,220
Massachusetts St Hlth & Ed Fac Auth Rev Quincy Med Ctr, Ser A		5.850	%		01/15/18		300		291,660
									10,455,041
Michigan–1.8%
Dearborn, MI Econ Dev Corp Rev Rfdg Ltd Oblig-Henry Ford Vlg		6.000	%		11/15/18		250		244,955
Iron River, MI Hosp Fin Auth Rfdg Iron Cnty Cmnty Hosp		6.000	%		05/15/20		440		448,853
Kent Hosp Fin Auth MI Rev Spectrum Hlth, Ser A(a)		5.500	%		01/15/47		1,000		1,153,920
Jackson, MI Cnty Econ Dev Corp.(j)		0.340	%		11/01/31		2,500		2,500,000
Michigan St Strategic Fd Ltd Oblig Rev Dow Chem Rfdg, Ser A-1 (AMT)(a)		6.750	%		12/01/28		2,000		2,224,520
									6,572,248
Minnesota–1.0%
Duluth, MN Hsg & Redev Auth Hlthcare & Hsg Rev Benedictine Hlth Ctr Proj		5.500	%		11/01/17		250		251,883
Inver Grove Heights, MN Presbyterian Homes Care Rfdg		5.000	%		10/01/16		430		440,165
Minneapolis, MN Hlthcare Sys Rev Fairview Hlth Svc, Ser A		6.375	%		11/15/23		500		587,305
Northern Muni Pwr Agy MN Elec Sys Rev Rfdg, Ser A (AGL Insd)		5.000	%		01/01/15		2,000		2,277,560
									3,556,913
Mississippi–0.3%
Mississippi Business Fin Corp MS Pollutn Ctl Rev Sys Energy Res Inc Proj		5.875	%		04/01/22		1,000		1,000,080

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Missouri–3.3%
Cape Girardeau Cnty, MO Indl Dev Auth Hlthcare Fac Rev Saint Francis Med Ctr		5.000	%		06/01/21	$	525	$	563,115
Fenton, MO Tax Increment Rev Gravois Bluffs Redev Proj Rfdg		5.000	%		04/01/13		500		528,210
Ferguson, MO Tax Increment Rev Crossing at Halls Ferry Rfdg		5.500	%		04/01/14		610		616,954
Kansas City, MO Indl Dev Auth Plaza Lib Proj		6.000	%		03/01/16		1,350		1,387,625
Kirkwood, MO Indl Dev Auth Retirement Cmnty Rev Temp 75 Aberdeen Hts, Ser C-1		7.500	%		11/15/16		1,000		1,013,520
Manchester, MO Tax Increment & Transn Rev Rfdg Hwy 141 Manchester Rd Proj		6.000	%		11/01/25		2,250		2,326,230
Maryland Heights, MO Tax Increment Rev South Heights Redev Proj Rfdg, Ser A		5.500	%		09/01/18		220		212,731
Missouri St Environmental Impt & Energy Res Auth KC Pwr & LT Co Proj (AMT)(a)		4.900	%		05/01/38		1,500		1,594,020
Raytown, MO Annual Raytown Live Redev Plan Proj 1		5.000	%		12/01/16		500		553,545
Saint Charles, MO Ctf Partn, Ser B		5.500	%		05/01/18		2,000		2,106,620
Saint Louis Cnty, MO Indl Dev Auth Hlth Fac Rev Rfdg Ranken Jordan Proj		5.000	%		11/15/22		540		514,922
Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac Rev Friendship Vlg West Cnty, Ser A		5.250	%		09/01/17		250		260,128
									11,677,620
Nebraska–1.0%
Gage Cnty, Neb Hosp Auth No 1 Healthcare Fac Rev Beatrice Cmnty Hosp & Hlth		6.000	%		06/01/25		1,000		1,047,720
Municipal Energy Agy of NE Pwr Supply Sys Rev Rfdg, Ser A (BHAC Insd)		5.125	%		04/01/23		560		648,586
University of NE Fac Corp Defd Maint (AMBAC Insd)		5.000	%		07/15/17		1,500		1,750,170
									3,446,476
Nevada–1.5%
Clark Cnty, NV Arpt Rev Sys Sub Lien, Ser C (AGM Insd)		5.000	%		07/01/26		2,000		2,156,320
Humboldt Cnty, NV Pollutn Ctl Rev ID Pwr Co Proj Rfdg		5.150	%		12/01/24		1,800		1,942,308
Las Vegas, NV Redev Agy Tax Increment Rev, Ser A		7.000	%		06/15/20		1,000		1,185,520
									5,284,148
New Hampshire–0.9%
Manchester, NH Gen Arpt Rev Rfdg Gen, Ser A		5.000	%		01/01/17		1,000		1,100,930
New Hampshire St Business Fin Auth Pollutn Ctl Rev Utd Illum Co Proj (AMT)(a)		7.125	%		07/01/27		2,000		2,095,220
									3,196,150
New Jersey–1.0%
New Jersey Econ Dev Auth Rev First Mtg Presbyterian, Ser A		6.250	%		11/01/20		500		500,690
New Jersey Econ Dev Auth Rev MSU Student Hsg Pj-Provident Group-Montclair LLC.		5.375	%		06/01/25		1,000		1,057,480
New Jersey Econ Dev Auth Rev Sch Fac Constr, Ser BB		5.000	%		09/01/34		500		535,245
New Jersey Hlthcare Fac Fin Auth Rev Saint Clare’s Hosp Inc Rfdg, Ser A (Radian Insd)(h)		5.250	%		07/01/20		1,000		1,225,980
New Jersey Hlthcare Fac Fin Auth Rev Saint Josephs Hlthcare Sys		5.750	%		07/01/15		360		393,185
									3,712,580
New Mexico–1.8%
Farmington, NM Pollutn Ctl Rev Pub Svc Co NM San Juan, Ser A(a)		5.200	%		06/01/40		1,700		1,741,820
Jicarilla, NM Apache Nation Rev, Ser A (Acquired 10/23/03, Cost $1,020,380)(g)		5.500	%		09/01/23		1,000		1,063,140
New Mexico Fin Auth Rev Sr Lien Pub Proj Revolving Fd, Ser B (NATL Insd)		5.000	%		06/01/17		1,310		1,521,067
New Mexico St Hosp Equip Ln Council First Mtg Rev La Vida Llena Proj, Ser A		5.000	%		07/01/19		1,000		1,032,850
New Mexico St Hosp Equip Ln Council Hosp Rev Presbyterian Hlthcare Svc, Ser A		6.000	%		08/01/23		1,000		1,142,730
									6,501,607

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
New York–4.0%
Albany, NY Indl Dev Agy Civic Fac Rev Saint Peters Hosp Proj, Ser A		5.750	%		11/15/22	$	500	$	534,345
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		5.750	%		07/15/17		1,000		1,110,020
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		5.750	%		07/15/19		1,000		1,109,010
Long Island Pwr Auth NY Elec Gen, Ser C (Prerefunded @ 9/01/13)		5.500	%		09/01/17		1,000		1,141,840
Madison Cnty, NY Indl Dev Agy Civic Fac Rev Oneida Hlth Sys Inc Proj, Ser A		4.500	%		02/01/17		185		184,586
Metropolitan Trans Auth NY Svc Contract Rfdg, Ser A		5.750	%		07/01/18		1,000		1,219,050
Nassau Cnty, NY Indl Dev Agy Continuing Care Retirement Amsterdam at Harborside, Ser A		5.875	%		01/01/18		1,125		1,152,000
New York City Indl Dev Agy Rev Liberty 7 World Trade Ctr, Ser A		6.250	%		03/01/15		1,500		1,504,890
New York City Indl Dev Agy Rev Queens Baseball Stad Pilot (AGL Insd)		5.000	%		01/01/18		200		228,128
New York City Indl Dev Agy Rev Queens Baseball Stad Pilot (AGL Insd)		5.000	%		01/01/19		200		228,726
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-3		5.000	%		01/15/21		1,000		1,121,850
New York St Environmental Fac Corp St Clean Wtr & Drinking Revolving Fd Muni Wtr Fin, Ser C		5.000	%		06/15/21		2,000		2,284,320
Niagara Falls, NY Pub Impt (NATL Insd)		6.900	%		03/01/20		5		5,010
Seneca Cnty, NY Indl Dev Agy Solid Waste Disp Rev Seneca Meadows Inc Proj (AMT)(a)(b)		6.625	%		10/01/35		1,000		1,012,790
Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev Remk NY Inst Tech Proj		5.250	%		03/01/21		1,425		1,490,408
									14,326,973
North Carolina–2.5%
North Carolina Eastn Muni Pwr Agy Pwr Sys Rev, Ser B		5.000	%		01/01/26		2,000		2,168,540
North Carolina Eastn Muni Pwr Agy Pwr Sys Rev, Ser C		6.750	%		01/01/24		1,000		1,223,110
North Carolina Eastn Muni Pwr Agy Pwr Sys Rev, Ser C (AGL Insd)		6.000	%		01/01/19		1,250		1,429,362
North Carolina Med Care Commn Hlthcare Fac Rev Rfdg First Mtg Salemtowne		5.000	%		10/01/15		500		518,110
North Carolina Med Care Commn Retirement Fac Rev First Mtg Southminster Proj, Ser A		5.300	%		10/01/19		250		254,238
North Carolina Muni Pwr Agy, Ser A (NATL Insd)		5.250	%		01/01/19		1,000		1,078,570
Raleigh Durham NC Arpt Auth Arpt Rev Ref, Ser A		5.000	%		05/01/22		2,000		2,296,900
									8,968,830
North Dakota–0.5%
Grand Forks, ND Sr Hsg Rev 4000 Vly Square Proj Rfdg		5.000	%		12/01/16		500		498,655
North Dakota Pub Fin Auth St Revolving Fd Pgm, Ser A		5.500	%		10/01/19		1,195		1,462,298
									1,960,953
Ohio–4.4%
Adams Cnty Hosp Fac Impt Rev Adams Cnty Hosp Proj		6.250	%		09/01/20		500		427,030
American Muni Pwr OH Inc Hydroelec Proj, Ser C		5.250	%		02/15/19		1,175		1,357,795
Athens Cnty, OH Hosp Fac Rev & Impt O’ Bleness Mem Rfdg, Ser A		6.250	%		11/15/13		415		429,263
Cleveland, OH Non Tax Rev Cleveland Stad Proj Rfdg (AMBAC Insd)		5.125	%		12/01/20		1,370		1,480,847
Lorain Cnty, OH Hosp Rev Fac Catholic, Ser H (AGL Insd)		5.000	%		02/01/24		1,500		1,622,490
Montgomery Cnty, OH Health Care & Multifamily Hsg Rev & Impt–St Lemonard		6.000	%		04/01/20		1,000		1,065,560
Montgomery Cnty, OH Rev Miami Valley Hosp, Ser B(a)		5.250	%		11/15/39		1,000		1,098,060
Ohio Muni Elec Generation Agy Jt Venture 5 Ctf Ben Int Rfdg (AMBAC Insd)		5.000	%		02/15/21		750		794,167
Ohio St Air Quality Dev Auth Ref OH Pwr Co Galvin-A (AMT)(a)		2.875	%		12/01/27		2,000		2,003,420
Ohio St Air Quality Dev Auth Rev Rfdg Pollutn Ctl First Energy, Ser C		5.625	%		06/01/18		2,000		2,238,640
Ohio St Higher Ed Fac Commn Rev Univ Hosp Hlth Syst, Ser C(a)		3.750	%		01/15/25		2,000		2,068,780
Ohio St Wtr Dev Auth Solid Waste Rev Allied Waste Inc Proj, Ser A (AMT)		5.150	%		07/15/15		1,000		1,020,930
									15,606,982

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Oklahoma–1.2%
Chickasaw Nation, OK Hlth Sys(b)		5.375	%		12/01/17	$	415	$	451,694
Citizen Potawatomi Nation OK Oblig Tax Rev, Ser A		5.750	%		09/01/11		775		774,442
Tulsa Cnty, OK Indl Auth Sr Living Cmnty Rev Montereau Inc Proj, Ser A		6.875	%		11/01/23		1,300		1,333,163
Tulsa, OK Arpt Impt Tr Gen Rev, Ser A		5.375	%		06/01/24		1,750		1,826,073
									4,385,372
Pennsylvania–3.7%
Allegheny Cnty, PA Arpt Auth Pittsburgh Intl Arpt, Ser A (AGM Insd) (AMT)		5.000	%		01/01/16		1,000		1,076,070
Allegheny Cnty, PA Indl Dev Auth Lease Rev Residential Res Inc Proj		5.000	%		09/01/21		500		497,485
Allegheny Cnty, PA Redev Auth Rev Pittsburgh Mills Proj		5.100	%		07/01/14		160		161,914
Canon McMillan Sch Dist PA Rfdg, Ser A (NATL Insd)		5.000	%		12/15/15		1,120		1,246,862
Delaware Cnty, PA Auth Rev Elwyn Proj		5.000	%		06/01/20		1,980		2,079,416
Monroe Cnty, PA Hosp Auth Rev Hosp Pocono Med Ctr		5.000	%		01/01/17		500		540,310
Montgomery Cnty, PA Indl Dev Auth Rev Mtg Whitemarsh Continuing Care		6.000	%		02/01/21		500		478,085
Pennsylvania Econ Dev Fin Auth Exempt Fac Rev Exelon Generation, Ser A(a)		5.000	%		12/01/42		2,000		2,110,040
Pennsylvania Econ Dev Fin Auth Solid Waste Disp Rev Waste Mgmt Proj(a)		2.625	%		12/01/33		1,000		1,009,880
Philadelphia, PA Gas Wks Rev, Ser 18 (AGL Insd)		5.250	%		08/01/18		750		811,170
Philadelphia, PA Redev Auth Rev Neighborhood Trans, Ser A (NATL Insd)		5.500	%		04/15/16		2,000		2,122,440
Washington Cnty, PA Indl Dev Auth College Rev WA Jefferson College		5.000	%		11/01/25		1,000		1,085,580
									13,219,252
South Carolina–1.9%
Georgetown Cnty, SC Environmental Impt Rev Intl Paper Co Proj Rfdg, Ser A		5.950	%		03/15/14		1,000		1,114,660
Lexington, SC Wtr & Swr Rev & Impt Comb Rfdg, Ser A (NATL Insd)		5.000	%		04/01/14		1,065		1,079,260
Piedmont Muni Pwr Agy SC Elec Rev Rfdg, Ser A-4		5.000	%		01/01/21		2,000		2,247,880
Piedmont Muni Pwr Agy SC Elec Rev, Ser A-2		5.000	%		01/01/24		1,000		1,078,680
South Carolina Jobs Econ Dev Auth Hosp Rev Rfdg & Impt Anmed Hlth, Ser B (AGL Insd)		5.000	%		02/01/19		1,000		1,136,710
									6,657,190
South Dakota–0.2%
South Dakota St Health & Edl Fac Auth Rev Regl Health		5.000	%		09/01/22		500		546,030
Tennessee–1.0%
Chattanooga, TN Hlth Ed Hsg Fac CDFI Phase I LLC Proj Rfdg, Ser A		5.000	%		10/01/15		270		284,132
Franklin, TN Spl Sch Dist Cap Apprec (AGM Insd)		*			06/01/15		700		647,969
Gatlinburg, TN Pub Bldg Auth Rfdg (AMBAC Insd)		5.750	%		12/01/11		1,000		1,058,220
Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev, Ser C		5.250	%		06/01/18		1,000		1,116,060
Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev Trezevant Manor Proj, Ser A		5.250	%		09/01/16		500		503,490
									3,609,871
Texas–8.6%
Alliance Arpt Auth Inc TX Spl Fac Rev FedEx Corp Proj Rfdg (AMT)		4.850	%		04/01/21		1,000		1,015,920
Austin, TX Wtr & Wastewater Sys Rev Austin Wtr & Swr, Ser A		5.000	%		11/15/24		1,500		1,720,980
Capital Area Cultural Ed Fac Fin Corp TX Rev Roman Catholic Diocese-A-Rmkt		5.500	%		04/01/25		1,610		1,675,237
Dallas Cnty, TX Flood Ctl Dist Rfdg		6.750	%		04/01/16		205		220,324
Dallas, TX Civic Ctr Rfdg & Impt (AGL Insd)		5.000	%		08/15/18		1,500		1,720,080
Dallas-Fort Worth, TX Intl Arpt Rev Jt, Ser C (NATL Insd) (AMT)		5.750	%		11/01/18		500		501,615

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Texas–(continued)
Dallas-Fort Worth, TX Intl Arpt Rev Jt, Ser C (NATL Insd) (AMT)		6.000	%		11/01/23	$	500	$	501,760
Greenville, TX Elec Util Sys Rev Rfdg & Impt		5.000	%		02/15/25		2,355		2,555,999
Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev Rfdg Mem Hermann Hlthcare Sys, Ser B		7.000	%		12/01/27		500		582,020
Harris Cnty, TX Indl Dev Corp Solid Waste Disp Rev Deer Pk Refng Proj		5.000	%		02/01/23		1,500		1,593,045
HFDC Cent TX Inc Rev Sears Tyler Methodist, Ser B		6.375	%		11/15/19		625		626,575
Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc Proj		5.000	%		08/15/13		500		524,910
Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc Proj		5.000	%		08/15/19		350		355,932
Hopkins Cnty, TX Hosp Dist Hosp Rev		5.500	%		02/15/23		500		506,615
Lufkin, TX Hlth Fac Dev Corp Hlth Sys Rev Mem East Texas		5.125	%		02/15/22		250		252,598
Mesquite, TX Hlth Fac Dev Retirement Christian Care		5.000	%		02/15/15		1,025		1,074,528
Mission, TX Econ Dev Corp Solid Waste Disp Rev Allied Waste Inc Proj A (AMT)		5.200	%		04/01/18		400		403,820
Mission, TX Econ Dev Corp Solid Waste Disp Rev Waste Mgmt Inc Proj (AMT)(a)		6.000	%		08/01/20		500		544,495
North TX Twy Auth Rev Sys First Tier Rfdg, Ser A		6.000	%		01/01/23		1,000		1,130,810
North TX Twy Auth Rev Sys First Tier Rfdg, Ser L-2(a)		6.000	%		01/01/38		1,000		1,098,230
Spring, TX Indpt Sch Dist Sch House (PSF Gtd)		5.000	%		08/15/24		1,000		1,144,300
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Buckner Retirement Svc Inc Proj		5.000	%		11/15/17		500		537,125
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Hosp Rev Rfdg Baylor Hlthcare Sys Proj		5.750	%		11/15/24		1,000		1,132,930
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac CC Young Mem Home, Ser B-2		6.500	%		02/15/14		1,000		1,005,810
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac Temps 75 Mirador Proj, Ser B-1		7.250	%		11/15/16		1,000		1,019,960
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Rev Christus Hlth Rfdg, Ser A (AGL Insd)		5.750	%		07/01/18		2,000		2,182,300
Texas St Trans Commn Rev First Tier, Ser A		5.000	%		04/01/20		2,000		2,288,300
Texas Trans Commn Cent TX Tpk Sys Rev Rfdg First Tier Put(a)		5.000	%		08/15/42		3,000		3,039,330
									30,955,548
Virginia–1.8%
Fairfax Cnty, VA Indl Dev Auth Rev Hlthcare Inova Hlth Sys, Ser A		5.125	%		05/15/24		1,000		1,121,620
Roanoke VA Economic Dev Auth Hosp Rev Ref-Carilion Clinic Oblig		5.000	%		07/01/25		2,000		2,081,060
Virginia Small Business Fin Auth Rev Hampton Rd Proton (Acquired 8/07/09, Cost $983,180)(g)		8.000	%		07/01/19		1,000		1,066,200
Washington Cnty, VA Indl Dev Auth Hosp Fac Rev Mtn St Hlth Alliance, Ser C		7.250	%		07/01/19		1,000		1,153,140
White Oak Vlg Shops VA Cmnty Dev Auth Spl Assmt Rev		5.300	%		03/01/17		1,167		1,195,627
									6,617,647
Washington–3.2%
Clark Cnty, WA Pub Util Dist No 001 Elec Rev Sys Rfdg		5.000	%		01/01/23		1,000		1,114,240
FYI Properties Wash Lease Rev WA St Dis Proj		5.250	%		06/01/26		2,000		2,195,340
Kalispel Tribe Indians Priority Dist WA Rev		6.200	%		01/01/16		150		143,469
Seattle, WA Muni Lt & Pwr Rev Rfdg & Impt		5.750	%		04/01/23		1,725		2,104,017
Tacoma Environmental Services Pptys WA		5.000	%		12/01/24		1,000		1,111,290
Washington St Higher Ed Fac Auth Rev Rfdg Whitworth Univ Proj		5.125	%		10/01/24		1,500		1,565,385
Washington St, Ser A (AGM Insd)		5.000	%		07/01/20		3,000		3,357,210
									11,590,951
West Virginia–0.2%
Ohio Cnty, WV Cnty Commn Tax Increment Rev Fort Henry Ctr Fin Dist, Ser A		5.625	%		06/01/22		250		248,605
West Virginia St Hosp Fin Auth Hosp Rev Thomas Hlth Sys		6.000	%		10/01/20		500		520,605
									769,210

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

17        Invesco Van Kampen Intermediate Term Municipal Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)			Value
Wisconsin–3.0%
Superior, WI Collateralized Util Rev Superior Wtr Lt & Pwr Proj Rfdg, Ser A (AMT)		5.375	%		11/01/21	$	1,370		$	1,454,789
Wisconsin Hsg & Econ Dev Auth Home Ownership Rev, Ser A (AMT)		5.300	%		09/01/23		1,875			1,983,825
Wisconsin St Hlth & Ed Fac Auth Rev Aurora Hlth Care Inc, Ser B(a)		4.750	%		08/15/25		1,000			1,076,060
Wisconsin St Hlth & Ed Fac Auth Rev Aurora Hlth Care Inc, Ser B(a)		5.125	%		08/15/27		1,000			1,101,870
Wisconsin St Hlth & Ed Fac Auth Rev Meriter Hosp Inc. Ser A(j)		0.330	%		12/01/24		2,000			2,000,000
Wisconsin St Hlth & Ed Fac Auth Rev Reedsburg Area Med Ctr, Ser A		5.650	%		06/01/26		970			878,995
Wisconsin St Hlth & Ed Fac Auth Rev Temps Saint Johns Cmnty Inc, Ser C-2		5.400	%		09/15/14		1,750			1,755,320
Wisconsin St Hlth & Ed Fac Beaver Dam Cmnty Hosp Inc, Ser A		5.500	%		08/15/14		500			500,025
										10,750,884
Wyoming–0.3%
Wyoming Muni Pwr Agy Pwr Supply, Ser A		5.375	%		01/01/25		1,000			1,107,650
Guam–0.6%
Guam Govt Ltd Oblig Rev Section 30, Ser A		5.250	%		12/01/17		1,000			1,101,270
Guam Govt Ltd Oblig Rev Section 30, Ser A		5.500	%		12/01/18		1,000			1,121,210
										2,222,480
Puerto Rico–0.9%
Puerto Rico Elec Pwr Auth Pwr Rev, Ser CCC		5.000	%		07/01/24		2,000			2,165,120
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A (Prerefunded @ 08/01/11)(a)		5.000	%		08/01/39		1,000			1,039,860
										3,204,980
Virgin Islands–1.1%
Virgin Islands Pub Fin Auth Rev Matching Fd Ln Diago		6.000	%		10/01/14		500			547,445
Virgin Islands Pub Fin Auth Rev Matchinfg Fd Ln Nt Sr Lien-A		5.000	%		10/01/17		1,000			1,104,200
Virgin Islands Pub Fin Auth Rev Rfdg Sr Lien, Ser B		5.000	%		10/01/19		2,000			2,218,540
										3,870,185
TOTAL INVESTMENTS–100.8% (Cost $337,900,752)										360,985,234
Floating Rate Note and Dealer Trust Obligations Related to Securities Held–(1.2%)
(Cost $4,275,000)
Notes with interest rates ranging from 0.27% to 0.29% at 09/30/10 and contractual maturities of collateral ranging from 05/01/23 to 08/01/25 (See Note 1(K) in the Notes to Financial Statements)(i)							(4,275	)		(4,275,000	)
TOTAL NET INVESTMENTS–99.6% (Cost $333,625,752)										356,710,234
OTHER ASSETS IN EXCESS OF LIABILITIES–0.4%										1,423,209
NET ASSETS–100.0%									$	358,133,443

Percentages are calculated as a percentage of net assets.

Investment Abbreviations:

AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– AMBAC Indemnity Corp.
AMT	– Alternative Minimum Tax
BHAC	– Berkshire Hathaway Assurance Corp.
CIFG	– CDC IXIS Financial Guaranty
Connie Lee	– Connie Lee Insurance Co.
FHA	– Federal Housing Administration
NATL	– National Public Finance Guarantee Corp.
PSF	– Public School Fund
Radian	– Radian Asset Assurance
Syncora Gtd.	– Syncora Guaranteed Corp.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

18        Invesco Van Kampen Intermediate Term Municipal Income Fund

Notes to Schedule of Investments:

*	Zero coupon bond
(a)	Variable Rate Coupon
(b)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(c)	Underlying security related to Special Purpose Trusts entered into by the Trust. See Note 1(K) in the Notes to Financial Statements.
(d)	Floating Rate Coupon
(e)	Security includes a feature allowing the Fund an option on any interest rate payment date to offer the security for sale at par. The sale is contingent upon market conditions.
(f)	Non-income producing security.
(g)	Security is restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. Restricted securities comprise 0.7% of net assets.
(h)	Escrowed to Maturity
(i)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at September 30, 2010. At September 30, 2010, the Fund’s investments with a value of $7,402,842 are held by the Dealer Trusts and serve as collateral for the $4,275,000 in floating rate note and dealer trust obligations outstanding at that date.
(j)	Demand Security payable upon demand by the Fund at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on September 30, 2010.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

19        Invesco Van Kampen Intermediate Term Municipal Income Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investment, at value (Cost $337,900,752)	$	360,985,234
Cash		1,671,872
Receivables:
Interest		4,728,883
Fund shares sold		855,825
Investments sold		75,000
Other		6,903
Total assets		368,323,717
Liabilities:
Payables:
Investments purchased		4,842,539
Floating rate note and dealer trust obligations		4,275,000
Fund shares repurchased		597,552
Income distributions		183,089
Distributor and affiliates		164,228
Trustees’ deferred compensation and retirement plans		757
Accrued expenses		127,109
Total liabilities		10,190,274
Net Assets	$	358,133,443
Net assets consist of:
Capital (Par value of $0.01 per share with an unlimited number of shares authorized)	$	334,922,493
Net unrealized appreciation		23,084,482
Accumulated undistributed net investment income		579,262
Accumulated net realized gain (loss)		(452,794	)
Net Assets	$	358,133,443
Maximum offering price per share:
Class A shares:
Net asset value and redemption price per share (Based on net assets of $270,764,318 and 24,543,423 shares of beneficial interest issued and outstanding)	$	11.03
Maximum sales charge (4.75% of offering price)		0.55
Maximum offering price to public	$	11.58
Class B shares:
Net asset value and offering price per share (Based on net assets of $16,361,950 and 1,460,371 shares of beneficial interest issued and outstanding)	$	11.20
Class C shares:
Net asset value and offering price per share (Based on net assets of $61,645,802 and 5,595,583 shares of beneficial interest issued and outstanding)	$	11.02
Class Y shares:
Net asset value and offering price per share (Based on net assets of $9,361,373 and 849,031 shares of beneficial interest issued and outstanding)	$	11.03

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

20        Invesco Van Kampen Intermediate Term Municipal Income Fund

Statement of Operations

For the year ended September 30, 2010

Investment income:
Interest	$	15,639,392
Expenses:
Investment advisory fee		1,602,495
Distribution fees
Class A		617,096
Class B		148,694
Class C		509,955
Transfer agent fees		144,546
Administrative services fees		124,134
Registration fees		66,584
Professional fees		66,340
Interest, line of credit and residual trust expenses		46,011
Reports to shareholders		36,268
Trustees and officers’ fees and benefits		30,452
Custody		27,225
Other		24,815
Total expenses		3,444,615
Expense reduction		320,499
Net expenses		3,124,116
Net investment income		12,515,276
Realized and unrealized gain:
Net realized gain		469,341
Unrealized appreciation:
Beginning of the period		16,034,336
End of the period		23,084,482
Net unrealized appreciation during the period		7,050,146
Net realized and unrealized gain		7,519,487
Net increase in net assets from operations	$	20,034,763

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

21        Invesco Van Kampen Intermediate Term Municipal Income Fund

Statements of Changes in Net Assets

	For the			For the
	year ended			year ended
	September 30,			September 30,
	2010			2009
From investment activities:
Operations:
Net investment income	$	12,515,276		$	8,202,008
Net realized gain (loss)		469,341			(925,217	)
Net unrealized appreciation during the period		7,050,146			21,058,765
Change in net assets from operations		20,034,763			28,335,556
Distributions from net investment income:
Class A shares		(9,748,647	)		(6,980,949	)
Class B shares		(471,679	)		(410,066	)
Class C shares		(1,630,279	)		(953,632	)
Class Y shares		(326,758	)		(71,426	)
Total distributions		(12,177,363	)		(8,416,073	)
Net change in net assets from investment activities		7,857,400			19,919,483
From capital transactions:
Proceeds from shares sold		154,994,918			205,215,933
Net asset value of shares issued through dividend reinvestment		10,106,996			6,444,172
Cost of shares repurchased		(99,127,149	)		(80,762,795	)
Net change in net assets from capital transactions		65,974,765			130,897,310
Total increase in net assets		73,832,165			150,816,793
Net assets:
Beginning of the period		284,301,278			133,484,485
End of the period (including accumulated undistributed net investment income of $579,262 and $249,582, respectively)	$	358,133,443		$	284,301,278

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

22        Invesco Van Kampen Intermediate Term Municipal Income Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

		Class A shares
		Year ended September 30,
		2010			2009			2008			2007			2006
Net asset value, beginning of the period		$	10.80		$	10.05		$	10.59		$	10.68		$	10.69
Net investment income(a)			0.44			0.42			0.41			0.38			0.37
Net realized and unrealized gain (loss)			0.21			0.76			(0.55	)		(0.10	)		0.04
Total from investment operations			0.65			1.18			(0.14	)		0.28			0.41
Less:
Distributions from net investment income			0.42			0.43			0.40			0.37			0.37
Distributions from net realized gain	��		-0-			-0-			-0-			-0-			0.05
Total distributions			0.42			0.43			0.40			0.37			0.42
Net asset value, end of the period		$	11.03		$	10.80		$	10.05		$	10.59		$	10.68
Total return*			6.24	%(b)		12.16	%(c)		(1.42	)%(c)		2.63	%(c)		3.91	%(c)
Net assets at end of the period (in millions)		$	270.8		$	225.1		$	103.7		$	81.4		$	79.4
Ratio of expenses to average net assets*			0.83	%(d)		0.93	%		1.00	%		0.98	%		0.99	%
Ratio of net investment income to average net assets*			4.05	%(d)		4.16	%		3.95	%		3.54	%		3.46	%
Portfolio turnover(e)			12	%		23	%		61	%		11	%		21	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)*			0.82	%(d)		0.90	%		0.95	%		0.98	%		0.99	%
* If certain expenses had not been voluntarily assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets			0.93	%(d)		1.03	%		1.10	%		1.08	%		1.09	%
Ratio of net investment income to average net assets			3.95	%(d)		4.06	%		3.85	%		3.44	%		3.36	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)			0.92	%(d)		1.00	%		1.06	%		1.08	%		1.09	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $246,838.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

23        Invesco Van Kampen Intermediate Term Municipal Income Fund

Financial Highlights—(continued)

	Class B shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	10.96		$	10.19		$	10.73		$	10.82		$	10.82
Net investment income(a)		0.36			0.36			0.41			0.38			0.39
Net realized and unrealized gain (loss)		0.22			0.77			(0.56	)		(0.10	)		0.04
Total from investment operations		0.58			1.13			(0.15	)		0.28			0.43
Less:
Distributions from net investment income		0.34			0.36			0.39			0.37			0.38
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.05
Total distributions		0.34			0.36			0.39			0.37			0.43
Net asset value, end of the period	$	11.20		$	10.96		$	10.19		$	10.73		$	10.82
Total return*		5.46	%(b)		11.42	%(c)(e)		(1.45	)%(c)(e)		2.59	%(c)(e)		4.13	%(c)(e)
Net assets at end of the period (in millions)	$	16.4		$	13.6		$	10.5		$	11.1		$	14.6
Ratio of expenses to average net assets*		1.58	%(d)		1.57	%(e)		1.05	%(e)		0.98	%(e)		0.78	%(e)
Ratio of net investment income to average net assets*		3.30	%(d)		3.53	%(e)		3.87	%(e)		3.55	%(e)		3.67	%(e)
Portfolio turnover(f)		12	%		23	%		61	%		11	%		21	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)*		1.57	%(d)		1.55	%(e)		1.00	%(e)		0.98	%(e)		0.78	%(e)
* If certain expenses had not been voluntarily assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.68	%(d)		1.67	%(e)		1.15	%(e)		1.08	%(e)		0.88	%(e)
Ratio of net investment income to average net assets		3.20	%(d)		3.43	%(e)		3.77	%(e)		3.45	%(e)		3.57	%(e)
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.67	%(d)		1.65	%(e)		1.11	%(e)		1.08	%(e)		0.88	%(e)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 4%, charged on certain redemptions made within the first and second year of purchase and declining to 0% after the fifth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $14,869.
(e)	The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%.
(f)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

24        Invesco Van Kampen Intermediate Term Municipal Income Fund

Financial Highlights—(continued)

	Class C shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	10.78		$	10.03		$	10.57		$	10.66		$	10.68
Net investment income(a)		0.35			0.34			0.33			0.30			0.29
Net realized and unrealized gain (loss)		0.23			0.77			(0.55	)		(0.10	)		0.03
Total from investment operations		0.58			1.11			(0.22	)		0.20			0.32
Less:
Distributions from net investment income		0.34			0.36			0.32			0.29			0.29
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.05
Total distributions		0.34			0.36			0.32			0.29			0.34
Net asset value, end of the period	$	11.02		$	10.78		$	10.03		$	10.57		$	10.66
Total return*		5.53	%(b)		11.35	%(c)		(2.17	)%(c)		1.88	%(c)(e)		3.04	%(c)
Net assets at end of the period (in millions)	$	61.6		$	39.0		$	18.4		$	13.0		$	14.7
Ratio of expenses to average net assets*		1.58	%(d)		1.68	%		1.75	%		1.72	%(e)		1.74	%
Ratio of net investment income to average net assets*		3.30	%(d)		3.41	%		3.20	%		2.81	%(e)		2.71	%
Portfolio turnover(f)		12	%		23	%		61	%		11	%		21	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)*		1.57	%(d)		1.66	%		1.70	%		1.72	%(e)		1.74	%
* If certain expenses had not been voluntarily assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.68	%(d)		1.78	%		1.85	%		1.82	%(e)		1.84	%
Ratio of net investment income to average net assets		3.20	%(d)		3.31	%		3.10	%		2.71	%(e)		2.61	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.67	%(d)		1.76	%		1.81	%		1.82	%(e)		1.84	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $50,996.
(e)	The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%.
(f)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

25        Invesco Van Kampen Intermediate Term Municipal Income Fund

Financial Highlights—(continued)

	Class Y sharesÙ
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	10.79		$	10.04		$	10.59		$	10.67		$	10.69
Net investment income(a)		0.46			0.45			0.45			0.40			0.39
Net realized and unrealized gain (loss)		0.23			0.76			(0.58	)		(0.09	)		0.03
Total from investment operations		0.69			1.21			(0.13	)		0.31			0.42
Less:
Distributions from net investment income		0.45			0.46			0.42			0.39			0.39
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.05
Total distributions		0.45			0.46			0.42			0.39			0.44
Net asset value, end of the period	$	11.03		$	10.79		$	10.04		$	10.59		$	10.67
Total return*		6.56	%(b)		12.45	%(c)		(1.27	)%(c)		2.98	%(c)		4.08	%(c)
Net assets at end of the period (in millions)	$	9.4		$	6.6		$	0.9		$	0.2		$	0.9
Ratio of expenses to average net assets*		0.58	%(d)		0.67	%		0.73	%		0.72	%		0.72	%
Ratio of net investment income to average net assets*		4.30	%(d)		4.49	%		4.33	%		3.79	%		3.73	%
Portfolio turnover(e)		12	%		23	%		61	%		11	%		21	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)*		0.57	%(d)		0.65	%		0.69	%		0.72	%		0.72	%
* If certain expenses had not been voluntarily assumed by the adviser, total return would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.68	%(d)		0.77	%		0.83	%		0.82	%		0.82	%
Ratio of net investment income to average net assets		4.20	%(d)		4.39	%		4.23	%		3.69	%		3.63	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.67	%(d)		0.75	%		0.79	%		0.82	%		0.82	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption on Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $7,796.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
Ù	On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y shares.

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen Intermediate Term Municipal Income Fund (the “Fund”), is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Intermediate Term Municipal Income Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Tax Free Trust. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively, of the Fund.

26        Invesco Van Kampen Intermediate Term Municipal Income Fund

  Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.

  The Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, consistent with preservation of capital.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

27        Invesco Van Kampen Intermediate Term Municipal Income Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.
J.	Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located.
	Since many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
	There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
K.	Floating Rate Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating rate note and dealer trust obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest, line of credit and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The average floating rate notes outstanding and average annual interest and fee rate related to residual interests during the year ended September 30, 2010 were $4,271,039 and 0.87%, respectively.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $500 million		0	.50%
Over $500 million		0	.45%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $1,032,602 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares

28        Invesco Van Kampen Intermediate Term Municipal Income Fund

to 0.90%, 1.65%, 1.65% and 0.65% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012.

  Prior to the Reorganization, Van Kampen voluntarily waived $206,520 of fees and/or reimbursed expenses of the Acquired Fund.

  For the period ended September 30, 2010, the Adviser waived advisory fees of $113,979.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $25,848 to VKII. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  Prior to the Reorganization, under a legal services agreement, VKII provided legal services to the Acquired Fund. Pursuant to such agreement, the Acquired Fund paid $17,640 to VKII.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Pursuant to such agreement, for the period ended September 30, 2010, IIS was paid $51,796 for providing such services. Prior to the Reorganization, the Acquired Fund paid $33,495 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.

  With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class A, Class B and Class C shares. Pursuant to such agreements, the Acquired Fund paid $813,093 to VKFI.

  For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $26,495 in front-end sales commissions from the sale of Class A shares and $996, $3,657 and $2,824 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Prior to the Reorganization, VKFI retained $147,236 in front-end sales commissions from the sale of Class A shares and $21,852, for CDSC imposed on redemptions by shareholders.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

29        Invesco Van Kampen Intermediate Term Municipal Income Fund

  The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Municipal Securities	$	-0-	$	360,985,234	$	-0-	$	360,985,234

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period ended September 30, 2010, the Fund paid legal fees of $245 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $5,291 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	7,295	$	2,366
Ordinary income — tax exempt		12,170,068		8,333,691
Total distributions	$	12,177,363	$	8,336,057

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	341,728
Net unrealized appreciation — investments		23,316,258
Capital loss carryforward		(447,036	)
Shares of beneficial interest		334,922,493
Total net assets	$	358,133,443

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to bond premium.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

30        Invesco Van Kampen Intermediate Term Municipal Income Fund

  The Fund utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2015	$	2,882
September 30, 2017		320,180
September 30, 2018		123,974
Total capital loss carryforward	$	447,036

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $102,822,696 and $38,460,040, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	24,569,296
Aggregate unrealized (depreciation) of investment securities		(1,253,038	)
Net unrealized appreciation of investment securities	$	23,316,258
Cost of investments for tax purposes is $337,668,976.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of tax accretion, on September 30, 2010, undistributed net investment income (loss) was decreased by $8,233 and undistributed net realized gain (loss) was increased by $8,233. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	For The Year Ended September 30,
	2010(a)						2009
	Shares			Value			Shares			Value
Sales:
Class A		10,404,703	(b)	$	111,830,282	(b)		16,604,175		$	166,439,181
Class B		592,419			6,463,394			712,094			7,257,125
Class C		2,963,393			31,775,657			2,517,951			25,323,551
Class Y		458,457			4,925,585			590,535			6,196,076
Total Sales		14,418,972		$	154,994,918			20,424,755		$	205,215,933
Dividend Reinvestment:
Class A		771,076		$	8,299,496			530,836		$	5,393,306
Class B		34,155			373,544			29,205			299,557
Class C		118,971			1,280,132			68,636			697,263
Class Y		14,257			153,824			5,307			54,046
Total Dividend Reinvestment		938,459		$	10,106,996			633,984		$	6,444,172
Repurchases:
Class A		(7,478,946	)	$	(80,292,464	)		(6,605,144	)	$	(66,529,881	)
Class B		(411,113	)(b)		(4,495,030	)(b)		(529,019	)		(5,397,816	)
Class C		(1,100,898	)		(11,817,640	)		(808,587	)		(8,110,924	)
Class Y		(235,118	)		(2,522,015	)		(72,367	)		(724,174	)
Total Repurchases		(9,226,075	)	$	(99,127,149	)		(8,015,117	)	$	(80,762,795	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 44% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such a securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the share owned of record by these entities are also owned beneficially.

(b)

Includes automatic conversion of 125,572 Class B shares into 127,482 Class A shares at a value of $1,384,033.

31        Invesco Van Kampen Intermediate Term Municipal Income Fund

Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

NOTE 10—Purposes and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such instruments are typically created by a special purpose trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the special purpose trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

  The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

  In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

  The Fund may also invest in private placement securities. TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities.

NOTE 11—Borrowings

During the period ended September 30, 2010, the Acquired Fund entered into a $150,000,000 joint revolving bank credit facility. The Fund terminated its participation in the facility on May 31, 2010.

NOTE 12—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

NOTE 13—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Municipal Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

32        Invesco Van Kampen Intermediate Term Municipal Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Van Kampen Intermediate Term Municipal Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen Intermediate Term Municipal Income Fund (formerly known as Van Kampen Intermediate Term Municipal Income Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 20, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

33        Invesco Van Kampen Intermediate Term Municipal Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2		(09/30/10)		Period2		Ratio
A	$	1,000.00	$	1,056.07	$	4.23	$	1,020.96	$	4.15		0.82	%
B		1,000.00		1,051.32		8.07		1,017.20		7.94		1.57
C		1,000.00		1,052.03		8.08		1,017.20		7.94		1.57
Y		1,000.00		1,057.10		2.94		1,022.21		2.89		0.57

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010 through September 30, 2010, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year.

34        Invesco Van Kampen Intermediate Term Municipal Income Fund

Approval of Investment Advisory and Sub-advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco Van Kampen Intermediate Term Municipal Income Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Van Kampen retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these

35        Invesco Van Kampen Intermediate Term Municipal Income Fund

services to Invesco Funds in accordance with the terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

36        Invesco Van Kampen Intermediate Term Municipal Income Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Tax-Exempt Interest Dividends*	99.94%

*  The above percentages are based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

37        Invesco Van Kampen Intermediate Term Municipal Income Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Van Kampen Intermediate Term Municipal Income Fund was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		16,066,978		292,534		961,398		0

38        Invesco Van Kampen Intermediate Term Municipal Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

     Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-66242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its

reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

VK-ITMI-AR-1 Invesco Distributors, Inc.

Annual Report to Shareholders September 30, 2010

Invesco Van Kampen Municipal Income Fund

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
22	Financial Statements
25	Financial Highlights
28	Notes to Financial Statements
35	Auditor’s Report
36	Fund Expenses
37	Approval of Investment Advisory and Sub-Advisory Agreements
39	Tax Information
40	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

     Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2              Invesco Van Kampen Municipal Income Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3              Invesco Van Kampen Municipal Income Fund

Management’s Discussion of Fund Performance

Performance summary

All share classes of Invesco Van Kampen Municipal Income Fund at net asset value (NAV) posted positive returns during the 12-month reporting period ended September 30, 2010. The Fund’s Class A shares at NAV outperformed the Fund’s broad market and style-specific benchmark, the Barclays Capital Municipal Bond Index. The Fund’s security selection at the long end of the yield curve, and an overweight position and security selection in the life care asset class were the main contributors to relative outperformance versus the Barclays Capital Municipal Bond Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	6.54	%
Class B Shares	5.76
Class C Shares	5.69
Class Y Shares	6.81
Barclays Capital Municipal Bond Index▼ (Broad Market/Style-Specific Index)	5.81

^▼Lipper Inc.

How we invest

The Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, consistent with preservation of capital.

     Under normal market conditions, we seek to achieve the Fund’s investment objective by investing at least 80% of the Fund’s total assets in investment grade municipal securities. Investment grade securities are: securities rated BBB or higher by S&P or Baa or higher by Moody’s or an equivalent rating by another agency, comparably rated short term securities or unrated municipal securities which we have determined to be of comparable quality at the time of purchase.

     Under normal market conditions, the Fund may invest up to 20% of its total assets in municipal securities rated below investment grade. Lower grade securities

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	91.0	%
General Obligation Bonds	5.4
Pre-refunded Bonds	2.1
Cash/Other	1.5

Top Five Sectors*

1.  Hospital	20.0	%
2.  Life Care	10.5
3.  Utilities	9.1
4.  Bridge, Tunnel & Toll Road	8.1
5.  General Purpose	6.4

are commonly referred to as junk bonds and involve greater risks than investments in higher grade securities. The Fund does not purchase securities that are in default or rated in categories lower than B- by S&P or B3 by Moody’s or unrated securities of comparable quality.

     The Fund may invest all or a substantial portion of its total assets in municipal securities that are subject to the federal alternative minimum tax. Accordingly, the Fund may not be a suitable investment for investors who are already subject to the federal alternative minimum tax or could become subject to the federal alternative minimum tax as a result of an investment in the Fund. From time to time, the Fund temporarily may invest up to 10% of its total assets in tax-exempt money market funds, and such instruments will be treated as investments in municipal securities. Investments in other mutual funds may involve duplication of management fees and certain other expenses. We may sell securities based on factors such as degradation in credit quality, a decision to shorten or lengthen the Fund’s duration, or reducing exposure to a particular sector or issuer.

Total Net Assets	$697.6 million
Total Number of Holdings*		391

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

* Excluding money market fund holdings.

Market conditions and your Fund

Market conditions during the reporting period were influenced by two broad themes: private sector recovery and concerns over sovereign creditworthi-ness. In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high unemployment continued to weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased 3.7%.¹ The U.S. Federal Reserve Board (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy by stating: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

     Sector performance was driven by quality spread tightening largely as a result of continued flows into the municipal market combined with less tax-exempt issuance. As a result, BBB-rated and lower credit quality sectors outperformed. Fund flows have continued to remain strong after a record 2009.³ In addition, year-to-date issuance through the reporting period is about 2.2% ahead of last year’s pace, at $293.2 billion versus 286.9 billion.³ However, approximately 30% of supply since the beginning of the year was in the form of taxable municipal bonds.³

     The Fund generated positive absolute returns for the reporting period. Class A shares generated positive relative returns

4              Invesco Van Kampen Municipal Income Fund

versus the Barclays Municipal Bond Index. In terms of yield curve positioning, security selection in the 12- to 20-year range of the curve as well as on the long-end of the curve contributed to returns relative to the Barclays Capital Municipal Bond Index.

     During the reporting period, lower rated tax-exempt bonds experienced greater price increases relative to higher quality issues. An overweight exposure and security selection in BBB-rated bonds was a positive contributor to relative and absolute returns. Security selection in non-rated bonds also contributed to performance.

     At a sector level, the Fund’s underweight position and security selection in tax-supported bonds, specifically local general obligation bonds, was a contributor on a relative basis. At the industry level, our overweight and security selection in the life care asset class and industrial revenue bond/pollution control revenue bond sectors contributed to positive absolute and relative returns for the reporting period.

     Our overweight exposure and security selection in tobacco bonds detracted from performance on an absolute and relative basis for the period.

     We may use inverse floating rate securities in Invesco Van Kampen Municipal Income Fund to help manage duration, yield curve exposure and credit exposure, and to potentially enhance yield. Over the reporting period, the exposure to inverse floating rate securities in the Fund enhanced returns.

     Thank you for investing in Invesco Van Kampen Municipal Income Fund and for sharing our long-term investment horizon.

1	Bureau of Economic Analysis
2	U.S. Federal Reserve
3	Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Thomas Byron

Portfolio manager, is manager of Invesco Van Kampen Municipal Income Fund. Mr. Byron joined Invesco in 2010. He earned a B.S. in finance from Marquette University and an M.B.A. in finance from DePaul University.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen Municipal Income Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Robert Wimmel

Portfolio manager, is manager of Invesco Van Kampen Municipal Income Fund. Mr. Wimmel joined Invesco in 2010. Mr. Wimmel earned a B.A. in anthropology from the University of Cincinnati and an M.A. in economics from the University of Illinois, Chicago.

5              Invesco Van Kampen Municipal Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment — Oldest Share Class since Inception

Index data from 7/31/90, Fund data from 8/1/90

Past performance cannot guarantee comparable future results.

     The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management fees. Index results include reinvested dividends, but they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses and management fees; performance of a market index does not.

Performance shown in the chart and table(s) does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating changes in value during the early years shown in the chart. The vertical axis, the

one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

6              Invesco Van Kampen Municipal Income Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

							After Taxes
							on Distributions
				After Taxes			and Sale of
	Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (8/1/90)		5.10	%		4.85	%		4.91	%
10 Years		4.02			3.88			3.99
5 Years		2.39			2.12			2.46
1 Year		1.45			0.14			1.33
Class B Shares
Inception (8/24/92)		4.31	%		4.22	%		4.30	%
10 Years		3.91			3.77			3.83
5 Years		2.28			2.05			2.32
1 Year		0.76			-0.40			0.85
Class C Shares
Inception (8/13/93)		3.51	%		3.43	%		3.54	%
10 Years		3.74			3.62			3.68
5 Years		2.60			2.38			2.59
1 Year		4.69			3.53			3.40
Class Y Shares
Inception (8/12/05)		3.65	%		3.38	%		3.58	%
5 Years		3.63			3.35			3.55
1 Year		6.81			5.37			4.85

Effective June 1, 2010, Class A, Class B, Class C and Class I shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B, Class C and Class Y shares, respectively, of Invesco Van Kampen Municipal Income Fund. Returns shown above for Class A, Class B, Class C and Class Y shares are blended returns of the predecessor fund and Invesco Van Kampen Municipal Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.00%, 1.75%, 1.75% and 0.75%, respectively. The expense ratios presented above may vary from the expense ratios

presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the seventh year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0% at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their

shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

7              Invesco Van Kampen Municipal Income Fund

Invesco Van Kampen Municipal Income Fund’s investment objective is to provide investors with
a high level of current income exempt from federal income tax, consistent with preservation of
capital.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n	The yields of municipal securities may move differently and adversely compared to the yields of the overall debt securities markets. Although the interest received from municipal securities generally is exempt from federal income tax, the Fund may invest all or a substantial portion of its total assets in municipal securities subject to the federal alternative minimum tax. In addition, there could be changes in applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.
n	Risks of derivatives include possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to certain transactions; risks that the transactions may result in losses that partially or completely offset gains in portfolio positions; and risks that the transactions may not be liquid.
n	Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Medium-grade obligations possess speculative characteristics so that changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of the issuer to make principal and interest payments

	than in the case of higher-rated securities. The credit quality of noninvestment grade securities is considered speculative by recognized rating agencies with respect to the issuer’s continuing ability to pay interest and principal. Lower-grade securities (also sometimes known as junk bonds) may have less liquidity and a higher incidence of default than higher-grade securities. The Fund may incur higher expenses to protect the Fund’s interest in such securities. The credit risks and market prices of lower-grade securities generally are more sensitive to negative issuer developments or adverse economic conditions than are higher-grade securities.
n	The income you receive from the Fund is based primarily on prevailing interest rates, which can vary widely over the short and long term. If interest rates drop, your income from the Fund may drop as well.
n	If interest rates fall, it is possible that issuers of securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from the called securities would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.
n	Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in debt securities generally are affected by changes in interest rates and the creditworthiness of the issuer. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities. As interest rates change, zero coupon bonds often fluctuate more in price than traditional debt securities and may subject the Fund to greater market risk than a fund that does not own these types of securities.

About indexes used in this report

n	The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.
n	The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

n

The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

n

The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols
Class A Shares	VKMMX
Class B Shares	VMIBX
Class C Shares	VMICX
Class Y Shares	VMIIX

8              Invesco Van Kampen Municipal Income Fund

Schedule of Investments

September 30, 2010

						Par
						Amount
	Coupon			Maturity		(000)		Value
Municipal Bonds–107.8%
Alabama–1.5%
Courtland, AL Indl Dev Brd Solid Waste Disp Rev Rfdg Intl Paper Co Proj (AMT)		5.200	%		06/01/25	$	2,500	$	2,494,725
Healthcare Auth for Baptist Hlth AL, Ser A(a)		6.125	%		11/15/36		2,000		2,096,900
Huntsville Redstone Vlg, AL Spl Care Fac Fin Auth Redstone Vlg Proj		5.500	%		01/01/43		900		732,861
Selma, AL Indl Dev Brd Rev Gulf Opportunity Zone Intl Paper Co Proj, Ser A		6.250	%		11/01/33		1,800		1,943,766
University AL at Birmingham Hosp Rev, Ser A(a)		5.750	%		09/01/22		3,000		3,352,590
									10,620,842
Alaska–1.5%
Alaska Indl Dev & Expt Auth Rev Lake Dorothy Hydroelectric Proj (AMBAC Insd) (AMT)		5.000	%		12/01/35		3,015		2,741,962
Alaska Muni Bd Bk, Ser 1		5.750	%		09/01/33		200		219,002
Matanuska Susitna Boro, AK Goose Greek Creek Correctional Ctr (AGL Insd)		6.000	%		09/01/28		5,000		5,952,550
Northern Tob Sec Corp Rev Bkd, Ser A		5.000	%		06/01/46		2,000		1,361,640
									10,275,154
Arizona–3.8%
Flagstaff, AZ Indl Dev Auth Rev Sr Living Cmnty Northn AZ Rfdg		5.700	%		07/01/42		1,000		843,910
Glendale, AZ Indl Dev Auth Midwestern Univ		5.000	%		05/15/35		500		514,995
Glendale, AZ Indl Dev Auth Midwestern Univ		5.125	%		05/15/40		1,000		1,034,110
Glendale, AZ Indl Dev Auth Rfdg		5.000	%		12/01/35		1,655		1,597,456
Maricopa Cnty, AZ Pollutn Rfdg AZ Pub Svc Co, Ser A(a)		6.000	%		05/01/29		1,000		1,082,100
Navajo Cnty, AZ Pollutn Ctl Corp Rev, Ser C(a)		5.500	%		06/01/34		1,000		1,085,850
Navajo Cnty, AZ Pollutn Ctl Corp Rev, Ser E(a)		5.750	%		06/01/34		1,000		1,083,340
Phoenix, AZ Civic Impt Corp Arpt Rev Sr Lien, Ser B (AMT)		5.250	%		07/01/19		1,000		1,121,480
Phoenix, AZ Civic Impt Corp Arpt Rev Sr Lien, Ser B (NATL Insd) (AMT)		5.250	%		07/01/32		5,000		5,039,950
Phoenix, AZ Indl Dev Auth Ed Rev Career Success Sch Proj		7.000	%		01/01/39		600		637,242
Phoenix, AZ Indl Dev Auth Ed Rev Career Success Sch Proj		7.125	%		01/01/45		570		608,407
Pima Cnty, AZ Indl Dev Auth Wtr & Waste Wtr Rev Global Wtr Resh LLC Proj (AMT)		6.375	%		12/01/18		815		824,462
Pima Cnty, AZ Indl Dev Auth Wtr & Waste Wtr Rev Global Wtr Resh LLC Proj (AMT)		6.550	%		12/01/37		1,600		1,617,008
Pinal Cnty, AZ Elec Dist 4 Elec Sys Rev		6.000	%		12/01/23		550		597,223
Pinal Cnty, AZ Elec Dist 4 Elec Sys Rev		6.000	%		12/01/28		740		789,587
Salt River Proj AZ Agric Impt, Ser A		5.000	%		01/01/39		6,000		6,468,120
University Med Ctr Corp AZ		6.000	%		07/01/24		1,250		1,371,050
									26,316,290
California–12.0%
Adelanto, CA Pub Util Auth Rev Rfdg Util Sys Proj, Ser A		6.750	%		07/01/39		2,000		2,105,600
Anaheim, CA Pub Fin Auth Lease Rev Cap Apprec Sub Pub Impt Proj, Ser C (AGM Insd)		*			09/01/20		4,870		3,128,050
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(c)		5.000	%		04/01/39		3,620		3,822,611
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(c)		5.125	%		04/01/39		5,000		5,356,250
Beverly Hills, CA Uni Sch Dist Cap Apprec 2008 Election		*			08/01/27		2,000		925,440
Beverly Hills, CA Uni Sch Dist Cap Apprec 2008 Election		*			08/01/28		2,000		871,800
California Cnty, CA Tob Sec Agy Tob LA Cnty Sec(d)		0.000/5.250	%		06/01/21		2,000		1,901,620
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser A		6.000	%		07/01/39		2,000		2,198,200

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
California–(continued)
California Hsg Fin Agy Rev Home Mtg, Ser I (AMT)(c)		4.800	%		08/01/36	$	6,690	$	5,727,777
California St Econ Recovery Rfdg, Ser A		5.250	%		07/01/21		1,000		1,181,740
California St Var Purp		5.750	%		04/01/31		1,350		1,491,723
California Statewide Cmnty Dev Auth Rev CA Baptist Univ, Ser A		5.500	%		11/01/38		1,250		1,090,962
California Statewide Cmnty Dev Auth Rev Front Porch Cmnty & Svc, Ser A(e)		5.125	%		04/01/37		1,000		953,360
California Statewide Cmnty Dev Auth Rev Mtg Methodist Hosp Proj (FHA Gtd)		6.250	%		08/01/24		2,000		2,401,340
California Statewide Cmnty Dev Auth Rev Sr Living-Southn CA Presbyterian Homes		6.250	%		11/15/19		500		541,995
California Statewide Cmnty Sr Living Southn CA		6.625	%		11/15/24		2,000		2,200,260
Desert Hot Springs, CA Redev Agy Tax Alloc Merged Redev Proj, Ser A2		5.000	%		09/01/23		1,610		1,658,525
Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg (NATL Insd)		*			01/15/17		3,000		2,025,690
Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap Apprec Rfdg		*			01/15/24		21,000		8,700,930
Golden St Tob Sec Corp CA Tob Settlement Rev Asset Bkd Sr, Ser A-1		4.500	%		06/01/27		1,290		1,155,505
Golden St Tob Sec Corp CA Tob Settlement Rev Asset Bkd Sr, Ser A-1		5.750	%		06/01/47		4,000		3,046,120
Hesperia, CA Pub Fin Auth Rev Redev & Hsg Proj, Ser A (Syncora Gtd)		5.000	%		09/01/37		1,400		1,096,298
Lancaster, CA Rev Dev Agy Tax Comb Rev Dev Proj Areas		6.500	%		08/01/29		2,000		2,273,980
Los Angeles, CA Un Sch Dist, Ser I		5.000	%		07/01/29		3,000		3,229,860
Los Angeles, CA Wtr & Pwr Rev Pwr Sys, Ser A-1(c)		5.250	%		07/01/38		2,000		2,175,540
Poway, CA Un Sch Dist Election 2008 Impt Dist 2007, Ser 1-A		*			08/01/23		2,750		1,463,110
Poway, CA Uni Sch Dist Election 2008 Impt Dist 2007, Ser 1-A		*			08/01/26		1,000		442,180
Richmond, CA Jt Pwr Fin Auth Rev Lease Point Potrero, Ser A		6.250	%		07/01/24		2,500		2,817,875
Sacramento Cnty CA Arpt Sys Rev Sr		5.000	%		07/01/40		2,100		2,171,946
San Francisco, CA City & Cnty Mission Bay South Rev Dev, Ser D		6.000	%		08/01/24		1,000		1,097,600
Tobacco Sec Auth Southn CA Tob Settlement Sr, Ser A-1		5.000	%		06/01/37		1,000		774,640
Turlock, CA Hlth Fac Rev Emanuel Med Ctr Inc		5.375	%		10/15/34		1,600		1,567,184
University CA Rev, Ser O(c)		5.750	%		05/15/23		2,295		2,794,782
University CA Rev, Ser O(c)		5.750	%		05/15/25		3,390		4,095,154
West Contra Costa CA Uni Election of 2002, Ser B (AGM Insd)		5.000	%		08/01/26		5,000		5,105,000
									83,590,647
Colorado–3.0%
Colorado Hlth Fac Auth Rev Amern Baptist Home, Ser A		5.900	%		08/01/37		3,000		2,596,170
Colorado Hlth Fac Auth Rev Evangelical Lutheran, Ser A		5.250	%		06/01/34		1,000		1,001,580
Colorado Hlth Fac Auth Rev Poudre Vly CO Hlth Fac Auth Hosp, Ser A (AGM Insd)		5.200	%		03/01/31		2,000		2,142,540
Denver, CO City & Cnty Justice Sys(c)		5.000	%		08/01/24		1,500		1,723,515
Denver, CO City & Cnty Justice Sys(c)		5.000	%		08/01/25		6,000		6,861,480
Lincoln Pk, CO Metro Dist Rfdg & Impt		6.200	%		12/01/37		2,000		2,043,840
Montezuma Cnty, CO Hosp Dist Hlth Fac Enterprise Hosp Rfdg		5.900	%		10/01/37		500		446,390
North Range Metro Dist No 2 CO Ltd Tax		5.500	%		12/15/27		1,830		1,562,545
Regional Trans Dist CO Denver Trans Partners		6.000	%		01/15/41		1,250		1,328,825
Regional Trans Dist CO Denver Trans Partners		6.500	%		01/15/30		1,150		1,283,113
									20,989,998

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Connecticut–0.4%
Connecticut St Dev Auth Hlth Fac Rev Alzheimers Res Ctr Conn Inc Proj		5.500	%		08/15/27	$	1,000	$	898,350
Hamden, CT Fac Rev Whitney Ctr Proj, Ser B		6.125	%		01/01/14		1,000		1,014,340
Hamden, CT Fac Rev Whitney Ctr Proj, Ser C(a)		7.250	%		01/01/43		1,000		1,071,730
									2,984,420
Delaware–0.1%
New Castle Cnty, DE Rev Newark Charter Sch Inc Proj		5.000	%		09/01/22		630		626,063
District of Columbia–3.1%
District Columbia Hosp Rev Sibley Mem Hosp		6.375	%		10/01/34		2,200		2,413,796
District Columbia Income Tax Rev, Ser A(c)		5.000	%		12/01/23		4,285		4,936,963
District Columbia Income Tax Rev, Ser B(c)		5.000	%		12/01/24		1,715		1,968,408
District Columbia Tax Incrmnt Gallery Place Proj (AGM Insd)		5.250	%		07/01/27		5,150		5,288,844
District Columbia Wtr & Swr Auth Pub Util Rev Sub Lien, Ser A (AGM Insd)		5.500	%		10/01/41		4,000		4,313,920
Metropolitan Washington DC Arpt Auth Sys, Ser A (NATL Insd) (AMT)		5.250	%		10/01/32		3,000		3,042,930
									21,964,861
Florida–5.1%
Alachua Cnty, FL Indl Dev Rev North FL Retirement Vlg		5.250	%		11/15/17		1,000		997,880
Alachua Cnty, FL Indl Dev Rev North FL Retirement Vlg		5.875	%		11/15/36		1,000		906,750
Broward Cnty, FL Arpt Sys Rev, Ser J-I (AMBAC Insd) (AMT)		5.250	%		10/01/26		5,000		5,057,200
Capital Tr Agy FL Rev Ft Lauderdale Proj (AMT)		5.750	%		01/01/32		1,000		943,760
Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC Insd)		5.950	%		07/01/20		435		453,013
Fiddlers Creek Cmnty Dev Dist No 1 FL Spl Assmt Rev(f)		6.000	%		05/01/38		1,665		632,866
Florida St Brd Ed Pub Ed Rfdg Cap Outlay 2007, Ser A		5.000	%		06/01/19		3,715		4,310,069
Florida St Tpk Auth Tpk Rev Rfdg Dept Trans, Ser A(c)		5.000	%		07/01/26		1,305		1,416,069
Florida St Tpk Auth Tpk Rev Rfdg Dept Tran, Ser A(c)		5.000	%		07/01/27		1,325		1,431,994
Florida St Tpk Auth Tpk Rev Rfdg Dept Trans, Ser A(c)		5.000	%		07/01/28		1,440		1,548,245
Florida St Tpk Auth Tpk Rev Rfdg Dept Trans, Ser A(c)		5.000	%		07/01/32		2,500		2,662,525
Grand Bay at Doral Cmnty Dev Dist FL, Ser B		6.000	%		05/01/17		5,000		1,901,500
Main Str Cmnty Dev Dist FL Cap Impt Rev, Ser B (Acquired 2/19/08, Cost $1,000,000)(h)		6.900	%		05/01/17		1,000		958,680
Miami Dade Cnty, FL Aviation Rev Miami Intl Arpt, Ser A		5.375	%		10/01/35		2,000		2,107,560
Orange Cnty, FL Hlth Fac Auth Rev First Mtg Orlando Lutheran Tower		5.500	%		07/01/38		1,750		1,565,235
Palm Beach Cnty, FL Hlth Fac Auth Rev Wtrford Proj		5.875	%		11/15/37		800		773,128
Putnam Cnty, FL Dev Auth Pollutn Ctl Rev Rfdg Seminole Proj, Ser A (AMBAC Insd)(a)		5.350	%		03/15/42		2,200		2,444,574
Reunion East Cmnty Dev Dist FL Spl Assmt		5.800	%		05/01/36		490		269,725
Seminole Tribe FL Spl Oblig Rev, Ser A(e)		5.250	%		10/01/27		3,000		2,863,650
Seven Oaks, FL Cmnty Dev Dist II Spl Assmt Rev, Ser A		6.400	%		05/01/34		1,390		1,401,384
Tolomato Cmnty, FL Dev Dist Spl Assmt		6.550	%		05/01/27		400		300,828
Tolomato Cmnty, FL Dev Dist Spl Assmt		6.650	%		05/01/40		665		498,757
World Comm Cmnty Dev Dist FL Spl Assmt(f)		5.500	%		05/01/38		1,000		332,670
									35,778,062
Georgia–1.5%
Atlanta, GA Tax Alloc Beltline Proj, Ser B		7.375	%		01/01/31		2,500		2,613,325
Atlanta, GA Tax Alloc Eastside Proj, Ser B		5.600	%		01/01/30		2,500		2,542,450
Atlanta, GA Wtr & Waste Wtr Rev, Ser A		6.000	%		11/01/27		1,000		1,140,840

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Georgia–(continued)
Atlanta, GA Wtr & Waste Wtr Rev, Ser A		6.000	%		11/01/28	$	1,000	$	1,136,780
Gainesville & Hall Cnty, GA Dev Acts Retirement Life Cmnty, Ser A-2		6.375	%		11/15/29		700		750,176
Putnam Cnty, GA Dev Auth Pollutn Ctl Rev GA Pwr Co, Ser 1		5.100	%		06/01/23		2,000		2,070,440
									10,254,011
Hawaii–1.6%
Hawaii St Dept Budget & Fin Spl Purp Rev Hawaiian Elec Co Subsidary		6.500	%		07/01/39		2,000		2,228,380
Hawaii St Dept Budget & Fin Spl Purp Rev, Ser C-1		7.500	%		11/15/15		2,000		2,054,300
Hawaii St Dept Budget & Fin Spl Purp Rev, Ser C-2		6.400	%		11/15/14		1,000		1,012,110
Hawaii St, Ser DK(c)		5.000	%		05/01/23		5,125		5,831,328
									11,126,118
Idaho–0.8%
Idaho Hlth Fac Auth Rev Saint Lukes Hlth Sys Proj, Ser A		6.500	%		11/01/23		1,000		1,159,090
Idaho Hlth Fac Auth Rev Vly Vista Care Corp Rfdg		6.125	%		11/15/27		635		578,936
Idaho Hsg & Fin Assn Single Family Mtg Rev, Ser A (AMT)		5.750	%		07/01/39		1,965		2,065,726
Idaho Hsg & Fin Assn Single Family Mtg Rev, Ser A (AMT)		5.850	%		07/01/36		1,520		1,610,257
									5,414,009
Illinois–10.2%
Bartlett, IL Tax Increment Rev Sr Lien Quarry Redev Proj Rfdg		5.600	%		01/01/23		2,250		1,981,597
Bolingbrook, IL Sales Tax Rev Bolingbrook		6.250	%		01/01/24		1,500		954,030
Chicago, IL Increment Alloc Rev Diversey Narragansett Proj (Acquired 08/01/06, Cost $522,987)(h)		7.460	%		02/15/26		490		490,877
Chicago, IL Increment Alloc Rev Rfdg NT Roosevelt Square ABLA, Ser A		7.130	%		03/15/22		2,000		2,030,960
Chicago, IL Lakefront Millennium Pkg Fac (NATL Insd) (Prerefunded @ 01/01/12)		5.650	%		01/01/19		3,000		3,253,710
Chicago, IL Metro Wtr Reclamation Capital Impt Bonds(i)		7.000	%		01/01/11		355		360,520
Chicago, IL O’Hare Intl Arpt Rev, Ser A (AGM Insd)(c)		5.000	%		01/01/33		3,000		3,104,880
Chicago, IL Proj Rfdg, Ser C (NATL Insd)		5.750	%		01/01/16		1,200		1,216,572
Chicago, IL Tax Increment Alloc Santn Drain & Ship Canal, Ser A		7.750	%		01/01/14		620		621,215
Gilberts, IL Spl Svc Area No 19 Spl Tax, Ser 1(f)		5.375	%		03/01/16		1,000		520,200
Illinois Dev Fin Auth Pollutn Ctl Rev Amerencips Rfdg, Ser A(a)		5.500	%		03/01/14		5,050		5,070,149
Illinois Fin Auth Rev Advocate Hlthcare Network, Ser D		6.500	%		11/01/38		1,000		1,143,010
Illinois Fin Auth Rev Art Institute Chicago, Ser A		6.000	%		03/01/38		2,500		2,763,975
Illinois Fin Auth Rev Fairview Oblig Grp Rfdg, Ser A		6.000	%		08/15/22		250		236,190
Illinois Fin Auth Rev Kewanee Hosp Proj		5.100	%		08/15/31		920		760,224
Illinois Fin Auth Rev Northwestn Mem Hosp, Ser A(c)		5.375	%		08/15/24		1,000		1,114,480
Illinois Fin Auth Rev Northwestn Mem Hosp, Ser A(c)		5.750	%		08/15/30		2,000		2,222,900
Illinois Fin Auth Rev Resurrection Hlthcare (AGM Insd)		5.000	%		05/15/15		4,700		5,132,917
Illinois Fin Auth Rev Resurrection Hlthcare (AGM Insd)		5.000	%		05/15/17		5,100		5,545,536
Illinois Fin Auth Rev Resurrection Hlthcare (AGM Insd)		5.000	%		05/15/18		5,050		5,475,513
Illinois Fin Auth Rev Rfdg Fairview Oblig Grp, Ser A		5.500	%		08/15/18		1,000		941,970
Illinois Fin Auth Rev Rfdg Fairview Oblig Grp, Ser A		6.125	%		08/15/28		1,500		1,370,295
Illinois Fin Auth Rev Riverside Hlth Sys		6.250	%		11/15/35		2,000		2,155,420
Illinois Fin Auth Rev Rush Univ Med Ctr Oblig Grp, Ser A		7.250	%		11/01/38		2,500		2,872,025
Illinois Fin Auth Rev Sherman Hlth Sys, Ser 2007-A		5.500	%		08/01/37		2,000		1,953,240
Illinois Fin Auth Rev Silver Cross Hosp & Med Rfdg		6.000	%		08/15/23		1,745		1,933,425

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Illinois–(continued)
Illinois Fin Auth Rev Temps 65 Pk Pl Elmhurst, Ser D-2		7.000	%		11/15/15	$	1,500	$	1,510,005
Metropolitan Pier & Expo Auth IL Dedicated St Tax McCormick Pl Expn Proj A Rfdg		5.500	%		06/15/27		1,500		1,501,845
Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev Cap Apprec McCormick Rfdg (NATL Insd)(d)		0.000/5.400	%		06/15/19		9,250		9,396,058
Pingree Grove Vlg, IL Spl Svc Area No 1 Spl Tax Cambridge Lakes Proj, Ser 05		5.250	%		03/01/15		1,458		1,420,967
Plano, IL Spl Svc Area No 6 Spl Tax Lakewood Springs Club Proj		5.800	%		03/01/37		1,500		781,635
Volo Vlg, IL Spl Svc Area No 3 Symphony Meadows Proj, Ser 1		6.000	%		03/01/36		549		459,293
Will-Kankakee Regl Dev Auth IL Multi-Family Hsg Rev Sr Estates Supportive Living (AMT)		7.000	%		12/01/42		425		408,200
Yorkville, IL Utd City Spl Svc Area Spl Tax No 2004-107 Raintree Vlg IL Proj		6.250	%		03/01/35		991		566,446
									71,270,279
Indiana–1.4%
Indiana Hlth & Ed Fac Fin Auth Hosp Rev Cmnty Fndtn Northwest IN		5.500	%		03/01/22		500		529,505
Indiana Hlth Fac Fin Auth Rev Hoosier Care Proj, Ser A		7.125	%		06/01/34		1,770		1,729,839
Indiana Muni Pwr Agy Pwr Supply Indiana Muni Pwr Agy, Ser B		6.000	%		01/01/39		3,000		3,331,140
Indianapolis, IN Arpt Auth Rev Rfdg Spl Fac Fed Ex Corp Proj (AMT)		5.100	%		01/15/17		1,500		1,620,330
Indianapolis, IN Loc Pub Impt Ser D		6.750	%		02/01/14		465		504,669
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/11		140		132,574
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/12		140		122,794
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/13		135		109,644
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/14		130		97,798
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/15		130		90,572
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/16		135		87,110
Saint Joseph Cnty, IN Redev Dist Tax Increment Rev, Ser B		*			06/30/17		225		134,458
Vigo Cnty, IN Hosp Auth Rev Union Hosp Inc(e)		5.500	%		09/01/27		1,500		1,498,290
									9,988,723
Iowa–1.6%
Altoona, IA Urban Renewal Tax Increment Rev Annual Appropriation		6.000	%		06/01/34		1,860		1,971,060
Coralville, IA Ctf Partn, Ser D		5.250	%		06/01/26		1,125		1,191,544
Iowa Fin Auth Hlthcare Fac Rev Madrid Home Proj		5.750	%		11/15/24		1,100		985,523
Iowa St Spl Oblig I Jobs Prog, Ser A(b)(c)		5.000	%		06/01/27		4,650		5,191,446
Jefferson Cnty, IA Hosp Rev Jefferson Cnty Hosp Proj, Ser C		5.950	%		08/01/37		1,000		867,090
Tobacco Settlement Auth IA Tob Settlement Rev, Ser C		5.375	%		06/01/38		1,000		791,180
									10,997,843
Kansas–1.1%
Burlington, KS Environmental Impt Rev KC Pwr Lt Rfdg, Ser B (Syncora Gtd)(a)		5.000	%		12/01/23		1,000		1,018,300
Kansas St Dev Fin Auth Hosp Rev Adventist Hlth		5.500	%		11/15/29		1,500		1,660,860
Lenexa, KS Hlthcare Fac Rev Rfdg & Impt		5.500	%		05/15/39		3,000		2,563,740
Manhattan, KS Hlthcare Fac Rev Meadowlark Hills Retirement, Ser A		5.000	%		05/15/24		1,600		1,483,312
Manhattan, KS Hlthcare Fac Rev Meadowlark Hills Retirement, Ser A		5.000	%		05/15/36		1,000		816,090
Manhattan, KS Hlthcare Fac Rev Meadowlark Hills Retirement, Ser B		5.125	%		05/15/42		400		322,936
									7,865,238
Kentucky–1.8%
Kentucky Econ Dev Fin Auth Hosp Fac Rev Baptist Hlthcare Sys, Ser A		5.375	%		08/15/24		3,000		3,349,110
Kentucky Econ Dev Fin Auth Hosp Fac Rev Baptist Hlthcare Sys, Ser A		5.625	%		08/15/27		1,000		1,120,990

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Kentucky–(continued)
Kentucky Econ Dev Fin Auth Hosp Fac Rev Owensboro Med Hlth Sys, Ser A		6.500	%		03/01/45	$	1,500	$	1,612,350
Kentucky Econ Dev Fin Auth Louisville Arena Proj Rev Sub, Ser A-1 (AGL Insd)		6.000	%		12/01/33		4,000		4,400,200
Paducah, KY Elec Plt Brd Rev, Ser A (AGL Insd)		5.250	%		10/01/35		2,000		2,148,120
									12,630,770
Louisiana–1.0%
Lakeshore Vlg Master Cmnty Dev Dist LA Spl Assmt		5.250	%		07/01/17		1,364		743,926
Louisiana Pub Fac Auth Rev Entergy LA LLC Proj		5.000	%		06/01/30		1,050		1,058,967
New Orleans, LA Aviation Brd Rev Rfdg Restructuring Garbs, Ser A-1 (AGL Insd)		6.000	%		01/01/23		1,000		1,168,810
Rapides Fin Auth LA Rev Cleco Pwr Proj (AMT)(a)		5.250	%		11/01/37		1,550		1,649,804
Rapides Fin Auth LA Rev Cleco Pwr Proj (AMT)(a)		6.000	%		10/01/38		2,000		2,069,300
									6,690,807
Maryland–1.6%
Baltimore, MD Spl Oblig Spc Oblig, Ser A		7.000	%		09/01/38		1,000		1,039,900
Howard Cnty, MD Retirement Cmnty Vantage House Fac Rfdg, Ser B		5.250	%		04/01/37		2,000		1,576,720
Maryland St Cmnty Dev Admin Dept Hsg & Cmnty Dev, Ser H (AMT)		5.050	%		09/01/32		3,105		3,213,178
Maryland St Econ Dev Corp Econ Dev Rev Term Proj, Ser B		5.750	%		06/01/35		1,460		1,533,890
Maryland St Econ Dev Corp Econ Dev Rev Trans Fac Proj, Ser A		5.375	%		06/01/25		1,030		1,084,271
Maryland St Trans Auth Grant & Rev Antic		5.250	%		03/01/20		2,000		2,440,840
Prince Georges Cnty, MD Spl Oblig Natl Harbor Proj		5.200	%		07/01/34		300		278,376
									11,167,175
Massachusetts–0.8%
Massachusetts St College Bldg, Ser A		5.500	%		05/01/39		1,000		1,109,210
Massachusetts St Dev Fin Agy Rev Linden Ponds Inc Fac, Ser A		5.750	%		11/15/35		2,400		1,779,888
Massachusetts St Dev Fin Agy Solid Waste Disp Rev Dominion Energy Brayton Rfdg, Ser 1(a)		5.750	%		12/01/42		2,000		2,223,740
Massachusetts St Hlth & Ed Fac Auth Rev Bal Structured Ylg, Ser G (NATL Insd)(a)		5.000	%		07/01/13		400		400,704
									5,513,542
Michigan–2.3%
Detroit, MI Wtr Supply Sys Rfdg Second Lien, Ser C (AGM Insd)		5.000	%		07/01/26		2,000		2,062,320
Green Lake Twp MI Econ Dev Corp Rev Rfdg Interlochen Ctr Proj(l)		0.300	%		06/01/34		3,000		3,000,000
Iron River, MI Hosp Fin Auth Rfdg Iron Cnty Cmnty Hosp		6.000	%		05/15/20		2,195		2,239,163
Kent Hosp Fin Auth MI Rev Spectrum Hlth, Ser A(a)		5.250	%		01/15/47		650		728,813
Kent Hosp Fin Auth MI Rev Spectrum Hlth, Ser A(a)		5.500	%		01/15/47		375		432,720
Michigan St Strategic Fd Ltd Oblig Rev Detroit Edison Co Proj Rfdg, Ser C (Syncora Gtd) (AMT)		5.450	%		12/15/32		5,000		5,007,250
Michigan St Strategic Fd Solid Genesee Pwr Stad Proj Rfdg (AMT)		7.500	%		01/01/21		1,610		1,496,286
Michigan Tob Settlement Fin Auth Tob Settlement Asset Sr, Ser A		6.000	%		06/01/48		2,000		1,542,800
									16,509,352
Minnesota–1.4%
Chisago, MN Hlthcare Fac Rev CDL Homes LLC Proj		6.000	%		08/01/42		450		452,578
Columbia Heights, MN Multi-Family & Hlthcare Fac Rev Rfdg Crest View Corp Proj A		5.700	%		07/01/42		1,000		795,030
Duluth, MN Hsg & Redev Auth Hlthcare & Hsg Rev Benedictine Hlth Ctr Proj		5.700	%		11/01/22		380		381,075
Duluth, MN Hsg & Redev Auth Hlthcare & Hsg Rev Benedictine Hlth Ctr Proj		5.875	%		11/01/33		750		738,780
Minneapolis, MN Hlthcare Sys Rev Fairview Hlth Svc, Ser A		6.750	%		11/15/32		3,000		3,454,920

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Minnesota–(continued)
Minneapolis, MN Hsg & Hlthcare Fac Rev Providence Proj Rfdg, Ser A		5.625	%		10/01/27	$	2,000	$	1,997,180
North Oaks, MN Sr Hsg Rev Presbyterian Homes North Oaks		6.000	%		10/01/27		150		153,089
Saint Paul, MN Hsg & Redev Auth Hlthcare Fac Rev Hlth Partners Oblig Grp Proj		5.250	%		05/15/36		2,000		1,955,780
									9,928,432
Mississippi–1.0%
Mississippi Business Fin Corp MS Pollutn Ctl Rev Sys Energy Res Inc Proj		5.875	%		04/01/22		2,000		2,000,160
Mississippi Business Fin Corp. MS Gulf Opportunity Zone Chevron USA Inc Proj, Ser A(l)		0.270	%		12/01/30		4,700		4,700,000
									6,700,160
Missouri–4.0%
Cape Girardeau Cnty, MO Indl Dev St Francis Med Ctr		5.750	%		06/01/39		2,150		2,285,471
Carthage, MO Hosp Rev		5.750	%		04/01/22		1,000		905,650
Carthage, MO Hosp Rev		5.875	%		04/01/30		1,000		898,400
Kansas City, MO Indl Dev Auth Plaza Lib Proj		6.000	%		03/01/16		3,000		3,083,610
Kansas City, MO Tax Increment Fin Comm Kansas City MO Maincor Proj, Ser A		5.250	%		03/01/18		500		506,720
Kirkwood, MO Indl Dev Auth Retirement Cmnty Rev Temp 75 Aberdeen Hts, Ser C-1		7.500	%		11/15/16		1,600		1,621,632
Maryland Heights, MO Tax Increment Rev South Heights Redev Proj Rfdg, Ser A		5.500	%		09/01/18		605		585,011
Missouri St Environmental Impt & Energy Res Auth KC Pwr & LT Co Proj (AMT)(a)		4.900	%		05/01/38		2,700		2,869,236
Missouri St Hlth & Ed Fac Auth Rev Sr Living Fac Lutheran Rfdg, Ser B		5.125	%		02/01/27		1,200		1,200,744
Missouri St Hlth & Ed Fac Auth Rev Sr Living Fac Lutheran Sr		5.500	%		02/01/42		950		953,363
Raytown, MO Annual Raytown Live Redev Plan Proj 1		5.125	%		12/01/31		3,325		3,374,443
Saint Louis Cnty, MO Indl Dev Auth Hlth Fac Rev Ranken Jordan Proj Rfdg		5.000	%		11/15/35		1,300		1,112,839
Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac Rev Friendship Vlg West Cnty, Ser A		5.375	%		09/01/21		1,000		1,019,910
Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac Rev Friendship Vlg West Cnty, Ser A		5.500	%		09/01/28		3,000		2,956,200
Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac Rev Saint Andrews Res for Srs, Ser A		6.375	%		12/01/30		500		453,940
Saint Louis Cnty, MO Indl Dev Auth Sr Living Fac Rev Saint Andrews Res for Srs, Ser A		6.375	%		12/01/41		1,250		1,117,750
Saint Louis, MO Indl Dev Auth Tax Increment & Cmnty Impt Dist Loughborough Com Redev Rfdg		5.750	%		11/01/27		450		432,477
Springfield, MO Pub Bldg Corp Leasehold Rev, Ser B (AMBAC Insd) (AMT)		4.550	%		07/01/29		2,205		2,224,977
									27,602,373
Montana–0.4%
Forsyth Mont Pollutn Ctl Rev Rfdg Portland Gen, Ser A		5.000	%		05/01/33		2,600		2,728,310
Nebraska–0.3%
Municipal Energy Agy of NE Pwr Supply Sys Rev Rfdg, Ser A (BHAC Insd)		5.375	%		04/01/39		1,000		1,097,150
University NB Univ Rev Lincoln Student Fees & Fac, Ser A		5.250	%		07/01/39		1,000		1,097,750
									2,194,900
Nevada–0.2%
Clark Cnty, NV Indl Dev Rev Southwest Gas Corp Proj, Ser A (BHAC Insd) (AMT)		4.750	%		09/01/36		70		66,159
Mesquite, NV Spl Impt Dist No 07-01 Loc Impt-Anthem at Mesquite		5.850	%		08/01/18		620		599,918
Mesquite, NV Spl Impt Dist No 07-01 Loc Impt-Anthem at Mesquite		6.000	%		08/01/27		535		473,347
									1,139,424
New Hampshire–0.7%
New Hampshire St Business Fin Auth Elec Fac Rev Plymouth Cogeneration (AMT) (Acquired
06/29/93, Cost $376,827)(h)		7.750	%		06/01/14		385		384,923

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
New Hampshire–(continued)
New Hampshire St Business Fin Auth Pollutn Ctl Rev Utd Illum Co Proj (AMT)(a)		7.125	%		07/01/27	$	3,250	$	3,404,733
New Hampshire St Business Fin Auth Rev First Mtg Huggins Hosp		6.875	%		10/01/39		1,000		1,035,160
									4,824,816
New Jersey–3.6%
Burlington Cnty, NJ Brdg Cmnty Econ Dev Rev Evergreens Proj		5.625	%		01/01/38		375		339,937
Landis, NJ Sew Auth Swr Rev Reg Cars (NATL Insd)(j)		9.244	%		09/19/19		2,350		3,086,819
New Jersey Econ Dev Auth Msu Student Housing PJ-Provide Group-Montclair LLC, Ser AA		5.750	%		06/01/31		1,450		1,546,207
New Jersey Econ Dev Auth Ret Cmnty Rev Seabrook Vlg Inc Fac Rfdg		5.250	%		11/15/26		750		697,462
New Jersey Econ Dev Auth Rev Sch Fac Constr, Ser BB		5.000	%		09/01/34		1,750		1,873,357
New Jersey Hlthcare Fac Fin Auth Rev Saint Josephs Hlthcare Sys		5.750	%		07/01/15		2,045		2,233,508
New Jersey Hlthcare Fac Fin Auth Rev Saint Peter’s Univ Hosp Oblig		5.750	%		07/01/37		1,000		1,017,400
New Jersey St Higher Ed Assistance Auth Student Ln Rev, Ser A		5.625	%		06/01/30		1,000		1,086,310
New Jersey St Hsg & Mtg Fin Agy Rev, Ser AA		6.375	%		10/01/28		2,825		3,188,804
New Jersey St Hsg & Mtg Fin Agy Rev Single Family Hsg, Ser X (AMT)		5.100	%		10/01/23		4,025		4,212,968
New Jersey St Tpk Auth Tpk Rev, Ser C (NATL Insd)		6.500	%		01/01/16		565		687,063
New Jersey St Tpk Auth Tpk Rev, Ser C (NATL Insd)(i)		6.500	%		01/01/16		2,725		3,133,696
Tobacco Settlement Fin Corp NJ, Ser 1-A		5.000	%		06/01/41		2,550		1,768,170
									24,871,701
New Mexico–0.6%
Farmington, NM Pollutn Ctl Rev Pub Svc Co NM San Juan, Ser A(a)		5.200	%		06/01/40		1,000		1,024,600
Farmington, NM Pollutn Ctl Rev Pub Svc Co NM San Juan, Ser C		5.900	%		06/01/40		1,950		2,028,487
New Mexico St Hosp Equip Ln Council Hosp Rev Presbyterian Hlthcare Svc, Ser A(c)		6.375	%		08/01/32		1,000		1,141,730
									4,194,817
New York–4.8%
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		6.250	%		07/15/40		1,280		1,395,648
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		6.375	%		07/15/43		530		580,329
Brooklyn Arena Loc Dev Corp NY Cap Apprec Barclays Ctr Proj		*			07/15/35		5,000		1,085,950
Long Island Pwr Auth NY Elec Sys Rev Gen, Ser A		6.000	%		05/01/33		5,000		5,791,350
New York City Indl Dev Agy Civic Fac Rev Polytechnic Univ Proj (ACA Insd)		5.250	%		11/01/37		2,500		2,474,925
New York City Indl Dev Agy Rev Liberty 7 World Trade Ctr, Ser A		6.250	%		03/01/15		3,000		3,009,780
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-3		5.250	%		01/15/39		2,000		2,185,900
New York Liberty Dev Corp Rev Natl Sports Museum Proj, Ser A (Acquired 08/07/06, Cost $750,000)(f)(g)(h)		6.125	%		02/15/19		750		7
New York St Energy Resh & Dev Auth Gas Fac Reg(j)		11.933			04/01/20		2,500		2,593,700
New York St Energy Resh & Dev Auth Gas Fac Rev Regr Ribs Brooklyn Union Gas, Ser B (AMT)(j)		13.076			07/01/26		3,000		3,012,420
New York St Environmental Fac Corp St Clean Wtr & Drinking Revolving Fd Muni Wtr Fin, Ser C		5.000	%		06/15/21		1,545		1,764,637
New York St Twy Auth St Pers Income Tax Rev Trans, Ser A(c)		5.000	%		03/15/28		2,000		2,235,820
Port Auth NY & NJ Cons One Hundred Forty Fourth(c)		5.000	%		10/01/35		6,000		6,404,760
Seneca Nation Indians Cap Impt Auth NY Spl Oblig, Ser A(e)		5.000	%		12/01/23		1,300		1,083,953
									33,619,179
North Carolina–0.7%
North Carolina Med Care Commn Hlthcare Fac Rev First Mtg Salemtowne Proj Rfdg		5.100	%		10/01/30		1,100		1,020,591
North Carolina Med Care Commn Hlthcare Fac Rev Wake Med, Ser A (AGL Insd)		5.625	%		10/01/38		1,100		1,151,634

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
North Carolina–(continued)
North Carolina Med Care Commn Hosp Rev Aces Pooled Fin Proj, Ser B(l)		0.230	%		10/01/13	$	1,300	$	1,300,000
North Carolina Med Care Commn Retirement Fac Rev First Mtg Southminster Proj, Ser A		5.625	%		10/01/27		1,000		980,180
									4,452,405
North Dakota–0.4%
Grand Forks, ND Sr Hsg Rev 4000 Vly Square Proj Rfdg		5.200	%		12/01/26		1,000		873,180
McLean Cnty, ND Solid Waste Fac Rev Great River Energy, Ser B		5.150	%		07/01/40		1,000		1,033,230
Ward Cnty, ND Hlthcare Fac Rev Trinity Obligated Group Rfdg		5.125	%		07/01/29		1,000		974,640
									2,881,050
Ohio–4.6%
Adams Cnty Hosp Fac Impt Rev Adams Cnty Hosp Proj		6.250	%		09/01/20		3,340		2,852,560
Cuyahoga Cnty, OH Hlthcare & Indpt Living Fac Rev Eliza Jennings Sr Care, Ser A		5.750	%		05/15/27		500		478,065
Hamilton Cnty, OH Hlthcare Rev Life Enriching Cmnty Proj Rfdg, Ser A		5.000	%		01/01/37		4,750		4,510,172
Lorain Cnty, OH Hosp Rev Fac Catholic, Ser H (AGL Insd)		5.000	%		02/01/24		4,810		5,202,785
Ohio St Air Quality Dev Auth Rev Rfdg Columbus Rev Southn Pwr Co, Ser B(a)		5.800	%		12/01/38		3,000		3,228,030
Ohio St Air Quality Dev Auth Rev Rfdg Pollutn Ctl First Energy, Ser C		5.625	%		06/01/18		2,850		3,190,062
Ohio St Higher Ed Fac Commn Rev Univ Hosp Hlth Sys, Ser 2009-A		6.750	%		01/15/39		4,000		4,311,760
Ohio St Hsg Fin Agy Residential Mtg Rev Mtg Bkd Sec Prog, Ser D (GNMA Collateralized) (AMT)(c)		5.300	%		09/01/28		2,239		2,346,517
Ohio St Hsg Fin Agy Residential Mtg Rev Mtg Bkd Sec Prog, Ser D (GNMA Collateralized) (AMT)(c)		5.400	%		03/01/33		2,467		2,572,440
Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev Rfdg First Energy, Ser A(a)		5.875	%		06/01/33		1,000		1,119,920
Ohio St Wtr Dev Auth Solid Waste Rev Allied Waste Inc Proj, Ser A (AMT)		5.150	%		07/15/15		1,750		1,786,628
Tuscarawas Cnty, OH Hosp Fac Rev Twin City Hosp Proj		6.100	%		11/01/22		1,000		773,810
									32,372,749
Oklahoma–1.0%
Chickasaw Nation, OK Hlth Sys(e)		6.250	%		12/01/32		1,050		1,127,374
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/21		1,340		1,548,156
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/22		1,340		1,537,570
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/23		2,275		2,592,590
Oklahoma Hsg Fin Agy Single Family Rev Mtg (GNMA Collateralized) (AMT)		7.997	%		08/01/18		95		97,888
									6,903,578
Oregon–0.6%
Clackamas Cnty, OR Hosp Fac Legacy Hlth Sys, Ser A		5.500	%		07/15/35		2,230		2,386,947
Warm Springs Reservation OR Confederated Tribes Pelton Round Butte Tribal, Ser B (Acquired 11/20/09, Cost $1,477,305)(h)		6.375	%		11/01/33		1,500		1,563,270
									3,950,217
Pennsylvania–2.3%
Allegheny Cnty, PA Hosp Dev Auth Rev Hlth Sys West PA, Ser A		5.000	%		11/15/28		1,000		789,380
Chester Cnty PA Indl Dev Auth Rev Archdiocese Philadelphia(l)		0.290	%		07/01/31		9,000		9,000,000
Pennsylvania Econ Dev Fin Auth Exempt Fac Rev Exelon Generation, Ser A(a)		5.000	%		12/01/42		1,750		1,846,285
Pennsylvania St Tpk Com Tpk Rev Sub, Ser A (AGL Insd)		5.000	%		06/01/39		1,850		1,947,717
Pennsylvania St Tpk Commn Tpk Rev Conv Cap Apprec Sub, Ser B-2(d)		0.000/5.750	%		12/01/28		2,150		1,685,772
Pennsylvania St Tpk Commn Tpk Rev Conv Cap Apprec Sub, Ser B-2(d)		0.000/6.000	%		12/01/34		1,300		1,019,629
									16,288,783

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

17        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Rhode Island–0.3%
Rhode Island St Econ Dev Corp Arpt Rev, Ser A (AGL Insd) (AMT)		5.250	%		07/01/28	$	1,810	$	1,902,129
South Carolina–1.6%
Piedmont Muni Pwr Agy SC Elec Rev Rfdg		5.000	%		01/01/25		700		700,623
Piedmont Muni Pwr Agy SC Elec Rev, Ser A-2		5.000	%		01/01/24		2,000		2,157,360
South Carolina Jobs Econ Dev Auth Hlth Fac Rev First Mtg Wesley Commons Rfdg		5.125	%		10/01/26		500		433,350
South Carolina Jobs Econ Dev Auth Hosp Rev & Impt Palmetto Hlth Rfdg		5.750	%		08/01/39		1,000		1,029,920
South Carolina Jobs Econ Dev Auth Hosp Rev Rfdg & Impt Anmed Hlth, Ser B (AGL Insd)		5.000	%		02/01/19		1,000		1,136,710
South Carolina Jobs Econ Dev Auth Hosp Rev Rfdg & Impt Anmed Hlth, Ser B (AGL Insd)		5.375	%		02/01/29		2,000		2,179,140
South Carolina Jobs Econ Dev Auth Rev Woodlands at Furman Proj, Ser A		6.000	%		11/15/27		1,000		862,610
South Carolina St Pub Svc Auth Santee Cooper, Ser A		5.500	%		01/01/38		2,000		2,230,560
Tobacco Settlement Rev Mgmt Auth SC Tob Settlement Rev Rfdg		5.000	%		06/01/18		380		380,338
									11,110,611
Tennessee–0.9%
Chattanooga, TN Hlth Ed & Hsg Fac Brd Rev CDFI Phase I LLC Proj Rfdg, Ser A		5.000	%		10/01/25		1,000		979,340
Elizabethton, TN Hlth & Ed Fac Brd Rev Rfdg, Ser B (NATL Insd) (Prerefunded @ 07/01/12)		7.750	%		07/01/29		4,000		4,459,640
Johnson City, TN Hlth & Ed Fac Brd Hosp Rev First Mtg Mtn St Hlth, Ser A		5.500	%		07/01/36		1,000		1,010,700
									6,449,680
Texas–9.5%
Alliance Arpt Auth Inc TX Spl Fac Rev FedEx Corp Proj Rfdg (AMT)		4.850	%		04/01/21		3,615		3,672,551
Angelina & Neches Riv Auth TX Indl Dev Corp Environmental Aspen Pwr LLC Proj, Ser A (AMT)		6.500	%		11/01/29		440		260,669
Bexar Cnty, TX Hlth Fac Dev Corp Hosp Rev Saint Luke’s Lutheran Hosp(i)		7.000	%		05/01/21		500		701,020
Brazos Riv TX Hbr Nav Dist Brazoria Cnty Environmental Dow Chemical Co Proj, Ser A-4 (AMT)(a)		5.950	%		05/15/33		1,100		1,146,541
Capital Area Cultural Ed Fac Corp TX Rev Roman Catholic Diocese(a)		6.125	%		04/01/45		2,000		2,066,140
Dallas-Fort Worth, TX Intl Arpt Rev Impt & Rfdg, Ser A (BHAC Insd) (AMT)		5.500	%		11/01/31		5,000		5,044,550
Dallas-Fort Worth, TX Intl Arpt Rev Jt, Ser C (NATL Insd) (AMT)		5.750	%		11/01/18		500		501,615
Dallas-Fort Worth, TX Intl Arpt Rev Jt, Ser C (NATL Insd) (AMT)		6.000	%		11/01/23		1,000		1,003,520
Harris Cnty, TX Hlth Fac Dev Corp Hosp Rev Rfdg Mem Hermann Hlthcare Sys, Ser B		7.250	%		12/01/35		1,000		1,158,750
Harris Cnty, TX Sr Lien Toll Rd, Ser A		5.000	%		08/15/38		1,000		1,062,900
HFDC Cent TX Inc Rev Sears Tyler Methodist, Ser B		6.375	%		11/15/19		1,000		1,002,520
Hopkins Cnty, TX Hosp Dist Hosp Rev		5.500	%		02/15/23		1,805		1,828,880
Lufkin, TX Hlth Fac Dev Corp Hlth Sys Rev Mem Hlth Sys East TX		5.500	%		02/15/37		1,250		1,204,462
McLennan Cnty, TX Pub Fac Corp Proj Rev		6.625	%		06/01/35		3,000		3,315,600
Metropolitan Hlth Fac Dev Corp TX Wilson N Jones Mem Hosp Proj (Prerefunded @ 01/01/11)		7.200	%		01/01/21		2,000		2,031,220
Mission, TX Econ Dev Corp Solid Waste Disp Rev Waste Mgmt Inc Proj (AMT)(a)		6.000	%		08/01/20		2,000		2,177,980
North TX Twy Auth Rev Rfdg Sys First Tier, Ser A		5.625	%		01/01/33		1,000		1,066,970
North TX Twy Auth Rev Sys First Tier Rfdg, Ser A		6.000	%		01/01/23		2,000		2,261,620
North TX Twy Auth Rev Sys First Tier Rfdg, Ser L-2(a)		6.000	%		01/01/38		2,000		2,196,460
North TX Twy Auth Rev Toll 2nd Tier Rfdg, Ser F		6.125	%		01/01/31		4,000		4,335,760
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Buckner Retirement Svc Inc Proj		5.000	%		11/15/17		500		537,125
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac Air Force Vlg Oblig		6.125	%		11/15/29		2,000		2,074,060
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac Buckingham Sr Living Cmnty Inc		5.750	%		11/15/37		1,750		1,636,005
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac Buckner Retirement Svc Inc Proj		5.250	%		11/15/37		4,000		3,994,000
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac CC Young Mem Hom Proj		5.750	%		02/15/29		1,500		1,333,155

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

18        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Texas–(continued)
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac CC Young Mem Home Proj		5.750	%		02/15/25	$	2,200	$	2,043,294
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Retirement Fac CC Young Mem Home, Ser B-2		6.500	%		02/15/14		2,000		2,011,620
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Rev Christus Hlth Rfdg, Ser A (AGL Insd)		5.750	%		07/01/18		3,250		3,546,238
Texas Private Activity Surface Trans Corp Sr Lien Nt Mobility		6.875	%		12/31/39		2,000		2,210,820
Texas St Dept Hsg & Cmnty Affairs Home Mtg Rev, Ser C-2 (GNMA Collateralized) (AMT)(j)		12.628	%		07/02/24		575		704,628
Texas St Trans Commn Mobility Fd(c)		5.000	%		04/01/28		4,000		4,461,320
Texas St Trans Commn Rev First Tier, Ser A		5.000	%		04/01/20		2,000		2,288,300
Texas Trans Commn Cent TX Tpk Sys Rev Rfdg First Tier Put(a)		5.000	%		08/15/42		1,500		1,519,665
									66,399,958
Utah–1.3%
Salt Lake City, UT Hosp Rev IHC Hosp Inc Rfdg		6.150	%		02/15/12		6,700		6,995,269
Utah Hsg Corp Single Family Mtg Rev, Class III, Ser C-1 (AMT)		5.700	%		07/01/28		1,335		1,410,201
Utah St Charter Sch Fin Auth Charter Sch Rev Summit Academy, Ser A		5.800	%		06/15/38		600		576,786
									8,982,256
Vermont–0.1%
Vermont Econ Dev Auth Mtg Rev Wake Robin Corp Proj, Ser A		5.375	%		05/01/36		1,000		869,480
Virginia–1.3%
Lexington, VA Indl Dev Auth Residential Care Fac Rev Mtg Kendal at Lexington, Ser A		5.500	%		01/01/37		1,300		1,140,113
Peninsula Town Ctr Cmnty Dev Auth VA Spl Oblig		6.450	%		09/01/37		1,000		1,001,590
Virgin Islands Pub Fin Auth Rev Matching Fd Ln Nt-Sr Lien, Ser A		5.000	%		10/01/25		1,700		1,781,821
Virginia Small Business Fin Auth Rev Hampton Rd Proton (Acquired 8/07/09, Cost $983,180)(h)		8.000	%		07/01/19		1,000		1,066,200
Washington Cnty, VA Indl Dev Au Mtn Sts Hlth Alliance, Ser C		7.500	%		07/01/29		2,000		2,335,980
White Oak Vlg Shops VA Cmnty Dev Auth Spl Assmt Rev		5.300	%		03/01/17		1,634		1,674,082
									8,999,786
Washington–2.8%
FYI Ppty Wash Lease Rev WA St Dis Proj		5.500	%		06/01/39		1,000		1,074,480
Kalispel Tribe Indians Priority Dist WA Rev		6.625	%		01/01/28		950		852,407
Seattle, WA Muni Lt & Pwr Rev Rfdg & Impt		5.750	%		04/01/23		2,000		2,439,440
Washington St Higher Ed Fac Auth Rev Rfdg Whitworth Univ Proj		5.375	%		10/01/29		1,500		1,543,665
Washington St Higher Ed Fac Auth Rev Rfdg Whitworth Univ Proj		5.625	%		10/01/40		1,500		1,544,280
Washington St Hlthcare Fac Auth Rev Multicare Hlth Sys, Ser A (AGM Insd)		5.250	%		08/15/28		1,000		1,079,130
Washington St Hsg Fin Commn Nonprofit Rev Custodial Rcpt Wesley Homes, Ser 2007A-2027 (Acquired 05/07/08, Cost $1,100,000)(h)		6.000	%		01/01/27		1,100		1,105,005
Washington St Motor Vehicle Fuel, Ser 2010-B(c)		5.000	%		08/01/30		9,000		10,043,370
									19,681,777
West Virginia–0.3%
Harrison Cnty, WV Cnty Cmnty Solid Waste Disp Rev Allegheny Energy Rfdg, Ser D (AMT)		5.500	%		10/15/37		1,000		1,011,010
Ohio Cnty, WV Cnty Commn Tax Increment Rev Fort Henry Centre Fin Dist, Ser A		5.850	%		06/01/34		250		238,295
Pleasants Cnty, WV Pollutn Ctl Rev Cnty Comm Allegheny Rfdg, Ser F		5.250	%		10/15/37		855		861,481
									2,110,786
Wisconsin–4.0%
Superior, WI Collateralized Util Rev Superior Wtr Lt & Pwr Proj Rfdg, Ser A (AMT)		5.375	%		11/01/21		2,000		2,123,780

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

19        Invesco Van Kampen Municipal Income Fund

						Par
						Amount
	Coupon			Maturity		(000)		Value
Wisconsin–(continued)
Wisconsin Hsg & Econ Dev Auth Home Ownership Rev, Ser A (AMT)		5.300	%		09/01/23	$	8,125	$	8,596,575
Wisconsin Hsg & Econ Dev Auth Home Ownership Rev, Ser C (AMT)(c)		5.125	%		09/01/28		6,000		6,103,080
Wisconsin Hsg & Econ Dev Auth Home Ownership Rev, Ser C (AMT)(c)		5.200	%		03/01/38		2,830		2,849,810
Wisconsin St Gen Rev Appropriation Rev, Ser A		5.375	%		05/01/25		2,355		2,705,377
Wisconsin St Hlth & Ed Fac Auth Rev Prohlth Care Inc Oblig Grp		6.375	%		02/15/29		500		556,300
Wisconsin St Hlth & Ed Fac Auth Rev Prohlth Care Inc Oblig Grp		6.625	%		02/15/39		1,000		1,108,570
Wisconsin St Hlth & Ed Fac Auth Rev Reedsburg Area Med Ctr, Ser A		5.650	%		06/01/26		1,945		1,762,520
Wisconsin St Hlth & Ed Fac Rfdg Catholic Residential Svcs		5.250	%		05/01/28		1,250		1,145,113
Wisconsin St Hlth & Ed Fac St Johns Cmnty Inc, Ser A		7.250	%		09/15/29		1,000		1,050,690
									28,001,815
Wyoming–1.2%
Campbell Cnty, WY Solid Wst Fac Basin Elec Pwr Coop, Ser A		5.750	%		07/15/39		4,000		4,471,840
Wyoming Muni Pwr Agy Pwr Supply, Ser A		5.000	%		01/01/36		1,000		1,035,480
Wyoming Muni Pwr Agy Pwr Supply, Ser A		5.500	%		01/01/33		2,360		2,534,687
									8,042,007
Puerto Rico–1.7%
Puerto Rico Elec Pwr Auth Pwr Rev, Ser CCC		5.250	%		07/01/27		2,000		2,173,180
Puerto Rico Elec Pwr Auth Rev, Ser WW		5.250	%		07/01/33		2,000		2,086,480
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A		5.375	%		08/01/39		2,200		2,333,232
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A		5.500	%		08/01/42		2,000		2,133,680
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser C		5.250	%		08/01/41		3,000		3,155,130
									11,881,702
TOTAL INVESTMENTS–107.8% (Cost $727,321,561)									751,659,085
Floating Rate Note and Dealer Trust Obligations Related to Securities Held–(8.5%)
(Cost ($59,160,000))
(59,160) Notes with interest rates ranging from 0.27% to 0.40% at 09/30/10 and contractual maturities of collateral ranging from 05/01/23 to 04/01/39 (See Note 1(K) in the Notes to Financial Statements)(k)									(59,160,000	)
TOTAL NET INVESTMENTS–99.3% (Cost $668,161,561)									692,499,085
OTHER ASSETS IN EXCESS OF LIABILITIES–0.7%									5,091,064
NET ASSETS–100.0%								$	697,590,149

Percentages are calculated as a percentage of net assets.

Investment Abbreviations:

ACA	– American Capital Access
AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– AMBAC Indemnity Corp.
AMT	– Alternative Minimum Tax
BHAC	– Berkshire Hathaway Assurance Corp.
FHA	– Federal Housing Administration
GNMA	– Government National Mortgage Association
LOC	– Letter of Credit
NATL	– National Public Finance Guarantee Corp.
Syncora Gtd	– Syncora Guaranteed Limited

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

20        Invesco Van Kampen Municipal Income Fund

Notes to Schedule of Investments:

*	Zero coupon bond
(a)	Variable Rate Coupon
(b)	Security is subject to a shortfall agreement which may require the Fund to pay amounts to a counterparty in the event of a significant decline in the market value of the security underlying the inverse floater. In case of a shortfall, the maximum potential amount of payments the Fund could ultimately be required to make under the agreement is $3,100,000. However, such shortfall payment would be reduced by the proceeds from the sale of the security underlying the inverse floater.
(c)	Underlying security related to Special Purpose Trusts entered into by the Fund. See Note 1(K) in the Notes to Financial Statements.
(d)	Security is a “step up” bond where the coupon increases or steps up at a predetermined date.
(e)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(f)	Non-income producing security.
(g)	This borrower has filed for protection in federal bankruptcy court.
(h)	Security is restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. Restricted securities comprise 0.8% of net assets.
(i)	Escrowed to Maturity
(j)	Inverse Floating Rate. The interest rates shown reflect the rates in the effect at September 30, 2010.
(k)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at September 30, 2010. At September 30, 2010, Fund investments with a value of $102,145,193 are held by the Dealer Trusts and serve as collateral for the $59,160,000 in floating rate note and dealer trust obligations outstanding at that date.
(l)	Demand Security payable upon demand by the Fund at specified time intervals no greater than thirtheen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on Septermber 30, 2010.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

21        Invesco Van Kampen Municipal Income Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investments, at value (Cost $727,321,561)	$	751,659,085
Receivables:
Interest		10,729,704
Fund shares sold		1,021,703
Investments sold		125,249
Other		12,234
Total assets		763,547,975
Liabilities:
Floating rate note and dealer trust obligations		59,160,000
Payables:
Custodian bank		2,591,338
Investments purchased		2,000,000
Fund shares repurchased		1,294,197
Income distributions		443,137
Distributor and affiliates		289,368
Accrued expenses		179,786
Total liabilities		65,957,826
Net assets	$	697,590,149
Net assets consist of:
Capital (Par value of $0.001 per share with an unlimited number of shares authorized)	$	718,597,739
Net unrealized appreciation		24,337,524
Accumulated undistributed net investment income		2,915,917
Accumulated net realized gain (loss)		(48,261,031	)
Net assets	$	697,590,149
Maximum offering price per share:
Class A Shares:
Net asset value and redemption price per share (Based on net assets of $619,235,922 and 45,793,292 shares of beneficial interest issued and outstanding)	$	13.52
Maximum sales charge (4.75% of offering price)		0.67
Maximum offering price to public	$	14.19
Class B Shares:
Net asset value and offering price per share (Based on net assets of $23,116,042 and 1,712,445 shares of beneficial interest issued and outstanding)	$	13.50
Class C Shares:
Net asset value and offering price per share (Based on net assets of $51,612,700 and 3,830,737 shares of beneficial interest issued and outstanding)	$	13.47
Class Y Shares:
Net asset value and offering price per share (Based on net assets of $3,625,485 and 268,345 shares of beneficial interest issued and outstanding)	$	13.51

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

22        Invesco Van Kampen Municipal Income Fund

Statement of Operations

For the year ended September 30, 2010

Investment income:
Interest	$	41,851,824
Expenses:
Investment advisory fee		3,346,737
Distribution fees
Class A		1,526,020
Class B		236,112
Class C		479,807
Interest, line of credit and residual trust expenses		567,348
Transfer agent fees		348,690
Administrative services fees		186,612
Professional fees		92,234
Reports to shareholders		72,331
Registration fees		65,434
Trustees’ and officers’ fee and benefits		42,748
Custody		40,862
Other		32,156
Total expenses		7,037,091
Net investment income		34,814,733
Realized and unrealized gain (loss):
Net realized gain (loss)		(12,985,380	)
Unrealized appreciation (depreciation):
Beginning of the period		3,053,894
End of the period		24,337,524
Net unrealized appreciation during the period		21,283,630
Net realized and unrealized gain		8,298,250
Net increase in net assets from operations	$	43,112,983

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

23        Invesco Van Kampen Municipal Income Fund

Statements of Changes in Net Assets

	For the			For the
	year ended			year ended
	September 30,			September 30,
	2010			2009
From investment activities:
Operations:
Net investment income	$	34,814,733		$	32,756,391
Net realized gain (loss)		(12,985,380	)		(12,212,740	)
Net unrealized appreciation during the period		21,283,630			69,616,861
Change in net assets from operations		43,112,983			90,160,512
Distributions from net investment income:
Class A Shares		(30,699,296	)		(33,458,420	)
Class B Shares		(1,006,199	)		(891,332	)
Class C Shares		(2,048,414	)		(1,513,303	)
Class Y Shares		(195,465	)		(46,845	)
Total distributions		(33,949,374	)		(35,909,900	)
Net change in net assets from investment activities		9,163,609			54,250,612
From capital transactions:
Proceeds from shares sold		98,730,477			210,936,630
Net asset value of shares issued through dividend reinvestment		28,538,975			29,661,009
Cost of shares repurchased		(150,287,011	)		(144,341,770	)
Net change in net assets from capital transactions		(23,017,559	)		96,255,869
Total increase (decrease) in net assets		(13,853,950	)		150,506,481
Net assets:
Beginning of the period		711,444,099			560,937,618
End of the period (including accumulated undistributed net investment income of $2,915,917 and $128,440, respectively)	$	697,590,149		$	711,444,099

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

24        Invesco Van Kampen Municipal Income Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Class A Shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	13.34		$	12.45		$	14.29		$	14.84		$	14.71
Net investment income(a)		0.68			0.66			0.69			0.62			0.64
Net realized and unrealized gain (loss)		0.16			0.96			(1.84	)		(0.52	)		0.14
Total from investment operations		0.84			1.62			(1.15	)		0.10			0.78
Less distributions from net investment income		0.66			0.73			0.69			0.65			0.65
Net asset value, end of the period	$	13.52		$	13.34		$	12.45		$	14.29		$	14.84
Total return		6.54	%(b)		13.88	%(c)		(8.31	)%(c)		0.66	%(c)		5.46	%(c)
Net assets at end of the period (in millions)	$	619.2		$	640.1		$	526.7		$	625.9		$	613.6
Ratio of expenses to average net assets		0.95	%(d)		1.01	%		1.41	%		1.28	%		1.11	%
Ratio of net investment income to average net assets		5.14	%(d)		5.57	%		5.03	%		4.21	%		4.40	%
Portfolio turnover(e)		10	%		29	%		62	%		28	%		16	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.87	%(d)		0.90	%		0.88	%		0.87	%		0.89	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized based on average daily net assets (000’s omitted) of $612,859.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

25        Invesco Van Kampen Municipal Income Fund

Financial Highlights—(continued)

	Class B Shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	13.32		$	12.43		$	14.27		$	14.82		$	14.69
Net investment income(a)		0.57			0.57			0.59			0.51			0.53
Net realized and unrealized gain (loss)		0.17			0.96			(1.84	)		(0.52	)		0.14
Total from investment operations		0.74			1.53			(1.25	)		(0.01	)		0.67
Less distributions from net investment income		0.56			0.64			0.59			0.54			0.54
Net asset value, end of the period	$	13.50		$	13.32		$	12.43		$	14.27		$	14.82
Total return		5.76	%(b)		13.05	%(c)		(9.02	)%(c)		(0.09	)%(c)		4.69	%(c)
Net assets at end of the period (in millions)	$	23.1		$	22.1		$	15.7		$	20.9		$	29.6
Ratio of expenses to average net assets		1.70	%(d)		1.76	%		2.17	%		2.03	%		1.86	%
Ratio of net investment income to average net assets		4.38	%(d)		4.81	%		4.26	%		3.45	%		3.64	%
Portfolio turnover(e)		10	%		29	%		62	%		28	%		16	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.62	%(d)		1.65	%		1.63	%		1.62	%		1.64	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 4%, charged on certain redemptions made within one year of purchase and declining to 0% after the sixth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized based on average daily net assets (000’s omitted) of $23,611.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

26        Invesco Van Kampen Municipal Income Fund

Financial Highlights—(continued)

	Class C Shares
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	13.30		$	12.41		$	14.24		$	14.79		$	14.67
Net investment income(a)		0.57			0.57			0.59			0.50			0.53
Net realized and unrealized gain (loss)		0.16			0.96			(1.83	)		(0.51	)		0.13
Total from investment operations		0.73			1.53			(1.24	)		(0.01	)		0.66
Less distributions from net investment income		0.56			0.64			0.59			0.54			0.54
Net asset value, end of the period	$	13.47		$	13.30		$	12.41		$	14.24		$	14.79
Total return		5.69	(b)		13.08	%(c)		(8.97	)%(c)		(0.10	)%(c)		4.62	%(c)
Net assets at end of the period (in millions)	$	51.6		$	44.1		$	18.3		$	17.4		$	14.3
Ratio of expenses to average net assets		1.70	%(d)		1.76	%		2.17	%		2.04	%		1.86	%
Ratio of net investment income to average net assets		4.38	%(d)		4.79	%		4.31	%		3.46	%		3.65	%
Portfolio turnover(e)		10	%		29	%		62	%		28	%		16	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		1.62	%(d)		1.65	%		1.63	%		1.62	%		1.64	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized based on average daily net assets (000’s omitted) of $47,981.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

27        Invesco Van Kampen Municipal Income Fund

Financial Highlights—(continued)

	Class Y Sharesˆ
	Year ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	13.33		$	12.45		$	14.29		$	14.83		$	14.71
Net investment income(a)		0.71			0.70			0.72			0.65			0.68
Net realized and unrealized gain (loss)		0.16			0.94			(1.83	)		(0.50	)		0.13
Total from investment operations		0.87			1.64			(1.11	)		0.15			0.81
Less distributions from net investment income		0.69			0.76			0.73			0.69			0.69
Net asset value, end of the period	$	13.51		$	13.33		$	12.45		$	14.29		$	14.83
Total return		6.81	%(b)		14.08	%(c)		(8.07	)%(c)		0.98	%(c)		5.65	%(c)
Net assets at end of the period (in millions)	$	3.6		$	5.1		$	0.3		$	0.4		$	1.4
Ratio of expenses to average net assets		0.70	%(d)		0.77	%		1.16	%		1.03	%		0.86	%
Ratio of net investment income to average net assets		5.37	%(d)		5.89	%		5.25	%		4.42	%		4.67	%
Portfolio Turnover(e)		10	%		29	%		62	%		28	%		16	%
Supplemental ratio:
Ratio of expenses to average net assets (excluding interest and residual trust expenses)		0.62	%(d)		0.66	%		0.63	%		0.62	%		0.64	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period. These returns do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are annualized based on average daily net assets (000’s omitted) of $3,712.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
ˆ	On June 1, 2010, the Fund’s former Class I Shares were reorganized into Class Y Shares.

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen Municipal Income Fund (the “Fund”), is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen Municipal Income Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Tax Free Trust. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B, Class C and Class I shares received Class A, Class B, Class C and Class Y shares, respectively of the Fund.

  Information for the Acquired Fund’s Class I shares prior to the Reorganization is included with Class Y shares of the Fund throughout this report.

  The Fund’s investment objective is to provide investors with a high level of current income exempt from federal income tax, consistent with preservation of capital.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size

28        Invesco Van Kampen Municipal Income Fund

	trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.
F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.

29        Invesco Van Kampen Municipal Income Fund

I.	Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.
J.	Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located.
	Since, many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
	There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
K.	Floating Rate Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating Rate Note Obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest, line of credit and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The average floating rate notes outstanding and average annual interest and fee rate related to residual interests during the year ended September 30, 2010 were $66,969,220 and 0.83%, respectively.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $500 million		0	.50%
Over $500 million		0	.45%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $2,227,737 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares to 0.90%, 1.65%, 1.65% and 0.65% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser did not waive fees and/or reimburse expenses during the period under this limitation.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $39,384 to VKII. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of

30        Invesco Van Kampen Municipal Income Fund

providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Pursuant to such agreement, for the period ended September 30, 2010, IIS was paid $119,551 for providing such services. Prior to the Reorganization, the Acquired Fund paid $110,967 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.

  With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class A, Class B and Class C shares. Pursuant to such agreements, the Acquired Fund paid $1,485,522 to VKFI.

  For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $26,761 in front-end sales commissions from the sale of Class A shares and $1,142, $10,707 and $1,769 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Prior to the Reorganization, VKFI retained $126,764 in front-end sales commissions from the sale of Class A shares and $43,211, for CDSC imposed on redemptions by shareholders.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

  The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Municipal Bonds	$	—0-	$	751,659,085	$	—0-	$	751,659,085

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period ended September 30, 2010, the Fund paid legal fees of $318 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $12,064 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

31        Invesco Van Kampen Municipal Income Fund

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	58,755	$	30,819
Ordinary income — tax exempt		33,890,619		35,870,538
Total distributions	$	33,949,374	$	35,901,357

Tax Components of Net Assets at Period-End:

	2010
Undistributed ordinary income	$	2,545,825
Net unrealized appreciation — investments		24,551,343
Temporary book/tax differences		(1,567	)
Post-October deferrals		(14,484,956	)
Capital loss carryforward		(33,618,235	)
Shares of beneficial interest		718,597,739
Total net assets	$	697,590,149

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to wash sales.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions. Under these limitation rules, the Fund is limited to use $0 of capital loss carryforward in the fiscal year ending September 30, 2011.

  The Fund utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2015	$	10,905,393
September 30, 2016		4,317,804
September 30, 2017		13,244,161
September 30, 2018		5,150,877
Total capital loss carryforward	$	33,618,235

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $75,180,424 and $113,511,631, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	47,992,493
Aggregate unrealized (depreciation) of investment securities		(23,441,150	)
Net unrealized appreciation of investment securities	$	24,551,343
Cost of investments for tax purposes is $727,107,742.

32        Invesco Van Kampen Municipal Income Fund

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of defaulted bonds transactions and net operating losses, on September 30, 2010, accumulated undistributed net investment income (loss) was increased by $1,922,118, accumulated net realized gain (loss) was increased by $5,326,517 and shares of beneficial interest decreased by $7,248,635. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	For the year ended September 30,
	2010(a)						2009
	Shares			Value			Shares			Value
Sales:
Class A		5,764,084	(b)	$	75,670,079	(b)		14,323,247		$	167,520,464
Class B		497,955			6,491,487			854,259			10,177,675
Class C		1,139,787			14,915,406			2,392,360			28,258,639
Class Y		125,740			1,653,505			390,745			4,979,852
Total sales		7,527,566		$	98,730,477			179,960,611		$	210,936,630
Dividend reinvestment:
Class A		1,976,582		$	25,977,065			2,319,047		$	27,668,379
Class B		59,436			779,430			60,367			720,029
Class C		131,538			1,723,734			102,921			1,233,866
Class Y		4,459			58,746			3,204			38,735
Total dividend reinvestment		2,172,015		$	28,538,975			2,485,539		$	29,661,009
Repurchases:
Class A		(9,930,943	)	$	(130,510,675	)		(10,958,238	)	$	(130,161,405	)
Class B		(507,303	)(b)		(6,658,128	)(b)		(513,985	)		(6,077,108	)
Class C		(759,623	)		(9,962,870	)		(649,926	)		(7,688,261	)
Class Y		(241,609	)		(3,155,338	)		(35,409	)		(414,996	)
Total repurchases		(11,439,478	)	$	(150,287,011	)		(12,157,558	)	$	(144,341,770	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 39% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Includes automatic conversion of 119,166 Class B shares into 118,987 Class A shares at a value of $1,583,578.

Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

NOTE 10—Purposes and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such instruments are typically created by a Special Purpose Trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the special purpose trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

  The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

  In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose

33        Invesco Van Kampen Municipal Income Fund

trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

  The Fund may also invest in private placement securities. TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities.

NOTE 11—Borrowings

During the period ended September 30, 2010, the Acquired Fund entered into a $150,000,000 joint revolving bank credit facility. The Fund terminated its participation in the facility on May 31, 2010.

NOTE 12—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

NOTE 13—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco Van Kampen Insured Tax Free Income Fund and Invesco Tax Exempt Securities Fund (the “Target Funds”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

34        Invesco Van Kampen Municipal Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Van Kampen Municipal Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen Municipal Income Fund (formerly known as Van Kampen Municipal Income Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian and brokers, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 20, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

35        Invesco Van Kampen Municipal Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. With the exception of the actual ending account value and expenses of the Class S shares, the example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2010, through September 30, 2010. The actual ending account value and expenses of the Class S shares in the example below are based on an investment of $1,000 invested as of close of business September 25, 2009 (commencement date) and held through September 30, 2010.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period (as of close of business September 25, 2009 through September 30, 2010 for the Class S shares). Because the actual ending account value and expense information in the example is not based upon a six month period for the Class S shares, the ending account value and expense information may not provide a meaningful comparison to mutual funds that provide such information for a full six month period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2		(09/30/10)		Period2		Ratio
A	$	1,000.00	$	1,063.35	$	4.86	$	1,020.36	$	4.76		0.94	%
B		1,000.00		1,058.71		8.72		1,016.60		8.54		1.69
C		1,000.00		1,058.83		8.72		1,016.60		8.54		1.69
Y		1,000.00		1,063.88		3.57		1,021.61		3.50		0.69

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010 through September 30, 2010, after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year.

36        Invesco Van Kampen Municipal Income Fund

Approval of Investment Advisory and Sub-Advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco Van Kampen Municipal Income Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Van Kampen retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these services to Invesco Funds in accordance with the

37        Invesco Van Kampen Municipal Income Fund

terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

38        Invesco Van Kampen Municipal Income Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Tax-Exempt	99.86%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

39        Invesco Van Kampen Municipal Income Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Van Kampen Municipal Income Fund was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		31,601,760		767,001		2,119,727		0

40        Invesco Van Kampen Municipal Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

    ��Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC file numbers for the Fund are 811-07890 and 033-66242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

VK-MINC-AR-1 Invesco Distributors, Inc.

Annual Report to Shareholders September 30, 2010

Invesco Van Kampen New York Tax Free Income Fund

2	Letters to Shareholders
4	Performance Summary
4	Management Discussion
6	Long-Term Fund Performance
8	Supplemental Information
9	Schedule of Investments
13	Financial Statements
16	Financial Highlights
19	Notes to Financial Statements
26	Auditor’s Report
27	Fund Expenses
28	Approval of Investment Advisory and Sub-Advisory Agreements
30	Tax Information
31	Results of Proxy
T-1	Trustees and Officers

Letters to Shareholders

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. I hope you find it useful. Whether you’re a long-time Invesco client or a shareholder who joined us as a result of our June 1 acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments, I’m glad you’re part of the Invesco family.

     Near the end of this letter, I’ve provided the number to call if you have specific questions about your account; I’ve also provided my email address so you can send a general Invesco-related question or comment to me directly.

The benefits of Invesco

As a leading global investment manager, Invesco is committed to helping investors worldwide achieve their financial objectives. I believe Invesco is uniquely positioned to serve your needs.

     First, we are committed to investment excellence. We believe the best investment insights come from specialized investment teams with discrete investment perspectives, each operating under a disciplined philosophy and process with strong risk oversight and quality controls. This approach enables our portfolio managers, analysts and researchers to pursue consistent results across market cycles.

     Second, we offer you a broad range of investment products that can be tailored to your needs and goals. In addition to traditional mutual funds, we manage a variety of other investment products. These products include single-country, regional and global investment options spanning major equity, fixed income and alternative asset classes.

     And third, we have just one focus: investment management. At Invesco, we believe that focus brings success, and that’s why investment management is all we do. We direct all of our intellectual capital and global resources toward helping investors achieve their long-term financial objectives.

     Your financial adviser can also help you as you pursue your financial goals. Your financial adviser is familiar with your individual goals and risk tolerance, and can answer questions about changing market conditions and your changing investment needs.

Our customer focus

Short-term market conditions can change from time to time, sometimes suddenly and sometimes dramatically. But regardless of market trends, our commitment to putting you first, helping you achieve your financial objectives and providing you with excellent customer service will not change.

     If you have questions about your account, please contact one of our client services representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, please email me directly at phil@invesco.com.

     I want to thank our existing Invesco clients for placing your faith in us. And I want to welcome our new Invesco clients: We look forward to serving your needs in the years ahead. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director, Invesco

2 Invesco Van Kampen New York Tax Free Income Fund

Bruce Crockett

Dear Fellow Shareholders:

Although the global markets have improved since their lows of 2009, they remain challenging as governments around the world work to ensure the recovery remains on track. In this volatile environment, it’s comforting to know that your Board is committed to putting your interests first. We realize you have many choices when selecting a money manager, and your Board is working hard to ensure you feel you’ve made the right choice.

     To that end, I’m pleased to share the news that Invesco has completed its acquisition of Morgan Stanley’s retail asset management business, including Van Kampen Investments. This acquisition greatly expands the breadth and depth of investment strategies we can offer you. As a result of this combination, Invesco gained investment talent for a number of investment strategies, including U.S. value equity, U.S. small cap growth equity, tax-free municipals, bank loans and others. Another key advantage of this combination is the highly complementary nature of our cultures. This is making it much easier to bring our organizations together while ensuring that our investment teams remain focused on managing your money.

     We view this addition as an excellent opportunity for you, our shareholders, to have access to an even broader range of well-diversified mutual funds. Now that the acquisition has closed, Invesco is working to bring the full value of the combined organization to shareholders. The key goals of this effort are to ensure that we have deeply resourced and focused investment teams, a compelling line of products and enhanced efficiency, which will benefit our shareholders now and over the long term.

     It might interest you to know that the mutual funds of the combined organization are overseen by a single fund Board composed of 17 current members, including four new members who joined us from Van Kampen/Morgan Stanley. This expanded Board will continue to oversee the funds with the same strong sense of responsibility for your money and your continued trust that we have always maintained.

     As always, you are welcome to contact me at bruce@brucecrockett.com with any questions or concerns you may have. We look forward to representing you and serving your interests.

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

3 Invesco Van Kampen New York Tax Free Income Fund

Management’s Discussion of Fund Performance

Performance summary

All share classes of Invesco Van Kampen New York Tax Free Income Fund at net asset value (NAV) posted positive returns during the 12-month reporting period ended September 30, 2010. The Fund’s Class A shares at NAV outperformed both the Fund’s broad market benchmark, the Barclays Capital Municipal Bond Index, and the Fund’s style-specific index, the Barclays Capital New York Municipal Index. The Fund’s security selection on the long end of the yield curve and an overweight position and security selection in BBB-rated bonds and non-rated bonds were the main contributors to relative outperformance versus the Barclays Capital New York Municipal Index.

     Your Fund’s long-term performance appears later in this report.

Fund vs. Indexes

Total returns, 9/30/09 to 9/30/10, at net asset value (NAV). Performance shown does not include applicable contingent deferred sales charges (CDSC) or front-end sales charges, which would have reduced performance.

Class A Shares	7.32	%
Class B Shares	6.76
Class C Shares	6.44
Class Y Shares*	7.41
Barclays Capital Municipal Bond Index▼ (Broad Market Index)	5.81
Barclays Capital New York Municipal Index■ (Style-Specific Index)	5.75

^▼Lipper Inc.; ^■Invesco, Barclays Capital

*Share Class incepted during reporting period. Please see page 7 for detailed explanation of Fund
performance.

How we invest

The Fund’s investment objective is to provide investors with a high level of current income exempt from federal, New York State and New York City income taxes, consistent with preservation of capital. Under normal market conditions, we seek to achieve the Fund’s investment objective by investing primarily in a portfolio of New York municipal securities that are investment grade at the time of purchase. The Fund is designed for investors who are residents of New York for New York tax purposes. Under normal market conditions, the Fund invests at least 80% of its total assets in investment grade securities at the time of purchase. Investment grade securities are rated BBB or higher by S&P or Baa or higher by Moody’s or an equivalent rating by another agency or unrated securities which we have

determined to be of comparable quality. However, the Fund may not invest more than 20% of its total assets in unrated investment grade securities. Under normal market conditions, the Fund may invest up to 20% of its total assets in securities with below-investment grade credit quality at the time of purchase. Lower-grade securities are commonly referred to as junk bonds and involve greater risks than investments in higher grade securities. The Fund does not purchase municipal securities that are in default or rated in categories lower than B– by S&P or B3 by Moody’s or unrated securities of comparable quality. Under normal market conditions, the Fund may invest up to 20% of its total assets in municipal securities that are subject to the federal alternative minimum tax. From time to time, the Fund temporarily may invest up to 10% of its total assets in

tax exempt money market funds and such instruments will be treated as investments in municipal securities. Investments in other mutual funds may involve duplication of management fees and certain other expenses.

     The Fund may purchase and sell options, futures contracts, options on futures contracts and interest rate swaps or other interest rate-related transactions, which are derivative instruments, for various portfolio management purposes, including to earn income, to facilitate portfolio management and to mitigate risks.

     We may sell securities based on factors such as degradation in credit quality, a decision to shorten or lengthen the Fund’s duration, or reducing exposure to a particular sector or issuer.

Market conditions and your Fund

Market conditions during the reporting period were influenced by two broad themes: private sector recovery and concerns over sovereign creditworthiness. In the U.S. and most of the developed world, a gradual and somewhat lackluster recovery continued, with central banks keeping interest rates at low levels and with few of them withdrawing their quantitative easing measures. This helped private sector companies improve their balance sheets and earnings following the global financial crisis that began to dissipate in early 2009. Recently, however, investor skepticism of global governments’ abilities to retire huge amounts of debt without affecting economic growth rates caused sovereign debt distress (especially for Greece and other southern eurozone countries) and became a focal point of investor concern in the first half of 2010.

     In the U.S., economic recovery was present, although uneven and possibly slowing, as stubbornly high unemploy-

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	95.1	%
General Obligation Bonds	4.1
Pre-refunded Bonds	1.0
Cash/Other	-0.2

Total Net Assets	$102.7 million
Total Number of Holdings	111

Top Five Sectors

1.	Higher Education	14.6	%
2.	Hospital	14.6
3.	Other	10.7
4.	General Purpose	9.3
5.	Water & Sewer	6.7

The Fund’s holdings are subject to change, and there is no assurance that the Fund will continue to hold any particular security.

4 Invesco Van Kampen New York Tax Free Income Fund

ment continued to weigh on the U.S. economy. Real gross domestic product (GDP), the broadest measure of overall U.S. economic activity, increased at an annual rate of 1.7% in the second quarter of 2010.¹ In the first quarter, real GDP increased 3.7%.¹ The U.S. Federal Reserve (the Fed) maintained a very accommodative monetary policy throughout the period, with the federal funds target rate unchanged in its range of zero to 0.25%.² The Fed recently described its view of the U.S. economy: “Financial conditions have become less supportive of economic growth on balance, largely reflecting developments abroad.”² As such, it was widely expected that the Fed would continue to keep rates low for an extended period.

     Sector performance was driven by quality spread tightening largely as a result of continued flows into the municipal market combined with less tax-exempt issuance. As a result, BBB-rated and lower credit quality sectors outperformed. Fund flows continued to remain strong after an impressive 2009. In addition, year-to-date issuance through the reporting period is about 2.2% ahead of last year’s pace, at $293.2 billion versus $286.9 billion.³

However, approximately 30% of supply since the beginning of the year was in the form of taxable municipal bonds.³

     Historically, the state of New York has benefited from its broad-based and wealthy economy. However, the economic slowdown and concerns on Wall Street, as well as the volatility in the financial markets posed challenges for the state and its financial position. Like many states, New York is currently looking for solutions to compensate for declines in revenues, particularly falling personal income taxes.

     The Fund generated positive absolute and relative returns for the reporting period. In terms of the yield curve strategy, security selection in the long-end of the curve, as well as in the 12- to 20-year maturity range, contributed to returns.

     As discussed earlier, during the reporting period lower rated tax-exempt bonds experienced greater price increases relative to higher quality issues. An overweight exposure and security selection in BBB- and non-rated bonds was a positive for relative and absolute Fund returns.

     At the sector level, security selection in dedicated tax bonds contributed to returns. Overweight exposure and security selection in education and industrial revenue bonds/pollution control revenue bonds also enhanced Fund performance for the reporting period.

     Our overweight exposure and security selection in tobacco bonds slightly detracted from relative performance during the period.

     We may use inverse floating rate securities in Invesco Van Kampen New York Tax Free Income Fund to help manage duration, yield curve exposure and credit exposure and to potentially enhance yield. Over the reporting period, the exposure to inverse floating rate securities contributed to Fund returns.

     Thank you for investing in Invesco Van Kampen New York Tax Free Income Fund and for sharing our long-term investment horizon.

1 Bureau of Economic Analysis
2 U.S. Federal Reserve
3 Barclays Capital

The views and opinions expressed in management’s discussion of Fund performance are those of Invesco Advisers, Inc. These views and opinions are subject to change at any time based on factors such as market and economic conditions. These views and opinions may not be relied upon as investment advice or recommendations, or as an offer for a particular security. The information is not a complete analysis of every aspect of any market, country, industry, security or the Fund. Statements of fact are from sources considered reliable, but Invesco Advisers, Inc. makes no representation or warranty as to their completeness or accuracy. Although historical performance is no guarantee of future results, these insights may help you understand our investment management philosophy.

See important Fund and index disclosures later in this report.

Mark Paris

Portfolio manager, is manager of Invesco Van Kampen New York Tax Free Income Fund. Mr. Paris joined Invesco in 2010. He earned a B.B.A. in finance from the City University of New York.

Robert Stryker

Chartered Financial Analyst, portfolio manager, is manager of Invesco Van Kampen New York Tax Free Income Fund. Mr. Stryker joined Invesco in 2010. He earned a B.S. in finance from the University of Illinois, Chicago.

Julius Williams

Portfolio manager, is manager of Invesco Van Kampen New York Tax Free Income Fund. Mr. Williams joined Invesco in 2010. Mr. Williams earned a B.A. in economics and sociology and an M.E. in educational psychology from the University of Virginia.

5 Invesco Van Kampen New York Tax Free Income Fund

Your Fund’s Long-Term Performance

Results of a $10,000 Investment – Oldest Share Classes since Inception

Fund data from 7/29/94, index data from 7/31/94

Past performance cannot guarantee comparable future results.

     The data shown in the chart include reinvested distributions, applicable sales charges and Fund expenses including management fees. Results for Class B shares are calculated as if a hypothetical shareholder had liquidated his entire investment in the Fund at the close of the reporting period and paid the applicable contingent deferred sales charges. Index results include reinvested dividends, but they do not reflect sales charges.

     Performance of the peer group, if applicable, reflects fund expenses and management fees; performance of a market index does not. Performance shown in the chart and table(s) does not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares.

     This chart, which is a logarithmic chart, presents the fluctuations in the value of the Fund and its indexes. We believe that a logarithmic chart is more effective than other types of charts in illustrating

changes in value during the early years shown in the chart. The vertical axis, the one that indicates the dollar value of an investment, is constructed with each segment representing a percent change in the value of the investment. In this chart, each segment represents a doubling, or 100% change, in the value of the investment. In other words, the space between $5,000 and $10,000 is the same size as the space between $10,000 and $20,000, and so on.

6 Invesco Van Kampen New York Tax Free Income Fund

Average Annual Total Returns

As of 9/30/10, including maximum applicable sales charges

								After Taxes
								on Distributions
					After Taxes			and Sale of
		Before Taxes			on Distributions			Fund Shares
Class A Shares
Inception (7/29/94)			5.34	%		5.21	%		5.18	%
10	Years		4.78			4.62			4.60
5	Years		2.90			2.57			2.82
1	Year		2.21			0.98			1.79
Class B Shares
Inception (7/29/94)			5.27	%		5.14	%		5.09	%
10	Years		4.78			4.61			4.55
5	Years		3.23			2.92			3.10
1	Year		1.76			0.56			1.48
Class C Shares
Inception (7/29/94)			4.88	%		4.77	%		4.71	%
10	Years		4.51			4.36			4.30
5	Years		3.14			2.85			2.98
1	Year		5.44			4.37			3.85
Class Y Shares
10	Years		5.30	%		5.13	%		5.07	%
5	Years		3.92			3.59			3.71
1	Year		7.41			6.09			5.18

Effective June 1, 2010, Class A, Class B and Class C shares of the predecessor fund advised by Van Kampen Asset Management were reorganized into Class A, Class B and Class C shares, respectively, of Invesco Van Kampen New York Tax Free Income Fund. Returns shown above for Class A, Class B and Class C shares are blended returns of the predecessor fund and Invesco Van Kampen New York Tax Free Income Fund. Share class returns will differ from the predecessor fund because of different expenses.

     Class Y shares incepted on June 1, 2010. Performance shown prior to that date is that of the predecessor fund’s Class A shares and includes the 12b-1 fees applicable to Class A shares. Class A shares performance reflects any applicable fee waivers or expense reimbursements.

     The performance data quoted represent past performance and cannot guarantee comparable future results; current performance may be lower or higher. Please visit invesco.com/performance for the most recent month-end performance. Performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated.

Investment return and principal value will fluctuate so that you may have a gain or loss when you sell shares.

     The net annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 0.80%, 1.55%, 1.55% and 0.55%, respectively.¹ The total annual Fund operating expense ratio set forth in the most recent Fund prospectus as of the date of this report for Class A, Class B, Class C and Class Y shares was 1.05%, 1.80%, 1.80% and 0.80%, respectively. The expense ratios presented above may vary from the expense ratios presented in other sections of this report that are based on expenses incurred during the period covered by this report.

     Class A share performance reflects the maximum 4.75% sales charge, and Class B and Class C share performance reflects the applicable contingent deferred sales charge (CDSC) for the period involved. For shares purchased prior to June 1, 2010, the CDSC on Class B shares declines from 4% at the time of purchase to 0% at the beginning of the seventh year. For shares purchased on or after June 1, 2010, the CDSC on Class B shares declines from 5% at the time of purchase to 0%

at the beginning of the seventh year. The CDSC on Class C shares is 1% for the first year after purchase. Class Y shares do not have a front-end sales charge or a CDSC; therefore, performance is at net asset value.

     The performance of the Fund’s share classes will differ primarily due to different sales charge structures and class expenses.

     After-tax returns are calculated using the historical highest individual federal marginal income tax rate. They do not reflect the effect of state and local taxes. Actual after-tax returns depend on the investor’s tax situation and may differ from those shown. After-tax returns shown are not relevant to investors who hold their shares in tax-deferred accounts such as 401(k)s or IRAs. The Fund’s past performance, before and after taxes, is not necessarily an indication of how the Fund will perform in the future.

     Had the adviser not waived fees and/or reimbursed expenses, performance would have been lower.

1 Total annual Fund operating expenses after any contractual fee waivers and/or expense reimbursements by the adviser in effect through at least June 30, 2012. See current prospectus for more information.

7 Invesco Van Kampen New York Tax Free Income Fund

Invesco Van Kampen New York Tax Free Income Fund’s investment objective is to provide investors with a high level of current income exempt from federal, New York State and New York City income taxes, consistent with preservation of capital.

n	Unless otherwise stated, information presented in this report is as of September 30, 2010, and is based on total net assets.
n	Unless otherwise noted, all data provided by Invesco.
n	To access your Fund’s reports/prospectus visit invesco.com/fundreports.

About share classes

n	Effective November 30, 2010, Class B or Class B5 shares may not be purchased or acquired by exchange from share classes other than Class B or Class B5 shares. Please see the prospectus for more information.
n	Class Y shares are available to only certain investors. Please see the prospectus for more information.

Principal risks of investing in the Fund

n	The yields of municipal securities, or of insured municipal securities, may move differently and adversely compared to the yields of the overall debt securities markets. The Fund may invest up to 20% of its net assets in municipal securities subject to the federal alternative minimum tax. There could be changes in applicable tax laws or tax treatments that reduce or eliminate the current federal income tax exemption on municipal securities or otherwise adversely affect the current federal or state tax status of municipal securities.
n	The Fund may invest a greater portion of its assets in a more limited number of issuers than a diversified fund and may be subject to greater risk than a diversified fund because changes in the financial condition or market assessment of a single issuer may cause greater fluctuations in the value of the Fund’s shares.
n	Because the Fund invests substantially all of its assets in a portfolio of New York municipal securities, the Fund is more susceptible to political, economic, regulatory or other factors affecting the city and state of New York municipal securities than a fund that does not limit its investments to such issuers.
n	Risks of derivatives include the possible imperfect correlation between the value of the instruments and the underlying assets; risks of default by the other party to the transaction; risks that the transactions may result in losses that partially or completely offset

	gains in portfolio positions; and risks that the transactions may not be liquid.
n	Credit risk refers to an issuer’s ability to make timely payments of interest and principal. Securities rated BBB by S&P or Baa by Moody’s are in the lowest of the four investment grades and are considered by the rating agencies to be medium-grade obligations which possess speculative characteristics so that changes in economic conditions or other circumstances are more likely to lead to a weakened capacity of the issuer to make principal and interest payments than in the case of higher-rated securities. The credit quality of noninvestment grade securities is considered speculative by recognized rating agencies with respect to the issuer’s continuing ability to pay interest and principal. Lower-grade securities (also sometimes known as junk bonds) may have less liquidity and a higher incidence of default than higher-grade securities. The Fund may incur higher expenditures to protect the Fund’s interests in such securities. The credit risks and market prices of lower-grade securities generally are more sensitive to negative issuer developments or adverse economic conditions than are higher-grade securities.
n	The income you receive from the Fund is based primarily on prevailing interest rates, which can vary widely over the short-and long-term. If interest rates drop, your income from the Fund may drop as well.
n	If interest rates fall, it is possible that issuers of securities with high interest rates will prepay or call their securities before their maturity dates. In this event, the proceeds from the called securities would likely be reinvested by the Fund in securities bearing the new, lower interest rates, resulting in a possible decline in the Fund’s income and distributions to shareholders.
n	Market risk is the possibility that the market values of securities owned by the Fund will decline. Investments in debt securities generally are affected

by changes in interest rates and the creditworthiness of the issuer. The prices of debt securities tend to fall as interest rates rise, and such declines tend to be greater among debt securities with longer maturities.

About indexes used in this report

n The Barclays Capital Municipal Bond Index is an unmanaged index considered representative of the tax-exempt bond market.

n	The Barclays Capital New York Municipal Index is an index of New York investment grade municipal bonds.
n	The Fund is not managed to track the performance of any particular index, including the index(es) defined here, and consequently, the performance of the Fund may deviate significantly from the performance of the index(es).
n	A direct investment cannot be made in an index. Unless otherwise indicated, index results include reinvested dividends, and they do not reflect sales charges. Performance of the peer group, if applicable, reflects fund expenses; performance of a market index does not.

Other information

n

The Chartered Financial Analyst® (CFA®) designation is globally recognized and attests to a charterholder’s success in a rigorous and comprehensive study program in the field of investment management and research analysis.

n

The returns shown in management’s discussion of Fund performance are based on net asset values calculated for shareholder transactions. Generally accepted accounting principles require adjustments to be made to the net assets of the Fund at period end for financial reporting purposes, and as such, the net asset values for shareholder transactions and the returns based on those net asset values may differ from the net asset values and returns reported in the Financial Highlights.

This report must be accompanied or preceded by a currently effective Fund prospectus, which contains more complete information, including sales charges and expenses. Investors should read it carefully before investing.

NOT FDIC INSURED | MAY LOSE VALUE | NO BANK GUARANTEE

Fund Nasdaq Symbols

Class A Shares	VNYAX
Class B Shares	VBNYX
Class C Shares	VNYCX
Class Y Shares	VNYYX

8 Invesco Van Kampen New York Tax Free Income Fund

Schedule of Investments

September 30, 2010

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Municipal Bonds 101.6%
New York–93.5%
Albany, NY Indl Dev Agy Civic Fac Rev Albany Law Sch Univ, Ser A		5.000	%		07/01/31	$	1,000	$	1,016,540
Albany, NY Indl Dev Agy Civic Fac Rev Saint Peters Hosp Proj, Ser D		5.750	%		11/15/27		400		418,260
Albany, NY Indl Dev Agy Indl Dev Rev Albany College of Pharmacy, Ser A		5.625	%		12/01/34		1,290		1,307,802
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		*			07/15/34		2,175		508,232
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		6.250	%		07/15/40		275		299,846
Brooklyn Arena Loc Dev Corp NY Barclays Ctr Proj		6.375	%		07/15/43		275		301,114
Chautauqua Cnty, NY Indl Dev Agy Exempt Fac Rev Nrg-Dunkirk Pwr Proj		5.875	%		04/01/42		625		650,212
Dutchess Cnty, NY Indl Dev Agy Civic Fac Rev Elant Fishkill Inc, Ser A		5.250	%		01/01/37		380		294,394
East Rochester, NY Hsg Auth Rev Sr Living Woodland Vlg Proj Rfdg		5.500	%		08/01/33		1,000		890,450
Essex Cnty, NY Indl Dev Agy Solid Waste Disp Rev Intl Paper Rfdg, Ser A (AMT)		5.200	%		12/01/23		600		600,762
Hempstead Town, NY Indl Dev Adelphi Univ Civic Fac		5.750	%		06/01/22		1,250		1,297,012
Hempstead Town, NY Loc Dev Corp Rev Molloy College Proj		5.750	%		07/01/39		795		853,091
Islip, NY Res Recovery Agy Res 1985 Fac, Ser E (AGM Insd) (AMT)		5.750	%		07/01/22		1,290		1,378,971
Livingston Cnty, NY Indl Dev Agy Civic Fac Rev Nicholas H Noyes Mem Hosp		6.000	%		07/01/30		1,000		959,710
Long Island Pwr Auth NY Elec Sys Rev Gen, Ser A (BHAC Insd)		5.500	%		05/01/33		355		400,930
Long Island Pwr Auth NY Elec Sys Rev, Ser A		5.000	%		04/01/23		700		775,558
Madison Cnty, NY Indl Dev Agy Civic Fac Rev Colgate Univ Proj, Ser A (AMBAC Insd)		5.000	%		07/01/35		750		781,627
Metropolitan Trans Auth NY Dedicated Tax Fd, Ser B		5.000	%		11/15/34		1,000		1,078,160
Metropolitan Trans Auth NY Rev Rfdg, Ser A (AMBAC Insd)		5.500	%		11/15/19		750		809,955
Montgomery Cnty, NY Indl Dev Agy Lease Rev HFM Boces, Ser A (Syncora Gtd)		5.000	%		07/01/34		1,320		1,239,612
Nassau Cnty, NY Gen Impt, Ser C (AGL Insd)		5.000	%		10/01/27		750		848,295
Nassau Cnty, NY Indl Dev Agy Continuing Care Retirement Amsterdam at Harborside, Ser A		6.700	%		01/01/43		1,250		1,266,987
New York City Hlth & Hosp Corp Rev Hlth Sys, Ser A (AGM Insd)		5.500	%		02/15/18		1,500		1,561,215
New York City Hlth & Hosp Corp Rev Hlth Sys, Ser A (AGM Insd)		5.500	%		02/15/19		1,000		1,037,900
New York City Hsg Dev Corp Multi-Family Hsg Rev, Ser B1 (AMT)		5.150	%		11/01/37		2,000		2,046,980
New York City Hsg Dev Corp Multi-Family Hsg Rev, Ser E1 (AMT)		5.350	%		11/01/37		750		775,860
New York City Hsg Dev Corp Multi-Family Hsg Rev, Ser K (AMT)		5.000	%		11/01/37		1,000		1,009,790
New York City Indl Dev Agy Civic Fac Rev Polytechnic Univ Proj (ACA Insd)		5.250	%		11/01/37		1,000		989,970
New York City Indl Dev Agy Civic Fac Rev Staten Island Univ Hosp Proj, Ser B		6.375	%		07/01/31		715		722,865
New York City Indl Dev Agy Fac Rev Royal Charter-NY Presbyterian (AGM Insd)		5.375	%		12/15/16		1,405		1,507,818
New York City Indl Dev Agy Rev Liberty 7 World Trade Ctr, Ser A		6.250	%		03/01/15		500		501,630
New York City Indl Dev Agy Rev Liberty Iac/Interactive Corp.		5.000	%		09/01/35		890		830,094
New York City Indl Dev Agy Rev Queens Baseball Stad-Pilot (AGL Insd)		6.500	%		01/01/46		1,000		1,133,570
New York City Indl Dev Agy Spl Fac Rev NY Stk Exchange Proj Rfdg, Ser A		5.000	%		05/01/25		1,000		1,089,480
New York City Indl Dev Agy Spl Fac Rev Term One Group Assn Proj (AMT)(a)		5.500	%		01/01/20		2,000		2,142,680
New York City Muni Wtr Fin Auth Wtr & Swr Rev, Ser FF-2		5.500	%		06/15/40		1,000		1,140,500
New York City Muni Wtr Fin Auth Wtr & Swr Sys Rev, Ser D(b)		5.000	%		06/15/37		4,000		4,249,600
New York City, Ser F1		5.500	%		11/15/28		1,000		1,149,100
New York City Tr Cultural Res Rev American Museum Nat History Rfdg, Ser A (NATL Insd)(b)		5.000	%		07/01/44		960		990,557
New York City Tr Cultural Res Rev Carnegie Hall, Ser A		5.000	%		12/01/39		500		526,300
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-1		5.500	%		07/15/38		500		560,950

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

9        Invesco Van Kampen New York Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
New York–(continued)
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-2		6.000	%		07/15/33	$	500	$	584,755
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-3		5.250	%		01/15/27		1,560		1,756,716
New York City Transitional Fin Auth Bldg Aid Rev Fiscal 2009, Ser S-3		5.250	%		01/15/39		500		546,475
New York Liberty Dev Corp 2nd Priority Bank American Rfdg		6.375	%		07/15/49		715		769,669
New York Liberty Dev Corp Rev Natl Sports Museum Proj, Ser A (Acquired 08/07/06, Cost $750,000)(c)(d)		6.125	%		02/15/19		750		7
New York, NY Sub, Ser I-1		5.250	%		04/01/32		1,000		1,111,040
New York St Dorm Auth Rev Catholic Hlth L.I. Oblig Group		5.000	%		07/01/27		1,000		1,019,090
New York St Dorm Auth Rev City Univ Rfdg, Ser D (AGM Insd)		5.750	%		07/01/12		585		611,360
New York St Dorm Auth Rev City Univ Sys Cons, Ser B		6.000	%		07/01/14		690		753,349
New York St Dorm Auth Rev Dept Ed		5.250	%		07/01/21		1,000		1,083,130
New York St Dorm Auth Rev Insd Brooklyn Law Sch, Ser B (Syncora Gtd)		5.375	%		07/01/23		1,000		1,035,970
New York St Dorm Auth Rev Insd NY St Rehab Assn, Ser A (AMBAC Insd)		5.500	%		07/01/15		1,040		1,093,882
New York St Dorm Auth Rev Mem Sloan Kettering Cancer Ctr, Ser C (NATL Insd)		5.500	%		07/01/23		1,250		1,498,475
New York St Dorm Auth Rev Miriam Osborn Mem Home, Ser B (ACA Insd)		6.375	%		07/01/29		1,200		1,217,184
New York St Dorm Auth Rev Non St Supported Debt Manhattan College, Ser A (Radian Insd)		5.000	%		07/01/41		750		750,368
New York St Dorm Auth Rev Non St Supported Debt Francis College		5.000	%		10/01/40		500		509,460
New York St Dorm Auth Rev Non St Supported Debt Court Fac Lease NYC Issue, Ser A (AMBAC Insd)		5.500	%		05/15/30		1,500		1,767,720
New York St Dorm Auth Rev Non St Supported Debt L.I. Jewish, Ser A		5.000	%		11/01/26		1,000		1,036,120
New York St Dorm Auth Rev Non St Supported Debt Manhattan Marymount		5.250	%		07/01/29		500		518,600
New York St Dorm Auth Rev Non St Supported Debt Mount Sinai Sch Of Medicine		5.125	%		07/01/39		1,250		1,287,225
New York St Dorm Auth Rev Non St Supported Debt North Shore LI Jewish, Ser A		5.500	%		05/01/37		750		790,875
New York St Dorm Auth Rev Non St Supported Debt NY Univ, Ser C		5.000	%		07/01/38		1,000		1,063,630
New York St Dorm Auth Rev Non St Supported Debt Orange Regl Med Ctr		6.500	%		12/01/21		1,000		1,074,530
New York St Dorm Auth Rev Non St Supported Debt Providence Rest (ACA Insd)		5.250	%		07/01/25		2,000		1,617,440
New York St Dorm Auth Rev Non St Supported Debt Sch Dist Bd Fin Pgm, Ser C		7.500	%		04/01/39		2,000		2,438,280
New York St Dorm Auth Rev Non St Supported Debt Sch Dist Fin Pgm, Ser C (AGL Insd)		5.000	%		10/01/24		1,000		1,127,330
New York St Dorm Auth Rev Sec Insd NY Univ Insd, Ser 1 (BHAC Insd)		5.500	%		07/01/31		390		467,922
New York St Dorm Auth Rev St Supported Debt Lease St Univ Dorm Fac, Ser A		5.000	%		07/01/25		1,000		1,102,460
New York St Dorm Auth Rev St Supported Debt Mental Hlth Svc Fac Impt, Ser A (AGM Insd)		5.000	%		02/15/27		500		545,485
New York St Dorm Auth Rev St Supported Debt Mental Hlth Svc, Ser C (AGM Insd) (AMT)		5.250	%		02/15/28		2,000		2,078,940
New York St Dorm Auth St Pers Income Tax Rev Ed, Ser B		5.750	%		03/15/36		1,000		1,165,470
New York St Energy Resh & Dev Auth Gas Fac Rev Regr Ribs Brooklyn Union Gas, Ser B (AMT)(e)		13.076	%		07/01/26		500		502,070
New York St Environmental Fac Corp Rev, Ser C		5.000	%		10/15/39		750		821,137
New York St Environmental Fac Corp St Clean Wtr & Drinking Revolving Fd Pooled Fin Pgm, Ser I		5.250	%		09/15/19		500		539,330
New York St Twy Auth Second Gen Hwy & Brdg Tr Fd, Ser B		5.000	%		04/01/25		1,000		1,116,850
New York St Urban Dev Corp Rev Correctional Fac Rfdg, Ser A		5.500	%		01/01/14		500		532,985
Oneida Cnty, NY Indl Dev Agy Civic Fac Saint Elizabeth Med, Ser A		5.875	%		12/01/29		570		570,234
Onondaga, NY Civic Dev Corp Rev Le Moyne College Proj		5.375	%		07/01/40		625		642,863
Port Auth NY & NJ Spl Oblig Rev Spl Proj JFK Intl Arpt Term 6 (NATL Insd) (AMT)		5.750	%		12/01/22		2,000		2,004,860
Rensselaer Cnty, NY Indl Dev Agy Indl Dev Rev Franciscan Heights LP Proj, Ser A (SONYMA Insd) (AMT) (LOC:
JPMorgan Chase Bank)		5.375	%		12/01/36		1,000		1,014,450
Rockland Cnty, NY Solid Waste, Ser B (AMBAC Insd) (AMT)		5.000	%		12/15/23		1,000		1,020,650
Seneca Cnty, NY Indl Dev Agy Solid Waste Disp Rev Seneca Meadows Inc Proj (AMT)(a)(f)		6.625	%		10/01/35		500		506,395
Seneca Nation Indians Cap Impt Auth NY Spl Oblig, Ser A(f)		5.000	%		12/01/23		1,000		833,810
Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev Eastrn Long Island Hosp Assn(f)		5.375	%		01/01/27		1,385		1,136,919

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

10        Invesco Van Kampen New York Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)			Value
New York–(continued)
Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev Family Svc League Suffolk Cnty (LOC:
Fleet National Bank)		5.000	%		11/01/34	$	825		$	835,139
Syracuse, NY Indl Dev Agy Rev First Mtg Jewish Home, Ser A		7.375	%		03/01/21		250			252,640
Tompkins Cnty, NY Indl Dev Agy Rev Civic Fac Cornell Univ, Ser A		5.000	%		07/01/37		250			272,435
Troy, NY Cap Resource Corp Rev Rensselaer Polytechnic, Ser A		5.000	%		09/01/30		750			786,443
Tsasc, Inc NY, Ser 1		5.000	%		06/01/34		750			640,643
Tsasc, Inc NY, Ser 1		5.125	%		06/01/42		1,500			1,219,290
Ulster Cnty, NY Res Recovery Agy Solid Waste Sys Rev Rfdg (AMBAC Insd)		5.250	%		03/01/18		1,000			1,078,460
United Nations Dev Corp NY Rev Rfdg, Ser A		5.000	%		07/01/25		1,000			1,115,790
Upper Mohawk Vly Regl Wtr Fin Auth NY Wtr Sys Rev (AMBAC Insd)		5.750	%		04/01/20		160			162,226
Utica, NY Indl Dev Agy Civic Fac Rev Utica College Proj, Ser A		5.750	%		08/01/28		290			272,438
Warren & Washington Cnty, NY Indl Dev Agy Civic Fac Rev Glens Falls Hosp Proj, Ser A (AGM Insd)		5.000	%		12/01/35		1,000			1,016,180
Westchester Cnty, NY Indl Dev Agy Mtg Kendal on Hudson Proj, Ser A		6.375	%		01/01/24		500			502,555
Westchester Cnty, NY Indl Dev Guiding Eyes for the Blind		5.375	%		08/01/24		1,000			1,041,800
Westchester Tob Asset Sec Corp NY		5.125	%		06/01/45		1,500			1,198,230
										96,004,158
Guam–1.6%
Guam Govt Ltd Oblig Rev Sect 30, Ser A		5.750	%		12/01/34		1,250			1,316,300
Guam Pwr Auth Rev, Ser A		5.500	%		10/01/40		265			276,114
										1,592,414
Puerto Rico–4.5%
Puerto Rico Comwlth Infrastructure Fin Auth Spl Tax Rev Rfdg, Ser C (AMBAC Insd)		5.500	%		07/01/27		400			441,700
Puerto Rico Elec Pwr Auth Rev, Ser WW		5.250	%		07/01/33		500			521,620
Puerto Rico Elec Pwr Auth Rev, Ser WW		5.500	%		07/01/21		1,000			1,117,800
Puerto Rico Sales Tax Fin Corp Sales Tax Rev Cap Apprec, Ser A		*			08/01/34		2,500			591,425
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A (Prerefunded @ 08/01/11)(a)		5.000	%		08/01/39		1,000			1,039,860
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser A		5.375	%		08/01/39		315			334,077
Puerto Rico Sales Tax Fin Corp Sales Tax Rev First Sub, Ser C		5.250	%		08/01/41		500			525,855
										4,572,337
U.S. Virgin Islands–2.0%
Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes Ln Nt, Ser A		6.375	%		10/01/19		1,000			1,012,220
Virgin Islands Pub Fin Auth Rev Matching Fd Ln Diago, Ser A		6.625	%		10/01/29		500			573,710
Virgin Islands Pub Fin Auth Rev Sr Lien/Cap Proj, Ser A-1		5.000	%		10/01/39		500			502,880
										2,088,810
TOTAL INVESTMENTS–101.6% (Cost $101,124,042)										104,257,719
Floating Rate Note and Dealer Trust Obligations Related to Securities Held–(3.2%)
(Cost ($3,270,000))
Notes with interest rates ranging from 0.27% to 0.30% at 09/30/10, and contractual maturities of collateral ranging from 06/15/37 to 07/01/44 (See Note 1(K) in the Notes to Financial Statements)(g)							(3,270	)		(3,270,000	)
TOTAL NET INVESTMENTS–98.4% (Cost $97,854,042)										100,987,719
OTHER ASSETS IN EXCESS OF LIABILITIES–1.6%										1,688,912
NET ASSETS–100.0%									$	102,676,631

Percentages are calculated as a percentage of net assets.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

11        Invesco Van Kampen New York Tax Free Income Fund

Investment Abbreviations:

ACA	– American Capital Access
AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– AMBAC Indemnity Corp.
AMT	– Alternative Minimum Tax
BHAC	– Berkshire Hathaway Assurance Corp.
LOC	– Letter of Credit
NATL	– National Public Finance Guarantee Corp.
Radian	– Radian Asset Assurance
SONYMA	– State of New York Mortgage Agency
Syncora Gtd	– Syncora Guaranteed Limited

Notes to Schedule of Investments:

*	Zero coupon bond
(a)	Variable Rate Coupon
(b)	Underlying security related to Special Purpose Trusts entered into by the Fund. See Note 1(K) in the Notes to Financial Statements.
(c)	Security is restricted and may be resold only in transactions exempt from registration which are normally those transactions with qualified institutional buyers. Restricted securities comprise less than 0.1% of net assets.
(d)	Non-income producing as security is in default.
(e)	Inverse Floating Rate. The interest rates shown reflect the rates in effect at September 30, 2010.
(f)	144A-Private Placement security which is exempt from registration under Rule 144A of the Securities Act of 1933, as amended. This security may only be resold in transactions exempt from registration which are normally those transactions with qualified institutional buyers.
(g)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at September 30, 2010. At September 30, 2010, the Fund’s investments with a value of $5,240,157 are held by the Dealer Trusts and serve as collateral for the $3,270,000 in floating rate note and dealer trust obligations outstanding at that date.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

12        Invesco Van Kampen New York Tax Free Income Fund

Statement of Assets and Liabilities

September 30, 2010

Assets:
Investments, at value (Cost $101,124,042)	$	104,257,719
Cash		374,482
Receivables:
Interest		1,545,263
Fund shares sold		254,443
Other		3,086
Total assets		106,434,993
Liabilities:
Payables:
Floating rate note and dealer trust obligations		3,270,000
Fund shares repurchased		267,678
Income distributions		88,403
Distributor and affiliates		45,813
Accrued expenses		86,224
Trustees’ deferred compensation and retirement plans		244
Total liabilities		3,758,362
Net assets	$	102,676,631
Net assets consist of:
Capital (Par value of $0.01 per share with an unlimited number of shares authorized)	$	104,691,446
Net unrealized appreciation		3,133,677
Accumulated undistributed net investment income		144,992
Accumulated net realized gain (loss)		(5,293,484	)
Net assets	$	102,676,631
Maximum offering price per share:
Class A shares:
Net asset value and redemption price per share (Based on net assets of $74,722,026 and 4,735,284 shares of beneficial interest issued and outstanding)	$	15.78
Maximum sales charge (4.75% of offering price)		0.79
Maximum offering price to public	$	16.57
Class B shares:
Net asset value and offering price per share (Based on net assets of $8,895,486 and 566,625 shares of beneficial interest issued and outstanding)	$	15.70
Class C shares:
Net asset value and offering price per share (Based on net assets of $19,048,738 and 1,208,206 shares of beneficial interest issued and outstanding)	$	15.77
Class Y shares:
Net asset value and offering price per share (Based on net assets of $10,381 and 658 shares of beneficial interest issued and outstanding)	$	15.78

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

13        Invesco Van Kampen New York Tax Free Income Fund

Statement of Operations

For the year ended September 30, 2010

Investment income:
Interest	$	5,377,518
Expenses:
Investment advisory fee		472,741
Distribution fees
Class A		178,565
Class B		75,967
Class C		189,788
Professional fees		59,596
Administrative services fees		59,386
Transfer agent fees		49,445
Interest, line of credit and residual trust expenses		38,257
Trustees’ and officers’ fees and benefits		25,254
Reports to shareholders		22,152
Custody		10,691
Registration fees		10,096
Other		15,838
Total expenses		1,207,776
Expense reduction		251,458
Net expenses		956,318
Net investment income		4,421,200
Realized and unrealized gain (loss):
Net realized gain (loss)		(14,391	)
Unrealized appreciation
Beginning of the period		688,115
End of the period		3,133,677
Net unrealized appreciation during the period		2,445,562
Net realized and unrealized gain		2,431,171
Net increase in net assets from operations	$	6,852,371

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

14        Invesco Van Kampen New York Tax Free Income Fund

Statements of Changes in Net Assets

For the years ended September 30, 2010 and 2009

	September 30,			September 30,
	2010			2009
From investment activities:
Operations:
Net investment income	$	4,421,200		$	4,695,247
Net realized gain (loss)		(14,391	)		(3,649,773	)
Net unrealized appreciation during the period		2,445,562			10,302,109
Change in net assets from operations		6,852,371			11,347,583
Distributions from net investment income:
Class A shares		(3,301,571	)		(3,381,881	)
Class B shares		(439,089	)		(604,492	)
Class C shares		(739,006	)		(756,316	)
Class Y shares		(161	)		-0-
Total distributions		(4,479,827	)		(4,742,689	)
Net change in net assets from investment activities		2,372,544			6,604,894
From capital transactions:
Proceeds from shares sold		14,128,770			15,255,525
Net asset value of shares issued through dividend reinvestment		3,380,901			3,526,080
Cost of shares repurchased		(21,041,626	)		(29,586,268	)
Net change in net assets from capital transactions		(3,531,955	)		(10,804,663	)
Total increase (decrease) in net assets		(1,159,411	)		(4,199,769	)
Net assets:
Beginning of the period		103,836,042			108,035,811
End of the period (including accumulated undistributed net investment income of $144,992 and $189,142, respectively)	$	102,676,631		$	103,836,042

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

15        Invesco Van Kampen New York Tax Free Income Fund

Financial Highlights

The following schedules present financial highlights for one share of the Fund outstanding throughout the periods indicated.

	Class A Shares
	Year Ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	15.40		$	14.31		$	16.01		$	16.47		$	16.67
Net investment income(a)		0.70			0.70			0.69			0.67			0.66
Net realized and unrealized gain (loss)		0.39			1.10			(1.66	)		(0.43	)		0.11
Total from investment operations		1.09			1.80			(0.97	)		0.24			0.77
Less:
Distributions from net investment income		0.71			0.71			0.71			0.68			0.65
Distributions from net realized gain		-0-			-0-			0.02			0.02			0.32
Total distributions		0.71			0.71			0.73			0.70			0.97
Net asset value, end of the period	$	15.78		$	15.40		$	14.31		$	16.01		$	16.47
Total return*		7.32	%(b)		13.24	%(c)		(6.32	)%(c)		1.34	%(c)		4.96	%(c)
Net assets at end of the period (in millions)	$	74.7		$	72.7		$	74.4		$	82.3		$	73.8
Ratio of expenses to average net assets*		0.76	%(d)		0.84	%		0.89	%		0.81	%		0.73	%
Ratio of net investment income to average net assets*		4.59	%(d)		5.06	%		4.44	%		4.12	%		4.05	%
Portfolio turnover(e)		18	%		32	%		34	%		13	%		30	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)*		0.73	%(d)		0.78	%		0.73	%		0.72	%		0.73	%
* If certain expenses had not been voluntarily assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.01	%(d)		1.09	%		1.14	%		1.06	%		0.98	%
Ratio of net investment income to average net assets		4.34	%(d)		4.81	%		4.19	%		3.87	%		3.80	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)		0.98	%(d)		1.03	%		0.98	%		0.97	%		0.98	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum sales charge of 4.75% or contingent deferred sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be imposed on certain redemptions made within eighteen months of purchase. If the sales charges were included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 0.25% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	Ratios are based on average daily net assets (000’s omitted) of $71,426.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

16        Invesco Van Kampen New York Tax Free Income Fund

Financial Highlights—(continued)

	Class B Shares
	Year Ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	15.35		$	14.27		$	15.97		$	16.43		$	16.63
Net investment income(a)		0.62			0.69			0.70			0.60			0.54
Net realized and unrealized gain (loss)		0.39			1.09			(1.65	)		(0.43	)		0.11
Total from investment operations		1.01			1.78			(0.95	)		0.17			0.65
Less:
Distributions from net investment income		0.66			0.70			0.73			0.61			0.53
Distributions from net realized gain		-0-			-0-			0.02			0.02			0.32
Total distributions		0.66			0.70-			0.75			0.63			0.85
Net asset value, end of the period	$	15.70		$	15.35		$	14.27		$	15.97		$	16.43
Total return*		6.76	%(b)(c)		13.13	%(d)(e)		(6.22	)%(d)(e)		0.95	%(d)(e)		4.18	%(d)
Net assets at end of the period (in millions)	$	8.9		$	11.7		$	15.0		$	20.5		$	28.6
Ratio of expenses to average net assets*		1.26	%(c)(f)		0.92	%(e)		0.81	%(e)		1.23	%(e)		1.48	%
Ratio of net investment income to average net assets*		4.09	%(c)(f)		4.99	%(e)		4.52	%(e)		3.69	%(e)		3.30	%
Portfolio turnover(g)		18	%		32	%		34	%		13	%		30	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)*		1.23	%(c)(f)		0.86	%(e)		0.65	%(e)		1.14	%(e)		1.48	%
* If certain expenses had not been voluntarily assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.51	%(c)(f)		1.17	%(e)		1.06	%(e)		1.48	%(e)		1.73	%
Ratio of net investment income to average net assets		3.84	%(c)(f)		4.74	%(e)		4.27	%(e)		3.44	%(e)		3.05	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)		1.48	%(c)(f)		1.11	%(e)		0.90	%(e)		1.39	%(e)		1.73	%

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of 0.75%.
(d)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 4%, charged on certain redemptions made within one year of purchase and declining to 0% after the sixth year. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(e)	The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%.
(f)	Ratios are based on average daily net assets (000’s omitted) of $10,175.
(g)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

17        Invesco Van Kampen New York Tax Free Income Fund

Financial Highlights—(continued)

	Class C Shares
	Year Ended September 30,
	2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	15.39		$	14.29		$	15.99		$	16.45		$	16.65
Net investment income(a)		0.59			0.61			0.58			0.55			0.54
Net realized and unrealized gain (loss)		0.38			1.10			(1.67	)		(0.43	)		0.11
Total from investment operations		0.97			1.71			(1.09	)		0.12			0.65
Less:
Distributions from net investment income		0.59			0.61			0.59			0.56			0.53
Distributions from net realized gain		-0-			-0-			0.02			0.02			0.32
Total distributions		0.59			0.61			0.61			0.58			0.85
Net asset value, end of the period	$	15.77		$	15.39		$	14.29		$	15.99		$	16.45
Total return*		6.50	%(b)		12.51	%(c)(d)		(7.04	)%(c)		0.66	%(c)(d)		4.14	%(c)(d)
Net assets at end of the period (in millions)	$	19.0		$	19.4		$	18.6		$	18.9		$	17.4
Ratio of expenses to average net assets*		1.51	%(e)		1.50	%(d)		1.64	%		1.55	%(d)		1.46	%(d)
Ratio of net investment income to average net assets*		3.84	%(e)		4.40	%(d)		3.70	%		3.37	%(d)		3.32	%(d)
Portfolio turnover(f)		18	%		32	%		34	%		13	%		30	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)*		1.48	%(e)		1.44	%(d)		1.48	%		1.46	%(d)		1.46	%(d)
* If certain expenses had not been voluntarily assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		1.76	%(e)		1.75	%(d)		1.89	%		1.80	%(d)		1.71	%(d)
Ratio of net investment income to average net assets		3.59	%(e)		4.15	%(d)		3.45	%		3.12	%(d)		3.10	%(d)
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)		1.73	%(e)		1.69	%(d)		1.73	%		1.71	%(d)		1.71	%(d)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Assumes reinvestment of all distributions for the period and does not include payment of the maximum CDSC of 1%, charged on certain redemptions made within one year of purchase. If the sales charge was included, total returns would be lower. These returns include combined Rule 12b-1 fees and service fees of up to 1% and do not reflect the deduction of taxes that a shareholder would pay on Fund distributions or the redemption of Fund shares.
(d)	The total return, ratio of expenses to average net assets and ratio of net investment income to average net assets reflect actual 12b-1 fees of less than 1%.
(e)	Ratios are based on average daily net assets (000’s omitted) of $18,979.
(f)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than a year, if applicable.

See accompanying Notes to Financial Statements which are an integral part of the financial statements.

18        Invesco Van Kampen New York Tax Free Income Fund

Financial Highlights—(continued)

	Class Y Shares
	June 1, 2010
	(Commencement of
	Operations) to
	September 30, 2010
Net asset value, beginning of the period	$	15.44
Net investment income(a)		0.25
Net realized and unrealized gain		0.34
Total from investment operations		0.59
Less:
Distributions from net investment income		0.25
Distributions from net realized gain		-0-
Total distributions		0.25
Net asset value, end of the period	$	15.78
Total return*(b)		3.83	%
Net assets at end of the period (in thousands)	$	10.4
Ratio of expenses to average net assets*		0.51	%(c)
Ratio of net investment income to average net assets*		4.77	%(c)
Portfolio turnover(d)		18	%
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)*		0.48	%(c)
* If certain expenses had not been voluntarily assumed by the adviser, total returns would have been lower and the ratios would have been as follows:
Ratio of expenses to average net assets		0.76	%(c)
Ratio of net investment income to average net assets		4.52	%(c)
Supplemental ratio:
Ratio of expenses to average net assets (Excluding interest and residual trust expenses)		0.73	%(c)

(a)	Based on average shares outstanding.
(b)	Includes adjustments in accordance with accounting principles generally accepted in the United States of America and as such, the net asset value for financial reporting purposes and the returns based upon those net asset values may differ from the net asset value and returns for shareholder transactions. Does not include sales charges and is not annualized for periods less than one year, if applicable.
(c)	Ratios are annualized and based on average daily net assets (000’s omitted) of $10.
(d)	Portfolio turnover is calculated at the fund level and is not annualized for period less than a year, if applicable.

Notes to Financial Statements

September 30, 2010

NOTE 1—Significant Accounting Policies

Invesco Van Kampen New York Tax Free Income Fund (the “Fund”), is a series portfolio of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), formerly AIM Tax-Exempt Funds (the “Trust”). The Trust is a Delaware statutory trust registered under the Investment Company Act of 1940, as amended (the “1940 Act”), as an open-end series management investment company consisting of eleven separate portfolios, each authorized to issue an unlimited number of shares of beneficial interest. The assets, liabilities and operations of each portfolio are accounted for separately. Information presented in these financial statements pertains only to the Fund. Matters affecting each portfolio or class will be voted on exclusively by the shareholders of such portfolio or class.

  Prior to June 1, 2010, the Fund operated as Van Kampen New York Tax-Free Income Fund (the “Acquired Fund”), an investment portfolio of Van Kampen Tax Free Trust. The Acquired Fund was reorganized on June 1, 2010, (the “Reorganization Date”) through the transfer of all of its assets and liabilities to the Fund (the “Reorganization”).

19        Invesco Van Kampen New York Tax Free Income Fund

  Upon closing of the Reorganization, holders of the Acquired Fund’s Class A, Class B and Class C shares received Class A, Class B and Class C shares, respectively, of the Fund.

  The Fund’s investment objective is to provide investors with a high level of current income exempt from federal, New York State and New York City income taxes, consistent with preservation of capital.

  The Fund currently consists of four different classes of shares: Class A, Class B, Class C and Class Y. Class A shares are sold with a front-end sales charge unless certain waiver criteria are met and under certain circumstances load waived shares may be subject to contingent deferred sales charges (“CDSC”). Class B shares and Class C shares are sold with a CDSC. Class Y shares are sold at net asset value. Generally, Class B shares will automatically convert to Class A shares on or about the month-end which is at least eight years after the date of purchase.

  The following is a summary of the significant accounting policies followed by the Fund in the preparation of its financial statements.

A.	Security Valuations — Securities, including restricted securities, are valued according to the following policy.
	Securities are fair valued using an evaluated quote provided by an independent pricing service approved by the Board of Trustees. Evaluated quotes provided by the pricing service may be determined without exclusive reliance on quoted prices and may reflect appropriate factors such as institution-size trading in similar groups of securities, yield, quality, coupon rate, maturity, type of issue, individual trading characteristics and other market data. Short-term obligations, including commercial paper, having 60 days or less to maturity are recorded at amortized cost which approximates value. Securities with a demand feature exercisable within one to seven days are valued at par. Debt securities are subject to interest rate and credit risks. In addition, all debt securities involve some risk of default with respect to interest and principal payments.
	Securities for which market quotations either are not readily available or are unreliable are valued at fair value as determined in good faith by or under the supervision of the Trust’s officers following procedures approved by the Board of Trustees. Some of the factors which may be considered in determining fair value are fundamental analytical data relating to the investment; the nature and duration of any restrictions on transferability or disposition; trading in similar securities by the same issuer or comparable companies; relevant political, economic or issuer specific news; and other relevant factors under the circumstances.
	Valuations change in response to many factors including the historical and prospective earnings of the issuer, the value of the issuer’s assets, general economic conditions, interest rates, investor perceptions and market liquidity. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.
B.	Securities Transactions and Investment Income — Securities transactions are accounted for on a trade date basis. Realized gains or losses on sales are computed on the basis of specific identification of the securities sold. Interest income is recorded on the accrual basis from settlement date. Dividend income (net of withholding tax, if any) is recorded on the ex-dividend date. Bond premiums and discounts are amortized and/or accreted for financial reporting purposes.
	The Fund may periodically participate in litigation related to Fund investments. As such, the Fund may receive proceeds from litigation settlements. Any proceeds received are included in the Statement of Operations as realized gain (loss) for investments no longer held and as unrealized gain (loss) for investments still held.
	Brokerage commissions and mark ups are considered transaction costs and are recorded as an increase to the cost basis of securities purchased and/or a reduction of proceeds on a sale of securities. Such transaction costs are included in the determination of realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the realized and unrealized net gains (losses) on securities per share in the Financial Highlights. Transaction costs are included in the calculation of the Fund’s net asset value and, accordingly, they reduce the Fund’s total returns. These transaction costs are not considered operating expenses and are not reflected in net investment income reported in the Statement of Operations and Statement of Changes in Net Assets, or the net investment income per share and ratios of expenses and net investment income reported in the Financial Highlights, nor are they limited by any expense limitation arrangements between the Fund and the investment adviser.
	The Fund allocates realized and unrealized capital gains and losses to a class based on the relative net assets of each class. The Fund allocates income to a class based on the relative value of the settled shares of each class.
C.	Country Determination — For the purposes of making investment selection decisions and presentation in the Schedule of Investments, the investment adviser may determine the country in which an issuer is located and/or credit risk exposure based on various factors. These factors include the laws of the country under which the issuer is organized, where the issuer maintains a principal office, the country in which the issuer derives 50% or more of its total revenues and the country that has the primary market for the issuer’s securities, as well as other criteria. Among the other criteria that may be evaluated for making this determination are the country in which the issuer maintains 50% or more of its assets, the type of security, financial guarantees and enhancements, the nature of the collateral and the sponsor organization. Country of issuer and/or credit risk exposure has been determined to be the United States of America, unless otherwise noted.
D.	Distributions — Distributions from income are declared daily and paid monthly. Distributions from net realized capital gain, if any, are generally paid annually and recorded on ex-dividend date. The Fund may elect to treat a portion of the proceeds from redemptions as distributions for federal income tax purposes.
E.	Federal Income Taxes — The Fund intends to comply with the requirements of Subchapter M of the Internal Revenue Code necessary to qualify as a regulated investment company and to distribute substantially all of the Fund’s taxable and tax-exempt earnings to shareholders. As such, the Fund will not be subject to federal income taxes on otherwise taxable income (including net realized capital gain) that is distributed to shareholders. Therefore, no provision for federal income taxes is recorded in the financial statements.
	In addition, the Fund intends to invest in such municipal securities to allow it to qualify to pay shareholders “exempt-interest dividends”, as defined in the Internal Revenue Code.
	The Fund files tax returns in the U.S. Federal jurisdiction and certain other jurisdictions. Generally the Fund is subject to examinations by such taxing authorities for up to three years after the filing of the return for the tax period.

20        Invesco Van Kampen New York Tax Free Income Fund

F.	Expenses — Fees provided for under the Rule 12b-1 plan of a particular class of the Fund and which are directly attributable to that class are charged to the operations of such class. All other expenses are allocated among the classes based on relative net assets. Prior to the Reorganization, incremental transfer agency fees which are unique to each class of shares of the Acquired Fund were charged to the operations of such class.
G.	Accounting Estimates — The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period including estimates and assumptions related to taxation. Actual results could differ from those estimates by a significant amount. In addition, the Fund monitors for material events or transactions that may occur or become known after the period-end date and before the date the financial statements are released to print.
H.	Indemnifications — Under the Trust’s organizational documents, each Trustee, officer, employee or other agent of the Trust is indemnified against certain liabilities that may arise out of performance of their duties to the Fund. Additionally, in the normal course of business, the Fund enters into contracts, including the Fund’s servicing agreements that contain a variety of indemnification clauses. The Fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Fund that have not yet occurred. The risk of material loss as a result of such indemnification claims is considered remote.
I.	Securities Purchased on a When-Issued and Delayed Delivery Basis — The Fund may purchase and sell interests in portfolio securities on a when-issued and delayed delivery basis, with payment and delivery scheduled for a future date. No income accrues to the Fund on such interests or securities in connection with such transactions prior to the date the Fund actually takes delivery of such interests or securities. These transactions are subject to market fluctuations and are subject to the risk that the value at delivery may be more or less than the trade date purchase price. Although the Fund will generally purchase these securities with the intention of acquiring such securities, they may sell such securities prior to the settlement date.
J.	Other Risks — The value of, payment of interest on, repayment of principal for and the ability to sell a municipal security may be affected by constitutional amendments, legislative enactments, executive orders, administrative regulations, voter initiatives and the economics of the regions in which the issuers are located.
	Since many municipal securities are issued to finance similar projects, especially those relating to education, health care, transportation and utilities, conditions in those sectors can affect the overall municipal securities market and a Fund’s investments in municipal securities.
	There is some risk that a portion or all of the interest received from certain tax-free municipal securities could become taxable as a result of determinations by the Internal Revenue Service.
K.	Floating Rate Obligations Related to Securities Held — The Fund enters into transactions in which it transfers to Special Purpose Trusts established by a broker dealer (“Dealer Trusts”) fixed rate bonds in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate investments. The Dealer Trusts fund the purchases of the fixed rate bonds by issuing floating rate notes to third parties and allowing the Fund to retain residual interest in the bonds. The Fund may enter into shortfall agreements with the Dealer Trusts which commit the Fund to pay the Dealer Trusts, in certain circumstances, the difference between the liquidation value of the fixed rate bonds held by the Dealer Trusts and the liquidation value of the floating rate notes held by third parties, as well as any shortfalls in interest cash flows. The residual interests held by the Fund (inverse floating rate investments) include the right of the Fund (1) to cause the holders of the floating rate notes to tender their notes at par at the next interest rate reset date, and (2) to transfer the municipal bond from the Dealer Trusts to the Fund, thereby collapsing the Dealer Trusts. The Fund accounts for the transfer of bonds to the Dealer Trusts as secured borrowings, with the securities transferred remaining in the Fund’s investment assets, and the related floating rate notes reflected as Fund liabilities under the caption “Floating rate note and dealer trust obligations” on the Statement of Assets and Liabilities. The Fund records the interest income from the fixed rate bonds under the caption “Interest” and records the expenses related to floating rate obligations and any administrative expenses of the Dealer Trusts under the caption “Interest, line of credit and residual trust expenses” on the Statement of Operations. The floating rate notes issued by the Dealer Trusts have interest rates that reset weekly and the floating rate note holders have the option to tender their notes to the Dealer Trusts for redemption at par at each reset date. The average floating rate notes outstanding and average annual interest and fee rate related to residual interests during the year ended September 30, 2010 were $3,270,000 and 0.90%, respectively.

NOTE 2—Advisory Fees and Other Fees Paid to Affiliates

The Trust has entered into a master investment advisory agreement with Invesco Advisers, Inc. (the “Adviser” or “Invesco”). Under the terms of the investment advisory agreement, the Fund pays an advisory fee to the Adviser based on the annual rate of the Fund’s average daily net assets as follows:

Average Daily Net Assets	Rate
First $500 million		0	.470%
Over $500 million		0	.445%

  Prior to the Reorganization, the Acquired Fund paid an advisory fee of $314,479 to Van Kampen Asset Management (“Van Kampen”) based on the annual rates above of the Acquired Fund’s average daily net assets.

  Under the terms of a master sub-advisory agreement between the Adviser and each of Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the “Affiliated Sub-Advisers”) the Adviser, not the Fund, may pay 40% of the fees paid to the Adviser to any such Affiliated Sub-Adviser(s) that provide discretionary investment management services to the Fund based on the percentage of assets allocated to such Sub-Adviser(s).

  Effective on the Reorganization date, the Adviser has contractually agreed, through June 30, 2012, to waive advisory fees and/or reimburse expenses of all shares to the extent necessary to limit total annual operating expenses (excluding certain items discussed below) of Class A, Class B, Class C and Class Y shares

21        Invesco Van Kampen New York Tax Free Income Fund

to 0.78%, 1.53%, 1.53% and 0.53% of average daily net assets, respectively. In determining the Adviser’s obligation to waive advisory fees and/or reimburse expenses, the following expenses are not taken into account, and could cause the net annual operating expenses to exceed the numbers reflected above: (1) interest; (2) taxes; (3) dividend expense on short sales; (4) extraordinary items or non-routine items; and (5) expenses that the Fund has incurred but did not actually pay because of an expense offset arrangement. Unless the Board of Trustees and Invesco mutually agree to amend or continue the fee waiver agreement, it will terminate on June 30, 2012. The Adviser waived $84,182 of fees and/or reimbursed expenses during the period under this limitation.

  Prior to the Reorganization, Van Kampen voluntarily waived $167,276 of fees and/or reimbursed expenses of the Acquired Fund.

  The Trust has entered into a master administrative services agreement with Invesco pursuant to which the Fund has agreed to pay Invesco for certain administrative costs incurred in providing accounting services to the Fund. Prior to the Reorganization, under separate accounting services and chief compliance officer (“CCO”) employment agreements, Van Kampen Investments Inc. (“VKII”) provided accounting services and the CCO provided compliance services to the Acquired Fund. Pursuant to such agreements, the Acquired Fund paid $14,009 to VKII. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as administrative services fees. Also, Invesco has entered into service agreements whereby State Street Bank and Trust Company (“SSB”) serves as the custodian and fund accountant and provides certain administrative services to the Fund.

  Prior to the Reorganization, under a legal services agreement, VKII provided legal services to the Acquired Fund. Pursuant to such agreement, the Acquired Fund paid $15,088 to VKII.

  The Trust has entered into a transfer agency and service agreement with Invesco Investment Services, Inc. (“IIS”) pursuant to which the Fund has agreed to pay IIS a fee for providing transfer agency and shareholder services to the Fund and reimburse IIS for certain expenses incurred by IIS in the course of providing such services. IIS may make payments to intermediaries that provide omnibus account services, sub-accounting services and/or networking services. All fees payable by IIS to intermediaries that provide omnibus account services or sub-accounting are charged back to the Fund, subject to certain limitations approved by the Trust’s Board of Trustees. Pursuant to such agreement, for the period ended September 30, 2010, IIS was paid $15,776 for providing such services. Prior to the Reorganization, the Acquired Fund paid $17,730 to Van Kampen Investor Services Inc., which served as the Acquired Fund’s transfer agent. For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as transfer agent fees.

  Shares of the Fund are distributed by Invesco Distributors, Inc. (“IDI”). The Fund has adopted a distribution plan pursuant to Rule 12b-1 under the 1940 Act, and a service plan (collectively, the “Plans”) for Class A shares, Class B shares and Class C shares to compensate IDI for the sale, distribution, shareholder servicing and maintenance of shareholder accounts for these shares. Under the Plans, the Fund will incur annual fees of up to 0.25% of Class A average daily net assets and up to 1.00% each of Class B and Class C average daily net assets.

  With respect to Class B and Class C shares, the Fund is authorized to reimburse in future years any distribution related expenses that exceed the maximum annual reimbursement rate for such class, so long as such reimbursement does not cause the Fund to exceed the Class B and Class C maximum annual reimbursement rate, respectively. With respect to Class A shares, distribution related expenses that exceed the maximum annual reimbursement rate for such class are not carried forward to future years and the Fund will not reimburse IDI for any such expenses.

  Prior to the Reorganization, the Acquired Fund had entered into master distribution agreements with Van Kampen Funds Inc. (“VKFI”) to serve as the distributor for the Class A, Class B and Class C shares. Pursuant to such agreements, the Acquired Fund paid $291,832 to VKFI.

  For the year ended September 30, 2010, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

  Front-end sales commissions and CDSC (collectively the “sales charges”) are not recorded as expenses of the Fund. Front-end sales commissions are deducted from proceeds from the sales of Fund shares prior to investment in Class A shares of the Fund. CDSC are deducted from redemption proceeds prior to remittance to the shareholder. For the period June 1, 2010 to September 30, 2010, IDI advised the Fund that IDI retained $3,228 in front-end sales commissions from the sale of Class A shares and $2,063, $2,922 and $1,138 from Class A, Class B and Class C shares, respectively, for CDSC imposed on redemptions by shareholders. Prior to the Reorganization, VKFI retained $14,586 in front-end sales commissions from the sale of Class A shares and $9,998, for CDSC imposed on redemptions by shareholders.

  Certain officers and trustees of the Trust are officers and directors of Invesco, IIS and/or IDI.

NOTE 3—Additional Valuation Information

GAAP defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, under current market conditions. GAAP establishes a hierarchy that prioritizes the inputs to valuation methods giving the highest priority to readily available unadjusted quoted prices in an active market for identical assets (Level 1) and the lowest priority to significant unobservable inputs (Level 3) generally when market prices are not readily available or are unreliable. Based on the valuation inputs, the securities or other investments are tiered into one of three levels. Changes in valuation methods may result in transfers in or out of an investment’s assigned level:

Level 1 —	Prices are determined using quoted prices in an active market for identical assets.
Level 2 —	Prices are determined using other significant observable inputs. Observable inputs are inputs that other market participants may use in pricing a security. These may include quoted prices for similar securities, interest rates, prepayment speeds, credit risk, yield curves, loss severities, default rates, discount rates, volatilities and others.
Level 3 —	Prices are determined using significant unobservable inputs. In situations where quoted prices or observable inputs are unavailable (for example, when there is little or no market activity for an investment at the end of the period), unobservable inputs may be used. Unobservable inputs reflect the Fund’s own assumptions about the factors market participants would use in determining fair value of the securities or instruments and would be based on the best available information.

22        Invesco Van Kampen New York Tax Free Income Fund

  The level assigned to the securities valuations may not be an indication of the risk or liquidity associated with investing in those securities. Because of the inherent uncertainties of valuation, the values reflected in the financial statements may materially differ from the value received upon actual sale of those investments.

	Level 1		Level 2		Level 3		Total
Municipal Securities	$	-0-	$	104,257,719	$	-0-	$	104,257,719

NOTE 4—Trustees’ and Officers’ Fees and Benefits

“Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to pay remuneration to certain Trustees and Officers of the Fund. Trustees have the option to defer compensation payable by the Fund, and “Trustees’ and Officers’ Fees and Benefits” also include amounts accrued by the Fund to fund such deferred compensation amounts. Those Trustees who defer compensation have the option to select various Invesco Funds in which their deferral accounts shall be deemed to be invested. Finally, certain current Trustees are eligible to participate in a retirement plan that provides for benefits to be paid upon retirement to Trustees over a period of time based on the number of years of service. The Fund may have certain former Trustees who also participate in a retirement plan and receive benefits under such plan. “Trustees’ and Officers’ Fees and Benefits” include amounts accrued by the Fund to fund such retirement benefits. Obligations under the deferred compensation and retirement plans represent unsecured claims against the general assets of the Fund.

  For the period ended September 30, 2010, the Fund paid legal fees of $0 for services rendered by Kramer, Levin, Naftalis & Frankel LLP as counsel to the Independent Trustees. A member of that firm is a Trustee of the Trust. Prior to the Reorganization, the Acquired Fund recognized expense of $6,229 representing legal services provided by Skadden, Arps, Slate, Meagher & Flom LLP, of which a director of the Acquired Fund was a partner of such firm and he and his law firm provided legal services as legal counsel to the Acquired Fund.

NOTE 5—Cash Balances

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with SSB, the custodian bank. To compensate the custodian bank for such overdrafts, the overdrawn Fund may either (1) leave funds as a compensating balance in the account so the custodian bank can be compensated by earning the additional interest; or (2) compensate by paying the custodian bank at a rate agreed upon by the custodian bank and Invesco, not to exceed the contractually agreed upon rate.

NOTE 6—Distributions to Shareholders and Tax Components of Net Assets

Tax Character of Distributions to Shareholders Paid During the Years Ended September 30, 2010 and 2009:

	2010		2009
Ordinary income	$	26,383	$	1,046
Ordinary income — tax exempt		4,453,444		4,752,989
Total distributions	$	4,479,827	$	4,754,035

Tax Components of Net Assets at Period-End:

	2010
Undistributed tax exempt income	$	86,141
Net unrealized appreciation — investments		3,275,205
Capital loss carryforward		(5,329,654	)
Post-October capital loss deferral		(46,507	)
Shares of beneficial interest		104,691,446
Total net assets	$	102,676,631

  The difference between book-basis and tax-basis unrealized appreciation (depreciation) is due to differences in the timing of recognition of gains and losses on investments for tax and book purposes. The Fund’s net unrealized appreciation (depreciation) difference is attributable primarily to bond premium and inverse floater adjustments.

  The temporary book/tax differences are a result of timing differences between book and tax recognition of income and/or expenses. The Fund’s temporary book/tax differences are the result of the trustee deferral of compensation and retirement plan benefits.

  Capital loss carryforward is calculated and reported as of a specific date. Results of transactions and other activity after that date may affect the amount of capital loss carryforward actually available for the Fund to utilize. The ability to utilize capital loss carryforward in the future may be limited under the Internal Revenue Code and related regulations based on the results of future transactions.

23        Invesco Van Kampen New York Tax Free Income Fund

  The Fund utilized $0 of capital loss carryforward in the current period to offset net realized capital gain for federal income tax purposes. The Fund has a capital loss carryforward as of September 30, 2010 which expires as follows:

	Capital Loss
Expiration	Carryforward*
September 30, 2017	$	1,814,155
September 30, 2018		3,515,499
Total capital loss carryforward	$	5,329,654

*  Capital loss carryforward as of the date listed above is reduced for limitations, if any, to the extent required by the Internal Revenue Code.

NOTE 7—Investment Securities

The aggregate amount of investment securities (other than short-term securities, U.S. Treasury obligations and money market funds, if any) purchased and sold by the Fund during the year ended September 30, 2010 was $18,765,592 and $19,743,052, respectively. Cost of investments on a tax basis includes the adjustments for financial reporting purposes as of the most recently completed Federal income tax reporting period-end.

Unrealized Appreciation (Depreciation) of Investment Securities on a Tax Basis
Aggregate unrealized appreciation of investment securities	$	6,300,238
Aggregate unrealized (depreciation) of investment securities		(3,025,033	)
Net unrealized appreciation of investment securities	$	3,275,205
Cost of investments for tax purposes is $100,982,514.

NOTE 8—Reclassification of Permanent Differences

Primarily as a result of differing book/tax treatment of tax accretion, on September 30, 2010, undistributed net investment income (loss) was increased by $14,477 and undistributed net realized gain (loss) was decreased by $14,477. This reclassification had no effect on the net assets of the Fund.

NOTE 9—Share Information

	Summary of Share Activity
	Year ended September 30,
	2010(a)						2009
	Shares			Amount			Shares			Amount
Sales:
Class A		733,021	(b)	$	11,258,712	(b)		785,019		$	10,966,063
Class B		65,009			989,456			116,624			1,628,367
Class C		122,330			1,870,602			191,911			2,661,095
Class Y		648			10,000			-0-			-0-
Total Sales		921,008			14,128,770			1,093,554			15,255,525
Dividend Reinvestment:
Class A		161,342			2,473,042			182,042			2,532,334
Class B		23,431			356,965			33,902			469,100
Class C		35,975			550,733			37,672			524,646
Class Y		10			161			-0-			-0-
Total Dividend Reinvestment		220,758			3,380,901			253,616			3,526,080
Repurchases:
Class A		(881,321	)		(13,481,359	)		(1,442,541	)		(19,825,201	)
Class B		(281,866	)(b)		(4,298,378	)(b)		(443,008	)		(6,046,339	)
Class C		(213,484	)		(3,261,889	)		(271,042	)		(3,714,728	)
Class Y		-0-			-0-			-0-			-0-
Total Repurchases		(1,376,671	)	$	(21,041,626	)		(2,156,591	)	$	(29,586,268	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 40% of the outstanding shares of the Fund. IDI has an agreement with these entities to sell Fund shares. The Fund, Invesco and/or Invesco affiliates may make payments to these entities, which are considered to be related to the Fund, for providing services to the Fund, Invesco and/or Invesco affiliates including but not limited to services such as securities brokerage, distribution, third party record keeping and account servicing. The Trust has no knowledge as to whether all or any portion of the shares owned of record by these entities are also owned beneficially.

(b)

Includes automatic conversion of 109,306 Class B shares into 108,782 Class A shares at a value of $1,673,533.

24        Invesco Van Kampen New York Tax Free Income Fund

Effective November 30, 2010, all Invesco funds will be closing their Class B shares. Shareholders with investments in Class B shares may continue to hold such shares until they convert to Class A shares, but no additional investments will be accepted in Class B shares on or after November 30, 2010. Any dividends or capital gains distributions may continue to be reinvested in Class B shares until conversion. Also, shareholders in Class B shares will be able to exchange those shares for Class B shares of other Invesco Funds offering such shares until they convert.

NOTE 10—Purposes and Risks Relating to Certain Financial Instruments

The Fund may invest a portion of its assets in inverse floating rate municipal securities, which are variable debt instruments that pay interest at rates that move in the opposite direction of prevailing interest rates. These investments are typically used by the Fund in seeking to enhance the yield of the portfolio. Inverse floating rate investments tend to underperform the market for fixed rate bonds in a rising interest rate environment, but tend to outperform the market for fixed rate bonds when interest rates decline or remain relatively stable. Inverse floating rate investments have varying degrees of liquidity. Inverse floating rate securities in which the Fund may invest include derivative instruments such as residual interest bonds (“RIBs”) or tender option bonds (“TOBs”). Such instruments are typically created by a special purpose trust that holds long-term fixed rate bonds (which may be tendered by the Fund in certain instances) and sells two classes of beneficial interests: short-term floating rate interests, which are sold to third party investors, and inverse floating residual interests, which are purchased by the Fund. The short-term floating rate interests have first priority on the cash flow from the bonds held by the special purpose trust and the Fund is paid the residual cash flow from the bonds held by the special purpose trust.

  The Fund generally invests in inverse floating rate investments that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The market value of a “leveraged” inverse floating rate investment generally will fluctuate in response to changes in market rates of interest to a greater extent than the value of an unleveraged investment. The extent of increases and decreases in the value of inverse floating rate investments generally will be larger than changes in an equal principal amount of a fixed rate security having similar credit quality, redemption provisions and maturity, which may cause the Fund’s net asset value to be more volatile than if it had not invested in inverse floating rate investments.

  In certain instances, the short-term floating rate interests created by the special purpose trust may not be able to be sold to third parties or, in the case of holders tendering (or putting) such interests for repayment of principal, may not be able to be remarketed to third parties. In such cases, the special purpose trust holding the long-term fixed rate bonds may be collapsed. In the case of RIBs or TOBs created by the contribution of long-term fixed income bonds by the Fund, the Fund will then be required to repay the principal amount of the tendered securities. During times of market volatility, illiquidity or uncertainty, the Fund could be required to sell other portfolio holdings at a disadvantageous time to raise cash to meet that obligation.

  The Fund may also invest in private placement securities. TOBs are presently classified as private placement securities. Private placement securities are subject to restrictions on resale because they have not been registered under the Securities Act of 1933, as amended or are otherwise not readily marketable. As a result of the absence of a public trading market for these securities, they may be less liquid than publicly traded securities. Although these securities may be resold in privately negotiated transactions, the prices realized from these sales could be less than those originally paid by the Fund or less than what may be considered the fair value of such securities.

NOTE 11—Borrowings

During the period ended September 30, 2010, the Acquired Fund entered into a $150,000,000 joint revolving bank credit facility. The Fund terminated its participation in the facility on May 31, 2010.

NOTE 12—Change in Independent Registered Public Accounting Firm

In connection with the Reorganization of the Fund, the Audit Committee of the Board of Trustees of the Trust appointed, and the Board of Trustees ratified and approved, PricewaterhouseCoopers LLP (“PWC”) as the independent registered public accounting firm of the Fund for the fiscal year following May 31, 2010. The predecessor fund’s financial statements were audited by a different independent registered public accounting firm (the “Prior Auditor”). Concurrent with the closing of the Reorganization, the Prior Auditor resigned as the independent registered public accounting firm of the predecessor fund. The Prior Auditor’s report on the financial statements of the Fund for the past two years did not contain an adverse opinion or a disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. During the period the Prior Auditor was engaged, there were no disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure which, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its report.

Note 13—Subsequent Event

Following a number of meetings in September and October, 2010, the Board of Trustees unanimously approved an Agreement and Plan of Reorganization (the “Agreement”) pursuant to which the Fund would acquire all of the assets and liabilities of Invesco New York Tax-Free Income Fund (the “Target Fund”) in exchange for shares of the Fund. The Agreement requires approval of the Target Fund’s shareholders and will be submitted to the shareholders for their consideration at a meeting to be held in or around April 2011.

25        Invesco Van Kampen New York Tax Free Income Fund

Report of Independent Registered Public Accounting Firm

To the Board of Trustees of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

and Shareholders of Invesco Van Kampen New York Tax Free Income Fund:

In our opinion, the accompanying statement of assets and liabilities, including the schedule of investments, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Invesco Van Kampen New York Tax Free Income Fund (formerly known as Van Kampen New York Tax Free Income Fund; one of the funds constituting AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds), hereafter referred to as the “Fund”) at September 30, 2010, the results of its operations, the changes in its net assets and the financial highlights for the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). 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, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audit, which included confirmation of securities at September 30, 2010 by correspondence with the custodian, provides a reasonable basis for our opinion. The statement of changes in net assets and the financial highlights of the Fund for the periods ended September 30, 2009 and prior were audited by other independent auditors whose report dated November 20, 2009 expressed an unqualified opinion on those financial statements.

PRICEWATERHOUSECOOPERS LLP

November 22, 2010

Houston, Texas

26        Invesco Van Kampen New York Tax Free Income Fund

Calculating your ongoing Fund expenses

Example

As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, which may include sales charges (loads) on purchase payments or contingent deferred sales charges on redemptions, and redemption fees, if any; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with ongoing costs of investing in other mutual funds. With the exception of the actual ending account value and expenses of the Class Y shares, the example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period April 1, 2010, through September 30, 2010. The actual ending account value and expenses of the Class Y shares in the example below are based on an investment of $1,000 invested as of close of business June 1, 2010 (commencement date) and held through September 30, 2010.

Actual expenses

The table below provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the table under the heading entitled “Actual Expenses Paid During Period” to estimate the expenses you paid on your account during this period (as of close of business June 1, 2010 through September 30, 2010 for the Class Y shares). Because the actual ending account value and expense information in the example is not based upon a six month period for the Class Y shares, the ending account value and expense information may not provide a meaningful comparison to mutual funds that provide such information for a full six month period.

Hypothetical example for comparison purposes

The table below also provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return.

  The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

  Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transaction costs, such as sales charges (loads) on purchase payments, contingent deferred sales charges on redemptions, and redemption fees, if any. Therefore, the hypothetical information is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transaction costs were included, your costs would have been higher.

							HYPOTHETICAL
							(5% annual return before
			ACTUAL				expenses)
	Beginning		Ending		Expenses		Ending		Expenses		Annualized
	Account Value		Account Value		Paid During		Account Value		Paid During		Expense
Class	(04/01/10)		(09/30/10)1		Period2		(09/30/10)		Period3		Ratio4
A	$	1,000.00	$	1,060.02	$	3.77	$	1,021.41	$	3.70		0.73	%
B		1,000.00		1,058.26		4.95		1,020.26		4.86		0.96
C		1,000.00		1,055.26		7.63		1,017.65		7.49		1.48
Y		1,000.00		1,038.33		1.72		1,022.51		2.59		0.51

1	The actual ending account value is based on the actual total return of the Fund for the period April 1, 2010, through September 30, 2010 (as of close of business June 1, 2010, through September 30, 2010 for the Class Y shares), after actual expenses and will differ from the hypothetical ending account value which is based on the Fund’s expense ratio and a hypothetical annual return of 5% before expenses.
2	Expenses are equal to the Fund’s annualized expense ratio as indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect the most recent fiscal half year. For the Class Y shares actual expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 121 (as of close of business June 1, 2010, through September 30, 2010)/365. Because the Class Y shares have not been in existence for a full six month period, the actual ending account value and expense information shown may not provide a meaningful comparison to fund expense information of classes that show such data for a full six month period and, because the actual ending account value and expense information in the expense example covers a short time period, return and expense data may not be indicative of return and expense data for longer time periods.
3	Hypothetical expenses are equal to the annualized expense ratio indicated above multiplied by the average account value over the period, multiplied by 183/365 to reflect a one-half year period. The hypothetical ending account value and expenses may be used to compare ongoing costs of investing in Class Y shares of the Fund and other funds because such data is based on a full six month period.
4	The Class B expense ratio reflects actual 12b-1 fees of less than 1%.

27        Invesco Van Kampen New York Tax Free Income Fund

Approval of Investment Advisory and Sub-advisory Agreements

The Board of Trustees (the Board) of AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the Company) is required under the Investment Company Act of 1940 to approve the Invesco New York Tax-Free Income Fund (the Fund) investment advisory agreements. During meetings held on December 1-2, 2009, the Board as a whole and the disinterested or “independent” Trustees, voting separately approved (i) an amendment to the Company’s investment advisory agreement with Invesco Advisers, Inc. (Invesco Advisers) to add the Fund and (ii) an amendment to the Master Intergroup Sub-Advisory Contract for Mutual Funds (the sub-advisory contracts) with Invesco Asset Management Deutschland GmbH, Invesco Asset Management Limited, Invesco Asset Management (Japan) Limited, Invesco Australia Limited, Invesco Hong Kong Limited, Invesco Senior Secured Management, Inc. and Invesco Trimark Ltd. (collectively, the Affiliated Sub-Advisers) to add the Fund. In doing so, the Board determined that the investment advisory agreements are in the best interests of the Fund and its shareholders and that the compensation to Invesco Advisers and the Affiliated Sub-Advisers under the Fund’s investment advisory agreements is fair and reasonable.

The Board’s Fund Evaluation Process

The Fund was formed to acquire the assets and liabilities of a Morgan Stanley retail fund (the Acquired Fund) with substantially similar investment objectives, strategies and risks. At the time of approval of the investment advisory agreements, the Fund had no assets and no performance history and the portfolio managers were not employed by Invesco Advisers or one of the Affiliated Sub-Advisers.

  In determining to approve the Fund’s investment advisory agreements, the Board considered among other things, the factors discussed below in evaluating the fairness and reasonableness of the Fund’s investment advisory agreements. The discussion below serves as a summary of the material factors and related conclusions that formed the basis for the Board’s approval of the Fund’s investment advisory agreements. The Board considered the information provided to them and did not identify any information that was controlling. One Trustee may have weighed a particular piece of information differently than another.

Factors and Conclusions and Summary of Evaluation of Investment Advisory Agreements

A.  Nature, Extent and Quality of Services Provided by Invesco Advisers and the Affiliated Sub-Advisers

  The Board reviewed the advisory services to be provided to the Fund by Invesco Advisers under the Fund’s investment advisory agreement. The Board’s review of the qualifications of Invesco Advisers to provide these services included the Board’s consideration of Invesco Advisers’ portfolio and product review process, various back office support functions provided by Invesco Advisers and its affiliates, and Invesco Adviser’s global trading operations. In determining whether to approve the Fund’s investment advisory agreement, the Board considered the prior relationship between Invesco Advisers and the series portfolios of funds advised by Invesco Advisers (the Invesco Funds), as well as the Board’s knowledge of Invesco Advisers’ operations. The Board concluded that the nature, extent and quality of the advisory services to be provided to the Fund support the Board’s approval of the investment advisory agreements.

  The Board reviewed the services to be provided by the Affiliated Sub-Advisers under the sub-advisory contracts. The Board noted that the Affiliated Sub-Advisers, which have offices and personnel that are located in financial centers around the world, can provide research and investment analysis on the markets and economies of various countries in which the Fund invests and make recommendations on securities of companies located in such countries. The Board concluded that the sub-advisory contracts will benefit the Fund and its shareholders by permitting Invesco Advisers to use the resources and talents of the Affiliated Sub-Advisers in managing the Fund. The Board concluded that the nature, extent and quality of the services to be provided by the Affiliated Sub-Advisers are appropriate.

B.  Fund Performance

The Fund will retain the performance track record of the Acquired Fund. The Board considered the performance of the Acquired Fund and the fact that the Fund is to be managed by substantially the same portfolio management team as managed the Acquired Fund. The Board did not view Fund performance as a relevant factor in considering whether to approve the sub-advisory contracts, as no Affiliated Sub-Adviser currently manages assets of the Fund.

C.  Advisory and Sub-Advisory Fees and Fee Waivers

The Board considered that the contractual advisory fee rate of the Fund is the same as that of the Acquired Fund, that the board of the Acquired Fund had approved such fee, and that Invesco Advisers has contractually agreed to limit expenses of the Fund through June 30, 2012. The Board was provided with a comparison of the contractual advisory fee of the Fund to the uniform fee schedule applicable to other Invesco Funds and with materials prepared by Lipper, Inc. for the board of the Acquired Fund.

  The Board also considered the services to be provided by the Affiliated Sub-Advisers pursuant to the sub-advisory contracts and the services to be provided by Invesco Advisers pursuant to the Fund’s investment advisory agreement, as well as the allocation of fees between Invesco Advisers and the Affiliated Sub-Advisers pursuant to the sub-advisory contracts. The Board noted that the sub-advisory fees have no direct effect on the Fund or its shareholders, as they are paid by Invesco Advisers to the Affiliated Sub-Advisers, and that Invesco Advisers and the Affiliated Sub-Advisers are affiliates.

  After taking account of the Fund’s contractual advisory fee rate, the contractual sub-advisory fee rate, the expense limits and other relevant factors, the Board concluded that the Fund’s advisory and sub-advisory fees were fair and reasonable.

D.  Economies of Scale and Breakpoints

The Board considered the extent to which there are economies of scale in the provision of advisory services to the Fund. The Board also considered whether the Fund benefits from such economies of scale through contractual breakpoints in the Fund’s advisory fee schedule. The Board noted that the Fund’s contractual advisory fee schedule provides for breakpoints. The Board also noted that the Fund shares directly in economies of scale through lower fees charged by third party service providers based on the combined size of all of the Invesco Funds and other clients advised by Invesco Advisers.

E.  Profitability and Financial Resources

The Board considered information from the 2009 contract renewal process provided by Invesco Advisers concerning the costs of the advisory and other services that Invesco Advisers and its affiliates provide to the Invesco Funds and the profitability of Invesco Advisers and its affiliates in providing these services. The Board noted that Invesco Advisers continues to operate at a net profit. The Board concluded that the Fund’s fees were fair and reasonable, and that the level of profits realized by Invesco Advisers and its affiliates from providing services to the Fund are not anticipated to be excessive in light of the nature, quality and extent of the services provided. The Board considered whether Invesco Advisers is financially sound and has the resources necessary to perform its obligations under the Fund’s investment advisory agreement, and concluded that Invesco Advisers has the financial resources necessary to fulfill these obligations. The Board also considered whether each Affiliated Sub-Adviser is financially sound and has the resources necessary to perform its obligations under its respective sub-advisory contract, and concluded that each Affiliated Sub-Adviser has the financial resources necessary to fulfill these obligations.

F.  Collateral Benefits to Invesco Advisers and its Affiliates

The Board considered various other benefits to be received by Invesco Advisers and its affiliates resulting from Invesco Advisers’ relationship with the Fund, including the fees to be received by Invesco Advisers and its affiliates for their provision of administrative, transfer agency and distribution services to the Fund. The Board considered the performance of Invesco Advisers and its affiliates in providing these services to other Invesco Funds and the organizational structure employed by Invesco Advisers and its affiliates to provide these services. The Board also considered that these services will be provided to the Fund pursuant to written contracts that are reviewed and approved on an annual basis by the Board. The Board concluded that Invesco Advisers and its affiliates were providing these

28        Invesco Van Kampen New York Tax Free Income Fund

services to Invesco Funds in accordance with the terms of their contracts, and were qualified to provide these services to the Fund.

  The Board considered the benefits realized by Invesco Advisers as a result of portfolio brokerage transactions executed through “soft dollar” arrangements. The Board noted that soft dollar arrangements shift the payment obligation for research and execution services from Invesco Advisers and the Affiliated Sub-Advisers to the funds and therefore may reduce Invesco Advisers’ and the Affiliated Sub-Advisers’ expenses. The Board concluded that Invesco Advisers’ and the Affiliated Sub-Advisers’ soft dollar arrangements are appropriate. The Board also concluded that, based on its review and representations made by the Chief Compliance Officer of Invesco Advisers, these arrangements are consistent with regulatory requirements.

  The Board considered the fact that the Fund’s uninvested cash and cash collateral from any securities lending arrangements may be invested in money market funds advised by Invesco Advisers pursuant to procedures approved by the Board. The Board noted that Invesco Advisers will receive advisory fees from these affiliated money market funds attributable to such investments, although Invesco Advisers has contractually agreed to waive through at least June 30, 2011, the advisory fees payable by the Fund in an amount equal to 100% of the net advisory fee Invesco Advisers receives from the affiliated money market funds with respect to the Fund’s investment in the affiliated money market funds of uninvested cash, but not cash collateral. The Board concluded that the Fund’s investment of uninvested cash and cash collateral from any securities lending arrangements in the affiliated money market funds is in the best interests of the Fund and its shareholders.

29        Invesco Van Kampen New York Tax Free Income Fund

Tax Information

Form 1099-DIV, Form 1042-S and other year-end tax information provide shareholders with actual calendar year amounts that should be included in their tax returns. Shareholders should consult their tax advisors.

  The following distribution information is being provided as required by the Internal Revenue Code or to meet a specific state’s requirement.

  The Fund designates the following amounts or, if subsequently determined to be different, the maximum amount allowable for its fiscal year ended September 30, 2010:

Federal and State Income Tax
Tax-Exempt Interest Dividends*	99.39%

*  The above percentage is based on ordinary income dividends paid to shareholders during the Fund’s fiscal year.

30        Invesco Van Kampen New York Tax Free Income Fund

Proxy Results

A Special Meeting (“Meeting”) of Shareholders of Van Kampen New York Tax Free Income Fund was held on Tuesday, May 11, 2010. The Meeting was held for the following purpose:

(1)  Approve an Agreement and Plan of Reorganization.

The results of the voting on the above matter were as follows:

				Votes		Votes		Broker
	Matter	Votes For		Against		Abstain		Non-Votes
(1)	Approve an Agreement and Plan of Reorganization		3,488,295		108,660		205,288		0

31        Invesco Van Kampen New York Tax Free Income Fund

Trustees and Officers

The address of each trustee and officer is AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds) (the “Trust”), 11 Greenway Plaza, Suite 2500, Houston, Texas 77046-1173. The trustees serve for the life of the Trust, subject to their earlier death, incapacitation, resignation, retirement or removal as more specifically provided in the Trust’s organizational documents. Each officer serves for a one year term or until their successors are elected and qualified. Column two below includes length of time served with predecessor entities, if any.

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Interested Persons
Martin L. Flanagan1 — 1960 Trustee	2007	Executive Director, Chief Executive Officer and President, Invesco Ltd. (ultimate parent of Invesco and a global investment management firm); Advisor to the Board, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Trustee, The Invesco Funds; Vice Chair, Investment Company Institute; and Member of Executive Board, SMU Cox School of Business Formerly: Chairman, Invesco Advisers, Inc. (registered investment adviser); Director, Chairman, Chief Executive Officer and President, IVZ Inc. (holding company), INVESCO Group Services, Inc. (service provider) and Invesco North American Holdings, Inc. (holding company); Director, Chief Executive Officer and President, Invesco Holding Company Limited (parent of Invesco and a global investment management firm); Director, Invesco Ltd.; Chairman, Investment Company Institute and President, Co-Chief Executive Officer, Co-President, Chief Operating Officer and Chief Financial Officer, Franklin Resources, Inc. (global investment management organization)	207	None
Philip A. Taylor2 — 1954 Trustee, President and Principal Executive Officer	2006	Head of North American Retail and Senior Managing Director, Invesco Ltd.; Director, Co-Chairman, Co-President and Co-Chief Executive Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Director, Chief Executive Officer and President, 1371 Preferred Inc. (holding company); Director, Chairman, Chief Executive Officer and President, Invesco Management Group, Inc. (formerly Invesco Aim Management Group, Inc.) (financial services holding company); Director and President, INVESCO Funds Group, Inc. (registered investment adviser and registered transfer agent) and AIM GP Canada Inc. (general partner for limited partnerships); Director and Chairman, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) (registered transfer agent) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.) (registered broker dealer); Director, President and Chairman, INVESCO Inc. (holding company) and Invesco Canada Holdings Inc. (holding company); Chief Executive Officer, Invesco Trimark Corporate Class Inc. (corporate mutual fund company) and Invesco Trimark Canada Fund Inc. (corporate mutual fund company); Director and Chief Executive Officer, Invesco Trimark Ltd./Invesco Trimark Ltèe (registered investment adviser and registered transfer agent) and Invesco Trimark Dealer Inc. (registered broker dealer); Trustee, President and Principal Executive Officer, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); Trustee and Executive Vice President, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only); and Director, Van Kampen Asset Management; Director, Chief Executive Officer and President, Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Director and Chairman, Van Kampen Investor Services Inc. and Director and President, Van Kampen Advisors, Inc. Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.) (registered broker dealer); Manager, Invesco PowerShares Capital Management LLC; Director, Chief Executive Officer and President, Invesco Advisers, Inc.; Director, Chairman, Chief Executive Officer and President, Invesco Aim Capital Management, Inc.; President, Invesco Trimark Dealer Inc. and Invesco Trimark Ltd./Invesco Trimark Ltèe; Director and President, AIM Trimark Corporate Class Inc. and AIM Trimark Canada Fund Inc.; Senior Managing Director, Invesco Holding Company Limited; Trustee and Executive Vice President, Tax-Free Investments Trust; Director and Chairman, Fund Management Company (former registered broker dealer); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only); President, AIM Trimark Global Fund Inc. and AIM Trimark Canada Fund Inc.	207	None
Wayne M. Whalen3 — 1939 Trustee	2010	Of Counsel, and prior to 2010, partner in the law firm of Skadden, Arps, Slate, Meagher & Flom LLP, legal counsel to funds in the Fund Complex	225	Director of the Abraham Lincoln Presidential Library Foundation
Independent Trustees
Bruce L. Crockett — 1944 Trustee and Chair	1993	Chairman, Crockett Technology Associates (technology consulting company) Formerly: Director, Captaris (unified messaging provider); Director, President and Chief Executive Officer COMSAT Corporation; and Chairman, Board of Governors of INTELSAT (international communications company)	207	ACE Limited (insurance company); and Investment Company Institute
David C. Arch — 1945 Trustee	2010	Chairman and Chief Executive Officer of Blistex Inc., a consumer health care products manufacturer.	225	Member of the Heartland Alliance Advisory Board, a nonprofit organization serving human needs based in Chicago. Board member of the Illinois Manufacturers’ Association. Member of the Board of Visitors, Institute for the Humanities, University of Michigan

1	Mr. Flanagan is considered an interested person of the Trust because he is an officer of the adviser to the Trust, and an officer and a director of Invesco Ltd., ultimate parent of the adviser to the Trust.
2	Mr. Taylor is considered an interested person of the Trust because he is an officer and a director of the adviser to, and a director of the principal underwriter of, the Trust.
3	Mr. Whalen is considered an “interested person” (within the meaning of Section 2(a)(19) of the 1940 Act) of certain Funds in the Fund Complex by reason of he and his firm currently providing legal services as legal counsel to such Funds in the Fund Complex.

T-1

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Bob R. Baker — 1936 Trustee	2003	Retired Formerly: President and Chief Executive Officer, AMC Cancer Research Center; and Chairman and Chief Executive Officer, First Columbia Financial Corporation	207	None
Frank S. Bayley — 1939 Trustee	2001	Retired Formerly: Director, Badgley Funds, Inc. (registered investment company) (2 portfolios) and Partner, law firm of Baker & McKenzie	207	None
James T. Bunch — 1942 Trustee	2003	Founder, Green, Manning & Bunch Ltd. (investment banking firm) Formerly: Executive Committee, United States Golf Association; and Director, Policy Studies, Inc. and Van Gilder Insurance Corporation	207	Vice Chairman, Board of Governors, Western Golf Association/Evans Scholars Foundation and Director, Denver Film Society
Rodney Dammeyer — 1940 Trustee	2010	President of CAC, LLC, a private company offering capital investment and management advisory services. Formerly: Prior to January 2004, Director of TeleTech Holdings Inc.; Prior to 2002, Director of Arris Group, Inc.; Prior to 2001, Managing Partner at Equity Group Corporate Investments. Prior to 1995, Chief Executive Officer of Itel Corporation. Prior to 1985, experience includes Senior Vice President and Chief Financial Officer of Household International, Inc, Executive Vice President and Chief Financial Officer of Northwest Industries, Inc. and Partner of Arthur Andersen & Co.	225	Director of Quidel Corporation and Stericycle, Inc. Prior to May 2008, Trustee of The Scripps Research Institute. Prior to February 2008, Director of Ventana Medical Systems, Inc. Prior to April 2007, Director of GATX Corporation. Prior to April 2004, Director of TheraSense, Inc.
Albert R. Dowden — 1941 Trustee	2000	Director of a number of public and private business corporations, including the Boss Group, Ltd. (private investment and management); Reich & Tang Funds (5 portfolios) (registered investment company); and Homeowners of America Holding Corporation/Homeowners of America Insurance Company (property casualty company) Formerly: Director, Continental Energy Services, LLC (oil and gas pipeline service); Director, CompuDyne Corporation (provider of product and services to the public security market) and Director, Annuity and Life Re (Holdings), Ltd. (reinsurance company); Director, President and Chief Executive Officer, Volvo Group North America, Inc.; Senior Vice President, AB Volvo; Director of various public and private corporations; Chairman, DHJ Media, Inc.; Director Magellan Insurance Company; and Director, The Hertz Corporation, Genmar Corporation (boat manufacturer), National Media Corporation; Advisory Board of Rotary Power International (designer, manufacturer, and seller of rotary power engines); and Chairman, Cortland Trust, Inc. (registered investment company)	207	Board of Nature’s Sunshine Products, Inc.
Jack M. Fields — 1952 Trustee	1997	Chief Executive Officer, Twenty First Century Group, Inc. (government affairs company); and Owner and Chief Executive Officer, Dos Angelos Ranch, L.P. (cattle, hunting, corporate entertainment), Discovery Global Education Fund (non-profit) and Cross Timbers Quail Research Ranch (non-profit) Formerly: Chief Executive Officer, Texana Timber LP (sustainable forestry company) and member of the U.S. House of Representatives	207	Administaff
Carl Frischling — 1937 Trustee	1993	Partner, law firm of Kramer Levin Naftalis and Frankel LLP	207	Director, Reich & Tang Funds (16 portfolios)
Prema Mathai-Davis — 1950 Trustee	1998	Retired Formerly: Chief Executive Officer, YWCA of the U.S.A.	207	None
Lewis F. Pennock — 1942 Trustee	1993	Partner, law firm of Pennock & Cooper	207	None
Larry Soll — 1942 Trustee	2003	Retired Formerly, Chairman, Chief Executive Officer and President, Synergen Corp. (a biotechnology company)	207	None

T-2

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Independent Trustees
Hugo F. Sonnenschein — 1940 Trustee	2010	President Emeritus and Honorary Trustee of the University of Chicago and the Adam Smith Distinguished Service Professor in the Department of Economics at the University of Chicago. Prior to July 2000, President of the University of Chicago.	225	Trustee of the University of Rochester and a member of its investment committee. Member of the National Academy of Sciences, the American Philosophical Society and a fellow of the American Academy of Arts and Sciences
Raymond Stickel, Jr. — 1944 Trustee	2005	Retired Formerly: Director, Mainstay VP Series Funds, Inc. (25 portfolios) and Partner, Deloitte & Touche	207	None
Other Officers
Russell C. Burk — 1958 Senior Vice President and Senior Officer	2005	Senior Vice President and Senior Officer of Invesco Funds	N/A	N/A
John M. Zerr — 1962 Senior Vice President, Chief Legal Officer and Secretary	2006	Director, Senior Vice President, Secretary and General Counsel, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp., Senior Vice President, Invesco Advisers, Inc. formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Senior Vice President and Secretary, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Vice President and Secretary, Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and IVZ Distributors, Inc. (formerly known as INVESCO Distributors, Inc.); Director and Vice President, INVESCO Funds Group, Inc.; Senior Vice President, Chief Legal Officer and Secretary, The Invesco Funds; Manager, Invesco PowerShares Capital Management LLC; Director, Secretary and General Counsel, Van Kampen Asset Management; Director and Secretary, Van Kampen Advisors Inc.; Secretary and General Counsel, Van Kampen Funds Inc.; and Director, Vice President, Secretary and General Counsel, Van Kampen Investor Services Inc.; and General Counsel, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Fund Trust II, PowerShares India Exchange-Traded Fund Trust and PowerShares Actively Managed Exchange-Traded Fund Trust Formerly: Director, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Director, Senior Vice President, General Counsel and Secretary, Invesco Advisers, Inc.; Director, Vice President and Secretary, Fund Management Company; Director, Senior Vice President, Secretary, General Counsel and Vice President, Invesco Aim Capital Management, Inc.; Chief Operating Officer and General Counsel, Liberty Ridge Capital, Inc. (an investment adviser); Vice President and Secretary, PBHG Funds (an investment company) and PBHG Insurance Series Fund (an investment company); Chief Operating Officer, General Counsel and Secretary, Old Mutual Investment Partners (a broker-dealer); General Counsel and Secretary, Old Mutual Fund Services (an administrator) and Old Mutual Shareholder Services (a shareholder servicing center); Executive Vice President, General Counsel and Secretary, Old Mutual Capital, Inc. (an investment adviser); and Vice President and Secretary, Old Mutual Advisors Funds (an investment company)	N/A	N/A
Lisa O. Brinkley — 1959 Vice President	2004	Global Compliance Director, Invesco Ltd.; Chief Compliance Officer, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc.(formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc.; and Vice President, The Invesco Funds Formerly: Senior Vice President, Invesco Management Group, Inc.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and The Invesco Funds; Vice President and Chief Compliance Officer, Invesco Aim Capital Management, Inc. and Invesco Distributors, Inc.; Vice President, Invesco Investment Services, Inc. and Fund Management Company	N/A	N/A
Sheri Morris — 1964 Vice President, Treasurer and Principal Financial Officer	1999	Vice President, Treasurer and Principal Financial Officer, The Invesco Funds; and Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) Formerly: Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.; Assistant Vice President and Assistant Treasurer, The Invesco Funds and Assistant Vice President, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A

T-3

Trustees and Officers — (continued)

			Number of
			Funds in
			Fund Complex
Name, Year of Birth and	Trustee and/	Principal Occupation(s)	Overseen by	Other Directorship(s)
Position(s) Held with the Trust	or Officer Since	During Past 5 Years	Trustee	Held by Trustee
Other Officers
Karen Dunn Kelley — 1960 Vice President	1993	Head of Invesco’s World Wide Fixed Income and Cash Management Group; Senior Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser) and Van Kampen Investments Inc.; Executive Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.); Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.); and Director, Invesco Mortgage Capital Inc.; Vice President, The Invesco Funds (other than AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust); President and Principal Executive Officer, The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust) and Short-Term Investments Trust only). Formerly: Vice President, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.); Director of Cash Management and Senior Vice President, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; President and Principal Executive Officer, Tax-Free Investments Trust; Director and President, Fund Management Company; Chief Cash Management Officer, Director of Cash Management, Senior Vice President, and Managing Director, Invesco Aim Capital Management, Inc.; Director of Cash Management, Senior Vice President, and Vice President, Invesco Advisers, Inc. and The Invesco Funds (AIM Treasurer’s Series Trust (Invesco Treasurer’s Series Trust), Short-Term Investments Trust and Tax-Free Investments Trust only)	N/A	N/A
Lance A. Rejsek — 1967 Anti-Money Laundering Compliance Officer	2005	Anti-Money Laundering Compliance Officer, Invesco Advisers, Inc. (formerly known as Invesco Institutional (N.A.), Inc.) (registered investment adviser); Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.), The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, Van Kampen Asset Management, Van Kampen Investor Services Inc., and Van Kampen Funds Inc. Formerly: Anti-Money Laundering Compliance Officer, Fund Management Company, Invesco Advisers, Inc., Invesco Aim Capital Management, Inc. and Invesco Aim Private Asset Management, Inc.	N/A	N/A
Todd L. Spillane — 1958 Chief Compliance Officer	2006	Senior Vice President, Invesco Management Group, Inc. (formerly known as Invesco Aim Management Group, Inc.), Van Kampen Investments Inc. and Van Kampen Exchange Corp.; Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. (registered investment adviser) (formerly known as Invesco Institutional (N.A.), Inc.); Chief Compliance Officer, The Invesco Funds, PowerShares Exchange-Traded Fund Trust, PowerShares Exchange-Traded Trust II, PowerShares India Exchange-Traded Fund Trust, PowerShares Actively Managed Exchange-Traded Fund Trust, INVESCO Private Capital Investments, Inc. (holding company), and Invesco Private Capital, Inc. (registered investment adviser); Vice President, Invesco Distributors, Inc. (formerly known as Invesco Aim Distributors, Inc.), Invesco Investment Services, Inc. (formerly known as Invesco Aim Investment Services, Inc.) and Van Kampen Investor Services Inc. Formerly: Senior Vice President and Chief Compliance Officer, Invesco Advisers, Inc. and Invesco Aim Capital Management, Inc.; Chief Compliance Officer, Invesco Global Asset Management (N.A.), Inc. and Invesco Senior Secured Management, Inc. (registered investment adviser); Vice President, Invesco Aim Capital Management, Inc. and Fund Management Company	N/A	N/A

The Statement of Additional Information of the Trust includes additional information about the Fund’s Trustees and is available upon request, without charge, by calling 1.800.959.4246. Please refer to the Fund’s prospectus for information on the Fund’s sub-advisers.

Office of the Fund	Investment Adviser	Distributor	Auditors
11 Greenway Plaza, Suite 2500	Invesco Advisers, Inc.	Invesco Distributors, Inc.	PricewaterhouseCoopers LLP
Houston, TX 77046-1173	1555 Peachtree Street, N.E.	11 Greenway Plaza, Suite 2500	1201 Louisiana Street, Suite 2900
	Atlanta, GA 30309	Houston, TX 77046-1173	Houston, TX 77002-5678
Counsel to the Fund	Counsel to the Independent	Transfer Agent	Custodian
Stradley Ronon Stevens & Young, LLP	Trustees	Invesco Investment Services, Inc.	State Street Bank and Trust Company
2600 One Commerce Square	Kramer, Levin, Naftalis & Frankel LLP	P.O. Box 4739	225 Franklin
Philadelphia, PA 19103	1177 Avenue of the Americas	Houston, TX 77210-4739	Boston, MA 02110-2801
	New York, NY 10036-2714

T-4

Invesco mailing information

Send general correspondence to Invesco, P.O. Box 4739, Houston, TX 77210-4739.

Invesco privacy policy

You share personal and financial information with us that is necessary for your transactions and your account records. We take very seriously the obligation to keep that information confidential and private.

     Invesco collects nonpublic personal information about you from account applications or other forms you complete and from your transactions with us or our affiliates. We do not disclose information about you or our former customers to service providers or other third parties except to the extent necessary to service your account and in other limited circumstances as permitted by law. For example, we use this information to facilitate the delivery of transaction confirmations, financial reports, prospectuses and tax forms.

     Even within Invesco, only people involved in the servicing of your accounts and compliance monitoring have access to your information. To ensure the highest level of confidentiality and security, Invesco maintains physical, electronic and procedural safeguards that meet or exceed federal standards. Special measures, such as data encryption and authentication, apply to your communications with us on our website. More detail is available to you at invesco.com/privacy.

Important notice regarding delivery of security holder documents

To reduce Fund expenses, only one copy of most shareholder documents may be mailed to shareholders with multiple accounts at the same address (Householding). Mailing of your shareholder documents may be householded indefinitely unless you instruct us otherwise. If you do not want the mailing of these documents to be combined with those for other members of your household, please contact Invesco Investment Services, Inc. at 800 959 4246 or contact your financial institution. We will begin sending you individual copies for each account within 30 days after receiving your request.

Fund holdings and proxy voting information

The Fund provides a complete list of its holdings four times in each fiscal year, at the quarter-ends. For the second and fourth quarters, the lists appear in the Fund’s semiannual and annual reports to shareholders. For the first and third quarters, the Fund files the lists with the Securities and Exchange Commission (SEC) on Form N-Q. The most recent list of portfolio holdings is available at invesco.com/completeqtrholdings. Shareholders can also look up the Fund’s Forms N-Q on the SEC website at sec.gov. Copies of the Fund’s Forms N-Q may be reviewed and copied at the SEC Public Reference Room in Washington, D.C. You can obtain information on the operation of the Public Reference Room, including information about duplicating fee charges, by calling 202 551 8090 or 800 732 0330, or by electronic request at the following email address: publicinfo@sec.gov. The SEC fi le numbers for the Fund are 811-07890 and 033-66242.

     A description of the policies and procedures that the Fund uses to determine how to vote proxies relating to portfolio securities is available without charge, upon request, from our Client Services department at 800 959 4246 or at invesco.com/proxyguidelines. The information is also available on the SEC website, sec.gov.

     Information regarding how the Fund voted proxies related to its portfolio securities during the period between June 1, 2010, and June 30, 2010, is or will be available at invesco.com/proxysearch. In addition, this information is or will be available on the SEC website, sec.gov. Proxy voting information for the predecessor fund prior to its

reorganization with the Fund on June 1, 2010, is not available on the Invesco website but is or will be available on the SEC website under the predecessor fund.

     Invesco Advisers, Inc. is an investment adviser; it provides investment advisory services to individual and institutional clients and does not sell securities. Invesco Distributors, Inc. is the U.S. distributor for Invesco Ltd.’s retail mutual funds, exchange-traded funds and institutional money market funds. Both are wholly owned, indirect subsidiaries of Invesco Ltd.

VK-NYTFI-AR-1 Invesco Distributors, Inc.

ITEM 2. CODE OF ETHICS.

As of the end of the period covered by this report, the Registrant had adopted a code of ethics (the “Code”) that applies to the Registrant’s principal executive officer (“PEO”) and principal financial officer (“PFO”). The Code was amended in June, 2010, to (i) add an individual to Exhibit A and (ii) update the names of certain legal entities. The Registrant did not grant any waivers, including implicit waivers, from any provisions of the Code to the PEO or PFO during the period covered by this report.

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The Board of Trustees has determined that the Registrant has at least one audit committee financial expert serving on its Audit Committee. The Audit Committee financial expert is Raymond Stickel, Jr. Mr. Stickel is “independent” within the meaning of that term as used in Form N-CSR.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Fees Billed by Principal Accountant Related to the Registrant

     The following information relates to the series funds of the Registrant covered by this report and includes information pertaining to principal accountant fees and services rendered to such funds for the two most recently completed fiscal years or, if shorter, since a fund’s commencement of operations:

			Percentage of Fees Billed Applicable
			to Non-Audit Services Provided for
	Fees Billed for Services Rendered to		fiscal year end 9/30/2010 Pursuant to
	the Registrant for fiscal year end		Waiver of Pre-Approval
	9/30/2010		Requirement(1)
Audit Fees	$	179,400		N/A
Audit-Related Fees	$	0		0	%
Tax Fees(2)	$	24,600		0	%
All Other Fees	$	0		0	%
Total Fees	$	204,000		0	%

PWC billed the Registrant aggregate non-audit fees of $24,600 for the fiscal year ended September 30, 2010.

(1)

With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.

(2)

Tax fees for the fiscal year end September 30, 2010 includes fees billed for reviewing tax returns.

Fees Billed by PWC Related to Invesco and Invesco Affiliates

     PWC billed Invesco Advisers, Inc. (“Invesco”), the Registrant’s adviser, and any entity controlling, controlled by or under common control with Invesco that provides ongoing services to the Registrant (“Invesco Affiliates”) aggregate fees for pre-approved non-audit services rendered to Invesco and Invesco Affiliates for the last two fiscal years or, if shorter, since a fund’s commencement of operations as follows:

	Fees Billed for Non-Audit Services
	Rendered to Invesco and Invesco
	Affiliates for fiscal year end 9/30/2010		Percentage of Fees Billed
	That Were Required		Applicable to Non-Audit Services
	to be Pre-Approved		Provided for fiscal year end
	by the Registrant’s		9/30/2010 Pursuant to Waiver of
	Audit Committee		Pre-Approval Requirement(1)
Audit-Related Fees	$	0		0	%
Tax Fees	$	0		0	%
All Other Fees	$	0		0	%
Total Fees(2)	$	0		0	%

(1)	With respect to the provision of non-audit services, the pre-approval requirement is waived pursuant to a de minimis exception if (i) such services were not recognized as non-audit services by the Registrant at the time of engagement, (ii) the aggregate amount of all such services provided is no more than 5% of the aggregate audit and non-audit fees paid by the Registrant, Invesco and Invesco Affiliates to PWC during a fiscal year; and (iii) such services are promptly brought to the attention of the Registrant’s Audit Committee and approved by the Registrant’s Audit Committee prior to the completion of the audit.
(2)	Including the fees for services not required to be pre-approved by the registrant’s audit committee, PWC billed Invesco and Invesco Affiliates aggregate non-audit fees of $0 for the fiscal year ended September 30, 2010.
	The Audit Committee also has considered whether the provision of non-audit services that were rendered to Invesco and Invesco Affiliates that were not required to be pre-approved pursuant to SEC regulations, if any, is compatible with maintaining PWC’s independence. To the extent that such services were provided, the Audit Committee determined that the provision of such services is compatible with PWC maintaining independence with respect to the Registrant.

PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES
POLICIES AND PROCEDURES
As adopted by the Audit Committees of
the Invesco Funds (the “Funds”)
Last Amended May 4, 2010

Statement of Principles

Under the Sarbanes-Oxley Act of 2002 and rules adopted by the Securities and Exchange Commission (“SEC”) (“Rules”), the Audit Committees of the Funds’ (the “Audit Committees”) Board of Trustees (the “Board”) are responsible for the appointment, compensation and oversight of the work of independent accountants (an “Auditor”). As part of this responsibility and to assure that the Auditor’s independence is not impaired, the Audit Committees pre-approve the audit and non-audit services provided to the Funds by each Auditor, as well as all non-audit services provided by the Auditor to the Funds’ investment adviser and to affiliates of the adviser that provide ongoing services to the Funds (“Service Affiliates”) if the services directly impact the Funds’ operations or financial reporting. The SEC Rules also specify the types of services that an Auditor may not provide to its audit client. The following policies and procedures comply with the requirements for pre-approval and provide a mechanism by which management of the Funds may request and secure pre-approval of audit and non-audit services in an orderly manner with minimal disruption to normal business operations.

Proposed services either may be pre-approved without consideration of specific case-by-case services by the Audit Committees (“general pre-approval”) or require the specific pre-approval of the Audit Committees (“specific pre-approval”). As set forth in these policies and procedures, unless a type of service has received general pre-approval, it will require specific pre-approval by the Audit Committees. Additionally, any fees exceeding 110% of estimated pre-approved fee levels provided at the time the service was pre-approved will also require specific approval by the Audit Committees before payment is made. The Audit Committees will also consider the impact of additional fees on the Auditor’s independence when determining whether to approve any additional fees for previously pre-approved services.

The Audit Committees will annually review and generally pre-approve the services that may be provided by each Auditor without obtaining specific pre-approval from the Audit Committee generally on an annual basis. The term of any general pre-approval runs from the date of such pre-approval through September 30^th of the following year, unless the Audit Committees consider a different period and state otherwise. The Audit Committees will add to or subtract from the list of general pre-approved services from time to time, based on subsequent determinations.

The purpose of these policies and procedures is to set forth the guidelines to assist the Audit Committees in fulfilling their responsibilities.

Delegation

The Audit Committees may from time to time delegate pre-approval authority to one or more of its members who are Independent Trustees. All decisions to pre-approve a service by a delegated member shall be reported to the Audit Committees at the next quarterly meeting.

Audit Services

The annual audit services engagement terms will be subject to specific pre-approval of the Audit Committees. Audit services include the annual financial statement audit and other procedures such as tax provision work that is required to be performed by the independent auditor to be able to form an opinion on the Funds’ financial statements. The Audit Committees will obtain, review and consider sufficient information concerning the proposed Auditor to make a reasonable evaluation of the Auditor’s qualifications and independence.

In addition to the annual Audit services engagement, the Audit Committees may grant either general or specific pre-approval of other audit services, which are those services that only the independent auditor reasonably can provide. Other Audit services may include services such as issuing consents for the

inclusion of audited financial statements with SEC registration statements, periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings.

Non-Audit Services

The Audit Committees may provide either general or specific pre-approval of any non-audit services to the Funds and its Service Affiliates if the Audit Committees believe that the provision of the service will not impair the independence of the Auditor, is consistent with the SEC’s Rules on auditor independence, and otherwise conforms to the Audit Committees’ general principles and policies as set forth herein.

Audit-Related Services

“Audit-related services” are assurance and related services that are reasonably related to the performance of the audit or review of the Fund’s financial statements or that are traditionally performed by the independent auditor. Audit-related services include, among others, accounting consultations related to accounting, financial reporting or disclosure matters not classified as “Audit services”; assistance with understanding and implementing new accounting and financial reporting guidance from rulemaking authorities; and agreed-upon procedures related to mergers, compliance with ratings agency requirements and interfund lending activities.

Tax Services

“Tax services” include, but are not limited to, the review and signing of the Funds’ federal tax returns, the review of required distributions by the Funds and consultations regarding tax matters such as the tax treatment of new investments or the impact of new regulations. The Audit Committees will scrutinize carefully the retention of the Auditor in connection with a transaction initially recommended by the Auditor, the major business purpose of which may be tax avoidance or the tax treatment of which may not be supported in the Internal Revenue Code and related regulations. The Audit Committees will consult with the Funds’ Treasurer (or his or her designee) and may consult with outside counsel or advisors as necessary to ensure the consistency of Tax services rendered by the Auditor with the foregoing policy.

No Auditor shall represent any Fund or any Service Affiliate before a tax court, district court or federal court of claims.

Under rules adopted by the Public Company Accounting Oversight Board and approved by the SEC, in connection with seeking Audit Committees’ pre-approval of permissible Tax services, the Auditor shall:

1. Describe in writing to the Audit Committees, which writing may be in the form of the proposed engagement letter:

a.	The scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the Fund, relating to the service; and
b.	Any compensation arrangement or other agreement, such as a referral agreement, a referral fee or fee-sharing arrangement, between the Auditor and any person (other than the Fund) with respect to the promoting, marketing, or recommending of a transaction covered by the service;

2.	Discuss with the Audit Committees the potential effects of the services on the independence of the Auditor; and
3.	Document the substance of its discussion with the Audit Committees.

All Other Auditor Services

The Audit Committees may pre-approve non-audit services classified as “All other services” that are not categorically prohibited by the SEC, as listed in Exhibit 1 to this policy.

Pre-Approval Fee Levels or Established Amounts

Pre-approval of estimated fees or established amounts for services to be provided by the Auditor under general or specific pre-approval policies will be set periodically by the Audit Committees. Any proposed fees exceeding 110% of the maximum estimated pre-approved fees or established amounts for pre-approved audit and non-audit services will be reported to the Audit Committees at the quarterly Audit Committees meeting and will require specific approval by the Audit Committees before payment is made. The Audit Committees will always factor in the overall relationship of fees for audit and non-audit services in determining whether to pre-approve any such services and in determining whether to approve any additional fees exceeding 110% of the maximum pre-approved fees or established amounts for previously pre-approved services.

Procedures

Generally on an annual basis, Invesco Advisers, Inc. (“Invesco”) will submit to the Audit Committees for general pre-approval, a list of non-audit services that the Funds or Service Affiliates of the Funds may request from the Auditor. The list will describe the non-audit services in reasonable detail and will include an estimated range of fees and such other information as the Audit Committee may request.

Each request for services to be provided by the Auditor under the general pre-approval of the Audit Committees will be submitted to the Funds’ Treasurer (or his or her designee) and must include a detailed description of the services to be rendered. The Treasurer or his or her designee will ensure that such services are included within the list of services that have received the general pre-approval of the Audit Committees. The Audit Committees will be informed at the next quarterly scheduled Audit Committees meeting of any such services for which the Auditor rendered an invoice and whether such services and fees had been pre-approved and if so, by what means.

Each request to provide services that require specific approval by the Audit Committees shall be submitted to the Audit Committees jointly by the Fund’s Treasurer or his or her designee and the Auditor, and must include a joint statement that, in their view, such request is consistent with the policies and procedures and the SEC Rules.

Each request to provide tax services under either the general or specific pre-approval of the Audit Committees will describe in writing: (i) the scope of the service, the fee structure for the engagement, and any side letter or amendment to the engagement letter, or any other agreement between the Auditor and the audit client, relating to the service; and (ii) any compensation arrangement or other agreement between the Auditor and any person (other than the audit client) with respect to the promoting, marketing, or recommending of a transaction covered by the service. The Auditor will discuss with the Audit Committees the potential effects of the services on the Auditor’s independence and will document the substance of the discussion.

Non-audit services pursuant to the de minimis exception provided by the SEC Rules will be promptly brought to the attention of the Audit Committees for approval, including documentation that each of the conditions for this exception, as set forth in the SEC Rules, has been satisfied.

On at least an annual basis, the Auditor will prepare a summary of all the services provided to any entity in the investment company complex as defined in section 2-01(f)(14) of Regulation S-X in sufficient detail as to the nature of the engagement and the fees associated with those services.

The Audit Committees have designated the Funds’ Treasurer to monitor the performance of all services provided by the Auditor and to ensure such services are in compliance with these policies and procedures. The Funds’ Treasurer will report to the Audit Committees on a periodic basis as to the results of such monitoring. Both the Funds’ Treasurer and management of Invesco will immediately report to the chairman of the Audit Committees any breach of these policies and procedures that comes to the attention of the Funds’ Treasurer or senior management of Invesco.

Exhibit 1 to Pre-Approval of Audit and Non-Audit Services Policies and Procedures

Conditionally Prohibited Non-Audit Services (not prohibited if the Fund can reasonably conclude that the results of the service would not be subject to audit procedures in connection with the audit of the Fund’s financial statements)

• Bookkeeping or other services related to the accounting records or financial statements of the audit client

• Financial information systems design and implementation

• Appraisal or valuation services, fairness opinions, or contribution-in-kind reports

• Actuarial services

• Internal audit outsourcing services

Categorically Prohibited Non-Audit Services

• Management functions

• Human resources

• Broker-dealer, investment adviser, or investment banking services

• Legal services

• Expert services unrelated to the audit

• Any service or product provided for a contingent fee or a commission

• Services related to marketing, planning, or opining in favor of the tax treatment of confidential transactions or aggressive tax position transactions, a significant purpose of which is tax avoidance

• Tax services for persons in financial reporting oversight roles at the Fund

• Any other service that the Public Company Oversight Board determines by regulation is impermissible.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

          Not applicable.

ITEM 6. SCHEDULE OF INVESTMENTS.

Investments in securities of unaffiliated issuers is included as part of the reports to stockholders filed under Item 1 of this Form.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

          Not applicable.

ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT COMPANIES.

          Not applicable.

ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

          Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          None

ITEM 11. CONTROLS AND PROCEDURES.

(a)

As of September 16, 2010, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the PEO and PFO, to assess the effectiveness of the Registrant’s disclosure controls and procedures, as that term is defined in Rule 30a-3(c) under the Investment Company Act of 1940 (the “Act”), as amended. Based on that evaluation, the Registrant’s officers, including the PEO and PFO, concluded that, as of September 16, 2010, the Registrant’s disclosure controls and procedures were reasonably designed to ensure: (1) that information required to be disclosed by the Registrant on Form N-CSR is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Securities and Exchange Commission; and (2) that material information relating to the Registrant is made known to the PEO and PFO as appropriate to allow timely decisions regarding required disclosure.

(b)

There have been no changes in the Registrant’s internal control over financial reporting (as defined in Rule 30a-3(d) under the Act) that occurred during the second fiscal quarter of the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

12(a)(1)	Code of Ethics.
12(a)(2)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a)(3)	Not applicable.
12(b)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Registrant: AIM Tax-Exempt Funds (Invesco Tax-Exempt Funds)

By:	/s/ Philip A. Taylor
	Philip A. Taylor
	Principal Executive Officer

Date: December 6, 2010

Pursuant to the requirements of the Securities and Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

By:	/s/ Philip A. Taylor
	Philip A. Taylor
	Principal Executive Officer

Date: December 6, 2010

By:	/s/ Sheri Morris
	Sheri Morris
	Principal Financial Officer

Date: December 6, 2010

TABLE OF CONTENTS

EXHIBIT INDEX

12(a)(1)	Code of Ethics.
12(a)(2)	Certifications of principal executive officer and principal Financial officer as required by Rule 30a-2(a) under the Investment Company Act of 1940.
12(a)(3)	Not applicable.
12(b)	Certifications of principal executive officer and principal financial officer as required by Rule 30a-2(b) under the Investment Company Act of 1940.