Aim Tax Exempt Funds N-CSRS Certified semi-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: 3/31/11

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

Item 1. Reports to Stockholders.

Invesco Municipal Fund

Semiannual Report to Shareholders  § March 31, 2011

Nasdaq:
A: MSMHX § B: IMUGX § C: IMUHX § Y: MPMFX

2	Fund Performance
4	Letters to Shareholders
5	Schedule of Investments
11	Financial Statements
13	Notes to Financial Statements
18	Financial Highlights
19	Fund Expenses

For the most current month-end Fund performance and commentary, please visit invesco.com/performance.

Unless otherwise noted, all data provided by Invesco.

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 Performance

Performance summary

Fund vs. Indexes

Cumulative total returns, 9/30/10 to 3/31/11, 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	-3.70	%
Class B Shares	-4.06
Class C Shares	-4.05
Class Y Shares	-3.66
Barclays Capital 10-Year Municipal Bond Index▼ (Style-Specific Index)	-2.93
Barclays Capital 5-Year Municipal Bond Index▼ (Style-Specific Index)	-0.96
Custom Invesco Municipal Index§ (Style-Specific Index)	-1.94
Lipper Intermediate Municipal Debt Funds Index▼ (Peer Group Index)	-2.59

^▼Lipper Inc.; § Lipper Inc., Invesco

The Barclays Capital 10-Year Municipal Bond Index is an unmanaged index with maturities between nine and 12 years. The Barclays Capital 10-Year Municipal Bond Index is the 10-year total return subset of the Barclays Capital Municipal Bond Index.

     The Barclays Capital 5-Year Municipal Bond 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 Bond Index is the five-year (four-six) component of the Barclays Capital Municipal Bond Index.

     The Custom Invesco Municipal Index is an unmanaged index composed of the Barclays Capital Long Municipal Index from October 1, 1992, to March 31, 1996, and 50% Barclays Capital 10-Year Municipal Bond Index and 50% Barclays Capital 5-Year Municipal Bond Index thereafter.

     The Lipper Intermediate Municipal Debt Funds Index is an unmanaged index considered representative of intermediate municipal debt funds tracked by Lipper.

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

     The Barclays Capital Long Municipal Index is an unmanaged index composed of general obligation bonds, insured bonds and pre-refunded bonds, all in the maturity range of more than 22 years.

     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).

     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.

2 Invesco Municipal Fund

Average Annual Total Returns

As of 3/31/11, including maximum applicable sales charges

							After Taxes
				After Taxes			on Distributions
	Before			on			and Sale of
	Taxes			Distributions			Fund Shares
Class A Shares
Inception (1/2/08)		-0.70	%		-0.84	%		-0.16	%
1 Year		-4.16			-4.18			-1.57
Class B Shares
Inception		-0.78	%		-0.92	%		-0.24	%
1 Year		-4.89			-4.91			-2.21
Class C Shares
Inception		0.06	%		-0.08	%		0.47	%
1 Year		-1.00			-1.01			0.32
Class Y Shares
Inception (10/1/92)		5.19	%		5.01	%		4.98	%
10 Years		3.55			3.40			3.49
5 Years		2.24			2.03			2.34
1 Year		0.81			0.79			1.81

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 share 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. Before tax performance figures reflect reinvested distributions, changes in net asset value and the effect of the maximum sales charge unless otherwise stated. Performance figures do

not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. 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 0.73%, 1.48%, 1.48% and 0.48%, 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.

3 Invesco Municipal Fund

Letters to Shareholders

Bruce Crockett

Dear Fellow Shareholders:

With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.

     Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.

     I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.
As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”

     Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”¹ These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.

     I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.

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

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

1 Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.”

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.

     The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.

     This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.

     If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director
Invesco Ltd.

4 Invesco Municipal Fund

Schedule of Investments

March 31, 2011

(Unaudited)

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Municipal Obligations–100.43%
Alaska–1.31%
Alaska (State of) Railroad Corp. (FTA Section 5307 Urbanized Area Formula Funds & Section 5309 Fixed Guideway Modernization Formula Funds); Series 2007, Capital Grant Receipts RB (INS–NATL)(a)		5.00	%		08/01/15	$	2,680	$	2,926,131
Arizona–0.66%
Maricopa (County of) Pollution Control Corp. (Arizona Public Service Co. Palo Verde); Series 2009 A, Ref. PCR(b)		6.00	%		05/01/14		1,400		1,470,952
California–7.32%
Indio (City of) Redevelopment Agency (Indio Merged Redevelopment); Series 2008 A, Sub. Tax Allocation RB		5.00	%		08/15/24		1,470		1,289,219
Los Angeles Unified School District (Election of 2004); Series 2009 I, Unlimited Tax GO Bonds		5.25	%		07/01/22		3,200		3,425,120
Palomar Pomerado Health (Election of 2004);
Series 2007 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		08/01/16		1,880		1,513,231
Series 2007 A, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		08/01/17		4,970		3,694,052
Riverside (County of) (Public Safety Communication and Refunding); Series 2007 A, COP (INS–AMBAC)(a)		5.00	%		11/01/14		3,500		3,763,305
Twin Rivers Unified School District; Series 2009, Unlimited Tax CAB GO BAN(c)		0.00	%		04/01/14		2,950		2,689,545
									16,374,472
Colorado–0.45%
Regional Transportation District (Denver Transit Partners Eagle P3); Series 2010, Private Activity RB		5.25	%		07/15/19		1,000		1,007,940
District of Columbia–3.64%
District of Columbia;
Series 2007 C, Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		06/01/16		2,325		2,636,364
Series 2007 C, Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		06/01/19		5,000		5,499,050
									8,135,414
Florida–13.28%
Florida (State of) Municipal Loan Council;
Series 2007 A, RB (INS–NATL)(a)		5.00	%		10/01/12		1,040		1,065,979
Series 2007 A, RB (INS–NATL)(a)		5.00	%		10/01/13		1,630		1,673,374
Florida (State of) State Board of Education; Series 2005 A, Lottery RB (INS–AMBAC)(a)		5.00	%		07/01/19		2,500		2,661,200
Miami-Dade (County of);
Series 2007, Ref. Gtd. Entitlement RB (INS–NATL)(a)		5.00	%		08/01/12		4,655		4,867,873
Series 2007, Ref. Gtd. Entitlement RB (INS–NATL)(a)		5.00	%		08/01/13		1,810		1,931,379
Osceola (County of);
Series 2007, Ref. Infrastructure Sales Surtax RB (INS–AMBAC)(a)		5.00	%		10/01/12		1,930		2,024,087
Series 2007, Ref. Infrastructure Sales Surtax RB (INS–AMBAC)(a)		5.00	%		10/01/13		3,140		3,358,921
Palm Beach School District;
Series 2007 D, Ref. COP (INS–NATL)(a)		5.00	%		08/01/12		3,545		3,715,975
Series 2007 D, Ref. COP (INS–NATL)(a)		5.00	%		08/01/13		3,735		3,997,608
St. Lucie (County of); Series 2007, Transportation RB (INS–AMBAC)(a)		5.00	%		08/01/13		1,000		1,080,320
Tallahassee (City of) & Leon (County of) Blueprint 2000 Intergovernmental Agency;
Series 2007, Sales Tax RB (INS–NATL)(a)		5.00	%		10/01/13		1,605		1,716,901
Series 2007, Sales Tax RB (INS–NATL)(a)		5.00	%		10/01/14		1,500		1,623,615
									29,717,232

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

5        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Illinois–11.88%
Chicago (City of) (City Colleges of Chicago Capital Improvement); Series 1999, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		01/01/19	$	4,000	$	2,683,000
Chicago (City of) Board of Education (Dedicated Revenues); Series 2007 D, Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		12/01/17		1,010		1,078,034
Chicago (City of) Transit Authority (FTA Section 5309 Fixed Guideway Modernization Formula Funds);
Series 2008, Capital Grant Receipts RB (INS–AGC)(a)		5.25	%		06/01/24		3,965		3,952,788
Series 2008, Capital Grant Receipts RB (INS–AGC)(a)		5.25	%		06/01/23		2,200		2,190,848
Chicago (City of); Series 2011, Tax Increment RB COP		7.13	%		05/01/21		250		247,805
Hawthorn Community Consolidated School District No. 73;
Series 2002, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		12/01/19		3,585		2,335,950
Series 2002, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		12/01/21		4,045		2,307,551
Series 2002, Unlimited Tax CAB GO Bonds(c)(d)		0.00	%		12/01/21		330		224,317
Illinois (State of) Finance Authority (Edward Hospital Obligated Group);
Series 2008 A, RB (INS–AMBAC)(a)		6.00	%		02/01/23		900		949,356
Series 2008 A, RB (INS–AMBAC)(a)		6.00	%		02/01/24		1,175		1,225,642
Series 2008 A, RB (INS–AMBAC)(a)		6.00	%		02/01/26		380		390,211
Illinois (State of) Finance Authority (Northwestern Medical Faculty Foundation, Inc.); Series 1998, Ref. RB (INS–NATL)(a)		5.00	%		11/15/12		1,000		1,001,710
Illinois (State of) Finance Authority (Northwestern Memorial Hospital); Series 2009 B, RB		5.00	%		08/15/16		1,890		2,095,991
Illinois (State of) Finance Authority (Park Place of Elmhurst); Series 2010 D-2, TEMPS-65sm RB		7.00	%		11/15/15		1,000		976,860
Illinois (State of) Municipal Electric Agency;
Series 2007 A, Power Supply System RB (INS–NATL)(a)		5.00	%		02/01/13		1,065		1,119,837
Series 2007 A, Power Supply System RB (INS–NATL)(a)		5.00	%		02/01/15		1,000		1,072,890
Madison & Jersey Community Unit School District No. 11; Series 2002, Unlimited Tax CAB GO Bonds (INS–AGM)(a)(c)		0.00	%		12/01/20		2,900		1,750,817
Railsplitter Tobacco Settlement Authority; Series 2010, RB		5.25	%		06/01/21		1,000		977,610
									26,581,217
Indiana–12.64%
Eagle-Union Middle School Building Corp.;
Series 2001, Ref. First Mortgage RB (INS–AMBAC)(a)		4.90	%		07/05/16		1,000		1,003,720
Series 2001, Ref. First Mortgage RB (INS–AMBAC)(a)		5.00	%		07/05/17		1,500		1,505,580
Fort Wayne (City of) Hospital Authority (Parkview Health System, Inc.); Series 1998, RB (INS–NATL)(a)		4.70	%		11/15/11		520		521,440
Indiana (State of) Transportation Finance Authority; Series 1993��A, CAB Highway RB (INS–AMBAC)(a)(c)		0.00	%		12/01/16		1,695		1,429,902
Indiana (State of) Port Commission (Cargill Inc.); Series 2004, Ref. RB		4.10	%		05/01/12		3,450		3,531,869
Merrillville Multi-School Building Corp.;
Series 2008, First Mortgage RB		5.00	%		01/15/17		1,260		1,379,057
Series 2008, First Mortgage RB		5.00	%		07/15/17		1,285		1,408,321
Michigan City (City of) Area-Wide School Building Corp.;
Series 2002, First Mortgage CAB RB (INS–NATL)(a)(c)		0.00	%		01/15/17		2,000		1,647,360
Series 2002, First Mortgage CAB RB (INS–NATL)(a)(c)		0.00	%		01/15/18		3,000		2,329,950
Noblesville High School Building Corp.;
Series 1993, First Mortgage CAB RB (INS–AMBAC)(a)(c)		0.00	%		02/15/19		1,850		1,303,751
Series 2007, Ref. First Mortgage RB (INS–AMBAC)(a)		5.00	%		07/10/13		2,475		2,686,390
North Side High School Building Corp.; Series 2003, First Mortgage RB (INS–AGM)(a)		5.25	%		07/15/13		2,910		3,212,116
Northwest Allen School Building Corp.;
Series 2008, First Mortgage RB (INS–AGM)(a)		5.00	%		07/15/16		1,395		1,535,686
Series 2008, First Mortgage RB (INS–AGM)(a)		5.00	%		07/15/19		3,200		3,404,864
Westfield High School 1995 Building Corp.; Series 2007, Ref. First Mortgage RB (INS–AGM)(a)		5.00	%		01/10/13		1,285		1,372,573
									28,272,579

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

6        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Iowa–0.56%
Iowa (State of) Finance Authority (Drake University); Series 2007, Private University RB (INS–CIFG)(a)		5.00	%		04/01/13	$	1,210	$	1,264,789
Kansas–1.28%
Harvey Unified School District No. 373; Series 2007, Ref. & Improvement Unlimited Tax GO Bonds (INS–NATL)(a)		5.00	%		09/01/19		2,630		2,864,675
Kentucky–0.90%
Kentucky (State of) Asset/Liability Commission (Project Notes Federal Highway Trust Fund First Series); Series 2007, RB (INS–NATL)(a)		5.00	%		09/01/14		1,800		2,009,304
Louisiana–1.80%
Louisiana (State of) Correctional Facilities Corp.; Series 2007, Lease RB (INS–AMBAC)(a)		5.00	%		09/01/12		1,230		1,294,415
Louisiana (State of) Local Government Environmental Facilities (Community Development Authority Bossier City Public Improvement);
Series 2007, RB (INS–AMBAC)(a)		5.00	%		11/01/13		1,320		1,423,290
Series 2007, RB (INS–AMBAC)(a)		5.00	%		11/01/15		1,200		1,321,200
									4,038,905
Maryland–0.25%
Maryland (State of) Health & Higher Educational Facilities Authority (Lifebridge Health);
Series 2011, RB		6.00	%		07/01/23		335		357,703
Series 2011, RB		6.00	%		07/01/25		200		208,212
									565,915
Massachusetts–0.75%
Massachusetts (State of) Health & Educational Facilities Authority (UMass Memorial); Series 1998 A, RB (INS–AMBAC)(a)		4.80	%		07/01/12		1,665		1,668,646
Michigan–8.34%
Brandon School District;
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/16		1,425		1,569,353
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/18		1,410		1,539,043
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/19		1,395		1,491,715
Dearborn School District; Series 2007, Ref. Unlimited Tax GO Bonds (INS–NATL)(a)		5.00	%		05/01/16		2,480		2,731,224
Greenville Public Schools;
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/16		1,410		1,552,833
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/18		1,235		1,348,027
Lansing (City of) Board of Water & Light; Series 2008 A, Water Supply, Steam, Chilled Water and Electric Utility System RB		5.00	%		07/01/24		1,000		1,025,280
Traverse City Area Public Schools;
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/17		2,300		2,523,008
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/18		2,280		2,481,210
Series 2008, Ref. Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		05/01/19		2,260		2,409,477
									18,671,170
Missouri–2.39%
Manchester (City of) (Highway 141/Manchester Road); Series 2010, Ref. Transportation Tax Increment Allocation RB		6.00	%		11/01/25		3,000		2,851,710
Missouri (State of) Health & Educational Facilities Authority (St. Louis University); Series 2008 A-2, VRD RB (LOC–Wells Fargo Bank, N.A.)(e)(f)		0.20	%		10/01/35		2,500		2,500,000
									5,351,710
Nebraska–0.96%
Nebraska (State of) Public Power District; Series 2007 B, General RB (INS–AGM)(a)		5.00	%		01/01/13		2,000		2,140,400

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

7        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
Nevada–1.87%
Director of the State of Nevada Department of Business & Industry (Republic Services, Inc.); Series 2001, Solid Waste Disposal RB(b)(g)(h)		5.63	%		06/01/18	$	1,100	$	1,161,930
Las Vegas (City of) Redevelopment Agency; Series 2009 A, Tax Increment Allocation RB		6.25	%		06/15/16		1,475		1,628,739
Washoe School District; Series 2008 A, School Improvement Limited Tax GO Bonds		4.75	%		06/01/26		1,405		1,383,279
									4,173,948
New Jersey–1.44%
Monmouth (County of) Improvement Authority;
Series 2007, Governmental Loan RB (INS–AMBAC)(a)		5.00	%		12/01/16		1,010		1,086,942
Series 2007, Governmental Loan RB (INS–AMBAC)(a)		5.00	%		12/01/17		2,000		2,134,720
									3,221,662
New Mexico–1.07%
New Mexico (State of) Finance Authority;
Series 2007 C, Sub. Lien Public Revolving Fund RB (INS–NATL)(a)		5.00	%		06/15/13		1,000		1,079,850
Series 2007 C, Sub. Lien Public Revolving Fund RB (INS–NATL)(a)		5.00	%		06/15/14		1,200		1,314,732
									2,394,582
New York–0.56%
Suffolk (County of) Industrial Development Agency (2000 New York Institute of Technology); Series 2000 A, Ref. Civil Facility RB		5.00	%		03/01/26		1,300		1,256,827
Ohio–1.13%
Cleveland (City of) (Bridges & Roadways Improvements); Series 2008 B, Sub. Lien Income Tax RB (INS–AGC)(a)		5.00	%		10/01/25		1,555		1,601,992
Ohio (State of) Water Development Authority (FirstEnergy Nuclear Generation Corp.); Series 2009 A, Ref. PCR(b)		5.88	%		06/01/16		865		929,867
									2,531,859
Oregon–0.64%
Gilliam (County of) (Waste Management, Inc.); Series 2003 A, Solid Waste Disposal RB(b)(g)		4.88	%		05/01/12		1,400		1,424,066
Pennsylvania–5.13%
Allegheny (County of) Hospital Development Authority (University of Pittsburgh Medical Center); Series 2008 A, RB		5.00	%		09/01/18		3,000		3,286,920
Cranberry (Township of); Series 2001 B, Unlimited Tax GO Bonds (INS–NATL)(a)		4.80	%		12/01/18		1,310		1,342,082
Girard School District;
Series 1992 B, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		10/01/18		700		518,280
Series 1992 B, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		10/01/19		250		173,023
Montour School District; Series 1993 B, Unlimited Tax CAB GO Bonds (INS–NATL)(a)(c)		0.00	%		01/01/13		300		286,938
Penn Hills Municipality;
Series 1995 B, Unlimited Tax GO Bonds(c)(d)		0.00	%		06/01/12		1,615		1,543,536
Series 1995 B, Unlimited Tax GO Bonds(c)		0.00	%		12/01/13		210		187,139
Pennsylvania (State of) Finance Authority (Aliquippa School District); Series 1994, CAB RB(c)		0.00	%		06/01/12		685		670,601
Philadelphia (City of) Authority for Industrial Development (City of Philadelphia–One Benjamin Franklin Parkway); Series 2007 C, Ref. Lease RB (INS–AGM)(a)		5.00	%		02/15/15		2,150		2,388,113
Pittsburgh (City of) Water & Sewer Authority; Series 2007 A, Ref. First Lien Water & Sewer System RB (INS–AGM)(a)		5.00	%		09/01/13		1,000		1,084,270
									11,480,902
Puerto Rico–0.85%
Puerto Rico (Commonwealth of) Electric Power Authority; Series 2010 CCC, Power RB		5.00	%		07/01/24		2,000		1,904,800

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

8        Invesco Municipal Fund

						Principal
	Interest			Maturity		Amount
	Rate			Date		(000)		Value
South Carolina–0.40%
Lexington (County of) Health Services District, Inc.; Series 2007, Ref. Hospital RB		5.00	%		11/01/16	$	165	$	177,535
Richland (County of) (International Paper); Series 2003 A, Ref. Environmental Improvement RB(g)		6.10	%		04/01/23		725		726,711
									904,246
Tennessee–0.68%
Memphis (City of) & Shelby (County of) Sports Authority, Inc. (Memphis Area); Series 2007 C, Ref. RB (INS–NATL)(a)		5.00	%		11/01/13		1,410		1,513,973
Texas–10.20%
Amarillo (City of); Series 2007, Combination Limited Tax Ctfs. of GO Bonds (INS–NATL)(a)		5.00	%		05/15/13		1,020		1,107,455
Bexar (County of); Series 2007, Combination Flood Control Limited Tax Ctfs. of GO Bonds (INS–AGM)(a)		5.00	%		06/15/14		1,330		1,490,943
Brownsville (City of); Series 2008 A, Ref. Utilities System Revenue RB (INS–AGM)(a)		5.00	%		09/01/23		1,240		1,292,737
Capital Area Cultural Education Facilities Finance Corp.(The Roman Catholic Diocese of Austin); Series 2005 A, RB		5.50	%		04/01/23		1,670		1,614,523
Greenville (City of); Series 2010, Ref. & Improvement Electric Utility System RB		5.00	%		02/15/26		2,475		2,490,865
Harris (County of) Health Facilities Development Corp. (TECO); Series 2008, Thermal Utility RB (INS–AGC)(a)		5.25	%		11/15/24		1,950		2,035,078
Houston (City of) Convention & Entertainment Facilities Department; Series 2001 B, Hotel Occupancy Tax & Special CAB RB (INS–AGM)(a)(c)		0.00	%		09/01/25		2,575		1,138,330
Houston (City of);
Series 2007 A, Ref. Public Improvement Limited Tax GO Bonds (INS–NATL)(a)		5.00	%		03/01/16		1,000		1,139,040
Series 2007 B, Ref. First Lien Combined Utility System RB (INS–NATL)(a)		5.00	%		11/15/13		1,000		1,101,480
Houston Community College System Public Facility Corp. (Northline Mall Campus); Series 2007, Lease RB (INS–AMBAC)(a)		4.00	%		04/15/12		1,465		1,517,213
Lubbock (City of); Series 2007 A, Waterworks System Surplus Ctfs. of Obligation Limited Tax (INS–AGM)(a)		5.00	%		02/15/14		1,355		1,500,459
Sam Rayburn Municipal Power Agency; Series 2002 A, Ref. RB		6.00	%		10/01/21		650		659,191
Tarrant (County of) Cultural Education Facilities Finance Corp. (Mirador); Series 2010 B-1, Retirement Facility TEMPS-75 RB		7.25	%		11/15/16		1,800		1,808,280
Texas (State of) Turnpike Authority (Central Texas Turnpike System); Series 2002 A, First Tier CAB RB (INS–AMBAC)(a)(c)		0.00	%		08/15/18		5,700		3,928,212
									22,823,806
Utah–1.88%
Intermountain Power Agency; Series 1993 A, Ref. Power Supply CAB RB(c)(d)		0.00	%		07/01/17		1,750		1,445,062
University of Utah;
Series 2007, COP (INS–AMBAC)(a)		5.00	%		12/01/12		1,545		1,653,490
Series 2007, COP (INS–AMBAC)(a)		5.00	%		12/01/13		1,000		1,101,390
									4,199,942
Washington–4.97%
Camas School District No. 117; Series 2007, Unlimited Tax GO Bonds (INS–AGM)(a)		5.00	%		12/01/13		1,500		1,654,170
Seattle (City of); Series 2007, Ref. Solid Waste RB		5.00	%		02/01/18		1,795		1,989,381
Washington (State of);
Series 2005 C, Motor Vehicle Fuel Unlimited Tax CAB GO Bonds (INS–AMBAC)(a)(c)		0.00	%		06/01/14		3,025		2,861,529
Series 2005 C, Motor Vehicle Fuel Unlimited Tax CAB GO Bonds (INS–AMBAC)(a)(c)		0.00	%		06/01/15		3,250		2,968,907
Series 2005 C, Motor Vehicle Fuel Unlimited Tax CAB GO Bonds (INS–AMBAC)(a)(c)		0.00	%		06/01/16		1,885		1,654,615
									11,128,602

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
Wisconsin–0.75%
Badger Tobacco Asset Securitization Corp.; Series 2002, Asset-Backed RB(d)		6.13	%		06/01/27	$	625	$	650,863
Wisconsin (State of) Health & Educational Facilities Authority (Children’s Hospital of Wisconsin); Series 1998, RB (INS–AMBAC)(a)		5.63	%		02/15/12		1,000		1,038,290
									1,689,153
Wyoming–0.45%
Uinta (County of) (Chevron U.S.A. Inc.); Series 1993, Ref. VRD PCR(e)		0.17	%		08/15/20		1,000		1,000,000
TOTAL INVESTMENTS(i)–100.43% (Cost $217,528,455)									224,709,819
OTHER ASSETS LESS LIABILITIES–(0.43)%									(961,018	)
NET ASSETS–100.00%								$	223,748,801

Investment Abbreviations:

AGC	– Assured Guaranty Corp.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– American Municipal Bond Assurance Corp.*
BAN	– Bond Anticipation Note
CAB	– Capital Appreciation Bond
CIFG	– CIFG Assurance North America, Inc.
COP	– Certificates of Participation
Ctfs.	– Certificates
FTA	– Federal Transit Administration
GO	– General Obligation
Gtd.	– Guaranteed
INS	– Insurer
LOC	– Letter of Credit
NATL	– National Public Finance Guarantee Corp.
PCR	– Pollution Control Revenue Bonds
RB	– Revenue Bonds
Ref.	– Refunding
Sub.	– Subordinated
TEMPS	– Tax-Exempt Mandatory Paydown Securities
VRD	– Variable Rate Demand

Notes to Schedule of Investments:

(a)	Principal and/or interest payments are secured by the bond insurance company listed.
(b)	Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(c)	Zero coupon bond issued at a discount.
(d)	Advance refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral.
(e)	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 March 31, 2011.
(f)	Principal and interest payments are fully enhanced by a letter of credit from the bank listed or a predecessor bank, branch or subsidiary.
(g)	Security subject to the alternative minimum tax.
(h)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The value of this security at March 31, 2011 represented 0.52% of the Fund’s Net Assets.
(i)	This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations.

Entities	Percentage
National Public Finance Guarantee Corp.		27.66	%
American Municipal Bond Assurance Corp.*		21.82
Assured Guaranty Municipal Corp.		21.40

  *  AMBAC filed for bankruptcy on November 8, 2010

Portfolio Composition

By credit sector, based on total investments

Revenue Bonds	64.5	%
General Obligation Bonds	34.1
Prerefunded Bonds	1.0
Other	0.4

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

10        Invesco Municipal Fund

Statement of Assets and Liabilities

March 31, 2011

(Unaudited)

Assets:
Investments, at value (Cost $217,528,455)	$	224,709,819
Receivable for:
Investments sold		1,000,000
Fund shares sold		95,187
Interest		2,565,594
Fund expenses absorbed		14,180
Investment for trustee deferred compensation and retirement plans		1,587
Other assets		45,221
Total assets		228,431,588
Liabilities:
Payable for:
Fund shares reacquired		1,435,699
Amount due custodian		3,106,288
Accrued fees to affiliates		36,999
Accrued other operating expenses		98,829
Trustee deferred compensation and retirement plans		4,972
Total liabilities		4,682,787
Net assets applicable to shares outstanding	$	223,748,801
Net assets consist of:
Shares of beneficial interest	$	338,827,612
Undistributed net investment income		1,689,891
Undistributed net realized gain (loss)		(123,950,066	)
Unrealized appreciation		7,181,364
	$	223,748,801
Net Assets:
Class A	$	71,875,984
Class B	$	12,488
Class C	$	606,129
Class Y	$	151,254,200
Shares outstanding, $0.001 par value per share, with an unlimited number of shares authorized:
Class A		6,281,181
Class B		1,091
Class C		52,947
Class Y		13,231,788
Class A:
Net asset value per share	$	11.44
Maximum offering price per share (Net asset value of $11.44 divided by 95.25%)	$	12.01
Class B:
Net asset value and offering price per share	$	11.45
Class C:
Net asset value and offering price per share	$	11.45
Class Y:
Net asset value and offering price per share	$	11.43

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

11        Invesco Municipal Fund

Statement of Operations

For the six months ended March 31, 2011

(Unaudited)

Investment income:
Interest	$	5,885,107
Expenses:
Advisory fees		499,303
Administrative services fees		46,467
Custodian fees		19,748
Distribution fees:
Class A		114,156
Class B		88
Class C		2,972
Transfer agent fees		20,390
Trustees’ and officers’ fees and benefits		14,295
Other		86,685
Total expenses		804,104
Net investment income		5,081,003
Realized and unrealized gain (loss) from:
Net realized gain (loss) from investment securities		(18,528	)
Change in net unrealized appreciation (depreciation) of investment securities		(16,664,028	)
Net realized and unrealized gain (loss)		(16,682,556	)
Net increase (decrease) in net assets resulting from operations	$	(11,601,553	)

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

12        Invesco Municipal Fund

Statement of Changes in Net Assets

For the six months ended March 31, 2011 and the year ended September 30, 2010

(Unaudited)

	March 31,			September 30,
	2011			2010
Operations:
Net investment income	$	5,081,003		$	15,110,466
Net realized gain (loss)		(18,528	)		(23,417,004	)
Change in net unrealized appreciation (depreciation)		(16,664,028	)		21,209,655
Net increase (decrease) in net assets resulting from operations		(11,601,553	)		12,903,117
Distributions to shareholders from net investment income:
Class A		(1,541,828	)		(4,046,400	)
Class B		(198	)		(85	)
Class C		(7,831	)		(2,346	)
Class Y		(3,296,509	)		(12,793,462	)
Total distributions from net investment income		(4,846,366	)		(16,842,293	)
Share transactions–net:
Class A		(38,046,636	)		32,579,119
Class B		3,255			10,085
Class C		53,814			579,985
Class Y		(68,348,080	)		(214,067,863	)
Net increase (decrease) in net assets resulting from share transactions		(106,337,647	)		(180,898,674	)
Net increase (decrease) in net assets		(122,785,566	)		(184,837,850	)
Net assets:
Beginning of period		346,534,367			531,372,217
End of period (includes undistributed net investment income of $1,689,891 and $1,455,254, respectively)	$	223,748,801		$	346,534,367

Notes to Financial Statements

March 31, 2011

(Unaudited)

NOTE 1—Significant Accounting Policies

Invesco Municipal Fund (the “Fund”) is a series portfolio of AIM Tax-Exempt Funds (Invesco 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 (the “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 C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert.

13        Invesco Municipal Fund

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. 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. Redemption of Class B shares prior to conversion date will be subject to a CDSC.

  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 net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized 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

14        Invesco Municipal 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.	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.

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 at the annual rate of 0.375% of the 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).

  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 and/or expense reimbursement (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 and/or expense reimbursement to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (2) taxes; (3) dividend expense on short sales; (4) extraordinary 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. The Adviser did not waive fees and/or reimburse expenses during the period under this expense 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. For the six months ended March 31, 2011, expenses incurred under the agreement 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. For the six months ended March 31, 2011, the expenses incurred under the agreement 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. For the six months ended March 31, 2011, 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. During the six months ended March 31, 2011, IDI advised the Fund that IDI retained $159 in front-end sales commissions from the sale of Class A shares and $1,358 from Class C shares 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

15        Invesco Municipal Fund

(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 following is a summary of the tiered valuation input levels, as of March 31, 2011. 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 six months ended March 31, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Municipal Obligations	$	—	$	224,709,819	$	—	$	224,709,819

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.

  During the six months ended March 31, 2011, the Fund paid legal fees of $807 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 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—Tax Information

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.

  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 had 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.

16        Invesco Municipal 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 six months ended March 31, 2011 was $1,797,853 and $109,092,429, 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	$	8,747,483
Aggregate unrealized (depreciation) of investment securities		(1,172,867	)
Net unrealized appreciation of investment securities	$	7,574,616
Cost of investments for tax purposes is $217,135,203.

NOTE 8—Share Information

	Summary of Share Activity
	Six months ended						Year ended
	March 31, 2011(a)						September 30, 2010
	Shares			Amount			Shares			Amount
Sold:
Class A		277,961		$	3,288,562			8,300,378		$	98,310,710
Class B(b)		1,651			19,329			842			10,000
Class C(b)		25,099			293,609			48,311			578,923
Class Y		589,743			6,823,055			3,661,335			43,402,158
Issued as reinvestment of dividends:
Class A		83,108			969,133			298,154			3,529,282
Class B(b)		10			112			7			85
Class C(b)		272			3,155			130			1,575
Class Y		251,993			2,936,803			1,008,958			11,956,447
Reacquired:
Class A		(3,634,100	)		(42,304,331	)		(5,836,446	)		(69,260,873	)
Class B(b)		(1,419	)		(16,186	)		—			—
Class C(b)		(20,823	)		(242,950	)		(42	)		(513	)
Class Y		(6,691,207	)		(78,107,938	)		(22,790,639	)		(269,426,468	)
Net increase (decrease) in share activity		(9,117,712	)	$	(106,337,647	)		(15,309,012	)	$	(180,898,674	)

(a)

There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 86% of the outstanding shares of the Fund. 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, third party record keeping and account servicing and administrative services. 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)

Commencement date of June 1, 2010 for Class B and Class C shares.

17        Invesco Municipal Fund

NOTE 9—Financial Highlights

The following schedule presents financial highlights for a share of the Fund outstanding throughout the periods indicated.

																															Ratio of			Ratio of
																															expenses			expenses
						Net gains																									to average			to average net			Ratio of net
	Net asset					(losses) on						Dividends																			net assets			assets without			investment
	value,		Net			securities (both			Total from			from net			Distributions									Net asset					Net assets,		with fee waivers			fee waivers			income
	beginning		investment			realized and			investment			investment			from net			Total			Redemption			value, end		Total			end of period		and/or expenses			and/or expenses			to average			Portfolio
	of period		income(a)			unrealized)			operations			income			realized gains			Distributions			Fees			of period		Return(b)			(000s omitted)		absorbed			absorbed			net assets			turnover(c)
Class A
Six months ended 03/31/11	$	12.08	$	0.21		$	(0.65	)	$	(0.44	)	$	(0.20	)	$	—		$	(0.20	)	$	—		$	11.44		(3.70	)%	$	71,876		0.75	%(d)		0.75	%(d)		3.54	%(d)		1	%
Year ended 09/30/10		12.09		0.41	†		0.04	†		0.45			(0.46	)		—			(0.46	)		—			12.08		3.87			115,443		0.80			0.84			3.42			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
Six months ended 03/31/11		12.08		0.16			(0.64	)		(0.48	)		(0.15	)		—			(0.15	)		—			11.45		(3.98	)		12		1.50	(d)		1.50	(d)		2.79	(d)		1
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	(i)		1.50	(i)		2.72	(i)		7
Class C
Six months ended 03/31/11		12.09		0.16			(0.65	)		(0.49	)		(0.15	)		—			(0.15	)		—			11.45		(4.05	)		606		1.50	(d)		1.50	(d)		2.79	(d)		1
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	(i)		1.50	(i)		2.72	(i)		7
Class Y
Six months ended 03/31/11		12.08		0.22			(0.66	)		(0.44	)		(0.21	)		—			(0.21	)		—			11.43		(3.66	)		151,254		0.50	(d)		0.50	(d)		3.79	(d)		1
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			0.51			3.75			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)		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			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 annualized and based on average daily net assets (000’s) of $91,575, $18, $596 and $183,242 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 connection 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 4.12% and 4.55% for Class A shares and 4.44% and 4.79% for Class Y shares for the years ended September 30, 2009 and 2008, respectively.
(h)	Commencement date of January 2, 2008 for Class A shares and June 1, 2010 for Class B and Class C shares.
(i)	Annualized.
†	Subsequent to issuance of its September 30, 2010 financial statements, the Fund identified an error solely related to the net investment income per share and net gains (losses) on securities per share amounts included within the financial highlights for the fiscal year ended September 30, 2010. The financial highlights above reflect the revised ratios.

NOTE 10—Subsequent Event

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 Income Fund (the “Acquiring Fund”).

  The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in June 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.

  In anticipation of the closing, the Fund limited public sales of its shares to new investors, effective as of the open of business on May 9, 2011.

18        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 October 1, 2010 through March 31, 2011.

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	(10/01/10)			(03/31/11)1		Period2		(03/31/11)		Period2		Ratio
A	$	1,000.00		$	963.00	$	3.67	$	1,021.19	$	3.78		0.75	%
B		1,000.00			959.40		7.33		1,017.45		7.54		1.50
C		1,000.00			959.50		7.33		1,017.45		7.54		1.50
Y		1,000.00			963.40		2.45		1,022.44		2.52		0.50

1	The actual ending account value is based on the actual total return of the Fund for the period October 1, 2010 through March 31, 2011, 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 182/365 to reflect the most recent fiscal half year.

19        Invesco Municipal Fund

Go Paperless with eDelivery Visit invesco.com/edelivery to receive quarterly statements, tax forms, fund reports and prospectuses with a service that’s all about eeees: – environmentally friendly. Go green by reducing the number of trees used to produce paper. – economical. Help reduce your fund’s printing and delivery expenses and put more capital back in your fund’s returns. This service is provided by Invesco Investment Services, Inc. – efficient. Stop waiting for regular mail. Your documents will be sent via email as soon as they’re available. – easy. Download, save and print files using your home computer with a few clicks of your mouse.

Invesco mailing information

Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.

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 available at invesco.com/proxysearch. In addition, this information is 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-SAR-1 Invesco Distributors, Inc.

Invesco Van Kampen California Insured Tax Free Fund
Semiannual Report to Shareholders § March 31, 2011
Nasdaq:
A: VKCIX § B: VCIBX § C: VCICX § Y: VCIIX

2	Fund Performance
4	Letters to Shareholders
5	Schedule of Investments
9	Financial Statements
11	Notes to Financial Statements
17	Financial Highlights
21	Fund Expenses

For the most current month-end Fund performance and commentary, please visit invesco.com/performance.

Unless otherwise noted, all data provided by Invesco.

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 Performance

Performance summary

Fund vs. Indexes

Cumulative total returns, 9/30/10 to 3/31/11, 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	-8.23	%
Class B Shares	-8.33
Class C Shares	-8.54
Class Y Shares	-8.13
Barclays Capital Municipal Bond Index▼ (Broad Market Index)	-3.68
Barclays Capital California Insured Municipal Index■ (Style-Specific Index)	2.06

^▼Lipper Inc.; ^■ Invesco, IDC via FactSet Research

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

     The Barclays Capital California Insured Municipal Index tracks the performance of California-issued municipal bonds with two or more years to maturity.

     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).

     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.

2 Invesco Van Kampen California Insured Tax Free Fund

Average Annual Total Returns

As of 3/31/11, including maximum applicable sales charges

							After Taxes
				After Taxes			on Distributions
	Before			on			and Sale of
	Taxes			Distributions			Fund Shares
Class A Shares
Inception (12/13/85)		5.40	%		5.37	%		5.43	%
10 Years		2.17			2.11			2.46
5 Years		-0.29			-0.31			0.39
1 Year		-7.50			-7.50			-3.34
Class B Shares
Inception (4/30/93)		3.64	%		3.60	%		3.74	%
10 Years		2.50			2.44			2.70
5 Years		0.29			0.28			0.89
1 Year		-7.84			-7.85			-3.59
Class C Shares
Inception (8/13/93)		3.06	%		3.02	%		3.17	%
10 Years		1.93			1.87			2.17
5 Years		-0.03			-0.04			0.52
1 Year		-4.49			-4.49			-1.57
Class Y Shares
Inception (8/12/05)		1.04	%		0.99	%		1.56	%
5 Years		0.92			0.91			1.48
1 Year		-2.71			-2.71			-0.06

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. Before tax performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale of Fund shares. 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 0.95%, 1.35%, 1.67% and 0.70%, 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.

3 Invesco Van Kampen California Insured Tax Free Fund

Letters to Shareholders

Bruce Crockett

Dear Fellow Shareholders:

With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.

     Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.

     I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds. As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”

     Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”¹ These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.

     I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.

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

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

1 Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.”

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.

     The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.

     This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.

     If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director
Invesco Ltd.

4 Invesco Van Kampen California Insured Tax Free Fund

Schedule of Investments

March 31, 2011

(Unaudited)

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Municipal Bonds–104.8%
California–104.8%
Alhambra, CA City Elem Sch Dist Cap Apprec, Ser A (AGM Insd)		*			09/01/20	$	1,925	$	1,141,217
Apple Valley, CA Pub Fin Auth Lease Rev Town Hall Annex Proj, Ser A (AMBAC Insd)		5.000	%		09/01/27		2,365		2,355,729
Arcadia, CA Uni Sch Dist Election 2006, Ser A (AGM Insd)		5.000	%		08/01/37		1,500		1,423,155
Bakersfield, CA Wastewater Rev, Ser A (AGM Insd)		5.000	%		09/15/32		1,000		973,670
Bay Area Govt Assn CA Lease Rev Cap Proj, Ser A (AMBAC Insd)		5.250	%		07/01/17		1,430		1,435,920
Bay Area Govt Assn CA Lease Rev West Sacramento, Ser A (Syncora Gtd)		5.000	%		09/01/29		2,735		2,561,218
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(a)		5.000	%		04/01/39		1,250		1,167,150
Bay Area Toll Auth CA Toll Brdg Rev San Francisco Bay Area, Ser F1(a)		5.125	%		04/01/39		1,500		1,427,295
Bonita, CA Uni Sch Dist Election 2004, Ser A (NATL Insd)		5.000	%		08/01/28		1,000		989,650
Brea & Olinda, CA Uni Sch Dist Ctf Partn Rfdg, Ser A (AGM Insd)		5.500	%		08/01/18		1,850		1,893,530
Byron Bethany JT Pwrs Auth CA Lease Rev Admin Bldg Proj, Ser A (CIFG Insd)		4.625	%		10/01/32		515		473,810
California Ed Fac Auth Rev Claremont McKenna College(a)		5.000	%		01/01/38		2,100		1,994,475
California Ed Fac Auth Rev Univ Pacific (NATL Insd)		5.875	%		11/01/20		2,040		2,046,528
California Ed Fac Auth Rev Univ Southn CA, Ser A(a)		5.250	%		10/01/39		1,800		1,818,324
California Hlth Fac Fin Auth Rev Adventist Hlth Sys West, Ser A		5.750	%		09/01/39		500		469,445
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser A		6.000	%		07/01/39		500		500,910
California Hlth Fac Fin Auth Rev Childrens Hosp (AGM Insd)		5.250	%		07/01/38		1,700		1,475,685
California Hlth Fac Fin Auth Rev Providence Hlth & Svcs, Ser C		6.500	%		10/01/38		980		1,060,821
California Hlth Fac Fin Auth Rev Providence Hlth & Svcs, Ser C (Prerefunded @ 10/01/18)		6.500	%		10/01/38		20		25,401
California Hlth Fac Fin Auth Rev Scripps Hlth, Ser A		5.000	%		11/15/36		500		433,200
California Muni Fin Auth Ctf Partn Cmnty Hosp Cent CA		5.250	%		02/01/37		500		390,175
California Muni Fin Auth Rev Eisenhower Med Ctr, Ser A		5.500	%		07/01/30		500		446,485
California Muni Fin Auth Rev Eisenhower Med Ctr, Ser A		5.750	%		07/01/40		500		443,425
California Spl Dist Assn Fin Corp Ctf Partn Spl Dist Fin Pgm, Ser DD (AGM Insd)		5.625	%		01/01/27		1,050		974,788
California St (FGIC Insd)		6.250	%		09/01/12		640		663,034
California St Univ Rev Systemwide, Ser A (AGL Insd)		5.250	%		11/01/38		1,000		915,740
California St Univ Rev Systemwide, Ser A (AGM Insd)		5.000	%		11/01/39		500		439,425
California Statewide Cmnty Dev Auth Rev Amern Baptist Homes West		6.250	%		10/01/39		500		467,950
California Statewide Cmnty Dev Auth Rev FHA Insd Mtg Methodist Hosp Proj (FHA Gtd)		6.750	%		02/01/38		500		541,980
California Statewide Cmnty Dev Auth Rev Sr Living Southn CA Presbyterian Homes		7.250	%		11/15/41		500		521,055
Castaic Lake Wtr Agy CA Ctf Partn Wtr Sys Impt Proj Rfdg, Ser A (NATL Insd)		7.000	%		08/01/12		2,000		2,160,800
Cerritos, CA Cmnty College Dist Election 2004, Ser A (NATL Insd)		5.000	%		08/01/26		100		100,986
Cerritos, CA Cmnty College Dist Election 2004, Ser A (NATL Insd)		5.000	%		08/01/28		125		125,429
Coachella, CA Fin Auth Tax Alloc Rev Redev Proj 1 & 2 Rfdg, Ser A (Syncora Gtd)		5.250	%		12/01/30		1,160		936,364
Desert, CA Cmnty College Dist, Ser C (AGM Insd)		5.000	%		08/01/37		2,500		2,341,825
East Bay, CA Mun Util Dist Wtr Sys Rev, Ser A (AGM Insd)(b)		0.300	%		06/01/25		1,500		1,500,000
El Dorado, CA Irr Dist Ctf Partn, Ser A (AGL Insd)		5.750	%		08/01/39		1,000		1,000,810
El Monte, CA Un High Sch Dist Election Of 2008, Ser A (AGL Insd)		5.500	%		06/01/34		1,000		1,000,240
Fairfield, CA Cmnty Fac Dist Spl Tax No 3 North Cordelia Gen Impt		6.000	%		09/01/32		1,200		1,154,100
Fairfield, CA Ctf Partn Fairfield Wtr, Ser A (NATL Insd)		5.000	%		04/01/42		2,330		1,929,030
Fontana, CA Redev Agy Tax Alloc Dwntwn Redev Proj Rfdg (NATL Insd)		5.000	%		09/01/21		1,480		1,363,272

See accompanying notes which are an integral part of the financial statements.

5        Invesco Van Kampen California Insured Tax Free Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
California–(continued)
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900	%		08/01/17	$	590	$	654,711
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900	%		08/01/18		630		693,989
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900	%		08/01/19		675		737,417
Fresno, CA Uni Sch Dist Rfdg, Ser C (NATL Insd)		5.900	%		08/01/20		720		780,883
Glendora, CA Pub Fin Auth Rev Tax Alloc Proj No 1, Ser A (NATL Insd)		5.000	%		09/01/24		2,425		2,125,803
Golden Vly Uni Sch Dist CA Election 2006, Ser A (AGM Insd)		5.000	%		08/01/41		1,000		879,250
Hanford, CA Jt Un High Sch Dist Election 1998, Ser C (NATL Insd)		5.700	%		08/01/28		2,230		2,337,910
Hawaiian Gardens, CA Redev Agy Proj No 1 Tax Alloc, Ser A (AMBAC Insd)		5.000	%		12/01/25		2,275		1,902,150
Hesperia, CA Pub Fin Auth Rev Redev & Hsg Proj, Ser A (Syncora Gtd)		5.000	%		09/01/31		2,025		1,413,895
Indio, CA Redev Agy Tax Alloc Sub Merged Redev Proj Area, Ser A		5.625	%		08/15/35		250		211,717
Inglewood, CA Redev Agy Tax Alloc Merged Redev Proj Rfdg, Ser A (AMBAC Insd)		5.250	%		05/01/23		2,000		1,753,200
Irvine, CA Pub Fac & Infrastructure Auth Assmt Rev, Ser B (AMBAC Insd)		5.000	%		09/02/23		1,670		1,469,049
Kern Cnty, CA Ctfs Partn Cap Impt Proj, Ser A (AGL Insd)		5.750	%		08/01/35		1,000		1,004,910
La Quinta, CA Fin Auth Loc Agy Rev, Ser A (AMBAC Insd)		5.250	%		09/01/24		2,000		1,797,840
Lodi, CA Wastewater Sys Rev Ctf Partn, Ser A (AGM Insd)		5.000	%		10/01/37		1,000		928,710
Los Angeles, CA Cmnty College Dist 2003 Election, Ser F1(a)		5.000	%		08/01/33		2,000		1,910,500
Los Angeles, CA Dept Wtr & Pwr Wtrwks Rev, Ser C (NATL Insd)		5.000	%		07/01/26		1,000		1,014,140
Los Angeles, CA Dept Wtr & Pwr Wtrwks Rev Sys Sub, Ser A-1 (AMBAC Insd)		5.000	%		07/01/37		1,000		952,890
Los Angeles, CA Dept Wtr & Pwr Wtrwks Rev Sys Sub, Ser A-2 (AMBAC Insd)		5.000	%		07/01/44		1,000		934,790
Los Angeles, CA Mtg Rev FHA Sec 8 Asstd Proj Rfdg, Ser A (NATL Insd)		6.100	%		07/01/25		535		535,407
Los Angeles, CA Uni Sch Dist Election 2004, Ser H (AGM Insd)		5.000	%		07/01/32		1,000		955,190
Los Angeles Cnty, CA Ctf Partn Disney Pkg Proj Rfdg (AMBAC Insd)		4.750	%		03/01/23		1,000		844,530
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		995,050
Los Angeles Cnty, CA Sch Regionalized Business Svcs Ctf Cap Apprec Pooled Fin, Ser A (AMBAC Insd)		*			08/01/24		1,265		463,243
Metropolitan Wtr Dist Southn CA Wtrwks Rev, Ser A (AGM Insd)		5.000	%		07/01/35		1,520		1,516,702
Monrovia, CA Fin Auth Lease Rev Hillside Wilderness Preserve (AMBAC Insd)		5.000	%		12/01/20		1,105		1,110,282
Montclair, CA Redev Agy Tax Allocation Redev Proj No V Rfdg (NATL Insd)		5.000	%		10/01/20		2,000		1,797,300
Montebello Calif Uni Sch Dist Election Of 2004, Ser A-1 (AGL Insd)		5.250	%		08/01/34		1,000		967,920
Morongo Band of Mission Indians CA Enterprise Rev Indians Enterprise Casino, Ser B(c)		6.500	%		03/01/28		1,000		929,780
Mountain View, CA Shoreline Regl Pk Cmnty Tax Alloc, Ser A (NATL Insd)		5.250	%		08/01/16		1,570		1,578,698
Norco, CA Fin Auth Enterprise Rev Rfdg (AGM Insd)		5.625	%		10/01/34		1,000		997,410
Oceanside, CA Ctf Partn Rfdg, Ser A (AMBAC Insd)		5.200	%		04/01/23		1,300		1,278,719
Pacifica, CA Wastewtr Rev Rfdg (AMBAC Insd)		5.000	%		10/01/25		1,145		982,387
Palm Springs, CA Fin Auth Lease Rev Convention Ctr Proj Rfdg, Ser A (NATL Insd)		5.250	%		11/01/19		1,340		1,381,125
Palomar Pomerado Hlthcare Dist CA Ctf Partn		6.750	%		11/01/39		500		475,740
Panama-Buena Vista Uni Sch Dist CA Ctf Partn Sch Constr Proj (NATL Insd)		5.000	%		09/01/30		1,045		961,431
Paramount, CA Uni Sch Dist Election 2006 (AGM Insd)		5.250	%		08/01/30		1,600		1,557,264
Pittsburg, CA Uni Sch Dist Election 2006, Ser B (AGM Insd)		5.500	%		08/01/31		1,000		1,028,760
Pomona, CA Pub Fin Auth Rev Merged Redev Proj, Ser AD (NATL Insd)		5.000	%		02/01/15		2,020		2,021,737
Pomona, CA Pub Fin Auth Rev Merged Redev Proj, Ser AD (NATL Insd)		5.000	%		02/01/16		1,110		1,110,599
Pomona, CA Pub Fin Auth Rev Sub Merged Redev Proj		5.125	%		02/01/33		1,000		782,370
Port Hueneme, CA Ctf Partn Cap Impt Pgm Rfdg (NATL Insd)		6.000	%		04/01/19		1,360		1,416,930
Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho Redev Hsg Set Aside, Ser A (NATL Insd)		5.000	%		09/01/34		1,000		748,150
Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho Redev Proj (NATL Insd)		5.375	%		09/01/25		3,000		2,641,020

See accompanying notes which are an integral part of the financial statements.

6        Invesco Van Kampen California Insured Tax Free Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
California–(continued)
Rancho Mirage, CA Jt Pwr Fin Auth Ctf Partn Eisenhower Med Rmkt, Ser B (NATL Insd)		4.875	%		07/01/22	$	1,000	$	947,200
Redding, CA Redev Agy Tax Alloc Canby Hilltop Cypress Redev, Ser A (NATL Insd)		5.000	%		09/01/23		1,400		1,288,378
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)		5.000	%		10/01/28		500		497,405
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)		5.000	%		10/01/38		1,800		1,650,546
Riverside, CA Wtr Rev, Ser B (AGM Insd)		5.000	%		10/01/33		1,000		982,110
Riverside Cnty, CA Transn Commn Sales Tax Rev Ltd Tax, Ser A		5.000	%		06/01/32		500		477,645
Rohnert Pk, CA Cmnty Dev Commn Tax Alloc Rev Hsg Redev Proj, Ser H (NATL Insd)		4.375	%		08/01/30		6,375		4,762,444
Sacramento Cnty, CA Arpt Sys Rev Sr, Ser A (AGM Insd)		5.000	%		07/01/32		1,000		916,610
Sacramento Cnty, CA Arpt Sys Rev Sr, Ser A (AGM Insd)		5.000	%		07/01/41		1,015		874,027
Sacramento Cnty, CA San Dist Fin Auth Rev Sacramento Regl Cnty San (NATL Insd)		5.000	%		12/01/29		2,000		2,027,580
San Diego, CA Cmnty College Dist Election 2002(a)		5.250	%		08/01/33		1,500		1,506,420
San Diego, CA Pub Fac Fin Auth Rev Pooled Fin Southcrest, Ser B (Radian Insd)		5.250	%		10/01/27		2,535		2,214,855
San Francisco, CA City & Cnty Arpt Commn Intl Arpt, Ser E		6.000	%		05/01/39		1,000		1,038,160
San Jose Evergreen CA Cmnty College Dist Election 2004, Ser B (AGM Insd)		*			09/01/31		3,110		786,239
San Leandro, CA Ctf Partn Jt Proj Area Fin (NATL Insd)		5.100	%		12/01/26		1,000		958,280
Shafter, CA Cmnty Dev Agy Tax Alloc Rev Cmnty Dev Proj Area No 1 Rfdg, Ser A (AGM Insd)(d)		5.000	%		11/01/36		1,460		1,288,406
Sierra View Loc Hlthcare Dist CA Rev		5.250	%		07/01/32		500		448,615
South Gate, CA Pub Fin Auth Tax Alloc Rev South Gate Redev Proj No 1 (Syncora Gtd)		5.750	%		09/01/22		1,000		964,300
Southern CA Logistics Arpt Auth Southn CA Logistics Arpt		5.375	%		12/01/22		2,365		1,881,097
Southern CA Logistics Arpt Auth Southn CA Logistics Arpt		6.100	%		12/01/37		1,250		887,450
Southern CA Pub Pwr Auth Transmission Proj Rev Ref Southern Transmiss, Ser A (AGM Insd)(b)		0.330	%		07/01/21		700		700,000
Temecula, CA Redev Agy Tax Alloc Rev Temecula Redev Proj No 1 (NATL Insd)		5.125	%		08/01/27		2,150		1,828,984
Tobacco Sec Auth Northn CA Tob Settlement Rev Asset Bkd Bd, Ser A-1		5.375	%		06/01/38		1,000		682,980
Tobacco Sec Auth Southn CA Tob Settlement Sr, Ser A-1		5.125	%		06/01/46		2,000		1,217,620
Turlock, CA Pub Fin Auth Tax Alloc Rev (AGM Insd)		5.000	%		09/01/36		2,500		1,940,375
Twin Rivers, CA Uni Sch Dist Ctfs Partn Sch Fac Brdg Pgm (AGM Insd)(e)		3.500	%		06/01/41		1,000		1,000,030
University CA Regt Med Ctr Pooled Rev, Ser A (BHAC Insd)		4.500	%		05/15/47		2,555		2,120,906
University CA Rev, Ser O(a)		5.750	%		05/15/23		705		795,014
University CA Rev, Ser O(a)		5.750	%		05/15/25		1,050		1,166,151
Val Verde, CA Uni Sch Dist Ctf Partn Ref, Ser A (AGL Insd)		5.125	%		03/01/36		1,475		1,351,823
Walnut, CA Enegry Ctr Auth Rev Rfdg, Ser A		5.000	%		01/01/35		1,000		899,830
Washington, CA Uni Sch Dist Yolo Cnty Ctf Partn New High Sch Proj (AMBAC Insd)		5.125	%		08/01/37		1,170		1,048,028
West Contra Costa, CA Uni Sch Dist Cabs (NATL Insd)		*			08/01/25		2,500		966,450
Westn Riverside Cnty, CA Wtr & Wastewater Fin Auth Wastern Muni Wtr Dist Impt (AGL Insd)		5.625	%		09/01/39		1,000		995,030
Yosemite, CA Cmnty College Dist Cap Apprec (AGM Insd)		*			08/01/25		3,000		1,195,681
TOTAL INVESTMENTS(f)–104.9% (Cost $153,653,885)									141,972,213
FLOATING RATE NOTE OBLIGATIONS(g)–(5.7%)
Notes with interest rates ranging from 0.25% to 0.31% at 03/31/11 and contractual maturities of collateral ranging from 05/15/23 to 10/01/39 (See Note 1K)									(7,690,000	)
OTHER ASSETS IN EXCESS OF LIABILITIES–0.8%									1,136,843
NET ASSETS–100.0%								$	135,419,056

See accompanying notes which are an integral part of the financial statements.

7        Invesco Van Kampen California Insured Tax Free Fund

Investments Abbreviations:

AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– American Municipal Bond Assurance 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 Dealer Trusts entered into by the Trust. See Note 1K.
(b)	Demand security payable upon demand by the Fund at a specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on March 31, 2011.
(c)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at March 31, 2011 was $929,780, which represented 0.69% of the Fund’s Net Assets.
(d)	Security has been deemed illiquid.
(e)	Interest and dividend rate is redetermined periodically. Rate shown is the rate in effect on March 31, 2011.
(f)	This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations.

Entities	Percentage
National Public Finance Guarantee Corp.		31.01	%
Assured Guaranty Municipal Corp.		22.44
American Municipal Bond Assurance Corp.**		13.61
Assured Guaranty Ltd.		5.10

(g)	Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at March 31, 2011. At March 31, 2011, the Fund’s investments with a value of $11,785,329 are held by the Dealer Trusts and serve as collateral for the $7,690,000 in the floating rate note obligations outstanding at that date.
**	AMBAC filed for bankruptcy on November 8, 2010.

Top Five Fixed Income Holdings

Rohnert Pk, CA Cmnty Dev Commn Tax Alloc Rev Hsg Redev Proj	3.4	%
Rancho Cucamonga, CA Redev Agy Tax Alloc Rancho Redev Proj	1.9
Bay Area Govt Assn CA Lease Rev West Sacramento	1.8
Apple Valley, CA Pub Fin Auth Lease Rev Town Hall Annex Proj	1.7
Desert, CA Cmnty College Dist	1.6

See accompanying notes which are an integral part of the financial statements.

8        Invesco Van Kampen California Insured Tax Free Fund

Statement of Assets and Liabilities

March 31, 2011

(Unaudited)

Assets:
Investments, at value (Cost $153,653,885)	$	141,972,213
Receivables:
Interest		1,927,611
Investment sold		493,793
Fund shares sold		210,688
Investment for trustee deferred compensation and retirement plans		1,147
Total assets		144,605,452
Liabilities:
Floating rate note obligations		7,690,000
Payables:
Custodian bank		1,044,898
Fund shares repurchased		166,092
Income distributions		114,701
Accrued other operating expenses		111,953
Accrued fees to affiliates		55,811
Trustees’ deferred compensation and retirement plans		2,941
Total liabilities		9,186,396
Net assets applicable to shares outstanding	$	135,419,056
Net assets consist of:
Shares of beneficial interest	$	160,851,816
Undistributed net investment income		429,392
Unrealized appreciation (depreciation)		(11,681,672	)
Undistributed net realized gain (loss)		(14,180,480	)
	$	135,419,056
Net Assets:
Class A	$	122,640,971
Class B	$	3,739,769
Class C	$	7,837,254
Class Y	$	1,201,062
Share outstanding, $0.001 per value per share, unlimited number of shares authorized:
Class A		8,038,508
Class B		240,645
Class C		513,356
Class Y		78,803
Class A:
Net asset value per share	$	15.26
Maximum offering price per share (Net asset value of $15.26 divided by 95.25%)	$	16.02
Class B:
Net asset value and offering price per share	$	15.54
Class C:
Net asset value and offering price per share	$	15.27
Class Y:
Net asset value and offering price per share	$	15.24

See accompanying notes which are an integral part of the financial statements.

9        Invesco Van Kampen California Insured Tax Free Fund

Statement of Operations

For the six months ended March 31, 2011

(Unaudited)

Investment income:
Interest	$	4,288,998
Expenses:
Advisory fee		369,094
Distribution fees:
Class A		172,645
Class B		6,509
Class C		39,171
Report to shareholders		44,532
Transfer agent fees		42,817
Interest, facilities and maintenance fees		36,240
Trustees’ and officers’ fees and benefits		2,646
Administrative services fees		24,932
Custodian fees		10,510
Other		14,781
Total expenses		763,877
Net investment income		3,525,121
Realized and unrealized gain (loss):
Net realized gain (loss)		(960,709	)
Unrealized appreciation (depreciation):
Beginning of the period		4,686,984
End of the period		(11,681,672	)
Net unrealized appreciation (depreciation) during the period		(16,368,656	)
Net realized and unrealized gain (loss)		(17,329,365	)
Net increase (decrease) in net assets from operations	$	(13,804,244	)

See accompanying notes which are an integral part of the financial statements.

10        Invesco Van Kampen California Insured Tax Free Fund

Statements of Changes in Net Assets

For the six months ended March 31, 2011 and the year ended September 30, 2010

(Unaudited)

	March 31,			September 30,
	2011			2010
Operations:
Net investment income	$	3,525,121		$	7,811,534
Net realized gain (loss)		(960,709	)		(1,098,943	)
Net unrealized appreciation (depreciation) during the period		(16,368,656	)		1,114,314
Net increase (decrease) in net assets resulting from operations		(13,804,244	)		7,826,905
Distributions to shareholders from net investment income:
Class A		(3,213,231	)		(7,233,300	)
Class B		(115,259	)		(284,719	)
Class C		(165,273	)		(353,842	)
Class Y		(24,209	)		(15,430	)
Total distributions from net investment income		(3,517,972	)		(7,887,291	)
Net increase (decrease) in net assets from investment activities		(17,322,216	)		(60,386	)
From capital transactions:
Proceeds from shares sold		4,560,845			14,385,854
Net asset value of shares issued through dividend reinvestment		2,780,280			6,357,503
Cost of shares repurchased		(29,094,525	)		(36,904,766	)
Net increase (decrease) in net assets from capital transactions		(21,753,400	)		(16,161,409	)
Total increase (decrease) in net assets		(39,075,616	)		(16,221,795	)
Net assets:
Beginning of the period		174,494,672			190,716,467
End of the period (including undistributed net investment income of $429,392 and $422,243, respectively)	$	135,419,056		$	174,494,672

Notes to Financial Statements

March 31, 2011

(Unaudited)

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) (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 Fee 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”)

  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 C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert. 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. 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. Redemption of Class B shares prior to conversion date will be subject to a CDSC.

11        Invesco Van Kampen California Insured Tax Free Fund

  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 net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized 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.
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

12        Invesco Van Kampen California Insured Tax Free 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.	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.
J.	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.
K.	Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Fund. 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. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance 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 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 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.
	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.
	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 as a component of Interest, facilities and maintenance fees on the Statement of Operations.
	The Fund generally invests in inverse floating rate securities that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of 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 securities. 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.
M.	Interest, Facilities and Maintenance Fees — Interest, Facilities and Maintenance Fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate note obligations, if any.

13        Invesco Van Kampen California Insured Tax Free 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:

Average Net Assets	Rate
First $100 million		0	.50%
Next $150 million		0	.45%
Next $250 million		0	.425%
Over $500 million		0	.40%

  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).

  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 after fee waiver and/or expense reimbursement (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 after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (2) taxes; (3) dividend expense on short sales; (4) extraordinary 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. For the six months ended March 31, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.

  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. For the six months ended March 31, 2011, the expenses incurred under the agreement 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.

  For the six months ended March 31, 2011, 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. During the six months ended March 31, 2011, IDI advised the Fund that IDI retained $4,710 in front-end sales commissions from the sale of Class A shares and $936, $5,459 and $275 from Class A, Class B and Class C shares, respectively, 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.

14        Invesco Van Kampen California Insured Tax Free Fund

  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 March 31, 2011. 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 six months ended March 31, 2011, there were no significant transfers between levels.

	Level 1		Level 2		Level 3		Total
Municipal Obligations	$	—	$	141,972,213	$	—	$	141,972,213

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.

  During the six months ended March 31, 2011, the Fund paid legal fees of $691 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 5—Cash Balances and Borrowings

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company (“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.

  Inverse floating rate note obligations resulting from the transfer of bonds to Dealer Trusts are accounted for as secured borrowings. The average floating rate notes outstanding and average annual interest and fees related to inverse floating rate note obligations during the six months ended March 31, 2011 were $8,892,143 and 0.82%, respectively.

NOTE 6—Tax Information

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.

  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 had 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.

15        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 six months ended March 31, 2011 was $3,196,247 and $27,070,601 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	$	1,234,067
Aggregate unrealized (depreciation) of investment securities		(12,799,158	)
Net unrealized appreciation (depreciation) of investment securities	$	(11,565,091	)
Cost of investments for tax purposes is $153,537,304.

NOTE 8—Share Information

	Summary of Share Activity
	Six months ended						Year ended
	March 31, 2011(a)						September 30, 2010
	Shares			Value			Shares			Value
Sales:
Class A		181,997	(b)	$	2,908,451	(b)		694,475	(c)	$	11,505,316	(c)
Class B		6,563			112,359			43,931			738,443
Class C		40,572			657,724			104,789			1,739,987
Class Y		54,484			882,311			23,997			402,108
Total Sales		283,616		$	4,560,845			867,192		$	14,385,854
Dividend Reinvestment:
Class A		161,215		$	2,562,136			354,583		$	5,883,700
Class B		5,299			85,738			12,663			213,475
Class C		7,275			115,564			15,384			255,349
Class Y		1,074			16,842			297			4,979
Total Dividend Reinvestment		174,863		$	2,780,280			382,927		$	6,357,503
Repurchases:
Class A		(1,626,485	)	$	(25,758,366	)		(1,819,602	)	$	(30,232,589	)
Class B		(126,713	)(b)		(2,024,301	)(b)		(182,921	)(c)		(3,089,972	)(c)
Class C		(71,429	)		(1,146,835	)		(204,611	)		(3,391,151	)
Class Y		(10,577	)		(165,023	)		(11,555	)		(191,054	)
Total Repurchases		(1,835,204	)	$	(29,094,525	)		(2,218,689	)	$	(36,904,766	)

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 52% 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 55,035 Class B shares into 55,981 Class A shares at a value of $882,954.
(c)	Includes automatic conversion of 87,449 Class B shares into 88,954 Class A shares at a value of $1,483,855.

NOTE 9—Subsequent Event

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”).

  The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in June 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.

  In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.

16        Invesco Van Kampen California Insured Tax Free Fund

NOTE 10—Financial Highlights

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

	Class A Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.02		$	16.99		$	15.92		$	17.83		$	18.57		$	18.80
Net investment income(a)		0.37			0.73			0.72			0.77			0.72			0.71
Net realized and unrealized gain (loss)		(1.76	)		0.04			1.09			(1.94	)		(0.68	)		0.03
Total from investment operations		(1.39	)		0.77			1.81			(1.17	)		0.04			0.74
Less:
Distributions from net investment income		0.37			0.74			0.74			0.74			0.71			0.73
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.07			0.24
Total distributions		0.37			0.74			0.74			0.74			0.78			0.97
Net asset value, end of the period	$	15.26		$	17.02		$	16.99		$	15.92		$	17.83		$	18.57
Total return		(8.23	)%(b)		4.72	%(b)		11.86	%(c)		(6.81	)%(c)		0.15	%(c)		4.14	%(c)
Net assets at end of the period (000’s omitted)	$	122,641		$	158,625		$	171,467		$	172,117		$	194,232		$	190,008
Portfolio turnover(e)		2	%		9	%		30	%		34	%		37	%		31	%
Ratios/supplemental data based on average net assets:
Without fee waivers and/or expense reimbursements		0.96	%(d)		0.97	%		0.96	%		1.29	%		1.16	%		0.91	%
Without fee waivers and/or expense reimbursement excluding interest, facilities and maintenance fees(f)		0.91	%(d)		0.92	%		0.95	%		0.90	%		0.93	%		0.91	%
Ratio of net investment income		4.65	%(d)		4.41	%		4.61	%		4.41	%		3.91	%		3.86	%

(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 $138,770.
(e)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(f)	For the years ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.

17        Invesco Van Kampen California Insured Tax Free Fund

NOTE 10—Financial Highlights—(continued)

	Class B Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.31		$	17.29		$	16.19		$	18.12		$	18.86		$	19.07
Net investment income(a)		0.37			0.68			0.73			0.78			0.73			0.77
Net realized and unrealized gain (loss)		(1.78	)		0.03			1.10			(1.97	)		(0.69	)		0.02
Total from investment operations		(1.41	)		0.71			1.83			(1.19	)		0.04			0.79
Less:
Distributions from net investment income		0.36			0.69			0.73			0.74			0.71			0.76
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.07			0.24
Total distributions		0.36			0.69			0.73			0.74			0.78			1.00
Net asset value, end of the period	$	15.54		$	17.31		$	17.29		$	16.19		$	18.12		$	18.86
Total return		(8.21	)%(b)(i)		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 (000’s omitted)	$	3,740		$	6,153		$	8,330		$	11,174		$	17,199		$	25,262
Portfolio turnover(f)		2	%		9	%		30	%		34	%		37	%		31	%
Ratios/supplemental data based on average net assets:
Without fee waivers and/or expense reimbursements		0.96	%(g)(i)		1.37	%(d)		1.00	%(e)		1.30	%(e)		1.17	%(e)		0.69	%(e)
Without fee waivers and/or expense reimbursement excluding interest, facilities and maintenance fees(h)		0.91	%(g)(i)		1.32	%(d)		0.99	%(e)		0.90	%(e)		0.93	%(e)		0.69	%(e)
Ratio of net investment income		4.64	%(g)(i)		4.00	%(d)		4.57	%(e)		4.38	%(e)		3.90	%(e)		4.08	%(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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(g)	Ratios are annualized and based on average daily net assets (000’s omitted) of $5,222.
(h)	For the years ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.
(i)	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 0.25%.

18        Invesco Van Kampen California Insured Tax Free Fund

NOTE 10—Financial Highlights—(continued)

	Class C Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.03		$	17.00		$	15.94		$	17.84		$	18.58		$	18.81
Net investment income(a)		0.32			0.61			0.60			0.66			0.58			0.57
Net realized and unrealized gain (loss)		(1.77	)		0.04			1.08			(1.95	)		(0.68	)		0.03
Total from investment operations		(1.45	)		0.65			1.68			(1.29	)		(0.10	)		0.60
Less:
Distributions from net investment income		0.31			0.62			0.62			0.61			0.57			0.59
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.07			0.24
Total distributions		0.31			0.62			0.62			0.61			0.64			0.83
Net asset value, end of the period	$	15.27		$	17.03		$	17.00		$	15.94		$	17.84		$	18.58
Total return		(8.54	)%(b)(i)		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 (000’s omitted)	$	7,837		$	9,142		$	10,562		$	10,572		$	10,658		$	9,944
Portfolio turnover(f)		2	%		9	%		30	%		34	%		37	%		31	%
Ratios/supplemental data based on average net assets:
Without fee waivers and/or expense reimbursements		1.65	%(g)(i)		1.69	%(d)		1.76	%		1.90	%(e)		1.88	%(e)		1.66	%
Without fee waivers and/or expense reimbursement excluding interest, facilities and maintenance fees(h)		1.60	%(g)(i)		1.64	%(d)		1.75	%		1.51	%(e)		1.65	%(e)		1.66	%
Ratio of net investment income		3.96	%(g)(i)		3.69	%(d)		3.81	%		3.82	%(e)		3.19	%(e)		3.11	%

(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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(g)	Ratios are annualized and based on average daily net assets (000’s omitted) of $8,405.
(h)	For the years ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.
(i)	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 0.94%.

19        Invesco Van Kampen California Insured Tax Free Fund

NOTE 10—Financial Highlights—(continued)

	Class Y Sharesˆ
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	17.00		$	16.98		$	15.91		$	17.82		$	18.57		$	18.80
Net investment income(a)		0.39			0.76			0.76			0.81			0.76			0.74
Net realized and unrealized gain (loss)		(1.76	)		0.04			1.09			(1.94	)		(0.69	)		0.05
Total from investment operations		(1.37	)		0.80			1.85			(1.13	)		0.07			0.79
Less:
Distributions from net investment income		0.39			0.78			0.78			0.78			0.75			0.78
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.07			0.24
Total distributions		0.39			0.78			0.78			0.78			0.82			1.02
Net asset value, end of the period	$	15.24		$	17.00		$	16.98		$	15.91		$	17.82		$	18.57
Total return		(8.13	)%(b)		4.93	%(b)		12.14	%(c)		(6.57	)%(c)		0.35	%(c)		4.40	%(c)
Net assets at end of the period (000’s omitted)	$	1,201		$	575		$	358		$	3,371		$	3,862		$	3,892
Portfolio turnover(d)		2	%		9	%		30	%		34	%		37	%		31	%
Ratios/supplemental data based on average net assets:
Without fee waivers and/or expense reimbursements		0.71	%(e)		0.72	%		0.70	%		1.04	%		0.91	%		0.66	%
Without fee waivers and/or expense reimbursement excluding interest, facilities and maintenance fees(f)		0.66	%(e)		0.67	%		0.68	%		0.65	%		0.68	%		0.66	%
Ratio of net investment income		4.96	%(e)		4.59	%		4.82	%		4.65	%		4.16	%		4.11	%

(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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $984.
(f)	For the years ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.
ˆ	On June 1, 2010 the Fund’s former Class I Shares were reorganized into Class Y shares.

20        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. 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 October 1, 2010, through March 31, 2011. 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 March 31, 2011.

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 March 31, 2011 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	(10/01/10)		(03/31/11)1		Period2		(03/31/11)		Period2		Ratio
A	$	1,000.00	$	917.70	$	4.59	$	1,020.14	$	4.84		0.96	%
B		1,000.00		916.70		4.59		1,020.14		4.84		0.96
C		1,000.00		914.60		7.88		1,016.70		8.30		1.65
Y		1,000.00		918.70		3.40		1,021.39		3.58		0.71

1	The actual ending account value is based on the actual total return of the Fund for the period October 1, 2010 through March 31, 2011, 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 182/365 to reflect the most recent fiscal half year.

21        Invesco Van Kampen California Insured Tax Free Fund

Invesco mailing information

Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.

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 available at invesco.com/proxysearch.

In addition, this information is 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-SAR-1 Invesco Distributors, Inc.

Invesco Van Kampen Insured Tax Free Income Fund

Semiannual Report to Shareholders  § March 31, 2011

Nasdaq:
A: VKMTX § B: VMTBX § C: VMTCX § Y: VMTIX

2	Fund Performance
4	Letters to Shareholders
5	Schedule of Investments
14	Financial Statements
17	Financial Highlights
21	Notes to Financial Statements
27	Fund Expenses

For the most current month-end Fund performance and commentary, please visit invesco.com/performance.

Unless otherwise noted, all data provided by Invesco.

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 Performance

Performance summary

Fund vs. Indexes

Cumulative total returns, 9/30/10 to 3/31/11, 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	-5.19	%
Class B Shares	-5.50
Class C Shares	-5.57
Class Y Shares	-5.01
Barclays Capital Municipal Bond Index▼ (Broad Market/Style-Specific Index)	-3.68

^▼ Lipper Inc.

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

     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).

     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.

2 Invesco Van Kampen Insured Tax Free Income Fund

Average Annual Total Returns

As of 3/31/11, including maximum applicable sales charges

										After Taxes
							After Taxes			on Distributions
				Before			on			and Sale of
				Taxes			Distributions			Fund Shares
Class A Shares
Inception (12/14/84)					6.11	%		5.97	%		6.04	%
10		Years			2.46			2.27			2.63
	5	Years			0.06			0.05			0.68
	1	Year			-4.47			-4.48			-1.43
Class			B Shares
Incept			ion (5/3/93)		3.67	%		3.53	%		3.70	%
10		Years			2.33			2.15			2.46
	5	Years			-0.05			-0.07			0.49
	1	Year			-5.24			-5.24			-2.13
Class C Shares
Inception (8/13/93)					3.11	%		2.96	%		3.15	%
10		Years			2.17			1.99			2.30
	5	Years			0.28			0.27			0.77
	1	Year			-1.40			-1.41			0.37
Class Y Shares
Inception (8/12/05)					1.46	%		1.38	%		1.89	%
	5	Years			1.29			1.28			1.77
	1	Year			0.57			0.56			2.01

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. Before tax performance figures do not reflect deduction of taxes a shareholder would pay on Fund distributions or sale

of Fund shares. 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 0.96%, 1.71%, 1.71% and 0.71%, 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.

3 Invesco Van Kampen Insured Tax Free Income Fund

Letters to Shareholders

Bruce Crockett

Dear Fellow Shareholders:

With 2010 behind us, now is a good time to review our portfolios and ensure that we are adhering to a long-term, diversified investment strategy, which I’ve mentioned in previous letters. The year was notable for a number of reasons, but I’m sure most of us are grateful for a return to more stable markets and growing signs that the worst of the economic crisis is behind us.

     Your Board continued to oversee the Invesco Funds with a strong sense of responsibility for your savings and a deep appreciation for your continued trust. As always, we worked throughout 2010 to manage costs and ensure Invesco continued to place investor interests first.

     I’m pleased to report that the latest report from Morningstar affirmed the work we’ve done and included a number of positive comments regarding your Board’s oversight of the Invesco Funds.

As background, Morningstar is a leading independent provider of investment research in North America, Europe, Australia and Asia. Morningstar stated, “A fund board’s duty is to represent the interests of fund shareholders, ensuring that the funds that it oversees charge reasonable fees and are run by capable advisors with a sound investment process.”

     Morningstar maintained your Fund Board’s “A” grade for Board Quality, praising the Board for taking “meaningful steps in recent years to act in fund shareholders’ interests.”¹ These steps included becoming much more proactive and vocal in overseeing how Invesco votes the funds’ shareholders’ proxies and requiring each fund trustee to invest more than one year’s board compensation in Invesco funds, further aligning our interests with those of our shareholders. Morningstar also cited the work I’ve done to make myself more available to fund shareholders via email.

     I am also pleased that Morningstar recognized the effort and the Fund Board’s efforts over the past several years to work together with management at Invesco to enhance performance and sharpen the focus on investors.

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

Sincerely,

Bruce L. Crockett
Independent Chair
Invesco Funds Board of Trustees

1 Among the criteria Morningstar considers when evaluating a fund board are the degree to which the board is independent of the fund company; board members’ financial interests are aligned with those of fund shareholders; the board acts in fund shareholders’ interests; and the board works constructively with company management and investment personnel. Morningstar first awarded an “A” rating to the Invesco Funds board on September 13, 2007; that rating has been maintained in subsequent reports, the most recent of which was released December 17, 2010. Ratings are subject to change, usually every 12 to 24 months. Morningstar ratings range from “A” to “F.”

Philip Taylor

Dear Shareholders:

Enclosed is important information about your Fund and its performance. At Invesco, investment excellence is our goal across our product line. Let me explain what that means. All of our funds are managed by specialized teams of investment professionals. Each team has a discrete investment perspective and philosophy, and all follow disciplined, repeatable processes governed by strong risk oversight. Our investment-centric culture provides an environment that seeks to reduce distractions, allowing our fund managers to concentrate on what they do best – manage your money.

     The importance of a broad product line and investment management expertise is obvious given the markets we’ve experienced over the last two to three years. We’ve seen that investment strategies can outperform or underperform their benchmark indexes for a variety of reasons, including where we are in the market cycle, and whether prevailing economic conditions are favorable or unfavorable for that strategy. That’s why no investment strategy can guarantee top-tier performance at all times. What investors can expect, and what Invesco offers, are funds that are managed according to their stated investment objectives and strategies, with robust risk oversight using consistent, repeatable investment processes that don’t change as short-term external conditions change – investments managed for the long term. This disciplined approach can’t guarantee a profit; no investment can do that, since all involve some measure of risk. But it can ensure that your money is managed the way we said it would be.

     This adherence to stated investment objectives and strategies allows your financial advisor to build a diversified portfolio that meets your individual risk tolerance and financial goals.

     If you have questions about your account, please contact one of our client service representatives at 800 959 4246. If you have a general Invesco-related question or comment for me, I invite you to email me directly at phil@invesco.com. All of us at Invesco look forward to serving your investment management needs for many years to come. Thank you for investing with us.

Sincerely,

Philip Taylor
Senior Managing Director
Invesco Ltd.

4 Invesco Van Kampen Insured Tax Free Income Fund

Schedule of Investments

March 31, 2011

(Unaudited)

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Municipal Bonds–104.4%
Alabama–0.9%
Birmingham, AL Wtrwks & Swr Brd Rev, Ser A (NATL Insd)		5.000	%		01/01/21	$	1,095	$	1,117,798
Houston Cnty, AL Hlthcare Auth, Ser A (AMBAC Insd)		5.250	%		10/01/30		3,670		3,188,863
Selma, AL Indl Dev Brd Rev Gulf Opportunity Zone Intl Paper Co Proj, Ser A		6.250	%		11/01/33		2,300		2,355,016
									6,661,677
Alaska–2.1%
Alaska St Intl Arpt Rev Rfdg, Ser B (NATL Insd)		5.000	%		10/01/24		6,525		6,675,989
Alaska St Intl Arpt Rev Rfdg, Ser D (NATL Insd)		5.000	%		10/01/24		9,570		9,791,450
									16,467,439
Arizona–1.6%
Arizona Hlth Fac Auth Rev Banner Hlth, Ser D (BHAC Insd)		5.500	%		01/01/38		5,000		5,003,700
Arizona St Univ Ctf Partn Resh Infrastructure Proj (AMBAC Insd)		5.250	%		09/01/24		885		907,258
Goodyear, AZ McDowell Rd Coml Corridor Impt Dist (AMBAC Insd)		5.250	%		01/01/32		1,665		1,546,635
Salt River Proj AZ Agric Impt & Pwr Dist Elec Sys Rev, Ser A(a)		5.000	%		01/01/25		3,000		3,170,400
Salt River Proj AZ Agric Impt & Pwr Dist Elec Sys Rev, Ser A(a)		5.000	%		01/01/28		2,000		2,081,280
									12,709,273
California–18.3%
Bay Area Govt Assn CA Rev Tax Alloc CA Redev Pool, Ser A (Syncora Gtd)		5.250	%		09/01/35		3,780		2,721,978
Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC Insd)		5.000	%		10/01/30		2,205		1,625,019
California Hlth Fac Fin Auth Rev Catholic Hlthcare West, Ser A		6.000	%		07/01/39		3,000		3,005,460
California Hlth Fac Fin Auth Rev Sutter Hlth, Ser A (NATL Insd)		5.350	%		08/15/28		1,630		1,565,762
California Hsg Fin Agy Rev Home Mtg, Ser G (AMT)		5.050	%		02/01/29		8,810		8,220,082
California Hsg Fin Agy Rev Home Mtg, Ser K (AMT)		5.300	%		08/01/23		3,500		3,326,330
California Hsg Fin Agy Rev Home Mtg, Ser K (AMT)		5.450	%		08/01/28		4,000		3,605,120
California St Dept Vet Affairs Home Pur Rev, Ser A (AMT)(a)		4.950	%		12/01/37		9,585		7,822,606
California St Dept Vet Affairs Home Pur Rev, Ser B (AMT)		5.150	%		12/01/27		4,250		3,959,172
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin, Ser 2004A (AGM Insd)		5.000	%		10/01/29		1,095		1,033,154
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev Pooled Fin, Ser 2004A (AGM Insd)		5.250	%		10/01/24		3,920		4,007,612
California Stwide Cmnty Dev Auth Wtr & Wastewtr Rev, Ser D (AGM Insd)		5.000	%		10/01/26		4,615		4,484,119
Capistrano, CA Uni Sch Dist (NATL Insd)		5.000	%		09/01/25		5,000		4,535,250
Desert Hot Springs, CA Redev Agy Tax Alloc Merged Redev Proj, Ser A-2		5.250	%		09/01/28		2,000		1,574,460
Earlimart, CA Elem Sch Dist, Ser 1 (AMBAC Insd)		6.700	%		08/01/21		425		493,570
Golden St Tob Sec Corp CA Tob Settlement Rev, Ser A-1		5.750	%		06/01/47		1,010		674,579
Golden West Sch Fin Auth CA Rev Rfdg, Ser A (NATL Insd)		5.750	%		08/01/19		265		289,560
Hawthorne, CA Cmnty Redev Agy Tax Alloc Proj Area No 2 (Syncora Gtd)		5.250	%		09/01/36		7,000		5,613,580
Loma Linda, CA Redev Agy Tax Alloc, Ser A (Syncora Gtd)		5.250	%		07/01/30		3,360		2,883,989
Los Angeles Cnty, CA Met Trans Auth Sales Tax Rev Prop A First Tier, Ser A (AMBAC Insd)		5.000	%		07/01/35		2,000		1,990,100
Merced, CA Irr Dist Rev Ctf Partn Elec Sys Proj (Syncora Gtd)		5.250	%		09/01/36		10,000		7,598,400
Metropolitan Wtr Dist Southn CA Wtrwks Rev, Ser A (AGM Insd)		5.000	%		07/01/35		2,000		1,995,660
Paramount, CA Uni Sch Dist Election 2006 (AGM Insd)		5.250	%		08/01/30		1,000		973,290

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

5        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
California–(continued)
Pittsburg, CA Uni Sch Dist Election 2006, Ser B (AGM Insd)		5.500	%		08/01/31	$	2,420	$	2,489,599
Port Oakland, CA Rfdg Inter Lien, Ser A (NATL Insd) (AMT)		5.000	%		11/01/29		4,000		3,386,520
Poway, CA Uni Sch Dist Spl Tax Cmnty Fac Dist No 6-4S Ranch (AMBAC Insd)		5.000	%		09/01/35		7,500		5,865,150
Riverside, CA Elec Rev Issue, Ser D (AGM Insd)		5.000	%		10/01/38		6,335		5,809,005
San Diego, CA Cmnty College Dist Election 2002(a)		5.250	%		08/01/33		7,500		7,532,100
San Francisco, CA City & Cnty Arpts Commn Intl Arpt, Ser 23-A (AGM Insd) (AMT)		5.000	%		05/01/30		2,390		2,195,502
San Marcos, CA Pub Fac Auth Rev Tax Increment Pass-Thru Rfdg, Ser A (AMBAC Insd)		5.000	%		10/01/31		5,140		4,245,691
South Orange Cnty, CA Pub Fin Auth Spl Tax Rev Ladera Ranch, Ser A (AMBAC Insd)		5.000	%		08/15/27		5,380		4,761,999
South Tahoe, CA Jt Pwr Fin Redev Proj Area No 1 Rfdg, Ser A (AMBAC Insd)		5.000	%		10/01/35		2,000		1,528,740
Tobacco Sec Auth Southn CA Tob Settlement, Ser A-1		5.125	%		06/01/46		9,000		5,479,290
Twin Rivers, CA Uni Sch Dist Ctf Partn Sch Fac Brdg Pgm (AGM Insd)(b)(e)		3.500	%		05/31/13		2,000		2,000,060
University CA Regt, Ser A (BHAC Insd)		4.500	%		05/15/47		3,510		2,913,651
University CA Rev, Ser O(a)		5.750	%		05/15/23		3,275		3,693,152
University CA Rev, Ser O(a)		5.750	%		05/15/25		4,815		5,347,635
Vernon, CA Elec Sys Rev, Ser A		5.125	%		08/01/21		3,000		3,018,600
Washington, CA Uni Sch Dist Yolo Cnty Partn New High Sch Proj (AMBAC Insd)		5.000	%		08/01/30		2,840		2,443,167
West Contra Costa, CA Uni Sch Dist Cap Apprec (NATL Insd)		*			08/01/27		7,865		2,583,653
Yosemite, CA Cmnty College Dist Cap Apprec (AGM Insd)		*			08/01/24		3,570		1,539,670
									140,832,036
Colorado–2.6%
Colorado Ed & Cultural Fac Auth Rev Charter Sch Aurora Academy Sch Proj Rfdg, Ser A (Syncora Gtd)		5.250	%		02/15/34		3,745		3,335,896
Colorado Ed & Cultural Fac Auth Rev Charter Sch Bromley Sch Proj Rfdg (Syncora Gtd)		5.250	%		09/15/32		2,500		2,303,875
Colorado Ed & Cultural Fac Auth Rev Rfdg Charter Sch Challenge Proj Rfdg (CIFG Insd)		5.000	%		06/01/37		1,070		941,696
Colorado Springs, CO Hosp Rev Conv (AGM Insd)		5.250	%		12/15/20		3,375		3,589,785
Colorado Springs, CO Hosp Rev Conv (AGM Insd)		5.250	%		12/15/21		3,530		3,726,197
Compark Business Campus Met Dist Co Rfdg & Impt, Ser A (Radian Insd)		5.600	%		12/01/34		2,000		1,491,800
Denver, CO Convention Ctr Hotel Auth Rev Rfdg (Syncora Gtd)		5.000	%		12/01/35		5,680		4,403,307
									19,792,556
District of Columbia–1.2%
District Columbia Income Tax Rev, Ser A(a)		5.000	%		12/01/23		6,430		6,905,434
District Columbia Income Tax Rev, Ser B(a)		5.000	%		12/01/24		2,570		2,744,297
									9,649,731
Florida–9.3%
Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC Insd)		5.950	%		07/01/20		115		117,182
Florida Hsg Fin Corp Rev Homeowner Mtg, Ser 1 (GNMA Collateralized) (AMT)		5.800	%		07/01/28		1,505		1,540,443
Florida Hsg Fin Corp Rev Homeowner Mtg, Ser 1 (GNMA Collateralized) (AMT)		6.000	%		07/01/39		925		949,873
Florida Muni Ln Council Rev, Ser B (NATL Insd)		5.750	%		11/01/14		575		579,911
Florida St Brd Ed Cap Outlay Pub Ed, Ser C(b)(h)		5.000	%		06/01/11		1,185		1,205,998
Florida St Brd of Regt Hsg Rev (NATL Insd)		5.750	%		07/01/14		750		758,017
Gulf Breeze, FL Rev Loc Govt (FGIC Insd)(e)		5.150	%		12/01/15		1,340		1,324,067
Gulf Breeze, FL Rev Loc Govt (FGIC Insd)(b)(e)		5.650	%		12/01/17		500		504,610
Hillsborough Cnty, FL Aviation Auth Rev, Ser A (AGL Insd) (AMT)		5.375	%		10/01/33		2,500		2,365,925

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

6        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Florida–(continued)
Hillsborough Cnty, FL Indl Dev Auth Pollutn Ctl Rev Hillsborough Cnty Rfdg (AMBAC Insd)(b)(e)		5.000	%		03/15/12	$	800	$	825,632
Key West, FL Util Brd Elec Rev Cap Apprec, Ser D(c)		*			10/01/13		1,000		955,120
Miami-Dade Cnty, FL Aviation Rev Miami Intl Arpt, Ser A (AGL Insd) (AMT)		5.000	%		10/01/38		16,100		13,819,596
Miami-Dade Cnty, FL Ed Fac Auth Rev Univ Miami, Ser A (BHAC Insd)		5.500	%		04/01/38		4,000		4,013,000
Miami-Dade Cnty, FL Expwy Auth, Ser A (AGL Insd)		5.000	%		07/01/35		3,350		3,156,806
Miami-Dade Cnty, FL Sch Brd Ctf Partn, Ser B (AGL Insd)		5.250	%		05/01/26		5,000		5,061,650
Miami-Dade Cnty, FL Wtr & Swr Rev Miami-Dade Cnty Wtr & Swr Sys (AGM Insd)		5.000	%		10/01/39		4,500		4,264,695
Orange Cnty, FL Hlth Fac Auth Hosp-Orlando Reg Hlthcare, Ser A-1 (AGM Insd)(f)		0.290	%		10/01/41		500		500,000
Orlando, FL Cmnty Redev Agy Tax Rep Drive Unvl Blvd Rfdg (AMBAC Insd)		5.125	%		04/01/20		1,000		960,630
Palm Beach Cnty, FL Hlth Fac Auth Rev Waterford Proj		5.250	%		11/15/17		2,200		2,244,220
Port Saint Lucie, FL Spl Assmt Rev Util Svc Area No 3 & 4A (NATL Insd)		5.000	%		10/01/18		525		525,320
Port Saint Lucie, FL Util Rev Rfdg Sys (AGL Insd)		5.000	%		09/01/35		1,500		1,410,360
Putnam Cnty, FL Dev Auth Pollutn Ctl Rev Rfdg Seminole Proj, Ser A (AMBAC Insd)(b)(e)		5.350	%		05/01/18		3,000		3,128,880
Saint Johns Cnty, FL Indl Dev Auth First Mtg Rev Presbyterian Retirement, Ser A		5.625	%		08/01/34		5,000		4,311,800
Saint Johns Cnty, FL Indl Dev Auth Professional Golf Proj Rfdg(b)(h)		5.250	%		09/01/12		535		547,139
Saint Lucie Cnty, FL Sch Brd Ctf, Ser A(b)(h)		5.000	%		07/01/11		1,000		1,018,280
Seminole Tribe FL Spl Oblig Rev, Ser A(d)		5.250	%		10/01/27		500		414,955
Seminole Tribe FL Spl Oblig Rev, Ser A(d)		5.750	%		10/01/22		500		460,560
Sunrise, FL Util Sys Rev(c)		5.200	%		10/01/22		1,725		1,952,786
Sunrise, FL Util Sys Rev (AMBAC Insd)		5.200	%		10/01/22		2,275		2,385,315
Tallahassee, FL Hlth Fac Rev Tallahassee Mem Regl Med Rfdg, Ser A (NATL Insd)		6.625	%		12/01/13		4,840		4,854,859
Village Ctr Cmnty Dev Dist FL, Ser A (NATL Insd)		5.200	%		11/01/25		1,000		900,420
Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry Riddle Rfdg, Ser B (AMBAC Insd)		5.250	%		10/15/19		3,735		3,735,971
Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry Riddle Rfdg, Ser B (AMBAC Insd)		5.250	%		10/15/22		1,000		991,110
									71,785,130
Georgia–3.8%
Atlanta, GA Tax Allocation Rfdg Atlantic Sta Proj (AGL Insd)		5.250	%		12/01/21		1,370		1,390,824
Atlanta, GA Tax Allocation Rfdg Atlantic Sta Proj (AGL Insd)		5.250	%		12/01/22		1,000		1,007,130
Bleckley-Cochran, GA Dev Auth Student Hsg Fac Rev MGC Real Estate Fndtn, Ser A (CIFG Insd)		5.000	%		07/01/25		4,390		4,436,534
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (AMBAC Insd)		6.400	%		01/01/13		9,845		10,388,346
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y (NATL Insd)		6.500	%		01/01/17		9,445		10,821,798
Georgia Muni Elec Auth Pwr Rev 2005, Ser Y(b)(h)		6.500	%		01/01/14		145		167,198
Georgia Muni Elec Auth Pwr Rev, Ser Y(c)		6.400	%		01/01/13		610		650,882
Georgia Muni Elec Auth Pwr Rev, Ser Y(b)(h)		6.500	%		01/01/14		410		475,169
									29,337,881
Hawaii–0.6%
Honolulu, HI City & Cnty, Ser A(a)		5.250	%		04/01/29		4,120		4,366,829
Idaho–0.6%
Idaho Hsg & Fin Assn Single Family Mtg Rev, Class I, Ser A (AMT)		5.625	%		07/01/28		915		928,359
Idaho Hsg & Fin Assn Single Family Mtg Rev, Class III, Ser A (AMT)		5.700	%		07/01/28		3,480		3,523,848
									4,452,207

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

7        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Illinois–14.9%
Bourbonnais, IL Indl Proj Rev Olivet Nazarene Univ Proj (Radian Insd)		5.125	%		11/01/37	$	3,755	$	3,307,404
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser A (NATL Insd)		*			12/01/19		1,500		952,920
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser A (NATL Insd)		*			12/01/25		1,020		410,213
Chicago, IL Brd Ed Cap Apprec Sch Reform, Ser B-1 (NATL Insd)		*			12/01/19		2,845		1,807,372
Chicago, IL Midway Arpt Rev Second Lien Rfdg, Ser B (AMBAC Insd)		5.000	%		01/01/21		5,925		5,993,138
Chicago, IL Midway Arpt Rev Second Lien Rfdg, Ser B (AMBAC Insd)		5.000	%		01/01/22		6,220		6,261,798
Chicago, IL O’Hare Intl Arpt Rev Gen Arpt Third Lien, Ser A (AGL Insd)		5.250	%		01/01/24		6,000		6,042,060
Chicago, IL O’Hare Intl Arpt Rev Gen Arpt Third Lien, Ser A (AGL Insd)		5.250	%		01/01/26		3,855		3,846,827
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser A (AGL Insd)		5.000	%		01/01/29		1,000		976,920
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser A-2 (AGM Insd) (AMT)(a)		5.750	%		01/01/20		9,360		9,642,859
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.000	%		01/01/34		5,000		4,665,050
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/21		2,840		2,876,721
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/23		3,120		3,141,934
Chicago, IL O’Hare Intl Arpt Rev Rfdg Gen Arpt Third Lien, Ser E (AGL Insd)		5.250	%		01/01/24		1,430		1,436,049
Chicago, IL Pk Dist, Ser C (NATL Insd)		5.500	%		01/01/19		615		620,990
Chicago, IL Proj Rfdg, Ser A (AMBAC Insd)		5.625	%		01/01/39		145		134,097
Chicago, IL, Ser A (AGL Insd)(a)		5.250	%		01/01/24		4,200		4,205,544
Chicago, IL, Ser A (AGL Insd)(a)		5.250	%		01/01/25		4,400		4,363,524
Cook Cnty, IL Sch Dist No 100 Berwyn South (AGM Insd)		8.100	%		12/01/16		345		437,277
Cook Cnty, IL Sch Dist No 100 Berwyn South (AGM Insd)		8.200	%		12/01/14		290		347,104
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/17		2,605		1,922,438
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/18		2,995		2,056,517
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/19		4,210		2,697,221
Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap Apprec (NATL Insd)		*			12/01/20		4,050		2,417,850
Du Page Cnty, IL Cmnty High Sch (AGM Insd)		5.600	%		01/01/22		3,000		3,154,440
Grundy, Kendall & Will Cntys, IL (AMBAC Insd)		5.500	%		05/01/20		540		542,338
Grundy, Kendall & Will Cntys, IL (AMBAC Insd)		5.500	%		05/01/21		340		341,472
Huntley, IL Spl Svc Area No 10 Spl Tax Rfdg (AGL Insd)		5.100	%		03/01/29		3,000		2,912,430
Illinois Fin Auth Rev IL Fin Auth Roosevelt Univ		5.400	%		04/01/27		1,000		917,640
Illinois Fin Auth Rev Resurrection Hlthcare, Ser A (AGM Insd)		5.500	%		05/15/24		12,000		12,182,640
Illinois Fin Auth Rev Sherman Hlth Sys, Ser 2007-A		5.500	%		08/01/37		1,500		1,243,350
Illinois Med Dist (NATL Insd)		5.250	%		06/01/32		2,000		1,555,920
Lake Cnty, IL Cmnty Cons Sch Dist No 50 Woodland Cap Apprec, Ser B(c)		*			12/01/14		1,200		1,135,308
Lake Cnty, IL Cmnty Cons Sch Dist No 60 Waukegan Cap Apprec, Ser A(c)		*			12/01/17		2,875		2,420,175
Lake Cnty, IL Cmnty Cons Sch Dist No 60 Waukegan Cap Apprec, Ser A (AGM Insd)		*			12/01/17		3,915		2,889,192
McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No 158 Cap Apprec (NATL Insd)		*			01/01/17		3,000		2,298,030
McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No 158 Cap Apprec (NATL Insd)		*			01/01/18		4,000		2,847,280
McHenry Cnty, IL Cmnty High Sch Dist No 154 Cap Apprec (NATL Insd)		*			01/01/16		1,330		1,112,239
Metropolitan Pier & Expo Auth IL Dedicated St Tax Rev McCormick Pl Expn, Ser A (NATL Insd)		5.250	%		06/15/42		6,000		5,497,860
Railsplitter Tobacco Settlement Auth IL		6.000	%		06/01/28		3,050		2,960,727
									114,574,868
Indiana–0.2%
Indiana Hlth & Ed Fac Fin Auth Rev Rfdg Saint Francis, Ser E (AGM Insd)		5.250	%		05/15/41		2,000		1,858,820

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

8        Invesco Van Kampen Insured Tax Free Income Fund

						Par
						Amount
Description	Coupon			Maturity		(000)		Value
Iowa–0.8%
Iowa Fin Auth Hlth Fac Rev, Ser A (AGL Insd)		5.250	%		08/15/29	$	1,500	$	1,471,320
Iowa St Spl Oblig I-Jobs Pgm, Ser A(a)(g)		5.000	%		06/01/27		4,650		4,841,022
									6,312,342
Kansas–0.3%
Wyandotte Cnty, Kansas City, KA Univ Govt Util Sys Rev, Ser A (BHAC Insd)		5.000	%		09/01/29		2,000		2,026,660
Kentucky–1.4%
Kentucky Econ Dev Fin Auth Louisville Arena Proj Rev, Ser A-1 (AGL Insd)		6.000	%		12/01/38		4,000		4,016,920
Kentucky St Ppty & Bldgs Commn Rev Rfdg Proj No 93 (AGL Insd)		5.250	%		02/01/28		3,000		3,093,990
Paducah, KY Elec Plt Brd Rev, Ser A (AGL Insd)		5.250	%		10/01/35		4,000		3,970,040
									11,080,950
Louisiana–2.7%
Calcasieu Parish, LA Mem Hosp Svc Dist Hosp Rev Lake Charles Mem Hosp Proj, Ser A (Connie Lee Insd)		6.375	%		12/01/12		1,330		1,330,678
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		5,558,811
Lafayette, LA Util Rev (NATL Insd)		5.250	%		11/01/24		7,500		7,810,875
Louisiana St Gas & Fuels Tax Rev, Ser A (AGC Insd)		5.000	%		05/01/28		2,500		2,540,800
New Orleans, LA Aviation Brd Rev Rfdg Restructuring Garbs, Ser A-1 (AGL Insd)		6.000	%		01/01/23		1,000		1,098,180
Regional Tran Auth LA Sales Tax Rev (AGM Insd)		5.000	%		12/01/30		2,580		2,585,702
									20,925,046
Massachusetts–0.8%
Massachusetts Muni Whsl Elec Co Nuclear Mix, Ser 1-A (NATL Insd)		5.250	%		07/01/13		2,350		2,426,258
Massachusetts Muni Whsl Elec Co Proj No. 6-A, Ser A (NATL Insd)		5.250	%		07/01/16		175		180,318
Massachusetts St Hlth & Ed Fac Auth Rev Caregroup, Ser B-2 (NATL Insd)		5.375	%		02/01/27		2,000		1,924,560
Massachusetts St Hsg Fin Agy Hsg, Ser C (AMT)		5.100	%		12/01/27		1,745		1,710,344
									6,241,480
Michigan–0.9%
Detroit, MI Swr Disp Rev Sr Lien, Ser B (AGM Insd)		7.500	%		07/01/33		5,750		6,766,772
Minnesota–0.9%
Minneapolis, MN Hlthcare Sys Rev Fairview Hlth Svc, Ser B (AGL Insd)		6.500	%		11/15/38		4,000		4,196,520
Saint Paul, MN Hsg & Redev Auth Hlthcare Fac Rev Hlth Partners Oblig Grp Proj		5.250	%		05/15/36		3,000		2,663,610
									6,860,130
Mississippi–0.1%
Harrison Cnty, MS Wastewtr Mgmt & Solid Wastewtr Treatment Fac Rfdg, Ser A(c)		8.500	%		02/01/13		1,000		1,095,660
Missouri–0.2%
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		1,895,420
Nebraska–2.4%
Municipal Energy Agy of NE Pwr Supply Sys Rev Rfdg, Ser A (BHAC Insd)		5.375	%		04/01/39		3,000		3,042,810
Nebraska Pub Pwr Dist Rev Gen, Ser B (BHAC Insd)		5.000	%		01/01/37		15,570		15,075,964
									18,118,774
Nevada–1.9%
Clark Cnty, NV Arpt Rev Sub Lien, Ser A-1 (NATL Insd) (AMT)		5.500	%		07/01/20		3,045		3,105,443
Clark Cnty, NV Arpt Rev Sub Lien, Ser A-1 (NATL Insd) (AMT)		5.500	%		07/01/21		3,000		3,044,670

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
Nevada–(continued)
Clark Cnty, NV Passenger Fac Charge Rev Las Vegas McCarran Intl Arpt, Ser A (AGM Insd)		5.250	%		07/01/39	$	4,000	$	3,695,760
Nevada St Muni Bd Bk Proj, Ser F (AGM Insd)		5.000	%		12/01/23		3,500		3,613,365
Reno, NV Cap Impt Rev (NATL Insd)		5.125	%		06/01/26		935		874,066
									14,333,304
New Hampshire–0.6%
Manchester NH Gen Arpt Rev Rfdg Gen, Ser A (AGM Insd)		5.125	%		01/01/30		4,500		4,435,650
New Jersey–1.1%
New Jersey Econ Dev Auth Rev Sch Fac Constr, Ser Z (AGL Insd)		5.500	%		12/15/34		1,000		1,010,540
New Jersey St Hsg & Mtg Fin Agy Rev, Ser AA		6.375	%		10/01/28		930		991,743
Tobacco Settlement Fin Corp NJ, Ser 1A		4.750	%		06/01/34		6,430		3,920,242
Tobacco Settlement Fin Corp NJ, Ser 1A		5.000	%		06/01/41		3,600		2,180,772
									8,103,297
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		2,105,480
New York–2.6%
Long Island Pwr Auth NY Elec Sys Rev Gen, Ser A (BHAC Insd)		5.500	%		05/01/33		5,000		5,215,000
New York City Hlth & Hosp Hlth Sys, Ser A(b)(h)		5.000	%		02/15/12		5,470		5,691,316
New York City Indl Dev Agy Civic Fac Rev Polytechnic Univ Proj (ACA Insd)		5.250	%		11/01/27		5,000		4,729,650
New York City Indl Dev Agy Rev Queens Baseball Stad Pilot (AGL Insd)		6.375	%		01/01/39		1,000		1,026,900
New York St Dorm Auth Rev Insd Brooklyn Law Sch, Ser B (Syncora Gtd)		5.375	%		07/01/21		3,105		3,202,218
									19,865,084
North Carolina–1.2%
Johnston, NC Mem Hosp Auth (AGM Insd)		5.250	%		10/01/24		6,000		6,345,120
North Carolina Med Care Commn Hlthcare Fac Rev Wake Med, Ser A (AGL Insd)		5.625	%		10/01/38		1,100		1,105,533
North Carolina Tpk Auth Triangle Expwy Sys Rev, Ser A (AGL Insd)		5.125	%		01/01/24		2,000		2,077,560
									9,528,213
North Dakota–0.6%
Mercer Cnty, ND Pollutn Ctl Rev Antelope Vly Station Rfdg (AMBAC Insd)		7.200	%		06/30/13		3,580		3,739,203
Oliver Cnty, ND Pollutn Ctl Rev Square Butte Elec Coop Rfdg, Ser A (AMBAC Insd)		5.300	%		01/01/27		970		969,980
									4,709,183
Ohio–1.4%
Lorain Cnty, OH Hosp Rev Fac Catholic Rfdg, Ser C-1 (AGM Insd)		5.000	%		04/01/24		1,750		1,762,390
Montgomery Cnty, OH Rev Miami Vly Hosp, Ser A		6.000	%		11/15/28		2,825		2,910,767
Ohio Hsg Fin Agy Multifamily Hsg Mtg Covenant, Ser C (GNMA Collateralized) (AMT)		6.100	%		09/20/49		2,845		2,932,029
Ohio St Air Quality Dev Auth Rev Pollutn Ctl First Energy Rfdg, Ser C		5.625	%		06/01/18		3,000		3,159,900
									10,765,086
Oklahoma–2.1%
Chickasaw Nation, OK Hlth Sys(d)		6.250	%		12/01/32		1,000		1,031,800
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/21		2,395		2,609,448
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/22		2,395		2,583,678

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
Oklahoma–(continued)
Grand River Dam Auth OK Rev, Ser A (BHAC Insd)		5.000	%		06/01/23	$	4,075	$	4,349,533
McAlester, OK Pub Wks Auth Util Cap Apprec, Ser A (AGM Insd)		*			02/01/30		4,320		1,498,867
Oklahoma Colleges Brd Regt Stad Univ Cent OK, Ser B (AMBAC Insd)		5.500	%		06/01/24		2,000		2,060,240
Tulsa, OK Cmnty College Rev (AMBAC Insd)		5.500	%		07/01/22		2,000		2,080,720
									16,214,286
Pennsylvania–2.2%
Allegheny Cnty, PA Hosp Dev Auth Rev Pittsburgh Mercy Hlth Sys Inc(c)		5.625	%		08/15/26		4,875		4,896,206
Lehigh Cnty, PA Gen Purp Hosp Rev Lehigh Vy Hlth Network, Ser B (AGL Insd)(f)		0.200	%		07/01/28		3,000		3,000,000
Lycoming Cnty, PA Auth College Rev PA College of Technology (AMBAC Insd)		5.350	%		07/01/26		3,000		2,907,030
Pennsylvania St Tpk Commn Tpk Rev, Ser A (AGL Insd)		5.000	%		06/01/24		4,000		4,133,240
Pittsburgh & Allegheny Cnty, PA Sports & Exhib Auth Sales Reg Asset Dist Rfdg (AGM Insd)		5.000	%		02/01/31		2,000		1,980,020
									16,916,496
South Carolina–2.6%
Easley, SC Util Rev Impt & Rfdg(b)(h)		5.000	%		12/01/15		5,170		5,907,449
South Carolina Jobs Econ Dev Auth Hosp Rev Rfdg & Impt Anmed Hlth, Ser B (AGL Insd)		5.500	%		02/01/38		3,000		2,907,750
South Carolina Jobs Econ Dev Auth Indl Rev Elec & Gas Co Proj, Ser A (AMBAC Insd)		5.200	%		11/01/27		6,500		6,509,490
Spartanburg Cnty, SC Regl Hlth Svc Dist Rfdg, Ser D (AGL Insd)		5.250	%		04/15/22		4,465		4,639,358
									19,964,047
South Dakota–1.4%
South Dakota St Hlth & Ed Fac Auth Vocational Ed Prog (AGL Insd)		5.500	%		08/01/38		3,000		3,012,330
South Dakota St Lease Rev Tr Ctf, Ser A (AGM Insd)		6.625	%		09/01/12		2,750		2,871,550
South Dakota St Lease Rev Tr Ctf, Ser A (AGM Insd)		6.700	%		09/01/17		4,000		4,688,920
									10,572,800
Texas–8.6%
Dallas Fort Worth, TX Intl Arpt Rev Impt, Ser B (AGM Insd) (AMT)		5.375	%		11/01/21		4,000		4,119,560
Dallas Fort Worth, TX Intl Arpt Rev Impt, Ser B (AGM Insd) (AMT)		5.500	%		11/01/19		6,110		6,415,194
Dallas, TX Civic Ctr Rfdg & Impt (AGL Insd)		5.250	%		08/15/34		4,000		3,983,720
Houston, TX Util Sys Rev First Lien Rfdg, Ser A (BHAC Insd)		5.250	%		05/15/23		22,500		23,953,050
Mission, TX Econ Dev Corp Solid Waste Disp Rev Waste Mgmt Inc Proj (AMT)(b)(e)		6.000	%		08/01/13		3,000		3,229,350
North TX Twy Auth Rev Rfdg Sys First Tier, Ser A		5.625	%		01/01/33		2,500		2,434,025
Nueces Riv Auth TX Wtr Supply Rev Fac Corpus Christi Proj Rfdg (AGM Insd)		5.000	%		07/15/25		2,750		2,800,875
Nueces Riv Auth TX Wtr Supply Rev Fac Corpus Christi Proj Rfdg (AGM Insd)		5.000	%		03/01/27		2,000		1,959,080
Tarrant Cnty, TX Cultural Ed Fac Fin Corp Rev Christus Hlth Rfdg, Ser A (AGL Insd)		6.500	%		07/01/37		4,250		4,359,820
Tarrant Cnty, TX Hlth Fac Dev Corp Hlth Sys Rev, Ser B(c)		5.000	%		09/01/15		1,750		1,939,560
Texas Private Activity Surface Trans Corp Lien Nt Mobility		6.875	%		12/31/39		1,850		1,895,122
Texas St Tpk Auth Cent, TX Tpk First Tier, Ser A (AMBAC Insd)		5.500	%		08/15/39		10,000		9,039,100
									66,128,456
Utah–0.1%
Provo, UT Elec Rev 1984 Rfdg, Ser A(c)		10.375	%		09/15/15		370		450,505
Utah Hsg Corp Single Family Mtg Rev, Class III, Ser C-1 (AMT)		5.700	%		07/01/28		660		668,316
									1,118,821

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
Washington–10.6%
Chelan Cnty, WA Sch Dist No 246(b)(h)		5.000	%		06/01/12	$	4,115	$	4,334,617
Energy Northwest WA Elec Rev Columbia Generating Rfdg, Ser A(b)(h)		5.500	%		07/01/11		11,340		11,600,706
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser A(b)(h)		5.500	%		07/01/11		4,500		4,597,605
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser A(b)(h)		5.500	%		07/01/11		14,500		14,814,505
Energy Northwest WA Elec Rev Proj No 3 Rfdg, Ser B (AGM Insd)		6.000	%		07/01/16		5,000		5,323,000
Energy Northwest WA Wind Proj (AMBAC Insd)		5.000	%		07/01/23		1,365		1,374,842
Fife, WA Wtr & Swr Rev (NATL Insd)		5.125	%		04/01/24		685		691,261
King Cnty, WA Hsg Auth Cap Pgm Rev Egis Hsg Pgm (AGM Insd) (AMT)		5.300	%		06/01/23		1,025		1,009,584
King Cnty, WA Pub Hosp Dist No 001, Ser A (AGL Insd)		5.250	%		12/01/28		3,575		3,716,391
Lynnwood, WA Pub Fac Dist Rev Convention Ctr (AMBAC Insd)		5.000	%		12/01/34		4,140		3,844,280
Snohomish Cnty, WA Pub Util 1 (AGM Insd)		5.500	%		12/01/23		2,565		2,711,231
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.250	%		09/01/33		3,000		2,934,120
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.750	%		12/01/25		2,000		2,090,260
Spokane, WA Pub Fac Dist Hotel (NATL Insd)		5.750	%		12/01/26		2,420		2,477,935
Washington St Hlthcare Fac Auth Rev Multicare Hlth Sys, Ser B (AGL Insd)		6.000	%		08/15/39		2,000		2,039,220
Washington St Hlthcare Fac Auth Rev Providence Hlth, Ser D (AGM Insd)		5.250	%		10/01/33		5,000		4,868,100
Washington St Motor Vehicle Fuel, Ser 2010-B(a)		5.000	%		08/01/30		12,000		12,863,875
									81,291,532
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		1,608,933
Puerto Rico–0.3%
Puerto Rico Indl Tourist Ed Med & Environmental Ctl Fac Hosp Aux (NATL Insd)		6.250	%		07/01/16		2,380		2,387,854
TOTAL INVESTMENTS(i)–104.4% (Cost $822,017,020)									803,860,203
FLOATING RATE NOTE OBLIGATIONS–(6.7)%
Notes with interest rates ranging from 0.25% to 0.40% at 03/31/11 and contractual maturities of collateral ranging from 01/01/20 to 12/01/37 (See Note 1J)(j)									(51,590,000	)
OTHER ASSETS IN EXCESS OF LIABILITIES–2.3%									17,855,525
NET ASSETS–100.0%								$	770,125,728

Investment Abbreviations:

ACA	– American Capital Access
AGC	– Assured Guaranty Corp.
AGL	– Assured Guaranty Ltd.
AGM	– Assured Guaranty Municipal Corp.
AMBAC	– American Municipal Bond Assurance 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
**	AMBAC filed for bankruptcy on November 8, 2010.
(a)	Underlying security related to Dealer Trusts entered into by the Fund. See Note 1J.
(b)	Interest or dividend rate is redetermined periodically. Rate shown is the rate in effect on March 31, 2011.

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

12        Invesco Van Kampen Insured Tax Free Income Fund

(c)	Advanced refunded; secured by an escrow fund of U.S. Government obligations or other highly rated collateral.
(d)	Security purchased or received in a transaction exempt from registration under the Securities Act of 1933, as amended. The security may be resold pursuant to an exemption from registration under the 1933 Act, typically to qualified institutional buyers. The aggregate value of these securities at March 31, 2011 was $1,907,315, which represented 0.3% of the Fund’s net assets.
(e)	Security has an irrevocable call by the issuer or mandatory put by the holder. Maturity date reflects such call or put.
(f)	Demand security payable upon demand by the Trust at specified time intervals no greater than thirteen months. Interest rate is redetermined periodically. Rate shown is the rate in effect on March 31, 2011.
(g)	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.
(h)	Advanced refunded.
(I)	This table provides a listing of those entities that have either issued, guaranteed, backed or otherwise enhanced the credit quality of more than 5% of the securities held in the portfolio. In instances where the entity has guaranteed, backed or otherwise enhanced the credit quality of a security, it is not primarily responsible for the issuer’s obligations but may be called upon to satisfy the issuer’s obligations.

Entities	Percentage
Assured Guaranty Municipal Corp.		24.46	%
Assured Guaranty Ltd.		14.37	%
National Public Finance Guarantee Corp.		13.65	%
American Municipal Bond Assurance Corp.**		12.69	%
Berkshire Hathaway Assurance Corp.		8.81	%

^(j) Floating rate note obligations related to securities held. The interest rates shown reflect the rates in effect at March 31, 2011. At March 31, 2011, the Trust’s investments with a value of $81,686,037 are held by Dealer Trusts and serve as collateral for the $51,590,000 in the floating rate note obligations outstanding at that date.

Top 5 Sectors

Airports	13.7	%
Electric	13.0
Hospital	12.7
General Purpose	9.8
Water & Sewer	7.6

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

13        Invesco Van Kampen Insured Tax Free Income Fund

Statement of Assets and Liabilities

March 31, 2011

(Unaudited)

Assets:
Investments, at value (Cost $822,017,020)	$	803,860,203
Cash		6,848,390
Receivables:
Interest		12,465,309
Fund shares sold		573,782
Investments sold		325,000
Other		16,068
Total assets		824,088,752
Liabilities:
Floating rate note obligations		51,590,000
Payables:
Fund shares repurchased		1,356,355
Income distributions		432,958
Accrued fees to affiliates		282,854
Accrued other operating expenses		291,763
Trustees’ deferred compensation and retirement plans		9,094
Total liabilities		53,963,024
Net assets	$	770,125,728
Net assets consist of:
Shares of beneficial interest	$	881,357,299
Accumulated undistributed net investment income		2,506,121
Net unrealized appreciation (depreciation)		(18,156,817	)
Accumulated net realized gain (loss)		(95,580,875	)
Net assets	$	770,125,728
Maximum Offering Price Per Share:
Class A shares:
Net asset value and redemption price per share (based on net assets of $729,263,272 and 46,997,704 shares of beneficial interest issued and outstanding)	$	15.52
Maximum sales charge (4.75% of offering price)		0.77
Maximum offering price to public	$	16.29
Class B shares:
Net asset value and offering price per share (based on net assets of $10,897,160 and 703,193 shares of beneficial interest issued and outstanding)	$	15.50
Class C shares:
Net asset value and offering price per share (based on net assets of $26,466,430 and 1,709,702 shares of beneficial interest issued and outstanding)	$	15.48
Class Y shares:
Net asset value and offering price per share (based on net assets of $3,498,866 and 225,487 shares of beneficial interest issued and outstanding)	$	15.52

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

14        Invesco Van Kampen Insured Tax Free Income Fund

Statement of Operations

For the six months ended March 31, 2011

(Unaudited)

Investment income:
Interest	$	22,529,639
Expenses:
Investment advisory fee		2,099,816
Distribution fees:
Class A		952,259
Class B		64,785
Class C		151,791
Reports to shareholders		234,343
Transfer agent fees		223,288
Interest, facilities and maintenance fees		221,448
Administrative services fees		108,683
Trustees’ and officers’ fees and benefits		25,101
Custodian fees		14,991
Other		43,919
Total expenses		4,140,424
Less: fees waived and expense offset arrangement		104,408
Net expenses		4,036,016
Net investment income		18,493,623
Realized and unrealized gain (loss):
Net realized gain (loss)		(4,664,534	)
Unrealized appreciation (depreciation):
Beginning of the period		41,646,538
End of the period		(18,156,817	)
Net unrealized appreciation (depreciation) during the period		(59,803,355	)
Net realized and unrealized gain (loss)		(64,467,889	)
Net decrease in net assets from operations	$	(45,974,266	)

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

15        Invesco Van Kampen Insured Tax Free Income Fund

Statements of Changes in Net Assets

(Unaudited)

	For the six			For the
	months ended			year ended
	March 31,			September 30,
	2011			2010
From investment activities:
Operations:
Net investment income	$	18,493,623		$	39,013,541
Net realized gain (loss)		(4,664,534	)		(5,408,512	)
Net unrealized appreciation (depreciation) during the period		(59,803,355	)		8,471,489
Change in net assets from operations		(45,974,266	)		42,076,518
Distributions from net investment income:
Class A shares		(16,766,388	)		(37,017,316	)
Class B shares		(232,728	)		(596,355	)
Class C shares		(545,487	)		(1,162,505	)
Class Y shares		(78,816	)		(107,683	)
Total distributions		(17,623,419	)		(38,883,859	)
Net change in net assets from investment activities		(63,597,685	)		3,192,659
From capital transactions:
Proceeds from shares sold		18,245,837			71,010,993
Net asset value of shares issued through dividend reinvestment		14,875,195			32,739,430
Cost of shares repurchased		(86,846,683	)		(130,186,721	)
Net change in net assets from capital transactions		(53,725,651	)		(26,436,298	)
Total increase (decrease) in net assets		(117,323,336	)		(23,243,639	)
Net assets:
Beginning of the period		887,449,064			910,692,703
End of the period (including accumulated undistributed net investment income of $2,506,121 and $1,635,917, respectively)	$	770,125,728		$	887,449,064

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

16        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights

(Unaudited)

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

	Class A Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.73		$	16.66		$	15.30		$	17.72		$	18.59		$	18.87
Net investment income(a)		0.36			0.73			0.72			0.77			0.74			0.72
Net realized and unrealized gain (loss)		(1.22	)		0.07			1.40			(2.43	)		(0.84	)		0.09
Total from investment operations		(0.86	)		0.80			2.12			(1.66	)		(0.10	)		0.81
Less:
Distributions from net investment income		0.35			0.73			0.76			0.76			0.71			0.71
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.06			0.38
Total distributions		0.35			0.73			0.76			0.76			0.77			1.09
Net asset value, end of the period	$	15.52		$	16.73		$	16.66		$	15.30		$	17.72		$	18.59
Total return		(5.19	)%(b)		4.98	%(b)		14.32	%(c)		(9.57	)%(c)		(0.63	)%(c)		4.49	%(c)
Net assets at end of the period (000s omitted)	$	729,263		$	835,024		$	859,045		$	794,433		$	983,277		$	1,075,891
Portfolio turnover(d)		1	%		5	%		21	%		59	%		51	%		45	%
Ratios based on average net assets:
Ratio of expenses:
With fee waivers and/or expense absorbed		0.95	%(e)		0.95	%		1.00	%		1.47	%		1.54	%		1.00	%
With fee waivers and/or expense absorbed excluding interest, facilities and maintenance fees(f)		0.90	%(e)		0.88	%		0.90	%		0.89	%		0.88	%		0.88	%
Without fee waivers and expense absorbed		0.98	%(e)		N/A			N/A			N/A			N/A			N/A
Ratio of net investment income		4.58	%(e)		4.46	%		4.71	%		4.58	%		4.02	%		3.87	%

(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 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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $770,398.
(f)	For the year ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.

N/A=Not applicable.

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

17        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

(Unaudited)

	Class B Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.70		$	16.64		$	15.28		$	17.70		$	18.57		$	18.85
Net investment income(a)		0.30			0.60			0.61			0.64			0.60			0.58
Net realized and unrealized gain (loss)		(1.22	)		0.06			1.39			(2.43	)		(0.84	)		0.09
Total from investment operations		(0.92	)		0.66			2.00			(1.79	)		(0.24	)		0.67
Less:
Distributions from net investment income		0.28			0.60			0.64			0.63			0.57			0.57
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.06			0.38
Total distributions		0.28			0.60			0.64			0.63			0.63			0.95
Net asset value, end of the period	$	15.50		$	16.70		$	16.64		$	15.28		$	17.70		$	18.57
Total return		(5.50	)%(b)		4.14	%(b)		13.49	%(c)		(10.27	)%(c)		(1.38	)%(c)		3.71	%(c)
Net assets at end of the period (000s omitted)	$	10,897		$	15,261		$	18,290		$	20,695		$	30,011		$	43,024
Portfolio turnover(d)		1	%		5	%		21	%		59	%		51	%		45	%
Ratios based on average net assets:
Ratio of expenses:
With fee waivers and/or expense absorbed		1.70	%(e)		1.70	%		1.75	%		2.22	%		2.29	%		1.75	%
With fee waivers and/or expense absorbed excluding interest, facilities and maintenance fees(f)		1.65	%(e)		1.63	%		1.65	%		1.64	%		1.63	%		1.63	%
Without fee waivers and expense absorbed		1.73	%(e)		N/A			N/A			N/A			N/A			N/A
Ratio of net investment income		3.83	%(e)		3.71	%		3.97	%		3.79	%		3.25	%		3.11	%

(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 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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $12,996.
(f)	For the year ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.

N/A=Not applicable.

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

18        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

(Unaudited)

	Class C Shares
	Six months
	ended
	March 31,			Year ended September 30,
	2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period	$	16.69		$	16.62		$	15.27		$	17.68		$	18.55		$	18.84
Net investment income(a)		0.30			0.60			0.60			0.65			0.60			0.58
Net realized and unrealized gain (loss)		(1.23	)		0.07			1.39			(2.43	)		(0.84	)		0.08
Total from investment operations		(0.93	)		0.67			1.99			(1.78	)		(0.24	)		0.66
Less:
Distributions from net investment income		0.28			0.60			0.64			0.63			0.57			0.57
Distributions from net realized gain		-0-			-0-			-0-			-0-			0.06			0.38
Total distributions		0.28			0.60			0.64			0.63			0.63			0.95
Net asset value, end of the period	$	15.48		$	16.69		$	16.62		$	15.27		$	17.68		$	18.55
Total return		(5.57	)%(b)		4.20	%(b)		13.50	%(c)		(10.28	)%(c)		(1.38	)%(c)		3.66	%(c)
Net assets at end of the period (000s omitted)	$	26,466		$	34,614		$	30,785		$	18,388		$	18,979		$	21,255
Portfolio turnover(d)		1	%		5	%		21	%		59	%		51	%		45	%
Ratios based on average net assets:
Ratio of expenses:
With fee waivers and/or expense absorbed		1.70	%(e)		1.70	%		1.75	%		2.23	%		2.29	%		1.75	%
With fee waivers and/or expense absorbed excluding interest, facilities and maintenance fees(f)		1.65	%(e)		1.63	%		1.65	%		1.64	%		1.63	%		1.63	%
Without fee waivers and expense absorbed		1.73	%(e)		N/A			N/A			N/A			N/A			N/A
Ratio of net investment income		3.83	%(e)		3.71	%		3.95	%		3.83	%		3.26	%		3.11	%

(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 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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $30,422.
(f)	For the year ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.

N/A=Not applicable.

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

19        Invesco Van Kampen Insured Tax Free Income Fund

Financial Highlights—(continued)

(Unaudited)

		Class Y Sharesˆ
		Six months
		ended
		March 31,			Year ended September 30,
		2011			2010			2009			2008			2007			2006
Net asset value, beginning of the period		$	16.73		$	16.66		$	15.30		$	17.72		$	18.59		$	18.87
Net investment income(a)			0.38			0.77			0.76			0.82			0.78			0.75
Net realized and unrealized gain (loss)			(1.22	)		0.07			1.40			(2.44	)		(0.84	)		0.10
Total from investment operations			(0.84	)		0.84			2.16			(1.62	)		(0.06	)		0.85
Less:
Distributions from net investment income			0.37			0.77			0.80			0.80			0.75			0.75
Distributions from net realized gain			-0-			-0-			-0-			-0-			0.06			0.38
Total distributions			0.37			0.77			0.80			0.80			0.81			1.13
Net asset value, end of the period		$	15.52		$	16.73		$	16.66		$	15.30		$	17.72		$	18.59
Total return			(5.07	)%(b)		5.24	%(b)		14.60	%(c)		(9.34	)%(c)		(0.38	)%(c)		4.75	%(c)
Net assets at end of the period (000s omitted)		$	3,499		$	2,550		$	2,573		$	838		$	1,073		$	2,435
Portfolio turnover(d)			1	%		5	%		21	%		59	%		51	%		45	%
Ratios based on average net assets:
Ratio of expenses:
With fee waivers and/or expense absorbed			0.70	%(e)		0.70	%		0.75	%		1.22	%		1.29	%		0.75	%
With fee waivers and/or expense absorbed excluding interest, facilities and maintenance fees(f)	��		0.65	%(e)		0.63	%		0.65	%		0.64	%		0.63	%		0.63	%
Without fee waivers and expense absorbed			0.73	%(e)		N/A			N/A			N/A			N/A			N/A
Ratio of net investment income			4.83	%(e)		4.71	%		4.99	%		4.83	%		4.23	%		4.11	%

(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 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)	Portfolio turnover is calculated at the fund level and is not annualized for periods less than one year, if applicable.
(e)	Ratios are annualized and based on average daily net assets (000’s omitted) of $3,418.
(f)	For the year ended September 30, 2010 and prior, ratio does not exclude facilities and maintenance fees.

N/A=Not applicable.

ˆ On June 1, 2010, the Fund’s former Class I shares were reorganized into Class Y shares.

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

20        Invesco Van Kampen Insured Tax Free Income Fund

Notes to Financial Statements

March 31, 2011

(Unaudited)

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) (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 C shares are sold with a CDSC. Class Y shares are sold at net asset value. Effective November 30, 2010, new or additional investments in Class B shares are no longer permitted. Existing shareholders of Class B shares may continue to reinvest dividends and capital gains distributions in Class B shares until they convert. 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. 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. Redemption of Class B shares prior to conversion date will be subject to a CDSC.

  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 net realized and unrealized gain (loss) from investment securities reported in the Statement of Operations and the Statement of Changes in Net Assets and the net realized and unrealized 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.

21        Invesco Van Kampen Insured Tax Free Income Fund

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.
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.	Floating Rate Note Obligations — The Fund invests in inverse floating rate securities, such as Residual Interest Bonds (“RIBs”) or Tender Option Bonds (“TOBs”) for investment purposes and to enhance the yield of the Fund. 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. Such transactions may be purchased in the secondary market without first owning the underlying bond or by the sale of fixed rate bonds by the Fund to special purpose trusts established by a broker dealer (“Dealer Trusts”) in exchange for cash and residual interests in the Dealer Trusts’ assets and cash flows, which are in the form of inverse floating rate securities. The Dealer Trusts finance 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 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 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.
	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.
	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 as a component of Interest, facilities and maintenance fees on the Statement of Operations.
	The Fund generally invests in inverse floating rate securities that include embedded leverage, thus exposing the Fund to greater risks and increased costs. The primary risks associated with inverse floating rate securities are varying degrees of liquidity and the changes in the value of such securities in response to changes in market rates of interest to a greater extent than the value of an equal principal amount of a fixed rate security having similar

22        Invesco Van Kampen Insured Tax Free Income Fund

	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 securities. 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.
K.	Interest, Facilities and Maintenance Fees — Interest, facilities and maintenance fees include interest and related borrowing costs such as commitment fees and other expenses associated with lines of credit and interest and administrative expenses related to establishing and maintaining floating rate note obligations, if any.
L.	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.

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	.50%
Next $500 million		0	.475%
Over $1.5 billion		0	.45%

  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).

  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 after fee waiver and/or expense reimbursement (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 after fee waiver and/or expense reimbursement to exceed the numbers reflected above: (1) interest, facilities and maintenance fees; (2) taxes; (3) dividend expense on short sales; (4) extraordinary 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.

  For the six months ended March 31, 2011, the Adviser waived $104,034.

  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. For the six months ended March 31, 2011, expenses incurred under the agreement are shown in the Statement of Operations as administrative services fees.

  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. For the six months ended March 31, 2011, the expenses incurred under the agreement 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.

  For the six months ended March 31, 2011, expenses incurred under these agreements are shown in the Statement of Operations as distribution fees.

23        Invesco Van Kampen Insured Tax Free Income Fund

  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. During the six months ended March 31, 2011, IDI advised the Fund that IDI retained $26,652 in front-end sales commissions from the sale of Class A shares and $24,658, $10,438 and $1,790 from Class A, Class B and Class C shares, respectively, 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 following is a summary of the tiered valuation input levels as of March 31, 2011. 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 six months ended March 31, 2011, there were no significant transfers between investment levels.

	Level 1		Level 2		Level 3		Total
Municipal Obligations	$	—	$	803,860,203	$	—	$	803,860,203

NOTE 4—Expense Offset Arrangement(s)

The expense offset arrangement is comprised of transfer agency credits which result from balances in Demand Deposit Accounts (DDA) used by the transfer agent for clearing shareholder transactions. For the six months ended March 31, 2011, the Fund received credits from this arrangement, which resulted in the reduction of the Fund’s total expenses of $374.

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 six months ended March 31, 2011, the Fund paid legal fees of $1,174 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 and Borrowings

The Fund is permitted to temporarily carry a negative or overdrawn balance in its account with The State Street Bank and Trust Company, 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.

  Inverse floating rate note obligations resulting from the transfer of bonds to Dealer Trusts are accounted for as secured borrowings. The average floating rate notes outstanding and average annual interest and fees related to inverse floating rate note obligations during the period ending March 31, 2011 were $56,610,714 and 0.78%, respectively.

24        Invesco Van Kampen Insured Tax Free Income Fund

NOTE 7— Tax Information

The amount and character of income and gains to be distributed are determined in accordance with income tax regulations, which may differ from generally accepted accounting principles. Reclassifications are made to the Fund’s capital accounts to reflect income and gains available for distribution (or available capital loss carryforward) under income tax regulations. The tax character of distributions paid during the year and the tax components of net assets will be reported at the Fund’s fiscal year-end.

  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 had 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.

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 six months ended March 31, 2011 was $5,907,153 and $75,190,932, 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	$	22,842,558
Aggregate unrealized (depreciation) of investment securities		(38,641,730	)
Net unrealized appreciation (depreciation) of investment securities	$	(15,799,172	)
Cost of investments for tax purposes is $819,659,375.

NOTE 9—Share Information

	For the						For the
	six months ended						year ended
	March 31, 2011(a)						September 30, 2010
	Shares			Value			Shares			Value
Sales:
Class A		844,105	(b)	$	13,429,152	(b)		3,568,189	(c)	$	58,117,008	(c)
Class B		27,373			436,744			177,983			2,903,003
Class C		123,395			1,993,745			549,575			8,960,449
Class Y		146,964			2,386,196			62,608			1,030,533
Total sales		1,141,837		$	18,245,837			4,358,355		$	71,010,993
Dividend reinvestment:
Class A		895,213		$	14,171,991			1,913,300		$	31,209,441
Class B		12,133			192,018			30,780			501,061
Class C		28,985			458,057			59,355			966,490
Class Y		3,375			53,129			3,833			62,438
Total dividend reinvestment		939,706		$	14,875,195			2,007,268		$	32,739,430
Repurchases:
Class A		(4,662,076	)	$	(73,574,462	)		(7,131,391	)	$	(116,348,902	)
Class B		(249,955	)(b)		(3,959,005	)(b)		(394,573	)(c)		(6,423,120	)(c)
Class C		(517,089	)		(8,097,971	)		(387,035	)		(6,301,595	)
Class Y		(77,303	)		(1,215,245	)		(68,446	)		(1,113,104	)
Total repurchases		(5,506,423	)	$	(86,846,683	)		(7,981,445	)	$	(130,186,721	)

25        Invesco Van Kampen Insured Tax Free Income Fund

(a)	There are entities that are record owners of more than 5% of the outstanding shares of the Fund and in the aggregate own 36% 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 137,225 Class B shares into 137,021 Class A shares at a value of $2,177,274.
(c)	Includes automatic conversion of 96,499 Class B shares into 96,368 Class A shares at a value of $1,578,390.

NOTE 10—Subsequent Event

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”).

  The Fund’s shareholders approved the Agreement on April 14, 2011 and the reorganization is expected to be consummated in June 2011. Upon closing of the reorganization, shareholders of the Fund will receive a corresponding class of shares of the Acquiring Fund in exchange for their shares of the Fund and the Fund will liquidate and cease operations.

  In anticipation of the closing, the Fund will limit public sales of its shares to new investors, effective as of the open of business on May 9, 2011.

26        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. The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period October 1, 2010, through March 31, 2011.

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	(10/01/10)		(03/31/11)1		Period2		(03/31/11)		Period2		Ratio
A	$	1,000.00	$	948.10	$	4.61	$	1,020.19	$	4.78		0.95	%
B		1,000.00		945.00		8.24		1,016.45		8.55		1.70
C		1,000.00		944.30		8.24		1,016.45		8.55		1.70
Y		1,000.00		949.90		3.40		1,021.44		3.53		0.70

1	The actual ending account value is based on the actual total return of the Fund for the period October 1, 2010 through March 31, 2011, 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 182/365 to reflect the most recent fiscal half year.

27        Invesco Van Kampen Insured Tax Free Income Fund

Invesco mailing information

Send general correspondence to Invesco Investment Services, Inc., P.O. Box 219078, Kansas City, MO 64121-9078.

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 available at invesco.com/proxysearch. In addition, this information is 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-SAR-1 Invesco Distributors, Inc.

ITEM 2. CODE OF ETHICS.

There were no amendments to the Code of Ethics (the “Code”) that applies to the Registrant’s Principal Executive Officer (“PEO”) and Principal Financial Officer (“PFO”) during the period covered by the report. 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.

Not applicable.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Not applicable.

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 INVESTMENT 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 March 21, 2011, an evaluation was performed under the supervision and with the participation of the officers of the Registrant, including the Principal Executive Officer (“PEO”) and Principal Financial Officer (“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 March 21,2011, 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 the report that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting.

ITEM 12. EXHIBITS.

12(a) (1)   Not applicable.

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: June 6, 2011

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: June 6, 2011

By:	/s/ Sheri Morris  Sheri Morris
	Principal Financial Officer

Date: June 6, 2011

EXHIBIT INDEX

12(a) (1)	Not applicable.
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.