Skadden, Arps, Slate, Meagher & Flom LLP
333 West Wacker Drive
Chicago, Illinois 60606
September 6, 2005
Mr. Kevin Rupert
Securities and Exchange Commission
100 F Street, N.E.
Washington, D.C., 20549
Re: Van Kampen Municipal Opportunity Trust
Form N-14 Filing (File No. 333-126305)
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Dear Mr. Rupert:
Van Kampen Municipal Opportunity Trust (File No. 811-06567) has filed a
registration statement on Form N-14 with respect to the proposed reorganization
of Van Kampen Advantage Municipal Income Trust into Van Kampen Municipal
Opportunity Trust (the "Proposed Reorganization"). I write in response to your
request that we address, with respect to the Proposed Reorganization, any issues
raised by the staff of the Securities and Exchange Commission in North American
Security Trust (publ. avail. Aug. 5, 1994) ("North American").
In North American, North American Security Trust ("NAST"), a registered
investment company with a number of separate investment portfolios organized as
series of NAST, had reorganized three existing funds into a newly created fund,
and NAST sought the staff's position on whether the newly created fund could
advertise the performance record of one of the predecessor target funds. This
fact pattern materially differs from the fact pattern presented in the Proposed
Reorganization of Van Kampen Advantage Municipal Income Trust (the "Target
Fund") into Van Kampen Municipal Opportunity Trust (the "Acquiring Fund"). In
North American, the acquiring fund was a newly created fund with no historical
performance record that was seeking to advertise the historical performance of
one of the three target funds. In the Proposed Reorganization, however, the
Acquiring Fund is an existing, operating fund which intends going forward to
advertise only its own historical performance and does not seek to advertise
performance information of the Target Fund. Thus, North American on its face
does not apply to the present situation.
Mr. Kevin Rupert
Securities and Exchange Commission
September 6, 2005
Page 2
Notwithstanding this conclusion, we also believe an analysis of the factors
enumerated by the staff in North American does not preclude the surviving
Acquiring Fund in the Proposed Reorganization from using its historical
performance record going forward. In North American, the staff stated that the
surviving fund in the reorganization could carry forward the performance record
of the predecessor target fund that most "closely resembles" the surviving fund.
The staff indicated that in determining which predecessor fund most closely
resembles the surviving fund, the following factors, among others, should be
considered: 1) the similarity of the investment advisers of the funds; 2) the
investment objective(s), policies and restrictions of each fund; 3) the net
asset level of each fund; 4) the expense structure and expense ratio of each
fund; and 5) the portfolio composition of each fund. We address each of these
factors in turn below:
1) The investment adviser to each Fund is Van Kampen Asset Management (the
"Adviser"). The Funds are managed by the some of the same members of the
Adviser's Municipal Fixed Income team. The surviving fund will continue to be
managed by the same members of this team.
2) Each Fund seeks to provide a high level of current income exempt from
federal income tax, consistent with preservation of capital. Each Fund seeks to
achieve this primarily by investing in a diversified portfolio of municipal
securities which the Adviser believes does not involve undue risk to income or
principal. The surviving fund will continue to pursue this primary investment
objective. While the Funds' other investment policies and investment
restrictions are similar, the surviving fund will continue to comply with the
Acquiring Fund's investment policies and investment restrictions.
3) As of January 31, 2005, the Acquiring Fund had net assets (including
assets attributable to preferred shares) of approximately $412 million and the
Target Fund had net assets (including assets attributable to preferred shares)
of approximately $516 million.
4) The expense structures of the Funds are identical. Each Fund pays the
Adviser a monthly management fee at the annual rate of 0.55% of such Fund's
average daily net assets, including assets attributable to preferred shares, and
the surviving fund will maintain this expense structure.
5) Under normal market conditions, each Fund invests substantially all of
its net assets in municipal securities rated investment grade at the time of
investment. Under normal market conditions, each Fund invests at least 80% of
its assets in municipal securities. The portfolio composition of the surviving
fund will continue to be that of the Acquiring Fund.
This analysis of the factors set forth in North American demonstrates that
the Funds are substantially similar but does not suggest that either Fund is the
logically superior choice to be the surviving fund. In the absence of such a
choice, management
Mr. Kevin Rupert
Securities and Exchange Commission
September 6, 2005
Page 2
determined that, consistent with its practice in prior reorganizations, the Fund
with the consistently lowest discount to net asset value would be the surviving
fund. Accordingly, the Acquiring Fund, which, at the time the surviving fund was
determined, generally had a lower discount to net asset value than the Target
Fund, was chosen to be the surviving fund.
After completion of the Proposed Reorganization, the surviving fund will
closely resemble the Acquiring Fund. Although the Acquiring Fund is not the
larger fund in terms of net assets, the surviving fund will be managed by the
Acquiring Fund's portfolio management team, will maintain the Acquiring Fund's
expense structure, will continue to pursue the Acquiring Fund's investment
objectives and policies and will hold a portfolio that is substantially similar
to that of the Acquiring Fund. Accordingly, it is appropriate for the surviving
fund to carry forward the historical performance record of the Acquiring Fund.
Should the staff have any additional questions regarding this issue, please
contact the undersigned at (312) 407-0940 or Charles B. Taylor at (312)
407-0863.
Sincerely,
/s/ Christopher M. Rohrbacher
Christopher M. Rohrbacher