UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-7400
Van Kampen Value Municipal Income Trust
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
1221 Avenue of the Americas, New York, New York 10020
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Ronald Robison
1221 Avenue of the Americas, New York, New York 10020
- --------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: 212-762-4000
Date of fiscal year end: 10/31
Date of reporting period: 4/30/05
Item 1. Report to Shareholders
The Trust's semi-annual report transmitted to shareholders pursuant to Rule
30e-1 under the Investment Company Act of 1940 is as follows:
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Value Municipal Income Trust performed during the semiannual period. The
portfolio management team will provide an overview of the market
conditions and discuss some of the factors that affected investment
performance during the reporting period. In addition, this report
includes the trust's financial statements and a list of trust investments
as of April 30, 2005.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE TRUST WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. TRUSTS ARE SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE TRUST WILL DECLINE AND
THAT THE VALUE OF TRUST SHARES MAY THEREFORE BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS TRUST.
INCOME MAY SUBJECT CERTAIN INDIVIDUALS TO THE FEDERAL ALTERNATIVE MINIMUM
TAX (AMT).
<Table>
<Caption>
---------------------------------------------------------------------------------------
NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
---------------------------------------------------------------------------------------
</Table>
Performance Summary as of 4/30/05
<Table>
<Caption>
VALUE MUNICIPAL INCOME TRUST
SYMBOL: VKV
- ------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS MARKET NAV
Since Inception (3/26/93) 5.78% 7.15%
10-year 7.44 7.96
5-year 10.36 9.71
1-year 8.90 10.61
6-month -3.55 3.70
- ------------------------------------------------------------
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. FOR THE MOST RECENT MONTH-END PERFORMANCE FIGURES, PLEASE VISIT
VANKAMPEN.COM OR SPEAK WITH YOUR FINANCIAL ADVISOR. INVESTMENT RETURNS, NET
ASSET VALUE (NAV) AND COMMON SHARE MARKET PRICE WILL FLUCTUATE AND TRUST SHARES,
WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
NAV per share is determined by dividing the value of the trust's portfolio
securities, cash and other assets, less all liabilities, by the total number of
common shares outstanding. The common share market price is the price the market
is willing to pay for shares of the trust at a given time. Common share market
price is influenced by a range of factors, including supply and demand and
market conditions. Total return assumes an investment at the beginning of the
period, reinvestment of all distributions for the period in accordance with the
trust's dividend reinvestment plan, and sale of all shares at the end of the
period.
The Lehman Brothers Municipal Bond Index is a broad-based statistical composite
of municipal bonds. The index does not include any expenses, fees or sales
charges, which would lower performance. The index is unmanaged and should not be
considered an investment. It is not possible to invest directly in an index.
1
Trust Report
FOR THE 6-MONTH PERIOD ENDED APRIL 30, 2005
Van Kampen Value Municipal Income Trust is managed by the Adviser's Municipal
Fixed Income team.(1) Current members include Timothy D. Haney and Robert
Wimmel, Vice Presidents of the Adviser; and John Reynoldson, Executive Director
of the Adviser.
MARKET CONDITIONS
The six-month period ended April 30, 2005, was characterized by continued
short-term interest rate increases. As crude oil prices reached record highs,
the prospect of rising inflation also cast a shadow. The Federal Open Market
Committee (the "Fed") raised the federal funds target rate 100 basis points
during the period through a series of four "measured" 0.25 percent tightenings
to 2.75 percent by the end of April. Although rates in the short and
intermediate areas of the yield curve shifted upward as the Fed tightened, long-
term interest rates fell as buyers did not seem deterred by the prospect of
rising inflation. As a result, the yield curve (the difference between short and
longer-term yields) flattened and the long end of the municipal market handily
outperformed the shorter end.
The municipal market in total posted positive returns during the period, though
it was not uniformly strong. In contrast to the strong showing by longer-term
bonds, shorter-term municipals were hampered by the Fed's tightening and turned
in a flat to slightly negative showing. Within the investment-grade segment of
the market, yield differentials between BBB-rated and AAA-rated municipal
securities were slightly wider, though BBB-rated securities still outperformed
high grades due to their higher coupons, while securities rated below investment
grade strongly outperformed as investors sought out their higher yields.
The Fed's interest rate hikes did not appear to dampen investors' appetites for
municipal bonds, as net inflows into municipal bond funds topped $290 million
during the period. The supply of new issues was modest during the closing months
of 2004 (the first two months of the period) before soaring in the opening
months of 2005 as long-term issuers rushed to bring securities to market in
anticipation of additional interest rate increases in the near term.
(1)Team members may change without notice at any time.
2
PERFORMANCE ANALYSIS
The trust's return can be calculated based upon either the market price or the
net asset value (NAV) of its shares. NAV per share is determined by dividing the
value of the trust's portfolio securities, cash and other assets, less all
liabilities, by the total number of common shares outstanding, while market
price reflects the supply and demand for the shares. As a result, the two
returns can differ, as they did during the reporting period. On an NAV basis,
the trust outperformed its benchmark index, the Lehman Brothers Municipal Bond
Index. On a market price basis, the trust underperformed its benchmark.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED APRIL 30, 2005
<Table>
<Caption>
- ----------------------------------------------------------
BASED ON BASED ON LEHMAN BROTHERS
NAV MARKET PRICE MUNICIPAL BOND INDEX
3.70% -3.55% 1.93%
- ----------------------------------------------------------
</Table>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE, WHICH IS NO GUARANTEE OF
FUTURE RESULTS, AND CURRENT PERFORMANCE MAY BE LOWER OR HIGHER THAN THE FIGURES
SHOWN. INVESTMENT RETURN, NET ASSET VALUE AND COMMON SHARE MARKET PRICE WILL
FLUCTUATE AND TRUST SHARES, WHEN SOLD, MAY BE WORTH MORE OR LESS THAN THEIR
ORIGINAL COST. SEE PERFORMANCE SUMMARY FOR ADDITIONAL PERFORMANCE INFORMATION
AND INDEX DEFINITION.
The trust uses leverage to enhance its dividend to common shareholders. The
trust borrows money at short-term rates through the issuance of preferred
shares. The proceeds are reinvested in longer-term securities, taking advantage
of the difference between short- and longer-term rates. The Fed's policy of
raising interest rates throughout the period made the trust's borrowing activity
more expensive. These expenses, however, were more than offset by the positive
performance of the bonds held by the trust.
As part of an ongoing strategy to position the trust for continued increases in
short-term interest rates, we trimmed exposure to bonds with maturities in the
five- to 15-year range. Our strategy also included adding selectively to the
trust's holdings of bonds with longer maturities but moderate interest rate
characteristics. Finally, we kept the trust's duration (a measure of overall
interest-rate sensitivity) below that of its benchmark.
We continued to focus on relative-value trading between liquid, high-quality
securities to capture relative value opportunities identified by our analysts.
The trust's overall credit exposure remained tilted toward higher-quality
securities, with 87 percent of its exposure at the end of the period in bonds
rated AA or better. We took advantage of what we believed to be some compelling
opportunities to add BBB rated securities to the portfolio when our analysts
identified securities with attractive structures and yield characteristics.
3
The trust's portfolio remained well diversified across the major sectors of the
municipal bond market, with its top three sectors at the end of the period being
general purpose, transportation and health care.
There is no guarantee the security sectors mentioned will continue to perform
well or be held by the trust in the future.
4
<Table>
<Caption>
TOP 5 SECTORS AS OF 4/30/05
General Purpose 14.8%
Transportation 13.4
Health Care 12.8
Public Building 10.4
Industrial Revenue 9.1
<Caption>
RATINGS ALLOCATION AS OF 4/30/05
AAA/Aaa 78.8%
AA/Aa 8.4
A/A 6.1
BBB/Baa 4.2
B/B 0.4
Non-Rated 2.1
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 4/30/05
California 12.2%
New York 11.4
Texas 9.3
Illinois 6.0
New Jersey 5.9
Washington 4.8
Florida 4.6
Louisiana 4.5
Georgia 3.1
Colorado 3.0
Ohio 3.0
Tennessee 2.5
Michigan 2.5
Arizona 2.4
Oregon 2.3
Puerto Rico 2.3
Nevada 2.2
Massachusetts 2.0
Hawaii 1.9
Alabama 1.8
Maryland 1.6
Pennsylvania 1.6
Kansas 1.5
South Carolina 1.4
Missouri 1.1
West Virginia 1.0
Connecticut 0.9
District of Columbia 0.9
Arkansas 0.6
Wisconsin 0.5
Utah 0.5
Mississippi 0.3
Oklahoma 0.3
Kentucky 0.1
-----
Total Investments 100.0%
</Table>
5
Subject to change daily. Provided for informational purposes only and should not
be deemed as a recommendation to buy or sell the securities mentioned or
securities in the sectors shown above. Ratings and summary of investments by
state classification are as a percentage of total investments. Sectors are as a
percentage of long-term investments. Securities are classified by sectors that
represent broad groupings of related industries. Van Kampen is a wholly owned
subsidiary of a global securities firm which is engaged in a wide range of
financial services including, for example, securities trading and brokerage
activities, investment banking, research and analysis, financing and financial
advisory services. Rating allocations based upon ratings as issued by Standard
and Poor's and Moody's, respectively.
6
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen trust provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
trust's second and fourth fiscal quarters by filing the schedule
electronically with the Securities and Exchange Commission (SEC). The
semiannual reports are filed on Form N-CSRS and the annual reports are
filed on Form N-CSR. Van Kampen also delivers the semiannual and annual
reports to trust shareholders, and makes these reports available on its
public Web site, www.vankampen.com. In addition to the semiannual and
annual reports that Van Kampen delivers to shareholders and makes
available through the Van Kampen public Web site, each trust files a
complete schedule of portfolio holdings with the SEC for the trust's
first and third fiscal quarters on Form N-Q. Van Kampen does not deliver
the reports for the first and third fiscal quarters to shareholders, nor
are the reports posted to the Van Kampen public Web site. You may,
however, obtain the Form N-Q filings (as well as the Form N-CSR and
N-CSRS filings) by accessing the SEC's Web site, http://www.sec.gov. You
may also review and copy them at the SEC's Public Reference Room in
Washington, DC. Information on the operation of the SEC's Public
Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. You
can also request copies of these materials, upon payment of a duplicating
fee, by electronic request at the SEC's e-mail address
(publicinfo@sec.gov) or by writing the Public Reference section of the
SEC, Washington, DC 20549-0102.
You may obtain copies of a trust's fiscal quarter filings by contacting
Van Kampen Client Relations at 1-800-847-2424.
PROXY VOTING POLICIES AND PROCEDURES AND PROXY VOTING RECORD
The trust's policies and procedures with respect to the voting of proxies
relating to the trust's portfolio securities and information on how the
trust voted proxies relating to portfolio securities during the most
recent twelve-month period ended June 30 is available without charge,
upon request, by visiting our Web site at www.vankampen.com. This
information is also available on the Securities and Exchange Commission's
Web site at http://www.sec.gov.
7
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
MUNICIPAL BONDS 157.5%
ALABAMA 2.9%
$ 1,000 Birmingham Baptist Med Ctr AL Baptist Hlth
Sys Ser A................................. 5.875% 11/15/24 $ 1,061,820
5,000 Birmingham Baptist Med Ctr AL Spl Care Fac
Fin Auth Rev (MBIA Insd).................. 5.750 11/15/10 5,298,300
4,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser
A......................................... 5.250 01/01/23 4,275,400
4 Mobile, AL Indl Dev Brd Solid Waste Disp
Rev Mobile Energy Svc Co Proj Rfdg........ 6.950 01/01/20 71
-------------
10,635,591
-------------
ARIZONA 3.7%
5,000 Arizona Sch Fac Brd Ctf Ser B (Prerefunded
@ 09/01/14) (FSA Insd).................... 5.250 09/01/19 5,654,250
5,250 Arizona Tourism & Sports Auth Tax Rev
Multipurpose Stad Fac Ser A (MBIA Insd)... 5.375 07/01/23 5,818,155
2,280 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease
Oblig Irvington Proj Tucson Ser A Rfdg
(FSA Insd)................................ 7.250 07/15/10 2,386,704
-------------
13,859,109
-------------
ARKANSAS 0.9%
1,930 Arkansas St Cap Apprec College Svg........ * 06/01/16 1,209,357
2,000 Arkansas St Dev Fin Auth Rev St Agy Fac
Donaghey Plaza Proj (FSA Insd)............ 5.000 06/01/34 2,089,780
-------------
3,299,137
-------------
CALIFORNIA 19.4%
6,215 ABC, CA Uni Sch Dist Cap Apprec (FGIC
Insd)..................................... * 08/01/34 1,408,070
8 California Rural Home Mtg Fin Auth Single
Family Mtg Rev Ser B (AMT) (GNMA
Collateralized)........................... 7.750 09/01/26 7,613
10,000 California St (Prerefunded @ 03/01/10)
(MBIA Insd)............................... 5.500 03/01/17 11,241,900
3,000 California St Dept Wtr Res Ser A.......... 5.875 05/01/16 3,397,830
5,000 California St Pub Wks Brd Dept Gen Svc Cap
East End A (AMBAC Insd)................... 5.125 12/01/21 5,346,300
6,000 California St Pub Wks Brd Lease Rev Dept
of Corrections St Prisons Ser A Rfdg
(AMBAC Insd).............................. 5.250 12/01/13 6,762,480
2,000 California St Pub Wks Brd Lease Rev Dept
of Corrections St Prisons Ser A Rfdg
(AMBAC Insd) (a).......................... 5.000 12/01/19 2,197,020
5,000 California St Rfdg........................ 5.000 02/01/19 5,276,450
2,000 Florin, CA Res Consv Dist Cap Impt Elk
Grove Wtr Svc Ser A (MBIA Insd)........... 5.000 09/01/33 2,097,320
30,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Ser A Rfdg............................ * 01/15/22 11,480,700
1,000 Foothill/Eastern Corridor Agy CA Toll Rd
Rev Sr Lien Ser A (Prerefunded @
01/01/07)................................. 6.500 01/01/32 1,061,250
</Table>
8 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 3,350 Imperial Irr Dist CA Ctf Part Elec Sys
Proj (FSA Insd) (b)....................... 5.250% 11/01/19 $ 3,658,233
5,500 Port Oakland, CA Ser L (AMT) (FGIC
Insd)..................................... 5.000 11/01/32 5,627,050
9,000 Riverside Cnty, CA Asset Leasing Corp
Leasehold Rev Riverside Cnty Hosp Proj
(MBIA Insd)............................... * 06/01/21 4,174,740
5,700 Sacramento, CA City Fin Auth Rev Comb Proj
B (MBIA Insd)............................. * 11/01/15 3,668,121
10,225 Santa Ana, CA Uni Sch Dist Ctf Part Cap
Apprec Fin Proj (FSA Insd)................ * 04/01/32 2,654,819
5,755 Southwestern Cmnty College Cap Apprec
Election 2000 (FGIC Insd)................. * 08/01/29 1,724,773
-------------
71,784,669
-------------
COLORADO 4.8%
4,340 Adams & Arapahoe Cntys, CO Jt Sch Dist Ser
A (FSA Insd).............................. 5.250 12/01/18 4,797,349
4,290 Adams & Arapahoe Cntys, CO Jt Sch Dist Ser
C (Prerefunded 12/01/06) (MBIA Insd)...... 5.750 12/01/08 4,568,550
3,000 Arapahoe Cnty, CO Cap Impt Tr Fd Hwy Rev
E-470 Proj (Prerefunded @ 08/31/05) (c)... 7.000 08/31/26 3,133,980
1,000 Arapahoe Cnty, CO Cap Impt Tr Fd Hwy Rev
E-470 Proj Ser B (Prerefunded @ 08/31/05)
(c)....................................... 6.950 08/31/20 1,044,490
9,000 Arapahoe Cnty, CO Cap Impt Tr Fd Hwy Rev
E-470 Proj Ser C (Prerefunded @
08/31/05)................................. * 08/31/26 1,861,740
2,000 Colorado Hlth Fac Auth Rev Catholic Hlth
Initiatives Ser A (Escrowed to
Maturity)................................. 5.500 03/01/32 2,233,320
-------------
17,639,429
-------------
CONNECTICUT 1.4%
5,000 Connecticut St Ser C (FGIC Insd) (a)...... 5.000 04/01/22 5,366,100
-------------
DISTRICT OF COLUMBIA 1.4%
5,000 Metropolitan Washington DC Arpt Auth Sys
Ser A (AMT) (FGIC Insd)................... 5.250 10/01/32 5,217,550
-------------
FLORIDA 7.3%
2,500 Dade Cnty, FL Wtr & Swr Sys Rev (FGIC
Insd)..................................... 5.250 10/01/21 2,633,525
5,000 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)..................................... 5.950 07/01/20 5,077,550
3,980 Jacksonville, FL Port Auth (AMT) (MBIA
Insd)..................................... 5.700 11/01/30 4,311,773
</Table>
See Notes to Financial Statements 9
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,780 Jacksonville, FL Port Auth (Prerefunded @
11/01/10) (AMT) (MBIA Insd)............... 5.700% 11/01/30 $ 3,088,997
11,500 Miami-Dade Cnty, FL Aviation Rev Miami
Intl Arpt (AMT) (FGIC Insd)............... 5.375 10/01/32 12,118,930
-------------
27,230,775
-------------
GEORGIA 4.4%
5,000 Georgia Muni Elec Auth Pwr Rev Ser B
(Escrowed to Maturity) (FGIC Insd)........ 5.700 01/01/19 5,779,450
2,700 Marietta, GA Dev Auth Rev First Mtg Life
College Ser B (FSA Insd) (b).............. 5.375 09/01/09 2,774,790
2,205 Municipal Elec Auth GA Comb Cycle Proj Ser
A (MBIA Insd)............................. 5.000 11/01/20 2,383,781
4,995 Municipal Elec Auth GA Comb Turbine Proj
Ser A (MBIA Insd)......................... 5.250 11/01/20 5,440,304
-------------
16,378,325
-------------
HAWAII 3.1%
10,430 Hawaii St Dept Budget & Fin Spl Purp Rev
Hawaiian Elec Co Inc Ser A (AMT) (MBIA
Insd)..................................... 5.650 10/01/27 11,409,690
-------------
ILLINOIS 9.6%
3,500 Chicago, IL Cap Apprec (Prerefunded @
07/01/05) (AMBAC Insd).................... * 01/01/17 1,677,130
6,000 Chicago, IL Lakefront Millenium Pkg Fac
(MBIA Insd) (d)........................... 0/5.750 01/01/29 6,147,120
3,180 Illinois Hlth Fac Auth Rev Children's Mem
Hosp (MBIA Insd).......................... 6.250 08/15/13 3,680,119
1,485 Illinois Hlth Fac Auth Rev Evangelical
Hosp Ser A Rfdg (FSA Insd)................ 6.750 04/15/17 1,806,681
825 Illinois Hlth Fac Auth Rev Evangelical
Hosp Ser C (FSA Insd)..................... 6.750 04/15/17 1,003,711
1,000 Illinois Hlth Fac Auth Rev Highland Park
Hosp Proj Ser A (Prerefunded @ 10/01/07)
(MBIA Insd)............................... 5.750 10/01/17 1,083,720
2,070 Northern IL Univ Ctf Part Hoffman Estates
Ctr Proj (FSA Insd)....................... 5.400 09/01/16 2,322,147
5,000 Regional Trans Auth IL Ser A (AMBAC
Insd)..................................... 8.000 06/01/17 6,893,250
10,000 Will Cnty, IL Sch Dist No 122 Ser B Rfdg
(FGIC Insd)............................... 5.250 11/01/20 10,840,800
-------------
35,454,678
-------------
</Table>
10 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
KANSAS 2.1%
$ 3,430 Kansas St Dev Fin Auth Rev KS Proj Ser N
(AMBAC Insd) (b).......................... 5.250% 10/01/20 $ 3,714,347
3,615 Kansas St Dev Fin Auth Rev KS Proj Ser N
(AMBAC Insd) (b).......................... 5.250 10/01/21 3,914,683
-------------
7,629,030
-------------
KENTUCKY 0.2%
500 Mount Sterling, KY Lease Rev KY League
Cities Fdg Ser B.......................... 6.100 03/01/18 593,560
-------------
LOUISIANA 7.2%
5,000 Lafayette, LA Util Rev (MBIA Insd)........ 5.250 11/01/21 5,484,800
5,970 Louisiana Loc Govt Environment Southeastn
LA Student Hsg A (MBIA Insd) (b).......... 5.250 08/01/24 6,462,406
8,065 Louisiana St Office Fac Corp LA St Cap
Complex Pgm (MBIA Insd) (b)............... 5.000 11/01/20 8,591,886
6,000 Saint Charles Parish, LA Solid Waste Disp
Rev LA Pwr & Lt Co Proj (AMT) (FSA Insd)
(a)....................................... 7.050 04/01/22 6,020,280
-------------
26,559,372
-------------
MARYLAND 2.6%
5,000 Maryland St Econ Dev Corp MD Aviation
Admin Fac (AMT) (FSA Insd)................ 5.375 06/01/20 5,414,550
4,000 Maryland St Trans Auth Arpt Baltimore/WA
Intl Arpt B (AMT) (AMBAC Insd)............ 5.125 03/01/24 4,219,280
-------------
9,633,830
-------------
MASSACHUSETTS 3.2%
2,500 Massachusetts Bay Trans Auth Ser A........ 5.000 07/01/32 2,602,175
1,750 Massachusetts St Hlth & Ed Fac Auth Rev
Hlthcare Sys Covenant Hlth................ 6.000 07/01/31 1,863,767
925 Massachusetts St Indl Fin Agy Wtr
Treatment American Hingham (AMT).......... 6.900 12/01/29 978,003
925 Massachusetts St Indl Fin Agy Wtr
Treatment American Hingham (AMT).......... 6.950 12/01/35 978,733
5,000 Massachusetts St Wtr Pollutn Abatement Tr
Pool Prog Bds Ser 10...................... 5.000 08/01/21 5,381,300
-------------
11,803,978
-------------
MICHIGAN 3.9%
5,000 Detroit, MI Downtown Dev Auth Tax
Increment Rev Dev Area No. 1 Proj Ser C1
(Prerefunded @ 07/01/06).................. 6.250 07/01/25 5,298,000
3,185 Detroit, MI Wtr Supply Sys Rev Sr Lien Ser
A (MBIA Insd) (b)......................... 5.250 07/01/20 3,501,971
2,000 Kent Hosp Fin Auth MI Rev Met Hosp Proj
Ser A..................................... 6.000 07/01/35 2,141,480
3,090 Troy, MI Downtown Dev Auth Dev Rfdg (MBIA
Insd)..................................... 5.500 11/01/15 3,443,342
-------------
14,384,793
-------------
</Table>
See Notes to Financial Statements 11
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
MISSISSIPPI 0.5%
$ 2,000 Mississippi Bus Fin Corp MS Pollutn Ctl
Rev Sys Energy Res Inc Proj............... 5.875% 04/01/22 $ 2,025,100
-------------
MISSOURI 1.7%
2,195 Missouri St Hlth & Ed Fac Rev Univ MO
Columbia Arena Proj (b)................... 5.000 11/01/16 2,365,486
4,000 Platte Cnty, MO Indl Dev Auth Trans Rev... 4.500 12/01/24 4,019,960
-------------
6,385,446
-------------
NEVADA 3.4%
8,000 Clark Cnty, NV Arpt Rev Sub Lien Ser A-2
(FGIC Insd)............................... 5.000 07/01/36 8,312,640
4,000 Clark Cnty, NV Indl Dev Rev Southwest Gas
Corp Proj Ser A (AMT) (AMBAC Insd)........ 5.250 07/01/34 4,196,480
290 Nevada Hsg Div Single Family Pgm Mezz B
(AMT) (FHA/VA Gtd)........................ 6.550 10/01/12 293,692
-------------
12,802,812
-------------
NEW JERSEY 9.2%
5,000 Essex Cnty, NJ Impt Auth Rev Cnty Gtd Proj
Consldtn Rfdg (MBIA Insd)................. 5.125 10/01/20 5,431,700
1,400 New Jersey Econ Dev Auth Rev Cigarette
Tax....................................... 5.750 06/15/29 1,502,088
4,350 New Jersey Econ Dev Wtr NJ Amern Wtr Co
Inc Ser A (AMT) (FGIC Insd)............... 5.250 07/01/38 4,508,297
2,500 New Jersey Hlthcare Fac Fin Auth Rev Gen
Hosp Ctr at Passaic (Escrowed to Maturity)
(FSA Insd)................................ 6.750 07/01/19 3,164,700
1,695 New Jersey Hlthcare Fac Fin Auth Rev Gen
Hosp Ctr Passaic (Escrowed to Maturity)
(FSA Insd)................................ 6.000 07/01/06 1,730,341
10,000 New Jersey St Ed Fac Auth Higher Ed Cap
Impt Ser A (AMBAC Insd)................... 5.250 09/01/20 10,873,800
6,750 Salem Cnty, NJ Indl Pollutn Ctl Fin Auth
Rev Pollutn Ctl Pub Svc Elec & Gas Ser A
(AMT) (MBIA Insd)......................... 5.450 02/01/32 6,806,228
-------------
34,017,154
-------------
NEW YORK 18.0%
7,000 Metropolitan Trans Auth NY Ser A Rfdg
(FGIC Insd)............................... 5.250 11/15/31 7,523,320
5,000 Metropolitan Trans Auth NY Svc Contract
Ser A Rfdg (AMBAC Insd)................... 5.000 07/01/30 5,212,200
3,500 New York City Ser C....................... 5.500 08/01/13 3,906,175
7,500 New York City Ser E (FSA Insd)............ 5.000 11/01/20 8,060,550
6,000 New York City Transitional Fin Auth Rev
Future Tax Secd Ser A Rfdg (d)............ 5.500/14.000 11/01/26 6,675,300
8,240 New York City Transitional Future Tax Secd
Ser C Rfdg (AMBAC Insd)................... 5.250 08/01/18 9,054,030
</Table>
12 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 7,575 New York St Dorm Auth Rev City Univ Sys
Con Ser A................................. 5.625% 07/01/16 $ 8,664,588
3,845 New York St Dorm Auth Rev Secd Hosp Gen
Hosp Rfdg................................. 5.750 02/15/20 4,271,141
2,310 New York St Med Care Fac Fin Agy Rev Saint
Peter's Hosp Proj Ser A (AMBAC Insd)...... 5.375 11/01/13 2,337,720
5,000 New York St Ser G (Prerefunded @
02/01/06)................................. 5.750 02/01/14 5,190,600
5,000 New York St Urban Dev Corp Rev St Fac
Rfdg...................................... 5.700 04/01/20 5,870,850
-------------
66,766,474
-------------
OHIO 4.7%
1,150 Cuyahoga Cnty, OH Hosp Fac Rev Canton Inc
Proj...................................... 7.500 01/01/30 1,293,428
2,000 Cuyahoga Cnty, OH Multi-Family Rev Hsg
Dale Bridge Apt (AMT) (GNMA
Collateralized)........................... 6.600 10/20/30 2,057,200
3,540 Franklin Cnty, OH Hosp Rev & Impt Doctor's
Hosp Proj Rfdg (Escrowed to Maturity)..... 5.875 12/01/23 3,574,798
1,500 Mahoning Cnty, OH Hosp Fac Forum Hlth
Oblig Group Ser A......................... 6.000 11/15/32 1,611,915
5,130 Muskingum Cnty, OH Hosp Fac Rev Bethesda
Care Sys Impt Rfdg (Connie Lee Insd)
(b)....................................... 6.250 12/01/10 5,482,688
2,000 Ohio St Wtr Dev Auth Pollutn Ctl Fac Rev
OH Edison Co Proj Rfdg.................... 5.950 05/15/29 2,020,280
1,280 Toledo Lucas Cnty, OH Port Auth Dev Rev
Northwest OH Bd Fd Ser C (AMT) (b)........ 6.600 11/15/15 1,356,467
-------------
17,396,776
-------------
OKLAHOMA 0.5%
1,500 Jenks, OK Aquarium Auth Rev First Mtg
(Prerefunded 07/01/10) (MBIA Insd)........ 6.100 07/01/30 1,725,075
-------------
OREGON 3.7%
5,000 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)..................................... 5.250 07/01/22 5,471,350
2,745 Oregon St Dept Admin Ser A (Prerefunded @
11/01/05) (MBIA Insd)..................... 5.250 11/01/10 2,809,068
5,000 Oregon St Dept Admin Ser C Rfdg (MBIA
Insd)..................................... 5.250 11/01/18 5,453,500
-------------
13,733,918
-------------
PENNSYLVANIA 2.3%
2,500 Harrisburg, PA Auth Res Gtd Sub Ser D-2
(Variable Rate Coupon) (FSA Insd)......... 5.000 12/01/33 2,722,225
2,535 Pennsylvania St Higher Ed UPMC Hlth Sys
Ser A..................................... 6.250 01/15/17 2,862,370
1,000 Pennsylvania St Higher Ed UPMC Hlth Sys
Ser A..................................... 6.250 01/15/18 1,126,950
</Table>
See Notes to Financial Statements 13
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,370 Philadelphia, PA Hosp & Higher Ed Fac Auth
Rev Cmnty College Ser B Rfdg (MBIA Insd)
(b)....................................... 6.500% 05/01/08 $ 1,505,260
465 Ridley Park, PA Hosp Auth Rev Taylor Hosp
Ser A (Escrowed to Maturity).............. 6.000 12/01/05 473,858
-------------
8,690,663
-------------
SOUTH CAROLINA 2.2%
1,015 Rock Hill, SC Util Sys Rev Comb Ser C Rfdg
(FSA Insd) (b)............................ 5.000 01/01/11 1,101,255
6,500 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser A (AMBAC Insd)..... 5.200 11/01/27 6,968,325
-------------
8,069,580
-------------
TENNESSEE 4.0%
7,050 Hallsdale Powell Util Dist Knox Cnty TN
Wtr & Swr Rev Impt Ser B (FGIC Insd)...... 5.000 04/01/34 7,366,122
12,525 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev Cap Apprec First Mtg Ser A Rfdg (MBIA
Insd)..................................... * 07/01/26 4,411,430
2,500 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg Mtn St Hlth Ser A Rfdg (MBIA
Insd)..................................... 7.500 07/01/25 3,145,675
-------------
14,923,227
-------------
TEXAS 14.7%
1,585 Brazos River Auth TX Pollutn Ctl Rev Adj
TXU Elec Co Proj Ser C Rfdg (Variable Rate
Coupon) (AMT)............................. 5.750 05/01/36 1,721,326
5,000 Dallas-Fort Worth, TX Intl Arpt Rev Impt
Jt Ser A Rfdg (AMT) (FGIC Insd)........... 5.500 11/01/31 5,289,400
2,345 Denton Cnty, TX Perm Impt (Prerefunded
07/15/10) (b)............................. 5.500 07/15/19 2,568,150
1,000 Harris Cnty, TX Hlth Fac Dev Mem Hermann
Hlthcare Ser A............................ 6.375 06/01/29 1,104,220
5,000 Harris Cnty, TX Sr Lien Toll Rd Rfdg (FSA
Insd)..................................... 5.125 08/15/32 5,229,500
4,655 Houston, TX Arpt Sys Rev Sub Lien (FSA
Insd)..................................... 5.500 07/01/15 5,179,898
3,000 Houston, TX Arpt Sys Rev Sub Lien Ser A
(AMT) (FSA Insd).......................... 5.625 07/01/30 3,234,270
3,920 Lower Colorado Riv Auth TX LCRA Svcs Corp
Proj Rfdg (FGIC Insd)..................... 5.000 05/15/33 4,030,779
5,000 Matagorda Cnty, TX Navig Dist No 1 Rev
Houston Lt Rfdg (AMT) (AMBAC Insd) (c).... 5.125 11/01/28 5,429,100
2,000 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj....................... 7.250 01/01/31 2,039,440
3,325 North Cent TX Hlth Fac Dev Hosp Baylor
Hlthcare Sys Proj Ser A................... 5.125 05/15/29 3,421,425
3,610 San Antonio, TX Elec & Gas Sys Rfdg....... 5.375 02/01/16 3,945,730
</Table>
14 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 1,390 San Antonio, TX Elec & Gas Sys Rfdg
(Prerefunded @ 02/01/12).................. 5.375% 02/01/16 $ 1,546,222
3,960 Stafford, TX Econ Dev Corp (FGIC Insd).... 5.500 09/01/30 4,397,738
5,000 Wylie, TX Indpt Sch Dist Rfdg (PSF Gtd)... 5.000 08/15/30 5,156,700
-------------
54,293,898
-------------
UTAH 0.8%
4,950 Intermountain Pwr Agy UT Pwr Supply Rev
Ser A Rfdg (Escrowed to Maturity)
(FGIC Insd)............................... * 07/01/17 2,821,104
-------------
WASHINGTON 7.7%
5,000 Clark Cnty, WA Sch Dist 114 (FSA Insd).... 5.250 06/01/19 5,482,400
3,630 King City, WA Ser B (Prerefunded @
12/01/07)................................. 5.900 12/01/14 3,966,791
1,370 King Cnty, WA Ser B (Prerefunded @
12/01/07)................................. 5.900 12/01/14 1,497,109
2,245 King Cnty, WA Ser B (Prerefunded @
12/01/07)................................. 6.625 12/01/15 2,493,611
4,000 Washington St Pub Pwr Supply Ser A Rfdg
(FGIC Insd)............................... 7.000 07/01/08 4,470,840
10,000 Washington St Pub Pwr Supply Ser A Rfdg
(AMBAC Insd).............................. 5.700 07/01/09 10,521,300
-------------
28,432,051
-------------
WEST VIRGINIA 1.6%
5,920 Harrison Cnty, WV Cnty Cmnty Solid Waste
Disp Rev West PA Pwr Co Ser C (AMT) (AMBAC
Insd)..................................... 6.750 08/01/24 6,056,930
-------------
WISCONSIN 0.8%
2,675 Wisconsin St Hlth & Ed Fac FH Hlthcare Dev
Inc Proj.................................. 6.250 11/15/28 2,848,099
-------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
PUERTO RICO 3.6%
$ 7,000 Puerto Rico Comwlth Hwy & Tran Auth Hwy
Rev Ser Y Rfdg (FSA Insd) (a)............. 6.250% 07/01/21 $ 8,886,010
4,000 Puerto Rico Pub Bldgs Auth Gtd Pub Ed &
Hlth Fac Ser M Rfdg (MBIA Insd)........... 5.600 07/01/08 4,333,120
-------------
13,219,130
-------------
TOTAL LONG-TERM INVESTMENTS 157.5%
(Cost $543,446,761)........................................................ 583,087,053
SHORT-TERM INVESTMENTS 1.1%
(Cost $4,100,000).......................................................... 4,100,000
-------------
TOTAL INVESTMENTS 158.6%
(Cost $547,546,761)........................................................ 587,187,053
OTHER ASSETS IN EXCESS OF LIABILITIES 2.2%.................................. 8,266,696
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (60.8%).................. (225,191,898)
-------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%............................... $ 370,261,851
=============
</Table>
Percentages are calculated as a percentage of net assets applicable to common
shares.
* Zero coupon bond
(a) All or a portion of these securities have been physically segregated in
connection with open futures contracts.
(b) The Trust owns 100% of the bond issuance.
(c) Security converts to a fixed coupon rate at a predetermined date.
(d) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FHA/VA--Federal Housing Administration/Department of Veterans Affairs
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
PSF--Public School Fund
16 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2005 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $547,546,761)....................... $587,187,053
Cash........................................................ 3,082
Receivables:
Interest.................................................. 8,762,166
Investments Sold.......................................... 2,112,200
Variation Margin on Futures............................... 221,250
Other....................................................... 2,491
------------
Total Assets............................................ 598,288,242
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 2,034,620
Investment Advisory Fee................................... 267,133
Income Distributions--Common Shares....................... 56,705
Other Affiliates.......................................... 24,415
Trustees' Deferred Compensation and Retirement Plans........ 328,080
Accrued Expenses............................................ 123,540
------------
Total Liabilities....................................... 2,834,493
Preferred Shares (including accrued distributions).......... 225,191,898
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $370,261,851
============
NET ASSET VALUE PER COMMON SHARE ($370,261,851 divided by
23,555,115 shares outstanding)............................ $ 15.72
============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 23,555,115 shares issued and
outstanding).............................................. $ 235,551
Paid in Surplus............................................. 330,817,133
Net Unrealized Appreciation................................. 39,125,111
Accumulated Undistributed Net Investment Income............. 1,635,355
Accumulated Net Realized Loss............................... (1,551,299)
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $370,261,851
============
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 9,000 issued with liquidation preference of
$25,000 per share)........................................ $225,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $595,261,851
============
</Table>
See Notes to Financial Statements 17
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2005 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $14,565,083
-----------
EXPENSES:
Investment Advisory Fee..................................... 1,617,837
Preferred Share Maintenance................................. 313,258
Trustees' Fees and Related Expenses......................... 36,635
Legal....................................................... 30,554
Custody..................................................... 17,538
Other....................................................... 125,847
-----------
Total Expenses.......................................... 2,141,669
-----------
NET INVESTMENT INCOME....................................... $12,423,414
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 1,434,758
Futures................................................... 1,721,541
-----------
Net Realized Gain........................................... 3,156,299
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 40,650,218
-----------
End of the Period:
Investments............................................. 39,640,292
Futures................................................. (515,181)
-----------
39,125,111
-----------
Net Unrealized Depreciation During the Period............... (1,525,107)
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 1,631,192
===========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $(2,051,834)
===========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $12,002,772
===========
</Table>
18 See Notes to Financial Statements
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2005 OCTOBER 31, 2004
-----------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................... $ 12,423,414 $ 24,740,659
Net Realized Gain/Loss................................... 3,156,299 (4,966,234)
Net Unrealized Appreciation/Depreciation During the
Period................................................. (1,525,107) 7,913,408
Distributions to Preferred Shareholders:
Net Investment Income.................................. (2,051,834) (2,460,484)
------------ ------------
Change in Net Assets Applicable to Common Shares from
Operations............................................. 12,002,772 25,227,349
Distributions to Common Shareholders:
Net Investment Income.................................. (10,634,692) (23,212,687)
------------ ------------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
INVESTMENT ACTIVITIES.................................. 1,368,080 2,014,662
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period.................................. 368,893,771 366,879,109
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $1,635,355 and $1,898,467,
respectively).......................................... $370,261,851 $368,893,771
============ ============
</Table>
See Notes to Financial Statements 19
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE COMMON SHARE OF THE
TRUST OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX
MONTHS
ENDED
APRIL 30, ------------------
2005 2004 2003
--------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD.................... $ 15.66 $ 15.58 $ 15.63
------- ------- -------
Net Investment Income...................................... .53 1.05 1.10
Net Realized and Unrealized Gain/Loss...................... .07 .12 (.04)
Common Share Equivalent of Distributions Paid to Preferred
Shareholders:
Net Investment Income.................................... (.09) (.10) (.10)
------- ------- -------
Total from Investment Operations............................ .51 1.07 .96
Distributions Paid to Common Shareholders:
Net Investment Income.................................... (.45) (.99) (1.01)
------- ------- -------
NET ASSET VALUE, END OF THE PERIOD.......................... $ 15.72 $ 15.66 $ 15.58
======= ======= =======
Common Share Market Price at End of the Period.............. $ 13.50 $ 14.46 $ 14.70
Total Return (b)............................................ -3.55%* 5.25% 9.61%
Net Assets Applicable to Common Shares at End of the Period
(In millions).............................................. $ 370.3 $ 368.9 $ 366.9
Ratio of Expenses to Average Net Assets Applicable to Common
Shares (c)................................................. 1.17% 1.32% 1.33%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c)............................ 6.80% 6.76% 6.99%
Portfolio Turnover.......................................... 9%* 24% 30%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including Preferred
Shares (c)................................................. .73% .82% .83%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d)............................ 5.68% 6.09% 6.37%
SENIOR SECURITIES:
Total Preferred Shares Outstanding.......................... 9,000 9,000 9,000
Asset Coverage Per Preferred Share (e)...................... $66,162 $65,999 $65,769
Involuntary Liquidating Preference Per Preferred Share...... $25,000 $25,000 $25,000
Average Market Value Per Preferred Share.................... $25,000 $25,000 $25,000
</Table>
* Non-Annualized
(a)As required, effective November 1, 2001, the Trust has adopted the provisions
of the AICPA Audit and Accounting Guide for Investment Companies and began
accreting market discount on fixed income securities. The effect of this
change for the year ended October 31, 2002 was to increase net investment
income per share by less than $.01, decrease net realized and unrealized
gains and losses per share by less than $.01 and increase the ratio of net
investment income to average net assets applicable to common shares by .02%.
Per share, ratios, and supplemental data for the periods prior to October 31,
2002 have not been restated to reflect this change.
(b)Total return assumes an investment at the common share market price at the
beginning of the period indicated, reinvestment of all distributions for the
period in accordance with the Trust's dividend reinvestment plan, and sale of
all shares at the closing common share market price at the end of the period
indicated.
(c)Ratios do not reflect the effect of dividend payments to preferred
shareholders.
(d)Ratios reflect the effect of divided payments to preferred shareholders.
(e)Calculated by subtracting the Trust's total liabilities (not including the
preferred shares) from the Trust's total assets and dividing this by the
number of preferred shares outstanding.
20
<Table>
YEAR ENDED OCTOBER 31,
- ----------------------------------------------------------------------------------------------------------
2002 (A) 2001 2000 1999 1998 1997 1996 1995
- ----------------------------------------------------------------------------------------------------------
$ 15.68 $ 14.38 $ 13.80 $ 15.64 $ 15.14 $ 14.50 $ 14.37 $ 12.90
------- ------- ------- -------- -------- -------- -------- --------
1.11 1.13 1.15 1.14 1.14 1.16 1.17 1.18
(.06) 1.25 .63 (1.86) .51 .63 .13 1.57
(.13) (.31) (.39) (.31) (.34) (.34) (.34) (.38)
------- ------- ------- -------- -------- -------- -------- --------
.92 2.07 1.39 (1.03) 1.31 1.45 .96 2.37
(.97) (.77) (.81) (.81) (.81) (.81) (.83) (.90)
------- ------- ------- -------- -------- -------- -------- --------
$ 15.63 $ 15.68 $ 14.38 $ 13.80 $ 15.64 $ 15.14 $ 14.50 $ 14.37
======= ======= ======= ======== ======== ======== ======== ========
$ 14.37 $ 13.78 $ 12.25 $12.0625 $ 14.75 $13.5625 $ 12.375 $ 12.75
11.50% 19.22% 8.56% -13.29% 15.10% 16.61% 3.70% 27.67%
$ 368.1 $ 369.3 $ 338.7 $ 325.1 $ 368.5 $ 356.6 $ 341.5 $ 338.4
1.46% 1.63% 1.77% 1.67% 1.67% 1.70% 1.77% 1.80%
7.22% 7.49% 8.36% 7.56% 7.41% 7.93% 8.15% 8.67%
38% 30% 25% 35% 24% 32% 42% 50%
.90% 1.00% 1.05% 1.02% 1.03% 1.03% 1.06% 1.06%
6.36% 5.44% 5.55% 5.50% 5.21% 5.61% 5.78% 5.90%
9,000 9,000 9,000 9,000 4,500 4,500 4,500 4,500
$65,910 $66,028 $62,631 $ 61,123 $131,890 $129,243 $125,881 $125,198
$25,000 $25,000 $25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
$25,000 $25,000 $25,000 $ 25,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000
</Table>
See Notes to Financial Statements 21
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Value Municipal Income Trust (the "Trust") is registered as a
diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Trust's investment objective is to provide
a high level of current income exempt from federal income tax, consistent with
preservation of capital. The Trust will invest in a portfolio consisting
substantially of municipal obligations rated investment grade at the time of
investment. The Trust commenced investment operations on March 26, 1993.
The following is a summary of significant accounting policies consistently
followed by the Trust in the preparation of its financial statements. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.
A. SECURITY VALUATION Municipal bonds are valued by independent pricing services
or dealers using the mean of the bid and asked prices or, in the absence of
market quotations, at fair value based upon yield data relating to municipal
bonds with similar characteristics and general market conditions. Securities
which are not valued by independent pricing services or dealers are valued at
fair value using procedures established in good faith by the Board of Trustees.
Future contracts are valued at the settlement price established each day on the
exchange on which they are traded. Short-term securities with remaining
maturities of 60 days or less are valued at amortized cost, which approximates
market value.
B. SECURITY TRANSACTIONS Security transactions are recorded on a trade date
basis. Realized gains and losses are determined on an identified cost basis. The
Trust may purchase and sell securities on a "when-issued" or "delayed delivery"
basis with settlement to occur at a later date. The value of the security so
purchased is subject to market fluctuations during this period. The Trust will
segregate assets with the custodian having an aggregate value at least equal to
the amount of the when-issued or delayed delivery purchase commitments until
payment is made. At April 30, 2005, the Trust had no when-issued or delayed
delivery purchase commitments.
C. INVESTMENT INCOME Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security.
D. FEDERAL INCOME TAXES It is the Trust's policy to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies and to distribute substantially all of its taxable income to its
shareholders. Therefore, no provision for federal income taxes is required.
The Trust intends to utilize provisions of the federal income tax laws which
allow it to carry a realized capital loss forward for eight years following the
year of the loss and offset such losses against any future realized capital
gains. At October 31, 2004, the Trust had an
22
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
accumulated capital loss carryforward for tax purposes of $5,643,037 which will
expire according to the following schedule.
<Table>
<Caption>
AMOUNT EXPIRATION
$2,246,517.................................................. October 31, 2007
3,396,520.................................................. October 31, 2012
</Table>
At April 30, 2005, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $546,878,897
============
Gross tax unrealized appreciation........................... $ 40,709,557
Gross tax unrealized depreciation........................... (401,401)
------------
Net tax unrealized appreciation on investments.............. $ 40,308,156
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Trust declares and pays monthly
dividends from net investment income to common shareholders. Net realized gains,
if any, are distributed annually on a pro rata basis to common and preferred
shareholders. Distributions from net realized gains for book purposes may
include short-term capital gains and a portion of futures gains, which are
included as ordinary income for tax purposes.
The tax character of distributions paid during the year ended October 31,
2004 was as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $185,505
Long-term capital gain.................................... -0-
--------
$185,505
========
</Table>
As of October 31, 2004, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $169,276
</Table>
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Trust's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") provides investment advice and facilities to the
Trust for an annual fee payable monthly of .55% of the average daily net assets
of the Trust. Effective November 1, 2004, the investment advisory fee was
reduced from .60% to .55%.
For the six months ended April 30, 2005, the Trust recognized expenses of
approximately $13,300 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Trust is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Trust.
Under separate Accounting Services and Legal Services agreements, the
Adviser provides accounting and legal services to the Trust. The Adviser
allocates the cost of such services to each trust. For the six months ended
April 30, 2005, the Trust recognized expenses of
23
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
approximately $31,800 representing Van Kampen's cost of providing accounting and
legal services to the Trust, which are reported as part of "Other" and "Legal"
expenses, respectively, in the Statement of Operations.
Certain officers and trustees of the Trust are also officers and directors
of Van Kampen. The Trust does not compensate its officers or trustees who are
also officers of Van Kampen.
The Trust has implemented deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to defer all or a portion of their compensation to a
later date. Benefits under the retirement plan are payable for a ten-year period
and are based upon each trustee's years of service to the Trust. The maximum
annual benefit per trustee under the plan is $2,500.
3. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $54,605,076 and $52,364,457,
respectively.
4. DERIVATIVE FINANCIAL INSTRUMENTS
A derivative financial instrument in very general terms refers to a security
whose value is "derived" from the value of an underlying asset, reference rate,
or index.
The Trust may invest up to 15% of its net assets in "inverse floating rate
obligations." The inverse floating rate obligations in which the Trust may
invest are typically created through a division of a fixed-rate municipal
obligation into two separate instruments, a short-term obligation and a
long-term obligation. The interest rate on the short-term obligation is set at
periodic auctions. The interest rate on the long-term obligation which the Trust
may purchase is the rate the issuer would have paid on the fixed-income
obligation, (i) plus the difference between such fixed rate and the rate on the
short-term obligation, if the short-term rate is lower than the fixed rate; or
(ii) minus such difference if the interest rate on the short-term obligation is
higher than the fixed rate. These securities have varying degrees of liquidity
and the market value of such securities generally will fluctuate 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. These securities 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. Although volatile, inverse floating rate obligations
typically offer the potential for yields exceeding the yields available on fixed
rate bonds with comparable credit quality, coupon, call provisions and maturity.
These securities usually permit the investor to convert the floating rate
security counterpart to a fixed rate (normally adjusted downward), and this
optional conversion feature may provide a partial hedge against rising rates if
exercised at an opportune time.
In order to seek to manage the interest rate exposure of the Trust's
portfolio in a changing interest rate environment, the Trust may purchase or
sell financial futures contracts or engage in transactions involving interest
rate swaps, caps, floors, or collars. The Trust expects to enter into these
transactions primarily as a hedge against anticipated interest rate or fixed
income market changes, for duration management or for risk management purposes,
but may also enter into these transactions to generate additional income. All of
the Trust's portfolio holdings, including derivative instruments, are marked to
market each day with the change in value reflected in unrealized
appreciation/depreciation. Upon disposition, a realized
24
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
gain or loss is recognized accordingly, except when taking delivery of a
security underlying a futures contract. In this instance, the recognition of
gain or loss is postponed until the disposal of the security underlying the
futures contract.
During the period, the Trust invested in futures contracts, a type of
derivative. A futures contract is an arrangement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Trust
generally invests in exchange traded futures on U.S. Treasury Bonds and Notes
and typically closes the contract prior to the delivery date. Upon entering into
futures contracts, the Trust maintains an amount of cash or liquid securities
with a value equal to a percentage of the contract amount with either a futures
commission merchant pursuant to the rules and regulations promulgated under the
1940 Act, as amended, or with its custodian in an account in the broker's name.
This amount is known as initial margin. During the period the futures contract
is open, payments are received from or made to the broker based upon changes in
the value of the contract (the variation margin). The risk of loss associated
with a futures contract is in excess of the variation margin reflected on the
Statement of Assets and Liabilities.
Transactions in futures contracts for the six months ended April 30, 2005,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at October 31, 2004............................. 1,297
Futures Opened.............................................. 2,589
Futures Closed.............................................. (3,001)
------
Outstanding at April 30, 2005............................... 885
======
</Table>
The futures contracts outstanding as of April 30, 2005, and the description
and unrealized appreciation/depreciation are as follows:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Notes 5-Year Futures June 2005 (Current
Notional Value of $108,453 per contract).................. 885 $(515,181)
--- ---------
</Table>
5. PREFERRED SHARES
The Trust has outstanding 9,000 Auction Preferred Shares ("APS") in five series.
Series A, B, C and D each contain 2,000 shares and Series E contains 1,000
shares. Dividends are cumulative and the dividend rate is periodically reset
through an auction process. The dividend period for Series A and E is seven
days. The dividend period for Series B, C and D is 28 days. The average rate in
effect on April 30, 2005 was 2.578%. During the six months ended April 30, 2005,
the rates ranged from 1.400% to 2.960%.
25
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
The Trust pays annual fees equivalent to .25% of the preferred share
liquidation value for the remarketing efforts associated with the preferred
auctions. These fees are included as a component of "Preferred Share
Maintenance" expense in the Statement of Operations.
The APS are redeemable at the option of the Trust in whole or in part at the
liquidation value of $25,000 per share plus accumulated and unpaid dividends.
The Trust is subject to certain asset coverage tests and the APS are subject to
mandatory redemption if the tests are not met.
6. INDEMNIFICATIONS
The Trust enters into contracts that contain a variety of indemnifications. The
Trust's maximum exposure under these arrangements is unknown. However, the Trust
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
26
VAN KAMPEN VALUE MUNICIPAL INCOME TRUST
BOARD OF TRUSTEES, OFFICERS AND IMPORTANT ADDRESSES
BOARD OF TRUSTEES
DAVID C. ARCH
JERRY D. CHOATE
ROD DAMMEYER
LINDA HUTTON HEAGY
R. CRAIG KENNEDY
HOWARD J KERR
MITCHELL M. MERIN*
JACK E. NELSON
RICHARD F. POWERS, III*
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
MITCHELL M. MERIN
President and Chief Executive Officer
RONALD E. ROBISON
Executive Vice President and
Principal Executive Officer
JOSEPH J. MCALINDEN
Executive Vice President and
Chief Investment Officer
AMY R. DOBERMAN
Vice President
STEFANIE V. CHANG
Vice President and Secretary
JOHN L. SULLIVAN
Chief Compliance Officer
JAMES W. GARRETT
Chief Financial Officer and Treasurer
INVESTMENT ADVISER
VAN KAMPEN ASSET MANAGEMENT
1221 Avenue of the Americas
New York, New York 10020
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
225 Franklin Street
P.O. Box 1713
Boston, Massachusetts 02110
TRANSFER AGENT
EQUISERVE TRUST COMPANY, N.A.
P.O. Box 43011
Providence, Rhode Island 02940-3011
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
DELOITTE & TOUCHE LLP
180 North Stetson Avenue
Chicago, Illinois 60601
* "Interested persons" of the Trust, as defined in the Investment Company Act
of 1940, as amended.
27
VAN KAMPEN
AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY
We are required by federal law to provide you with a copy of our Privacy
Policy annually.
The following Policy applies to current and former individual clients of Van
Kampen Investments Inc., Van Kampen Asset Management, Van Kampen Advisors Inc.,
Van Kampen Funds Inc., Van Kampen Investor Services Inc. and Van Kampen Exchange
Corp., as well as current and former individual investors in Van Kampen mutual
funds, unit investment trusts, and related companies.
This Policy is not applicable to partnerships, corporations, trusts or other
non-individual clients or account holders, nor is this Policy applicable to
individuals who are either beneficiaries of a trust for which we serve as
trustee or participants in an employee benefit plan administered or advised by
us. This Policy is, however, applicable to individuals who select us to be a
custodian of securities or assets in individual retirement accounts, 401(k)
accounts, 529 Educational Savings Accounts, accounts subject to the Uniform
Gifts to Minors Act, or similar accounts.
Please note that we may amend this Policy at any time, and will inform you
of any changes to this Policy as required by law.
WE RESPECT YOUR PRIVACY
We appreciate that you have provided us with your personal financial
information. We strive to maintain the privacy of such information while we help
you achieve your financial objectives. This Policy describes what non-public
personal information we collect about you, why we collect it, and when we may
share it with others.
We hope this Policy will help you understand how we collect and share
non-public personal information that we gather about you. Throughout this
Policy, we refer to the non-public information that personally identifies you or
your accounts as "personal information."
1. WHAT PERSONAL INFORMATION DO WE COLLECT ABOUT YOU?
To serve you better and manage our business, it is important that we collect and
maintain accurate information about you. We may obtain this information from
applications and other forms you submit to us, from your dealings with us, from
consumer reporting agencies, from our Web sites and from third parties and other
sources.
For example:
-- We may collect information such as your name, address, e-mail address,
telephone/fax numbers, assets, income and investment objectives through
applications and other forms you submit to us.
-- We may obtain information about account balances, your use of
account(s) and the types of products and services you prefer to receive
from us through your dealings and transactions with us and other
sources.
-- We may obtain information about your creditworthiness and credit
history from consumer reporting agencies.
-- We may collect background information from and through third-party
vendors to verify representations you have made and to comply with
various regulatory requirements.
-- If you interact with us through our public and private Web sites, we
may collect information that you provide directly through online
communications (such as an e-mail address). We may also collect
information about your Internet service provider, your domain name,
your computer's operating system and Web browser,
(continued on back)
VAN KAMPEN
AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY continued
your use of our Web sites and your product and service preferences,
through the use of "cookies." "Cookies" recognize your computer each
time you return to one of our sites, and help to improve our sites'
content and personalize your experience on our sites by, for example,
suggesting offerings that may interest you. Please consult the Terms of
Use of these sites for more details on our use of cookies.
2. WHEN DO WE DISCLOSE PERSONAL INFORMATION WE COLLECT ABOUT YOU?
To provide you with the products and services you request, to serve you better
and to manage our business, we may disclose personal information we collect
about you to our affiliated companies and to non-affiliated third parties as
required or permitted by law.
A. INFORMATION WE DISCLOSE TO OUR AFFILIATED COMPANIES. We do not disclose
personal information that we collect about you to our affiliated companies
except to enable them to provide services on our behalf or as otherwise required
or permitted by law.
B. INFORMATION WE DISCLOSE TO THIRD PARTIES. We do not disclose personal
information that we collect about you to non-affiliated third parties except to
enable them to provide services on our behalf, to perform joint marketing
agreements with other financial institutions, or as otherwise required or
permitted by law. For example, some instances where we may disclose information
about you to non-affiliated third parties include: for servicing and processing
transactions, to offer our own products and services, to protect against fraud,
for institutional risk control, to respond to judicial process or to perform
services on our behalf. When we share personal information with these companies,
they are required to limit their use of personal information to the particular
purpose for which it was shared and they are not allowed to share personal
information with others except to fulfill that limited purpose.
3. HOW DO WE PROTECT THE SECURITY AND CONFIDENTIALITY OF PERSONAL INFORMATION WE
COLLECT ABOUT YOU?
We maintain physical, electronic and procedural security measures to help
safeguard the personal information we collect about you. We have internal
policies governing the proper handling of client information. Third parties that
provide support or marketing services on our behalf may also receive personal
information, and we require them to adhere to confidentiality standards with
respect to such information.
Van Kampen Funds Inc.
1 Parkview Plaza, P.O. Box 5555
Oakbrook Terrace, IL 60181-5555
www.vankampen.com
Copyright (C)2005 Van Kampen Funds Inc. All rights reserved.
Member NASD/SIPC.
VKV SAR 6/05 RN05-01315P-Y04/05
(VAN KAMPEN INVESTMENTS LOGO)
Item 2. Code of Ethics.
Not applicable for semi-annual reports.
Item 3. Audit Committee Financial Expert.
Not applicable for semi-annual reports.
Item 4. Principal Accountant Fees and Services.
Not applicable for semi-annual reports.
Item 5. Audit Committee of Listed Registrants.
Not applicable for semi-annual reports.
Item 6. Schedule of Investments.
Please refer to Item #1.
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.
Not applicable.
Item 11. Controls and Procedures
(a) The Trust's principal executive officer and principal financial officer have
concluded that the Trust's disclosure controls and procedures are sufficient to
ensure that information required to be disclosed by the Trust in this Form N-CSR
was recorded, processed, summarized and reported within the time periods
specified in the Securities and Exchange Commission's rules and forms, based
upon such officers' evaluation of these controls and procedures as of a date
within 90 days of the filing date of the report.
(b) There were no changes in the registrant's internal control over financial
reporting that occurred during the registrant's most recent fiscal half-year
(the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(a) Code of Ethics -- Not applicable for semi-annual reports.
(b)(1) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(b)(2) A certification for the Principal Financial Officer of the registrant is
attached hereto as part of EX-99.CERT.
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) Van Kampen Value Municipal Income Trust
By: /s/ Ronald E. Robison
----------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 16, 2005
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed by the following
persons on behalf of the registrant and in the capacities and on the dates
indicated.
By: /s/ Ronald E. Robison
---------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: June 16, 2005
By: /s/ James W. Garrett
--------------------
Name: James W. Garrett
Title: Principal Financial Officer
Date: June 16, 2005