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 811-4386
Van Kampen Tax Free 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: 9/30
Date of reporting period: 3/31/07
Item 1. Reports to Shareholders.
The Fund's semiannual 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
Insured Tax Free Income Fund 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 fund's financial statements and a list of fund investments
as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B, AND C
SHARE OR CLASS I SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE
PROSPECTUSES CONTAIN INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT
OBJECTIVES, RISKS, CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL
PROSPECTUS, CONTACT YOUR FINANCIAL ADVISOR OR DOWNLOAD ONE AT
VANKAMPEN.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
since 12/14/84 since 5/3/93 since 8/13/93 since 8/12/05
- ---------------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALES SALES W/O SALES SALES W/O SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 7.44% 7.20% 4.69% 4.69% 4.42% 4.42% 4.00%
10-year 5.28 4.77 4.62 4.62 4.47 4.47 --
5-year 5.27 4.25 4.47 4.21 4.46 4.46 --
1-year 4.49 -0.48 3.72 -0.28 3.72 2.72 4.75
6-month 1.46 -3.38 1.08 -2.89 1.08 0.09 1.58
- ---------------------------------------------------------------------------------------------------
SEC Yield 3.44% 2.87% 2.87% 3.86%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The returns shown in this report do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Performance of share classes will vary due to differences in sales charges and
expenses. Average annual total return with sales charges includes payment of the
maximum sales charge of 4.75 percent for Class A shares, a contingent deferred
sales charge of 4.00 percent for Class B shares (in year one and declining to
zero after year six), a contingent deferred sales charge of 1.00 percent for
Class C shares in year one and combined Rule 12b-1 fees and service fees of up
to 0.25 percent for Class A shares and up to 1.00 percent for Class B and C
shares. The since inception and 10-year returns for Class B shares reflect their
conversion into Class A shares eight years after purchase. The since inception
returns for Class C shares reflect their conversion into Class A shares ten
years after purchase. Class I shares are available for purchase exclusively by
investors through (i) tax-exempt retirement plans with assets of at least $1
million (including 401(k) plans, 457 plans, employer-sponsored 403(b) plans,
profit sharing and money purchase plans, defined benefit plans and non-qualified
deferred compensation plans), (ii) fee-based investment programs with assets of
at least $1 million and (iii) institutional clients with assets of at least $1
million. Class I shares are offered without any sales charges on purchases or
sales and do not include combined Rule 12b-1 fees and service fees. Figures
shown above assume reinvestment of all dividends and capital gains. SEC yield is
a calculation for determining the amount of portfolio income, excluding
non-income items as prescribed by the SEC. Yields are subject to change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt 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
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to sell off until February when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and, as a result, the
yield differential between long maturity and short maturity issues was quite
small.
New issue supply rose dramatically during the period, increasing by 35 percent
versus the same six-month period a year ago, as relatively low interest rates
spurred municipalities to refinance their debt. Insured bond issuance also rose
considerably and represented more than half of the total new issue supply.
Demand for municipal bonds was robust as well, particularly for high-yield
securities as investors proved increasingly willing to take on more risk in
return for relatively higher yields. The strong demand caused credit spreads,
which were already near historically tight levels, to further narrow. As a
result, the lower-quality, higher yielding segment of the market considerably
outperformed, returning 185 basis points more than the investment-grade segment
for the overall period.
2
PERFORMANCE ANALYSIS
The fund returned 1.46 percent for the six months ended March 31, 2007 (Class A
shares, unadjusted for sales charges) underperforming the fund's benchmark, the
Lehman Brothers Municipal Bond Index, which returned 1.93 percent for the
period.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- --------------------------------------------------------------
LEHMAN
BROTHERS
MUNICIPAL
CLASS A CLASS B CLASS C CLASS I BOND INDEX
1.46% 1.08% 1.08% 1.58% 1.93%
- --------------------------------------------------------------
</Table>
The performance for the four share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definition.
A key driver of the fund's performance over the course of the period was our
focus on the long end of the yield curve. Given the relatively flat shape of the
curve throughout the period, we invested in the very long end, specifically
bonds with maturities of 25 to 30 years, in order to capture more attractive
yields, which proved beneficial to performance as this part of the curve
outperformed. Additionally, in an effort to further enhance yield, we added to
the fund's holdings of inverse floating-rate securities,* which performed well
when interest rates fell. As these securities can add some interest-rate risk to
the portfolio, we hedged that risk by purchasing U.S. Treasury futures, which
also proved beneficial during the period.
The fund's holdings in tax-supported debt helped boost performance, as did
holdings in the health care and utilities sectors, which not only performed
quite well but were also overweighted versus the benchmark Lehman Brothers
Municipal Bond Index.
Certain positions, however, detracted from the fund's overall performance. One
of the primary contributors to the fund's underperformance versus the benchmark
index was its relative underweight in transportation and zero coupon bonds as
these sectors performed strongly. Security selection in the education sector
also dampened returns. Recent fund enhancements allow for up to 20 percent of
assets to be invested in uninsured--but still investment-grade--securities. (The
remainder must be invested in AAA rated insured bonds.) As such, we selectively
added holdings in BBB, A, and AA rated credits. The performance of these
holdings also detracted from the fund's overall performance during the period.
*An inverse floating-rate security, or "inverse floater", is a variable rate
security whose coupon rate changes in the opposite direction from the change in
the reference rate used to calculate the coupon rate.
3
We continued to keep the fund's Alternative Minimum Tax (AMT) exposure low and
the portfolio well diversified across a broad range of sectors. As of the end of
the period, airports, public education, and wholesale electric represented the
fund's largest sector weightings.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
4
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
California 19.0%
Illinois 17.3
Washington 9.1
Florida 8.8
Texas 7.2
New Jersey 5.5
Alabama 4.7
Pennsylvania 4.5
Georgia 4.1
Colorado 3.6
Louisiana 3.0
Arizona 2.7
South Carolina 2.5
Alaska 2.1
Nevada 2.0
Oklahoma 1.9
Indiana 1.7
Missouri 1.7
North Carolina 1.2
South Dakota 1.1
North Dakota 1.1
Virginia 1.1
Massachusetts 0.9
Arkansas 0.8
New York 0.8
Wisconsin 0.8
Montana 0.7
Michigan 0.7
Ohio 0.6
Mississippi 0.6
District of Columbia 0.5
Maryland 0.4
Nebraska 0.3
Utah 0.3
Oregon 0.3
Puerto Rico 0.3
Iowa 0.2
</Table>
<Table>
(continued on next page)
</Table>
5
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
(continued from previous page)
West Virginia .1%
-----
Total Long-Term Investments 114.2
Short-Term Investments 4.6
-----
Total Investments 118.8
Liability for Floating Rate Note Obligations (16.8)
-----
Total Net Investments 102.0
Liabilities in Excess of Other Assets (2.0)
-----
Net Assets 100.0%
<Caption>
RATINGS ALLOCATIONS AS OF 3/31/07
AAA/Aaa 88.4%
AA/Aa 3.3
A/A 1.1
BBB/Baa 7.2%
</Table>
<Table>
<Caption>
<Caption>
TOP FIVE SECTORS AS OF 3/31/2007
Airports 11.9%
Public Education 11.1
Wholesale Electric 8.6
Higher Education 7.4
Water & Sewer 7.2
</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 allocations and sectors are as a
percentage of total long-term investments. Summary of investments by state
classification are as a percentage of total net assets. 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 fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
7
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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.
8
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and C Shares;
and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,014.56 $6.63
Hypothetical............................... 1,000.00 1,018.35 6.64
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,010.77 10.38
Hypothetical............................... 1,000.00 1,014.61 10.40
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,010.78 10.38
Hypothetical............................... 1,000.00 1,014.61 10.40
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,015.80 5.38
Hypothetical............................... 1,000.00 1,019.60 5.39
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.32%, 2.07%,
2.07%, and 1.07%, for Class A, B, C, and I Shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period).
Assumes all dividends and distributions were reinvested.
9
The following table shows what expenses a shareholder would have paid, excluding
interest and residual trust expenses.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,014.56 $4.47
Hypothetical............................... 1,000.00 1,020.49 4.48
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,010.77 8.22
Hypothetical............................... 1,000.00 1,016.75 8.25
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,010.78 8.22
Hypothetical............................... 1,000.00 1,016.75 8.25
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,015.80 3.22
Hypothetical............................... 1,000.00 1,021.74 3.23
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.89%, 1.64%,
1.64%, and 0.64%, for Class A, B, C, and I Shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period).
Assumes all dividends and distributions were reinvested.
10
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 114.2%
ALABAMA 4.7%
$ 2,255 Alabama St Brd Ed Rev George C Wallace Cmnty
College (AMBAC Insd) (a)...................... 5.250% 07/01/23 $ 2,423,629
1,095 Birmingham, AL Wtrwks & Swr Brd Ser A (FGIC
Insd)......................................... 5.000 01/01/21 1,162,496
3,670 Houston Cnty, AL Hlthcare Auth Ser A (AMBAC
Insd)......................................... 5.250 10/01/30 3,961,215
3,120 Huntsville, AL Hlthcare Auth Ser A (MBIA Insd)
(Prerefunded @ 5/14/12)....................... 5.400 06/01/22 3,414,715
2,500 Huntsville, AL Hlthcare Auth Ser A (MBIA Insd)
(Prerefunded @ 5/14/12)....................... 5.500 06/01/27 2,747,700
5,000 Mobile, AL Wt Impt & Rfdg (AMBAC Insd)........ 5.000 02/15/23 5,314,500
5,280 Montgomery Cnty, AL Pub Bldg Auth Rev Wt Fac
Proj (MBIA Insd) (a).......................... 5.000 03/01/24 5,585,342
5,550 Montgomery Cnty, AL Pub Bldg Auth Rev Wt Fac
Proj (MBIA Insd) (a).......................... 5.000 03/01/25 5,866,683
8,000 Trussville, AL Wt Ser A (FGIC Insd)........... 5.000 10/01/31 8,456,560
10,000 Trussville, AL Wt Ser A (FGIC Insd)........... 5.000 10/01/36 10,541,500
2,500 Tuscaloosa Ala Wts-ser A Ser A (AMBAC Insd)... 4.375 07/01/37 2,438,375
--------------
51,912,715
--------------
ALASKA 2.1%
1,000 Alaska Hsg Fin Corp Home Mtg
Amt Ser C (AMT)............................... 4.800 06/01/38 997,850
2,000 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)......................................... 5.000 12/01/30 2,093,860
1,000 Alaska St Hsg Fin Corp Gen Hsg Ser A (FGIC
Insd)......................................... 5.250 12/01/41 1,059,770
9,570 Alaska St Intl Arpt Rev Rfdg Ser B
(MBIA Insd) (b)............................... 5.000 10/01/24 10,184,107
6,530 Alaska St Intl Arpt Rev Rfdg Ser D
(MBIA Insd) (b)............................... 5.000 10/01/24 6,949,030
1,425 Anchorage, AK Wtr Rev Rfdg (AMBAC Insd)....... 6.000 09/01/19 1,513,008
--------------
22,797,625
--------------
ARIZONA 2.7%
1,940 Arizona St Univ Ctf Partn Resh Infrastructure
Proj (AMBAC Insd)............................. 5.250 09/01/23 2,085,907
1,225 Arizona St Univ Ctf Partn Resh Infrastructure
Proj (AMBAC Insd)............................. 5.250 09/01/24 1,313,886
2,900 Arizona Tourism & Sports Auth Multi Purp Stad
Fac Ser A (MBIA Insd) (Prerefunded @
7/01/13)...................................... 5.375 07/01/22 3,167,931
5,000 Maricopa Cnty, AZ Pollutn Ctl Corp Pollutn Ctl
Rev El Paso Elec Co Rfdg Ser A (FGIC Insd).... 4.800 08/01/40 5,020,150
10,000 Mesa, AZ Util Sys Rev Rfdg Second Ser (FGIC
Insd) (b)..................................... 4.500 07/01/28 10,052,500
2,000 Pima Cnty, AZ Indl Dev Auth AZ Charter Sch
Proj Ser O.................................... 5.000 07/01/26 2,010,880
</Table>
See Notes to Financial Statements 11
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
ARIZONA (CONTINUED)
$ 1,750 Pima Cnty, AZ Indl Dev Auth AZ Charter Sch
Proj Ser O.................................... 5.250% 07/01/31 $ 1,800,890
515 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease
Oblig Irvington Proj Tucson Elec Pwr Co Rfdg
Ser A (FSA Insd).............................. 7.250 07/15/10 529,508
1,875 Scottsdale, AZ Indl Dev Hosp Scottsdale Mem
Hosp Rfdg Ser A (AMBAC Insd).................. 6.000 09/01/12 1,929,525
1,750 Scottsdale, AZ Indl Dev Hosp Scottsdale Mem
Hosp Rfdg Ser A (AMBAC Insd).................. 6.125 09/01/17 1,800,102
--------------
29,711,279
--------------
ARKANSAS 0.8%
2,500 Arkansas St Dev Fin Auth Rev St Agy Fac
Donaghey Plaza Proj (FSA Insd)................ 5.000 06/01/29 2,620,200
6,265 Little Rock, AR Sch Dist Rfdg Ser B (FSA
Insd)......................................... 5.500 02/01/25 6,538,154
--------------
9,158,354
--------------
CALIFORNIA 19.0%
4,000 Bay Area Govt Assn CA Rev Tax Alloc CA Redev
Pool Ser A (XLCA Insd)........................ 5.250 09/01/35 4,277,040
3,205 Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC
Insd)......................................... 5.000 10/01/30 3,385,570
3,310 Bell, CA Cmnty Hsg Auth Lease Rev Rfdg (AMBAC
Insd)......................................... 5.000 10/01/36 3,477,155
3,500 California Ed Fac Auth Rev Occidental College
Ser A (MBIA Insd)............................. 5.000 10/01/36 3,694,635
3,000 California St Pub Wks Brd UCLA Replacement
Hosp Ser A (FSA Insd)......................... 5.000 10/01/22 3,135,570
3,000 California St Pub Wks Brd UCLA Replacement
Hosp Ser A (FSA Insd)......................... 5.375 10/01/20 3,236,490
10,000 California St Rfdg (g)........................ 4.500 08/01/30 9,878,400
4,000 California Stwide Cmnty Dev Auth Wtr Rev
Pooled Fin Pgm Ser C (FSA Insd)............... 5.250 10/01/34 4,255,080
2,980 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Pgm Ser C (FSA Insd)
(a)........................................... 5.000 10/01/29 3,133,053
1,095 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Ser 2004A (FSA
Insd)......................................... 5.000 10/01/29 1,154,842
3,920 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Pooled Fin Ser 2004A (FSA
Insd)......................................... 5.250 10/01/24 4,263,666
4,615 California Stwide Cmnty Dev Auth Wtr &
Wastewtr Rev Ser D (FSA Insd) (a)............. 5.250 10/01/26 4,902,145
7,430 Capistrano, CA Uni Sch Dist (FGIC Insd) (a)... 5.000 09/01/25 7,877,360
7,995 Capistrano, CA Uni Sch Dist (FGIC Insd) (a)... 5.000 09/01/26 8,464,706
8,600 Capistrano, CA Uni Sch Dist (FGIC Insd) (a)... 5.000 09/01/27 9,099,058
3,500 Capistrano, CA Uni Sch Dist (FGIC Insd)....... 5.000 09/01/29 3,697,995
5,000 Chino Vly Uni Sch Dist CA Election 2002 Ser C
(MBIA Insd)................................... 5.250 08/01/30 5,418,800
</Table>
12 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 3,225 Coronado, CA Cmnty Dev Agy Tax Alloc Coronado
Cmnty Dev Proj (AMBAC Insd)................... 5.000% 09/01/30 $ 3,398,086
425 Earlimart, CA Elem Sch Dist Ser 1 (AMBAC
Insd)......................................... 6.700 08/01/21 552,899
25,000 Golden St Tob Sec Corp CA Tob Settlement Rev
Ser A-1 (b)................................... 5.125 06/01/47 26,050,938
265 Golden West Sch Fin Auth CA Rev Rfdg Ser A
(MBIA Insd) (a)............................... 5.750 08/01/19 311,349
10,000 Hawthorne, CA Cmnty Redev Agy Tax Alloc Proj
Area No 2 (XLCA Insd)......................... 5.250 09/01/36 10,789,400
690 Jurupa, CA Univ Sch Dist Election 2001 (FGIC
Insd)......................................... 5.000 08/01/26 727,453
1,985 Lancaster, CA Fin Auth Tax Alloc Rev Sch Dist
Proj.......................................... 4.500 02/01/31 1,959,155
2,500 Lehman Muni Tr Rcpts Var Sts Ri Trs Ser 07
(MBIA Insd) (d)............................... 4.779 05/15/47 2,267,150
3,360 Loma Linda, CA Redev Agy Tax Alloc Ser A (XLCA
Insd)......................................... 5.250 07/01/30 3,609,749
16,630 Los Angeles, CA Muni Impt Corp Lease Rev
Police Headquarters Fac Ser A (FGIC Insd)..... 4.250 01/01/37 15,781,039
10,000 Merced, CA Irr Dist Rev Ctf Partn Elec Sys
Proj (XLCA Insd).............................. 5.250 09/01/36 10,741,500
4,000 Murrieta Vy, CA Uni Sch Dist Pub Fin Auth Spl
Tax Rev Ser A (AGL Insd)...................... 4.750 09/01/36 4,077,480
3,455 Oxnard, CA Fin Auth Headworks Proj (AMBAC
Insd) (a)..................................... 5.000 06/01/36 3,645,854
2,070 Pacifica, CA Wastewtr Rev Rfdg (AMBAC Insd)
(a)........................................... 5.250 10/01/23 2,230,032
5,000 Palm Springs, CA Fin Lease Rev Convention Ctr
Proj Ser A (MBIA Insd)........................ 5.500 11/01/29 5,548,250
2,250 Riverside, CA Ctf Partn (AMBAC Insd) (a)...... 5.000 09/01/23 2,359,958
1,440 Rohnert Park, CA Swr Sys Rev Ctf Partn Spl
Term (AMBAC Insd)............................. 5.000 06/01/30 1,515,326
2,310 Roseville, CA Redev Agy Tax Alloc Roseville
Redev Proj Ser A (AMBAC Insd)................. 5.000 09/01/38 2,436,819
5,000 Sacramento Cnty, CA San Dist Fin Auth Rev
Sacramento Regl Cnty San (FGIC Insd).......... 5.000 12/01/29 5,323,050
5,140 San Marcos, CA Pub Fac Auth Rev Tax Increment
Pass-Thru Ser A (AMBAC Insd) (b).............. 5.000 10/01/31 5,453,257
2,785 Santa Monica, CA Cmnty College Rfdg Ser A
(AMBAC Insd).................................. 5.000 02/01/27 2,915,199
1,775 Sierra, CA Jt Cmnty College Impt Dist 2 Westn
Nevada Ser A (FGIC Insd) (a).................. 5.000 08/01/28 1,867,762
1,460 Sierra, CA Jt Cmnty College Impt Dist 2 Westn
Nevada Ser A (FGIC Insd) (a).................. 5.000 08/01/29 1,535,365
5,380 South Orange Cnty, CA Pub Fin Auth Spl Tax Rev
Ladera Ranch Ser A (AMBAC Insd)............... 5.000 08/15/27 5,694,622
</Table>
See Notes to Financial Statements 13
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 2,000 South Tahoe CA, Jt Pwr Fin Redev Proj Area No
1 Rfdg Ser A (AMBAC Insd)..................... 5.000% 10/01/35 $ 2,103,920
2,500 Tobacco Sec Auth Southn CA Tob Settlement Rols
II R Ser 741 (d).............................. 8.902 06/01/46 2,400,850
1,100 Vallejo City, CA Uni Sch Rfdg Ser A (MBIA
Insd)......................................... 5.900 08/01/25 1,334,058
--------------
209,982,085
--------------
COLORADO 3.6%
3,745 Colorado Ed & Cultural Fac Auth Rev Charter
Sch Aurora Academy Sch Proj Rfdg Ser A (XLCA
Insd) (a)..................................... 5.250 02/15/34 3,980,972
2,500 Colorado Ed & Cultural Fac Auth Rev Charter
Sch Bromley Sch Proj Rfdg (XLCA Insd)......... 5.250 09/15/32 2,686,125
1,000 Colorado Ed & Cultural Fac Auth Rev Charter
Sch Woodrow Wilson Sch Proj Rfdg Ser A
(XLCA Insd)................................... 5.250 12/01/34 1,074,450
5,000 Colorado Ed & Cultural Fac Auth Rev Frontier
Academy Rfdg (CIFG Insd)...................... 4.375 06/01/26 4,923,200
17,580 Denver, CO Convention Ctr Hotel Auth Rev Rfdg
(XLCA Insd) (b)............................... 5.000 12/01/35 18,488,447
2,000 Regional Transn Dist CO Sales Tax Rev
Fastracks Proj Ser A (AMBAC Insd)............. 4.375 11/01/36 1,948,100
1,175 Thornton, CO Ctf Partn (AMBAC Insd)
(Prerefunded @ 12/01/12)...................... 5.375 12/01/19 1,273,829
3,080 Thornton, CO Ctf Partn (AMBAC Insd)
(Prerefunded @ 12/01/12) (a).................. 5.375 12/01/21 3,339,059
1,650 Thornton, CO Ctf Partn (AMBAC Insd)
(Prerefunded @ 12/01/12)...................... 5.375 12/01/22 1,788,782
--------------
39,502,964
--------------
DISTRICT OF COLUMBIA 0.5%
1,000 District of Columbia Ctf Partn Dist Pub Safety
& Emergency (AMBAC Insd)...................... 5.500 01/01/19 1,085,780
4,000 Metropolitan Washington DC Arpt Ser A (FSA
Insd) (AMT)................................... 5.000 10/01/32 4,210,160
--------------
5,295,940
--------------
FLORIDA 8.8%
5,000 Auburndale, FL Wtr & Swr Rev (AMBAC Insd)
(g)........................................... 4.250 12/01/32 4,771,000
9,910 Auburndale, FL Wtr & Swr Rev (AMBAC Insd) (a)
(g)........................................... 4.375 12/01/37 9,632,223
1,000 Brevard Cnty, FL Sch Brd Ctf Partn Ser A
(AMBAC Insd).................................. 5.400 07/01/12 1,076,710
500 Dade Cnty, FL Aviation Rev Ser B (MBIA
Insd)......................................... 5.600 10/01/26 510,620
1,000 Dade Cnty, FL Ed Fac Auth Rev Exchanged From
Univ of Miami Ser B (MBIA Insd)............... 5.750 04/01/20 1,011,650
750 Dade Cnty, FL Wtr & Swr Sys Rev (FGIC Insd)... 5.375 10/01/16 770,962
</Table>
14 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 140 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)......................................... 5.950% 07/01/20 $ 145,432
1,000 Escambia Cnty, FL Util Auth Util Sys Rev (FGIC
Insd) (Prerefunded @ 1/01/09)................. 5.250 01/01/24 1,037,030
1,000 Florida Intergovnmtl Fin Ser C1 (AMBAC
Insd)......................................... 5.125 02/01/31 1,041,360
575 Florida Muni Ln Council Rev Ser B (MBIA
Insd)......................................... 5.750 11/01/14 619,269
1,185 Florida St Brd Ed Cap Outlay Pub Ed Ser C
(FGIC Insd)................................... 5.000 06/01/23 1,242,958
1,250 Florida St Brd Ed Lottery Rev Ser A (FGIC
Insd) (Prerefunded @ 7/01/10)................. 6.000 07/01/12 1,350,962
1,000 Florida St Brd Ed Lottery Rev Ser A (FGIC
Insd) (Prerefunded @ 7/01/10)................. 6.000 07/01/14 1,080,770
2,750 Florida St Brd Ed Lottery Rev Ser B (FGIC
Insd)......................................... 5.250 07/01/13 2,828,842
750 Florida St Brd of Regt Hsg Rev (MBIA Insd).... 5.750 07/01/14 803,318
1,365 Florida St Correctional Privatization Commn
Ctf Partn (MBIA Insd)......................... 5.375 08/01/14 1,466,829
1,750 Florida St Div Bd Fin Dept Gen Svc Rev Dept
Environmental Prot Presvtn 2000 Ser A (AMBAC
Insd)......................................... 5.000 07/01/12 1,773,013
1,500 Florida St Div Bd Fin Dept Gen Svc Rev Dept
Environmental Prot Presvtn 2000 Ser B (FSA
Insd)......................................... 5.250 07/01/11 1,543,380
2,000 Fort Myers, FL Impt Rev Rfdg (MBIA Insd)...... 4.450 12/01/35 1,968,040
1,340 Gulf Breeze, FL Rev Loc Govt (FGIC Insd)
(c)........................................... 5.150 12/01/20 1,409,961
500 Gulf Breeze, FL Rev Loc Govt (FGIC Insd)...... 5.650 12/01/20 529,465
1,000 Indian River Cnty, FL Hosp Rev Rfdg (FSA
Insd)......................................... 6.100 10/01/18 1,021,790
1,750 Jea, FL Wtr & Swr Sys Rev Ser A (MBIA Insd)... 5.375 10/01/30 1,750,088
1,000 Key West, FL Util Brd Elec Rev Cap Apprec Ser
D (AMBAC Insd) (e)............................ * 10/01/13 759,570
1,000 Miami-Dade Cnty, FL Hlth Fac Miami Childrens
Hosp Rfdg Ser A (AMBAC Insd) (Prerefunded @
8/15/11)...................................... 5.125 08/15/26 1,065,340
5,000 Miami-Dade Cnty, FL Pub Fac Rev Jackson Hlth
Sys Ser A (MBIA Insd)......................... 5.000 06/01/31 5,243,950
1,820 Florida Hsg Fin Corp Rev Ser G (AMT) (b)...... 4.550 07/01/26 1,798,424
3,500 Florida Hsg Fin Corp Rev Ser G (AMT) (b)...... 4.625 07/01/31 3,458,507
2,500 Florida Hsg Fin Corp Rev Ser G (AMT) (b)...... 4.700 07/01/37 2,470,363
1,000 Orange Cnty, FL Sch Brd Ctf Ser A
(AMBAC Insd).................................. 5.250 08/01/14 1,076,710
1,000 Orlando, FL Cmnty Redev Agy Tax Rep Drive Unvl
Blvd Rfdg (AMBAC Insd)........................ 5.125 04/01/20 1,059,620
800 Palm Beach Cnty, FL Sch Brd Ctf Ser A (AMBAC
Insd) (Prerefunded @ 8/01/11)................. 5.125 08/01/26 851,904
4,000 Palm Beach Cnty, FL Sch Brd Ctf Ser C (FSA
Insd) (Prerefunded @ 8/01/12)................. 5.000 08/01/21 4,246,520
4,000 Palm Beach Cnty, FL Sch Brd Ctf Ser C (FSA
Insd) (Prerefunded @ 8/01/12)................. 5.000 08/01/22 4,246,520
</Table>
See Notes to Financial Statements 15
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 750 Polk Cnty, FL Sch Brd Ctf Partn Master Lease
Ser A (FSA Insd).............................. 5.500% 01/01/16 $ 803,663
1,000 Port Saint Lucie, FL Spl Assmt Rev Util Svc
Area No 3 & 4A (MBIA Insd).................... 5.000 10/01/18 1,028,520
535 Saint Johns Cnty, FL Indl Dev Auth
Professional Golf Proj Rfdg (MBIA Insd)....... 5.250 09/01/12 573,509
1,000 Saint Lucie Cnty, FL Sch Brd Ctf Ser A
(FSA Insd).................................... 5.000 07/01/21 1,047,860
3,245 Santa Rosa Bay Brdg Auth FL Rev Cap Apprec
(MBIA Insd)................................... * 07/01/18 1,978,639
4,000 Sunrise, FL Util Sys Rev Rfdg (AMBAC Insd).... 5.200 10/01/22 4,441,840
10,000 Tallahassee, FL Hlth Fac Rev Tallahassee Mem
Regl Med Rfdg Ser A (MBIA Insd) (f)........... 6.625 12/01/13 10,021,700
2,500 Tampa Bay Wtr FL Regl Wtr Supply Auth Util Sys
Rev Impt & Rfdg Ser A (FGIC Insd)............. 4.500 10/01/36 2,473,800
2,740 University Cent FL Ctf Partn UCF Convocation
Corp Ser A (FGIC Insd) (a).................... 5.000 10/01/27 2,886,371
1,000 Village Ctr Cmnty Dev Dist FL Ser A (MBIA
Insd)......................................... 5.200 11/01/25 1,061,460
3,735 Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry
Riddle Rfdg Ser B (AMBAC Insd)................ 5.250 10/15/19 3,906,773
1,000 Volusia Cnty, FL Ed Fac Auth Rev Ed Fac Embry
Riddle Rfdg Ser B (AMBAC Insd)................ 5.250 10/15/22 1,043,390
--------------
96,930,625
--------------
GEORGIA 4.1%
4,590 Bleckley-Cochran, GA Dev Auth Student Hsg Fac
Rev MGC Real Estate Fndtn Ser A (CIFG Insd)
(a)........................................... 5.000 07/01/25 4,838,686
11,355 Bleckley-Cochran, GA Dev Auth Student Hsg Fac
Rev MGC Real Estate Fndtn Ser A (CIFG Insd)
(a)........................................... 5.000 07/01/36 11,873,469
14,530 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(AMBAC Insd).................................. 6.400 01/01/13 16,036,616
160 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(AMBAC Insd) (Prerefunded @ 1/01/11).......... 6.400 01/01/13 175,318
9,445 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(MBIA Insd)................................... 6.500 01/01/17 11,005,031
145 Georgia Muni Elec Auth Pwr Rev 2005 Ser Y
(MBIA Insd) (Prerefunded @ 1/01/14)........... 6.500 01/01/17 168,724
860 Georgia Muni Elec Auth Pwr Rev Ser Y (AMBAC
Insd) (e)..................................... 6.400 01/01/13 955,408
410 Georgia Muni Elec Auth Pwr Rev Ser Y (MBIA
Insd) (e)..................................... 6.500 01/01/17 490,897
--------------
45,544,149
--------------
ILLINOIS 17.3%
1,500 Chicago, IL Brd Ed Cap Apprec Sch Reform Ser A
(FGIC Insd)................................... * 12/01/19 883,710
1,020 Chicago, IL Brd Ed Cap Apprec Sch Reform Ser A
(FGIC Insd)................................... * 12/01/25 455,920
</Table>
16 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 2,845 Chicago, IL Brd Ed Cap Apprec Sch Reform Ser
B-1 (FGIC Insd)............................... * 12/01/19 $ 1,676,103
2,000 Chicago, IL Lakefront Millenium Pkg Fac (MBIA
Insd)......................................... 5.700% 01/01/25 2,208,660
2,000 Chicago, IL Lakefront Millenium Pkg Fac (MBIA
Insd)......................................... 5.750 01/01/29 2,212,980
5,925 Chicago, IL Midway Arpt Rev Second Lien Rfdg
Ser B (AMBAC Insd) (a)........................ 5.000 01/01/21 6,265,628
6,220 Chicago, IL Midway Arpt Rev Second Lien Rfdg
Ser B (AMBAC Insd) (a)........................ 5.000 01/01/22 6,564,961
1,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser A (MBIA Insd)............. 5.000 01/01/29 1,047,350
5,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............. 5.000 01/01/34 5,195,500
2,840 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd) (a)......... 5.250 01/01/21 3,036,812
2,975 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd) (a)......... 5.250 01/01/22 3,177,538
3,120 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............. 5.250 01/01/23 3,328,634
1,430 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Rfdg Ser E (CIFG Insd)............. 5.250 01/01/24 1,522,149
17,500 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A-2 Rfdg (FSA Insd) (AMT)
(b)........................................... 5.750 01/01/20 19,176,238
20,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A-2 Rfdg (FSA Insd) (AMT)
(b)........................................... 5.750 01/01/21 21,940,300
6,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A (MBIA Insd) (b).............. 5.250 01/01/24 6,482,160
6,000 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien Ser A (MBIA Insd) (b).............. 5.250 01/01/26 6,482,160
5,000 Chicago, IL Pk Dist Ser A (FGIC Insd)......... 5.000 01/01/31 5,277,000
615 Chicago, IL Pk Dist Ser C (FGIC Insd)......... 5.500 01/01/19 655,787
3,230 Chicago, IL Proj Rfdg Ser A (FGIC Insd)....... 5.375 01/01/34 3,338,819
1,305 Chicago, IL Proj Rfdg Ser A (MBIA Insd)....... 5.500 01/01/38 1,386,563
50 Chicago, IL Proj Rfdg Ser A (MBIA Insd)
(Prerefunded @ 1/01/11)....................... 5.500 01/01/38 53,623
145 Chicago, IL Proj Rfdg Ser A (AMBAC Insd)...... 5.625 01/01/39 156,552
5,000 Chicago, IL Single Family Mtg Rev Coll Ser I
(GNMA Collateralized) (AMT)................... 5.300 06/01/43 5,294,900
345 Cook Cnty, IL Sch Dist No 100 Berwyn South Cap
Apprec (FSA Insd) (a)......................... 8.100 12/01/16 459,347
290 Cook Cnty, IL Sch Dist No 100 Berwyn South Cap
Apprec (FSA Insd) (a)......................... 8.200 12/01/14 372,328
2,605 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)........................ * 12/01/17 1,680,824
</Table>
See Notes to Financial Statements 17
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 2,995 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)........................ * 12/01/18 $ 1,844,141
4,210 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd) (a)........................ * 12/01/19 2,471,060
4,050 Cook Cnty, IL Sch Dist No 122 Oak Lawn Cap
Apprec (FGIC Insd)............................ * 12/01/20 2,267,109
3,000 Du Page Cnty, IL Cmnty High Sch (FSA Insd).... 5.600% 01/01/22 3,258,750
540 Grundy, Kendall & Will Cntys, IL (AMBAC
Insd)......................................... 5.500 05/01/20 573,269
340 Grundy, Kendall & Will Cntys, IL (AMBAC
Insd)......................................... 5.500 05/01/21 359,564
2,000 Illinois Dev Fin Auth Rev Sch Dist Pgm
Rockford Sch 205 (FSA Insd)................... 6.650 02/01/11 2,208,460
9,070 Illinois Fin Auth Rev Ill Finance Auth.
Bradley Ser A (XLCA Insd) (a) (g)............. 5.000 08/01/27 9,559,961
4,800 Illinois Fin Auth Rev Swedish American Hosp
(AMBAC Insd).................................. 5.000 11/15/31 4,992,480
2,500 Illinois Hsg Dev Auth Multi Fam Rev Ser G..... 4.800 07/01/32 2,515,600
1,965 Illinois Hsg Dev Auth Multi Fam Rev Ser K..... 4.600 07/01/23 1,984,807
2,000 Illinois Med Dist (MBIA Insd)................. 5.250 06/01/32 2,115,600
3,500 Illinois Muni Elec Agy Pwr Supply Sys Rev Rfdg
(FSA Insd).................................... 5.000 02/01/21 3,570,175
10,000 Illinois St Toll Hwy Auth Toll Highway Rev Sr
Priority Ser A-1 (FSA Insd)................... 5.000 01/01/26 10,627,200
10,000 Kendall, Kane & Will Cntys IL (MBIA Insd)..... 4.500 02/01/25 10,058,700
1,200 Lake Cnty, IL Cmnty Cons Sch Dist No 50
Woodland Cap Apprec Ser B (FGIC Insd)......... * 12/01/14 885,660
6,790 Lake Cnty, IL Cmnty Unit Sch Dist No 60
Waukegan Cap Apprec Ser A (FSA Insd).......... * 12/01/17 4,381,112
1,330 McHenry Cnty, IL Cmnty High Sch Dist No 154
Cap Apprec (FGIC Insd)........................ * 01/01/16 931,545
3,000 McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No
158 Cap Apprec (FGIC Insd).................... * 01/01/17 2,011,680
4,000 McHenry & Kane Cnty, IL Cmnty Cons Sch Dist No
158 Cap Apprec (FGIC Insd).................... * 01/01/18 2,561,040
6,000 Metropolitan Pier & Expo Auth IL Dedicated St
Tax Rev McCormick Pl Expn Ser A (MBIA Insd)... 5.250 06/15/42 6,409,620
5,245 University IL Univ Rev Aux Fac Sys (MBIA
Insd)......................................... 4.500 04/01/36 5,190,505
--------------
191,110,584
--------------
INDIANA 1.7%
5,810 Indiana Bd Bk Rev Spl Pgm Ser B1
(FSA Insd) (a)................................ 5.000 03/01/27 6,141,519
745 Indiana Bd Bk Spl Pgm Ser A (AMBAC Insd)
(e)........................................... 9.750 08/01/09 800,748
6,745 Indiana Hlth Fac Fin Auth Hosp Rev Cmnty Proj
Ser A (AMBAC Insd)............................ 5.000 05/01/35 7,043,264
2,335 Lake Cnty, IN Bldg Corp First Mtg
(MBIA Insd) (a)............................... 5.750 08/01/11 2,483,809
</Table>
18 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
INDIANA (CONTINUED)
$ 800 Plainfield, IN Cmnty High Sch Bldg Corp First
Mtg (FGIC Insd)............................... 5.000% 01/15/30 $ 843,888
1,900 South Harrison, IN 2000 Sch Bldg Corp Ser A
(FSA Insd).................................... 5.250 01/15/25 2,039,764
--------------
19,352,992
--------------
IOWA 0.2%
2,375 Iowa Fin Auth Hosp Fac Rev Trinity Regl Hosp
Proj (FSA Insd)............................... 5.750 07/01/17 2,434,066
--------------
LOUISIANA 3.0%
3,585 Calcasieu Parish, LA Mem Hosp Svc Dist Hosp
Rev Lake Charles Mem Hosp Proj Ser A (Connie
Lee Insd)..................................... 6.375 12/01/12 3,836,380
5,530 Calcasieu Parish, LA Mem Hosp Svc Dist Hosp
Rev Lake Charles Mem Hosp Proj Ser A (Connie
Lee Insd)..................................... 6.500 12/01/18 6,662,212
7,500 Lafayette, LA Util Rev (MBIA Insd)............ 5.250 11/01/24 8,118,150
2,035 Louisiana Loc Govt Environment BRCC Fac Corp
Proj (MBIA Insd) (a).......................... 5.375 12/01/17 2,181,968
2,150 Louisiana Loc Govt Environment BRCC Fac Corp
Proj (MBIA Insd) (a).......................... 5.375 12/01/18 2,309,229
7,000 Louisiana St Gas & Fuels Tax Rev Ser A (XLCA
Insd) (b)..................................... 5.000 05/01/27 7,405,580
2,500 Louisiana St Gas & Fuels Tax Rev Ser A (XLCA
Insd) (b)..................................... 5.000 05/01/28 2,644,850
265 New Orleans, LA Home Mtg Auth Single Family
Mtg Rev Ser 1985 (MBIA Insd).................. * 09/15/16 99,078
--------------
33,257,447
--------------
MARYLAND 0.4%
1,255 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b)........................... 4.450 09/01/21 1,244,107
1,000 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b)........................... 4.550 09/01/26 991,320
1,350 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b)........................... 4.625 09/01/31 1,338,282
675 Maryland St Cmnty Dev Admin Dept Hsg & Cmnty
Dev Ser P (AMT) (b)........................... 4.700 03/01/37 669,141
--------------
4,242,850
--------------
MASSACHUSETTS 0.9%
2,600 Massachusetts Muni Whsl Elec Co Nuclear Mix
1-A (MBIA Insd)............................... 5.250 07/01/13 2,792,322
175 Massachusetts Muni Whsl Elec Co Proj No. 6-A
Ser A (MBIA Insd)............................. 5.250 07/01/16 187,945
</Table>
See Notes to Financial Statements 19
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
$ 2,060 Massachusetts St Hsg Fin Agy Hsg Rev Single
Family Hsg Ser 126 (AMT) (b).................. 4.625% 06/01/32 $ 2,041,738
5,000 Massachusetts St Wtr Pollutn Abatement Tr Pool
Pgm Ser 12 (b)................................ 4.375 08/01/31 4,933,375
--------------
9,955,380
--------------
MICHIGAN 0.7%
75 Chippewa Valley, MI Sch Bldg & Site (FSA
Insd)......................................... 5.000 05/01/20 80,082
1,400 Huron, MI Sch Dist (FSA Insd) (Prerefunded @
5/01/11)...................................... 5.250 05/01/21 1,485,638
2,575 Wayne Charter Cnty, MI Arpt Rev Rfdg Ser C
(FGIC Insd)................................... 5.375 12/01/17 2,767,739
2,840 Wayne Charter Cnty, MI Arpt Rev Rfdg Ser C
(FGIC Insd)................................... 5.375 12/01/20 3,054,817
--------------
7,388,276
--------------
MISSISSIPPI 0.6%
1,000 Harrison Cnty, MS Wastewtr Mgmt & Solid
Wastewtr Treatment Fac Rfdg Ser A (FGIC Insd)
(e)........................................... 8.500 02/01/13 1,244,450
5,000 Mississippi Dev Bank Spl Oblg Muni Energy Agy
Pwr Supply Proj Ser A (XLCA Insd)............. 5.000 03/01/41 5,213,550
--------------
6,458,000
--------------
MISSOURI 1.7%
1,170 Mehlville, MO Sch Dist No R-9 Ctf Partn Ser A
(FSA Insd).................................... 5.500 03/01/16 1,246,588
1,225 Mehlville, MO Sch Dist No R-9 Ctf Partn Ser A
(FSA Insd).................................... 5.500 03/01/17 1,299,676
840 Saint Louis, MO Arpt Rev Cap Impt Pgm Ser A
(MBIA Insd) (Prerefunded @ 07/01/12).......... 5.375 07/01/17 907,603
2,750 Springfield, MO Pub Bldg Corp Leasehold Rev
Springfield Branson Arpt Ser B (AMBAC Insd)
(AMT) (b)..................................... 4.550 07/01/29 2,685,561
3,350 Springfield, MO Pub Bldg Corp Leasehold Rev
Springfield Branson Arpt Ser B (AMBAC Insd)
(AMT) (b)..................................... 4.600 07/01/36 3,271,501
10,000 Springfield, MO Pub Util Rev (FGIC Insd)...... 4.500 08/01/36 9,910,900
--------------
19,321,829
--------------
MONTANA 0.7%
2,900 Forsyth, MT Pollutn Ctl Rev Northwestn Corp
Colstrip Rfdg (AMBAC Insd).................... 4.650 08/01/23 2,997,730
5,000 Montana St Brd Hsg Single Family Mtg Ser A-2
(AMT)......................................... 4.800 12/01/37 5,006,650
--------------
8,004,380
--------------
NEBRASKA 0.3%
3,620 Saunders Cnty, NE (FSA Insd) (a).............. 5.500 07/01/22 3,719,333
--------------
</Table>
20 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
NEVADA 2.0%
$ 10,040 Clark Cnty, NV Arpt Rev Sub Lien Ser A-1 (AMT)
(FGIC Insd) (b)............................... 5.500% 07/01/22 $ 10,815,540
10,000 Director St, NV Dept Business & Ind Las Vegas
Monorail Proj First Tier (AMBAC Insd)......... 5.625 01/01/32 10,619,900
935 Reno, NV Cap Impt Rev (FGIC Insd)............. 5.125 06/01/26 985,415
--------------
22,420,855
--------------
NEW JERSEY 5.5%
5,000 Tobacco Settlement Fin Corp NJ Ser A-1........ 4.750 06/01/34 4,719,350
55,000 Tobacco Settlement Fin Corp NJ Ser A-1 (b).... 5.000 06/01/41 53,702,275
2,760 Newark, NJ Hsg Auth Port Auth Newark Marine
Term (MBIA Insd) (Prerefunded @ 1/01/14)...... 5.500 01/01/28 3,044,749
--------------
61,466,374
--------------
NEW YORK 0.8%
5,470 New York City Hlth & Hosp Hlth Sys Ser A (FSA
Insd)......................................... 5.000 02/15/21 5,724,629
3,105 New York St Dorm Auth Rev Insd Brooklyn Law
Sch Ser B (XLCA Insd) (a)..................... 5.375 07/01/21 3,381,003
--------------
9,105,632
--------------
NORTH CAROLINA 1.2%
10,000 North Carolina Muni Pwr Agy Ser A (MBIA
Insd)......................................... 5.250 01/01/18 10,723,700
2,735 North Carolina Muni Pwr Agy Ser A (MBIA
Insd)......................................... 5.250 01/01/19 2,932,932
--------------
13,656,632
--------------
NORTH DAKOTA 1.1%
5,000 Mercer Cnty, ND Pollutn Ctl Rev Antelope Vly
Station Rfdg (AMBAC Insd)..................... 7.200 06/30/13 5,656,100
5,000 Oliver Cnty, ND Pollutn Ctl Rev Square Butte
Elec Coop Rfdg Ser A (AMBAC Insd)............. 5.300 01/01/27 5,206,450
1,125 Ward Cnty, ND Hlthcare Fac Rev Trinity
Obligated Group............................... 5.125 07/01/25 1,171,170
--------------
12,033,720
--------------
OHIO 0.6%
1,000 Chillicothe, OH City Sch Dist Sch Impt (FGIC
Insd) (Prerefunded @ 12/01/14)................ 5.250 12/01/26 1,099,610
5,000 Columbus, OH City Sch Dist Sch Fac Constr &
Impt (FSA Insd) (Prerefunded @ 12/01/14)...... 5.250 12/01/27 5,498,050
--------------
6,597,660
--------------
OKLAHOMA 1.9%
1,480 Jenks, OK Aquarium Auth Rev Rfdg (MBIA
Insd)......................................... 5.250 07/01/33 1,598,237
4,320 McAlester, OK Pub Wks Auth Util Cap Apprec Ser
A (FSA Insd).................................. * 02/01/30 1,236,773
2,020 Oklahoma City, OK Arpt Tr Jr Lien 27th Ser A
(FSA Insd) (Prerefunded @ 7/01/10)............ 5.000 07/01/17 2,099,043
2,400 Oklahoma City, OK Pub Ppty Auth Hotel Tax Rev
(FGIC Insd)................................... 5.250 10/01/29 2,621,664
</Table>
See Notes to Financial Statements 21
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
OKLAHOMA (CONTINUED)
$ 2,000 Oklahoma Colleges Brd Regt Stad Univ Cent OK
Ser B (AMBAC Insd)............................ 5.500% 06/01/24 $ 2,198,340
2,000 Tulsa, OK Cmnty College Rev (AMBAC Insd)...... 5.500 07/01/22 2,175,320
8,260 Tulsa, OK Tulsa Indl Auth Rev Univ Tulsa Ser A
(MBIA Insd) (Prerefunded @ 10/01/10).......... 5.375 10/01/31 8,714,795
--------------
20,644,172
--------------
OREGON 0.3%
2,835 Oregon St Dept Admin Rfdg Ser B (MBIA Insd)... 5.250 05/01/17 3,016,638
--------------
PENNSYLVANIA 4.5%
5,000 Allegheny Cnty, PA Hosp Dev Auth Rev Insd Hlth
Sys Ser A (MBIA Insd)......................... 6.500 11/15/30 5,523,050
4,875 Allegheny Cnty, PA Hosp Dev Auth Rev
Pittsburgh Mercy Hlth Sys Inc (AMBAC Insd)
(e)........................................... 5.625 08/15/26 5,264,025
2,600 Harrisburg, PA Auth Res Gtd Sub Ser D-2 (FSA
Insd)......................................... 5.000 12/01/33 2,770,326
3,000 Lycoming Cnty, PA Auth College Rev PA College
of Technology (AMBAC Insd).................... 5.350 07/01/26 3,150,750
1,800 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (b)............................ 4.600 10/01/27 1,777,810
2,500 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (b)............................ 4.650 10/01/31 2,469,181
4,700 Pennsylvania Hsg Fin Agy Single Family Mtg Rev
Ser 96-A (AMT) (b)............................ 4.700 10/01/37 4,642,061
1,375 Pennsylvania St Higher Ed Fac Auth Rev St Sys
Higher Ed Ser P (AMBAC Insd).................. 5.000 12/15/16 1,396,189
2,990 Philadelphia, PA Gas Wks Rev 1998 Gen
Ordinance 4th Ser (FSA Insd).................. 5.250 08/01/18 3,190,121
4,555 Philadelphia, PA Gas Wks Rev 1998 Gen
Ordinance 4th Ser (FSA Insd).................. 5.250 08/01/21 4,848,342
1,485 Philadelphia, PA Gas Wks Rev Eighteenth Ser
AGC (AGL Insd)................................ 5.250 08/01/20 1,591,682
3,665 Philadelphia, PA Gas Wks Rev Fifth Ser A-1
(AGL Insd) (a)................................ 5.250 09/01/17 3,970,441
4,400 State Pub Sch Bldg Auth PA Rev Lehigh Career &
Tech Inst (XLCA Insd)......................... 4.250 10/01/32 4,198,788
5,000 State Pub Sch Bldg Auth PA Sch Lease
Philadelphia Sch Dist Proj (FSA Insd)
(Prerefunded @ 6/01/13)....................... 5.250 06/01/26 5,422,300
--------------
50,215,066
--------------
SOUTH CAROLINA 2.5%
3,325 Columbia, SC Pkg Fac Rev Ser A (CIFG Insd).... 5.000 02/01/37 3,474,891
5,170 Easley, SC Util Rev Impt & Rfdg (FSA Insd).... 5.000 12/01/34 5,438,840
3,000 Kershaw Cnty, SC Pub Sch Fndtn Installment Pwr
Rev Dist Proj (CIFG Insd)..................... 5.000 12/01/30 3,156,030
</Table>
22 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
$ 3,800 Scago Ed & Fac Corp for Cherokee Cnty SC Proj
Ser B (FSA Insd).............................. 5.000% 12/01/30 $ 4,009,912
6,500 South Carolina Jobs Econ Dev Auth Indl Rev
Elec & Gas Co Proj Ser A (AMBAC Insd)......... 5.200 11/01/27 6,912,230
4,000 South Carolina Jobs Econ Tuomey (CIFG Insd)... 5.000 11/01/30 4,197,880
--------------
27,189,783
--------------
SOUTH DAKOTA 1.1%
1,455 Rapid City, SD Sales Tax Rev Rfdg (AMBAC
Insd)......................................... 5.500 06/01/12 1,556,413
5,205 South Dakota St Lease Rev Tr Ctf Ser A........ 6.625 09/01/12 5,748,298
4,000 South Dakota St Lease Rev Tr Ctf Ser A........ 6.700 09/01/17 4,908,520
--------------
12,213,231
--------------
TEXAS 7.2%
1,165 Alamo, TX Cmnty College Dist Combined Fee Rfdg
(FSA Insd).................................... 5.000 11/01/22 1,217,308
5,000 Brazos Riv Auth TX Rev Houston Ind Inc Proj
Ser C (AMBAC Insd)............................ 5.125 05/01/19 5,164,300
1,900 Colorado Riv, TX Muni Wtr Dist Sys Rfdg (AMBAC
Insd)......................................... 5.375 01/01/19 2,046,604
4,000 Dallas Fort Worth, TX Intl Arpt Rev Impt Set B
(FSA Insd) (AMT) (b).......................... 5.375 11/01/21 4,285,840
6,110 Dallas Fort Worth, TX Intl Arpt Rev Impt Ser B
(FSA Insd) (AMT) (b).......................... 5.500 11/01/19 6,617,069
22,500 Houston, TX Util Sys Rev First Lien Rfdg Ser A
(FGIC Insd)................................... 5.250 05/15/23 24,329,025
750 Laredo Tex Cmnty College Dist Unrefunded
Balance Bldg & Ref (AMBAC Insd)............... 5.300 08/01/26 782,318
3,000 Nueces Riv Auth TX Wtr Supply Rev Fac Corpus
Christi Proj Rfdg (FSA Insd).................. 5.000 07/15/25 3,169,620
2,000 Nueces Riv Auth TX Wtr Supply Rev Fac Corpus
Christi Proj Rfdg (FSA Insd).................. 5.000 03/01/27 2,107,360
2,220 Raven Hills, TX Higher Ed Corp Cardinal Vlg
Llc Lamar Univ A (MBIA Insd) (Prerefunded @
8/01/13)...................................... 5.500 08/01/28 2,440,468
2,000 San Antonio, TX Hotel Occupancy Rev Sub Lien
Rfdg Ser A (AMBAC Insd)....................... 5.000 08/15/29 2,092,820
1,750 Tarrant Cnty, TX Hlth Fac Dev Corp Hlth Sys
Rev Ser B (FGIC Insd) (e)..................... 5.000 09/01/15 1,872,955
1,060 Tarrant Regl Wtr Dist TX Impt Rfdg (FSA
Insd)......................................... 5.250 03/01/18 1,136,988
10,000 Texas St Tpk Auth Cent TX Tpk First Tier Ser A
(AMBAC Insd).................................. 5.500 08/15/39 10,768,600
9,500 Texas St Trans Commn Mobility Fd Ser A (FGIC
Insd)......................................... 4.500 04/01/35 9,402,910
1,800 Tyler, TX Indpt Sch Dist (FSA Insd) (a)....... 5.000 02/15/27 1,892,538
--------------
79,326,723
--------------
</Table>
See Notes to Financial Statements 23
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
UTAH 0.3%
$ 2,140 Murray City, UT Swr & Wtr Rev (AMBAC Insd).... 5.250% 10/01/23 $ 2,305,807
560 Provo, UT Elec Rev 1984 Rfdg Ser A (AMBAC
Insd) (e)..................................... 10.375 09/15/15 717,416
--------------
3,023,223
--------------
VIRGINIA 1.1%
3,160 Virginia St Hsg Auth Dev Auth Rental Hsg Ser D
(AMT) (b)..................................... 4.500 07/01/29 3,118,257
3,660 Virginia St Hsg Auth Dev Auth Rental Hsg Ser D
(AMT) (b)..................................... 4.600 07/01/33 3,624,004
5,840 Virginia St Hsg Auth Dev Auth Rental Hsg Ser D
(AMT) (b)..................................... 4.650 01/01/39 5,758,561
--------------
12,500,822
--------------
WASHINGTON 9.1%
4,115 Chelan Cnty, WA Sch Dist No 246 (FSA Insd).... 5.000 12/01/21 4,345,563
11,340 Energy Northwest WA Elec Rev Columbia
Generating Rfdg Ser A (FSA Insd).............. 5.500 07/01/17 12,204,902
4,500 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser A (FSA Insd).............................. 5.500 07/01/17 4,843,215
14,500 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser A (FSA Insd).............................. 5.500 07/01/18 15,608,815
5,000 Energy Northwest WA Elec Rev Proj No 3 Rfdg
Ser B (FSA Insd).............................. 6.000 07/01/16 5,541,600
1,365 Energy Northwest WA Wind Proj (AMBAC Insd).... 5.000 07/01/23 1,420,801
5,540 Everett, WA Wtr & Swr Rev (MBIA Insd)......... 5.000 12/01/29 5,856,888
1,215 Fife, WA Wtr & Swr Rev (MBIA Insd) (a)........ 5.000 04/01/24 1,277,585
1,160 Fife, WA Wtr & Swr Rev (MBIA Insd) (a)........ 5.000 04/01/29 1,215,436
1,895 Fife, WA Wtr & Swr Rev (MBIA Insd)............ 5.125 04/01/24 1,906,730
2,500 Goat Hill Ppty WA Lease Rev Govt Office Bldg
Proj (MBIA Insd).............................. 5.000 12/01/33 2,609,000
8,160 Klickitat Cnty, WA Pub Util Dist 001 Elec Rev
Rfdg Ser B (FGIC Insd) (a).................... 5.000 12/01/26 8,690,645
5,115 Lynnwood, WA Pub Fac Dist Rev Convention Ctr
(AMBAC Insd).................................. 5.000 12/01/34 5,361,850
4,185 Port Seattle, WA Rev Inter Lien Rfdg (XLCA
Insd)......................................... 5.000 02/01/27 4,415,552
8,220 Port Seattle, WA Rev Inter Lien Rfdg (XLCA
Insd)......................................... 5.000 02/01/28 8,672,840
2,000 Seattle, WA Muni Lt & Pwr Rev Impt & Rfdg (FSA
Insd)......................................... 5.500 03/01/18 2,121,540
145 Snohomish Cnty, WA Pub Util 1 (FSA Insd)...... 5.000 12/01/24 150,975
2,565 Snohomish Cnty, WA Pub Util 1 (FSA Insd)...... 5.500 12/01/23 2,774,509
3,000 Spokane, WA Pub Fac Dist Hotel (MBIA Insd).... 5.250 09/01/33 3,193,050
2,000 Spokane, WA Pub Fac Dist Hotel (MBIA Insd).... 5.750 12/01/25 2,209,160
2,420 Spokane, WA Pub Fac Dist Hotel (MBIA Insd).... 5.750 12/01/26 2,671,583
</Table>
24 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- --------------------------------------------------------------------------------------------------
WASHINGTON (CONTINUED)
$ 1,465 Tacoma, WA Solid Waste Util Rev Rfdg (AMBAC
Insd) (Prerefunded @ 12/01/11)................ 5.375% 12/01/18 $ 1,571,535
1,600 Washington St Rfdg Ser R 99A (FGIC Insd)...... 5.000 01/01/17 1,635,440
--------------
100,299,214
--------------
WEST VIRGINIA 0.1%
1,530 West Virginia Econ Dev Auth Lease Rev
Correctional Juvenile & Pub-A (MBIA Insd)..... 5.500 06/01/19 1,664,671
--------------
WISCONSIN 0.8%
1,350 Plover, WI Wtr Sys Rev (AMBAC Insd) (a)....... 5.400 12/01/16 1,408,590
1,500 Plover, WI Wtr Sys Rev (AMBAC Insd) (a)....... 5.500 12/01/18 1,567,755
1,405 Racine, WI Wtrwks Rev Sys Mtg (MBIA Insd) (a)
(Prerefunded @ 09/01/11)...................... 5.250 09/01/16 1,495,061
4,000 Wisconsin Pub Pwr Inc Sys Pwr Supply Sys Rev
Ser A (AMBAC Insd)............................ 5.000 07/01/37 4,196,800
--------------
8,668,206
--------------
PUERTO RICO 0.3%
3,000 Puerto Rico Indl Tourist Ed Med &
Environmental Ctl Fac Hosp Aux (MBIA Insd).... 6.250 07/01/16 3,006,300
--------------
TOTAL LONG-TERM INVESTMENTS 114.2%
(Cost $1,214,333,656).......................................................... 1,263,129,795
TOTAL SHORT-TERM INVESTMENTS 4.6%
(Cost $51,320,000)............................................................. 51,320,000
--------------
TOTAL INVESTMENTS 118.8%
(Cost $1,265,653,656).......................................................... 1,314,449,795
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (16.8%)
(Cost ($186,130,000))
(186,130) Notes with interest rates ranging from 3.650% to 3.750% at March 31,
2007 and contractual maturities of collateral ranging from 2019 to
2047 (see Note 1) (h)............................................... (186,130,000)
--------------
<Caption>
DESCRIPTION VALUE
- --------------------------------------------------------------------------------------------------
TOTAL NET INVESTMENTS 102.0%
(Cost $1,077,700,026).......................................................... 1,128,319,795
LIABILITIES IN EXCESS OF OTHER ASSETS (2.0%).................................... (21,754,509)
--------------
NET ASSETS 100.0%............................................................... $1,106,565,286
==============
</Table>
See Notes to Financial Statements 25
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) The Fund owns 100% of the outstanding bond issuance.
(b) Underlying security related to Inverse Floaters entered into by the Fund.
See Notes 1.H. and 6.B.
(c) Security converts to a fixed coupon rate at a predetermined date.
(d) Variable Rate Coupon
(e) Escrowed to Maturity
(f) All or a portion of this security has been physically segregated in
connection with open futures contracts.
(g) Security purchased on a when-issued or delayed delivery basis.
(h) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2007.
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
CIFG--CDC IXIS Financial Guaranty
Connie Lee--Connie Lee Insurance Co.
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
26 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
FUTURES CONTRACTS OUTSTANDING AS OF MARCH 31, 2007:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Bonds Futures, June 2007 (Current Notional
Value of $111,250 per contract)........................... 1,007 $1,140,891
U.S. Treasury Notes 10-Year Futures, June 2007 (Current
Notional Value of $108,125 per contract).................. 1,581 637,697
----- ----------
2,588 $1,778,588
===== ==========
</Table>
See Notes to Financial Statements 27
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $1,265,653,656)..................... $1,314,449,795
Cash........................................................ 190,839
Receivables:
Interest.................................................. 14,355,825
Fund Shares Sold.......................................... 602,708
Variation Margin on Futures............................... 512,313
Investments Sold.......................................... 35,438
Other..................................................... 291,743
--------------
Total Assets............................................ 1,330,438,661
--------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 186,130,000
Investments Purchased..................................... 33,973,062
Fund Shares Repurchased................................... 1,627,664
Income Distributions...................................... 681,399
Investment Advisory Fee................................... 480,794
Distributor and Affiliates................................ 358,739
Trustees' Deferred Compensation and Retirement Plans........ 391,780
Accrued Expenses............................................ 229,937
--------------
Total Liabilities....................................... 223,873,375
--------------
NET ASSETS.................................................. $1,106,565,286
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,053,237,702
Net Unrealized Appreciation................................. 50,574,727
Accumulated Undistributed Net Investment Income............. 1,623,729
Accumulated Net Realized Gain............................... 1,129,128
--------------
NET ASSETS.................................................. $1,106,565,286
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,047,266,882 and 56,763,074 shares of
beneficial interest issued and outstanding)............. $ 18.45
Maximum sales charge (4.75%* of offering price)......... .92
--------------
Maximum offering price to public........................ $ 19.37
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $37,681,910 and 2,044,922 shares of
beneficial interest issued and outstanding)............. $ 18.43
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $19,342,628 and 1,050,676 shares of
beneficial interest issued and outstanding)............. $ 18.41
==============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $2,273,866 and 123,251 shares of
beneficial interest issued and outstanding)............. $ 18.45
==============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
28 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $29,343,843
-----------
EXPENSES:
Investment Advisory Fee..................................... 2,852,487
Interest and Residual Trust Expenses........................ 2,396,329
Distribution (12b-1) and Service Fees
Class A................................................... 1,304,552
Class B................................................... 202,334
Class C................................................... 99,793
Transfer Agent Fees......................................... 346,242
Accounting and Administration Expenses...................... 106,832
Professional Fees........................................... 76,896
Custody..................................................... 55,554
Reports to Shareholders..................................... 52,894
Trustees' Fees and Related Expenses......................... 33,247
Registration Fees........................................... 31,466
Other....................................................... 38,435
-----------
Total Expenses.......................................... 7,597,061
Less Credits Earned on Cash Balances.................... 47,543
-----------
Net Expenses............................................ 7,549,518
-----------
NET INVESTMENT INCOME....................................... $21,794,325
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 4,270,266
Futures................................................... (1,936,401)
Swaps..................................................... (2,862,937)
-----------
Net Realized Loss........................................... (529,072)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 55,739,241
-----------
End of the Period:
Investments............................................. 48,796,139
Futures................................................. 1,778,588
-----------
50,574,727
-----------
Net Unrealized Depreciation During the Period............... (5,164,514)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(5,693,586)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $16,100,739
===========
</Table>
See Notes to Financial Statements 29
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 21,794,325 $ 44,231,145
Net Realized Gain/Loss............................... (529,072) 9,909,928
Net Unrealized Depreciation During the Period........ (5,164,514) (4,367,911)
-------------- --------------
Change in Net Assets from Operations................. 16,100,739 49,773,162
-------------- --------------
Distributions from Net Investment Income:
Class A Shares..................................... (20,255,638) (41,491,407)
Class B Shares..................................... (621,065) (1,533,329)
Class C Shares..................................... (306,913) (670,641)
Class I Shares..................................... (47,828) (78,466)
-------------- --------------
(21,231,444) (43,773,843)
-------------- --------------
Distributions from Net Realized Gain:
Class A Shares..................................... (3,149,919) (22,486,062)
Class B Shares..................................... (122,192) (1,089,279)
Class C Shares..................................... (59,328) (456,473)
Class I Shares..................................... (7,068) (37,990)
-------------- --------------
(3,338,507) (24,069,804)
-------------- --------------
Total Distributions.................................. (24,569,951) (67,843,647)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (8,469,212) (18,070,485)
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 27,856,271 74,704,286
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 19,496,770 54,158,045
Cost of Shares Repurchased........................... (74,922,505) (162,232,377)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... (27,569,464) (33,370,046)
-------------- --------------
TOTAL DECREASE IN NET ASSETS......................... (36,038,676) (51,440,531)
NET ASSETS:
Beginning of the Period.............................. 1,142,603,962 1,194,044,493
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of $1,623,729
and $1,060,848, respectively)...................... $1,106,565,286 $1,142,603,962
============== ==============
</Table>
30 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ----------------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................... $ 18.59 $ 18.87 $ 19.07 $ 19.27 $ 19.65 $ 19.22
-------- -------- -------- -------- -------- --------
Net Investment Income........ .36(a) .72(a) .72 .76 .77 .81
Net Realized and Unrealized
Gain/Loss.................. (.09) .09 (.01) .02 (.23) .87
-------- -------- -------- -------- -------- --------
Total from Investment
Operations................... .27 .81 .71 .78 .54 1.68
-------- -------- -------- -------- -------- --------
Less:
Distributions from Net
Investment Income.......... .35 .71 .74 .75 .74 .81
Distributions from Net
Realized Gain.............. .06 .38 .17 .23 .18 .44
-------- -------- -------- -------- -------- --------
Total Distributions............ .41 1.09 .91 .98 .92 1.25
-------- -------- -------- -------- -------- --------
NET ASSET VALUE, END OF THE
PERIOD....................... $ 18.45 $ 18.59 $ 18.87 $ 19.07 $ 19.27 $ 19.65
======== ======== ======== ======== ======== ========
Total Return (b)............... 1.46%* 4.49% 3.77% 4.22% 2.90% 9.28%
Net Assets at End of the Period
(In millions)................ $1,047.3 $1,075.9 $1,114.2 $1,137.2 $1,209.9 $1,244.3
Ratio of Expenses to Average
Net Assets................... 1.32% 1.00% 0.94% 0.89% 0.86% 0.87%
Ratio of Net Investment Income
to Average Net Assets........ 3.92% 3.87% 3.81% 3.99% 4.02% 4.30%
Portfolio Turnover............. 21%* 45% 65% 39% 58% 54%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses).................... 0.89% 0.88% 0.88% 0.87% 0.86% 0.87%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See Notes to Financial Statements 31
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $18.57 $18.85 $19.05 $19.24 $19.63 $19.20
------ ------ ------ ------ ------ ------
Net Investment Income............ .29(a) .58(a) .59 .62 .63 .66
Net Realized and Unrealized
Gain/Loss...................... (.09) .09 (.02) .02 (.24) .88
------ ------ ------ ------ ------ ------
Total from Investment Operations... .20 .67 .57 .64 .39 1.54
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... .28 .57 .60 .60 .60 .67
Distributions from Net Realized
Gain........................... .06 .38 .17 .23 .18 .44
------ ------ ------ ------ ------ ------
Total Distributions................ .34 .95 .77 .83 .78 1.11
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $18.43 $18.57 $18.85 $19.05 $19.24 $19.63
====== ====== ====== ====== ====== ======
Total Return (b)................... 1.08%* 3.71% 3.04% 3.43% 2.08% 8.47%
Net Assets at End of the Period (In
millions)........................ $ 37.7 $ 43.0 $ 56.2 $ 66.4 $ 82.6 $ 87.2
Ratio of Expenses to Average Net
Assets........................... 2.07% 1.75% 1.70% 1.65% 1.62% 1.63%
Ratio of Net Investment Income to
Average Net Assets............... 3.17% 3.11% 3.05% 3.23% 3.26% 3.53%
Portfolio Turnover................. 21%* 45% 65% 39% 58% 54%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.64% 1.63% 1.64% 1.63% 1.62% 1.63%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining to 0% after the sixth year.
If the sales charge was included, total returns would be lower. These
returns include combined Rule 12b-1 fees and service fees of up to 1% and do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
32 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $18.55 $18.84 $19.04 $19.23 $19.62 $19.19
------ ------ ------ ------ ------ ------
Net Investment Income.............. .29(a) .58(a) .58 .62 .63 .67
Net Realized and Unrealized
Gain/Loss........................ (.09) .08 (.01) .02 (.24) .87
------ ------ ------ ------ ------ ------
Total from Investment Operations... .20 .66 .57 .64 .39 1.54
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income........................... .28 .57 .60 .60 .60 .67
Distributions from Net Realized
Gain............................. .06 .38 .17 .23 .18 .44
------ ------ ------ ------ ------ ------
Total Distributions................ .34 .95 .77 .83 .78 1.11
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $18.41 $18.55 $18.84 $19.04 $19.23 $19.62
====== ====== ====== ====== ====== ======
Total Return (b)................... 1.08%* 3.66% 3.04% 3.43% 2.08% 8.48%
Net Assets at End of the Period (In
millions)........................ $ 19.3 $ 21.3 $ 21.7 $ 19.9 $ 24.1 $ 22.1
Ratio of Expenses to Average Net
Assets........................... 2.07% 1.75% 1.70% 1.65% 1.62% 1.63%
Ratio of Net Investment Income to
Average Net Assets............... 3.17% 3.11% 3.05% 3.23% 3.25% 3.53%
Portfolio Turnover................. 21%* 45% 65% 39% 58% 54%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.64% 1.63% 1.64% 1.63% 1.62% 1.63%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
See Notes to Financial Statements 33
VAN KAMPEN INSURED TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS AUGUST 12, 2005
ENDED YEAR ENDED (COMMENCEMENT OF
CLASS I SHARES MARCH 31, SEPTEMBER 30, OPERATIONS) TO
2007 2006 SEPTEMBER 30, 2005
-------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD..... $18.59 $18.87 $18.93
------ ------ ------
Net Investment Income...................... .39(a) 75(a) .10
Net Realized and Unrealized Gain/Loss...... (.09) .10 (.06)
------ ------ ------
Total from Investment Operations............. .30 .85 .04
------ ------ ------
Less:
Distributions from Net Investment Income... .38 .75 .10
Distributions from Net Realized Gain....... .06 .38 -0-
------ ------ ------
Total Distributions.......................... .44 1.13 .10
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD........... $18.45 $18.59 $18.87
====== ====== ======
Total Return (b)............................. 1.58%* 4.75% 0.20%*
Net Assets at End of the Period (In
millions).................................. $ 2.3 $ 2.4 $ 1.9
Ratio of Expenses to Average Net Assets...... 1.07% 0.75% 0.70%
Ratio of Net Investment Income to Average Net
Assets..................................... 4.17% 4.11% 4.06%
Portfolio Turnover........................... 21%* 45% 65%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses).................................. 0.64% 0.63% 0.64%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period. These returns do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
34 See Notes to Financial Statements
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Insured Tax Free Income Fund (the "Fund") is organized as a series of
the Van Kampen Tax Free Trust, a Delaware statutory trust, and is registered as
a diversified open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"), as amended. The Fund's investment
objective is to provide investors a high level of current income exempt from
federal income taxes, with liquidity and safety of principal, primarily through
investment in a diversified portfolio of insured municipal securities. The Fund
commenced investment operations on December 14, 1984. The Fund offers Class A
Shares, Class B Shares, Class C Shares and Class I Shares. Each class of shares
differs by its initial sales load, contingent deferred sales charges, the
allocation of class-specific expenses and voting rights on matters affecting a
single class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Interest rate swaps are valued using market
quotations from brokers. 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
Fund 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 Fund 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 March 31, 2007, the Fund had $33,973,062 when-issued or
delayed delivery purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies
35
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
The Fund 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. As of September 30, 2006, the Fund did not have any accumulated capital
loss carryforward.
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $1,077,700,026
==============
Gross tax unrealized appreciation........................... $ 52,623,662
Gross tax unrealized depreciation........................... (2,003,893)
--------------
Net tax unrealized appreciation on investments.............. $ 50,619,769
==============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed annually. 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 September 30,
2006 was as follows:
<Table>
<Caption>
Distributions paid from:
Ordinary income............................................. $ 5,594,196
Tax-exempt income........................................... 43,813,499
Long-term capital gain...................................... 18,477,514
-----------
$67,885,209
===========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 362,927
Undistributed tax-exempt income............................. 1,719,881
Undistributed long-term capital gain........................ 3,333,429
</Table>
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of gains or losses recognized on securities for
tax purposes but not for book.
F. INSURANCE EXPENSES The Fund typically invests in insured bonds. Any portfolio
securities not specifically covered by a primary insurance policy are insured
secondarily through the Fund's portfolio insurance policy. Insurance premiums
are based on the daily balances of uninsured bonds in the portfolio of
investments and are charged to expense on an accrual basis. The insurance policy
guarantees the timely payment of principal and interest on the securities in the
Fund's portfolio.
36
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
G. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $47,543 as a result of credits earned on cash
balances.
H. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Fund enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interest in the dealer trusts' assets and cash
flows, which are in the form of inverse floating rate investments. The dealer
trusts fund the purchases of the fixed rate bonds by issuing floating rate notes
to third parties and allowing the Fund to retain residual interests in the
bonds. The Fund enters into shortfall agreements with the dealer trusts, which
commit the Fund to pay the dealer trusts, in certain circumstances, the
difference between the liquidation value of the fixed rate bonds held by the
dealer trusts and the liquidation value of the floating rate notes held by third
parties, as well as any shortfalls in interest cash flows. The residual
interests held by the Fund (inverse floating rate investments) include the right
of the Fund (1) to cause the holders of the floating rate notes to tender their
notes at par at the next interest rate reset date, and (2) to transfer the
municipal bond from the dealer trusts to the Fund, thereby collapsing the dealer
trusts. The Fund accounts for the transfer of bonds to the dealer trusts as
secured borrowings, with the securities transferred remaining in the Fund's
investment assets, and the related floating rate notes reflected as Fund
liabilities under the caption "Floating Rate Note Obligations" on the Statement
of Assets and Liabilities. The Fund records the interest income from the fixed
rate bonds under the caption "Interest" and records the expenses related to
floating rate note obligations and any administrative expenses of the dealer
trusts under the caption "Interest and Residual Trust Expenses" on the Fund's
Statement of Operations. The notes issued by the dealer trust have interest
rates that reset weekly and the floating rate note holders have the option to
tender their notes to the dealer trusts for redemption at par at each reset
date. At March 31, 2007, Fund investments with a value of $263,022,484 are held
by the dealer trusts and serve as collateral for the $186,130,000 in floating
rate notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2007 are presented on the
Portfolio of Investments.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $500 million.......................................... .525%
Next $500 million........................................... .500%
Next $500 million........................................... .475%
Over $1.5 billion........................................... .450%
</Table>
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $14,000 representing legal expenses provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO
37
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
provides compliance services to the Fund. The costs of these services are
allocated to each fund. For the six months ended March 31, 2007, the Fund
recognized expenses of approximately $63,900 representing Van Kampen Investments
Inc.'s or its affiliates' (collectively "Van Kampen") cost of providing
accounting and legal services to the Fund, as well as the salary, benefits and
related costs of the CCO and related support staff paid by Van Kampen. Services
provided pursuant to the Legal Services agreement are reported as part of
"Professional Fees" expenses on the Statement of Operations. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Accounting and Administrative Expenses" on the Statement of Operations.
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $261,700
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund and to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $263,631 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2007.
Appreciation/ depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligations and do not affect the net asset value of the Fund. 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 Fund. The maximum annual
benefit per trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $68,000 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $36,500. Sales charges do not represent expenses of the
Fund.
38
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------- ---------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A.......................... 1,390,213 $ 25,806,739 3,647,193 $ 67,459,015
Class B.......................... 59,142 1,097,833 145,733 2,695,598
Class C.......................... 46,717 865,514 193,827 3,592,442
Class I.......................... 4,644 86,185 52,223 957,231
---------- ------------ ---------- -------------
Total Sales........................ 1,500,716 $ 27,856,271 4,038,976 $ 74,704,286
========== ============ ========== =============
Dividend Reinvestment:
Class A.......................... 1,005,975 $ 18,673,960 2,782,083 $ 51,372,658
Class B.......................... 27,052 501,531 99,188 1,829,554
Class C.......................... 14,381 266,382 45,556 839,386
Class I.......................... 2,957 54,897 6,305 116,447
---------- ------------ ---------- -------------
Total Dividend Reinvestment........ 1,050,365 $ 19,496,770 2,933,132 $ 54,158,045
========== ============ ========== =============
Repurchases:
Class A.......................... (3,505,964) $(65,110,344) (7,591,729) $(140,348,327)
Class B.......................... (358,298) (6,634,564) (909,576) (16,794,436)
Class C.......................... (156,170) (2,893,434) (248,131) (4,575,867)
Class I.......................... (15,316) (284,163) (27,777) (513,747)
---------- ------------ ---------- -------------
Total Repurchases.................. (4,035,748) $(74,922,505) (8,777,213) $(162,232,377)
========== ============ ========== =============
</Table>
4. REDEMPTION FEES
The Fund assesses a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within seven days of purchase. The
redemption fee is paid directly to the Fund. For the six months ended March 31,
2007, the Fund received redemption fees of approximately $23, which are reported
as part of "Cost of Shares Repurchased" on the Statement of Changes in Net
Assets. The per share impact from redemption fees paid to the Fund was less than
$0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $352,486,688 and
$259,893,314, respectively.
6. 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 Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Fund's holdings, including
39
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
derivative instruments, are marked to market each day with the change in value
reflected in unrealized appreciation/depreciation. Upon disposition, a realized
gain or loss is recognized accordingly, except when exercising an option
contract or taking delivery of a security underlying a futures contract. In
these instances, the recognition of gain or loss is postponed until the disposal
of the security underlying the option or futures contract. Summarized below are
the specific types of derivative financial instruments used by the Fund.
A. FUTURES CONTRACTS A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Fund generally invests in exchange traded futures contracts on U.S. Treasury
Bonds or Notes for duration and risk management purposes and typically closes
the contract prior to the delivery date. Upon entering into futures contracts,
the Fund 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 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 March 31, 2007,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... 890
Futures Opened.............................................. 6,328
Futures Closed.............................................. (4,630)
------
Outstanding at March 31, 2007............................... 2,588
======
</Table>
B. INVERSE FLOATING RATE INVESTMENTS The Fund may invest a portion of its assets
in inverse floating rate instruments, either through outright purchases of
inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Fund in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Fund to greater risk and increased costs. Leverage may cause the
Fund's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Fund's portfolio securities. The use of leverage may also cause
the Fund to liquidate portfolio positions when it may not be advantageous to do
so in order to satisfy its obligations with respect to inverse floating rate
instruments.
C. INTEREST RATE SWAPS The Fund may enter into forward interest rate swap
transactions intended to help the Fund manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Fund's interest rate sensitivity with that of the broader municipal market.
Forward interest rate swap transactions involve the Fund's agreement with a
counterparty to pay, in the future, a fixed or variable rate payment in exchange
for the
40
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
counterparty paying the Fund a variable or fixed rate payment, the accruals for
which would begin at a specified date in the future (the "effective date"). The
amount of the payment obligation is based on the notional amount of the forward
swap contract and the termination date of the swap (which is akin to a bond's
maturity). The value of the Fund's swap commitment would increase or decrease
based primarily on the extent to which long-term interest rates for bonds having
a maturity of the swap's termination date increases or decreases. The Fund may
terminate a swap contract prior to the effective date, at which point a realized
gain or loss is recognized. When a forward swap is terminated, it ordinarily
does not involve the delivery of securities or other underlying assets or
principal, but rather is settled in cash on a net basis. The Fund intends, but
is not obligated, to terminate its forward swaps before the effective date.
Accordingly, the risk of loss with respect to the swap counterparty on such
transactions is limited to the credit risk associated with a counterparty
failing to honor its commitment to pay any realized gain to the Fund upon
termination. To reduce such credit risk, all counterparties are required to
pledge collateral daily (based on the daily valuation of each swap) on behalf of
the Fund with a value approximately equal to the amount of any unrealized gain.
Reciprocally, when the Fund has an unrealized loss on a swap contract, the Fund
has instructed the custodian to pledge cash or liquid securities as collateral
with a value approximately equal to the amount of the unrealized loss.
Collateral pledges are monitored and subsequently adjusted if and when the swap
valuations fluctuate. Restricted cash, if any, for segregating purposes is shown
on the Statement of Assets and Liabilities.
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the Plans, the Fund
will incur annual fees of up to .25% of Class A average daily net assets and up
to 1.00% each of Class B and Class C average daily net assets. These fees are
accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $932,100 and $52,900
for Class B and Class C Shares, respectively. These amounts may be recovered
from future payments under the distribution plan or CDSC. To the extent the
unreimbursed receivable has been fully recovered, the distribution fee is
reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial
41
VAN KAMPEN INSURED TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
statements. FIN 48 is effective for fiscal years beginning after December 15,
2006 and is to be applied to all open tax years as of the effective date. Recent
SEC guidance allows implementing FIN 48 in the fund NAV calculations as late as
the fund's last NAV calculation in the first required financial statement
period. As a result, the Fund will incorporate FIN 48 in its semi annual report
on March 31, 2008. The impact to the Fund's financial statements, if any, is
currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
42
VAN KAMPEN INSURED TAX FREE INCOME FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
43
Van Kampen Insured Tax Free Income Fund
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.
(continued on next page)
Van Kampen Insured Tax Free Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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
(continued on back)
Van Kampen Insured Tax Free Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
32, 332, 532, 632
TFINSAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-00932P-Y03/07
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Strategic Municipal Income Fund 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 fund's financial statements and a list of fund investments
as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B, AND C
SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE PROSPECTUS CONTAINS
INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT OBJECTIVES, RISKS,
CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL PROSPECTUS, CONTACT YOUR
FINANCIAL ADVISOR OR DOWNLOAD ONE AT VANKAMPEN.COM. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF FUND SHARES MAY BE LESS THAN WHAT YOU PAID FOR
THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES
6/28/85 4/30/93 8/13/93
- ---------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALES SALES W/O SALES SALES W/O SALES SALES
TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 6.66% 6.42% 5.10% 5.10% 4.79% 4.79%
10-year 5.27 4.76 4.63 4.63 4.54 4.54
5-year 6.86 5.83 6.06 5.82 6.20 6.20
1-year 7.84 2.75 7.05 3.05 6.98 5.98
6-month 2.85 -2.05 2.47 -1.53 2.45 1.45
- ---------------------------------------------------------------------------------------------
30 day SEC Yield 4.48% 3.95% 3.90%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
Average annual total return with sales charges includes payment of the maximum
sales charge of 4.75 percent for Class A shares, a contingent deferred sales
charge of 4.00 percent for Class B shares (in year one and declining to zero
after year six), a contingent deferred sales charge of 1.00 percent for Class C
shares in year one and combined Rule 12b-1 fees and service fees of up to 0.25
percent for Class A shares and up to 1.00 percent for Class B and C shares. The
since inception and 10-year returns for Class B shares reflect the conversion of
Class B shares into Class A shares seven years after purchase. The since
inception returns for Class C shares reflect the conversion of Class C shares
into Class A shares ten years after purchase. Figures shown above assume
reinvestment of all dividends and capital gains. SEC yield is a calculation for
determining the amount of portfolio income, excluding non-income items as
prescribed by the SEC. Yields are subject to change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt 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
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July due to concern over the weak housing market's potential drag on the
economy. Bonds continued to sell off until February when the sub-prime mortgage
market showed signs of deterioration, causing a sell-off in equities and a
"flight-to-quality" bond market rally. In March the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and as such, the yield
differential between long maturity and short maturity issues was quite small.
New issue supply rose dramatically during the period, increasing by 15 percent
versus the prior six months and 35 percent versus the same six-month period a
year ago, as relatively low interest rates spurred municipalities to refinance
their debt. The majority of this supply was high-grade paper; high-yield
municipal bond supply remained limited. At the same time, demand for municipal
bonds was robust, particularly for high-yield securities as investors proved
increasingly willing to take on more risk in return for potentially higher
yields. The strong demand caused credit spreads, which were already near
historically tight levels, to further narrow. As a result, the lower-quality,
higher yielding segment of the market considerably outperformed, returning 185
basis points more than the investment-grade segment for the overall period.
2
PERFORMANCE ANALYSIS
The fund returned 2.85 percent for the six months ended March 31, 2007 (Class A
shares, unadjusted for sales charges), outperforming the fund's benchmark, the
Lehman Brothers Municipal Bond Index, which returned 1.93 percent for the
period.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- -------------------------------------------------------------------
LEHMAN BROTHERS MUNICIPAL
CLASS A CLASS B CLASS C BOND INDEX
2.85% 2.47% 2.45% 1.93%
- -------------------------------------------------------------------
</Table>
The performance for the three share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definition.
Various factors contributed to the fund's strong performance throughout the
course of the period. The key performance driver, however, was the fund's
allocation to lower- and non-rated securities. Ongoing investor appetite for
risk, narrowing spreads, and a limited supply led to the outperformance of these
high-yield securities. As such, the portfolio's approximate 50 percent stake in
this segment of the market, most of which was comprised of non-rated issues,
helped to boost the fund's returns.
Also additive to performance were select holdings within the health care,
special tax district and master settlement tobacco bond sectors, all of which
enjoyed price appreciation during the period. The fund continued to hold inverse
floating-rate securities, which are variable rate instruments whose interest
rates move in the opposite direction of a particular reference rate. These
inverse floating-rate securities, which offered attractive yields, also
typically add volatility to a portfolio. As such, we felt it prudent to reduce
the fund's exposure to these securities somewhat during the period in order to
help lower the portfolio's overall volatility and bring its duration (a measure
of interest-rate sensitivity) more in line with internal targets. We reallocated
the majority of these assets in AAA and AA rated bonds. Although the fund
outperformed its benchmark, the Lehman Municipal Bond Index, a few isolated
issues in the industrial revenue sector, as well as a charter school bond,
experienced price erosion during the period, which detracted from returns.
The fund's investments remained well-diversified across a broad range of
sectors. As of the end of the period, sector exposure relatively unchanged from
six months earlier, with hospital, life care, and special tax district bonds
representing the fund's largest sector weightings.
We closely manage the growth of the fund's asset base as an important part of
our commitment to the fund's existing shareholders. Based on our analysis of
3
the supply and demand trends in the market, we believed the prudent course was
to keep the fund closed to new investors during the period.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
4
<Table>
<Caption>
RATINGS ALLOCATION AS OF 3/31/07
AAA/Aaa 13.7%
AA/Aa 3.6
A/A 3.3
BBB/Baa 12.5
BB/Ba 2.6
B/B 1.0
Non-Rated 63.3
<Caption>
TOP FIVE SECTORS AS OF 3/31/07
Hospital 22.0%
Life Care 16.3
Special Tax Districts 13.1
Master Tobacco Settlement 4.3
Airports 4.1
<Caption>
SUMMARY OF INVESTMENTS BY INDUSTRY CLASSIFICATION AS OF 3/31/07
Florida 16.1%
California 12.7
Illinois 8.8
New York 6.7
Texas 6.5
Minnesota 5.7
Tennessee 5.6
Ohio 4.4
Pennsylvania 4.4
Virginia 4.2
Michigan 3.8
District of Columbia 3.0
Missouri 3.0
Arizona 2.9
Colorado 2.8
New Jersey 2.7
Massachusetts 1.9
Puerto Rico 1.9
Maryland 1.8
Oklahoma 1.8
Alaska 1.5
Georgia 1.5
South Carolina 1.5
Wisconsin 1.1
Iowa 1.0
Alabama 0.9
Indiana 0.9
Oregon 0.9
Louisiana 0.8
Nevada 0.8
Washington 0.8
Kansas 0.6
New Mexico 0.6
South Dakota 0.5
Connecticut 0.4
</Table>
<Table>
(continued on next page)
</Table>
5
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
(continued from previous page)
Hawaii 0.4
New Hampshire 0.4
Wyoming 0.4
Idaho 0.3
North Carolina 0.3
Rhode Island 0.3
U.S. Virgin Islands 0.3
Arkansas 0.2
Delaware 0.2
Montana 0.2
North Dakota 0.2
Utah 0.2
Vermont 0.1
Mississippi 0.0*
-----
Total Long-Term Investments 118.0
Short-Term Investments 0.1
Liability for Floating Rate Note Obligations Related to
Securities Held (18.4)
Other Assets in Excess of Liabilities 0.3
-----
Net Assets 100.0%
</Table>
* Amount is less than 0.1%
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 allocations and Sectors are as a
percentage of total long-term investments. Summary of Investments by State
Classification is as a percentage of total net assets. 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 fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
7
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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.
8
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and Class C
Shares; and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,028.49 $ 9.20
Hypothetical............................... 1,000.00 1,015.86 9.15
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,024.68 13.02
Hypothetical............................... 1,000.00 1,012.07 12.94
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,024.45 13.02
Hypothetical............................... 1,000.00 1,012.07 12.94
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.82%, 2.58%,
and 2.58%, for Class A, B, and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the
one-half year period).
Assumes all dividends and distributions were reinvested.
9
The following table shows what expenses a shareholder would have paid, excluding
interest and residual trust expenses.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,028.49 $4.15
Hypothetical............................... 1,000.00 1,020.84 4.13
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,024.68 7.93
Hypothetical............................... 1,000.00 1,017.10 7.90
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,024.45 7.92
Hypothetical............................... 1,000.00 1,017.10 7.90
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.82%, 1.57%,
and 1.57%, for Class A, B, and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the
one-half year period).
Assumes all dividends and distributions were reinvested.
10
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MUNICIPAL BONDS 118.0%
ALABAMA 0.9%
$ 2,000 Alabama Drinking Wtr Fin Auth Revolving Fd
Ln Ser C (AMBAC Insd)..................... 5.375% 08/15/23 $ 2,109,460
1,000 Alabama Drinking Wtr Fin Auth Revolving Fd
Ln Ser C (AMBAC Insd) (a)................. 5.750 08/15/18 1,071,650
2,000 Alabama Wtr Pollutn Ctl Auth (AMBAC
Insd)..................................... 5.750 08/15/18 2,143,300
1,500 Alexander City, AL Spl Care Fac Fin Auth
Med Fac Rev Russell Hosp Corp Ser A....... 5.750 12/01/36 1,576,500
1,000 Butler, AL Indl Dev Brd Solid GA Pacific
Corp Proj Rfdg (AMT)...................... 5.750 09/01/28 1,033,270
1,500 Colbert Cnty Northwest Auth Hlthcare
Fac....................................... 5.750 06/01/27 1,573,875
2,500 Huntsville/Carlton Cove, AL Carlton Cove
Inc Proj Ser A............................ 7.000 11/15/17 1,386,550
250 Huntsville Redstone Vlg, AL Spl Care Fac
Fin Auth Ser A............................ 8.250 12/01/32 284,252
3 Mobile, AL Indl Dev Brd Solid Waste Disp
Rev Mobile Energy Svc Co Proj Rfdg........ 6.950 01/01/20 293
1,395 Valley, AL Spl Care Fac Fin Auth Rev
Lanier Mem Hosp Ser A..................... 5.600 11/01/16 1,422,719
1,750 Valley, AL Spl Care Fac Fin Auth Rev
Lanier Mem Hosp Ser A..................... 5.650 11/01/22 1,783,862
--------------
14,385,731
--------------
ALASKA 1.5%
1,320 Alaska Indl Dev & Expt Auth Williams Lynxs
AK Cargoport (AMT) (Acquired 05/17/01,
Cost $1,320,000) (b)...................... 7.800 05/01/14 1,407,899
3,780 Juneau, AK City & Borough Rev Saint Ann's
Care Ctr Proj............................. 6.875 12/01/25 3,893,967
21,000 Northern Tob Securitization Corp Asst Bkd
Ser A..................................... 5.000 06/01/46 20,470,380
--------------
25,772,246
--------------
ARIZONA 2.9%
1,750 Arizona Hlth Fac Auth Beatitudes Campus
Proj...................................... 5.200 10/01/37 1,769,092
1,000 Arizona Hlth Fac Auth Rev Terraces Proj
Ser A..................................... 7.500 11/15/23 1,116,330
1,250 Arizona Hlth Fac Auth Rev Terraces Proj
Ser A..................................... 7.750 11/15/33 1,399,425
5,650 Cochise Cnty, AZ Indl Dev Sierra Vista
Cmnty Hosp Rfdg Ser A..................... 6.750 12/01/26 5,768,481
500 Flagstaff, AZ Indl Dev Auth Rev Sr Living
Cmnty Northn AZ Proj...................... 6.300 09/01/38 503,440
980 Flagstaff, AZ Indl Dev Auth Rev Sr Living
Cmnty Northn AZ Proj...................... 7.500 03/01/35 1,067,357
7,000 Glendale, AZ Indl Dev Auth Rfdg........... 5.000 12/01/35 7,147,700
</Table>
See Notes to Financial Statements 11
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
ARIZONA (CONTINUED)
$ 4,000 Maricopa Cnty, AZ Hlth Fac Rev Catholic
Hlthcare West Ser A....................... 5.500% 07/01/26 $ 4,284,480
2,105 Maricopa Cnty, AZ Indl Dev Christian Care
Mesa Inc Proj Ser A (Prerefunded @
04/01/07)................................. 7.750 04/01/15 2,147,311
2,000 Maricopa Cnty, AZ Indl Dev Christian Care
Mesa Inc Proj Ser A (Prerefunded @
04/01/07)................................. 7.875 04/01/27 2,040,200
1,500 Peoria, AZ Indl Dev Auth Rev Sierra Winds
Life Rfdg Ser A........................... 6.375 08/15/29 1,553,700
2,525 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
Choice Ed & Dev Corp Proj................. 6.250 06/01/26 2,675,566
1,590 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
P.L.C Charter Schs Proj................... 6.500 04/01/26 1,693,000
2,805 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
P.L.C Charter Schs Proj................... 6.750 04/01/36 3,001,013
4,225 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
Premier & Air Co.......................... 7.000 09/01/35 4,320,232
1,865 Pima Cnty, AZ Indl Dev Auth Ed Rev Fac
Milestones Charter Sch Proj............... 6.750 11/01/33 1,917,145
800 Pima Cnty, AZ Indl Dev Auth Fac Skyline
Tech High Sch Proj........................ 7.500 02/01/34 818,784
1,000 Pima Cnty, AZ Indl Dev Auth Rev La Posada
at Park Ctr Ser A......................... 7.000 05/15/27 1,021,890
2,000 Pima Cnty, AZ Indl Dev Auth Wtr & Waste
Rev Global Wtr Res LLC Proj (AMT)
(Acquired 12/15/06, Cost $2,000,000)
(b)....................................... 5.600 12/01/22 2,010,200
790 Red Hawk Canyon Cmnty Fac Dist No 2 AZ
Dist Assmt Rev Ser A...................... 6.500 12/01/12 808,360
2,025 Tucson, AZ Multi-Family Rev Hsg Catalina
Asstd Living Ser A (AMT).................. 6.500 07/01/31 1,829,081
--------------
48,892,787
--------------
ARKANSAS 0.2%
1,720 Baxter Cnty Ark Hosp Rev Rfdg............. 5.000 09/01/22 1,778,033
2,325 Baxter Cnty Ark Hosp Rev Rfdg............. 5.000 09/01/26 2,392,657
--------------
4,170,690
--------------
CALIFORNIA 12.7%
1,000 ABAG Fin Auth Nonprofit Corp CA Amern
Bapitist Homes Rfdg Ser A................. 5.850 10/01/27 1,016,260
1,000 Beaumont, CA Fin Auth Loc Agy Rev Ser D... 5.800 09/01/35 1,070,720
1,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.600 09/01/25 1,067,740
2,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.650 09/01/30 2,137,520
2,000 Beaumont, CA Fin Auth Loc Agy Ser A....... 5.700 09/01/35 2,136,160
1,000 Blythe, CA Redev Agy Proj................. 5.750 05/01/34 1,059,910
15,000 California Hlth Fac Fin Auth Rev Cedars
Sinai Med Ctr Rfdg (o).................... 5.000 11/15/34 15,557,625
</Table>
12 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 3,000 California Pollutn Ctl Fin Auth Solid
Waste Disp Rev Solid Waste Mgmt Inc Proj 2
Ser A (AMT)............................... 5.400% 04/01/25 $ 3,160,590
1,000 California Statewide Cmnty Dev Auth Elder
Care Alliance Ser A (Prerefunded @
11/15/12)................................. 8.250 11/15/32 1,227,380
930 California Statewide Cmnty Dev Auth Multi-
Family Rev Hsg Heritage Pointe Sr Apt Ser
QQ (AMT) (Acquired 02/19/02, Cost
$927,675) (b)............................. 7.500 10/01/26 967,312
1,000 California Statewide Cmnty Dev Auth San
Francisco Art Institute (Acquired
07/05/02, Cost $1,000,000) (b)............ 7.375 04/01/32 1,067,410
20,000 California Statewide Cmntys Dev Auth Rev
Kaiser Permanente Ser B (o)............... 5.000 03/01/41 20,783,120
20,000 California Statewide Cmntys Dev Auth Rev
Kaiser Permanente Ser B (o)............... 5.250 03/01/45 20,783,120
1,000 Chino, CA Cmnty Fac Dist No 03 Impt Area
1......................................... 5.700 09/01/29 1,051,190
5,000 Contra Costa, CA Home Mtg Fin Auth Home
Mtg Rev (MBIA Insd) (h)................... * 09/01/17 2,591,250
1,500 Corona-Norco, CA Univ Sch Dist Pub Fin
Auth Spl Tax Rev Ser A.................... 5.800 09/01/35 1,549,785
2,300 Foothill/Eastern Tran Corridor Agy CA Toll
Rd Rev (MBIA Insd)........................ * 01/15/18 1,341,521
5,010 Golden St Tob Securitization Enhanced
Asset Bkd Rfdg Ser A (AMBAC Insd)......... 5.000 06/01/45 5,238,606
10,000 Golden St Tob Securitization Asset Bkd
Rfdg Ser A................................ 5.125 06/01/47 9,930,100
30,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Enhanced Asset Bkd
Ser A (o)................................. 5.000 06/01/45 31,003,800
1,750 Huntington Beach, CA Cmnty No 2003 1
Huntington Ctr............................ 5.800 09/01/23 1,808,835
2,000 Indio, CA Redev Agy Tax Alloc Sub Merged
Proj Area Ser B........................... 6.375 08/15/33 2,194,220
500 Indio, CA Redev Agy Tax Alloc Sub Merged
Proj Area Ser B........................... 6.500 08/15/34 550,770
1,000 Jurupa, CA Cmnty Svc Dist Spl Cmnty Fac
Dist No 4 Ser A........................... 5.700 09/01/34 1,032,810
1,780 Lake Elsinore, CA Pub Fin Auth Loc Agy Rev
Ser F..................................... 7.100 09/01/20 1,837,405
2,500 Lake Elsinore, CA Spl Tax Cmnty Fac Dist 2
Area AA................................... 5.450 09/01/36 2,588,500
1,000 Lee Lake Wtr Dist CA Cmnty Fac Dist No 1
Spl Tax Sycamore Creek.................... 6.000 09/01/33 1,078,310
905 Lincoln, CA Spl Tax Cmnty Fac Dist No 2003
Ser 1..................................... 6.000 09/01/34 941,607
</Table>
See Notes to Financial Statements 13
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 14,190 Los Angeles, CA Hbr Dept Rev Rfdg Ser B
(AMT)..................................... 5.000% 08/01/22 $ 15,125,547
8,400 Los Angeles, CA Hbr Dept Rev Rfdg Ser B
(FGIC Insd) (AMT)......................... 5.000 08/01/23 8,938,272
1,375 Millbrae, CA Residential Fac Rev Magnolia
of Millbrae Proj Ser A (AMT).............. 7.375 09/01/27 1,426,178
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area A............................... 5.900 09/01/27 1,066,330
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area A............................... 6.000 09/01/34 1,071,220
1,000 Murrieta, CA Cmnty Fac Dist No 2 the Oaks
Impt Area B............................... 6.000 09/01/27 1,072,510
3,000 Northstar Cmnty Svc Dist CA Spl Tax Cmnty
Fac Dist No 1............................. 5.450 09/01/28 3,098,550
1,000 Palmdale, CA Spl Tax Cmnty Fac 03-1
Anaverde Ser A............................ 5.350 09/01/30 1,040,090
1,100 Palmdale, CA Spl Tax Cmnty Fac 03-1
Anaverde Ser A............................ 5.400 09/01/35 1,143,153
1,000 Perris, CA Cmnty Fac Dist Spl Tax No 01-2
Ser A..................................... 6.375 09/01/32 1,090,550
2,000 Rancho Cordova Cmnty Fac Dist CA Spl Tax
No 2003 1 Sunridge Anatolia............... 5.500 09/01/37 2,078,400
2,000 Riverside, CA Univ Sch Dist Tax Cmnty Fac
Dist 15 Impt Area 1....................... 5.550 09/01/30 2,064,720
6,000 San Jose, CA Multi-Family Hsg Rev Helzer
Courts Apt Proj Ser A (AMT)............... 6.400 12/01/41 6,138,660
2,000 San Marcos, CA Pub Fac Auth Spl Tax Rev
Ser A..................................... 5.650 09/01/36 2,078,940
5,700 Silicon VY Tob Securitization Auth Calif
Tob Settlement Rev Cap Apprec Turbo Santa
Clara A................................... * 06/01/36 1,122,786
4,645 Silicon VY Tob Securitization Auth Calif
Tob Settlement Rev Cap Apprec Turbo Santa
Clara A................................... * 06/01/41 686,020
9,000 Silicon VY Tob Securitization Auth Calif
Tob Settlement Rev Cap Apprec Turbo Santa
Clara A................................... * 06/01/47 925,020
22,500 Silicon VY Tob Securitization Auth Calif
Tob Settlement Rev Cap Apprec Turbo Santa
Clara D................................... * 06/01/56 1,076,625
7,500 Silicon VY Tob Securitization Auth Calif
Tob Settlement Rev Cap Apprec Turbo Santa
Clara A................................... * 06/01/56 274,800
3,000 Temecula, CA Pub Fin Auth Spl Tax
Roripaugh Cmnty Fac Dist 03- 2............ 5.500 09/01/36 2,847,210
</Table>
14 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 35,000 Tobacco Securitization Southn CA Tob
Settlement Cabs-First Sub................. * 06/01/46 $ 3,253,950
27,200 Tobacco Securitization Southn CA Tob
Settlement Cabs-Second Sub................ * 06/01/46 2,378,912
47,000 Tobacco Securitization Southn CA Tob
Settlement Cabs-Third Sub................. * 06/01/46 3,231,720
1,000 Upland, CA Cmnty Fac Dist 2003 San Antonio
Impt Ser 1 Ser A.......................... 5.900% 09/01/24 1,060,540
1,500 Upland, CA Cmnty Fac Dist 2003 San Antonio
Impt Ser 1 Ser A.......................... 6.000 09/01/34 1,592,400
1,965 Vallejo, CA Ctf Partn Touro Univ.......... 7.250 06/01/16 2,101,921
925 Vallejo, CA Pub Fin Auth Loc Hiddenbrooke
Impt Dist Ser A........................... 5.800 09/01/31 975,024
1,000 Woodland, CA Spl Tax Cmnty Fac Dist 1
Spring Lake............................... 6.250 09/01/34 1,099,350
1,800 Yuba City, CA Redev Agy Tax Proj Ser A.... 6.000 09/01/31 1,931,670
3,000 Yuba City, CA Redev Agy Tax Proj Ser A.... 6.000 09/01/39 3,209,790
--------------
211,974,434
--------------
COLORADO 2.8%
1,060 Beacon Pt Metro Dist CO Ser A............. 6.125 12/01/25 1,134,889
1,005 Beacon Pt Metro Dist CO Ser A............. 6.250 12/01/35 1,079,621
1,000 Bromley Pk Metro Dist CO No 2 Ser B....... 8.050 12/01/32 1,084,060
1,000 Castle Oaks Metro Dist CO Ltd Tax......... 6.000 12/01/25 1,041,370
1,500 Castle Oaks Metro Dist CO Ltd Tax......... 6.125 12/01/35 1,559,100
1,700 Colorado Ed & Cultural Fac Auth Rev
Charter Sch Brighton Sch Proj............. 6.000 11/01/36 1,747,906
795 Colorado Ed & Cultural Fac Auth Rev
Charter Sch Frontier Academy (Prerefunded
@ 06/01/11)............................... 7.250 06/01/20 882,108
2,000 Colorado Hlth Fac Auth Rev Baptist Home
Assn Ser A................................ 6.375 08/15/24 2,004,380
2,000 Colorado Hlth Fac Auth Rev Baptist Home
Assn Ser B (d)............................ 7.250 08/15/27 1,995,860
2,000 Copperleaf Met Dist No 2 CO (Acquired
09/15/06, Cost $2,000,000) (b)............ 5.950 12/01/36 2,077,860
3,425 Denver, CO Hlth & Hosp Auth Rfdg Ser A.... 6.250 12/01/33 3,820,451
2,500 Elk Vly, CO Pub Impt Fee Ser A............ 7.300 09/01/22 2,658,700
1,150 High Plains Metro Dist CO Ser A........... 6.125 12/01/25 1,231,248
2,250 High Plains Metro Dist CO Ser A........... 6.250 12/01/35 2,417,063
565 Lafayette, CO Indl Dev Rev Rocky Mtn Instr
Proj Ser A (c)............................ 6.750 10/01/14 480,131
1,880 Lafayette, CO Indl Dev Rev Rocky Mtn Instr
Proj Ser A (AMT).......................... 7.000 10/01/18 1,589,596
4,560 Lake Creek Affordable Hsg Corp Hsg Proj
Rfdg Ser A................................ 6.250 12/01/23 4,842,994
500 Neu Towne, CO Metro Dist.................. 7.250 12/01/34 552,945
</Table>
See Notes to Financial Statements 15
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$ 3,500 Northwest CO Metro Dist No 3 Ltd Tax...... 6.125% 12/01/25 $ 3,737,160
1,500 Salida, CO Hosp Dist Rev.................. 5.250 10/01/36 1,526,385
1,000 Serenity Ridge, CO Metro Dist No 2........ 7.500 12/01/34 1,130,010
1,616 Skyland Metro Dist CO Gunnison Cnty
Rfdg...................................... 6.750 12/01/22 1,660,876
1,000 Southlands Metro Dist No 1 CO............. 7.000 12/01/24 1,110,220
2,500 Tallgrass Met Dist CO Rfdg & Impt......... 5.250 12/01/37 2,517,900
1,000 Vista Ridge Met Dist CO Ltd Tax Sub Rfdg
Ser B..................................... 6.625 12/01/40 1,022,040
1,000 Wheatlands Metro Dist No 2 CO Ltd Tax..... 6.000 12/01/25 1,044,180
1,500 Wheatlands Metro Dist No 2 CO Ltd Tax..... 6.125 12/01/35 1,568,550
--------------
47,517,603
--------------
CONNECTICUT 0.4%
1,500 Connecticut St Dev Auth Indl Afco Cargo
Bdl LLC Proj (AMT)........................ 8.000 04/01/30 1,624,830
3,500 Mohegan Tribe Indians CT Pub Impt Priority
Dist (Acquired 11/03/04, Cost $3,418,565)
(b)....................................... 5.250 01/01/33 3,627,435
2,000 Mohegan Tribe Indians CT Pub Impt Priority
Dist (Acquired 09/27/01, Cost $1,955,120)
(b)....................................... 6.250 01/01/31 2,128,180
--------------
7,380,445
--------------
DELAWARE 0.2%
850 Sussex Cnty, DE Rev Adj First Mtg Cadbury
Lewes Ser A............................... 5.900 01/01/26 899,666
1,000 Sussex Cnty, DE Rev Adj First Mtg Cadbury
Lewes Ser A............................... 6.000 01/01/35 1,057,750
1,060 Wilmington, DE Multi-Family Rent Rev Hsg
Electra Arms Sr Assoc Proj (AMT).......... 6.250 06/01/28 1,084,613
--------------
3,042,029
--------------
DISTRICT OF COLUMBIA 3.0%
12,119 District Columbia Ballpark Rev Ser B1
(o)....................................... 5.000 02/01/24 12,837,947
13,033 District Columbia Ballpark Rev Ser B1
(o)....................................... 5.000 02/01/25 13,806,170
13,948 District Columbia Ballpark Rev Ser B1
(o)....................................... 5.000 02/01/26 14,775,451
85 District of Columbia Ser A-1 (MBIA Insd)
(h)....................................... 6.500 06/01/10 92,223
1,000 District of Columbia Rev Methodist Home
Issue..................................... 6.000 01/01/29 1,027,360
28,940 District of Columbia Tob Settlement Fin
Corp Ser A................................ * 06/15/46 2,711,100
17,500 District of Columbia Tob Settlement Fin
Corp Ser B................................ * 06/15/46 1,551,900
67,660 District of Columbia Tob Settlement Fin
Corp Ser C................................ * 06/15/55 2,750,379
--------------
49,552,530
--------------
FLORIDA 16.1%
985 Anthem Pk Cmnty Dev Dist FL Cap Impt
Rev....................................... 5.800 05/01/36 1,031,305
2,000 Ave Maria Stewardship Cmnty Dist FL Cap
Impt Rev Ser A............................ 5.125 05/01/38 2,005,680
</Table>
16 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,500 Bartram PK Cmnty Dev Dist FL Assmt........ 5.400% 05/01/37 $ 2,515,025
1,500 Bartram Springs Cmnty Dev Dist FL Assmt
Rfdg...................................... 4.750 05/01/34 1,450,020
1,375 Bay Laurel Ctr Cmnty Dev Dist FL Spl Assmt
Candler................................... 5.450 05/01/37 1,397,082
1,000 Bellalago Ed Fac Benefits Ser A........... 6.000 05/01/33 1,054,430
985 Bellalago Ed Fac Benefits Ser B........... 5.800 05/01/34 1,021,081
4,260 Bloomingdale, FL Cmnty Dev Dist Spl Assmt
Rev....................................... 5.875 05/01/36 4,483,224
985 Bluewaters Cmnty Dev Dist of FL........... 6.000 05/01/35 1,041,421
1,830 Boca Raton, FL Hsg Auth Mtg Hsg Rev First
Lien Banyan Pl Sr Apt Rfdg (Acquired
03/23/06, Cost $1,811,556) (b)............ 5.800 10/01/26 1,848,904
2,350 Boca Raton, FL Hsg Auth Mtg Hsg Rev First
Lien Banyan Pl Sr Apt Rfdg (Acquired
03/23/06, Cost $2,317,265) (b)............ 5.900 10/01/36 2,379,469
2,500 Bonnet Creek Resort Cmnty Dev............. 7.500 05/01/34 2,751,425
20,000 Brevard Cnty, FL Hlth Fac Auth Hlthcare
Fac Rev Hlth First Inc Proj (o)........... 5.000 04/01/34 20,681,200
785 Caribe Palm Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.850 05/01/35 825,310
990 City Ctr Cmnty Dev Dist FL Spl Assmt Rev
Ser A..................................... 6.125 05/01/36 1,021,937
1,085 Escambia Cnty, FL Rev ICF/MR Pensacola
Care Dev Ctr.............................. 10.250 07/01/11 1,095,731
2,555 Escambia Cnty, FL Rev ICF/MR Pensacola
Care Dev Ctr Ser A........................ 10.250 07/01/11 2,580,269
5,000 Fiddlers Creek Cmnty Dev Dist............. 6.000 05/01/38 5,340,950
2,500 Florida Hsg Fin Corp Multi-Family Hsg
Whistlers Cove Apt Proj (AMT)............. 6.500 01/01/39 2,554,250
3,615 Florida Hsg Fin Corp Rev Hsg Beacon Hill
Apt Ser C (AMT)........................... 6.610 07/01/38 3,734,331
7,020 Florida Hsg Fin Corp Rev Hsg Cypress Trace
Apt Ser G (AMT)........................... 6.600 07/01/38 7,224,282
4,745 Florida Hsg Fin Corp Rev Hsg Westchase Apt
Ser B (AMT)............................... 6.610 07/01/38 4,877,385
2,450 Gramercy Farms Cmnty Dev Dist FL Spl Assmt
Ser A1.................................... 5.250 05/01/39 2,429,224
2,100 Gramercy Farms Cmnty Dev Dist FL Spl Assmt
Ser B..................................... 5.100 05/01/14 2,096,934
19,740 Halifax Hosp Med Ctr FL Hosp Rev & Impt
Rfdg Ser A (o)............................ 5.375 06/01/46 20,792,636
2,495 Hammock Bay Cmnty Dev Dist FL Spl Assmt
Rev Ser A................................. 6.125 05/01/35 2,640,858
1,460 Harbour Isles Cmnty Dev Dist of FL........ 6.125 05/01/35 1,557,572
290 Heritage Harbor Cmnty Dev Dist FL Rev
Rec....................................... 7.750 05/01/23 290,913
</Table>
See Notes to Financial Statements 17
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 775 Heritage Harbor Cmnty Dev Dist FL Rev Spl
Assmt Ser A............................... 6.700% 05/01/19 $ 783,804
31,500 Highlands Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Sys Ser C (o).............. 5.250 11/15/36 33,314,715
2,000 Highlands, FL Cmnty Dev Dist Spl Assmt.... 5.550 05/01/36 2,044,960
3,500 Hillsborough Cnty, FL Hsg Fin Hsg Clipper
Cove Apt Proj Ser A (AMT)................. 7.375 07/01/40 3,741,010
975 Islands At Doral III Cmnty 2004 Ser A..... 5.900 05/01/35 1,011,455
1,000 Islands At Doral NE Cmnty Dev............. 6.250 05/01/34 1,077,400
12,820 Jea FL Wtr & Swr Sys Rev Sub 2nd Crossover
(o)....................................... 4.750 10/01/40 12,980,635
1,530 Kendall Breeze West Cmnty Dev Dist FL Spl
Assmt (c)................................. 5.875 05/01/34 1,612,452
1,950 Keys Cove Cmnty Dev Dist FL Assmt Rev..... 5.875 05/01/35 2,047,851
2,900 Keys Cove Cmnty Dev Dist II FL............ 5.500 05/01/36 2,955,738
650 Lee Cnty FL Indl Dev Auth Hlthcare Fac Rev
Rfdg Shell Pt/Alliance Cmnty Proj (g)..... 5.000 11/15/22 669,494
1,100 Lee Cnty FL Indl Dev Auth Hlthcare Fac Rev
Rfdg Shell Pt/Alliance Cmnty Proj (g)..... 5.000 11/15/29 1,126,730
1,500 Lee Cnty Fla Indl Dev Auth Indl Dev Rev
Ser A Lee Charter Foundation (g).......... 5.250 06/15/27 1,513,455
1,500 Lee Cnty Fla Indl Dev Auth Indl Dev Rev
Ser A Lee Charter Foundation Ser A (g).... 5.375 06/15/37 1,521,060
2,000 Lee Cnty, FL Indl Dev Auth Hlthcare Fac
Rev Cypress Cove Hlthpk Ser A............. 6.750 10/01/32 2,161,480
1,500 Lee Cnty, FL Indl Dev Auth Hlthcare
Shell..................................... 5.125 11/15/36 1,543,545
3,435 Leon Cnty, FL Ed Fac Auth Rev Southgate
Residence Hall Rfdg Ser A................. 6.750 09/01/28 3,543,924
1,255 Lexington Cmnty Dev Dist FL............... 6.125 05/01/34 1,341,344
75 Marshall Creek Cmnty Dev FL Spl Assmt Ser
B......................................... 6.750 05/01/07 75,060
2,435 Meadow Woods Cmnty Dev Dist FL Ser A...... 6.050 05/01/35 2,582,464
2,500 Miami Beach, FL Hlth Fac Hosp Mt Sinai Med
Ctr Rfdg (Acquired 04/26/04,
Cost $2,411,600) (b)...................... 6.750 11/15/29 2,831,075
1,000 Miami Beach, FL Hlth Fac Hosp Mt Sinai Med
Ctr FL Proj............................... 5.375 11/15/28 1,015,210
25,000 Miami Dade Cnty, FL Aviation Rev Miami
Intl Arpt Ser A (AMT) (o)................. 5.000 10/01/38 26,054,500
3,000 Midtown Miami, FL Cmnty Dev Dist Ser A.... 6.000 05/01/24 3,235,410
1,005 Miromar Lakes Cmnty Dev Dist Rfdg Ser B... 7.250 05/01/12 1,104,987
885 Northern Palm Beach Cnty Dist FL Impt Wtr
Ctl & Impt Unit Dev No 16 Rfdg............ 7.500 08/01/24 939,304
1,730 Oak Creek Cmnty Dev Dist FL Spl Assmt..... 5.800 05/01/35 1,808,784
1,000 Orange Cnty, FL Hlth Fac Auth Rev Hosp
Adventist Hlth Sys (Prerefunded @
11/15/10)................................. 6.375 11/15/20 1,097,780
</Table>
18 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 2,000 Orange Cnty, FL Hlth Fac Auth Rev
Westminster Cmnty Care.................... 6.600% 04/01/24 $ 2,076,440
975 Overoaks, FL Cmnty Dev Dist CA Ser A...... 6.125 05/01/35 1,040,159
5,000 Palm Coast Pk Cmnty Dev Dist FL Spl Assmt
Rev....................................... 5.700 05/01/37 5,134,850
970 Parklands Lee Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.800 05/01/35 1,001,253
985 Pine Island Cmnty Dev Dist FL Spl Assmt... 5.750 05/01/35 1,014,195
3,000 Pinellas Cnty, FL Hlth Fac Auth Oaks of
Clearwtr Proj............................. 6.250 06/01/34 3,204,090
1,000 Reunion East Cmnty Dev Dist............... 5.800 05/01/36 1,042,650
2,000 Reunion West Cmnty Dev Dist............... 6.250 05/01/36 2,113,140
940 Saddlebrook, FL Cmnty Ser A............... 6.900 05/01/33 1,010,199
1,600 Saint John's Cnty, FL Indl Dev Auth
Glenmoor Proj Ser A....................... 5.375 01/01/40 1,634,240
500 Saint John's Cnty, FL Indl Dev Auth
Hlthcare Glenmoor Saint John's Proj Ser A
(Prerefunded @ 01/01/10).................. 8.000 01/01/17 556,045
4,500 Saint John's Cnty, FL Indl Dev Auth
Hlthcare Glenmoor Saint John's Proj Ser A
(Prerefunded @ 01/01/10).................. 8.000 01/01/30 5,004,405
2,000 Sarasota Natl Cmnty Dev Dist FL Spl
Assmt..................................... 5.300 05/01/39 1,999,280
1,955 Silver Palms Cmnty Dev Dist (c)........... 5.900 05/01/34 2,054,177
1,300 South Dade Venture Cmnty Dev.............. 6.125 05/01/34 1,389,440
1,480 South Vlg Cmnty Dev Dist FL Cap Impt Rev
Ser A..................................... 5.700 05/01/35 1,520,049
115 Stoneybrook West Cmnty Dev Dist FL Spl
Assmt Rev Ser B........................... 6.450 05/01/10 115,818
4,000 Tisons Landing Cmnty Dev Dist FL Spl Assmt
Ser A..................................... 5.625 05/01/37 4,093,640
1,480 Town Ctr at Palm Coast Cmnty Dev Dist FL
Cap Impt Rev.............................. 6.000 05/01/36 1,547,118
3,850 Turnbull Creek Cmnty Dev Dist FL
Spl Assmt................................. 5.250 05/01/37 3,856,699
1,480 Turnbull Creek Cmnty Dev Dist FL
Spl Assmt................................. 5.800 05/01/35 1,534,212
1,652 University Square Cmnty Dev Dist FL Cap
Impt Rev (Acquired 10/07/99 to 09/07/00,
Cost $1,650,391) (b)...................... 6.750 05/01/20 1,747,600
2,000 West Vlgs Impt Dist FL Rev Spl Assmt Unit
of Dev No 3............................... 5.500 05/01/37 2,007,020
2,000 Winter Garden Vlg At Fowler Groves Cmnty
Dev Dist FL Spl........................... 5.650 05/01/37 2,068,080
</Table>
See Notes to Financial Statements 19
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 960 World Comm Cmnty Dev Dist Ser A1.......... 6.250% 05/01/22 $ 1,045,066
1,670 World Comm Cmnty Dev Dist Ser A2.......... 6.125 05/01/35 1,784,896
--------------
270,053,235
--------------
GEORGIA 1.5%
1,840 Atlanta, GA Tax Alloc Atlantic Sta Proj... 7.750 12/01/14 2,024,129
1,235 Atlanta, GA Tax Alloc Princeton Lakes Proj
(Acquired 03/10/06, Cost $1,235,000)
(b)....................................... 5.500 01/01/31 1,264,603
2,285 Atlanta, GA Urban Residential Fin Auth
Multi-Family Rev John Eagan Proj Ser A
(AMT)..................................... 6.750 07/01/30 2,360,291
1,000 Effingham Cnty, GA Dev Auth Solfort James
Proj (AMT)................................ 5.625 07/01/18 1,014,360
1,800 Fulton Cnty, GA Residential Care
Canterbury Court Proj Ser A............... 6.000 02/15/22 1,828,170
650 Fulton Cnty, GA Residential Care
Canterbury Crt Proj Ser A................. 6.125 02/15/34 687,472
3,500 Fulton Cnty, GA Residential Care Sr Lien
RHA Asstd Living Ser A.................... 7.000 07/01/29 3,675,560
1,500 Medical Ctr Hosp Auth GA Rev Rfdg Spring
Harbor Green Isl Proj (g)................. 5.250 07/01/27 1,535,730
2,000 Medical Ctr Hosp Auth GA Rev Rfdg Spring
Harbor Green Isl Proj (g)................. 5.250 07/01/37 2,031,060
4,000 Milledgeville Baldwin Cnty, GA College &
St Univ Fndtn............................. 5.625 09/01/30 4,322,920
1,000 Private Colleges & Univ Auth GA Mercer Hsg
Corp Proj Ser A........................... 6.000 06/01/21 1,073,360
2,930 Renaissance On Peachtree Unit Invt Tr Ctf
GA Custody Ctfs (d)....................... 6.000 10/01/25 2,600,902
--------------
24,418,557
--------------
HAWAII 0.4%
2,500 Hawaii St Dept Budget & Fin Spl Purp Rev
Kahala Nui Proj Ser A..................... 8.000 11/15/33 2,895,025
2,825 Kuakini, HI Hlth Sys Spl Ser A............ 6.375 07/01/32 3,086,680
--------------
5,981,705
--------------
IDAHO 0.3%
2,290 Gooding Cnty, ID Indl Dev Corp Solid Waste
Disp Rev Intrepid Technology & Res Proj
(AMT) (Acquired 11/03/06,
Cost $2,290,000) (b)...................... 7.500 11/01/24 2,307,564
3,000 Idaho Hlth Fac Auth Rev Vly Vista Care
Rfdg Ser A................................ 7.875 11/15/29 3,161,100
--------------
5,468,664
--------------
</Table>
20 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
ILLINOIS 8.8%
$ 2,300 Annawan IL Tax Increment Rev Patriot
Renewable Fuels Llc Proj.................. 5.625% 01/01/18 $ 2,293,537
2,500 Bolingbrook, IL Cap Apprec Ser B
(MBIA Insd)............................... * 01/01/29 783,975
4,000 Bolingbrook, IL Sales Tax Rev Bolingbrook
(i)....................................... 0.000/6.250 01/01/24 3,993,280
1,984 Bolingbrook, IL Spl Svc Area No 01-1
(Prerefunded @ 07/01/11).................. 7.375 07/01/31 2,263,903
1,486 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Augusta Vlg Proj (Prerefunded @ 03/01/32)
(Acquired 11/13/02, Cost $1,500,000)
(b)....................................... 6.750 03/01/32 1,680,621
1,665 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Augusta Vlg Proj Ser 2004 (Prerefunded @
03/01/12)................................. 6.250 03/01/32 1,847,301
2,000 Bolingbrook, IL Spl Svc Area No 1 Spl Tax
Forest City Tax Proj (i).................. 0.000/5.900 03/01/27 2,061,980
1,874 Bolingbrook, IL Spl Svc Area No 3 Lakewood
Ridge Proj (Prerefunded @ 03/01/11)....... 7.050 03/01/31 2,097,793
735 Cary, IL Spl Tax Svc Area No 1 Cambridge
Ser A (Prerefunded @ 03/01/10)............ 7.625 03/01/30 820,032
1,305 Chicago, IL 2006 Proj Rfdg Ser A
(MBIA Insd)............................... 5.500 01/01/38 1,386,562
1,750 Chicago, IL Incrmnt Alloc Rev Diversey
Narragansett Proj Nt (Acquired 08/01/06,
Cost $1,867,810) (b)...................... 7.460 02/15/26 1,868,667
3,390 Chicago, IL Multi-Family Hsg Rev Paul G
Stewart Phases I & II FHA (GNMA) (AMT).... 4.900 03/20/44 3,358,473
1,785 Chicago, IL Multi-Family Hsg Rev Paul G
Stewart Phases I & II FHA (GNMA) (AMT).... 5.000 03/20/49 1,807,384
15,500 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
3rd Lein Rfdg Ser A-2 (o)................. 5.750 01/01/19 16,975,058
50 Chicago, IL Proj Rfdg Ser A (MBIA Insd)
(Prerefunded @ 01/01/11).................. 5.500 01/01/38 53,623
4,000 Chicago, IL Spl Assmt Lakeshore East
Proj...................................... 6.625 12/01/22 4,333,120
680 Chicago, IL Tax Increment Alloc Read
Dunning Ser B (ACA Insd).................. 7.250 01/01/14 695,266
1,925 Chicago, IL Tax Increment Alloc Sub Cent
Rev Loop Ser A (ACA Insd)................. 6.500 12/01/08 2,006,582
3,465 Cortland, IL Spl Tax Rev Sheaffer Sys Proj
(Acquired 05/02/06, Cost $3,465,000)
(b)....................................... 5.500 03/01/17 3,512,678
2,000 Deerfield, IL Ed Fac Chicagoland Jewish
High Sch Proj............................. 6.000 05/01/41 2,054,100
989 Gilberts, IL Spl Svc Area No 9 Spl Tax Big
Timber Proj (c) (h)....................... 7.375 03/01/11 1,068,951
1,245 Gilberts, IL Spl Svc Area No 9 Spl Tax Big
Timber Proj (Prerefunded @ 03/01/11)
(a)....................................... 7.750 03/01/27 1,440,241
1,500 Godfrey, IL Rev Utd Methodist Vlg Ser A... 5.875 11/15/29 1,263,405
</Table>
See Notes to Financial Statements 21
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 2,700 Hoopeston, IL Hosp Cap Impt Rev Hoopeston
Cmnty Mem Hosp Impt & Rfdg................ 6.550% 11/15/29 $ 2,742,903
1,575 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A.......................... 8.500 12/01/15 1,600,625
2,621 Huntley, IL Spl Svc Area No 10 Ser A...... 6.500 03/01/29 2,746,284
137 Huntley, IL Spl Svc Area No 10 Spl Tax Ser
A (c)..................................... 6.250 03/01/09 141,037
4,500 Illinois Fin Auth Rev Clare Oaks Proj Ser
A......................................... 6.000 11/15/39 4,720,950
9,000 Illinois Fin Auth Rev Clare at Wtr Tower
Proj Ser A................................ 6.125 05/15/38 9,461,250
1,405 Illinois Fin Auth Rev Cmnty Fac Clinic
Altgeld Proj.............................. 8.000 11/15/16 1,422,703
500 Illinois Fin Auth Rev Fairview Oblig Grp
Rfdg Ser A................................ 6.125 08/15/27 508,500
1,000 Illinois Fin Auth Rev Friendship Vlg
Schaumburg Ser A.......................... 5.375 02/15/25 1,020,840
2,000 Illinois Fin Auth Rev Friendship Vlg
Schaumburg Ser A.......................... 5.625 02/15/37 2,065,960
2,700 Illinois Fin Auth Rev Kewanee Hosp Proj... 5.000 08/15/26 2,727,027
3,000 Illinois Fin Auth Rev Landing at Plymouth
Pl Proj Ser A............................. 6.000 05/15/37 3,200,940
3,300 Illinois Fin Auth Rev Luther Oaks Proj Ser
A......................................... 6.000 08/15/26 3,493,710
2,000 Illinois Fin Auth Rev Luther Oaks Proj Ser
A......................................... 6.000 08/15/39 2,109,800
1,000 Illinois Fin Auth Rev Montgomery Place
Proj (g).................................. 5.500 05/15/26 1,027,280
2,000 Illinois Fin Auth Rev Montgomery Place
Proj Ser A (g)............................ 5.750 05/15/38 2,088,000
3,000 Illinois Fin Auth Rev Northwestern Mem
Hosp Ser A................................ 5.500 08/15/43 3,268,800
500 Illinois Fin Auth Rev Fairview Oblig Group
Ser A Rfdg................................ 6.000 08/15/20 508,905
1,500 Illinois Fin Auth Rev Three Crowns Pk
Plaza Ser A............................... 5.875 02/15/38 1,578,765
1,000 Illinois Hlth Fac Auth Rev Ctr Baptist
Home Proj................................. 7.125 11/15/29 1,052,430
2,500 Illinois Hlth Fac Auth Rev Decatur
Mem Hosp.................................. 5.750 10/01/24 2,641,725
650 Illinois Hlth Fac Auth Rev Loyola Univ
Hlth Sys Ser A (Prerefunded @ 07/01/11)... 6.000 07/01/21 704,958
1,200 Illinois Hlth Fac Auth Rev Lutheran Sr
Ministries Oblig Ser A (Prerefunded @
08/15/11)................................. 7.375 08/15/31 1,382,832
250 Illinois Hlth Fac Auth Rev Rfdg Ser A..... 6.200 08/15/23 253,268
1,125 Illinois Hlth Fac Auth Rev Rfdg Ser A..... 6.400 08/15/33 1,141,549
400 Illinois Hlth Fac Auth Rev Silver Cross... 5.500 08/15/19 412,904
</Table>
22 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 675 Lake Cnty, IL Fst Presv Dist Ld
Acquisition & Dev......................... 5.750% 12/15/17 $ 722,736
80 Lake, Cook, Kane & McHenry Cntys, IL Cmnty
Unit Sch Dist No 22 (FGIC Insd)........... 5.750 12/01/19 85,447
2,200 Manhattan, IL No 04-1 Brookstone Springs
Proj...................................... 6.100 03/01/35 2,339,370
989 Minooka, IL Spl Assmt Impt Lakewood Trls
Unit 2 Proj............................... 6.375 03/01/34 1,072,936
1,187 Montgomery, IL Spl Assmt Impt Lakewood
Creek Proj (Prerefunded @ 3/01/11)........ 7.750 03/01/30 1,363,293
2,248 Pingree Grove, IL Spl Svc Area No 7 Spl
Tax Ser 06-1 Proj Cambridge Lakes......... 6.000 03/01/36 2,349,565
3,000 Pingree Grove, IL Spl Svc Area No 2 Spl
Tax Cambridge Lakes Proj Ser 05-2......... 6.000 03/01/35 3,156,690
1,600 Pingree Grove Vlg IL Rev Cambridge Lakes
Learning Ctr.............................. 6.000 06/01/36 1,610,848
1,996 Plano, IL Spl Svc Area No 1 Lakewood
Springs Proj Ser A........................ 6.200 03/01/34 2,139,112
1,370 Quad Cities Reg Econ Dev Auth IL Multi-
Family Hsg Heritage Woods Moline Slf Proj
(AMT)..................................... 6.000 12/01/41 1,385,344
2,095 Regional Tran Auth IL Ser B (AMBAC
Insd)..................................... 8.000 06/01/17 2,776,315
930 Sterling, IL Rev Hoosier Care Proj Ser
A......................................... 7.125 06/01/34 960,727
1,925 Volo Vlg, IL Spl Svc Area No 3 Symphony
Meadows Proj Ser 1........................ 6.000 03/01/36 2,011,972
3,135 Wheeling, IL Tax Increment Rev N
Milwaukee/ Lake Cook Tif Proj............. 6.000 01/01/25 3,197,857
5,633 Yorkville, IL Utd City Spl Svc Area Spl
Tax No 2004 107 Raintree Vlg IL Proj...... 6.250 03/01/35 6,030,183
1,981 Yorkville, IL Utd City Spl Svc Area Spl
Tax No 4 104 Mpi Grade Res Proj........... 6.375 03/01/34 2,127,059
--------------
147,019,931
--------------
INDIANA 0.9%
825 Crawfordsville, IN Redev Cmnty Redev Dist
Tax Increment Rev (Acquired 10/15/97, Cost
$825,000) (b) (c)......................... 7.000 02/01/12 842,754
1,865 Indiana Hlth Fac Fin Auth Rev Hoosier Care
Proj Ser A................................ 7.125 06/01/34 1,926,414
6,500 Indiana Hlth Fac Hosp Rev Cmnty Fndtn
Northwest IN Ser A........................ 6.000 03/01/34 6,971,380
2,000 Petersburg, IN Pollutn Ctl Rev IN Pwr & Lt
(AMT)..................................... 6.375 11/01/29 2,166,680
1,810 Portage, IN Spl Impt Dist Rev Marina
Shores Proj............................... 6.375 03/01/35 1,868,952
470 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj Ser A........... 6.000 05/15/38 498,412
</Table>
See Notes to Financial Statements 23
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
INDIANA (CONTINUED)
$ 265 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj A............... 5.700% 05/15/28 $ 270,189
230 Saint Joseph Cnty, IN Econ Dev Rev Holy
Cross Vlg Notre Dame Proj A............... 6.000 05/15/26 245,628
--------------
14,790,409
--------------
IOWA 1.0%
1,000 Bremer Cnty, IA Retirement Fac Rev Bartels
Lutheran Ser A............................ 5.375 11/15/27 1,026,300
2,000 Estherville, IA Hosp Rev Avera Holy Family
Proj...................................... 6.250 07/01/26 2,128,500
375 Evansdale, IA Hlthcare Westn Home Proj.... 6.000 11/01/26 383,520
3,400 Evansdale, IA Hlthcare Westn Home Proj Ser
A (c)..................................... 6.000 11/01/26 3,464,396
1,520 Iowa Fin Auth Hlthcare Fac Care
Initiatives Proj Rfdg (Prerefunded @
07/01/11)................................. 9.250 07/01/25 1,855,023
3,250 Iowa Fin Auth Hlth Fac Dev Rev Care
Initiatives Proj Ser A (g)................ 5.500 07/01/25 3,421,828
500 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 5.750 11/15/19 504,865
500 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 6.000 11/15/24 509,725
800 Iowa Fin Auth Retirement Cmnty Friendship
Haven Proj Ser A.......................... 6.125 11/15/32 826,696
350 Iowa Fin Auth Sr Hsg Rev Bethany Life
Cmnty Proj Rfdg Ser A..................... 5.450 11/01/26 352,313
1,000 Iowa Fin Auth Sr Hsg Rev Bethany Life
Cmnty Proj Rfdg Ser A..................... 5.550 11/01/41 1,006,830
1,000 Polk Cnty, IA Hlthcare Fac Rev Luther Pk
Hlth Ctr Inc Proj......................... 6.150 10/01/36 1,028,690
--------------
16,508,686
--------------
KANSAS 0.6%
1,000 Lenexa, KS Hlthcare Fac Rev Lakeview Vlg
Inc Ser B................................. 6.250 05/15/26 1,021,070
2,000 Manhattan, KS Hlthcare Fac Rev Meadowlark
Hills Retirement Ser A.................... 5.000 05/15/24 2,022,860
1,500 Manhattan, KS Hlthcare Fac Rev Meadowlark
Hills Retirement Ser A.................... 5.000 05/15/36 1,496,490
1,000 Olathe, KS Sr Living Fac Rev Catholic Care
Campus Inc Ser A.......................... 6.000 11/15/26 1,067,720
</Table>
24 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
KANSAS (CONTINUED)
$ 1,000 Olathe, KS Sr Living Fac Rev Catholic Care
Campus Inc Ser A.......................... 6.000% 11/15/38 $ 1,070,390
1,570 Overland Pk, KS Trans Dev Dist Spl Assmt
Grass Creek Proj (g)...................... 5.125 09/01/28 1,594,963
1,500 Overland Pk, KS Dev Corp Rev First Tier
Overland Pk Ser A......................... 7.375 01/01/32 1,636,050
--------------
9,909,543
--------------
LOUISIANA 0.8%
1,965 Louisiana Hsg Fin Agy Rev Azalea Estates
Rfdg Ser A (GNMA Collateralized) (AMT).... 5.375 10/20/39 2,057,650
4,100 Louisiana Loc Govt Environment Fac Cmnty
Dev Auth Rev Hlthcare Saint James Place
Rfdg Ser A................................ 7.000 11/01/25 4,275,972
1,800 Louisiana Loc Govt Environment Fac Cmnty
Dev Auth Rev Hlthcare Saint James Place
Rfdg Ser A................................ 7.000 11/01/29 1,874,916
1,500 Louisiana Pub Fac Auth Rev Progressive
Hlthcare.................................. 6.375 10/01/20 1,530,405
1,000 Louisiana Pub Fac Auth Rev Progressive
Hlthcare.................................. 6.375 10/01/28 1,018,050
2,890 Louisiana St Univ & Agric & Mechanical
College Univ Rev Master Agreement
(Acquired 11/30/98, Cost $2,973,329)
(b)....................................... 5.750 10/30/18 2,891,296
--------------
13,648,289
--------------
MARYLAND 1.8%
1,000 Baltimore Cnty, MD Mtg Rev Shelter Elder
Care Ser A................................ 7.250 11/01/29 1,042,710
1,500 Brunswick, MD Spl Oblg Brunswick Crossing
Spl Taxing................................ 5.500 07/01/36 1,538,685
4,000 Frederick Cnty, MD Spl Oblig Urbana Cmnty
Dev Auth Ser A............................ 5.950 07/01/30 4,093,280
1,000 Frederick Cnty, MD Spl Oblig Urbana Cmnty
Dev Auth Ser B............................ 6.250 07/01/30 1,023,470
1,500 Howard Cnty Md Retirement Rfdg Vantage
House Fac Ser A (g)....................... 5.250 04/01/27 1,544,715
1,000 Howard Cnty Md Retirement Rfdg Vantage
House Fac Ser A (g)....................... 5.250 04/01/33 1,025,820
1,500 Howard Cnty Md Retirement Rfdg Vantage
House Fac Ser B (g)....................... 5.250 04/01/37 1,535,160
230 Maryland St Econ Dev Corp Air Cargo Rev
Afco Cargo BWI II LLC Proj (AMT) (c)...... 6.250 07/01/07 230,449
1,180 Maryland St Econ Dev Corp MD Golf Course
Sys (Prerefunded @ 06/01/11).............. 8.250 06/01/28 1,362,841
1,500 Maryland St Economic Dev Corp Sr Lien Proj
Chesapeake Bay Ser B (g).................. 5.250 12/01/31 1,539,360
</Table>
See Notes to Financial Statements 25
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MARYLAND (CONTINUED)
$ 3,000 Maryland St Hlth & Higher Ed Fac Auth Rev
Carroll Hosp Ctr (g)...................... 5.000% 07/01/40 $ 3,085,980
1,540 Maryland St Hlth & Higher Ed Calvert Hlth
Sys....................................... 5.500 07/01/36 1,653,005
1,500 Maryland St Hlth & Higher Ed Fac Auth Rev
Washington Christian Academy.............. 5.500 07/01/38 1,544,940
1,000 Maryland St Hlth & Higher Ed Medstar Hlth
Rfdg...................................... 5.500 08/15/33 1,065,670
3,000 Montgomery Cnty, MD Econ Dev Editorial
Proj In Ed Ser A (Acquired 09/28/98, Cost
$3,000,000) (b)........................... 6.400 09/01/28 2,700,570
2,863 Prince Georges Cnty, MD Rev (Prerefunded @
10/01/07) (d)............................. 7.000 04/01/16 2,905,258
1,000 Westminster, MD Econ Dev Carroll Lutheran
Vlg Ser A................................. 6.000 05/01/24 1,061,140
1,500 Westminster, MD Econ Dev Carroll Lutheran
Vlg Ser A................................. 6.250 05/01/34 1,602,810
--------------
30,555,863
--------------
MASSACHUSETTS 1.9%
1,000 Massachusetts St Dev Fin Agy Briarwood Ser
B (Prerefunded @ 12/01/10)................ 8.000 12/01/22 1,149,920
250 Massachusetts St Dev Fin Agy Rev Evergreen
Ctr Inc................................... 5.000 01/01/24 248,997
500 Massachusetts St Dev Fin Agy Rev Evergreen
Ctr Inc................................... 5.500 01/01/35 514,085
735 Massachusetts St Dev Fin Agy Rev Gtr Lynn
Mental Hlth (Prerefunded @ 06/01/08)
(Acquired 07/27/00, Cost $733,600) (b).... 7.750 06/01/18 780,313
1,880 Massachusetts St Dev Fin Agy Rev Hillcrest
Ed Ctr Inc................................ 6.375 07/01/29 1,925,703
2,890 Massachusetts St Dev Fin Agy Rev Hlthcare
Fac Alliance Ser A........................ 7.100 07/01/32 3,015,802
1,000 Massachusetts St Dev Fin Agy Rev MCHSP
Human Svc Providers Ser A (Prerefunded @
07/01/10)................................. 8.000 07/01/20 1,131,370
3,585 Massachusetts St Dev Fin Agy Rev New
England Ctr For Children.................. 6.000 11/01/19 3,700,939
3,000 Massachusetts St Dev Fin Agy Rev First Mtg
Reeds Accd Invt Rfdg...................... 5.750 10/01/31 3,009,030
1,000 Massachusetts St Health & Ed Fac Auth Rev
Milford Reg Med Ser E..................... 5.000 07/15/32 1,028,300
3,100 Massachusetts St Hlth & Ed Civic Invt Ser
B......................................... 9.150 12/15/23 3,794,059
891 Massachusetts St Hlth & Ed Nichols College
Issue Ser C............................... 6.000 10/01/17 941,618
1,000 Massachusetts St Hlth & Ed Northrn
Berkshire Hlth Ser B...................... 6.250 07/01/24 1,070,460
</Table>
26 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MASSACHUSETTS (CONTINUED)
$ 515 Massachusetts St Indl Fin Agy Rev First
Mtg GF/Pilgrim Inc Proj................... 6.500% 10/01/15 $ 478,167
2,000 Massachusetts St Indl Fin Agy Rev First
Mtg GF/Pilgrim Inc Proj................... 6.750 10/01/28 1,771,380
1,940 Massachusetts St Indl Fin Agy Rev First
Mtg Reeds Landing Proj (Prerefunded @
10/01/08) (d) (i)......................... 7.35/7.450 10/01/28 2,091,960
220 Massachusetts St Indl Fin Agy Rev Gtr Lynn
Mental Hlth (Acquired 06/24/98, Cost
$220,000) (b) (h)......................... 6.200 06/01/08 225,557
2,130 Massachusetts St Indl Fin Agy Rev Gtr Lynn
Mental Hlth (Prerefunded @ 06/01/08)
(Acquired 06/24/98, Cost $2,130,000)
(b)....................................... 6.375 06/01/18 2,228,704
2,800 Massachusetts St Indl Fin Agy Rev Swr Fac
Res Ctl Composting (AMT) (Acquired
08/10/89, Cost $2,800,000) (b)............ 9.250 6/01/10 2,817,052
--------------
31,923,416
--------------
MICHIGAN 3.8%
2,500 Chelsea, MI Econ Dev Corp Rev Utd
Methodist Retirement Rfdg................. 5.400 11/15/27 2,524,125
835 Detroit, MI Loc Dev Fin Auth Tax Increment
Sub Ser C (Acquired 09/08/97, Cost
$835,000) (b)............................. 6.850 05/01/21 852,777
1,000 Gaylord, MI Hosp Fin Auth Ltd Oblig Rev
Otsego Mem Hosp Rfdg...................... 6.500 01/01/31 1,050,100
1,700 Hillsdale, MI Hosp Fin Hillsdale Cmnty
Hlth Ctr.................................. 5.000 05/15/13 1,699,014
4,000 Kent Hosp Fin Auth MI Rev Metro Hosp Proj
Ser A..................................... 6.250 07/01/40 4,455,920
2,390 Meridian, MI Econ Dev Corp Ltd Oblig Rev
First Mtg Burcham Hills Rfdg Ser A........ 7.500 07/01/13 2,441,385
3,430 Meridian, MI Econ Dev Corp Ltd Oblig Rev
First Mtg Burcham Hills Rfdg Ser A........ 7.750 07/01/19 3,504,122
13,380 Michigan St Hosp Fin Auth Rev Henry Ford
Hlth Sys Rfdg Ser A (o)................... 5.250 11/15/46 14,135,836
2,735 Michigan St Hosp Fin Auth Rev Hosp Pontiac
Osteopathic Rfdg Ser A.................... 6.000 02/01/14 2,735,821
1,500 Michigan St Hosp Fin Auth Rev Hosp Pontiac
Osteopathic Rfdg Ser A.................... 6.000 02/01/24 1,500,765
2,000 Michigan St Hosp Fin Auth Rev Presbyterian
Vlg Rfdg.................................. 5.500 11/15/35 2,080,060
20,660 Wayne Cnty, MI Arpt Auth Rev Detroit Met
Wayne Cnty Arpt (o)....................... 5.250 12/01/24 22,082,131
5,120 Wenonah Pk Ppty Inc Bay City Hotel Rev
Bd........................................ 7.500 04/01/33 4,352,666
--------------
63,414,722
--------------
</Table>
See Notes to Financial Statements 27
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MINNESOTA 5.7%
$ 700 Aitkin, MN Hlth Care Fac Riverwood
Hlthcare Ctr Rfdg (g)..................... 5.500% 2/01/24 $ 720,671
2,540 Aitkin, MN Hlth Care Fac Riverwood
Hlthcare Ctr Rfdg (g)..................... 5.600 02/01/32 2,620,670
2,000 Aitkin, MN Hlth Fac Rev Riverwood Hlthcare
Ctr Proj (Prerefunded @ 02/01/11)......... 7.750 02/01/31 2,274,800
1,000 Cambridge, MN Hsg & Hlthcare Fac Rev
Grandview West Proj Ser B................. 6.000 10/01/33 1,004,460
2,000 Carlton, MN Hlth & Hsg Fac Inter Faith
Social Svc Inc Proj (Prerefunded @
04/01/10)................................. 7.500 04/01/19 2,222,700
2,000 Carlton, MN Hlth & Hsg Fac Inter Faith
Social Svc Inc Proj (Prerefunded @
04/01/10)................................. 7.750 04/01/29 2,243,620
2,700 Carlton, MN Hlthcare & Hsg Fac Rev Inter
Faith Care Ctr Proj Rfdg.................. 5.700 04/01/36 2,755,404
2,250 Cuyuna Range Hosp Dist MN Hlth Fac Gross
Rev....................................... 5.500 06/01/35 2,339,482
2,100 Dakota Cnty Minn Cmnty Dev Agy Multi-
Family Hsg Rev Commons On Marice Proj Rfdg
Ser A..................................... 5.000 05/01/42 2,093,007
790 Duluth, MN Econ Dev Auth Hlthcare Fac Rev
Saint Lukes Hosp.......................... 6.000 06/15/12 829,121
1,500 Duluth, MN Econ Dev Auth Hlthcare Fac Rev
Saint Lukes Hosp.......................... 7.250 06/15/32 1,659,435
2,000 Glencoe, MN Hlthcare Fac Rev (Prerefunded
@ 04/01/11)............................... 7.500 04/01/31 2,267,660
1,400 Minneapolis, MN Student Hsg Rev Riverton
Cmnty Hsg Proj Ser A...................... 5.600 08/01/26 1,413,916
3,100 Minneapolis, MN Student Hsg Rev Riverton
Cmnty Hsg Proj Ser A...................... 5.700 08/01/40 3,127,404
1,000 Minneapolis, MN Tax Increment Rev Ivy
Tower Proj................................ 5.700 02/01/29 1,024,850
6,695 Minneapolis & Saint Paul MN Metro Arpt Rev
Sub Ser B (AMBAC Insd) (AMT) (c).......... 5.000 01/01/21 7,023,256
7,385 Minneapolis & Saint Paul MN Metro Arpt Rev
Sub Ser B (AMBAC Insd) (AMT) (c).......... 5.000 01/01/23 7,722,273
900 Minnesota Agric & Econ Dev Brd Rev
Hlthcare Benedictine Proj Ser A........... 5.500 08/01/23 916,317
875 Minnesota Agric & Econ Dev Brd Rev
Hlthcare Benedictine Proj Ser A........... 5.750 02/01/30 895,134
3,770 Moorhead, MN Sr Hsg Rev Sheyenne Crossing
Proj...................................... 5.650 04/01/41 3,826,550
2,150 New Ulm, MN Econ Dev Auth Hadc Ridgeway
Proj Rfdg Ser A (GTY AGMT)................ 6.000 06/01/41 2,199,751
875 New Ulm, MN Econ Dev Auth Hadc Ridgeway
Proj Rfdg Ser A (GTY AGMT)................ 5.750 06/01/28 893,454
</Table>
28 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
$ 850 Northwest, MN Multi-Cnty Hsg & Redev Auth
Govt Hsg Rev Pooled Hsg Prog Rfdg......... 5.250% 07/01/26 $ 843,319
2,340 Northwest, MN Multi-Cnty Hsg & Redev Auth
Govt Hsg Rev Pooled Hsg Pgm Rfdg.......... 5.450 07/01/41 2,320,040
2,500 Northwest, MN Multi-Cnty Pooled Hsg Prog
Rfdg Ser A................................ 6.250 07/01/40 2,547,250
1,500 Oakdale, MN Rev Sr Hsg Oak Meadows Proj
Rfdg...................................... 6.250 04/01/34 1,574,745
2,450 Oronoco, MN Multi-Family Hsg Rev Wedum
Shorewood Campus Proj Rfdg................ 5.400 06/01/41 2,458,232
1,350 Park Rapids, MN Hsg Hlth Fac Cdl Homes LLC
Proj (j).................................. 5.400 08/01/36 1,366,186
1,100 Pine City Minn Lease Rev Lakes Intl
Language Academy Ser A.................... 6.250 05/01/35 1,122,451
2,000 Prior Lake, MN Sr Hsg Rev Shepards Path
Ser B..................................... 5.700 08/01/36 2,064,100
2,000 Prior Lake, MN Sr Hsg Rev Shepards Path
Ser B..................................... 5.750 08/01/41 2,041,520
1,425 Ramsey, MN Lease Rev Pact Charter Sch Proj
Ser A..................................... 6.750 12/01/33 1,537,518
1,500 Saint Cloud, MN Hsg & Redev Auth Sterling
Heights Apt Proj (AMT).................... 7.550 04/01/39 1,592,430
2,355 Saint Louis Park, MN Rev Roitenberg Family
Asstd Proj Rfdg (g)....................... 5.700 08/15/41 2,408,435
1,000 Saint Paul, MN Hsg & Redev Auth Higher
Ground Academy Rfdg Ser A................. 6.625 12/01/23 1,072,260
400 Saint Paul, MN Hsg & Redev Auth Hmong
Academy Proj Ser A........................ 5.750 09/01/26 413,044
1,000 Saint Paul, MN Hsg & Redev Auth Hmong
Academy Proj Ser A........................ 6.000 09/01/36 1,035,210
5,000 Saint Paul, MN Hsg & Redev Auth Hosp Rev
Hlth East Proj............................ 6.000 11/15/35 5,509,900
2,185 Saint Paul, MN Hsg & Redev Auth Lease Rev
Hope Cmnty Academy Proj................... 6.250 12/01/33 2,265,736
2,295 Saint Paul, MN Hsg & Redev Auth LSE Rev
Rfdg (k).................................. 6.750 01/01/35 1,011,498
1,000 Saint Paul, MN Hsg & Redev Cmnty of Peace
Academy Proj Ser A
(Prerefunded @ 12/01/10).................. 7.875 12/01/30 1,154,380
2,250 Saint Paul, MN Port Auth Hotel Fac Rev
Radisson Kellogg Proj Rfdg Ser 2
(Prerefunded @ 08/01/08).................. 7.375 08/01/29 2,421,405
1,250 Saint Paul, MN Port Auth Lease Rev
Hltheast Midway Campus 03 Ser A........... 5.875 05/01/30 1,294,625
700 Saint Paul, MN Port Auth Lease Rev
Hltheast Midway Campus 03 Ser B........... 6.000 05/01/30 726,257
</Table>
See Notes to Financial Statements 29
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MINNESOTA (CONTINUED)
$ 1,000 Shakopee, MN Hlthcare Saint Francis Regl
Med Ctr................................... 5.250% 09/01/34 $ 1,046,510
1,000 Vadnais Heights, MN Lease Rev Agric & Food
Sciences Ser A............................ 6.375 12/01/24 1,023,790
1,000 Vadnais Heights, MN Lease Rev Agric & Food
Sciences Ser A............................ 6.600 12/01/34 1,021,730
1,450 Winona, MN Hlthcare Winona Hlth Ser A..... 6.000 07/01/34 1,579,282
--------------
95,525,788
--------------
MISSISSIPPI 0.0%
615 Mississippi Bus Fin Corp (AMT)............ 7.250 07/01/34 676,789
--------------
MISSOURI 3.0%
1,500 Carthage, MO Hosp Rev..................... 5.875 04/01/30 1,535,235
8,500 Carthage, MO Hosp Rev..................... 6.000 04/01/38 8,698,645
1,250 Cole Cnty, MO Indl Dev Auth Sr Living Fac
Rev Lutheran Svc Heisinger Proj........... 5.500 02/01/35 1,316,762
910 Fenton, MO Tax Increment Rev & Impt
Gravois Bluffs Proj Rfdg (Prerefunded @
10/01/11)................................. 6.125 10/01/21 1,018,244
960 Fenton, MO Tax Increment Rev & Impt
Gravois Bluffs Proj Rfdg (Prerefunded @
10/01/12)................................. 7.000 10/01/21 1,097,789
1,300 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj....................... 5.000 04/01/17 1,287,403
120 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj (h)................... 7.250 04/01/07 120,011
3,095 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj (Prerefunded @
04/01/07)................................. 7.625 04/01/17 3,157,179
209 Ferguson, MO Tax Increment Rev Crossings
at Halls Ferry Proj (Prerefunded @
04/01/07)................................. 7.625 04/01/18 213,199
2,590 Hermann, MO Area Hosp Dist Hosp Rev....... 5.100 09/01/31 2,580,935
3,000 Joplin, MO Indl Dev Auth Hlth Fac Rev
Freeman Hlth Sys Proj..................... 5.500 02/15/29 3,213,420
2,000 Kansas City, MO Indl Dev Auth First Mtg
Bishop Spencer Ser A...................... 6.250 01/01/24 2,111,500
1,500 Kansas City, MO Indl Dev Auth First Mtg
Bishop Spencer Ser A...................... 6.500 01/01/35 1,592,505
968 Kansas City, MO Indl Dev Auth Multi-Family
Hsg Rev Brentwood Manor Apt Proj Ser B
(AMT)..................................... 7.250 10/15/38 1,008,637
3,000 Kansas City, MO Indl Dev Plaza Lib Proj... 5.900 03/01/24 3,039,900
1,753 Kansas City, MO Multi-Family Hsg Rev
Northwoods Apts Proj Ser A (AMT).......... 6.450 05/01/40 1,863,790
3,000 Missouri St Health & Ed Fac Auth Hlth Fac
Rev BJC Sys Ser A......................... 5.000 05/15/22 3,154,140
</Table>
30 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
MISSOURI (CONTINUED)
$ 2,220 Nevada, MO Hosp Rev Nevada Regl Med Ctr
(Prerefunded @ 10/01/11).................. 6.750% 10/01/22 $ 2,504,981
2,750 Saint Joseph, MO Indl Dev Auth Hlthcare
Rev Living Cmnty Saint Joseph Proj........ 7.000 08/15/32 2,790,397
500 Saint Joseph, MO Indl Dev Auth Tax
Increment Rev Shoppes at North Vlg Proj
Ser A..................................... 5.100 11/01/19 504,015
1,000 Saint Joseph, MO Indl Dev Auth Tax
Increment Rev Shoppes at North Vlg Proj
Ser A..................................... 5.500 11/01/27 1,025,800
4,720 Saline Cnty, MO Indl Dev Auth Hlth Fac Rev
(Acquired 01/12/99, Cost $4,727,371)
(b)....................................... 6.500 12/01/28 4,860,562
1,000 Sikeston, MO Elec Rev Rfdg (MBIA Insd).... 6.000 06/01/15 1,156,020
--------------
49,851,069
--------------
MONTANA 0.2%
1,000 Montana Fac Fin Auth Rev Sr Living Saint
Johns Lutheran Ser A (g).................. 6.000 05/15/25 1,037,600
2,000 Montana Fac Fin Auth Rev Sr Living Saint
Johns Lutheran Ser A (g).................. 6.125 05/15/36 2,097,220
--------------
3,134,820
--------------
NEVADA 0.8%
3,500 Clark Cnty, NV Indl Dev Southwest Gas Corp
Proj Ser D1 (FGIC Insd) (AMT)............. 5.250 03/01/38 3,714,900
2,400 Director St NV Dept Business & Industry
Las Vegas Monorail Proj Second Tier....... 7.375 01/01/40 2,525,256
3,000 Henderson, NV Hlthcare Fac Rev Catholic
Hlthcare West Ser A....................... 5.625 07/01/24 3,232,620
1,000 Las Vegas, NV Loc Impt Bds Spl Impt Dist
No 607.................................... 6.000 06/01/19 1,031,680
2,375 Reno Nev Redev Agy Tax Allocat Sub Lien
Ser C..................................... 5.400 06/01/27 2,396,090
--------------
12,900,546
--------------
NEW HAMPSHIRE 0.4%
1,500 New Hampshire Hlth & Ed Fac Hlthcare Sys
Covenant Hlth............................. 5.500 07/01/34 1,596,135
1,690 New Hampshire Hlth & Ed Fac Auth Rev
Huntington at Nashua Ser A................ 6.875 05/01/33 1,809,246
1,500 New Hampshire Hlth & Ed Fac Speare Mem
Hosp...................................... 5.875 07/01/34 1,582,020
1,000 New Hampshire St Business Fin Auth Rev
Alice Peck Day Hlth Sys Ser A............. 6.875 10/01/19 1,056,790
--------------
6,044,191
--------------
</Table>
See Notes to Financial Statements 31
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
NEW JERSEY 2.7%
$ 1,000 Middlesex Cnty, NJ Pollutn Ctl
Amerada Rfdg.............................. 6.050% 09/15/34 $ 1,084,410
2,000 New Jersey Econ Dev Auth Cedar Crest Vlg
Inc Fac Ser A (Prerefunded @ 11/15/08).... 7.000 11/15/16 2,097,720
2,500 New Jersey Econ Dev Auth Econ Dev Rev Utd
Methodist Homes Ser A1.................... 6.000 07/01/18 2,705,925
2,000 New Jersey Econ Dev Auth First Mtg
Franciscan Oaks Proj...................... 5.700 10/01/17 2,041,300
1,230 New Jersey Econ Dev Auth First Mtg Lions
Gate Proj A............................... 5.875 01/01/37 1,288,942
750 New Jersey Econ Dev Auth First Mtg
Seashore Gardens Proj..................... 5.300 11/01/26 761,340
900 New Jersey Econ Dev Auth First Mtg
Seashore Gardens Proj..................... 5.375 11/01/36 917,172
1,000 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/08)........ 8.125 11/15/18 1,063,590
1,000 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/10)........ 8.000 11/15/15 1,149,090
1,440 New Jersey Econ Dev Auth Retirement Cmnty
Rev Ser A (Prerefunded @ 11/15/10)........ 8.125 11/15/23 1,660,306
710 New Jersey Econ Dev Auth Rev First Mtg
Lions Gate Proj A......................... 5.750 01/01/25 738,726
1,365 New Jersey Econ Dev Auth Rev Kullman Assoc
Proj Ser A (AMT).......................... 6.125 06/01/18 1,292,423
2,000 New Jersey Econ Dev Auth Rev Sr Living Fac
Esplanade Bear (AMT)...................... 7.000 06/01/39 1,467,200
1,500 New Jersey Econ Dev Auth Sr Mtg Arbor Glan
Proj Ser A................................ 6.000 05/15/28 1,549,545
3,500 New Jersey Econ Dev Auth Utd Methodist
Homes NJ Oblig............................ 5.750 07/01/29 3,584,455
900 New Jersey Hlthcare Fac Fin Auth Rev
Avalon at Hillsborough Ser A (AMT)........ 6.375 07/01/25 916,614
575 New Jersey Hlthcare Fac Fin Auth Rev
Avalon at Hillsborough Ser A (AMT)........ 6.625 07/01/35 586,086
8,840 New Jersey Hlthcare Fac Fin Auth Rev Cap
Apprec St Barnabas Hlth Ser B............. * 07/01/35 2,095,787
7,780 New Jersey Hlthcare Fac Fin Auth Rev Cap
Apprec St Barnabas Hlth Ser B............. * 07/01/36 1,752,912
7,155 New Jersey Hlthcare Fac Fin Auth Rev Cap
Apprec St Barnabas Hlth Ser B............. * 07/01/37 1,527,449
3,225 New Jersey Hlthcare Fac Fin Auth Rev Cap
Hlth Sys Oblig Grp Ser A.................. 5.375 07/01/33 3,369,931
645 New Jersey Hlthcare Fac Fin Auth Rev
Raritan Bay Med Ctr Issue Rfdg............ 7.250 07/01/14 665,414
5,000 New Jersey Hlthcare Fac Fin Auth Rev St
Barnabas Hlthcare Sys Ser A............... 5.000 07/01/29 5,145,500
</Table>
32 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
$ 4,740 New Jersey Hlthcare Fac Fin Auth Rev St
Barnabas Hlthcare Sys Ser B............... * 07/01/34 $ 1,185,664
3,000 New Jersey Hlthcare Fac Fin Inst Inc
Cherry Hill Proj.......................... 8.000% 07/01/27 3,064,140
970 New Jersey St Ed Fac Auth Rev Felician
College of Lodi Ser D (Acquired 11/07/97,
Cost $1,275,000) (b)...................... 7.375 11/01/22 1,007,520
--------------
44,719,161
--------------
NEW MEXICO 0.6%
4,010 Albuquerque, NM Retirement Fac Rev La Vida
Llena Proj Rfdg Ser B..................... 6.600 12/15/28 4,176,174
1,505 Cabezon Pub Impt Dist NM Spl Levg Rev..... 6.000 09/01/24 1,581,304
991 New Mexico Hsg Auth Region lll Sr
Brentwood Gardens Apt Ser A (AMT)......... 6.850 12/01/31 1,072,480
2,000 New Mexico St Hosp Equip Ln Council Hosp
Rev Rehoboth Proj Ser A Rfdg.............. 5.250 08/15/26 1,987,860
750 Ventana West Pub Impt Dist NM............. 6.875 08/01/33 812,670
--------------
9,630,488
--------------
NEW YORK 6.7%
1,000 Amherst, NY Indl Dev Agy Civic Beechwood
Health Care Ctr Inc....................... 5.200 01/01/40 1,013,980
955 Bethlehem, NY Indl Dev Agy Sr Hsg Rev Van
Allen Proj Ser A (Prerefunded @
06/01/09)................................. 6.875 06/01/39 1,037,101
1,000 Brookhaven, NY Indl Dev Agy Mem Hosp Med
Ctr Inc Ser A (Prerefunded @ 11/15/10).... 8.125 11/15/20 1,146,760
1,400 Brookhaven, NY Indl Dev Agy Sr Residential
Hsg Rev Woodcrest Estates Fac Ser A
(AMT)..................................... 6.375 12/01/37 1,448,524
1,000 Dutchess Cnty, NY Indl Dev Agy Civic Fac
Rev Elant Fishkill Inc Ser A.............. 5.250 01/01/37 1,010,800
3,330 Dutchess Cnty, NY Indl Dev Agy Saint
Francis Hosp Rfdg Ser A................... 7.500 03/01/29 3,707,888
1,700 East Rochester, NY Hsg Auth Rev Sr Living
Woodland Vlg Proj Rfdg.................... 5.500 08/01/33 1,752,700
2,000 Erie Cnty, NY Indl Dev Agy Rev Orchard Pk
CCRC Inc Proj Ser A....................... 6.000 11/15/36 2,138,580
1,840 Monroe Cnty, NY Indl Dev Agy Woodland Vlg
Proj (Prerefunded @ 11/15/10)............. 8.000 11/15/15 2,076,109
18,175 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A..................... 6.250 03/01/15 19,300,396
15,400 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A..................... 6.500 03/01/35 16,394,070
10,000 New York City Mun Wtr Fin Auth Wtr & Swr
Sys Rev Ser D............................. 5.000 06/15/36 10,477,900
2,975 New York City Ser A....................... 7.000 08/01/07 3,005,970
17,780 New York, NY City Indl Dev Agy Liberty 7
World Trade Ctr Ser A (o)................. 6.250 03/01/15 18,880,849
</Table>
See Notes to Financial Statements 33
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 3,870 New York St Dorm Auth Rev Nonst Supported
Debt NYU Hosp Ctr Ser A................... 5.000% 07/01/36 $ 3,963,306
2,500 New York St Energy Resh & Dev Auth Gas Fac
Rev (e)................................... 8.822 04/01/20 2,718,675
1,940 Saratoga Cnty, NY Indl Dev Agy Sr Hsg Rev
Highpointe at Malta Proj Ser A............ 6.875 06/01/39 2,122,049
1,000 Suffolk Cnty, NY Gurwin Jewish Phase II... 6.700 05/01/39 1,095,120
1,000 Suffolk Cnty, NY Indl Dev Agy Continuing
Care Retirement Cmnty Rev Ser A
(Prerefunded @ 11/01/09).................. 7.250 11/01/28 1,104,280
1,445 Suffolk Cnty, NY Indl Dev Agy Peconic
Landing Ser A............................. 8.000 10/01/20 1,600,626
2,875 Suffolk Cnty, NY Indl Dev Agy Eastern Long
Is Hosp Assoc Ser A....................... 7.750 01/01/22 3,072,484
1,280 Suffolk Cnty, NY Indl Dev Agy Indl Dev Rev
Spellman High Voltage Fac Ser A (AMT)..... 6.375 12/01/17 1,294,528
4,000 Suffolk Cnty, NY Indl Dev Agy Medford
Hamlet Asstd Living Proj (AMT)............ 6.375 01/01/39 4,111,720
1,000 Syracuse, NY Indl Dev Agy Rev First Mtg
Jewish Home Ser A......................... 7.375 03/01/31 1,070,100
2,700 Ulster Cnty, NY Indl Dev Agy Civic Fac Rev
Benedictine Hosp Proj Ser A (Prerefunded @
06/01/09)................................. 6.450 06/01/24 2,868,588
2,315 Utica, NY Indl Dev Agy Civic Utica College
Civic Fac................................. 6.750 12/01/21 2,527,031
1,000 Westchester Cnty, NY Indl Dev Hebrew Hosp
Sr Hsg Inc Ser A.......................... 7.375 07/01/30 1,074,930
--------------
112,015,064
--------------
NORTH CAROLINA 0.3%
2,000 North Carolina Med Care Commn First Mtg
Utd Methodist Homes (Prerefunded @
10/01/09)................................. 7.000 10/01/17 2,160,900
2,600 North Carolina Med Care Commn Retirement
Fac Rev First Mtg Ser A 05................ 5.500 10/01/35 2,673,138
--------------
4,834,038
--------------
NORTH DAKOTA 0.2%
2,000 Grand Forks, ND Sr Hsg Rev Spl Term 4000
Vly Square Proj (Prerefunded @
12/01/07)................................. 6.250 12/01/34 2,029,280
930 Grand Forks, ND Sr Hsg Rev Spl Term 4000
Vly Square Proj (Prerefunded @
12/01/07)................................. 6.375 12/01/34 943,606
--------------
2,972,886
--------------
</Table>
34 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
OHIO 4.4%
$ 10,200 Adams Cnty Hosp Fac Impt Rev Adams Cnty
Hosp Proj................................. 6.500% 09/01/36 $ 10,600,248
5,000 Athens Cnty, OH Hosp Fac Rev Impt
O'Bleness Mem Rfdg Ser A.................. 7.125 11/15/33 5,474,050
3,000 Cleveland-Cuyahoga Cnty, OH Spl Assmt/ Tax
Increment................................. 7.000 12/01/18 3,288,570
1,000 Cuyahoga Cnty, OH Hlthcare Fac Franciscan
Cnty OH Inc Proj Ser C.................... 6.250 05/15/32 1,020,570
5,000 Cuyahoga Cnty, OH Rev Rfdg Ser A.......... 6.000 01/01/32 5,518,950
1,760 Dayton, OH Spl Fac Rev Air Freight Cargo
Day LLC Proj (AMT)........................ 6.300 04/01/22 1,792,771
7,510 Erie Cnty, OH Hosp Fac Rev Firelands Regl
Med Ctr Ser A............................. 5.625 08/15/32 8,010,692
5,955 Franklin Cnty, OH Hlthcare Fac Rev Impt
Lutheran Sr City Proj Rfdg (c)............ 6.125 12/15/28 5,963,516
2,600 Franklin Cnty, OH Hlthcare Fac Rev Impt OH
Presbyterian Svc Ser A.................... 5.125 07/01/35 2,686,346
2,400 Hamilton Cnty, OH Hlthcare Life Rev Life
Enriching Cmnty Proj Rfdg Ser A........... 5.000 01/01/37 2,450,928
1,500 Lucas Cnty, OH Hlthcare & Impt Sunset
Retirement Rfdg........................... 6.500 08/15/20 1,598,250
750 Lucas Cnty, OH Port Auth Rev Saint Mary
Woods Proj Ser A.......................... 6.000 05/15/24 767,048
2,250 Lucas Cnty, OH Port Auth Rev Saint Mary
Woods Proj Ser A.......................... 6.000 05/15/34 2,284,425
2,805 Madison Cnty, OH Hosp Impt Rev Madison
Cnty Hosp Proj Rfdg
(Prerefunded @ 08/01/08).................. 6.400 08/01/28 2,899,949
4,340 Norwood, OH Tax Increment Rev Fin
Cornerstone at Norwood.................... 6.200 12/01/31 4,411,002
10,000 Ohio Hsg Fin Agy Mtg Rev Residential Ser A
(AMT) (o)................................. 4.625 09/01/27 9,960,450
5,000 Ohio St Higher Ed Fac Commn Rev Hosp Univ
Hosp Hlth Sys Inc Ser A................... 5.250 01/15/46 5,300,100
--------------
74,027,865
--------------
OKLAHOMA 1.8%
1,000 Citizen Potawatomi Nation, OK Ser A....... 6.500 09/01/16 1,059,670
430 Langston, OK Econ Dev Langston Cmnty Dev
Corp Proj Ser A (h)....................... 7.000 08/01/10 452,377
1,000 Langston, OK Econ Dev Langston Cmnty Dev
Corp Proj Ser A (Prerefunded @
08/01/10)................................. 7.625 08/01/20 1,135,510
750 Langston, OK Economic Dev Langston Cmnty
Dev Corp Proj Ser A
(Prerefunded @ 08/01/10).................. 7.400 08/01/17 846,397
1,000 Norman, OK Regl Hosp Auth Hosp Rev........ 5.375 09/01/29 1,055,920
3,000 Norman, OK Regl Hosp Auth Hosp Rev........ 5.375 09/01/36 3,151,410
</Table>
See Notes to Financial Statements 35
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
OKLAHOMA (CONTINUED)
$ 2,000 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg........................... 6.000% 04/01/18 $ 2,050,240
750 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 5.700 04/01/25 775,927
1,250 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 5.875 04/01/30 1,308,675
1,000 Oklahoma Cnty, OK Fin Auth Rev Epworth
Villa Proj Rfdg Ser A..................... 7.000 04/01/25 1,021,200
5,500 Oklahoma Cnty, OK Fin Auth Rev Retirement
Fac Concordia Ser A....................... 6.000 11/15/38 5,609,615
1,500 Oklahoma Cnty, OK Fin Auth Rev Retirement
Fac Concordia Ser A....................... 6.125 11/15/25 1,544,385
4,000 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
08/15/09) (a)............................. 5.625 08/15/19 4,212,360
1,065 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
08/15/09)................................. 5.750 08/15/12 1,124,534
1,000 Oklahoma Dev Fin Auth Rev Hillcrest
Hlthcare Sys Rfdg Ser A (Prerefunded @
08/15/09)................................. 5.750 08/15/15 1,055,900
3,250 Tulsa Cnty, OK Pub Fac Auth (AMBAC Insd)
(Prerefunded @ 11/01/09).................. 6.250 11/01/22 3,518,743
--------------
29,922,863
--------------
OREGON 0.9%
2,000 Clackamas Cnty, OR Hosp Fac Willamette
View Inc Proj Ser A (Prerefunded @
11/01/09)................................. 7.500 11/01/29 2,207,300
2,145 Clatsop Care Ctr Hlth Dist OR Rev Sr
Hsg....................................... 6.875 08/01/28 2,194,914
1,250 Multhnomah Cnty OR Hosp Fac Auth Rev
Terwilliger Plaza Proj A.................. 5.250 12/01/26 1,290,000
2,500 Multnomah Cnty, OR Hosp Fac Auth Rev
Terwilliger Plaza Proj Rfdg (Acquired
05/21/04, Cost $2,442,200) (b)............ 6.500 12/01/29 2,582,800
1,250 Multnomah Cnty, OR Hosp Fac Auth Rev
Terwilliger Plaza Proj.................... 5.250 12/01/36 1,282,225
4,998 Oregon St Hlth Hsg Ed & Cultural Fac Auth
Ser A (AMT)............................... 7.250 06/01/28 5,164,866
945 Oregon St Hlth Hsg Ed Auth OR Baptist
Retirement Homes Ser A.................... 8.000 11/15/26 957,361
--------------
15,679,466
--------------
PENNSYLVANIA 4.4%
1,925 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser
B......................................... 9.250 11/15/15 2,278,103
2,000 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser
B......................................... 9.250 11/15/22 2,363,140
2,000 Allegheny Cnty, PA Hosp Dev Hlth Sys Ser
B......................................... 9.250 11/15/30 2,367,000
2,000 Allegheny Cnty, PA Indl Dev Auth Lease Rev
(AMT)..................................... 6.625 09/01/24 2,069,580
1,500 Allegheny Cnty, PA Redev Auth Pittsburgh
Mills Proj................................ 5.600 07/01/23 1,595,025
</Table>
36 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,500 Bucks Cnty, PA Indl Dev Auth Retirement
Cmt Rev Ann's Choice Inc Fac Ser A........ 6.125% 01/01/25 $ 1,598,100
1,250 Bucks Cnty, PA Indl Dev Auth Retirement
Cmt Rev Ann's Choice Inc Fac Ser A........ 6.250 01/01/35 1,328,837
1,000 Bucks Cnty, PA Indl Dev Auth Rev First Mtg
Hlthcare Fac Chandler..................... 6.200 05/01/19 1,000,740
1,800 Bucks Cnty, PA Indl Dev Auth Rev First Mtg
Hlthcare Fac Chandler..................... 6.300 05/01/29 1,801,926
1,500 Chester Cnty, PA Hlth & Ed Fac Chester
Cnty Hosp Ser A........................... 6.750 07/01/31 1,640,670
2,000 Cumberland Cnty, PA Indl Dev Auth Rev
First Mtg Woods Cedar Run Rfdg Ser A (k)
(l)....................................... 6.500 11/01/28 1,046,040
2,250 Cumberland Cnty, PA Mun Auth Rev Diakon
Lutheran Ministries Proj.................. 5.000 01/01/36 2,313,697
3,000 Dauphin Cnty, PA Gen Auth Rev Office & Pkg
Riverfront Office......................... 6.000 01/01/25 2,904,300
1,000 Fulton Cnty, PA Indl Dev Auth Hosp Rev
Fulton Cnty Med Ctr Proj.................. 5.875 07/01/31 1,037,460
1,900 Fulton Cnty, PA Indl Dev Auth Hosp Rev
Fulton Cnty Med Ctr Proj.................. 5.900 07/01/40 1,971,934
1,000 Harrisburg, PA Auth Univ Rev Harrisburg
Univ of Science Ser A..................... 5.400 09/01/16 1,021,050
2,000 Harrisburg, PA Auth Univ Rev Harrisburg
Univ of Science Ser B..................... 6.000 09/01/36 2,084,040
2,200 Indiana Cnty, PA Indl Dev Auth PSEG Pwr
LLC Proj Rfdg (AMT)....................... 5.850 06/01/27 2,329,976
1,000 Lancaster Cnty, PA Hosp Auth Rev Hlth Ctr
Saint Anne's Home......................... 6.625 04/01/28 1,032,090
1,200 Lehigh Cnty, PA Gen Purp Auth First Mtg
Bible Fellowship Church................... 7.625 11/01/21 1,326,888
3,000 Lehigh Cnty, PA Gen Purp Auth Rev Good
Shepherd Grp Ser A........................ 5.500 11/01/24 3,187,920
3,585 Lehigh Cnty, PA Gen Purp Auth Rev
Kidspeace Oblig Grp (c)................... 6.200 11/01/14 3,594,679
5,500 Lehigh Cnty, PA Gen Purp Auth Rev
Kidspeace Oblig Grp Rfdg.................. 6.000 11/01/23 5,442,745
1,000 Lehigh Cnty, PA Indl Dev Auth Hlth Fac Rev
Lifepath Inc Proj......................... 6.100 06/01/18 1,001,360
4,180 Montgomery Cnty, PA Higher Ed & Hlth Auth
Rev Montgomery Impt & Rfdg................ 6.875 04/01/36 4,474,983
1,085 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care Proj................. 6.000 02/01/21 1,144,480
4,500 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care Proj................. 6.250 02/01/35 4,770,855
1,365 Northeastern, PA Hosp & Ed Auth Hlthcare
Rev....................................... 7.125 10/01/29 1,406,523
</Table>
See Notes to Financial Statements 37
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 1,690 Northeastern, PA Hosp & Ed Auth Hlthcare
Rev Oakwood Ter Proj (Acquired 12/27/05,
Cost $1,690,000) (b) (c) (m).............. 6.500% 10/01/32 $ 1,729,631
1,500 Pennsylvania Econ Dev Fin Auth Reliant
Energy Ser A (AMT) (d).................... 6.750 12/01/36 1,653,060
3,000 Pennsylvania Econ Dev Fin Auth Reliant
Energy Seward Ser A (AMT) (d)............. 6.750 12/01/36 3,306,120
980 Pennsylvania St Higher Ed Student Assn Inc
Proj Ser A................................ 6.750 09/01/32 1,065,466
2,150 Philadelphia, PA Auth Indl Dev Rev Coml
Dev Rfdg (AMT)............................ 7.750 12/01/17 2,154,816
1,695 Philadelphia, PA Hosp & Higher Ed Fac Auth
Rev Centralized Comp Human Svc Ser A...... 6.125 01/01/13 1,691,966
1,500 Westmoreland Cnty, PA Indl Dev Hlthcare
Fac Redstone Ser B (Prerefunded @
11/15/10)................................. 8.000 11/15/23 1,710,495
--------------
73,445,695
--------------
RHODE ISLAND 0.3%
1,825 Rhode Island St Econ Dev Corp Rev Oblig
Providence Pl............................. 7.250 07/01/20 1,931,708
3,000 Tobacco Settlement Fin Corp RI Asset Bkd
Ser A..................................... 6.000 06/01/23 3,198,720
--------------
5,130,428
--------------
SOUTH CAROLINA 1.5%
2,500 Lancaster Cnty, SC Assmt Rev Edenmoor Impt
Dist Ser A (Acquired 05/19/06, Cost
$2,500,000) (b)........................... 5.750 12/01/37 2,612,350
1,700 Lancaster Cnty, SC Assmt Rev San City
Carolina Lakes Impt....................... 5.450 12/01/37 1,729,818
1,000 Myrtle Beach, SC Tax Increment Myrtle
Beach Air Force Base Ser A (Acquired
09/29/06, Cost $997,500) (b).............. 5.250 11/01/26 1,025,320
1,250 Myrtle Beach, SC Tax Increment Myrtle
Beach Air Force Base Ser A (Acquired
09/29/06, Cost $1,245,313) (b)............ 5.300 11/01/35 1,283,500
3,000 South Carolina Jobs Econ Dev Auth Econ Dev
Rev Westminster Impt & Rfdg............... 5.375 11/15/30 3,047,400
1,570 South Carolina Jobs Econ Dev Auth Hosp Fac
Rev Palmetto Hlth Alliance Impt &
Rfdg Ser A................................ 6.250 08/01/31 1,752,403
1,000 South Carolina Jobs Econ Dev Episcopal
Home Still Proj Ser A..................... 6.000 05/15/17 1,025,110
2,000 South Carolina Jobs Econ Dev First Mtg
Westley Com Proj (Prerefunded @
10/01/10)................................. 7.750 10/01/24 2,297,940
4,500 South Carolina Jobs Econ Dev First Mtg
Westley Com Proj (Prerefunded @
10/01/10)................................. 8.000 10/01/31 5,203,755
</Table>
38 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
SOUTH CAROLINA (CONTINUED)
$ 2,250 South Carolina Jobs Economic Dev First Mtg
Wesley Commons Rfdg (g)................... 5.300% 10/01/36 $ 2,297,835
3,000 Tobacco Settlement Rev Mgmt Auth SC Tob
Settlement Rev Ser B...................... 6.375 05/15/28 3,242,880
--------------
25,518,311
--------------
SOUTH DAKOTA 0.5%
1,010 Keystone, SD Econ Dev Rev Wtr Quality Mgmt
Corp Ser A (AMT).......................... 6.000 12/15/18 1,017,231
1,750 Sioux Falls, SD Hlth Fac Rev Dow Rummel
Vlg Proj Rfdg............................. 5.000 11/15/33 1,738,170
1,035 Sioux Falls, SD Multi-Family Rev Rfdg Hsg
Inn On Westport Sub B (Acquired 08/04/06,
Cost $1,035,000) (b) (c).................. 7.500 03/01/40 1,046,023
4,080 Sioux Falls, SD Multi-Family Rev Hsg Inn
on Westport Proj Ser A1 (Acquired
08/04/06, Cost $4,080,000) (b)............ 6.000 03/01/40 4,162,375
1,050 South Dakota St Hlth & Ed Fac Auth Rev
Sioux Vly Hosp & Hlth Sys Ser A........... 5.250 11/01/34 1,106,301
--------------
9,070,100
--------------
TENNESSEE 5.6%
3,000 Elizabethton, TN Hlth & Ed Fac Brd Rev
Rfdg (MBIA Insd) (a)...................... 7.750 07/01/29 3,596,280
1,000 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg Mtn Sts Hlth Rfdg Ser A..... 7.500 07/01/33 1,160,810
9,900 Johnson City, TN Hlth & Ed Fac Brd Hosp
Rev First Mtg Mtn Sts Hlth Ser A (o)...... 5.500 07/01/36 10,572,260
1,000 Johnson City, TN Hlth & Ed Fac Brd
Retirement Fac Rev Appalachian Christian
Vlg Proj Ser A............................ 6.250 02/15/32 1,050,540
1,750 Shelby Cnty, TN Hlth & Ed Germantown Vlg
Ser A..................................... 7.000 12/01/23 1,757,140
1,000 Shelby Cnty, TN Hlth & Ed Germantown Vlg
Ser A..................................... 7.250 12/01/34 1,015,820
1,000 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A................ 5.625 09/01/26 1,028,510
800 Shelby Cnty, TN Hlth Ed & Hsg Vlg at
Germantown................................ 6.250 12/01/34 731,496
4,500 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A................ 5.750 09/01/37 4,628,250
1,500 Sullivan Cnty, TN Hlth Ed & Hsg Fac Brd
Hosp Wellmont Hlth Sys Proj Ser C......... 5.250 09/01/36 1,573,800
4,920 Sullivan Cnty, TN Hlth Ed & Hsg Fac Brd
Rev (c)................................... 8.410 11/01/19 5,131,018
12,500 Tennessee Energy Acqusn Corp Gas Rev Ser A
(o)....................................... 5.250 09/01/21 13,772,875
</Table>
See Notes to Financial Statements 39
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
TENNESSEE (CONTINUED)
$ 40,000 Tennessee Energy Acquisition Corp Gas Rev
Ser A (o)................................. 5.250% 09/01/22 $ 44,131,000
2,625 Trenton, TN Hlth & Ed Fac Brd Rev Inc Proj
Ser A (Acquired 06/08/89, Cost $3,195,000)
(b) (c)................................... 10.000 11/01/19 2,742,443
1,160 Trenton, TN Hlth & Ed Fac Brd Rev Inc Proj
Ser B (Acquired 06/08/89, Cost $1,160,000)
(b) (c) (d)............................... 10.000 11/01/20 124,259
--------------
93,016,501
--------------
TEXAS 6.5%
300 Abia Dev Corp TX Arpt Fac Rev Austin Belly
Port Dev LLC Proj Ser A (AMT)............. 6.250 10/01/08 303,354
3,000 Abia Dev Corp TX Arpt Fac Rev Austin Belly
Port Dev LLC Proj Ser A (AMT)............. 6.500 10/01/23 3,074,430
1,000 Atlanta, TX Hosp Auth Fac Rev............. 6.700 08/01/19 1,046,140
2,035 Atlanta, TX Hosp Auth Fac Rev............. 6.750 08/01/29 2,124,336
990 Austin-Bergstorm Landhost Enterprises Inc
TX Arpt Hotel Sr Ser A (n)................ 6.750/4.450 04/01/27 811,543
975 Bexar Cnty, TX Hsg Fin Corp Multi-Family
Hsg Rev Woodland Ridge Apt Proj Ser A
(AMT)..................................... 7.000 01/01/39 1,049,753
2,000 Brazos Cnty, TX Hlth Fac Dev Oblig Grp.... 5.375 01/01/32 2,104,960
735 Comal Cnty, TX Hlth Fac Dev Hlthcare Sys
McKenna Mem Proj Ser A.................... 6.250 02/01/32 797,769
4,205 Dallas Cnty Tex Flood Ctl Dist Rfdg (c)... 6.750 04/01/16 4,429,000
1,825 Dallas Cnty, TX Flood Ctl Dist No 1 Cap
Apprec Rfdg (Acquired 08/28/89, Cost
$660,829) (b)............................. * 08/01/11 1,439,067
3,445 Dallas Cnty, TX Flood Ctl Dist No 1
Rfdg...................................... 7.250 04/01/32 3,617,870
2,500 Decatur, TX Hosp Auth Hosp Wise Regl Hlth
Sys Ser A................................. 7.000 09/01/25 2,748,125
3,500 Decatur, TX Hosp Auth Hosp Wise Regl Hlth
Sys Ser A................................. 7.125 09/01/34 3,857,000
1,500 Grand Prairie, TX Hsg Fin Corp Indpt Sr
Living Ctr Rev (n)........................ 7.500/3.750 07/01/17 1,393,770
3,000 Grand Prairie, TX Hsg Fin Corp Indpt Sr
Living Ctr Rev (n)........................ 7.750/3.875 01/01/34 2,791,440
1,750 Houston, TX Arpt Sys Rev Sub Lien Ser A
(FSA Insd) (AMT).......................... 5.125 07/01/32 1,804,583
3,000 Houston, TX Hlth Fac Dev Corp Buckingham
Sr Living Cmnty Ser A..................... 7.125 02/15/34 3,354,210
17,760 Lower CO Riv Auth TX Rev Rfdg Ser A (o)... 5.875 05/15/14 18,709,627
7,500 Lower CO Riv Auth TX Rev Rfdg Ser A (o)... 5.875 05/15/15 7,901,025
1,000 Lubbock, TX Hlth Fac Dev Corp First Mtg
Carillon Proj Rev......................... 6.500 07/01/26 1,049,470
</Table>
40 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 10,000 Lubbock, TX Hlth Fac Dev Corp Rev First
Mtg Carillon Proj A Rfdg.................. 6.625% 07/01/36 $ 10,526,300
1,255 Lubbock, TX Hlth Fac Dev Corp Rev First
Mtg Carillon Proj Ser A (Prerefunded @
07/01/09)................................. 6.500 07/01/19 1,337,504
2,235 Meadow Parc Dev Inc TX Multi-Family Rev
Hsg Meadow Parc Apt Proj.................. 6.500 12/01/30 2,273,353
2,500 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj....................... 7.250 01/01/31 2,592,950
1,500 Midlothian, TX Dev Auth Tax Increment
Contract Rev (Acquired 12/02/04, Cost
$1,500,000) (b)........................... 6.200 11/15/29 1,606,995
2,670 Midlothian, TX Dev Auth Tax Increment
Contract Rev.............................. 6.700 11/15/23 2,765,906
2,000 Midlothian, TX Dev Auth Tax Increment
Contract Rev.............................. 7.875 11/15/26 2,322,120
1,685 Midlothian, TX Dev Auth Tax Increment
Contract Rev Sub Lien Rfdg Ser B.......... 5.125 11/15/26 1,703,400
1,000 Richardson, TX Hosp Auth Rev Baylor &
Richardson Impt Rfdg...................... 5.625 12/01/28 1,027,280
2,500 Tarrant Cnty, TX Cultural Ed Fac Fin Corp
Retirement Fac Northwest Sr Hsg Edgemere
Proj A.................................... 6.000 11/15/36 2,680,700
1,050 Texas St Dept Hsg & Cmnty Affairs Home Mtg
Rev (GNMA Collateralized) (AMT)........... 6.900 07/02/24 1,079,285
1,675 Texas St Pub Fin Auth Sch Excellence Ed
Proj Ser A (Acquired 12/02/04,
Cost $1,654,197) (b)...................... 7.000 12/01/34 1,852,935
1,500 Texas St Student Hsg Corp MSU Proj
Midwestern St Univ........................ 6.500 09/01/34 1,617,765
2,950 Tomball, TX Hosp Auth Rev Hosp Tomball
Regl Hosp................................. 6.000 07/01/29 3,060,271
1,000 Travis Cnty, TX Hlth Fac Dev Corp
Retirement Fac Rev Querencia Barton Creek
Proj...................................... 5.500 11/15/25 1,023,360
2,950 Travis Cnty, TX Hlth Fac Dev Corp
Retirement Fac Rev Querencia Barton Creek
Proj...................................... 5.650 11/15/35 3,039,061
925 Wichita Cnty, TX Hlth Fac Rolling Meadows
Fac Rfdg Ser A............................ 6.250 01/01/28 952,870
2,500 Woodhill Pub Fac Corp TX Hsg-Woodhill Apt
Proj...................................... 7.500 12/01/29 2,479,450
--------------
108,348,977
--------------
UTAH 0.2%
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (k).................................. 3.120 09/01/15 315,000
585 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (k).................................. 3.120 09/01/25 184,275
</Table>
See Notes to Financial Statements 41
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
UTAH (CONTINUED)
$ 1,165 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (k).................................. 3.200% 09/01/20 $ 366,975
2,355 Utah St Hsg Fin Agy Rev RHA Cmnty Svc Proj
Ser A..................................... 6.875 07/01/27 2,406,292
--------------
3,272,542
--------------
VERMONT 0.1%
1,000 Vermont Ed & Hlth Bldg Fin Agy Rev
Bennington College Proj................... 6.625 10/01/29 1,041,720
770 Vermont Ed & Hlth Bldg Fin Agy Rev VT
Council Dev Mental Hlth Ser A............. 6.000 12/15/09 799,183
--------------
1,840,903
--------------
VIRGINIA 4.2%
4,000 Albemarle Cnty, VA Indl Dev Auth Ed Fac
Rev Covenant Sch Inc Ser A................ 7.750 07/15/32 4,481,160
5,000 Celebrate, VA South Cmnty Dev Celebrate VA
South Proj................................ 6.250 03/01/37 5,191,700
1,500 Farms New Kent, VA Cmnty Dev Ser B........ 5.450 03/01/36 1,516,995
1,500 Farms New Kent, VA Cmnty Dev Ser C........ 5.800 03/01/36 1,514,550
2,500 Henrico Cnty, VA Econ Dev Auth Residential
Care Fac Rev Utd Methodist Rfdg Ser A..... 6.500 06/01/22 2,678,150
1,750 Henrico Cnty, VA Econ Dev Auth Residential
Care Fac Rev Mtg Westminster Caterbury
Rfdg...................................... 5.000 10/01/35 1,790,530
1,250 Lynchburg, VA Indl Dev Auth Residential
Care Fac Rev Mtg Westminster Canterbury
Rfdg...................................... 5.000 07/01/31 1,264,912
1,000 New Port Cmnty Dev Auth VA Spl Assmt...... 5.500 09/01/26 1,055,570
2,500 New Port Cmnty Dev Auth VA Spl Assmt...... 5.600 09/01/36 2,634,475
4,000 Peninsula Ports Auth VA Residential Care
Fac Rev VA Baptist Homes Rfdg Ser C....... 5.400 12/01/33 4,146,040
4,000 Roanoke Cnty, VA Indl Dev Auth Glebe Inc
Ser A..................................... 6.300 07/01/35 4,077,280
17,620 Tobacco Settlement Fin Corp VA
Asset Bkd (o)............................. 5.625 06/01/37 18,855,779
1,700 Virginia Small Business Fin Auth Rev Indl
Dev SIL Clean Wtr Proj (AMT) (k).......... 7.250 11/01/24 1,188,912
15,220 Virginia St Hsg Auth Dev Auth Comwlth Mtg
Sub Ser D1 (AMT) (o)...................... 4.900 01/01/33 20,482,961
--------------
70,879,014
--------------
WASHINGTON 0.8%
1,000 King Cnty, WA Pub Hosp Dist No 004
Snoqualmie Vly Hosp....................... 7.250 12/01/15 1,059,030
8,830 Tobacco Settlement Auth WA Asset Bkd...... 6.625 06/01/32 9,845,450
</Table>
42 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
WASHINGTON (CONTINUED)
$ 1,000 Washington St Hsg Fin Commn Nonprofit Rev
Skyline at First Hill Proj Ser A.......... 5.625% 01/01/27 $ 1,035,120
1,000 Washington St Hsg Fin Commn Nonprofit Rev
Skyline at First Hill Proj Ser A.......... 5.625 01/01/38 1,028,250
--------------
12,967,850
--------------
WISCONSIN 1.1%
800 Baldwin, WI Hosp Rev Mtg Ser A............ 6.125 12/01/18 803,376
1,000 Baldwin, WI Hosp Rev Mtg Ser A............ 6.375 12/01/28 1,005,250
1,740 Milwaukee, WI Rev Sr Air Cargo (AMT)...... 6.500 01/01/25 1,876,555
1,000 Waukesha, WI Redev Auth Hsg Sr Kirkland
Crossings Proj Rfdg....................... 5.500 07/01/31 1,022,090
1,500 Waukesha, WI Redev Auth Hsg Sr Kirkland
Crossings Proj Rfdg....................... 5.600 07/01/41 1,542,855
750 Wisconsin Hlth & Ed Fac Eastcastle Pl Inc
Proj...................................... 6.000 12/01/24 776,100
2,000 Wisconsin St Hlth & Ed Fac Auth Rev Aurora
Hlthcare Inc Ser A........................ 5.600 02/15/29 2,066,480
1,000 Wisconsin St Hlth & Ed Fac Auth Rev
Oakwood Vlg Proj Ser A.................... 7.625 08/15/30 1,085,380
1,500 Wisconsin St Hlth & Ed Fac Beaver Dam
Cmnty Hosp Inc Ser A...................... 6.750 08/15/34 1,640,895
1,000 Wisconsin St Hlth & Ed Fac Divine Savior
Hlthcare Ser C (Prerefunded @ 05/01/12)... 7.500 05/01/32 1,155,360
2,000 Wisconsin St Hlth & Ed Fac Fort Hlthcare
Inc Proj.................................. 6.100 05/01/34 2,215,100
1,500 Wisconsin St Hlth & Ed Fac Southwest Hlth
Ctr Ser A................................. 6.125 04/01/24 1,585,980
1,105 Wisconsin St Hlth & Ed Fac Upland Hills
Hlth Inc Ser B (g)........................ 5.000 05/15/36 1,119,896
--------------
17,895,317
--------------
WYOMING 0.4%
4,000 Sweetwater Cnty, WY Solid Waste Disp Rev
Corp Proj Rfdg (AMT)...................... 5.600 12/01/35 4,260,960
1,500 Teton Cnty, WY Hosp Dist Hosp Saint Johns
Med Ctr................................... 6.750 12/01/27 1,601,520
--------------
5,862,480
--------------
PUERTO RICO 1.9%
2,000 Puerto Rico Comwlth Hwy & Trans Auth Hwy
Rev Cap Apprec Rfdg Ser CC (g)............ * 07/01/27 795,080
2,000 Puerto Rico Comwlth Hwy & Trans Auth Hwy
Rev Ser M (g)............................. 5.000 07/01/46 2,085,280
15,000 Puerto Rico Comwlth Hwy & Trans Auth
Transn Rev Ser K (Prerefunded @
07/01/15)................................. 5.000 07/01/40 16,313,850
</Table>
See Notes to Financial Statements 43
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ------------------------------------------------------------------------------------------------
PUERTO RICO (CONTINUED)
$ 6,500 Puerto Rico Comwlth Infrastrucure Ser B... 5.000% 07/01/46 $ 6,755,255
5,000 Puerto Rico Pub Bldg Auth Rev Govt Fac Ser
I (Comwth Gtd)............................ 5.250 07/01/33 5,304,150
--------------
31,253,615
--------------
U.S. VIRGIN ISLANDS 0.3%
2,500 Northern Mariana Islands Ser A............ 7.375 06/01/30 2,704,900
2,000 Virgin Islands Pub Fin Auth Res Secd-
Hovensa Refinery (AMT).................... 4.700 07/01/22 2,008,760
1,000 Virgin Islands Pub Fin Auth Res Secd-
Hovensa Refinery (AMT).................... 5.875 07/01/22 1,093,590
--------------
5,807,250
--------------
TOTAL LONG-TERM INVESTMENTS 118.0%
(Cost $1,900,307,999)........................................................ 1,972,625,532
TOTAL SHORT-TERM INVESTMENTS 0.1%
(Cost $1,900,000)............................................................ 1,900,000
--------------
TOTAL INVESTMENTS 118.1%
(Cost $1,902,207,999)........................................................ 1,974,525,532
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES
HELD (18.4%)
(Cost ($307,040,000))
(307,040) Notes with interest rates ranging from 3.68% to 3.74% at March 31,
2007 and contractual maturities of collateral ranging from 2015 to
2046 (see Note 1) (f)............................................. (307,040,000)
--------------
TOTAL NET INVESTMENTS 99.7%
(Cost $1,595,167,999)........................................................ 1,667,485,532
OTHER ASSETS IN EXCESS OF LIABILITIES 0.3%.................................... 5,168,598
--------------
NET ASSETS 100.0%............................................................. $1,672,654,130
==============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) All or a portion of this security has been physically segregated in
connection with open futures contracts.
(b) Securities are restricted and may be resold only in transactions exempt from
registration which are normally those transactions with qualified
institutional buyers. Restricted securities comprise 4.3% of net assets.
44 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
(c) The Fund owns 100% of the outstanding bond issuance.
(d) Variable Rate Coupon
(e) Inverse Floating Rate
(f) Floating rate notes. The interest rates shown reflect the rates in the
effect at March 31, 2007.
(g) Security purchased on a when-issued or delayed delivery basis.
(h) Escrowed to Maturity
(i) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(j) Floating Rate Coupon
(k) Non-income producing security.
(l) This borrower has filed for protection in federal bankruptcy court.
(m) 144A-Private Placement security which is exempt from registration under Rule
144A of the Securities Act of 1933, as amended. This security may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(n) Interest is accruing at less than the stated coupon. Coupon is shown as
stated coupon/actual coupon.
(o) Underlying security related to Inverse Floaters entered into by the Fund.
See Note 1.
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
CIFG--CDC IXIS Financial Guaranty
Comwth--Commonwealth of Puerto Rico
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
GTY AGMT--Guarantee Agreement
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
FUTURES CONTRACTS OUTSTANDING AS OF MARCH 31, 2007:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Bonds Futures, June 2007 (Current Notional
Value of $111,250 per contract)........................... 1,605 $(1,948,208)
----- -----------
</Table>
See Notes to Financial Statements 45
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $1,902,207,999)..................... $1,974,525,532
Cash........................................................ 276,948
Receivables:
Interest.................................................. 27,279,202
Investments Sold.......................................... 17,101,325
Fund Shares Sold.......................................... 1,803,247
Variation Margin on Futures............................... 501,563
Other....................................................... 202,506
--------------
Total Assets............................................ 2,021,690,323
--------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 307,040,000
Investments Purchased..................................... 32,336,171
Fund Shares Repurchased................................... 5,751,265
Income Distributions...................................... 2,059,398
Distributor and Affiliates................................ 736,887
Investment Advisory Fee................................... 664,430
Trustees' Deferred Compensation and Retirement Plans........ 292,197
Accrued Expenses............................................ 155,845
--------------
Total Liabilities....................................... 349,036,193
--------------
NET ASSETS.................................................. $1,672,654,130
==============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $1,710,318,243
Net Unrealized Appreciation................................. 70,369,325
Accumulated Undistributed Net Investment Income............. 575,819
Accumulated Net Realized Loss............................... (108,609,257)
--------------
NET ASSETS.................................................. $1,672,654,130
==============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $1,370,205,307 and 100,621,064 shares of
beneficial interest issued and outstanding)............. $ 13.62
Maximum sales charge (4.75%* of offering price)......... .68
--------------
Maximum offering price to public........................ $ 14.30
==============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $108,300,464 and 7,958,457 shares of
beneficial interest issued and outstanding)............. $ 13.61
==============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $194,148,359 and 14,150,370 shares of
beneficial interest issued and outstanding)............. $ 13.72
==============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
46 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $57,805,166
-----------
EXPENSES:
Interest and Residual Trust Expenses........................ 8,444,828
Investment Advisory Fee..................................... 3,897,628
Distribution (12b-1) and Service Fees
Class A................................................... 1,699,948
Class B................................................... 573,722
Class C................................................... 983,116
Transfer Agent Fees......................................... 376,578
Accounting and Administrative Expenses...................... 151,573
Professional Fees........................................... 104,460
Custody..................................................... 65,483
Reports to Shareholders..................................... 55,029
Registration Fees........................................... 39,243
Trustees' Fees and Related Expenses......................... 33,569
Other....................................................... 32,087
-----------
Total Expenses.......................................... 16,457,264
Less Credits Earned on Cash Balances.................... 15,102
-----------
Net Expenses............................................ 16,442,162
-----------
NET INVESTMENT INCOME....................................... $41,363,004
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 8,921,621
Futures................................................... (1,407,307)
-----------
Net Realized Gain........................................... 7,514,314
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 73,653,473
-----------
End of the Period:
Investments............................................. 72,317,533
Futures................................................. (1,948,208)
-----------
70,369,325
-----------
Net Unrealized Depreciation During the Period............... (3,284,148)
-----------
NET REALIZED AND UNREALIZED GAIN............................ $ 4,230,166
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $45,593,170
===========
</Table>
See Notes to Financial Statements 47
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Cash Flows
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
CASH FLOWS USED FOR OPERATING ACTIVITIES
Purchases of investments.................................. $(168,482,744)
Proceeds from sales/maturities of investments............. 352,628,717
Net investment income....................................... 41,363,004
Adjustments to reconcile net investment income to net cash
used in operating activities
Net Amortization/Accretion................................ 2,353,356
Change in Unrealized Depreciation on Futures.............. 2,200,597
(Increase)/decrease in assets and increase/(decrease) in
liabilities related to operations
Interest receivable..................................... 591,968
Other Assets............................................ (487,326)
Accrued expenses........................................ (1,134)
-------------
NET CASH USED IN OPERATING ACTIVITIES....................... 230,166,438
-------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from subscriptions................................. 115,793,066
Repurchased shares.......................................... (124,359,783)
Dividends paid (net of reinvested dividends of
$28,628,025).............................................. (14,057,213)
Payment of floating rate note obligations................... (210,200,000)
-------------
NET CASH PROVIDED BY FINANCING ACTIVITIES................... (232,823,930)
-------------
NET DECREASE IN CASH FOR THE PERIOD......................... (2,657,492)
Cash at beginning of period................................. 2,934,440
-------------
CASH AT END OF PERIOD....................................... $ 276,948
=============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid............................................... $ 8,444,828
=============
</Table>
48 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 41,363,004 $ 83,566,311
Net Realized Gain.................................... 7,514,314 3,527,529
Net Unrealized Appreciation/Depreciation During the
Period............................................. (3,284,148) 41,198,112
-------------- --------------
Change in Net Assets from Operations................. 45,593,170 128,291,952
-------------- --------------
Distributions from Net Investment Income:
Class A Shares..................................... (35,562,622) (69,389,893)
Class B Shares..................................... (2,557,850) (6,164,057)
Class C Shares..................................... (4,344,438) (9,173,440)
-------------- --------------
Total Distributions.................................. (42,464,910) (84,727,390)
-------------- --------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... 3,128,260 43,564,562
-------------- --------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 109,937,235 204,752,493
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 28,628,025 56,971,212
Cost of Shares Repurchased........................... (125,610,506) (260,956,548)
-------------- --------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 12,954,754 767,157
-------------- --------------
TOTAL INCREASE IN NET ASSETS......................... 16,083,014 44,331,719
NET ASSETS:
Beginning of the Period.............................. 1,656,571,116 1,612,239,397
-------------- --------------
End of the Period (Including accumulated
undistributed net investment income of $575,819 and
$1,677,725, respectively).......................... $1,672,654,130 $1,656,571,116
============== ==============
</Table>
See Notes to Financial Statements 49
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30,
CLASS A SHARES SIX MONTHS ENDED ----------------------------------------------
MARCH 31, 2007 2006 2005 2004 2003 2002
-----------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD.................... $ 13.59 $ 13.23 $ 13.00 $13.03 $13.21 $13.25
-------- -------- -------- ------ ------ ------
Net Investment Income......... .35(a) .71(a) .72(a) .74(a) .79 .78
Net Realized and Unrealized
Gain/Loss................... .03 .37 .27 -0- (.25) (.11)
-------- -------- -------- ------ ------ ------
Total from Investment
Operations.................... .38 1.08 .99 .74 .54 .67
Less Distributions from
Net Investment Income......... .35 .72 .76 .77 .72 .71
-------- -------- -------- ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................ $ 13.62 $ 13.59 $ 13.23 $13.00 $13.03 $13.21
======== ======== ======== ====== ====== ======
Total Return (b)............... 2.85%* 8.41% 7.75% 5.87% 4.21% 5.28%
Net Assets at End of the Period
(In millions)................. $1,370.2 $1,338.7 $1,267.3 $766.1 $560.9 $579.1
Ratio of Expenses to
Average Net Assets............ 1.82% 1.39% 1.04% 0.99% 0.92% 0.89%
Ratio of Net Investment Income
to Average Net Assets......... 5.07% 5.34% 5.41% 5.74% 6.07% 5.99%
Portfolio Turnover............. 1%* 48% 34% 10% 14% 13%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses)..................... 0.82% 0.84% 0.86% 0.91% 0.89% 0.86%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
50 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30,
CLASS B SHARES SIX MONTHS ENDED ----------------------------------------------
MARCH 31, 2007 2006 2005 2004 2003 2002
------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $13.58 $13.22 $12.99 $13.02 $13.20 $13.24
------ ------ ------ ------ ------ ------
Net Investment Income...... .29(a) .61(a) .62(a) .65(a) .69(a) .70
Net Realized and
Unrealized Gain/Loss..... .04 .37 .27 (.01) (.25) (.12)
------ ------ ------ ------ ------ ------
Total from Investment
Operations................. .33 .98 .89 .64 .44 .58
Less Distributions from
Net Investment Income...... .30 .62 .66 .67 .62 .62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD..................... $13.61 $13.58 $13.22 $12.99 $13.02 $13.20
====== ====== ====== ====== ====== ======
Total Return (b)............. 2.47%* 7.54% 7.04% 5.07% 3.42% 4.49%
Net Assets at End of the
Period (In millions)....... $108.3 $120.0 $144.9 $123.8 $115.6 $149.5
Ratio of Expenses to
Average Net Assets......... 2.58% 2.14% 1.79% 1.75% 1.67% 1.65%
Ratio of Net Investment
Income to Average Net
Assets..................... 4.32% 4.58% 4.67% 5.00% 5.32% 5.23%
Portfolio Turnover........... 1%* 48% 34% 10% 14% 13%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses).................. 1.57% 1.59% 1.61% 1.67% 1.64% 1.62%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4% charged on certain redemptions
made within one year of purchase and declining to 0% after the sixth year.
If the sales charge was included, total returns would be lower. These
returns include combined Rule 12b-1 fees and service fees of up to 1% and do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See Notes to Financial Statements 51
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
YEAR ENDED SEPTEMBER 30,
CLASS C SHARES SIX MONTHS ENDED ----------------------------------------------
MARCH 31, 2007 2006 2005 2004 2003 2002
------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD................. $13.69 $13.32 $13.09 $13.11 $13.20 $13.24
------ ------ ------ ------ ------ ------
Net Investment Income...... .30(a) .61(a) .62(a) .64(a) .79(a) .70
Net Realized and
Unrealized Gain/Loss..... .03 .38 .27 .01 (.26) (.12)
------ ------ ------ ------ ------ ------
Total from Investment
Operations................. .33 .99 .89 .65 .53 .58
Less Distributions from
Net Investment Income...... .30 .62 .66 .67 .62 .62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD..................... $13.72 $13.69 $13.32 $13.09 $13.11 $13.20
====== ====== ====== ====== ====== ======
Total Return (b)............. 2.45%* 7.55% 6.98% 5.10%(d) 4.10%(c) 4.49%
Net Assets at End of the
Period (In millions)....... $194.1 $198.0 $200.0 $ 84.0 $ 34.3 $ 38.5
Ratio of Expenses to
Average Net Assets......... 2.58% 2.14% 1.80% 1.73% 1.67% 1.65%
Ratio of Net Investment
Income to Average Net
Assets..................... 4.32% 4.59% 4.62% 4.94%(d) 6.00%(c) 5.23%
Portfolio Turnover........... 1%* 48% 34% 10% 14% 13%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average
Net Assets (Excluding
Interest and Residual Trust
Expenses).................. 1.57% 1.59% 1.62% 1.65% 1.64% 1.62%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
(c) Certain non-recurring payments were made to Class C Shares, resulting in an
increase to the Total Return and Ratio of Net Investment Income to Average
Net Assets of .68% and .69%, respectively.
(d) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See footnote 7)
52 See Notes to Financial Statements
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Strategic Municipal Income Fund (the "Fund") is organized as a series
of the Van Kampen Tax Free Trust, a Delaware statutory trust, and is registered
as a diversified, open-end management investment company under the Investment
Company Act of 1940 (the "1940 Act"), as amended. The Fund's investment
objective is to seek to provide investors a high level of current income exempt
from federal income tax primarily through investment in a diversified portfolio
of medium- and lower-grade municipal securities. The Fund commenced investment
operations on June 28, 1985. The Fund offers Class A Shares, Class B Shares,
Class C Shares and Class I Shares. Each class of shares differs by its initial
sales load, contingent deferred sales charges, the allocation of class-specific
expenses and voting rights on matters affecting a single class. As of March 31,
2007, there have been no sales of Class I Shares.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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.
Futures 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.
Legal expenditures that are expected to result in the restructuring of or a plan
of reorganization for an investment are recorded as realized losses. The Fund
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 Fund 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 March 31, 2007, the Fund had $31,298,408 of when-issued or delayed
delivery purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
53
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
D. FEDERAL INCOME TAXES It is the Fund'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 Fund 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 these losses against any future realized capital
gains. At September 30, 2006, the Fund had an accumulated capital loss
carryforward for tax purposes of $115,213,774 which will expire according to the
following schedule.
<Table>
<Caption>
AMOUNT EXPIRATION
$ 9,610,374................................................. September 30, 2008
10,147,307................................................. September 30, 2009
16,221,240................................................. September 30, 2010
22,472,916................................................. September 30, 2011
3,607,121................................................. September 30, 2012
28,957,443................................................. September 30, 2013
24,197,373................................................. September 30, 2014
</Table>
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $1,592,285,457
==============
Gross tax unrealized appreciation........................... $ 86,959,830
Gross tax unrealized depreciation........................... (11,759,755)
--------------
Net tax unrealized appreciation on investments.............. $ 75,200,075
==============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed annually. 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 the year ended September 30,
2006 were as follows:
<Table>
Distributions paid from:
Ordinary income......................................... $ 57,989
Tax-exempt income....................................... 84,689,847
-----------
$84,747,836
===========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 192,687
Undistributed tax-exempt income............................. 5,043,163
</Table>
54
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Net realized gains or losses may differ for financial and tax reporting
purposes primarily as a result of the deferral of losses relating to wash sale
transactions.
F. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $15,102 as a result of credits earned on cash
balances.
G. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Fund enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interest in the dealer trusts' assets and cash
flows, which are in the form of inverse floating rate investments. The dealer
trusts fund the purchases of the fixed rate bonds by issuing floating rate notes
to third parties and allowing the Fund to retain residual interests in the
bonds. The Fund enters into shortfall agreements with the dealer trusts, which
commit the Fund to pay the dealer trusts, in certain circumstances, the
difference between the liquidation value of the fixed rate bonds held by the
dealer trusts and the liquidation value of the floating rate notes held by third
parties, as well as any shortfalls in interest cash flows. The residual
interests held by the Fund (inverse floating rate investments) include the right
of the Fund (1) to cause the holders of the floating rate notes to tender their
notes at par at the next interest rate reset date, and (2) to transfer the
municipal bond from the dealer trusts to the Fund, thereby collapsing the dealer
trusts. The Fund accounts for the transfer of bonds to the dealer trusts as
secured borrowings, with the securities transferred remaining in the Fund's
investments assets, and the related floating rate notes reflected as Fund
liabilities under the caption "Floating Rate Note Obligations" on the Statement
of Assets and Liabilities. The Fund records the interest income from the fixed
rate bonds under the caption "Interest" and records the expenses related to
floating rate note obligations and any administrative expenses of the dealer
trusts under the caption "Interest and Residual Trust Expenses" on the Fund's
Statement of Operations. The notes issued by the dealer trust have interest
rates that reset weekly and the floating rate note holders have the option to
tender their notes to the dealer trusts for redemption at par at each reset
date. At March 31, 2007, Fund investments with a value of $459,830,770 are held
by the dealer trusts and serve as collateral for the $307,040,000 in floating
rate notes outstanding at that date. Contractual maturities of the floating rate
notes and interest rates in effect at March 31, 2007 are presented on the
Portfolio of Investments.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management ("the Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $500 million.......................................... .50%
Over $500 million........................................... .45%
</Table>
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $20,200 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
55
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended March 31,
2007, the Fund recognized expenses of approximately $134,800 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Fund, as well as the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Accounting and Administrative Expenses" on the Statement of Operations.
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent of the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $319,600
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund and to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $171,468 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2007.
Appreciation/depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligation and do not affect the net asset value of the Fund. 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 Fund. The maximum annual benefit per
trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen, as distributor for the
Fund, received commissions on sales of the Fund's Class A shares of
approximately $167,200 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $69,700. Sales charges do not represent expenses of the
Fund.
56
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------- ---------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A........................ 7,129,723 $ 97,272,806 13,055,319 $ 173,891,015
Class B........................ 142,449 1,944,398 334,366 4,446,493
Class C........................ 779,564 10,720,031 1,973,723 26,414,985
---------- ------------- ----------- -------------
Total Sales...................... 8,051,736 $ 109,937,235 15,363,408 $ 204,752,493
========== ============= =========== =============
Dividend Reinvestment:
Class A........................ 1,799,945 $ 24,595,691 3,595,933 $ 47,892,378
Class B........................ 127,137 1,736,072 308,235 4,099,833
Class C........................ 166,798 2,296,262 371,317 4,979,001
---------- ------------- ----------- -------------
Total Dividend Reinvestment...... 2,093,880 $ 28,628,025 4,275,485 $ 56,971,212
========== ============= =========== =============
Repurchases:
Class A........................ (6,794,848) $ (92,792,117) (13,939,360) $(185,299,918)
Class B........................ (1,141,912) (15,573,547) (2,767,368) (36,807,094)
Class C........................ (1,254,272) (17,244,842) (2,899,964) (38,849,536)
---------- ------------- ----------- -------------
Total Repurchases................ (9,191,032) $(125,610,506) (19,606,692) $(260,956,548)
========== ============= =========== =============
</Table>
4. REDEMPTION FEE
The Fund assesses a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within 30 days of purchase. The redemption
fee is paid directly to the Fund. For the six months ended March 31, 2007, the
Fund received redemption fees of approximately $3,100 which are reported as part
of "Cost of Shares Repurchased" on the Statement of Changes in Net Assets. The
per share impact from redemption fees paid to the fund was less than $0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $7,739,882 and $198,996,747,
respectively.
6. 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 Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio, to manage the portfolio's effective yield, maturity and duration, or
generate potential gain. All of the Fund'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
57
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (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. Risks may arise as a result of the potential inability of the
counter parties to meet the terms of their contracts.
Summarized below are the specific types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Fund generally invests in exchange traded futures contracts on U.S. Treasury
Securities and typically closes the contract prior to the delivery date. These
contracts are generally used to manage the Fund's effective maturity and
duration. Upon entering into futures contracts, the Fund 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 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).
Transactions in future contracts for six months ended March 31, 2007, are as
follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... 2,670
Futures Opened.............................................. 14,815
Futures Closed.............................................. (15,880)
-------
Outstanding at March 31, 2007............................... 1,605
=======
</Table>
B. INVERSE FLOATING RATE INVESTMENTS The Fund may invest a portion of its assets
in inverse floating rate instruments, either through outright purchases of
inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Fund in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Fund to greater risk and increased costs. Leverage may cause the
Fund's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Fund's portfolio securities. The use of leverage may also cause
the Fund to liquidate portfolio positions when it may not be advantageous to do
so in order to satisfy its obligations with respect to inverse floating rate
instruments.
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the
58
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Plans, the Fund will incur annual fees of up to .25% of Class A average daily
net assets and up to 1.00% each of Class B and Class C average daily net assets.
These fees are accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $2,266,100 and $75,900
for Class B and Class C Shares, respectively. These amounts may be recovered
from future payments under the distribution plan or CDSC. To the extent the
unreimbursed receivable has been fully recovered, the distribution fee is
reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial statements. FIN 48 is effective for fiscal
years beginning after December 15, 2006 and is to be applied to all open tax
years as of the effective date. Recent SEC guidance allows implementing FIN in
the fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement period. As a result, the Fund will
incorporate FIN 48 in its semi annual report on March 31, 2008. The impact to
the Fund's financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosure.
59
VAN KAMPEN STRATEGIC MUNICIPAL INCOME FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
60
Van Kampen Strategic Municipal Income Fund
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.
(continued on next page)
Van Kampen Strategic Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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
(continued on back)
Van Kampen Strategic Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
39, 339, 539
STMISAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-01046P-Y03/07
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
California Insured Tax Free Fund 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 fund's financial statements and a list of fund investments
as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B, AND C
SHARE OR CLASS I SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE
PROSPECTUSES CONTAIN INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT
OBJECTIVES, RISKS, CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL
PROSPECTUS, CONTACT YOUR FINANCIAL ADVISOR OR DOWNLOAD ONE AT
VANKAMPEN.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
<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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
since 12/13/85 since 4/30/93 since 8/13/93 since 8/12/05
- -----------------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALES SALES W/O SALES SALES W/O SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 6.75% 6.50% 4.80% 4.80% 4.48% 4.48% 3.84%
10-year 5.42 4.91 4.91 4.91 4.66 4.66 --
5-year 5.16 4.14 4.97 4.72 4.42 4.42 --
1-year 4.75 -0.25 5.02 1.02 4.07 3.07 5.07
6-month 1.57 -3.27 1.54 -2.43 1.24 0.25 1.70
- -----------------------------------------------------------------------------------------------------
30-Day SEC Yield 3.29% 3.46% 2.71% 3.71%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The returns shown in this report do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Performance of share classes will vary due to differences in sales charges and
expenses. Average annual total return with sales charges includes payment of the
maximum sales charge of 4.75 percent for Class A shares, a contingent deferred
sales charge of 4.00 percent for Class B shares (in years one and two and
declining to zero after year five), a contingent deferred sales charge of 1.00
percent for Class C shares in year one and combined Rule 12b-1 fees and service
fees of up to 0.25 percent for Class A shares and up to 1.00 percent for Class B
and C shares. The since inception and 10-year returns for Class B shares reflect
the conversion of Class B shares into Class A shares eight years after purchase.
The since inception returns for Class C shares reflect the conversion of Class C
shares into Class A shares ten years after purchase. Class I shares are
available for purchase exclusively by investors through (i) tax-exempt
retirement plans with assets of at least $1 million (including 401(k) plans, 457
plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans,
defined benefit plans and non-qualified deferred compensation plans), (ii)
fee-based investment programs with assets of at least $1 million and (iii)
institutional clients with assets of at least $1 million. Class I shares are
offered without any sales charges on purchases or sales and do not include
combined Rule 12b-1 fees and service fees. Figures shown above assume
reinvestment of all dividends and capital gains. SEC yield is a calculation for
determining the amount of portfolio income, excluding non-income items as
prescribed by the SEC. Yields are subject to change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt bonds. The Lehman Brothers California Insured
Municipal Bond Index is comprised of insured CA municipal bond issues. The
indexes do not include any expenses, fees or sales charges, which would lower
performance. The indexes are unmanaged and should not be considered investments.
1
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to sell off until February when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and, as a result, the
yield differential between long maturity and short maturity issues was quite
small.
New issue supply rose dramatically during the period, increasing by 35 percent
versus the same six-month period a year ago, as relatively low interest rates
spurred municipalities to refinance their debt. Insured bond issuance also rose
considerably and represented more than half of the total new issue supply.
Demand for municipal bonds was robust as well, particularly for high-yield
securities as investors proved increasingly willing to take on more risk in
return for relatively higher yields. The strong demand caused credit spreads,
which were already near historically tight levels, to further narrow. As a
result, the lower-quality, higher yielding segment of the market considerably
outperformed, returning 185 basis points more than the investment-grade segment
for the overall period.
The State of California was the country's leading issuer of municipal bonds
during the period. New issuance for the state rose by 122 percent and
represented a 20 percent share of total market volume. Roughly half of all the
2
municipal bonds that came to market in the state were insured. California
started 2007 off on a generally good economic footing as the state's
unemployment rate remained low and the state contributed more than its share of
non-farm growth in February.
PERFORMANCE ANALYSIS
The fund returned 1.57 percent for the six months ended March 31, 2007 (Class A
shares, unadjusted for sales charges) underperforming the fund's benchmarks, the
Lehman Brothers California Insured Municipal Bond Index and the Lehman Brothers
Municipal Bond Index, which returned 2.06 percent and 1.93 percent for the
period, respectively.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- ------------------------------------------------------------------------------------------
LEHMAN BROTHERS LEHMAN BROTHERS
CALIFORNIA INSURED MUNICIPAL BOND
CLASS A CLASS B CLASS C CLASS I MUNICIPAL BOND INDEX INDEX
1.57% 1.54% 1.24% 1.70% 2.06% 1.93%
- ------------------------------------------------------------------------------------------
</Table>
The performance for the four share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definitions.
A variety of factors drove the fund's performance over the course of the period.
One of the biggest contributors to return was the fund's investment in
uninsured, investment-grade bonds, which represented approximately 3 percent of
total assets as of the end of the period. Recent fund enhancements provide for
greater investment flexibility here, allowing up to 20 percent of assets to be
invested in lower-rated--but still investment-grade-securities. (The remainder
must be invested in AAA rated insured bonds.) As such, we selectively added
holdings in BBB, A, and AA rated credits, which proved beneficial to performance
as credit spreads relative to the highest-quality bonds tightened during the
period, leading to the outperformance of bonds rated below AAA.
Another key driver of performance was the fund's yield curve and duration
positioning. Given the relatively flat shape of the curve throughout the period,
we invested in the very long end, specifically bonds with maturities of 25 to 30
years, in order to capture more attractive yields, which proved beneficial to
performance as this part of the curve outperformed. The fund's duration (a
measure of interest-rate sensitivity) was longer than that of the benchmark
Lehman Brothers California Insured Municipal Bond Index, which was also additive
to performance.
3
In an effort to further enhance yield, we added to the fund's holdings of
inverse floating-rate securities,* which performed well when interest rates
fell. As these securities can add some interest-rate risk to the portfolio, we
hedged that risk by purchasing U.S. Treasury futures. We also continued to
purchase current coupons bonds for absolute yield.
The fund's holdings in BBB rated tobacco revenue bonds helped boost performance,
as did holdings in the tax-supported debt sector (state and local general
obligation bonds), which not only performed well but were also overweighted in
the portfolio compared to the benchmark Lehman Brothers California Insured
Municipal Bond Index.
Various positions, however, detracted from the fund's performance during the
period. One of the primary contributors to the fund's underperformance versus
the benchmark index was the portfolio's smaller relative allocations to
transportation, utilities, and zero coupon bonds, as these sectors which
performed strongly during the period. Additionally, the fund's U.S. Treasury
hedge position also dampened performance during the period.
We continued to keep the fund's portfolio well diversified across a broad range
of sectors. As of the end of the period, tax-supported debt, utilities, and
education represented the fund's largest sector weightings. In addition, the
portfolio did not contain any holdings subject to the Alternative Minimum Tax
(AMT).
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
*An inverse floating-rate security, or "inverse floater", is a variable rate
security whose coupon rate changes in the opposite direction from the change in
the reference rate used to calculate the coupon rate.
4
<Table>
<Caption>
TOP FIVE SECTORS AS OF 3/31/07
Tax Allocation 25.1%
Public Education 18.0
Public Buildings 11.6
General Purpose 10.3
Water & Sewer 5.7
<Caption>
RATINGS ALLOCATIONS AS OF 3/31/07
AAA/Aaa 90.4%
A/A 4.7
BBB/Baa 4.9
</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 industries shown above. Ratings allocations are a percentage
of total investments. Top 5 sectors percentages are as a percentage of long-term
investments. 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. Ratings allocations based
upon ratings as issued by Standard & Poor's and Moody's, respectively.
5
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
6
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and C Shares;
and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
cost would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,015.69 $4.98
Hypothetical............................... 1,000.00 1,020.00 4.99
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,015.44 4.97
Hypothetical............................... 1,000.00 1,020.00 4.99
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,012.38 8.08
Hypothetical............................... 1,000.00 1,016.90 8.10
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,016.95 3.72
Hypothetical............................... 1,000.00 1,021.24 3.73
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.99%, 0.99%,
1.61% and 0.74% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 182/365 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
8
The following table shows what expenses a shareholder would have paid, excluding
interest and residual trust expenses.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,015.69 $4.72
Hypothetical............................... 1,000.00 1,020.24 4.73
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,015.44 4.72
Hypothetical............................... 1,000.00 1,020.24 4.73
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,012.38 7.83
Hypothetical............................... 1,000.00 1,017.15 7.85
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,016.95 3.47
Hypothetical............................... 1,000.00 1,021.49 3.48
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.94%, 0.94%,
1.56% and 0.69% for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 182/365 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA MUNICIPAL BONDS 110.1%
$ 1,925 Alhambra, CA City Elem Sch Dist Cap Apprec Ser A
(FSA Insd) (a).................................. * 09/01/20 $ 1,090,493
2,000 Anaheim, CA Pub Fin Auth Tax Alloc Rev (MBIA
Insd) (b)....................................... 9.170% 12/28/18 2,154,360
3,000 Baldy Mesa, CA Wtr Dist Ctf Partn Parity Wtr Sys
Impt Proj (AMBAC Insd).......................... 5.000 08/01/36 3,172,920
1,430 Bay Area Govt Assn CA Lease Rev Cap Proj Ser A
(AMBAC Insd) (a)................................ 5.250 07/01/17 1,547,503
2,735 Bay Area Govt Assn CA Lease West Sacramento Ser
A (XLCA Insd) (a)............................... 5.000 09/01/29 2,868,714
1,000 Bonita, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.000 08/01/28 1,054,200
1,070 Bonita, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.250 08/01/24 1,161,335
1,850 Brea & Olinda, CA Uni Sch Dist Rfdg Ser A (FSA
Insd) (a)....................................... 5.500 08/01/18 1,999,110
2,165 California Ed Fac Auth Rev Univ Pacific (MBIA
Insd)........................................... 5.875 11/01/20 2,327,353
2,000 California Infrastructure & Econ Dev Bk Rev Bay
Area Toll Brdg First Lien Ser A (FGIC Insd)
(Prerefunded @ 1/01/28)......................... 5.000 07/01/29 2,248,300
2,000 California Mobilehome Pk Fin Auth Rev Union City
Tropics Rfdg Ser A.............................. 4.500 12/15/36 1,959,720
1,050 California Spl Dist Assn Fin Corp Ctf Partn Pgm
Ser DD (FSA Insd) (a)........................... 5.625 01/01/27 1,072,386
1,050 California St (FGIC Insd)....................... 6.250 09/01/12 1,155,882
5,000 California St Dept Wtr Res Pwr Supply Rev Ser A
(MBIA Insd) (c)................................. 5.375 05/01/21 5,459,200
2,500 California St Pub Wks Brd Lease Dept
Corrections-Ten Admin Ser A (AMBAC Insd)........ 5.250 03/01/17 2,660,025
10,000 California St Rfdg (d).......................... 4.500 08/01/30 9,878,400
7,750 California St Rfdg (FGIC Insd).................. 5.000 02/01/23 7,897,327
1,000 California St Univ Rev & Colleges Systemwide Ser
A (AMBAC Insd).................................. 5.375 11/01/18 1,084,060
2,000 California Statewide Cmntys Dev Auth Rev Kaiser
Permanente Ser A................................ 4.750 04/01/33 2,000,780
1,900 California Statewide Cmntys Dev Auth Wtr Rev Ser
A (FSA Insd).................................... 5.000 10/01/26 2,018,085
1,000 Carson, CA Redev Agy Redev Proj Area No 1 Tax
Alloc (MBIA Insd)............................... 5.500 10/01/15 1,124,850
2,000 Castaic Lake Wtr Agy CA Ctf Partn Wtr Sys Impt
Proj Rfdg Ser A (MBIA Insd)..................... 7.000 08/01/12 2,315,240
3,000 Castaic Lake Wtr Agy CA Rev Ctf Partn Ser A
(MBIA Insd)..................................... 5.250 08/01/23 3,177,510
100 Cerritos, CA Cmnty College Election 2004 Ser A
(MBIA Insd)..................................... 5.000 08/01/26 106,005
</Table>
10 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 125 Cerritos, CA Cmnty College Election 2004 Ser A
(MBIA Insd)..................................... 5.000% 08/01/28 $ 132,432
2,725 Clearlake, CA Pub Fin Auth Rev Redev Agy
Highlands Pk Proj Ser A (MBIA Insd)............. 4.250 10/01/31 2,614,719
1,160 Coachella, CA Fin Auth Tax Proj 1 & 2 Rfdg Ser A
(XLCA Insd) (a)................................. 5.250 12/01/30 1,241,049
3,140 Colton, CA Jt Uni Sch Dist Election 2001 Ser C
(FGIC Insd) (a)................................. 5.250 02/01/25 3,393,963
3,400 Contra Costa, CA Cmnty College Election 2002
(MBIA Insd)..................................... 5.000 08/01/29 3,582,070
1,400 Corona, CA Redev Agy Tax Alloc Temescal Canyon
Proj Area Ser A (AGL Insd)...................... 4.375 11/01/26 1,378,230
2,890 Cucamonga Vly, CA Wtr Dist Ctf Partn Wtr Fac Fin
(MBIA Insd)..................................... 5.000 09/01/36 3,053,256
2,500 Culver City, CA Redev Agy Tax Alloc Redev Proj
Rfdg Ser A (AMBAC Insd)......................... 5.000 11/01/23 2,641,175
2,400 Dinuba, CA Redev Agy Tax Alloc Merged City Redev
Proj No 2 Rfdg (AMBAC Insd)..................... 5.000 09/01/34 2,524,128
2,870 Dinuba, CA Redev Agy Tax Alloc Merged City Redev
Proj No 2 Rfdg (AMBAC Insd)..................... 5.000 09/01/36 3,027,563
1,000 East Bay, CA Muni Util Dist Wtr Sys Rev (MBIA
Insd)........................................... 5.000 06/01/21 1,050,340
2,195 Elk Grove, CA Uni Sch Dist Spl Tax Cmnty Fac
Dist No 1 (MBIA Insd)........................... 5.000 12/01/35 2,310,764
1,280 Fillmore, CA Uni Sch Dist Election 2004 Ser A
(FSA Insd)...................................... 5.000 08/01/27 1,357,325
1,300 Folsom Cordova, CA Uni Sch Dist Sch Fac Impt
Dist No 2 Ser A (MBIA Insd)..................... 5.375 10/01/17 1,404,507
1,480 Fontana, CA Redev Agy Tax Alloc Dwntwn Redev
Proj Rfdg (MBIA Insd)........................... 5.000 09/01/21 1,530,157
650 Fresno, CA Jt Pwrs Fin Auth Ser A (FSA Insd).... 5.000 06/01/17 683,624
590 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/17 690,819
630 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/18 741,667
675 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/19 799,240
720 Fresno, CA Uni Sch Dist Rfdg Ser C (MBIA Insd)
(a)............................................. 5.900 08/01/20 857,398
2,000 Glendale, CA Redev Agy Tax Ctr Glendale Redev
Proj (MBIA Insd)................................ 5.250 12/01/20 2,172,840
2,425 Glendora, CA Pub Fin Auth Tax Alloc Proj No 1
Ser A (MBIA Insd)............................... 5.000 09/01/24 2,539,339
5,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Asset Bkd Sr Ser A1 (c).......... 5.125 06/01/47 5,210,188
</Table>
See Notes to Financial Statements 11
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 5,000 Golden St Tob Securitization Corp CA Tob
Settlement Rev Asset Bkd Sr Ser A1 (c).......... 5.750% 06/01/47 $ 5,210,187
2,230 Hanford, CA High Sch Dist Election 1998 Ser C
(MBIA Insd) (a)................................. 5.700 08/01/28 2,510,311
2,275 Hawaiian Gardens, CA Redev Agy Proj No 1 Tax
Alloc Ser A (AMBAC Insd)........................ 5.000 12/01/25 2,422,943
2,500 Huntington Beach, CA High Election 2004 (FSA
Insd)........................................... 5.000 08/01/26 2,656,800
2,000 Imperial Irr Dist CA Ctf Partn Elec Sys Proj
(FSA Insd)...................................... 5.250 11/01/23 2,135,660
1,950 Imperial Irr Dist CA Ctf Partn Wtr Sys Proj
(AMBAC Insd) (a)................................ 5.000 07/01/19 2,043,912
2,000 Inglewood, CA Redev Agy Tax Alloc Merged Redev
Proj Rfdg Ser A (AMBAC Insd).................... 5.250 05/01/23 2,246,960
1,715 Irvine, CA Pub Fac & Infrastructure Ser B (AMBAC
Insd) (a)....................................... 5.000 09/02/23 1,773,722
2,000 La Canada, CA Uni Sch Dist Election 2004 Ser A
(MBIA Insd)..................................... 5.500 08/01/28 2,196,320
2,000 La Quinta, CA Fin Auth Loc Ser A (AMBAC Insd)... 5.000 09/01/29 2,101,680
2,000 La Quinta, CA Fin Auth Loc Ser A (AMBAC Insd)... 5.250 09/01/24 2,172,300
2,000 La Quinta, CA Redev Agy Tax Alloc Redev Proj
Area No 1 (AMBAC Insd).......................... 5.000 09/01/22 2,124,340
2,500 Lehman Muni Tr Rcpt Various St Ser 07 K14 (MBIA
Insd) (b) (h)................................... 4.779 05/15/47 2,267,150
1,000 Livermore-Amador Vly Wtr Mgmt Agy CA Swr Rev Ser
A (AMBAC Insd).................................. 5.250 08/01/16 1,063,990
1,545 Long Beach, CA Bd Fin Auth Pub Lease Safety Fac
Proj (AMBAC Insd) (a)........................... 5.250 11/01/20 1,662,791
2,000 Long Beach, CA Cmnty College Dist 2002 Election
Ser B (FGIC Insd)............................... 5.000 05/01/25 2,122,040
1,975 Los Angeles, CA Ctf Partn Real Ppty Pgm Ser T
(MBIA Insd) (a)................................. 5.000 02/01/19 2,087,200
2,000 Los Angeles, CA Dept Wtr & Pwr Sys Ser C (MBIA
Insd)........................................... 5.000 07/01/26 2,124,980
1,230 Los Angeles, CA Mtg Rev FHA Sec 8 Asstd Proj
Rfdg Ser A (MBIA Insd).......................... 6.100 07/01/25 1,231,427
1,375 Los Angeles, CA Spl Assmt Landscaping & Dist No
96 Ser 1 (AMBAC Insd) (a)....................... 5.000 03/01/21 1,454,365
1,000 Los Angeles Cnty, CA Ctf Partn Disney Pkg Proj
Rfdg (AMBAC Insd)............................... 4.750 03/01/23 1,015,880
1,000 Los Angeles Cnty, CA Met Tran Auth Sales Tax Rev
Prop A First Tier Sr Rfdg Ser C (AMBAC Insd).... 5.000 07/01/23 1,033,270
1,265 Los Angeles Cnty, CA Sch Regionalized Business
Svcs Ctf Partn Cap Apprec Pooled Fin Ser A
(AMBAC Insd).................................... * 08/01/24 585,442
</Table>
12 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,000 Lynwood, CA Uni Sch Dist 2002 Election Ser A
(FSA Insd)...................................... 5.000% 08/01/27 $ 1,054,280
1,500 Modesto, CA Irr Rect Ctf Partn Cap Impt Ser A
(FSA Insd)...................................... 5.250 07/01/18 1,598,715
1,105 Monrovia, CA Fin Auth Lease Rev Hillside
Wilderness Preserve (AMBAC Insd)................ 5.000 12/01/20 1,181,355
2,000 Montclair, CA Redev Agy Tax Redev Proj No V Rfdg
(MBIA Insd)..................................... 5.000 10/01/20 2,115,440
1,570 Mountain View, CA Shoreline Tax Alloc Ser A
(MBIA Insd) (a)................................. 5.250 08/01/16 1,664,608
1,000 Mount Pleasant, CA Elem Sch Dist 1998 Election
Ser C (FSA Insd)................................ 5.500 03/01/26 1,067,320
1,105 National City, CA Cmnty Dev Commn Redev Proj
Rfdg Ser B (AMBAC Insd)......................... 5.250 08/01/32 1,186,229
1,000 Novato, CA Uni Sch Dist (FSA Insd).............. 5.000 08/01/28 1,054,200
3,915 Oak Grove, CA Sch Dist 1995 Election (FGIC
Insd)........................................... 5.250 08/01/25 4,126,958
1,000 Oakland, CA Uni Sch Dist Alameda Cnty (FSA
Insd)........................................... 5.000 08/01/17 1,026,270
1,300 Oceanside, CA Ctf Partn Rfdg Ser A (AMBAC
Insd)........................................... 5.200 04/01/23 1,376,479
3,025 Orange Cnty, CA Pub Fin Auth Lease Rev Juvenile
Justice Ctr Fac Rfdg (AMBAC Insd)............... 5.375 06/01/17 3,278,858
1,145 Pacifica, CA Wastewtr Rev Rfdg (AMBAC Insd)..... 5.000 10/01/25 1,206,819
1,200 Palm Desert, CA Fin Auth Tax Alloc Rev Proj Area
No 4 Rfdg Ser A (MBIA Insd)..................... 5.000 10/01/29 1,272,168
1,340 Palm Springs, CA Fin Lease Rev Convention Ctr
Proj Rfdg Ser A (MBIA Insd)..................... 5.250 11/01/19 1,438,450
3,545 Panama-Buena Vista Uni Sch Dist CA Ctf Partn Sch
Constr Proj (MBIA Insd)......................... 5.000 09/01/30 3,742,456
3,065 Placentia Yorba Linda, CA Uni Sch Dist Ctf Partn
(FGIC Insd)..................................... 5.000 10/01/30 3,230,970
2,020 Pomona, CA Pub Fin Auth Rev Merged Redev Proj
Ser AD (MBIA Insd) (a).......................... 5.000 02/01/15 2,116,697
1,110 Pomona, CA Pub Fin Auth Rev Merged Redev Proj
Ser AD (MBIA Insd) (a).......................... 5.000 02/01/16 1,163,136
1,430 Pomona, CA Pub Fin Auth Rev Swr Proj Ser BA
(AMBAC Insd).................................... 4.500 12/01/46 1,417,359
1,360 Port Hueneme, CA Ctf Partn Cap Impt Pgm Rfdg
(MBIA Insd)..................................... 6.000 04/01/19 1,613,694
1,055 Poway, CA Redev Agy Tax Alloc Paguay Redev Proj
(AMBAC Insd) (a)................................ 5.375 06/15/20 1,136,921
3,000 Rancho Cucamonga, CA Redev Agy Rancho Redev Proj
(MBIA Insd)..................................... 5.375 09/01/25 3,184,200
925 Redding, CA Elec Sys Rev Ctf Partn (MBIA Insd)
(b) (e)......................................... 9.156 07/01/22 1,270,469
</Table>
See Notes to Financial Statements 13
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,400 Redding, CA Redev Agy Tax Alloc Canby Hilltop
Cypress Redev Ser A (MBIA Insd)................. 5.000% 09/01/23 $ 1,482,586
3,775 Riverside, CA Lease Rev Ctf Partn Galleria at
Tyler Pub Impt (FGIC Insd)...................... 5.000 09/01/36 3,988,250
3,775 Riverside Cnty, CA Ctf Partn Historic Courthouse
Proj Ser B (FGIC Insd) (a)...................... 5.000 11/01/27 3,983,720
6,380 Rohnert Pk, CA Cmnty Dev Comm Tax Alloc Rev Hsg
Redev Proj Ser H (FGIC Insd) (c) (d)............ 4.375 08/01/30 6,195,219
2,160 Roseville, CA Jt Uni High Sch Election 2004 Ser
A (FGIC Insd) (a)............................... 5.000 08/01/26 2,295,475
70 Sacramento, CA City Fin Auth Rev Cap Impt (AMBAC
Insd)........................................... 5.000 12/01/33 73,121
2,000 Sacramento Cnty, CA San Dist Fin Auth Rev
Sacramento Regl Cnty San (FGIC Insd)............ 5.000 12/01/29 2,129,220
2,000 San Francisco, CA City & Cnty Second Ser Issue
26B (FGIC Insd)................................. 5.000 05/01/22 2,081,660
2,675 San Jose, CA Fin Auth Lease Rev Convention Ctr
Proj Rfdg Ser F (MBIA Insd)..................... 5.000 09/01/17 2,807,707
2,250 San Jose, CA Redev Agy Tax Alloc Merged Area
Redev Proj Rfdg Ser C (MBIA Insd)............... 4.250 08/01/30 2,158,133
2,290 San Jose, CA Uni Sch Dist Ctf Partn Rfdg (FGIC
Insd)........................................... 4.500 06/01/24 2,312,259
1,000 San Leandro, CA Ctf Partn Lib & Fire Stations
Fin (AMBAC Insd)................................ 5.750 11/01/29 1,064,940
1,000 San Leandro, CA Jt Proj Area Fin (MBIA Insd).... 5.100 12/01/26 1,056,900
1,340 Sanger, CA Uni Sch Dist Ctf Cap Impt Prog (FSA
Insd) (a)....................................... 5.000 03/01/25 1,412,722
2,000 Santa Fe Springs, CA Cmnty Dev Comm Tax Alloc
Rfdg Ser A (MBIA Insd) (a)...................... 5.375 09/01/20 2,121,940
2,065 Santa Fe Springs, CA Cmnty Dev Comm Tax Alloc
Rfdg Ser A (MBIA Insd).......................... 5.375 09/01/21 2,183,056
2,450 Santa Monica, CA Cmnty College Rfdg Ser A (AMBAC
Insd) (a)....................................... 5.250 02/01/23 2,621,623
1,460 Shafter, CA Cmnty Dev Agy Tax Alloc Rev Cmnty
Dev Proj Area No 1 Rfdg Ser A (FSA Insd)........ 5.000 11/01/36 1,543,658
1,000 Shasta, CA Jt Pwr Fin Auth Cnty Admin Bldg Proj
Ser A (MBIA Insd)............................... 5.250 04/01/22 1,064,200
1,000 South Gate, CA Pub Fin Auth South Gate Redev
Proj No 1 (XLCA Insd)........................... 5.750 09/01/22 1,106,290
2,150 Temecula, CA Redev Agy Tax Alloc Rev Temecula
Redev Proj No 1 (MBIA Insd)..................... 5.125 08/01/27 2,222,391
1,250 Tobacco Securitization Auth Southern CA Tob
Settlement (Acquired 1/07/05, Cost $1,369,742)
(b) (i)......................................... 8.902 06/01/46 1,200,425
2,500 Turlock, CA Pub Fin Auth Tax Alloc Rev (FSA
Insd)........................................... 5.000 09/01/36 2,641,225
</Table>
14 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ---------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 1,540 Vallejo City, CA Uni Sch Dist Rfdg Ser A (MBIA
Insd) (f)....................................... 5.900% 02/01/20 $ 1,832,277
2,000 Ventura Cnty, CA Ctf Partn Pub Fin Auth Ser I
(FSA Insd)...................................... 5.250 08/15/16 2,075,780
3,655 Woodland, CA Fin Auth Wastewater Rev Second Sr
Lien (MBIA Insd) (a)............................ 5.000 03/01/30 3,846,376
------------
TOTAL LONG-TERM INVESTMENTS 110.1%
(Cost $242,190,320)......................................................... 253,739,425
TOTAL SHORT-TERM INVESTMENTS 0.2%
(Cost $500,000)............................................................. 500,000
------------
TOTAL INVESTMENTS 110.3%
(Cost $242,690,320)......................................................... 254,239,425
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (6.4%)
(Cost ($14,785,000))
(14,785) Note with interest rates ranging from 3.64% to 3.68% at March 31,
2007 and a contractual maturities of collateral ranging from 2021
to 2047 (See Note 1) (g).......................................... (14,785,000)
------------
TOTAL NET INVESTMENTS 103.9%
(Cost $227,905,320)......................................................... 239,454,425
LIABILITIES IN EXCESS OF OTHER ASSETS (3.9%).................................. (8,979,446)
------------
NET ASSETS 100.0%............................................................. $230,474,979
============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) The Fund owns 100% of the outstanding bond issuance.
(b) Inverse Floating Rate
(c) Underlying security related to Inverse Floaters entered into by the Fund.
See Notes 1 and 6B.
(d) Security purchased on a when-issued or delayed delivery basis.
(e) Escrowed to Maturity
(f) All or a portion of this security has been physically segregated in
connection with open futures contracts
(g) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2007.
See Notes to Financial Statements 15
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
(h) 144A-Private Placement security which is exempt from registration under Rule
144A of the Securities Act of 1933, as amended. This security may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(i) This security is restricted and may be resold only in transactions exempt
from registration which are normally those transactions with qualified
institutional buyers. Restricted securities comprise 0.1% of net assets.
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FSA--Financial Security Assurance Inc.
MBIA--Municipal Bond Investors Assurance Corp.
XLCA--XL Capital Assurance Inc.
FUTURES CONTRACTS OUTSTANDING AS OF MARCH 31, 2007:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS:
U.S. Treasury Bonds Futures, June 2007 (Current Notional
Value of $111,250 per contract)........................... 182 $55,170
U.S. Treasury Notes 10-Year Futures, June 2007 (Current
Notional Value of $108,125 per contract).................. 70 28,234
--- -------
252 $83,404
=== =======
</Table>
16 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $242,690,320)....................... $254,239,425
Cash........................................................ 282,531
Receivables:
Investments Sold.......................................... 6,234,122
Interest.................................................. 2,522,568
Fund Shares Sold.......................................... 171,285
Variation Margin on Futures............................... 59,840
Other....................................................... 158,529
------------
Total Assets............................................ 263,668,300
------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 14,785,000
Investments Purchased..................................... 17,544,366
Fund Shares Repurchased................................... 231,171
Income Distributions...................................... 200,397
Investment Advisory Fee................................... 92,582
Distributor and Affiliates................................ 21,521
Trustees' Deferred Compensation and Retirement Plans........ 238,650
Accrued Expenses............................................ 79,634
------------
Total Liabilities....................................... 33,193,321
------------
NET ASSETS.................................................. $230,474,979
============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $218,099,028
Net Unrealized Appreciation................................. 11,632,509
Accumulated Undistributed Net Investment Income............. 523,339
Accumulated Net Realized Gain............................... 220,103
------------
NET ASSETS.................................................. $230,474,979
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $194,091,055 and 10,520,621 shares of
beneficial interest issued and outstanding)............. $ 18.45
Maximum sales charge (4.75%* of offering price)......... 0.92
------------
Maximum offering price to public........................ $ 19.37
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $21,757,038 and 1,160,715 shares of
beneficial interest issued and outstanding)............. $ 18.74
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $10,630,339 and 575,918 shares of
beneficial interest issued and outstanding)............. $ 18.46
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $3,996,547 and 216,704 shares of
beneficial interest issued and outstanding)............. $ 18.44
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements 17
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $ 5,492,110
-----------
EXPENSES:
Investment Advisory Fee..................................... 541,635
Distribution (12b-1) and Service Fees
Class A................................................... 238,905
Class B................................................... 29,554
Class C................................................... 44,382
Transfer Agent Fees......................................... 57,904
Interest and Residual Trust Expenses........................ 54,968
Custody..................................................... 47,714
Accounting and Administrative Expenses...................... 40,037
Professional Fees........................................... 33,145
Reports to Shareholders..................................... 29,938
Trustees' Fees and Related Expenses......................... 21,722
Registration Fees........................................... 1,526
Other....................................................... 17,419
-----------
Total Expenses.......................................... 1,158,849
Less Credits Earned on Cash Balances.................... 4,026
-----------
Net Expenses............................................ 1,154,823
-----------
NET INVESTMENT INCOME....................................... $ 4,337,287
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 451,538
Futures................................................... (167,001)
-----------
Net Realized Gain........................................... 284,537
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 12,516,570
-----------
End of the Period:
Investments............................................. 11,549,105
Futures................................................. 83,404
-----------
11,632,509
-----------
Net Unrealized Depreciation During the Period............... (884,061)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $ (599,524)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $ 3,737,763
===========
</Table>
18 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 4,337,287 $ 8,831,670
Net Realized Gain.................................... 284,537 926,419
Net Unrealized Depreciation During the Period........ (884,061) (685,615)
------------ ------------
Change in Net Assets from Operations................. 3,737,763 9,072,474
------------ ------------
Distributions from Net Investment Income:
Class A Shares..................................... (3,673,260) (7,346,494)
Class B Shares..................................... (445,052) (1,198,106)
Class C Shares..................................... (160,752) (355,129)
Class I Shares..................................... (79,435) (110,088)
------------ ------------
(4,358,499) (9,009,817)
------------ ------------
Distributions from Net Realized Gain:
Class A Shares..................................... (785,137) (2,396,767)
Class B Shares..................................... (94,337) (396,499)
Class C Shares..................................... (40,739) (152,451)
Class I Shares..................................... (15,774) (31,914)
------------ ------------
(935,987) (2,977,631)
------------ ------------
Total Distributions.................................. (5,294,486) (11,987,448)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (1,556,723) (2,914,974)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 19,786,673 38,204,676
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 3,834,103 8,620,544
Cost of Shares Repurchased........................... (20,694,959) (51,173,595)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 2,925,817 (4,348,375)
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS................ 1,369,094 (7,263,349)
NET ASSETS:
Beginning of the Period.............................. 229,105,885 236,369,234
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $523,339 and
$544,551, respectively)............................ $230,474,979 $229,105,885
============ ============
</Table>
See Notes to Financial Statements 19
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $18.57 $18.80 $18.93 $18.84 $19.45 $18.64
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.35(a) 0.71(a) 0.72 0.75 0.74 0.77
Net Realized and Unrealized
Gain/Loss...................... (0.04) 0.03 0.01 0.06 (0.44) 0.85
------ ------ ------ ------ ------ ------
Total from Investment Operations... 0.31 0.74 0.73 0.81 0.30 1.62
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.35 0.73 0.74 0.72 0.75 0.78
Distributions from Net Realized
Gain........................... 0.08 0.24 0.12 -0- 0.16 0.03
------ ------ ------ ------ ------ ------
Total Distributions................ 0.43 0.97 0.86 0.72 0.91 0.81
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $18.45 $18.57 $18.80 $18.93 $18.84 $19.45
====== ====== ====== ====== ====== ======
Total Return (b)................... 1.57%* 4.14% 3.96% 4.42% 1.67% 9.01%
Net Assets at End of the Period (In
millions)........................ $194.1 $190.0 $188.0 $183.0 $195.4 $200.4
Ratio of Expenses to Average Net
Assets........................... 0.99% 0.91% 0.92% 0.89% 0.87% 0.87%
Ratio of Net Investment Income to
Average Net Assets............... 3.80% 3.86% 3.83% 4.00% 3.93% 4.18%
Portfolio Turnover................. 14%* 31% 25% 16% 25% 32%
SUPPLEMENTAL RATIO:
Ratios of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 0.94% 0.91% 0.92% 0.89% 0.87% 0.87%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
20 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $18.86 $19.07 $19.03 $18.82 $19.44 $18.65
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.36(a) 0.77(a) 0.79 0.72 0.60 0.63
Net Realized and Unrealized
Gain/Loss...................... (0.05) 0.02 (0.03) 0.07 (0.45) 0.84
------ ------ ------ ------ ------ ------
Total from Investment Operations... 0.31 0.79 0.76 0.79 0.15 1.47
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.35 0.76 0.60 0.58 0.61 0.65
Distributions from Net Realized
Gain........................... 0.08 0.24 0.12 -0- 0.16 0.03
------ ------ ------ ------ ------ ------
Total Distributions................ 0.43 1.00 0.72 0.58 0.77 0.68
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $18.74 $18.86 $19.07 $19.03 $18.82 $19.44
====== ====== ====== ====== ====== ======
Total Return (b)................... 1.54%(c)* 4.40%(c) 4.10%(c) 4.29%(c) 0.87% 8.16%
Net Assets at End of the Period (In
millions)........................ $ 21.8 $ 25.3 $ 33.7 $ 41.1 $ 49.8 $ 53.0
Ratio of Expenses to Average Net
Assets........................... 0.99%(c) 0.69%(c) 0.81%(c) 1.09%(c) 1.62% 1.63%
Ratio of Net Investment Income to
Average Net Assets............... 3.80%(c) 4.08%(c) 3.96%(c) 3.80%(c) 3.18% 3.42%
Portfolio Turnover................. 14%* 31% 25% 16% 25% 32%
SUPPLEMENTAL RATIO:
Ratios of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 0.94%(c) 0.69%(c) 0.81%(c) 1.09%(c) 1.62% 1.63%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining to 0% after the fifth year.
If the sales charge was included, total returns would be lower. These
returns include combined Rule 12b-1 fees and service fees of up to 1% and do
not reflect the deduction of taxes that a shareholder would pay on the Fund
distributions or the redemption of Fund shares.
(c) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See footnote 7).
See Notes to Financial Statements 21
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $18.58 $18.81 $18.93 $18.82 $19.43 $18.64
------ ------ ------ ------ ------ ------
Net Investment Income............ 0.29(a) 0.57(a) 0.59 0.61 0.61 0.64
Net Realized and Unrealized
Gain/Loss...................... (0.04) 0.03 0.01 0.08 (0.45) 0.83
------ ------ ------ ------ ------ ------
Total from Investment Operations... 0.25 0.60 0.60 0.69 0.16 1.47
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... 0.29 0.59 0.60 0.58 0.61 0.65
Distributions from Net Realized
Gain........................... 0.08 0.24 0.12 -0- 0.16 0.03
------ ------ ------ ------ ------ ------
Total Distributions................ 0.37 0.83 0.72 0.58 0.77 0.68
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $18.46 $18.58 $18.81 $18.93 $18.82 $19.43
====== ====== ====== ====== ====== ======
Total Return (b)................... 1.24%(d)* 3.36% 3.26%(d) 3.75%(d) 0.92%(c) 8.16%
Net Assets at End of the Period (In
millions)........................ $ 10.6 $ 9.9 $ 12.0 $ 12.6 $ 18.1 $ 15.0
Ratio of Expenses to Average Net
Assets........................... 1.61%(d) 1.66% 1.61%(d) 1.59%(d) 1.62% 1.63%
Ratio of Net Investment Income to
Average Net Assets............... 3.18%(d) 3.11% 3.15%(d) 3.30%(d) 3.20%(c) 3.41%
Portfolio Turnover................. 14%* 31% 25% 16% 25% 32%
SUPPLEMENTAL RATIO:
Ratios of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses)......... 1.56%(d) 1.66% 1.61%(d) 1.59%(d) 1.62% 1.63%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1% charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
(c) Certain non-recurring payments were made to Class C Shares, resulting in an
increase to the Total Return and Ratio of Net Investment Income to Average
Net Assets of .03%.
(d) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See footnote 7).
22 See Notes to Financial Statements
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
AUGUST 12, 2005
CLASS I SHARES SIX MONTHS (COMMENCEMENT OF
ENDED YEAR ENDED OPERATIONS) TO
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
2007 2006 2005
-----------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD..... $18.57 $18.80 $18.87
------ ------ ------
Net Investment Income...................... 0.37(a) 0.74(a) 0.09
Net Realized and Unrealized Gain/Loss...... (0.04) 0.05 (0.06)
------ ------ ------
Total from Investment Operations............. 0.33 0.79 0.03
------ ------ ------
Less:
Distributions from Net Investment Income... 0.38 0.78 0.10
Distributions from Net Realized Gain....... 0.08 0.24 -0-
------ ------ ------
Total Distributions.......................... 0.46 1.02 0.10
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD........... $18.44 $18.57 $18.80
====== ====== ======
Total Return (b)............................. 1.70%* 4.40% 0.17%*
Net Assets at End of the Period (In
millions).................................. $ 4.0 $ 3.9 $ 2.6
Ratio of Expenses to Average Net Assets...... 0.74% 0.66% 0.73%
Ratio of Net Investment Income to Average Net
Assets..................................... 4.05% 4.11% 4.03%
Portfolio Turnover........................... 14%* 31% 25%
SUPPLEMENTAL RATIO:
Ratios of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses).................................. 0.69% 0.66% 0.73%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period. These returns do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See Notes to Financial Statements 23
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen California Insured Tax Free Fund (the "Fund") is organized as a
series of the Van Kampen Tax Free Trust, a Delaware statutory trust, and is
registered as a diversified, open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"), as amended. The Fund's
investment objective is to provide only California investors with a high level
of current income exempt from federal and California income taxes, with
liquidity and safety of principal, primarily through investment in a diversified
portfolio of insured California municipal securities. The Fund commenced
investment operations on December 13, 1985. The Fund offers Class A Shares,
Class B Shares, Class C Shares and Class I Shares. Each class of shares differs
by its initial sales load, contingent deferred sales charges, the allocation of
class specific expenses and voting rights on matters affecting a single class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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 last reported 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. Futures contracts are valued at the settlement price established each
day on the exchange on which they are traded. Interest rate swaps are valued
using market quotations from brokers. 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
Fund 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 Fund 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 March 31, 2007, the Fund had $17,544,366 of when-issued and
delayed delivery purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
24
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
D. FEDERAL INCOME TAXES It is the Fund'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.
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $242,476,081
============
Gross tax unrealized appreciation........................... $ 12,048,267
Gross tax unrealized depreciation........................... (284,923)
------------
Net tax unrealized appreciation on investments.............. $ 11,763,344
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed at least annually. Distributions from net realized gains for book
purposes may include short-term capital gains and a portion of futures gains,
which are included in ordinary income for tax purposes.
The tax character of distributions paid during the year ended September 30,
2006 was as follows:
<Table>
Distributions paid from:
Ordinary Income........................................... $ 95,063
Tax exempt income......................................... 9,038,938
Long-term capital gain.................................... 2,883,508
-----------
$12,017,509
===========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 881
Undistributed tax-exempt.................................... 757,779
Undistributed long-term capital gain........................ 863,817
</Table>
F. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Fund enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interest in the dealer trusts' assets and cash
flows, which are in the form of inverse floating rate investments. The dealer
trusts fund the purchases of the fixed rate bonds by issuing floating rate notes
to third parties and allowing the Fund to retain residual interests in the
bonds. The Fund enters into shortfall and forbearance agreements with the dealer
trusts, which commit the Fund to pay the dealer trusts, in certain
circumstances, the difference between the liquidation value of the fixed rate
bonds held by the dealer trusts and the liquidation value of the floating rate
notes held by third parties, as well as any shortfalls in interest cash flows.
The residual interests held by the Fund (inverse floating rate investments)
include the right of the Fund (1) to cause the holders of the floating rate
notes to tender their notes at par at the next interest rate reset date, and (2)
to transfer the municipal bond from the dealer trusts to the Fund, thereby
collapsing the dealer trusts. The Fund accounts for the transfer of bonds to the
dealer trusts as secured borrowings, with the
25
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
securities transferred remaining in the Fund's investments assets, and the
related floating rate notes reflected as Fund liabilities under the caption
"Floating Rate Note Obligations" on the Statement of Assets and Liabilities. The
notes issued by the dealer trusts have interest rates that reset weekly and the
floating rate note holders have the option to tender their notes to the dealer
trusts for redemption at par at each reset date. At March 31, 2007, Fund
investments with a value of $22,074,794 are held by the dealer trusts and serve
as collateral for the $14,785,000 in floating rate notes outstanding at that
date. Contractual maturities of the floating rate notes and interest rates in
effect at March 31, 2007 are presented on the Portfolio of Investments.
G. INSURANCE EXPENSE The Fund typically invests in insured bonds. Any portfolio
securities not specifically covered by a primary insurance policy are insured
secondarily through the Fund's portfolio insurance policy. Insurance premiums
are based on the daily balances of uninsured bonds in the portfolio of
investments and are charged to expense on an accrual basis. The insurance policy
guarantees the timely payment of principal and interest on the securities in the
Fund's portfolio.
H. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $4,026 as a result of credits earned on cash
balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $100 million.......................................... 0.500%
Next $150 million........................................... 0.450%
Next $250 million........................................... 0.425%
Over $500 million........................................... 0.400%
</Table>
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $2,400 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
Under separate Legal services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended March 31,
2007, the Fund recognized expenses of approximately $30,500 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting services to the Fund, as well as the salary, benefits and
related costs of the CCO and related support staff paid by Van Kampen. Services
provided pursuant to the Legal Services agreement are reported as part of
"Professional Fees" on the Statement of Operations. Services provided pursuant
to the Accounting Services and CCO Employment agreement are reported as part of
"Accounting and Administrative Expenses" on the Statement of Operations.
26
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $48,700
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund, and to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $134,004 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2007.
Appreciation/depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligation and do not affect the net asset value of the Fund. 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 Fund. The maximum annual benefit per
trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $43,000 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $2,500. Sales charges do not represent expenses of the
Fund.
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A........................... 952,226 $ 17,657,249 1,812,267 $ 33,433,166
Class B........................... 22,732 427,502 49,974 934,624
Class C........................... 76,007 1,409,363 108,337 2,004,651
Class I........................... 15,751 292,559 100,465 1,832,235
---------- ------------ ---------- ------------
Total Sales......................... 1,066,716 $ 19,786,673 2,071,043 $ 38,204,676
========== ============ ========== ============
Dividend Reinvestment:
Class A........................... 174,340 $ 3,232,135 380,862 $ 7,032,383
Class B........................... 19,976 376,328 60,585 1,135,274
Class C........................... 7,033 130,431 16,821 310,888
Class I........................... 5,135 95,209 7,689 141,999
---------- ------------ ---------- ------------
Total Dividend Reinvestment......... 206,484 $ 3,834,103 465,957 $ 8,620,544
========== ============ ========== ============
</Table>
27
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Repurchases:
Class A........................... (836,047) $(15,490,382) (1,962,076) $(36,181,704)
Class B........................... (221,194) (4,163,431) (536,985) (10,050,277)
Class C........................... (42,312) (785,862) (229,765) (4,227,565)
Class I........................... (13,743) (255,284) (38,520) (714,049)
---------- ------------ ---------- ------------
Total Repurchases................... (1,113,296) $(20,694,959) (2,767,346) $(51,173,595)
========== ============ ========== ============
</Table>
4. REDEMPTION FEE
The Fund assesses a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within seven days of purchase. The
redemption fee is paid directly to the Fund. For the six months ended March 31,
2007, the Fund received redemption fees of approximately $1,800, which are
reported as part of "Cost of Shares Repurchased" on the Statements of Changes in
Net Assets. The per share impact from redemption fees paid to the Fund was less
than $0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $57,366,398 and $33,421,099,
respectively.
6. 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 Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio and to manage the portfolio's effective yield, maturity and duration.
All of the Fund'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 gain or loss is
recognized accordingly, except when taking delivery of a security underlying a
futures contract. In these instances, the recognition of gain or loss is
postponed until the disposal of the security underlying the futures contract.
Summarized below are the specific types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS During the period, the Fund invested in futures contracts,
a type of derivative. A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Fund generally invests in futures on U.S. Treasury Notes and typically closes
the contract prior to the delivery date. The contracts are generally used to
manage the portfolio's effective maturity and duration. Upon entering into
futures contracts, the Fund 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 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.
28
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
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).
Transactions in futures contracts for the six months ended March 31, 2007,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... -0-
Futures Opened.............................................. 437
Futures Closed.............................................. (185)
----
Outstanding at March 31, 2007............................... 252
====
</Table>
B. INVERSE FLOATING RATE INVESTMENTS The Fund may invest a portion of its assets
in inverse floating rate instruments, either through outright purchases of
inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Fund in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Fund to greater risk and increased costs. Leverage may cause the
Fund's net asset value to be more volatile than if it had nor been leverage
because leverage tends to magnify the effect of any increases or decreases in
the value of the Fund's portfolio securities. The use of leverage may also cause
the Fund to liquidate portfolio positions when it may not be advantageous to do
so in order to satisfy its obligations with respect to inverse floating rate
instruments.
C. INTEREST RATE SWAPS The Fund may enter into forward interest rate swap
transactions intended to help the Fund manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Fund's interest rate sensitivity with that of the broader municipal market.
Forward interest rate swap transactions involve the Fund's agreement with a
counterparty to pay, in the future, a fixed or variable rate payment in exchange
for the counterparty paying the Fund a variable or fixed rate payment, the
accruals for which would begin at a specified date in the future (the "effective
date"). The amount of the payment obligation is based on the notional amount of
the forward swap contract and the termination date of the swap (which is akin to
a bond's maturity). The value of the Fund's swap commitment would increase or
decrease based primarily on the extent to which long-term interest rates for
bonds having a maturity of the swap's termination date increases or decreases.
The Fund may terminate a swap contract prior to the effective date, at which
point a realized gain or loss is recognized. When a forward swap is terminated,
it ordinarily does not involve the delivery of securities or other underlying
assets or principal, but rather is settled in cash on a net basis. The Fund
intends, but is not obligated, to terminate its forward swaps before the
effective date. Accordingly, the risk of loss with respect to the swap
counterparty on such transactions is limited to the credit risk associated with
a counterparty failing to honor its commitment to pay any realized gain to the
Fund upon termination. To reduce such credit risk, all counterparties are
required to pledge collateral daily (based on the daily valuation of each swap)
on behalf of the Fund with a value approximately equal to the amount of any
unrealized gain. Reciprocally, when the Fund has an unrealized loss on a swap
29
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
contract, the Fund has instructed the custodian to pledge cash or liquid
securities as collateral with a value approximately equal to the amount of the
unrealized loss. Collateral pledges are monitored and subsequently adjusted if
and when the swap valuations fluctuate. Restricted cash, if any, for segregating
purposes is shown on the Statement of Assets and Liabilities.
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the Plans, the Fund
will incur annual fees of up to .25% of Class A average daily net assets and up
to 1.00% each of Class B and Class C average daily net assets. These fees are
accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $0 and $8,700 for Class
B and Class C Shares, respectively. These amounts may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
receivable has been fully recovered, the distribution fee is reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial statements. FIN 48 is effective for the fiscal
years beginning after December 15, 2006 and is to be applied to all open tax
years as of the effective date. Recent SEC guidance allows implementing FIN 48
in the fund NAV calculations as late as the funds last NAV calculation in the
first required financial statement period. As a result, the Fund will
incorporate FIN 48 in its semi annual report on March 31, 2008. The impact to
the Fund's financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
30
VAN KAMPEN CALIFORNIA INSURED TAX FREE FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
31
Van Kampen California Insured Tax Free Fund
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.
(continued on next page)
Van Kampen California Insured Tax Free Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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
(continued on back)
Van Kampen California Insured Tax Free Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
41, 341, 541, 641
CAISAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-00920P-Y03/07
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Municipal Income Fund 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 fund's financial statements and a list of fund investments
as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B AND C SHARE
OR CLASS I SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE PROSPECTUSES
CONTAIN INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT OBJECTIVES,
RISKS, CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL PROSPECTUS, CONTACT
YOUR FINANCIAL ADVISOR OR DOWNLOAD ONE AT VANKAMPEN.COM. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
since 8/1/90 since 8/24/92 since 8/13/93 since 8/12/05
- ---------------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALE SALES W/O SALES SALES W/O SALES SALES W/O SALES
TOTAL RETURNS CHARGES CHARGE CHARGES CHARGE CHARGES CHARGE CHARGES
Since Inception 5.90% 5.59% 4.68% 4.68% 4.10% 4.10% 4.98%
10-year 4.84 4.33 4.20 4.20 4.04 4.04 --
5-year 5.53 4.51 4.74 4.49 4.73 4.73 --
1-year 5.72 0.69 5.02 1.02 4.95 3.95 5.98
6-month 1.73 -3.10 1.28 -2.69 1.35 0.36 1.86
- ---------------------------------------------------------------------------------------------------
30-Day SEC Yield 3.37% 2.79% 2.79% 3.79%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The returns shown in this report do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Performance of share classes will vary due to differences in sales charges and
expenses. Average annual total return with sales charges includes payment of the
maximum sales charge of 4.75 percent for Class A shares, a contingent deferred
sales charge of 4.00 percent for Class B shares (in year one and declining to
zero after year six), a contingent deferred sales charge of 1.00 percent for
Class C shares in year one and combined Rule 12b-1 fees and service fees of up
to 0.25 percent for Class A shares and up to 1.00 percent for Class B and C
shares. The since inception and 10-year returns for Class B shares reflect the
conversion of Class B shares into Class A shares eight years after purchase. The
since inception returns for Class C shares reflect the conversion of Class C
shares into Class A shares ten years after purchase. Class I shares are
available for purchase exclusively by investors through (i) tax-exempt
retirement plans with assets of at least $1 million (including 401(k) plans, 457
plans, employer-sponsored 403(b) plans, profit sharing and money purchase plans,
defined benefit plans and non-qualified deferred compensation plans), (ii)
fee-based investment programs with assets of at least $1 million and (iii)
institutional clients with assets of at least $1 million. Class I shares are
offered without any sales charges on purchases or sales and do not include
combined Rule 12b-1 fees and service fees. Figures shown above assume
reinvestment of all dividends and capital gains. SEC yield is a calculation for
determining the amount of portfolio income, excluding non-income items as
prescribed by the SEC. Yields are subject to change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt 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
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to sell off until February when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March, the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and as such, the yield
differential between long maturity and short maturity issues was quite small.
New issue supply rose dramatically during the period, increasing by 35 percent
versus the same six-month period a year ago, as relatively low interest rates
spurred municipalities to refinance their debt. Demand for municipal bonds was
robust as well, particularly for high-yield securities as investors proved
increasingly willing to take on more risk in return for relatively higher
yields. The strong demand caused credit spreads, which were already near
historically tight levels, to further narrow. As a result, the lower-quality,
higher yielding segment of the market considerably outperformed, returning 185
basis points more than the investment-grade segment for the overall period.
2
PERFORMANCE ANALYSIS
The fund returned 1.73 percent for the six months ended March 31, 2007 (Class A
shares, unadjusted for sales charges). In comparison, the fund's benchmark, the
Lehman Brothers Municipal Bond Index, returned 1.93 percent for the period.
TOTAL RETURNS FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- ---------------------------------------------------------------------------------
LEHMAN BROTHERS
CLASS A CLASS B CLASS C CLASS I MUNICIPAL BOND INDEX
1.73% 1.28% 1.35% 1.86% 1.93%
- ---------------------------------------------------------------------------------
</Table>
The performance for the four share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definition.
The fund's credit quality profile was one of the primary contributors to returns
during the reporting period. We maintained an overweight in BBB and non-rated
bonds relative to the Lehman Brothers Municipal Bond Index, which served the
fund well as strong demand for higher-yielding bonds and steady flows into
high-yield municipal bond funds led to ongoing spread tightening and strong
performance for the sector. Although we added slightly to holdings in non-rated
paper during the period, with spreads at such tight levels we are taking a more
cautious approach to the lower-quality sectors.
The fund also benefited from an overweight relative to the Lehman Brothers
Municipal Bond Index in zero coupon bonds during the period, which outpaced
current and premium coupon bonds due to spread tightening. Conversely, the
fund's holdings in U.S. Treasury futures, which are used to help hedge interest-
rate risk in the portfolio, detracted slightly from performance. The fund's
overweight in prerefunded* bonds on the short end of the yield curve also
detracted from returns.
Our activity over the period focused on replacing income as higher-yielding
bonds in the portfolio matured or were called. New purchases included higher-
liquidity, AA rated single-family housing bonds which tend to experience less
volatility, select insured discount coupon bonds which offer higher yields, and
as mentioned earlier, a small amount of non-rated paper. In addition, given the
Fed's recent indication that the future direction of monetary policy will be
very data dependent, we are keeping the portfolio's duration (a measure of
interest-rate risk) close to that of the Lehman Brothers Municipal Bond Index.
The fund's overall credit quality remained high and investments were well-
diversified across a broad range of sectors. As of the end of the period, sector
exposure was relatively unchanged from six months earlier, with prerefunded*,
3
hospital, and local general obligation (GO) bonds representing the fund's
largest sector weightings.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
*Prerefunding, or advance refunding, is a financing structure under which new
bonds are issued to repay an outstanding bond issue prior to its first call
date.
4
<Table>
<Caption>
RATINGS ALLOCATION AS OF 3/31/07
AAA/Aaa 57.3%
AA/Aa 12.2
A/A 3.5
BBB/Baa 8.5
BB/Ba 0.9
B/B 0.5
Non-Rated 17.1
<Caption>
TOP FIVE SECTORS AS OF 3/31/07
General Purpose 15.1%
Hospital 11.7
Wholesale Electric 7.8
Bridge, Tunnel & Toll Road 7.4
Water & Sewer 6.5
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
California 18.2%
New York 14.1
Texas 10.7
Illinois 7.3
Colorado 6.3
New Jersey 6.1
Florida 5.0
Missouri 4.1
Michigan 3.5
Massachusetts 2.8
Connecticut 2.2
Utah 1.9
Arizona 1.9
North Carolina 1.8
Indiana 1.7
Tennessee 1.5
Alabama 1.3
Georgia 1.3
District of Columbia 1.3
Washington 1.3
Kansas 1.2
Iowa 1.1
Maryland 1.0
Pennsylvania 1.0
Oregon 0.9
Virginia 0.8
Nevada 0.8
West Virginia 0.8
South Dakota 0.6
Minnesota 0.6
Ohio 0.5
Kentucky 0.5
New Hampshire 0.5
Rhode Island 0.5
Alaska 0.4
</Table>
<Table>
(continued on next page)
</Table>
5
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
(continued from previous page)
Oklahoma 0.4%
Nebraska 0.4
North Dakota 0.3
Vermont 0.3
South Carolina 0.2
Montana 0.1
Delaware 0.1
-----
Total Long-Term Investments 107.3
Total Short-Term Investments 0.8
-----
Total Investments 108.1
Liability for Floating Rate Note Obligations Related to
Securities Held (9.3)
Other Assets in Excess of Liabilities 1.2
-----
Net Assets 100.0%
</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 allocations and sectors are as a
percentage of total investments. Summary of investments by state classification
is as a percentage of net assets. 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 fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
7
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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.
8
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and C Shares;
and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,017.30 $ 5.93
Hypothetical............................... 1,000.00 1,019.05 5.94
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,012.84 9.69
Hypothetical............................... 1,000.00 1,015.31 9.70
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,013.54 9.69
Hypothetical............................... 1,000.00 1,015.31 9.70
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,018.56 4.68
Hypothetical............................... 1,000.00 1,020.29 4.68
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 1.18%, 1.93%,
1.93% and 0.93%, for Class A, B, C and I Shares, respectively, multiplied by
the average account value over the period, multiplied by 182/365 (to reflect
the one-half year period).
Assumes all dividends and distributions were reinvested.
9
The following table shows what expenses a shareholder would have paid, excluding
interest and residual trust expenses.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,017.30 $ 4.33
Hypothetical............................... 1,000.00 1,020.64 4.33
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,012.84 8.08
Hypothetical............................... 1,000.00 1,016.90 8.10
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,013.54 8.08
Hypothetical............................... 1,000.00 1,016.90 8.10
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,018.56 3.07
Hypothetical............................... 1,000.00 1,021.89 3.07
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.86%, 1.61%,
1.61%, and 0.61%, for Class A, B, C, and I Shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period).
Assumes all dividends and distributions were reinvested.
10
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
MUNICIPAL BONDS 107.3%
ALABAMA 1.3%
$ 2,000 Birmingham Baptist Med Ctr AL Baptist Hlth
Sys Inc Ser A............................... 5.000% 11/15/30 $ 2,053,460
1,000 Jefferson Cnty, AL Ltd Oblig Sch Wt Ser A... 5.000 01/01/24 1,044,460
3 Mobile, AL Indl Dev Brd Solid Waste Disp Rev
Mobile Energy Svc Co Proj Rfdg.............. 6.950 01/01/20 293
2,250 Montgomery Cnty, AL Pub Bldg Wt Fac Proj
(MBIA Insd)................................. 5.000 03/01/31 2,373,255
3,420 University AL Birmingham Hosp Rev Ser A
(c)......................................... 5.000 09/01/36 3,548,660
------------
9,020,128
------------
ALASKA 0.4%
3,000 Northern Tob Sec Corp Rev Bkd Ser A......... 5.000 06/01/46 2,924,340
------------
ARIZONA 1.9%
1,000 Cottonwood, AZ Wtr Rev Sys Sr Lien (XLCA
Insd)....................................... 5.000 07/01/30 1,058,780
5,000 Phoenix, AZ Civic Impt Corp Sr Lien Ser B
(FGIC Insd) (AMT)........................... 5.250 07/01/32 5,213,700
1,875 Scottsdale, AZ Indl Dev Hosp Scottsdale Mem
Hosp Rfdg Ser A (AMBAC Insd)................ 6.000 09/01/12 1,929,525
1,750 Scottsdale, AZ Indl Dev Hosp Scottsdale Mem
Hosp Rfdg Ser A (AMBAC Insd)................ 6.125 09/01/17 1,800,102
2,750 University of AZ Med Ctr Corp............... 5.000 07/01/35 2,813,250
------------
12,815,357
------------
CALIFORNIA 18.2%
4,870 Anaheim, CA Pub Fin Auth Lease Rev Cap
Apprec Sub Pub Impt Proj Ser C (FSA Insd)... * 09/01/20 2,751,599
1,875 California Cnty, CA Tob Agy Tob Sec Sonoma
Cnty Corp Rfdg.............................. 5.250 06/01/45 1,897,462
2,000 California Cnty, CA Tob Sec Agy Tob LA Cnty
Sec (b)..................................... 0/5.250 06/01/21 1,747,800
1,000 California Hlth Fac Fin Auth Rev Cedars
Sinai Med Ctr Rfdg.......................... 5.000 11/15/27 1,041,530
3,000 California Hlth Fac Fin Auth Rev Cedars
Sinai Med Ctr Rfdg (c)...................... 5.000 11/15/34 3,111,530
1,200 California Hlth Fac Fin Auth Rev Kaiser
Permanente Ser A............................ 5.250 04/01/39 1,265,568
10,000 California Infrastructure & Econ Dev Bk Rev
Bay Area Toll Brdg First Lien A (FSA Insd)
(Prerefunded @ 7/01/13) (c)................. 5.250 07/01/20 10,924,700
305 California Infrastructure & Econ Dev Bk Rev
Bay Area Toll Brdg First Lien A (FSA Insd)
(Prerefunded @ 7/01/13)..................... 5.250 07/01/20 333,203
1,350 California Statewide Cmnty Dev Auth Rev
Daughters of Charity Hlth Ser A............. 5.000 07/01/39 1,375,029
</Table>
See Notes to Financial Statements 11
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
CALIFORNIA (CONTINUED)
$ 3,000 California Statewide Cmnty Dev Auth Rev Hlth
Fac Adventist Hlth Ser A.................... 5.000% 03/01/35 $ 3,093,840
3,000 California Statewide Cmnty Dev Auth Rev
Kaiser Permanente........................... 5.250 08/01/31 3,178,020
1,600 California Statewide Cmnty Dev Auth Rev
Kaiser Permanente Ser B..................... 5.000 03/01/41 1,643,392
2,200 California Statewide Cmnty Dev Auth Rev
Kaiser Permanente Ser B..................... 5.250 03/01/45 2,312,618
5,000 California St Dept Wtr Res Pwr Ser A (XLCA
Insd) (Prerefunded @ 5/01/12)............... 5.375 05/01/17 5,459,200
13,150 California St Dept Wtr Res Pwr Supply Rev
Ser A (MBIA Insd) (c)....................... 5.250 05/01/20 14,281,821
5,725 California St (FSA Insd).................... 5.000 02/01/29 5,985,259
3,500 California St Pub Wks Brd Lease Rev Dept
Corrections Ser C........................... 5.250 06/01/28 3,702,230
15,000 California St (XLCA Insd) (c) (d)........... 5.250 10/01/20 16,128,675
3,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Cap Apprec Rfdg (MBIA Insd)................. * 01/15/17 1,857,420
21,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Cap Apprec Rfdg............................. * 01/15/24 8,183,070
15,000 Foothill/Eastern Corridor Agy CA Toll Rd Rev
Cap Apprec Rfdg............................. * 01/15/30 4,053,300
2,000 Golden St Tob Securitization Ser A-1........ 5.000 06/01/33 1,979,700
8,000 Golden St Tob Securitization Ser A-1........ 5.750 06/01/47 8,509,200
6,695 San Francisco, CA City & Cnty Second Rfdg
Ser Issue 29 B (FGIC Insd).................. 5.125 05/01/20 7,081,368
5,000 Tobacco Sec Auth Southn CA Tob Settlement Sr
Ser A1...................................... 5.000 06/01/37 4,904,950
1,600 Turlock, CA Hlth Fac Rev Emanuel Med Ctr
Inc......................................... 5.375 10/15/34 1,678,752
5,000 West Contra Costa CA Uni Election of 2002
Ser B (FSA Insd)............................ 5.000 08/01/26 5,237,850
------------
123,719,086
------------
COLORADO 6.3%
2,840 Adams Cnty, CO Single Family Mtg Rev Ser A
(d) (f)..................................... 8.875 08/01/10 3,286,505
5,000 Arapahoe Cnty, CO Wtr & Waste Proj Ser A
(MBIA Insd)................................. 5.125 12/01/32 5,292,950
5,000 Colorado Ed & Cultural Fac Auth Rev Impt
Charter Sch Peak to Peak Rfdg (XLCA Insd)... 5.250 08/15/34 5,334,650
3,000 Colorado Hlth Fac Auth Rev Covenant
Retirement Cmntys Inc....................... 5.000 12/01/35 3,051,540
1,500 Colorado Hlth Fac Auth Rev Evangelical
Lutheran Proj............................... 5.250 06/01/31 1,581,930
1,000 Colorado Hlth Fac Auth Rev Evangelical
Lutheran Ser A.............................. 5.250 06/01/34 1,042,660
</Table>
12 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
COLORADO (CONTINUED)
$ 5,000 Colorado Springs, CO Util Rev Sys Sub Lien
Impt Rfdg Ser A............................. 5.000% 11/15/21 $ 5,255,300
5,000 Colorado Springs, CO Util Rev Sys Sub Lien
Impt Rfdg Ser A............................. 5.000 11/15/29 5,163,150
1,530 Dove Vly Met Dist CO Arapahoe Cnty Rfdg (FSA
Insd)....................................... 5.000 11/01/25 1,621,371
15,000 E 470 Pub Hwy Auth Co Rev Cap Apprec Sr Ser
B (MBIA Insd)............................... * 09/01/20 8,475,150
1,500 Park Creek Met Dist CO Rev Sr Ltd Tax Ppty
Rfdg........................................ 5.500 12/01/37 1,591,260
1,000 Salida, CO Hosp Dist Rev.................... 5.250 10/01/36 1,017,590
------------
42,714,056
------------
CONNECTICUT 2.2%
5,570 Bridgeport, CT Rfdg Ser A (FGIC Insd) (c)
(d)......................................... 5.375 08/15/15 6,023,565
5,900 Bridgeport, CT Rfdg Ser A (FGIC Insd) (c)... 5.375 08/15/16 6,380,437
2,470 Mashantucket Western Pequot Tribe CT Spl Rev
Ser A (Prerefunded @ 9/01/07) (e)........... 6.400 09/01/11 2,522,981
------------
14,926,983
------------
DELAWARE 0.1%
630 New Castle Cnty, DE Rev Newark Charter Sch
Inc Proj.................................... 5.000 09/01/22 652,718
------------
DISTRICT OF COLUMBIA 1.3%
5,150 District Columbia Tax Incrmnt Gallery Place
Proj (FSA Insd)............................. 5.250 07/01/27 5,466,983
3,000 Metropolitan Washington DC Arpt Auth Sys Ser
A (FGIC Insd) (AMT)......................... 5.250 10/01/32 3,148,830
------------
8,615,813
------------
FLORIDA 5.0%
5,000 Broward Cnty, FL Arpt Sys Rev Ser J-I (AMBAC
Insd) (AMT)................................. 5.250 10/01/26 5,220,600
1,100 Capital Tr Agy FL Rev Ft Lauderdale Proj
(AMT)....................................... 5.750 01/01/32 1,154,120
9,000 Dade Cnty, FL Gtd Entitlement Rev Cap Apprec
Rfdg Ser A (MBIA Insd)...................... * 02/01/18 4,789,530
570 Escambia Cnty, FL Hlth Fac Auth Rev (AMBAC
Insd)....................................... 5.950 07/01/20 592,116
1,000 Halifax Hosp Med Ctr FL Hosp Rev Impt Rfdg
Ser A....................................... 5.250 06/01/26 1,053,860
6,385 Lake Cnty, FL Sch Brd Ctf Part (AMBAC Insd)
(Prerefunded @ 7/01/12)..................... 5.375 07/01/16 6,898,865
595 Orange Cnty, FL Tourist Dev Tax Rev (AMBAC
Insd) (f)................................... 6.000 10/01/16 597,969
</Table>
See Notes to Financial Statements 13
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
FLORIDA (CONTINUED)
$ 4,765 Orlando, FL Util Commn Wtr Rfdg............. 5.250% 10/01/19 $ 5,093,785
8,095 Orlando, FL Util Commn Wtr Rfdg (Prerefunded
@ 10/01/11)................................. 5.250 10/01/19 8,691,844
------------
34,092,689
------------
GEORGIA 1.3%
2,000 Atlanta, GA Tax Allocation Eastside Proj Ser
B........................................... 5.600 01/01/30 2,075,640
6,310 Municipal Elec Auth GA Combustion Ser A
(MBIA Insd)................................. 5.250 11/01/17 6,749,997
5 Municipal Elec Auth GA Combustion Turbine
Ser A (MBIA Insd) (Prerefunded @
11/01/12)................................... 5.250 11/01/17 5,394
------------
8,831,031
------------
ILLINOIS 7.3%
1,500 Bolingbrook, IL Sales Tax Rev (b)........... 0/6.250 01/01/24 1,497,480
500 Chicago, IL Increment Alloc Rev Diversey/
Narragansett Proj (Acquired 08/01/06, Cost
$533,660) (g)............................... 7.460 02/15/26 533,905
3,000 Chicago, IL Lakefront Millennium Pkg Fac
(MBIA Insd)................................. 5.650 01/01/19 3,306,510
1,000 Chicago, IL Met Wtr Reclamation Capital Impt
Bonds (f)................................... 7.000 01/01/11 1,081,660
8,050 Chicago, IL O'Hare Intl Arpt Rev Gen Arpt
Third Lien C-2 Rfdg (XLCA Insd) (AMT)....... 5.250 01/01/34 8,479,065
2,010 Chicago, IL Proj Rfdg Ser C (FGIC Insd)
(Prerefunded @ 7/01/10) (d)................. 5.750 01/01/16 2,156,428
1,200 Chicago, IL Proj Rfdg Ser C (FGIC Insd)
(d)......................................... 5.750 01/01/16 1,285,692
20 Chicago, IL Single Family Mtg Rev Ser A
(GNMA Collateralized) (AMT)................. 7.000 09/01/27 20,507
885 Chicago, IL Tax Increment Alloc Santn Drain
& Ship Canal Ser A.......................... 7.750 01/01/14 905,072
5,000 Cook Cnty, IL Ser A (FGIC Insd) (Prerefunded
@ 5/15/11).................................. 5.500 11/15/31 5,348,050
1,000 Gilberts, IL Spl Svc Area No 19 Spl Tax Ser
1........................................... 5.375 03/01/16 990,610
1,185 Huntley, IL Increment Alloc Rev Huntley
Redev Proj Ser A............................ 8.500 12/01/15 1,204,280
1,000 Illinois Fin Auth Rev Kewanee Hosp Proj..... 5.100 08/15/31 1,020,340
4,700 Illinois Hsg Dev Auth Rev Homeowner Mtg Sub
Ser C2 (AMT)................................ 5.150 08/01/37 4,855,335
5,000 Illinois St Ser 1 (FSA Insd)................ 5.250 12/01/21 5,365,050
9,250 Metropolitan Pier & Expo Auth IL Dedicated
St Tax Rev Cap Apprec McCormick Rfdg (MBIA
Insd) (b)................................... 0/5.400 06/15/19 7,803,393
2,333 Pingree Grove Vlg, IL Spl Svc Area No 1 Spl
Tax Cambridge Lakes Proj Ser 05............. 5.250 03/01/15 2,408,379
</Table>
14 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
ILLINOIS (CONTINUED)
$ 550 Volo Vlg, IL Spl Svc Area No 3 Symphony
Meadows Proj Ser 1.......................... 6.000% 03/01/36 $ 574,849
997 Yorkville, IL Utd City Spl Svc Area Spl Tax
No 2004-107 Raintree Vlg IL Proj............ 6.250 03/01/35 1,067,298
------------
49,903,903
------------
INDIANA 1.7%
5,000 Indiana Hlth Fac Fin Auth Hosp Rev Cmnty
Proj Ser A (AMBAC Insd)..................... 5.000 05/01/35 5,221,100
1,870 Indiana Hlth Fac Fin Auth Rev Hoosier Care
Proj Ser A.................................. 7.125 06/01/34 1,931,579
550 Indianapolis, IN Loc Pub Impt Ser D......... 6.750 02/01/14 622,050
140 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/11 101,496
140 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/12 94,018
135 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/13 83,984
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/14 74,920
130 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/15 69,407
135 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/16 66,771
225 Saint Joseph Cnty, IN Redev Dist Tax
Increment Rev Ser B (d)..................... * 06/30/17 103,088
3,295 Vigo Cnty, IN Elem Sch Bldg First Mtg Impt &
Rfdg (FSA Insd)............................. 5.250 01/10/22 3,488,845
------------
11,857,258
------------
IOWA 1.1%
1,125 Coralville, IA Ctf Partn Ser D.............. 5.250 06/01/26 1,194,694
2,400 Iowa Fin Auth Hosp Fac Rev Trinity Regl Hosp
Proj (FSA Insd)............................. 5.750 07/01/17 2,459,688
1,000 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C................................... 5.375 06/01/38 1,022,870
2,500 Tobacco Settlement Auth IA Tob Settlement
Rev Ser C................................... 5.625 06/01/46 2,615,675
------------
7,292,927
------------
KANSAS 1.2%
1,000 Lawrence, KS Hosp Rev Lawrence Mem Hosp..... 5.125 07/01/36 1,043,730
6,600 Sedgwick Cnty, KS Uni Sch Dist No 259
Wichita (MBIA Insd) (d)..................... 5.625 09/01/13 6,994,548
------------
8,038,278
------------
KENTUCKY 0.5%
3,500 Kentucky Hsg Corp Hsg Rev Ser C (AMT)....... 4.800 07/01/37 3,493,630
------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
MARYLAND 1.0%
$ 5,000 Maryland St Cmnty Dev Admin Residential Ser
A (AMT)..................................... 4.650% 09/01/32 $ 4,937,400
600 Maryland St Hlth & Higher Edenwald Ser A.... 5.400 01/01/37 624,636
1,250 Prince Georges Cnty, MD Spl Oblig Natl
Harbor Proj................................. 5.200 07/01/34 1,280,650
------------
6,842,686
------------
MASSACHUSETTS 2.8%
3,500 Massachusetts St Hlth & Ed Fac Auth Rev Ser
G (MBIA Insd)............................... 5.000 07/01/13 3,503,290
2,000 Massachusetts St Hlth & Ed Fac Auth Rev Univ
MA Mem Issue Ser D.......................... 5.000 07/01/33 2,034,340
2,695 Massachusetts St Indl Fin Agy Rev First Mtg
Reeds Landing Proj (Prerefunded @ 10/01/08)
(b)......................................... 7.45/7.550 10/01/28 2,906,099
10,000 Massachusetts St Rites PA 1290 (FSA Insd)
(c)......................................... 5.000 03/01/24 10,845,800
------------
19,289,529
------------
MICHIGAN 3.5%
810 Detroit, MI Loc Dev Fin Auth Tax Increment
Sub Ser C (Acquired 09/08/97, Cost $810,000)
(g)......................................... 6.850 05/01/21 827,245
5,000 Detroit, MI Sew Disp Rev Sr Lien Ser A (FGIC
Insd) (Prerefunded @ 7/01/11)............... 5.125 07/01/31 5,284,750
5,000 Michigan St Bldg Auth Rev Fac Proj Ser II
(Prerefunded @ 10/15/11).................... 5.500 10/15/16 5,380,550
5,000 Michigan St Strategic Fd Detroit Edison Co
Proj Rfdg Ser C (XLCA Insd) (AMT)........... 5.450 12/15/32 5,309,000
1,840 Michigan St Strategic Fd Solid Genesee Pwr
Stad Proj Rfdg (AMT)........................ 7.500 01/01/21 1,840,037
5,000 Western Townships, MI Utils A Rfdg (MBIA
Insd)....................................... 5.250 01/01/16 5,202,100
------------
23,843,682
------------
MINNESOTA 0.6%
1,000 Dakota Cnty, MN Cmnty Dev Agy Rfdg Commons
on Marice Proj Ser A........................ 5.000 05/01/42 996,670
550 Inver Grove Heights, MN Presbyterian Homes
Care Rfdg................................... 5.500 10/01/33 559,598
2,000 Saint Paul, MN Hsg & Redev Auth Hosp Rev
Hlth East Proj.............................. 6.000 11/15/35 2,203,960
------------
3,760,228
------------
MISSOURI 4.1%
1,000 Carthage, MO Hosp Rev....................... 5.750 04/01/22 1,019,700
1,000 Carthage, MO Hosp Rev....................... 5.875 04/01/30 1,023,490
3,000 Kansas City, MO Indl Dev Auth Plaza Lib
Proj........................................ 6.000 03/01/16 3,121,050
2,275 Missouri Jt Muni Elec Util Cmnty Pwr Proj
Rev Plum Point Proj (MBIA Insd)............. 5.000 01/01/26 2,418,143
</Table>
16 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
MISSOURI (CONTINUED)
$ 1,200 Missouri St Hlth & Ed Fac Auth Rev Sr Living
Fac Lutheran Rfdg Ser B..................... 5.125% 02/01/27 $ 1,243,920
385 Saint Louis, MO Tax Increment Rev Scullin
Redev Area Ser A............................ 10.000 08/01/10 422,006
2,745 Springfield, MO Pub Bldg Corp Leasehold Rev
(AMBAC Insd) (AMT) (c)...................... 4.550 07/01/29 2,680,678
3,355 Springfield, MO Pub Bldg Corp Leasehold Rev
(AMBAC Insd) (AMT) (c)...................... 4.600 07/01/36 3,276,384
12,500 Springfield, MO Pub Util Rev (FGIC Insd).... 4.500 08/01/36 12,388,625
------------
27,593,996
------------
MONTANA 0.1%
1,000 Forsyth, MT Pollutn Ctl Rev Northwestn Corp
Colstrip Rfdg (AMBAC Insd).................. 4.650 08/01/23 1,033,700
------------
NEBRASKA 0.4%
2,500 University of NE Fac Corp Defd Maint (AMBAC
Insd)....................................... 5.000 07/15/17 2,723,475
------------
NEVADA 0.8%
5,300 Clark Cnty, NV Indl Dev Rev Southwest Gas
Corp Proj, Ser A (FGIC Insd) (c)............ 4.750 09/01/36 5,319,796
------------
NEW HAMPSHIRE 0.5%
1,010 New Hampshire Higher Ed & Hlth Fac Auth Rev
(d)......................................... 8.800 06/01/09 1,089,376
480 New Hampshire Higher Ed & Hlth Fac Auth Rev
Daniel Webster College Issue Rfdg (d)....... 6.100 07/01/09 483,763
645 New Hampshire St Business Fin Auth Elec Fac
Rev Plymouth Cogeneration (AMT) (Acquired
06/29/93, Cost $631,308) (g)................ 7.750 06/01/14 654,204
1,000 New Hampshire St Business Fin Auth Rev Alice
Peck Day Hlth Sys Ser A..................... 6.875 10/01/19 1,056,790
------------
3,284,133
------------
NEW JERSEY 6.1%
3,250 Landis, NJ Auth Sewer Rev (FGIC Insd) (a)... 7.520 09/19/19 3,872,083
4,490 Middlesex Cnty, NJ Util Auth Swr Rev Rfdg
Ser A (MBIA Insd)........................... 6.250 08/15/10 4,698,605
2,000 New Jersey Econ Dev Auth Cig Tax............ 5.750 06/15/34 2,152,040
190 New Jersey St Tpk Auth Tpk Rev Ser C (MBIA
Insd) (f)................................... 6.500 01/01/16 220,086
565 New Jersey St Tpk Auth Tpk Rev Ser C (MBIA
Insd)....................................... 6.500 01/01/16 652,598
2,725 New Jersey St Tpk Auth Tpk Rev Ser C (MBIA
Insd) (f)................................... 6.500 01/01/16 3,156,504
5,710 New Jersey St Trans Corp Ctf Fed Trans Admin
Gnt Ser A (AMBAC Insd)...................... 5.750 09/15/10 5,987,335
</Table>
See Notes to Financial Statements 17
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
NEW JERSEY (CONTINUED)
$ 10,000 New Jersey St Trans Corp Ctf Fed Trans Admin
Gnt Ser B (AMBAC Insd) (Prerefunded @
9/15/10) (h)................................ 6.000% 09/15/15 $ 10,755,200
8,000 Tobacco Settlement Fin Corp NJ (c).......... 5.000 06/01/41 7,811,240
2,000 Tobacco Settlement Fin Corp NJ Ser 1A....... 5.000 06/01/41 1,952,800
------------
41,258,491
------------
NEW YORK 14.1%
5,000 Metropolitan Trans Auth NY Rev Ser B (FGIC
Insd)....................................... 5.250 11/15/18 5,431,550
1,000 Nassau Cnty, NY Tob Settlement Corp Ser
A-3......................................... 5.000 06/01/35 1,010,270
1,000 Nassau Cnty, NY Tob Settlement Corp Ser
A-3......................................... 5.125 06/01/46 1,019,430
5,000 New York City Hsg Dev Multi Family Rev Ser K
(AMT)....................................... 5.000 11/01/37 5,095,900
1,000 New York City Indl Dev Agy Spl Fac Rev Amern
Airl JFK Intl Arpt (AMT).................... 7.750 08/01/31 1,214,050
3,000 New York City Indl Dev Agy Rev Liberty 7
World Trade Ctr Ser A....................... 6.250 03/01/15 3,185,760
2,300 New York City Indl Dev Agy Spl Fac Rev Amern
Airl JFK Intl Arpt (AMT).................... 7.625 08/01/25 2,777,963
2,975 New York City Ser A......................... 7.000 08/01/07 3,005,970
2,845 New York City Ser B (MBIA Insd)............. 5.875 08/01/15 3,061,618
14,515 New York City Ser B (MBIA Insd) (Prerefunded
@ 8/01/10).................................. 5.875 08/01/15 15,684,328
10,000 New York City Ser C (MBIA Insd) (c)......... 5.000 06/15/27 10,603,450
3,000 New York City Tob Tr IV Settlement Pass Thru
Ser A....................................... 5.000 06/01/42 3,028,050
10,000 New York City Transitional Fin Auth Future
Tax Secd Ser C (AMBAC Insd) (c)............. 5.250 08/01/19 10,746,350
750 New York Liberty Dev Corp Rev Natl Sports
Museum Proj Ser A (Acquired 08/07/06, Cost
$750,000) (g)............................... 6.125 02/15/19 790,643
695 New York St Dorm Auth Rev Mental Hlth Ser
A........................................... 5.750 02/15/11 710,005
680 New York St Dorm Auth Rev Mental Hlth Ser
A........................................... 5.750 02/15/12 694,681
2,500 New York St Energy Resh & Dev Auth Gas Fac
Rev (a)..................................... 8.751 04/01/20 2,718,675
3,000 New York St Energy Resh & Dev Auth Gas Fac
Rev Brooklyn Union Gas Ser B (AMT) (a)...... 9.848 07/01/26 3,174,900
</Table>
18 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 10,725 New York St Environmental Fac Rev Fd Second
Resolution (d).............................. 5.000% 06/15/20 $ 11,500,739
10,000 Triborough Brdg & Tunl Auth NY Gen Rfdg Ser
B........................................... 5.000 11/15/22 10,540,000
------------
95,994,332
------------
NORTH CAROLINA 1.8%
2,000 Charlotte Mecklenberg Hosp Auth NC Hlthcare
Fac Rev Ser A............................... 5.000 01/15/45 2,068,300
1,100 North Carolina Med Care Commn Hlthcare Fac
Rev First Mtg Salemtowne Proj Rfdg.......... 5.100 10/01/30 1,117,644
8,500 North Carolina Muni Pwr Agy Ser A (MBIA
Insd)....................................... 5.250 01/01/19 9,115,145
------------
12,301,089
------------
NORTH DAKOTA 0.3%
1,000 Grand Forks, ND Sr Hsg Rev 4000 Vly Square
Proj Rfdg................................... 5.200 12/01/26 1,010,350
1,125 Ward Cnty, ND Hlthcare Fac Rev Trinity
Obligated Group Rfdg........................ 5.125 07/01/25 1,171,170
------------
2,181,520
------------
OHIO 0.5%
3,340 Adams Cnty Hosp Fac Impt Rev Adams Cnty Hosp
Proj........................................ 6.250 09/01/20 3,434,322
------------
OKLAHOMA 0.4%
2,250 Oklahoma City, OK Pub Ppty Auth Hotel Tax
Rev (FGIC Insd)............................. 5.250 10/01/29 2,457,810
265 Oklahoma Hsg Fin Agy Single Family Rev Mtg,
Class B (GNMA Collateralized) (AMT)......... 7.997 08/01/18 283,881
------------
2,741,691
------------
OREGON 0.9%
5,000 Oregon Hlth Sciences Univ Insd Ser A (MBIA
Insd)....................................... 5.250 07/01/22 5,347,200
1,000 Port Morrow, OR Pollutn Ctl Portland Rfdg... 5.200 05/01/33 1,024,120
------------
6,371,320
------------
PENNSYLVANIA 1.0%
1,000 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Continuing Care Proj............. 6.250 02/01/35 1,060,190
5,250 Philadelphia, PA Auth Indl Dev Lease Rev Ser
B (FSA Insd)................................ 5.500 10/01/16 5,683,178
------------
6,743,368
------------
</Table>
See Notes to Financial Statements 19
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
RHODE ISLAND 0.5%
$ 915 Rhode Island St Econ Dev Corp
Rev (d)..................................... 7.250% 07/01/10 $ 954,116
2,000 Rhode Island St Hlth & Ed Bldg Higher Ed
Johnson & Wales Rfdg (XLCA Insd)............ 5.375 04/01/19 2,143,600
------------
3,097,716
------------
SOUTH CAROLINA 0.2%
700 Piedmont Muni Pwr Agy SC Elec Rev Rfdg...... 5.000 01/01/25 700,224
500 South Carolina Jobs Econ Dev Auth Hlth Fac
Rev First Mtg Wesley Commons Rfdg........... 5.125 10/01/26 506,570
------------
1,206,794
------------
SOUTH DAKOTA 0.6%
1,000 South Dakota Hsg Dev Auth (Acquired
11/30/06, Cost $986,770) (a) (g)............ 4.387 11/01/26 935,920
2,010 South Dakota Hsg Dev Auth (Acquired
11/30/06, 12/06/06, Cost $2,010,000) (a)
(g)......................................... 4.887 05/01/36 1,821,221
1,250 South Dakota St Hlth & Ed Fac Auth Rev Sioux
Vly Hosp & Hlth Sys Ser A................... 5.250 11/01/34 1,317,025
------------
4,074,166
------------
TENNESSEE 1.5%
1,000 Chattanooga, TN Hlth Ed & Hsg Fac Brd Rev
CDFI Phase I LLC Proj Rfdg Ser A............ 5.000 10/01/25 1,019,070
4,000 Elizabethton, TN Hlth & Ed Fac Rfdg (MBIA
Insd) (d)................................... 7.750 07/01/29 4,795,040
1,000 Sullivan Cnty, TN Hlth Ed & Hsg Fac Brd Hosp
Rev Wellmont Hlth Sys Proj Ser C............ 5.250 09/01/36 1,049,200
3,250 West Wilson Util Dist TN Wtrwk Rev Impt &
Rfdg (MBIA Insd)............................ 4.250 06/01/36 3,110,932
------------
9,974,242
------------
TEXAS 10.7%
2,000 Alliance Arpt Auth Inc TX Spl Fac Rev FedEx
Corp Proj Rfdg (AMT)........................ 4.850 04/01/21 2,041,700
500 Bexar Cnty, TX Hlth Fac Dev Corp Hosp Rev
Saint Luke's Lutheran Hosp (f).............. 7.000 05/01/21 649,255
3,170 Brazos Riv Auth TX Pollutn Ctl Rev Adj TXU
Elec Co Proj Rfdg Ser C (AMT)............... 5.750 05/01/36 3,265,829
8,410 Comal, TX Indpt Sch Dist Sch Bldg (PSF
Insd)....................................... 5.000 02/01/31 8,772,723
5,000 Dallas-Fort Worth, TX Intl Arpt Rev Impt Jt
Rfdg Ser A (FGIC Insd) (AMT)................ 5.500 11/01/31 5,286,550
5,000 Harris Cnty-Houston, TX Sports Auth Spl Rev
Jr Lien Rfdg Ser B (MBIA Insd).............. 5.250 11/15/40 5,269,900
6,065 Harris Cnty, TX Toll Rd Sub Lien Rfdg....... 5.000 08/01/33 6,140,449
10,000 Houston, TX Hotel Occupancy Tax Convention &
Entmt Ser B (AMBAC Insd).................... 5.750 09/01/14 10,811,500
</Table>
20 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
TEXAS (CONTINUED)
$ 7,500 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (Acquired 10/20/99, Cost $7,623,805)
(a) (g)..................................... 6.917% 05/15/14 $ 8,302,050
6,250 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (Acquired 10/20/99, Cost $6,312,134)
(a) (g)..................................... 6.917 05/15/15 6,918,375
3,250 Lower CO Riv Auth TX Rev Rfdg Ser A (FSA
Insd) (Acquired 10/29/99, Cost $3,254,875)
(a) (g)..................................... 6.917 05/15/16 3,600,285
5,210 Mabank, TX Indpt Sch Dist (PSF Insd)
(Prerefunded @ 8/15/12) (d)................. 5.000 08/15/30 5,535,886
2,000 Metropolitan Hlth Fac Dev Corp TX Wilson N
Jones Mem Hosp Proj......................... 7.200 01/01/21 2,075,240
1,075 Texas St Dept Hsg & Cmnty Affairs Home Mtg
Rev Coll Rfdg Ser C-2 (GNMA Collateralized)
(AMT) (a)................................... 9.714 07/02/24 1,135,017
3,200 Texas St Trans Commn Mobility Fd Ser A (FGIC
Insd)....................................... 4.500 04/01/35 3,167,296
------------
72,972,055
------------
UTAH 1.9%
1,340 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (i).................................... 7.800 09/01/15 422,100
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (i).................................... 7.800 09/01/25 315,000
1,000 Hildale, UT Elec Rev Gas Turbine Elec Fac
Proj (i).................................... 8.000 09/01/20 315,000
11,000 Salt Lake City, UT Hosp Rev IHC Hosp Inc
Rfdg........................................ 6.150 02/15/12 11,926,640
------------
12,978,740
------------
VERMONT 0.3%
1,000 Vermont Econ Dev Auth Mtg Wake Robin Corp
Proj Ser A.................................. 5.375 05/01/36 1,023,400
1,000 Vermont Ed & Hlth Bldg Fin Agy Rev
Bennington College Proj..................... 6.625 10/01/29 1,041,720
------------
2,065,120
------------
VIRGINIA 0.8%
5,840 Virginia St Hsg Auth Dev Auth Rental Hsg Ser
D (AMT) (c)................................. 4.650 01/01/39 5,758,561
------------
WASHINGTON 1.3%
8,000 King Cnty, WA Sch Dist No 411 (FGIC Insd)
(d)......................................... 5.250 12/01/20 8,611,680
------------
</Table>
See Notes to Financial Statements 21
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- ----------------------------------------------------------------------------------------------
WEST VIRGINIA 0.8%
$ 1,500 West Virginia St Hosp Fin Auth Hosp Rev
Bears & Bulls WV Univ Med Corp Rfdg (MBIA
Insd)....................................... 6.100% 01/01/18 $ 1,505,745
4,000 West Virginia St Hosp Fin Auth Hosp Rev
Bears & Bulls WV Univ Med Corp Rfdg (MBIA
Insd)....................................... 6.100 01/01/18 4,014,840
------------
5,520,585
------------
TOTAL LONG-TERM INVESTMENTS 107.3%
(Cost $701,479,603).......................................................... 729,875,214
TOTAL SHORT-TERM INVESTMENTS 0.8%
(Cost $5,200,000)............................................................ 5,200,000
------------
TOTAL INVESTMENTS 108.1%
(Cost $706,679,603).......................................................... 735,075,214
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD (9.3%)
(Cost $63,020,000)
(63,020) Notes with interest rates ranging from 3.65% to 3.75% at March 31,
2007 and contractual maturities of collateral ranging from 2015 to
2041 (See Note 1) (j).............................................. (63,020,000)
------------
TOTAL NET INVESTMENTS 98.8%
(Cost $643,659,603).......................................................... 672,055,214
OTHER ASSETS IN EXCESS OF LIABILITIES 1.2%.................................... 8,201,825
------------
NET ASSETS 100.0%............................................................. $680,257,039
============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) Inverse Floating Rate
(b) Security is a "step-up" bond where the coupon increases or steps up at a
predetermined date.
(c) Underlying security related to Inverse Floaters entered into by the Fund.
See Notes 1 and 6.B.
(d) The Fund owns 100% of the outstanding bond issuance.
(e) 144A-Private Placement security which is exempt from registration under Rule
144A of the Securities Act of 1933, as amended. This security may only be
resold in transactions exempt from registration which are normally those
transactions with qualified institutional buyers.
(f) Escrowed to Maturity
22 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
(g) This security is restricted and may be resold only in transactions exempt
from registration which are normally those transactions with qualified
institutional buyers. Restricted securities comprise 3.7% of net assets.
(h) All or portion of this security has been physically segregated in connection
with open futures contracts.
(i) Non-income producing security.
(j) Floating rate notes. The interest rates shown reflect rates in effect at
March 31, 2007.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
CIFG--CDC IXIS Financial Guaranty
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance Inc.
GNMA--Government National Mortgage Association
MBIA--Municipal Bond Investors Assurance Corp.
PSF--Public School Fund
XLCA--XL Capital Assurance Inc.
FUTURES CONTRACTS OUTSTANDING AS OF MARCH 31, 2007:
<Table>
<Caption>
UNREALIZED
APPRECIATION/
CONTRACTS DEPRECIATION
SHORT CONTRACTS
U.S. Treasury Bonds Futures, June 2007
(Current Notional Value of $111,250 per contract)......... 21 $ 7,822
U.S. Treasury Notes 10-Year Futures, June 2007
(Current Notional Value of $108,125 per contract)......... 38 5,234
-- -------
59 $13,056
== =======
</Table>
See Notes to Financial Statements 23
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $706,679,603)....................... $735,075,214
Cash........................................................ 240,770
Receivables:
Interest.................................................. 8,714,803
Fund Shares Sold.......................................... 1,748,486
Variation Margin on Futures............................... 11,312
Other....................................................... 216,095
------------
Total Assets............................................ 746,006,680
------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 63,020,000
Fund Shares Repurchased................................... 1,211,306
Income Distributions...................................... 587,023
Investment Advisory Fee................................... 280,852
Distributor and Affiliates................................ 220,445
Trustees' Deferred Compensation and Retirement Plans........ 302,021
Accrued Expenses............................................ 127,994
------------
Total Liabilities....................................... 65,749,641
------------
NET ASSETS.................................................. $680,257,039
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $680,351,904
Net Unrealized Appreciation................................. 28,408,667
Accumulated Undistributed Net Investment Income............. 4,165,483
Accumulated Net Realized Loss............................... (32,669,015)
------------
NET ASSETS.................................................. $680,257,039
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $636,810,709 and 43,129,425 shares of
beneficial interest issued and outstanding)............. $ 14.77
Maximum sales charge (4.75%* of offering price)......... .74
------------
Maximum offering price to public........................ $ 15.51
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $25,652,741 and 1,739,835 shares of
beneficial interest issued and outstanding)............. $ 14.74
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $16,485,773 and 1,119,889 shares of
beneficial interest issued and outstanding)............. $ 14.72
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $1,307,816 and 88,600 shares of beneficial
interest issued and outstanding)........................ $ 14.76
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
24 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $17,746,229
-----------
EXPENSES:
Investment Advisory Fee..................................... 1,627,776
Interest and Residual Trust Expenses........................ 1,073,072
Distribution (12b-1) and Service Fees
Class A Shares............................................ 776,141
Class B Shares............................................ 140,329
Class C Shares............................................ 76,337
Transfer Agent Fees......................................... 184,855
Accounting and Administrative Expenses...................... 58,205
Professional Fees........................................... 47,628
Reports to Shareholders..................................... 30,355
Registration Fees........................................... 27,149
Trustees' Fees and Related Expenses......................... 23,994
Custody..................................................... 21,932
Other....................................................... 18,206
-----------
Total Expenses.......................................... 4,105,979
Less Credits Earned on Cash Balances.................... 2,000
-----------
Net Expenses............................................ 4,103,979
-----------
NET INVESTMENT INCOME....................................... $13,642,250
===========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ (210,996)
Futures................................................... (252,620)
-----------
Net Realized Loss......................................... (463,616)
-----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 30,434,316
-----------
End of the Period:
Investments............................................. 28,395,611
Futures................................................. 13,056
-----------
28,408,667
-----------
Net Unrealized Depreciation During the Period............... (2,025,649)
-----------
NET REALIZED AND UNREALIZED LOSS............................ $(2,489,265)
===========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $11,152,985
===========
</Table>
See Notes to Financial Statements 25
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income................................ $ 13,642,250 $ 27,665,939
Net Realized Loss.................................... (463,616) (5,627,230)
Net Unrealized Appreciation/Depreciation During the
Period............................................. (2,025,649) 11,427,554
------------ ------------
Change in Net Assets from Operations................. 11,152,985 33,466,263
------------ ------------
Distributions from Net Investment Income:
Class A Shares..................................... (13,699,726) (26,130,470)
Class B Shares..................................... (511,672) (1,254,229)
Class C Shares..................................... (279,104) (498,465)
Class I Shares..................................... (30,493) (60,090)
------------ ------------
Total Distributions.................................. (14,520,995) (27,943,254)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT
ACTIVITIES......................................... (3,368,010) 5,523,009
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold............................ 62,758,007 86,101,699
Net Asset Value of Shares Issued Through Dividend
Reinvestment....................................... 10,621,108 19,662,764
Cost of Shares Repurchased........................... (48,590,454) (91,989,700)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS... 24,788,661 13,774,763
------------ ------------
TOTAL INCREASE IN NET ASSETS......................... 21,420,651 19,297,772
NET ASSETS:
Beginning of the Period.............................. 658,836,388 639,538,616
------------ ------------
End of the Period (Including accumulated
undistributed net investment income of $4,165,483
and $5,044,228, respectively)...................... $680,257,039 $658,836,388
============ ============
</Table>
26 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.84 $14.71 $14.81 $14.84 $15.03 $14.56
------ ------ ------ ------ ------ ------
Net Investment Income............. .31(a) .64(a) .64(a) .66(a) .67(a) .71
Net Realized and Unrealized
Gain/Loss....................... (.05) .14 (.09) (.05) (.19) .46
------ ------ ------ ------ ------ ------
Total from Investment Operations.... .26 .78 .55 .61 .48 1.17
Less Distributions from Net
Investment Income................. .33 .65 .65 .64 .67 .70
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $14.77 $14.84 $14.71 $14.81 $14.84 $15.03
====== ====== ====== ====== ====== ======
Total Return (b).................... 1.73%* 5.46% 3.78% 4.20% 3.31% 8.35%
Net Assets at End of the Period (In
millions)......................... $636.8 $613.6 $587.6 $609.4 $658.5 $696.4
Ratio of Expenses to Average Net
Assets............................ 1.18% 1.11% 1.04% 0.98% 0.92% 0.89%
Ratio of Net Investment Income to
Average Net Assets................ 4.13% 4.40% 4.35% 4.46% 4.53% 4.89%
Portfolio Turnover.................. 5%* 16% 30% 11% 43% 47%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 0.86% 0.89% 0.88% 0.89% 0.88% 0.87%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million of more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See Notes to Financial Statements 27
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.82 $14.69 $14.79 $14.82 $15.02 $14.54
------ ------ ------ ------ ------ ------
Net Investment Income............. .25(a) .53(a) .53(a) .55(a) .56(a) .60
Net Realized and Unrealized
Gain/Loss....................... (.06) .14 (.09) (.05) (.20) .48
------ ------ ------ ------ ------ ------
Total from Investment Operations.... .19 .67 .44 .50 .36 1.08
Less Distributions from Net
Investment Income................. .27 .54 .54 .53 .56 .60
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $14.74 $14.82 $14.69 $14.79 $14.82 $15.02
====== ====== ====== ====== ====== ======
Total Return (b).................... 1.28%* 4.69% 3.03% 3.41% 2.48% 7.64%
Net Assets at End of the Period (In
millions)......................... $ 25.7 $ 29.6 $ 38.1 $ 48.8 $ 58.4 $ 65.0
Ratio of Expenses to Average Net
Assets............................ 1.93% 1.86% 1.79% 1.73% 1.67% 1.64%
Ratio of Net Investment Income to
Average Net Assets................ 3.38% 3.64% 3.60% 3.71% 3.78% 4.13%
Portfolio Turnover.................. 5%* 16% 30% 11% 43% 47%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 1.61% 1.64% 1.63% 1.64% 1.63% 1.62%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining to 0% after the sixth year.
If the sales charge was included, total returns would be lower. These
returns include combined Rule 12b-1 fees and service fees of up to 1% and do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
28 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD............................ $14.79 $14.67 $14.77 $14.80 $15.00 $14.52
------ ------ ------ ------ ------ ------
Net Investment Income............. .25(a) .53(a) .53(a) .55(a) .56(a) .60
Net Realized and Unrealized
Gain/Loss....................... (.05) .13 (.09) (.05) (.20) .48
------ ------ ------ ------ ------ ------
Total from Investment Operations.... .20 .66 .44 .50 .36 1.08
Less Distributions from Net
Investment Income................. .27 .54 .54 .53 .56 .60
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD............................ $14.72 $14.79 $14.67 $14.77 $14.80 $15.00
====== ====== ====== ====== ====== ======
Total Return (b).................... 1.35%* 4.62% 3.03% 3.43% 2.48% 7.65%
Net Assets at End of the Period (In
millions)......................... $ 16.5 $ 14.3 $ 12.5 $ 13.7 $ 17.0 $ 18.8
Ratio of Expenses to Average Net
Assets............................ 1.93% 1.86% 1.79% 1.73% 1.67% 1.64%
Ratio of Net Investment Income to
Average Net Assets................ 3.38% 3.65% 3.60% 3.71% 3.78% 4.13%
Portfolio Turnover.................. 5%* 16% 30% 11% 43% 47%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expenses).......... 1.61% 1.64% 1.63% 1.64% 1.63% 1.62%
</Table>
* Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
See Notes to Financial Statements 29
VAN KAMPEN MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
AUGUST 12, 2005
SIX MONTHS YEAR (COMMENCEMENT OF
ENDED ENDED OPERATIONS) TO
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS I SHARES 2007 2006 2005
---------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD........ $14.83 $14.71 $14.71
------ ------ ------
Net Investment Income (a)..................... .32 .68 .09
Net Realized and Unrealized Gain/Loss......... (.05) .13 -0-**
------ ------ ------
Total from Investment Operations................ .27 .81 .09
Less Distributions from Net Investment Income... .34 .69 .09
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.............. $14.76 $14.83 $14.71
====== ====== ======
Total Return (b)................................ 1.86%* 5.65% .60%*
Net Assets at End of the Period (In millions)... $ 1.3 $ 1.4 $ 1.3
Ratio of Expenses to Average Net Assets......... 0.93% 0.86% 0.82%
Ratio of Net Investment Income to Average Net
Assets........................................ 4.38% 4.67% 4.56%
Portfolio Turnover.............................. 5%* 16% 30%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expenses)..................................... 0.61% 0.64% 0.66%
</Table>
* Non-Annualized
** Amount is less than $.01.
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period. These returns do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
30 See Notes to Financial Statements
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Municipal Income Fund (the "Fund") is organized as a series of the
Van Kampen Tax Free Trust, a Delaware statutory trust, and is registered as a
diversified open-end management investment company under the Investment Company
Act of 1940 (the "1940 Act"), as amended. The Fund's investment objective is to
provide a high level of current income exempt from federal income tax,
consistent with preservation of capital. The Fund commenced investment
operations on August 1, 1990. The Fund offers Class A Shares, Class B Shares,
Class C Shares and Class I Shares. Each class of shares differs by its initial
sales load, contingent deferred sales charges, the allocation of class-specific
expenses and voting rights on the matters affecting a single class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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.
Legal expenditures that are expected to result in the restructuring of or a plan
of reorganization for an investment are recorded as realized losses. The Fund
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 Fund 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 March 31, 2007, the Fund had no when-issued and delayed delivery
purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
D. FEDERAL INCOME TAXES It is the Fund's policy to comply with the requirements
of Subchapter M of the Internal Revenue Code applicable to regulated investment
companies
31
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
and to distribute substantially all of its taxable income to its shareholders.
Therefore, no provision for federal income taxes is required.
The Fund 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 these losses against any future realized capital
gains. At September 30, 2006, the Fund had an accumulated capital loss
carryforward for tax purposes of $21,157,577, which will expire according to the
following schedule.
<Table>
<Caption>
AMOUNT EXPIRATION
$4,180,889.................................................. September 30, 2008
9,728,055.................................................. September 30, 2009
7,248,633.................................................. September 30, 2010
</Table>
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $644,413,292
============
Gross tax unrealized appreciation........................... 30,816,129
Gross tax unrealized depreciation........................... (3,174,207)
------------
Net tax unrealized appreciation investments................. $ 27,641,922
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed at least annually. Distributions from net realized gains for book
purposes may include short-term capital gains and gains on futures transactions.
All short-term capital gains and a portion of futures gains are included in
ordinary income for tax purposes.
The tax character of distributions paid during the year ended September 30,
2006 were as follows:
<Table>
Distribution paid from:
Ordinary income........................................... $ 105,229
Tax-exempt income......................................... 27,858,452
-----------
$27,963,681
===========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 35,026
Undistributed tax-exempt income............................. 6,959,489
</Table>
F. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $2,000 as a result of credits earned on cash
balances.
G. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Fund enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interest in the dealer trusts' assets and cash
flows, which are in the form of inverse
32
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
floating rate investments. The dealer trusts fund the purchases of the fixed
rate bonds by issuing floating rate notes to third parties and allowing the Fund
to retain residual interests in the bonds. The Fund enters into shortfall
agreements with the dealer trusts, which commit the Fund to pay the dealer
trusts, in certain circumstances, the difference between the liquidation value
of the fixed rate bonds held by the dealer trusts and the liquidation value of
the floating rate notes held by third parties, as well as any shortfalls in
interest cash flows. The residual interests held by the Fund (inverse floating
rate investments) include the right of the Fund (1) to cause the holders of the
floating rate notes to tender their notes at par at the next interest rate reset
date, and (2) to transfer the municipal bond from the dealer trusts to the Fund,
thereby collapsing the dealer trusts. The Fund accounts for the transfer of
bonds to the dealer trusts as secured borrowings, with the securities
transferred remaining in the Fund's investments assets, and the related floating
rate notes reflected as Fund liabilities under the caption "Floating Rate Note
Obligations" on the Statement of Assets and Liabilities. The Fund records the
interest income from the fixed rate bonds under the caption "Interest" and
records the expenses related to floating rate note obligations and any
administrative expenses of the dealer trusts under the caption "Interest and
Residual Trust Expenses" on the Fund's Statement of Operations. The notes issued
by the dealer trust have interest rates that reset weekly and the floating rate
note holders have the option to tender their notes to the dealer trusts for
redemption at par at each reset date. At March 31, 2007, Fund investments with a
value of $117,441,647 are held by the dealer trusts and serve as collateral for
the $63,020,000 in floating rate notes outstanding at that date. Contractual
maturities of the floating rate notes and interest rates in effect at March 31,
2007 are presented on the Portfolio of Investments.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $500 million.......................................... .50%
Over $500 million........................................... .45%
</Table>
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $6,500 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as legal counsel to the
Fund.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment Agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended March 31,
2007, the Fund recognized expenses of approximately $39,600 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Fund, as well as the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the
33
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Accounting Services and CCO Employment agreement are reported as part of
"Accounting and Administrative Expenses" on the Statement of Operations.
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $150,800
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund and, to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $188,158 are included in
"Other" assets on the Statements of Assets and Liabilities at March 31, 2007.
Appreciation/depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligation and do not affect the net asset value of the Fund. 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 Fund. The maximum annual benefit per
trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $119,600 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $19,700. Sales charges do not represent expenses of the
Fund.
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A............................. 3,847,281 $ 57,080,665 5,173,374 $ 75,736,363
Class B............................. 118,424 1,754,525 308,856 4,508,963
Class C............................. 245,853 3,638,658 366,639 5,340,515
Class I............................. 19,168 284,159 35,407 515,858
---------- ------------ ---------- ------------
Total Sales........................... 4,230,726 $ 62,758,007 5,884,276 $ 86,101,699
========== ============ ========== ============
Dividend Reinvestment:
Class A............................. 676,577 $ 10,037,834 1,258,124 $ 18,406,616
Class B............................. 23,591 349,580 57,246 835,581
Class C............................. 13,735 203,200 24,712 360,477
Class I............................. 2,055 30,494 4,107 60,090
---------- ------------ ---------- ------------
Total Dividend Reinvestment........... 715,958 $ 10,621,108 1,344,189 $ 19,662,764
========== ============ ========== ============
Repurchases:
Class A............................. (2,750,301) $(40,778,547) (5,014,627) $(73,329,393)
Class B............................. (397,426) (5,882,006) (965,243) (14,079,445)
Class C............................. (104,357) (1,542,455) (281,046) (4,104,067)
Class I............................. (26,106) (387,446) (32,456) (476,795)
---------- ------------ ---------- ------------
Total Repurchases..................... (3,278,190) $(48,590,454) (6,293,372) $(91,989,700)
========== ============ ========== ============
</Table>
34
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
4. REDEMPTION FEE
The Fund will assess a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within seven days of purchase. The
redemption fee is paid directly to the Fund. For the six months ended March 31,
2007, the Fund received redemption fees of approximately $1,000, which are
reported as part of "Cost of Shares Repurchased" on the Statement of Changes in
Net Assets. The per share impact from redemption fees paid to the Fund was less
than $0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $75,516,211 and $33,635,233,
respectively.
6. 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 Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio, to manage the portfolio's effective yield, maturity and duration, or
generate potential gain. All of the Fund'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
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. Risks may arise as a result of the potential inability of the
counter parties to meet the terms of their contracts.
Summarized below are the different types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS A futures contract is an agreement involving the delivery
of a particular asset on a specified future date at an agreed upon price. The
Fund generally invests in exchange traded futures on U.S. Treasury Notes and
typically closes the contract prior to delivery date. Upon entering into futures
contracts, the Fund 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 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 March 31, 2007,
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... 35
Futures Opened.............................................. 378
Futures Closed.............................................. (354)
----
Outstanding at March 31, 2007............................... 59
====
</Table>
35
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
B. INVERSE FLOATING RATE INVESTMENTS The Fund may invest a portion of its assets
in inverse floating rate instruments, either through outright purchases of
inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Fund in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that my
expose the Fund to greater risk and increased costs. Leverage may cause the
Fund's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Fund's portfolio securities. The use of leverage may also cause
the Fund to liquidate portfolio positions when it may not be advantageous to do
so in order to satisfy its obligations with respect to inverse floating rate
instruments.
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the Plans, the Fund
will incur annual fees of up to .25% of Class A average daily net assets and up
to 1.00% each of Class B and Class C average daily net assets. These fees are
accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $2,458,800 and $214,700
for Class B and Class C Shares, respectively. These amounts may be recovered
from future payments under the distribution plan or CDSC. To the extent the
unreimbursed receivable has been fully recovered, the distribution fee is
reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes -- an
interpretation of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting
for income taxes by prescribing the minimum recognition threshold a tax position
must meet before being recognized in the financial statements. FIN 48 is
effective for the fiscal years beginning after December 15, 2006 and is to be
applied to all open tax years as of the effective date. Recent SEC guidance
allows implementing FIN 48 in the fund NAV calculations as late as the funds
last NAV calculation in the first required financial statement period. As a
result, the Fund will incorporate FIN 48 in its semi annual report on March 31,
2008. The impact to the Fund's financial statements, if any, is currently being
assessed.
36
VAN KAMPEN MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
37
VAN KAMPEN MUNICIPAL INCOME FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
38
Van Kampen Municipal Income Fund
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.
(continued on next page)
Van Kampen Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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
(continued on back)
Van Kampen Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
49, 349, 549, 649
MIFSAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-00918P-Y03/07
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen
Intermediate Term Municipal Income Fund 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 fund's financial statements and a list of fund
investments as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B, AND C
SHARE OR CLASS I SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE
PROSPECTUSES CONTAIN INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT
OBJECTIVES, RISKS, CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL
PROSPECTUS, CONTACT YOUR FINANCIAL ADVISOR OR DOWNLOAD ONE AT
VANKAMPEN.COM. PLEASE READ THE PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES I SHARES
5/28/93 5/28/93 10/19/93 8/12/05
- ----------------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
AVERAGE W/O 4.75% W/O 4.00% W/O 1.00% W/O
ANNUAL SALES SALES SALES SALES SALES SALES SALES
TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 5.20% 4.84% 4.76% 4.76% 4.22% 4.22% 3.76%
10-year 4.88 4.37 4.36 4.36 4.10 4.10 --
5-year 4.84 3.82 4.62 4.37 4.09 4.09 --
1-year 4.58 -0.42 4.75 0.75 3.71 2.71 4.74
6-months 1.53 -3.27 1.52 -2.48 1.16 0.16 1.66
- ----------------------------------------------------------------------------------------------------
SEC Yield 3.14% 3.31% 2.55% 3.55%
- ----------------------------------------------------------------------------------------------------
Unsubsidized SEC
Yield 3.05% 3.21% 2.45% 3.45%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The returns shown in this report do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Performance of share classes will vary due to differences in sales charges and
expenses. Average annual total return with sales charges includes payment of the
maximum sales charge of 4.75 percent for Class A shares, a contingent deferred
sales charge of 4.00 percent for Class B shares (in years one and two and
declining to zero after year five), a contingent deferred sales charge of 1.00
percent for Class C shares in year one and combined Rule 12b-1 fees and service
fees of up to 0.25 percent for Class A shares and up to 1.00 percent for Class B
and C shares. The since inception and 10-year returns for Class B shares reflect
the conversion of Class B shares into Class A shares eight years after purchase.
The since inception returns for Class C shares reflect the conversion of Class C
shares into Class A shares ten years after purchase. Class I shares are
available for purchase exclusively by investors through (i) tax-exempt
retirement plans with assets of at least $1 million (including 401(k) plans, 457
plans, employer sponsored 403(b) plans, profit sharing and money purchase plans,
defined benefit plans and non-qualified deferred compensation plans), (ii)
fee-based investment programs with assets of at least $1 million and (iii)
institutional clients with assets of at least $1 million. Class I shares are
offered without any sales charges on purchases or sales and do not include
combined Rule 12b-1 fees and service fees. Figures shown above assume
reinvestment of all dividends and capital gains. The fund's adviser has waived
or reimbursed fees and expenses from time to time; absent such waivers/
reimbursements the fund's returns would have been lower. SEC yield is a
calculation for determining the amount of portfolio income, excluding nonincome
items as prescribed by the SEC. The unsubsidized SEC yields reflect some or all
of the expenses that the adviser had voluntarily waived. Yields are subject to
change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt 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
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to sell off until February when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and as such, the yield
differential between long maturity and short maturity issues was quite small.
New issue supply rose dramatically during the period, increasing by 15 percent
versus the prior six months and 35 percent versus the same six-month period a
year ago, as relatively low interest rates spurred municipalities to refinance
their debt. Demand for municipal bonds was robust as well, particularly for
high-yield securities as investors proved increasingly willing to take on more
risk in return for relatively higher yields. The strong demand caused credit
spreads, which were already near historically tight levels, to further narrow.
As a result, the lower-quality, higher yielding segment of the market
considerably outperformed, returning 185 basis points more than the
investment-grade segment for the overall period.
2
PERFORMANCE ANALYSIS
The fund returned 1.53 percent for the six months ended March 31, 2007 (Class A
shares, unadjusted for sales charges) underperforming the fund's benchmark, the
Lehman Brothers Municipal Bond Index, which returned 1.93 percent for the
period.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- --------------------------------------------------------------
LEHMAN
BROTHERS
MUNICIPAL
CLASS A CLASS B CLASS C CLASS I BOND INDEX
1.53% 1.52% 1.16% 1.66% 1.93%
- --------------------------------------------------------------
</Table>
The performance for the four share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definition.
The fund's credit quality profile was one of the primary contributors to returns
during the reporting period. We maintained an overweight in BBB and non-rated
bonds relative to the Lehman Brothers Municipal Bond Index, which served the
fund well as strong demand for higher-yielding bonds and steady flows into
high-yield municipal bond funds led to ongoing spread tightening and strong
performance for the sector. Although we added slightly to holdings in non-rated
paper during the period, with spreads at such tight levels we are taking a more
cautious approach to the lower-quality sectors.
In terms of yield-curve positioning, we emphasized the long end of the fund's
investment range for the yield advantage. This strategy was also additive to
performance as longer maturity issues significantly outperformed those with
shorter maturities. It's important to note that the fund has a shorter average
maturity than that of the Lehman Brothers Municipal Bond Index, which is a
long-term index, and as such, could not benefit as much from the considerable
price appreciation on the very long end of the curve.
The fund also benefited from a relative overweight in tobacco bonds as the
sector performed well during the period. Conversely, the fund's holdings in U.S.
Treasury futures, which are used to help hedge interest-rate risk in the
portfolio, detracted slightly from performance, as did an underweight relative
to the index in zero coupon bonds, which performed well due to spread tightening
in the sector.
Our activity over the period was focused on adding higher-yielding securities to
the portfolio to replace maturing bonds. New purchases included BBB rated health
care, non-rated life care, and tobacco bonds. In addition, given the Fed's
recent indication that the future direction of monetary policy will be very data
3
dependent, we are keeping the portfolio's duration (a measure of interest-rate
sensitivity) close to that of the Lehman Brothers Municipal Bond Index.
The fund's overall credit quality remained high and investments were well-
diversified across a broad range of sectors. As of the end of the period, sector
exposure was relatively unchanged from six months earlier, with appropriation,
prerefunded, and local general obligation (GO) bonds representing the fund's
largest sector weightings.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
4
<Table>
RATINGS ALLOCATIONS AS OF 3/31/07
AAA/Aaa 59.9%
AA/Aa 6.9
A/A 5.2
BBB/Baa 11.4
Non-Rated 16.6
TOP FIVE SECTORS AS OF 3/31/07
Public Education 13.4%
Retail Electric 11.2
General Purpose 9.1
Higher Education 7.8
Hospital 7.7
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
Pennsylvania 9.1%
Missouri 8.5
Florida 5.7
New Jersey 5.7
California 5.1
Ohio 4.4
Illinois 4.1
Colorado 4.0
New York 4.0
Texas 3.7
Alabama 3.6
Maryland 3.5
Oregon 3.5
Indiana 3.1
South Carolina 3.0
Tennessee 2.3
Arizona 2.3
New Mexico 2.3
Michigan 2.2
North Carolina 2.1
Kansas 2.0
Nebraska 1.5
South Dakota 1.5
West Virginia 1.4
Washington 1.0
Kentucky 1.0
Virginia 0.9
North Dakota 0.9
Arkansas 0.9
Iowa 0.5
Delaware 0.5
Wisconsin 0.5
Minnesota 0.4
Connecticut 0.2
Georgia 0.1
</Table>
<Table>
(continued on next page)
</Table>
5
<Table>
<Caption>
SUMMARY OF INVESTMENTS BY STATE CLASSIFICATION AS OF 3/31/07
(continued from previous page)
Montana 0.1%
Massachusetts 0.1
-----
Total Long-Term Investments 95.7
Short-Term Investments 2.9
-----
Total Investments 98.6
Other Assets in Excess of Liabilities 1.4
-----
Net Assets 100.0%
</Table>
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. Subject to change daily. Ratings allocations and sector
percentages are as a percentage of long-term investments. Securities are
classified by sectors that represent broad groupings of related industries.
Summary of investments by state classification are as a percentage of total net
assets. 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 fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
7
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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.
8
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and C Shares;
and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect any transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
costs would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,015.35 $ 4.67
Hypothetical............................... 1,000.00 1,020.29 4.68
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,015.15 4.72
Hypothetical............................... 1,000.00 1,020.24 4.73
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,011.58 8.38
Hypothetical............................... 1,000.00 1,016.60 8.40
(5% annual return before expenses)
Class I
Actual..................................... 1,000.00 1,016.61 3.47
Hypothetical............................... 1,000.00 1,021.49 3.48
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.93%, 0.94%,
1.67%, and 0.69%, for Class A, B, C, and I Shares, respectively, multiplied
by the average account value over the period, multiplied by 182/365 (to
reflect the one-half year period). These ratios reflect an expense waiver.
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL BONDS 95.7%
ALABAMA 3.6%
$1,260 Dothan Houston Cnty, AL Arpt Auth (MBIA Insd)
(AMT) (a)....................................... 5.400% 12/01/15 $ 1,342,933
1,000 Jefferson Cnty, AL Pub Bldg Auth Lease Rev Wts
(AMBAC Insd).................................... 5.125 04/01/21 1,075,500
1,500 Montgomery Cnty, AL Pub Bldg Auth Rev Wts Fac
Proj (MBIA Insd) (a)............................ 5.000 03/01/23 1,589,025
------------
4,007,458
------------
ARIZONA 2.3%
1,000 Arizona St Univ Rev Sys Rfdg (AMBAC Insd)....... 5.000 07/01/20 1,068,920
1,000 Maricopa Cnty, AZ Uni Sch Dist No 48 Scottsdale
Sch Impt Proj Ser B (FSA Insd) (Prerefunded @
07/01/16)....................................... 4.750 07/01/23 1,072,260
390 Pima Cnty, AZ Indl Dev Auth Indl Rev Lease Oblig
Irvington Proj Tucson Rfdg Ser A (FSA Insd)..... 7.250 07/15/10 400,986
------------
2,542,166
------------
ARKANSAS 0.9%
950 University of AR Rev UALR Cap Impt Ser B (FSA
Insd)........................................... 4.500 12/01/19 978,909
------------
CALIFORNIA 5.1%
1,090 California Ed Fac Auth Rev Occidental College
Ser A (MBIA Insd) (a)........................... 5.000 10/01/20 1,167,096
1,000 California St (AMBAC Insd) (a).................. 6.400 09/01/08 1,039,010
1,500 California St Dept Wtr Res Pwr Ser A (AMBAC
Insd) (Prerefunded @ 05/01/12).................. 5.375 05/01/18 1,637,760
565 Perris, CA Pub Fin Auth Rev Tax Alloc (a)....... 4.750 10/01/13 569,085
1,100 Santa Clara, CA Elec Rev Sub Ser A (MBIA
Insd)........................................... 5.250 07/01/20 1,190,827
------------
5,603,778
------------
COLORADO 4.0%
500 Colorado Hlth Fac Auth Rev Christian Living
Cmnty Proj Ser A................................ 5.250 01/01/15 514,385
115 Colorado Hlth Fac Auth Rev Sr Living Fac Eaton
Ter Ser A....................................... 6.800 07/01/09 118,058
1,560 Colorado Springs, CO Util Rev Sys Sub Lien Impt
Ser A........................................... 5.000 11/15/19 1,667,250
1,000 Denver, CO City & Cnty Arpt Rev Rfdg Ser D (FSA
Insd) (AMT)..................................... 5.500 11/15/12 1,069,380
1,000 Denver, CO Convention Ctr Hotel Auth Rev Rfdg
(XLCA Insd)..................................... 5.250 12/01/14 1,094,730
------------
4,463,803
------------
CONNECTICUT 0.2%
165 New Haven, CT Indl Fac Rev Adj Govt Ctr Thermal
Energies (AMT).................................. 7.250 07/01/09 165,825
------------
</Table>
10 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
DELAWARE 0.5%
$ 500 New Castle Cnty, DE Rev Newark Charter Sch Inc
Proj............................................ 5.000% 09/01/22 $ 518,030
------------
FLORIDA 5.7%
500 Baywinds Cmnty Dev Dist FL Spl Assmt Ser B...... 4.900 05/01/12 495,215
1,000 Brevard Cnty, FL Sch Brd Ctf Rfdg Ser B (FGIC
Insd)........................................... 5.000 07/01/20 1,056,810
2,000 Broward Cnty, FL Arpt Sys Rev Rfdg Ser E (MBIA
Insd) (AMT)..................................... 5.375 10/01/13 2,065,240
500 Halifax, FL Hosp Med Ctr Rev Impt & Rfdg Ser
A............................................... 5.250 06/01/19 529,625
1,500 Orange Cnty, FL Sch Brd Ctf Ser A (AMBAC
Insd)........................................... 5.250 08/01/14 1,615,065
500 Saint Johns Cnty, FL Indl Dev Auth Hlthcare
Glenmoor Proj Ser A............................. 5.000 01/01/16 503,485
------------
6,265,440
------------
GEORGIA 0.1%
155 Forsyth Cnty, GA Hosp Auth Rev Antic Ctf GA
Baptist Hlthcare Sys Proj (b)................... 6.000 10/01/08 158,066
------------
ILLINOIS 4.1%
545 Clay Cnty, IL Hosp Rev (Prerefunded @ 12/01/08)
(a)............................................. 5.500 12/01/10 568,473
500 Hodgkins, IL Tax Increment Rev Sr Lien Rfdg..... 5.000 01/01/14 525,975
57 Huntley, IL Spl Svc Area No 7 Spl Tax........... 6.000 03/01/09 57,679
500 Illinois Fin Auth Rev Landing at Plymouth Pl
Proj Ser A...................................... 5.250 05/15/14 507,175
1,000 Illinois Fin Auth Student Hsg Rev MJH Ed
Assistance IV Sr Ser A.......................... 5.500 06/01/19 1,069,160
500 Lincolnshire, IL Spl Svc Area Sedgebrook Proj... 5.000 03/01/11 511,490
282 Pingree Grove Village, IL Spl Svc Area No 1 Spl
Tax Cambridge Lakes Proj Ser 05................. 5.250 03/01/15 291,111
1,000 Round Lake Beach, IL Tax........................ 4.650 12/15/13 1,008,420
------------
4,539,483
------------
INDIANA 3.1%
1,000 Allen Cnty, IN Juvenile Just Ctr First Mtg
(AMBAC Insd).................................... 5.500 01/01/18 1,077,740
1,000 Carmel Cnty, IN Redev Auth Opt Income Tax Lease
Rent Rev (MBIA Insd)............................ 5.000 07/01/22 1,065,090
830 Hobart, IN Bldg Corp First Mtg (FGIC Insd)
(a)............................................. 5.500 07/15/13 909,464
400 Saint Joseph Cnty, IN Econ Dev Rev Holy Cross
Vlg Notre Dame Proj Ser A....................... 5.750 05/15/13 414,868
------------
3,467,162
------------
IOWA 0.5%
500 Coralville, IA Ctf Partn Ser D.................. 5.250 06/01/22 531,365
------------
</Table>
See Notes to Financial Statements 11
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
KANSAS 2.0%
$ 500 Burlington, KS Environmental Impt Rev (Mandatory
Put 10/01/07)................................... 4.750% 09/01/15 $ 502,115
500 Kansas St Dev Fin Auth Hlth Fac Rev Hays Med Ctr
Inc Ser L....................................... 5.250 11/15/16 536,065
1,000 Shawnee Cnty, KS Sch Dist 501 Topeka
(Prerefunded @ 02/01/12)........................ 5.000 02/01/20 1,053,190
120 Wyandotte Cnty, KS City KS Univ Brd of Public
Util Office Bldg Complex Proj (MBIA Insd)....... 5.000 05/01/11 125,885
------------
2,217,255
------------
KENTUCKY 1.0%
1,000 Louisville & Jefferson Cnty, KY Ser C (FSA Insd)
(AMT)........................................... 5.500 07/01/17 1,077,030
------------
MARYLAND 3.5%
1,000 Baltimore, MD Convention Ctr Hotel Rev Ser A
(XLCA Insd)..................................... 5.250 09/01/22 1,092,750
1,000 Maryland St Econ Dev Corp Student Hsg Rev Univ
MD College Park Proj Rfdg (CIFG Insd)........... 5.000 06/01/13 1,069,080
625 Maryland St Econ Dev Corp Univ MD College Park
Proj (b)........................................ 5.750 06/01/13 696,700
500 Maryland St Hlth & Higher King Farm Presbyterian
Cmnty Ser B..................................... 5.000 01/01/17 502,710
500 Prince Georges Cnty, MD Spl Oblig Natl Harbor
Proj............................................ 4.700 07/01/15 508,835
------------
3,870,075
------------
MASSACHUSETTS 0.1%
85 Massachusetts St Indl Fin Agy Rev Gtr Lynn
Mental Hlth (Acquired 06/24/1998, Cost $85,000)
(b) (c)......................................... 6.200 06/01/08 87,147
------------
MICHIGAN 2.2%
1,000 Brighton, MI Area Sch Dist Rfdg (a)............. 5.250 05/01/18 1,076,120
1,000 Brighton, MI Area Sch Dist Rfdg................. 5.250 05/01/20 1,076,120
250 Michigan St Strategic Fd Ltd Oblig United Waste
Sys Proj (AMT).................................. 5.200 04/01/10 256,240
------------
2,408,480
------------
MINNESOTA 0.4%
430 Inver Grove Heights, MN Presbyterian Homes Care
Rfdg............................................ 5.000 10/01/16 431,333
------------
MISSOURI 8.5%
500 Carthage, MO Hosp Rev........................... 4.000 04/01/07 499,995
500 Fenton, MO Tax Increment Rev Gravois Bluffs
Redev Proj Rfdg................................. 5.000 04/01/13 524,950
610 Ferguson, MO Tax Increment Rev Crossing at Halls
Ferry Rfdg (a).................................. 5.500 04/01/14 625,122
</Table>
12 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MISSOURI (CONTINUED)
$1,350 Kansas City, MO Indl Dev Auth Plaza Lib Proj.... 6.000% 03/01/16 $ 1,404,472
1,000 Macon, MO Ctf Partn (MBIA Insd)................. 5.250 08/01/17 1,035,010
830 Missouri St Dev Fin Brd Fac Rev Pub Safety Proj
Ser A (a)....................................... 5.000 03/01/11 857,979
2,125 O' Fallon, MO Ctf Partn (MBIA Insd) (a)......... 5.375 02/01/18 2,270,988
2,000 Saint Charles, MO Ctf Partn Ser B............... 5.500 05/01/18 2,137,180
------------
9,355,696
------------
MONTANA 0.1%
110 Crow Fin Auth, MT Tribal Purp Rev (Acquired
12/11/1997, Cost $110,000) (c).................. 5.400 10/01/07 110,876
------------
NEBRASKA 1.5%
1,500 University of NE Fac Corp Defd Maint (AMBAC
Insd)........................................... 5.000 07/15/17 1,634,085
------------
NEW JERSEY 5.7%
1,400 Essex Cnty, NJ Impt Auth Lease Gtd Cnty
Correctional Fac Proj (FGIC Insd) (Prerefunded @
10/01/10)....................................... 5.750 10/01/30 1,497,986
1,500 New Jersey Econ Dev Auth Rev Cig Tax............ 5.500 06/15/16 1,631,415
1,000 New Jersey Hlthcare Fac Fin Auth Rev St. Clare's
Hosp Inc Rfdg Ser A (Radian Insd)............... 5.250 07/01/20 1,064,030
455 Rahway, NJ Ctf Partn (MBIA Insd)................ 5.500 02/15/16 482,241
565 Rahway, NJ Ctf Partn (MBIA Insd)................ 5.600 02/15/17 601,024
1,000 Tobacco Settlement Fin Corp NJ Ser 1A........... 4.500 06/01/23 978,130
------------
6,254,826
------------
NEW MEXICO 2.3%
1,000 Jicarilla, NM Apache Nation Rev Ser A (Acquired
10/23/2003, Cost $1,020,380) (c)................ 5.500 09/01/23 1,078,640
1,310 New Mexico Fin Auth Rev Sr Lien Pub Proj
Revolving Fd Ser B (MBIA Insd).................. 5.000 06/01/17 1,420,865
------------
2,499,505
------------
NEW YORK 4.0%
160 Brookhaven, NY Indl Dev Agy Sr Residential Hsg
Rev Woodcrest Estates Fac Ser A (AMT)........... 5.875 12/01/09 161,714
1,000 Long Island Pwr Auth NY Elec Gen Ser C
(Prerefunded @ 09/01/13)........................ 5.500 09/01/17 1,105,290
500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................. 6.250 03/01/15 530,960
780 New York City Indl Dev Agy Spl Fac Rev Term One
Group Assn Proj (AMT)........................... 5.000 01/01/10 804,203
300 New York City Ser A............................. 7.000 08/01/07 303,123
430 New York St Dorm Auth Rev Mt Sinai NYU Hlth Ser
C............................................... 5.000 07/01/11 433,999
</Table>
See Notes to Financial Statements 13
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$ 5 Niagara Falls, NY Pub Impt (MBIA Insd).......... 6.900% 03/01/20 $ 5,014
1,000 Tobacco Settlement Fin Corp NY Ser B-1C......... 5.250 06/01/13 1,016,680
------------
4,360,983
------------
NORTH CAROLINA 2.1%
630 North Carolina Eastn Muni Pwr Agy Pwr Sys Rev
Ser D........................................... 6.450 01/01/14 675,203
500 North Carolina Med Care Commn Hlthcare Fac First
Mtg Salemtowne Rfdg (a)......................... 5.000 10/01/15 515,255
1,000 North Carolina Muni Pwr Agy Ser A (MBIA Insd)... 5.250 01/01/19 1,072,370
------------
2,262,828
------------
NORTH DAKOTA 0.9%
500 Grand Forks, ND Sr Hsg Rev 4000 Vly Square Proj
Rfdg............................................ 5.000 12/01/16 508,515
500 Ward Cnty, ND Hlthcare Fac Rev Trinity Obligated
Group........................................... 5.125 07/01/17 527,860
------------
1,036,375
------------
OHIO 4.4%
500 Adams Cnty Hosp Fac Impt Rev Adams Cnty Hosp
Proj............................................ 6.250 09/01/20 514,120
500 Athens Cnty, OH Hosp Fac Rev & Impt O' Bleness
Mem Rfdg Ser A.................................. 6.250 11/15/13 525,610
1,370 Cleveland, OH Non Tax Rev Cleveland Stad Proj
Rfdg (AMBAC Insd)............................... 5.125 12/01/20 1,465,818
355 Dayton, OH Spl Fac Rev Afco Cargo Day LLC Proj
(AMT) (a)....................................... 6.000 04/01/09 357,890
750 Ohio Muni Elec Generation Agy Jt Venture 5 Ctf
Ben Int Rfdg (AMBAC Insd)....................... 5.000 02/15/21 790,282
1,160 Sugarcreek, OH Loc Sch Dist Sch Impt & Rfdg
(MBIA Insd) (Prerefunded @ 12/01/13) (a)........ 5.250 12/01/18 1,264,992
------------
4,918,712
------------
OREGON 3.5%
2,575 Emerald Peoples Util Dist OR Rfdg Ser A (FSA
Insd) (a)....................................... 5.250 11/01/16 2,793,772
1,000 Port Morrow, OR Pollutn Ctl Portland Gen Rfdg
Ser A (Mandatory Put 05/01/09).................. 5.200 05/01/33 1,024,120
------------
3,817,892
------------
PENNSYLVANIA 9.1%
500 Allegheny Cnty, PA Indl Dev Auth Lease Rev
Residential Res Inc Proj........................ 5.000 09/01/21 513,205
250 Allegheny Cnty, PA Redev Auth Rev Pittsburgh
Mills Proj...................................... 5.100 07/01/14 258,692
1,120 Canon McMillan Sch Dist PA Rfdg Ser A (MBIA
Insd)........................................... 5.000 12/15/15 1,200,237
500 Montgomery Cnty, PA Indl Dev Auth Rev Mtg
Whitemarsh Cont Care Proj....................... 6.000 02/01/21 527,410
</Table>
14 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
PENNSYLVANIA (CONTINUED)
$ 950 Philadelphia, PA Gas Wks Rev Ser 18 (AGL
Insd)........................................... 5.250% 08/01/18 $ 1,020,367
900 Philadelphia, PA Gas Wks Rev Ser 3 (FSA Insd)... 5.000 08/01/10 935,928
2,000 Philadelphia, PA Redev Auth Rev Neighborhood
Trans Ser A (FGIC Insd)......................... 5.500 04/15/16 2,163,200
1,090 Wilson, PA Area Sch Dist (FGIC Insd)............ 5.125 03/15/17 1,156,708
2,070 York Cnty, PA Sch Technology (FGIC Insd)........ 5.375 02/15/16 2,243,528
------------
10,019,275
------------
SOUTH CAROLINA 3.0%
1,020 Berkeley Cnty, SC Impt & Rfdg (FSA Insd)........ 5.000 09/01/17 1,089,717
1,000 Kershaw Cnty, SC Pub Sch Fndtn Installment Pwr
Rev Kershaw Cnty Sch Dist Proj (CIFG Insd)...... 5.000 12/01/22 1,061,760
1,065 Lexington, SC Wtr & Swr Rev & Impt Comb Rfdg Ser
A (MBIA Insd) (a)............................... 5.000 04/01/14 1,113,234
------------
3,264,711
------------
SOUTH DAKOTA 1.5%
1,515 Minnehaha Cnty, SD Ctf Ltd Tax (FSA Insd)....... 5.000 12/01/18 1,619,762
------------
TENNESSEE 2.3%
455 Chattanooga, TN Hlth Ed Hsg Fac CDFI Phase I LLC
Proj Rfdg Ser A................................. 5.000 10/01/15 468,172
700 Franklin, TN Spl Sch Dist Cap Apprec (FSA
Insd)........................................... * 06/01/15 506,744
1,000 Gatlinburg, TN Pub Bldg Auth Rfdg (AMBAC
Insd)........................................... 5.750 12/01/11 1,089,130
500 Shelby Cnty, TN Hlth Ed & Hsg Fac Brd Rev
Trezevant Manor Proj Ser A...................... 5.250 09/01/16 503,785
------------
2,567,831
------------
TEXAS 3.7%
1,000 Alliance Arpt Auth Inc TX Spl Fac Rev FedEx Corp
Proj Rfdg (AMT)................................. 4.850 04/01/21 1,020,850
395 Brazos Riv Auth TX Pollutn Ctl Rev Adj TXU Elec
Co Proj Rfdg Ser C (AMT) (Mandatory Put
11/01/11)....................................... 5.750 05/01/36 406,941
500 Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc
Proj............................................ 5.000 08/15/13 515,795
350 Hidalgo Cnty, TX Hlth Svc Mission Hosp Inc
Proj............................................ 5.000 08/15/19 356,398
1,000 Lower Colorado Riv Auth TX LCRA Svc Corp Proj
Rfdg (FGIC Insd)................................ 5.000 05/15/17 1,042,660
500 Mesquite, TX Hlth Fac Dev Retirement Christian
Care............................................ 5.000 02/15/15 511,505
195 San Antonio, TX Hsg Fin Corp Multi-Family Hsg
Rev Beverly Oaks Apt Proj Ser A (a)............. 7.500 02/01/10 200,534
------------
4,054,683
------------
VIRGINIA 0.9%
1,000 Tobacco Settlement Fin Corp VA Asset Bkd........ 5.250 06/01/19 1,050,390
------------
</Table>
See Notes to Financial Statements 15
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
WASHINGTON 1.0%
$1,000 Klickitat Cnty, WA Pub Util Dist No 001 Elec Rev
Rfdg Ser B (FGIC Insd).......................... 5.250% 12/01/22 $ 1,095,590
------------
WEST VIRGINIA 1.4%
1,500 West Virginia St Hosp Fin Auth (MBIA Insd)...... 6.100 01/01/18 1,505,745
------------
WISCONSIN 0.5%
500 Wisconsin St Hlth & Ed Fac Beaver Dam Cmnty Hosp
Inc Ser A....................................... 5.500 08/15/14 509,290
------------
TOTAL LONG-TERM INVESTMENTS 95.7%
(Cost $102,650,966)....................................................... 105,271,860
SHORT-TERM INVESTMENTS 2.9%
(Cost $3,200,000)......................................................... 3,200,000
------------
TOTAL INVESTMENTS 98.6%
(Cost $105,850,966)....................................................... 108,471,860
OTHER ASSETS IN EXCESS OF LIABILITIES 1.4%................................. 1,481,506
------------
NET ASSETS 100.0%.......................................................... $109,953,366
============
</Table>
Percentages are calculated as a percentage of net assets.
* Zero coupon bond
(a) The Fund owns 100% of the outstanding bond issuance.
(b) Escrowed to Maturity
(c) This security is restricted and may be resold only in transactions exempt
from registration which are normally those transactions with qualified
institutional buyers. Restricted securities comprise 1.2% of net assets.
AGL--Assured Guaranty Ltd.
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
CIFG--CDC IXIS Financial Guaranty
FGIC--Financial Guaranty Insurance Co.
FSA--Financial Security Assurance Inc.
MBIA--Municipal Bond Investors Assurance Corp.
Radian--Radian Asset Assurance
XLCA--XL Capital Assurance Inc.
16 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $105,850,966)....................... $108,471,860
Cash........................................................ 117,481
Receivables:
Interest.................................................. 1,504,544
Investments Sold.......................................... 145,000
Fund Shares Sold.......................................... 58,239
Other....................................................... 146,868
------------
Total Assets............................................ 110,443,992
------------
LIABILITIES:
Payables:
Fund Shares Repurchased................................... 109,634
Income Distributions...................................... 71,385
Investment Advisory Fee................................... 36,962
Distributor and Affiliates................................ 13,494
Trustees' Deferred Compensation and Retirement Plans........ 222,283
Accrued Expenses............................................ 36,868
------------
Total Liabilities....................................... 490,626
------------
NET ASSETS.................................................. $109,953,366
============
NET ASSETS CONSIST OF:
Capital (Par value of $.01 per share with an unlimited
number of shares authorized).............................. $107,112,474
Net Unrealized Appreciation................................. 2,620,894
Accumulated Undistributed Net Investment Income............. 288,913
Accumulated Net Realized Loss............................... (68,915)
------------
NET ASSETS.................................................. $109,953,366
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $82,025,606 and 7,696,727 shares of
beneficial interest issued and outstanding)............. $ 10.66
Maximum sales charge (4.75%* of offering price)......... .53
------------
Maximum offering price to public........................ $ 11.19
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $12,890,801 and 1,193,809 shares of
beneficial interest issued and outstanding)............. $ 10.80
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $13,963,926 and 1,311,848 shares of
beneficial interest issued and outstanding)............. $ 10.64
============
Class I Shares:
Net asset value and offering price per share (Based on
net assets of $1,073,033 and 100,731 shares of
beneficial interest issued
and outstanding)........................................ $ 10.65
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
See Notes to Financial Statements 17
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $2,444,836
----------
EXPENSES:
Investment Advisory Fee..................................... 270,260
Distribution (12b-1) and Service Fees
Class A................................................... 98,922
Class B................................................... 17,390
Class C................................................... 69,571
Accounting and Administrative Expenses...................... 34,734
Transfer Agent Fees......................................... 30,670
Professional Fees........................................... 27,419
Registration Fees........................................... 23,172
Trustees' Fees and Related Expenses......................... 17,208
Custody..................................................... 7,706
Reports to Shareholders..................................... 4,110
Other....................................................... 8,782
----------
Total Expenses.......................................... 609,944
Investment Advisory Fee Reduction....................... 54,052
Less Credits Earned on Cash Balances.................... 1,239
----------
Net Expenses............................................ 554,653
----------
NET INVESTMENT INCOME....................................... $1,890,183
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 17,217
Futures................................................... (88,253)
----------
Net Realized Loss........................................... (71,036)
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 2,840,451
End of the Period......................................... 2,620,894
----------
Net Unrealized Depreciation During the Period............... (219,557)
----------
NET REALIZED AND UNREALIZED LOSS............................ $ (290,593)
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $1,599,590
==========
</Table>
18 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
--------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................. $ 1,890,183 $ 3,877,834
Net Realized Gain/Loss................................. (71,036) 228,777
Net Unrealized Appreciation/Depreciation During the
Period............................................... (219,557) 45,442
------------ ------------
Change in Net Assets from Operations................... 1,599,590 4,152,053
------------ ------------
Distributions from Net Investment Income:
Class A Shares....................................... (1,360,109) (2,855,993)
Class B Shares....................................... (236,027) (553,231)
Class C Shares....................................... (189,665) (430,486)
Class I Shares....................................... (17,682) (22,966)
------------ ------------
(1,803,483) (3,862,676)
------------ ------------
Distributions from Net Realized Gain:
Class A Shares....................................... -0- (390,380)
Class B Shares....................................... -0- (76,687)
Class C Shares....................................... -0- (80,238)
Class I Shares....................................... -0- (2,627)
------------ ------------
-0- (549,932)
------------ ------------
Total Distributions.................................... (1,803,483) (4,412,608)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.... (203,893) (260,555)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.............................. 13,713,528 23,378,784
Net Asset Value of Shares Issued Through Dividend
Reinvestment......................................... 1,331,966 3,272,076
Cost of Shares Repurchased............................. (14,553,849) (38,938,362)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS..... 491,645 (12,287,502)
------------ ------------
TOTAL INCREASE/DECREASE IN NET ASSETS.................. 287,752 (12,548,057)
NET ASSETS:
Beginning of the Period................................ 109,665,614 122,213,671
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $288,913 and $202,213,
respectively)........................................ $109,953,366 $109,665,614
============ ============
</Table>
See Notes to Financial Statements 19
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD........................... $10.68 $10.69 $10.72 $10.76 $10.86 $10.42
------ ------ ------ ------ ------ ------
Net Investment Income............ .19(a) .37(a) .36 .37 .38 .42
Net Realized and Unrealized
Gain/Loss...................... (.03) .04 (.01) .04 (.03) .44
------ ------ ------ ------ ------ ------
Total from Investment Operations... .16 .41 .35 .41 .35 .86
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income......................... .18 .37 .37 .37 .40 .42
Distributions from Net Realized
Gain........................... -0- .05 .01 .08 .05 -0-
------ ------ ------ ------ ------ ------
Total Distributions................ .18 .42 .38 .45 .45 .42
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD........................... $10.66 $10.68 $10.69 $10.72 $10.76 $10.86
====== ====== ====== ====== ====== ======
Total Return* (b).................. 1.53%** 3.91% 3.31% 3.84% 3.33% 8.48%
Net Assets at End of the Period (In
millions)........................ $ 82.0 $ 79.4 $ 88.2 $ 76.5 $ 70.1 $ 53.5
Ratio of Expenses to Average Net
Assets*.......................... .93% .99% .99% .93% .84% .85%
Ratio of Net Investment Income to
Average Net Assets*.............. 3.59% 3.46% 3.32% 3.50% 3.55% 4.08%
Portfolio Turnover................. 4%** 21% 34% 60% 35% 75%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets........................ 1.03% 1.09% 1.09% 1.03% 1.04% 1.14%
Ratio of Net Investment Income
to Average Net Assets......... 3.49% 3.36% 3.22% 3.40% 3.35% 3.79%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
include combined Rule 12b-1 fees and service fees of up to .25% and do not
reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
20 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ----------------------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $10.82 $10.82 $10.75 $10.78 $10.84 $10.41
------ ------ ------ ------ ------ ------
Net Investment Income........... .19(a) .39(a) .40 .30 .32 .35
Net Realized and Unrealized
Gain/Loss..................... (.03) .04 (.03) .04 (.01) .42
------ ------ ------ ------ ------ ------
Total from Investment
Operations...................... .16 .43 .37 .34 .31 .77
------ ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income............. .18 .38 .29 .29 .32 .34
Distributions from Net Realized
Gain.......................... -0- .05 .01 .08 .05 -0-
------ ------ ------ ------ ------ ------
Total Distributions............... .18 .43 .30 .37 .37 .34
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.......................... $10.80 $10.82 $10.82 $10.75 $10.78 $10.84
====== ====== ====== ====== ====== ======
Total Return* (b)................. 1.52%(d)** 4.13%(d) 3.47%(d) 3.15%(d) 2.96%(c) 7.61%
Net Assets at End of the Period
(In millions)................... $ 12.9 $ 14.6 $ 16.9 $ 20.3 $ 23.9 $ 17.1
Ratio of Expenses to Average Net
Assets*......................... .94%(d) .78%(d) .82%(d) 1.67%(d) 1.59% 1.60%
Ratio of Net Investment Income to
Average Net Assets*............. 3.59%(d) 3.67%(d) 3.51%(d) 2.76%(d) 3.08%(c) 3.34%
Portfolio Turnover................ 4%** 21% 34% 60% 35% 75%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have been lower
and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................... 1.04%(d) .88%(d) .92%(d) 1.77%(d) 1.79% 1.89%
Ratio of Net Investment Income
to Average Net Assets........ 3.49%(d) 3.57%(d) 3.41%(d) 2.66%(d) 2.88%(c) 3.05%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within the first and second year of purchase and declining to 0% after
the fifth year. If the sales charge was included, total returns would be
lower. These returns include combined Rule 12b-1 fees and service fees of up
to 1% and do not reflect the deduction of taxes that a shareholder would pay
on Fund distributions or the redemption of Fund shares.
(c) Certain non-recurring payments were made to Class B Shares, resulting in an
increase to the Ratio of Net Investment Income to Average Net Assets and
Total Return of .28%.
(d) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See footnote 7).
See Notes to Financial Statements 21
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ----------------------------------------------
2007 2006 2005 2004 2003 2002
-----------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD.......................... $10.66 $10.68 $10.70 $10.73 $10.82 $10.40
------ ------ ------ ------ ------ ------
Net Investment Income........... .15(a) .29(a) .29 .30 .30 .34
Net Realized and Unrealized
Gain/Loss..................... (.03) .03 (.01) .04 (.02) .42
------ ------ ------ ------ ------ ------
Total from Investment
Operations...................... .12 .32 .28 .34 .28 .76
------ ------ ------ ------ ------ ------
Less:
Distributions from Net
Investment Income............. .14 .29 .29 .29 .32 .34
Distributions from Net Realized
Gain.......................... -0- .05 .01 .08 .05 -0-
------ ------ ------ ------ ------ ------
Total Distributions............... .14 .34 .30 .37 .37 .34
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE
PERIOD.......................... $10.64 $10.66 $10.68 $10.70 $10.73 $10.82
====== ====== ====== ====== ====== ======
Total Return* (b)................. 1.16%(d)** 3.04% 2.64%(d) 3.17%(d) 2.69%(c) 7.52%
Net Assets at End of the Period
(In millions)................... $ 14.0 $ 14.7 $ 16.5 $ 18.1 $ 21.4 $ 13.2
Ratio of Expenses to Average Net
Assets*......................... 1.67%(d) 1.74% 1.64%(d) 1.66%(d) 1.59% 1.60%
Ratio of Net Investment Income to
Average Net Assets*............. 2.85%(d) 2.71% 2.69%(d) 2.77%(d) 2.84%(c) 3.33%
Portfolio Turnover................ 4%** 21% 34% 60% 35% 75%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets................... 1.77%(d) 1.84% 1.74%(d) 1.76%(d) 1.79% 1.89%
Ratio of Net Investment Income
to Average Net Assets........ 2.75%(d) 2.61% 2.59%(d) 2.67%(d) 2.64%(c) 3.04%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1%, charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
(c) Certain non-recurring payments were made to Class C Shares, resulting in an
increase to the Ratio of Net Investment Income to Average Net Assets and
Total Return of .06%.
(d) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See footnote 7).
22 See Notes to Financial Statements
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
AUGUST 12, 2005
SIX MONTHS (COMMENCEMENT OF
ENDED YEAR ENDED OPERATIONS) TO
MARCH 31, SEPTEMBER 30, SEPTEMBER 30,
CLASS I SHARES 2007 2006 2005
-----------------------------------------------
NET ASSET VALUE, BEGINNING OF THE PERIOD...... $10.67 $10.69 $10.70
------ ------ ------
Net Investment Income....................... .20(a) .39(a) .05
Net Realized and Unrealized Gain/Loss....... (.02) .03 (.01)
------ ------ ------
Total from Investment Operations.............. .18 .42 .04
------ ------ ------
Less:
Distributions from Net Investment Income.... .20 .39 .05
Distributions from Net Realized Gain........ -0- .05 -0-
------ ------ ------
Total Distributions........................... .20 .44 .05
------ ------ ------
NET ASSET VALUE, END OF THE PERIOD............ $10.65 $10.67 $10.69
====== ====== ======
Total Return* (b)............................. 1.66%** 4.08% 0.38%**
Net Assets at End of the Period (In
millions)................................... $ 1.1 $ .9 $ .6
Ratio of Expenses to Average Net Assets*...... .69% .72% .77%
Ratio of Net Investment Income to Average Net
Assets*..................................... 3.85% 3.73% 3.59%
Portfolio Turnover............................ 4%** 21% 34%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average Net Assets.... .79% .82% .87%
Ratio of Net Investment Income to Average
Net Assets............................... 3.75% 3.63% 3.49%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period. These returns do
not reflect the deduction of taxes that a shareholder would pay on Fund
distributions or the redemption of Fund shares.
See Notes to Financial Statements 23
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen Intermediate Term Municipal Income Fund (the "Fund") is organized as
a series of the Van Kampen Tax Free Trust, a Delaware statutory trust, and is
registered as a diversified, open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"), as amended. The Fund's
investment objective is to provide investors with a high level of current income
exempt from federal income tax, consistent with preservation of capital. The
Fund commenced investment operations on May 28, 1993. The Fund offers Class A
Shares, Class B Shares, Class C Shares and Class I Shares. Each class of shares
differs by its initial sales load, contingent deferred sales charges, the
allocation of class specific expenses and voting rights on matters affecting a
single class.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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 are valued at fair value
using procedures established in good faith by the Board of Trustees. Futures
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.
Legal expenditures that are expected to result in the restructuring of or a plan
of reorganization for an investment are recorded as realized losses. The Fund
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. Purchasing securities on
this basis involves a risk that the market value at the time of delivery may be
lower than the agreed upon purchase price resulting in an unrealized loss. The
Fund 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 March 31, 2007, the Fund has no when-issued or delayed
delivery purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
24
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
D. FEDERAL INCOME TAXES It is the Fund'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, if any, to
its shareholders. Therefore, no provision for federal income taxes is required.
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation were as follows:
<Table>
Cost of investments for tax purposes........................ $105,833,996
============
Gross tax unrealized appreciation........................... $ 2,654,939
Gross tax unrealized depreciation........................... (17,075)
------------
Net tax unrealized appreciation on investments.............. $ 2,637,864
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares daily and pays monthly
dividends from net investment income. Net realized gains, if any, are
distributed at least annually. Distributions from net realized gains for book
purposes may include short term capital gains and gains on futures transactions.
All short-term capital gains and a portion of futures gains are included in
ordinary income for tax purposes.
The tax character of distributions paid during the year ended September 30,
2006 was as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 467,011
Tax-exempt income......................................... 3,880,983
Long-term capital gain.................................... 84,585
----------
$4,432,579
==========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis was as follows:
<Table>
Undistributed tax-exempt income............................. $459,602
</Table>
F. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $1,239 as a result of credits earned on cash
balances.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management (the "Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $500 million.......................................... .50%
Over $500 million........................................... .45%
</Table>
For the six months ended March 31, 2007, the Adviser waived $54,052 of its
investment advisory fee. This represents .10% of the Fund's average daily net
assets for the period. This waiver is voluntary in nature and can be
discontinued at the Adviser's discretion.
25
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $800 representing legal services provided by Skadden, Arps, Slate,
Meagher & Flom LLP, of which a trustee of the Fund is a partner of such firm and
he and his law firm provide services as legal counsel to the Fund.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended March 31,
2007, the Fund recognized expenses of approximately $24,200 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Fund, as well as the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the Accounting Services and CCO Employment agreement are reported as
part of "Accounting and Administrative Expenses" on the Statement of Operations.
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $26,200
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund, and to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $126,658 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2007.
Appreciation/ depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligation and do not affect the net asset value of the Fund. 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 Fund. The maximum annual benefit per
trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $10,000 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $8,800. Sales charges do not represent expenses of the
Fund.
26
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006,
transactions were as follows:
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------- --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A........................... 1,079,715 $ 11,535,275 1,797,066 $ 19,041,928
Class B........................... 41,352 447,684 122,999 1,315,764
Class C........................... 142,512 1,519,501 243,523 2,575,766
Class I........................... 19,796 211,068 42,334 445,326
---------- ------------ ---------- ------------
Total Sales......................... 1,283,375 $ 13,713,528 2,205,922 $ 23,378,784
========== ============ ========== ============
Dividend Reinvestment:
Class A........................... 99,948 $ 1,067,753 242,302 $ 2,565,280
Class B........................... 12,604 136,405 35,247 377,806
Class C........................... 10,326 110,126 28,688 303,396
Class I........................... 1,656 17,682 2,418 25,594
---------- ------------ ---------- ------------
Total Dividend Reinvestment......... 124,534 $ 1,331,966 308,655 $ 3,272,076
========== ============ ========== ============
Repurchases:
Class A........................... (921,591) $ (9,843,580) (2,853,781) $(30,222,471)
Class B........................... (212,869) (2,302,647) (367,467) (3,939,234)
Class C........................... (220,868) (2,353,012) (436,595) (4,611,782)
Class I........................... (5,112) (54,610) (15,578) (164,875)
---------- ------------ ---------- ------------
Total Repurchases................... (1,360,440) $(14,553,849) (3,673,421) $(38,938,362)
========== ============ ========== ============
</Table>
4. REDEMPTION FEE
The Fund assesses a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within seven days of purchase. The
redemption fee is paid directly to the Fund. For the six months ended March 31,
2007, the Fund did not receive any redemption fees.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $4,047,195 and $4,581,268, respectively.
6. 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 Fund may use derivative instruments for a variety of reasons, such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio, to manage the portfolio's effective yield, maturity and duration, or
to generate potential gain. All of the Fund's portfolio holdings, including
derivative instruments, are marked to market each day with the change in value
reflected in the unrealized appreciation/depreciation. Upon
27
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
disposition, a realized 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. Risks may arise as a result of the potential
inability of the counterparties to meet the terms of their contracts.
During the period, the Fund invested in futures contracts, a type of
derivative. A futures contract is an agreement involving the delivery of a
particular asset on a specified future date at an agreed upon price. The Fund
generally invests in exchange traded futures contracts on U.S. Treasury
Securities and typically closes the contract prior to delivery date. These
contracts are generally used to manage the Fund's effective maturity and
duration. Upon entering into futures contracts, the Fund 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 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 March 31, 2007
were as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... 45
Futures Opened.............................................. 83
Futures Closed.............................................. (128)
----
Outstanding at March 31, 2007............................... 0
====
</Table>
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the Plans, the Fund
will incur annual fees of up to .25% of Class A average daily net assets and up
to 1.00% each of Class B and Class C average daily net assets. These fees are
accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $0 and $0 for Class B
and Class C Shares, respectively. These amounts may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
receivable has been fully recovered, the distribution fee is reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
28
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial statements. FIN 48 is effective for fiscal
years beginning after December 15, 2006 and is to be applied to all open tax
years as of the effective date. Recent SEC guidance allows implementing FIN 48
in the fund NAV calculations as late as the fund's last NAV calculation in the
first required financial statement period. As a result, the Fund will
incorporate FIN 48 in its semi annual report on March 31, 2008. The impact to
the Fund's financial statements, if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Fund's financial statement disclosures.
29
VAN KAMPEN INTERMEDIATE TERM MUNICIPAL INCOME FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN* - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
30
Van Kampen Intermediate Term Municipal Income Fund
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.
(continued on next page)
Van Kampen Intermediate Term Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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.
(continued on back)
Van Kampen Intermediate Term Municipal Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
138, 338, 538, 638
INFSAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-00919P-Y03/07
Welcome, Shareholder
In this report, you'll learn about how your investment in Van Kampen New
York Tax Free Income Fund 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 fund's financial statements and a list of fund investments
as of March 31, 2007.
THIS MATERIAL MUST BE PRECEDED OR ACCOMPANIED BY A CLASS A, B, AND C
SHARE PROSPECTUS FOR THE FUND BEING OFFERED. THE PROSPECTUS CONTAINS
INFORMATION ABOUT THE FUND, INCLUDING THE INVESTMENT OBJECTIVES, RISKS,
CHARGES AND EXPENSES. TO OBTAIN AN ADDITIONAL PROSPECTUS, CONTACT YOUR
FINANCIAL ADVISOR OR DOWNLOAD ONE AT VANKAMPEN.COM. PLEASE READ THE
PROSPECTUS CAREFULLY BEFORE INVESTING.
MARKET FORECASTS PROVIDED IN THIS REPORT MAY NOT NECESSARILY COME TO
PASS. THERE IS NO ASSURANCE THAT THE FUND WILL ACHIEVE ITS INVESTMENT
OBJECTIVE. THE FUND IS SUBJECT TO MARKET RISK, WHICH IS THE POSSIBILITY
THAT THE MARKET VALUES OF SECURITIES OWNED BY THE FUND WILL DECLINE AND,
THEREFORE, THE VALUE OF THE FUND SHARES MAY BE LESS THAN WHAT YOU PAID
FOR THEM. ACCORDINGLY, YOU CAN LOSE MONEY INVESTING IN THIS FUND.
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 3/31/07
<Table>
<Caption>
A SHARES B SHARES C SHARES
since 7/29/94 since 7/29/94 since 7/29/94
- ---------------------------------------------------------------------------------------------
W/MAX W/MAX W/MAX
4.75% 4.00% 1.00%
AVERAGE ANNUAL W/O SALES SALES W/O SALES SALES W/O SALES SALES
TOTAL RETURNS CHARGES CHARGES CHARGES CHARGES CHARGES CHARGES
Since Inception 6.23% 5.82% 5.74% 5.74% 5.62% 5.62%
10-year 6.01 5.50 5.38 5.38 5.23 5.23
5-year 5.90 4.87 5.10 4.85 5.11 5.11
1-year 5.53 0.52 4.76 0.76 4.86 3.86
6-month 1.91 -2.92 1.53 -2.45 1.62 0.62
- ---------------------------------------------------------------------------------------------
30-Day SEC Subsidized
Yield 3.62% 3.05% 3.05%
- ---------------------------------------------------------------------------------------------
30-Day SEC Yield 3.38% 2.80% 2.80%
</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 AND
PRINCIPAL VALUE WILL FLUCTUATE AND FUND SHARES, WHEN REDEEMED, MAY BE WORTH MORE
OR LESS THAN THEIR ORIGINAL COST.
The returns shown in this report do not reflect the deduction of taxes that a
shareholder would pay on fund distributions or the redemption of fund shares.
Performance of share classes will vary due to differences in sales charges and
expenses. Average annual total return with sales charges includes payment of the
maximum sales charge of 4.75 percent for Class A shares, a contingent deferred
sales charge of 4.00 percent for Class B shares (in year one and declining to
zero after year six), a contingent deferred sales charge of 1.00 percent for
Class C shares in year one and combined Rule 12b-1 fees and service fees of up
to 0.25 percent for Class A shares and up to 1.00 percent for Class B and C
shares. The since inception and 10-year returns for Class B shares reflect its
conversion into Class A shares eight years after purchase. The since inception
returns for Class C shares reflects the conversion of Class C shares into Class
A shares ten years after purchase. Figures shown above assume reinvestment of
all dividends and capital gains. The fund's adviser has waived or reimbursed
fees and expenses from time to time; absent such waivers/reimbursements the
fund's returns would have been lower. SEC yield is a calculation for determining
the amount of portfolio income, excluding non-income items as prescribed by the
SEC. The unsubsidized SEC yields reflect some or all of the expenses that the
adviser had voluntarily waived. Yields are subject to change.
The Lehman Brothers Municipal Bond Index is generally representative of
investment-grade, tax-exempt bonds. The Lehman Brothers NY Municipal Bond Index
tracks the performance of NY issued municipal bonds rated at least Baa or BBB by
Moody's Investors Service, Inc. or Standard & Poor's Corporation, respectively
and with maturities of 2 years or greater. Indexes do not include any expenses,
fees or sales charges, which would lower performance. Indexes are unmanaged and
should not be considered an investment. It is not possible to invest directly in
an index.
1
Fund Report
FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
MARKET CONDITIONS
The overall environment for municipal bonds was favorable during the reporting
period, but mixed economic indicators and concerns about the residential housing
sector led to increased market uncertainty and volatility. In the initial months
of the period, the pace of economic growth appeared to be slowing but in
December the outlook for the economy turned positive following a slate of
stronger-than-expected economic releases. The improved economic picture pushed
bond yields higher and effectively reversed the run-up in prices that had begun
in July on concern over the weak housing market's potential drag on the economy.
Bonds continued to sell off until February when the sub-prime mortgage market
showed signs of deterioration, causing a sell-off in equities and a
flight-to-quality bond market rally. In March the rally ended as strong
employment reports and upward movement in inflationary pressures sparked selling
in an overbought Treasury market. At month end, however, the short end of the
bond market rebounded strongly following news that the Federal Open Market
Committee (the "Fed") had dropped its bias toward higher rates. This came as
somewhat of a surprise, given the fact that core inflation readings still
remained elevated.
Municipal bond yields followed the general movement of the Treasury market.
However, the 30-year AAA municipal bond yield reached lows not seen in decades,
declining to 4.00 percent in the first half of the reporting period before
reversing course and ending the period at 4.15 percent. Yields on the short end
of the curve generally rose throughout the course of the period. As a result,
the short end of the municipal curve posted the lowest returns while the long
end outperformed other portions of the curve by as much as 100 basis points. The
slope of the municipal curve remained relatively flat and as such, the yield
differential between long maturity and short maturity issues was quite small.
New issue supply rose dramatically during the period, increasing by 35 percent
versus the same six-month period a year ago, as relatively low interest rates
spurred municipalities to refinance their debt. Demand for municipal bonds was
robust as well, particularly for high-yield securities as investors proved
increasingly willing to take on more risk in return for relatively higher
yields. The strong demand caused credit spreads, which were already near
historically tight levels, to further narrow. As a result, the lower-quality,
higher yielding segment of the market considerably outperformed, returning 185
basis points more than the investment-grade segment for the overall period.
Municipal bond issuance by the State of New York continued to be high; the state
was the country's second largest issuer during the period. As was the case for
the municipal market overall, the large supply of bonds and the low
interest-rate environment led to a high amount of refundings, wherein new bonds
are issued to repay an outstanding bond issue prior to its stated maturity.
2
New York's economy is largely driven by the financial world, which continued to
have strong earnings. As such, the credit outlook for the state remains
positive.
PERFORMANCE ANALYSIS
Van Kampen New York Tax Free Income Fund Class A shares, unadjusted for sales
charges, outperformed the Lehman Brothers New York Municipal Bond Index, Class B
and C shares underperformed the Lehman Brothers New York Municipal Bond Index,
and all share classes underperformed the Lehman Brothers Municipal Bond Index
for the six months ended March 31, 2007, assuming no deduction of applicable
sales charges.
TOTAL RETURN FOR THE SIX-MONTH PERIOD ENDED MARCH 31, 2007
<Table>
<Caption>
- ---------------------------------------------------------------------------
LEHMAN BROTHERS LEHMAN BROTHERS
NY MUNICIPAL MUNICIPAL
CLASS A CLASS B CLASS C BOND INDEX BOND INDEX
1.91% 1.53% 1.62% 1.88% 1.93%
- ---------------------------------------------------------------------------
</Table>
The performance for the three share classes varies because each has different
expenses. The fund's total return figures assume the reinvestment of all
distributions, but do not reflect the deduction of any applicable sales charges.
Such costs would lower performance. Past performance is no guarantee of future
results. See Performance Summary for standardized performance information and
index definitions.
A variety of strategies drove the fund's performance during the course of the
period. One of the biggest contributors to returns was the fund's focus on the
higher-yielding sector of the market, which considerably outperformed the
higher-quality sector. In particular, the portfolio had a higher allocation to
BBB and lower-rated bonds relative to the Lehman Brothers New York Municipal
Bond Index and an underweight relative to the same index in AAA rated bonds. We
added selectively to these high-yield holdings during the period, using the
proceeds from the sale of various bonds that were prerefunded. These purchases
were primarily in the health care sector, which performed well for the overall
period. A relative overweight and strong security selection within the sector
were also additive to returns.
Another key driver of performance was our focus on the long end of the yield
curve, where we favored bonds with maturities of 25 years or more. Given the
relatively flat shape of the curve throughout the period, we invested in the
very long end in order to capture more attractive yields, which proved
beneficial to performance as this part of the curve outperformed.
The fund's holdings in higher education bonds also contributed to returns as did
holdings in tobacco revenue bonds. Although the performance of the tobacco
sector waned in the first quarter of the year, its performance for the overall
period was quite strong. The tobacco bonds in the portfolio are newer than those
in the Lehman Brothers New York Municipal Bond Index and as
3
such, the fund did not benefit as much from the significant amount of
prerefundings that occurred in the sector. However, the fund's overweight
relative to the Lehman Brothers New York Municipal Bond Index in these bonds
helped to compensate. Additionally, strong security selection in transportation
helped the fund's comparatively lower allocation to the sector keep pace with
that of the Lehman New York Municipal Bond Index.
In light of the recent change in the Fed's monetary policy bias, we lengthened
the portfolio's duration (a measure of interest-rate sensitivity) to a neutral
stance during the period in order to be better positioned to take advantage of
potential price appreciation should the Fed decide to cut interest rates. As of
the end of the reporting period, the fund's sector exposure was relatively
unchanged from six months earlier, with education, health care, and general
purpose bonds representing the fund's largest sector weightings.
There is no guarantee that any sectors mentioned will continue to perform as
discussed herein or that securities in such sectors will be held by the fund in
the future.
4
<Table>
<Caption>
RATINGS ALLOCATIONS AS OF 3/31/07
AAA/Aaa 32.4%
AA/Aa 29.9
A/A 11.2
BBB/Baa 15.2
BB/Ba 4.4
B/B 1.6
Non-Rated 5.3
<Caption>
TOP FIVE SECTORS AS OF 3/31/07
Hospital 16.4%
General Purpose 14.9
Higher Education 7.8
Master Tobacco Settlement 7.6
Student Housing 7.0
</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 industries shown above. Ratings allocations are as a
percentage of total investments. Top 5 sectors percentages are as a percentage
of long-term investments. 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.
Ratings allocations based upon ratings as issued by Standard & Poor's and
Moody's, respectively.
5
FOR MORE INFORMATION ABOUT PORTFOLIO HOLDINGS
Each Van Kampen fund provides a complete schedule of portfolio holdings
in its semiannual and annual reports within 60 days of the end of the
fund's second and fourth fiscal quarters. The semiannual reports and the
annual reports are filed electronically with the Securities and Exchange
Commission (SEC) on Form N-CSRS and Form N-CSR, respectively. Van Kampen
also delivers the semiannual and annual reports to fund 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 fund files a complete schedule of portfolio holdings with the
SEC for the fund'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 (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 fund's fiscal quarter filings by contacting
Van Kampen Client Relations at (800) 847-2424.
6
HOUSEHOLDING NOTICE
To reduce fund expenses, the fund attempts to eliminate duplicate
mailings to the same address. The fund delivers a single copy of certain
shareholder documents to investors who share an address, even if the
accounts are registered under different names. The fund's prospectuses
and shareholder reports (including annual privacy notices) will be
delivered to you in this manner indefinitely unless you instruct us
otherwise. You can request multiple copies of these documents by either
calling (800) 341-2911 or writing to Van Kampen Investor Services at 1
Parkview Plaza, P.O. Box 5555, Oakbrook Terrace, IL 60181. Once Investor
Services has received your instructions, we will begin sending individual
copies for each account within 30 days.
PROXY VOTING POLICY AND PROCEDURES AND PROXY VOTING RECORD
You may obtain a copy of the fund's Proxy Voting Policy and Procedures
without charge, upon request, by calling toll free (800) 847-2424 or by
visiting our Web site at www.vankampen.com. It is also available on the
Securities and Exchange Commission's Web site at http://www.sec.gov.
You may obtain information regarding how the fund voted proxies relating
to portfolio securities during the most recent twelve-month period ended
June 30 without charge 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
Expense Example
As a shareholder of the Fund, you incur two types of costs: (1) transaction
costs, including sales charges (loads) on purchase payments of Class A Shares
and contingent deferred sales charges on redemptions of Class B and Class C
Shares; and redemption fees; and (2) ongoing costs, including management fees;
distribution and service (12b-1) fees; and other Fund expenses. This example is
intended to help you understand your ongoing costs (in dollars) of investing in
the Fund and to compare these costs with the ongoing costs of investing in other
mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the
period and held for the entire period 10/1/06 - 3/31/07.
ACTUAL EXPENSE
The first line of the table below provides information about actual account
values and actual expenses. You may use the information in this line, together
with the amount you invested, to estimate the expenses that you paid over the
period. Simply divide your account value by $1,000 (for example, an $8,600
account value divided by $1,000 = 8.6), then multiply the result by the number
in the first line under the heading entitled "Expenses Paid During Period" to
estimate the expenses you paid on your account during this period.
HYPOTHETICAL EXAMPLE FOR COMPARISON PURPOSES
The second line of the table below provides information about hypothetical
account values and hypothetical expenses based on the Fund's actual expense
ratio and an assumed rate of return of 5% per year before expenses, which is not
the Fund's actual return. The hypothetical account values and expenses may not
be used to estimate the actual ending account balance or expenses you paid for
the period. You may use this information to compare the ongoing cost of
investing in the Fund and other funds. To do so, compare this 5% hypothetical
example with the 5% hypothetical examples that appear in the shareholder reports
of the other funds.
Please note that the expenses shown in the table are meant to highlight your
ongoing costs only and do not reflect and transactional costs, such as sales
charges (loads) or contingent deferred sales charges or redemption fees.
Therefore, the second line of the table is useful in comparing ongoing costs
only, and will not help you determine the relative total costs of owning
different funds. In addition, if these transactional costs were included, your
cost would have been higher.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,019.09 $4.48
Hypothetical............................... 1,000.00 1,020.49 4.48
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,015.34 8.24
Hypothetical............................... 1,000.00 1,016.75 8.25
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,016.15 8.14
Hypothetical............................... 1,000.00 1,016.85 8.15
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.89%, 1.64%,
and 1.62% for Class A, B, and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the
one-half year period). These expense ratios reflect an expense waiver.
Assumes all dividends and distributions were reinvested.
8
The following table shows what expenses a shareholder would have paid, excluding
interest and residual trust expenses.
<Table>
<Caption>
BEGINNING ENDING EXPENSES PAID
ACCOUNT VALUE ACCOUNT VALUE DURING PERIOD*
-------------------------------------------------
10/1/06 3/31/07 10/1/06-3/31/07
Class A
Actual..................................... $1,000.00 $1,019.09 $3.57
Hypothetical............................... 1,000.00 1,021.39 3.58
(5% annual return before expenses)
Class B
Actual..................................... 1,000.00 1,015.34 7.34
Hypothetical............................... 1,000.00 1,017.65 7.34
(5% annual return before expenses)
Class C
Actual..................................... 1,000.00 1,016.15 7.24
Hypothetical............................... 1,000.00 1,017.75 7.24
(5% annual return before expenses)
</Table>
* Expenses are equal to the Fund's annualized expense ratio of 0.71%, 1.46%
and 1.44% for Class A, B and C Shares, respectively, multiplied by the
average account value over the period, multiplied by 182/365 (to reflect the
one-half year period). These expense ratios reflect an expense waiver.
Assumes all dividends and distributions were reinvested.
9
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED)
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
MUNICIPAL BONDS 101.0%
NEW YORK 100.1%
$1,290 Albany Cnty, NY Indl Dev Agy Indl Dev Rev Albany
College of Pharmacy Ser A....................... 5.625% 12/01/34 $ 1,377,127
500 Amherst NY Indl Dev Agy Civic Beechwood Hlthcare
Ctr Inc......................................... 5.200 01/01/40 506,990
330 Bethlehem, NY Indl Dev Agy Sr Hsg Rev Van Allen
Proj Ser A (Prerefunded @ 06/01/09)............. 6.875 06/01/39 358,370
400 Dutchess Cnty NY Indl Dev Agy Elant Fishkill Inc
Ser A........................................... 5.250 01/01/37 404,320
500 East Rochester, NY Hsg Auth Rev Ref Sr Living
Woodland Vlg Proj Rfdg.......................... 5.500 08/01/33 515,500
1,250 Erie Cnty, NY Indl Dev Agy Sch Fac Rev City of
Buffalo Proj (FSA Insd)......................... 5.750 05/01/21 1,367,462
1,250 Erie Cnty, NY Indl Dev Agy Sch Fac Rev City of
Buffalo Proj (FSA Insd)......................... 5.750 05/01/22 1,364,737
1,000 Erie Cnty, NY Tob Asset Sec Corp Ser A.......... 5.000 06/01/45 1,009,350
1,530 Hempstead Town, NY Indl Dev Adelphi Univ Civic
Fac............................................. 5.000 10/01/35 1,599,508
1,250 Hempstead Town, NY Indl Dev Adelphi Univ Civic
Fac............................................. 5.750 06/01/22 1,358,162
1,290 Islip, NY Res Recovery Agy Res 1985 Fac Ser E
(FSA Insd) (AMT)................................ 5.750 07/01/22 1,425,901
1,000 Livingston Cnty, NY Indl Dev Agy Civic Fac Rev
Nicholas H Noyes Mem Hosp....................... 6.000 07/01/30 1,035,660
1,500 Long Island Pwr Auth NY Elec Sys Rev Gen Ser
B............................................... 5.000 12/01/35 1,577,040
1,500 Long Island Pwr Auth NY Elec Sys Rev Gen Ser C
(Prerefunded @ 09/01/13)........................ 5.500 09/01/19 1,657,935
2,500 Metropolitan Trans Auth NY Dedicated Tax Fd Ser
B (MBIA Insd)................................... 4.500 11/15/36 2,497,850
1,500 Metropolitan Trans Auth NY Rev Ser A............ 5.000 11/15/23 1,595,970
1,000 Metropolitan Trans Auth NY Rev Rfdg Ser A (AMBAC
Insd)........................................... 5.500 11/15/19 1,090,340
1,000 Metropolitan Trans Auth NY Svc Contract Rfdg Ser
A............................................... 5.125 01/01/29 1,051,310
1,000 Monroe Cnty, NY Indl Dev Agy Nazareth College
Rochester Proj (MBIA Insd)...................... 5.250 10/01/21 1,072,440
1,320 Montgomery Cnty, NY Indl Dev Agy Lease Rev HFM
Boces Ser A (XLCA Insd)......................... 5.000 07/01/34 1,381,156
2,425 New York City Fiscal 2003 Ser I................. 5.750 03/01/15 2,657,339
1,500 New York City Hlth & Hosp Corp Rev Hlth Sys Ser
A (FSA Insd).................................... 5.500 02/15/18 1,621,095
1,000 New York City Hlth & Hosp Corp Rev Hlth Sys Ser
A (FSA Insd).................................... 5.500 02/15/19 1,080,730
1,000 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser J1.......................................... 4.850 05/01/36 1,022,160
</Table>
10 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$2,500 New York City Hsg Dev Corp Multi-Family Hsg Rev
Ser L (AMT)..................................... 5.050% 11/01/39 $ 2,543,450
1,000 New York City Hsg Dev Corp Ser A (AMT).......... 5.500 11/01/34 1,033,720
455 New York City Indl Dev Agy Civic Fac Rev Cmnty
Res Developmentally Disabled.................... 7.500 08/01/26 464,869
500 New York City Indl Dev Agy Civic Fac Rev College
of New Rochelle Proj............................ 5.750 09/01/17 513,140
1,245 New York City Indl Dev Agy Civic Fac Rev Ctr for
Nursing Ser B................................... 5.375 08/01/27 1,268,145
500 New York City Indl Dev Agy Civic Fac Rev YMCA
Greater NY Proj................................. 6.000 08/01/07 503,580
1,405 New York City Indl Dev Agy Fac Rev Royal
Charter-NY Presbyterian (FSA Insd).............. 5.375 12/15/16 1,531,309
500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................. 6.250 03/01/15 530,960
500 New York City Indl Dev Agy Rev Liberty 7 World
Trade Ctr Ser A................................. 6.500 03/01/35 532,275
1,125 New York City Indl Dev Agy Rev Liberty
Iac/Interactive Corp............................ 5.000 09/01/35 1,164,499
500 New York City Indl Dev Agy Spl Fac Rev Amern
Airl JFK Intl Arpt (AMT)........................ 7.750 08/01/31 607,025
1,500 New York City Indl Dev Agy Spl Fac Rev JetBlue
Airways Corp Proj (AMT)......................... 5.125 05/15/30 1,494,075
2,000 New York City Indl Dev Agy Spl Fac Rev Term One
Group Assn Proj (AMT) (a)....................... 5.500 01/01/19 2,170,475
1,400 New York City Muni Wtr Fin Auth Wtr & Swr Sys
Rev Ser B....................................... 5.000 06/15/36 1,466,906
500 New York City Muni Wtr Fin Ser B................ 6.000 06/15/33 538,195
2,500 New York City Ser A............................. 5.500 08/01/20 2,710,100
2,500 New York City Ser G............................. 5.000 08/01/24 2,643,400
2,390 New York City Ser G............................. 5.000 12/01/28 2,503,740
1,500 New York City Ser J............................. 5.000 03/01/24 1,578,540
1,000 New York City Transitional Cultural Res Rev
Amern Museum Nat History Ser A (MBIA Insd)...... 5.000 07/01/44 1,045,180
515 New York City Transitional Future Tax Secd Ser B
(Prerefunded @ 02/01/11)........................ 5.500 02/01/15 554,135
1,025 New York City Transitional Future Tax Secd Ser
B............................................... 5.500 02/01/15 1,096,986
1,335 New York City Transitional Future Tax Secd Ser C
(AMBAC Insd).................................... 5.250 08/01/21 1,434,631
165 New York City Transitional Future Tax Secd Ser C
(AMBAC Insd) (Prerefunded @ 08/01/12)........... 5.250 08/01/21 177,977
2,475 New York Cnty Tob Tr IV Settlement Pass Thru Ser
A............................................... 5.000 06/01/45 2,498,141
750 New York Liberty Dev Corp Rev Natl Sports Museum
Proj Ser A (Acquired 08/07/06, Cost $750,000)
(b)............................................. 6.125 02/15/19 790,642
</Table>
See Notes to Financial Statements 11
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$1,500 New York St Dorm Auth Lease Rev Muni Hlth Fac
Impt Pgm Ser 1 (FSA Insd)....................... 5.500% 01/15/14 $ 1,600,620
2,000 New York St Dorm Auth Rev Catholic Hlth L I
Oblig Grp....................................... 5.000 07/01/27 2,059,280
1,000 New York St Dorm Auth Rev City Univ Cons Third
Ser 1 (FGIC Insd)............................... 5.250 07/01/25 1,038,350
1,230 New York St Dorm Auth Rev City Univ Rfdg Ser D
(FSA Insd)...................................... 5.750 07/01/12 1,310,713
650 New York St Dorm Auth Rev City Univ Sys Cons Ser
A............................................... 5.625 07/01/16 721,415
1,000 New York St Dorm Auth Rev City Univ Sys Cons Ser
B............................................... 6.000 07/01/14 1,092,900
1,890 New York St Dorm Auth Rev Dept Ed (c)........... 5.250 07/01/21 2,031,807
1,000 New York St Dorm Auth Rev Insd Brooklyn Law Sch
Ser B (XLCA Insd)............................... 5.375 07/01/23 1,085,130
1,040 New York St Dorm Auth Rev Insd NY St Rehab Assn
Ser A (AMBAC Insd) (c).......................... 5.500 07/01/15 1,126,913
1,200 New York St Dorm Auth Rev Miriam Osborn Mem Home
Ser B (ACA Insd)................................ 6.375 07/01/29 1,306,932
2,000 New York St Dorm Auth Rev Mtg Montefiore Hosp
(FGIC Insd)..................................... 5.000 08/01/33 2,099,660
1,000 New York St Dorm Auth Rev Non St Supported Debt
L I Jewish (a).................................. 5.000 11/01/26 1,049,670
1,000 New York St Dorm Auth Rev Non St Supported Debt
L I Jewish (a).................................. 5.000 11/01/34 1,049,670
2,000 New York St Dorm Auth Rev Non St Supported Debt
Mt Sinai NYU Hlth Ser C......................... 5.500 07/01/26 2,031,880
1,500 New York St Dorm Auth Rev Non St Supported Debt
NYU Hosp Ctr Ser A.............................. 5.000 07/01/20 1,542,990
3,000 New York St Dorm Auth Rev Non St Supported Debt
NYU Hosp Ctr Ser A.............................. 5.000 07/01/36 3,072,330
2,000 New York St Dorm Auth Rev Non St Supported Debt
Providence Rest (ACA Insd)...................... 5.250 07/01/25 2,120,700
750 New York St Dorm Auth Rev Nursing Home Menorah
Campus (FHA Gtd)................................ 5.950 02/01/17 766,245
1,000 New York St Dorm Auth Rev Secd Hosp North Gen
Hosp Rfdg....................................... 5.750 02/15/18 1,096,530
1,000 New York St Dorm Auth Rev St Univ Ed Fac 1989
Res (MBIA Insd) (Prerefunded @ 05/15/10)........ 6.000 05/15/15 1,080,310
415 New York St Dorm Auth Rev Supported Debt Mental
Hlth Rfdg Svc Ser B (MBIA Insd)................. 5.250 08/15/31 436,464
500 New York St Energy Resh & Dev Auth Gas Fac Rev
Brooklyn Union Gas Ser B (AMT) (d).............. 9.868 07/01/26 529,150
2,200 New York St Environmental Fac Corp St Clean Wtr
& Drinking NYC Muni Wtr Fin Auth Sub Ser B...... 5.000 06/15/26 2,344,364
</Table>
12 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$1,000 New York St Environmental Fac Corp St Clean Wtr
& Drinking Revolving Fd Pooled Fin Pgm Ser I.... 5.250% 09/15/19 $ 1,076,730
2,280 New York St Loc Govt Assistance Corp Rfdg Ser
E............................................... 6.000 04/01/14 2,540,650
1,990 New York St Mtg Agy Rev for Homeowner Mtg Ser
130 (AMT)....................................... 4.800 10/01/37 1,996,428
990 New York St Mtg Agy Rev Ser 101 (AMT)........... 5.400 04/01/32 1,017,868
695 New York St Mtg Agy Rev Ser 82 (AMT) (c)........ 5.650 04/01/30 700,226
500 New York St Urban Dev Corp Rev Correctional Fac
Rfdg Ser A...................................... 5.500 01/01/14 534,835
220 Oneida Cnty, NY Indl Dev Agy Civic Fac Saint
Elizabeth Med Ser A............................. 5.875 12/01/29 225,203
1,000 Rensselaer Cnty, NY Indl Dev Agy Indl Dev Rev
Franciscan Heights LP Proj Ser A (AMT) (LOC: JP
Morgan Chase Bank).............................. 5.375 12/01/36 1,064,160
2,500 Rensselaer Cnty, NY Sch Dist Ctf Partn (XLCA
Insd)........................................... 5.000 06/01/26 2,663,500
1,000 Rockland Cnty, NY Solid Waste Ser B (AMBAC Isnd)
(AMT)........................................... 5.000 12/15/23 1,045,100
825 Suffolk Cnty, NY Indl Dev Agy Civic Fac Rev
Family Svc League Suffolk Cnty (LOC: Fleet
National Bank).................................. 5.000 11/01/34 861,853
40 Syracuse, NY Hsg Auth Rev Sub Proj Loretto Rest
Ser B........................................... 7.500 08/01/10 40,819
250 Syracuse, NY Indl Dev Agy Rev First Mtg Jewish
Home Ser A...................................... 7.375 03/01/21 268,345
2,000 Tobacco Settlement Fin Corp NY Ser C-1.......... 5.500 06/01/22 2,161,900
325 Triborough Brdg & Tunl Auth NY Rev Gen Purp Ser
A............................................... 5.000 01/01/32 335,865
2,000 Triborough Brdg & Tunl Auth NY Rev Gen Purp Ser
A............................................... 5.250 01/01/18 2,131,620
1,590 Tsasc, Inc. NY Ser 1............................ 5.000 06/01/34 1,607,490
2,500 Tsasc, Inc. NY Ser 1............................ 5.125 06/01/42 2,548,575
1,000 Ulster Cnty, NY Res Recovery Agy Solid Waste Sys
Rev Rfdg (AMBAC Insd)........................... 5.250 03/01/18 1,067,070
160 Upper Mohawk Vly Regl Wtr Fin Auth NY Wtr Sys
Rev (AMBAC Insd)................................ 5.750 04/01/20 170,981
840 Upper Mohawk Vly Regl Wtr Fin Auth NY Wtr Sys
Rev (AMBAC Insd) (Prerefunded @ 04/01/10)....... 5.750 04/01/20 899,380
310 Utica, NY Indl Dev Agy Civic Fac Rev Utica
College Proj Ser A.............................. 5.750 08/01/28 321,427
1,000 Warren & Washington Cnty, NY Indl Dev Agy Civic
Fac Rev Glens Falls Hosp Proj Ser A (FSA
Insd)........................................... 5.000 12/01/35 1,043,400
500 Westchester Cnty, NY Indl Dev Agy Mtg Kendal on
Hudson Proj Ser A............................... 6.375 01/01/24 536,280
</Table>
See Notes to Financial Statements 13
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
<Table>
<Caption>
PAR
AMOUNT
(000) DESCRIPTION COUPON MATURITY VALUE
- -------------------------------------------------------------------------------------------
NEW YORK (CONTINUED)
$2,000 Westchester Tob Asset Sec Corp NY............... 5.125% 06/01/45 $ 2,032,820
1,000 Yonkers, NY Indl Dev Agy Civic Fac Rev Cmnty Dev
Ppty Yonkers Inc Ser A (Prerefunded @
02/01/11)....................................... 6.625 02/01/26 1,107,610
------------
126,618,705
------------
U.S. VIRGIN ISLANDS 0.9%
1,000 Virgin Islands Pub Fin Auth Rev Gross Rcpt Taxes
Ln Nt Ser A..................................... 6.375 10/01/19 1,088,520
------------
TOTAL LONG-TERM INVESTMENTS 101.0%
(Cost $122,730,197)....................................................... 127,707,225
SHORT-TERM INVESTMENT 0.3%
(Cost $405,000)........................................................... 405,000
------------
TOTAL INVESTMENTS 101.3%
(Cost $123,135,197)....................................................... 128,112,225
LIABILITY FOR FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES
HELD (2.3%)
(Cost ($3,000,000))
(3,000) Notes with interest rates of 3.65% at March 31, 2007 and
contractual maturities of collateral ranging from 2019 to 2034
(e)............................................................... (3,000,000)
------------
TOTAL NET INVESTMENTS 99.0%
(Cost $120,135,197)....................................................... 125,112,225
OTHER ASSETS IN EXCESS OF LIABILITIES 1.0%................................. 1,321,496
------------
NET ASSETS 100.0%.......................................................... $126,433,721
============
</Table>
Percentages are calculated as a percentage of net assets.
(a) Underlying security related to Inverse Floaters entered into by the Fund.
(b) This Security is restricted and may be resold only in transactions exempt
from registration which are normally those transactions with qualified
institutional buyers. Restricted securities comprise 0.6% of net assets.
(c) The Fund owns 100% of the outstanding bond issuance.
(d) Inverse Floating Rate
(e) Floating rate notes. The interest rates shown reflect the rates in effect at
March 31, 2007.
14 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
PORTFOLIO OF INVESTMENTS -- MARCH 31, 2007 (UNAUDITED) continued
ACA--American Capital Access
AMBAC--AMBAC Indemnity Corp.
AMT--Alternative Minimum Tax
FGIC--Financial Guaranty Insurance Co.
FHA--Federal Housing Administration
FSA--Financial Security Assurance Inc.
LOC--Letter of Credit
MBIA--Municipal Bond Investors Assurance Corp.
XLCA--XL Capital Assurance Inc.
See Notes to Financial Statements 15
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL STATEMENTS
Statement of Assets and Liabilities
March 31, 2007 (Unaudited)
<Table>
ASSETS:
Total Investments (Cost $123,135,197)....................... $128,112,225
Cash........................................................ 110,846
Receivables:
Interest.................................................. 1,750,223
Fund Shares Sold.......................................... 205,077
Investments Sold.......................................... 5,000
Other....................................................... 96,815
------------
Total Assets............................................ 130,280,186
------------
LIABILITIES:
Payables:
Floating Rate Note Obligations............................ 3,000,000
Fund Shares Repurchased................................... 428,998
Income Distributions...................................... 100,568
Distributor and Affiliates................................ 71,941
Investment Advisory Fee................................... 23,653
Trustees' Deferred Compensation and Retirement Plans........ 163,373
Accrued Expenses............................................ 57,932
------------
Total Liabilities....................................... 3,846,465
------------
NET ASSETS.................................................. $126,433,721
============
NET ASSETS CONSIST OF:
Capital (Par value of $0.01 per share with an unlimited
number of shares authorized).............................. $121,018,244
Net Unrealized Appreciation................................. 4,977,028
Accumulated Undistributed Net Investment Income............. 359,974
Accumulated Net Realized Gain............................... 78,475
------------
NET ASSETS.................................................. $126,433,721
============
MAXIMUM OFFERING PRICE PER SHARE:
Class A Shares:
Net asset value and redemption price per share (Based on
net assets of $82,106,883 and 4,993,760 shares of
beneficial interest issued and outstanding)............. $ 16.44
Maximum sales charge (4.75%* of offering price)......... 0.82
------------
Maximum offering price to public........................ $ 17.26
============
Class B Shares:
Net asset value and offering price per share (Based on
net assets of $26,057,265 and 1,588,806 shares of
beneficial interest issued and outstanding)............. $ 16.40
============
Class C Shares:
Net asset value and offering price per share (Based on
net assets of $18,269,573 and 1,112,847 shares of
beneficial interest issued and outstanding)............. $ 16.42
============
</Table>
* On sales of $100,000 or more, the sales charge will be reduced.
16 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statement of Operations
For the Six Months Ended March 31, 2007 (Unaudited)
<Table>
INVESTMENT INCOME:
Interest.................................................... $3,036,953
----------
EXPENSES:
Distribution (12b-1) and Service Fees
Class A................................................... 96,280
Class B................................................... 138,656
Class C................................................... 86,651
Investment Advisory Fee..................................... 287,908
Interest and Residual Trust Expense......................... 108,379
Transfer Agent Fees......................................... 36,293
Accounting and Administrative Expenses...................... 27,988
Reports to Shareholders..................................... 27,092
Professional Fees........................................... 23,868
Trustees' Fees and Related Expenses......................... 14,721
Custody..................................................... 7,522
Registration Fees........................................... 4,326
Other....................................................... 7,167
----------
Total Expenses.......................................... 866,851
Investment Advisory Fee Reduction....................... 153,142
Less Credits Earned on Cash Balances.................... 2,058
----------
Net Expenses............................................ 711,651
----------
NET INVESTMENT INCOME....................................... $2,325,302
==========
REALIZED AND UNREALIZED GAIN/LOSS:
Realized Gain/Loss:
Investments............................................... $ 118,214
Futures................................................... 11,543
----------
Net Realized Gain........................................... 129,757
----------
Unrealized Appreciation/Depreciation:
Beginning of the Period................................... 5,155,008
End of the Period......................................... 4,977,028
----------
Net Unrealized Depreciation During the Period............... (177,980)
----------
NET REALIZED AND UNREALIZED LOSS............................ $ (48,223)
==========
NET INCREASE IN NET ASSETS FROM OPERATIONS.................. $2,277,079
==========
</Table>
See Notes to Financial Statements 17
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL STATEMENTS continued
Statements of Changes in Net Assets (Unaudited)
<Table>
<Caption>
FOR THE FOR THE
SIX MONTHS ENDED YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
-------------------------------------
FROM INVESTMENT ACTIVITIES:
Operations:
Net Investment Income.................................. $ 2,325,302 $ 4,468,397
Net Realized Gain...................................... 129,757 480,212
Net Unrealized Appreciation/Depreciation During the
Period............................................... (177,980) 308,177
------------ ------------
Change in Net Assets from Operations................... 2,277,079 5,256,786
------------ ------------
Distributions from Net Investment Income:
Class A Shares....................................... (1,584,142) (2,816,473)
Class B Shares....................................... (467,106) (1,008,247)
Class C Shares....................................... (302,791) (572,354)
------------ ------------
(2,354,039) (4,397,074)
------------ ------------
Distributions from Net Realized Gain:
Class A Shares....................................... (112,999) (1,332,049)
Class B Shares....................................... (41,402) (632,017)
Class C Shares....................................... (26,599) (347,951)
------------ ------------
(181,000) (2,312,017)
------------ ------------
Total Distributions.................................... (2,535,039) (6,709,091)
------------ ------------
NET CHANGE IN NET ASSETS FROM INVESTMENT ACTIVITIES.... (257,960) (1,452,305)
------------ ------------
FROM CAPITAL TRANSACTIONS:
Proceeds from Shares Sold.............................. 15,311,149 21,951,233
Net Asset Value of Shares Issued Through Dividend
Reinvestment......................................... 1,811,594 4,826,992
Cost of Shares Repurchased............................. (10,272,603) (25,286,714)
------------ ------------
NET CHANGE IN NET ASSETS FROM CAPITAL TRANSACTIONS..... 6,850,140 1,491,511
------------ ------------
TOTAL INCREASE IN NET ASSETS........................... 6,592,180 39,206
NET ASSETS:
Beginning of the Period................................ 119,841,541 119,802,335
------------ ------------
End of the Period (Including accumulated undistributed
net investment income of $359,974 and $388,711,
respectively)........................................ $126,433,721 $119,841,541
============ ============
</Table>
18 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED)
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS A SHARES MARCH 31, ------------------------------------------
2007 2006 2005 2004 2003 2002
-------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD................................ $16.47 $16.67 $16.60 $16.40 $16.49 $15.76
------ ------ ------ ------ ------ ------
Net Investment Income................. 0.33(a) 0.66(a) 0.64 0.65 0.69 0.74
Net Realized and Unrealized
Gain/Loss........................... -0-(c) 0.11 0.06 0.17 (0.10) 0.73
------ ------ ------ ------ ------ ------
Total from Investment Operations........ 0.33 0.77 0.70 0.82 0.59 1.47
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.............................. 0.34 0.65 0.63 0.62 0.68 0.74
Distributions from Net Realized
Gain................................ 0.02 0.32 -0- -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions..................... 0.36 0.97 0.63 0.62 0.68 0.74
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD...... $16.44 $16.47 $16.67 $16.60 $16.40 $16.49
====== ====== ====== ====== ====== ======
Total Return* (b)....................... 1.91%** 4.96% 4.29% 5.13% 3.69% 9.63%
Net Assets at End of the Period
(In millions)......................... $ 82.1 $ 73.8 $ 67.8 $ 62.2 $ 63.6 $ 47.5
Ratio of Expenses to Average Net
Assets*............................... .89% .73% .76% .76% .55% .38%
Ratio of Net Investment Income to
Average Net Assets*................... 4.07% 4.05% 3.87% 3.94% 4.19% 4.68%
Portfolio Turnover...................... 6%** 30% 41% 15% 27% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expense)*............................. .71% .73% .76% .76% .55% .38%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets............................. 1.14% .98% 1.01% 1.09% 1.06% 1.07%
Ratio of Net Investment Income to
Average Net Assets................. 3.82% 3.80% 3.62% 3.60% 3.68% 3.99%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expense)............ .96% .98% 1.01% 1.09% 1.06% 1.07%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum sales charge of 4.75% or contingent deferred
sales charge (CDSC). On purchases of $1 million or more, a CDSC of 1% may be
imposed on certain redemptions made within eighteen months of purchase. If
the sales charges were included, total returns would be lower. These returns
do include combined Rule 12b-1 fees of up to .25% and do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(c) Amount is less than $0.01 per share.
See Notes to Financial Statements 19
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS B SHARES MARCH 31, ------------------------------------------
2007 2006 2005 2004 2003 2002
-------------------------------------------------------
NET ASSET VALUE, BEGINNING OF THE
PERIOD................................ $16.43 $16.63 $16.58 $16.38 $16.47 $15.74
------ ------ ------ ------ ------ ------
Net Investment Income................. 0.27(a) 0.54(a) 0.52 0.52 0.56 0.62
Net Realized and Unrealized
Gain/Loss........................... -0-(c) 0.11 0.04 0.18 (0.09) 0.73
------ ------ ------ ------ ------ ------
Total from Investment Operations........ 0.27 0.65 0.56 0.70 0.47 1.35
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income.............................. 0.28 0.53 0.51 0.50 0.56 0.62
Distributions from Net Realized
Gain................................ 0.02 0.32 -0- -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions..................... 0.30 0.85 0.51 0.50 0.56 0.62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD...... $16.40 $16.43 $16.63 $16.58 $16.38 $16.47
====== ====== ====== ====== ====== ======
Total Return* (b)....................... 1.53%** 4.18% 3.40% 4.36% 2.93% 8.83%
Net Assets at End of the Period
(In millions)......................... $ 26.1 $ 28.6 $ 33.9 $ 38.6 $ 40.5 $ 40.5
Ratio of Expenses to Average Net
Assets*............................... 1.64% 1.48% 1.51% 1.51% 1.29% 1.13%
Ratio of Net Investment Income to
Average Net Assets*................... 3.32% 3.30% 3.12% 3.19% 3.45% 3.92%
Portfolio Turnover...................... 6%** 30% 41% 15% 27% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net Assets
(Excluding Interest and Residual Trust
Expense)*............................. 1.46% 1.48% 1.51% 1.51% 1.29% 1.13%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average Net
Assets............................. 1.89% 1.73% 1.76% 1.84% 1.80% 1.82%
Ratio of Net Investment Income to
Average Net Assets................. 3.07% 3.05% 2.87% 2.85% 2.94% 3.24%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expense)............ 1.71% 1.73% 1.76% 1.84% 1.80% 1.82%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 4%, charged on certain redemptions
made within one year of purchase and declining to 0% after the sixth year.
If the sales charge was included, total returns would be lower. These
returns include combined Rule 12b-1 fees of up to 1% and do not reflect the
deduction of taxes that a shareholder would pay on Fund distributions or the
redemption of Fund shares.
(c) Amount is less than $0.01 per share.
20 See Notes to Financial Statements
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
FINANCIAL HIGHLIGHTS (UNAUDITED) continued
THE FOLLOWING SCHEDULE PRESENTS FINANCIAL HIGHLIGHTS FOR ONE SHARE OF THE FUND
OUTSTANDING THROUGHOUT THE PERIODS INDICATED.
<Table>
<Caption>
SIX MONTHS
ENDED YEAR ENDED SEPTEMBER 30,
CLASS C SHARES MARCH 31, ------------------------------------------
2007 2006 2005 2004 2003 2002
--------------------------------------------------------
NET ASSET VALUE, BEGINNING OF
THE PERIOD.......................... $16.45 $16.65 $16.59 $16.39 $16.48 $15.75
------ ------ ------ ------ ------ ------
Net Investment Income............... 0.27(a) 0.54(a) 0.52 0.52 0.56 0.62
Net Realized and Unrealized
Gain/Loss......................... -0-(c) 0.11 0.05 0.18 (0.09) 0.73
------ ------ ------ ------ ------ ------
Total from Investment Operations...... 0.27 0.65 0.57 0.70 0.47 1.35
------ ------ ------ ------ ------ ------
Less:
Distributions from Net Investment
Income............................ 0.28 0.53 0.51 0.50 0.56 0.62
Distributions from Net Realized
Gain.............................. 0.02 0.32 -0- -0- -0- -0-
------ ------ ------ ------ ------ ------
Total Distributions................... 0.30 0.85 0.51 0.50 0.56 0.62
------ ------ ------ ------ ------ ------
NET ASSET VALUE, END OF THE PERIOD.... $16.42 $16.45 $16.65 $16.59 $16.39 $16.48
====== ====== ====== ====== ====== ======
Total Return* (b)..................... 1.62%(e)** 4.14%(e) 3.46%(e) 4.36% 2.92%(d) 8.83%
Net Assets at End of the Period
(In millions)....................... $ 18.3 $ 17.4 $ 18.1 $ 17.5 $ 17.7 $ 12.0
Ratio of Expenses to Average Net
Assets*............................. 1.62%(e) 1.46%(e) 1.47%(e) 1.51% 1.30% 1.13%
Ratio of Net Investment Income to
Average Net Assets*................. 3.34%(e) 3.32%(e) 3.14%(e) 3.19% 3.45%(d) 3.92%
Portfolio Turnover.................... 6%** 30% 41% 15% 27% 43%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expense)*............ 1.44%(e) 1.46%(e) 1.47%(e) 1.51% 1.30% 1.13%
* If certain expenses had not been voluntarily assumed by Van Kampen, total return would have
been lower and the ratios would have been as follows:
Ratio of Expenses to Average
Net Assets....................... 1.87%(e) 1.71%(e) 1.72%(e) 1.84% 1.81% 1.82%
Ratio of Net Investment Income to
Average Net Assets............... 3.09%(e) 3.10%(e) 2.89%(e) 2.85% 2.94%(d) 3.23%
SUPPLEMENTAL RATIO:
Ratio of Expenses to Average Net
Assets (Excluding Interest and
Residual Trust Expense).......... 1.69%(e) 1.71%(e) 1.72%(e) 1.84% 1.81% 1.82%
</Table>
** Non-Annualized
(a) Based on average shares outstanding.
(b) Assumes reinvestment of all distributions for the period and does not
include payment of the maximum CDSC of 1% charged on certain redemptions
made within one year of purchase. If the sales charge was included, total
returns would be lower. These returns include combined Rule 12b-1 fees and
service fees of up to 1% and do not reflect the deduction of taxes that a
shareholder would pay on Fund distributions or the redemption of Fund
shares.
(c) Amount is less than $0.01 per share.
(d) Certain non-recurring payments were made to Class C Shares, resulting in an
increase to the Total Return and Ratio of Net Investment Income to Average
Net Assets of .03%.
(e) The Total Return, Ratio of Expenses to Average Net Assets and Ratio of Net
Investment Income to Average Net Assets reflect actual 12b-1 fees of less
than 1% (See Footnote 7).
See Notes to Financial Statements 21
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED)
1. SIGNIFICANT ACCOUNTING POLICIES
Van Kampen New York Tax Free Income Fund (the "Fund") is organized as a series
of the Van Kampen Tax Free Trust, a Delaware statutory trust, and is registered
as a non-diversified, open-end management investment company under the
Investment Company Act of 1940 (the "1940 Act"), as amended. The Fund's
investment objective is to provide investors with a high level of current income
exempt from federal, New York State and New York City income taxes, consistent
with the preservation of capital. The Fund seeks to achieve its investment
objective by investing at least 80% of its total assets in a portfolio of New
York municipal securities that are rated investment grade at the time of
purchase. The Fund commenced investment operations on July 29, 1994. The Fund
offers Class A Shares, Class B Shares, Class C Shares and Class I Shares. Each
class of shares differs by its initial sales load, contingent deferred sales
charges, the allocation of class specific expenses and voting rights on matters
affecting a single class. As of March 31, 2007, there have been no sales of
Class I Shares.
The following is a summary of significant accounting policies consistently
followed by the Fund in the preparation of its financial statements. The
preparation of financial statements in conformity with U.S. generally accepted
accounting principles 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.
Futures contracts are valued at the settlement price established each day on the
exchange on which they are traded. Interest rate swaps are valued using market
quotations from brokers. 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
Fund 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 Fund 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 March 31, 2007, there were no when-issued or delayed
delivery purchase commitments.
C. INCOME AND EXPENSES Interest income is recorded on an accrual basis. Bond
premium is amortized and discount is accreted over the expected life of each
applicable security. Income and expenses of the Fund are allocated on a pro rata
basis to each class of shares, except for distribution and service fees and
incremental transfer agency costs which are unique to each class of shares.
22
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
D. FEDERAL INCOME TAXES It is the Fund'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, if any, to
its shareholders. Therefore, no provision for federal income taxes is required.
At March 31, 2007, the cost and related gross unrealized appreciation and
depreciation are as follows:
<Table>
Cost of investments for tax purposes........................ $120,129,910
============
Gross tax unrealized appreciation........................... $ 4,988,465
Gross tax unrealized depreciation........................... (6,150)
------------
Net tax unrealized appreciation on investments.............. $ 4,982,315
============
</Table>
E. DISTRIBUTION OF INCOME AND GAINS The Fund declares and pays monthly dividends
from net investment income. Net realized gains, if any, are distributed at least
annually. Distributions from net realized gains for book purposes may include
short-term capital gains and gains on futures transactions. All short-term
capital gains and a portion of futures gains are included as ordinary income for
tax purposes.
The tax character of distributions paid during the year ended September 30,
2006 was as follows:
<Table>
Distributions paid from:
Ordinary income........................................... $ 140,635
Tax-exempt income......................................... 4,392,841
Long-term capital gain.................................... 2,171,980
----------
$6,705,456
==========
</Table>
As of September 30, 2006, the components of distributable earnings on a tax
basis were as follows:
<Table>
Undistributed ordinary income............................... $ 7,306
Undistributed tax-exempt income............................. 622,012
Undistributed long-term capital gain........................ 91,886
</Table>
Net realized gains or losses may differ for financial reporting and tax
purposes primarily as a result of gains or losses recognized on securities for
tax purposes but not for book purposes.
F. EXPENSE REDUCTIONS During the six months ended March 31, 2007, the Fund's
custody fee was reduced by $2,058 as a result of credits earned on cash
balances.
G. FLOATING RATE NOTE OBLIGATIONS RELATED TO SECURITIES HELD The Fund enters
into transactions in which it transfers to dealer trusts fixed rate bonds in
exchange for cash and residual interests in the dealer trusts' assets and cash
flows, which are in the form of inverse floating rate investments. The dealer
trusts fund the purchases of the fixed rate bonds by issuing floating rate notes
to third parties and allowing the Fund to retain residual interests in the
bonds. The Fund enters into shortfall agreements with the dealer trusts, which
commit
23
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
the Fund to pay the dealer trusts, in certain circumstances, the difference
between the liquidation value of the fixed rate bonds held by the dealer trusts
and the liquidation value of the floating rate notes held by third parties, as
well as any shortfalls in interest cash flows. The residual interests held by
the Fund (inverse floating rate investments) include the right of the Fund (1)
to cause the holders of the floating rate notes to tender their notes at par at
the next interest rate reset date, and (2) to transfer the municipal bond from
the dealer trusts to the Fund, thereby collapsing the dealer trusts. The Fund
accounts for the transfer of bonds to the dealer trusts as secured borrowings,
with the securities transferred remaining in the Fund's investment assets, and
the related floating rate notes reflected as Fund liabilities under the caption
"Floating Rate Note Obligations" on the Statement of Assets and Liabilities. The
Fund records the interest income from the fixed rate bonds under the caption
"Interest" and records the expenses related to floating rate note obligations
and any administrative expenses of the dealer trusts under the caption "Interest
and Residual Trust Expenses" in the Fund's Statement of Operations. The notes
issued by the dealer trusts have interest rates that reset weekly and the
floating rate note holders have the option to tender their notes to the dealer
trusts for redemption at par at each reset date. At March 31, 2007, Fund
investments with a value of $4,269,815 are held by the dealer trusts and serve
as collateral for the $3,000,000 in floating rate notes outstanding at that
date. Contractual maturities of the floating rate notes and interest rates in
effect at March 31, 2007 are presented on the Portfolio of Investment.
2. INVESTMENT ADVISORY AGREEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
Under the terms of the Fund's Investment Advisory Agreement, Van Kampen Asset
Management ("the Adviser") will provide investment advice and facilities to the
Fund for an annual fee payable monthly as follows:
<Table>
<Caption>
AVERAGE DAILY NET ASSETS % PER ANNUM
First $500 million.......................................... .470%
Over $500 million........................................... .445%
</Table>
For the six months ended March 31, 2007, the Adviser voluntarily waived
$153,142 of its investment advisory fees. This represents .25% of its average
net assets for the period. This waiver is voluntary and can be discontinued at
any time.
For the six months ended March 31, 2007, the Fund recognized expenses of
approximately $1,300 representing legal services provided by Skadden, Arps,
Slate, Meagher & Flom LLP, of which a trustee of the Fund is a partner of such
firm and he and his law firm provide legal services as counsel to the Fund.
Under separate Legal Services, Accounting Services and Chief Compliance
Officer (CCO) Employment agreements, the Adviser provides accounting and legal
services and the CCO provides compliance services to the Fund. The costs of
these services are allocated to each fund. For the six months ended March 31,
2007, the Fund recognized expenses of approximately $24,800 representing Van
Kampen Investments Inc.'s or its affiliates' (collectively "Van Kampen") cost of
providing accounting and legal services to the Fund, as well as the salary,
benefits and related costs of the CCO and related support staff paid by Van
Kampen. Services provided pursuant to the Legal Services agreement are reported
as part of "Professional Fees" on the Statement of Operations. Services provided
pursuant to the
24
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
Accounting Services and CCO Employment agreement are reported as part of
"Accounting and Administrative Expenses" on the Statement of Operations.
Van Kampen Investor Services Inc. (VKIS), an affiliate of the Adviser,
serves as the shareholder servicing agent for the Fund. For the six months ended
March 31, 2007, the Fund recognized expenses of approximately $24,700
representing transfer agency fees paid to VKIS. Transfer agency fees are
determined through negotiations with the Fund's Board of Trustees.
Certain officers and trustees of the Fund are also officers and directors of
Van Kampen. The Fund does not compensate its officers or trustees who are also
officers of Van Kampen.
The Fund 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 defer all or a portion of their compensation.
Amounts deferred are retained by the Fund and to the extent permitted by the
1940 Act, as amended, may be invested in the common shares of those funds
selected by the trustees. Investments in such funds of $75,794 are included in
"Other" assets on the Statement of Assets and Liabilities at March 31, 2007.
Appreciation/ depreciation and distributions received from these investments are
recorded with an offsetting increase/decrease in the deferred compensation
obligation and do not affect the net asset value of the Fund. 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 Fund. The maximum annual benefit per
trustee under the plan is $2,500.
For the six months ended March 31, 2007, Van Kampen, as Distributor for the
Fund, received commissions on sales of the Fund's Class A Shares of
approximately $26,500 and contingent deferred sales charge (CDSC) on redeemed
shares of approximately $14,400. Sales charges do not represent expenses of the
Fund.
25
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
3. CAPITAL TRANSACTIONS
For the six months ended March 31, 2007 and the year ended September 30, 2006,
transactions were as follows:
<Table>
<Caption>
FOR THE SIX MONTHS ENDED FOR THE YEAR ENDED
MARCH 31, 2007 SEPTEMBER 30, 2006
------------------------ --------------------------
SHARES VALUE SHARES VALUE
Sales:
Class A............................. 725,452 $ 11,978,492 1,111,770 $ 18,163,119
Class B............................. 69,012 1,135,715 122,535 2,005,119
Class C............................. 133,117 2,196,942 108,099 1,782,995
-------- ------------ ---------- ------------
Total Sales........................... 927,581 $ 15,311,149 1,342,404 $ 21,951,233
======== ============ ========== ============
Dividend Reinvestment:
Class A............................. 74,771 $ 1,234,312 182,158 $ 2,972,744
Class B............................. 21,768 358,523 74,600 1,204,963
Class C............................. 13,269 218,759 41,056 649,285
-------- ------------ ---------- ------------
Total Dividend Reinvestment........... 109,808 $ 1,811,594 297,814 $ 4,826,992
======== ============ ========== ============
Repurchases:
Class A............................. (289,304) $ (4,774,230) (878,472) $(14,316,761)
Class B............................. (243,451) (4,004,396) (495,061) (8,061,368)
Class C............................. (90,751) (1,493,977) (178,507) (2,908,585)
-------- ------------ ---------- ------------
Total Repurchases..................... (623,506) $(10,272,603) (1,552,040) $(25,286,714)
======== ============ ========== ============
</Table>
4. REDEMPTION FEE
The Fund assesses a 2% redemption fee on the proceeds of Fund shares that are
redeemed (either by sale or exchange) within seven days of purchase. The
redemption fee is paid directly to the Fund. For the six months ended March 31,
2007, the Fund received redemption fees of less than $100, which are reported as
part of "Cost of Shares Repurchased" on the Statement of Changes in Net Assets.
The per share impact from redemption fees paid to the Fund was less than $0.01.
5. INVESTMENT TRANSACTIONS
During the period, the cost of purchases and proceeds from sales of investments,
excluding short-term investments, were $14,279,847 and $7,046,062, respectively.
6. 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 Fund may use derivative instruments for a variety of reasons such as to
attempt to protect the Fund against possible changes in the market value of its
portfolio and to manage the portfolio's effective maturity and duration. All of
the Fund's portfolio holdings, including derivative instruments, are marked to
market each day with the change in value reflected in the unrealized
appreciation/depreciation. Upon disposition, a realized gain or loss is
recognized accordingly, except when taking delivery of a security underlying a
futures
26
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
contract. In this instance, the recognition of gain or loss is postponed until
the disposal of the security underlying the futures contract.
Summarized below are the different types of derivative financial instruments
used by the Fund.
A. FUTURES CONTRACTS During the period, the Fund invested in futures contracts,
a type of derivative investment. A futures contract is an agreement involving
the delivery of a particular asset on a specified future date at an agreed upon
price. The Fund generally invests in exchange traded futures contracts on U.S.
Treasury Bonds or Notes for duration and risk management purposes and typically
closes the contract prior to the delivery date. Upon entering into futures
contracts, the Fund 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 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 March 31, 2007
are as follows:
<Table>
<Caption>
CONTRACTS
Outstanding at September 30, 2006........................... 29
Futures Opened.............................................. 44
Futures Closed.............................................. (73)
---
Outstanding at March 31, 2007............................... 0
===
</Table>
B. INVERSE FLOATING RATE INVESTMENTS The Fund may invest a portion of its assets
in inverse floating rate instruments, either through outright purchases of
inverse floating rate securities or through the transfer of bonds to a dealer
trust in exchange for cash and residual interests in the dealer trust. These
investments are typically used by the Fund in seeking to enhance the yield of
the portfolio. These instruments typically involve greater risks than a fixed
rate municipal bond. In particular, these instruments are acquired through
leverage or may have leverage embedded in them and therefore involve many of the
risks associated with leverage. Leverage is a speculative technique that may
expose the Fund to greater risk and increased costs. Leverage may cause the
Fund's net asset value to be more volatile than if it had not been leveraged
because leverage tends to magnify the effect of any increases or decreases in
the value of the Fund's portfolio securities. The use of leverage may also cause
the Fund to liquidate portfolio positions when it may not be advantageous to do
so in order to satisfy its obligations with respect to inverse floating rate
instruments.
C. INTEREST RATE SWAPS The Fund may enter into forward interest rate swap
transactions intended to help the Fund manage its overall interest rate
sensitivity, either shorter or longer, generally to more closely align the
Fund's interest rate sensitivity with that of the broader municipal market.
Forward interest rate swap transactions involve the Fund's agreement with a
counterparty to pay, in the future, a fixed or variable rate payment in exchange
for the
27
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
counterparty paying the Fund a variable or fixed rate payment, the accruals for
which would begin at a specified date in the future (the "effective date"). The
amount of the payment obligation is based on the notional amount of the forward
swap contract and the termination date of the swap (which is akin to a bond's
maturity). The value of the Fund's swap commitment would increase or decrease
based primarily on the extent to which long-term interest rates for bonds having
a maturity of the swap's termination date increases or decreases. The Fund may
terminate a swap contract prior to the effective date, at which point a realized
gain or loss is recognized. When a forward swap is terminated, it ordinarily
does not involve the delivery of securities or other underlying assets or
principal, but rather is settled in cash on a net basis. The Fund intends, but
is not obligated, to terminate its forward swaps before the effective date.
Accordingly, the risk of loss with respect to the swap counterparty on such
transactions is limited to the credit risk associated with a counterparty
failing to honor its commitment to pay any realized gain to the Fund upon
termination. To reduce such credit risk, all counterparties are required to
pledge collateral daily (based on the daily valuation of each swap) on behalf of
the Fund with a value approximately equal to the amount of any unrealized gain.
Reciprocally, when the Fund has an unrealized loss on a swap contract, the Fund
has instructed the custodian to pledge cash or liquid securities as collateral
with a value approximately equal to the amount of the unrealized loss.
Collateral pledges are monitored and subsequently adjusted if and when the swap
valuations fluctuate. Restricted cash, if any, for segregating purposes is shown
on the Statement of Assets and Liabilities.
7. DISTRIBUTION AND SERVICE PLANS
Shares of the Fund are distributed by Van Kampen Funds Inc. (the "Distributor"),
an affiliate of the Adviser. The Fund has adopted a distribution plan pursuant
to Rule 12b-1 under the 1940 Act, as amended, and a service plan (collectively,
the "Plans") for Class A Shares, Class B Shares and Class C Shares to compensate
the Distributor for the sale, distribution, shareholder servicing and
maintenance of shareholder accounts for these shares. Under the Plans, the Fund
will incur annual fees of up to .25% of Class A average daily net assets and up
to 1.00% each of Class B and Class C average daily net assets. These fees are
accrued daily and paid to the Distributor monthly.
The amount of distribution expenses incurred by the Distributor and not yet
reimbursed ("unreimbursed receivable") was approximately $0 and $6,400 for Class
B and Class C Shares, respectively. These amounts may be recovered from future
payments under the distribution plan or CDSC. To the extent the unreimbursed
receivable has been fully recovered, the distribution fee is reduced.
8. INDEMNIFICATIONS
The Fund enters into contracts that contain a variety of indemnifications. The
Fund's maximum exposure under these arrangements is unknown. However, the Fund
has not had prior claims or losses pursuant to these contracts and expects the
risk of loss to be remote.
9. ACCOUNTING PRONOUNCEMENTS
In July 2006, the Financial Accounting Standards Board (FASB) issued
Interpretation 48, Accounting for Uncertainty in Income Taxes--an interpretation
of FASB Statement 109 (FIN 48). FIN 48 clarifies the accounting for income taxes
by prescribing the minimum recognition threshold a tax position must meet before
being recognized in the financial
28
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
NOTES TO FINANCIAL STATEMENTS -- MARCH 31, 2007 (UNAUDITED) continued
statements. FIN 48 is effective for the fiscal years beginning after December
15, 2006 and is to be applied to all open tax years as of the effective date.
Recent SEC guidance allows implementing FIN 48 in the fund NAV calculations as
late as the fund's last NAV calculation in the first required financial
statement period. As a result, the Fund will incorporate FIN 48 in its semi
annual report on March 31, 2008. The impact to the Fund's financial statements,
if any, is currently being assessed.
In addition, in September 2006, Statement of Financial Accounting Standards
No. 157, Fair Value Measurements (SFAS 157), was issued and is effective for
fiscal years beginning after November 15, 2007. SFAS 157 defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. Management is currently evaluating the impact the
adoption of SFAS 157 will have on the Trust's financial statement disclosures.
29
VAN KAMPEN NEW YORK TAX FREE INCOME FUND
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
JACK E. NELSON
HUGO F. SONNENSCHEIN
WAYNE W. WHALEN * - Chairman
SUZANNE H. WOOLSEY
OFFICERS
RONALD E. ROBISON
President and Principal Executive Officer
DENNIS SHEA
Vice President
J. DAVID GERMANY
Vice President
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
DISTRIBUTOR
VAN KAMPEN FUNDS INC.
1221 Avenue of the Americas
New York, New York 10020
SHAREHOLDER SERVICING AGENT
VAN KAMPEN INVESTOR SERVICES INC.
P.O. Box 947
Jersey City, New Jersey 07303-0947
CUSTODIAN
STATE STREET BANK
AND TRUST COMPANY
One Lincoln Street
Boston, Massachusetts 02111
LEGAL COUNSEL
SKADDEN, ARPS, SLATE,
MEAGHER & FLOM LLP
333 West Wacker Drive
Chicago, Illinois 60606
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
233 South Wacker Drive
Chicago, Illinois 60606
* "Interested persons" of the Fund, as defined in the Investment Company Act
of 1940, as amended.
30
Van Kampen New York Tax Free Income Fund
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.
(continued on next page)
Van Kampen New York Tax Free Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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 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
(continued on back)
Van Kampen New York Tax Free Income Fund
An Important Notice Concerning Our U.S. Privacy Policy continued
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)2007 Van Kampen Funds Inc.
All rights reserved. Member NASD/SIPC.
235, 325, 425
NYTFSAR 5/07
(VAN KAMPEN INVESTMENTS LOGO) IU07-01003P-Y03/07
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-CSRS 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 second fiscal quarter of the period covered
by this report that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial reporting.
Item 12. Exhibits.
(1) Code of Ethics -- Not applicable for semi-annual reports.
(2)(a) A certification for the Principal Executive Officer of the registrant is
attached hereto as part of EX-99.CERT.
(2)(b) 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 Tax Free Trust
By: /s/ Ronald E. Robison
---------------------
Name: Ronald E. Robison
Title: Principal Executive Officer
Date: May 22, 2007
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: May 22, 2007
By: /s/ James W. Garrett
---------------------
Name: James W. Garrett
Title: Principal Financial Officer
Date: May 22, 2007