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 811-6535
Van Kampen Trust For Investment Grade California Municipals
- --------------------------------------------------------------------------------
(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. Reports 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
Trust for Investment Grade California Municipals 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 THE 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>
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NOT FDIC INSURED OFFER NO BANK GUARANTEE MAY LOSE VALUE
---------------------------------------------------------------------------------------
NOT INSURED BY ANY FEDERAL GOVERNMENT AGENCY NOT A DEPOSIT
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</Table>
Performance Summary as of 4/30/05
<Table>
<Caption>
TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
SYMBOL: VIC
- ------------------------------------------------------------
AVERAGE ANNUAL BASED ON BASED ON
TOTAL RETURNS NAV MARKET PRICE
Since Inception (03/27/1992) 8.01% 6.93%
10-year 8.04 7.98
5-year 9.21 6.79
1-year 11.87 9.82
6-month 3.86 -1.12
- ------------------------------------------------------------
</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 California Municipal Bond Index is a broad-based statistical
composite of California 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 Trust for Investment Grade California Municipals is managed by the
Adviser's Municipal Fixed Income team.(1) Current members include Joseph Piraro
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.
From a credit perspective, the state of California has made some positive
strides. The California government's measures to stem current and projected
budget deficits have been met with broad approval by investors. This in turn has
resulted in improved demand for California bonds and a general rise in bond
prices. However, the state faces notable challenges to achieving fiscal balance.
For example, the governor's declining popularity could hinder his plans for
resolving the state's deficit.
(1)Team members may change without notice at any time.
2
During the period, the state maintained its position as the leading issuer of
new municipal debt. More than half of the new issuance which came to market was
protected by credit insurance, which was helpful for the trust as we attempted
to put cash to work.
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 California
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>
- ----------------------------------------------------------
LEHMAN BROTHERS
BASED ON BASED ON CALIFORNIA MUNICIPAL
NAV MARKET PRICE BOND INDEX
3.86% -1.12% 2.35%
- ----------------------------------------------------------
</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.
During the reporting period, we remained focused on keeping the portfolio's
credit quality high. Seventy-eight percent of the bonds in the portfolio were
rated AAA at the close of the period. However, as high-yield spreads continued
to tighten, lower quality bonds tended to perform better. Additionally, due to
our concerns about the long-term merits of tobacco bonds, we did not include
them in the portfolio. This decision prevented the trust from participating in
the short-term rebound experienced by tobacco and other lower-rated bonds during
the period.
3
One of our primary strategies in managing the trust was to take advantage of
what we believed to be compelling opportunities in the 25- to 30-year segment of
the market. We focused here on purchasing securities with premium (that is,
above-market) coupons and moderate interest rate sensitivity.
Our purchases of these securities were funded by the proceeds of sales of
several shorter-maturity positions, many of which had been refunded during the
period. This was part of our ongoing strategy of positioning the trust for an
environment of rising short-term interest rates by limiting the trust's exposure
to that segment of the market. As part of this strategy, we also kept the
trust's duration (a measure of interest rate sensitivity) below that of the
market.
The portfolio remained well diversified across the major sectors of the
California municipal market. We continued to favor the essential services
segments of the market, while avoiding the housing sector out of concerns about
those bonds' structural characteristics and remained especially selective
regarding the health care sector. We also avoided zero coupon bonds. Public
education, tax districts, and public building represented the portfolio's top
exposures.
There is no guarantee the security sectors mentioned will continue to perform
well or be held by the trust in the future.
<Table>
RATINGS ALLOCATION AS OF 4/30/05 TOP 5 SECTORS AS OF 4/30/05
AAA/Aaa 78.3% Public Education 17.9%
AA/Aa 7.7 Tax District 15.5
A/A 4.9 Public Building 11.6
BBB/Baa 7.8 Higher Education 10.1
Non-Rated 1.3 Transportation 8.8
</Table>
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 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.
4
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.
5
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL BONDS 156.7%
CALIFORNIA 155.2%
$1,020 A B C CA Uni Sch Dist Cap Apprec Ser B (FGIC
Insd)........................................... * 08/01/17 $ 594,048
1,000 Abag Fin Auth For Nonprofit Corp CA Multi-Family
Rev Hsg Utd Dominion Ser A Rfdg (AMT) (Asset Gty
Insd)........................................... 6.400% 08/15/30 1,071,180
3,540 Anaheim, CA Pub Fin Auth Lease Rev Cap Apprec
Pub Impt Proj Ser C (FSA Insd).................. * 09/01/32 903,019
1,000 Banning, CA Cmnty Redev Agy Tax Alloc Merged
Downtown (Radian Insd).......................... 5.000 08/01/23 1,034,320
2,000 Bay Area Toll Auth CA Toll Brdg Rev San
Francisco Bay Area Ser D........................ 5.000 04/01/17 2,149,740
3,535 Brea, CA Redev Agy Tax Alloc Ser A Rfdg
(AMBAC Insd) (a)................................ 5.500 08/01/20 3,888,712
1,000 California Ed Fac Auth Rev Golden Gate Univ
(b)............................................. 5.000 10/01/36 1,000,850
1,000 California Ed Fac Auth Rev Pooled College & Univ
Proj Ser B...................................... 5.250 04/01/24 1,021,630
1,000 California Ed Fac Auth Rev Pooled College & Univ
Proj Ser B...................................... 6.750 06/01/30 1,092,320
240 California Ed Fac Auth Rev Student Ln CA Ln Pgm
Ser A (AMT) (MBIA Insd)......................... 6.000 03/01/16 252,569
105 California Hlth Fac Fin Auth Rev Hlth Fac Small
Fac Ln Ser A (CA MTG Insd)...................... 6.700 03/01/11 105,266
180 California Hlth Fac Fin Auth Rev Hlth Fac Small
Fac Ln Ser A (CA MTG Insd)...................... 6.750 03/01/20 180,508
2,500 California Hlth Fac Fin Auth Rev Insd Hlth Fac
Vlycare Ser A (CA MTG Insd)..................... 6.125 05/01/12 2,504,875
1,000 California Hsg Fin Agy Rev Multi-Family Hsg III
Ser A (AMT) (MBIA Insd)......................... 5.850 08/01/17 1,035,850
4,500 California Pollutn Ctl Fin Auth Pollutn Ctl Rev
Southn CA Edison Co (AMT) (AMBAC Insd).......... 6.000 07/01/27 4,514,130
2,110 California Spl Dists Fin Prog Ser 00
(MBIA Insd) (a)................................. 5.250 12/01/26 2,256,096
1,000 California St (CIFG Insd)....................... 5.000 10/01/22 1,052,810
2,000 California St Dept Wtr Res Pwr Ser A
(AMBAC Insd).................................... 5.500 05/01/16 2,252,340
835 California St Dept Wtr Res Rev Ser W............ 5.500 12/01/17 933,421
2,000 California St Pub Wks Brd Univ CA Institute Proj
Ser C........................................... 5.000 04/01/26 2,119,500
2,000 California St Univ Rev Syswise Ser A
(AMBAC Insd).................................... 5.000 11/01/28 2,118,700
1,000 California St Vet Bd Ser BH (AMT) (FSA Insd).... 5.400 12/01/15 1,047,180
1,600 California St Vet Bd Ser BH (AMT) (FSA Insd).... 5.400 12/01/16 1,665,232
1,085 Cathedral City, CA Pub Fin Auth Rev Cap Apprec
Ser A (MBIA Insd) (a)........................... * 08/01/30 307,901
</Table>
6 See Notes to Financial Statements
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$1,085 Cathedral City, CA Pub Fin Auth Rev Cap Apprec
Ser A (MBIA Insd) (a)........................... * 08/01/31 $ 291,572
1,000 Chaffey, CA Uni High Sch Dist Ser C (FSA
Insd)........................................... 5.000% 05/01/27 1,050,790
1,700 Chino Vly Uni Sch Dist CA Ctf Part Ser A Rfdg
(FSA Insd)...................................... 5.375 09/01/20 1,861,466
2,000 Chula Vista, CA Indl Dev Rev San Diego Gas
Ser A........................................... 5.300 07/01/21 2,149,820
1,605 Coachella, CA Fin Auth Tax Alloc Rev Redev Proj
4 Ser B Rfdg (XLCA Insd)........................ 5.250 09/01/34 1,712,246
2,900 Colton, CA Jt Uni Sch Dist Ser A (FGIC Insd).... 5.500 08/01/22 3,279,146
1,000 Colton, CA Redev Agy Tax Alloc Mt Vernon
Corridor Redev Proj............................. 6.300 09/01/36 1,066,970
1,000 Corona, CA Ctf Part Clearwater Cogeneration Proj
(MBIA Insd)..................................... 5.000 09/01/17 1,077,250
1,360 Csuci Fin Auth Rev CA East Campus Cmnty Ser A
(LOC -Citibank) (MBIA Insd)..................... 5.125 09/01/21 1,459,810
1,245 Duarte, CA Multi-Family Rev Hsg Heritage Park
Apt Ser A (AMT) (FNMA Collateralized)........... 5.850 05/01/30 1,292,136
1,000 Fairfield Suisun, CA Uni Sch Dist Spl Tax Cmnty
Fac Dist No 5 New Sch (FSA Insd)................ 5.375 08/15/29 1,075,970
1,000 Folsom, CA Spl Tax Cmnty Fac Dist No 2 Rfdg
(Connie Lee Insd)............................... 5.250 12/01/19 1,073,350
1,950 Fontana, CA Redev Agy Tax Alloc Southwest Indl
Park Proj (MBIA Insd)........................... 5.200 09/01/30 2,063,646
10,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev Cap
Apprec Rfdg..................................... * 01/15/25 3,182,700
1,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Conv Cap Apprec Sr Lien Ser A (Escrowed to
Maturity)....................................... 7.050 01/01/10 1,175,040
1,680 Glendale, CA Uni Sch Dist Ser D (MBIA Insd)
(a)............................................. 5.250 09/01/17 1,845,564
1,725 Golden St Tob Sec Enhanced Asset Bkd Ser B
(AMBAC Insd).................................... 5.000 06/01/43 1,762,329
1,000 Imperial Irr Dist CA Ctf Part Elec Sys Proj (FSA
Insd)........................................... 5.250 11/01/23 1,081,500
1,000 Kern, CA Cmnty College Sch Fac Impt Dist Mammoth
Campus/Kern Cmnty (AMBAC Insd) (a).............. * 08/01/22 443,340
1,000 Laguna Hills, CA Ctf Part Cmnty Ctr Proj (MBIA
Insd)........................................... 5.000 12/01/18 1,076,650
1,105 Larkspur, CA Sch Dist Cap Apprec Ser A (FGIC
Insd) (a)....................................... * 08/01/20 547,218
1,000 Loma Linda, CA Redev Agy Tax Loma Linda Redev
Proj Rfdg (MBIA Insd)........................... 5.125 07/01/30 1,065,130
1,000 Los Angeles, CA Ctf Part Sr Sonnenblick Del Rio
W L. A. (AMBAC Insd)............................ 6.000 11/01/19 1,142,290
1,473 Los Angeles, CA Multi-Family Rev Hsg Earthquake
Rehab Proj Ser A (AMT) (FNMA Collateralized).... 5.700 12/01/27 1,509,151
1,000 Los Angeles, CA Wtr & Pwr Rev Ser A............. 5.250 07/01/18 1,015,150
</Table>
See Notes to Financial Statements 7
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$1,000 Los Gatos, CA Jt Uni High Sch Election of 1998
Ser C (FSA Insd) (Prerefunded @ 06/01/12)....... 5.000% 06/01/27 $ 1,117,600
1,000 Mendocino Cnty, CA Ctf Part Cnty Pub Fac Corp
(MBIA Insd)..................................... 5.250 06/01/30 1,064,620
1,000 Metropolitan Wtr Dist Southn CA Auth Ser B2
(FGIC Insd)..................................... 5.000 10/01/26 1,055,140
1,670 National City, CA Cmnty Dev Tax Alloc Redev Proj
Ser B Rfdg (AMBAC Insd) (a)..................... 5.000 08/01/25 1,772,488
1,000 Novato, CA Uni Sch Dist (FSA Insd).............. 5.000 08/01/27 1,057,230
1,000 Oakland, CA Uni Sch Dist Alameda Cnty
(FSA Insd)...................................... 5.000 08/01/17 1,060,660
1,000 Oxnard, CA Uni High Sch Dist Ser A Rfdg (MBIA
Insd)........................................... 6.200 08/01/30 1,181,180
1,965 Pacifica, CA Wastewater Rev Rfdg
(AMBAC Insd) (a)................................ 5.250 10/01/22 2,148,924
1,500 Placentia-Yorba Linda, CA Uni Ser A (FGIC
Insd)........................................... 5.000 08/01/26 1,572,855
3,000 Port Oakland, CA Ser N Rfdg (AMT) (MBIA Insd)... 5.000 11/01/22 3,116,910
1,220 Rancho Mirage, CA Redev Agy Tax Redev Plan 1984
Proj Ser A 1 (MBIA Insd)........................ 5.000 04/01/26 1,271,728
1,000 Redlands, CA Lease Rev Ctf Partn Rfdg (AMBAC
Insd)........................................... 5.000 09/01/17 1,077,250
1,000 Redlands, CA Redev Agy Tax Alloc Redev Proj Ser
A Rfdg (MBIA Insd).............................. 4.750 08/01/21 1,024,920
2,045 Riverside Cnty, CA Ctf Part Cap Impt Family Law
Ser A Rfdg (FGIC Insd) (a)...................... 5.000 11/01/24 2,174,776
1,615 Riverside Cnty, CA Ctf Part Historic Courthouse
Ser B Rfdg (FGIC Insd) (a)...................... 5.000 11/01/24 1,717,488
1,650 Roseville, CA Jt Uni High Sch Dist Ser B (FGIC
Insd)........................................... * 06/01/20 809,094
1,000 Salinas Vly CA Solid Waste Auth Rev (AMT) (AMBAC
Insd)........................................... 5.250 08/01/27 1,051,290
1,000 San Bernardino Cnty, CA Ctf Part Med Cent Fin
Proj (MBIA Insd)................................ 5.000 08/01/28 1,039,340
1,500 San Diego, CA Redev Agy Centre City Redev Proj
Ser A........................................... 6.400 09/01/25 1,597,035
1,000 San Diego, CA Uni Port Dist Rev Ser B
(MBIA Insd)..................................... 5.000 09/01/24 1,065,600
1,185 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Rev Second Ser Issue 15B (MBIA Insd)....... 4.800 05/01/17 1,225,942
1,660 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Rev Spl Fac Lease Ser A (AMT) (FSA Insd)... 6.125 01/01/27 1,801,963
1,000 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Second Ser 27A Rfdg (AMT) (MBIA Insd)...... 5.250 05/01/26 1,041,490
1,000 San Francisco, CA City & Cnty Arpt Commn Intl
Arpt Rev Second Ser 30 Rfdg (XLCA Insd)......... 5.250 05/01/16 1,101,730
1,000 Sanger, CA Uni Sch Dist Rfdg (MBIA Insd)........ 5.600 08/01/23 1,189,240
</Table>
8 See Notes to Financial Statements
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$2,000 Santa Ana, CA Uni Sch Dist (MBIA Insd).......... 5.375% 08/01/27 $ 2,177,940
1,000 Santa Ana, CA Uni Sch Dist Ctf Part Cap Apprec
Fin Proj (FSA Insd)............................. * 04/01/36 209,000
2,000 South Orange Cnty, CA Pub Fin Auth Reassmt Rev
(FSA Insd)...................................... 5.800 09/02/18 2,226,380
35 Southern CA Home Fin Auth Single Family Mtg Rev
Ser A (AMT) (GNMA Collateralized)............... 6.750 09/01/22 35,013
1,300 Taft, CA City Elem Sch Dist Ser A (MBIA Insd)
(a)............................................. * 08/01/22 576,342
2,000 University of CA Ctf Part San Diego Campus Proj
Ser A........................................... 5.250 01/01/32 2,091,160
4,000 University of CA Rev Hosp UCLA Med Ctr Ser A
(AMBAC Insd).................................... 5.250 05/15/30 4,265,840
1,200 Ventura Cnty, CA Cmnty College Dist Ser A (MBIA
Insd)........................................... 5.500 08/01/23 1,352,004
1,000 Vista, CA Uni Sch Dist Ser A (FSA Insd)......... 5.000 08/01/23 1,061,730
1,000 Woodland, CA Fin Auth Lease Rev Cap Proj Rfdg
(XLCA Insd)..................................... 5.000 03/01/25 1,050,290
------------
119,784,623
------------
U. S. VIRGIN ISLANDS 1.5%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes
Ln Nt Ser A..................................... 6.375 10/01/19 1,140,350
------------
TOTAL LONG-TERM INVESTMENTS 156.7%
(Cost $113,668,340)....................................................... 120,924,973
SHORT-TERM INVESTMENT 1.3%
(Cost $1,000,000)......................................................... 1,000,000
------------
TOTAL INVESTMENTS 158.0%
(Cost $114,668,340)....................................................... 121,924,973
OTHER ASSETS IN EXCESS OF LIABILITIES 0.4%................................. 310,910
PREFERRED SHARES (INCLUDING ACCRUED DISTRIBUTIONS) (58.4%)................. (45,066,574)
------------
NET ASSETS APPLICABLE TO COMMON SHARES 100.0%.............................. $ 77,169,309
============
</Table>
Percentages are calculated as a percentage of net assets applicable to common
shares.
* Zero coupon bond
(a) The Trust owns 100% of the bond issuance.
(b) Securities purchased on a when-issued or delayed delivery basis.
See Notes to Financial Statements 9
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
PORTFOLIO OF INVESTMENTS -- APRIL 30, 2005 (UNAUDITED) continued
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
Asset Gty--Asset Guaranty Insurance Co.
CA MTG--California Mortgage Insurance
CIFG--CDC IXIS Financial Guaranty
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FNMA--Federal National Mortgage Association
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
10 See Notes to Financial Statements
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
April 30, 2005 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $114,668,340)....................... $121,924,973
Cash........................................................ 59,539
Interest Receivable......................................... 1,606,272
Other....................................................... 340
------------
Total Assets............................................ 123,591,124
------------
LIABILITIES:
Payables:
Investments Purchased..................................... 996,800
Investment Advisory Fee................................... 54,729
Income Distributions--Common Shares....................... 18,167
Other Affiliates.......................................... 3,569
Trustees' Deferred Compensation and Retirement Plans........ 222,778
Accrued Expenses............................................ 59,198
------------
Total Liabilities....................................... 1,355,241
Preferred Shares (including accrued distributions).......... 45,066,574
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 77,169,309
============
NET ASSET VALUE PER COMMON SHARE ($77,169,309 divided by
4,676,173 shares outstanding)............................. $ 16.50
============
NET ASSETS CONSIST OF:
Common Shares ($.01 par value with an unlimited number of
shares authorized, 4,676,173 shares issued and
outstanding).............................................. $ 46,762
Paid in Surplus............................................. 68,745,778
Net Unrealized Appreciation................................. 7,256,633
Accumulated Net Realized Gain............................... 821,476
Accumulated Undistributed Net Investment Income............. 298,660
------------
NET ASSETS APPLICABLE TO COMMON SHARES...................... $ 77,169,309
============
PREFERRED SHARES ($.01 par value, authorized 100,000,000
shares, 1,800 issued with liquidation preference of
$25,000 per share)........................................ $ 45,000,000
============
NET ASSETS INCLUDING PREFERRED SHARES....................... $122,169,309
============
</Table>
See Notes to Financial Statements 11
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended April 30, 2005 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $2,998,128
----------
EXPENSES:
Investment Advisory Fee..................................... 330,963
Preferred Share Maintenance................................. 63,230
Trustees' Fees and Related Expenses......................... 17,791
Legal....................................................... 12,236
Custody..................................................... 7,163
Other....................................................... 64,717
----------
Total Expenses.......................................... 496,100
----------
NET INVESTMENT INCOME....................................... $2,502,028
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Net Realized Gain........................................... $ 821,437
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 7,554,341
End of the Period......................................... 7,256,633
----------
Net Unrealized Depreciation During the Period............... (297,708)
----------
NET REALIZED AND UNREALIZED GAIN............................ $ 523,729
==========
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS..................... $ (366,514)
==========
NET INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
OPERATIONS................................................ $2,659,243
==========
</Table>
12 See Notes to Financial Statements
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
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...................................... $ 2,502,028 $ 4,920,898
Net Realized Gain.......................................... 821,437 26,222
Net Unrealized Appreciation/Depreciation During the
Period................................................... (297,708) 1,868,854
Distributions to Preferred Shareholders:
Net Investment Income.................................... (364,116) (451,660)
Net Realized Gain........................................ (2,398) (50,413)
----------- -----------
Change in Net Assets Applicable to Common Shares from
Operations............................................... 2,659,243 6,313,901
Distributions to Common Shareholders:
Net Investment Income.................................... (2,174,259) (4,639,074)
Net Realized Gain........................................ (23,846) (650,619)
----------- -----------
NET CHANGE IN NET ASSETS APPLICABLE TO COMMON SHARES FROM
INVESTMENT ACTIVITIES.................................... 461,138 1,024,208
FROM CAPITAL TRANSACTIONS:
Value of Common Shares Issued Through Dividend
Reinvestment............................................. -0- 136,145
----------- -----------
TOTAL INCREASE IN NET ASSETS APPLICABLE TO COMMON SHARES... 461,138 1,160,353
NET ASSETS APPLICABLE TO COMMON SHARES:
Beginning of the Period.................................... 76,708,171 75,547,818
----------- -----------
End of the Period (Including accumulated undistributed net
investment income of $298,660 and $335,007,
respectively)............................................ $77,169,309 $76,708,171
=========== ===========
</Table>
See Notes to Financial Statements 13
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
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................... $ 16.40 $ 16.18 $ 16.49
------- ------- -------
Net Investment Income.................................... .53 1.05 1.08
Net Realized and Unrealized Gain/Loss.................... .12 .41 .03
Common Share Equivalent of Distributions Paid to
Preferred Shareholders:
Net Investment Income.................................. (.08) (.10) (.08)
Net Realized Gain...................................... -0-* (.01) (.01)
------- ------- -------
Total from Investment Operations........................... .57 1.35 1.02
Distributions Paid to Common Shareholders:
Net Investment Income.................................. (.46) (.99) (1.08)
Net Realized Gain...................................... (.01) (.14) (.25)
------- ------- -------
NET ASSET VALUE, END OF THE PERIOD......................... $ 16.50 $ 16.40 $ 16.18
======= ======= =======
Common Share Market Price at End of the Period............. $ 14.56 $ 15.20 $ 15.84
Total Return (b)........................................... -1.12%** 3.22% 5.09%
Net Assets Applicable to Common Shares at End of the Period
(In millions)............................................ $ 77.2 $ 76.7 $ 75.5
Ratio of Expenses to Average Net Assets Applicable to
Common Shares (c)........................................ 1.31% 1.46% 1.47%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (c).......................... 6.61% 6.53% 6.65%
Portfolio Turnover......................................... 16%** 15% 17%
SUPPLEMENTAL RATIOS:
Ratio of Expenses to Average Net Assets Including Preferred
Shares (c)............................................... .82% .91% .93%
Ratio of Net Investment Income to Average Net Assets
Applicable to Common Shares (d).......................... 5.65% 5.93% 6.17%
SENIOR SECURITIES:
Total Preferred Shares Outstanding......................... 1,800 1,800 1,800
Asset Coverage Per Preferred Share (e)..................... $67,909 $67,625 $66,977
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>
* Amount is less than .01
** 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 $.01, decrease net realized and unrealized gains and
losses per share by $.01 and increase the ratio of net investment income to
average net assets applicable to common shares from 7.11% to 7.13%. Per
share, ratios, and supplemental data for periods prior to October 31, 2002
have not been restated to reflect this change in presentation.
(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 dividend 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.
14
<Table>
<Caption>
YEAR ENDED OCTOBER 31,
- ---------------------------------------------------------------------------------------
2002 (a) 2001 2000 1999 1998 1997 1996 1995
- ---------------------------------------------------------------------------------------
$ 16.81 $ 15.84 $ 15.10 $ 17.51 $ 17.16 $ 16.58 $ 16.29 $ 14.67
------- ------- ------- ------- -------- -------- -------- --------
1.16 1.16 1.22 1.19 1.24 1.26 1.30 1.30
(.10) 1.03 .84 (1.95) .70 .84 .40 1.64
(.07) (.29) (.33) (.22) (.28) (.27) (.32) (.40)
(.08) (.01) -0- (.10) (.07) (.06) (.04) -0-
------- ------- ------- ------- -------- -------- -------- --------
.91 1.89 1.73 (1.08) 1.59 1.77 1.34 2.54
(.98) (.92) (.99) (.99) (.99) (.99) (.96) (.92)
(.25) -0- -0- (.34) (.25) (.20) (.09) -0-
------- ------- ------- ------- -------- -------- -------- --------
$ 16.49 $ 16.81 $ 15.84 $ 15.10 $ 17.51 $ 17.16 $ 16.58 $ 16.29
======= ======= ======= ======= ======== ======== ======== ========
$ 16.37 $ 15.59 $16.125 $14.375 $ 18.00 $ 16.75 $ 15.75 $ 14.75
13.41% 2.45% 19.77% -13.54% 15.46% 12.96% 14.14% 23.60%
$ 77.0 $ 78.5 $ 73.8 $ 70.2 $ 81.0 $ 79.3 $ 76.6 $ 75.3
1.56% 1.74% 1.80% 1.74% 1.71% 1.77% 1.80% 1.83%
7.13% 7.17% 7.98% 7.15% 7.16% 7.57% 7.97% 8.39%
21% 27% 28% 25% 27% 23% 16% 13%
.98% 1.09% 1.10% 1.10% 1.10% 1.12% 1.13% 1.12%
6.68% 5.37% 5.81% 5.84% 5.54% 5.93% 5.97% 5.83%
1,800 1,800 1,800 1,800 900 900 900 900
$67,762 $68,588 $66,008 $64,025 $140,049 $138,057 $135,121 $133,628
$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 15
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Trust for Investment Grade California Municipals (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 and California
income taxes, consistent with preservation of capital. The Trust will invest in
a portfolio consisting substantially of California municipal obligations rated
investment grade at the time of investment. The Trust commenced investment
operations on March 27, 1992.
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.
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 $996,800 of 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.
16
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
At April 30, 2005 the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $114,609,399
============
Gross tax unrealized appreciation........................... $ 7,324,288
Gross tax unrealized depreciation........................... (8,714)
------------
Net tax unrealized appreciation on investments.............. $ 7,315,574
============
</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, which are included as ordinary income for tax
purposes.
The tax character of distributions paid during 2004 was as follows:
<Table>
Distribution paid from:
Ordinary Income........................................... $176,700
Long-term capital gain.................................... 530,069
--------
$706,769
========
</Table>
As of October 31, 2004, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $21,867
Undistributed long-term capital gain........................ 26,282
</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 $2,200 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, counsel to the Trust, 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 approximately $16,600
representing Van Kampen Investments Inc's or its affiliates' (collectively "Van
Kampen") 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 provides deferred compensation and retirement plans for its
trustees who are not officers of Van Kampen. Under the deferred compensation
plan, trustees may elect to
17
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
defer all or a portion of their compensation to a later date. Benefits under the
retirement plan are payable upon retirement 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. CAPITAL TRANSACTIONS
At April 30, 2005 and October 31, 2004, paid in surplus related to common shares
aggregated $68,745,778 and $68,745,778, respectively.
Transactions in common shares were as follows:
<Table>
<Caption>
SIX MONTHS ENDED YEAR ENDED
APRIL 30, 2005 OCTOBER 31, 2004
Beginning Shares........................................ 4,676,173 4,667,882
Shares Issued Through Dividend Reinvestment............. -0- 8,291
--------- ---------
Ending Shares........................................... 4,676,173 4,676,173
========= =========
</Table>
4. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $19,379,169 and $18,595,670,
respectively.
5. PREFERRED SHARES
As of April 30, 2005, the Trust has outstanding 1,800 Auction Preferred Shares
("APS"). Dividends are cumulative and the dividend rate is currently reset every
28 days through an auction process. The rate in effect on April 30, 2005 was
2.250%. During the six months ended April 30, 2005, rates ranged from 1.250% to
2.250%.
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.
18
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
NOTES TO FINANCIAL STATEMENTS -- APRIL 30, 2005 (UNAUDITED) continued
7. TRUST MERGER
On March 18, 2005, the Trustees of Trust for Investment Grade California
Municipals, California Quality Municipal Trust, and California Municipal Trust
("Target Trusts") announced its intention to merge the Target Trusts into
California Value Municipal Income Trust ("Acquiring Trust"). The Trustees of
each of the trusts have approved in principal an agreement and plan of
reorganization between the trusts providing for a transfer of assets and
liabilities of the Target Trusts to the Acquiring Trust in exchange for shares
of beneficial interest of the Acquiring Trust (the "Reorganization"). The
Reorganization is subject to the approval by the shareholders of the Target
Trusts. The issuance of additional common shares of the Acquiring Trust is
subject to the approval of the Shareholders of the Acquiring Trust.
8. 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.
19
VAN KAMPEN TRUST FOR INVESTMENT GRADE CALIFORNIA MUNICIPALS
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.
20
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, your use of our Web
sites and your product and service preferences, through the use
(continued on back)
VAN KAMPEN
AN IMPORTANT NOTICE CONCERNING OUR U.S. PRIVACY POLICY continued
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.
VIC SAR 6/04 RN05-01288P-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 Trust For Investment Grade California Municipals
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